BILL NUMBER: AB 2327 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Feuer
FEBRUARY 24, 2012
An act to amend Section 12591.1 of the Government Code, relating
to charitable organizations.
LEGISLATIVE COUNSEL'S DIGEST
AB 2327, as introduced, Feuer. Charitable organizations:
enforcement.
Under existing law, the Supervision of Trustees and Fundraisers
for Charitable Purposes Act governs charitable corporations,
unincorporated associations trustees, commercial fundraisers,
fundraising counsel, commercial coventurers, and other legal entities
who hold or solicit property for charitable purposes over which the
Attorney General has enforcement and supervisory powers. The act
requires that any person who violates any provision of the act with
the intent to deceive or defraud be liable for a specified civil
penalty. The act also requires that any person who violates any
provision of the act, regardless of intent, is liable for a specified
civil penalty.
This bill would revise those enforcement provisions to instead
provide that the Attorney General may issue a cease and desist order
whenever the Attorney General finds that any person or entity that
the act applies to has committed an act that would constitute a
violation of, or is operating in violation of, any provision of the
act. The bill would authorize the Attorney General to impose a
specified penalty on any person or entity for each act or omission
that constitutes a violation of the act, subject to certain
procedures. The bill would also authorize the Attorney General, if
the Attorney General had assessed a penalty against a person or
entity pursuant to these provisions, to suspend the registration of
that person or entity in accordance with certain procedures. The bill
would authorize a person or entity that the Attorney General has
filed an action against pursuant to the act to request a hearing to
review that action in accordance with certain procedures. The bill
would authorize the Attorney General to seek injunctive relief to
enforce the provisions of this act.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 12591.1 of the Government Code is amended to
read:
12591.1. (a) Any person who violates any provision of this
article with intent to deceive or defraud any charity or individual
is liable for a civil penalty not exceeding ten thousand dollars
($10,000).
(b) The Attorney General may issue a cease and desist order
whenever the Attorney General finds that any entity or person that is
subject to the provisions of this article pursuant to Section 12581,
or its agent, servant, or employee, has committed an act that would
constitute a violation of, or is operating in violation of, this
article, or its implementing regulations, or an order issued by the
Attorney General, including, but not limited to, all of the
following:
(1) Has refused or failed, after notice, to produce any records of
the organization or to disclose any information required to be
disclosed under this article or Chapter 4 (commencing with Section
300) of Division 1 of Title 11 of the California Code of Regulations.
(2) Has made a material false statement in an application,
statement, or report required to be filed under this article or
Chapter 4 (commencing with Section 300) of Division 1 of Title 11 of
the California Code of Regulations.
(3) Has failed to file a financial report, or has filed an
incomplete financial report, that is required by this article or
Chapter 4 (commencing with Section 300) of Division 1 of Title 11 of
the California Code of Regulations.
(4) Has engaged in any act prohibited pursuant to Section 12599.6.
(c) The Attorney General may impose a penalty on any person or
entity, not to exceed one thousand dollars ($1,000) per act or
omission, for each act or omission that constitutes a violation of
this article or Chapter 4 (commencing with Section 300) of Division 1
of Title 11 of the California Code of Regulations. At least five
days prior to imposing that penalty, the Attorney General shall
provide notice to the person or entity that committed the violation
by certified mail to the address of record at the Registry of
Charitable Trusts. Penalties shall accrue, commencing on the fifth
day after notice is given, at a rate of one hundred dollars ($100)
per day for each day until that person or entity corrects that
violation. Penalties shall stop accruing as of the date set forth in
the written notice provided by the Attorney General that the
violation or omission subject to penalties has been corrected or
remedied.
(d) If the Attorney General assesses penalties under this section,
the Attorney General may suspend the registration of that person or
entity in accordance with the procedures set forth in Section 999.6
of Title 11 of the California Code of Regulations. Registration shall
be automatically suspended until the fine is paid and no
registration shall be renewed until the fine is paid.
(e) Any person or entity that the Attorney General has filed an
action against pursuant to this section may request a hearing to
review that action in accordance with the procedures set forth in
Chapter 15 (commencing with Section 999.1) of Division 1 of Title 11
of the California Code of Regulations and rules adopted by the
Attorney General. Any request for hearing shall be made within 30
days after the Attorney General has served the person with notice of
the action, which notice shall be deemed effective upon mailing.
(f) The Attorney General may apply to a superior court of the
State of California for relief, and the court may issue a temporary
injunction or a permanent injunction to restrain violations of this
chapter, appoint a receiver, order restitution or an accounting, or
grant other relief as may be appropriate to ensure the due
application of charitable funds. Proceedings thereon shall be brought
in the name of the state.
(g) All penalties paid to the Attorney General pursuant to this
section shall be used by the Department of Justice in accordance with
the provisions of Section 12586.2.
(b) Except as provided in subdivision (d), any person who violates
any other provision of this article is liable for a civil penalty,
as follows:
(1) For the first offense, a fine not exceeding one thousand
dollars ($1,000).
(2) For any subsequent offense, a fine not exceeding two thousand
five hundred dollars ($2,500).
(c) Any offense committed under this article involving a
solicitation may be deemed to have been committed at either the place
at which the solicitation was initiated or at the place where the
solicitation was received.
(d) Any person who violates only subdivision (c), (d), (e), or (f)
of Section 12586.1 shall not be liable for a civil penalty under
subdivision (b) if the person (1) has not received reasonable notice
of the violation and (2) has not been given a reasonable opportunity
to correct the violation. The Attorney General shall notify in
writing a person who violates only subdivisions (c), (d), (e), or (f)
of Section 12586.1 that he or she has 30 days to correct the
violation.
(e) The recovery of a civil penalty pursuant to this section
precludes assessment of a late fee pursuant to Section 12586.1 for
the same offense.