BILL ANALYSIS Ó
AB 2077
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Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2077 (Allen) - As Amended: April 21, 2014
Policy Committee: Business and
Professions Vote: 14 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires money in the Attorney General's Registry of
Charitable Trusts Fund, upon appropriation by the Legislature,
to be used by the Attorney General to enforce the registration
and reporting requirements of commercial charitable fundraisers
pursuant to the Supervision of Trustees and Fundraisers for
Charitable Purposes Act (Act).
FISCAL EFFECT
On-going costs to the Attorney General in the range of $1.4
million (special fund) to support up to 13 positions to:
1) Handle administrative appeals and court actions related
to delinquencies.
2) Assist unregistered charities in complying with
registration and reporting requirements.
3) Review initial applications and financial reports.
4) Provide public education and protection activities.
These costs would be fully supported by fees deposited into the
Registry of Charitable Trusts Fund and would likely decrease
after the initial backlog is gone.
COMMENTS
1)Purpose . According to the author, "Commercial fundraisers, the
for-profit companies behind the vast majority of those
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telemarketing appeals for charity donations, raised almost
$300 million on behalf of nonprofits in California in 2012,
according to the state Attorney General. The nonprofits got
just a fraction of the proceeds, an average of only 37
percent, or $108 million, and the commercial fundraisers kept
the rest for themselves." This bill is intended to help ensure
adequate registration and reporting requirements in order to
protect consumers from fraudulent or misleading commercial
charitable contributions.
2)Registration and reporting requirements . The Act requires a
commercial fundraiser for charitable purposes to register with
the Attorney General prior to soliciting or receiving any
funds, assets, or property in California for charitable
purposes. Fundraisers must register with the Attorney General
within 30 days, and file notice not less than 10 working days
prior to the commencement of each solicitation campaign,
event, or service. DOJ estimates there are approximately
52,000 delinquent charities. These charities were, at one
point, registered, but became delinquent in their annual
registration and reporting. DOJ also estimates there are over
130,000 charities and charitable trustees operating in
California but not registered. Enforcement action would be
needed to bring these existing entities into compliance
initially, as well as ongoing action to ensure that the law is
enforced in the future.
3)Registry of Charitable Trusts Fund . This fund, in the state
Treasury, is administered by the Department of Justice. The
Act requires that all registration fees paid to the Department
of Justice pursuant to the Act be deposited in the fund, and
requires those moneys to be used by the Attorney General, upon
appropriation by the Legislature, to operate and maintain the
Attorney General's Registry of Charitable Trusts. This bill
will additionally require those moneys to be used for
enforcement of the registration and reporting provisions of
the Act.
4)Previous legislation . AB 2327 (Feuer), Chapter 483, Statutes
of 2012, allows the Attorney General to issue a cease and
desist order when any person or entity pursuant to the
Supervision of Trustees and Fundraisers for Charitable
Purposes Act has committed an act that would constitute a
violation of, or is operating in violation of, any provision
of the Act.
AB 2077
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Analysis Prepared by : Jennifer Swenson / APPR. / (916)
319-2081