BILL ANALYSIS Ó
AB 2077
Page 1
ASSEMBLY THIRD READING
AB 2077 (Allen)
As Amended April 21, 2014
Majority vote
BUSINESS & PROFESSIONS 14-0 APPROPRIATIONS 17-0
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|Ayes:|Bonilla, Jones, |Ayes:|Gatto, Bigelow, |
| |Bocanegra, Campos, | |Bocanegra, Bradford, Ian |
| |Dickinson, Eggman, | |Calderon, Campos, |
| |Gordon, Hagman, Holden, | |Donnelly, Eggman, Gomez, |
| |Maienschein, Mullin, | |Holden, Jones, Linder, |
| |Skinner, Ting, Wilk | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires money in the Registry of Charitable Trusts
(RCT) Fund 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. Specifically, this
bill :
1)Requires money in the Attorney General's RCT Fund, upon
appropriation by the Legislature, to be used by the Attorney
General to enforce the registration and reporting provisions
of the Supervision of Trustees and Fundraisers for Charitable
Purposes Act (Act).
2)Makes a technical and clarifying amendment.
EXISTING LAW establishes the Act, which provides comprehensive
regulation of charitable corporations, unincorporated
associations, trustees, and other legal entities holding
property for charitable purposes, commercial fundraisers for
charitable purposes, fundraising counsel for charitable
purposes, and commercial covertures, over which the state or the
Attorney General has enforcement or supervisory powers.
(Government Code (GOV) Section 12580 et seq.)
AB 2077
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FISCAL EFFECT : According to the Assembly Appropriations
Committee:
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 of this bill. This bill requires money in the RCT
fund to be used by the Attorney General to enforce the
registration and reporting provisions of the Act. This will
help the Attorney General ensure adequate notice and
registration requirements are provided to protect consumers
from fraudulent or misleading commercial charitable
contributions. This bill is author sponsored.
2)Author's statement. According to the author, "a recent
investigation of America's 50 Worst Charities by the Center
for Investigative Reporting and the Tampa Bay Times [show] an
overwhelming majority of certain contributions - some 77
percent - go towards professional fundraisers and managers who
orchestrate dialing-for-dollars phone drives, rather than the
cause itself. The 50 worst raised $1.3 billion over 10 years
- and almost $1 billion of it went straight to fundraisers.
"Commercial fundraisers - the for-profit companies behind the
vast majority of those telemarketing appeals for charity
donations - raised almost $300 million on behalf of nonprofits
AB 2077
Page 3
in California in 2012, according to figures collected by 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 year the [Orange County] Register specifically reported
a local [OC] charity giving only [three] percent to the
intended cause. The California attorney general sued the
charity in 2009, on the grounds that the charity mislead their
donors about the cause at hand, and also fraudulently
attempted to trick them into believing that they had donated
before, when in fact they had not. AB 2077 will move the
'scam charity' conversation forward with the intent of
protecting kindhearted patrons and the integrity of legitimate
nonprofits throughout California."
3)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's RCT within 30 days, and file notice not less than 10
working days prior to the commencement of each solicitation
campaign, event, or service.
This bill would simply allow the Attorney General to use money
in the RCT Fund for enforcement of the Act.
Analysis Prepared by : Sarah Huchel / B., P. & C.P. / (916)
319-3301
FN: 0003731