Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2855


Introduced by Assembly Member Frazier

February 19, 2016


An act tobegin delete amendend deletebegin insert addend insert Sectionbegin delete 17510.3 ofend deletebegin insert 17510.86 toend insert the Business and Professions Code, relating to charitable solicitations.

LEGISLATIVE COUNSEL’S DIGEST

AB 2855, as amended, Frazier. Charitablebegin delete solicitationend deletebegin insert solicitations: financialend insert disclosures.

Existing law requiresbegin delete certain disclosures to be madeend deletebegin insert a solicitor or seller,end insert prior to any solicitation or sales solicitation for charitablebegin delete purposes.end deletebegin insert purposes, to provide the prospective donor or purchaser with certain disclosures, including, among others, the name and address of the combined campaign, each organizationend insertbegin insert or fund on behalf of which money collected will be utilized, and the percentage of the total gift or purchase price that may be deducted as a charitable contribution under both federal and state law. Under existing law, a violation of certain advertising restrictions, including charitable solicitation requirements, is a crime.end insert

This bill wouldbegin delete make a nonsubstantive change to this provision.end deletebegin insert require an Internet Web site produced by, or on behalf of, a charity to contain an Internet Web page that includes a disclosure of the charity’s administrative overhead expenses and a copy of the charity’s most recent Internal Revenue Service Form 990 filingend insertbegin insert and would further require each Internet Web page on the Internet Web site to contain a direct link to that financial disclosures Internet Web page, as specified. The bill would also require a document produced by, or on behalf of, a charity for solicitation for charitable purposes to include a disclosure statement indicating the percentage of the charity’s funding spent on those administrative overhead expenses, as specified. As a violation of these requirements would be a crime, this bill would impose a state-mandated local program.end insert

begin insert

This bill would authorize the Attorney General to enforce these requirements by directing the Franchise Tax Board to suspend or revoke a violating charity’s tax-exempt status, by suspending or revoking the registration of a violating charity, or by taking any other enforcement action pursuant to the Attorney General’s existing powers and duties, as specified.

end insert
begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 17510.86 is added to the end insertbegin insertBusiness and
2Professions Code
end insert
begin insert, to read:end insert

begin insert
3

begin insert17510.86.end insert  

(a) An Internet Web site produced by, or on behalf
4of, a charity that operates, or engages in the solicitation for
5charitable purposes of funds or other property, in this state shall
6comply with both of the following:

7(1) The Internet Web site shall contain a financial disclosures
8Internet Web page, which shall include both of the following:

9(A) A disclosure of the sum total of the salaries, other
10compensation, and employee benefits of the charity’s executive
11director and board of directors and all of the charity’s other
12administrative overhead expenses, as reported on the charity’s
13most recent Internal Revenue Service Form 990 filing. The
14disclosure shall be set forth in at least 14-point, bold, sans serif
15type font and shall be clear and conspicuous, as defined in Section
1617601.

17(B) A complete copy of the charity’s most recent Internal
18Revenue Service Form 990 filing.

P3    1(2) Each Internet Web page on the Internet Web site shall
2include a direct link to the financial disclosures Internet Web page
3required pursuant to paragraph (1). The direct link shall contain
4the phrase “Click here to read a full disclosure of the finances,
5including the salaries and expenses, of this organization,” shall
6be placed in the top right corner of each Internet Web page in at
7least 14-point, bold, sans serif type font, and shall be clear and
8conspicuous, as defined in Section 17601.

9(b) (1) A document produced by, or on behalf of, a charity for
10the solicitation for charitable purposes of funds or other property
11in this state shall include a disclosure statement indicating the
12percentage of the charity’s funding that is spent on the sum total
13of the salaries, other compensation, and employee benefits of the
14charity’s executive director and board of directors and all of the
15charity’s other administrative overhead expenses, as reported on
16the charity’s most recent Internal Revenue Service Form 990 filing.

17(2) The disclosure statement shall be printed on the first page
18of the document in at least 14-point, bold, sans serif type font and
19shall be clear and conspicuous, as defined in Section 17601.

20(c) The Attorney General may enforce this section by taking
21any of the following actions against a charity that provides false
22information or otherwise violates this section:

23(1) Directing the Franchise Tax Board to suspend or revoke
24the charity’s exemption from the taxes imposed by the Corporation
25Tax Law (Part 11 (commencing with Section 23001) of Division
262 of the Revenue and Taxation Code). The suspension or revocation
27shall become effective immediately upon receipt by the Franchise
28Tax Board, and the Franchise Tax Board shall reinstate the
29exemption only upon subsequent notification by the Attorney
30General that the charity is in compliance with this section.

31(2) Refusing to register, or revoking or suspending the
32registration of, a charity pursuant to the Supervision of Trustees
33and Fundraisers for Charitable Purposes Act (Article 7
34(commencing with Section 12580) of Chapter 6 of Part 2 of
35Division 3 of Title 2 of the Government Code).

36(3) Taking any other enforcement action pursuant to the
37Attorney General’s existing powers and duties.

end insert
38begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
39Section 6 of Article XIII B of the California Constitution because
40the only costs that may be incurred by a local agency or school
P4    1district will be incurred because this act creates a new crime or
2infraction, eliminates a crime or infraction, or changes the penalty
3for a crime or infraction, within the meaning of Section 17556 of
4the Government Code, or changes the definition of a crime within
5the meaning of Section 6 of Article XIII B of the California
6Constitution.

end insert
begin delete
7

SECTION 1.  

Section 17510.3 of the Business and Professions
8Code
is amended to read:

9

17510.3.  

(a) Prior to any solicitation or sales solicitation for
10charitable purposes, the solicitor or seller shall exhibit to the
11prospective donor or purchaser a card entitled “Solicitation or Sale
12for Charitable Purposes Card.” The card shall be signed and dated
13under penalty of perjury by an individual who is a principal, staff
14member, or officer of the soliciting organization. The card shall
15give the name and address of the soliciting organization or the
16person who signed the card and the name and business address of
17the paid individual who is doing the actual soliciting.

18In lieu of exhibiting a card, the solicitor or seller may distribute
19during the course of the solicitation any printed material, such as
20a solicitation brochure, provided the material complies with the
21standards set forth below, and provided that the solicitor or seller
22informs the prospective donor or purchaser that the information
23as required below is contained in the printed material.

24Information on the card or printed material shall be presented
25in at least 10-point type and shall include the following:

26(1) The name and address of the combined campaign, each
27organization, or fund on behalf of which all or any part of the
28money collected will be utilized for charitable purposes.

29(2) If there is no organization or fund, the manner in which the
30money collected will be utilized for charitable purposes.

31(3) The non-tax-exempt status of the organization or fund, if
32the organization or fund for which the money or funds are being
33solicited does not have a charitable tax exemption under both
34federal and state law.

35(4) The percentage of the total gift or purchase price which may
36be deducted as a charitable contribution under both federal and
37state law. If no portion is so deductible the card shall state that
38“This contribution is not tax deductible.”

39(5) If the organization making the solicitation represents any
40nongovernmental organization by any name which includes, but
P5    1is not limited to, the term “officer,” “peace officer,” “police,” “law
2enforcement,” “reserve officer,” “deputy,” “California Highway
3Patrol,” “Highway Patrol,” “deputy sheriff,” “firefighter,” or “fire
4marshall,” which would reasonably be understood to imply that
5the organization is composed of law enforcement or firefighting
6personnel, the solicitor shall give the total number of members in
7the organization and the number of members working or living
8within the county where the solicitation is being made, and if the
9solicitation is for advertising, the statewide circulation of the
10publication in which the solicited ad will appear.

11(6) If the organization making the solicitation represents any
12nongovernmental organization by any name which includes, but
13is not limited to, the term “veteran” or “veterans,” which would
14reasonably be understood to imply that the organization is
15composed of veterans, the solicitor shall give the total number of
16members in the organization and the number of members working
17or living within the county where the solicitation is being made.
18This paragraph does not apply to federally chartered or state
19incorporated veterans’ organizations with 200 or more dues paying
20members or to a thrift store operated or controlled by a federally
21chartered or state incorporated veterans’ organization. This
22paragraph does not apply to any state incorporated
23community-based organization that provides direct services to
24veterans and their families and qualifies as a tax-exempt
25organization under Section 501(c)(3) or 501(c)(19) of the Internal
26Revenue Code and Section 23701d of the Revenue and Taxation
27Code.

28(b) Knowing and willful noncompliance by any individual
29volunteer who receives no compensation of any type from or in
30connection with a solicitation by any charitable organization shall
31subject the solicitor or seller to the penalties of the law.

32(c) When the solicitation is not a sales solicitation, any
33individual volunteer who receives no compensation of any type
34from, or in connection with, a solicitation by any charitable
35organization may comply with the disclosure provisions by
36providing the name and address of the charitable organization on
37behalf of which all or any part of the money collected will be
38utilized for charitable purposes, by stating the charitable purposes
39for which the solicitation is made, and by stating to the person
40solicited that information about revenues and expenses of the
P6    1organization, including its administration and fundraising costs,
2may be obtained by contacting the organization’s office at the
3address disclosed. The organization shall provide this information
4to the person solicited within seven days after receipt of the request.

5(d) A volunteer who receives no compensation of any type from,
6or in connection with, a solicitation or sales solicitation by a
7charitable organization that has qualified for a tax exemption under
8Section 501(c)(3) of the Internal Revenue Code, and who is 18
9years of age or younger, is not required to make any disclosures
10pursuant to this section.

11(e) If any provision of this section or the application thereof to
12any person or circumstances is held invalid, that invalidity shall
13not affect other provisions or applications of this section that can
14be given effect without the invalid provision or application, and
15to this end the provisions of this section are severable.

end delete


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