AB 2855, as amended, Frazier. Charitable solicitations: financial disclosures.
Existing law requires a solicitor or seller, prior to any solicitation or sales solicitation for charitable purposes, to provide the prospective donor or purchaser with certain disclosures, including, among others, the name and address of the combined campaign, each organization 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.
This bill would require an Internet Web site produced by, or on behalf of, a
begin delete charityend delete to contain begin delete 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 filing 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.end delete As a violation of these requirements would be a crime, this bill would impose a state-mandated local program.
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 delete
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.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 17510.86 is added to the Business and
11Professions Code, to read:
(a) An Internet Web site produced by, or on behalf
13of, a charity that operates, or engages in the solicitation for
14charitable purposes of funds or other property, in this state shall
15comply with both of the following:
16(1) The Internet Web site shall contain a financial disclosures
17Internet Web page, which shall include both of the following:
18(A) A disclosure of the sum total of the salaries, other
19compensation, and employee benefits of the charity’s executive
20director and board of directors and all of the charity’s other
21administrative overhead expenses, as reported on the charity’s
22most recent Internal Revenue Service Form 990 filing. The
23disclosure shall be set forth in at least 14-point, bold, sans serif
24type font and shall be clear and conspicuous, as defined in Section
26(B) A complete copy of the charity’s most recent Internal
27Revenue Service Form 990 filing.
28(2) Each Internet Web page on the Internet Web site shall
29include a direct link to the financial disclosures Internet Web page
30required pursuant to paragraph (1). The direct link shall contain
31the phrase “Click here to read a full disclosure of the finances,
32including the salaries and expenses, of this organization,” shall be
33placed in the top right corner of each Internet Web page in at least
3414-point, bold, sans serif type font, and shall be clear and
35conspicuous, as defined in Section 17601.
36(b) (1) A document produced by, or on behalf of, a charity for
37the solicitation for charitable purposes of funds or other property
38in this state shall include a disclosure statement indicating the
39percentage of the charity’s funding that is spent on the sum total
40of the salaries, other compensation, and employee benefits of the
P4 1charity’s executive director and board of directors and all of the
2charity’s other administrative overhead expenses, as reported on
3the charity’s most recent Internal Revenue Service Form 990 filing.
4(2) The disclosure statement shall be printed on the first page
5of the document in at least 14-point, bold, sans serif type font and
6shall be clear and conspicuous, as defined in Section 17601.
7(c) The Attorney General may enforce this section by taking
8any of the following actions against a charity that provides false
9information or otherwise violates this section:
10(1) Directing the Franchise Tax
Board to suspend or revoke the
11charity’s exemption from the taxes imposed by the Corporation
12Tax Law (Part 11 (commencing with Section 23001) of Division
132 of the Revenue and Taxation Code). The suspension or revocation
14shall become effective immediately upon receipt by the Franchise
15Tax Board, and the Franchise Tax Board shall reinstate the
16exemption only upon subsequent notification by the Attorney
17General that the charity is in compliance with this section.
18(2) Refusing to register, or revoking or suspending the
19registration of, a charity pursuant to the Supervision of Trustees
20and Fundraisers for Charitable Purposes Act (Article 7
21(commencing with Section 12580) of Chapter 6 of Part 2 of
22Division 3 of Title 2 of the Government Code).
23(3) Taking any other enforcement action pursuant to the
24Attorney General’s existing powers and duties.
No reimbursement is required by this act pursuant to
26Section 6 of Article XIII B of the California Constitution because
27the only costs that may be incurred by a local agency or school
28district will be incurred because this act creates a new crime or
29infraction, eliminates a crime or infraction, or changes the penalty
30for a crime or infraction, within the meaning of Section 17556 of
31the Government Code, or changes the definition of a crime within
32the meaning of Section 6 of Article XIII B of the California