BILL ANALYSIS �
AB 2641
Page 1
ASSEMBLY THIRD READING
AB 2641 (Skinner)
As Amended May 25, 2012
Majority vote
GOVERNMENTAL ORGANIZATION 11-5 APPROPRIATIONS 12-5
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|Ayes:|Hall, Atkins, Block, |Ayes:|Fuentes, Blumenfield, |
| |Blumenfield, Chesbro, | |Bradford, Charles |
| |Gatto, Hill, Ma, Perea, | |Calderon, Campos, Davis, |
| |V. Manuel P�rez, Torres | |Gatto, Ammiano, Hill, |
| | | |Lara, Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Nestande, Cook, Garrick, |Nays:|Harkey, Donnelly, |
| |Jones, Silva | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Requires the Governor's Office of Business and
Economic Development (GO-Biz) to post on its Internet Web site
information to assist a person in starting a nonprofit
corporation and to assist nonprofit corporations to achieve
compliance with the state's statutory and regulatory
requirements. Specifically, this bill :
1)Provides GO-Biz shall post all of the necessary information on
its Internet Web site to assist an individual to start a
nonprofit corporation in this state and to assist a nonprofit
corporation to achieve compliance with the state's statutory
and regulatory requirements, as defined. The Internet Web
site shall contain information on the incorporation,
registration, and renewal requirements of the following
agencies:
a) The Employment Development Department;
b) The Franchise Tax Board;
c) The Internal Revenue Service;
d) The Office of the Attorney General;
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e) The Office of the Secretary of State; and,
f) The State Board of Equalization.
2)Requires a state agency to provide accurate and updated
information about its requirements to GO-Biz.
3)Requires GO-Biz to be responsible for maintaining updated
information on the requirements of the Internal Revenue
Service. The office may refer individuals to the California
Tax Center Internet Web site.
4)Prohibits a state agency from using this Internet Web site as
the exclusive source of information that it provides to the
public.
EXISTING LAW
1)Provides for the organization and governance of nonprofit
public benefit corporations, nonprofit mutual benefit
corporations, and nonprofit religious corporations.
2)Requires nonprofit corporations to prepare and file articles
of incorporation with the Secretary of State (SOS), and within
90 days of that filing, and biennially thereafter, to file a
form prescribed by the SOS specifying information regarding
certain specified information.
3)Requires charitable corporations to file periodic written
reports with the Attorney General beginning within four months
and 15 days following the close of the first calendar or
fiscal year in which it initially receives property stating
information as to the nature of the assets held for charitable
purposes and the administration thereof.
4)Requires charitable corporations, unincorporated associations
and trusts to be filed with the Attorney General articles of
incorporation, or other documents governing the organization's
operations within 30 days after initial receipt of property.
5)Requires charitable corporations with gross revenues of $2
million or more must prepare annual financial statements
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audited by an independent certified public accountant.
6)Requires charities with gross revenues of $2 million or more
to establish and maintain an audit committee.
7)Requires executive compensation by charitable corporations,
unincorporated associations and charitable trusts must be
review and approved.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, costs associated with this legislation should be
minor and absorbable within existing resources.
COMMENTS :
Purpose of the bill : According to the author, "there is no
single government website that lists all of the incorporation
and renewal requirements. Different websites for government
agencies lists select requirements, but there is no complete,
comprehensive list that details the requirements for both
incorporation and renewal."
The author further contends that, "larger nonprofits have the
resources to hire lawyers for the creation and renewal of the
organization, while ensuring that the organization is in
compliance with state law. Smaller nonprofits do not have
equivalent resources, resulting in many nonprofits failing to
comply with state law. It is difficult for smaller nonprofits
to even know what paperwork needs to be filed on a yearly
basis."
Governor's Office of Business and Economic Development (GO-Biz) :
The purpose of GO-Biz is to promote California as a place to do
business, to support those interested in starting, growing,
financing, expanding or relocating a business in California, and
to help, to the extent possible, those businesses facing
challenges to operating in California. GO-Biz was created
within the Governor's Office, and is headed by a director
designated by the governor.
Information already available online : While it is true that
there is no single government Web site that provides an easy to
comprehend list of all the incorporation and renewal
requirements that a nonprofit has to follow, there are currently
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various Web sites that provide that information. For example,
the Nonprofit Resources Center's Web site provides a
comprehensive list of all the requirements that an individual
has to follow in order to start a nonprofit in the State of
California. This list includes not only links to the
appropriate forms, but also links to the appropriate federal and
state laws. The same Web site also provides information to help
established nonprofits to achieve compliance with the state's
statutory and regulatory requirements.
Arguments in support : The American Federation of State, County
and Municipal Employees (AFSCME), AFL-CIO states that, "AB 2641
resolves the issue by simplifying the incorporation and renewal
processes for nonprofits by providing a single government
website that provides all of the necessary information and
forms, while helping the organizations stay in compliance with
the law."
Prior legislation : AB 29 (John A. P�rez), Chapter 475, Statutes
of 2011, created, within the Governor's office, the Governor's
Office of Business and Economic Development.
Analysis Prepared by : Felipe Lopez / G. O. / (916) 319-2531
FN: 0003918