AB 1181

Bill Subjects

Abstract

Existing law governing solicitations and sale solicitations for charitable purposes requires all financial records of a soliciting organization to be maintained on the basis of generally accepted accounting principles as defined by the American Institute of Certified Public Accountants, the Governmental Accounting Standards Board, or the Financial Accounting Standards Board. This bill would instead require those financial records to be maintained on the basis of generally accepted accounting principles as established by the Financial Accounting Standards Board and the Governmental Accounting Standards Board. The bill would, notwithstanding this requirement, require a noncash pharmaceutical drug, nonprescription drug, medication, medical device, or medical supply contribution received by a charitable organization that is restricted by the donor from being used in the United States to be valued using the fair value of the end recipient market or a reasonable estimate thereof if the end recipient market value cannot be ascertained following a reasonable inquiry. The bill would also require a charitable organization, if the end recipient market is unknown when the noncash pharmaceutical drug, nonprescription drug, medication, medical device, or medical supply contribution is received, to value the contribution using only those markets in which the contribution is reasonably likely to be distributed or used. The bill would exclude from this provision noncash grants awarded by the United States, any state, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any of their agencies or governmental subdivisions that provide valuations for their noncash grants to the charitable organizations. The bill would authorize the Attorney General to adopt rules and regulations to carry out these provisions. The bill would make these provisions operative on January 1, 2021. Existing law, the Uniform Supervision of Trustees and Fundraisers for Charitable Purposes Act, governs charitable corporations, unincorporated associations, trustees, commercial fundraisers, fundraising counsel, commercial coventurers, and other legal entities holding or soliciting property for charitable purposes over which the state or the Attorney General has enforcement and supervisory powers. The act authorizes the Attorney General to impose specified civil penalties for acts and omissions. The act imposes specific requirements on charitable organizations and commercial fundraisers for charitable purposes and prohibits specified acts and practices in the planning, conduct, or execution of any solicitation or charitable sales promotion, including misrepresenting the purpose of the charitable organization or the nature or purpose or beneficiary of a solicitation. Existing law requires charitable corporations, unincorporated associations, and trustees to file periodic written reports with the Attorney General under oath. This bill would add to the list of prohibited actions reporting its noncash contributions in its audited financial statements, reports filed with the Attorney General, or solicitation materials, in a way that is misleading or likely to cause confusion. By expanding the crime of perjury with regard to statements made in the periodic written reports, this bill would impose a state-mandated local program. 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.