State Codes and Statutes

Statutes > California > Gov > 12580-12599.7

GOVERNMENT CODE
SECTION 12580-12599.7



12580.  This article may be cited as the Supervision of Trustees and
Fundraisers for Charitable Purposes Act.



12581.  This article applies to all 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 coventurers, over which the state or the Attorney General
has enforcement or supervisory powers. The provisions of this
article shall not apply to any committee as defined in Section 82013
which is required to and does file any statement pursuant to the
provisions of Article 2 (commencing with Section 84200) of Chapter 4
of Title 9.


12581.2.  As used in this article, "solicitation" or "soliciting"
for charitable purposes means any request, plea, entreaty, demand, or
invitation, or attempt thereof, to give money or property, in
connection with which any of the following applies:
   (a) Any appeal is made for charitable purposes.
   (b) The name of any charity, philanthropic or charitable
organization, is used or referred to in any such appeal as an
inducement for making any such gift.
   (c) Any statement is made to the effect that the gift or any part
thereof will go to or be used for any charitable purpose or
organization.
   (d) The name of any organization of law enforcement personnel,
firefighters or other persons who protect the public safety is used
or referred to as an inducement for transferring any money or
property, unless the only expressed or implied purpose of the
solicitation is for the sole benefit of the actual active membership
of the organization.


12582.  "Trustee" means (a) any individual, group of individuals,
corporation, unincorporated association, or other legal entity
holding property in trust pursuant to any charitable trust, (b) any
corporation or unincorporated association which has accepted property
to be used for a particular charitable purpose as distinguished from
the general purposes of the corporation or unincorporated
association, and (c) a corporation or unincorporated association
formed for the administration of a charitable trust, pursuant to the
directions of the settlor or at the instance of the trustee.



12582.1.  "Charitable corporation" means any nonprofit corporation
organized under the laws of this State for charitable or eleemosynary
purposes and any similar foreign corporation doing business or
holding property in this State for such purposes.




12583.  The filing, registration, and reporting provisions of this
article do not apply to the United States, any state, territory, or
possession of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, or to any of their agencies or
governmental subdivisions, to any religious corporation sole or other
religious corporation or organization that holds property for
religious purposes, or to any officer, director, or trustee thereof
who holds property for like purposes, to a cemetery corporation
regulated under Chapter 19 (commencing with Section 9600) of Division
3 of the Business and Professions Code, or to any committee as
defined in Section 82013 that is required to and does file any
statement pursuant to Article 2 (commencing with Section 84200) of
Chapter 4 of Title 9, or to a charitable corporation or
unincorporated association organized and operated primarily as a
religious organization, educational institution, hospital, or a
health care service plan licensed pursuant to Section 1349 of the
Health and Safety Code.



12584.  The Attorney General shall establish and maintain a register
of charitable corporations, unincorporated associations, and
trustees subject to this article and of the particular trust or other
relationship under which they hold property for charitable purposes
and, to that end, may conduct whatever investigation is necessary,
and shall obtain from public records, court officers, taxing
authorities, trustees, and other sources, whatever information,
copies of instruments, reports, and records are needed for the
establishment and maintenance of the register.



12585.  (a) Every charitable corporation, unincorporated
association, and trustee subject to this article shall file with the
Attorney General an initial registration form, under oath, setting
forth information and attaching documents prescribed in accordance
with rules and regulations of the Attorney General, within 30 days
after the corporation, unincorporated association, or trustee
initially receives property. A trustee is not required to register as
long as the charitable interest in a trust is a future interest, but
shall do so within 30 days after any charitable interest in a trust
becomes a present interest.
   (b) The Attorney General shall adopt rules and regulations as to
the contents of the initial registration form and the manner of
executing and filing that document or documents.




12586.  (a) Except as otherwise provided and except corporate
trustees which are subject to the jurisdiction of the Commissioner of
Financial Institutions of the State of California under Division 1
(commencing with Section 99) of the Financial Code or to the
Comptroller of the Currency of the United States, every charitable
corporation, unincorporated association, and trustee subject to this
article shall, in addition to filing copies of the instruments
previously required, file with the Attorney General periodic written
reports, under oath, setting forth information as to the nature of
the assets held for charitable purposes and the administration
thereof by the corporation, unincorporated association, or trustee,
in accordance with rules and regulations of the Attorney General.
   (b) The Attorney General shall make rules and regulations as to
the time for filing reports, the contents thereof, and the manner of
executing and filing them. The Attorney General may classify trusts
and other relationships concerning property held for a charitable
purpose as to purpose, nature of assets, duration of the trust or
other relationship, amount of assets, amounts to be devoted to
charitable purposes, nature of trustee, or otherwise, and may
establish different rules for the different classes as to time and
nature of the reports required to the ends (1) that he or she shall
receive reasonably current, periodic reports as to all charitable
trusts or other relationships of a similar nature, which will enable
him or her to ascertain whether they are being properly administered,
and (2) that periodic reports shall not unreasonably add to the
expense of the administration of charitable trusts and similar
relationships. The Attorney General may suspend the filing of reports
as to a particular charitable trust or relationship for a
reasonable, specifically designated time upon written application of
the trustee filed with the Attorney General and after the Attorney
General has filed in the register of charitable trusts a written
statement that the interests of the beneficiaries will not be
prejudiced thereby and that periodic reports are not required for
proper supervision by his or her office.
   (c) A copy of an account filed by the trustee in any court having
jurisdiction of the trust or other relationship, if the account
substantially complies with the rules and regulations of the Attorney
General, may be filed as a report required by this section.
   (d) The first periodic written report, unless the filing thereof
is suspended as herein provided, shall be filed not later than four
months and 15 days following the close of the first calendar or
fiscal year in which property is initially received. If any part of
the income or principal of a trust previously established is
authorized or required to be applied to a charitable purpose at the
time this article takes effect, the first report shall be filed at
the close of the calendar or fiscal year in which it was registered
with the Attorney General or not later than four months and 15 days
following the close of the calendar or fiscal period.
   (e) Every charitable corporation, unincorporated association, and
trustee required to file reports with the Attorney General pursuant
to this section that receives or accrues in any fiscal year gross
revenue of two million dollars ($2,000,000) or more, exclusive of
grants from, and contracts for services with, governmental entities
for which the governmental entity requires an accounting of the funds
received, shall do the following:
   (1) Prepare annual financial statements using generally accepted
accounting principles that are audited by an independent certified
public accountant in conformity with generally accepted auditing
standards. For any nonaudit services performed by the firm conducting
the audit, the firm and its individual auditors shall adhere to the
standards for auditor independence set forth in the latest revision
of the Government Auditing Standards, issued by the Comptroller
General of the United States (the Yellow Book). The Attorney General
may, by regulation, prescribe standards for auditor independence in
the performance of nonaudit services, including standards different
from those set forth in the Yellow Book. If a charitable corporation
or unincorporated association that is required to prepare an annual
financial statement pursuant to this subdivision is under the control
of another organization, the controlling organization may prepare a
consolidated financial statement. The audited financial statements
shall be available for inspection by the Attorney General and by
members of the public no later than nine months after the close of
the fiscal year to which the statements relate. A charity shall make
its annual audited financial statements available to the public in
the same manner that is prescribed for IRS Form 990 by the latest
revision of Section 6104(d) of the Internal Revenue Code and
associated regulations.
   (2) If it is a corporation, have an audit committee appointed by
the board of directors. The audit committee may include persons who
are not members of the board of directors, but the member or members
of the audit committee shall not include any members of the staff,
including the president or chief executive officer and the treasurer
or chief financial officer. If the corporation has a finance
committee, it must be separate from the audit committee. Members of
the finance committee may serve on the audit committee; however, the
chairperson of the audit committee may not be a member of the finance
committee and members of the finance committee shall constitute less
than one-half of the membership of the audit committee. Members of
the audit committee shall not receive any compensation from the
corporation in excess of the compensation, if any, received by
members of the board of directors for service on the board and shall
not have a material financial interest in any entity doing business
with the corporation. Subject to the supervision of the board of
directors, the audit committee shall be responsible for recommending
to the board of directors the retention and termination of the
independent auditor and may negotiate the independent auditor's
compensation, on behalf of the board of directors. The audit
committee shall confer with the auditor to satisfy its members that
the financial affairs of the corporation are in order, shall review
and determine whether to accept the audit, shall assure that any
nonaudit services performed by the auditing firm conform with
standards for auditor independence referred to in paragraph (1), and
shall approve performance of nonaudit services by the auditing firm.
If the charitable corporation that is required to have an audit
committee pursuant to this subdivision is under the control of
another corporation, the audit committee may be part of the board of
directors of the controlling corporation.
   (f) If, independent of the audit requirement set forth in
paragraph (1) of subdivision (e), a charitable corporation,
unincorporated association, or trustee required to file reports with
the Attorney General pursuant to this section prepares financial
statements that are audited by a certified public accountant, the
audited financial statements shall be available for inspection by the
Attorney General and shall be made available to members of the
public in conformity with paragraph (1) of subdivision (e).
   (g) The board of directors of a charitable corporation or
unincorporated association, or an authorized committee of the board,
and the trustee or trustees of a charitable trust shall review and
approve the compensation, including benefits, of the president or
chief executive officer and the treasurer or chief financial officer
to assure that it is just and reasonable. This review and approval
shall occur initially upon the hiring of the officer, whenever the
term of employment, if any, of the officer is renewed or extended,
and whenever the officer's compensation is modified. Separate review
and approval shall not be required if a modification of compensation
extends to substantially all employees. If a charitable corporation
is affiliated with other charitable corporations, the requirements of
this section shall be satisfied if review and approval is obtained
from the board, or an authorized committee of the board, of the
charitable corporation that makes retention and compensation
decisions regarding a particular individual.



12586.1.  In addition to a registration fee, a charitable
corporation or trustee, commercial fundraiser, fundraising counsel,
or coventurer may be assessed a late fee or an additional fee of
twenty-five dollars ($25) for each month or part of the month after
the date on which the registration statement and financial report
were due to be filed or after the period of extension granted for the
filing if the charitable corporation or trustee, commercial
fundraiser, fundraising counsel, or coventurer does any of the
following:
   (a) Exists and operates in California without being registered.
   (b) Solicits contributions in California without being registered
or, if applicable, bonded.
   (c) Fails to file its first report no later than four months and
15 days following the close of each calendar or fiscal year and has
not requested an extension of time to file the annual report.
   (d) Fails to file its subsequent annual report no later than four
months and 15 days following the close of each calendar or fiscal
year subsequent to the filing of the first report and has not
requested an extension of time to file the annual report.
   (e) Fails to file its annual registration/renewal form within the
time specified by the Attorney General irrespective of other report
filing requirements.
   (f) Fails to correct the deficiencies in its registration or
annual report within 10 days of receipt of written notice of those
deficiencies.



12586.2.  All fines, penalties, attorney's fees, if any, as
authorized by law, and costs of investigation paid to the Attorney
General pursuant to Section 12598 shall be used by the Department of
Justice solely for the administration of the Attorney General's
charitable trust enforcement responsibilities.



12587.  The Attorney General may make additional rules and
regulations necessary for the administration of this article,
provided that any assessment of an annual registration or renewal fee
from charitable trustees and corporations, commercial fundraisers,
fundraising counsel, and commercial coventurers subject to this
article, authorized by statute or regulation, shall be used by the
Department of Justice solely to operate and maintain the Attorney
General's Registry of Charitable Trusts and provide public access via
the Internet to reports filed with the Attorney General.



12587.1.  (a) The Registry of Charitable Trusts Fund is hereby
established in the State Treasury, to be administered by the
Department of Justice.
   (b) Notwithstanding any other provision of law, all registration
fees, registration renewal fees, and late fees or other fees paid to
the Department of Justice pursuant to this article, Section 2850 of
the Probate Code, or Section 320.5 of the Penal Code, shall be
deposited in the Registry of Charitable Trusts Fund.
   (c) Moneys in the fund, upon appropriation by the Legislature,
shall be used by the Attorney General solely to operate and maintain
the Attorney General's Registry of Charitable Trusts and Registry of
Conservators, Guardians, and Trustees, and provide public access via
the Internet to reports filed with the Attorney General.



12588.  The Attorney General may investigate transactions and
relationships of corporations and trustees subject to this article
for the purpose of ascertaining whether or not the purposes of the
corporation or trust are being carried out in accordance with the
terms and provisions of the articles of incorporation or other
instrument. He may require any agent, trustee, fiduciary,
beneficiary, institution, association, or corporation, or other
person to appear, at a named time and place, in the county designated
by the Attorney General, where the person resides or is found, to
give information under oath and to produce books, memoranda, papers,
documents of title, and evidence of assets, liabilities, receipts, or
disbursements in the possession or control of the person ordered to
appear.


12589.  When the Attorney General requires the attendance of any
person, as provided in Section 12588, he shall issue an order setting
forth the time when and the place where attendance is required and
shall cause the same to be delivered to or sent by registered mail to
the person at least 14 days before the date fixed for attendance.
Such order shall have the same force and effect as a subpoena and,
upon application of the Attorney General, obedience to the order may
be enforced by the superior court in the county where the person
receiving it resides or is found, in the same manner as though the
notice were a subpoena. The court, after hearing, for cause, and upon
application of any person aggrieved by the order, shall have the
right to alter, amend, revise, suspend or postpone all or any part of
its provisions.



12590.  Subject to reasonable rules and regulations adopted by the
Attorney General, the register, copies of instruments, and the
reports filed with the Attorney General shall be open to public
inspection. The Attorney General shall withhold from public
inspection any instrument so filed whose content is not exclusively
for charitable purposes.



12591.  The Attorney General may institute appropriate proceedings
to secure compliance with this article and to invoke the jurisdiction
of the court. The powers and duties of the Attorney General provided
in this article are in addition to his existing powers and duties.
Nothing in this article shall impair or restrict the jurisdiction of
any court with respect to any of the matters covered by it, except
that no court shall have jurisdiction to modify or terminate any
trust of property for charitable purposes unless the Attorney General
is a party to the proceedings.



12591.1.  (a) Any person who violates any provision of this article
with intent to deceive or defraud any charity or individual is liable
for a civil penalty not exceeding ten thousand dollars ($10,000).
   (b) Except as provided in subdivision (d), any person who violates
any other provision of this article is liable for a civil penalty,
as follows:
   (1) For the first offense, a fine not exceeding one thousand
dollars ($1,000).
   (2) For any subsequent offense, a fine not exceeding two thousand
five hundred dollars ($2,500).
   (c) Any offense committed under this article involving a
solicitation may be deemed to have been committed at either the place
at which the solicitation was initiated or at the place where the
solicitation was received.
   (d) Any person who violates only subdivision (c), (d), (e), or (f)
of Section 12586.1 shall not be liable for a civil penalty under
subdivision (b) if the person (1) has not received reasonable notice
of the violation and (2) has not been given a reasonable opportunity
to correct the violation. The Attorney General shall notify in
writing a person who violates only subdivisions (c), (d), (e), or (f)
of Section 12586.1 that he or she has 30 days to correct the
violation.
   (e) The recovery of a civil penalty pursuant to this section
precludes assessment of a late fee pursuant to Section 12586.1 for
the same offense.



12591.2.  In any case where the Attorney General has authority to
institute an action or proceeding under this article, he or she may
accept an assurance of voluntary compliance through which any person
alleged to be engaged in any method, act, or practice in violation of
this article agrees to discontinue that method, act, or practice.
The assurance may, among other terms, include a stipulation of a
voluntary payment by the person of the cost of the investigation or
of an amount to be held in escrow pending the outcome of an action or
as restitution to aggrieved persons, or both. The assurance of
voluntary compliance shall not be considered an admission of a
violation for any purpose. The assurance of compliance shall be in
writing and shall be filed with a superior court in this state for
approval and if approved shall thereafter be filed with the clerk of
the court. Matters closed may at any time be reopened by the court
for further proceedings in the public interest. In the event of an
alleged violation, the Attorney General may, at his or her
discretion, either initiate contempt proceedings or proceed as if the
assurance of voluntary compliance has not been accepted.



12592.  This article shall apply regardless of any contrary
provisions of any instrument.



12593.  Every person who offers for probate any instrument which
establishes a testamentary trust of property for charitable purposes
or who records in any county or city and county any inter vivos
transfer of property for charitable purposes shall furnish a copy of
such document to the Attorney General. The custodian of the records
of a court having jurisdiction of probate matters or of charitable
trusts shall furnish such copies of papers, records and files of his
office relating to the subject of this article as the Attorney
General requires.


12594.  Every officer, agency, board, or commission of this State
receiving applications for exemption from taxation of any
corporation, charitable trust or similar relationship in which the
corporation or trustee is subject to this article shall annually file
with the Attorney General a list of all applications received during
the year.



12595.  This act shall be so construed as to effectuate its general
purpose to make uniform the law of those states which enact it.



12596.  Any action brought by the Attorney General against trustees
or other persons holding property in trust for charitable purposes or
against any charitable corporation or any director or officer
thereof to enforce a charitable trust or to impress property with a
trust for charitable purposes or to recover property or the proceeds
thereof for and on behalf of any charitable trust or corporation, may
be brought at any time within ten (10) years after the cause of
action shall have accrued.



12597.  In any proceeding brought by the Attorney General to secure
compliance with the provisions of Sections 12584 to 12587, inclusive,
or any regulation issued pursuant thereto, the judgment, if in favor
of the state, shall provide that the person having the
responsibility or duty to comply with such provisions on behalf of
any charitable trust or charitable corporation, shall pay the
reasonable expense necessarily incurred by the state in the
investigation and prosecution of such action.



12598.  (a) The primary responsibility for supervising charitable
trusts in California, for ensuring compliance with trusts and
articles of incorporation, and for protection of assets held by
charitable trusts and public benefit corporations, resides in the
Attorney General. The Attorney General has broad powers under common
law and California statutory law to carry out these charitable trust
enforcement responsibilities. These powers include, but are not
limited to, charitable trust enforcement actions under all of the
following:
   (1) This article.
   (2) Title 8 (commencing with Section 2223) of Part 4 of Division 3
of the Civil Code.
   (3) Division 2 (commencing with Section 5000) of Title 1 of the
Corporations Code.
   (4) Sections 8111, 11703, 15004, 15409, 15680 to 15685, inclusive,
16060 to 16062, inclusive, 16064, and 17200 to 17210, inclusive, of
the Probate Code.
   (5) Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of the Business and Professions Code, and Sections 17500
and 17535 of the Business and Professions Code.
   (6) Sections 319, 326.5, and 532d of the Penal Code.
   (b) The Attorney General shall be entitled to recover from
defendants named in a charitable trust enforcement action all
reasonable attorney's fees and actual costs incurred in conducting
that action, including, but not limited to, the costs of auditors,
consultants, and experts employed or retained to assist with the
investigation, preparation, and presentation in court of the
charitable trust enforcement action.
   (c) Attorney's fees and costs shall be recovered by the Attorney
General pursuant to court order. When awarding attorneys' fees and
costs, the court shall order that the attorney's fees and costs be
paid by the charitable organization and the individuals named as
defendants in or otherwise subject to the action, in a manner that
the court finds to be equitable and fair.
   (d) Upon a finding by the court that a lawsuit filed by the
Attorney General was frivolous or brought in bad faith, the court may
award the defendant charity the costs of that action.
   (e) (1) The Attorney General may refuse to register or may revoke
or suspend the registration of a charitable corporation or trustee,
commercial fundraiser, fundraising counsel, or coventurer whenever
the Attorney General finds that the charitable corporation or
trustee, commercial fundraiser, fundraising counsel, or coventurer
has violated or is operating in violation of any provisions of this
article.
   (2) All actions of the Attorney General shall be taken subject to
the rights authorized pursuant to Chapter 4.5 (commencing with
Section 11400) of Part 1 of Division 3 of Title 2.



12599.  (a) "Commercial fundraiser for charitable purposes" means
any individual, corporation, unincorporated association, or other
legal entity who for compensation does any of the following:
   (1) Solicits funds, assets, or property in this state for
charitable purposes.
   (2) As a result of a solicitation of funds, assets, or property in
this state for charitable purposes, receives or controls the funds,
assets, or property solicited for charitable purposes.
   (3) Employs, procures, or engages any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   A commercial fundraiser for charitable purposes shall include any
person, association of persons, corporation, or other entity that
obtains a majority of its inventory for sale by the purchase,
receipt, or control for resale to the general public, of salvageable
personal property solicited by an organization qualified to solicit
donations pursuant to Section 148.3 of the Welfare and Institutions
Code.
   A commercial fundraiser for charitable purposes shall not include
a "trustee" as defined in Section 12582 or 12583, a "charitable
corporation" as defined in Section 12582.1, or any employee thereof.
A commercial fundraiser for charitable purposes shall not include an
individual who is employed by or under the control of a commercial
fundraiser for charitable purposes registered with the Attorney
General. A commercial fundraiser for charitable purposes shall not
include any federally insured financial institution that holds as a
depository funds received as a result of a solicitation for
charitable purposes.
   As used in this section, "charitable purposes" includes any
solicitation in which the name of any organization of law enforcement
personnel, firefighters, or other persons who protect the public
safety is used or referred to as an inducement for transferring any
funds, assets, or property, unless the only expressed or implied
purpose of the solicitation is for the sole benefit of the actual
active membership of the organization.
   (b) A commercial fundraiser for charitable purposes shall, prior
to soliciting any funds, assets, or property, including salvageable
personal property, in California for charitable purposes, or prior to
receiving and controlling any funds, assets, or property, including
salvageable personal property, as a result of a solicitation in this
state for charitable purposes, register with the Attorney General's
Registry of Charitable Trusts on a registration form provided by the
Attorney General. Renewals of registration shall be filed with the
Registry of Charitable Trusts by January 15 of each calendar year in
which the commercial fundraiser for charitable purposes does business
and shall be effective for one year. A registration or renewal fee
of two hundred dollars ($200) shall be required for registration of a
commercial fundraiser for charitable purposes, and shall be payable
by certified or cashier's check to the Attorney General's Registry of
Charitable Trusts at the time of registration or renewal. The
Attorney General may adjust the annual registration or renewal fee,
or means of payment, as needed pursuant to this section. The Attorney
General's Registry of Charitable Trusts may grant extensions of time
to file annual registration as required, pursuant to subdivision (b)
of Section 12586. No separate fee shall be charged by the Attorney
General for electronic registration, electronic renewal, or
electronic repayment of fees.
   (c) A commercial fundraiser for charitable purposes shall file
with the Attorney General's Registry of Charitable Trusts an annual
financial report on a form provided by the Attorney General,
accounting for all funds collected pursuant to any solicitation for
charitable purposes during the preceding calendar year. The annual
financial report shall be filed with the Attorney General's Registry
of Charitable Trusts no later than 30 days after the close of the
preceding calendar year.
   (d) The contents of the forms for annual registration and annual
financial reporting by commercial fundraisers for charitable purposes
shall be established by the Attorney General in a manner consistent
with the procedures set forth in subdivisions (a) and (b) of Section
12586. The annual financial report shall require a detailed, itemized
accounting of funds, assets, or property, solicited for charitable
purposes on behalf of each charitable organization exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code or for
each charitable purpose during the accounting period, and shall
include, among other data, the following information for funds,
assets, or property, solicited by the commercial fundraiser for
charitable purposes:
   (1) Total revenue.
   (2) The fee or commission charged by the commercial fundraiser for
charitable purposes.
   (3) Salaries paid by the commercial fundraiser for charitable
purposes to its officers and employees.
   (4) Fundraising expenses.
   (5) Distributions to the identified charitable organization or
purpose.
   (6) The names and addresses of any director, officer, or employee
of the commercial fundraiser for charitable purposes who is a
director, officer, or employee of any charitable organization listed
in the annual financial report.
   (e) A commercial fundraiser for charitable purposes that obtains a
majority of its inventory for sale by the purchase, receipt, or
control for resale to the general public, of salvageable personal
property solicited by an organization qualified to solicit donations
pursuant to Section 148.3 of the Welfare and Institutions Code shall
file with the Attorney General's Registry of Charitable Trusts, and
not with the sheriff of any county, an annual financial report on a
form provided by the Attorney General that is separate and distinct
from forms filed by other commercial fundraisers for charitable
purposes pursuant to subdivisions (c) and (d).
   (f) It shall be unlawful for any commercial fundraiser for
charitable purposes to solicit funds in this state for charitable
purposes unless the commercial fundraiser for charitable purposes has
complied with the registration or annual renewal and financial
reporting requirements of this article. Failure to comply with these
registration or annual renewal and financial reporting requirements
shall be grounds for injunction against solicitation in this state
for charitable purposes and other civil remedies provided by law.
   (g) A commercial fundraiser for charitable purposes is a
constructive trustee for charitable purposes as to all funds
collected pursuant to solicitation for charitable purposes and shall
account to the Attorney General for all funds. A commercial
fundraiser for charitable purposes is subject to the Attorney General'
s supervision and enforcement over charitable funds and assets to the
same extent as a trustee for charitable purposes under this article.
   (h) Not less than 10 working days prior to the commencement of
each solicitation campaign, event, or service, or not later than
commencement of solicitation for solicitations to aid victims of
emergency hardship or disasters, a commercial fundraiser for
charitable purposes shall file with the Attorney General's Registry
of Charitable Trusts a notice on a form prescribed by the Attorney
General that sets forth all of the following:
   (1) The name, address, and telephone number of the commercial
fundraiser for charitable purposes.
   (2) The name, address, and telephone number of the charitable
organization with whom the commercial fundraiser has contracted.
   (3) The fundraising methods to be used.
   (4) The projected dates when performance under the contract will
commence and terminate.
   (5) The name, address, and telephone number of the person
responsible for directing and supervising the work of the commercial
fundraiser under the contract.
   (i) There shall be a written contract between a commercial
fundraiser for charitable purposes and a charitable organization for
each solicitation campaign, event, or service, that shall be signed
by the authorized contracting officer for the commercial fundraiser
and by an official of the charitable organization who is authorized
to sign by the organization's governing body. The contract shall be
available for inspection by the Attorney General and shall contain
all of the following provisions:
   (1) The legal name and address of the charitable organization as
registered with the Registry of Charitable Trusts, unless the
charitable organization is exempt from registration.
   (2) A statement of the charitable purpose for which the
solicitation campaign, event, or service is being conducted.
   (3) A statement of the respective obligations of the commercial
fundraiser and the charitable organization.
   (4) If the commercial fundraiser is to be paid a fixed fee, a
statement of the fee to be paid to the commercial fundraiser and a
good faith estimate of what percentage the fee will constitute of the
total contributions received. The contract shall clearly disclose
the assumptions upon which the estimate is based, and the stated
assumptions shall be based upon all of the relevant facts known to
the commercial fundraiser regarding the solicitation to be conducted
by the commercial fundraiser.
   (5) If a percentage fee is to be paid to the commercial
fundraiser, a statement of the percentage of the total contributions
received that will be remitted to or retained by the charitable
organization, or, if the solicitation involves the sale of goods or
services or the sale of admissions to a fundraising event, the
percentage of the purchase price that will be remitted to the
charitable organization. The stated percentage shall be calculated by
subtracting from contributions received and sales receipts not only
the commercial fundraiser's fee, but also any additional amounts that
the charitable organization is obligated to pay as fundraising
costs.
   (6) The effective and termination dates of the contract and the
date solicitation activity is to commence within the state.
   (7) A provision that requires that each contribution in the
control or custody of the commercial fundraiser shall in its entirety
and within five working days of its receipt comply with either of
the following:
   (A) Be deposited in an account at a bank or other federally
insured financial institution that is solely in the name of the
charitable organization and over which the charitable organization
has sole control of withdrawals.
   (B) Be delivered to the charitable organization in person, by
United States express mail, or by another method of delivery
providing for overnight delivery.
   (8) A statement that the charitable organization exercises control
and approval over the content and frequency of any solicitation.
   (9) If the commercial fundraiser proposes to make any payment in
cash or in kind to any person or legal entity to secure any person's
attendance at, or sponsorship, approval, or endorsement of, a charity
fundraising event, the maximum dollar amount of those payments shall
be set forth in the contract. "Charity fundraising event" means any
gathering of persons, including, but not limited to, a party,
banquet, concert, or show, that is held for the purpose or claimed
purpose of raising funds for any charitable purpose or organization.
   (10) A provision that includes all of the following statements:
   (A) The charitable organization has the right to cancel the
contract without cost, penalty, or liability for a period of 10 days
following the date on which the contract is executed.
   (B) The charitable organization may cancel the contract by serving
a written notice of cancellation on the commercial fundraiser.
   (C) If mailed, service shall be by certified mail, return receipt
requested, and cancellation shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (D) Any funds collected after effective notice that the contract
has been canceled shall be deemed to be held in trust for the benefit
of the charitable organization without deduction for costs or
expenses of any nature.
   (E) The charitable organization shall be entitled to recover all
funds collected after the date of cancellation.
   (11) A provision that includes all of the following statements:
   (A) Following the initial 10-day cancellation period, the
charitable organization may terminate the contract by giving 30 days'
written notice.
   (B) If mailed, service of the notice shall be by certified mail,
return receipt requested, and shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (C) In the event of termination under this subdivision, the
charitable organization shall be liable for services provided by the
commercial fundraiser up to 30 days after the effective service of
the notice.
   (12) A provision that, following the initial 10-day cancellation
period, the charitable organization may terminate the contract at any
time upon written notice, without payment or compensation of any
kind to the commercial fundraiser, if the commercial fundraiser or
its agents, employees, or representatives do any of the following:
   (A) Make any material misrepresentations in the course of
solicitations or with respect to the charitable organization.
   (B) Are found by the charitable organization to have been
convicted of a crime arising from the conduct of a solicitation for a
charitable organization or purpose punishable as a misdemeanor or a
felony.
   (C) Otherwise conduct fundraising activities in a manner that
causes or could cause public disparagement of the charitable
organization's good name or good will.
   (13) Any other information required by the regulations of the
Attorney General.
   (j) It shall be unlawful for a commercial fundraiser for
charitable purposes to not disclose the percentage of total
fundraising expenses of the fundraiser upon receiving a written or
oral request from a person solicited for a contribution for a
charitable purpose. "Percentage of total fundraising expenses," as
used in this section, means the ratio of the total expenses of the
fundraiser to the total revenue received by the fundraiser for the
charitable purpose for which funds are being solicited, as reported
on the most recent financial report filed with the Attorney General's
Registry of Charitable Trusts. A commercial fundraiser shall
disclose this information in writing within five working days from
receipt of a request by mail or facsimile. A commercial fundraiser
shall orally disclose this information immediately upon a request
made in person or in a telephone conversation and shall follow this
response with a written disclosure within five working days. Failure
to comply with the requirements of this subdivision shall be grounds
for an injunction against solicitation in this state for charitable
purposes and other civil remedies provided by law.
   (k) If the Attorney General issues a report to the public
containing information obtained from registration forms or financial
report forms filed by commercial fundraisers for charitable purposes,
there shall be a separate section concerning commercial fundraisers
for charitable purposes that obtain a majority of their inventory for
sale by the purchase, receipt, or control for resale to the general
public, of salvageable personal property solicited by an organization
qualified to solicit donations pursuant to Section 148.3 of the
Welfare and Institutions Code. The report shall include an
explanation of the distinctions between these thrift store operations
and other types of commercial fundraising.
   (l) No person may act as a commercial fundraiser for charitable
purposes if that person, any officer or director of that person's
business, any person with a controlling interest in the business, or
any person the commercial fundraiser employs, engages, or procures to
solicit for compensation, has been convicted by a court of any state
or the United States of a crime arising from the conduct of a
solicitation for a charitable organization or purpose punishable as a
misdemeanor or felony.
   (m) A commercial fundraiser for charitable purposes shall not
solicit in the state on behalf of a charitable organization unless
that charitable organization is registered or is exempt from
registration with the Attorney General's Registry of Charitable
Trusts.
   (n) If any provision of this section or the application thereof to
any person or circumstances is held invalid, that invalidity shall
not affect any other provision or application of this section that
can be given effect without the invalid provision or application, and
to this end the provisions of this section are severable.



12599.1.  (a) "Fundraising counsel for charitable purposes" is
defined as any individual, corporation, unincorporated association,
or other legal entity who is described by all of the following:
   (1) For compensation plans, manages, advises, counsels, consults,
or prepares material for, or with respect to, the solicitation in
this state of funds, assets, or property for charitable purposes.
   (2) Does not solicit funds, assets, or property for charitable
purposes.
   (3) Does not receive or control funds, assets, or property
solicited for charitable purposes in this state.
   (4) Does not employ, procure, or engage any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   (b) "Fundraising counsel for charitable purposes" does not include
any of the following:
   (1) An attorney, investment counselor, or banker who in the
conduct of that person's profession advises a client when actually
engaged in the giving of legal, investment, or financial advice.
   (2) A trustee as defined in Section 12582 or 12583.
   (3) A charitable corporation as defined in Section 12582.1, or any
employee thereof.
   (4) A person employed by or under the control of a fundraising
counsel for charitable purposes, as defined in subdivision (a).
   (5) A person, corporation, or other legal entity, engaged as an
independent contractor directly by a trustee or a charitable
corporation, that prints, reproduces, or distributes written
materials prepared by a trustee, a charitable corporation, or any
employee thereof, or that performs artistic or graphic services with
respect to written materials prepared by a trustee, a charitable
corporation, or any employee thereof, provided that the independent
contractor does not perform any of the activities described in
paragraph (1) of subdivision (a).
   (6) A person whose total annual gross compensation for performing
any activity described in paragraph (1) of subdivision (a) does not
exceed twenty-five thousand dollars ($25,000).
   (c) A fundraising counsel for charitable purposes shall, prior to
managing, advising, counseling, consulting, or preparing material
for, or with respect to, the solicitation in this state of funds,
assets, or property for charitable purposes, register with the
Attorney General's Registry of Charitable Trusts on a registration
form provided by the Attorney General. Renewals of registration shall
be filed with the Registry of Charitable Trusts by January 15 of
each calendar year in which the fundraising counsel for charitable
purposes does business and shall be effective for one year.
   A registration or renewal fee of two hundred dollars ($200) shall
be required for registration of a fundraising counsel for charitable
purposes, and shall be payable by certified or cashier's check to the
Attorney General's Registry of Charitable Trusts at the time of
registration and renewal. The Attorney General may adjust the annual
registration or renewal fee, or means of payment, as needed pursuant
to this section. The Attorney General's Registry of Charitable Trusts
may grant extensions of time to file annual registration as
required, pursuant to subdivision (b) of Section 12586.
   (d) A fundraising counsel for charitable purposes shall file
annually with the Attorney General's Registry of Charitable Trusts on
a form provided by the Attorney General, a report listing each
person, corporation, unincorporated association, or other legal
entity for whom the fundraising counsel has performed any services
described in paragraph (1) of subdivision (a), and a statement
certifying that the fundraising counsel had a written contract with
each listed person, corporation, unincorporated association, or other
legal entity that complied with the requirements of subdivision (f).
   (e) Not less than 10 working days prior to the commencement of the
performance of any service for a charitable organization by a
fundraising counsel for charitable purposes, or not later than
commencement of solicitation for solicitations to aid victims of
emergency hardship or disasters, the fundraising counsel shall file
with the Attorney General's Registry of Charitable Trusts a notice on
a form prescribed by the Attorney General that sets forth all of the
following:
   (1) The name, address, and telephone number of the fundraising
counsel for charitable purposes.
   (2) The name, address, and telephone number of the charitable
organization with whom the fundraising counsel has contracted.
   (3) The projected dates when performance under the contract will
commence and terminate.
   (4) The name, address, and telephone number of the person
responsible for directing and supervising the work of the fundraising
counsel under the contract.
   (f) There shall be a written contract between a fundraising
counsel for charitable purposes and a charitable organization for
each service to be performed by the fundraising counsel for the
charitable organization, that shall be signed by the authorized
contracting officer for the fundraising counsel and by an official of
the charitable organization who is authorized to sign by the
organization's governing body. The contract shall be available for
inspection by the Attorney General and shall contain all of the
following provisions:
   (1) The legal name and address of the charitable organization as
registered with the Registry of Charitable Trusts unless the
charitable organization is exempt from registration.
   (2) A statement of the charitable purpose for which the
solicitation campaign is being conducted.
   (3) A statement of the respective obligations of the fundraising
counsel and the charitable organization.
   (4) A clear statement of the fees and any other form of
compensation, including commissions and property, that will be paid
to the fundraising counsel.
   (5) The effective and termination dates of the contract and the
date services will commence with respect to solicitation in this
state of contributions for a charitable organization.
   (6) A statement that the fundraising counsel will not at any time
solicit funds, assets, or property for charitable purposes, receive
or control funds, assets, or property solicited for charitable
purposes, or employ, procure, or engage any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   (7) A statement that the charitable organization exercises control
and approval over the content and frequency of any solicitation.
   (8) A provision that includes all of the following statements:
   (A) The charitable organization has the right to cancel the
contract without cost, penalty, or liability for a period of 10 days
following the date on which the contract is executed.
   (B) The charitable organization may cancel the contract by serving
a written notice of cancellation on the fundraising counsel.
   (C) If mailed, service shall be by certified mail, return receipt
requested, and cancellation shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (9) A provision that includes all of the following statements:
   (A) Following the initial 10-day cancellation period, the
charitable organization may terminate the contract by giving 30 days'
written notice.
   (B) If mailed, service of the notice shall be by certified mail,
return receipt requested, and shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (C) In the event of termination under this subdivision, the
charitable organization shall be liable for services provided by the
fundraising counsel to the effective date of the termination.
   (10) Any other information required by the regulations of the
Attorney General.
   (g) It shall be unlawful for any fundraising counsel for
charitable purposes to manage, advise, counsel, consult, or prepare
material for, or with respect to, the solicitation in this state of
funds, assets, or property for charitable purposes unless the
fundraising counsel for charitable purposes has complied with the
registration or annual renewal and financial reporting requirements
of this article.
   (h) A fundraising counsel for charitable purposes is subject to
the Attorney General's supervision and enforcement to the same extent
as a trustee for charitable purposes under this article.
   (i) If any provision of this section or the application thereof to
any person or circumstances is held invalid, that invalidity shall
not affect other provisions or application of this section which can
be given effect without the invalid provision or application, and to
this end the provisions of this section are severable.



12599.2.  (a) "Commercial coventurer" is defined as any person who,
for profit, is regularly and primarily engaged in trade or commerce
other than in connection with the raising of funds, assets, or
property for charitable organizations or charitable purposes, and who
represents to the public that the purchase or use of any goods,
services, entertainment, or any other thing of value will benefit a
charitable organization or will be used for a charitable purpose.
   (b) A commercial coventurer is a trustee as defined in Section
12582. Notwithstanding the requirements of Sections 12585 and 12586,
a commercial coventurer is not required to register or file periodic
reports with the Attorney General provided that the commercial
coventurer:
   (1) Has a written contract with a trustee or charitable
corporation subject to this article, signed by two officers of the
trustee or charitable corporation, prior to representing to the
public that the purchase or use of any goods, services,
entertainment, or any other thing of value will benefit the trustee
or charitable corporation or will be used for a charitable purpose.
   (2) Within 90 days after commencement of those representations,
and at the end of each successive 90-day period during which the
representations are made, transfers to that trustee or charitable
corporation subject to this article all funds, assets, or property
received as a result of the representations.
   (3) Provides in conjunction with each transfer required by
paragraph (2) a written accounting to the trustee or charitable
corporation subject to this article of all funds, assets, or property
received sufficient to enable the trustee or charitable corporation
(A) to determine that representations made to the public on its
behalf have been adhered to accurately and completely, and (B) to
prepare its periodic report filed with the Attorney General pursuant
to Section 12586.
   (c) A commercial coventurer that does not meet the requirements of
paragraphs (1), (2), and (3) of subdivision (b) shall register and
report to the Attorney General on forms required by the Attorney
General. An annual registration or renewal fee of two hundred dollars
($200) shall be required for registration or renewal of registration
of a commercial coventurer, and shall be payable by certified or
cashier's check to the Attorney General's Registry of Charitable
Trusts at the time of registration or renewal. The Attorney General
may adjust the annual registration or renewal fee, or means of
payment, as needed pursuant to this section.




12599.3.  (a) A contract between a charitable organization and a
commercial fundraiser for charitable purposes or fundraising counsel
for charitable purposes shall be voidable by the charitable
organization unless the commercial fundraiser or the fundraising
counsel is registered with the Attorney General's Registry of
Charitable Trusts prior to the commencement of the solicitation.
   (b) Whenever a charitable organization contracts with a commercial
fundraiser for charitable purposes or fundraising counsel for
charitable purposes, the charitable organization shall have the right
to cancel the contract without cost, penalty, or liability for a
period of 10 days following the date on which the contract is
executed. Any provision in the contract that is intended to waive
this right of cancellation shall be void and unenforceable.
   (c) A charitable organization may cancel a contract pursuant to
subdivision (b) by serving a written notice of cancellation on the
fundraising counsel or commercial fundraiser. If mailed, service
shall be by certified mail, return receipt requested, and
cancellation shall be deemed effective upon the expiration of five
calendar days from the date of mailing. The notice shall be
sufficient if it indicates that the charitable organization does not
intend to be bound by the contract.
   (d) Whenever a charitable organization cancels a contract pursuant
to this section, it shall mail a duplicate copy of the notice of
cancellation to the Attorney General's Registry of Charitable Trusts.
   (e) Any funds collected after effective notice that a contract has
been canceled shall be deemed to be held in trust for the benefit of
the charitable organization without deduction for costs or expenses
of any nature. A charitable organization shall be entitled to recover
all funds collected after the date of cancellation.
   (f) Following the initial 10-day cancellation period, a charitable
organization may terminate a contract with a commercial fundraiser
for charitable purposes or a fundraising counsel for charitable
purposes by giving 30 days' written notice. If mailed, service of the
notice shall be by certified mail, return receipt requested, and
shall be deemed effective upon the expiration of five calendar days
from the date of mailing. In the event of termination under this
subdivision, the charitable organization shall be liable for services
provided by the commercial fundraiser or fundraising counsel up to
30 days after the effective service of the notice.
   (g) Following the initial 10-day cancellation period, a charitable
organization may terminate at any time upon written notice a
contract with a commercial fundraiser for charitable purposes or a
fundraising counsel for charitable purposes, without payment or
compensation of any kind to the commercial fundraiser or fundraising
counsel, if the commercial fundraiser or the fundraising counsel, or
their agents, employees, or representatives (1) make any material
misrepresentations in the course of solicitations or with respect to
the charitable organization, (2) are found by the charitable
organization to have been convicted of a crime arising from the
conduct of a solicitation for a charitable organization or purpose
that is punishable as a felony or misdemeanor, or (3) otherwise
conduct fundraising activities in a manner that causes or could cause
public disparagement of the charitable organization's good name or
good will.



12599.5.  Each application for registration or renewal of
registration under subdivision (b) of Section 12599 shall be
accompanied by a cash deposit or by a bond issued by an admitted
surety in favor of the State of California and in a form acceptable
to the Attorney General. The cash deposit or bond shall be in the
amount of twenty-five thousand dollars ($25,000) and shall be for the
benefit of any person damaged as a result of malfeasance or
misfeasance in the conduct of the activities specified in subdivision
(a) of Section 12599. The bond may be in the form of a rider to a
larger blanket liability bond.



12599.6.  (a) Charitable organizations and commercial fundraisers
for charitable purposes shall not misrepresent the purpose of the
charitable organization or the nature or purpose or beneficiary of a
solicitation. A misrepresentation may be accomplished by words or
conduct or failure to disclose a material fact.
   (b) A charitable organization must establish and exercise control
over its fundraising activities conducted for its benefit, including
approval of all written contracts and agreements, and must assure
that fundraising activities are conducted without coercion.
   (c) A charitable organization shall not enter into any contract or
agreement with, or employ, any commercial fundraiser for charitable
purposes or fundraising counsel for charitable purposes unless that
commercial fundraiser or fundraising counsel is registered with the
Attorney General's Registry of Charitable Trusts or, if not
registered, agrees to register prior to the commencement of any
solicitation.
   (d) A charitable organization shall not enter into any contract or
agreement with, or raise any funds for, any charitable organization
required to be registered pursuant to this act unless that charitable
organization is registered with the Attorney General's Registry of
Charitable Trusts or, if not registered, agrees to register prior to
the commencement of the solicitation.
   (e) Each contribution in the control or custody of a commercial
fundraiser for charitable purposes shall in its entirety and within
five working days of receipt (1) be deposited in an account at a bank
or other federally insured financial institution that is solely in
the name of the charitable organization on whose behalf the
contribution was solicited and over which the charitable organization
has sole control of withdrawals or, (2) be delivered to the
charitable organization in person, by Express Mail, or by another
method of delivery providing for overnight delivery.
   (f) Regardless of injury, the following acts and practices are
prohibited in the planning, conduct, or execution of any solicitation
or charitable sales promotion:
   (1) Operating in violation of, or failing to comply with, any of
the requirements of this act or regulations or orders of the Attorney
General, or soliciting contributions after registration with the
Attorney General's Registry of Charitable Trusts has expired or has
been suspended or revoked.
   (2) Using any unfair or deceptive acts or practices or engaging in
any fraudulent conduct that creates a likelihood of confusion or
misunderstanding.
   (3) Using any name, symbol, emblem, statement, or other material
stating, suggesting, or implying to a reasonable person that the
contribution is to or for the benefit of a particular charitable
organization when that is not the fact.
   (4) Misrepresenting or misleading anyone in any manner to believe
that the person on whose behalf a solicitation or charitable sales
promotion is being conducted is a charitable organization or that the
proceeds of the solicitation or charitable sales promotion will be
used for charitable purposes when that is not the fact.
   (5) Misrepresenting or misleading anyone in any manner to believe
that any other person sponsors, endorses, or approves a charitable
solicitation or charitable sales promotion when that person has not
given consent in writing to the use of the person's name for these
purposes.
   (6) Misrepresenting or misleading anyone in any manner to believe
that goods or services have endorsement, sponsorship, approval,
characteristics, ingredients, uses, benefits, or qualities that they
do not have or that a person has endorsement, sponsorship, approval,
status, or affiliation that the person does not have.
   (7) Using or exploiting the fact of registration with the Attorney
General's Registry of Charitable Trusts so as to lead any person to
believe that the registration in any manner constitutes an
endorsement or approval by the Attorney General. The use of the
following statement is not prohibited:
   "The official registration and financial information regarding
(insert the legal name of the charity as registered with the Registry
of Charitable Trusts) can be obtained from the Attorney General's
Web site at https://caag.state.ca.us/charities/. Registration does not
imply endorsement."
   (8) Representing directly or by implication that a charitable
organization will receive an amount greater than the actual net
proceeds reasonably estimated to be retained by the charity for its
use.
   (9) With respect to solicitations by commercial fundraisers for
charitable purposes on behalf of law enforcement personnel,
firefighters, or other persons who protect the public safety,
issuing, offering, giving, delivering, or distributing any honorary
membership cards, courtesy cards, or similar cards, or any stickers,
emblems, plates, or other items that could be used for display on a
motor vehicle, and that suggest affiliation with, or endorsement by
any public safety personnel or a group comprising such personnel.
   (10) (A) Soliciting for advertising to appear in a for-profit
publication that relates to, purports to relate to, or that could
reasonably be construed to relate to, any charitable purpose without
making the following disclosures at the time of solicitation:
   (i) The publication is a for-profit, commercial enterprise.
   (ii) The true name of the solicitor and the fact that the
solicitor is a professional solicitor.
   (iii) The publication is not affiliated with or sponsored by any
charitable organization.
   (B) Where a sale of advertising has been made, the solicitor,
prior to accepting any money for the sale, shall make to the
purchaser the disclosures required by subparagraph (A) in written
form and in conspicuous type.
   (11) Representing that any part of the contributions solicited by
a charitable organization will be given or donated to any other
charitable organization unless that organization has consented in
writing to the use of its name prior to the solicitation. The written
consent shall be signed by one authorized officer, director, or
trustee of the charitable organization.
   (12) Representing that tickets to events will be donated for use
by another, unless all of the following requirements have been met:
   (A) The charitable organiza	
	
	
	
	

State Codes and Statutes

Statutes > California > Gov > 12580-12599.7

GOVERNMENT CODE
SECTION 12580-12599.7



12580.  This article may be cited as the Supervision of Trustees and
Fundraisers for Charitable Purposes Act.



12581.  This article applies to all 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 coventurers, over which the state or the Attorney General
has enforcement or supervisory powers. The provisions of this
article shall not apply to any committee as defined in Section 82013
which is required to and does file any statement pursuant to the
provisions of Article 2 (commencing with Section 84200) of Chapter 4
of Title 9.


12581.2.  As used in this article, "solicitation" or "soliciting"
for charitable purposes means any request, plea, entreaty, demand, or
invitation, or attempt thereof, to give money or property, in
connection with which any of the following applies:
   (a) Any appeal is made for charitable purposes.
   (b) The name of any charity, philanthropic or charitable
organization, is used or referred to in any such appeal as an
inducement for making any such gift.
   (c) Any statement is made to the effect that the gift or any part
thereof will go to or be used for any charitable purpose or
organization.
   (d) The name of any organization of law enforcement personnel,
firefighters or other persons who protect the public safety is used
or referred to as an inducement for transferring any money or
property, unless the only expressed or implied purpose of the
solicitation is for the sole benefit of the actual active membership
of the organization.


12582.  "Trustee" means (a) any individual, group of individuals,
corporation, unincorporated association, or other legal entity
holding property in trust pursuant to any charitable trust, (b) any
corporation or unincorporated association which has accepted property
to be used for a particular charitable purpose as distinguished from
the general purposes of the corporation or unincorporated
association, and (c) a corporation or unincorporated association
formed for the administration of a charitable trust, pursuant to the
directions of the settlor or at the instance of the trustee.



12582.1.  "Charitable corporation" means any nonprofit corporation
organized under the laws of this State for charitable or eleemosynary
purposes and any similar foreign corporation doing business or
holding property in this State for such purposes.




12583.  The filing, registration, and reporting provisions of this
article do not apply to the United States, any state, territory, or
possession of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, or to any of their agencies or
governmental subdivisions, to any religious corporation sole or other
religious corporation or organization that holds property for
religious purposes, or to any officer, director, or trustee thereof
who holds property for like purposes, to a cemetery corporation
regulated under Chapter 19 (commencing with Section 9600) of Division
3 of the Business and Professions Code, or to any committee as
defined in Section 82013 that is required to and does file any
statement pursuant to Article 2 (commencing with Section 84200) of
Chapter 4 of Title 9, or to a charitable corporation or
unincorporated association organized and operated primarily as a
religious organization, educational institution, hospital, or a
health care service plan licensed pursuant to Section 1349 of the
Health and Safety Code.



12584.  The Attorney General shall establish and maintain a register
of charitable corporations, unincorporated associations, and
trustees subject to this article and of the particular trust or other
relationship under which they hold property for charitable purposes
and, to that end, may conduct whatever investigation is necessary,
and shall obtain from public records, court officers, taxing
authorities, trustees, and other sources, whatever information,
copies of instruments, reports, and records are needed for the
establishment and maintenance of the register.



12585.  (a) Every charitable corporation, unincorporated
association, and trustee subject to this article shall file with the
Attorney General an initial registration form, under oath, setting
forth information and attaching documents prescribed in accordance
with rules and regulations of the Attorney General, within 30 days
after the corporation, unincorporated association, or trustee
initially receives property. A trustee is not required to register as
long as the charitable interest in a trust is a future interest, but
shall do so within 30 days after any charitable interest in a trust
becomes a present interest.
   (b) The Attorney General shall adopt rules and regulations as to
the contents of the initial registration form and the manner of
executing and filing that document or documents.




12586.  (a) Except as otherwise provided and except corporate
trustees which are subject to the jurisdiction of the Commissioner of
Financial Institutions of the State of California under Division 1
(commencing with Section 99) of the Financial Code or to the
Comptroller of the Currency of the United States, every charitable
corporation, unincorporated association, and trustee subject to this
article shall, in addition to filing copies of the instruments
previously required, file with the Attorney General periodic written
reports, under oath, setting forth information as to the nature of
the assets held for charitable purposes and the administration
thereof by the corporation, unincorporated association, or trustee,
in accordance with rules and regulations of the Attorney General.
   (b) The Attorney General shall make rules and regulations as to
the time for filing reports, the contents thereof, and the manner of
executing and filing them. The Attorney General may classify trusts
and other relationships concerning property held for a charitable
purpose as to purpose, nature of assets, duration of the trust or
other relationship, amount of assets, amounts to be devoted to
charitable purposes, nature of trustee, or otherwise, and may
establish different rules for the different classes as to time and
nature of the reports required to the ends (1) that he or she shall
receive reasonably current, periodic reports as to all charitable
trusts or other relationships of a similar nature, which will enable
him or her to ascertain whether they are being properly administered,
and (2) that periodic reports shall not unreasonably add to the
expense of the administration of charitable trusts and similar
relationships. The Attorney General may suspend the filing of reports
as to a particular charitable trust or relationship for a
reasonable, specifically designated time upon written application of
the trustee filed with the Attorney General and after the Attorney
General has filed in the register of charitable trusts a written
statement that the interests of the beneficiaries will not be
prejudiced thereby and that periodic reports are not required for
proper supervision by his or her office.
   (c) A copy of an account filed by the trustee in any court having
jurisdiction of the trust or other relationship, if the account
substantially complies with the rules and regulations of the Attorney
General, may be filed as a report required by this section.
   (d) The first periodic written report, unless the filing thereof
is suspended as herein provided, shall be filed not later than four
months and 15 days following the close of the first calendar or
fiscal year in which property is initially received. If any part of
the income or principal of a trust previously established is
authorized or required to be applied to a charitable purpose at the
time this article takes effect, the first report shall be filed at
the close of the calendar or fiscal year in which it was registered
with the Attorney General or not later than four months and 15 days
following the close of the calendar or fiscal period.
   (e) Every charitable corporation, unincorporated association, and
trustee required to file reports with the Attorney General pursuant
to this section that receives or accrues in any fiscal year gross
revenue of two million dollars ($2,000,000) or more, exclusive of
grants from, and contracts for services with, governmental entities
for which the governmental entity requires an accounting of the funds
received, shall do the following:
   (1) Prepare annual financial statements using generally accepted
accounting principles that are audited by an independent certified
public accountant in conformity with generally accepted auditing
standards. For any nonaudit services performed by the firm conducting
the audit, the firm and its individual auditors shall adhere to the
standards for auditor independence set forth in the latest revision
of the Government Auditing Standards, issued by the Comptroller
General of the United States (the Yellow Book). The Attorney General
may, by regulation, prescribe standards for auditor independence in
the performance of nonaudit services, including standards different
from those set forth in the Yellow Book. If a charitable corporation
or unincorporated association that is required to prepare an annual
financial statement pursuant to this subdivision is under the control
of another organization, the controlling organization may prepare a
consolidated financial statement. The audited financial statements
shall be available for inspection by the Attorney General and by
members of the public no later than nine months after the close of
the fiscal year to which the statements relate. A charity shall make
its annual audited financial statements available to the public in
the same manner that is prescribed for IRS Form 990 by the latest
revision of Section 6104(d) of the Internal Revenue Code and
associated regulations.
   (2) If it is a corporation, have an audit committee appointed by
the board of directors. The audit committee may include persons who
are not members of the board of directors, but the member or members
of the audit committee shall not include any members of the staff,
including the president or chief executive officer and the treasurer
or chief financial officer. If the corporation has a finance
committee, it must be separate from the audit committee. Members of
the finance committee may serve on the audit committee; however, the
chairperson of the audit committee may not be a member of the finance
committee and members of the finance committee shall constitute less
than one-half of the membership of the audit committee. Members of
the audit committee shall not receive any compensation from the
corporation in excess of the compensation, if any, received by
members of the board of directors for service on the board and shall
not have a material financial interest in any entity doing business
with the corporation. Subject to the supervision of the board of
directors, the audit committee shall be responsible for recommending
to the board of directors the retention and termination of the
independent auditor and may negotiate the independent auditor's
compensation, on behalf of the board of directors. The audit
committee shall confer with the auditor to satisfy its members that
the financial affairs of the corporation are in order, shall review
and determine whether to accept the audit, shall assure that any
nonaudit services performed by the auditing firm conform with
standards for auditor independence referred to in paragraph (1), and
shall approve performance of nonaudit services by the auditing firm.
If the charitable corporation that is required to have an audit
committee pursuant to this subdivision is under the control of
another corporation, the audit committee may be part of the board of
directors of the controlling corporation.
   (f) If, independent of the audit requirement set forth in
paragraph (1) of subdivision (e), a charitable corporation,
unincorporated association, or trustee required to file reports with
the Attorney General pursuant to this section prepares financial
statements that are audited by a certified public accountant, the
audited financial statements shall be available for inspection by the
Attorney General and shall be made available to members of the
public in conformity with paragraph (1) of subdivision (e).
   (g) The board of directors of a charitable corporation or
unincorporated association, or an authorized committee of the board,
and the trustee or trustees of a charitable trust shall review and
approve the compensation, including benefits, of the president or
chief executive officer and the treasurer or chief financial officer
to assure that it is just and reasonable. This review and approval
shall occur initially upon the hiring of the officer, whenever the
term of employment, if any, of the officer is renewed or extended,
and whenever the officer's compensation is modified. Separate review
and approval shall not be required if a modification of compensation
extends to substantially all employees. If a charitable corporation
is affiliated with other charitable corporations, the requirements of
this section shall be satisfied if review and approval is obtained
from the board, or an authorized committee of the board, of the
charitable corporation that makes retention and compensation
decisions regarding a particular individual.



12586.1.  In addition to a registration fee, a charitable
corporation or trustee, commercial fundraiser, fundraising counsel,
or coventurer may be assessed a late fee or an additional fee of
twenty-five dollars ($25) for each month or part of the month after
the date on which the registration statement and financial report
were due to be filed or after the period of extension granted for the
filing if the charitable corporation or trustee, commercial
fundraiser, fundraising counsel, or coventurer does any of the
following:
   (a) Exists and operates in California without being registered.
   (b) Solicits contributions in California without being registered
or, if applicable, bonded.
   (c) Fails to file its first report no later than four months and
15 days following the close of each calendar or fiscal year and has
not requested an extension of time to file the annual report.
   (d) Fails to file its subsequent annual report no later than four
months and 15 days following the close of each calendar or fiscal
year subsequent to the filing of the first report and has not
requested an extension of time to file the annual report.
   (e) Fails to file its annual registration/renewal form within the
time specified by the Attorney General irrespective of other report
filing requirements.
   (f) Fails to correct the deficiencies in its registration or
annual report within 10 days of receipt of written notice of those
deficiencies.



12586.2.  All fines, penalties, attorney's fees, if any, as
authorized by law, and costs of investigation paid to the Attorney
General pursuant to Section 12598 shall be used by the Department of
Justice solely for the administration of the Attorney General's
charitable trust enforcement responsibilities.



12587.  The Attorney General may make additional rules and
regulations necessary for the administration of this article,
provided that any assessment of an annual registration or renewal fee
from charitable trustees and corporations, commercial fundraisers,
fundraising counsel, and commercial coventurers subject to this
article, authorized by statute or regulation, shall be used by the
Department of Justice solely to operate and maintain the Attorney
General's Registry of Charitable Trusts and provide public access via
the Internet to reports filed with the Attorney General.



12587.1.  (a) The Registry of Charitable Trusts Fund is hereby
established in the State Treasury, to be administered by the
Department of Justice.
   (b) Notwithstanding any other provision of law, all registration
fees, registration renewal fees, and late fees or other fees paid to
the Department of Justice pursuant to this article, Section 2850 of
the Probate Code, or Section 320.5 of the Penal Code, shall be
deposited in the Registry of Charitable Trusts Fund.
   (c) Moneys in the fund, upon appropriation by the Legislature,
shall be used by the Attorney General solely to operate and maintain
the Attorney General's Registry of Charitable Trusts and Registry of
Conservators, Guardians, and Trustees, and provide public access via
the Internet to reports filed with the Attorney General.



12588.  The Attorney General may investigate transactions and
relationships of corporations and trustees subject to this article
for the purpose of ascertaining whether or not the purposes of the
corporation or trust are being carried out in accordance with the
terms and provisions of the articles of incorporation or other
instrument. He may require any agent, trustee, fiduciary,
beneficiary, institution, association, or corporation, or other
person to appear, at a named time and place, in the county designated
by the Attorney General, where the person resides or is found, to
give information under oath and to produce books, memoranda, papers,
documents of title, and evidence of assets, liabilities, receipts, or
disbursements in the possession or control of the person ordered to
appear.


12589.  When the Attorney General requires the attendance of any
person, as provided in Section 12588, he shall issue an order setting
forth the time when and the place where attendance is required and
shall cause the same to be delivered to or sent by registered mail to
the person at least 14 days before the date fixed for attendance.
Such order shall have the same force and effect as a subpoena and,
upon application of the Attorney General, obedience to the order may
be enforced by the superior court in the county where the person
receiving it resides or is found, in the same manner as though the
notice were a subpoena. The court, after hearing, for cause, and upon
application of any person aggrieved by the order, shall have the
right to alter, amend, revise, suspend or postpone all or any part of
its provisions.



12590.  Subject to reasonable rules and regulations adopted by the
Attorney General, the register, copies of instruments, and the
reports filed with the Attorney General shall be open to public
inspection. The Attorney General shall withhold from public
inspection any instrument so filed whose content is not exclusively
for charitable purposes.



12591.  The Attorney General may institute appropriate proceedings
to secure compliance with this article and to invoke the jurisdiction
of the court. The powers and duties of the Attorney General provided
in this article are in addition to his existing powers and duties.
Nothing in this article shall impair or restrict the jurisdiction of
any court with respect to any of the matters covered by it, except
that no court shall have jurisdiction to modify or terminate any
trust of property for charitable purposes unless the Attorney General
is a party to the proceedings.



12591.1.  (a) Any person who violates any provision of this article
with intent to deceive or defraud any charity or individual is liable
for a civil penalty not exceeding ten thousand dollars ($10,000).
   (b) Except as provided in subdivision (d), any person who violates
any other provision of this article is liable for a civil penalty,
as follows:
   (1) For the first offense, a fine not exceeding one thousand
dollars ($1,000).
   (2) For any subsequent offense, a fine not exceeding two thousand
five hundred dollars ($2,500).
   (c) Any offense committed under this article involving a
solicitation may be deemed to have been committed at either the place
at which the solicitation was initiated or at the place where the
solicitation was received.
   (d) Any person who violates only subdivision (c), (d), (e), or (f)
of Section 12586.1 shall not be liable for a civil penalty under
subdivision (b) if the person (1) has not received reasonable notice
of the violation and (2) has not been given a reasonable opportunity
to correct the violation. The Attorney General shall notify in
writing a person who violates only subdivisions (c), (d), (e), or (f)
of Section 12586.1 that he or she has 30 days to correct the
violation.
   (e) The recovery of a civil penalty pursuant to this section
precludes assessment of a late fee pursuant to Section 12586.1 for
the same offense.



12591.2.  In any case where the Attorney General has authority to
institute an action or proceeding under this article, he or she may
accept an assurance of voluntary compliance through which any person
alleged to be engaged in any method, act, or practice in violation of
this article agrees to discontinue that method, act, or practice.
The assurance may, among other terms, include a stipulation of a
voluntary payment by the person of the cost of the investigation or
of an amount to be held in escrow pending the outcome of an action or
as restitution to aggrieved persons, or both. The assurance of
voluntary compliance shall not be considered an admission of a
violation for any purpose. The assurance of compliance shall be in
writing and shall be filed with a superior court in this state for
approval and if approved shall thereafter be filed with the clerk of
the court. Matters closed may at any time be reopened by the court
for further proceedings in the public interest. In the event of an
alleged violation, the Attorney General may, at his or her
discretion, either initiate contempt proceedings or proceed as if the
assurance of voluntary compliance has not been accepted.



12592.  This article shall apply regardless of any contrary
provisions of any instrument.



12593.  Every person who offers for probate any instrument which
establishes a testamentary trust of property for charitable purposes
or who records in any county or city and county any inter vivos
transfer of property for charitable purposes shall furnish a copy of
such document to the Attorney General. The custodian of the records
of a court having jurisdiction of probate matters or of charitable
trusts shall furnish such copies of papers, records and files of his
office relating to the subject of this article as the Attorney
General requires.


12594.  Every officer, agency, board, or commission of this State
receiving applications for exemption from taxation of any
corporation, charitable trust or similar relationship in which the
corporation or trustee is subject to this article shall annually file
with the Attorney General a list of all applications received during
the year.



12595.  This act shall be so construed as to effectuate its general
purpose to make uniform the law of those states which enact it.



12596.  Any action brought by the Attorney General against trustees
or other persons holding property in trust for charitable purposes or
against any charitable corporation or any director or officer
thereof to enforce a charitable trust or to impress property with a
trust for charitable purposes or to recover property or the proceeds
thereof for and on behalf of any charitable trust or corporation, may
be brought at any time within ten (10) years after the cause of
action shall have accrued.



12597.  In any proceeding brought by the Attorney General to secure
compliance with the provisions of Sections 12584 to 12587, inclusive,
or any regulation issued pursuant thereto, the judgment, if in favor
of the state, shall provide that the person having the
responsibility or duty to comply with such provisions on behalf of
any charitable trust or charitable corporation, shall pay the
reasonable expense necessarily incurred by the state in the
investigation and prosecution of such action.



12598.  (a) The primary responsibility for supervising charitable
trusts in California, for ensuring compliance with trusts and
articles of incorporation, and for protection of assets held by
charitable trusts and public benefit corporations, resides in the
Attorney General. The Attorney General has broad powers under common
law and California statutory law to carry out these charitable trust
enforcement responsibilities. These powers include, but are not
limited to, charitable trust enforcement actions under all of the
following:
   (1) This article.
   (2) Title 8 (commencing with Section 2223) of Part 4 of Division 3
of the Civil Code.
   (3) Division 2 (commencing with Section 5000) of Title 1 of the
Corporations Code.
   (4) Sections 8111, 11703, 15004, 15409, 15680 to 15685, inclusive,
16060 to 16062, inclusive, 16064, and 17200 to 17210, inclusive, of
the Probate Code.
   (5) Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of the Business and Professions Code, and Sections 17500
and 17535 of the Business and Professions Code.
   (6) Sections 319, 326.5, and 532d of the Penal Code.
   (b) The Attorney General shall be entitled to recover from
defendants named in a charitable trust enforcement action all
reasonable attorney's fees and actual costs incurred in conducting
that action, including, but not limited to, the costs of auditors,
consultants, and experts employed or retained to assist with the
investigation, preparation, and presentation in court of the
charitable trust enforcement action.
   (c) Attorney's fees and costs shall be recovered by the Attorney
General pursuant to court order. When awarding attorneys' fees and
costs, the court shall order that the attorney's fees and costs be
paid by the charitable organization and the individuals named as
defendants in or otherwise subject to the action, in a manner that
the court finds to be equitable and fair.
   (d) Upon a finding by the court that a lawsuit filed by the
Attorney General was frivolous or brought in bad faith, the court may
award the defendant charity the costs of that action.
   (e) (1) The Attorney General may refuse to register or may revoke
or suspend the registration of a charitable corporation or trustee,
commercial fundraiser, fundraising counsel, or coventurer whenever
the Attorney General finds that the charitable corporation or
trustee, commercial fundraiser, fundraising counsel, or coventurer
has violated or is operating in violation of any provisions of this
article.
   (2) All actions of the Attorney General shall be taken subject to
the rights authorized pursuant to Chapter 4.5 (commencing with
Section 11400) of Part 1 of Division 3 of Title 2.



12599.  (a) "Commercial fundraiser for charitable purposes" means
any individual, corporation, unincorporated association, or other
legal entity who for compensation does any of the following:
   (1) Solicits funds, assets, or property in this state for
charitable purposes.
   (2) As a result of a solicitation of funds, assets, or property in
this state for charitable purposes, receives or controls the funds,
assets, or property solicited for charitable purposes.
   (3) Employs, procures, or engages any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   A commercial fundraiser for charitable purposes shall include any
person, association of persons, corporation, or other entity that
obtains a majority of its inventory for sale by the purchase,
receipt, or control for resale to the general public, of salvageable
personal property solicited by an organization qualified to solicit
donations pursuant to Section 148.3 of the Welfare and Institutions
Code.
   A commercial fundraiser for charitable purposes shall not include
a "trustee" as defined in Section 12582 or 12583, a "charitable
corporation" as defined in Section 12582.1, or any employee thereof.
A commercial fundraiser for charitable purposes shall not include an
individual who is employed by or under the control of a commercial
fundraiser for charitable purposes registered with the Attorney
General. A commercial fundraiser for charitable purposes shall not
include any federally insured financial institution that holds as a
depository funds received as a result of a solicitation for
charitable purposes.
   As used in this section, "charitable purposes" includes any
solicitation in which the name of any organization of law enforcement
personnel, firefighters, or other persons who protect the public
safety is used or referred to as an inducement for transferring any
funds, assets, or property, unless the only expressed or implied
purpose of the solicitation is for the sole benefit of the actual
active membership of the organization.
   (b) A commercial fundraiser for charitable purposes shall, prior
to soliciting any funds, assets, or property, including salvageable
personal property, in California for charitable purposes, or prior to
receiving and controlling any funds, assets, or property, including
salvageable personal property, as a result of a solicitation in this
state for charitable purposes, register with the Attorney General's
Registry of Charitable Trusts on a registration form provided by the
Attorney General. Renewals of registration shall be filed with the
Registry of Charitable Trusts by January 15 of each calendar year in
which the commercial fundraiser for charitable purposes does business
and shall be effective for one year. A registration or renewal fee
of two hundred dollars ($200) shall be required for registration of a
commercial fundraiser for charitable purposes, and shall be payable
by certified or cashier's check to the Attorney General's Registry of
Charitable Trusts at the time of registration or renewal. The
Attorney General may adjust the annual registration or renewal fee,
or means of payment, as needed pursuant to this section. The Attorney
General's Registry of Charitable Trusts may grant extensions of time
to file annual registration as required, pursuant to subdivision (b)
of Section 12586. No separate fee shall be charged by the Attorney
General for electronic registration, electronic renewal, or
electronic repayment of fees.
   (c) A commercial fundraiser for charitable purposes shall file
with the Attorney General's Registry of Charitable Trusts an annual
financial report on a form provided by the Attorney General,
accounting for all funds collected pursuant to any solicitation for
charitable purposes during the preceding calendar year. The annual
financial report shall be filed with the Attorney General's Registry
of Charitable Trusts no later than 30 days after the close of the
preceding calendar year.
   (d) The contents of the forms for annual registration and annual
financial reporting by commercial fundraisers for charitable purposes
shall be established by the Attorney General in a manner consistent
with the procedures set forth in subdivisions (a) and (b) of Section
12586. The annual financial report shall require a detailed, itemized
accounting of funds, assets, or property, solicited for charitable
purposes on behalf of each charitable organization exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code or for
each charitable purpose during the accounting period, and shall
include, among other data, the following information for funds,
assets, or property, solicited by the commercial fundraiser for
charitable purposes:
   (1) Total revenue.
   (2) The fee or commission charged by the commercial fundraiser for
charitable purposes.
   (3) Salaries paid by the commercial fundraiser for charitable
purposes to its officers and employees.
   (4) Fundraising expenses.
   (5) Distributions to the identified charitable organization or
purpose.
   (6) The names and addresses of any director, officer, or employee
of the commercial fundraiser for charitable purposes who is a
director, officer, or employee of any charitable organization listed
in the annual financial report.
   (e) A commercial fundraiser for charitable purposes that obtains a
majority of its inventory for sale by the purchase, receipt, or
control for resale to the general public, of salvageable personal
property solicited by an organization qualified to solicit donations
pursuant to Section 148.3 of the Welfare and Institutions Code shall
file with the Attorney General's Registry of Charitable Trusts, and
not with the sheriff of any county, an annual financial report on a
form provided by the Attorney General that is separate and distinct
from forms filed by other commercial fundraisers for charitable
purposes pursuant to subdivisions (c) and (d).
   (f) It shall be unlawful for any commercial fundraiser for
charitable purposes to solicit funds in this state for charitable
purposes unless the commercial fundraiser for charitable purposes has
complied with the registration or annual renewal and financial
reporting requirements of this article. Failure to comply with these
registration or annual renewal and financial reporting requirements
shall be grounds for injunction against solicitation in this state
for charitable purposes and other civil remedies provided by law.
   (g) A commercial fundraiser for charitable purposes is a
constructive trustee for charitable purposes as to all funds
collected pursuant to solicitation for charitable purposes and shall
account to the Attorney General for all funds. A commercial
fundraiser for charitable purposes is subject to the Attorney General'
s supervision and enforcement over charitable funds and assets to the
same extent as a trustee for charitable purposes under this article.
   (h) Not less than 10 working days prior to the commencement of
each solicitation campaign, event, or service, or not later than
commencement of solicitation for solicitations to aid victims of
emergency hardship or disasters, a commercial fundraiser for
charitable purposes shall file with the Attorney General's Registry
of Charitable Trusts a notice on a form prescribed by the Attorney
General that sets forth all of the following:
   (1) The name, address, and telephone number of the commercial
fundraiser for charitable purposes.
   (2) The name, address, and telephone number of the charitable
organization with whom the commercial fundraiser has contracted.
   (3) The fundraising methods to be used.
   (4) The projected dates when performance under the contract will
commence and terminate.
   (5) The name, address, and telephone number of the person
responsible for directing and supervising the work of the commercial
fundraiser under the contract.
   (i) There shall be a written contract between a commercial
fundraiser for charitable purposes and a charitable organization for
each solicitation campaign, event, or service, that shall be signed
by the authorized contracting officer for the commercial fundraiser
and by an official of the charitable organization who is authorized
to sign by the organization's governing body. The contract shall be
available for inspection by the Attorney General and shall contain
all of the following provisions:
   (1) The legal name and address of the charitable organization as
registered with the Registry of Charitable Trusts, unless the
charitable organization is exempt from registration.
   (2) A statement of the charitable purpose for which the
solicitation campaign, event, or service is being conducted.
   (3) A statement of the respective obligations of the commercial
fundraiser and the charitable organization.
   (4) If the commercial fundraiser is to be paid a fixed fee, a
statement of the fee to be paid to the commercial fundraiser and a
good faith estimate of what percentage the fee will constitute of the
total contributions received. The contract shall clearly disclose
the assumptions upon which the estimate is based, and the stated
assumptions shall be based upon all of the relevant facts known to
the commercial fundraiser regarding the solicitation to be conducted
by the commercial fundraiser.
   (5) If a percentage fee is to be paid to the commercial
fundraiser, a statement of the percentage of the total contributions
received that will be remitted to or retained by the charitable
organization, or, if the solicitation involves the sale of goods or
services or the sale of admissions to a fundraising event, the
percentage of the purchase price that will be remitted to the
charitable organization. The stated percentage shall be calculated by
subtracting from contributions received and sales receipts not only
the commercial fundraiser's fee, but also any additional amounts that
the charitable organization is obligated to pay as fundraising
costs.
   (6) The effective and termination dates of the contract and the
date solicitation activity is to commence within the state.
   (7) A provision that requires that each contribution in the
control or custody of the commercial fundraiser shall in its entirety
and within five working days of its receipt comply with either of
the following:
   (A) Be deposited in an account at a bank or other federally
insured financial institution that is solely in the name of the
charitable organization and over which the charitable organization
has sole control of withdrawals.
   (B) Be delivered to the charitable organization in person, by
United States express mail, or by another method of delivery
providing for overnight delivery.
   (8) A statement that the charitable organization exercises control
and approval over the content and frequency of any solicitation.
   (9) If the commercial fundraiser proposes to make any payment in
cash or in kind to any person or legal entity to secure any person's
attendance at, or sponsorship, approval, or endorsement of, a charity
fundraising event, the maximum dollar amount of those payments shall
be set forth in the contract. "Charity fundraising event" means any
gathering of persons, including, but not limited to, a party,
banquet, concert, or show, that is held for the purpose or claimed
purpose of raising funds for any charitable purpose or organization.
   (10) A provision that includes all of the following statements:
   (A) The charitable organization has the right to cancel the
contract without cost, penalty, or liability for a period of 10 days
following the date on which the contract is executed.
   (B) The charitable organization may cancel the contract by serving
a written notice of cancellation on the commercial fundraiser.
   (C) If mailed, service shall be by certified mail, return receipt
requested, and cancellation shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (D) Any funds collected after effective notice that the contract
has been canceled shall be deemed to be held in trust for the benefit
of the charitable organization without deduction for costs or
expenses of any nature.
   (E) The charitable organization shall be entitled to recover all
funds collected after the date of cancellation.
   (11) A provision that includes all of the following statements:
   (A) Following the initial 10-day cancellation period, the
charitable organization may terminate the contract by giving 30 days'
written notice.
   (B) If mailed, service of the notice shall be by certified mail,
return receipt requested, and shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (C) In the event of termination under this subdivision, the
charitable organization shall be liable for services provided by the
commercial fundraiser up to 30 days after the effective service of
the notice.
   (12) A provision that, following the initial 10-day cancellation
period, the charitable organization may terminate the contract at any
time upon written notice, without payment or compensation of any
kind to the commercial fundraiser, if the commercial fundraiser or
its agents, employees, or representatives do any of the following:
   (A) Make any material misrepresentations in the course of
solicitations or with respect to the charitable organization.
   (B) Are found by the charitable organization to have been
convicted of a crime arising from the conduct of a solicitation for a
charitable organization or purpose punishable as a misdemeanor or a
felony.
   (C) Otherwise conduct fundraising activities in a manner that
causes or could cause public disparagement of the charitable
organization's good name or good will.
   (13) Any other information required by the regulations of the
Attorney General.
   (j) It shall be unlawful for a commercial fundraiser for
charitable purposes to not disclose the percentage of total
fundraising expenses of the fundraiser upon receiving a written or
oral request from a person solicited for a contribution for a
charitable purpose. "Percentage of total fundraising expenses," as
used in this section, means the ratio of the total expenses of the
fundraiser to the total revenue received by the fundraiser for the
charitable purpose for which funds are being solicited, as reported
on the most recent financial report filed with the Attorney General's
Registry of Charitable Trusts. A commercial fundraiser shall
disclose this information in writing within five working days from
receipt of a request by mail or facsimile. A commercial fundraiser
shall orally disclose this information immediately upon a request
made in person or in a telephone conversation and shall follow this
response with a written disclosure within five working days. Failure
to comply with the requirements of this subdivision shall be grounds
for an injunction against solicitation in this state for charitable
purposes and other civil remedies provided by law.
   (k) If the Attorney General issues a report to the public
containing information obtained from registration forms or financial
report forms filed by commercial fundraisers for charitable purposes,
there shall be a separate section concerning commercial fundraisers
for charitable purposes that obtain a majority of their inventory for
sale by the purchase, receipt, or control for resale to the general
public, of salvageable personal property solicited by an organization
qualified to solicit donations pursuant to Section 148.3 of the
Welfare and Institutions Code. The report shall include an
explanation of the distinctions between these thrift store operations
and other types of commercial fundraising.
   (l) No person may act as a commercial fundraiser for charitable
purposes if that person, any officer or director of that person's
business, any person with a controlling interest in the business, or
any person the commercial fundraiser employs, engages, or procures to
solicit for compensation, has been convicted by a court of any state
or the United States of a crime arising from the conduct of a
solicitation for a charitable organization or purpose punishable as a
misdemeanor or felony.
   (m) A commercial fundraiser for charitable purposes shall not
solicit in the state on behalf of a charitable organization unless
that charitable organization is registered or is exempt from
registration with the Attorney General's Registry of Charitable
Trusts.
   (n) If any provision of this section or the application thereof to
any person or circumstances is held invalid, that invalidity shall
not affect any other provision or application of this section that
can be given effect without the invalid provision or application, and
to this end the provisions of this section are severable.



12599.1.  (a) "Fundraising counsel for charitable purposes" is
defined as any individual, corporation, unincorporated association,
or other legal entity who is described by all of the following:
   (1) For compensation plans, manages, advises, counsels, consults,
or prepares material for, or with respect to, the solicitation in
this state of funds, assets, or property for charitable purposes.
   (2) Does not solicit funds, assets, or property for charitable
purposes.
   (3) Does not receive or control funds, assets, or property
solicited for charitable purposes in this state.
   (4) Does not employ, procure, or engage any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   (b) "Fundraising counsel for charitable purposes" does not include
any of the following:
   (1) An attorney, investment counselor, or banker who in the
conduct of that person's profession advises a client when actually
engaged in the giving of legal, investment, or financial advice.
   (2) A trustee as defined in Section 12582 or 12583.
   (3) A charitable corporation as defined in Section 12582.1, or any
employee thereof.
   (4) A person employed by or under the control of a fundraising
counsel for charitable purposes, as defined in subdivision (a).
   (5) A person, corporation, or other legal entity, engaged as an
independent contractor directly by a trustee or a charitable
corporation, that prints, reproduces, or distributes written
materials prepared by a trustee, a charitable corporation, or any
employee thereof, or that performs artistic or graphic services with
respect to written materials prepared by a trustee, a charitable
corporation, or any employee thereof, provided that the independent
contractor does not perform any of the activities described in
paragraph (1) of subdivision (a).
   (6) A person whose total annual gross compensation for performing
any activity described in paragraph (1) of subdivision (a) does not
exceed twenty-five thousand dollars ($25,000).
   (c) A fundraising counsel for charitable purposes shall, prior to
managing, advising, counseling, consulting, or preparing material
for, or with respect to, the solicitation in this state of funds,
assets, or property for charitable purposes, register with the
Attorney General's Registry of Charitable Trusts on a registration
form provided by the Attorney General. Renewals of registration shall
be filed with the Registry of Charitable Trusts by January 15 of
each calendar year in which the fundraising counsel for charitable
purposes does business and shall be effective for one year.
   A registration or renewal fee of two hundred dollars ($200) shall
be required for registration of a fundraising counsel for charitable
purposes, and shall be payable by certified or cashier's check to the
Attorney General's Registry of Charitable Trusts at the time of
registration and renewal. The Attorney General may adjust the annual
registration or renewal fee, or means of payment, as needed pursuant
to this section. The Attorney General's Registry of Charitable Trusts
may grant extensions of time to file annual registration as
required, pursuant to subdivision (b) of Section 12586.
   (d) A fundraising counsel for charitable purposes shall file
annually with the Attorney General's Registry of Charitable Trusts on
a form provided by the Attorney General, a report listing each
person, corporation, unincorporated association, or other legal
entity for whom the fundraising counsel has performed any services
described in paragraph (1) of subdivision (a), and a statement
certifying that the fundraising counsel had a written contract with
each listed person, corporation, unincorporated association, or other
legal entity that complied with the requirements of subdivision (f).
   (e) Not less than 10 working days prior to the commencement of the
performance of any service for a charitable organization by a
fundraising counsel for charitable purposes, or not later than
commencement of solicitation for solicitations to aid victims of
emergency hardship or disasters, the fundraising counsel shall file
with the Attorney General's Registry of Charitable Trusts a notice on
a form prescribed by the Attorney General that sets forth all of the
following:
   (1) The name, address, and telephone number of the fundraising
counsel for charitable purposes.
   (2) The name, address, and telephone number of the charitable
organization with whom the fundraising counsel has contracted.
   (3) The projected dates when performance under the contract will
commence and terminate.
   (4) The name, address, and telephone number of the person
responsible for directing and supervising the work of the fundraising
counsel under the contract.
   (f) There shall be a written contract between a fundraising
counsel for charitable purposes and a charitable organization for
each service to be performed by the fundraising counsel for the
charitable organization, that shall be signed by the authorized
contracting officer for the fundraising counsel and by an official of
the charitable organization who is authorized to sign by the
organization's governing body. The contract shall be available for
inspection by the Attorney General and shall contain all of the
following provisions:
   (1) The legal name and address of the charitable organization as
registered with the Registry of Charitable Trusts unless the
charitable organization is exempt from registration.
   (2) A statement of the charitable purpose for which the
solicitation campaign is being conducted.
   (3) A statement of the respective obligations of the fundraising
counsel and the charitable organization.
   (4) A clear statement of the fees and any other form of
compensation, including commissions and property, that will be paid
to the fundraising counsel.
   (5) The effective and termination dates of the contract and the
date services will commence with respect to solicitation in this
state of contributions for a charitable organization.
   (6) A statement that the fundraising counsel will not at any time
solicit funds, assets, or property for charitable purposes, receive
or control funds, assets, or property solicited for charitable
purposes, or employ, procure, or engage any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   (7) A statement that the charitable organization exercises control
and approval over the content and frequency of any solicitation.
   (8) A provision that includes all of the following statements:
   (A) The charitable organization has the right to cancel the
contract without cost, penalty, or liability for a period of 10 days
following the date on which the contract is executed.
   (B) The charitable organization may cancel the contract by serving
a written notice of cancellation on the fundraising counsel.
   (C) If mailed, service shall be by certified mail, return receipt
requested, and cancellation shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (9) A provision that includes all of the following statements:
   (A) Following the initial 10-day cancellation period, the
charitable organization may terminate the contract by giving 30 days'
written notice.
   (B) If mailed, service of the notice shall be by certified mail,
return receipt requested, and shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (C) In the event of termination under this subdivision, the
charitable organization shall be liable for services provided by the
fundraising counsel to the effective date of the termination.
   (10) Any other information required by the regulations of the
Attorney General.
   (g) It shall be unlawful for any fundraising counsel for
charitable purposes to manage, advise, counsel, consult, or prepare
material for, or with respect to, the solicitation in this state of
funds, assets, or property for charitable purposes unless the
fundraising counsel for charitable purposes has complied with the
registration or annual renewal and financial reporting requirements
of this article.
   (h) A fundraising counsel for charitable purposes is subject to
the Attorney General's supervision and enforcement to the same extent
as a trustee for charitable purposes under this article.
   (i) If any provision of this section or the application thereof to
any person or circumstances is held invalid, that invalidity shall
not affect other provisions or application of this section which can
be given effect without the invalid provision or application, and to
this end the provisions of this section are severable.



12599.2.  (a) "Commercial coventurer" is defined as any person who,
for profit, is regularly and primarily engaged in trade or commerce
other than in connection with the raising of funds, assets, or
property for charitable organizations or charitable purposes, and who
represents to the public that the purchase or use of any goods,
services, entertainment, or any other thing of value will benefit a
charitable organization or will be used for a charitable purpose.
   (b) A commercial coventurer is a trustee as defined in Section
12582. Notwithstanding the requirements of Sections 12585 and 12586,
a commercial coventurer is not required to register or file periodic
reports with the Attorney General provided that the commercial
coventurer:
   (1) Has a written contract with a trustee or charitable
corporation subject to this article, signed by two officers of the
trustee or charitable corporation, prior to representing to the
public that the purchase or use of any goods, services,
entertainment, or any other thing of value will benefit the trustee
or charitable corporation or will be used for a charitable purpose.
   (2) Within 90 days after commencement of those representations,
and at the end of each successive 90-day period during which the
representations are made, transfers to that trustee or charitable
corporation subject to this article all funds, assets, or property
received as a result of the representations.
   (3) Provides in conjunction with each transfer required by
paragraph (2) a written accounting to the trustee or charitable
corporation subject to this article of all funds, assets, or property
received sufficient to enable the trustee or charitable corporation
(A) to determine that representations made to the public on its
behalf have been adhered to accurately and completely, and (B) to
prepare its periodic report filed with the Attorney General pursuant
to Section 12586.
   (c) A commercial coventurer that does not meet the requirements of
paragraphs (1), (2), and (3) of subdivision (b) shall register and
report to the Attorney General on forms required by the Attorney
General. An annual registration or renewal fee of two hundred dollars
($200) shall be required for registration or renewal of registration
of a commercial coventurer, and shall be payable by certified or
cashier's check to the Attorney General's Registry of Charitable
Trusts at the time of registration or renewal. The Attorney General
may adjust the annual registration or renewal fee, or means of
payment, as needed pursuant to this section.




12599.3.  (a) A contract between a charitable organization and a
commercial fundraiser for charitable purposes or fundraising counsel
for charitable purposes shall be voidable by the charitable
organization unless the commercial fundraiser or the fundraising
counsel is registered with the Attorney General's Registry of
Charitable Trusts prior to the commencement of the solicitation.
   (b) Whenever a charitable organization contracts with a commercial
fundraiser for charitable purposes or fundraising counsel for
charitable purposes, the charitable organization shall have the right
to cancel the contract without cost, penalty, or liability for a
period of 10 days following the date on which the contract is
executed. Any provision in the contract that is intended to waive
this right of cancellation shall be void and unenforceable.
   (c) A charitable organization may cancel a contract pursuant to
subdivision (b) by serving a written notice of cancellation on the
fundraising counsel or commercial fundraiser. If mailed, service
shall be by certified mail, return receipt requested, and
cancellation shall be deemed effective upon the expiration of five
calendar days from the date of mailing. The notice shall be
sufficient if it indicates that the charitable organization does not
intend to be bound by the contract.
   (d) Whenever a charitable organization cancels a contract pursuant
to this section, it shall mail a duplicate copy of the notice of
cancellation to the Attorney General's Registry of Charitable Trusts.
   (e) Any funds collected after effective notice that a contract has
been canceled shall be deemed to be held in trust for the benefit of
the charitable organization without deduction for costs or expenses
of any nature. A charitable organization shall be entitled to recover
all funds collected after the date of cancellation.
   (f) Following the initial 10-day cancellation period, a charitable
organization may terminate a contract with a commercial fundraiser
for charitable purposes or a fundraising counsel for charitable
purposes by giving 30 days' written notice. If mailed, service of the
notice shall be by certified mail, return receipt requested, and
shall be deemed effective upon the expiration of five calendar days
from the date of mailing. In the event of termination under this
subdivision, the charitable organization shall be liable for services
provided by the commercial fundraiser or fundraising counsel up to
30 days after the effective service of the notice.
   (g) Following the initial 10-day cancellation period, a charitable
organization may terminate at any time upon written notice a
contract with a commercial fundraiser for charitable purposes or a
fundraising counsel for charitable purposes, without payment or
compensation of any kind to the commercial fundraiser or fundraising
counsel, if the commercial fundraiser or the fundraising counsel, or
their agents, employees, or representatives (1) make any material
misrepresentations in the course of solicitations or with respect to
the charitable organization, (2) are found by the charitable
organization to have been convicted of a crime arising from the
conduct of a solicitation for a charitable organization or purpose
that is punishable as a felony or misdemeanor, or (3) otherwise
conduct fundraising activities in a manner that causes or could cause
public disparagement of the charitable organization's good name or
good will.



12599.5.  Each application for registration or renewal of
registration under subdivision (b) of Section 12599 shall be
accompanied by a cash deposit or by a bond issued by an admitted
surety in favor of the State of California and in a form acceptable
to the Attorney General. The cash deposit or bond shall be in the
amount of twenty-five thousand dollars ($25,000) and shall be for the
benefit of any person damaged as a result of malfeasance or
misfeasance in the conduct of the activities specified in subdivision
(a) of Section 12599. The bond may be in the form of a rider to a
larger blanket liability bond.



12599.6.  (a) Charitable organizations and commercial fundraisers
for charitable purposes shall not misrepresent the purpose of the
charitable organization or the nature or purpose or beneficiary of a
solicitation. A misrepresentation may be accomplished by words or
conduct or failure to disclose a material fact.
   (b) A charitable organization must establish and exercise control
over its fundraising activities conducted for its benefit, including
approval of all written contracts and agreements, and must assure
that fundraising activities are conducted without coercion.
   (c) A charitable organization shall not enter into any contract or
agreement with, or employ, any commercial fundraiser for charitable
purposes or fundraising counsel for charitable purposes unless that
commercial fundraiser or fundraising counsel is registered with the
Attorney General's Registry of Charitable Trusts or, if not
registered, agrees to register prior to the commencement of any
solicitation.
   (d) A charitable organization shall not enter into any contract or
agreement with, or raise any funds for, any charitable organization
required to be registered pursuant to this act unless that charitable
organization is registered with the Attorney General's Registry of
Charitable Trusts or, if not registered, agrees to register prior to
the commencement of the solicitation.
   (e) Each contribution in the control or custody of a commercial
fundraiser for charitable purposes shall in its entirety and within
five working days of receipt (1) be deposited in an account at a bank
or other federally insured financial institution that is solely in
the name of the charitable organization on whose behalf the
contribution was solicited and over which the charitable organization
has sole control of withdrawals or, (2) be delivered to the
charitable organization in person, by Express Mail, or by another
method of delivery providing for overnight delivery.
   (f) Regardless of injury, the following acts and practices are
prohibited in the planning, conduct, or execution of any solicitation
or charitable sales promotion:
   (1) Operating in violation of, or failing to comply with, any of
the requirements of this act or regulations or orders of the Attorney
General, or soliciting contributions after registration with the
Attorney General's Registry of Charitable Trusts has expired or has
been suspended or revoked.
   (2) Using any unfair or deceptive acts or practices or engaging in
any fraudulent conduct that creates a likelihood of confusion or
misunderstanding.
   (3) Using any name, symbol, emblem, statement, or other material
stating, suggesting, or implying to a reasonable person that the
contribution is to or for the benefit of a particular charitable
organization when that is not the fact.
   (4) Misrepresenting or misleading anyone in any manner to believe
that the person on whose behalf a solicitation or charitable sales
promotion is being conducted is a charitable organization or that the
proceeds of the solicitation or charitable sales promotion will be
used for charitable purposes when that is not the fact.
   (5) Misrepresenting or misleading anyone in any manner to believe
that any other person sponsors, endorses, or approves a charitable
solicitation or charitable sales promotion when that person has not
given consent in writing to the use of the person's name for these
purposes.
   (6) Misrepresenting or misleading anyone in any manner to believe
that goods or services have endorsement, sponsorship, approval,
characteristics, ingredients, uses, benefits, or qualities that they
do not have or that a person has endorsement, sponsorship, approval,
status, or affiliation that the person does not have.
   (7) Using or exploiting the fact of registration with the Attorney
General's Registry of Charitable Trusts so as to lead any person to
believe that the registration in any manner constitutes an
endorsement or approval by the Attorney General. The use of the
following statement is not prohibited:
   "The official registration and financial information regarding
(insert the legal name of the charity as registered with the Registry
of Charitable Trusts) can be obtained from the Attorney General's
Web site at https://caag.state.ca.us/charities/. Registration does not
imply endorsement."
   (8) Representing directly or by implication that a charitable
organization will receive an amount greater than the actual net
proceeds reasonably estimated to be retained by the charity for its
use.
   (9) With respect to solicitations by commercial fundraisers for
charitable purposes on behalf of law enforcement personnel,
firefighters, or other persons who protect the public safety,
issuing, offering, giving, delivering, or distributing any honorary
membership cards, courtesy cards, or similar cards, or any stickers,
emblems, plates, or other items that could be used for display on a
motor vehicle, and that suggest affiliation with, or endorsement by
any public safety personnel or a group comprising such personnel.
   (10) (A) Soliciting for advertising to appear in a for-profit
publication that relates to, purports to relate to, or that could
reasonably be construed to relate to, any charitable purpose without
making the following disclosures at the time of solicitation:
   (i) The publication is a for-profit, commercial enterprise.
   (ii) The true name of the solicitor and the fact that the
solicitor is a professional solicitor.
   (iii) The publication is not affiliated with or sponsored by any
charitable organization.
   (B) Where a sale of advertising has been made, the solicitor,
prior to accepting any money for the sale, shall make to the
purchaser the disclosures required by subparagraph (A) in written
form and in conspicuous type.
   (11) Representing that any part of the contributions solicited by
a charitable organization will be given or donated to any other
charitable organization unless that organization has consented in
writing to the use of its name prior to the solicitation. The written
consent shall be signed by one authorized officer, director, or
trustee of the charitable organization.
   (12) Representing that tickets to events will be donated for use
by another, unless all of the following requirements have been met:
   (A) The charitable organiza	
	











































		
		
	

	
	
	

			

			
		

		

State Codes and Statutes

State Codes and Statutes

Statutes > California > Gov > 12580-12599.7

GOVERNMENT CODE
SECTION 12580-12599.7



12580.  This article may be cited as the Supervision of Trustees and
Fundraisers for Charitable Purposes Act.



12581.  This article applies to all 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 coventurers, over which the state or the Attorney General
has enforcement or supervisory powers. The provisions of this
article shall not apply to any committee as defined in Section 82013
which is required to and does file any statement pursuant to the
provisions of Article 2 (commencing with Section 84200) of Chapter 4
of Title 9.


12581.2.  As used in this article, "solicitation" or "soliciting"
for charitable purposes means any request, plea, entreaty, demand, or
invitation, or attempt thereof, to give money or property, in
connection with which any of the following applies:
   (a) Any appeal is made for charitable purposes.
   (b) The name of any charity, philanthropic or charitable
organization, is used or referred to in any such appeal as an
inducement for making any such gift.
   (c) Any statement is made to the effect that the gift or any part
thereof will go to or be used for any charitable purpose or
organization.
   (d) The name of any organization of law enforcement personnel,
firefighters or other persons who protect the public safety is used
or referred to as an inducement for transferring any money or
property, unless the only expressed or implied purpose of the
solicitation is for the sole benefit of the actual active membership
of the organization.


12582.  "Trustee" means (a) any individual, group of individuals,
corporation, unincorporated association, or other legal entity
holding property in trust pursuant to any charitable trust, (b) any
corporation or unincorporated association which has accepted property
to be used for a particular charitable purpose as distinguished from
the general purposes of the corporation or unincorporated
association, and (c) a corporation or unincorporated association
formed for the administration of a charitable trust, pursuant to the
directions of the settlor or at the instance of the trustee.



12582.1.  "Charitable corporation" means any nonprofit corporation
organized under the laws of this State for charitable or eleemosynary
purposes and any similar foreign corporation doing business or
holding property in this State for such purposes.




12583.  The filing, registration, and reporting provisions of this
article do not apply to the United States, any state, territory, or
possession of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, or to any of their agencies or
governmental subdivisions, to any religious corporation sole or other
religious corporation or organization that holds property for
religious purposes, or to any officer, director, or trustee thereof
who holds property for like purposes, to a cemetery corporation
regulated under Chapter 19 (commencing with Section 9600) of Division
3 of the Business and Professions Code, or to any committee as
defined in Section 82013 that is required to and does file any
statement pursuant to Article 2 (commencing with Section 84200) of
Chapter 4 of Title 9, or to a charitable corporation or
unincorporated association organized and operated primarily as a
religious organization, educational institution, hospital, or a
health care service plan licensed pursuant to Section 1349 of the
Health and Safety Code.



12584.  The Attorney General shall establish and maintain a register
of charitable corporations, unincorporated associations, and
trustees subject to this article and of the particular trust or other
relationship under which they hold property for charitable purposes
and, to that end, may conduct whatever investigation is necessary,
and shall obtain from public records, court officers, taxing
authorities, trustees, and other sources, whatever information,
copies of instruments, reports, and records are needed for the
establishment and maintenance of the register.



12585.  (a) Every charitable corporation, unincorporated
association, and trustee subject to this article shall file with the
Attorney General an initial registration form, under oath, setting
forth information and attaching documents prescribed in accordance
with rules and regulations of the Attorney General, within 30 days
after the corporation, unincorporated association, or trustee
initially receives property. A trustee is not required to register as
long as the charitable interest in a trust is a future interest, but
shall do so within 30 days after any charitable interest in a trust
becomes a present interest.
   (b) The Attorney General shall adopt rules and regulations as to
the contents of the initial registration form and the manner of
executing and filing that document or documents.




12586.  (a) Except as otherwise provided and except corporate
trustees which are subject to the jurisdiction of the Commissioner of
Financial Institutions of the State of California under Division 1
(commencing with Section 99) of the Financial Code or to the
Comptroller of the Currency of the United States, every charitable
corporation, unincorporated association, and trustee subject to this
article shall, in addition to filing copies of the instruments
previously required, file with the Attorney General periodic written
reports, under oath, setting forth information as to the nature of
the assets held for charitable purposes and the administration
thereof by the corporation, unincorporated association, or trustee,
in accordance with rules and regulations of the Attorney General.
   (b) The Attorney General shall make rules and regulations as to
the time for filing reports, the contents thereof, and the manner of
executing and filing them. The Attorney General may classify trusts
and other relationships concerning property held for a charitable
purpose as to purpose, nature of assets, duration of the trust or
other relationship, amount of assets, amounts to be devoted to
charitable purposes, nature of trustee, or otherwise, and may
establish different rules for the different classes as to time and
nature of the reports required to the ends (1) that he or she shall
receive reasonably current, periodic reports as to all charitable
trusts or other relationships of a similar nature, which will enable
him or her to ascertain whether they are being properly administered,
and (2) that periodic reports shall not unreasonably add to the
expense of the administration of charitable trusts and similar
relationships. The Attorney General may suspend the filing of reports
as to a particular charitable trust or relationship for a
reasonable, specifically designated time upon written application of
the trustee filed with the Attorney General and after the Attorney
General has filed in the register of charitable trusts a written
statement that the interests of the beneficiaries will not be
prejudiced thereby and that periodic reports are not required for
proper supervision by his or her office.
   (c) A copy of an account filed by the trustee in any court having
jurisdiction of the trust or other relationship, if the account
substantially complies with the rules and regulations of the Attorney
General, may be filed as a report required by this section.
   (d) The first periodic written report, unless the filing thereof
is suspended as herein provided, shall be filed not later than four
months and 15 days following the close of the first calendar or
fiscal year in which property is initially received. If any part of
the income or principal of a trust previously established is
authorized or required to be applied to a charitable purpose at the
time this article takes effect, the first report shall be filed at
the close of the calendar or fiscal year in which it was registered
with the Attorney General or not later than four months and 15 days
following the close of the calendar or fiscal period.
   (e) Every charitable corporation, unincorporated association, and
trustee required to file reports with the Attorney General pursuant
to this section that receives or accrues in any fiscal year gross
revenue of two million dollars ($2,000,000) or more, exclusive of
grants from, and contracts for services with, governmental entities
for which the governmental entity requires an accounting of the funds
received, shall do the following:
   (1) Prepare annual financial statements using generally accepted
accounting principles that are audited by an independent certified
public accountant in conformity with generally accepted auditing
standards. For any nonaudit services performed by the firm conducting
the audit, the firm and its individual auditors shall adhere to the
standards for auditor independence set forth in the latest revision
of the Government Auditing Standards, issued by the Comptroller
General of the United States (the Yellow Book). The Attorney General
may, by regulation, prescribe standards for auditor independence in
the performance of nonaudit services, including standards different
from those set forth in the Yellow Book. If a charitable corporation
or unincorporated association that is required to prepare an annual
financial statement pursuant to this subdivision is under the control
of another organization, the controlling organization may prepare a
consolidated financial statement. The audited financial statements
shall be available for inspection by the Attorney General and by
members of the public no later than nine months after the close of
the fiscal year to which the statements relate. A charity shall make
its annual audited financial statements available to the public in
the same manner that is prescribed for IRS Form 990 by the latest
revision of Section 6104(d) of the Internal Revenue Code and
associated regulations.
   (2) If it is a corporation, have an audit committee appointed by
the board of directors. The audit committee may include persons who
are not members of the board of directors, but the member or members
of the audit committee shall not include any members of the staff,
including the president or chief executive officer and the treasurer
or chief financial officer. If the corporation has a finance
committee, it must be separate from the audit committee. Members of
the finance committee may serve on the audit committee; however, the
chairperson of the audit committee may not be a member of the finance
committee and members of the finance committee shall constitute less
than one-half of the membership of the audit committee. Members of
the audit committee shall not receive any compensation from the
corporation in excess of the compensation, if any, received by
members of the board of directors for service on the board and shall
not have a material financial interest in any entity doing business
with the corporation. Subject to the supervision of the board of
directors, the audit committee shall be responsible for recommending
to the board of directors the retention and termination of the
independent auditor and may negotiate the independent auditor's
compensation, on behalf of the board of directors. The audit
committee shall confer with the auditor to satisfy its members that
the financial affairs of the corporation are in order, shall review
and determine whether to accept the audit, shall assure that any
nonaudit services performed by the auditing firm conform with
standards for auditor independence referred to in paragraph (1), and
shall approve performance of nonaudit services by the auditing firm.
If the charitable corporation that is required to have an audit
committee pursuant to this subdivision is under the control of
another corporation, the audit committee may be part of the board of
directors of the controlling corporation.
   (f) If, independent of the audit requirement set forth in
paragraph (1) of subdivision (e), a charitable corporation,
unincorporated association, or trustee required to file reports with
the Attorney General pursuant to this section prepares financial
statements that are audited by a certified public accountant, the
audited financial statements shall be available for inspection by the
Attorney General and shall be made available to members of the
public in conformity with paragraph (1) of subdivision (e).
   (g) The board of directors of a charitable corporation or
unincorporated association, or an authorized committee of the board,
and the trustee or trustees of a charitable trust shall review and
approve the compensation, including benefits, of the president or
chief executive officer and the treasurer or chief financial officer
to assure that it is just and reasonable. This review and approval
shall occur initially upon the hiring of the officer, whenever the
term of employment, if any, of the officer is renewed or extended,
and whenever the officer's compensation is modified. Separate review
and approval shall not be required if a modification of compensation
extends to substantially all employees. If a charitable corporation
is affiliated with other charitable corporations, the requirements of
this section shall be satisfied if review and approval is obtained
from the board, or an authorized committee of the board, of the
charitable corporation that makes retention and compensation
decisions regarding a particular individual.



12586.1.  In addition to a registration fee, a charitable
corporation or trustee, commercial fundraiser, fundraising counsel,
or coventurer may be assessed a late fee or an additional fee of
twenty-five dollars ($25) for each month or part of the month after
the date on which the registration statement and financial report
were due to be filed or after the period of extension granted for the
filing if the charitable corporation or trustee, commercial
fundraiser, fundraising counsel, or coventurer does any of the
following:
   (a) Exists and operates in California without being registered.
   (b) Solicits contributions in California without being registered
or, if applicable, bonded.
   (c) Fails to file its first report no later than four months and
15 days following the close of each calendar or fiscal year and has
not requested an extension of time to file the annual report.
   (d) Fails to file its subsequent annual report no later than four
months and 15 days following the close of each calendar or fiscal
year subsequent to the filing of the first report and has not
requested an extension of time to file the annual report.
   (e) Fails to file its annual registration/renewal form within the
time specified by the Attorney General irrespective of other report
filing requirements.
   (f) Fails to correct the deficiencies in its registration or
annual report within 10 days of receipt of written notice of those
deficiencies.



12586.2.  All fines, penalties, attorney's fees, if any, as
authorized by law, and costs of investigation paid to the Attorney
General pursuant to Section 12598 shall be used by the Department of
Justice solely for the administration of the Attorney General's
charitable trust enforcement responsibilities.



12587.  The Attorney General may make additional rules and
regulations necessary for the administration of this article,
provided that any assessment of an annual registration or renewal fee
from charitable trustees and corporations, commercial fundraisers,
fundraising counsel, and commercial coventurers subject to this
article, authorized by statute or regulation, shall be used by the
Department of Justice solely to operate and maintain the Attorney
General's Registry of Charitable Trusts and provide public access via
the Internet to reports filed with the Attorney General.



12587.1.  (a) The Registry of Charitable Trusts Fund is hereby
established in the State Treasury, to be administered by the
Department of Justice.
   (b) Notwithstanding any other provision of law, all registration
fees, registration renewal fees, and late fees or other fees paid to
the Department of Justice pursuant to this article, Section 2850 of
the Probate Code, or Section 320.5 of the Penal Code, shall be
deposited in the Registry of Charitable Trusts Fund.
   (c) Moneys in the fund, upon appropriation by the Legislature,
shall be used by the Attorney General solely to operate and maintain
the Attorney General's Registry of Charitable Trusts and Registry of
Conservators, Guardians, and Trustees, and provide public access via
the Internet to reports filed with the Attorney General.



12588.  The Attorney General may investigate transactions and
relationships of corporations and trustees subject to this article
for the purpose of ascertaining whether or not the purposes of the
corporation or trust are being carried out in accordance with the
terms and provisions of the articles of incorporation or other
instrument. He may require any agent, trustee, fiduciary,
beneficiary, institution, association, or corporation, or other
person to appear, at a named time and place, in the county designated
by the Attorney General, where the person resides or is found, to
give information under oath and to produce books, memoranda, papers,
documents of title, and evidence of assets, liabilities, receipts, or
disbursements in the possession or control of the person ordered to
appear.


12589.  When the Attorney General requires the attendance of any
person, as provided in Section 12588, he shall issue an order setting
forth the time when and the place where attendance is required and
shall cause the same to be delivered to or sent by registered mail to
the person at least 14 days before the date fixed for attendance.
Such order shall have the same force and effect as a subpoena and,
upon application of the Attorney General, obedience to the order may
be enforced by the superior court in the county where the person
receiving it resides or is found, in the same manner as though the
notice were a subpoena. The court, after hearing, for cause, and upon
application of any person aggrieved by the order, shall have the
right to alter, amend, revise, suspend or postpone all or any part of
its provisions.



12590.  Subject to reasonable rules and regulations adopted by the
Attorney General, the register, copies of instruments, and the
reports filed with the Attorney General shall be open to public
inspection. The Attorney General shall withhold from public
inspection any instrument so filed whose content is not exclusively
for charitable purposes.



12591.  The Attorney General may institute appropriate proceedings
to secure compliance with this article and to invoke the jurisdiction
of the court. The powers and duties of the Attorney General provided
in this article are in addition to his existing powers and duties.
Nothing in this article shall impair or restrict the jurisdiction of
any court with respect to any of the matters covered by it, except
that no court shall have jurisdiction to modify or terminate any
trust of property for charitable purposes unless the Attorney General
is a party to the proceedings.



12591.1.  (a) Any person who violates any provision of this article
with intent to deceive or defraud any charity or individual is liable
for a civil penalty not exceeding ten thousand dollars ($10,000).
   (b) Except as provided in subdivision (d), any person who violates
any other provision of this article is liable for a civil penalty,
as follows:
   (1) For the first offense, a fine not exceeding one thousand
dollars ($1,000).
   (2) For any subsequent offense, a fine not exceeding two thousand
five hundred dollars ($2,500).
   (c) Any offense committed under this article involving a
solicitation may be deemed to have been committed at either the place
at which the solicitation was initiated or at the place where the
solicitation was received.
   (d) Any person who violates only subdivision (c), (d), (e), or (f)
of Section 12586.1 shall not be liable for a civil penalty under
subdivision (b) if the person (1) has not received reasonable notice
of the violation and (2) has not been given a reasonable opportunity
to correct the violation. The Attorney General shall notify in
writing a person who violates only subdivisions (c), (d), (e), or (f)
of Section 12586.1 that he or she has 30 days to correct the
violation.
   (e) The recovery of a civil penalty pursuant to this section
precludes assessment of a late fee pursuant to Section 12586.1 for
the same offense.



12591.2.  In any case where the Attorney General has authority to
institute an action or proceeding under this article, he or she may
accept an assurance of voluntary compliance through which any person
alleged to be engaged in any method, act, or practice in violation of
this article agrees to discontinue that method, act, or practice.
The assurance may, among other terms, include a stipulation of a
voluntary payment by the person of the cost of the investigation or
of an amount to be held in escrow pending the outcome of an action or
as restitution to aggrieved persons, or both. The assurance of
voluntary compliance shall not be considered an admission of a
violation for any purpose. The assurance of compliance shall be in
writing and shall be filed with a superior court in this state for
approval and if approved shall thereafter be filed with the clerk of
the court. Matters closed may at any time be reopened by the court
for further proceedings in the public interest. In the event of an
alleged violation, the Attorney General may, at his or her
discretion, either initiate contempt proceedings or proceed as if the
assurance of voluntary compliance has not been accepted.



12592.  This article shall apply regardless of any contrary
provisions of any instrument.



12593.  Every person who offers for probate any instrument which
establishes a testamentary trust of property for charitable purposes
or who records in any county or city and county any inter vivos
transfer of property for charitable purposes shall furnish a copy of
such document to the Attorney General. The custodian of the records
of a court having jurisdiction of probate matters or of charitable
trusts shall furnish such copies of papers, records and files of his
office relating to the subject of this article as the Attorney
General requires.


12594.  Every officer, agency, board, or commission of this State
receiving applications for exemption from taxation of any
corporation, charitable trust or similar relationship in which the
corporation or trustee is subject to this article shall annually file
with the Attorney General a list of all applications received during
the year.



12595.  This act shall be so construed as to effectuate its general
purpose to make uniform the law of those states which enact it.



12596.  Any action brought by the Attorney General against trustees
or other persons holding property in trust for charitable purposes or
against any charitable corporation or any director or officer
thereof to enforce a charitable trust or to impress property with a
trust for charitable purposes or to recover property or the proceeds
thereof for and on behalf of any charitable trust or corporation, may
be brought at any time within ten (10) years after the cause of
action shall have accrued.



12597.  In any proceeding brought by the Attorney General to secure
compliance with the provisions of Sections 12584 to 12587, inclusive,
or any regulation issued pursuant thereto, the judgment, if in favor
of the state, shall provide that the person having the
responsibility or duty to comply with such provisions on behalf of
any charitable trust or charitable corporation, shall pay the
reasonable expense necessarily incurred by the state in the
investigation and prosecution of such action.



12598.  (a) The primary responsibility for supervising charitable
trusts in California, for ensuring compliance with trusts and
articles of incorporation, and for protection of assets held by
charitable trusts and public benefit corporations, resides in the
Attorney General. The Attorney General has broad powers under common
law and California statutory law to carry out these charitable trust
enforcement responsibilities. These powers include, but are not
limited to, charitable trust enforcement actions under all of the
following:
   (1) This article.
   (2) Title 8 (commencing with Section 2223) of Part 4 of Division 3
of the Civil Code.
   (3) Division 2 (commencing with Section 5000) of Title 1 of the
Corporations Code.
   (4) Sections 8111, 11703, 15004, 15409, 15680 to 15685, inclusive,
16060 to 16062, inclusive, 16064, and 17200 to 17210, inclusive, of
the Probate Code.
   (5) Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of the Business and Professions Code, and Sections 17500
and 17535 of the Business and Professions Code.
   (6) Sections 319, 326.5, and 532d of the Penal Code.
   (b) The Attorney General shall be entitled to recover from
defendants named in a charitable trust enforcement action all
reasonable attorney's fees and actual costs incurred in conducting
that action, including, but not limited to, the costs of auditors,
consultants, and experts employed or retained to assist with the
investigation, preparation, and presentation in court of the
charitable trust enforcement action.
   (c) Attorney's fees and costs shall be recovered by the Attorney
General pursuant to court order. When awarding attorneys' fees and
costs, the court shall order that the attorney's fees and costs be
paid by the charitable organization and the individuals named as
defendants in or otherwise subject to the action, in a manner that
the court finds to be equitable and fair.
   (d) Upon a finding by the court that a lawsuit filed by the
Attorney General was frivolous or brought in bad faith, the court may
award the defendant charity the costs of that action.
   (e) (1) The Attorney General may refuse to register or may revoke
or suspend the registration of a charitable corporation or trustee,
commercial fundraiser, fundraising counsel, or coventurer whenever
the Attorney General finds that the charitable corporation or
trustee, commercial fundraiser, fundraising counsel, or coventurer
has violated or is operating in violation of any provisions of this
article.
   (2) All actions of the Attorney General shall be taken subject to
the rights authorized pursuant to Chapter 4.5 (commencing with
Section 11400) of Part 1 of Division 3 of Title 2.



12599.  (a) "Commercial fundraiser for charitable purposes" means
any individual, corporation, unincorporated association, or other
legal entity who for compensation does any of the following:
   (1) Solicits funds, assets, or property in this state for
charitable purposes.
   (2) As a result of a solicitation of funds, assets, or property in
this state for charitable purposes, receives or controls the funds,
assets, or property solicited for charitable purposes.
   (3) Employs, procures, or engages any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   A commercial fundraiser for charitable purposes shall include any
person, association of persons, corporation, or other entity that
obtains a majority of its inventory for sale by the purchase,
receipt, or control for resale to the general public, of salvageable
personal property solicited by an organization qualified to solicit
donations pursuant to Section 148.3 of the Welfare and Institutions
Code.
   A commercial fundraiser for charitable purposes shall not include
a "trustee" as defined in Section 12582 or 12583, a "charitable
corporation" as defined in Section 12582.1, or any employee thereof.
A commercial fundraiser for charitable purposes shall not include an
individual who is employed by or under the control of a commercial
fundraiser for charitable purposes registered with the Attorney
General. A commercial fundraiser for charitable purposes shall not
include any federally insured financial institution that holds as a
depository funds received as a result of a solicitation for
charitable purposes.
   As used in this section, "charitable purposes" includes any
solicitation in which the name of any organization of law enforcement
personnel, firefighters, or other persons who protect the public
safety is used or referred to as an inducement for transferring any
funds, assets, or property, unless the only expressed or implied
purpose of the solicitation is for the sole benefit of the actual
active membership of the organization.
   (b) A commercial fundraiser for charitable purposes shall, prior
to soliciting any funds, assets, or property, including salvageable
personal property, in California for charitable purposes, or prior to
receiving and controlling any funds, assets, or property, including
salvageable personal property, as a result of a solicitation in this
state for charitable purposes, register with the Attorney General's
Registry of Charitable Trusts on a registration form provided by the
Attorney General. Renewals of registration shall be filed with the
Registry of Charitable Trusts by January 15 of each calendar year in
which the commercial fundraiser for charitable purposes does business
and shall be effective for one year. A registration or renewal fee
of two hundred dollars ($200) shall be required for registration of a
commercial fundraiser for charitable purposes, and shall be payable
by certified or cashier's check to the Attorney General's Registry of
Charitable Trusts at the time of registration or renewal. The
Attorney General may adjust the annual registration or renewal fee,
or means of payment, as needed pursuant to this section. The Attorney
General's Registry of Charitable Trusts may grant extensions of time
to file annual registration as required, pursuant to subdivision (b)
of Section 12586. No separate fee shall be charged by the Attorney
General for electronic registration, electronic renewal, or
electronic repayment of fees.
   (c) A commercial fundraiser for charitable purposes shall file
with the Attorney General's Registry of Charitable Trusts an annual
financial report on a form provided by the Attorney General,
accounting for all funds collected pursuant to any solicitation for
charitable purposes during the preceding calendar year. The annual
financial report shall be filed with the Attorney General's Registry
of Charitable Trusts no later than 30 days after the close of the
preceding calendar year.
   (d) The contents of the forms for annual registration and annual
financial reporting by commercial fundraisers for charitable purposes
shall be established by the Attorney General in a manner consistent
with the procedures set forth in subdivisions (a) and (b) of Section
12586. The annual financial report shall require a detailed, itemized
accounting of funds, assets, or property, solicited for charitable
purposes on behalf of each charitable organization exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code or for
each charitable purpose during the accounting period, and shall
include, among other data, the following information for funds,
assets, or property, solicited by the commercial fundraiser for
charitable purposes:
   (1) Total revenue.
   (2) The fee or commission charged by the commercial fundraiser for
charitable purposes.
   (3) Salaries paid by the commercial fundraiser for charitable
purposes to its officers and employees.
   (4) Fundraising expenses.
   (5) Distributions to the identified charitable organization or
purpose.
   (6) The names and addresses of any director, officer, or employee
of the commercial fundraiser for charitable purposes who is a
director, officer, or employee of any charitable organization listed
in the annual financial report.
   (e) A commercial fundraiser for charitable purposes that obtains a
majority of its inventory for sale by the purchase, receipt, or
control for resale to the general public, of salvageable personal
property solicited by an organization qualified to solicit donations
pursuant to Section 148.3 of the Welfare and Institutions Code shall
file with the Attorney General's Registry of Charitable Trusts, and
not with the sheriff of any county, an annual financial report on a
form provided by the Attorney General that is separate and distinct
from forms filed by other commercial fundraisers for charitable
purposes pursuant to subdivisions (c) and (d).
   (f) It shall be unlawful for any commercial fundraiser for
charitable purposes to solicit funds in this state for charitable
purposes unless the commercial fundraiser for charitable purposes has
complied with the registration or annual renewal and financial
reporting requirements of this article. Failure to comply with these
registration or annual renewal and financial reporting requirements
shall be grounds for injunction against solicitation in this state
for charitable purposes and other civil remedies provided by law.
   (g) A commercial fundraiser for charitable purposes is a
constructive trustee for charitable purposes as to all funds
collected pursuant to solicitation for charitable purposes and shall
account to the Attorney General for all funds. A commercial
fundraiser for charitable purposes is subject to the Attorney General'
s supervision and enforcement over charitable funds and assets to the
same extent as a trustee for charitable purposes under this article.
   (h) Not less than 10 working days prior to the commencement of
each solicitation campaign, event, or service, or not later than
commencement of solicitation for solicitations to aid victims of
emergency hardship or disasters, a commercial fundraiser for
charitable purposes shall file with the Attorney General's Registry
of Charitable Trusts a notice on a form prescribed by the Attorney
General that sets forth all of the following:
   (1) The name, address, and telephone number of the commercial
fundraiser for charitable purposes.
   (2) The name, address, and telephone number of the charitable
organization with whom the commercial fundraiser has contracted.
   (3) The fundraising methods to be used.
   (4) The projected dates when performance under the contract will
commence and terminate.
   (5) The name, address, and telephone number of the person
responsible for directing and supervising the work of the commercial
fundraiser under the contract.
   (i) There shall be a written contract between a commercial
fundraiser for charitable purposes and a charitable organization for
each solicitation campaign, event, or service, that shall be signed
by the authorized contracting officer for the commercial fundraiser
and by an official of the charitable organization who is authorized
to sign by the organization's governing body. The contract shall be
available for inspection by the Attorney General and shall contain
all of the following provisions:
   (1) The legal name and address of the charitable organization as
registered with the Registry of Charitable Trusts, unless the
charitable organization is exempt from registration.
   (2) A statement of the charitable purpose for which the
solicitation campaign, event, or service is being conducted.
   (3) A statement of the respective obligations of the commercial
fundraiser and the charitable organization.
   (4) If the commercial fundraiser is to be paid a fixed fee, a
statement of the fee to be paid to the commercial fundraiser and a
good faith estimate of what percentage the fee will constitute of the
total contributions received. The contract shall clearly disclose
the assumptions upon which the estimate is based, and the stated
assumptions shall be based upon all of the relevant facts known to
the commercial fundraiser regarding the solicitation to be conducted
by the commercial fundraiser.
   (5) If a percentage fee is to be paid to the commercial
fundraiser, a statement of the percentage of the total contributions
received that will be remitted to or retained by the charitable
organization, or, if the solicitation involves the sale of goods or
services or the sale of admissions to a fundraising event, the
percentage of the purchase price that will be remitted to the
charitable organization. The stated percentage shall be calculated by
subtracting from contributions received and sales receipts not only
the commercial fundraiser's fee, but also any additional amounts that
the charitable organization is obligated to pay as fundraising
costs.
   (6) The effective and termination dates of the contract and the
date solicitation activity is to commence within the state.
   (7) A provision that requires that each contribution in the
control or custody of the commercial fundraiser shall in its entirety
and within five working days of its receipt comply with either of
the following:
   (A) Be deposited in an account at a bank or other federally
insured financial institution that is solely in the name of the
charitable organization and over which the charitable organization
has sole control of withdrawals.
   (B) Be delivered to the charitable organization in person, by
United States express mail, or by another method of delivery
providing for overnight delivery.
   (8) A statement that the charitable organization exercises control
and approval over the content and frequency of any solicitation.
   (9) If the commercial fundraiser proposes to make any payment in
cash or in kind to any person or legal entity to secure any person's
attendance at, or sponsorship, approval, or endorsement of, a charity
fundraising event, the maximum dollar amount of those payments shall
be set forth in the contract. "Charity fundraising event" means any
gathering of persons, including, but not limited to, a party,
banquet, concert, or show, that is held for the purpose or claimed
purpose of raising funds for any charitable purpose or organization.
   (10) A provision that includes all of the following statements:
   (A) The charitable organization has the right to cancel the
contract without cost, penalty, or liability for a period of 10 days
following the date on which the contract is executed.
   (B) The charitable organization may cancel the contract by serving
a written notice of cancellation on the commercial fundraiser.
   (C) If mailed, service shall be by certified mail, return receipt
requested, and cancellation shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (D) Any funds collected after effective notice that the contract
has been canceled shall be deemed to be held in trust for the benefit
of the charitable organization without deduction for costs or
expenses of any nature.
   (E) The charitable organization shall be entitled to recover all
funds collected after the date of cancellation.
   (11) A provision that includes all of the following statements:
   (A) Following the initial 10-day cancellation period, the
charitable organization may terminate the contract by giving 30 days'
written notice.
   (B) If mailed, service of the notice shall be by certified mail,
return receipt requested, and shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (C) In the event of termination under this subdivision, the
charitable organization shall be liable for services provided by the
commercial fundraiser up to 30 days after the effective service of
the notice.
   (12) A provision that, following the initial 10-day cancellation
period, the charitable organization may terminate the contract at any
time upon written notice, without payment or compensation of any
kind to the commercial fundraiser, if the commercial fundraiser or
its agents, employees, or representatives do any of the following:
   (A) Make any material misrepresentations in the course of
solicitations or with respect to the charitable organization.
   (B) Are found by the charitable organization to have been
convicted of a crime arising from the conduct of a solicitation for a
charitable organization or purpose punishable as a misdemeanor or a
felony.
   (C) Otherwise conduct fundraising activities in a manner that
causes or could cause public disparagement of the charitable
organization's good name or good will.
   (13) Any other information required by the regulations of the
Attorney General.
   (j) It shall be unlawful for a commercial fundraiser for
charitable purposes to not disclose the percentage of total
fundraising expenses of the fundraiser upon receiving a written or
oral request from a person solicited for a contribution for a
charitable purpose. "Percentage of total fundraising expenses," as
used in this section, means the ratio of the total expenses of the
fundraiser to the total revenue received by the fundraiser for the
charitable purpose for which funds are being solicited, as reported
on the most recent financial report filed with the Attorney General's
Registry of Charitable Trusts. A commercial fundraiser shall
disclose this information in writing within five working days from
receipt of a request by mail or facsimile. A commercial fundraiser
shall orally disclose this information immediately upon a request
made in person or in a telephone conversation and shall follow this
response with a written disclosure within five working days. Failure
to comply with the requirements of this subdivision shall be grounds
for an injunction against solicitation in this state for charitable
purposes and other civil remedies provided by law.
   (k) If the Attorney General issues a report to the public
containing information obtained from registration forms or financial
report forms filed by commercial fundraisers for charitable purposes,
there shall be a separate section concerning commercial fundraisers
for charitable purposes that obtain a majority of their inventory for
sale by the purchase, receipt, or control for resale to the general
public, of salvageable personal property solicited by an organization
qualified to solicit donations pursuant to Section 148.3 of the
Welfare and Institutions Code. The report shall include an
explanation of the distinctions between these thrift store operations
and other types of commercial fundraising.
   (l) No person may act as a commercial fundraiser for charitable
purposes if that person, any officer or director of that person's
business, any person with a controlling interest in the business, or
any person the commercial fundraiser employs, engages, or procures to
solicit for compensation, has been convicted by a court of any state
or the United States of a crime arising from the conduct of a
solicitation for a charitable organization or purpose punishable as a
misdemeanor or felony.
   (m) A commercial fundraiser for charitable purposes shall not
solicit in the state on behalf of a charitable organization unless
that charitable organization is registered or is exempt from
registration with the Attorney General's Registry of Charitable
Trusts.
   (n) If any provision of this section or the application thereof to
any person or circumstances is held invalid, that invalidity shall
not affect any other provision or application of this section that
can be given effect without the invalid provision or application, and
to this end the provisions of this section are severable.



12599.1.  (a) "Fundraising counsel for charitable purposes" is
defined as any individual, corporation, unincorporated association,
or other legal entity who is described by all of the following:
   (1) For compensation plans, manages, advises, counsels, consults,
or prepares material for, or with respect to, the solicitation in
this state of funds, assets, or property for charitable purposes.
   (2) Does not solicit funds, assets, or property for charitable
purposes.
   (3) Does not receive or control funds, assets, or property
solicited for charitable purposes in this state.
   (4) Does not employ, procure, or engage any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   (b) "Fundraising counsel for charitable purposes" does not include
any of the following:
   (1) An attorney, investment counselor, or banker who in the
conduct of that person's profession advises a client when actually
engaged in the giving of legal, investment, or financial advice.
   (2) A trustee as defined in Section 12582 or 12583.
   (3) A charitable corporation as defined in Section 12582.1, or any
employee thereof.
   (4) A person employed by or under the control of a fundraising
counsel for charitable purposes, as defined in subdivision (a).
   (5) A person, corporation, or other legal entity, engaged as an
independent contractor directly by a trustee or a charitable
corporation, that prints, reproduces, or distributes written
materials prepared by a trustee, a charitable corporation, or any
employee thereof, or that performs artistic or graphic services with
respect to written materials prepared by a trustee, a charitable
corporation, or any employee thereof, provided that the independent
contractor does not perform any of the activities described in
paragraph (1) of subdivision (a).
   (6) A person whose total annual gross compensation for performing
any activity described in paragraph (1) of subdivision (a) does not
exceed twenty-five thousand dollars ($25,000).
   (c) A fundraising counsel for charitable purposes shall, prior to
managing, advising, counseling, consulting, or preparing material
for, or with respect to, the solicitation in this state of funds,
assets, or property for charitable purposes, register with the
Attorney General's Registry of Charitable Trusts on a registration
form provided by the Attorney General. Renewals of registration shall
be filed with the Registry of Charitable Trusts by January 15 of
each calendar year in which the fundraising counsel for charitable
purposes does business and shall be effective for one year.
   A registration or renewal fee of two hundred dollars ($200) shall
be required for registration of a fundraising counsel for charitable
purposes, and shall be payable by certified or cashier's check to the
Attorney General's Registry of Charitable Trusts at the time of
registration and renewal. The Attorney General may adjust the annual
registration or renewal fee, or means of payment, as needed pursuant
to this section. The Attorney General's Registry of Charitable Trusts
may grant extensions of time to file annual registration as
required, pursuant to subdivision (b) of Section 12586.
   (d) A fundraising counsel for charitable purposes shall file
annually with the Attorney General's Registry of Charitable Trusts on
a form provided by the Attorney General, a report listing each
person, corporation, unincorporated association, or other legal
entity for whom the fundraising counsel has performed any services
described in paragraph (1) of subdivision (a), and a statement
certifying that the fundraising counsel had a written contract with
each listed person, corporation, unincorporated association, or other
legal entity that complied with the requirements of subdivision (f).
   (e) Not less than 10 working days prior to the commencement of the
performance of any service for a charitable organization by a
fundraising counsel for charitable purposes, or not later than
commencement of solicitation for solicitations to aid victims of
emergency hardship or disasters, the fundraising counsel shall file
with the Attorney General's Registry of Charitable Trusts a notice on
a form prescribed by the Attorney General that sets forth all of the
following:
   (1) The name, address, and telephone number of the fundraising
counsel for charitable purposes.
   (2) The name, address, and telephone number of the charitable
organization with whom the fundraising counsel has contracted.
   (3) The projected dates when performance under the contract will
commence and terminate.
   (4) The name, address, and telephone number of the person
responsible for directing and supervising the work of the fundraising
counsel under the contract.
   (f) There shall be a written contract between a fundraising
counsel for charitable purposes and a charitable organization for
each service to be performed by the fundraising counsel for the
charitable organization, that shall be signed by the authorized
contracting officer for the fundraising counsel and by an official of
the charitable organization who is authorized to sign by the
organization's governing body. The contract shall be available for
inspection by the Attorney General and shall contain all of the
following provisions:
   (1) The legal name and address of the charitable organization as
registered with the Registry of Charitable Trusts unless the
charitable organization is exempt from registration.
   (2) A statement of the charitable purpose for which the
solicitation campaign is being conducted.
   (3) A statement of the respective obligations of the fundraising
counsel and the charitable organization.
   (4) A clear statement of the fees and any other form of
compensation, including commissions and property, that will be paid
to the fundraising counsel.
   (5) The effective and termination dates of the contract and the
date services will commence with respect to solicitation in this
state of contributions for a charitable organization.
   (6) A statement that the fundraising counsel will not at any time
solicit funds, assets, or property for charitable purposes, receive
or control funds, assets, or property solicited for charitable
purposes, or employ, procure, or engage any compensated person to
solicit, receive, or control funds, assets, or property for
charitable purposes.
   (7) A statement that the charitable organization exercises control
and approval over the content and frequency of any solicitation.
   (8) A provision that includes all of the following statements:
   (A) The charitable organization has the right to cancel the
contract without cost, penalty, or liability for a period of 10 days
following the date on which the contract is executed.
   (B) The charitable organization may cancel the contract by serving
a written notice of cancellation on the fundraising counsel.
   (C) If mailed, service shall be by certified mail, return receipt
requested, and cancellation shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (9) A provision that includes all of the following statements:
   (A) Following the initial 10-day cancellation period, the
charitable organization may terminate the contract by giving 30 days'
written notice.
   (B) If mailed, service of the notice shall be by certified mail,
return receipt requested, and shall be deemed effective upon the
expiration of five calendar days from the date of mailing.
   (C) In the event of termination under this subdivision, the
charitable organization shall be liable for services provided by the
fundraising counsel to the effective date of the termination.
   (10) Any other information required by the regulations of the
Attorney General.
   (g) It shall be unlawful for any fundraising counsel for
charitable purposes to manage, advise, counsel, consult, or prepare
material for, or with respect to, the solicitation in this state of
funds, assets, or property for charitable purposes unless the
fundraising counsel for charitable purposes has complied with the
registration or annual renewal and financial reporting requirements
of this article.
   (h) A fundraising counsel for charitable purposes is subject to
the Attorney General's supervision and enforcement to the same extent
as a trustee for charitable purposes under this article.
   (i) If any provision of this section or the application thereof to
any person or circumstances is held invalid, that invalidity shall
not affect other provisions or application of this section which can
be given effect without the invalid provision or application, and to
this end the provisions of this section are severable.



12599.2.  (a) "Commercial coventurer" is defined as any person who,
for profit, is regularly and primarily engaged in trade or commerce
other than in connection with the raising of funds, assets, or
property for charitable organizations or charitable purposes, and who
represents to the public that the purchase or use of any goods,
services, entertainment, or any other thing of value will benefit a
charitable organization or will be used for a charitable purpose.
   (b) A commercial coventurer is a trustee as defined in Section
12582. Notwithstanding the requirements of Sections 12585 and 12586,
a commercial coventurer is not required to register or file periodic
reports with the Attorney General provided that the commercial
coventurer:
   (1) Has a written contract with a trustee or charitable
corporation subject to this article, signed by two officers of the
trustee or charitable corporation, prior to representing to the
public that the purchase or use of any goods, services,
entertainment, or any other thing of value will benefit the trustee
or charitable corporation or will be used for a charitable purpose.
   (2) Within 90 days after commencement of those representations,
and at the end of each successive 90-day period during which the
representations are made, transfers to that trustee or charitable
corporation subject to this article all funds, assets, or property
received as a result of the representations.
   (3) Provides in conjunction with each transfer required by
paragraph (2) a written accounting to the trustee or charitable
corporation subject to this article of all funds, assets, or property
received sufficient to enable the trustee or charitable corporation
(A) to determine that representations made to the public on its
behalf have been adhered to accurately and completely, and (B) to
prepare its periodic report filed with the Attorney General pursuant
to Section 12586.
   (c) A commercial coventurer that does not meet the requirements of
paragraphs (1), (2), and (3) of subdivision (b) shall register and
report to the Attorney General on forms required by the Attorney
General. An annual registration or renewal fee of two hundred dollars
($200) shall be required for registration or renewal of registration
of a commercial coventurer, and shall be payable by certified or
cashier's check to the Attorney General's Registry of Charitable
Trusts at the time of registration or renewal. The Attorney General
may adjust the annual registration or renewal fee, or means of
payment, as needed pursuant to this section.




12599.3.  (a) A contract between a charitable organization and a
commercial fundraiser for charitable purposes or fundraising counsel
for charitable purposes shall be voidable by the charitable
organization unless the commercial fundraiser or the fundraising
counsel is registered with the Attorney General's Registry of
Charitable Trusts prior to the commencement of the solicitation.
   (b) Whenever a charitable organization contracts with a commercial
fundraiser for charitable purposes or fundraising counsel for
charitable purposes, the charitable organization shall have the right
to cancel the contract without cost, penalty, or liability for a
period of 10 days following the date on which the contract is
executed. Any provision in the contract that is intended to waive
this right of cancellation shall be void and unenforceable.
   (c) A charitable organization may cancel a contract pursuant to
subdivision (b) by serving a written notice of cancellation on the
fundraising counsel or commercial fundraiser. If mailed, service
shall be by certified mail, return receipt requested, and
cancellation shall be deemed effective upon the expiration of five
calendar days from the date of mailing. The notice shall be
sufficient if it indicates that the charitable organization does not
intend to be bound by the contract.
   (d) Whenever a charitable organization cancels a contract pursuant
to this section, it shall mail a duplicate copy of the notice of
cancellation to the Attorney General's Registry of Charitable Trusts.
   (e) Any funds collected after effective notice that a contract has
been canceled shall be deemed to be held in trust for the benefit of
the charitable organization without deduction for costs or expenses
of any nature. A charitable organization shall be entitled to recover
all funds collected after the date of cancellation.
   (f) Following the initial 10-day cancellation period, a charitable
organization may terminate a contract with a commercial fundraiser
for charitable purposes or a fundraising counsel for charitable
purposes by giving 30 days' written notice. If mailed, service of the
notice shall be by certified mail, return receipt requested, and
shall be deemed effective upon the expiration of five calendar days
from the date of mailing. In the event of termination under this
subdivision, the charitable organization shall be liable for services
provided by the commercial fundraiser or fundraising counsel up to
30 days after the effective service of the notice.
   (g) Following the initial 10-day cancellation period, a charitable
organization may terminate at any time upon written notice a
contract with a commercial fundraiser for charitable purposes or a
fundraising counsel for charitable purposes, without payment or
compensation of any kind to the commercial fundraiser or fundraising
counsel, if the commercial fundraiser or the fundraising counsel, or
their agents, employees, or representatives (1) make any material
misrepresentations in the course of solicitations or with respect to
the charitable organization, (2) are found by the charitable
organization to have been convicted of a crime arising from the
conduct of a solicitation for a charitable organization or purpose
that is punishable as a felony or misdemeanor, or (3) otherwise
conduct fundraising activities in a manner that causes or could cause
public disparagement of the charitable organization's good name or
good will.



12599.5.  Each application for registration or renewal of
registration under subdivision (b) of Section 12599 shall be
accompanied by a cash deposit or by a bond issued by an admitted
surety in favor of the State of California and in a form acceptable
to the Attorney General. The cash deposit or bond shall be in the
amount of twenty-five thousand dollars ($25,000) and shall be for the
benefit of any person damaged as a result of malfeasance or
misfeasance in the conduct of the activities specified in subdivision
(a) of Section 12599. The bond may be in the form of a rider to a
larger blanket liability bond.



12599.6.  (a) Charitable organizations and commercial fundraisers
for charitable purposes shall not misrepresent the purpose of the
charitable organization or the nature or purpose or beneficiary of a
solicitation. A misrepresentation may be accomplished by words or
conduct or failure to disclose a material fact.
   (b) A charitable organization must establish and exercise control
over its fundraising activities conducted for its benefit, including
approval of all written contracts and agreements, and must assure
that fundraising activities are conducted without coercion.
   (c) A charitable organization shall not enter into any contract or
agreement with, or employ, any commercial fundraiser for charitable
purposes or fundraising counsel for charitable purposes unless that
commercial fundraiser or fundraising counsel is registered with the
Attorney General's Registry of Charitable Trusts or, if not
registered, agrees to register prior to the commencement of any
solicitation.
   (d) A charitable organization shall not enter into any contract or
agreement with, or raise any funds for, any charitable organization
required to be registered pursuant to this act unless that charitable
organization is registered with the Attorney General's Registry of
Charitable Trusts or, if not registered, agrees to register prior to
the commencement of the solicitation.
   (e) Each contribution in the control or custody of a commercial
fundraiser for charitable purposes shall in its entirety and within
five working days of receipt (1) be deposited in an account at a bank
or other federally insured financial institution that is solely in
the name of the charitable organization on whose behalf the
contribution was solicited and over which the charitable organization
has sole control of withdrawals or, (2) be delivered to the
charitable organization in person, by Express Mail, or by another
method of delivery providing for overnight delivery.
   (f) Regardless of injury, the following acts and practices are
prohibited in the planning, conduct, or execution of any solicitation
or charitable sales promotion:
   (1) Operating in violation of, or failing to comply with, any of
the requirements of this act or regulations or orders of the Attorney
General, or soliciting contributions after registration with the
Attorney General's Registry of Charitable Trusts has expired or has
been suspended or revoked.
   (2) Using any unfair or deceptive acts or practices or engaging in
any fraudulent conduct that creates a likelihood of confusion or
misunderstanding.
   (3) Using any name, symbol, emblem, statement, or other material
stating, suggesting, or implying to a reasonable person that the
contribution is to or for the benefit of a particular charitable
organization when that is not the fact.
   (4) Misrepresenting or misleading anyone in any manner to believe
that the person on whose behalf a solicitation or charitable sales
promotion is being conducted is a charitable organization or that the
proceeds of the solicitation or charitable sales promotion will be
used for charitable purposes when that is not the fact.
   (5) Misrepresenting or misleading anyone in any manner to believe
that any other person sponsors, endorses, or approves a charitable
solicitation or charitable sales promotion when that person has not
given consent in writing to the use of the person's name for these
purposes.
   (6) Misrepresenting or misleading anyone in any manner to believe
that goods or services have endorsement, sponsorship, approval,
characteristics, ingredients, uses, benefits, or qualities that they
do not have or that a person has endorsement, sponsorship, approval,
status, or affiliation that the person does not have.
   (7) Using or exploiting the fact of registration with the Attorney
General's Registry of Charitable Trusts so as to lead any person to
believe that the registration in any manner constitutes an
endorsement or approval by the Attorney General. The use of the
following statement is not prohibited:
   "The official registration and financial information regarding
(insert the legal name of the charity as registered with the Registry
of Charitable Trusts) can be obtained from the Attorney General's
Web site at https://caag.state.ca.us/charities/. Registration does not
imply endorsement."
   (8) Representing directly or by implication that a charitable
organization will receive an amount greater than the actual net
proceeds reasonably estimated to be retained by the charity for its
use.
   (9) With respect to solicitations by commercial fundraisers for
charitable purposes on behalf of law enforcement personnel,
firefighters, or other persons who protect the public safety,
issuing, offering, giving, delivering, or distributing any honorary
membership cards, courtesy cards, or similar cards, or any stickers,
emblems, plates, or other items that could be used for display on a
motor vehicle, and that suggest affiliation with, or endorsement by
any public safety personnel or a group comprising such personnel.
   (10) (A) Soliciting for advertising to appear in a for-profit
publication that relates to, purports to relate to, or that could
reasonably be construed to relate to, any charitable purpose without
making the following disclosures at the time of solicitation:
   (i) The publication is a for-profit, commercial enterprise.
   (ii) The true name of the solicitor and the fact that the
solicitor is a professional solicitor.
   (iii) The publication is not affiliated with or sponsored by any
charitable organization.
   (B) Where a sale of advertising has been made, the solicitor,
prior to accepting any money for the sale, shall make to the
purchaser the disclosures required by subparagraph (A) in written
form and in conspicuous type.
   (11) Representing that any part of the contributions solicited by
a charitable organization will be given or donated to any other
charitable organization unless that organization has consented in
writing to the use of its name prior to the solicitation. The written
consent shall be signed by one authorized officer, director, or
trustee of the charitable organization.
   (12) Representing that tickets to events will be donated for use
by another, unless all of the following requirements have been met:
   (A) The charitable organiza