Charitable organizations: enforcement.

(1) Under existing law, the Supervision of Trustees and Fundraisers for Charitable Purposes Act governs charitable corporations, unincorporated associations trustees, commercial fundraisers, fundraising counsel, commercial coventurers, and other legal entities who hold or solicit property for charitable purposes over which the Attorney General has enforcement and supervisory powers. The act requires that any person who violates any provision of the act with the intent to deceive or defraud be liable for a specified civil penalty. The act also requires that any person who violates any provision of the act, regardless of intent, is liable for a specified civil penalty. This bill would revise those enforcement provisions to instead provide that the Attorney General may issue a cease and desist order whenever the Attorney General finds that any person or entity that the act applies to has committed an act that would constitute a violation of, or is operating in violation of, any provision of the act. The bill would authorize the Attorney General to impose a specified penalty on any person or entity for each act or omission that constitutes a violation of the act, subject to certain procedures. The bill would also authorize the Attorney General, if the Attorney General had assessed a penalty against a person or entity pursuant to these provisions, to suspend the registration of that person or entity in accordance with certain procedures. The bill would authorize a person or entity that the Attorney General has filed an action against pursuant to the act to request a hearing to review that action in accordance with certain procedures. The bill would authorize the Attorney General to seek injunctive relief to enforce the provisions of this act. (2) Existing law, the Supervision of Trustees and Fundraisers for Charitable Purposes Act, prohibits charitable organizations, as defined, and commercial fundraisers for charitable purposes from misrepresenting the purpose of the charitable organization or the nature, purpose, or beneficiary of a solicitation. The act further prohibits specified practices in the planning, conduct, or execution of any solicitation or charitable sales promotion, including, among others, operating in violation of, or failing to comply with, any of the requirements of the act or orders of the Attorney General. This bill would prohibit any person from knowingly submitting for filing on behalf of any charitable organization any statement, report, financial statement, attachment, or other information to be filed with the Attorney General that contains information, a statement, or an omission that is false or misleading. (3) Existing law, the Supervision of Trustees and Fundraisers for Charitable Purposes Act, requires charitable organizations to 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. This bill would require a charitable organization, in any year that the balance sheet of that charitable organization shows that it holds restricted net assets, while reporting negative unrestricted net assets, to provide an explanation of its compliance with its charitable trust responsibilities and proof of directors' and officers' liability insurance coverage to the Attorney General's Registry of Charitable Trusts.