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California Regulatory Bill Passes Senate, Heads to Governor's Office

(Aug. 27, 2004) The California Senate approved S.B. 1262, the California Nonprofit Integrity Act, on Thursday, Aug. 26, by a vote of 22-13 with four abstentions. The bill now heads to the Governor's office for his consideration.

The legislation increases certain reporting and disclosure requirements and incorporates some of the standards in the federal Sarbanes-Oxley law regarding corporate accountability.

The California Assembly passed S.B. 1262 on Wednesday, Aug. 25, by a vote of 41-25.

AFP has worked closely with the attorney general's office and the office of the bill's sponsor, State Sen. Byron Sher, to make revisions to S.B. 1262 so the impact on legitimate organizations is minimized. AFP has spent considerable time on the bill because other states may use it as a model for their own legislation. Many of AFP's concerns have been addressed in the current version of the legislation, and numerous compromises have been made by both sides.

It is clear that the attorney general's priority has been to affect legitimate charities as little as possible while creating regulations that allow it to pursue fraudulent organizations. While AFP does not support additional regulations for the fundraising profession in particular or for nonprofits in general, it has taken a position of 'no opposition' regarding passage of S.B. 1262.

While the bill passed both bodies of the California Legislature with solid majorities, there is some doubt as to whether Governor Arnold Schwarzenegger (R) will sign the bill into law. The Governor's office has indicated that it has concerns with increasing regulations on the charitable sector.

For more information about the bill, including analyses and full test, go to California State Senate web page and search on '1262' under Bill Number Search.

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