Selected 2021 Developments in Nonprofit Organizations Law and Nonprofit Organizations (npo) Committee Highlights

• Publication year: 2022
• Author: Written by Steven Chiodini

SELECTED 2021 DEVELOPMENTS IN NONPROFIT ORGANIZATIONS LAW AND NONPROFIT ORGANIZATIONS (NPO) COMMITTEE HIGHLIGHTS

Written by Steven Chiodini

A number of California legislative developments have occurred as of the date of this article (October 2021) that affect nonprofit organizations, including the following key new laws:

Assembly Bill 283¹ ("AB 283") was sponsored by the NPO Committee and signed into law on October 5, 2021. This law furthers the interests of cooperative corporations and their members by allowing cooperative corporations to make equity-related patronage distributions to their members without the hardship and expense of dealing with securities qualification requirements. The passage of AB 283 represents the culmination of a long-term effort by the NPO Committee and more detail is available in the NPO Committee's e-bulletin.²

Assembly Bill 488,³ regarding online charitable fundraising, was signed into law on October 7, 2021. Starting on January 1, 2023, internet fundraising platforms and so-called "platform charities" (i.e., charities that facilitate solicitations on these fundraising platforms) are charitable trustees subject to regulation by the Attorney General. The new requirements, among other things, include (i) to register and make annual reports to the Attorney General, (ii) to make specified disclosures, and (iii) to obtain the consent of other charities before soliciting for them, except in certain cases.

Assembly Bill 663 ("AB 663"),⁴ sponsored jointly by the NPO Committee and the Corporations Committee, amends the Corporations Code by providing updated provisions concerning remote member and delegate meetings, to reflect current technology better. This law also provides more flexibility to corporations in operating under emergency circumstances. AB 663 became law on October 5, 2021, and the Committees have provided a more detailed description via e-bulletin.⁵

Assembly Bill 900,⁶ which takes effect on July 1, 2022, requires the trustees of charitable trusts to give twenty-days' prior notice to the Attorney General before they sell, transfer, or otherwise dispose of all or substantially all the trust's charitable assets. This new requirement

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generally mirrors the existing notice requirement that applies to charities organized as nonprofit public benefit corporations as well as to any charitable assets held by nonprofit mutual benefit corporations.

Separately, in the case of Turner v. Victoria,⁷ the California Court of Appeal for...