ASSEMBLY BILL 797 (CONNOLLY – 1994)
CHAPTER 40, STATUTES OF 1994 AB 797
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Civil Code section 366.2 was amended, and Probate Code sections 19255, 21320, and 21351, were amended with the passage of Assembly Bill 797 of 1994. (See Exhibits #1a through #1f) Assembly member Connolly introduced this measure, relating to civil proceedings, on February 25, 1993. (See Exhibit #1a)
Assembly Bill 797 was assigned to the Assembly Committee on Judiciary and the Senate Committee on Judiciary where policy issues raised by the bill were considered. (See Exhibits #3 and #6) Five amendments were made to Assembly Bill 797. (See Exhibits #1b through #1f) Subsequent to legislative approval, Governor Pete Wilson signed the bill on April 19, 1994, and it was recorded by the Secretary of State on that date as Chapter 40 of the Statutes of 1994. (See Exhibits #1g and #2)
Assembly Bill 797 contained an urgency clause which caused the bill to become effective immediately upon enactment. The urgency clause, found in section 6 of the bill, states that “In order to eliminate confusion relating to the manner with which public and nonprofit entities may arrange for and receive charitable donations, it is necessary that this bill take effect immediately.” (See Exhibit #1g, page 7)
An Office of Senate Floor Analyses’ Third Reading analysis of Assembly Bill 797, as amended on March 15, 1994, summarized the bill as follows:
This bill provides that a transfer to an entity that drafted or transcribed an instrument be valid, if the entity is a federal, state, or local public entity, or an entity that qualifies for an exemption from taxation under Section 501(c)(3) or 509(c)(19) of the Internal Revenue Code, or a trust holding an interest for any such entity, or the trustee of any such trust.
(See Exhibit #8, page 1)
Background information for Assembly Bill 797 was furnished by the Department of Consumer Affairs in its Enrolled Bill Report, which wrote:
AB 797 is sponsored by the State Bar of California as a technical clean-up bill to AB 21 (Umberg) (Stats. 1993, c.293). The provisions in AB 21 invalidated instruments making a donative transfer where the person drafting the instrument, or someone related to that person, was named as a transferee in the instrument. AB 21 provided certain exceptions to the provisions in the bill, however an exception for non-profit organizations was omitted. AB 797 would add this exception.
AB 21 was passed in 1993 in response to abuses by a probate attorney in Southern California who had drafted many wills and trust documents naming himself as beneficiary, trustee or conservator of various estates. Although the attorney was being investigated by the State Bar, the author of AB 21 felt that the law was unclear in this area. AB 21 codified the relevant case law existing at that time.(See Exhibit #14, document PE-14)