Juan Vargas
- Democratic
Author
(1) Existing law, the Corporate Securities Law of 1968, regulates the offer and sale of securities in this state by the Commissioner of Corporations. Existing law requires an issuer of securities to qualify with the commissioner the offer and sale of securities unless the transaction is subject to one of several specified exemptions from the qualification requirements. A willful violation of these provisions is a crime. Existing law exempts from the qualification requirements the offer or sale of any security made to no more than 35 people, as specified, and allows the commissioner to require the issuer to file a notice of transactions. Existing law provides that the exemption remains available to an issuer that fails to file the notice or files the notice after the time specified by the commissioner. Existing law requires an issuer relying on that exemption to file a notice within 15 business days following discovery of the failure to timely file the notice, or after demand of the commissioner, whichever is earlier. This bill would require the commissioner to require the issuer to file a notice of transactions in connection with that exemption. Existing federal law defines the term "accredited investor," for purposes of regulating securities transactions, including determining whether an offer and sale of securities is required to be registered pursuant to the federal Securities Act of 1933. This bill would require the commissioner to require an issuer that relies upon a specified exemption from the qualification requirements and that is principally engaged in the business of purchasing, selling, financing, or brokering real estate, for an offering to any person who is not an accredited investor in a transaction that is not registered pursuant to the Securities Act of 1933, to provide information regarding the nature of the proposed offering on a form prescribed by the commissioner, as specified. That information would include, but not be limited to, the offering disclosure documents provided to prospective investors, and the names of the officers and directors of a corporate issuer and, in the case of other types of issuers, the names of other specified persons. The bill would also require the commissioner to prepare an annual report regarding the securities offerings and sales authorized by permit issued by the commissioner under specified provisions of existing law and to make the report publicly available by posting the report on the Internet Web site of the Department of Corporations. (2) Existing law exempts from the qualification requirements, subject to complying with specified requirements, a transaction that involves the sale of a series of notes secured directly by an interest in real property or the sale of undivided interests in a note secured directly by real property equivalent to a series transaction, having no more than 10 investors. Existing law requires a real estate broker to indicate in the real estate broker's transaction file the provisions of law pertaining to qualification or exemption from qualification under which a transaction is being conducted. Existing law requires a real estate broker to file certain information with the commissioner relative to conducting these transactions that are exempt from qualification. Existing law requires a real estate broker to submit a copy of the information in the real estate broker's transaction file relative to qualification or exemption from qualification for a transaction to any investor from whom the real estate broker obtains funds in connection with the transaction. This bill would require that a transaction that involves the sale of a note secured directly by an interest in real property or the sale of an undivided interest in a note secured directly by real property equivalent to a series transaction be conducted in compliance with those requirements. (3) Existing law, the Real Estate Law, requires a real estate broker negotiating a loan, as specified, secured by a lien on real property or a business opportunity or the sale of a real property sales contract or promissory note secured directly or collaterally by a lien on real property, to provide a disclosure statement, containing specified information regarding the proposed transaction, to a prospective lender or a prospective purchaser, respectively. A willful violation of the Real Estate Law is a crime. This bill would add to the information required to be included in the disclosure statement a statement that the broker has a responsibility to make reasonable efforts to determine that the loan or the purchase, respectively, is a suitable and appropriate investment for the lender or purchaser, respectively. Because this bill would expand the scope of existing crimes, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.
Approved by the Governor.
Chaptered by Secretary of State. Chapter 669, Statutes of 2012.
Enrolled and presented to the Governor at 4:30 p.m.
Assembly amendments concurred in. (Ayes 37. Noes 0. Page 4766.) Ordered to engrossing and enrolling.
In Senate. Concurrence in Assembly amendments pending.
Read third time. Passed. (Ayes 77. Noes 0. Page 6128.) Ordered to the Senate.
Read second time. Ordered to third reading.
Read second time and amended. Ordered to second reading.
From committee: Do pass as amended. (Ayes 17. Noes 0.) (August 16).
Set, first hearing. Referred to APPR. suspense file.
From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 0.) (July 2). Re-referred to Com. on APPR.
From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.
Read third time. Passed. (Ayes 38. Noes 0. Page 3751.) Ordered to the Assembly.
In Assembly. Read first time. Held at Desk.
Ordered to special consent calendar.
Read second time and amended. Ordered to third reading.
From committee: Do pass as amended. (Ayes 7. Noes 0. Page 3589.) (May 24).
Set for hearing May 24.
From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR.
Placed on APPR. suspense file.
Set for hearing May 7.
From committee: Do pass and re-refer to Com. on APPR. (Ayes 8. Noes 0. Page 3259.) (April 23). Re-referred to Com. on APPR.
Set for hearing April 23.
From committee with author's amendments. Read second time and amended. Re-referred to Com. on B., P. & E.D.
From committee: Do pass and re-refer to Com. on RLS. (Ayes 6. Noes 0. Page 3119.) (April 11). Re-referred to Com. on RLS.
From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.I.
Set for hearing April 11.
From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.I.
From printer. May be acted upon on or after February 23.
Introduced. Read first time. To Com. on RLS. for assignment. To print.
| Bill Text Versions | Format |
|---|---|
| SB978 | HTML |
| 01/23/12 - Introduced | |
| 02/23/12 - Amended Senate | |
| 03/15/12 - Amended Senate | |
| 04/19/12 - Amended Senate | |
| 05/15/12 - Amended Senate | |
| 05/25/12 - Amended Senate | |
| 06/18/12 - Amended Assembly | |
| 08/20/12 - Amended Assembly | |
| 08/27/12 - Enrolled | |
| 09/27/12 - Chaptered |
| Document | Format |
|---|---|
| No related documents. |
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