Bill Text: CA AB2610 | 2015-2016 | Regular Session | Amended

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Bill Title: Securities: qualification: period of effectiveness.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Failed) 2016-11-30 - From committee without further action. [AB2610 Detail]

Download: California-2015-AB2610-Amended.html

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BILL NUMBER: AB 2610	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 17, 2016

INTRODUCED BY   Assembly Member Holden
   (Coauthor: Assembly Member Brown)

                        FEBRUARY 19, 2016

   An act to amend Section 25114 of the Corporations  Code
   Code,  relating to securities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2610, as amended, Holden. Securities:  qualification.
  qualification: period of effectiveness. 
   Existing law, the Corporate Securities Law of 1968, requires
securities offered or sold in this state in an issuer transaction to
be qualified through an application filed with the Commissioner of
Business Oversight, unless exempt from the qualification 
requirements. Existing law   requirements, and 
generally provides that every qualification under these provisions is
effective for 12 months from its effective date.  Existing
  This  law makes it  unlawful 
 a crime  for a person  in connection with the
offer, sale, or purchase of a security to engage in fraudulent or
misleading acts or omissions.   to willfully violate any
of its provisions. 
   This bill would increase that effective period  of
  for a  qualification  eligible for a Small
Corporate Offering Registration, as specified,  from 12 months
to 36  months   months,  unless an issuer
makes a change to its board members, directors, officers, partners,
members, or trustees, in which case the qualification would become
 ineffective, as provided.   ineffective. The
bill would reinstate effectiveness for the remainder of the 36 
 -months qualification period if the offering is requalified, as
specified. By modifying the period and conditions under which an
offering is effective, this bill would modify the application of
criminal provisions in existing law and thereby 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. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    It is the intent of the Legislature in
enacting this legislation to expand the period of effectiveness for a
qualification eligible for a Small Corporate Offering Registration.
It is not the intent of the Legislature to modify the consumer
protections provided by the requirements for qualification. 
   SECTION 1.   SEC. 2.   Section 25114 of
the Corporations Code is amended to read:
   25114.  (a)  Subject to the limitations in subdivisions
(b) and (c), every   Every  qualification under
this chapter is effective for  36   12 
months from its effective date, unless the commissioner by order or
rule specifies a different period, except during the time an order
under Section 25140 or subdivision (a) of Section 25143 is in effect.

   (b) (1) Any qualification under this chapter immediately becomes
ineffective upon any change in board members, directors, officers,
partners, members, or trustees of the issuer.  
   (2) If any of the changes specified in paragraph (1) occur, an
issuer shall reapply for qualification pursuant to this chapter. If a
qualification becomes ineffective pursuant to paragraph (1) but the
issuer subsequently successfully obtains qualification for the
securities, then that qualification shall only remain effective for
the same period of time as the original qualification issued pursuant
to subdivision (a).  
   (c) The provisions of this section shall not change the
qualification requirements of Sections 25111, 25112, or 25113.
 
   (b) (1) Notwithstanding subdivision (a) and subject to the
limitations in paragraph (2) and the authority of the commissioner
pursuant to Section 25140 or subdivision (a) of Section 25143, a
qualification pursuant to paragraph (2) of subdivision (b) of Section
25113 shall be effective for a period of 36 months from its
effective date.  
   (2) (A) At the end of 12 months from the effective date of the
qualification period authorized pursuant to paragraph (1), the
qualification shall become ineffective upon any change in the board
members, directors, officers, partners, members, or trustee of the
issuer.  
   (B) If a qualification becomes ineffective pursuant to
subparagraph (A), an issuer may apply for a requalification pursuant
to paragraph (2) of subdivision (b) of Section 25113. If an issuer
subsequently obtains a requalification, then the requalification
shall only remain effective for the remaining period of the 36 months
authorized pursuant to paragraph (1).  
   (3) The provisions of this subdivision shall not be deemed to
modify the qualification requirements of Section 25111, 25112, or
25113. 
   SEC. 3.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.