AB 2795: Financial regulation.
- Session Year: 2025-2026
- House: Assembly
- Latest Version Date: 2026-09-20
Current Status:
Passed
(2026-09-20: Chaptered by Secretary of State - Chapter 410, Statutes of 2026.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
(1)The State Assistance Fund for Enterprise Act of 1989 authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing the availability of financial assistance for small businesses in California. The act requires the State Controller to establish a separate account in the General Fund entitled the State Enterprise Loan Fund, which is continuously appropriated for purposes of the act.
This bill would repeal that act.
(2)Existing law specifies the types of securities that are eligible for the investment of surplus state funds, which include, among other things, bonds, notes, or other obligations of a local government of this state. Existing law requires those local bonds, notes, or other obligations to be within the top 3 ratings of a nationally recognized statistical rating organization.
Existing law also provides that an eligible security for the investment of surplus state funds includes bonds, debentures, and notes issued by corporations organized and operating with the United States and requires that those securities be within the top 3 ratings of a nationally recognized statistical rating organization.
This bill would instead require those local bonds, notes, or other obligations and corporate bonds, debentures, and notes to be rated in a rating category of A or its equivalent or better by such an organization to be eligible for investment.
Existing law provides that an eligible security for the investment of surplus state funds includes commercial paper of prime quality, as defined by a nationally recognized statistical rating organization that rates these securities, that also meets certain conditions. Under existing law, those conditions include, among other things, that the paper not exceed 270 days maturity and, at the request of the Pooled Money Investment Board, is secured by the issuer by depositing with the Treasurer certain authorized securities of a market value at least 10% in excess of the amount of the states investment (authorized securities condition).
This bill would instead require that the paper be of prime quality of the highest ranking or of the highest letter and number rating, as defined by a statistical rating organization, and not exceed 397 days maturity. The bill would also remove the authorized securities condition. The bill would also make nonsubstantive changes.
(3)Existing law establishes the Department of Financial Protection and Innovation to generally oversee and regulate financial institutions and related businesses. Existing law requires the department and the Commissioner of Financial Protection and Innovation to provide various notices and information by mail. Existing law requires the department and commissioner to process and issue licenses to various types of financial institutions and to levy fees or assessments in connection therewith.
This bill would remove the requirement that various notices and information be provided by mail and would instead authorize the commissioner to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address, as specified. For any person licensed or registered through the Nationwide Multistate Licensing System and Registry (NMLS), the bill would also authorize the commissioner to fulfill these notice requirements by electronic communication through that system. When a statute or regulation requires licensure or registration through NMLS, this bill would require the commissioner to require the use of NMLS forms and instructions.
(4)This bill would incorporate additional changes to Section 23016 of the Financial Code proposed by AB 2028 to be operative only if this bill and AB 2028 are enacted and this bill is enacted last.
(1)The State Assistance Fund for Enterprise Act of 1989 authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing the availability of financial assistance for small businesses in California. The act requires the State Controller to establish a separate account in the General Fund entitled the State Enterprise Loan Fund, which is continuously appropriated for purposes of the act.
This bill would repeal that act.
(2)Existing law specifies the types of securities that are eligible for the investment of surplus state funds, which include, among other things, bonds, notes, or other obligations of a local government of this state. Existing law requires those local bonds, notes, or other obligations to be within the top 3 ratings of a nationally recognized statistical rating organization.
Existing law also provides that an eligible security for the investment of surplus state funds includes bonds, debentures, and notes issued by corporations organized and operating with the United States and requires that those securities be within the top 3 ratings of a nationally recognized statistical rating organization.
This bill would instead require those local bonds, notes, or other obligations and corporate bonds, debentures, and notes to be rated in a rating category of A or its equivalent or better by such an organization to be eligible for investment.
Existing law provides that an eligible security for the investment of surplus state funds includes commercial paper of prime quality, as defined by a nationally recognized statistical rating organization that rates these securities, that also meets certain conditions. Under existing law, those conditions include, among other things, that the paper not exceed 270 days maturity and, at the request of the Pooled Money Investment Board, is secured by the issuer by depositing with the Treasurer certain authorized securities of a market value at least 10% in excess of the amount of the states investment (authorized securities condition).
This bill would instead require that the paper be of prime quality of the highest ranking or of the highest letter and number rating, as defined by a statistical rating organization, and not exceed 397 days maturity. The bill would also remove the authorized securities condition. The bill would also make nonsubstantive changes.
(3)Existing law establishes the Department of Financial Protection and Innovation to generally oversee and regulate financial institutions and related businesses. Existing law requires the department and the Commissioner of Financial Protection and Innovation to provide various notices and information by mail. Existing law requires the department and commissioner to process and issue licenses to various types of financial institutions and to levy fees or assessments in connection therewith.
This bill would remove the requirement that various notices and information be provided by mail and would instead authorize the commissioner to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address, as specified. For any person licensed or registered through the Nationwide Multistate Licensing System and Registry (NMLS), the bill would also authorize the commissioner to fulfill these notice requirements by electronic communication through that system. When a statute or regulation requires licensure or registration through NMLS, this bill would require the commissioner to require the use of NMLS forms and instructions.
(4)This bill would incorporate additional changes to Section 23016 of the Financial Code proposed by AB 2028 to be operative only if this bill and AB 2028 are enacted and this bill is enacted last.
(1)The State Assistance Fund for Enterprise Act of 1989 authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing the availability of financial assistance for small businesses in California. The act requires the State Controller to establish a separate account in the General Fund entitled the State Enterprise Loan Fund, which is continuously appropriated for purposes of the act.
This bill would repeal that act.
(2)Existing law specifies the types of securities that are eligible for the investment of surplus state funds, which include, among other things, bonds, notes, or other obligations of a local government of this state. Existing law requires those local bonds, notes, or other obligations to be within the top 3 ratings of a nationally recognized statistical rating organization.
Existing law also provides that an eligible security for the investment of surplus state funds includes bonds, debentures, and notes issued by corporations organized and operating with the United States and requires that those securities be within the top 3 ratings of a nationally recognized statistical rating organization.
This bill would instead require those local bonds, notes, or other obligations and corporate bonds, debentures, and notes to be rated in a rating category of A or its equivalent or better by such an organization to be eligible for investment.
Existing law provides that an eligible security for the investment of surplus state funds includes commercial paper of prime quality, as defined by a nationally recognized statistical rating organization that rates these securities, that also meets certain conditions. Under existing law, those conditions include, among other things, that the paper not exceed 270 days maturity and, at the request of the Pooled Money Investment Board, is secured by the issuer by depositing with the Treasurer certain authorized securities of a market value at least 10% in excess of the amount of the states investment (authorized securities condition).
This bill would instead require that the paper be of prime quality of the highest ranking or of the highest letter and number rating, as defined by a statistical rating organization, and not exceed 397 days maturity. The bill would also remove the authorized securities condition. The bill would also make nonsubstantive changes.
(3)Existing law establishes the Department of Financial Protection and Innovation to generally oversee and regulate financial institutions and related businesses. Existing law requires the department and the Commissioner of Financial Protection and Innovation to provide various notices and information by mail. Existing law requires the department and commissioner to process and issue licenses to various types of financial institutions and to levy fees or assessments in connection therewith.
This bill would remove the requirement that various notices and information be provided by mail and would instead authorize the commissioner to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address, as specified. For any person licensed or registered through the Nationwide Multistate Licensing System and Registry (NMLS), the bill would also authorize the commissioner to fulfill these notice requirements by electronic communication through that system. When a statute or regulation requires licensure or registration through NMLS, this bill would require the commissioner to require the use of NMLS forms and instructions.
(4)This bill would incorporate additional changes to Section 23016 of the Financial Code proposed by AB 2028 to be operative only if this bill and AB 2028 are enacted and this bill is enacted last.
(1)The State Assistance Fund for Enterprise Act of 1989 authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing the availability of financial assistance for small businesses in California. The act requires the State Controller to establish a separate account in the General Fund entitled the State Enterprise Loan Fund, which is continuously appropriated for purposes of the act.
This bill would repeal that act.
(3)(2)Existing law specifies the types of securities that are eligible for the investment of surplus state funds, which include, among other things, bonds, notes, or other obligations of a local government of this state. Existing law requires those local bonds, notes, or other obligations to be within the top 3 ratings of a nationally recognized statistical rating organization.
Existing law also provides that an eligible security for the investment of surplus state funds includes bonds, debentures, and notes issued by corporations organized and operating with the United States and requires that those securities be within the top 3 ratings of a nationally recognized statistical rating organization.
This bill would instead require those local bonds, notes, or other obligations and corporate bonds, debentures, and notes to be rated in a rating category of A or its equivalent or better by such an organization to be eligible for investment.
Existing law provides that an eligible security for the investment of surplus state funds includes commercial paper of prime quality, as defined by a nationally recognized statistical rating organization that rates these securities, that also meets certain conditions. Under existing law, those conditions include, among other things, that the paper not exceed 270 days maturity and, at the request of the Pooled Money Investment Board, is secured by the issuer by depositing with the Treasurer certain authorized securities of a market value at least 10% in excess of the amount of the states investment (authorized securities condition).
This bill would instead require that the paper be of prime quality of the highest ranking or of the highest letter and number rating, as defined by a statistical rating organization, and not exceed 397 days maturity. The bill would also remove the authorized securities condition. The bill would also make nonsubstantive changes.
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.(4)(3)Existing law establishes the Department of Financial Protection and Innovation to generally oversee and regulate financial institutions and related businesses. Existing law requires the department and the Commissioner of Financial Protection and Innovation to provide various notices and information by mail. Existing law requires the department and commissioner to process and issue licenses to various types of financial institutions and to levy fees or assessments in connection therewith.
This bill would remove the requirement that various notices and information be provided by mail and would instead authorize the commissioner to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address, as specified. For any person licensed or registered through the Nationwide Multistate Licensing System and Registry (NMLS), the bill would also authorize the commissioner to fulfill these notice requirements by electronic communication through that system. When a statute or regulation requires licensure or registration through NMLS, this bill would require the commissioner to require the use of NMLS forms and instructions.
(1)Existing law, the Franchise Investment Law, generally provides for the regulation of the offer and sale of franchises and requires the Commissioner of Financial Protection and Innovation to maintain a risk-based process of reviewing franchise applications with emphasis on risks associated with the franchisors financial condition, the franchisors compliance record, and significant deficiencies with the franchisors application. Existing law requires certain written disclosures under that law to be signed and verified, under penalty of perjury.
Existing law makes it unlawful for a person to effect or attempt to effect a sale of a franchise in this state unless the person meets certain criteria, including being identified in Item 2 of a franchise disclosure document submitted with an application or amended application filed with the commissioner, as specified.
This bill would remove the above-described specific reference to Item 2 of a franchise disclosure document. The bill would also make it unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state unless the person is registered as a franchise broker, notwithstanding certain exceptions from the above-described provisions. The bill would additionally make it unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state in a transaction that is exempted unless the franchise broker is registered, as specified. The bill would make other related changes to that law. By expanding the crime of perjury, the bill would impose a state-mandated local program.
(2)The State Assistance Fund for Enterprise Act of 1989 authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing the availability of financial assistance for small businesses in California. The act requires the State Controller to establish a separate account in the General Fund entitled the State Enterprise Loan Fund, which is continuously appropriated for purposes of the act.
This bill would repeal that act.
(3)Existing law specifies the types of securities that are eligible for the investment of surplus state funds, which include, among other things, bonds, notes, or other obligations of a local government of this state. Existing law requires those local bonds, notes, or other obligations to be within the top 3 ratings of a nationally recognized statistical rating organization.
Existing law also provides that an eligible security for the investment of surplus state funds includes bonds, debentures, and notes issued by corporations organized and operating with the United States and requires that those securities be within the top 3 ratings of a nationally recognized statistical rating organization.
This bill would instead require those local bonds, notes, or other obligations and corporate bonds, debentures, and notes to be rated in a rating category of A or its equivalent or better by such an organization to be eligible for investment.
Existing law provides that an eligible security for the investment of surplus state funds includes bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country, as described, if the securities are rated investment grade, or its equivalent or better, by a nationally recognized statistical rating organization.This bill would instead require the securities to be rated in a rating category of AA or its equivalent or better.Existing law provides that an eligible security for the investment of surplus state funds includes commercial paper of prime quality, as defined by a nationally recognized statistical rating organization that rates these securities, that also meets certain conditions. Under existing law, those conditions include, among other things, that the paper not exceed 270 days maturity and, at the request of the Pooled Money Investment Board, is secured by the issuer by depositing with the Treasurer certain authorized securities of a market value at least 10% in excess of the amount of the states investment (authorized securities condition).
This bill would instead require that the paper be of prime quality of the highest ranking or of the highest letter and number rating, as defined by a statistical rating organization, and not exceed 397 days maturity. The bill would also remove the authorized securities condition. The bill would also make nonsubstantive changes.
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.
(4)Existing law establishes the Department of Financial Protection and Innovation to generally oversee and regulate financial institutions and related businesses. Existing law requires the department and the Commissioner of Financial Protection and Innovation to provide various notices and information by mail. Existing law requires the department and commissioner to process and issue licenses to various types of financial institutions and to levy fees or assessments in connection therewith.
This bill would remove the requirement that various notices and information be provided by mail and would instead authorize the commissioner to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address, as specified. For any person licensed or registered through the Nationwide Multistate Licensing System and Registry (NMLS), the bill would also authorize the commissioner to fulfill these notice requirements by electronic communication through that system. When a statute or regulation requires licensure or registration through NMLS, this bill would require the commissioner to require the use of NMLS forms and instructions.
(1)Existing law, the Franchise Investment Law, generally provides for the regulation of the offer and sale of franchises and requires the Commissioner of Financial Protection and Innovation to maintain a risk-based process of reviewing franchise applications with emphasis on risks associated with the franchisors financial condition, the franchisors compliance record, and significant deficiencies with the franchisors application. Existing law requires certain written disclosures under that law to be signed and verified, under penalty of perjury.
Existing law makes it unlawful for a person to effect or attempt to effect a sale of a franchise in this state unless the person meets certain criteria, including being identified in Item 2 of a franchise disclosure document submitted with an application or amended application filed with the commissioner, as specified.
This bill would remove the above-described specific reference to Item 2 of a franchise disclosure document. The bill would also make it unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state unless the person is registered as a franchise broker, notwithstanding certain exceptions from the above-described provisions. The bill would additionally make it unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state in a transaction that is exempted unless the franchise broker is registered, as specified. The bill would make other related changes to that law. By expanding the crime of perjury, the bill would impose a state-mandated local program.
Existing law creates an exception to this unlawful franchise sale provision for specified transactions that are separately identified as exemptions under the Franchise Investment Law. These exemptions extend to transactions for which a franchisor complies with certain minimum net worth, experience, disclosure, and notice filing requirements.This bill would recast that provision to, instead, specify that it does not apply to those exempt transactions, unless the person effecting or attempting to effect the sale of a franchise in this state is a franchise broker. The bill would make other related changes. By expanding the crime of perjury, the bill would impose a state-mandated local program.(2)The State Assistance Fund for Enterprise Act of 1989 authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing the availability of financial assistance for small businesses in California. The act requires the State Controller to establish a separate account in the General Fund entitled the State Enterprise Loan Fund, which is continuously appropriated for purposes of the act.
This bill would repeal that act.
(3)Existing law specifies the types of securities that are eligible for the investment of surplus state funds, which include, among other things, bonds, notes, or other obligations of a local government of this state. Existing law requires those local bonds, notes, or other obligations to be within the top 3 ratings of a nationally recognized statistical rating organization.
Existing law also provides that an eligible security for the investment of surplus state funds includes bonds, debentures, and notes issued by corporations organized and operating with the United States and requires that those securities be within the top 3 ratings of a nationally recognized statistical rating organization.
This bill would instead require those local bonds, notes, or other obligations and corporate bonds, debentures, and notes to be rated in a rating category of A or its equivalent or better by such an organization to be eligible for investment.
Existing law provides that an eligible security for the investment of surplus state funds includes bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country, as described, if the securities are rated investment grade, or its equivalent or better, by a nationally recognized statistical rating organization.
This bill would instead require the securities to be rated in a rating category of AA or its equivalent or better.
Existing law provides that an eligible security for the investment of surplus state funds includes commercial paper of prime quality, as defined by a nationally recognized statistical rating organization that rates these securities, that also meets certain conditions. Under existing law, those conditions include, among other things, that the paper not exceed 270 days maturity and, at the request of the Pooled Money Investment Board, is secured by the issuer by depositing with the Treasurer certain authorized securities of a market value at least 10% in excess of the amount of the states investment (authorized securities condition).
This bill would instead require that the paper be of prime quality of the highest ranking or of the highest letter and number rating, as defined by a statistical rating organization, and not exceed 397 days maturity. The bill would also remove the authorized securities condition. The bill would also make nonsubstantive changes.
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.
(4)Existing law establishes the Department of Financial Protection and Innovation to generally oversee and regulate financial institutions and related businesses. Existing law requires the department and the Commissioner of Financial Protection and Innovation to provide various notices and information by mail. Existing law requires the department and commissioner to process and issue licenses to various types of financial institutions and to levy fees or assessments in connection therewith.
This bill would remove the requirement that various notices and information be provided by mail and would instead authorize the commissioner to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address, as specified. For any person licensed or registered through the Nationwide Multistate Licensing System and Registry (NMLS), the bill would also authorize the commissioner to fulfill these notice requirements by electronic communication through that system. When a statute or regulation requires licensure or registration through NMLS, this bill would require the commissioner to require the use of NMLS forms and instructions.
(1)Existing law, the Franchise Investment Law, generally provides for the regulation of the offer and sale of franchises and requires the Commissioner of Financial Protection and Innovation to maintain a risk-based process of reviewing franchise applications with emphasis on risks associated with the franchisors financial condition, the franchisors compliance record, and significant deficiencies with the franchisors application. Existing law requires certain written disclosures under that law to be signed and verified, under penalty of perjury.
Existing law makes it unlawful for a person to effect or attempt to effect a sale of a franchise in this state unless the person meets certain criteria, including being identified in Item 2 of a franchise disclosure document submitted with an application or amended application filed with the commissioner, as specified.
This bill would remove the above-described specific reference to Item 2 of a franchise disclosure document.
Existing law creates an exception to this unlawful franchise sale provision for specified transactions that are separately identified as exemptions under the Franchise Investment Law. These exemptions extend to transactions for which a franchisor complies with certain minimum net worth, experience, disclosure, and notice filing requirements.
This bill would recast that provision to, instead, specify that it does not apply to those exempt transactions, unless the person effecting or attempting to effect the sale of a franchise in this state is a franchise broker. The bill would make other related changes. By expanding the crime of perjury, the bill would impose a state-mandated local program.
(2)The State Assistance Fund for Enterprise Act of 1989 authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing the availability of financial assistance for small businesses in California. The act requires the State Controller to establish a separate account in the General Fund entitled the State Enterprise Loan Fund, which is continuously appropriated for purposes of the act.
This bill would repeal that act.
(3)Existing law specifies the types of securities that are eligible for the investment of surplus state funds, which include, among other things, bonds, notes, or other obligations of a local government of this state. Existing law requires those local bonds, notes, or other obligations to be within the top 3 ratings of a nationally recognized statistical rating organization.
Existing law also provides that an eligible security for the investment of surplus state funds includes bonds, debentures, and notes issued by corporations organized and operating with the United States and requires that those securities be within the top 3 ratings of a nationally recognized statistical rating organization.
This bill would instead require those local bonds, notes, or other obligations and corporate bonds, debentures, and notes to be rated in a rating category of A or its equivalent or better by such an organization to be eligible for investment.
Existing law provides that an eligible security for the investment of surplus state funds includes bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country, as described, if the securities are rated investment grade, or its equivalent or better, by a nationally recognized statistical rating organization.
This bill would instead require the securities to be rated in a rating category of AA or its equivalent or better.
Existing law provides that an eligible security for the investment of surplus state funds includes commercial paper of prime quality, as defined by a nationally recognized statistical rating organization that rates these securities, that also meets certain conditions. Under existing law, those conditions include, among other things, that the paper not exceed 270 days maturity and, at the request of the Pooled Money Investment Board, is secured by the issuer by depositing with the Treasurer certain authorized securities of a market value at least 10% in excess of the amount of the states investment (authorized securities condition).
This bill would instead require that the paper be of prime quality of the highest ranking or of the highest letter and number rating, as defined by a statistical rating organization, and not exceed 397 days maturity. The bill would also remove the authorized securities condition. The bill would also make nonsubstantive changes.
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.
(a)The commissioner shall charge and collect the fees fixed in this section and Section 25608.1. All fees charged and collected under this section and Section 25608.1 shall be transmitted to the Treasurer at least weekly, accompanied by a detailed statement thereof and shall be credited to the Financial Protection Fund.
(b)The fee for filing an application for a negotiating permit under subdivision (c) of Section 25102 is fifty dollars ($50).
(c)The fee for filing a notice pursuant to paragraph (5) of subdivision (h) of Section 25102, for filing a notice pursuant to paragraph (4) of subdivision (f) of Section 25102, or for filing a notice pursuant to paragraph (10) of subdivision (r) of Section 25102, in addition to the fee prescribed in those paragraphs, if applicable, shall be determined based on the value of the securities proposed to be sold in the transaction for which the notice is filed and in accordance with subdivision (g), and shall be as follows:
Value of Securities | Filing Fee |
$25,000 or less | $25 |
$25,001 to $100,000 | $35 |
$100,001 to $500,000 | $50 |
$500,001 to $1,000,000 | $150 |
Over $1,000,000 | $300 |
(d)The fee for filing an application for designation of an issuer pursuant to subdivision (k) of Section 25100 is fifty dollars ($50).
(e)The fee for filing an application for qualification of the sale of securities by notification under Section 25112 or by permit under paragraph (1) of subdivision (b) of Section 25113 (except applications for qualification by permit of the sale of any guarantee of any security, the fees for which applications are fixed in subdivision (k)) is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
The fee for filing a small company application for qualification of the sale of securities by permit under paragraph (2) of subdivision (b) of Section 25113 is two thousand five hundred dollars ($2,500). In the case where the costs of processing a small company application exceed the filing fee, an additional fee shall be charged, not to exceed one thousand dollars ($1,000), over and above the filing fee based on the costs of the salary or other compensation paid to persons processing the application plus overhead costs reasonably incurred in the performance of the work. In determining the costs, the commissioner may use the estimated average hourly cost for all persons processing applications for the fiscal year.
(f)The fee for filing an application for qualification of the sale of securities by coordination under Section 25111 or a notice of intention to sell under subdivision (t) of Section 25100 is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
(g)For the purpose of determining the fees fixed in subdivisions (e) and (f):
(1)The value of the securities shall be the price at which the company proposes to sell the securities, or the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration (if other than money) to be received in exchange therefor, or of the securities when sold, whichever is greater.
(2)Interim or voting trust certificates shall have a value equal to the aggregate value of the securities to be represented by the interim or voting trust certificates.
(3)The value of a warrant or right to purchase or subscribe to another security of the same or another issuer shall be an amount equal to the consideration to be paid for that warrant or right plus an amount equal to the consideration to be paid upon purchase of the additional securities, provided that if the latter amount is not determinable at the time of qualification, that amount shall then be the value of the additional securities as determined by the commissioner.
(4)In the case of a share dividend where the shareholders are given an option to accept either cash or additional shares of common stock, the value of the securities to be sold shall be the maximum amount of cash that would be payable in the event that all shareholders elected to accept cash.
(h)The fee for filing an application for qualification of the sale of securities by permit under Section 25121 is:
(1)Two hundred dollars ($200) in connection with any change (including any stock split or reverse stock split or stock dividend, except a stock dividend where the shareholders are given an option to accept either cash or additional shares of common stock) in the rights, preferences, privileges, or restrictions of or on outstanding securities.
(2)Two hundred dollars ($200) plus one-fifth of 1 percent of the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration to be received in exchange therefor, up to a maximum aggregate fee of two thousand five hundred dollars ($2,500), in any exchange of securities by the issuer with its existing security holders exclusively, or in any exchange in connection with any merger or consolidation or purchase of corporate assets in consideration of the issuance of securities, or any entity conversion transaction.
(i)The fee for filing an application for qualification of the sale of securities by notification under Section 25131 shall be one hundred dollars ($100).
(j)The fee for an application for the removal of any condition under Section 25141 is fifty dollars ($50).
(k)The fee for filing any application for a permit to execute or issue any guarantee of any security is fifty dollars ($50).
(l)The fee for acting as escrowholder for securities under Section 25149 is fifty dollars ($50). In addition, a fee of two dollars and fifty cents ($2.50) shall be paid for the deposit with the commissioner of each new certificate or other document resulting from a transfer in escrow.
(m)The fee for filing an application for an order (1) consenting to the transfer in escrow of securities or (2) consenting to the transfer of securities subject to any condition imposed by the commissioner requiring the commissioners consent to the transfer is twenty dollars ($20) for each transfer.
(n)The filing fee for an amendment to an application filed after the effective date of the qualification of the sale of securities is fifty dollars ($50) plus any additional fee that would have been required to be paid with the original application for qualification of the sale of securities under this section if the matters set forth in the amendment had been included in the original application.
(o)(1)The fee for filing an application for a broker-dealer certificate under Section 25211 is three hundred dollars ($300).
(2)Each broker-dealer shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of the broker-dealer program under this division, as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that the broker-dealer and the number of its agents in this state bears to the aggregate number of broker-dealers and agents in this state as shown by records maintained by or on behalf of the commissioner. The pro rata share may include the costs of any examinations, audit, or investigation provided for in subdivision (r).
(3)Every broker-dealer who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a minimum assessment of seventy-five dollars ($75) on or before the 31st of December in each year.
(4)The commissioner may assess and levy against each broker-dealer any additional amount above the minimum assessment amount of seventy-five dollars ($75) that is reasonable and necessary to support the broker-dealer program under this division. If an additional amount is assessed, the commissioner shall notify each broker-dealer of any additional amount assessed and levied against it on or before the 30th day of May in each year, and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(5)If a broker-dealer fails to pay any assessment on or before the 30th day of the month following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the broker-dealer. If, after that order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a broker-dealer shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided under this division.
(6)In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of the broker-dealer program under this division and all reimbursements applicable to the administration of the broker-dealer program under this division.
(p)(1)The commissioner shall charge a fee of fifty dollars ($50) for the filing of a notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(2)The commissioner shall charge a fee up to fifty dollars ($50) to keep in effect for the following year any notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(3)No person shall, on behalf of a broker-dealer licensed pursuant to Section 25211, effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless the broker-dealer pays the annual fee required by paragraph (2) of this subdivision on or before the day upon which payment is due.
(4)No person may, in this state, on behalf of an investment adviser licensed pursuant to Section 25231, offer or negotiate for the sale of investment advisory services of the investment adviser, determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser, or determine the reports or analyses concerning securities to be published by the investment adviser, unless the investment adviser pays the annual fee required by paragraph (2) on or before the day upon which payment is due.
(5)The commissioner may by order summarily enjoin an individual from performing any activity under paragraph (3) or (4) if the annual fee in paragraph (2) is not paid on or before the day upon which payment is due. An order under this paragraph may not be made before 10 days after notice by the commissioner that the fee is due and unpaid.
(q)(1)Except as provided for in paragraph (2), the fee for filing an application for an investment adviser under Section 25231 is one hundred twenty-five dollars ($125), and payment of this amount shall keep the certificate, if granted, in effect during the calendar year during which it is granted. Every investment adviser who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a renewal fee of one hundred twenty-five dollars ($125) on or before the 31st day of December.
(2)Paragraph (1) shall not apply to a broker-dealer licensed under Section 25210.
(r)(1)Except as provided for in paragraph (2), the fee for any routine or nonroutine regulatory examination, audit, or investigation is the amount of the salary or other compensation paid to the persons making the examination, audit, or investigation plus the amount of expenses including overhead reasonably incurred in the performance of the work. In determining the costs associated with an examination, audit, or investigation, the commissioner may use the estimated average hourly cost for all persons performing examinations, audits, or investigations for the fiscal year.
(2)An investment adviser licensed under Section 25230 pursuant to the Investment Adviser Registration Depository shall not be subject to paragraph (1) only in regard to the fee for a routine regulatory examination of its investment advisory services for which it is licensed under Section 25230.
(s)The fee for any hearing held by the commissioner pursuant to Section 25142 shall be the sum determined by the commissioner to cover the actual expense of noticing and holding the hearing.
(t)The commissioner may fix by rule a reasonable charge for any publications issued under the commissioners authority. The charges shall not apply to reports of the commissioner in the ordinary course of distribution.
(u)The fee for filing an offer under subdivision (b) of Section 25507 shall be the amount of filing fee payable under subdivision (e), (f), (h), or (i) of this section if an application had been filed to qualify the transaction in which the securities upon which the offer is to be made were sold in violation of the qualification provisions of this law.
(v)The fee for filing an application for exemption pursuant to subdivision (l) of Section 25100 is two hundred fifty dollars ($250).
(w)The commissioner may by rule require payment of a fee for filing a notice or report required by a rule adopted pursuant to Section 25105. The fee required in connection with a transaction as defined by that rule shall not exceed the fees specified in subdivision (c) based on the value of the securities sold, but the commissioner may permit a single notice for more than one transaction.
(x)The fee for filing the first notice of transaction under subdivision (n) of Section 25102 is six hundred dollars ($600).
(y)The fee for filing a notice of transaction under subdivision (o) of Section 25102 shall be the fee for filing an application for qualification of the sale of securities by permit under paragraph (1) of subdivision (b) of Section 25113 as set forth in subdivision (e) of this section.
(z)The fee for filing a notice of transaction under subdivision (h) of Section 25103 shall be six hundred dollars ($600).
SEC. 2.Section 31526 of the Corporations Code is amended to read:31526.(a)It is unlawful for a franchise broker to communicate with a prospective franchisee about investing in a franchise opportunity that is subject to this law unless the franchise broker first provides to the prospective franchisee a copy of the completed Uniform Franchise Broker Disclosure Document.
(b)A franchise broker may provide the Uniform Franchise Broker Disclosure Document to a prospective franchisee through electronic means, subject to any requirements or conditions imposed by the commissioner.
SEC. 3.Section 302 is added to the Financial Code, to read:302.Unless otherwise provided by rule, the commissioner shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
SEC. 4.Section 331.5 of the Financial Code is amended to read:331.5.(a)(1)Any person licensed by or registered with the commissioner under any law shall establish and maintain an electronic service address designated for receiving communications and documents that are sent by the commissioner to licensees or registrants. This electronic service address shall be provided to the commissioner upon licensure or registration. The electronic service address provided to the commissioner shall not be the electronic service address of any individual employee. A licensee or registrant shall have the capacity to receive an attachment that accompanies a message sent to its electronic service address, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(2)Prior to changing the electronic service address most recently provided to the commissioner, the licensee or registrant shall notify the commissioner of the change and provide to the commissioner their new electronic service address. The commissioner may impose a fine of up to fifty dollars ($50) per day, not to exceed one thousand dollars ($1,000) in the aggregate, on a licensee or registrant who fails to notify the commissioner before changing their electronic service address or fails to provide the commissioner a new electronic service address.
(3)The commissioner shall provide each licensee or registrant that establishes and maintains an electronic service address in accordance with this section with an electronic service address designated for receiving correspondence from licensees or registrants subject to the commissioners jurisdiction. This service address shall have the capacity to receive an attachment that accompanies a message sent by the licensee or registrant, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(b)(1)The commissioner may fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address established and maintained pursuant to this section.
(2)For any person licensed or registered through the Nationwide Multistate Licensing System and Registry, the commissioner may fulfill the notice requirements described in paragraph (1) by electronic communication through that system.
(c)A communication sent to an electronic service address established pursuant to this section does not satisfy any notice requirement, or displace any law or regulation, that requires notice to be served in a different manner, if a hearing right attaches to the notice.
SEC. 5.Section 2042 of the Financial Code is amended to read:2042.(a)In addition to the fees provided in Section 2038, the commissioner shall levy an assessment each fiscal year, on a pro rata basis, on those licensees that at any time during the preceding calendar year engaged in the business of money transmission in California in an amount that is, in their judgment, sufficient to meet the commissioners expenses in administering the provisions of this division and to provide a reasonable reserve for contingencies.
(b)For licensees that sell or issue payment instruments or stored value, the amount of the annual assessment on any licensee shall not exceed the sum of the products determined by multiplying (1) increments of the aggregate face amount of payment instruments and stored value issued or sold in California by the licensee, directly or indirectly through agents, in the calendar year next preceding the date of such assessment, by (2) percentages of the base assessment rate, according to the following table:
Aggregate face amount of payment instruments and stored value sold (in millions) | Percentage of base assessment rate | |
First $1 | 100.0 | |
Next $9 | 25.0 | |
Next $40 | 12.5 | |
Next $50 | 6.0 | |
Next $400 | 3 | |
Next $500 | 2 | |
Excess over $1,000 | 1 |
The base assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) face amount of payment instruments and stored value sold.
(c)For licensees receiving money for transmission, the basis of the apportionment of the assessment among the licensees assessed shall be the proportion that the total amount of money received for transmission by the licensee in California bears in relation to the total amount of money received for transmission by all licensees in California, as shown by the reports of licensees to the commissioner for the preceding calendar year. The assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) of money received for transmission in California by the licensee.
(d)The commissioner shall notify each licensee of the amount levied against it. The licensee shall pay the amount levied within 20 days. If payment is not made to the commissioner within that time, the commissioner shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent.
SEC. 6.Section 8032 of the Financial Code is amended to read:8032.(a)On or before the 20th day of June of each year the commissioner shall notify each association of the amount assessed and levied against it.
(b)Except as provided in this article, an association shall pay one-half or more of the amount assessed so as to be received by the commissioner not later than the 10th day of July and shall pay the remainder so as to be received by the commissioner not later than the following 10th day of January.
(c)If payment is not received by the commissioner on time, the commissioner shall assess and collect in addition to the annual assessment, a penalty of 5 percent of the unpaid assessment for each month or part of a month that the payment is delinquent.
SEC. 7.Section 12214 of the Financial Code is amended to read:12214.(a)An applicant at the time of filing an application for a license under this division shall pay to the commissioner the sum of fifty dollars ($50) as a fee for investigating the application and two hundred dollars ($200) as an application fee. The investigation fee and application fee are not refundable if an application is denied or withdrawn.
(b)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of this division as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the programs in the year in which such assessment is made. The pro rata share shall be the proportion which a licensees gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner. The pro rata share shall not include the costs of any examinations provided for in Section 12306, unless they cannot be collected from the licensee examined.
(2)On or before the 30th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(3)In the levying and collection of the assessment, a licensee shall not be assessed for nor be permitted to pay less than one hundred fifty dollars ($150) per year.
(4)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to such licensee. If, after such an order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 8.Section 17207 of the Financial Code is amended to read:17207.The commissioner shall charge and collect the following fees and assessments:
(a)For filing an application for an escrow agents license, six hundred twenty-five dollars ($625) for the first office or location and four hundred twenty-five dollars ($425) for each additional office or location.
(b)For filing an application for a duplicate of an escrow agents license lost, stolen, or destroyed, or for replacement, upon a satisfactory showing of the loss, theft, destruction, or surrender of certificate for replacement, two dollars ($2).
(c)For investigation services in connection with each application, one hundred dollars ($100), and for investigation services in connection with each additional office application, one hundred dollars ($100).
(d)For holding a hearing in connection with the application, as set forth under Section 17209.2, the actual costs experienced in each particular instance.
(e)(1)Each escrow agent shall pay to the commissioner for the support of this division for the ensuing year, plus a deficit or less a surplus actually incurred during the prior two fiscal years, an annual license fee not to exceed seven thousand two hundred fifteen dollars ($7,215) for each office or location.
(2)On or before May 30 in each year, the commissioner shall notify each escrow agent of the amount of the annual license fee levied against it, and that the payment of the invoice is payable by the escrow agent within 30 days after receipt of notification by the commissioner.
(3)If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the annual license fee, of 10 percent of the fee for each month or part of a month that the payment is delayed or withheld.
(4)If an escrow agent fails to pay the amount due on or before the June 30 following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company.
(5)If, after an order is made pursuant to paragraph (4), a request for a hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a company shall not conduct business pursuant to this division, except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(f)Fifty dollars ($50) for investigation services in connection with each application for qualification of any person under Section 17200.8, other than investigation services under subdivision (c) of this section.
(g)A fee not to exceed twenty-five dollars ($25) for the filing of a notice or report required by rules adopted pursuant to subdivision (a) or Section 17203.1.
(h)(1)If costs and expenses associated with the enforcement of this division, including overhead, are or will be incurred by the commissioner during the year for which the annual license fee is levied, and that will or could result in the commissioners incurring of costs and expenses, including overhead, in excess of the costs and expenses, including overhead, budgeted for expenditure for the year in which the annual license fee is levied, then the commissioner may levy a special assessment on each escrow agent for each office or location in an amount estimated to pay for the actual costs and expenses associated with the enforcement of this division, including overhead, in an amount not to exceed one thousand dollars ($1,000) for each office or location. The commissioner shall notify each escrow agent of the amount of the special assessment levied against it, and that payment of the special assessment is payable by the escrow agent within 60 days of receipt of notification by the commissioner. The funds received from the special assessment shall be deposited into the Financial Protection Fund and shall be used only for the purposes for which the special assessment is made.
(2)If payment is not made within 60 days, the commissioner may assess and collect a penalty, in addition to the special assessment, of 10 percent of the special assessment for each month or part of a month that the payment is delayed or withheld. If an escrow agent fails to pay the special assessment on or before 60 days following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company. If an order is made under this subdivision, the provisions of paragraph (5) of subdivision (e) shall apply.
(3)If the amount collected pursuant to this subdivision exceeds the actual costs and expenses, including overhead, incurred in the administration and enforcement of this division and any deficit incurred, the excess shall be credited to each escrow agent on a pro rata basis.
SEC. 9.Section 18351 of the Financial Code is amended to read:18351.On or before the 30th day of November in each year, the commissioner shall notify each industrial loan company of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
SEC. 10.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 10.5.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(d)An invoice or assessment notice issued by the commissioner to a licensee pursuant to this section shall include the pro rata amount calculation used to determine the amount due and payable by the licensee with each component listed as a separate line item, including, but not limited to, all of the following:
(1)The total costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year.
(2)Any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(3)The aggregate total dollar amount of deferred deposit transactions made by all licensees.
(4)The licensees total dollar amount of deferred deposit transactions.
(5)The number of license locations operated by the licensee.
SEC. 11.Division 15.5 (commencing with Section 32000) of the Financial Code is repealed.SEC. 12.Section 50401 of the Financial Code is amended to read:50401.(a)In addition to other fees and reimbursements required to be paid under this division, each residential mortgage lender or servicer licensee shall pay to the commissioner an amount equal to the lesser of: (1) its pro rata share of all costs and expenses (including overhead and the maintenance of a prudent reserve not to exceed 90 days costs and expenses) that the commissioner reasonably expects to incur in the current fiscal year in the administration of this division and not otherwise recovered by the commissioner under this division or from the Financial Protection Fund, plus a deficit or less a surplus actually incurred during the prior two fiscal years; or (2) fifteen thousand dollars ($15,000). The pro rata share shall be the greater of either three thousand dollars ($3,000) or the sum of: (A) a number derived from the ratio of the aggregate principal amount of the mortgage loans secured by residential real property originated by the licensee to all mortgage loans secured by residential real property originated by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner; plus (B) a number derived from the ratio of the average value of mortgage loans secured by residential real property serviced by a licensee to the average value of all mortgage loans secured by residential real property serviced by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner. For the purposes of this section, the principal amount of a mortgage loan means the initial total amount a borrower is obligated to repay the lender and the average value of loans serviced means the sum of the aggregate dollar value of all mortgage loans secured by residential real property serviced by a licensee, calculated as of the last day of each month in the calendar year just ended, divided by 12.
In order for the commissioner to calculate the assessment under this section, each licensee shall file an annual report for the calendar year just ended containing the information required by the commissioner on or before March 1 of the year in which the assessment is to be calculated.
In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of this division and all reimbursements provided for under this division.
(b)In no case shall the reimbursement, payment, or other fee authorized by this section exceed the cost, including overhead, reasonably incurred in the administration of this division, and the maintenance of a prudent reserve not to exceed 90 days costs and expenses.
(c)On or before the 30th day of September in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days. If payment is not made within 20 days, the commissioner shall assess and collect a penalty, in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(d)If a licensee fails to pay the assessment on or before the 30th day following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the license issued to the licensee. An order issued under this section is not stayed by the filing of a request for a hearing. If, after an order is made, the request for hearing is filed in writing within 15 days from the date of service of the order and a hearing is not held within 60 days of the filing, the order is deemed rescinded as of its effective date. During a period when its license is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by further order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division.
SEC. 13.Section 16430 of the Government Code is amended to read:16430.Eligible securities for the investment of surplus moneys shall be any of the following:
(a)Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
(b)Bonds or interest-bearing notes or obligations that are issued by or fully guaranteed as to principal and interest by a federal agency or a United States government-sponsored enterprise, as defined by the Omnibus Budget Reconciliation Act of 1990 (Sec. 13112, Public Law 101-508; 2 U.S.C. Sec. 622(8)).
(c)Bonds, notes, or other obligations of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
(d)(1)Bonds, notes, or other obligations of a local government of this state, including, but not limited to, any of the following:
(A)A county.
(B)A city.
(C)A city and county.
(D)A metropolitan water district.
(E)A water district.
(F)A water storage district.
(G)An irrigation district.
(H)A municipal utility district.
(I)A school district.
(2)Bonds, notes, or other obligations eligible for investment pursuant to this subdivision shall be rated in rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(e)Bonds, debentures, or other obligations of any of the following:
(1)Issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended (12 U.S.C. Sec. 2001 et seq.).
(2)Issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended (12 U.S.C. Sec. 2001 et seq.).
(3)Issued by the Federal Home Loan Bank established under the Federal Home Loan Bank Act (12 U.S.C. Sec. 1421 et seq.).
(4)Issued by the Federal National Mortgage Association established under the National Housing Act, as amended (12 U.S.C. Sec. 1701 et seq.).
(5)Issued by the Federal Home Loan Mortgage Corporation.
(6)Issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act, as amended (16 U.S.C. Sec. 831 et seq.).
(7)Guaranteed by the Commodity Credit Corporation for the export of California agricultural products under the Commodity Credit Corporation Charter Act, as amended (15 U.S.C. Sec. 714 et seq.).
(f)Bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country that the International Monetary Fund lists as an advanced economy and for which the full faith and credit of that country has been pledged for the payment of principal and interest, if the securities are rated investment grade or its equivalent, or better, by a nationally recognized statistical rating organization. Securities eligible for investment pursuant to this subdivision shall satisfy all of the following:
(1)Be United States dollar denominated with a maximum maturity of five years or less, and eligible for purchase and sale within the United States.
(2)The combined par value of all of the investments authorized by this subdivision do not exceed 1 percent of the total par value of Pooled Money Investment Account assets at the time of purchase.
(3)The government of the foreign country issuing the securities submits to the jurisdiction of a federal or state court in the United States when disputes arise related to the investments.
(g)(1)Commercial paper of prime quality of the highest ranking or of the highest letter and number rating as defined by a nationally recognized statistical rating organization that rates these securities, if the commercial paper is issued by a federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company that is approved by the Pooled Money Investment Board as meeting the conditions specified in either subparagraph (A) or subparagraph (B):
(A)Both of the following conditions:
(i)Organized and operating within the United States.
(ii)Having total assets in excess of five hundred million dollars ($500,000,000).
(B)Both of the following conditions:
(i)Organized within the United States as a federally or state-chartered bank or a state-licensed branch of a foreign bank, special purpose corporation, trust, or limited liability company.
(ii)Having programwide credit enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bond.
(2)A purchase of eligible commercial paper shall not do any of the following:
(A)Exceed 397 days maturity.
(B)Represent more than 10 percent of the outstanding paper of an issuing federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company.
(C)Exceed 30 percent of the resources of an investment program.
(h)Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, that are eligible for purchase by the Federal Reserve System.
(i)Negotiable certificates of deposits issued by a federally or state-chartered bank or savings and loan association, a state-licensed branch of a foreign bank, or a federally or state-chartered credit union. For the purposes of this section, negotiable certificates of deposits are not subject to Chapter 4 (commencing with Section 16500) and Chapter 4.5 (commencing with Section 16600).
(j)The portion of bank loans and obligations guaranteed by the United States Small Business Administration or the United States Farmers Home Administration.
(k)Bank loans and obligations guaranteed by the Export-Import Bank of the United States.
(l)Student loan notes insured under the Guaranteed Student Loan Program established pursuant to the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1001 et seq.) and eligible for resale to the Student Loan Marketing Association established pursuant to Section 133 of the Education Amendments of 1972, as amended (20 U.S.C. Sec. 1087-2).
(m)Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the International Finance Corporation, the Government Development Bank for Puerto Rico, the European Bank for Reconstruction and Development, or the European Investment Bank.
(n)Bonds, debentures, and notes issued by corporations organized and operating within the United States. Securities eligible for investment pursuant to this subdivision shall be rated in a rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(o)Negotiable Order of Withdrawal Accounts (NOW Accounts), invested in accordance with Chapter 4 (commencing with Section 16500).
(p)Shares of any money market mutual fund subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, provided that all of the following conditions are met:
(1)The money market mutual fund invests in securities and obligations described in one or more of the following: subdivision (a), (b), or (e) of this section or repurchase agreements or reverse repurchase agreements described in Section 16480.4.
(2)The financial institution issuing shares of the money market mutual fund has at least five years of experience investing in the types of securities and obligations being purchased by the state and has assets under management in the money market mutual fund in excess of ten billion dollars ($10,000,000,000).
(3)The money market mutual fund has attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations.
(4)The financial institution does not impose a commission on the purchase or sale of fund shares by the state.
(5)The state does not purchase more than 10 percent of a money market mutual funds total assets.
(6)The state does not invest more than 10 percent of the Pooled Money Investment Accounts funds in any single money market mutual fund meeting the requirements of this subdivision.
SEC. 14.Section 53667 of the Government Code is amended to read:53667.(a)Expenses incurred by the administrator in carrying out the duties and responsibilities assigned to the administrator by the sections specified in subdivision (a) of Section 53661, shall be borne by the Local Agency Deposit Security Fund, which is hereby created and continuously appropriated to the administrator for the administration of the sections specified in subdivision (a) of Section 53661. This fund shall consist of fines levied pursuant to Section 53661, fees collected pursuant to the sections specified in subdivision (a) of Section 53661, and assessments levied pursuant to this section.
(b)Each fiscal year the administrator shall levy an assessment on a pro rata basis on those depositories which at any time during the preceding fiscal year held local agency deposits. The total assessment levied on all of those depositories shall be in an amount which, when added to the amount of fines and fees that the administrator estimates will be collected during the fiscal year when the assessment is levied, is sufficient in the judgment of the administrator to meet the expenses of the administrator in administering the sections specified in subdivision (a) of Section 53661 and to provide a reasonable reserve for contingencies. The basis of the apportionment of the assessment among the depositories assessed shall be the proportion that the average amount of local agency deposits held by each of those depositories bears to the average total amount of local agency deposits held by all of those depositories as shown by the reports of depositories to the administrator for the preceding fiscal year, as required in subdivision (e) of Section 53661; provided, however, that the amount of the assessment levied on each of those depositories shall be not less than twenty-five dollars ($25).
(c)The administrator shall notify each depository of the amount levied against it. The depository shall pay the amount levied within 20 days after such notice into the Local Agency Deposit Security Fund for the administration of the sections specified in subdivision (a) of Section 53661. If payment is not made to the administrator within such time, the administrator shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent. If a depository fails to pay the assessment or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository.
SEC. 15.Section 10.5 of this bill incorporates amendments to Section 23016 of the Financial Code proposed by both this bill and Assembly Bill 2028. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 23016 of the Financial Code, and (3) this bill is enacted after Assembly Bill 2028, in which case Section 10 of this bill shall not become operative.
(a)The commissioner shall charge and collect the fees fixed in this section and Section 25608.1. All fees charged and collected under this section and Section 25608.1 shall be transmitted to the Treasurer at least weekly, accompanied by a detailed statement thereof and shall be credited to the Financial Protection Fund.
(b)The fee for filing an application for a negotiating permit under subdivision (c) of Section 25102 is fifty dollars ($50).
(c)The fee for filing a notice pursuant to paragraph (5) of subdivision (h) of Section 25102, for filing a notice pursuant to paragraph (4) of subdivision (f) of Section 25102, or for filing a notice pursuant to paragraph (10) of subdivision (r) of Section 25102, in addition to the fee prescribed in those paragraphs, if applicable, shall be determined based on the value of the securities proposed to be sold in the transaction for which the notice is filed and in accordance with subdivision (g), and shall be as follows:
Value of Securities | Filing Fee |
$25,000 or less | $25 |
$25,001 to $100,000 | $35 |
$100,001 to $500,000 | $50 |
$500,001 to $1,000,000 | $150 |
Over $1,000,000 | $300 |
(d)The fee for filing an application for designation of an issuer pursuant to subdivision (k) of Section 25100 is fifty dollars ($50).
(e)The fee for filing an application for qualification of the sale of securities by notification under Section 25112 or by permit under paragraph (1) of subdivision (b) of Section 25113 (except applications for qualification by permit of the sale of any guarantee of any security, the fees for which applications are fixed in subdivision (k)) is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
The fee for filing a small company application for qualification of the sale of securities by permit under paragraph (2) of subdivision (b) of Section 25113 is two thousand five hundred dollars ($2,500). In the case where the costs of processing a small company application exceed the filing fee, an additional fee shall be charged, not to exceed one thousand dollars ($1,000), over and above the filing fee based on the costs of the salary or other compensation paid to persons processing the application plus overhead costs reasonably incurred in the performance of the work. In determining the costs, the commissioner may use the estimated average hourly cost for all persons processing applications for the fiscal year.
(f)The fee for filing an application for qualification of the sale of securities by coordination under Section 25111 or a notice of intention to sell under subdivision (t) of Section 25100 is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
(g)For the purpose of determining the fees fixed in subdivisions (e) and (f):
(1)The value of the securities shall be the price at which the company proposes to sell the securities, or the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration (if other than money) to be received in exchange therefor, or of the securities when sold, whichever is greater.
(2)Interim or voting trust certificates shall have a value equal to the aggregate value of the securities to be represented by the interim or voting trust certificates.
(3)The value of a warrant or right to purchase or subscribe to another security of the same or another issuer shall be an amount equal to the consideration to be paid for that warrant or right plus an amount equal to the consideration to be paid upon purchase of the additional securities, provided that if the latter amount is not determinable at the time of qualification, that amount shall then be the value of the additional securities as determined by the commissioner.
(4)In the case of a share dividend where the shareholders are given an option to accept either cash or additional shares of common stock, the value of the securities to be sold shall be the maximum amount of cash that would be payable in the event that all shareholders elected to accept cash.
(h)The fee for filing an application for qualification of the sale of securities by permit under Section 25121 is:
(1)Two hundred dollars ($200) in connection with any change (including any stock split or reverse stock split or stock dividend, except a stock dividend where the shareholders are given an option to accept either cash or additional shares of common stock) in the rights, preferences, privileges, or restrictions of or on outstanding securities.
(2)Two hundred dollars ($200) plus one-fifth of 1 percent of the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration to be received in exchange therefor, up to a maximum aggregate fee of two thousand five hundred dollars ($2,500), in any exchange of securities by the issuer with its existing security holders exclusively, or in any exchange in connection with any merger or consolidation or purchase of corporate assets in consideration of the issuance of securities, or any entity conversion transaction.
(i)The fee for filing an application for qualification of the sale of securities by notification under Section 25131 shall be one hundred dollars ($100).
(j)The fee for an application for the removal of any condition under Section 25141 is fifty dollars ($50).
(k)The fee for filing any application for a permit to execute or issue any guarantee of any security is fifty dollars ($50).
(l)The fee for acting as escrowholder for securities under Section 25149 is fifty dollars ($50). In addition, a fee of two dollars and fifty cents ($2.50) shall be paid for the deposit with the commissioner of each new certificate or other document resulting from a transfer in escrow.
(m)The fee for filing an application for an order (1) consenting to the transfer in escrow of securities or (2) consenting to the transfer of securities subject to any condition imposed by the commissioner requiring the commissioners consent to the transfer is twenty dollars ($20) for each transfer.
(n)The filing fee for an amendment to an application filed after the effective date of the qualification of the sale of securities is fifty dollars ($50) plus any additional fee that would have been required to be paid with the original application for qualification of the sale of securities under this section if the matters set forth in the amendment had been included in the original application.
(o)(1)The fee for filing an application for a broker-dealer certificate under Section 25211 is three hundred dollars ($300).
(2)Each broker-dealer shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of the broker-dealer program under this division, as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that the broker-dealer and the number of its agents in this state bears to the aggregate number of broker-dealers and agents in this state as shown by records maintained by or on behalf of the commissioner. The pro rata share may include the costs of any examinations, audit, or investigation provided for in subdivision (r).
(3)Every broker-dealer who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a minimum assessment of seventy-five dollars ($75) on or before the 31st of December in each year.
(4)The commissioner may assess and levy against each broker-dealer any additional amount above the minimum assessment amount of seventy-five dollars ($75) that is reasonable and necessary to support the broker-dealer program under this division. If an additional amount is assessed, the commissioner shall notify each broker-dealer of any additional amount assessed and levied against it on or before the 30th day of May in each year, and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(5)If a broker-dealer fails to pay any assessment on or before the 30th day of the month following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the broker-dealer. If, after that order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a broker-dealer shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided under this division.
(6)In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of the broker-dealer program under this division and all reimbursements applicable to the administration of the broker-dealer program under this division.
(p)(1)The commissioner shall charge a fee of fifty dollars ($50) for the filing of a notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(2)The commissioner shall charge a fee up to fifty dollars ($50) to keep in effect for the following year any notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(3)No person shall, on behalf of a broker-dealer licensed pursuant to Section 25211, effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless the broker-dealer pays the annual fee required by paragraph (2) of this subdivision on or before the day upon which payment is due.
(4)No person may, in this state, on behalf of an investment adviser licensed pursuant to Section 25231, offer or negotiate for the sale of investment advisory services of the investment adviser, determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser, or determine the reports or analyses concerning securities to be published by the investment adviser, unless the investment adviser pays the annual fee required by paragraph (2) on or before the day upon which payment is due.
(5)The commissioner may by order summarily enjoin an individual from performing any activity under paragraph (3) or (4) if the annual fee in paragraph (2) is not paid on or before the day upon which payment is due. An order under this paragraph may not be made before 10 days after notice by the commissioner that the fee is due and unpaid.
(q)(1)Except as provided for in paragraph (2), the fee for filing an application for an investment adviser under Section 25231 is one hundred twenty-five dollars ($125), and payment of this amount shall keep the certificate, if granted, in effect during the calendar year during which it is granted. Every investment adviser who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a renewal fee of one hundred twenty-five dollars ($125) on or before the 31st day of December.
(2)Paragraph (1) shall not apply to a broker-dealer licensed under Section 25210.
(r)(1)Except as provided for in paragraph (2), the fee for any routine or nonroutine regulatory examination, audit, or investigation is the amount of the salary or other compensation paid to the persons making the examination, audit, or investigation plus the amount of expenses including overhead reasonably incurred in the performance of the work. In determining the costs associated with an examination, audit, or investigation, the commissioner may use the estimated average hourly cost for all persons performing examinations, audits, or investigations for the fiscal year.
(2)An investment adviser licensed under Section 25230 pursuant to the Investment Adviser Registration Depository shall not be subject to paragraph (1) only in regard to the fee for a routine regulatory examination of its investment advisory services for which it is licensed under Section 25230.
(s)The fee for any hearing held by the commissioner pursuant to Section 25142 shall be the sum determined by the commissioner to cover the actual expense of noticing and holding the hearing.
(t)The commissioner may fix by rule a reasonable charge for any publications issued under the commissioners authority. The charges shall not apply to reports of the commissioner in the ordinary course of distribution.
(u)The fee for filing an offer under subdivision (b) of Section 25507 shall be the amount of filing fee payable under subdivision (e), (f), (h), or (i) of this section if an application had been filed to qualify the transaction in which the securities upon which the offer is to be made were sold in violation of the qualification provisions of this law.
(v)The fee for filing an application for exemption pursuant to subdivision (l) of Section 25100 is two hundred fifty dollars ($250).
(w)The commissioner may by rule require payment of a fee for filing a notice or report required by a rule adopted pursuant to Section 25105. The fee required in connection with a transaction as defined by that rule shall not exceed the fees specified in subdivision (c) based on the value of the securities sold, but the commissioner may permit a single notice for more than one transaction.
(x)The fee for filing the first notice of transaction under subdivision (n) of Section 25102 is six hundred dollars ($600).
(y)The fee for filing a notice of transaction under subdivision (o) of Section 25102 shall be the fee for filing an application for qualification of the sale of securities by permit under paragraph (1) of subdivision (b) of Section 25113 as set forth in subdivision (e) of this section.
(z)The fee for filing a notice of transaction under subdivision (h) of Section 25103 shall be six hundred dollars ($600).
SEC. 2.Section 31526 of the Corporations Code is amended to read:31526.(a)It is unlawful for a franchise broker to communicate with a prospective franchisee about investing in a franchise opportunity that is subject to this law unless the franchise broker first provides to the prospective franchisee a copy of the completed Uniform Franchise Broker Disclosure Document.
(b)A franchise broker may provide the Uniform Franchise Broker Disclosure Document to a prospective franchisee through electronic means, subject to any requirements or conditions imposed by the commissioner.
SEC. 3.Section 302 is added to the Financial Code, to read:302.Unless otherwise provided by rule, the commissioner shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
SEC. 4.Section 331.5 of the Financial Code is amended to read:331.5.(a)(1)Any person licensed by or registered with the commissioner under any law shall establish and maintain an electronic service address designated for receiving communications and documents that are sent by the commissioner to licensees or registrants. This electronic service address shall be provided to the commissioner upon licensure or registration. The electronic service address provided to the commissioner shall not be the electronic service address of any individual employee. A licensee or registrant shall have the capacity to receive an attachment that accompanies a message sent to its electronic service address, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(2)Prior to changing the electronic service address most recently provided to the commissioner, the licensee or registrant shall notify the commissioner of the change and provide to the commissioner their new electronic service address. The commissioner may impose a fine of up to fifty dollars ($50) per day, not to exceed one thousand dollars ($1,000) in the aggregate, on a licensee or registrant who fails to notify the commissioner before changing their electronic service address or fails to provide the commissioner a new electronic service address.
(3)The commissioner shall provide each licensee or registrant that establishes and maintains an electronic service address in accordance with this section with an electronic service address designated for receiving correspondence from licensees or registrants subject to the commissioners jurisdiction. This service address shall have the capacity to receive an attachment that accompanies a message sent by the licensee or registrant, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(b)(1)The commissioner may fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address established and maintained pursuant to this section.
(2)For any person licensed or registered through the Nationwide Multistate Licensing System and Registry, the commissioner may fulfill the notice requirements described in paragraph (1) by electronic communication through that system.
(c)A communication sent to an electronic service address established pursuant to this section does not satisfy any notice requirement, or displace any law or regulation, that requires notice to be served in a different manner, if a hearing right attaches to the notice.
SEC. 5.Section 2042 of the Financial Code is amended to read:2042.(a)In addition to the fees provided in Section 2038, the commissioner shall levy an assessment each fiscal year, on a pro rata basis, on those licensees that at any time during the preceding calendar year engaged in the business of money transmission in California in an amount that is, in their judgment, sufficient to meet the commissioners expenses in administering the provisions of this division and to provide a reasonable reserve for contingencies.
(b)For licensees that sell or issue payment instruments or stored value, the amount of the annual assessment on any licensee shall not exceed the sum of the products determined by multiplying (1) increments of the aggregate face amount of payment instruments and stored value issued or sold in California by the licensee, directly or indirectly through agents, in the calendar year next preceding the date of such assessment, by (2) percentages of the base assessment rate, according to the following table:
Aggregate face amount of payment instruments and stored value sold (in millions) | Percentage of base assessment rate | |
First $1 | 100.0 | |
Next $9 | 25.0 | |
Next $40 | 12.5 | |
Next $50 | 6.0 | |
Next $400 | 3 | |
Next $500 | 2 | |
Excess over $1,000 | 1 |
The base assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) face amount of payment instruments and stored value sold.
(c)For licensees receiving money for transmission, the basis of the apportionment of the assessment among the licensees assessed shall be the proportion that the total amount of money received for transmission by the licensee in California bears in relation to the total amount of money received for transmission by all licensees in California, as shown by the reports of licensees to the commissioner for the preceding calendar year. The assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) of money received for transmission in California by the licensee.
(d)The commissioner shall notify each licensee of the amount levied against it. The licensee shall pay the amount levied within 20 days. If payment is not made to the commissioner within that time, the commissioner shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent.
SEC. 6.Section 8032 of the Financial Code is amended to read:8032.(a)On or before the 20th day of June of each year the commissioner shall notify each association of the amount assessed and levied against it.
(b)Except as provided in this article, an association shall pay one-half or more of the amount assessed so as to be received by the commissioner not later than the 10th day of July and shall pay the remainder so as to be received by the commissioner not later than the following 10th day of January.
(c)If payment is not received by the commissioner on time, the commissioner shall assess and collect in addition to the annual assessment, a penalty of 5 percent of the unpaid assessment for each month or part of a month that the payment is delinquent.
SEC. 7.Section 12214 of the Financial Code is amended to read:12214.(a)An applicant at the time of filing an application for a license under this division shall pay to the commissioner the sum of fifty dollars ($50) as a fee for investigating the application and two hundred dollars ($200) as an application fee. The investigation fee and application fee are not refundable if an application is denied or withdrawn.
(b)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of this division as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the programs in the year in which such assessment is made. The pro rata share shall be the proportion which a licensees gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner. The pro rata share shall not include the costs of any examinations provided for in Section 12306, unless they cannot be collected from the licensee examined.
(2)On or before the 30th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(3)In the levying and collection of the assessment, a licensee shall not be assessed for nor be permitted to pay less than one hundred fifty dollars ($150) per year.
(4)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to such licensee. If, after such an order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 8.Section 17207 of the Financial Code is amended to read:17207.The commissioner shall charge and collect the following fees and assessments:
(a)For filing an application for an escrow agents license, six hundred twenty-five dollars ($625) for the first office or location and four hundred twenty-five dollars ($425) for each additional office or location.
(b)For filing an application for a duplicate of an escrow agents license lost, stolen, or destroyed, or for replacement, upon a satisfactory showing of the loss, theft, destruction, or surrender of certificate for replacement, two dollars ($2).
(c)For investigation services in connection with each application, one hundred dollars ($100), and for investigation services in connection with each additional office application, one hundred dollars ($100).
(d)For holding a hearing in connection with the application, as set forth under Section 17209.2, the actual costs experienced in each particular instance.
(e)(1)Each escrow agent shall pay to the commissioner for the support of this division for the ensuing year, plus a deficit or less a surplus actually incurred during the prior two fiscal years, an annual license fee not to exceed seven thousand two hundred fifteen dollars ($7,215) for each office or location.
(2)On or before May 30 in each year, the commissioner shall notify each escrow agent of the amount of the annual license fee levied against it, and that the payment of the invoice is payable by the escrow agent within 30 days after receipt of notification by the commissioner.
(3)If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the annual license fee, of 10 percent of the fee for each month or part of a month that the payment is delayed or withheld.
(4)If an escrow agent fails to pay the amount due on or before the June 30 following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company.
(5)If, after an order is made pursuant to paragraph (4), a request for a hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a company shall not conduct business pursuant to this division, except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(f)Fifty dollars ($50) for investigation services in connection with each application for qualification of any person under Section 17200.8, other than investigation services under subdivision (c) of this section.
(g)A fee not to exceed twenty-five dollars ($25) for the filing of a notice or report required by rules adopted pursuant to subdivision (a) or Section 17203.1.
(h)(1)If costs and expenses associated with the enforcement of this division, including overhead, are or will be incurred by the commissioner during the year for which the annual license fee is levied, and that will or could result in the commissioners incurring of costs and expenses, including overhead, in excess of the costs and expenses, including overhead, budgeted for expenditure for the year in which the annual license fee is levied, then the commissioner may levy a special assessment on each escrow agent for each office or location in an amount estimated to pay for the actual costs and expenses associated with the enforcement of this division, including overhead, in an amount not to exceed one thousand dollars ($1,000) for each office or location. The commissioner shall notify each escrow agent of the amount of the special assessment levied against it, and that payment of the special assessment is payable by the escrow agent within 60 days of receipt of notification by the commissioner. The funds received from the special assessment shall be deposited into the Financial Protection Fund and shall be used only for the purposes for which the special assessment is made.
(2)If payment is not made within 60 days, the commissioner may assess and collect a penalty, in addition to the special assessment, of 10 percent of the special assessment for each month or part of a month that the payment is delayed or withheld. If an escrow agent fails to pay the special assessment on or before 60 days following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company. If an order is made under this subdivision, the provisions of paragraph (5) of subdivision (e) shall apply.
(3)If the amount collected pursuant to this subdivision exceeds the actual costs and expenses, including overhead, incurred in the administration and enforcement of this division and any deficit incurred, the excess shall be credited to each escrow agent on a pro rata basis.
SEC. 9.Section 18351 of the Financial Code is amended to read:18351.On or before the 30th day of November in each year, the commissioner shall notify each industrial loan company of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
SEC. 10.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 10.5.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(d)An invoice or assessment notice issued by the commissioner to a licensee pursuant to this section shall include the pro rata amount calculation used to determine the amount due and payable by the licensee with each component listed as a separate line item, including, but not limited to, all of the following:
(1)The total costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year.
(2)Any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(3)The aggregate total dollar amount of deferred deposit transactions made by all licensees.
(4)The licensees total dollar amount of deferred deposit transactions.
(5)The number of license locations operated by the licensee.
SEC. 11.Division 15.5 (commencing with Section 32000) of the Financial Code is repealed.SEC. 12.Section 50401 of the Financial Code is amended to read:50401.(a)In addition to other fees and reimbursements required to be paid under this division, each residential mortgage lender or servicer licensee shall pay to the commissioner an amount equal to the lesser of: (1) its pro rata share of all costs and expenses (including overhead and the maintenance of a prudent reserve not to exceed 90 days costs and expenses) that the commissioner reasonably expects to incur in the current fiscal year in the administration of this division and not otherwise recovered by the commissioner under this division or from the Financial Protection Fund, plus a deficit or less a surplus actually incurred during the prior two fiscal years; or (2) fifteen thousand dollars ($15,000). The pro rata share shall be the greater of either three thousand dollars ($3,000) or the sum of: (A) a number derived from the ratio of the aggregate principal amount of the mortgage loans secured by residential real property originated by the licensee to all mortgage loans secured by residential real property originated by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner; plus (B) a number derived from the ratio of the average value of mortgage loans secured by residential real property serviced by a licensee to the average value of all mortgage loans secured by residential real property serviced by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner. For the purposes of this section, the principal amount of a mortgage loan means the initial total amount a borrower is obligated to repay the lender and the average value of loans serviced means the sum of the aggregate dollar value of all mortgage loans secured by residential real property serviced by a licensee, calculated as of the last day of each month in the calendar year just ended, divided by 12.
In order for the commissioner to calculate the assessment under this section, each licensee shall file an annual report for the calendar year just ended containing the information required by the commissioner on or before March 1 of the year in which the assessment is to be calculated.
In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of this division and all reimbursements provided for under this division.
(b)In no case shall the reimbursement, payment, or other fee authorized by this section exceed the cost, including overhead, reasonably incurred in the administration of this division, and the maintenance of a prudent reserve not to exceed 90 days costs and expenses.
(c)On or before the 30th day of September in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days. If payment is not made within 20 days, the commissioner shall assess and collect a penalty, in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(d)If a licensee fails to pay the assessment on or before the 30th day following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the license issued to the licensee. An order issued under this section is not stayed by the filing of a request for a hearing. If, after an order is made, the request for hearing is filed in writing within 15 days from the date of service of the order and a hearing is not held within 60 days of the filing, the order is deemed rescinded as of its effective date. During a period when its license is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by further order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division.
SEC. 13.Section 16430 of the Government Code is amended to read:16430.Eligible securities for the investment of surplus moneys shall be any of the following:
(a)Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
(b)Bonds or interest-bearing notes or obligations that are issued by or fully guaranteed as to principal and interest by a federal agency or a United States government-sponsored enterprise, as defined by the Omnibus Budget Reconciliation Act of 1990 (Sec. 13112, Public Law 101-508; 2 U.S.C. Sec. 622(8)).
(c)Bonds, notes, or other obligations of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
(d)(1)Bonds, notes, or other obligations of a local government of this state, including, but not limited to, any of the following:
(A)A county.
(B)A city.
(C)A city and county.
(D)A metropolitan water district.
(E)A water district.
(F)A water storage district.
(G)An irrigation district.
(H)A municipal utility district.
(I)A school district.
(2)Bonds, notes, or other obligations eligible for investment pursuant to this subdivision shall be rated in rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(e)Bonds, debentures, or other obligations of any of the following:
(1)Issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended (12 U.S.C. Sec. 2001 et seq.).
(2)Issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended (12 U.S.C. Sec. 2001 et seq.).
(3)Issued by the Federal Home Loan Bank established under the Federal Home Loan Bank Act (12 U.S.C. Sec. 1421 et seq.).
(4)Issued by the Federal National Mortgage Association established under the National Housing Act, as amended (12 U.S.C. Sec. 1701 et seq.).
(5)Issued by the Federal Home Loan Mortgage Corporation.
(6)Issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act, as amended (16 U.S.C. Sec. 831 et seq.).
(7)Guaranteed by the Commodity Credit Corporation for the export of California agricultural products under the Commodity Credit Corporation Charter Act, as amended (15 U.S.C. Sec. 714 et seq.).
(f)Bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country that the International Monetary Fund lists as an advanced economy and for which the full faith and credit of that country has been pledged for the payment of principal and interest, if the securities are rated investment grade or its equivalent, or better, by a nationally recognized statistical rating organization. Securities eligible for investment pursuant to this subdivision shall satisfy all of the following:
(1)Be United States dollar denominated with a maximum maturity of five years or less, and eligible for purchase and sale within the United States.
(2)The combined par value of all of the investments authorized by this subdivision do not exceed 1 percent of the total par value of Pooled Money Investment Account assets at the time of purchase.
(3)The government of the foreign country issuing the securities submits to the jurisdiction of a federal or state court in the United States when disputes arise related to the investments.
(g)(1)Commercial paper of prime quality of the highest ranking or of the highest letter and number rating as defined by a nationally recognized statistical rating organization that rates these securities, if the commercial paper is issued by a federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company that is approved by the Pooled Money Investment Board as meeting the conditions specified in either subparagraph (A) or subparagraph (B):
(A)Both of the following conditions:
(i)Organized and operating within the United States.
(ii)Having total assets in excess of five hundred million dollars ($500,000,000).
(B)Both of the following conditions:
(i)Organized within the United States as a federally or state-chartered bank or a state-licensed branch of a foreign bank, special purpose corporation, trust, or limited liability company.
(ii)Having programwide credit enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bond.
(2)A purchase of eligible commercial paper shall not do any of the following:
(A)Exceed 397 days maturity.
(B)Represent more than 10 percent of the outstanding paper of an issuing federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company.
(C)Exceed 30 percent of the resources of an investment program.
(h)Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, that are eligible for purchase by the Federal Reserve System.
(i)Negotiable certificates of deposits issued by a federally or state-chartered bank or savings and loan association, a state-licensed branch of a foreign bank, or a federally or state-chartered credit union. For the purposes of this section, negotiable certificates of deposits are not subject to Chapter 4 (commencing with Section 16500) and Chapter 4.5 (commencing with Section 16600).
(j)The portion of bank loans and obligations guaranteed by the United States Small Business Administration or the United States Farmers Home Administration.
(k)Bank loans and obligations guaranteed by the Export-Import Bank of the United States.
(l)Student loan notes insured under the Guaranteed Student Loan Program established pursuant to the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1001 et seq.) and eligible for resale to the Student Loan Marketing Association established pursuant to Section 133 of the Education Amendments of 1972, as amended (20 U.S.C. Sec. 1087-2).
(m)Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the International Finance Corporation, the Government Development Bank for Puerto Rico, the European Bank for Reconstruction and Development, or the European Investment Bank.
(n)Bonds, debentures, and notes issued by corporations organized and operating within the United States. Securities eligible for investment pursuant to this subdivision shall be rated in a rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(o)Negotiable Order of Withdrawal Accounts (NOW Accounts), invested in accordance with Chapter 4 (commencing with Section 16500).
(p)Shares of any money market mutual fund subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, provided that all of the following conditions are met:
(1)The money market mutual fund invests in securities and obligations described in one or more of the following: subdivision (a), (b), or (e) of this section or repurchase agreements or reverse repurchase agreements described in Section 16480.4.
(2)The financial institution issuing shares of the money market mutual fund has at least five years of experience investing in the types of securities and obligations being purchased by the state and has assets under management in the money market mutual fund in excess of ten billion dollars ($10,000,000,000).
(3)The money market mutual fund has attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations.
(4)The financial institution does not impose a commission on the purchase or sale of fund shares by the state.
(5)The state does not purchase more than 10 percent of a money market mutual funds total assets.
(6)The state does not invest more than 10 percent of the Pooled Money Investment Accounts funds in any single money market mutual fund meeting the requirements of this subdivision.
SEC. 14.Section 53667 of the Government Code is amended to read:53667.(a)Expenses incurred by the administrator in carrying out the duties and responsibilities assigned to the administrator by the sections specified in subdivision (a) of Section 53661, shall be borne by the Local Agency Deposit Security Fund, which is hereby created and continuously appropriated to the administrator for the administration of the sections specified in subdivision (a) of Section 53661. This fund shall consist of fines levied pursuant to Section 53661, fees collected pursuant to the sections specified in subdivision (a) of Section 53661, and assessments levied pursuant to this section.
(b)Each fiscal year the administrator shall levy an assessment on a pro rata basis on those depositories which at any time during the preceding fiscal year held local agency deposits. The total assessment levied on all of those depositories shall be in an amount which, when added to the amount of fines and fees that the administrator estimates will be collected during the fiscal year when the assessment is levied, is sufficient in the judgment of the administrator to meet the expenses of the administrator in administering the sections specified in subdivision (a) of Section 53661 and to provide a reasonable reserve for contingencies. The basis of the apportionment of the assessment among the depositories assessed shall be the proportion that the average amount of local agency deposits held by each of those depositories bears to the average total amount of local agency deposits held by all of those depositories as shown by the reports of depositories to the administrator for the preceding fiscal year, as required in subdivision (e) of Section 53661; provided, however, that the amount of the assessment levied on each of those depositories shall be not less than twenty-five dollars ($25).
(c)The administrator shall notify each depository of the amount levied against it. The depository shall pay the amount levied within 20 days after such notice into the Local Agency Deposit Security Fund for the administration of the sections specified in subdivision (a) of Section 53661. If payment is not made to the administrator within such time, the administrator shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent. If a depository fails to pay the assessment or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository.
SEC. 15.Section 10.5 of this bill incorporates amendments to Section 23016 of the Financial Code proposed by both this bill and Assembly Bill 2028. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 23016 of the Financial Code, and (3) this bill is enacted after Assembly Bill 2028, in which case Section 10 of this bill shall not become operative.
(a)The commissioner shall charge and collect the fees fixed in this section and Section 25608.1. All fees charged and collected under this section and Section 25608.1 shall be transmitted to the Treasurer at least weekly, accompanied by a detailed statement thereof and shall be credited to the Financial Protection Fund.
(b)The fee for filing an application for a negotiating permit under subdivision (c) of Section 25102 is fifty dollars ($50).
(c)The fee for filing a notice pursuant to paragraph (5) of subdivision (h) of Section 25102, for filing a notice pursuant to paragraph (4) of subdivision (f) of Section 25102, or for filing a notice pursuant to paragraph (10) of subdivision (r) of Section 25102, in addition to the fee prescribed in those paragraphs, if applicable, shall be determined based on the value of the securities proposed to be sold in the transaction for which the notice is filed and in accordance with subdivision (g), and shall be as follows:
Value of Securities | Filing Fee |
$25,000 or less | $25 |
$25,001 to $100,000 | $35 |
$100,001 to $500,000 | $50 |
$500,001 to $1,000,000 | $150 |
Over $1,000,000 | $300 |
(d)The fee for filing an application for designation of an issuer pursuant to subdivision (k) of Section 25100 is fifty dollars ($50).
(e)The fee for filing an application for qualification of the sale of securities by notification under Section 25112 or by permit under paragraph (1) of subdivision (b) of Section 25113 (except applications for qualification by permit of the sale of any guarantee of any security, the fees for which applications are fixed in subdivision (k)) is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
The fee for filing a small company application for qualification of the sale of securities by permit under paragraph (2) of subdivision (b) of Section 25113 is two thousand five hundred dollars ($2,500). In the case where the costs of processing a small company application exceed the filing fee, an additional fee shall be charged, not to exceed one thousand dollars ($1,000), over and above the filing fee based on the costs of the salary or other compensation paid to persons processing the application plus overhead costs reasonably incurred in the performance of the work. In determining the costs, the commissioner may use the estimated average hourly cost for all persons processing applications for the fiscal year.
(f)The fee for filing an application for qualification of the sale of securities by coordination under Section 25111 or a notice of intention to sell under subdivision (t) of Section 25100 is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
(g)For the purpose of determining the fees fixed in subdivisions (e) and (f):
(1)The value of the securities shall be the price at which the company proposes to sell the securities, or the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration (if other than money) to be received in exchange therefor, or of the securities when sold, whichever is greater.
(2)Interim or voting trust certificates shall have a value equal to the aggregate value of the securities to be represented by the interim or voting trust certificates.
(3)The value of a warrant or right to purchase or subscribe to another security of the same or another issuer shall be an amount equal to the consideration to be paid for that warrant or right plus an amount equal to the consideration to be paid upon purchase of the additional securities, provided that if the latter amount is not determinable at the time of qualification, that amount shall then be the value of the additional securities as determined by the commissioner.
(4)In the case of a share dividend where the shareholders are given an option to accept either cash or additional shares of common stock, the value of the securities to be sold shall be the maximum amount of cash that would be payable in the event that all shareholders elected to accept cash.
(h)The fee for filing an application for qualification of the sale of securities by permit under Section 25121 is:
(1)Two hundred dollars ($200) in connection with any change (including any stock split or reverse stock split or stock dividend, except a stock dividend where the shareholders are given an option to accept either cash or additional shares of common stock) in the rights, preferences, privileges, or restrictions of or on outstanding securities.
(2)Two hundred dollars ($200) plus one-fifth of 1 percent of the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration to be received in exchange therefor, up to a maximum aggregate fee of two thousand five hundred dollars ($2,500), in any exchange of securities by the issuer with its existing security holders exclusively, or in any exchange in connection with any merger or consolidation or purchase of corporate assets in consideration of the issuance of securities, or any entity conversion transaction.
(i)The fee for filing an application for qualification of the sale of securities by notification under Section 25131 shall be one hundred dollars ($100).
(j)The fee for an application for the removal of any condition under Section 25141 is fifty dollars ($50).
(k)The fee for filing any application for a permit to execute or issue any guarantee of any security is fifty dollars ($50).
(l)The fee for acting as escrowholder for securities under Section 25149 is fifty dollars ($50). In addition, a fee of two dollars and fifty cents ($2.50) shall be paid for the deposit with the commissioner of each new certificate or other document resulting from a transfer in escrow.
(m)The fee for filing an application for an order (1) consenting to the transfer in escrow of securities or (2) consenting to the transfer of securities subject to any condition imposed by the commissioner requiring the commissioners consent to the transfer is twenty dollars ($20) for each transfer.
(n)The filing fee for an amendment to an application filed after the effective date of the qualification of the sale of securities is fifty dollars ($50) plus any additional fee that would have been required to be paid with the original application for qualification of the sale of securities under this section if the matters set forth in the amendment had been included in the original application.
(o)(1)The fee for filing an application for a broker-dealer certificate under Section 25211 is three hundred dollars ($300).
(2)Each broker-dealer shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of the broker-dealer program under this division, as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that the broker-dealer and the number of its agents in this state bears to the aggregate number of broker-dealers and agents in this state as shown by records maintained by or on behalf of the commissioner. The pro rata share may include the costs of any examinations, audit, or investigation provided for in subdivision (r).
(3)Every broker-dealer who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a minimum assessment of seventy-five dollars ($75) on or before the 31st of December in each year.
(4)The commissioner may assess and levy against each broker-dealer any additional amount above the minimum assessment amount of seventy-five dollars ($75) that is reasonable and necessary to support the broker-dealer program under this division. If an additional amount is assessed, the commissioner shall notify each broker-dealer of any additional amount assessed and levied against it on or before the 30th day of May in each year, and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(5)If a broker-dealer fails to pay any assessment on or before the 30th day of the month following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the broker-dealer. If, after that order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a broker-dealer shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided under this division.
(6)In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of the broker-dealer program under this division and all reimbursements applicable to the administration of the broker-dealer program under this division.
(p)(1)The commissioner shall charge a fee of fifty dollars ($50) for the filing of a notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(2)The commissioner shall charge a fee up to fifty dollars ($50) to keep in effect for the following year any notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(3)No person shall, on behalf of a broker-dealer licensed pursuant to Section 25211, effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless the broker-dealer pays the annual fee required by paragraph (2) of this subdivision on or before the day upon which payment is due.
(4)No person may, in this state, on behalf of an investment adviser licensed pursuant to Section 25231, offer or negotiate for the sale of investment advisory services of the investment adviser, determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser, or determine the reports or analyses concerning securities to be published by the investment adviser, unless the investment adviser pays the annual fee required by paragraph (2) on or before the day upon which payment is due.
(5)The commissioner may by order summarily enjoin an individual from performing any activity under paragraph (3) or (4) if the annual fee in paragraph (2) is not paid on or before the day upon which payment is due. An order under this paragraph may not be made before 10 days after notice by the commissioner that the fee is due and unpaid.
(q)(1)Except as provided for in paragraph (2), the fee for filing an application for an investment adviser under Section 25231 is one hundred twenty-five dollars ($125), and payment of this amount shall keep the certificate, if granted, in effect during the calendar year during which it is granted. Every investment adviser who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a renewal fee of one hundred twenty-five dollars ($125) on or before the 31st day of December.
(2)Paragraph (1) shall not apply to a broker-dealer licensed under Section 25210.
(r)(1)Except as provided for in paragraph (2), the fee for any routine or nonroutine regulatory examination, audit, or investigation is the amount of the salary or other compensation paid to the persons making the examination, audit, or investigation plus the amount of expenses including overhead reasonably incurred in the performance of the work. In determining the costs associated with an examination, audit, or investigation, the commissioner may use the estimated average hourly cost for all persons performing examinations, audits, or investigations for the fiscal year.
(2)An investment adviser licensed under Section 25230 pursuant to the Investment Adviser Registration Depository shall not be subject to paragraph (1) only in regard to the fee for a routine regulatory examination of its investment advisory services for which it is licensed under Section 25230.
(s)The fee for any hearing held by the commissioner pursuant to Section 25142 shall be the sum determined by the commissioner to cover the actual expense of noticing and holding the hearing.
(t)The commissioner may fix by rule a reasonable charge for any publications issued under the commissioners authority. The charges shall not apply to reports of the commissioner in the ordinary course of distribution.
(u)The fee for filing an offer under subdivision (b) of Section 25507 shall be the amount of filing fee payable under subdivision (e), (f), (h), or (i) of this section if an application had been filed to qualify the transaction in which the securities upon which the offer is to be made were sold in violation of the qualification provisions of this law.
(v)The fee for filing an application for exemption pursuant to subdivision (l) of Section 25100 is two hundred fifty dollars ($250).
(w)The commissioner may by rule require payment of a fee for filing a notice or report required by a rule adopted pursuant to Section 25105. The fee required in connection with a transaction as defined by that rule shall not exceed the fees specified in subdivision (c) based on the value of the securities sold, but the commissioner may permit a single notice for more than one transaction.
(x)The fee for filing the first notice of transaction under subdivision (n) of Section 25102 is six hundred dollars ($600).
(y)The fee for filing a notice of transaction under subdivision (o) of Section 25102 shall be the fee for filing an application for qualification of the sale of securities by permit under paragraph (1) of subdivision (b) of Section 25113 as set forth in subdivision (e) of this section.
(z)The fee for filing a notice of transaction under subdivision (h) of Section 25103 shall be six hundred dollars ($600).
SEC. 2.Section 31526 of the Corporations Code is amended to read:31526.(a)It is unlawful for a franchise broker to communicate with a prospective franchisee about investing in a franchise opportunity that is subject to this law unless the franchise broker first provides to the prospective franchisee a copy of the completed Uniform Franchise Broker Disclosure Document.
(b)A franchise broker may provide the Uniform Franchise Broker Disclosure Document to a prospective franchisee through electronic means, subject to any requirements or conditions imposed by the commissioner.
SEC. 3.Section 302 is added to the Financial Code, to read:302.Unless otherwise provided by rule, the commissioner shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
SEC. 4.Section 331.5 of the Financial Code is amended to read:331.5.(a)(1)Any person licensed by or registered with the commissioner under any law shall establish and maintain an electronic service address designated for receiving communications and documents that are sent by the commissioner to licensees or registrants. This electronic service address shall be provided to the commissioner upon licensure or registration. The electronic service address provided to the commissioner shall not be the electronic service address of any individual employee. A licensee or registrant shall have the capacity to receive an attachment that accompanies a message sent to its electronic service address, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(2)Prior to changing the electronic service address most recently provided to the commissioner, the licensee or registrant shall notify the commissioner of the change and provide to the commissioner their new electronic service address. The commissioner may impose a fine of up to fifty dollars ($50) per day, not to exceed one thousand dollars ($1,000) in the aggregate, on a licensee or registrant who fails to notify the commissioner before changing their electronic service address or fails to provide the commissioner a new electronic service address.
(3)The commissioner shall provide each licensee or registrant that establishes and maintains an electronic service address in accordance with this section with an electronic service address designated for receiving correspondence from licensees or registrants subject to the commissioners jurisdiction. This service address shall have the capacity to receive an attachment that accompanies a message sent by the licensee or registrant, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(b)(1)The commissioner may fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address established and maintained pursuant to this section.
(2)For any person licensed or registered through the Nationwide Multistate Licensing System and Registry, the commissioner may fulfill the notice requirements described in paragraph (1) by electronic communication through that system.
(c)A communication sent to an electronic service address established pursuant to this section does not satisfy any notice requirement, or displace any law or regulation, that requires notice to be served in a different manner, if a hearing right attaches to the notice.
SEC. 5.Section 2042 of the Financial Code is amended to read:2042.(a)In addition to the fees provided in Section 2038, the commissioner shall levy an assessment each fiscal year, on a pro rata basis, on those licensees that at any time during the preceding calendar year engaged in the business of money transmission in California in an amount that is, in their judgment, sufficient to meet the commissioners expenses in administering the provisions of this division and to provide a reasonable reserve for contingencies.
(b)For licensees that sell or issue payment instruments or stored value, the amount of the annual assessment on any licensee shall not exceed the sum of the products determined by multiplying (1) increments of the aggregate face amount of payment instruments and stored value issued or sold in California by the licensee, directly or indirectly through agents, in the calendar year next preceding the date of such assessment, by (2) percentages of the base assessment rate, according to the following table:
Aggregate face amount of payment instruments and stored value sold (in millions) | Percentage of base assessment rate | |
First $1 | 100.0 | |
Next $9 | 25.0 | |
Next $40 | 12.5 | |
Next $50 | 6.0 | |
Next $400 | 3 | |
Next $500 | 2 | |
Excess over $1,000 | 1 |
The base assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) face amount of payment instruments and stored value sold.
(c)For licensees receiving money for transmission, the basis of the apportionment of the assessment among the licensees assessed shall be the proportion that the total amount of money received for transmission by the licensee in California bears in relation to the total amount of money received for transmission by all licensees in California, as shown by the reports of licensees to the commissioner for the preceding calendar year. The assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) of money received for transmission in California by the licensee.
(d)The commissioner shall notify each licensee of the amount levied against it. The licensee shall pay the amount levied within 20 days. If payment is not made to the commissioner within that time, the commissioner shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent.
SEC. 6.Section 8032 of the Financial Code is amended to read:8032.(a)On or before the 20th day of June of each year the commissioner shall notify each association of the amount assessed and levied against it.
(b)Except as provided in this article, an association shall pay one-half or more of the amount assessed so as to be received by the commissioner not later than the 10th day of July and shall pay the remainder so as to be received by the commissioner not later than the following 10th day of January.
(c)If payment is not received by the commissioner on time, the commissioner shall assess and collect in addition to the annual assessment, a penalty of 5 percent of the unpaid assessment for each month or part of a month that the payment is delinquent.
SEC. 7.Section 12214 of the Financial Code is amended to read:12214.(a)An applicant at the time of filing an application for a license under this division shall pay to the commissioner the sum of fifty dollars ($50) as a fee for investigating the application and two hundred dollars ($200) as an application fee. The investigation fee and application fee are not refundable if an application is denied or withdrawn.
(b)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of this division as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the programs in the year in which such assessment is made. The pro rata share shall be the proportion which a licensees gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner. The pro rata share shall not include the costs of any examinations provided for in Section 12306, unless they cannot be collected from the licensee examined.
(2)On or before the 30th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(3)In the levying and collection of the assessment, a licensee shall not be assessed for nor be permitted to pay less than one hundred fifty dollars ($150) per year.
(4)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to such licensee. If, after such an order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 8.Section 17207 of the Financial Code is amended to read:17207.The commissioner shall charge and collect the following fees and assessments:
(a)For filing an application for an escrow agents license, six hundred twenty-five dollars ($625) for the first office or location and four hundred twenty-five dollars ($425) for each additional office or location.
(b)For filing an application for a duplicate of an escrow agents license lost, stolen, or destroyed, or for replacement, upon a satisfactory showing of the loss, theft, destruction, or surrender of certificate for replacement, two dollars ($2).
(c)For investigation services in connection with each application, one hundred dollars ($100), and for investigation services in connection with each additional office application, one hundred dollars ($100).
(d)For holding a hearing in connection with the application, as set forth under Section 17209.2, the actual costs experienced in each particular instance.
(e)(1)Each escrow agent shall pay to the commissioner for the support of this division for the ensuing year, plus a deficit or less a surplus actually incurred during the prior two fiscal years, an annual license fee not to exceed seven thousand two hundred fifteen dollars ($7,215) for each office or location.
(2)On or before May 30 in each year, the commissioner shall notify each escrow agent of the amount of the annual license fee levied against it, and that the payment of the invoice is payable by the escrow agent within 30 days after receipt of notification by the commissioner.
(3)If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the annual license fee, of 10 percent of the fee for each month or part of a month that the payment is delayed or withheld.
(4)If an escrow agent fails to pay the amount due on or before the June 30 following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company.
(5)If, after an order is made pursuant to paragraph (4), a request for a hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a company shall not conduct business pursuant to this division, except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(f)Fifty dollars ($50) for investigation services in connection with each application for qualification of any person under Section 17200.8, other than investigation services under subdivision (c) of this section.
(g)A fee not to exceed twenty-five dollars ($25) for the filing of a notice or report required by rules adopted pursuant to subdivision (a) or Section 17203.1.
(h)(1)If costs and expenses associated with the enforcement of this division, including overhead, are or will be incurred by the commissioner during the year for which the annual license fee is levied, and that will or could result in the commissioners incurring of costs and expenses, including overhead, in excess of the costs and expenses, including overhead, budgeted for expenditure for the year in which the annual license fee is levied, then the commissioner may levy a special assessment on each escrow agent for each office or location in an amount estimated to pay for the actual costs and expenses associated with the enforcement of this division, including overhead, in an amount not to exceed one thousand dollars ($1,000) for each office or location. The commissioner shall notify each escrow agent of the amount of the special assessment levied against it, and that payment of the special assessment is payable by the escrow agent within 60 days of receipt of notification by the commissioner. The funds received from the special assessment shall be deposited into the Financial Protection Fund and shall be used only for the purposes for which the special assessment is made.
(2)If payment is not made within 60 days, the commissioner may assess and collect a penalty, in addition to the special assessment, of 10 percent of the special assessment for each month or part of a month that the payment is delayed or withheld. If an escrow agent fails to pay the special assessment on or before 60 days following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company. If an order is made under this subdivision, the provisions of paragraph (5) of subdivision (e) shall apply.
(3)If the amount collected pursuant to this subdivision exceeds the actual costs and expenses, including overhead, incurred in the administration and enforcement of this division and any deficit incurred, the excess shall be credited to each escrow agent on a pro rata basis.
SEC. 9.Section 18351 of the Financial Code is amended to read:18351.On or before the 30th day of November in each year, the commissioner shall notify each industrial loan company of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
SEC. 10.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 10.5.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee by mail of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(d)An invoice or assessment notice issued by the commissioner to a licensee pursuant to this section shall include the pro rata amount calculation used to determine the amount due and payable by the licensee with each component listed as a separate line item, including, but not limited to, all of the following:
(1)The total costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year.
(2)Any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(3)The aggregate total dollar amount of deferred deposit transactions made by all licensees.
(4)The licensees total dollar amount of deferred deposit transactions.
(5)The number of license locations operated by the licensee.
SEC. 11.Division 15.5 (commencing with Section 32000) of the Financial Code is repealed.SEC. 12.Section 50401 of the Financial Code is amended to read:50401.(a)In addition to other fees and reimbursements required to be paid under this division, each residential mortgage lender or servicer licensee shall pay to the commissioner an amount equal to the lesser of: (1) its pro rata share of all costs and expenses (including overhead and the maintenance of a prudent reserve not to exceed 90 days costs and expenses) that the commissioner reasonably expects to incur in the current fiscal year in the administration of this division and not otherwise recovered by the commissioner under this division or from the Financial Protection Fund, plus a deficit or less a surplus actually incurred during the prior two fiscal years; or (2) fifteen thousand dollars ($15,000). The pro rata share shall be the greater of either three thousand dollars ($3,000) or the sum of: (A) a number derived from the ratio of the aggregate principal amount of the mortgage loans secured by residential real property originated by the licensee to all mortgage loans secured by residential real property originated by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner; plus (B) a number derived from the ratio of the average value of mortgage loans secured by residential real property serviced by a licensee to the average value of all mortgage loans secured by residential real property serviced by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner. For the purposes of this section, the principal amount of a mortgage loan means the initial total amount a borrower is obligated to repay the lender and the average value of loans serviced means the sum of the aggregate dollar value of all mortgage loans secured by residential real property serviced by a licensee, calculated as of the last day of each month in the calendar year just ended, divided by 12.
In order for the commissioner to calculate the assessment under this section, each licensee shall file an annual report for the calendar year just ended containing the information required by the commissioner on or before March 1 of the year in which the assessment is to be calculated.
In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of this division and all reimbursements provided for under this division.
(b)In no case shall the reimbursement, payment, or other fee authorized by this section exceed the cost, including overhead, reasonably incurred in the administration of this division, and the maintenance of a prudent reserve not to exceed 90 days costs and expenses.
(c)On or before the 30th day of September in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days. If payment is not made within 20 days, the commissioner shall assess and collect a penalty, in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(d)If a licensee fails to pay the assessment on or before the 30th day following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the license issued to the licensee. An order issued under this section is not stayed by the filing of a request for a hearing. If, after an order is made, the request for hearing is filed in writing within 15 days from the date of service of the order and a hearing is not held within 60 days of the filing, the order is deemed rescinded as of its effective date. During a period when its license is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by further order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division.
SEC. 13.Section 16430 of the Government Code is amended to read:16430.Eligible securities for the investment of surplus moneys shall be any of the following:
(a)Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
(b)Bonds or interest-bearing notes or obligations that are issued by or fully guaranteed as to principal and interest by a federal agency or a United States government-sponsored enterprise, as defined by the Omnibus Budget Reconciliation Act of 1990 (Sec. 13112, Public Law 101-508; 2 U.S.C. Sec. 622(8)).
(c)Bonds, notes, or other obligations of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
(d)(1)Bonds, notes, or other obligations of a local government of this state, including, but not limited to, any of the following:
(A)A county.
(B)A city.
(C)A city and county.
(D)A metropolitan water district.
(E)A water district.
(F)A water storage district.
(G)An irrigation district.
(H)A municipal utility district.
(I)A school district.
(2)Bonds, notes, or other obligations eligible for investment pursuant to this subdivision shall be rated in rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(e)Bonds, debentures, or other obligations of any of the following:
(1)Issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended (12 U.S.C. Sec. 2001 et seq.).
(2)Issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended (12 U.S.C. Sec. 2001 et seq.).
(3)Issued by the Federal Home Loan Bank established under the Federal Home Loan Bank Act (12 U.S.C. Sec. 1421 et seq.).
(4)Issued by the Federal National Mortgage Association established under the National Housing Act, as amended (12 U.S.C. Sec. 1701 et seq.).
(5)Issued by the Federal Home Loan Mortgage Corporation.
(6)Issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act, as amended (16 U.S.C. Sec. 831 et seq.).
(7)Guaranteed by the Commodity Credit Corporation for the export of California agricultural products under the Commodity Credit Corporation Charter Act, as amended (15 U.S.C. Sec. 714 et seq.).
(f)Bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country that the International Monetary Fund lists as an advanced economy and for which the full faith and credit of that country has been pledged for the payment of principal and interest, if the securities are rated investment grade or its equivalent, or better, by a nationally recognized statistical rating organization. Securities eligible for investment pursuant to this subdivision shall satisfy all of the following:
(1)Be United States dollar denominated with a maximum maturity of five years or less, and eligible for purchase and sale within the United States.
(2)The combined par value of all of the investments authorized by this subdivision do not exceed 1 percent of the total par value of Pooled Money Investment Account assets at the time of purchase.
(3)The government of the foreign country issuing the securities submits to the jurisdiction of a federal or state court in the United States when disputes arise related to the investments.
(g)(1)Commercial paper of prime quality of the highest ranking or of the highest letter and number rating as defined by a nationally recognized statistical rating organization that rates these securities, if the commercial paper is issued by a federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company that is approved by the Pooled Money Investment Board as meeting the conditions specified in either subparagraph (A) or subparagraph (B):
(A)Both of the following conditions:
(i)Organized and operating within the United States.
(ii)Having total assets in excess of five hundred million dollars ($500,000,000).
(B)Both of the following conditions:
(i)Organized within the United States as a federally or state-chartered bank or a state-licensed branch of a foreign bank, special purpose corporation, trust, or limited liability company.
(ii)Having programwide credit enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bond.
(2)A purchase of eligible commercial paper shall not do any of the following:
(A)Exceed 397 days maturity.
(B)Represent more than 10 percent of the outstanding paper of an issuing federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company.
(C)Exceed 30 percent of the resources of an investment program.
(h)Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, that are eligible for purchase by the Federal Reserve System.
(i)Negotiable certificates of deposits issued by a federally or state-chartered bank or savings and loan association, a state-licensed branch of a foreign bank, or a federally or state-chartered credit union. For the purposes of this section, negotiable certificates of deposits are not subject to Chapter 4 (commencing with Section 16500) and Chapter 4.5 (commencing with Section 16600).
(j)The portion of bank loans and obligations guaranteed by the United States Small Business Administration or the United States Farmers Home Administration.
(k)Bank loans and obligations guaranteed by the Export-Import Bank of the United States.
(l)Student loan notes insured under the Guaranteed Student Loan Program established pursuant to the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1001 et seq.) and eligible for resale to the Student Loan Marketing Association established pursuant to Section 133 of the Education Amendments of 1972, as amended (20 U.S.C. Sec. 1087-2).
(m)Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the International Finance Corporation, the Government Development Bank for Puerto Rico, the European Bank for Reconstruction and Development, or the European Investment Bank.
(n)Bonds, debentures, and notes issued by corporations organized and operating within the United States. Securities eligible for investment pursuant to this subdivision shall be rated in a rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(o)Negotiable Order of Withdrawal Accounts (NOW Accounts), invested in accordance with Chapter 4 (commencing with Section 16500).
(p)Shares of any money market mutual fund subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, provided that all of the following conditions are met:
(1)The money market mutual fund invests in securities and obligations described in one or more of the following: subdivision (a), (b), or (e) of this section or repurchase agreements or reverse repurchase agreements described in Section 16480.4.
(2)The financial institution issuing shares of the money market mutual fund has at least five years of experience investing in the types of securities and obligations being purchased by the state and has assets under management in the money market mutual fund in excess of ten billion dollars ($10,000,000,000).
(3)The money market mutual fund has attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations.
(4)The financial institution does not impose a commission on the purchase or sale of fund shares by the state.
(5)The state does not purchase more than 10 percent of a money market mutual funds total assets.
(6)The state does not invest more than 10 percent of the Pooled Money Investment Accounts funds in any single money market mutual fund meeting the requirements of this subdivision.
SEC. 14.Section 53667 of the Government Code is amended to read:53667.(a)Expenses incurred by the administrator in carrying out the duties and responsibilities assigned to the administrator by the sections specified in subdivision (a) of Section 53661, shall be borne by the Local Agency Deposit Security Fund, which is hereby created and continuously appropriated to the administrator for the administration of the sections specified in subdivision (a) of Section 53661. This fund shall consist of fines levied pursuant to Section 53661, fees collected pursuant to the sections specified in subdivision (a) of Section 53661, and assessments levied pursuant to this section.
(b)Each fiscal year the administrator shall levy an assessment on a pro rata basis on those depositories which at any time during the preceding fiscal year held local agency deposits. The total assessment levied on all of those depositories shall be in an amount which, when added to the amount of fines and fees that the administrator estimates will be collected during the fiscal year when the assessment is levied, is sufficient in the judgment of the administrator to meet the expenses of the administrator in administering the sections specified in subdivision (a) of Section 53661 and to provide a reasonable reserve for contingencies. The basis of the apportionment of the assessment among the depositories assessed shall be the proportion that the average amount of local agency deposits held by each of those depositories bears to the average total amount of local agency deposits held by all of those depositories as shown by the reports of depositories to the administrator for the preceding fiscal year, as required in subdivision (e) of Section 53661; provided, however, that the amount of the assessment levied on each of those depositories shall be not less than twenty-five dollars ($25).
(c)The administrator shall notify each depository of the amount levied against it. The depository shall pay the amount levied within 20 days after such notice into the Local Agency Deposit Security Fund for the administration of the sections specified in subdivision (a) of Section 53661. If payment is not made to the administrator within such time, the administrator shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent. If a depository fails to pay the assessment or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository.
SEC. 15.Section 10.5 of this bill incorporates amendments to Section 23016 of the Financial Code proposed by both this bill and Assembly Bill 2028. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 23016 of the Financial Code, and (3) this bill is enacted after Assembly Bill 2028, in which case Section 10 of this bill shall not become operative.
(a)The commissioner shall charge and collect the fees fixed in this section and Section 25608.1. All fees charged and collected under this section and Section 25608.1 shall be transmitted to the Treasurer at least weekly, accompanied by a detailed statement thereof and shall be credited to the Financial Protection Fund.
(b)The fee for filing an application for a negotiating permit under subdivision (c) of Section 25102 is fifty dollars ($50).
(c)The fee for filing a notice pursuant to paragraph (5) of subdivision (h) of Section 25102, for filing a notice pursuant to paragraph (4) of subdivision (f) of Section 25102, or for filing a notice pursuant to paragraph (10) of subdivision (r) of Section 25102, in addition to the fee prescribed in those paragraphs, if applicable, shall be determined based on the value of the securities proposed to be sold in the transaction for which the notice is filed and in accordance with subdivision (g), and shall be as follows:
Value of Securities | Filing Fee |
$25,000 or less | $25 |
$25,001 to $100,000 | $35 |
$100,001 to $500,000 | $50 |
$500,001 to $1,000,000 | $150 |
Over $1,000,000 | $300 |
(d)The fee for filing an application for designation of an issuer pursuant to subdivision (k) of Section 25100 is fifty dollars ($50).
(e)The fee for filing an application for qualification of the sale of securities by notification under Section 25112 or by permit under paragraph (1) of subdivision (b) of Section 25113 (except applications for qualification by permit of the sale of any guarantee of any security, the fees for which applications are fixed in subdivision (k)) is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
The fee for filing a small company application for qualification of the sale of securities by permit under paragraph (2) of subdivision (b) of Section 25113 is two thousand five hundred dollars ($2,500). In the case where the costs of processing a small company application exceed the filing fee, an additional fee shall be charged, not to exceed one thousand dollars ($1,000), over and above the filing fee based on the costs of the salary or other compensation paid to persons processing the application plus overhead costs reasonably incurred in the performance of the work. In determining the costs, the commissioner may use the estimated average hourly cost for all persons processing applications for the fiscal year.
(f)The fee for filing an application for qualification of the sale of securities by coordination under Section 25111 or a notice of intention to sell under subdivision (t) of Section 25100 is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
(g)For the purpose of determining the fees fixed in subdivisions (e) and (f):
(1)The value of the securities shall be the price at which the company proposes to sell the securities, or the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration (if other than money) to be received in exchange therefor, or of the securities when sold, whichever is greater.
(2)Interim or voting trust certificates shall have a value equal to the aggregate value of the securities to be represented by the interim or voting trust certificates.
(3)The value of a warrant or right to purchase or subscribe to another security of the same or another issuer shall be an amount equal to the consideration to be paid for that warrant or right plus an amount equal to the consideration to be paid upon purchase of the additional securities, provided that if the latter amount is not determinable at the time of qualification, that amount shall then be the value of the additional securities as determined by the commissioner.
(4)In the case of a share dividend where the shareholders are given an option to accept either cash or additional shares of common stock, the value of the securities to be sold shall be the maximum amount of cash that would be payable in the event that all shareholders elected to accept cash.
(h)The fee for filing an application for qualification of the sale of securities by permit under Section 25121 is:
(1)Two hundred dollars ($200) in connection with any change (including any stock split or reverse stock split or stock dividend, except a stock dividend where the shareholders are given an option to accept either cash or additional shares of common stock) in the rights, preferences, privileges, or restrictions of or on outstanding securities.
(2)Two hundred dollars ($200) plus one-fifth of 1 percent of the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration to be received in exchange therefor, up to a maximum aggregate fee of two thousand five hundred dollars ($2,500), in any exchange of securities by the issuer with its existing security holders exclusively, or in any exchange in connection with any merger or consolidation or purchase of corporate assets in consideration of the issuance of securities, or any entity conversion transaction.
(i)The fee for filing an application for qualification of the sale of securities by notification under Section 25131 shall be one hundred dollars ($100).
(j)The fee for an application for the removal of any condition under Section 25141 is fifty dollars ($50).
(k)The fee for filing any application for a permit to execute or issue any guarantee of any security is fifty dollars ($50).
(l)The fee for acting as escrowholder for securities under Section 25149 is fifty dollars ($50). In addition, a fee of two dollars and fifty cents ($2.50) shall be paid for the deposit with the commissioner of each new certificate or other document resulting from a transfer in escrow.
(m)The fee for filing an application for an order (1) consenting to the transfer in escrow of securities or (2) consenting to the transfer of securities subject to any condition imposed by the commissioner requiring the commissioners consent to the transfer is twenty dollars ($20) for each transfer.
(n)The filing fee for an amendment to an application filed after the effective date of the qualification of the sale of securities is fifty dollars ($50) plus any additional fee that would have been required to be paid with the original application for qualification of the sale of securities under this section if the matters set forth in the amendment had been included in the original application.
(o)(1)The fee for filing an application for a broker-dealer certificate under Section 25211 is three hundred dollars ($300).
(2)Each broker-dealer shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of the broker-dealer program under this division, as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that the broker-dealer and the number of its agents in this state bears to the aggregate number of broker-dealers and agents in this state as shown by records maintained by or on behalf of the commissioner. The pro rata share may include the costs of any examinations, audit, or investigation provided for in subdivision (r).
(3)Every broker-dealer who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a minimum assessment of seventy-five dollars ($75) on or before the 31st of December in each year.
(4)The commissioner may assess and levy against each broker-dealer any additional amount above the minimum assessment amount of seventy-five dollars ($75) that is reasonable and necessary to support the broker-dealer program under this division. If an additional amount is assessed, the commissioner shall notify each broker-dealer of any additional amount assessed and levied against it on or before the 30th day of May in each year, and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(5)If a broker-dealer fails to pay any assessment on or before the 30th day of the month following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the broker-dealer. If, after that order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a broker-dealer shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided under this division.
(6)In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of the broker-dealer program under this division and all reimbursements applicable to the administration of the broker-dealer program under this division.
(p)(1)The commissioner shall charge a fee of fifty dollars ($50) for the filing of a notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(2)The commissioner shall charge a fee up to fifty dollars ($50) to keep in effect for the following year any notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(3)No person shall, on behalf of a broker-dealer licensed pursuant to Section 25211, effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless the broker-dealer pays the annual fee required by paragraph (2) of this subdivision on or before the day upon which payment is due.
(4)No person may, in this state, on behalf of an investment adviser licensed pursuant to Section 25231, offer or negotiate for the sale of investment advisory services of the investment adviser, determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser, or determine the reports or analyses concerning securities to be published by the investment adviser, unless the investment adviser pays the annual fee required by paragraph (2) on or before the day upon which payment is due.
(5)The commissioner may by order summarily enjoin an individual from performing any activity under paragraph (3) or (4) if the annual fee in paragraph (2) is not paid on or before the day upon which payment is due. An order under this paragraph may not be made before 10 days after notice by the commissioner that the fee is due and unpaid.
(q)(1)Except as provided for in paragraph (2), the fee for filing an application for an investment adviser under Section 25231 is one hundred twenty-five dollars ($125), and payment of this amount shall keep the certificate, if granted, in effect during the calendar year during which it is granted. Every investment adviser who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a renewal fee of one hundred twenty-five dollars ($125) on or before the 31st day of December.
(2)Paragraph (1) shall not apply to a broker-dealer licensed under Section 25210.
(r)(1)Except as provided for in paragraph (2), the fee for any routine or nonroutine regulatory examination, audit, or investigation is the amount of the salary or other compensation paid to the persons making the examination, audit, or investigation plus the amount of expenses including overhead reasonably incurred in the performance of the work. In determining the costs associated with an examination, audit, or investigation, the commissioner may use the estimated average hourly cost for all persons performing examinations, audits, or investigations for the fiscal year.
(2)An investment adviser licensed under Section 25230 pursuant to the Investment Adviser Registration Depository shall not be subject to paragraph (1) only in regard to the fee for a routine regulatory examination of its investment advisory services for which it is licensed under Section 25230.
(s)The fee for any hearing held by the commissioner pursuant to Section 25142 shall be the sum determined by the commissioner to cover the actual expense of noticing and holding the hearing.
(t)The commissioner may fix by rule a reasonable charge for any publications issued under the commissioners authority. The charges shall not apply to reports of the commissioner in the ordinary course of distribution.
(u)The fee for filing an offer under subdivision (b) of Section 25507 shall be the amount of filing fee payable under subdivision (e), (f), (h), or (i) of this section if an application had been filed to qualify the transaction in which the securities upon which the offer is to be made were sold in violation of the qualification provisions of this law.
(v)The fee for filing an application for exemption pursuant to subdivision (l) of Section 25100 is two hundred fifty dollars ($250).
(w)The commissioner may by rule require payment of a fee for filing a notice or report required by a rule adopted pursuant to Section 25105. The fee required in connection with a transaction as defined by that rule shall not exceed the fees specified in subdivision (c) based on the value of the securities sold, but the commissioner may permit a single notice for more than one transaction.
(x)The fee for filing the first notice of transaction under subdivision (n) of Section 25102 is six hundred dollars ($600).
(y)The fee for filing a notice of transaction under subdivision (o) of Section 25102 shall be the fee for filing an application for qualification of the sale of securities by permit under paragraph (1) of subdivision (b) of Section 25113 as set forth in subdivision (e) of this section.
(z)The fee for filing a notice of transaction under subdivision (h) of Section 25103 shall be six hundred dollars ($600).
SEC. 2.Section 31210 of the Corporations Code is amended to read:31210.(a)It is unlawful for any person to effect or attempt to effect a sale of a franchise in this state, except in transactions exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division, unless that person is any of the following:(1)Identified in an application or amended application filed with the commissioner pursuant to Part 2 (commencing with Section 31100) of this division.(2)Licensed by the Department of Real Estate as a real estate broker or real estate salesperson.(3)Licensed by the commissioner as a broker-dealer or agent pursuant to the Corporate Securities Law of 1968.(4)Registered as a franchise broker pursuant to Part 7 (commencing with Section 31520).(b)Notwithstanding paragraphs (1) to (3), inclusive, of subdivision (a), it is unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state unless the franchise broker is registered pursuant to Part 7 (commencing with Section 31520).(c)Notwithstanding subdivision (a), it is unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state in a transaction exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division unless the franchise broker is registered pursuant to Part 7 (commencing with Section 31520).SEC. 3.SEC. 2.Section 31526 of the Corporations Code is amended to read:31526.(a)It is unlawful for a franchise broker to communicate with a prospective franchisee about investing in a franchise opportunity that is subject to this law unless the franchise broker first provides to the prospective franchisee a copy of the completed Uniform Franchise Broker Disclosure Document.(b)A franchise broker may provide the Uniform Franchise Broker Disclosure Document to a prospective franchisee through electronic means, subject to any requirements or conditions imposed by the commissioner.SEC. 4.SEC. 3.Section 302 is added to the Financial Code, to read:302.Unless otherwise provided by rule, the commissioner shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
SEC. 5.SEC. 4.Section 331.5 of the Financial Code is amended to read:331.5.(a)(1)Any person licensed by or registered with the commissioner under any law shall establish and maintain an electronic service address designated for receiving communications and documents that are sent by the commissioner to licensees or registrants. This electronic service address shall be provided to the commissioner upon licensure or registration. The electronic service address provided to the commissioner shall not be the electronic service address of any individual employee. A licensee or registrant shall have the capacity to receive an attachment that accompanies a message sent to its electronic service address, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(2)Prior to changing the electronic service address most recently provided to the commissioner, the licensee or registrant shall notify the commissioner of the change and provide to the commissioner their new electronic service address. The commissioner may impose a fine of up to fifty dollars ($50) per day, not to exceed one thousand dollars ($1,000) in the aggregate, on a licensee or registrant who fails to notify the commissioner before changing their electronic service address or fails to provide the commissioner a new electronic service address.
(3)The commissioner shall provide each licensee or registrant that establishes and maintains an electronic service address in accordance with this section with an electronic service address designated for receiving correspondence from licensees or registrants subject to the commissioners jurisdiction. This service address shall have the capacity to receive an attachment that accompanies a message sent by the licensee or registrant, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(b)(1)The commissioner may fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address established and maintained pursuant to this section.
(2)For any person licensed or registered through the Nationwide Multistate Licensing System and Registry, the commissioner may fulfill the notice requirements described in paragraph (1) by electronic communication through that system.
(c)A communication sent to an electronic service address established pursuant to this section does not satisfy any notice requirement, or displace any law or regulation, that requires notice to be served in a different manner, if a hearing right attaches to the notice.
SEC. 6.SEC. 5.Section 2042 of the Financial Code is amended to read:2042.(a)In addition to the fees provided in Section 2038, the commissioner shall levy an assessment each fiscal year, on a pro rata basis, on those licensees that at any time during the preceding calendar year engaged in the business of money transmission in California in an amount that is, in their judgment, sufficient to meet the commissioners expenses in administering the provisions of this division and to provide a reasonable reserve for contingencies.
(b)For licensees that sell or issue payment instruments or stored value, the amount of the annual assessment on any licensee shall not exceed the sum of the products determined by multiplying (1) increments of the aggregate face amount of payment instruments and stored value issued or sold in California by the licensee, directly or indirectly through agents, in the calendar year next preceding the date of such assessment, by (2) percentages of the base assessment rate, according to the following table:
Aggregate face amount of payment instruments and stored value sold (in millions) | Percentage of base assessment rate | |
First $1 | 100.0 | |
Next $9 | 25.0 | |
Next $40 | 12.5 | |
Next $50 | 6.0 | |
Next $400 | 3 | |
Next $500 | 2 | |
Excess over $1,000 | 1 |
The base assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) face amount of payment instruments and stored value sold.
(c)For licensees receiving money for transmission, the basis of the apportionment of the assessment among the licensees assessed shall be the proportion that the total amount of money received for transmission by the licensee in California bears in relation to the total amount of money received for transmission by all licensees in California, as shown by the reports of licensees to the commissioner for the preceding calendar year. The assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) of money received for transmission in California by the licensee.
(d)The commissioner shall notify each licensee of the amount levied against it. The licensee shall pay the amount levied within 20 days. If payment is not made to the commissioner within that time, the commissioner shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent.
SEC. 7.SEC. 6.Section 8032 of the Financial Code is amended to read:8032.(a)On or before the 20th day of June of each year the commissioner shall notify each association of the amount assessed and levied against it.
(b)Except as provided in this article, an association shall pay one-half or more of the amount assessed so as to be received by the commissioner not later than the 10th day of July and shall pay the remainder so as to be received by the commissioner not later than the following 10th day of January.
(c)If payment is not received by the commissioner on time, the commissioner shall assess and collect in addition to the annual assessment, a penalty of 5 percent of the unpaid assessment for each month or part of a month that the payment is delinquent.
SEC. 8.SEC. 7.Section 12214 of the Financial Code is amended to read:12214.(a)An applicant at the time of filing an application for a license under this division shall pay to the commissioner the sum of fifty dollars ($50) as a fee for investigating the application and two hundred dollars ($200) as an application fee. The investigation fee and application fee are not refundable if an application is denied or withdrawn.
(b)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of this division as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the programs in the year in which such assessment is made. The pro rata share shall be the proportion which a licensees gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner. The pro rata share shall not include the costs of any examinations provided for in Section 12306, unless they cannot be collected from the licensee examined.
(2)On or before the 30th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(3)In the levying and collection of the assessment, a licensee shall not be assessed for nor be permitted to pay less than one hundred fifty dollars ($150) per year.
(4)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to such licensee. If, after such an order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 9.SEC. 8.Section 17207 of the Financial Code is amended to read:17207.The commissioner shall charge and collect the following fees and assessments:
(a)For filing an application for an escrow agents license, six hundred twenty-five dollars ($625) for the first office or location and four hundred twenty-five dollars ($425) for each additional office or location.
(b)For filing an application for a duplicate of an escrow agents license lost, stolen, or destroyed, or for replacement, upon a satisfactory showing of the loss, theft, destruction, or surrender of certificate for replacement, two dollars ($2).
(c)For investigation services in connection with each application, one hundred dollars ($100), and for investigation services in connection with each additional office application, one hundred dollars ($100).
(d)For holding a hearing in connection with the application, as set forth under Section 17209.2, the actual costs experienced in each particular instance.
(e)(1)Each escrow agent shall pay to the commissioner for the support of this division for the ensuing year, plus a deficit or less a surplus actually incurred during the prior two fiscal years, an annual license fee not to exceed seven thousand two hundred fifteen dollars ($7,215) for each office or location.
(2)On or before May 30 in each year, the commissioner shall notify each escrow agent of the amount of the annual license fee levied against it, and that the payment of the invoice is payable by the escrow agent within 30 days after receipt of notification by the commissioner.
(3)If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the annual license fee, of 10 percent of the fee for each month or part of a month that the payment is delayed or withheld.
(4)If an escrow agent fails to pay the amount due on or before the June 30 following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company.
(5)If, after an order is made pursuant to paragraph (4), a request for a hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a company shall not conduct business pursuant to this division, except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(f)Fifty dollars ($50) for investigation services in connection with each application for qualification of any person under Section 17200.8, other than investigation services under subdivision (c) of this section.
(g)A fee not to exceed twenty-five dollars ($25) for the filing of a notice or report required by rules adopted pursuant to subdivision (a) or Section 17203.1.
(h)(1)If costs and expenses associated with the enforcement of this division, including overhead, are or will be incurred by the commissioner during the year for which the annual license fee is levied, and that will or could result in the commissioners incurring of costs and expenses, including overhead, in excess of the costs and expenses, including overhead, budgeted for expenditure for the year in which the annual license fee is levied, then the commissioner may levy a special assessment on each escrow agent for each office or location in an amount estimated to pay for the actual costs and expenses associated with the enforcement of this division, including overhead, in an amount not to exceed one thousand dollars ($1,000) for each office or location. The commissioner shall notify each escrow agent of the amount of the special assessment levied against it, and that payment of the special assessment is payable by the escrow agent within 60 days of receipt of notification by the commissioner. The funds received from the special assessment shall be deposited into the Financial Protection Fund and shall be used only for the purposes for which the special assessment is made.
(2)If payment is not made within 60 days, the commissioner may assess and collect a penalty, in addition to the special assessment, of 10 percent of the special assessment for each month or part of a month that the payment is delayed or withheld. If an escrow agent fails to pay the special assessment on or before 60 days following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company. If an order is made under this subdivision, the provisions of paragraph (5) of subdivision (e) shall apply.
(3)If the amount collected pursuant to this subdivision exceeds the actual costs and expenses, including overhead, incurred in the administration and enforcement of this division and any deficit incurred, the excess shall be credited to each escrow agent on a pro rata basis.
SEC. 10.SEC. 9.Section 18351 of the Financial Code is amended to read:18351.On or before the 30th day of November in each year, the commissioner shall notify each industrial loan company of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
SEC. 11.SEC. 10.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 12.SEC. 11.Division 15.5 (commencing with Section 32000) of the Financial Code is repealed.SEC. 13.SEC. 12.Section 50401 of the Financial Code is amended to read:50401.(a)In addition to other fees and reimbursements required to be paid under this division, each residential mortgage lender or servicer licensee shall pay to the commissioner an amount equal to the lesser of: (1) its pro rata share of all costs and expenses (including overhead and the maintenance of a prudent reserve not to exceed 90 days costs and expenses) that the commissioner reasonably expects to incur in the current fiscal year in the administration of this division and not otherwise recovered by the commissioner under this division or from the Financial Protection Fund, plus a deficit or less a surplus actually incurred during the prior two fiscal years; or (2) fifteen thousand dollars ($15,000). The pro rata share shall be the greater of either three thousand dollars ($3,000) or the sum of: (A) a number derived from the ratio of the aggregate principal amount of the mortgage loans secured by residential real property originated by the licensee to all mortgage loans secured by residential real property originated by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner; plus (B) a number derived from the ratio of the average value of mortgage loans secured by residential real property serviced by a licensee to the average value of all mortgage loans secured by residential real property serviced by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner. For the purposes of this section, the principal amount of a mortgage loan means the initial total amount a borrower is obligated to repay the lender and the average value of loans serviced means the sum of the aggregate dollar value of all mortgage loans secured by residential real property serviced by a licensee, calculated as of the last day of each month in the calendar year just ended, divided by 12.
In order for the commissioner to calculate the assessment under this section, each licensee shall file an annual report for the calendar year just ended containing the information required by the commissioner on or before March 1 of the year in which the assessment is to be calculated.
In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of this division and all reimbursements provided for under this division.
(b)In no case shall the reimbursement, payment, or other fee authorized by this section exceed the cost, including overhead, reasonably incurred in the administration of this division, and the maintenance of a prudent reserve not to exceed 90 days costs and expenses.
(c)On or before the 30th day of September in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days. If payment is not made within 20 days, the commissioner shall assess and collect a penalty, in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(d)If a licensee fails to pay the assessment on or before the 30th day following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the license issued to the licensee. An order issued under this section is not stayed by the filing of a request for a hearing. If, after an order is made, the request for hearing is filed in writing within 15 days from the date of service of the order and a hearing is not held within 60 days of the filing, the order is deemed rescinded as of its effective date. During a period when its license is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by further order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division.
SEC. 14.SEC. 13.Section 16430 of the Government Code is amended to read:16430.Eligible securities for the investment of surplus moneys shall be any of the following:
(a)Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
(b)Bonds or interest-bearing notes or obligations that are issued by or fully guaranteed as to principal and interest by a federal agency or a United States government-sponsored enterprise, as defined by the Omnibus Budget Reconciliation Act of 1990 (Sec. 13112, Public Law 101-508; 2 U.S.C. Sec. 622(8)).
(c)Bonds, notes, or other obligations of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
(d)(1)Bonds, notes, or other obligations of a local government of this state, including, but not limited to, any of the following:
(A)A county.
(B)A city.
(C)A city and county.
(D)A metropolitan water district.
(E)A water district.
(F)A water storage district.
(G)An irrigation district.
(H)A municipal utility district.
(I)A school district.
(2)Bonds, notes, or other obligations eligible for investment pursuant to this subdivision shall be rated in rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(e)Bonds, debentures, or other obligations of any of the following:
(1)Issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended (12 U.S.C. Sec. 2001 et seq.).
(2)Issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended (12 U.S.C. Sec. 2001 et seq.).
(3)Issued by the Federal Home Loan Bank established under the Federal Home Loan Bank Act (12 U.S.C. Sec. 1421 et seq.).
(4)Issued by the Federal National Mortgage Association established under the National Housing Act, as amended (12 U.S.C. Sec. 1701 et seq.).
(5)Issued by the Federal Home Loan Mortgage Corporation.
(6)Issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act, as amended (16 U.S.C. Sec. 831 et seq.).
(7)Guaranteed by the Commodity Credit Corporation for the export of California agricultural products under the Commodity Credit Corporation Charter Act, as amended (15 U.S.C. Sec. 714 et seq.).
(f)Bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country that the International Monetary Fund lists as an advanced economy and for which the full faith and credit of that country has been pledged for the payment of principal and interest, if the securities are rated investment grade or its equivalent, or better, by a nationally recognized statistical rating organization. Securities eligible for investment pursuant to this subdivision shall satisfy all of the following:
(1)Be United States dollar denominated with a maximum maturity of five years or less, and eligible for purchase and sale within the United States.
(2)The combined par value of all of the investments authorized by this subdivision do not exceed 1 percent of the total par value of Pooled Money Investment Account assets at the time of purchase.
(3)The government of the foreign country issuing the securities submits to the jurisdiction of a federal or state court in the United States when disputes arise related to the investments.
(g)(1)Commercial paper of prime quality of the highest ranking or of the highest letter and number rating as defined by a nationally recognized statistical rating organization that rates these securities, if the commercial paper is issued by a federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company that is approved by the Pooled Money Investment Board as meeting the conditions specified in either subparagraph (A) or subparagraph (B):
(A)Both of the following conditions:
(i)Organized and operating within the United States.
(ii)Having total assets in excess of five hundred million dollars ($500,000,000).
(B)Both of the following conditions:
(i)Organized within the United States as a federally or state-chartered bank or a state-licensed branch of a foreign bank, special purpose corporation, trust, or limited liability company.
(ii)Having programwide credit enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bond.
(2)A purchase of eligible commercial paper shall not do any of the following:
(A)Exceed 397 days maturity.
(B)Represent more than 10 percent of the outstanding paper of an issuing federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company.
(C)Exceed 30 percent of the resources of an investment program.
(h)Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, that are eligible for purchase by the Federal Reserve System.
(i)Negotiable certificates of deposits issued by a federally or state-chartered bank or savings and loan association, a state-licensed branch of a foreign bank, or a federally or state-chartered credit union. For the purposes of this section, negotiable certificates of deposits are not subject to Chapter 4 (commencing with Section 16500) and Chapter 4.5 (commencing with Section 16600).
(j)The portion of bank loans and obligations guaranteed by the United States Small Business Administration or the United States Farmers Home Administration.
(k)Bank loans and obligations guaranteed by the Export-Import Bank of the United States.
(l)Student loan notes insured under the Guaranteed Student Loan Program established pursuant to the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1001 et seq.) and eligible for resale to the Student Loan Marketing Association established pursuant to Section 133 of the Education Amendments of 1972, as amended (20 U.S.C. Sec. 1087-2).
(m)Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the International Finance Corporation, the Government Development Bank for Puerto Rico, the European Bank for Reconstruction and Development, or the European Investment Bank.
(n)Bonds, debentures, and notes issued by corporations organized and operating within the United States. Securities eligible for investment pursuant to this subdivision shall be rated in a rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(o)Negotiable Order of Withdrawal Accounts (NOW Accounts), invested in accordance with Chapter 4 (commencing with Section 16500).
(p)Shares of any money market mutual fund subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, provided that all of the following conditions are met:
(1)The money market mutual fund invests in securities and obligations described in one or more of the following: subdivision (a), (b), or (e) of this section or repurchase agreements or reverse repurchase agreements described in Section 16480.4.
(2)The financial institution issuing shares of the money market mutual fund has at least five years of experience investing in the types of securities and obligations being purchased by the state and has assets under management in the money market mutual fund in excess of ten billion dollars ($10,000,000,000).
(3)The money market mutual fund has attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations.
(4)The financial institution does not impose a commission on the purchase or sale of fund shares by the state.
(5)The state does not purchase more than 10 percent of a money market mutual funds total assets.
(6)The state does not invest more than 10 percent of the Pooled Money Investment Accounts funds in any single money market mutual fund meeting the requirements of this subdivision.
SEC. 15.SEC. 14.Section 53667 of the Government Code is amended to read:53667.(a)Expenses incurred by the administrator in carrying out the duties and responsibilities assigned to the administrator by the sections specified in subdivision (a) of Section 53661, shall be borne by the Local Agency Deposit Security Fund, which is hereby created and continuously appropriated to the administrator for the administration of the sections specified in subdivision (a) of Section 53661. This fund shall consist of fines levied pursuant to Section 53661, fees collected pursuant to the sections specified in subdivision (a) of Section 53661, and assessments levied pursuant to this section.
(b)Each fiscal year the administrator shall levy an assessment on a pro rata basis on those depositories which at any time during the preceding fiscal year held local agency deposits. The total assessment levied on all of those depositories shall be in an amount which, when added to the amount of fines and fees that the administrator estimates will be collected during the fiscal year when the assessment is levied, is sufficient in the judgment of the administrator to meet the expenses of the administrator in administering the sections specified in subdivision (a) of Section 53661 and to provide a reasonable reserve for contingencies. The basis of the apportionment of the assessment among the depositories assessed shall be the proportion that the average amount of local agency deposits held by each of those depositories bears to the average total amount of local agency deposits held by all of those depositories as shown by the reports of depositories to the administrator for the preceding fiscal year, as required in subdivision (e) of Section 53661; provided, however, that the amount of the assessment levied on each of those depositories shall be not less than twenty-five dollars ($25).
(c)The administrator shall notify each depository of the amount levied against it. The depository shall pay the amount levied within 20 days after such notice into the Local Agency Deposit Security Fund for the administration of the sections specified in subdivision (a) of Section 53661. If payment is not made to the administrator within such time, the administrator shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent. If a depository fails to pay the assessment or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository.
SEC. 16.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.(a)The commissioner shall charge and collect the fees fixed in this section and Section 25608.1. All fees charged and collected under this section and Section 25608.1 shall be transmitted to the Treasurer at least weekly, accompanied by a detailed statement thereof and shall be credited to the Financial Protection Fund.
(b)The fee for filing an application for a negotiating permit under subdivision (c) of Section 25102 is fifty dollars ($50).
(c)The fee for filing a notice pursuant to paragraph (5) of subdivision (h) of Section 25102, for filing a notice pursuant to paragraph (4) of subdivision (f) of Section 25102, or for filing a notice pursuant to paragraph (10) of subdivision (r) of Section 25102, in addition to the fee prescribed in those paragraphs, if applicable, shall be determined based on the value of the securities proposed to be sold in the transaction for which the notice is filed and in accordance with subdivision (g), and shall be as follows:
Value of Securities | Filing Fee |
$25,000 or less | $25 |
$25,001 to $100,000 | $35 |
$100,001 to $500,000 | $50 |
$500,001 to $1,000,000 | $150 |
Over $1,000,000 | $300 |
(d)The fee for filing an application for designation of an issuer pursuant to subdivision (k) of Section 25100 is fifty dollars ($50).
(e)The fee for filing an application for qualification of the sale of securities by notification under Section 25112 or by permit under paragraph (1) of subdivision (b) of Section 25113 (except applications for qualification by permit of the sale of any guarantee of any security, the fees for which applications are fixed in subdivision (k)) is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
The fee for filing a small company application for qualification of the sale of securities by permit under paragraph (2) of subdivision (b) of Section 25113 is two thousand five hundred dollars ($2,500). In the case where the costs of processing a small company application exceed the filing fee, an additional fee shall be charged, not to exceed one thousand dollars ($1,000), over and above the filing fee based on the costs of the salary or other compensation paid to persons processing the application plus overhead costs reasonably incurred in the performance of the work. In determining the costs, the commissioner may use the estimated average hourly cost for all persons processing applications for the fiscal year.
(f)The fee for filing an application for qualification of the sale of securities by coordination under Section 25111 or a notice of intention to sell under subdivision (t) of Section 25100 is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
(g)For the purpose of determining the fees fixed in subdivisions (e) and (f):
(1)The value of the securities shall be the price at which the company proposes to sell the securities, or the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration (if other than money) to be received in exchange therefor, or of the securities when sold, whichever is greater.
(2)Interim or voting trust certificates shall have a value equal to the aggregate value of the securities to be represented by the interim or voting trust certificates.
(3)The value of a warrant or right to purchase or subscribe to another security of the same or another issuer shall be an amount equal to the consideration to be paid for that warrant or right plus an amount equal to the consideration to be paid upon purchase of the additional securities, provided that if the latter amount is not determinable at the time of qualification, that amount shall then be the value of the additional securities as determined by the commissioner.
(4)In the case of a share dividend where the shareholders are given an option to accept either cash or additional shares of common stock, the value of the securities to be sold shall be the maximum amount of cash that would be payable in the event that all shareholders elected to accept cash.
(h)The fee for filing an application for qualification of the sale of securities by permit under Section 25121 is:
(1)Two hundred dollars ($200) in connection with any change (including any stock split or reverse stock split or stock dividend, except a stock dividend where the shareholders are given an option to accept either cash or additional shares of common stock) in the rights, preferences, privileges, or restrictions of or on outstanding securities.
(2)Two hundred dollars ($200) plus one-fifth of 1 percent of the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration to be received in exchange therefor, up to a maximum aggregate fee of two thousand five hundred dollars ($2,500), in any exchange of securities by the issuer with its existing security holders exclusively, or in any exchange in connection with any merger or consolidation or purchase of corporate assets in consideration of the issuance of securities, or any entity conversion transaction.
(i)The fee for filing an application for qualification of the sale of securities by notification under Section 25131 shall be one hundred dollars ($100).
(j)The fee for an application for the removal of any condition under Section 25141 is fifty dollars ($50).
(k)The fee for filing any application for a permit to execute or issue any guarantee of any security is fifty dollars ($50).
(l)The fee for acting as escrowholder for securities under Section 25149 is fifty dollars ($50). In addition, a fee of two dollars and fifty cents ($2.50) shall be paid for the deposit with the commissioner of each new certificate or other document resulting from a transfer in escrow.
(m)The fee for filing an application for an order (1) consenting to the transfer in escrow of securities or (2) consenting to the transfer of securities subject to any condition imposed by the commissioner requiring the commissioners consent to the transfer is twenty dollars ($20) for each transfer.
(n)The filing fee for an amendment to an application filed after the effective date of the qualification of the sale of securities is fifty dollars ($50) plus any additional fee that would have been required to be paid with the original application for qualification of the sale of securities under this section if the matters set forth in the amendment had been included in the original application.
(o)(1)The fee for filing an application for a broker-dealer certificate under Section 25211 is three hundred dollars ($300).
(2)Each broker-dealer shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of the broker-dealer program under this division, as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that the broker-dealer and the number of its agents in this state bears to the aggregate number of broker-dealers and agents in this state as shown by records maintained by or on behalf of the commissioner. The pro rata share may include the costs of any examinations, audit, or investigation provided for in subdivision (r).
(3)Every broker-dealer who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a minimum assessment of seventy-five dollars ($75) on or before the 31st of December in each year.
(4)The commissioner may assess and levy against each broker-dealer any additional amount above the minimum assessment amount of seventy-five dollars ($75) that is reasonable and necessary to support the broker-dealer program under this division. If an additional amount is assessed, the commissioner shall notify each broker-dealer of any additional amount assessed and levied against it on or before the 30th day of May in each year, and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(5)If a broker-dealer fails to pay any assessment on or before the 30th day of the month following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the broker-dealer. If, after that order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a broker-dealer shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided under this division.
(6)In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of the broker-dealer program under this division and all reimbursements applicable to the administration of the broker-dealer program under this division.
(p)(1)The commissioner shall charge a fee of fifty dollars ($50) for the filing of a notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(2)The commissioner shall charge a fee up to fifty dollars ($50) to keep in effect for the following year any notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(3)No person shall, on behalf of a broker-dealer licensed pursuant to Section 25211, effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless the broker-dealer pays the annual fee required by paragraph (2) of this subdivision on or before the day upon which payment is due.
(4)No person may, in this state, on behalf of an investment adviser licensed pursuant to Section 25231, offer or negotiate for the sale of investment advisory services of the investment adviser, determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser, or determine the reports or analyses concerning securities to be published by the investment adviser, unless the investment adviser pays the annual fee required by paragraph (2) on or before the day upon which payment is due.
(5)The commissioner may by order summarily enjoin an individual from performing any activity under paragraph (3) or (4) if the annual fee in paragraph (2) is not paid on or before the day upon which payment is due. An order under this paragraph may not be made before 10 days after notice by the commissioner that the fee is due and unpaid.
(q)(1)Except as provided for in paragraph (2), the fee for filing an application for an investment adviser under Section 25231 is one hundred twenty-five dollars ($125), and payment of this amount shall keep the certificate, if granted, in effect during the calendar year during which it is granted. Every investment adviser who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a renewal fee of one hundred twenty-five dollars ($125) on or before the 31st day of December.
(2)Paragraph (1) shall not apply to a broker-dealer licensed under Section 25210.
(r)(1)Except as provided for in paragraph (2), the fee for any routine or nonroutine regulatory examination, audit, or investigation is the amount of the salary or other compensation paid to the persons making the examination, audit, or investigation plus the amount of expenses including overhead reasonably incurred in the performance of the work. In determining the costs associated with an examination, audit, or investigation, the commissioner may use the estimated average hourly cost for all persons performing examinations, audits, or investigations for the fiscal year.
(2)An investment adviser licensed under Section 25230 pursuant to the Investment Adviser Registration Depository shall not be subject to paragraph (1) only in regard to the fee for a routine regulatory examination of its investment advisory services for which it is licensed under Section 25230.
(s)The fee for any hearing held by the commissioner pursuant to Section 25142 shall be the sum determined by the commissioner to cover the actual expense of noticing and holding the hearing.
(t)The commissioner may fix by rule a reasonable charge for any publications issued under the commissioners authority. The charges shall not apply to reports of the commissioner in the ordinary course of distribution.
(u)The fee for filing an offer under subdivision (b) of Section 25507 shall be the amount of filing fee payable under subdivision (e), (f), (h), or (i) of this section if an application had been filed to qualify the transaction in which the securities upon which the offer is to be made were sold in violation of the qualification provisions of this law.
(v)The fee for filing an application for exemption pursuant to subdivision (l) of Section 25100 is two hundred fifty dollars ($250).
(w)The commissioner may by rule require payment of a fee for filing a notice or report required by a rule adopted pursuant to Section 25105. The fee required in connection with a transaction as defined by that rule shall not exceed the fees specified in subdivision (c) based on the value of the securities sold, but the commissioner may permit a single notice for more than one transaction.
(x)The fee for filing the first notice of transaction under subdivision (n) of Section 25102 is six hundred dollars ($600).
(y)The fee for filing a notice of transaction under subdivision (o) of Section 25102 shall be the fee for filing an application for qualification of the sale of securities by permit under paragraph (1) of subdivision (b) of Section 25113 as set forth in subdivision (e) of this section.
(z)The fee for filing a notice of transaction under subdivision (h) of Section 25103 shall be six hundred dollars ($600).
SEC. 2.Section 31210 of the Corporations Code is amended to read:31210.(a)It is unlawful for any person to effect or attempt to effect a sale of a franchise in this state, except in transactions exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division, unless that person is any of the following:
(1)Identified in an application or amended application filed with the commissioner pursuant to Part 2 (commencing with Section 31100) of this division.
(2)Licensed by the Department of Real Estate as a real estate broker or real estate salesperson.
(3)Licensed by the commissioner as a broker-dealer or agent pursuant to the Corporate Securities Law of 1968.
(4)Registered as a franchise broker pursuant to Part 7 (commencing with Section 31520).
(b)Notwithstanding paragraphs (1) to (3), inclusive, of subdivision (a), it is unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state unless the franchise broker is registered pursuant to Part 7 (commencing with Section 31520).
(c)Notwithstanding subdivision (a), it is unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state in a transaction exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division unless the franchise broker is registered pursuant to Part 7 (commencing with Section 31520).
SEC. 3.Section 31526 of the Corporations Code is amended to read:31526.(a)It is unlawful for a franchise broker to communicate with a prospective franchisee about investing in a franchise opportunity that is subject to this law unless the franchise broker first provides to the prospective franchisee a copy of the completed Uniform Franchise Broker Disclosure Document.
(b)A franchise broker may provide the Uniform Franchise Broker Disclosure Document to a prospective franchisee through electronic means, subject to any requirements or conditions imposed by the commissioner.
SEC. 4.Section 302 is added to the Financial Code, to read:302.Unless otherwise provided by rule, the commissioner shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
SEC. 5.Section 331.5 of the Financial Code is amended to read:331.5.(a)(1)Any person licensed by or registered with the commissioner under any law shall establish and maintain an electronic service address designated for receiving communications and documents that are sent by the commissioner to licensees or registrants. This electronic service address shall be provided to the commissioner upon licensure or registration. The electronic service address provided to the commissioner shall not be the electronic service address of any individual employee. A licensee or registrant shall have the capacity to receive an attachment that accompanies a message sent to its electronic service address, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(2)Prior to changing the electronic service address most recently provided to the commissioner, the licensee or registrant shall notify the commissioner of the change and provide to the commissioner their new electronic service address. The commissioner may impose a fine of up to fifty dollars ($50) per day, not to exceed one thousand dollars ($1,000) in the aggregate, on a licensee or registrant who fails to notify the commissioner before changing their electronic service address or fails to provide the commissioner a new electronic service address.
(3)The commissioner shall provide each licensee or registrant that establishes and maintains an electronic service address in accordance with this section with an electronic service address designated for receiving correspondence from licensees or registrants subject to the commissioners jurisdiction. This service address shall have the capacity to receive an attachment that accompanies a message sent by the licensee or registrant, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(b)(1)The commissioner may fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address established and maintained pursuant to this section.
(2)For any person licensed or registered through the Nationwide Multistate Licensing System and Registry, the commissioner may fulfill the notice requirements described in paragraph (1) by electronic communication through that system.
(c)A communication sent to an electronic service address established pursuant to this section does not satisfy any notice requirement, or displace any law or regulation, that requires notice to be served in a different manner, if a hearing right attaches to the notice.
SEC. 6.Section 2042 of the Financial Code is amended to read:2042.(a)In addition to the fees provided in Section 2038, the commissioner shall levy an assessment each fiscal year, on a pro rata basis, on those licensees that at any time during the preceding calendar year engaged in the business of money transmission in California in an amount that is, in their judgment, sufficient to meet the commissioners expenses in administering the provisions of this division and to provide a reasonable reserve for contingencies.
(b)For licensees that sell or issue payment instruments or stored value, the amount of the annual assessment on any licensee shall not exceed the sum of the products determined by multiplying (1) increments of the aggregate face amount of payment instruments and stored value issued or sold in California by the licensee, directly or indirectly through agents, in the calendar year next preceding the date of such assessment, by (2) percentages of the base assessment rate, according to the following table:
Aggregate face amount of payment instruments and stored value sold (in millions) | Percentage of base assessment rate | |
First $1 | 100.0 | |
Next $9 | 25.0 | |
Next $40 | 12.5 | |
Next $50 | 6.0 | |
Next $400 | 3 | |
Next $500 | 2 | |
Excess over $1,000 | 1 |
The base assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) face amount of payment instruments and stored value sold.
(c)For licensees receiving money for transmission, the basis of the apportionment of the assessment among the licensees assessed shall be the proportion that the total amount of money received for transmission by the licensee in California bears in relation to the total amount of money received for transmission by all licensees in California, as shown by the reports of licensees to the commissioner for the preceding calendar year. The assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) of money received for transmission in California by the licensee.
(d)The commissioner shall notify each licensee of the amount levied against it. The licensee shall pay the amount levied within 20 days. If payment is not made to the commissioner within that time, the commissioner shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent.
SEC. 7.Section 8032 of the Financial Code is amended to read:8032.(a)On or before the 20th day of June of each year the commissioner shall notify each association of the amount assessed and levied against it.
(b)Except as provided in this article, an association shall pay one-half or more of the amount assessed so as to be received by the commissioner not later than the 10th day of July and shall pay the remainder so as to be received by the commissioner not later than the following 10th day of January.
(c)If payment is not received by the commissioner on time, the commissioner shall assess and collect in addition to the annual assessment, a penalty of 5 percent of the unpaid assessment for each month or part of a month that the payment is delinquent.
SEC. 8.Section 12214 of the Financial Code is amended to read:12214.(a)An applicant at the time of filing an application for a license under this division shall pay to the commissioner the sum of fifty dollars ($50) as a fee for investigating the application and two hundred dollars ($200) as an application fee. The investigation fee and application fee are not refundable if an application is denied or withdrawn.
(b)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of this division as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the programs in the year in which such assessment is made. The pro rata share shall be the proportion which a licensees gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner. The pro rata share shall not include the costs of any examinations provided for in Section 12306, unless they cannot be collected from the licensee examined.
(2)On or before the 30th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(3)In the levying and collection of the assessment, a licensee shall not be assessed for nor be permitted to pay less than one hundred fifty dollars ($150) per year.
(4)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to such licensee. If, after such an order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 9.Section 17207 of the Financial Code is amended to read:17207.The commissioner shall charge and collect the following fees and assessments:
(a)For filing an application for an escrow agents license, six hundred twenty-five dollars ($625) for the first office or location and four hundred twenty-five dollars ($425) for each additional office or location.
(b)For filing an application for a duplicate of an escrow agents license lost, stolen, or destroyed, or for replacement, upon a satisfactory showing of the loss, theft, destruction, or surrender of certificate for replacement, two dollars ($2).
(c)For investigation services in connection with each application, one hundred dollars ($100), and for investigation services in connection with each additional office application, one hundred dollars ($100).
(d)For holding a hearing in connection with the application, as set forth under Section 17209.2, the actual costs experienced in each particular instance.
(e)(1)Each escrow agent shall pay to the commissioner for the support of this division for the ensuing year, plus a deficit or less a surplus actually incurred during the prior two fiscal years, an annual license fee not to exceed seven thousand two hundred fifteen dollars ($7,215) for each office or location.
(2)On or before May 30 in each year, the commissioner shall notify each escrow agent of the amount of the annual license fee levied against it, and that the payment of the invoice is payable by the escrow agent within 30 days after receipt of notification by the commissioner.
(3)If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the annual license fee, of 10 percent of the fee for each month or part of a month that the payment is delayed or withheld.
(4)If an escrow agent fails to pay the amount due on or before the June 30 following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company.
(5)If, after an order is made pursuant to paragraph (4), a request for a hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a company shall not conduct business pursuant to this division, except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(f)Fifty dollars ($50) for investigation services in connection with each application for qualification of any person under Section 17200.8, other than investigation services under subdivision (c) of this section.
(g)A fee not to exceed twenty-five dollars ($25) for the filing of a notice or report required by rules adopted pursuant to subdivision (a) or Section 17203.1.
(h)(1)If costs and expenses associated with the enforcement of this division, including overhead, are or will be incurred by the commissioner during the year for which the annual license fee is levied, and that will or could result in the commissioners incurring of costs and expenses, including overhead, in excess of the costs and expenses, including overhead, budgeted for expenditure for the year in which the annual license fee is levied, then the commissioner may levy a special assessment on each escrow agent for each office or location in an amount estimated to pay for the actual costs and expenses associated with the enforcement of this division, including overhead, in an amount not to exceed one thousand dollars ($1,000) for each office or location. The commissioner shall notify each escrow agent of the amount of the special assessment levied against it, and that payment of the special assessment is payable by the escrow agent within 60 days of receipt of notification by the commissioner. The funds received from the special assessment shall be deposited into the Financial Protection Fund and shall be used only for the purposes for which the special assessment is made.
(2)If payment is not made within 60 days, the commissioner may assess and collect a penalty, in addition to the special assessment, of 10 percent of the special assessment for each month or part of a month that the payment is delayed or withheld. If an escrow agent fails to pay the special assessment on or before 60 days following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company. If an order is made under this subdivision, the provisions of paragraph (5) of subdivision (e) shall apply.
(3)If the amount collected pursuant to this subdivision exceeds the actual costs and expenses, including overhead, incurred in the administration and enforcement of this division and any deficit incurred, the excess shall be credited to each escrow agent on a pro rata basis.
SEC. 10.Section 18351 of the Financial Code is amended to read:18351.On or before the 30th day of November in each year, the commissioner shall notify each industrial loan company of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
SEC. 11.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 12.Division 15.5 (commencing with Section 32000) of the Financial Code is repealed.SEC. 13.Section 50401 of the Financial Code is amended to read:50401.(a)In addition to other fees and reimbursements required to be paid under this division, each residential mortgage lender or servicer licensee shall pay to the commissioner an amount equal to the lesser of: (1) its pro rata share of all costs and expenses (including overhead and the maintenance of a prudent reserve not to exceed 90 days costs and expenses) that the commissioner reasonably expects to incur in the current fiscal year in the administration of this division and not otherwise recovered by the commissioner under this division or from the Financial Protection Fund, plus a deficit or less a surplus actually incurred during the prior two fiscal years; or (2) fifteen thousand dollars ($15,000). The pro rata share shall be the greater of either three thousand dollars ($3,000) or the sum of: (A) a number derived from the ratio of the aggregate principal amount of the mortgage loans secured by residential real property originated by the licensee to all mortgage loans secured by residential real property originated by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner; plus (B) a number derived from the ratio of the average value of mortgage loans secured by residential real property serviced by a licensee to the average value of all mortgage loans secured by residential real property serviced by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner. For the purposes of this section, the principal amount of a mortgage loan means the initial total amount a borrower is obligated to repay the lender and the average value of loans serviced means the sum of the aggregate dollar value of all mortgage loans secured by residential real property serviced by a licensee, calculated as of the last day of each month in the calendar year just ended, divided by 12.
In order for the commissioner to calculate the assessment under this section, each licensee shall file an annual report for the calendar year just ended containing the information required by the commissioner on or before March 1 of the year in which the assessment is to be calculated.
In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of this division and all reimbursements provided for under this division.
(b)In no case shall the reimbursement, payment, or other fee authorized by this section exceed the cost, including overhead, reasonably incurred in the administration of this division, and the maintenance of a prudent reserve not to exceed 90 days costs and expenses.
(c)On or before the 30th day of September in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid within 20 days. If payment is not made within 20 days, the commissioner shall assess and collect a penalty, in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(d)If a licensee fails to pay the assessment on or before the 30th day following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the license issued to the licensee. An order issued under this section is not stayed by the filing of a request for a hearing. If, after an order is made, the request for hearing is filed in writing within 15 days from the date of service of the order and a hearing is not held within 60 days of the filing, the order is deemed rescinded as of its effective date. During a period when its license is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by further order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division.
SEC. 14.Section 16430 of the Government Code is amended to read:16430.Eligible securities for the investment of surplus moneys shall be any of the following:
(a)Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
(b)Bonds or interest-bearing notes or obligations that are issued by or fully guaranteed as to principal and interest by a federal agency or a United States government-sponsored enterprise, as defined by the Omnibus Budget Reconciliation Act of 1990 (Sec. 13112, Public Law 101-508; 2 U.S.C. Sec. 622(8)).
(c)Bonds, notes, or other obligations of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
(d)(1)Bonds, notes, or other obligations of a local government of this state, including, but not limited to, any of the following:
(A)A county.
(B)A city.
(C)A city and county.
(D)A metropolitan water district.
(E)A water district.
(F)A water storage district.
(G)An irrigation district.
(H)A municipal utility district.
(I)A school district.
(2)Bonds, notes, or other obligations eligible for investment pursuant to this subdivision shall be rated in rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(e)Bonds, debentures, or other obligations of any of the following:
(1)Issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended (12 U.S.C. Sec. 2001 et seq.).
(2)Issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended (12 U.S.C. Sec. 2001 et seq.).
(3)Issued by the Federal Home Loan Bank established under the Federal Home Loan Bank Act (12 U.S.C. Sec. 1421 et seq.).
(4)Issued by the Federal National Mortgage Association established under the National Housing Act, as amended (12 U.S.C. Sec. 1701 et seq.).
(5)Issued by the Federal Home Loan Mortgage Corporation.
(6)Issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act, as amended (16 U.S.C. Sec. 831 et seq.).
(7)Guaranteed by the Commodity Credit Corporation for the export of California agricultural products under the Commodity Credit Corporation Charter Act, as amended (15 U.S.C. Sec. 714 et seq.).
(f)Bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country that the International Monetary Fund lists as an advanced economy and for which the full faith and credit of that country has been pledged for the payment of principal and interest, if the securities are rated in a rating category of AA investment grade or its equivalent, or better, by a nationally recognized statistical rating organization. Securities eligible for investment pursuant to this subdivision shall satisfy all of the following:
(1)Be United States dollar denominated with a maximum maturity of five years or less, and eligible for purchase and sale within the United States.
(2)The combined par value of all of the investments authorized by this subdivision do not exceed 1 percent of the total par value of Pooled Money Investment Account assets at the time of purchase.
(3)The government of the foreign country issuing the securities submits to the jurisdiction of a federal or state court in the United States when disputes arise related to the investments.
(g)(1)Commercial paper of prime quality of the highest ranking or of the highest letter and number rating as defined by a nationally recognized statistical rating organization that rates these securities, if the commercial paper is issued by a federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company that is approved by the Pooled Money Investment Board as meeting the conditions specified in either subparagraph (A) or subparagraph (B):
(A)Both of the following conditions:
(i)Organized and operating within the United States.
(ii)Having total assets in excess of five hundred million dollars ($500,000,000).
(B)Both of the following conditions:
(i)Organized within the United States as a federally or state-chartered bank or a state-licensed branch of a foreign bank, special purpose corporation, trust, or limited liability company.
(ii)Having programwide credit enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bond.
(2)A purchase of eligible commercial paper shall not do any of the following:
(A)Exceed 397 days maturity.
(B)Represent more than 10 percent of the outstanding paper of an issuing federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company.
(C)Exceed 30 percent of the resources of an investment program.
(h)Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, that are eligible for purchase by the Federal Reserve System.
(i)Negotiable certificates of deposits issued by a federally or state-chartered bank or savings and loan association, a state-licensed branch of a foreign bank, or a federally or state-chartered credit union. For the purposes of this section, negotiable certificates of deposits are not subject to Chapter 4 (commencing with Section 16500) and Chapter 4.5 (commencing with Section 16600).
(j)The portion of bank loans and obligations guaranteed by the United States Small Business Administration or the United States Farmers Home Administration.
(k)Bank loans and obligations guaranteed by the Export-Import Bank of the United States.
(l)Student loan notes insured under the Guaranteed Student Loan Program established pursuant to the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1001 et seq.) and eligible for resale to the Student Loan Marketing Association established pursuant to Section 133 of the Education Amendments of 1972, as amended (20 U.S.C. Sec. 1087-2).
(m)Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the International Finance Corporation, the Government Development Bank for Puerto Rico, the European Bank for Reconstruction and Development, or the European Investment Bank.
(n)Bonds, debentures, and notes issued by corporations organized and operating within the United States. Securities eligible for investment pursuant to this subdivision shall be rated in a rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(o)Negotiable Order of Withdrawal Accounts (NOW Accounts), invested in accordance with Chapter 4 (commencing with Section 16500).
(p)Shares of any money market mutual fund subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, provided that all of the following conditions are met:
(1)The money market mutual fund invests in securities and obligations described in one or more of the following: subdivision (a), (b), or (e) of this section or repurchase agreements or reverse repurchase agreements described in Section 16480.4.
(2)The financial institution issuing shares of the money market mutual fund has at least five years of experience investing in the types of securities and obligations being purchased by the state and has assets under management in the money market mutual fund in excess of ten billion dollars ($10,000,000,000).
(3)The money market mutual fund has attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations.
(4)The financial institution does not impose a commission on the purchase or sale of fund shares by the state.
(5)The state does not purchase more than 10 percent of a money market mutual funds total assets.
(6)The state does not invest more than 10 percent of the Pooled Money Investment Accounts funds in any single money market mutual fund meeting the requirements of this subdivision.
SEC. 15.Section 53667 of the Government Code is amended to read:53667.(a)Expenses incurred by the administrator in carrying out the duties and responsibilities assigned to the administrator by the sections specified in subdivision (a) of Section 53661, shall be borne by the Local Agency Deposit Security Fund, which is hereby created and continuously appropriated to the administrator for the administration of the sections specified in subdivision (a) of Section 53661. This fund shall consist of fines levied pursuant to Section 53661, fees collected pursuant to the sections specified in subdivision (a) of Section 53661, and assessments levied pursuant to this section.
(b)Each fiscal year the administrator shall levy an assessment on a pro rata basis on those depositories which at any time during the preceding fiscal year held local agency deposits. The total assessment levied on all of those depositories shall be in an amount which, when added to the amount of fines and fees that the administrator estimates will be collected during the fiscal year when the assessment is levied, is sufficient in the judgment of the administrator to meet the expenses of the administrator in administering the sections specified in subdivision (a) of Section 53661 and to provide a reasonable reserve for contingencies. The basis of the apportionment of the assessment among the depositories assessed shall be the proportion that the average amount of local agency deposits held by each of those depositories bears to the average total amount of local agency deposits held by all of those depositories as shown by the reports of depositories to the administrator for the preceding fiscal year, as required in subdivision (e) of Section 53661; provided, however, that the amount of the assessment levied on each of those depositories shall be not less than twenty-five dollars ($25).
(c)The administrator shall notify each depository of the amount levied against it. The depository shall pay the amount levied within 20 days after such notice into the Local Agency Deposit Security Fund for the administration of the sections specified in subdivision (a) of Section 53661. If payment is not made to the administrator within such time, the administrator shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent. If a depository fails to pay the assessment or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository.
SEC. 16.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)The commissioner shall charge and collect the fees fixed in this section and Section 25608.1. All fees charged and collected under this section and Section 25608.1 shall be transmitted to the Treasurer at least weekly, accompanied by a detailed statement thereof and shall be credited to the Financial Protection Fund.
(b)The fee for filing an application for a negotiating permit under subdivision (c) of Section 25102 is fifty dollars ($50).
(c)The fee for filing a notice pursuant to paragraph (5) of subdivision (h) of Section 25102, for filing a notice pursuant to paragraph (4) of subdivision (f) of Section 25102, or for filing a notice pursuant to paragraph (10) of subdivision (r) of Section 25102, in addition to the fee prescribed in those paragraphs, if applicable, shall be determined based on the value of the securities proposed to be sold in the transaction for which the notice is filed and in accordance with subdivision (g), and shall be as follows:
Value of Securities | Filing Fee |
$25,000 or less | $25 |
$25,001 to $100,000 | $35 |
$100,001 to $500,000 | $50 |
$500,001 to $1,000,000 | $150 |
Over $1,000,000 | $300 |
(d)The fee for filing an application for designation of an issuer pursuant to subdivision (k) of Section 25100 is fifty dollars ($50).
(e)The fee for filing an application for qualification of the sale of securities by notification under Section 25112 or by permit under paragraph (1) of subdivision (b) of Section 25113 (except applications for qualification by permit of the sale of any guarantee of any security, the fees for which applications are fixed in subdivision (k)) is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
The fee for filing a small company application for qualification of the sale of securities by permit under paragraph (2) of subdivision (b) of Section 25113 is two thousand five hundred dollars ($2,500). In the case where the costs of processing a small company application exceed the filing fee, an additional fee shall be charged, not to exceed one thousand dollars ($1,000), over and above the filing fee based on the costs of the salary or other compensation paid to persons processing the application plus overhead costs reasonably incurred in the performance of the work. In determining the costs, the commissioner may use the estimated average hourly cost for all persons processing applications for the fiscal year.
(f)The fee for filing an application for qualification of the sale of securities by coordination under Section 25111 or a notice of intention to sell under subdivision (t) of Section 25100 is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500).
(g)For the purpose of determining the fees fixed in subdivisions (e) and (f):
(1)The value of the securities shall be the price at which the company proposes to sell the securities, or the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration (if other than money) to be received in exchange therefor, or of the securities when sold, whichever is greater.
(2)Interim or voting trust certificates shall have a value equal to the aggregate value of the securities to be represented by the interim or voting trust certificates.
(3)The value of a warrant or right to purchase or subscribe to another security of the same or another issuer shall be an amount equal to the consideration to be paid for that warrant or right plus an amount equal to the consideration to be paid upon purchase of the additional securities, provided that if the latter amount is not determinable at the time of qualification, that amount shall then be the value of the additional securities as determined by the commissioner.
(4)In the case of a share dividend where the shareholders are given an option to accept either cash or additional shares of common stock, the value of the securities to be sold shall be the maximum amount of cash that would be payable in the event that all shareholders elected to accept cash.
(h)The fee for filing an application for qualification of the sale of securities by permit under Section 25121 is:
(1)Two hundred dollars ($200) in connection with any change (including any stock split or reverse stock split or stock dividend, except a stock dividend where the shareholders are given an option to accept either cash or additional shares of common stock) in the rights, preferences, privileges, or restrictions of or on outstanding securities.
(2)Two hundred dollars ($200) plus one-fifth of 1 percent of the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration to be received in exchange therefor, up to a maximum aggregate fee of two thousand five hundred dollars ($2,500), in any exchange of securities by the issuer with its existing security holders exclusively, or in any exchange in connection with any merger or consolidation or purchase of corporate assets in consideration of the issuance of securities, or any entity conversion transaction.
(i)The fee for filing an application for qualification of the sale of securities by notification under Section 25131 shall be one hundred dollars ($100).
(j)The fee for an application for the removal of any condition under Section 25141 is fifty dollars ($50).
(k)The fee for filing any application for a permit to execute or issue any guarantee of any security is fifty dollars ($50).
(l)The fee for acting as escrowholder for securities under Section 25149 is fifty dollars ($50). In addition, a fee of two dollars and fifty cents ($2.50) shall be paid for the deposit with the commissioner of each new certificate or other document resulting from a transfer in escrow.
(m)The fee for filing an application for an order (1) consenting to the transfer in escrow of securities or (2) consenting to the transfer of securities subject to any condition imposed by the commissioner requiring the commissioners consent to the transfer is twenty dollars ($20) for each transfer.
(n)The filing fee for an amendment to an application filed after the effective date of the qualification of the sale of securities is fifty dollars ($50) plus any additional fee that would have been required to be paid with the original application for qualification of the sale of securities under this section if the matters set forth in the amendment had been included in the original application.
(o)(1)The fee for filing an application for a broker-dealer certificate under Section 25211 is three hundred dollars ($300).
(2)Each broker-dealer shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of the broker-dealer program under this division, as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that the broker-dealer and the number of its agents in this state bears to the aggregate number of broker-dealers and agents in this state as shown by records maintained by or on behalf of the commissioner. The pro rata share may include the costs of any examinations, audit, or investigation provided for in subdivision (r).
(3)Every broker-dealer who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a minimum assessment of seventy-five dollars ($75) on or before the 31st of December in each year.
(4)The commissioner may assess and levy against each broker-dealer any additional amount above the minimum assessment amount of seventy-five dollars ($75) that is reasonable and necessary to support the broker-dealer program under this division. If an additional amount is assessed, the commissioner shall notify each broker-dealer by mail of any additional amount assessed and levied against it on or before the 30th day of May in each year, and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(5)If a broker-dealer fails to pay any assessment on or before the 30th day of the month following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the broker-dealer. If, after that order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a broker-dealer shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided under this division.
(6)In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of the broker-dealer program under this division and all reimbursements applicable to the administration of the broker-dealer program under this division.
(p)(1)The commissioner shall charge a fee of fifty dollars ($50) for the filing of a notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(2)The commissioner shall charge a fee up to fifty dollars ($50) to keep in effect for the following year any notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230.
(3)No person shall, on behalf of a broker-dealer licensed pursuant to Section 25211, effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless the broker-dealer pays the annual fee required by paragraph (2) of this subdivision on or before the day upon which payment is due.
(4)No person may, in this state, on behalf of an investment adviser licensed pursuant to Section 25231, offer or negotiate for the sale of investment advisory services of the investment adviser, determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser, or determine the reports or analyses concerning securities to be published by the investment adviser, unless the investment adviser pays the annual fee required by paragraph (2) on or before the day upon which payment is due.
(5)The commissioner may by order summarily enjoin an individual from performing any activity under paragraph (3) or (4) if the annual fee in paragraph (2) is not paid on or before the day upon which payment is due. An order under this paragraph may not be made before 10 days after notice by the commissioner that the fee is due and unpaid.
(q)(1)Except as provided for in paragraph (2), the fee for filing an application for an investment adviser under Section 25231 is one hundred twenty-five dollars ($125), and payment of this amount shall keep the certificate, if granted, in effect during the calendar year during which it is granted. Every investment adviser who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a renewal fee of one hundred twenty-five dollars ($125) on or before the 31st day of December.
(2)Paragraph (1) shall not apply to a broker-dealer licensed under Section 25210.
(r)(1)Except as provided for in paragraph (2), the fee for any routine or nonroutine regulatory examination, audit, or investigation is the amount of the salary or other compensation paid to the persons making the examination, audit, or investigation plus the amount of expenses including overhead reasonably incurred in the performance of the work. In determining the costs associated with an examination, audit, or investigation, the commissioner may use the estimated average hourly cost for all persons performing examinations, audits, or investigations for the fiscal year.
(2)An investment adviser licensed under Section 25230 pursuant to the Investment Adviser Registration Depository shall not be subject to paragraph (1) only in regard to the fee for a routine regulatory examination of its investment advisory services for which it is licensed under Section 25230.
(s)The fee for any hearing held by the commissioner pursuant to Section 25142 shall be the sum determined by the commissioner to cover the actual expense of noticing and holding the hearing.
(t)The commissioner may fix by rule a reasonable charge for any publications issued under the commissioners authority. The charges shall not apply to reports of the commissioner in the ordinary course of distribution.
(u)The fee for filing an offer under subdivision (b) of Section 25507 shall be the amount of filing fee payable under subdivision (e), (f), (h), or (i) of this section if an application had been filed to qualify the transaction in which the securities upon which the offer is to be made were sold in violation of the qualification provisions of this law.
(v)The fee for filing an application for exemption pursuant to subdivision (l) of Section 25100 is two hundred fifty dollars ($250).
(w)The commissioner may by rule require payment of a fee for filing a notice or report required by a rule adopted pursuant to Section 25105. The fee required in connection with a transaction as defined by that rule shall not exceed the fees specified in subdivision (c) based on the value of the securities sold, but the commissioner may permit a single notice for more than one transaction.
(x)The fee for filing the first notice of transaction under subdivision (n) of Section 25102 is six hundred dollars ($600).
(y)The fee for filing a notice of transaction under subdivision (o) of Section 25102 shall be the fee for filing an application for qualification of the sale of securities by permit under paragraph (1) of subdivision (b) of Section 25113 as set forth in subdivision (e) of this section.
(z)The fee for filing a notice of transaction under subdivision (h) of Section 25103 shall be six hundred dollars ($600).
SECTION 1.SEC. 2.Section 31210 of the Corporations Code is amended to read:31210.(a)It is unlawful for any person to effect or attempt to effect a sale of a franchise in this state state, except in transactions exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division, unless that person is any of the following:
(1)Identified in an application or amended application filed with the commissioner pursuant to Part 2 (commencing with Section 31100) of this division.
(2)Licensed by the Department of Real Estate as a real estate broker or real estate salesperson.
(3)Licensed by the commissioner as a broker-dealer or agent pursuant to the Corporate Securities Law of 1968.
(4)Registered as a franchise broker pursuant to Part 7 (commencing with Section 31520).
(b)This section does not apply to transactions exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division, unless the person effecting or attempting to effect the sale of a franchise in this state is a franchise broker.(b)Notwithstanding paragraphs (1) to (3), inclusive, of subdivision (a), it is unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state unless the franchise broker is registered pursuant to Part 7 (commencing with Section 31520).
(c)Notwithstanding subdivision (a), it is unlawful for a franchise broker to effect or attempt to effect a sale of a franchise in this state in a transaction exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division unless the franchise broker is registered pursuant to Part 7 (commencing with Section 31520).
SEC. 2.SEC. 3.Section 31526 of the Corporations Code is amended to read:31526.(a)It is unlawful for a franchise broker to communicate with a prospective franchisee about investing in a franchise opportunity that is subject to this law unless the franchise broker first provides to the prospective franchisee a copy of the completed Uniform Franchise Broker Disclosure Document.
(b)A franchise broker may provide the Uniform Franchise Broker Disclosure Document to a prospective franchisee through electronic means, subject to any requirements or conditions imposed by the commissioner.
SEC. 4.Section 302 is added to the Financial Code, to read:302.Unless otherwise provided by rule, the commissioner shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
SEC. 5.Section 331.5 of the Financial Code is amended to read:331.5.(a)(1)A licensee subject to the commissioners jurisdiction Any person licensed by or registered with the commissioner under any law shall establish and maintain an electronic service address designated for receiving communications and documents that are sent by the commissioner to licensees. licensees or registrants. This electronic service address shall be provided to the commissioner upon licensure. licensure or registration. The electronic service address provided to the commissioner shall not be the electronic service address of any individual employee. A licensee or registrant shall have the capacity to receive an attachment that accompanies a message sent to its electronic service address, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(2)Prior to changing the electronic service address most recently provided to the commissioner, the licensee or registrant shall notify the commissioner of the change and provide to the commissioner his or her their new electronic service address. The commissioner may impose a fine of up to fifty dollars ($50) per day, not to exceed one thousand dollars ($1,000) in the aggregate, on a licensee or registrant who fails to notify the commissioner before changing his or her their electronic service address or fails to provide the commissioner a new electronic service address.
(3)The commissioner shall provide each licensee or registrant that establishes and maintains an electronic service address in accordance with this section with an electronic service address designated for receiving correspondence from licensees or registrants subject to the commissioners jurisdiction. This service address shall have the capacity to receive an attachment that accompanies a message sent by the licensee, licensee or registrant, provided the size of the attachment is reasonable in relation to the technology available at the time the attachment is sent.
(b)(1)The commissioner may fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address established and maintained pursuant to this section.
(2)For any person licensed or registered through the Nationwide Multistate Licensing System and Registry, the commissioner may fulfill the notice requirements described in paragraph (1) by electronic communication through that system.
(b)(c)A communication sent to an electronic service address established pursuant to this section does not satisfy any notice requirement, or displace any law or regulation, that requires notice to be served in a different manner, if a hearing right attaches to the notice.
SEC. 6.Section 2042 of the Financial Code is amended to read:2042.(a)In addition to the fees provided in Section 2038, the commissioner shall levy an assessment each fiscal year, on a pro rata basis, on those licensees that at any time during the preceding calendar year engaged in the business of money transmission in California in an amount that is, in his or her their judgment, sufficient to meet the commissioners expenses in administering the provisions of this division and to provide a reasonable reserve for contingencies.
(b)For licensees that sell or issue payment instruments or stored value, the amount of the annual assessment on any licensee shall not exceed the sum of the products determined by multiplying (1) increments of the aggregate face amount of payment instruments and stored value issued or sold in California by the licensee, directly or indirectly through agents, in the calendar year next preceding the date of such assessment, by (2) percentages of the base assessment rate, according to the following table:
Aggregate face amount of payment instruments and stored value sold (in millions) | Percentage of base assessment rate | |
First $1 | 100.0 | |
Next $9 | 25.0 | |
Next $40 | 12.5 | |
Next $50 | 6.0 | |
Next $400 | 3 | |
Next $500 | 2 | |
Excess over $1,000 | 1 |
The base assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) face amount of payment instruments and stored value sold.
(c)For licensees receiving money for transmission, the basis of the apportionment of the assessment among the licensees assessed shall be the proportion that the total amount of money received for transmission by the licensee in California bears in relation to the total amount of money received for transmission by all licensees in California, as shown by the reports of licensees to the commissioner for the preceding calendar year. The assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar ($1) per one thousand dollars ($1,000) of money received for transmission in California by the licensee.
(d)The commissioner shall notify each licensee by mail of the amount levied against it. The licensee shall pay the amount levied within 20 days. If payment is not made to the commissioner within that time, the commissioner shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent.
SEC. 7.Section 8032 of the Financial Code is amended to read:8032.(a)On or before the 20th day of June of each year the commissioner shall notify each association by mail of the amount assessed and levied against it.
(b)Except as provided in this article, an association shall pay one-half or more of the amount assessed so as to be received by the commissioner not later than the 10th day of July and shall pay the remainder so as to be received by the commissioner not later than the following 10th day of January.
(c)If payment is not received by the commissioner on time, the commissioner shall assess and collect in addition to the annual assessment, a penalty of 5 percent of the unpaid assessment for each month or part of a month that the payment is delinquent.
SEC. 8.Section 12214 of the Financial Code is amended to read:12214.(a)An applicant at the time of filing an application for a license under this division shall pay to the commissioner the sum of fifty dollars ($50) as a fee for investigating the application and two hundred dollars ($200) as an application fee. The investigation fee and application fee are not refundable if an application is denied or withdrawn.
(b)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of this division as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the programs in the year in which such assessment is made. The pro rata share shall be the proportion which a licensees gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner. The pro rata share shall not include the costs of any examinations provided for in Section 12306, unless they cannot be collected from the licensee examined.
(2)On or before the 30th day of May in each year, the commissioner shall notify each licensee by mail of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(3)In the levying and collection of the assessment, a licensee shall not be assessed for nor be permitted to pay less than one hundred fifty dollars ($150) per year.
(4)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to such licensee. If, after such an order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 9.Section 17207 of the Financial Code is amended to read:17207.The commissioner shall charge and collect the following fees and assessments:
(a)For filing an application for an escrow agents license, six hundred twenty-five dollars ($625) for the first office or location and four hundred twenty-five dollars ($425) for each additional office or location.
(b)For filing an application for a duplicate of an escrow agents license lost, stolen, or destroyed, or for replacement, upon a satisfactory showing of the loss, theft, destruction, or surrender of certificate for replacement, two dollars ($2).
(c)For investigation services in connection with each application, one hundred dollars ($100), and for investigation services in connection with each additional office application, one hundred dollars ($100).
(d)For holding a hearing in connection with the application, as set forth under Section 17209.2, the actual costs experienced in each particular instance.
(e)(1)Each escrow agent shall pay to the commissioner for the support of this division for the ensuing year, plus a deficit or less a surplus actually incurred during the prior two fiscal years, an annual license fee not to exceed seven thousand two hundred fifteen dollars ($7,215) for each office or location.
(2)On or before May 30 in each year, the commissioner shall notify each escrow agent by mail of the amount of the annual license fee levied against it, and that the payment of the invoice is payable by the escrow agent within 30 days after receipt of notification by the commissioner.
(3)If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the annual license fee, of 10 percent of the fee for each month or part of a month that the payment is delayed or withheld.
(4)If an escrow agent fails to pay the amount due on or before the June 30 following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company.
(5)If, after an order is made pursuant to paragraph (4), a request for a hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a company shall not conduct business pursuant to this division, except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(f)Fifty dollars ($50) for investigation services in connection with each application for qualification of any person under Section 17200.8, other than investigation services under subdivision (c) of this section.
(g)A fee not to exceed twenty-five dollars ($25) for the filing of a notice or report required by rules adopted pursuant to subdivision (a) or Section 17203.1.
(h)(1)If costs and expenses associated with the enforcement of this division, including overhead, are or will be incurred by the commissioner during the year for which the annual license fee is levied, and that will or could result in the commissioners incurring of costs and expenses, including overhead, in excess of the costs and expenses, including overhead, budgeted for expenditure for the year in which the annual license fee is levied, then the commissioner may levy a special assessment on each escrow agent for each office or location in an amount estimated to pay for the actual costs and expenses associated with the enforcement of this division, including overhead, in an amount not to exceed one thousand dollars ($1,000) for each office or location. The commissioner shall notify each escrow agent by mail of the amount of the special assessment levied against it, and that payment of the special assessment is payable by the escrow agent within 60 days of receipt of notification by the commissioner. The funds received from the special assessment shall be deposited into the Financial Protection Fund and shall be used only for the purposes for which the special assessment is made.
(2)If payment is not made within 60 days, the commissioner may assess and collect a penalty, in addition to the special assessment, of 10 percent of the special assessment for each month or part of a month that the payment is delayed or withheld. If an escrow agent fails to pay the special assessment on or before 60 days following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the company. If an order is made under this subdivision, the provisions of paragraph (5) of subdivision (e) shall apply.
(3)If the amount collected pursuant to this subdivision exceeds the actual costs and expenses, including overhead, incurred in the administration and enforcement of this division and any deficit incurred, the excess shall be credited to each escrow agent on a pro rata basis.
SEC. 10.Section 18351 of the Financial Code is amended to read:18351.On or before the 30th day of November in each year, the commissioner shall notify each industrial loan company by mail of the amount assessed and levied against it and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
SEC. 11.Section 23016 of the Financial Code is amended to read:23016.(a)(1)Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.
(2)The pro rata share shall be the proportion that a licensees total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.
(3)Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.
(b)On or before the 20th day of May in each year, the commissioner shall notify each licensee by mail of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c)If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
SEC. 3.SEC. 12.Division 15.5 (commencing with Section 32000) of the Financial Code is repealed.SEC. 13.Section 50401 of the Financial Code is amended to read:50401.(a)In addition to other fees and reimbursements required to be paid under this division, each residential mortgage lender or servicer licensee shall pay to the commissioner an amount equal to the lesser of: (1) its pro rata share of all costs and expenses (including overhead and the maintenance of a prudent reserve not to exceed 90 days costs and expenses) that the commissioner reasonably expects to incur in the current fiscal year in the administration of this division and not otherwise recovered by the commissioner under this division or from the Financial Protection Fund, plus a deficit or less a surplus actually incurred during the prior two fiscal years; or (2) fifteen thousand dollars ($15,000). The pro rata share shall be the greater of either three thousand dollars ($3,000) or the sum of: (A) a number derived from the ratio of the aggregate principal amount of the mortgage loans secured by residential real property originated by the licensee to all mortgage loans secured by residential real property originated by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner; plus (B) a number derived from the ratio of the average value of mortgage loans secured by residential real property serviced by a licensee to the average value of all mortgage loans secured by residential real property serviced by all licensees under this division, as shown by the annual financial reports to the commissioner, which number is then multiplied by one-half of the costs and expenses estimated by the commissioner. For the purposes of this section, the principal amount of a mortgage loan means the initial total amount a borrower is obligated to repay the lender and the average value of loans serviced means the sum of the aggregate dollar value of all mortgage loans secured by residential real property serviced by a licensee, calculated as of the last day of each month in the calendar year just ended, divided by 12.
In order for the commissioner to calculate the assessment under this section, each licensee shall file an annual report for the calendar year just ended containing the information required by the commissioner on or before March 1 of the year in which the assessment is to be calculated.
In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of this division and all reimbursements provided for under this division.
(b)In no case shall the reimbursement, payment, or other fee authorized by this section exceed the cost, including overhead, reasonably incurred in the administration of this division, and the maintenance of a prudent reserve not to exceed 90 days costs and expenses.
(c)On or before the 30th day of September in each year, the commissioner shall notify each licensee by mail of the amount assessed and levied against it and that amount shall be paid within 20 days. If payment is not made within 20 days, the commissioner shall assess and collect a penalty, in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(d)If a licensee fails to pay the assessment on or before the 30th day following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the license issued to the licensee. An order issued under this section is not stayed by the filing of a request for a hearing. If, after an order is made, the request for hearing is filed in writing within 15 days from the date of service of the order and a hearing is not held within 60 days of the filing, the order is deemed rescinded as of its effective date. During a period when its license is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by further order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division.
SEC. 4.SEC. 14.Section 16430 of the Government Code is amended to read:16430.Eligible securities for the investment of surplus moneys shall be any of the following:
(a)Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
(b)Bonds or interest-bearing notes or obligations that are issued by or fully guaranteed as to principal and interest by a federal agency or a United States government-sponsored enterprise, as defined by the Omnibus Budget Reconciliation Act of 1990 (Sec. 13112, Public Law 101-508; 2 U.S.C. Sec. 622(8)).
(c)Bonds, notes, or other obligations of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
(d)(1)Bonds, notes, or other obligations of a local government of this state, including, but not limited to, any of the following:
(A)A county.
(B)A city.
(C)A city and county.
(D)A metropolitan water district.
(E)A water district.
(F)A water storage district.
(G)An irrigation district.
(H)A municipal utility district.
(I)A school district.
(2)Bonds, notes, or other obligations eligible for investment pursuant to this subdivision shall be rated in rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(e)Bonds, debentures, or other obligations of any of the following:
(1)Issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended (12 U.S.C. Sec. 2001 et seq.).
(2)Issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended (12 U.S.C. Sec. 2001 et seq.).
(3)Issued by the Federal Home Loan Bank established under the Federal Home Loan Bank Act (12 U.S.C. Sec. 1421 et seq.).
(4)Issued by the Federal National Mortgage Association established under the National Housing Act, as amended (12 U.S.C. Sec. 1701 et seq.).
(5)Issued by the Federal Home Loan Mortgage Corporation.
(6)Issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act, as amended (16 U.S.C. Sec. 831 et seq.).
(7)Guaranteed by the Commodity Credit Corporation for the export of California agricultural products under the Commodity Credit Corporation Charter Act, as amended (15 U.S.C. Sec. 714 et seq.).
(f)Bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country that the International Monetary Fund lists as an advanced economy and for which the full faith and credit of that country has been pledged for the payment of principal and interest, if the securities are rated in a rating category of AA or its equivalent, or better, by a nationally recognized statistical rating organization. Securities eligible for investment pursuant to this subdivision shall satisfy all of the following:
(1)Be United States dollar denominated with a maximum maturity of five years or less, and eligible for purchase and sale within the United States.
(2)The combined par value of all of the investments authorized by this subdivision do not exceed 1 percent of the total par value of Pooled Money Investment Account assets at the time of purchase.
(3)The government of the foreign country issuing the securities submits to the jurisdiction of a federal or state court in the United States when disputes arise related to the investments.
(g)(1)Commercial paper of prime quality of the highest ranking or of the highest letter and number rating as defined by a nationally recognized statistical rating organization that rates these securities, if the commercial paper is issued by a federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company that is approved by the Pooled Money Investment Board as meeting the conditions specified in either subparagraph (A) or subparagraph (B):
(A)Both of the following conditions:
(i)Organized and operating within the United States.
(ii)Having total assets in excess of five hundred million dollars ($500,000,000).
(B)Both of the following conditions:
(i)Organized within the United States as a federally or state-chartered bank or a state-licensed branch of a foreign bank, special purpose corporation, trust, or limited liability company.
(ii)Having programwide credit enhancements enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bond.
(2)A purchase of eligible commercial paper shall not do any of the following:
(A)Exceed 397 days maturity.
(B)Represent more than 10 percent of the outstanding paper of an issuing federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company.
(C)Exceed 30 percent of the resources of an investment program.
(h)Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, that are eligible for purchase by the Federal Reserve System.
(i)Negotiable certificates of deposits issued by a federally or state-chartered bank or savings and loan association, a state-licensed branch of a foreign bank, or a federally or state-chartered credit union. For the purposes of this section, negotiable certificates of deposits are not subject to Chapter 4 (commencing with Section 16500) and Chapter 4.5 (commencing with Section 16600).
(j)The portion of bank loans and obligations guaranteed by the United States Small Business Administration or the United States Farmers Home Administration.
(k)Bank loans and obligations guaranteed by the Export-Import Bank of the United States.
(l)Student loan notes insured under the Guaranteed Student Loan Program established pursuant to the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1001 et seq.) and eligible for resale to the Student Loan Marketing Association established pursuant to Section 133 of the Education Amendments of 1972, as amended (20 U.S.C. Sec. 1087-2).
(m)Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the International Finance Corporation, the Government Development Bank for Puerto Rico, the European Bank for Reconstruction and Development, or the European Investment Bank.
(n)Bonds, debentures, and notes issued by corporations organized and operating within the United States. Securities eligible for investment pursuant to this subdivision shall be rated in a rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(o)Negotiable Order of Withdrawal Accounts (NOW Accounts), invested in accordance with Chapter 4 (commencing with Section 16500).
(p)Shares of any money market mutual fund subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, provided that all of the following conditions are met:
(1)The money market mutual fund invests in securities and obligations described in one or more of the following: subdivision (a), (b), or (e) of this section or repurchase agreements or reverse repurchase agreements described in Section 16480.4.
(2)The financial institution issuing shares of the money market mutual fund has at least five years of experience investing in the types of securities and obligations being purchased by the state and has assets under management in the money market mutual fund in excess of ten billion dollars ($10,000,000,000).
(3)The money market mutual fund has attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations.
(4)The financial institution does not impose a commission on the purchase or sale of fund shares by the state.
(5)The state does not purchase more than 10 percent of a money market mutual funds total assets.
(6)The state does not invest more than 10 percent of the Pooled Money Investment Accounts funds in any single money market mutual fund meeting the requirements of this subdivision.
SEC. 15.Section 53667 of the Government Code is amended to read:53667.(a)Expenses incurred by the administrator in carrying out the duties and responsibilities assigned to the administrator by the sections specified in subdivision (a) of Section 53661, shall be borne by the Local Agency Deposit Security Fund, which is hereby created and continuously appropriated to the administrator for the administration of the sections specified in subdivision (a) of Section 53661. This fund shall consist of fines levied pursuant to Section 53661, fees collected pursuant to the sections specified in subdivision (a) of Section 53661, and assessments levied pursuant to this section.
(b)Each fiscal year the administrator shall levy an assessment on a pro rata basis on those depositories which at any time during the preceding fiscal year held local agency deposits. The total assessment levied on all of those depositories shall be in an amount which, when added to the amount of fines and fees that the administrator estimates will be collected during the fiscal year when the assessment is levied, is sufficient in the judgment of the administrator to meet the expenses of the administrator in administering the sections specified in subdivision (a) of Section 53661 and to provide a reasonable reserve for contingencies. The basis of the apportionment of the assessment among the depositories assessed shall be the proportion that the average amount of local agency deposits held by each of those depositories bears to the average total amount of local agency deposits held by all of those depositories as shown by the reports of depositories to the administrator for the preceding fiscal year, as required in subdivision (e) of Section 53661; provided, however, that the amount of the assessment levied on each of those depositories shall be not less than twenty-five dollars ($25).
(c)The administrator shall notify each depository by mail of the amount levied against it. The depository shall pay the amount levied within 20 days after such notice into the Local Agency Deposit Security Fund for the administration of the sections specified in subdivision (a) of Section 53661. If payment is not made to the administrator within such time, the administrator shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent. If a depository fails to pay the assessment or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository.
SEC. 5.SEC. 16.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)It is unlawful for any person to effect or attempt to effect a sale of a franchise in this state, except in transactions exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division, state unless that person is any of the following:
(a)(1)Identified in Item 2 of a franchise disclosure document submitted with an application or amended application filed with the commissioner pursuant to Part 2 (commencing with Section 31100) of this division.
(b)(2)Licensed by the Department of Real Estate as a real estate broker or real estate salesperson.
(c)(3)Licensed by the commissioner as a broker-dealer or agent pursuant to the Corporate Securities Law of 1968.
(d)(4)Registered as a franchise broker pursuant to Part 7 (commencing with Section 31520).
(b)This section does not apply to transactions exempted under Chapter 1 (commencing with Section 31100) of Part 2 of this division, unless the person effecting or attempting to effect the sale of a franchise in this state is a franchise broker.
SEC. 2.Section 31526 of the Corporations Code is amended to read:31526.(a)It is unlawful for a franchise broker to communicate with a prospective franchisee about investing in a franchise opportunity that is subject to registration pursuant to this division this law unless the franchise broker first provides to the prospective franchisee a copy of the completed Uniform Franchise Broker Disclosure Document.
(b)A franchise broker may provide the Uniform Franchise Broker Disclosure Document to a prospective franchisee through electronic means, subject to any requirements or conditions imposed by the commissioner.
SEC. 3.Division 15.5 (commencing with Section 32000) of the Financial Code is repealed.SEC. 4.Section 16430 of the Government Code is amended to read:16430.Eligible securities for the investment of surplus moneys shall be any of the following:
(a)Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
(b)Bonds or interest-bearing notes or obligations that are issued by or fully guaranteed as to principal and interest by a federal agency or a United States government-sponsored enterprise, as defined by the Omnibus Budget Reconciliation Act of 1990 (Sec. 13112, Public Law 101-508; 2 U.S.C. Sec. 622(8)).
(c)Bonds, notes, or other obligations of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
(d)(1)Bonds, notes, or other obligations of a local government of this state, including, but not limited to, any of the following:
(A)A county.
(B)A city.
(C)A city and county.
(D)A metropolitan water district.
(E)A water district.
(F)A water storage district.
(G)An irrigation district.
(H)A municipal utility district.
(I)A school district.
(2)Bonds, notes, or other obligations eligible for investment pursuant to this subdivision shall be within the top three ratings of rated in rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(e)Bonds, debentures, or other obligations of any of the following:
(1)Issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended (12 U.S.C. Sec. 2001 et seq.).
(2)Issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended (12 U.S.C. Sec. 2001 et seq.).
(3)The Issued by the Federal Home Loan Bank established under the Federal Home Loan Bank Act (12 U.S.C. Sec. 1421 et seq.).
(4)The Issued by the Federal National Mortgage Association established under the National Housing Act, as amended (12 U.S.C. Sec. 1701 et seq.).
(5)The Issued by the Federal Home Loan Mortgage Corporation.
(6)Issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act, as amended (16 U.S.C. Sec. 831 et seq.).
(7)Guaranteed by the Commodity Credit Corporation for the export of California agricultural products under the Commodity Credit Corporation Charter Act, as amended (15 U.S.C. Sec. 714 et seq.).
(f)Bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country that the International Monetary Fund lists as an advanced economy and for which the full faith and credit of that country has been pledged for the payment of principal and interest, if the securities are rated investment grade in a rating category of AA or its equivalent, or better, by a nationally recognized statistical rating organization. Securities eligible for investment pursuant to this subdivision shall satisfy all of the following:
(1)Be United States dollar denominated with a maximum maturity of five years or less, and eligible for purchase and sale within the United States.
(2)The combined par value of all of the investments authorized by this subdivision do not exceed 1 percent of the total par value of Pooled Money Investment Account assets at the time of purchase.
(3)The government of the foreign country issuing the securities submits to the jurisdiction of a federal or state court in the United States when disputes arise related to the investments.
(g)(1)Commercial paper of prime quality of the highest ranking or of the highest letter and number rating as defined by a nationally recognized statistical rating organization that rates these securities, if the commercial paper is issued by a federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company that is approved by the Pooled Money Investment Board as meeting the conditions specified in either subparagraph (A) or subparagraph (B):
(A)Both of the following conditions:
(i)Organized and operating within the United States.
(ii)Having total assets in excess of five hundred million dollars ($500,000,000).
(B)Both of the following conditions:
(i)Organized within the United States as a federally or state-chartered bank or a state-licensed branch of a foreign bank, special purpose corporation, trust, or limited liability company.
(ii)Having programwide credit enhancements including, but not limited to, overcollateralization, letters of credit, or surety bond.
(2)A purchase of eligible commercial paper shall not do any of the following:
(A)Exceed 270 397 days maturity.
(B)Represent more than 10 percent of the outstanding paper of an issuing federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company.
(C)Exceed 30 percent of the resources of an investment program.
(3)At the request of the Pooled Money Investment Board, an investment made pursuant to this subdivision shall be secured by the issuer by depositing with the Treasurer securities authorized by Section 53651 of a market value at least 10 percent in excess of the amount of the states investment.(h)Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, that are eligible for purchase by the Federal Reserve System.
(i)Negotiable certificates of deposits issued by a federally or state-chartered bank or savings and loan association, a state-licensed branch of a foreign bank, or a federally or state-chartered credit union. For the purposes of this section, negotiable certificates of deposits are not subject to Chapter 4 (commencing with Section 16500) and Chapter 4.5 (commencing with Section 16600).
(j)The portion of bank loans and obligations guaranteed by the United States Small Business Administration or the United States Farmers Home Administration.
(k)Bank loans and obligations guaranteed by the Export-Import Bank of the United States.
(l)Student loan notes insured under the Guaranteed Student Loan Program established pursuant to the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1001 et seq.) and eligible for resale to the Student Loan Marketing Association established pursuant to Section 133 of the Education Amendments of 1972, as amended (20 U.S.C. Sec. 1087-2).
(m)Obligations issued, assumed, or guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the International Finance Corporation, the Government Development Bank for Puerto Rico, the European Bank for Reconstruction and Development, or the European Investment Bank.
(n)Bonds, debentures, and notes issued by corporations organized and operating within the United States. Securities eligible for investment pursuant to this subdivision shall be within the top three ratings of rated in a rating category of A or its equivalent or better by a nationally recognized statistical rating organization.
(o)Negotiable Order of Withdrawal Accounts (NOW Accounts), invested in accordance with Chapter 4 (commencing with Section 16500).
(p)Shares of any money market mutual fund subject to registration by, and under the regulatory authority of, the United States Securities and Exchange Commission, provided that all of the following conditions are met:
(1)The money market mutual fund invests in securities and obligations described in one or more of the following: subdivision (a), (b), or (e) of this section or repurchase agreements or reverse repurchase agreements described in Section 16480.4.
(2)The financial institution issuing shares of the money market mutual fund has at least five years of experience investing in the types of securities and obligations being purchased by the state and has assets under management in the money market mutual fund in excess of ten billion dollars ($10,000,000,000).
(3)The money market mutual fund has attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations.
(4)The financial institution does not impose a commission on the purchase or sale of fund shares by the state.
(5)The state does not purchase more than 10 percent of a money market mutual funds total assets.
(6)The state does not invest more than 10 percent of the Pooled Money Investment Accounts funds in any single money market mutual fund meeting the requirements of this subdivision.
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
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Date
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Status
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|---|---|
| Sep 20, 2026 | Chaptered by Secretary of State - Chapter 410, Statutes of 2026. |
| Sep 20, 2026 | Approved by the Governor. |
| Sep 4, 2026 | Enrolled and presented to the Governor at 4 p.m. |
| Aug 27, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0.). |
| Aug 27, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0. Page 6693.). |
| Aug 27, 2026 | In Assembly. Concurrence in Senate amendments pending. |
| Aug 26, 2026 | Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0.). |
| Aug 24, 2026 | Read second time. Ordered to third reading. |
| Aug 20, 2026 | Read third time and amended. Ordered to second reading. |
| Aug 13, 2026 | Read second time. Ordered to third reading. |
| Aug 12, 2026 | Read third time and amended. Ordered to second reading. |
| Aug 10, 2026 | Ordered to third reading. |
| Aug 10, 2026 | From Consent Calendar. |
| Aug 4, 2026 | Read second time. Ordered to Consent Calendar. |
| Aug 3, 2026 | From committee: Be ordered to second reading file pursuant to Senate Rule 28.8 and ordered to Consent Calendar. |
| Jun 18, 2026 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 7. Noes 0.) (June 17). Re-referred to Com. on APPR. |
| Jun 9, 2026 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on B. & F.I. |
| Jun 3, 2026 | Referred to Com. on B. & F.I. |
| May 21, 2026 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 21, 2026 | Read third time. Passed. Ordered to the Senate. (Ayes 68. Noes 0.) |
| May 21, 2026 | Read third time. Passed. Ordered to the Senate. (Ayes 68. Noes 0. Page 5230.) |
| May 14, 2026 | Read second time. Ordered to Consent Calendar. |
| May 13, 2026 | From committee: Do pass. To Consent Calendar. (Ayes 15. Noes 0.) (May 13). |
| Apr 23, 2026 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 9. Noes 0.) (April 23). Re-referred to Com. on APPR. |
| Apr 20, 2026 | Re-referred to Com. on B. & F. |
| Apr 16, 2026 | From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & F. Read second time and amended. |
| Mar 23, 2026 | Referred to Com. on B. & F. |
| Mar 20, 2026 | From printer. May be heard in committee April 19. |
| Mar 19, 2026 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 27, 2026 | AB 2795 B. & F. Concurrence in Senate Amendments By VALENCIA | Assembly Floor |
Passed |
|
| Aug 26, 2026 | Assembly 3rd Reading AB2795 B. & F. (Valencia) By Grayson | Senate Floor |
Passed |
|
| Jun 17, 2026 | Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar | Senate Standing Committee on Banking and Financial Institutions |
Passed |
|
| May 21, 2026 | AB 2795 Banking and Finance Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 13, 2026 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 23, 2026 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Banking and Finance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Association Of Realtors | ** Against | |
| California State Treasurer | ** Support | |
| California State Treasurer, Fiona Ma | ** Support | |
| International Franchise Association | ** Support | |
| State Treasurer Fiona Ma | ** Support |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 2795
Author:(Committee on Banking and Finance)
As Amended Ver:August 20, 2026
Majority vote
SUMMARY
This is the omnibus Assembly Banking Committee bill. This bill makes corrections to the Franchise Law, allows the Department of Financial Protection and Innovation (DFPI) send annual assessment notices in a manner that is more efficient and cost effective, repeals outdate provisions of the Financial Code, and modernizes terms and requirements for State investments.
Senate Amendments
Removes amendments to section 31210 of the Corporations Code.
COMMENTS
This bill is the Assembly Committee on Banking and Finance's Omnibus Bill which addresses four areas:
- SAFE-BIDCO
First, it repeals dead law, The State Assistance Fund for Enterprise Act of 1989. This law authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation (SAFE-BIDCO) for the general purpose of enhancing the availability of financial assistance for small businesses in California. There has been no substantive legislation since 2004 affecting this law other than one non-substantive change in 2016. There has been no litigation resulting in a published court decision on Division 15.5. SAFE-BIDCO became insolvent by 2017 and it was seized by the DPFP. SAFE-BIDCO was subsequently liquidated and then dissolved in 2023. This bill will repeal Division 15.5.
- Update to PMIA Bond Rating Requirement Language
Second, it will modernize standards and clarification of eligible securities for the Pool Money Investment Accounts. The State Treasurer, through the Pooled Money Investment Account (PMIA), invests taxpayers' money to help manage the State's cashflow, as well as provide investment options for local governments through the Local Agency Investment Fund (LAIF). The Investment Division of the Treasurer's office manages the PMIA on behalf of the Treasurer. Current legislation specifies eligible securities that the PMIA can purchase, and the Investment Policy division sets management goals for the PMIA of safety, liquidity and yield. However, the Government Code regulating these requirements has been amended over time using inconsistent benchmarks and now outdated terms to describe ratings. This bill would instead require those local bonds, notes, or other obligations and corporate bonds, debentures, and notes to be rated in a rating category of "A" or its equivalent or better by such an organization to be eligible for investment. This bill will also require that the paper be of "prime" quality of the highest ranking or of the highest letter and number rating, as defined by a statistical rating organization, and not exceed 397 days maturity, and update from the current 270 days.
- National Multistate Licensing System (NMLS)
Third, the bill authorizes the DFPI to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice of fee or assessment to an electronic service address, as specified. For any person licensed or registered through the Nationwide Multistate Licensing System and Registry (NMLS) the bill would also authorize the commissioner to fulfill these notice requirements by electronic communication through the NMLS.
- Correction Regarding Franchise Broker Law
Finally, in 2024, SB 919 (Umberg) Chapter 518, Statutes of 2024 was enacted to require a franchise broker to register with the commissioner before engaging in certain activities as prescribed, particularly, it would make it unlawful for a franchise broker to offer or sell a franchise in this state unless the franchise broker is registered pursuant to these provisions. However, franchise brokers, to whom the measure was also meant to apply, are regulated in a different part of the Division. This amendment will make a correction to the section on exemptions to clarify the application to specified franchise brokers.
- Senate Amendments
Amendments taken in the Senate were made due to late opposition who raised concerns over ambiguity of language. Due to a lack of time for meaningful discussion, the section is tabled for further debate in the interim.
According to the Author
Arguments in Support
"Currently, Government Code Section 16430, which governs PMIA bond rating requirements, has been updated inconsistently over time and contains outdated technology for defining ratings. AB 2795 addresses this issue by amending Section 16430 to clarify bond rating requirements for municipal bonds…commercial paper, and corporate bonds, while also establishing uniform language for eligible federal agency securities.
Clarifying this section of the code is essential to ensure that rating requirements for eligible investments are clearly defined and consistently applied, reducing ambiguity and improving the efficiency of the State's investment practices."—California State Treasurer
Arguments in Opposition
None received. Last verified 8/26/2026.
FISCAL COMMENTS
The following comments are from the analysis of the Assembly Appropriations Committee.
- Potential minor cost savings to DFPI by allowing electronic notices instead of requiring mailed notices and eliminating the need to continuously update regulations to conform with each update of NMLS forms and instructions.
- Minor and absorbable costs to the State Treasurer's Office (STO) to update rating requirements and conditions for certain securities.
VOTES:
ASM BANKING AND FINANCE: 9-0-0
YES: Valencia, Chen, Dixon, Fong, Krell, Michelle Rodriguez, Blanca Rubio, Schiavo, Harabedian
ASM APPROPRIATIONS: 15-0-0
YES: Wicks, Hoover, Bauer-Kahan, Calderon, Caloza, Ellis, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa
ASSEMBLY FLOOR: 68-0-12
YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gallagher, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Irwin, Jackson, Johnson, Kalra, Krell, Lee, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Zbur, Rivas
ABS, ABST OR NV: Arambula, Chen, Gabriel, Garcia, Hoover, Lackey, Lowenthal, Ramos, Celeste Rodriguez, Schultz, Wicks, Wilson
UPDATED
VERSION: August 20, 2026
CONSULTANT: Desiree NguyenOrth / B. & F. / (916) 319-3081 FN: 0004327
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-4171 | AB 2795 |
THIRD READING
Bill No: AB 2795
Author: Committee on Banking and Finance
Amended: 8/20/26 in Senate
Vote: 21
SENATE BANKING & F.I. COMMITTEE: 7-0, 6/17/26
AYES: Grayson, Niello, Cervantes, Hurtado, Reyes, Richardson, Strickland
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 68-0, 5/21/26 (Consent) - See last page for vote
SUBJECT: Financial regulation
SOURCE: Author
DIGEST:
This bill provides various technical and clarifying changes related to the Franchise Investment Law, notice requirements under licensing or registration laws administered by the Department of Financial Protection and Innovation, and instruments eligible for investment by the State Treasurer, among other technical and clarifying changes.
Senate Floor Amendments of 8/12/26 delete a provision related to franchise brokers.
Senate Floor Amendments of 8/20/26 address potential chaptering conflict with AB 2028. The amendments are nonsubstantive.
ANALYSIS:
Existing law:
- Provides the Franchise Investment Law (FIL) that generally requires franchisors to register with the commissioner of the Department of Financial Protection and Innovation (DFPI) before offering and selling franchises in this state. (Division 5 of Title 4 of the Corporations Code, commencing with Section 31000 et seq.)
- Pursuant to the FIL, prohibits a person from effecting or attempting to effect a sale of a franchise in this state, unless that person satisfies a specified condition, with one being that the person is identified in Item 2 of a franchise disclosure document, as specified. (Corporations Code Section 31210)
- Requires licensees or registrants across multiple programs administered by DFPI to submit applications and other licensing forms through the Nationwide Multistate Licensing System. (See, e.g., Financial Code Sections §§2039, 28111, 90009, 100006.3)
- Requires a licensee subject to DFPI’s jurisdiction to maintain an electronic service address designated for receiving communications and documents sent by the department, as specified. (Financial Code Section §331.5)
- Authorizes DFPI, upon notice by mail, to levy various assessments related to the recovery of costs generated by programs administered by the department, including programs that cover broker-dealers; money transmitters; check sellers, bill payers, and proraters; savings associations; escrow agents; industrial loan companies; deferred deposit transaction providers; residential mortgage lenders, servicers, and mortgage loan originators; and administration of the Local Agency Deposit Security Program.
- Authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing access to financial assistance for small businesses. (Division 15.5 of the Financial Code, commencing with Section §32000)
- Provides categories of securities eligible for the investment of surplus moneys by the State Treasurer. For certain securities, restricts such investments to securities of specified ratings. (Government Code Section §16430)
This bill:
- Makes technical and clarifying changes to the provision regulating the groups of persons who may effect or attempt to effect a sale of a franchise.
- Provides that DFPI shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
- Requires registrants overseen by DFPI to maintain an electronic service address.
- Authorizes DFPI to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice to an electronic service address or by sending such notice through Nationwide Multistate Licensing System (NMLS) for persons licensed or registered through that system. Removes requirements in various statutes that such notices be provided by mail.
- Repeals the division in the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation.
- Clarifies that specified categories of municipal bonds and corporate bonds that are eligible securities for the investment of surplus funds must have a rating of “A” or its equivalent, or better, by a nationally recognized statistical rating organization.
- Clarifies the rating requirement for commercial paper that are eligible securities for the investment of surplus funds to include only commercial paper with the highest ranking or the highest letter and number rating and extends the maximum maturity of commercial paper from 270 days to 397 days. Deletes the authority of the Pooled Money Investment Board to request that an issuer of commercial paper post collateral of at least 10% more than the amount of the state’s investment in the issuer’s commercial paper.
Comments
Purpose. AB 2795 is a code clean-up bill authored by the Assembly Banking and Finance Committee. The bill contains corrections in code sections affecting the Department of Financial Protection and Innovation, the State Treasurer’s Office, and obsolete portions of the Financial Code.
Background. This bill proposes a variety of technical and clarifying changes that are intended to be noncontroversial. All but one category of proposed changes affect laws administered by DFPI, with the one outlier being a provision of law that governs the types of securities in which the State Treasurer can invest surplus funds of the state.
Nationwide Multistate Licensing System (NMLS) and “by mail” notices. This bill proposes efficiencies related to communications between DFPI and its licensees. NMLS serves as a repository of information used by many licensees within the oversight of DFPI for the submittal and review of applications, application renewal, background checks, education, and testing. Existing law poses two barriers to DFPI using NMLS for efficient ways to administer licensing laws. First, a variety of licensing and registration laws require DFPI to send specified notices “by mail” and does not clarify that electronic forms of communication, like email or messaging through NMLS, are compliant with this requirement. Secondly, existing law requires that DFPI update regulations each time a new NMLS form is adopted as part of a licensing program. This bill removes those barriers by (1) removing “by mail” across a variety of statutes related to notifications and requiring that each licensee or registrant provide an electronic service address and (2) proposing a plenary directive that DFPI shall require the use of NMLS forms and instructions whenever a statute requires licensure or registration through NMLS.
SAFE-BIDCO. This bill removes a division of law from the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation, known as SAFE-BIDCO. SAFE-BIDCO was established as a nonprofit lender to aid small businesses, funded by an appropriation and loan from the state in 1981. After spending more than it earned for a decade, the company fell into a weak financial position and failed to convince the Legislature to appropriate additional funding. The predecessor agency to the DFPI, the Department of Business Oversight, seized SAFE-BIDCO in 2017 after it became insolvent. There is no apparent reason to maintain statutory authority for the creation of this entity, and this bill proposes to delete such provisions from the code.
Securities eligible for investment by the State Treasurer. Existing law specifies categories of securities that are eligible for investment by the State Treasurer, using surplus funds owned by the State that are not yet required to be available to pay for authorized expenditures. The list of eligible securities contains relatively low-risk investments, reflecting the general policy of prudent management of public funds that prioritizes safety and liquidity over yield (i.e., expected rate of return). This bill clarifies certain areas of ambiguity related to bond ratings thresholds and modernizes provisions related to commercial paper that is eligible for investment.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 8/20/26)
State Treasurer Fiona Ma
OPPOSITION: (Verified 8/20/26)
None received
ARGUMENTS IN SUPPORT: State Treasurer Fiona Ma writes in support of the provisions of this bill that clarify the bond rating requirements for investments that are eligible to be purchased and held in the Pooled Money Investment Account.
ASSEMBLY FLOOR: 68-0, 5/21/26
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gallagher, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Irwin, Jackson, Johnson, Kalra, Krell, Lee, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Zbur, Rivas
NO VOTE RECORDED: Arambula, Chen, Gabriel, Garcia, Hoover, Lackey, Lowenthal, Ramos, Celeste Rodriguez, Schultz, Wicks, Wilson
Prepared by: Michael Burdick / B. & F.I. /
8/24/26 13:49:14
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-4171 | AB 2795 |
THIRD READING
Bill No: AB 2795
Author: Committee on Banking and Finance
Amended: 8/12/26 in Senate
Vote: 21
SENATE BANKING & F.I. COMMITTEE: 7-0, 6/17/26
AYES: Grayson, Niello, Cervantes, Hurtado, Reyes, Richardson, Strickland
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 68-0, 5/21/26 (Consent) - See last page for vote
SUBJECT: Financial regulation
SOURCE: Author
DIGEST:
This bill provides various technical and clarifying changes related to the Franchise Investment Law, notice requirements under licensing or registration laws administered by the Department of Financial Protection and Innovation, and instruments eligible for investment by the State Treasurer, among other technical and clarifying changes.
Senate Floor Amendments of 8/12/26 delete a provision related to franchise brokers.
ANALYSIS:
Existing law:
- Provides the Franchise Investment Law (FIL) that generally requires franchisors to register with the commissioner of the Department of Financial Protection and Innovation (DFPI) before offering and selling franchises in this state. (Division 5 of Title 4 of the Corporations Code, commencing with Section 31000 et seq.)
- Pursuant to the FIL, prohibits a person from effecting or attempting to effect a sale of a franchise in this state, unless that person satisfies a specified condition, with one being that the person is identified in Item 2 of a franchise disclosure document, as specified. (Corporations Code Section 31210)
- Requires licensees or registrants across multiple programs administered by DFPI to submit applications and other licensing forms through the Nationwide Multistate Licensing System. (See, e.g., Financial Code Sections §§2039, 28111, 90009, 100006.3)
- Requires a licensee subject to DFPI’s jurisdiction to maintain an electronic service address designated for receiving communications and documents sent by the department, as specified. (Financial Code Section §331.5)
- Authorizes DFPI, upon notice by mail, to levy various assessments related to the recovery of costs generated by programs administered by the department, including programs that cover broker-dealers; money transmitters; check sellers, bill payers, and proraters; savings associations; escrow agents; industrial loan companies; deferred deposit transaction providers; residential mortgage lenders, servicers, and mortgage loan originators; and administration of the Local Agency Deposit Security Program.
- Authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing access to financial assistance for small businesses. (Division 15.5 of the Financial Code, commencing with Section §32000)
- Provides categories of securities eligible for the investment of surplus moneys by the State Treasurer. For certain securities, restricts such investments to securities of specified ratings. (Government Code Section §16430)
This bill:
- Makes technical and clarifying changes to the provision regulating the groups of persons who may effect or attempt to effect a sale of a franchise.
- Provides that DFPI shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
- Requires registrants overseen by DFPI to maintain an electronic service address.
- Authorizes DFPI to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice to an electronic service address or by sending such notice through Nationwide Multistate Licensing System (NMLS) for persons licensed or registered through that system. Removes requirements in various statutes that such notices be provided by mail.
- Repeals the division in the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation.
- Clarifies that specified categories of municipal bonds and corporate bonds that are eligible securities for the investment of surplus funds must have a rating of “A” or its equivalent, or better, by a nationally recognized statistical rating organization.
- Clarifies the rating requirement for commercial paper that are eligible securities for the investment of surplus funds to include only commercial paper with the highest ranking or the highest letter and number rating and extends the maximum maturity of commercial paper from 270 days to 397 days. Deletes the authority of the Pooled Money Investment Board to request that an issuer of commercial paper post collateral of at least 10% more than the amount of the state’s investment in the issuer’s commercial paper.
Comments
Purpose. AB 2795 is a code clean-up bill authored by the Assembly Banking and Finance Committee. The bill contains corrections in code sections affecting the Department of Financial Protection and Innovation, the State Treasurer’s Office, and obsolete portions of the Financial Code.
Background. This bill proposes a variety of technical and clarifying changes that are intended to be noncontroversial. All but one category of proposed changes affect laws administered by DFPI, with the one outlier being a provision of law that governs the types of securities in which the State Treasurer can invest surplus funds of the state.
Nationwide Multistate Licensing System (NMLS) and “by mail” notices. This bill proposes efficiencies related to communications between DFPI and its licensees. NMLS serves as a repository of information used by many licensees within the oversight of DFPI for the submittal and review of applications, application renewal, background checks, education, and testing. Existing law poses two barriers to DFPI using NMLS for efficient ways to administer licensing laws. First, a variety of licensing and registration laws require DFPI to send specified notices “by mail” and does not clarify that electronic forms of communication, like email or messaging through NMLS, are compliant with this requirement. Secondly, existing law requires that DFPI update regulations each time a new NMLS form is adopted as part of a licensing program. This bill removes those barriers by (1) removing “by mail” across a variety of statutes related to notifications and requiring that each licensee or registrant provide an electronic service address and (2) proposing a plenary directive that DFPI shall require the use of NMLS forms and instructions whenever a statute requires licensure or registration through NMLS.
SAFE-BIDCO. This bill removes a division of law from the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation, known as SAFE-BIDCO. SAFE-BIDCO was established as a nonprofit lender to aid small businesses, funded by an appropriation and loan from the state in 1981. After spending more than it earned for a decade, the company fell into a weak financial position and failed to convince the Legislature to appropriate additional funding. The predecessor agency to the DFPI, the Department of Business Oversight, seized SAFE-BIDCO in 2017 after it became insolvent. There is no apparent reason to maintain statutory authority for the creation of this entity, and this bill proposes to delete such provisions from the code.
Securities eligible for investment by the State Treasurer. Existing law specifies categories of securities that are eligible for investment by the State Treasurer, using surplus funds owned by the State that are not yet required to be available to pay for authorized expenditures. The list of eligible securities contains relatively low-risk investments, reflecting the general policy of prudent management of public funds that prioritizes safety and liquidity over yield (i.e., expected rate of return). This bill clarifies certain areas of ambiguity related to bond ratings thresholds and modernizes provisions related to commercial paper that is eligible for investment.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 8/12/26)
State Treasurer Fiona Ma
OPPOSITION: (Verified 8/12/26)
None received
ARGUMENTS IN SUPPORT: State Treasurer Fiona Ma writes in support of the provisions of this bill that clarify the bond rating requirements for investments that are eligible to be purchased and held in the Pooled Money Investment Account.
ASSEMBLY FLOOR: 68-0, 5/21/26
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gallagher, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Irwin, Jackson, Johnson, Kalra, Krell, Lee, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Zbur, Rivas
NO VOTE RECORDED: Arambula, Chen, Gabriel, Garcia, Hoover, Lackey, Lowenthal, Ramos, Celeste Rodriguez, Schultz, Wicks, Wilson
Prepared by: Michael Burdick / B. & F.I. /
8/17/26 9:53:49
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-4171 | AB 2795 |
THIRD READING
Bill No: AB 2795
Author: Committee on Banking and Finance
Amended: 6/9/26 in Senate
Vote: 21
SENATE BANKING & F.I. COMMITTEE: 7-0, 6/17/26
AYES: Grayson, Niello, Cervantes, Hurtado, Reyes, Richardson, Strickland
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 68-0, 5/21/26 (Consent) - See last page for vote
SUBJECT: Financial regulation
SOURCE: Author
DIGEST:
This bill provides various technical and clarifying changes related to the Franchise Investment Law, notice requirements under licensing or registration laws administered by the Department of Financial Protection and Innovation, and instruments eligible for investment by the State Treasurer, among other technical and clarifying changes.
ANALYSIS:
Existing law:
- Provides the Franchise Investment Law (FIL) that generally requires franchisors to register with the commissioner of the Department of Financial Protection and Innovation (DFPI) before offering and selling franchises in this state. (Division 5 of Title 4 of the Corporations Code, commencing with Section 31000 et seq.)
- Pursuant to the FIL, prohibits a person from effecting or attempting to effect a sale of a franchise in this state, unless that person satisfies a specified condition, with one being that the person is identified in Item 2 of a franchise disclosure document, as specified. (Corporations Code Section 31210)
- Requires licensees or registrants across multiple programs administered by DFPI to submit applications and other licensing forms through the Nationwide Multistate Licensing System. (See, e.g., Financial Code Sections 2039, 28111, 90009, 100006.3)
- Requires a licensee subject to DFPI’s jurisdiction to maintain an electronic service address designated for receiving communications and documents sent by the department, as specified. (Financial Code Section 331.5)
- Authorizes DFPI, upon notice by mail, to levy various assessments related to the recovery of costs generated by programs administered by the department, including programs that cover broker-dealers; money transmitters; check sellers, bill payers, and proraters; savings associations; escrow agents; industrial loan companies; deferred deposit transaction providers; residential mortgage lenders, servicers, and mortgage loan originators; and administration of the Local Agency Deposit Security Program.
- Authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing access to financial assistance for small businesses. (Division 15.5 of the Financial Code, commencing with Section 32000)
- Provides categories of securities eligible for the investment of surplus moneys by the State Treasurer. For certain securities, restricts such investments to securities of specified ratings. (Government Code Section 16430)
This bill:
- Makes technical and clarifying changes to the provision regulating the groups of persons who may effect or attempt to effect a sale of a franchise.
- Provides that DFPI shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
- Requires registrants overseen by DFPI to maintain an electronic service address.
- Authorizes DFPI to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice to an electronic service address or by sending such notice through NMLS for persons licensed or registered through that system. Removes requirements in various statutes that such notices be provided by mail.
- Repeals the division in the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation.
- Clarifies that specified categories of municipal bonds and corporate bonds that are eligible securities for the investment of surplus funds must have a rating of “A” or its equivalent, or better, by a nationally recognized statistical rating organization.
- Clarifies the rating requirement for commercial paper that are eligible securities for the investment of surplus funds to include only commercial paper with the highest ranking or the highest letter and number rating and extends the maximum maturity of commercial paper from 270 days to 397 days. Deletes the authority of the Pooled Money Investment Board to request that an issuer of commercial paper post collateral of at least 10% more than the amount of the state’s investment in the issuer’s commercial paper.
Comments
Purpose. This bill is a code clean-up bill authored by the Assembly Banking and Finance Committee. The bill contains corrections in code sections affecting the Department of Financial Protection and Innovation, the State Treasurer’s Office, and obsolete portions of the Financial Code.
Background. This bill proposes a variety of technical and clarifying changes that are intended to be noncontroversial. All but one category of proposed changes affect laws administered by the Department of Financial Protection and Innovation (DFPI), with the one outlier being a provision of law that governs the types of securities in which the State Treasurer can invest surplus funds of the state.
Franchises. This bill clarifies the intended scope of a recently enacted law regulating franchise brokers. In 2024 SB 919 (Umberg, Chapter 518, Statutes of 2024) enacted protections for franchisors and franchisees who use third-party franchise brokers when entering into franchise agreements. The law requires franchise brokers to register with DFPI and to provide specified disclosures to prospective franchisees. This bill clarifies that a franchise broker must be registered before effecting or attempting to affect a sale of a franchise, without regard to exemptions that may apply to the franchisor or the underlying franchise sale.
The only opposition to this bill is from California Association of Realtors (CAR) which argues that their members should not be required to register for franchise brokering activities – a requirement to which all other categories of persons would be subject under this bill. CAR claims that its members are already subject to oversight by the Department of Real Estate (DRE), but this argument does not apply to the franchise broker activities that existing law seeks to regulate. If, for example, a licensed lender subject to DFPI oversight engages in franchise brokering activities, that lender would still need to register as a franchise broker because franchise brokering is not covered by the lender’s lending license. The same truth applies to licensed activities covered by DRE. The requirement to register as a franchise broker is not duplicative as the law seeks to regulate different activities, and franchise brokering is not an activity overseen by DRE.
Nationwide Multistate Licensing System (NMLS) and “by mail” notices. This bill proposes efficiencies related to communications between DFPI and its licensees. NMLS serves as a repository of information used by many licensees within the oversight of DFPI for the submittal and review of applications, application renewal, background checks, education, and testing. Existing law poses two barriers to DFPI using NMLS for efficient ways to administer licensing laws. First, a variety of licensing and registration laws require DFPI to send specified notices “by mail” and does not clarify that electronic forms of communication, like email or messaging through NMLS, are compliant with this requirement. Secondly, existing law requires that DFPI update regulations each time a new NMLS form is adopted as part of a licensing program. This bill removes those barriers by (1) removing “by mail” across a variety of statutes related to notifications and requiring that each licensee or registrant provide an electronic service address and (2) proposing a plenary directive that DFPI shall require the use of NMLS forms and instructions whenever a statute requires licensure or registration through NMLS.
SAFE-BIDCO. This bill removes a division of law from the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation, known as SAFE-BIDCO. SAFE-BIDCO was established as a nonprofit lender to aid small businesses, funded by an appropriation and loan from the state in 1981. After spending more than it earned for a decade, the company fell into a weak financial position and failed to convince the Legislature to appropriate additional funding. The predecessor agency to the DFPI, the Department of Business Oversight, seized SAFE-BIDCO in 2017 after it became insolvent. There is no apparent reason to maintain statutory authority for the creation of this entity, and this bill proposes to delete such provisions from the code.
Securities eligible for investment by the State Treasurer. Existing law specifies categories of securities that are eligible for investment by the State Treasurer, using surplus funds owned by the State that are not yet required to be available to pay for authorized expenditures. The list of eligible securities contains relatively low-risk investments, reflecting the general policy of prudent management of public funds that prioritizes safety and liquidity over yield (i.e., expected rate of return). This bill clarifies certain areas of ambiguity related to bond ratings thresholds and modernizes provisions related to commercial paper that is eligible for investment.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
SUPPORT: (Verified 8/3/26)
International Franchise Association
State Treasurer Fiona Ma
OPPOSITION: (Verified 8/3/26)
California Association of Realtors
ARGUMENTS IN OPPOSITION: California Association of Realtors writes in opposition:
Current law expressly authorizes licensed real estate brokers and salespersons to affect or attempt to affect the sale of a franchise. However, as drafted, subdivision (b) of proposed Section 31210 would require any person acting as a franchise broker to register under the bill's new registration requirements, notwithstanding the existing exemption for DRE licensees. As a result, licensed real estate professionals who are already subject to comprehensive education, licensure, supervision, and enforcement by the Department of Real Estate would be required to obtain an additional registration to perform activities they are already authorized to conduct under existing law.
DRE licensees are already subject to extensive oversight under the Real Estate Law, including licensing standards, disciplinary authority, and continuing education requirements. Requiring these licensees to obtain a separate franchise broker registration would create redundant regulation without a corresponding public benefit.
ASSEMBLY FLOOR: 68-0, 5/21/26
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gallagher, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Irwin, Jackson, Johnson, Kalra, Krell, Lee, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Zbur, Rivas
NO VOTE RECORDED: Arambula, Chen, Gabriel, Garcia, Hoover, Lackey, Lowenthal, Ramos, Celeste Rodriguez, Schultz, Wicks, Wilson
Prepared by: Michael Burdick / B. & F.I. / 916-651-4102
8/11/26 9:12:55
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-4171 | AB 2795 |
CONSENT
Bill No: AB 2795
Author: Committee on Banking and Finance
Amended: 6/9/26 in Senate
Vote: 21
SENATE BANKING & F.I. COMMITTEE: 7-0, 6/17/26
AYES: Grayson, Niello, Cervantes, Hurtado, Reyes, Richardson, Strickland
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 68-0, 5/21/26 (Consent) - See last page for vote
SUBJECT: Financial regulation
SOURCE: Author
DIGEST:
This bill provides various technical and clarifying changes related to the Franchise Investment Law, notice requirements under licensing or registration laws administered by the Department of Financial Protection and Innovation, and instruments eligible for investment by the State Treasurer, among other technical and clarifying changes.
ANALYSIS:
Existing law:
- Provides the Franchise Investment Law (FIL) that generally requires franchisors to register with the commissioner of the Department of Financial Protection and Innovation (DFPI) before offering and selling franchises in this state. (Division 5 of Title 4 of the Corporations Code, commencing with Section 31000 et seq.)
- Pursuant to the FIL, prohibits a person from effecting or attempting to effect a sale of a franchise in this state, unless that person satisfies a specified condition, with one being that the person is identified in Item 2 of a franchise disclosure document, as specified. (Corporations Code Section 31210)
- Requires licensees or registrants across multiple programs administered by DFPI to submit applications and other licensing forms through the Nationwide Multistate Licensing System. (See, e.g., Financial Code Sections 2039, 28111, 90009, 100006.3)
- Requires a licensee subject to DFPI’s jurisdiction to maintain an electronic service address designated for receiving communications and documents sent by the department, as specified. (Financial Code Section 331.5)
- Authorizes DFPI, upon notice by mail, to levy various assessments related to the recovery of costs generated by programs administered by the department, including programs that cover broker-dealers; money transmitters; check sellers, bill payers, and proraters; savings associations; escrow agents; industrial loan companies; deferred deposit transaction providers; residential mortgage lenders, servicers, and mortgage loan originators; and administration of the Local Agency Deposit Security Program.
- Authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing access to financial assistance for small businesses. (Division 15.5 of the Financial Code, commencing with Section 32000)
- Provides categories of securities eligible for the investment of surplus moneys by the State Treasurer. For certain securities, restricts such investments to securities of specified ratings. (Government Code Section 16430)
This bill:
- Makes technical and clarifying changes to the provision regulating the groups of persons who may effect or attempt to effect a sale of a franchise.
- Provides that DFPI shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
- Requires registrants overseen by DFPI to maintain an electronic service address.
- Authorizes DFPI to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice to an electronic service address or by sending such notice through NMLS for persons licensed or registered through that system. Removes requirements in various statutes that such notices be provided by mail.
- Repeals the division in the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation.
- Clarifies that specified categories of municipal bonds and corporate bonds that are eligible securities for the investment of surplus funds must have a rating of “A” or its equivalent, or better, by a nationally recognized statistical rating organization.
- Clarifies the rating requirement for commercial paper that are eligible securities for the investment of surplus funds to include only commercial paper with the highest ranking or the highest letter and number rating and extends the maximum maturity of commercial paper from 270 days to 397 days. Deletes the authority of the Pooled Money Investment Board to request that an issuer of commercial paper post collateral of at least 10% more than the amount of the state’s investment in the issuer’s commercial paper.
Comments
Purpose. This bill is a code clean-up bill authored by the Assembly Banking and Finance Committee. The bill contains corrections in code sections affecting the Department of Financial Protection and Innovation, the State Treasurer’s Office, and obsolete portions of the Financial Code.
Background. This bill proposes a variety of technical and clarifying changes that are intended to be noncontroversial. All but one category of proposed changes affect laws administered by the Department of Financial Protection and Innovation (DFPI), with the one outlier being a provision of law that governs the types of securities in which the State Treasurer can invest surplus funds of the state.
Franchises. This bill clarifies the intended scope of a recently enacted law regulating franchise brokers. In 2024 SB 919 (Umberg, Chapter 518, Statutes of 2024) enacted protections for franchisors and franchisees who use third-party franchise brokers when entering into franchise agreements. The law requires franchise brokers to register with DFPI and to provide specified disclosures to prospective franchisees. This bill clarifies that a franchise broker must be registered before effecting or attempting to affect a sale of a franchise, without regard to exemptions that may apply to the franchisor or the underlying franchise sale.
The only opposition to this bill is from California Association of Realtors (CAR) which argues that their members should not be required to register for franchise brokering activities – a requirement to which all other categories of persons would be subject under this bill. CAR claims that its members are already subject to oversight by the Department of Real Estate (DRE), but this argument does not apply to the franchise broker activities that existing law seeks to regulate. If, for example, a licensed lender subject to DFPI oversight engages in franchise brokering activities, that lender would still need to register as a franchise broker because franchise brokering is not covered by the lender’s lending license. The same truth applies to licensed activities covered by DRE. The requirement to register as a franchise broker is not duplicative as the law seeks to regulate different activities, and franchise brokering is not an activity overseen by DRE.
Nationwide Multistate Licensing System (NMLS) and “by mail” notices. This bill proposes efficiencies related to communications between DFPI and its licensees. NMLS serves as a repository of information used by many licensees within the oversight of DFPI for the submittal and review of applications, application renewal, background checks, education, and testing. Existing law poses two barriers to DFPI using NMLS for efficient ways to administer licensing laws. First, a variety of licensing and registration laws require DFPI to send specified notices “by mail” and does not clarify that electronic forms of communication, like email or messaging through NMLS, are compliant with this requirement. Secondly, existing law requires that DFPI update regulations each time a new NMLS form is adopted as part of a licensing program. This bill removes those barriers by (1) removing “by mail” across a variety of statutes related to notifications and requiring that each licensee or registrant provide an electronic service address and (2) proposing a plenary directive that DFPI shall require the use of NMLS forms and instructions whenever a statute requires licensure or registration through NMLS.
SAFE-BIDCO. This bill removes a division of law from the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation, known as SAFE-BIDCO. SAFE-BIDCO was established as a nonprofit lender to aid small businesses, funded by an appropriation and loan from the state in 1981. After spending more than it earned for a decade, the company fell into a weak financial position and failed to convince the Legislature to appropriate additional funding. The predecessor agency to the DFPI, the Department of Business Oversight, seized SAFE-BIDCO in 2017 after it became insolvent. There is no apparent reason to maintain statutory authority for the creation of this entity, and this bill proposes to delete such provisions from the code.
Securities eligible for investment by the State Treasurer. Existing law specifies categories of securities that are eligible for investment by the State Treasurer, using surplus funds owned by the State that are not yet required to be available to pay for authorized expenditures. The list of eligible securities contains relatively low-risk investments, reflecting the general policy of prudent management of public funds that prioritizes safety and liquidity over yield (i.e., expected rate of return). This bill clarifies certain areas of ambiguity related to bond ratings thresholds and modernizes provisions related to commercial paper that is eligible for investment.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
SUPPORT: (Verified 8/3/26)
International Franchise Association
State Treasurer Fiona Ma
OPPOSITION: (Verified 8/3/26)
California Association of Realtors
ARGUMENTS IN OPPOSITION: California Association of Realtors writes in opposition:
Current law expressly authorizes licensed real estate brokers and salespersons to affect or attempt to affect the sale of a franchise. However, as drafted, subdivision (b) of proposed Section 31210 would require any person acting as a franchise broker to register under the bill's new registration requirements, notwithstanding the existing exemption for DRE licensees. As a result, licensed real estate professionals who are already subject to comprehensive education, licensure, supervision, and enforcement by the Department of Real Estate would be required to obtain an additional registration to perform activities they are already authorized to conduct under existing law.
DRE licensees are already subject to extensive oversight under the Real Estate Law, including licensing standards, disciplinary authority, and continuing education requirements. Requiring these licensees to obtain a separate franchise broker registration would create redundant regulation without a corresponding public benefit.
ASSEMBLY FLOOR: 68-0, 5/21/26
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gallagher, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Irwin, Jackson, Johnson, Kalra, Krell, Lee, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Zbur, Rivas
NO VOTE RECORDED: Arambula, Chen, Gabriel, Garcia, Hoover, Lackey, Lowenthal, Ramos, Celeste Rodriguez, Schultz, Wicks, Wilson
Prepared by: Michael Burdick / B. & F.I. / 916-651-4102
8/5/26 15:13:02
**** END ****
SENATE COMMITTEE ON
BANKING AND FINANCIAL INSTITUTIONS
Senator Timothy Grayson, Chair
2025 - 2026 Regular
Bill No: AB 2795 Hearing Date: June 17, 2026
Author: | Committee on Banking and Finance | ||
Version: | April 16, 2026 Amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Michael Burdick | ||
Subject: Financial regulation
SUMMARY
This bill provides various technical and clarifying changes related to the Franchise Investment Law, notice requirements under licensing or registration laws administered by the Department of Financial Protection and Innovation, and instruments eligible for investment by the State Treasurer, among other technical and clarifying changes.
EXISTING LAW
- Provides the Franchise Investment Law (FIL) that generally requires franchisors to register with the commissioner of the Department of Financial Protection and Innovation (DFPI) before offering and selling franchises in this state. (Division 5 of Title 4 of the Corporations Code, commencing with Section 31000 et seq.)
- Pursuant to the FIL, prohibits a person from effecting or attempting to effect a sale of a franchise in this state, unless that person satisfies a specified condition, with one being that the person is identified in Item 2 of a franchise disclosure document, as specified. (Corporations Code Section 31210)
- Requires licensees or registrants across multiple programs administered by DFPI to submit applications and other licensing forms through the Nationwide Multistate Licensing System. (See, e.g., Financial Code Sections 2039, 28111, 90009, 100006.3)
- Requires a licensee subject to DFPI’s jurisdiction to maintain an electronic service address designated for receiving communications and documents sent by the department, as specified. (Financial Code Section 331.5)
- Authorizes DFPI, upon notice by mail, to levy various assessments related to the recovery of costs generated by programs administered by the department, including programs that cover broker-dealers; money transmitters; check sellers, bill payers, and proraters; savings associations; escrow agents; industrial loan companies; deferred deposit transaction providers; residential mortgage lenders, servicers, and mortgage loan originators; and administration of the Local Agency Deposit Security Program.
- Authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation for the general purpose of enhancing access to financial assistance for small businesses. (Division 15.5 of the Financial Code, commencing with Section 32000)
- Provides categories of securities eligible for the investment of surplus moneys by the State Treasurer. For certain securities, restricts such investments to securities of specified ratings. (Government Code Section 16430)
THIS BILL
- Makes technical and clarifying changes to the provision regulating the groups of persons who may effect or attempt to effect a sale of a franchise.
- Provides that DFPI shall require the use of the Nationwide Multistate Licensing System and Registry forms and instructions whenever a statute or regulation requires licensure or registration through that system.
- Requires registrants overseen by DFPI to maintain an electronic service address.
- Authorizes DFPI to fulfill any notice requirement under any law or regulation related to the levy of a fee or assessment against any licensee or registrant by sending the notice to an electronic service address or by sending such notice through NMLS for persons licensed or registered through that system. Removes requirements in various statutes that such notices be provided by mail.
- Repeals the division in the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation.
- Clarifies that specified categories of municipal bonds and corporate bonds that are eligible securities for the investment of surplus funds must have a rating of “A” or its equivalent, or better, by a nationally recognized statistical rating organization.
- Clarifies the rating requirement for commercial paper that are eligible securities for the investment of surplus funds to include only commercial paper with the highest ranking or the highest letter and number rating and extends the maximum maturity of commercial paper from 270 days to 397 days. Deletes the authority of the Pooled Money Investment Board to request that an issuer of commercial paper post collateral of at least 10% more than the amount of the state’s investment in the issuer’s commercial paper.
COMMENTS
- Purpose
AB 2795 is a code clean-up bill authored by the Assembly Banking and Finance Committee. The bill contains corrections in code sections affecting the Department of Financial Protection and Innovation, the State Treasurer’s Office, and obsolete portions of the Financial Code.
- Background
This bill proposes a variety of technical and clarifying changes that are intended to be noncontroversial. All but one category of proposed changes affect laws administered by the Department of Financial Protection and Innovation (DFPI), with the one outlier being a provision of law that governs the types of securities in which the State Treasurer can invest surplus funds of the state.
Franchises
This bill clarifies the intended scope of a recently enacted law regulating franchise brokers. In 2024 SB 919 (Umberg, Chapter 518, Statutes of 2024) enacted protections for franchisors and franchisees who use third-party franchise brokers when entering into franchise agreements. The law requires franchise brokers to register with DFPI and to provide specified disclosures to prospective franchisees. This bill clarifies that a franchise broker must be registered before effecting or attempting to affect a sale of a franchise, without regard to exemptions that may apply to the franchisor or the underlying franchise sale.
Nationwide Multistate Licensing System (NMLS) and “by mail” notices
This bill proposes efficiencies related to communications between DFPI and its licensees. NMLS serves as a repository of information used by many licensees within the oversight of DFPI for the submittal and review of applications, application renewal, background checks, education, and testing. Existing law poses two barriers to DFPI using NMLS for efficient ways to administer licensing laws. First, a variety of licensing and registration laws require DFPI to send specified notices “by mail” and does not clarify that electronic forms of communication, like email or messaging through NMLS, are compliant with this requirement. Secondly, existing law requires that DFPI update regulations each time a new NMLS form is adopted as part of a licensing program. This bill removes those barriers by (1) removing “by mail” across a variety of statutes related to notifications and requiring that each licensee or registrant provide an electronic service address and (2) proposing a plenary directive that DFPI shall require the use of NMLS forms and instructions whenever a statute requires licensure or registration through NMLS.
SAFE-BIDCO
This bill removes a division of law from the Financial Code that authorizes the creation of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation, known as SAFE-BIDCO. SAFE-BIDCO was established as a nonprofit lender to aid small businesses, funded by an appropriation and loan from the state in 1981. After spending more than it earned for a decade, the company fell into a weak financial position and failed to convince the Legislature to appropriate additional funding. The predecessor agency to the DFPI, the Department of Business Oversight, seized SAFE-BIDCO in 2017 after it became insolvent. There is no apparent reason to maintain statutory authority for the creation of this entity, and this bill proposes to delete such provisions from the code.
Securities eligible for investment by the State Treasurer
Existing law specifies categories of securities that are eligible for investment by the State Treasurer, using surplus funds owned by the State that are not yet required to be available to pay for authorized expenditures. The list of eligible securities contains relatively low-risk investments, reflecting the general policy of prudent management of public funds that prioritizes safety and liquidity over yield (i.e., expected rate of return). This bill clarifies certain areas of ambiguity related to bond ratings thresholds and modernizes provisions related to commercial paper that is eligible for investment.
LIST OF REGISTERED SUPPORT/OPPOSITION
Support
California State Treasurer, Fiona Ma
International Franchise Association
Opposition
None received
-- END --
Date of Hearing: May 13, 2026
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
ABPCA Bill Id:AB 2795
Author:(Committee on Banking and Finance) – As Amended Ver:April 16, 2026
Policy Committee: | Banking and Finance | Vote: | 9 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill makes changes to various financial regulation laws.
Specifically, this bill:
- Strikes the requirement that the Department of Financial Protection and Innovation (DFPI) send various notices and information via mail and authorizes DFPI to fulfill a notice requirement related to the levy of a fee or assessment against a licensee or registrant via an electronic service address or via the Nationwide Multistate Licensing System (NMLS) if the person is licensed or registered through NMLS.
- Requires DFPI to mandate the use of NMLS forms and instructions whenever a statute or regulation requires licensure or registration through NMLS unless otherwise provided by rule.
- Strikes the reference to “Item 2” of a franchise disclosure document under the provision of the Franchise Investment Law regulating the sale of a franchise and provides the specific criteria a person must meet to lawfully sell a franchise.
- Repeals the State Assistance Fund for Enterprise Act of 1989 (SAFE Act).
- Revises the rating categories required for certain eligible securities used to invest surplus state funds and the conditions certain commercial papers must meet.
FISCAL EFFECT:
- Potential minor cost savings to DFPI by allowing electronic notices instead of requiring mailed notices and eliminating the need to continuously update regulations to conform with each update of NMLS forms and instructions.
- Minor and absorbable costs to the State Treasurer’s Office (STO) to update rating requirements and conditions for certain securities.
COMMENTS:
- Purpose. This is an omnibus measure authored by the Assembly Committee on Banking and Finance. Generally, a committee omnibus measure makes technical, non-controversial changes to laws within the committee’s jurisdiction.
- Background. NMLS. Most DFPI licensees, except for state-chartered banks and credit unions, are also registered with the NMLS. Since many NMLS filing requirements are contained in DFPI regulations, such regulations often become outdated because the NMLS frequently updates its forms. This bill requires DFPI to require the use of NMLS forms and instructions whenever a statute or regulation requires licensure or registration through NMLS, thus eliminating the need for conforming regulations. This bill also authorizes DFPI to fulfill a notice requirement related to the levy of a fee or assessment against a licensee or registrant via NMLS or other electronic means.
Franchises. SB 919 (Umberg), Chapter 518, Statutes of 2024, required a franchise broker to register with DFPI before engaging in certain activities, including offering to sell or selling a franchise. This bill corrects a drafting error to effectuate this intent. This bill is supported by the International Franchise Association.
Securities. The STO invests taxpayers’ money to help manage the state’s cashflow through the Pooled Money Investment Account (PMIA). Existing law specifies eligible securities the PMIA may purchase and an investment policy to set management goals for the PMIA’s safety, liquidity, and yield. This bill updates the terminology of ratings requirements for eligible securities. This bill also increases the maximum maturity date and repeals a collateral requirement for certain commercial papers approved by the PMIA. As noted in the Assembly Banking and Finance Committee’s analysis of this bill, the increase from 270 days to 397 days maturity is “in parity with current federal and state practices” and the collateral requirement is “no longer feasible to execute, and the risk associated with these purchases is already adequately managed by the limitations set by credit ratings, maturity dates, purchase amounts, and portfolio allocation requirements” under existing law.
SAFE Act. The SAFE Act authorized the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business, and Industrial Development Corporation (SAFE-BIDCO) to enhance the availability of financial assistance for small businesses in California. However, SAFE-BIDCO became insolvent in 2017 and was subsequently seized by DFPI (then organized as the “Department of Business Oversight”), liquidated, and formally dissolved in 2023. This bill repeals the SAFE Act.
Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081
Date of Hearing: April 23, 2026
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Avelino Valencia, Chair
ABPCA Bill Id:AB 2795 (
Author:Committee on Banking and Finance) – As Amended Ver:April 16, 2026
SUBJECT: Financial regulation
SUMMARY: This is the omnibus Assembly Banking Committee bill.
Specifically, this bill:
- Authorizes the DFPI to send annual assessment notices via NMLS and eliminate the need to adopt regulations in order to use NMLS forms for each licensing or registration program.
- Repeals Division 15.5 of the Financial Institutions Code, titled “State Assistance Fund for Enterprise, Business and Industrial Development Corporation.”
- Amends Government Code 16430 to add language to clarify rating requirements for Municipal Bonds, Foreign Government Bonds, Commercial Paper, and Corporate Bonds as well as add uniform language regarding eligible federal agency securities.
- Corrects a mistake wherein the Franchise Broker law was inadvertently changed in two places. This correction will make it unlawful to effect or attempt to effect a sale of a franchise unless the broker is registered.
EXISTING LAW:
DFPI Notice
- Requires the commissioner to notify, by mail, each licensee of any additional amount assessed and levied against it. (Corp.Code section 25608 (0)(4), Financial Code (Fin.Code) sections 8032(a), 12214(b)(2), 2041(d), 17207(e)(1)and (h)(1), 18351, 23016(b), 50401(c))
Franchise Broker
- Makes unlawful for any person to effect or attempt to effect a sale of a franchise, except in transactions, unless that person is any of the following:
- Identified in an application or amended application filed with the commissioner pursuant to Part 2 (commencing with Section 31100) of this division.
- Licensed by the Department of Real Estate as a real estate broker or real estate salesperson.
- Licensed by the commissioner as a broker-dealer or agent pursuant to the Corporate Securities Law of 1968.
- Registered as a franchise broker pursuant to Part 7 (commencing with Section 31520).
PMIA Bond Ratings
- Regarding eligible securities for the investment of surplus moneys, bonds, notes, or other obligations eligible for investment must be within the top three ratings of a nationally recognized statistical rating organization. (Government Code (Gov.Code) section 16430(d)(2))
- Requires investment grade rating or its equivalent, or better for bonds, notes, warrants, and other securities not in default that are the direct obligations of the government of a foreign country that the International Monetary Fund lists as an advanced economy and for which the full faith and credit of that country has been pledged for the payment of principal and interest, if the securities are rated, by a nationally recognized statistical rating organization. (Gov.Code section 16430(f))
- Requires commercial paper of “prime” quality as defined by a nationally recognized statistical rating organization that rates these securities, if the commercial paper is issued by a federally or state-chartered bank or a state-licensed branch of a foreign bank, corporation, trust, or limited liability company that is approved by the Pooled Money Investment Board as meeting the conditions specified. (Gov.Code section 16430(g)(1))
- Prohibits the purchase of eligible commercial paper that exceeds 270 days maturity. (Gov.Code section 16430(g)(2)(A))
- Requires, at the request of the Pooled Money Investment Board, an investment made pursuant to this subdivision to be secured by the issuer by depositing with the Treasurer securities authorized by Section 53651 of a market value at least 10 percent in excess of the amount of the state’s investment. (Gov.Code section 16430(g)(3))
SAFE-BIDCO
- Allows for the formation of a non-profit corporation, the purpose of which is to engage in special projects in the interest of promoting small business growth. (Fin.Code 32000 et seq.)
FISCAL EFFECT: Unknown. This bill is keyed Fiscal by Legislative Counsel.
COMMENTS:
- National Multistate Licensing System (NMLS)
Existing law limits how the Department of Financial Protection and Innovation (DFPI) can communicate with licensees regarding annual assessments. The annual assessment allocates costs of administering the licensing program among licensees of that program. The fee amount is adjusted by the individual licensee based on the amount of the licensee’s assets. Licensees have 30 days to pay after the invoice date. Current law requires the Department to notify licensees of their annual assessment fees “by mail.” Although “by mail” is not explicitly defined in the Financial Code, courts and other presiding entities would more than likely interpret these guidelines to require service by postal mail for the following reasons:
- “By mail” was commonly understood to mean physical, postal mail when these statutes were written and enacted; and
- California Code of Civil Procedure provides persuasive authority that “by mail” requires service by postal mail.
Currently, many NMLS filing requirements are contained in regulations. Most licensees, except for state-chartered banks and credit unions, are registered using NMLS. The NMLS frequently updates its forms, causing regulations to become outdated. For example, most recently, NMLS has proposed increasing its fees for licensees and registrants. This will require DFPI to update its regulations. Under the Administrative Procedure Act (APA), when requiring applications through NMLS, the rulemaking action must identify and adopt the specific version of the form in existence at the date of the rulemaking when that particular form is referenced in the rulemaking package. In order to require that an applicant apply through NMLS, DFPI must conduct rulemaking to adopt the requirement in regulations each time and specify the necessity for each data element in every application and form on NMLS. This creates a large amount of workload for DFPI’s legal division.
The amendments provided will instead allow the DFPI to provide notice of assessments by electronic service and in some cases by NMLS. The amendment also adds a general provision that applies any time the DFPI requires a person to register or apply for licensure through NMLS or maintain licensure or registration through NMLS. The general provision would require the applicant, licensee or registrant to provide information through NMLS, and pay fees required by NMLS for the use of the system. These changes will reduce costs to the Department and reduce attorney workload hours related to these bureaucratic requirements.
Update to PMIA Bond Rating Requirement Language
The State Treasurer, through the Pooled Money Investment Account (PMIA), invests taxpayers’ money to help manage the State’s cashflow, as well as provide investment options for local governments through the Local Agency Investment Fund (LAIF). The Investment Division of the Treasurer’s office manages the PMIA on behalf of the Treasurer. Current legislation specifies eligible securities that the PMIA can purchase, and the Investment Policy sets management goals for the PMIA of safety, liquidity and yield. However, the Government Code regulating these requirements has been amended over time using inconsistent benchmarks and now outdated terms to describe ratings.
Clarification is needed to ensure the rating requirements for eligible investments, including Municipal Bonds, Foreign Government Bonds, Commercial Paper Bonds, and Corporate Bonds are more easily identifiable and that there is uniform language regarding eligible federal agency securities. This will leave less room for error and misinterpretation and ensure the safety of the PMIA. Amendments also update the maximum maturity of bonds to 397 days which is in parity with current federal and state practices. The final amendment, repeal of the collateral requirement upon request of the PMIA, is needed because the language is obsolete. It is no longer feasible to execute, and the risk associated with these purchases is already adequately managed by the limitations set by credit ratings, maturity dates, purchase amounts, and portfolio allocation requirements stated in Government Code Section 16430.
Correction Regarding Franchise Broker Law
Division 5 of the Corporations Code governs franchise investment law. In 2024, SB 919 was enacted to require a franchise broker to register with the commissioner before engaging in certain activities as prescribed, particularly, it would make it unlawful for a franchise broker to offer or sell a franchise in this state unless the franchise broker is registered pursuant to these provisions. However, franchise brokers, to whom the measure was also meant to apply, are regulated in a different part of the Division. This amendment will make a correction to the section on exemptions to clarify the application to specified franchise brokers.
SAFE-BIDCO
The State Assistance Fund for Enterprise Act of 1989 authorizes the creation of a nonprofit corporation called the State Assistance Fund for Enterprise, Business and Industrial Development Corporation (SAFE-BIDCO) for the general purpose of enhancing the availability of financial assistance for small businesses in California. The act requires the State Controller to establish a separate account in the General Fund entitled the State Enterprise Loan Fund, which is continuously appropriated for purposes of the act. There has been no substantive legislation since 2004 affecting this law other than one non-substantive change in 2016. Per Westlaw searches conducted in late 2025, there has been no litigation resulting in a published court decision on Division 15.5. SAFE-BIDCO became insolvent by 2017 and was seized by the Department of Financial Protection & Innovation (then the “Department of Business Oversight”). SAFE-BIDCO was subsequently liquidated and then dissolved in 2023 (which was filed with the California Secretary of State). This amendment is a clean up to repeal Division 15.5.
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Analysis Prepared by: Desiree Nguyen Orth / B. & F. / (916) 319-3081
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