BILL NUMBER: AB 1000	CHAPTERED
	BILL TEXT

	CHAPTER  819
	FILED WITH SECRETARY OF STATE  SEPTEMBER 27, 2004
	APPROVED BY GOVERNOR  SEPTEMBER 27, 2004
	PASSED THE ASSEMBLY  AUGUST 16, 2004
	PASSED THE SENATE  AUGUST 10, 2004
	AMENDED IN SENATE  JULY 27, 2004
	AMENDED IN SENATE  JULY 19, 2004
	AMENDED IN SENATE  JUNE 21, 2004
	AMENDED IN SENATE  JUNE 2, 2004
	AMENDED IN ASSEMBLY  JANUARY 14, 2004
	AMENDED IN ASSEMBLY  JANUARY 5, 2004
	AMENDED IN ASSEMBLY  APRIL 21, 2003

INTRODUCED BY   Assembly Member Dutra

                        FEBRUARY 20, 2003

   An act to amend Sections 1502 and 2117 of, and to add Sections
1502.1 and 2117.1 to, the Corporations Code, and to amend Section
12186 of the Government Code, relating to corporations, and declaring
the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1000, Dutra.  Corporations:  disclosure statement.
   Existing law, the General Corporation Law, requires a domestic
corporation and a foreign corporation to file statements annually
with the Secretary of State disclosing specified information
concerning its operation and makes the information contained in the
statements open to public inspection.  Existing law specifies
additional information that a publicly traded company is required to
include in the statement.
   This bill would revise these provisions, including changing the
definitions for "publicly traded company" to "publicly traded
corporation" and for "executive officer."
   Under existing law, information required in the statement includes
the name of the independent auditor used by the corporation and a
description of any services performed for the corporation during the
previous 24 months by the auditor or its parent corporation, or by an
agent, subsidiary, corporate partner, or corporate affiliate of the
auditor or its parent corporation.
   This bill would instead require the corporations to disclose
services performed during its 2 most recent fiscal years and the
period between the end of its most recent fiscal year.
   Existing law requires these corporations to provide a statement
indicating whether any member of the board of directors or executive
officer of the corporation has been convicted of fraud within the
previous 10 years.
   This bill would instead require that statement if the conviction
has not been overturned or expunged.
   This bill would declare that it is to take effect immediately as
an urgency statue.


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


  SECTION 1.  (a) It is the intent of the Legislature to provide for
the timely and accurate disclosure of information to the public
regarding key relationships and activities of public corporations
doing business in California.
   (b) It is the intent of the Legislature that the California
Corporate Disclosure Act serve to provide critical items of
information about a corporation in one centralized location where
consumers, investors, and taxpayers can locate the information
quickly and efficiently.  While much of the information required
under the act is provided to the federal government through regular
filings to the Securities and Exchange Commission, the reports filed
with the Securities and Exchange Commission are not readily
searchable or understood by the average consumer or investor.
   (c) It is further the intent of the Legislature that any
inconsistencies or asymmetries between disclosures made pursuant to
Sections 1502, 1502.1, 2117, 2117.1, 6210, and 8210 of the
Corporations Code and disclosures or filings made pursuant to federal
securities law shall not be construed to infer anything beyond the
information disclosed.
  SEC. 2.  Section 1502 of the Corporations Code is amended to read:

   1502.  (a) Every corporation shall file, within 90 days after the
filing of its original articles and annually thereafter during the
applicable filing period, on a form prescribed by the Secretary of
State, a statement containing all of the following:
   (1) The names and complete business or residence addresses of its
incumbent directors.
   (2) The number of vacancies on the board, if any.
   (3) The names and complete business or residence addresses of its
chief executive officer, secretary, and chief financial officer.
   (4) The street address of its principal executive office.
   (5) If the address of its principal executive office is not in
this state, the street address of its principal business office in
this state, if any.
   (6) A statement of the general type of business that constitutes
the principal business activity of the corporation (for example,
manufacturer of aircraft; wholesale liquor distributor; or retail
department store).
   (b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or a corporation
that has complied with Section 1505 and whose capacity to act as an
agent has not terminated.  If a natural person is designated, the
statement shall set forth that person's complete business or
residence address.  If a corporate agent is designated, no address
for it shall be set forth.
   (c) If there has been no change in the information in the last
filed statement of the corporation on file in the Secretary of State'
s office, the corporation may, in lieu of filing the statement
required by subdivisions (a) and (b), advise the Secretary of State,
on a form prescribed by the Secretary of State, that no changes in
the required information have occurred during the applicable filing
period.
   (d) For the purposes of this section, the applicable filing period
for a corporation shall be the calendar month during which its
original articles were filed and the immediately preceding five
calendar months.  The Secretary of State shall mail a form for
compliance with this section to each corporation approximately three
months prior to the close of the applicable filing period.  The form
shall state the due date thereof and shall be mailed to the last
address of the corporation according to the records of the Secretary
of State.  The failure of the corporation to receive the form is not
an excuse for failure to comply with this section.
   (e) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b).  In order to
change its agent for service of process or the address of the agent,
the corporation must file a current statement containing all the
information required by subdivisions (a) and (b).  Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the articles as to
the agent for service of process and the address of the agent.
   (f) The Secretary of State may destroy or otherwise dispose of any
statement filed pursuant to this section after it has been
superseded by the filing of a new statement.
   (g) This section shall not be construed to place any person
dealing with the corporation on notice of, or under any duty to
inquire about, the existence or content of a statement filed pursuant
to this section.
   (h) The statement required by subdivision (a) shall be available
and open to the public for inspection.  The Secretary of State, not
later than December 31, 2004, shall provide access to all information
contained in this statement by means of an online database.
   (i) In addition to any other fees required, a corporation shall
pay a five-dollar ($5) disclosure fee when filing the statement
required by subdivision (a).  One-half of the fee shall be utilized
to further the provisions of this section, including the development
and maintenance of the online database required by subdivision (h),
and one-half shall be deposited into the Victims of Corporate Fraud
Compensation Fund established in Section 1502.5.
   (j) A corporation shall certify that the information it provides
pursuant to subdivisions (a) and (b) is true and correct.  No claim
may be made against the state for inaccurate information contained in
the statements.
  SEC. 3.  Section 1502.1 is added to the Corporations Code, to read:

   1502.1.  (a) In addition to the statement required pursuant to
Section 1502, every publicly traded corporation shall file annually,
within 150 days after the end of its fiscal year, a statement, on a
form prescribed by the Secretary of State, that includes all of the
following information:
   (1) The name of the independent auditor that prepared the most
recent auditor's report on the corporation's annual financial
statements.
   (2) A description of other services, if any, performed for the
corporation during its two most recent fiscal years and the period
between the end of its most recent fiscal year and the date of the
statement by the foregoing independent auditor, by its parent
corporation, or by a subsidiary or corporate affiliate of the
independent auditor or its parent corporation.
   (3) The name of the independent auditor employed by the
corporation on the date of the statement, if different from the
independent auditor listed pursuant to paragraph (1).
   (4) The compensation for the most recent fiscal year of the
corporation paid to each member of the board of directors and paid to
each of the five most highly compensated executive officers of the
corporation who are not members of the board of directors, including
the number of any shares issued, options for shares granted,  and
similar equity-based compensation granted to each of those persons.
If the chief executive officer is not among the five most highly
compensated executive officers of the corporation, the compensation
paid to the chief executive officer shall also be included.
   (5) A description of any loan, including the amount and terms of
the loan, made to any member of the board of directors by the
corporation during the corporation's two most recent fiscal years at
an interest rate lower than the interest rate available from
unaffiliated commercial lenders generally to a similarly-situated
borrower.
   (6) A statement indicating whether an order for relief has been
entered in a bankruptcy case with respect to the corporation, its
executive officers, or members of the board of directors of the
corporation during the 10 years preceding the date of the statement.

   (7) A statement indicating whether any member of the board of
directors or executive officer of the corporation was convicted of
fraud during the 10 years preceding the date of the statement,  if
the conviction has not been overturned or expunged.
   (8) A description of any material pending legal proceedings, other
than ordinary routine litigation incidental to the business, to
which the corporation or any of its subsidiaries is a party or of
which any of their property is the subject, as specified by Item 103
of Regulation S-K of the Securities Exchange Commission (Section
229.103 of Title 12 of the Code of Federal Regulations).  A
description of any material legal proceeding during which the
corporation was found legally liable by entry of a final judgment or
final order that was not overturned on appeal during the five years
preceding the date of the statement.
   (b) For purposes of this section, the following definitions apply:

   (1) "Publicly traded corporation" means a corporation, as defined
in Section 162, that is an issuer as defined in Section 3 of the
Securities Exchange Act of 1934, as amended (15 U.S.C. Sec. 78c), and
has at least one class of securities listed or admitted for trading
on a national securities exchange, on the National or Small-Cap
Markets of the NASDAQ Stock Market, on the OTC-Bulletin Board, or on
the electronic service operated by Pink Sheets, LLC.
   (2) "Executive officer" means the chief executive officer,
president, any vice president in charge of a principal business unit,
division, or function, any other officer of the corporation who
performs a policymaking function, or any other person who performs
similar policymaking functions for the corporation.
   (3) "Compensation" as used in paragraph (4) of subdivision (a)
means all plan and nonplan compensation awarded to, earned by, or
paid to the person for all services rendered in all capacities to the
corporation and to its subsidiaries, as the compensation is
specified by Item 402 of Regulation S-K of the Securities and
Exchange Commission (Section 229.402 of Title 17 of the Code of
Federal Regulations).
   (4) "Loan" as used in paragraph (5) of subdivision (a) excludes an
advance for expenses permitted under subdivision (d) of Section 315,
the corporation's payment of life insurance premiums permitted under
subdivision (e) of Section 315, and an advance of expenses permitted
under Section 317.
   (c) This statement shall be available and open to the public for
inspection.  The Secretary of State, not later than December 31,
2004, shall provide access to all information contained in this
statement by means of an online database.
   (d) A corporation shall certify that the information it provides
pursuant to this section is true and correct.  No claim may be made
against the state for inaccurate information contained in statements
filed under this section with the Secretary of State.
  SEC. 4.  Section 2117 of the Corporations Code is amended to read:

   2117.  (a) Every foreign corporation (other than a foreign
association) qualified to transact intrastate business shall file,
annually during the applicable filing period, on a form prescribed by
the Secretary of State, a statement containing the following:
   (1) The names and complete business or residence addresses of its
chief executive officer, secretary, and chief financial officer.
   (2) The street address of its principal executive office.
   (3) The street address of its principal business office in this
state, if any.
   (4) A statement of the general type of business that constitutes
the principal business activity of the corporation (for example,
manufacturer of aircraft; wholesale liquor distributor; or retail
department store).
   (b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or a corporation
that has complied with Section 1505 and whose capacity to act as the
agent has not terminated.  If a natural person is designated, the
statement shall set forth the person's complete business or residence
address.  If a corporate agent is designated, no address for it
shall be set forth.
   (c) The statement required by subdivision (a) shall be available
and open to the public for inspection.  The Secretary of State, not
later than December 31, 2004, shall provide access to all information
contained in the statement by means of an online database.
   (d) In addition to any other fees required, a foreign corporation
shall pay a five-dollar ($5) disclosure fee upon filing the statement
required by subdivision (a).  One-half of the fee shall be utilized
to further the provisions of this section, including the development
and maintenance of the online database required by subdivision (d),
and one-half shall be deposited into the Victims of Corporate Fraud
Compensation Fund established in Section 1502.5.
   (e) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b).  In order to
change its agent for service of process or the address of the agent,
the corporation shall file a current statement containing all the
information required by subdivisions (a) and (b).  Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the filing pursuant
to Section 2105.
   (f) Subdivisions (c), (d), (f), and (g) of Section 1502 apply to
statements filed pursuant to this section, except that "articles"
shall mean the filing pursuant to Section 2105, and "corporation"
shall mean a foreign corporation.
  SEC. 5.  Section 2117.1 is added to the Corporations Code, to read:

   2117.1.  (a) In addition to the statement required pursuant to
Section 2117, every publicly traded foreign corporation shall file
annually, within 150 days after the end of its fiscal year, on a form
prescribed by the Secretary of State, a statement that includes all
of the following information:
   (1) The name of the independent auditor that prepared the most
recent auditor's report on the publicly traded foreign corporation's
annual financial statements.
   (2) A description of other services, if any, performed for the
publicly traded foreign corporation during its two most recent fiscal
years and the period between the end of its most recent fiscal year
and the date of the statement by the foregoing independent auditor,
by its parent corporation, or by a subsidiary or corporate affiliate
of the independent auditor or its parent corporation.
   (3) The name of the independent auditor employed by the foreign
corporation on the date of the statement, if different from the
independent auditor listed pursuant to paragraph (1).
   (4) The compensation for the most recent fiscal year of the
publicly traded foreign corporation paid to each member of the board
of directors and paid to each of the five most highly compensated
executive officers of the foreign corporation who are not members of
the board of directors, including the number of any shares issued,
options for shares granted, and similar equity-based compensation
granted to each of those persons.  If the chief executive officer is
not among the five most highly compensated executive officers of the
corporation, the compensation paid to the chief executive officer
shall also be included.
   (5) A description of any loan, including the amount and terms of
the loans, made to any member of the board of directors by the
publicly traded foreign corporation during the foreign corporation's
two most recent fiscal years at an interest rate lower than the
interest rate available from unaffiliated commercial lenders
generally to a similarly situated borrower.
   (6) A statement indicating whether an order for relief has been
entered in a bankruptcy case with respect to the foreign corporation,
its executive officers, or members of the board of directors of the
foreign corporation during the 10 years preceding the date of the
statement.
   (7) A statement indicating whether any member of the board of
directors or executive officer of the publicly traded foreign
corporation was convicted of fraud during the 10 years preceding the
date of the statement, which conviction has not been overturned or
expunged.
   (8) A description of any material pending legal proceedings, other
than ordinary routine litigation incidental to the business, to
which the corporation or any of its subsidiaries is a party or of
which any of their property is the subject, as specified by Item 103
of Regulation S-K of the Securities Exchange Commission (Section
229.103 of Title 12 of the Code of Federal Regulations).  A
description of any material legal proceeding during which the
corporation was found legally liable by entry of a final judgment or
final order that was not overturned on appeal during the five years
preceding the date of the statement.
   (b) For purposes of this section, the following definitions apply:

   (1) "Publicly traded foreign corporation" means a foreign
corporation, as defined in Section 171, that is an issuer as defined
in Section 3 of the Securities Exchange Act of 1934, as amended (15
U.S.C.  Sec. 78c), and has at least one class of securities listed or
admitted for trading on a national securities exchange, on the
National or Small-Cap Markets of the NASDAQ Stock Market, on the
OTC-Bulletin Board, or on the electronic service operated by Pink
Sheets, LLC.
   (2) "Executive officer" means the chief executive officer,
president, any vice president in charge of a principal business unit,
division, or function, any other officer of the corporation who
performs a policymaking function, or any other person who performs
similar policymaking functions for the corporation.
   (3) "Compensation" as used in paragraph (4) of subdivision (a)
means all plan and nonplan compensation awarded to, earned by, or
paid to the person for all services rendered in all capacities to the
corporation and to its subsidiaries, as the compensation is
specified by Item 402 of Regulation S-K of the Securities and
Exchange Commission (Section 229.402 of Title 17 of the Code of
Federal Regulations).
   (4) "Loan" as used in paragraph (5) of subdivision (a) excludes an
advance for expenses, the foreign corporation's payment of life
insurance premiums, and an advance of litigation expenses, in each
instance as permitted according to the applicable law of the state or
place of incorporation or organization of the foreign corporation.
   (c) This statement shall be available and open to the public for
inspection.  The Secretary of State, not later than December 31,
2004, shall provide access to all information contained in this
statement by means of an online database.
   (d) A foreign corporation shall certify that the information it
provides pursuant to this section is true and correct.  No claim may
be made against the state for inaccurate information contained in
statements filed under this section with the Secretary of State.
  SEC. 6.  Section 12186 of the Government Code is amended to read:
   12186.  The fees for corporate filings are the following:
   (a) Issuing a certificate of reservation of corporate name:  Ten
dollars ($10).
   (b) Registering a corporate name for the calendar year pursuant to
Section 2101 of the Corporations Code:  Fifty dollars ($50).
   (c) Filing articles of incorporation providing for shares:  One
hundred dollars ($100).
   (d) Filing articles of incorporation not providing for shares:
Thirty dollars ($30).
   (e) Filing the statement and designation upon the qualification of
a foreign, nonprofit, nonstock corporation, and of a foreign
corporation organized for educational, religious, scientific, or
charitable purposes, and not issuing shares:  Thirty dollars ($30).
   (f) Filing the statement and designation upon the qualification of
any other foreign corporation not provided for in subdivision (e):
One hundred dollars ($100).
   (g) Filing the statement of information for every corporation
pursuant to Sections 1502, 6210, 8210, and 9660 of the Corporations
Code:  Twenty dollars ($20).
   (h) Filing the statement of information for every foreign
corporation (other than a foreign association) qualified to transact
intrastate business pursuant to Section 2117 of the Corporations
Code:  Twenty dollars ($20).
   (i) Filing changes to any statement of information subject to
subdivisions (g) and (h):  No fee.
   (j) Filing the statement pursuant to Section 1502.1 or 2117.1 of
the Corporations Code:  No fee.
   (k) Filing for the merger of one corporation solely with one or
more other corporations:  One hundred dollars ($100).
   (l) Filing for the merger of one or more corporations with one or
more other types of business entities:  One hundred fifty dollars
($150).
   (m) Filing a certificate of amendment changing the status of a
nonprofit corporation into a stock corporation:  Seventy dollars
($70).
   (n) Filing a certificate of election to dissolve a corporation, a
certificate of dissolution of a corporation, or a certificate of
surrender, or of change of address:  No fee.
   (o) Filing a statement of address by a foreign lending institution
on or before June 30 of each year pursuant to Section 2104 of the
Corporations Code:  Fifty dollars ($50).
   (p) Filing any other instrument by or on behalf of a corporation,
unless another fee is specified by law:  Thirty dollars ($30).
  SEC. 7.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order for the provisions of this act to take effect as soon as
possible, it is necessary that this act take effect immediately.