Amended in Senate June 9, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2289

Introduced by Assembly Member Daly

February 21, 2014

An act to amend Sections 25620, 31116, and 31121 of, and to add Section 31158 to, the Corporations Code, and to amend Sections 12201, 17201, 22101, and 23005 of the Financial Code, relating to business.

LEGISLATIVE COUNSEL’S DIGEST

AB 2289, as amended, Daly. begin delete Electronic records and signatures. end delete begin insert Business filings. end insert

(1) The Corporate Securities Law of 1968 authorizes the Commissioner of Business Oversight to prescribe circumstances under which to accept electronic records or electronic signatures, as defined.

This bill would provide additional examples of what meets the definition of an “electronic record.”

(2) The Franchise Investment Law generally provides for the regulation of the offer and sale of franchises by the Commissioner of Business Oversight. The law specifically provides that the registration of the offer of franchises automatically becomes effective at noon on the 15th business day after the filing of the application for registration or the last amendment, except as specified.

This bill would instead provide that the offer automatically becomes effective on the 30th day after the filing of a complete application, begin delete and defines the term “complete application” for this purpose. This bill would end delete similarly extend the time for a renewal of an offer, as begin delete specified. end delete begin insert specified, and define terms for these purposes. end insert This bill would authorize the commissioner to prescribe circumstances under which to accept electronic records or electronic signatures, as defined.

(3) The Check Sellers, Bill Payers and Proraters Law generally requires the Commissioner of Business Oversight to, among other things, proscribe the form of the application for a license to engage in business under its provisions.

This bill would authorize the commissioner to prescribe circumstances under which to accept electronic records or electronic signatures, as defined.

(4) The Escrow Law generally requires the Commissioner of Business Oversight to, among other things, proscribe the form of the application for a license as an escrow agent under its provisions.

This bill would authorize the commissioner to prescribe circumstances under which to accept electronic records or electronic signatures, as defined.

(5) The California Finance Lenders Law generally requires the Commissioner of Business Oversight to, among other things, proscribe the form of the application for a license as a finance lender or broker under its provisions.

This bill would authorize the commissioner to prescribe circumstances under which to accept electronic records or electronic signatures, as defined.

(6) The California Deferred Deposit Transaction Law generally requires the Commissioner of Business Oversight to, among other things, proscribe the form of the application for a license to engage in the businesses of offering, making, or arranging a deferred deposit transaction, as specified.

This bill would authorize the commissioner to prescribe circumstances under which to accept electronic records or electronic signatures, as defined.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 25620 of the Corporations Code is
amended to read:

25620.  

(a) Notwithstanding any other law, the commissioner
may by rule or order prescribe circumstances under which to accept
electronic records or electronic signatures. This section shall not
require the commissioner to accept electronic records or electronic
signatures.

(b) For purposes of this section, the following terms have the
following meanings:

(1) “Electronic record” means a record created, generated, sent,
communicated, received, or stored by electronic begin delete means, and
includes a record transmitted by means of facsimile machine or
other telephone transceiving equipment. end delete begin insert means. end insert “Electronic record”
also includes, but is not limited to, all of the following:

(A) An application, amendment, supplement, and exhibit, filed
for any qualification, registration, order, permit, certificate, license,
consent, or other begin delete authority, including, but not limited to,
correspondence between the parties and the commissioner directly
relating to the record. end delete begin insert authority. end insert

(B) A financial statement, reports, begin delete advertising, and
correspondence between a party and the commissioner directly
relating to the record. end delete begin insert or advertising. end insert

(C) An order, permit, certificate, license, consent, or other
authority.

(D) A notice of public hearing, accusation, and statement of
issues in connection with any application, qualification,
registration, order, permit, certificate, license, consent, or other
authority.

(E) A proposed decision of a hearing officer and a decision of
the commissioner.

(F) The transcripts of a begin delete hearing and correspondence between a
party and the commissioner directly relating to the record. end delete begin insert hearing. end insert

(G) A release, newsletter, interpretive opinion, determination,
begin delete specific ruling, and the correspondence relating to the record. end delete begin insert or
specific ruling. end insert

begin insert

(H) Correspondence between a party and the commissioner
directly relating to any document listed in subparagraphs (A) to
(G), inclusive.

end insert

(2) “Electronic signature” means an electronic sound, symbol,
or process attached to or logically associated with an electronic
record and executed or adopted by a person with the intent to sign
the electronic record.

(c) The Legislature finds and declares that the Department of
Business Oversight has continuously implemented methods to begin delete file end delete
begin insert accept end insert records begin insert filed end insert electronically, including broker-dealer and
investment adviser applications, and is encouraged to continue to
expand its use of electronic filings to the extent feasible, as budget,
resources, and equipment are made available to accomplish that
goal.

SEC. 2.  

Section 31116 of the Corporations Code is amended
to read:

31116.  

(a) Except as provided in subdivision (b), if no stop
order under Section 31115 is in effect under this law, registration
of the offer of franchises automatically becomes effective at 12
o’clock noon, California time, of the 30th business day after the
filing of a complete application for registration or the last
preeffective amendment thereto, or at such earlier time as the
commissioner determines.

(b) With respect to any application for registration or the last
amendment thereto filed between January 1, 1971, and March 15,
1971, if no stop order under Section 31115 is in effect under this
law, registration becomes effective on April 15, 1971; with respect
to any application filed after March 15, 1971 and before May 10,
1971, if no stop order under Section 31115 is in effect under this
law, registration becomes effective on June 1, 1971, or the 15th
business day after the filing, whichever is the later, or at such
earlier time as the commissioner determines.

(c) For purposes of this section, “complete application” means
an application that contains the appropriate filing fee, Uniform
Franchise Disclosure Document, and all additional exhibits,
including financial statements in conformity with begin delete regulation end delete
begin insert regulations end insert of the commissioner. begin insert “Preeffective amendment” means
an amendment to an application that is filed before the effective
date of the registration of the sale of franchises. end insert

SEC. 3.  

Section 31121 of the Corporations Code is amended
to read:

31121.  

(a) The registration may be renewed for additional
periods of one year each, unless the commissioner by rule or order
specifies a different period, by submitting to the commissioner a
renewal application before the expiration of the registration. If no
stop order or other order under Section 31115 is in effect under
this law, registration of the offer of the franchises automatically
becomes renewed effective at 12 o'clock noon, California time, of
the 30th business day after the filing of a complete application for
registration or the last preeffective amendment or at such earlier
time as the commissioner determines.

(b) For purposes of this section, “complete application” means
an application that contains the appropriate filing fee, Uniform
Franchise Disclosure Document, and all additional exhibits,
including financial statements in conformity with begin delete regulation end delete
begin insert regulations end insert of the commissioner. begin insert “Preeffective amendment” means
an amendment to an application that is filed before the effective
date of the registration of the sale of franchises. end insert

SEC. 4.  

Section 31158 is added to the Corporations Code, to
read:

31158.  

(a) Notwithstanding any other law, the commissioner
may by rule or order prescribe circumstances under which to accept
electronic records or electronic signatures. This section shall not
require the commissioner to accept electronic records or electronic
signatures.

(b) For purposes of this section, the following terms have the
following meanings:

(1) “Electronic record” means an initial registration application,
registration renewal statement, preeffective amendment,
posteffective amendment, or material modification and any other
record created, generated, sent, communicated, received, or stored
by electronic begin delete means, and includes a record transmitted by means
of facsimile machine or other telephone transceiving equipment. end delete
begin insert means. end insert “Electronic record” also includes, but is not limited to, all
of the following:

(A) An application, amendment, supplement, and exhibit, filed
for any begin delete qualification, end delete registration, order, begin delete permit, certificate, end delete license,
consent, or other begin delete authority, including, but not limited to,
correspondence between the parties and the commissioner directly
relating to the record. end delete begin insert authority. end insert

(B) A financial statement, reports, begin delete advertising, and
correspondence between a party and the commissioner directly
relating to the record. end delete begin insert or advertising. end insert

(C) An order, begin delete permit, certificate, end delete license, consent, or other
authority.

(D) A notice of public hearing, accusation, and statement of
issues in connection with any application, begin delete qualification, end delete
registration, order, begin delete permit, certificate, end delete license, consent, or other
authority.

(E) A proposed decision of a hearing officer and a decision of
the commissioner.

(F) The transcripts of a begin delete hearing and correspondence between a
party and the commissioner directly relating to the record. end delete begin insert hearing. end insert

(G) A release, newsletter, interpretive opinion, determination,
begin delete specific ruling, and correspondence relating to the record. end delete begin insert or
specific ruling. end insert

begin insert

(H) Correspondence between a party and the commissioner
directly relating to any document listed in subparagraphs (A) to
(G), inclusive.

end insert

(2) “Electronic signature” means an electronic sound, symbol,
or process attached to or logically associated with an electronic
record and executed or adopted by a person with the intent to sign
the electronic record.

(c) The Legislature finds and declares that the Department of
Business Oversight has continuously implemented methods to begin delete file end delete
begin insert accept end insert records begin insert filed end insert electronically, including broker-dealer and
investment adviser applications, and is encouraged to continue to
expand its use of electronic filings to the extent feasible, as budget,
resources, and equipment are made available to accomplish that
goal.

SEC. 5.  

Section 12201 of the Financial Code is amended to
read:

12201.  

(a) An application for a license shall be in writing,
under oath, and in a form prescribed by the commissioner and shall
contain the name, and the address both of the residence and place
of business, of the applicant and if the applicant is a partnership
or association, of every member thereof, and if a corporation, of
every officer and director thereof.

(b) Notwithstanding any other law, the commissioner may by
rule or order prescribe circumstances under which to accept
electronic records or electronic signatures. This section shall not
require the commissioner to accept electronic records or electronic
signatures.

(c) For purposes of this section, the following terms have the
following meanings:

(1) “Electronic record” means an initial begin delete registration end delete begin insert license end insert
application, begin delete registration renewal statement, preeffective
amendment, posteffective amendment, end delete or material modification
begin insert of that license application, end insert and any other record created, generated,
sent, communicated, received, or stored by electronic begin delete means, and
includes a record transmitted by means of facsimile machine or
other telephone transceiving equipment. end delete begin insert means. end insert “Electronic record”
also includes, but begin insert is end insert not limited to, all of the following:

(A) An application, amendment, supplement, and exhibit, filed
for any begin delete qualification, registration, order, permit, certificate, end delete begin insert end insert license,
consent, or other begin delete authority, including, but not limited to,
correspondence between the parties and the commissioner directly
relating to the record. end delete begin insert authority. end insert

(B) A financial statement, reports, begin delete advertising, and
correspondence between a party and the commissioner directly
relating to the record. end delete begin insert or advertising. end insert

(C) An order, begin delete permit, certificate, end delete license, consent, or other
authority.

(D) A notice of public hearing, accusation, and statement of
issues in connection with any application, begin delete qualification,
registration, order, permit, certificate, end delete license, consent, or other
authority.

(E) A proposed decision of a hearing officer and a decision of
the commissioner.

(F) The transcripts of a begin delete hearing and correspondence between a
party and the commissioner directly relating to the record. end delete begin insert hearing. end insert

(G) A release, newsletter, interpretive opinion, determination,
begin delete specific ruling, and correspondence relating to the record. end delete begin insert or
specific ruling. end insert

begin insert

(H) Correspondence between a party and the commissioner
directly relating to any document listed in subparagraphs (A) to
(G), inclusive.

end insert

(2) “Electronic signature” means an electronic sound, symbol,
or process attached to or logically associated with an electronic
record and executed or adopted by a person with the intent to sign
the electronic record.

(d) The Legislature finds and declares that the Department of
Business Oversight has continuously implemented methods to begin delete file end delete
begin insert accept end insert records begin delete electronically, including broker-dealer and
investment adviser applications, end delete begin insert filed electronically, end insert and is
encouraged to continue to expand its use of electronic filings to
the extent feasible, as budget, resources, and equipment are made
available to accomplish that goal.

SEC. 6.  

Section 17201 of the Financial Code is amended to
read:

17201.  

(a) An application for a license as an escrow agent
shall be in writing and in such form as is prescribed by the
commissioner. The application shall be verified by the oath of the
applicant.

(b) Notwithstanding any other law, the commissioner may by
rule or order prescribe circumstances under which to accept
electronic records or electronic signatures. This section shall not
require the commissioner to accept electronic records or electronic
signatures.

(c) For purposes of this section, the following terms have the
following meanings:

(1) “Electronic record” means an initial begin delete registration end delete begin insert license end insert
application, begin delete registration renewal statement, preeffective
amendment, posteffective amendment, end delete or material modification
begin insert of that license application, end insert and any other record created, generated,
sent, communicated, received, or stored by electronic begin delete means, and
includes a record transmitted by means of facsimile machine or
other telephone transceiving equipment. end delete begin insert means. end insert “Electronic
records” also includes, but begin insert is end insert not limited to, all of the following:

(A) An application, amendment, supplement, and exhibit, filed
for any begin delete qualification, registration, end delete order, begin delete permit, certificate, end delete begin insert end insert license,
consent, or other begin delete authority, including, but not limited to,
correspondence between the parties and the commissioner directly
relating to the record. end delete begin insert authority. end insert

(B) A financial statement, reports, begin delete advertising, and
correspondence between a party and the commissioner directly
relating to the record. end delete begin insert or advertising. end insert

(C) An order, begin delete permit, certificate, end delete license, consent, or other
authority.

(D) A notice of public hearing, accusation, and statement of
issues in connection with any application, begin delete qualification, end delete
registration, order, begin delete permit, certificate, end delete license, consent, or other
authority.

(E) A proposed decision of a hearing begin delete officer and a decision of
the commissioner. end delete begin insert officer. end insert

(F) The transcripts of a hearing and correspondence between a
party and the commissioner directly relating to the record.

(G) A release, newsletter, interpretive opinion, determination,
begin delete specific ruling, and the correspondence relating to the record. end delete begin insert or
specific ruling. end insert

begin insert

(H) Correspondence between a party and the commissioner
directly relating to any document listed in subparagraphs (A) to
(G), inclusive.

end insert

(2) “Electronic signature” means an electronic sound, symbol,
or process attached to or logically associated with an electronic
record and executed or adopted by a person with the intent to sign
the electronic record.

(d) The Legislature finds and declares that the Department of
Business Oversight has continuously implemented methods to begin delete file end delete
begin insert accept end insert records begin delete electronically, including broker-dealer and
investment adviser applications, end delete begin insert filed electronically, end insert and is
encouraged to continue to expand its use of electronic filings to
the extent feasible, as budget, resources, and equipment are made
available to accomplish that goal.

SEC. 7.  

Section 22101 of the Financial Code is amended to
read:

22101.  

(a) An application for a license as a finance lender or
broker under this division shall be in the form and contain the
information that the commissioner may by rule or order require
and shall be filed upon payment of the fee specified in Section
22103.

(b) Notwithstanding any other law, an applicant who does not
currently hold a license as a finance lender or broker under this
division shall furnish begin insert , end insert with his or her application, a full set of
fingerprints and related information for purposes of the
commissioner conducting a criminal history record check. The
commissioner shall obtain and receive criminal history information
from the Department of Justice and the Federal Bureau of
Investigation pursuant to Section 22101.5.

(c) This section shall not be construed to prevent a licensee from
engaging in the business of a finance lender through a subsidiary
corporation if the subsidiary corporation is licensed pursuant to
this division.

(d) For purposes of this section, “subsidiary corporation” means
a corporation that is wholly owned by a licensee.

(e) A new application shall not be required for a change in the
address of an existing location previously licensed under this
division. However, the licensee shall comply with the requirements
of Section 22153.

(f) Notwithstanding subdivisions (a) to (e), inclusive, the
commissioner may by rule require an application to be made
through the Nationwide Mortgage Licensing System and Registry,
and may require fees, fingerprints, financial statements, supporting
documents, changes of address, and any other information, and
amendments or modifications thereto, to be submitted in the same
manner.

(g) Notwithstanding any other law, the commissioner may by
rule or order prescribe circumstances under which to accept
electronic records or electronic signatures. This section shall not
require the commissioner to accept electronic records or electronic
signatures.

(h) For purposes of this section, the following terms have the
following meanings:

(1) “Electronic record” means an initial begin delete registration end delete begin insert license end insert
application, begin delete registration renewal statement, preeffective
amendment, posteffective amendment, end delete or material modification
begin insert of that license application, end insert and any other record created, generated,
sent, communicated, received, or stored by electronic begin delete means, and
includes a record transmitted by means of facsimile machine or
other telephone transceiving equipment. end delete begin insert means. end insert “Electronic
records” also includes, but begin insert is end insert not limited to, all of the following:

(A) An application, amendment, supplement, and exhibit, filed
for any begin delete qualification, registration, order, permit, certificate, end delete license,
consent, or other begin delete authority, including, but not limited to,
correspondence between the parties and the commissioner directly
relating to the record. end delete begin insert authority. end insert

(B) A financial statement, reports, begin delete advertising, and
correspondence between a party and the commissioner directly
relating to the record. end delete begin insert or advertising. end insert

(C) An order, begin delete permit, certificate, end delete license, consent, or other
authority.

(D) A notice of public hearing, accusation, and statement of
issues in connection with any application, begin delete qualification,
registration, order, permit, certificate, end delete license, consent, or other
authority.

(E) A proposed decision of a hearing officer and a decision of
the commissioner.

(F) The transcripts of a hearing and correspondence between a
party and the commissioner directly relating to the record.

(G) A release, newsletter, interpretive opinion, determination,
begin delete specific ruling, and the correspondence relating to the record. end delete begin insert or
specific ruling. end insert

begin insert

(H) Correspondence between a party and the commissioner
directly relating to any document listed in subparagraphs (A) to
(G), inclusive.

end insert

(2) “Electronic signature” means an electronic sound, symbol,
or process attached to or logically associated with an electronic
record and executed or adopted by a person with the intent to sign
the electronic record.

(i) The Legislature finds and declares that the Department of
Business Oversight has continuously implemented methods to begin delete file end delete
begin insert accept end insert records begin delete electronically, including broker-dealer and
investment adviser applications, end delete begin insert filed electronically, end insert and is
encouraged to continue to expand its use of electronic filings to
the extent feasible, as budget, resources, and equipment are made
available to accomplish that goal.

SEC. 8.  

Section 23005 of the Financial Code is amended to
read:

23005.  

(a) A person shall not offer, originate, or make a
deferred deposit transaction, arrange a deferred deposit transaction
for a deferred deposit originator, act as an agent for a deferred
deposit originator, or assist a deferred deposit originator in the
origination of a deferred deposit transaction without first obtaining
a license from the commissioner and complying with the provisions
of this division. The requirements of this subdivision shall not
apply to persons or entities that are excluded from the definition
of “licensee” as set forth in Section 23001. This division shall not
be construed to require the commissioner to create separate classes
of licenses.

(b) An application for a license under this division shall be in
the form and contain the information that the commissioner may
by rule require and shall be filed upon payment of the fee specified
in Section 23006.

(c) A licensee with one or more licensed locations seeking an
additional location license may file a short form license application
as may be established by the commissioner pursuant to subdivision
(b) of this section.

(d) Notwithstanding any other law, the commissioner may by
rule or order prescribe circumstances under which to accept
electronic records or electronic signatures. This section shall not
require the commissioner to accept electronic records or electronic
signatures.

(e) For purposes of this section, the following terms have the
following meanings:

(1) “Electronic record” means an initial begin delete registration end delete begin insert license end insert
application, begin delete registration renewal statement, preeffective
amendment, posteffective amendment, end delete or material modification
begin insert of that license application, end insert and any other record created, generated,
sent, communicated, received, or stored by electronic begin delete means, and
includes a record transmitted by means of facsimile machine or
other telephone transceiving equipment. end delete begin insert means. end insert “Electronic
records” also includes, but begin insert is end insert not limited to, all of the following:

(A) An application, amendment, supplement, and exhibit, filed
for any begin delete qualification, registration, order, permit, certificate, end delete license,
consent, or other begin delete authority, including, but not limited to,
correspondence between the parties and the commissioner directly
relating to the record. end delete begin insert authority. end insert

(B) A financial statement, reports, begin delete advertising, and
correspondence between a party and the commissioner directly
relating to the record. end delete begin insert or advertising. end insert

(C) An order, begin delete permit, certificate, end delete license, consent, or other
authority.

(D) A notice of public hearing, accusation, and statement of
issues in connection with any application, begin delete qualification,
registration, order, permit, certificate, end delete license, consent, or other
authority.

(E) A proposed decision of a hearing officer and a decision of
the commissioner.

(F) The transcripts of a begin delete hearing and correspondence between a
party and the commissioner directly relating to the record. end delete begin insert hearing. end insert

(G) A release, newsletter, interpretive opinion, determination,
begin delete specific ruling, and the correspondence relating to the record. end delete begin insert or
specific ruling. end insert

begin insert

(H) Correspondence between a party and the commissioner
directly relating to any document listed in subparagraphs (A) to
(G), inclusive.

end insert

(2) “Electronic signature” means an electronic sound, symbol,
or process attached to or logically associated with an electronic
record and executed or adopted by a person with the intent to sign
the electronic record.

(f) The Legislature finds and declares that the Department of
Business Oversight has continuously implemented methods to begin delete file end delete
begin insert accept end insert records begin delete electronically, including broker-dealer and
investment adviser applications, end delete begin insert filed electronically, end insert and is
encouraged to continue to expand its use of electronic filings to
the extent feasible, as budget, resources, and equipment are made
available to accomplish that goal.