Amended in Senate August 21, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 2763


Introduced by Committee on Accountability and Administrative Review

March 26, 2014


An act to amend Sections 10176.1 and 19869 of the Business and Professions Code, to amend Sections 1936.01, 2924.12, 2924.17, 2924.19, and 2924.20 of the Civil Code, to amend Sections 580d and 684.115 of the Code of Civil Procedure, to amend Sections 163, 201, 2510, 2601, 5122, 7122, 9122, and 12302 of the Corporations Code, to amend Sections 371, 380, 1514, 2105, 5106, 14381, 14382, 14652.5, 18002.5, 18022.5, and 23001 of the Financial Code, to amend Sections 6254.5, 7465, 7474, 7480, 13975.2, 13995.40.5,begin delete 51298,end delete 65040.9, and 66620 of, to amend the heading of Part 4.5 (commencing with Section 13975) of Division 3 of Title 2 of, to amend and renumber Sections 13975.1 and 13978.6 of, to repeal Chapter 5 (commencing with Section 13999) of Part 4.7 of Division 3 of Title 2 of, and to repeal Chapter 9.7 (commencing with Section 8790) of Division 1 of Title 2 of, the Government Code, to amend Section 44272.5 of the Health and Safety Code, to amend Sections 12414.31 and 12710 of the Insurance Code, to amend Section 2802 of the Penal Code, and to amend Section 22003 of, and to repeal Section 22553.2 of, the Public Utilities Code, relating to state government.

LEGISLATIVE COUNSEL’S DIGEST

AB 2763, as amended, Committee on Accountability and Administrative Review. State government operations.

(1) Existing law and the Governor’s Reorganization Plan No. 2 of 2012 (GRP 2), effective on July 3, 2012, and operative on July 1, 2013, assigns and reorganizes the functions of state government among executive officers, agencies, and other state entities.

This bill would generally enact conforming changes to statutes to reflect the assignment and reorganization of the functions of state government within the newly established structure of state government. This bill would reallocate specified duties of reorganized and abolished state entities and their officers to established state entities and officers, including, but not limited to, reallocating specified duties of the abolished Business, Transportation and Housing Agency and its secretary to the Governor’s Office of Business and Economic Development, the Transportation Agency and its secretary, and the Business, Consumer Services, and Housing Agency and its secretary. This bill would further reallocate certain existing duties to the Department of Business Oversight and its commissioner and other specified duties from the California Gambling Control Commission to the Department of Justice.

(2) The Space Enterprise Development Act requires the Business, Transportation and Housing Agency, an abolished agency, to implement a space enterprise development program to foster activities that increase the competitiveness of space enterprise in California.

This bill would repeal the act.

(3) Existing law establishes the California Collider Commission composed of the Governor, the Lieutenant Governor, the Treasurer, the President of the University of California, the Director of Finance, and the Secretary of Business, Transportation and Housing, an abolished state office. Existing law creates the commission for the purpose of representing the state before various entities in federal government concerning a proposal by the United States Department of Energy to construct a particle accelerator, known as a superconducting super collider. Existing law also authorizes land acquisition, financing alternatives, including an authorization for a bond issuance, and employment training and other support programs to site and construct the federal superconducting super collider within the state.

This bill would repeal these provisions.

(4) Existing law requires, subject to a specified condition and relating in part to the Secretary of Business, Transportation and Housing, an abolished state office, the advertised rate for a rental car to include certain charges.

This bill would remove that condition.

(5) This bill would make technical, nonsubstantive, and conforming changes.

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

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

P3    1

SECTION 1.  

Section 10176.1 of the Business and Professions
2Code
is amended to read:

3

10176.1.  

(a) (1) Whenever the commissioner takes any
4enforcement or disciplinary action against a licensee, and the
5enforcement or disciplinary action is related to escrow services
6provided pursuant to paragraph (4) of subdivision (a) of Section
717006 of the Financial Code, upon the action becoming final the
8commissioner shall notify the Insurance Commissioner and the
9Commissioner of Business Oversight of the action or actions taken.
10The purpose of this notification is to alert the departments that
11enforcement or disciplinary action has been taken, if the licensee
12seeks or obtains employment with entities regulated by the
13departments.

14(2) The commissioner shall provide the Insurance Commissioner
15and the Commissioner of Business Oversight, in addition to the
16notification of the action taken, with a copy of the written
17accusation, statement of issues, or order issued or filed in the matter
18and, at the request of the Insurance Commissioner or the
19Commissioner of Business Oversight, with any underlying factual
20material relevant to the enforcement or disciplinary action. Any
21confidential information provided by the commissioner to the
22Insurance Commissioner or the Commissioner of Business
23Oversight shall not be made public pursuant to this section.
24Notwithstanding any other provision of law, the disclosure of any
25underlying factual material to the Insurance Commissioner or the
26Commissioner of Business Oversight shall not operate as a waiver
27of confidentiality or any privilege that the commissioner may
28assert.

29(b) The commissioner shall establish and maintain, on the Web
30site maintained by the Bureau of Real Estate, a database of its
31licensees, including those who have been subject to any
32 enforcement or disciplinary action that triggers the notification
P4    1requirements of this section. The database shall also contain a
2direct link to the databases, described in Section 17423.1 of the
3Financial Code and Section 12414.31 of the Insurance Code and
4required to be maintained on the Web sites of the Department of
5Business Oversight and the Department of Insurance, respectively,
6of persons who have been subject to enforcement or disciplinary
7action for malfeasance or misconduct related to the escrow industry
8by the Insurance Commissioner and the Commissioner of Business
9Oversight.

10(c) There shall be no liability on the part of, and no cause of
11action of any nature shall arise against, the State of California, the
12Bureau of Real Estate, the Real Estate Commissioner, any other
13state agency, or any officer, agent, employee, consultant, or
14contractor of the state, for the release of any false or unauthorized
15information pursuant to this section, unless the release of that
16information was done with knowledge and malice, or for the failure
17to release any information pursuant to this section.

18

SEC. 2.  

Section 19869 of the Business and Professions Code
19 is amended to read:

20

19869.  

A request for withdrawal of any application may be
21made at any time prior to final action upon the application by the
22chief by the filing of a written request to withdraw with the
23department. For the purposes of this section, final action by the
24department means a final determination by the chief regarding his
25or her recommendation on the application to the commission. The
26commission shall not grant the request unless the applicant has
27established that withdrawal of the application would be consistent
28with the public interest and the policies of this chapter. If a request
29for withdrawal is denied, the department may go forward with its
30investigation and make a recommendation to the commission upon
31the application, and the commission may act upon the application
32as if no request for withdrawal had been made. If a request for
33withdrawal is granted with prejudice, the applicant thereafter shall
34be ineligible to renew its application until the expiration of one
35year from the date of the withdrawal. Unless the commission
36otherwise directs, no fee or other payment relating to any
37application is refundable by reason of withdrawal of an application.

38

SEC. 3.  

Section 1936.01 of the Civil Code is amended to read:

39

1936.01.  

(a) For the purpose of this section, the following
40definitions shall apply:

P5    1(1) “Airport concession fee” means a charge collected by a
2rental company from a renter that is the renter’s proportionate
3share of the amount paid by the rental company to the owner or
4operator of an airport for the right or privilege of conducting a
5vehicle rental business on the airport’s premises.

6(2) “Quote” means an estimated cost of rental provided by a
7rental company or a third party to a potential customer by
8telephone, in-person, computer-transmission, or other means, that
9is based on information provided by the potential customer and
10used to generate an estimated cost of rental, including, but not
11limited to, any of the following: potential dates of rental, locations,
12or classes of car.

13(3) “Tourism commission assessment” means the charge
14collected by a rental company from a renter that has been
15established by the California Travel and Tourism Commission
16pursuant to Section 13995.65 of the Government Code.

17(b) Notwithstanding subdivision (n) of Section 1936, the
18following provisions shall apply:

19(1) A rental company shall only advertise a rental rate that
20includes the entire amount, except taxes, a customer facility charge,
21if any, and a mileage charge, if any, that a renter must pay to hire
22or lease the vehicle for the period of time to which the rental rate
23applies.

24(2) When providing a quote, or imposing charges for a rental,
25the rental company may separately state the rental rate, taxes,
26customer facility charge, if any, airport concession fee, if any,
27tourism commission assessment, if any, and a mileage charge, if
28any, that a renter must pay to hire or lease the vehicle for the period
29of time to which the rental rate applies. A rental company may not
30charge in addition to the rental rate, taxes, a customer facility
31charge, if any, airport concession fee, if any, tourism commission
32assessment, if any, and a mileage charge, if any, any fee that must
33be paid by the renter as a condition of hiring or leasing the vehicle,
34such as, but not limited to, required fuel or airport surcharges other
35than customer facility charges and airport concession fees.

36(3) If customer facility charges, airport concession fees, or
37tourism commission assessments are imposed, the rental company
38shall do each of the following:

39(A) At the time the quote is given, provide the person receiving
40the quote with a good faith estimate of the rental rate, taxes,
P6    1customer facility charge, if any, airport concession fee, if any, and
2tourism commission assessment, if any, as well as the total charges
3for the entire rental. The total charges, if provided on an Internet
4Web site, shall be displayed in a typeface at least as large as any
5rental rate disclosed on that page and shall be provided on a page
6that the person receiving the quote may reach by following links
7through no more than two Internet Web site pages, including the
8page on which the rental rate is first provided. The good faith
9estimate may exclude mileage charges and charges for optional
10items that cannot be determined prior to completing the reservation
11based upon the information provided by the person.

12(B) At the time and place the rental commences, clearly and
13conspicuously disclose in the rental contract, or that portion of the
14contract that is provided to the renter, the total of the rental rate,
15taxes, customer facility charge, if any, airport concession fee, if
16any, and tourism commission assessment, if any, for the entire
17rental, exclusive of charges that cannot be determined at the time
18the rental commences. Charges imposed pursuant to this
19subparagraph shall be no more than the amount of the quote
20provided in a confirmed reservation, unless the person changes
21the terms of the rental contract subsequent to making the
22reservation.

23(C) Provide each person, other than those persons within the
24rental company, offering quotes to actual or prospective customers
25access to information about customer facility charges, airport
26concession fees, and tourism commission assessments as well as
27access to information about when those charges apply. Any person
28providing quotes to actual or prospective customers for the hire
29or lease of a vehicle from a rental company shall provide the quotes
30in the manner described in subparagraph (A).

31(4) In addition to the rental rate, taxes, customer facility charges,
32if any, airport concession fees, if any, tourism commission
33assessments, if any, and mileage charges, if any, a rental company
34may charge for an item or service provided in connection with a
35particular rental transaction if the renter could have avoided
36incurring the charge by choosing not to obtain or utilize the
37optional item or service. Items and services for which the rental
38company may impose an additional charge, include, but are not
39limited to, optional insurance and accessories requested by the
40renter, service charges incident to the renter’s optional return of
P7    1the vehicle to a location other than the location where the vehicle
2was hired or leased, and charges for refueling the vehicle at the
3conclusion of the rental transaction in the event the renter did not
4return the vehicle with as much fuel as was in the fuel tank at the
5beginning of the rental. A rental company also may impose an
6additional charge based on reasonable age criteria established by
7the rental company.

8(5) A rental company may not charge any fee for authorized
9drivers in addition to the rental charge for an individual renter.

10(6) If a rental company states a rental rate in print advertisement
11or in a telephonic, in-person, or computer-transmitted quote, the
12rental company shall clearly disclose in that advertisement or quote
13the terms of any mileage conditions relating to the rental rate
14disclosed in the advertisement or quote, including, but not limited
15to, to the extent applicable, the amount of mileage and gas charges,
16the number of miles for which no charges will be imposed, and a
17description of geographic driving limitations within the United
18States and Canada.

19(7) (A) When a rental rate is stated in an advertisement, in
20connection with a car rental at an airport where a customer facility
21charge is imposed, the rental company shall clearly disclose the
22existence and amount of the customer facility charge. For the
23purposes of this subparagraph, advertisements include radio,
24television, other electronic media, and print advertisements. If the
25rental rate advertisement is intended to include transactions at more
26than one airport imposing a customer facility charge, a range of
27charges may be stated in the advertisement. However, all rental
28rate advertisements that include car rentals at airport destinations
29shall clearly and conspicuously include a toll-free telephone
30number whereby a customer can be told the specific amount of
31the customer facility charge to which the customer will be
32obligated.

33(B) If any person or entity other than a rental car company,
34including a passenger carrier or a seller of travel services, advertises
35a rental rate for a car rental at an airport where a customer facility
36charge is imposed, that person or entity shall, provided they are
37provided with information about the existence and amount of the
38charge, to the extent not specifically prohibited by federal law,
39clearly disclose the existence and amount of the charge. If a rental
40car company provides the person or entity with rental rate and
P8    1customer facility charge information, the rental car company is
2not responsible for the failure of that person or entity to comply
3with this subparagraph.

4(8) If a rental company delivers a vehicle to a renter at a location
5other than the location where the rental company normally carries
6on its business, the rental company may not charge the renter any
7amount for the rental for the period before the delivery of the
8vehicle. If a rental company picks up a rented vehicle from a renter
9at a location other than the location where the rental company
10normally carries on its business, the rental company may not charge
11the renter any amount for the rental for the period after the renter
12notifies the rental company to pick up the vehicle.

13(9) Except as otherwise permitted pursuant to the customer
14facility charge, a rental company may not separately charge, in
15addition to the rental rate, a fee for transporting the renter to the
16location where the rented vehicle will be delivered to the renter.

17(c) A renter may bring an action against a rental company for
18the recovery of damages and appropriate equitable relief for a
19violation of this section. The prevailing party shall be entitled to
20recover reasonable attorney’s fees and costs.

21(d) Any waiver of any of the provisions of this section shall be
22void and unenforceable as contrary to public policy.

23

SEC. 4.  

Section 2924.12 of the Civil Code, as added by Section
2416 of Chapter 86 of the Statutes of 2012, is amended to read:

25

2924.12.  

(a) (1) If a trustee’s deed upon sale has not been
26recorded, a borrower may bring an action for injunctive relief to
27enjoin a material violation of Section 2923.55, 2923.6, 2923.7,
282924.9, 2924.10, 2924.11, or 2924.17.

29(2) Any injunction shall remain in place and any trustee’s sale
30shall be enjoined until the court determines that the mortgage
31servicer, mortgagee, trustee, beneficiary, or authorized agent has
32corrected and remedied the violation or violations giving rise to
33the action for injunctive relief. An enjoined entity may move to
34dissolve an injunction based on a showing that the material
35violation has been corrected and remedied.

36(b) After a trustee’s deed upon sale has been recorded, a
37mortgage servicer, mortgagee, trustee, beneficiary, or authorized
38agent shall be liable to a borrower for actual economic damages
39pursuant to Section 3281, resulting from a material violation of
40Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or
P9    12924.17 by that mortgage servicer, mortgagee, trustee, beneficiary,
2or authorized agent where the violation was not corrected and
3remedied prior to the recordation of the trustee’s deed upon sale.
4If the court finds that the material violation was intentional or
5reckless, or resulted from willful misconduct by a mortgage
6servicer, mortgagee, trustee, beneficiary, or authorized agent, the
7court may award the borrower the greater of treble actual damages
8or statutory damages of fifty thousand dollars ($50,000).

9(c) A mortgage servicer, mortgagee, trustee, beneficiary, or
10authorized agent shall not be liable for any violation that it has
11corrected and remedied prior to the recordation of a trustee’s deed
12upon sale, or that has been corrected and remedied by third parties
13working on its behalf prior to the recordation of a trustee’s deed
14upon sale.

15(d) A violation of Section 2923.55, 2923.6, 2923.7, 2924.9,
162924.10, 2924.11, or 2924.17 by a person licensed by the
17Department of Business Oversight or the Bureau of Real Estate
18shall be deemed to be a violation of that person’s licensing law.

19(e) No violation of this article shall affect the validity of a sale
20in favor of a bona fide purchaser and any of its encumbrancers for
21value without notice.

22(f) A third-party encumbrancer shall not be relieved of liability
23resulting from violations of Section 2923.55, 2923.6, 2923.7,
242924.9, 2924.10, 2924.11, or 2924.17 committed by that third-party
25encumbrancer, that occurred prior to the sale of the subject property
26to the bona fide purchaser.

27(g) A signatory to a consent judgment entered in the case entitled
28United States of America et al. v. Bank of America Corporation
29et al., filed in the United States District Court for the District of
30Columbia, case number 1:12-cv-00361 RMC, that is in compliance
31with the relevant terms of the Settlement Term Sheet of that
32consent judgment with respect to the borrower who brought an
33action pursuant to this section while the consent judgment is in
34effect shall have no liability for a violation of Section 2923.55,
352923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17.

36(h) The rights, remedies, and procedures provided by this section
37are in addition to and independent of any other rights, remedies,
38or procedures under any other law. Nothing in this section shall
39be construed to alter, limit, or negate any other rights, remedies,
40or procedures provided by law.

P10   1(i) A court may award a prevailing borrower reasonable
2attorney’s fees and costs in an action brought pursuant to this
3section. A borrower shall be deemed to have prevailed for purposes
4of this subdivision if the borrower obtained injunctive relief or
5was awarded damages pursuant to this section.

6(j) This section shall not apply to entities described in
7subdivision (b) of Section 2924.18.

8(k)  This section shall remain in effect only until January 1,
92018, and as of that date is repealed, unless a later enacted statute,
10that is enacted before January 1, 2018, deletes or extends that date.

11

SEC. 5.  

Section 2924.12 of the Civil Code, as added by Section
1216 of Chapter 87 of the Statutes of 2012, is amended to read:

13

2924.12.  

(a) (1) If a trustee’s deed upon sale has not been
14recorded, a borrower may bring an action for injunctive relief to
15enjoin a material violation of Section 2923.55, 2923.6, 2923.7,
162924.9, 2924.10, 2924.11, or 2924.17.

17(2) Any injunction shall remain in place and any trustee’s sale
18shall be enjoined until the court determines that the mortgage
19servicer, mortgagee, trustee, beneficiary, or authorized agent has
20corrected and remedied the violation or violations giving rise to
21the action for injunctive relief. An enjoined entity may move to
22dissolve an injunction based on a showing that the material
23violation has been corrected and remedied.

24(b) After a trustee’s deed upon sale has been recorded, a
25mortgage servicer, mortgagee, trustee, beneficiary, or authorized
26agent shall be liable to a borrower for actual economic damages
27pursuant to Section 3281, resulting from a material violation of
28Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or
292924.17 by that mortgage servicer, mortgagee, trustee, beneficiary,
30or authorized agent where the violation was not corrected and
31remedied prior to the recordation of the trustee’s deed upon sale.
32If the court finds that the material violation was intentional or
33reckless, or resulted from willful misconduct by a mortgage
34servicer, mortgagee, trustee, beneficiary, or authorized agent, the
35court may award the borrower the greater of treble actual damages
36or statutory damages of fifty thousand dollars ($50,000).

37(c) A mortgage servicer, mortgagee, trustee, beneficiary, or
38authorized agent shall not be liable for any violation that it has
39corrected and remedied prior to the recordation of a trustee’s deed
40upon sale, or that has been corrected and remedied by third parties
P11   1working on its behalf prior to the recordation of a trustee’s deed
2upon sale.

3(d) A violation of Section 2923.55, 2923.6, 2923.7, 2924.9,
42924.10, 2924.11, or 2924.17 by a person licensed by the
5Department of Business Oversight or the Bureau of Real Estate
6shall be deemed to be a violation of that person’s licensing law.

7(e) No violation of this article shall affect the validity of a sale
8in favor of a bona fide purchaser and any of its encumbrancers for
9value without notice.

10(f) A third-party encumbrancer shall not be relieved of liability
11resulting from violations of Section 2923.55, 2923.6, 2923.7,
122924.9, 2924.10, 2924.11, or 2924.17 committed by that third-party
13encumbrancer, that occurred prior to the sale of the subject property
14to the bona fide purchaser.

15(g) A signatory to a consent judgment entered in the case entitled
16United States of America et al. v. Bank of America Corporation
17et al., filed in the United States District Court for the District of
18Columbia, case number 1:12-cv-00361 RMC, that is in compliance
19with the relevant terms of the Settlement Term Sheet of that
20consent judgment with respect to the borrower who brought an
21action pursuant to this section while the consent judgment is in
22effect shall have no liability for a violation of Section 2923.55,
232923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17.

24(h) The rights, remedies, and procedures provided by this section
25are in addition to and independent of any other rights, remedies,
26or procedures under any other law. Nothing in this section shall
27be construed to alter, limit, or negate any other rights, remedies,
28or procedures provided by law.

29(i) A court may award a prevailing borrower reasonable
30attorney’s fees and costs in an action brought pursuant to this
31section. A borrower shall be deemed to have prevailed for purposes
32of this subdivision if the borrower obtained injunctive relief or
33was awarded damages pursuant to this section.

34(j) This section shall not apply to entities described in
35subdivision (b) of Section 2924.18.

36(k)  This section shall remain in effect only until January 1,
372018, and as of that date is repealed, unless a later enacted statute,
38that is enacted before January 1, 2018, deletes or extends that date.

39

SEC. 6.  

Section 2924.12 of the Civil Code, as added by Section
4017 of Chapter 86 of the Statutes of 2012, is amended to read:

P12   1

2924.12.  

(a) (1) If a trustee’s deed upon sale has not been
2recorded, a borrower may bring an action for injunctive relief to
3enjoin a material violation of Section 2923.5, 2923.7, 2924.11, or
42924.17.

5(2) Any injunction shall remain in place and any trustee’s sale
6shall be enjoined until the court determines that the mortgage
7servicer, mortgagee, trustee, beneficiary, or authorized agent has
8corrected and remedied the violation or violations giving rise to
9the action for injunctive relief. An enjoined entity may move to
10dissolve an injunction based on a showing that the material
11violation has been corrected and remedied.

12(b) After a trustee’s deed upon sale has been recorded, a
13mortgage servicer, mortgagee, trustee, beneficiary, or authorized
14agent shall be liable to a borrower for actual economic damages
15pursuant to Section 3281, resulting from a material violation of
16Section 2923.5, 2923.7, 2924.11, or 2924.17 by that mortgage
17servicer, mortgagee, trustee, beneficiary, or authorized agent where
18the violation was not corrected and remedied prior to the
19recordation of the trustee’s deed upon sale. If the court finds that
20the material violation was intentional or reckless, or resulted from
21willful misconduct by a mortgage servicer, mortgagee, trustee,
22beneficiary, or authorized agent, the court may award the borrower
23the greater of treble actual damages or statutory damages of fifty
24thousand dollars ($50,000).

25(c) A mortgage servicer, mortgagee, trustee, beneficiary, or
26authorized agent shall not be liable for any violation that it has
27corrected and remedied prior to the recordation of the trustee’s
28deed upon sale, or that has been corrected and remedied by third
29parties working on its behalf prior to the recordation of the trustee’s
30deed upon sale.

31(d) A violation of Section 2923.5, 2923.7, 2924.11, or 2924.17
32by a person licensed by the Department of Business Oversight or
33the Bureau of Real Estate shall be deemed to be a violation of that
34person’s licensing law.

35(e) No violation of this article shall affect the validity of a sale
36in favor of a bona fide purchaser and any of its encumbrancers for
37value without notice.

38(f) A third-party encumbrancer shall not be relieved of liability
39resulting from violations of Section 2923.5, 2923.7, 2924.11, or
P13   12924.17 committed by that third-party encumbrancer, that occurred
2prior to the sale of the subject property to the bona fide purchaser.

3(g) The rights, remedies, and procedures provided by this section
4are in addition to and independent of any other rights, remedies,
5or procedures under any other law. Nothing in this section shall
6be construed to alter, limit, or negate any other rights, remedies,
7or procedures provided by law.

8(h) A court may award a prevailing borrower reasonable
9attorney’s fees and costs in an action brought pursuant to this
10section. A borrower shall be deemed to have prevailed for purposes
11of this subdivision if the borrower obtained injunctive relief or
12was awarded damages pursuant to this section.

13(i) This section shall become operative on January 1, 2018.

14

SEC. 7.  

Section 2924.12 of the Civil Code, as added by Section
1517 of Chapter 87 of the Statutes of 2012, is amended to read:

16

2924.12.  

(a) (1) If a trustee’s deed upon sale has not been
17recorded, a borrower may bring an action for injunctive relief to
18enjoin a material violation of Section 2923.5, 2923.7, 2924.11, or
192924.17.

20(2) Any injunction shall remain in place and any trustee’s sale
21shall be enjoined until the court determines that the mortgage
22servicer, mortgagee, trustee, beneficiary, or authorized agent has
23corrected and remedied the violation or violations giving rise to
24the action for injunctive relief. An enjoined entity may move to
25dissolve an injunction based on a showing that the material
26violation has been corrected and remedied.

27(b) After a trustee’s deed upon sale has been recorded, a
28mortgage servicer, mortgagee, trustee, beneficiary, or authorized
29agent shall be liable to a borrower for actual economic damages
30pursuant to Section 3281, resulting from a material violation of
31Section 2923.5, 2923.7, 2924.11, or 2924.17 by that mortgage
32servicer, mortgagee, trustee, beneficiary, or authorized agent where
33the violation was not corrected and remedied prior to the
34recordation of the trustee’s deed upon sale. If the court finds that
35the material violation was intentional or reckless, or resulted from
36willful misconduct by a mortgage servicer, mortgagee, trustee,
37beneficiary, or authorized agent, the court may award the borrower
38the greater of treble actual damages or statutory damages of fifty
39thousand dollars ($50,000).

P14   1(c) A mortgage servicer, mortgagee, trustee, beneficiary, or
2authorized agent shall not be liable for any violation that it has
3corrected and remedied prior to the recordation of the trustee’s
4deed upon sale, or that has been corrected and remedied by third
5parties working on its behalf prior to the recordation of the trustee’s
6deed upon sale.

7(d) A violation of Section 2923.5, 2923.7, 2924.11, or 2924.17
8by a person licensed by the Department of Business Oversight or
9the Bureau of Real Estate shall be deemed to be a violation of that
10person’s licensing law.

11(e) No violation of this article shall affect the validity of a sale
12in favor of a bona fide purchaser and any of its encumbrancers for
13value without notice.

14(f) A third-party encumbrancer shall not be relieved of liability
15resulting from violations of Section 2923.5, 2923.7, 2924.11, or
162924.17 committed by that third-party encumbrancer, that occurred
17prior to the sale of the subject property to the bona fide purchaser.

18(g) The rights, remedies, and procedures provided by this section
19are in addition to and independent of any other rights, remedies,
20or procedures under any other law. Nothing in this section shall
21be construed to alter, limit, or negate any other rights, remedies,
22or procedures provided by law.

23(h) A court may award a prevailing borrower reasonable
24attorney’s fees and costs in an action brought pursuant to this
25section. A borrower shall be deemed to have prevailed for purposes
26of this subdivision if the borrower obtained injunctive relief or
27was awarded damages pursuant to this section.

28(i) This section shall become operative on January 1, 2018.

29

SEC. 8.  

Section 2924.17 of the Civil Code, as added by Section
3020 of Chapter 86 of the Statutes of 2012, is amended to read:

31

2924.17.  

(a) A declaration recorded pursuant to Section 2923.5
32or, until January 1, 2018, pursuant to Section 2923.55, a notice of
33default, notice of sale, assignment of a deed of trust, or substitution
34of trustee recorded by or on behalf of a mortgage servicer in
35connection with a foreclosure subject to the requirements of Section
362924, or a declaration or affidavit filed in any court relative to a
37foreclosure proceeding shall be accurate and complete and
38supported by competent and reliable evidence.

39(b) Before recording or filing any of the documents described
40in subdivision (a), a mortgage servicer shall ensure that it has
P15   1reviewed competent and reliable evidence to substantiate the
2borrower’s default and the right to foreclose, including the
3borrower’s loan status and loan information.

4(c) Until January 1, 2018, any mortgage servicer that engages
5in multiple and repeated uncorrected violations of subdivision (b)
6in recording documents or filing documents in any court relative
7to a foreclosure proceeding shall be liable for a civil penalty of up
8to seven thousand five hundred dollars ($7,500) per mortgage or
9deed of trust in an action brought by a government entity identified
10in Section 17204 of the Business and Professions Code, or in an
11administrative proceeding brought by the Department of Business
12Oversight or the Bureau of Real Estate against a respective licensee,
13in addition to any other remedies available to these entities. This
14subdivision shall be inoperative on January 1, 2018.

15

SEC. 9.  

Section 2924.17 of the Civil Code, as added by Section
1620 of Chapter 87 of the Statutes of 2012, is amended to read:

17

2924.17.  

(a) A declaration recorded pursuant to Section 2923.5
18or, until January 1, 2018, pursuant to Section 2923.55, a notice of
19default, notice of sale, assignment of a deed of trust, or substitution
20of trustee recorded by or on behalf of a mortgage servicer in
21connection with a foreclosure subject to the requirements of Section
222924, or a declaration or affidavit filed in any court relative to a
23foreclosure proceeding shall be accurate and complete and
24supported by competent and reliable evidence.

25(b) Before recording or filing any of the documents described
26in subdivision (a), a mortgage servicer shall ensure that it has
27reviewed competent and reliable evidence to substantiate the
28borrower’s default and the right to foreclose, including the
29borrower’s loan status and loan information.

30(c) Until January 1, 2018, any mortgage servicer that engages
31in multiple and repeated uncorrected violations of subdivision (b)
32in recording documents or filing documents in any court relative
33to a foreclosure proceeding shall be liable for a civil penalty of up
34to seven thousand five hundred dollars ($7,500) per mortgage or
35deed of trust in an action brought by a government entity identified
36in Section 17204 of the Business and Professions Code, or in an
37administrative proceeding brought by the Department of Business
38Oversight or the Bureau of Real Estate against a respective licensee,
39in addition to any other remedies available to these entities. This
40subdivision shall be inoperative on January 1, 2018.

P16   1

SEC. 10.  

Section 2924.19 of the Civil Code, as amended by
2Section 17 of Chapter 76 of the Statutes of 2013, is amended to
3read:

4

2924.19.  

(a) (1) If a trustee’s deed upon sale has not been
5recorded, a borrower may bring an action for injunctive relief to
6enjoin a material violation of Section 2923.5, 2924.17, or 2924.18.

7(2) An injunction shall remain in place and any trustee’s sale
8shall be enjoined until the court determines that the mortgage
9servicer, mortgagee, beneficiary, or authorized agent has corrected
10and remedied the violation or violations giving rise to the action
11for injunctive relief. An enjoined entity may move to dissolve an
12injunction based on a showing that the material violation has been
13corrected and remedied.

14(b) After a trustee’s deed upon sale has been recorded, a
15mortgage servicer, mortgagee, beneficiary, or authorized agent
16shall be liable to a borrower for actual economic damages pursuant
17to Section 3281, resulting from a material violation of Section
182923.5, 2924.17, or 2924.18 by that mortgage servicer, mortgagee,
19beneficiary, or authorized agent where the violation was not
20corrected and remedied prior to the recordation of the trustee’s
21deed upon sale. If the court finds that the material violation was
22intentional or reckless, or resulted from willful misconduct by a
23mortgage servicer, mortgagee, beneficiary, or authorized agent,
24the court may award the borrower the greater of treble actual
25damages or statutory damages of fifty thousand dollars ($50,000).

26(c) A mortgage servicer, mortgagee, beneficiary, or authorized
27agent shall not be liable for any violation that it has corrected and
28remedied prior to the recordation of the trustee’s deed upon sale,
29or that has been corrected and remedied by third parties working
30 on its behalf prior to the recordation of the trustee’s deed upon
31sale.

32(d) A violation of Section 2923.5, 2924.17, or 2924.18 by a
33person licensed by the Department of Business Oversight or the
34Bureau of Real Estate shall be deemed to be a violation of that
35person’s licensing law.

36(e) A violation of this article shall not affect the validity of a
37sale in favor of a bona fide purchaser and any of its encumbrancers
38for value without notice.

39(f) A third-party encumbrancer shall not be relieved of liability
40resulting from violations of Section 2923.5, 2924.17, or 2924.18,
P17   1committed by that third-party encumbrancer, that occurred prior
2to the sale of the subject property to the bona fide purchaser.

3(g) The rights, remedies, and procedures provided by this section
4are in addition to and independent of any other rights, remedies,
5or procedures under any other law. Nothing in this section shall
6be construed to alter, limit, or negate any other rights, remedies,
7or procedures provided by law.

8(h) A court may award a prevailing borrower reasonable
9attorney’s fees and costs in an action brought pursuant to this
10section. A borrower shall be deemed to have prevailed for purposes
11of this subdivision if the borrower obtained injunctive relief or
12damages pursuant to this section.

13(i) This section shall apply only to entities described in
14subdivision (b) of Section 2924.18.

15(j)  This section shall remain in effect only until January 1, 2018,
16and as of that date is repealed, unless a later enacted statute, that
17is enacted before January 1, 2018, deletes or extends that date.

18

SEC. 11.  

Section 2924.19 of the Civil Code, as amended by
19Section 18 of Chapter 76 of the Statutes of 2013, is amended to
20read:

21

2924.19.  

(a) (1) If a trustee’s deed upon sale has not been
22recorded, a borrower may bring an action for injunctive relief to
23enjoin a material violation of Section 2923.5, 2924.17, or 2924.18.

24(2) An injunction shall remain in place and any trustee’s sale
25shall be enjoined until the court determines that the mortgage
26servicer, mortgagee, beneficiary, or authorized agent has corrected
27and remedied the violation or violations giving rise to the action
28for injunctive relief. An enjoined entity may move to dissolve an
29injunction based on a showing that the material violation has been
30corrected and remedied.

31(b) After a trustee’s deed upon sale has been recorded, a
32mortgage servicer, mortgagee, beneficiary, or authorized agent
33shall be liable to a borrower for actual economic damages pursuant
34to Section 3281, resulting from a material violation of Section
352923.5, 2924.17, or 2924.18 by that mortgage servicer, mortgagee,
36beneficiary, or authorized agent where the violation was not
37corrected and remedied prior to the recordation of the trustee’s
38deed upon sale. If the court finds that the material violation was
39intentional or reckless, or resulted from willful misconduct by a
40mortgage servicer, mortgagee, beneficiary, or authorized agent,
P18   1the court may award the borrower the greater of treble actual
2damages or statutory damages of fifty thousand dollars ($50,000).

3(c) A mortgage servicer, mortgagee, beneficiary, or authorized
4agent shall not be liable for any violation that it has corrected and
5remedied prior to the recordation of the trustee’s deed upon sale,
6or that has been corrected and remedied by third parties working
7 on its behalf prior to the recordation of the trustee’s deed upon
8sale.

9(d) A violation of Section 2923.5, 2924.17, or 2924.18 by a
10person licensed by the Department of Business Oversight or the
11Bureau of Real Estate shall be deemed to be a violation of that
12person’s licensing law.

13(e) A violation of this article shall not affect the validity of a
14sale in favor of a bona fide purchaser and any of its encumbrancers
15for value without notice.

16(f) A third-party encumbrancer shall not be relieved of liability
17resulting from violations of Section 2923.5, 2924.17, or 2924.18,
18committed by that third-party encumbrancer, that occurred prior
19to the sale of the subject property to the bona fide purchaser.

20(g) The rights, remedies, and procedures provided by this section
21are in addition to and independent of any other rights, remedies,
22or procedures under any other law. Nothing in this section shall
23be construed to alter, limit, or negate any other rights, remedies,
24or procedures provided by law.

25(h) A court may award a prevailing borrower reasonable
26attorney’s fees and costs in an action brought pursuant to this
27section. A borrower shall be deemed to have prevailed for purposes
28of this subdivision if the borrower obtained injunctive relief or
29damages pursuant to this section.

30(i) This section shall apply only to entities described in
31subdivision (b) of Section 2924.18.

32(j)  This section shall remain in effect only until January 1, 2018,
33and as of that date is repealed, unless a later enacted statute, that
34is enacted before January 1, 2018, deletes or extends that date.

35

SEC. 12.  

Section 2924.20 of the Civil Code, as added by
36Section 23 of Chapter 86 of the Statutes of 2012, is amended to
37read:

38

2924.20.  

Consistent with their general regulatory authority,
39and notwithstanding subdivisions (b) and (c) of Section 2924.18,
40the Department of Business Oversight and the Bureau of Real
P19   1Estate may adopt regulations applicable to any entity or person
2under their respective jurisdictions that are necessary to carry out
3the purposes of the act that added this section. A violation of the
4regulations adopted pursuant to this section shall only be
5enforceable by the regulatory agency.

6

SEC. 13.  

Section 2924.20 of the Civil Code, as added by
7Section 23 of Chapter 87 of the Statutes of 2012, is amended to
8read:

9

2924.20.  

Consistent with their general regulatory authority,
10and notwithstanding subdivisions (b) and (c) of Section 2924.18,
11the Department of Business Oversight and the Bureau of Real
12Estate may adopt regulations applicable to any entity or person
13under their respective jurisdictions that are necessary to carry out
14the purposes of the act that added this section. A violation of the
15regulations adopted pursuant to this section shall only be
16enforceable by the regulatory agency.

17

SEC. 14.  

Section 580d of the Code of Civil Procedure is
18amended to read:

19

580d.  

(a) Except as provided in subdivision (b), no deficiency
20shall be owed or collected, and no deficiency judgment shall be
21rendered for a deficiency on a note secured by a deed of trust or
22mortgage on real property or an estate for years therein executed
23in any case in which the real property or estate for years therein
24has been sold by the mortgagee or trustee under power of sale
25contained in the mortgage or deed of trust.

26(b) The fact that no deficiency shall be owed or collected under
27the circumstances set forth in subdivision (a) does not affect the
28liability that a guarantor, pledgorbegin insert,end insert or other surety might otherwise
29have with respect to the deficiency, or that might otherwise be
30satisfied in whole or in part from other collateral pledged to secure
31the obligation that is the subject of the deficiency.

32(c) This section does not apply to a deed of trust, mortgage, or
33other lien given to secure the payment of bonds or other evidences
34of indebtedness authorized or permitted to be issued by the
35Commissioner of Business Oversight or which is made by a public
36utility subject to the Public Utilities Act (Part 1 (commencing with
37Section 201) of Division 1 of the Public Utilities Code).

38

SEC. 15.  

Section 684.115 of the Code of Civil Procedure is
39amended to read:

P20   1

684.115.  

(a) A financial institution may, and if it has more
2than nine branches or offices at which it conducts its business
3within this state shall, designate one or more central locations for
4service of legal process within this state. Each designated location
5shall be referred to as a “central location.” If a financial institution
6elects or is required to designate a central location for service of
7legal process, the financial institution shall file a notice of its
8designation with the Department of Business Oversight which
9filing shall be effective upon filing and shall contain all of the
10following:

11(1) The physical address of the central location.

12(2) The days and hours during which service will be accepted
13at the central location.

14(3) If the central location will not accept service of legal process
15directed at deposit accounts maintained or property held at all of
16the financial institution’s branches or offices within this state, or
17if the service accepted at the central location will not apply to
18safe-deposit boxes or other property of the judgment debtor held
19by or for the judgment debtor, the filing shall also contain sufficient
20information to permit a determination of the limitation or
21limitations, including, in the case of a limitation applicable to
22certain branches or offices, an identification of the branches or
23offices as to which service at the central location will not apply
24and the nature of the limitation applicable to those branches or
25offices. If the limitation will apply to all branches or offices of the
26financial institution within this state, the filing may indicate the
27nature of the limitation and that it applies to all branches or offices,
28in lieu of an identification of branches or offices as to which the
29limitation applies. To the extent that a financial institution’s
30designation of a central location for service of legal process covers
31the process directed at deposit accounts, safe-deposit boxes, or
32other property of the judgment debtor held by or for the judgment
33debtor at a particular branch or office located within this state, the
34branch or office shall be a branch or office covered by central
35process.

36(b) Should a financial institution required to designate a central
37location fail to do so, each branch of that institution located in this
38state shall be deemed to be a central location at which service of
39legal process may be made, and all of the institution’s branches
P21   1or offices located within this state shall be deemed to be a branch
2or office covered by central process.

3(c) Subject to any limitation noted pursuant to paragraph (3) of
4subdivision (a), service of legal process at a central location of a
5financial institution shall be effective against all deposit accounts
6and all property held for safekeeping, as collateral for an obligation
7owed to the financial institution or in a safe-deposit box if the same
8is described in the legal process and held by the financial institution
9at any branch or office covered by central process and located
10within this state. However, while service of legal process at the
11central location will establish a lien on all property, if any property
12other than deposit accounts is physically held by the financial
13institution in a county other than that in which the designated
14central location is located, the financial institution shall include in
15its garnishee’s memorandum the location or locations of the
16property, and the judgment creditor shall obtain a writ of execution
17covering the property and directed to the levying officer in that
18county to accomplish the turnover of the property and shall forward
19the writ and related required documentation to the levying officer
20in the county in which the property is held.

21(d) A financial institution may modify or revoke any designation
22made pursuant to subdivision (a) by filing the modification or
23revocation with the Department of Business Oversight. The
24modification or revocation shall be effective when the Department
25of Business Oversight’s records have been updated to reflect the
26modification or revocation, provided that the judgment creditor
27may rely upon the superseded designation during the 30-day period
28following the effective date of the revocation or modification.

29(e) (1) The Department of Business Oversight shall update its
30online records to reflect a filing by a financial institution pursuant
31to subdivision (a) or a modification or revocation filed by a
32financial institution pursuant to subdivision (d) within 10 business
33days following the filing by the financial institution. The
34Department of Business Oversight’s Internet Web site shall reflect
35the date its online records for each financial institution have most
36recently been updated.

37(2) The Department of Business Oversight shall provide any
38person requesting it with a copy of each current filing made by a
39financial institution pursuant to subdivision (a). The Department
40of Business Oversight may satisfy its obligation under this
P22   1subdivision by posting all current designations of a financial
2institution, or the pertinent information therein, on an Internet Web
3site available to the public without charge, and if that information
4is made available, the Department of Business Oversight may
5impose a reasonable fee for furnishing that information in any
6other manner.

7(f) As to deposit accounts maintained or property held for
8safekeeping, as collateral for an obligation owed to the financial
9institution or in a safe-deposit box at a branch or office covered
10by central process, service of legal process at a location other than
11a central location designated by the financial institution shall not
12be effective unless the financial institution, in its absolute
13discretion, elects to act upon the process at that location as if it
14were effective. In the absence of an election, the financial
15institution may respond to the legal process by mailing or delivery
16of the garnishee’s memorandum to the levying officer within the
17time otherwise provided therefor, with a statement on the
18garnishee’s memorandum that the legal process was not properly
19served at the financial institution’s designated location for receiving
20legal process, and, therefore, was not processed, and the address
21at which the financial institution is to receive legal process.

22(g) If any legal process is served at a central location of a
23financial institution pursuant to this section, all related papers to
24be served on the financial institution shall be served at that location,
25unless agreed to the contrary between the serving party and the
26financial institution.

27(h) This subdivision shall apply whenever a financial institution
28operates within this state at least one branch or office in addition
29to its head office or main office, as applicable, or a financial
30institution headquartered in another state operates more than one
31branch or office within this state, and no central location has been
32designated or deemed to have been designated by the institution
33for service of legal process relating to deposit accounts maintained
34at the financial institution’s head office or main office, as
35applicable, and branches located within this state. If a judgment
36creditor reasonably believes that, pursuant to Section 700.140 and,
37if applicable, Section 700.160, any act of enforcement would be
38effective against a specific deposit account maintained at a financial
39institution described in this subdivision, the judgment creditor may
40file with the financial institution a written request that the financial
P23   1institution identify the branch or office within this state at which
2a specified account might be maintained by the financial institution.
3The written request shall contain the following statements or
4information:

5(1) The name of the person reasonably believed by the judgment
6creditor to be a person in whose name the specified deposit account
7stands.

8(2) If the name of the person reasonably believed by the
9judgment creditor to be a person in whose name the specified
10deposit account stands is not a judgment debtor identified in the
11writ of execution, a statement that a person reasonably believed
12by the judgment creditor to be a person in whose name the specified
13deposit account stands will be appropriately identified in the legal
14process to be served pursuant to Section 700.160, including any
15supplementary papers, such as a court order or affidavit if the same
16will be required by Section 700.160.

17(3) The specific identifying number of the account reasonably
18believed to be maintained with the financial institution and standing
19in the name of the judgment debtor or other person.

20(4) The address of the requesting party.

21(5) An affidavit by the judgment creditor or the judgment
22creditor’s counsel stating substantially the following:

23

begin delete

24 I

end delete

25begin insert“Iend insert hereby declare that this deposit account location request
26complies with Section 684.115 of the Code of Civil Procedure,
27that the account or accounts of the judgment debtor or other person
28or persons appropriately identified in the legal process and
29specified herein are subject to a valid writ of execution, or court
30order, that I have a reasonable belief, formed after an inquiry
31reasonable under the circumstances, that the financial institution
32receiving this deposit account location request has an account
33standing in the name of the judgment debtor or other person or
34persons appropriately identified in the legal process, and that
35information pertaining to the location of the account will assist the
36judgment creditor in enforcing thebegin delete judgment.end deletebegin insert judgment.end insertbegin insertend insert

37

38(i) The affidavit contemplated by subdivision (h) shall be signed
39by the judgment creditor or the judgment creditor’s counsel and
40filed at the financial institution’s head office located within this
P24   1state or, if the financial institution’s head office is in another state,
2at one of its branches or offices within this state. Failure to comply
3with the requirements of subdivision (h) and this subdivision shall
4be sufficient basis for the financial institution to refuse to produce
5the information that would otherwise be required by subdivision
6(j).

7(j) Within 10 banking days following receipt by a financial
8institution at the applicable location specified in subdivision (i) of
9a request contemplated by subdivision (h), as to each specific
10deposit account identified in the request contemplated by
11subdivision (h), the financial institution shall respond by mailing,
12by first-class mail with postage prepaid, to the requester’s address
13as specified in the request a response indicating the branch or office
14location of the financial institution at which the specified deposit
15account might be maintained, or, if the specified deposit account,
16if it exists, would not be maintained at a specific location, at least
17one place within this state at which legal process relating to the
18deposit account should or may be served. The response to be
19furnished pursuant to this subdivision shall not require the financial
20institution to determine whether an account exists or, if an account
21does exist, whether it would be reached by the legal process, rather,
22the branch or office location shall be determined and reported by
23the financial institution based solely upon its determination that
24an account with the identifying number provided by the requester
25would be maintained at that branch if an account did exist, and the
26response shall not contain any information about the name in which
27the account stands or any other information concerning the account,
28if it exists. If more than one account number is specified in the
29request, the financial institution’s responses as to some or all of
30those account numbers may be combined in a single writing.

31(k) A response furnished in good faith by the financial institution
32pursuant to subdivision (j) shall not be deemed to violate the
33privacy of any person in whose name the specified deposit account
34stands nor the privacy of any other person, and shall not require
35the consent of the person in whose name the account stands nor
36that of any other person.

37(l) A financial institution shall not notify the person in whose
38name the specified deposit account stands or any other person
39related to the specified account of the receipt of any request made
40pursuant to subdivision (h) and affecting that person’s or persons’
P25   1accounts at the financial institution, provided that the financial
2institution shall have no liability for its failure to comply with the
3provisions of this subdivision.

4

SEC. 16.  

Section 163 of the Corporations Code is amended to
5read:

6

163.  

“Corporation subject to the Banking Law” (Division 1.1
7(commencing with Section 1000) of the Financial Code) means:

8(a) Any corporation which, with the approval of the
9Commissioner of Business Oversight, is incorporated for the
10purpose of engaging in, or which is authorized by the
11Commissioner of Business Oversight to engage in, the commercial
12banking business under Division 1.1 (commencing with Section
131000) of the Financial Code.

14(b) Any corporation which, with the approval of the
15Commissioner of Business Oversight, is incorporated for the
16purpose of engaging in, or which is authorized by the
17Commissioner of Business Oversight to engage in, the industrial
18banking business under Division 1.1 (commencing with Section
191000) of the Financial Code.

20(c) Any corporation (other than a corporation described in
21subdivision (d)) which, with the approval of the Commissioner of
22Business Oversight, is incorporated for the purpose of engaging
23in, or which is authorized by the Commissioner of Business
24Oversight to engage in, the trust business under Division 1.1
25(commencing with Section 1000) of the Financial Code.

26(d) Any corporation which is authorized by the Commissioner
27of Business Oversight and the Commissioner of Insurance to
28maintain a title insurance department to engage in title insurance
29business and a trust department to engage in trust business; or

30(e) Any corporation which, with the approval of the
31Commissioner of Business Oversight, is incorporated for the
32purpose of engaging in, or which is authorized by the
33Commissioner of Business Oversight to engage in, business under
34Article 1 (commencing with Section 1850), Chapter 21, Division
351.1 of the Financial Code.

36

SEC. 17.  

Section 201 of the Corporations Code is amended to
37read:

38

201.  

(a) The Secretary of State shall not file articles setting
39forth a name in which “bank,” “ trust,”begin delete “trustee”end deletebegin insert “trustee,end insertbegin insertend insert or
40related words appear, unless the certificate of approval of the
P26   1Commissioner of Business Oversight is attached thereto. This
2subdivision does not apply to the articles of any corporation subject
3to the Banking Law on which is endorsed the approval of the
4Commissioner of Business Oversight.

5(b) The Secretary of State shall not file articles which set forth
6a name which is likely to mislead the public or which is the same
7as, or resembles so closely as to tend to deceive, the name of a
8domestic corporation, the name of a foreign corporation which is
9authorized to transact intrastate business or has registered its name
10pursuant to Section 2101, a name which a foreign corporation has
11assumed under subdivision (b) of Section 2106, a name which will
12become the record name of a domestic or foreign corporation upon
13the effective date of a filed corporate instrument where there is a
14delayed effective date pursuant to subdivision (c) of Section 110
15or subdivision (c) of Section 5008, or a name which is under
16reservation for another corporation pursuant to this title, except
17that a corporation may adopt a name that is substantially the same
18as an existing domestic corporation or foreign corporation which
19is authorized to transact intrastate business or has registered its
20name pursuant to Section 2101, upon proof of consent by such
21domestic or foreign corporation and a finding by the Secretary of
22State that under the circumstances the public is not likely to be
23misled.

24The use by a corporation of a name in violation of this section
25may be enjoined notwithstanding the filing of its articles by the
26Secretary of State.

27(c) Any applicant may, upon payment of the fee prescribed
28therefor in the Government Code, obtain from the Secretary of
29State a certificate of reservation of any name not prohibited by
30subdivision (b), and upon the issuance of the certificate the name
31stated therein shall be reserved for a period of 60 days. The
32Secretary of State shall not, however, issue certificates reserving
33the same name for two or more consecutive 60-day periods to the
34same applicant or for the use or benefit of the same person,
35partnership, firm or corporation; nor shall consecutive reservations
36be made by or for the use or benefit of the same person, partnership,
37firm or corporation of names so similar as to fall within the
38prohibitions of subdivision (b).

39

SEC. 18.  

Section 2510 of the Corporations Code is amended
40to read:

P27   1

2510.  

“Flexible purpose corporation subject to the Banking
2Law” means any of the following:

3(a) A flexible purpose corporation that, with the approval of the
4Commissioner of Business Oversight, is incorporated for the
5purpose of engaging in, or that is authorized by the Commissioner
6of Business Oversight to engage in, the commercial banking
7business under the Banking Law (Division 1.1 (commencing with
8Section 1000) of the Financial Code).

9(b) Any flexible purpose corporation that, with the approval of
10the Commissioner of Business Oversight, is incorporated for the
11purpose of engaging in, or that is authorized by the Commissioner
12of Business Oversight to engage in, the industrial banking business
13under the Banking Law (Division 1.1 (commencing with Section
141000) of the Financial Code).

15(c) Any flexible purpose corporation, other than a flexible
16purpose corporation described in subdivision (d), that, with the
17approval of the Commissioner of Business Oversight, is
18incorporated for the purpose of engaging in, or that is authorized
19by the Commissioner of Business Oversight to engage in, the trust
20business under the Banking Law (Division 1.1 (commencing with
21Section 1000) of the Financial Code).

22(d) Any flexible purpose corporation that is authorized by the
23Commissioner of Business Oversight and the Commissioner of
24Insurance to maintain a title insurance department to engage in
25title insurance business and a trust department to engage in trust
26business.

27(e) Any flexible purpose corporation that, with the approval of
28the Commissioner of Business Oversight, is incorporated for the
29purpose of engaging in, or that is authorized by the Commissioner
30of Business Oversight to engage in, business under Article 1
31(commencing with Section 1850) of Chapter 21 of Division 1.1
32of the Financial Code.

33

SEC. 19.  

Section 2601 of the Corporations Code is amended
34to read:

35

2601.  

(a) The Secretary of State shall not file articles setting
36forth a name in which “bank,” “trust,”begin delete “trustee”end deletebegin insert “trustee,end insertbegin insertend insert or
37related words appear, unless the certificate of approval of the
38Commissioner of Business Oversight is attached to the articles.
39This subdivision does not apply to the articles of any flexible
P28   1purpose corporation subject to the Banking Law on which is
2endorsed the approval of the Commissioner of Business Oversight.

3(b) The Secretary of State shall not file articles that set forth a
4name that is likely to mislead the public or that is the same as, or
5resembles so closely as to tend to deceive, the name of a domestic
6corporation, the name of a domestic flexible purpose corporation,
7or the name of a foreign corporation that is authorized to transact
8intrastate business or has registered its name pursuant to Section
92101, a name that a foreign corporation has assumed under
10subdivision (b) of Section 2106, a name that will become the record
11name of a corporation or flexible purpose corporation or a foreign
12corporation upon the effective date of a filed corporate instrument
13where there is a delayed effective date pursuant to subdivision (c)
14of Section 110 or subdivision (c) of Section 5008, or a name that
15is under reservation for another corporation or flexible purpose
16corporation pursuant to this title, except that a flexible purpose
17corporation may adopt a name that is substantially the same as an
18existing corporation or flexible purpose corporation, foreign or
19domestic, which is authorized to transact intrastate business or has
20registered its name pursuant to Section 2101, upon proof of consent
21by the domestic or foreign corporation or flexible purpose
22corporation and a finding by the Secretary of State that under the
23circumstances the public is not likely to be misled. The use by a
24flexible purpose corporation of a name in violation of this section
25may be enjoined notwithstanding the filing of its articles by the
26Secretary of State.

27(c) Any applicant may, upon payment of the fee prescribed in
28the Government Code, obtain from the Secretary of State a
29certificate of reservation of any name not prohibited by subdivision
30(b), and upon the issuance of the certificate the name stated in the
31certificate shall be reserved for a period of 60 days. The Secretary
32of State shall not, however, issue certificates reserving the same
33name for two or more consecutive 60-day periods to the same
34applicant or for the use or benefit of the same person, partnership,
35firm, corporation, or flexible purpose corporation. No consecutive
36reservations shall be made by or for the use or benefit of the same
37person, partnership, firm, corporationbegin insert,end insert or flexible purpose
38corporation of names so similar as to fall within the prohibitions
39of subdivision (b).

P29   1

SEC. 20.  

Section 5122 of the Corporations Code is amended
2to read:

3

5122.  

(a) The Secretary of State shall not file articles setting
4forth a name in which “bank,” “trust,”begin delete “trustee”end deletebegin insert “trustee,end insertbegin insertend insert or
5related words appear, unless the certificate of approval of the
6Commissioner of Business Oversight is attached thereto.

7(b) The Secretary of State shall not file articles which set forth
8a name which is likely to mislead the public or which is the same
9as, or resembles so closely as to tend to deceive, the name of a
10domestic corporation, the name of a foreign corporation which is
11authorized to transact intrastate business or has registered its name
12pursuant to Section 2101, a name which a foreign corporation has
13assumed under subdivision (b) of Section 2106 or a name which
14will become the record name of a domestic or foreign corporation
15upon the effective date of a filed corporate instrument where there
16is a delayed effective date pursuant to subdivision (c) of Section
17110, or subdivision (c) of Section 5008, or a name which is under
18reservation pursuant to this title, except that a corporation may
19adopt a name that is substantially the same as an existing domestic
20or foreign corporation which is authorized to transact intrastate
21business or has registered its name pursuant to Section 2101, upon
22proof of consent by such corporation and a finding by the Secretary
23of State that under the circumstances the public is not likely to be
24misled.

25The use by a corporation of a name in violation of this section
26may be enjoined notwithstanding the filing of its articles by the
27Secretary of State.

28(c) Any applicant may, upon payment of the fee prescribed
29therefor in the Government Code, obtain from the Secretary of
30State a certificate of reservation of any name not prohibited by
31subdivision (b), and upon the issuance of the certificate the name
32stated therein shall be reserved for a period of 60 days. The
33Secretary of State shall not, however, issue certificates reserving
34the same name for two or more consecutive 60-day periods to the
35same applicant or for the use or benefit of the same person; nor
36shall consecutive reservations be made by or for the use or benefit
37of the same person of names so similar as to fall within the
38prohibitions of subdivision (b).

39

SEC. 21.  

Section 7122 of the Corporations Code is amended
40to read:

P30   1

7122.  

(a) The Secretary of State shall not file articles setting
2forth a name in which “bank,” “trust,” “trusteebegin insert,end insert” or related words
3appear, unless the certificate of approval of the Commissioner of
4Business Oversight is attached thereto.

5(b) The Secretary of State shall not file articles pursuant to this
6part setting forth a name which may create the impression that the
7purpose of the corporation is public, charitablebegin insert,end insert or religious or that
8it is a charitable foundation.

9(c) The Secretary of State shall not file articles which set forth
10a name which is likely to mislead the public or which is the same
11as, or resembles so closely as to tend to deceive, the name of a
12domestic corporation, the name of a foreign corporation which is
13authorized to transact intrastate business or has registered its name
14pursuant to Section 2101, a name which a foreign corporation has
15assumed under subdivision (b) of Section 2106, a name which will
16become the record name of a domestic or foreign corporation upon
17the effective date of a filed corporate instrument where there is a
18delayed effective date pursuant to subdivision (c) of Section 110,
19or subdivision (c) of Section 5008, or a name which is under
20reservation pursuant to this title, except that a corporation may
21adopt a name that is substantially the same as an existing domestic
22or foreign corporation which is authorized to transact intrastate
23business or has registered its name pursuant to Section 2101, upon
24proof of consent by such corporation and a finding by the Secretary
25of State that under the circumstances the public is not likely to be
26misled.

27The use by a corporation of a name in violation of this section
28may be enjoined notwithstanding the filing of its articles by the
29Secretary of State.

30(d) Any applicant may, upon payment of the fee prescribed
31therefor in the Government Code, obtain from the Secretary of
32State a certificate of reservation of any name not prohibited by
33subdivision (c), and upon the issuance of the certificate the name
34stated therein shall be reserved for a period of 60 days. The
35Secretary of State shall not, however, issue certificates reserving
36the same name for two or more consecutive 60-day periods to the
37same applicant or for the use or benefit of the same person; nor
38shall consecutive reservations be made by or for the use or benefit
39of the same person of names so similar as to fall within the
40prohibitions of subdivision (c).

P31   1

SEC. 22.  

Section 9122 of the Corporations Code is amended
2to read:

3

9122.  

(a) The Secretary of State shall not file articles setting
4forth a name in which “bank,” “trust,” “trusteebegin insert,end insert” or related words
5appear, unless the certificate of approval of the Commissioner of
6Business Oversight is attached thereto.

7(b) The Secretary of State shall not file articles which set forth
8a name which is likely to mislead the public or which is the same
9as, or resembles so closely as to tend to deceive, the name of a
10domestic corporation, the name of a foreign corporation which is
11authorized to transact intrastate business or has registered its name
12pursuant to Section 2101, a name which a foreign corporation has
13assumed under subdivision (b) of Section 2106 or a name which
14will become the record name of a domestic or foreign corporation
15upon the effective date of a filed corporate instrument where there
16is a delayed effective date pursuant to subdivision (c) of Section
17110 or subdivision (c) of Section 5008, or a name which is under
18reservation pursuant to this title, except that a corporation may
19adopt a name that is substantially the same as an existing domestic
20or foreign corporation which is authorized to transact intrastate
21business or has registered its name pursuant to Section 2101, upon
22proof of consent by such corporation and a finding by the Secretary
23of State that under the circumstances the public is not likely to be
24misled.

25The use by a corporation of a name in violation of this section
26may be enjoined notwithstanding the filing of its articles by the
27Secretary of State.

28(c) Any applicant may, upon payment of the fee prescribed
29 therefor in the Government Code, obtain from the Secretary of
30State a certificate of reservation of any name not prohibited by
31subdivision (b), and upon the issuance of the certificate the name
32stated therein shall be reserved for a period of 60 days. The
33Secretary of State shall not, however, issue certificates reserving
34the same name for two or more consecutive 60-day periods to the
35same applicant or for the use or benefit of the same person; nor
36shall consecutive reservations be made by or for the use or benefit
37of the same person of names so similar as to fall within the
38prohibitions of subdivision (b).

39

SEC. 23.  

Section 12302 of the Corporations Code is amended
40to read:

P32   1

12302.  

(a) The Secretary of State shall not file articles setting
2forth a name in which “bank,” “trust,”begin delete “trustee”end deletebegin insert “trustee,end insertbegin insertend insert or
3related words appear, unless the certificate of approval of the
4Commissioner of Business Oversight is attached thereto.

5(b) The Secretary of State shall not file articles which set forth
6a name which is likely to mislead the public or which is the same
7as, or resembles so closely as to tend to deceive, the name of a
8domestic corporation, the name of a foreign corporation which is
9authorized to transact intrastate business or has registered its name
10pursuant to Section 2101, a name which a foreign corporation has
11assumed under subdivision (b) of Section 2106, a name which will
12become the record name of a domestic or foreign corporation upon
13the effective date of a filed corporate instrument where there is a
14delayed effective date pursuant to this title, or a name which is
15under reservation pursuant to this title, except that a corporation
16may adopt a name that is substantially the same as an existing
17domestic or foreign corporation which is authorized to transact
18intrastate business or has registered its name pursuant to Section
192101, upon proof of consent by such corporation and a finding by
20the Secretary of State that under the circumstances the public is
21not likely to be misled.

22(c) The use by a corporation of a name in violation of this
23section may be enjoined notwithstanding the filing of its articles
24by the Secretary of State.

25(d) Any applicant may, upon payment of the fee prescribed
26therefor in the Government Code, obtain from the Secretary of
27State a certificate of reservation of any name not prohibited by
28subdivision (c), and upon the issuance of the certificate the name
29stated therein shall be reserved for a period of 60 days. The
30Secretary of State shall not, however, issue certificates reserving
31the same name for two or more consecutive 60-day periods to the
32same applicant or for the use or benefit of the same person; nor
33shall consecutive reservations be made by or for the use or benefit
34of the same person of names so similar as to fall within the
35prohibitions of subdivision (c).

36

SEC. 24.  

Section 371 of the Financial Code is amended to read:

37

371.  

(a) There is in the Department of Business Oversight, the
38Division of Corporations, under the direction of the Senior Deputy
39Commissioner of Business Oversight for the Division of
40Corporations. The senior deputy commissioner has charge of the
P33   1execution of the laws of the state that were, prior to July 1, 2013,
2under the charge of the Department of Corporations.

3(b) There is in the Department of Business Oversight, the
4Division of Financial Institutions under the direction of the Senior
5Deputy Commissioner for the Division of Financial Institutions.
6The senior deputy commissioner has charge of the execution of
7the laws of the state that were, prior to July 1, 2013, under the
8charge of the Department of Financial Institutions.

9

SEC. 25.  

Section 380 of the Financial Code is amended to read:

10

380.  

(a) The commissioner shall inform appropriate state and
11federal officials charged with the regulation of financial institutions
12or securities transactions of any enforcement actions, including,
13but not limited to, civil or criminal actions, cease and desist orders,
14license or authorization suspensions or revocations, or an open
15investigation.

16(b) The commissioner shall inform appropriate state and federal
17officials charged with the regulation of financial institutions or
18securities transactions if it appears that any bank, bank holding
19company, savings association, savings and loan holding company,
20credit union, industrial loan company, industrial loan holding
21company, or other licensee of the department is conducting its
22business in a fraudulent, unsafe, unsound, or injurious manner, or
23has suffered or will suffer substantial financial loss or damage,
24and it appears to the commissioner that the information is relevant
25to the regulatory activities of the other agency.

26

SEC. 26.  

Section 1514 of the Financial Code is amended to
27read:

28

1514.  

A commercial bank may organize, sponsor, operate,
29control, or render investment advice to, an investment company,
30or underwrite, distribute, or sell securities of any investment
31company which has qualified to sell its securities in this state
32pursuant to Part 2 (commencing with Section 25100) of Division
331 of Title 4 of the Corporations Code, if the officers and employees
34of the bank who sell these securities meet such standards with
35respect to training, experience, and sales practices as established
36by the Secretary of Business, Consumer Services, and Housing or
37the secretary’s designee. For the purpose of this section,
38“investment company” means an investment company as defined
39in the Investment Company Act of 1940 (15 U.S.C., Sec. 80a-1 et
40seq.).

P34   1

SEC. 27.  

Section 2105 of the Financial Code is amended to
2read:

3

2105.  

(a) Each licensee or agent shall prominently post on the
4premises of each branch office that conducts money transmission
5a notice stating that:
6

 

“If you have complaints with respect to any aspect of the money transmission activities conducted at this location, you may contact the begin delete Department of Business end deletebegin insertDepartment of Business end insertOversight at its toll-free telephone number 1-800-275-2677, its Internet Web site at www.dbo.ca.gov/Consumer/consumer_services.asp, or by mail at Department of Business Oversight, Consumer Services, 1515 K Street, Suite 200, Sacramento, CA 95814.”

P34  14

 

15(b) The commissioner may by order or regulation modify the
16content of the notice required by this section. This notice shall be
17printed in English and in the same language principally used by
18the licensee or any agent of the licensee to advertise, solicit, or
19negotiate either orally or in writing, with respect to money
20transmission at that branch office. The information required in this
21notice shall be clear, legible, and in letters not less than one-half
22inch in height. The notice shall be posted in a conspicuous location
23in the unobstructed view of the public within the premises. The
24licensee shall provide to each of its agents the notice required by
25this section. In those locations operated by an agent, the agent, and
26not the licensee, shall be responsible for the failure to properly
27post the required notice.

28

SEC. 28.  

Section 5106 of the Financial Code is amended to
29read:

30

5106.  

“Department” means the Department of Business
31Oversight.

32

SEC. 29.  

Section 14381 of the Financial Code is amended to
33read:

34

14381.  

The Credit Union Advisory Committee shall advise the
35commissioner and the Deputy Commissioner of Business Oversight
36for the Office of Credit Unions on matters relating to credit unions
37or the credit union business.

38

SEC. 30.  

Section 14382 of the Financial Code is amended to
39read:

P35   1

14382.  

(a) The Credit Union Advisory Committee consists of
2seven members.

3(b) The members of the Credit Union Advisory Committee shall
4be appointed by the Secretary of Business, Consumer Services,
5and Housing.

6(c) The term of a member of the Credit Union Advisory
7Committee is two years. However, a member may be reappointed.

8(d) Membership in the Credit Union Advisory Committee is
9voluntary. No person is required to accept an appointment to the
10Credit Union Advisory Committee, and any member may resign
11by filing a resignation with the commissioner.

12(e) No member of the Credit Union Advisory Committee shall
13receive any compensation, reimbursement for expenses, or other
14payment from the state in connection with service on the Credit
15Union Advisory Committee.

16

SEC. 31.  

Section 14652.5 of the Financial Code is amended
17to read:

18

14652.5.  

A credit union may organize, sponsor, operate,
19control, or render investment advice to, an investment company,
20or underwrite, distribute, or sell securities of any investment
21company which has qualified to sell its securities in this state
22pursuant to Part 2 (commencing with Section 25100) of Division
231 of Title 4 of the Corporations Code, if the officers and employees
24of the credit union who sell these securities meet such standards
25with respect to training, experience, and sales practices as
26established by the Secretary of Business, Consumer Services, and
27Housing or the secretary’s designee. For the purpose of this section,
28“investment company” means an investment company as defined
29in the Investment Company Act of 1940 (15 U.S.C., Sec. 80a-1 et
30seq.).

31

SEC. 32.  

Section 18002.5 of the Financial Code is amended
32to read:

33

18002.5.  

“Department” means the Department of Business
34Oversight.

35

SEC. 33.  

Section 18022.5 of the Financial Code is amended
36to read:

37

18022.5.  

An industrial loan company may organize, sponsor,
38operate, control, or render investment advice to, an investment
39company, or underwrite, distribute, or sell securities of any
40investment company which has qualified to sell its securities in
P36   1this state pursuant to Part 2 (commencing with Section 25100) of
2Division 1, Title 4 of the Corporations Code, if the officers and
3employees of the industrial loan company who sell these securities
4meet such standards with respect to training experience, and sales
5practices as established by the Secretary of Business, Consumer
6Services, and Housing or the secretary’s designee. For the purpose
7of this section, “investment company” means an investment
8company as defined in the Investment Company Act of 1940 (15
9U.S.C., Sec. 80a-1 et seq.).

10

SEC. 34.  

Section 23001 of the Financial Code is amended to
11read:

12

23001.  

As used in this division, the following terms have the
13following meanings:

14(a) “Deferred deposit transaction” means a transaction whereby
15a person defers depositing a customer’s personal check until a
16specific date, pursuant to a written agreement for a fee or other
17charge, as provided in Section 23035.

18(b) “Commissioner” means the Commissioner of Business
19Oversight.

20(c) “Department” means the Department of Business Oversight.

21(d) “Licensee” means any person who offers, originates, or
22makes a deferred deposit transaction, who arranges a deferred
23deposit transaction for a deferred deposit originator, who acts as
24an agent for a deferred deposit originator, or who assists a deferred
25deposit originator in the origination of a deferred deposit
26transaction. However, “licensee” does not include a state or
27federally chartered bank, thrift, savings association, industrial loan
28company, or credit union. “Licensee” also does not include a retail
29seller engaged primarily in the business of selling consumer goods,
30including consumables, to retail buyers that cashes checks or issues
31money orders for a minimum fee not exceeding two dollars ($2)
32as a service to its customers that is incidental to its main purpose
33or business. “Licensee” also does not include an employee regularly
34employed by a licensee at the licensee’s place of business. An
35employee, when acting under the scope of the employee’s
36employment, shall be exempt from any other law from which the
37employee’s employer is exempt.

38(e) “Person” means an individual, a corporation, a partnership,
39a limited liability company, a joint venture, an association, a joint
40stock company, a trust, an unincorporated organization, a
P37   1government entity, or a political subdivision of a government
2entity.

3(f) “Deferred deposit originator” means a person who offers,
4originates, or makes a deferred deposit transaction.

5

SEC. 35.  

Section 6254.5 of the Government Code is amended
6to read:

7

6254.5.  

Notwithstanding any other provisions ofbegin delete theend delete law,
8whenever a state or local agency discloses a public record which
9is otherwise exempt from this chapter, to any member of the public,
10this disclosure shall constitute a waiver of the exemptions specified
11in Sections 6254, 6254.7, or other similar provisions of law. For
12purposes of this section, “agency” includes a member, agent,
13officer, or employee of the agency acting within the scope of his
14or her membership, agency, office, or employment.

15This section, however, shall not apply to disclosures:

16(a) Made pursuant to the Information Practices Act (commencing
17with Section 1798 of the Civil Code) or discovery proceedings.

18(b) Made through other legal proceedings or as otherwise
19required by law.

20(c) Within the scope of disclosure of a statute which limits
21disclosure of specified writings to certain purposes.

22(d) Not required by law, and prohibited by formal action of an
23elected legislative body of the local agency which retains the
24writings.

25(e) Made to any governmental agency which agrees to treat the
26disclosed material as confidential. Only persons authorized in
27writing by the person in charge of the agency shall be permitted
28to obtain the information. Any information obtained by the agency
29shall only be used for purposes which are consistent with existing
30law.

31(f) Of records relating to a financial institution or an affiliate
32thereof, if the disclosures are made to the financial institution or
33affiliate by a state agency responsible for the regulation or
34supervision of the financial institution or affiliate.

35(g) Of records relating to any person that is subject to the
36jurisdiction of the Department of Business Oversight, if the
37disclosures are made to the person that is the subject of the records
38for the purpose of corrective action by that person, or if a
39corporation, to an officer, director, or other key personnel of the
40corporation for the purpose of corrective action, or to any other
P38   1person to the extent necessary to obtain information from that
2person for the purpose of an investigation by the Department of
3Corporations.

4(h) Made by the Commissioner of Business Oversight under
5Section 450, 452, 8009, or 18396 of the Financial Code.

6(i) Of records relating to any person that is subject to the
7jurisdiction of the Department of Managed Health Care, if the
8disclosures are made to the person that is the subject of the records
9for the purpose of corrective action by that person, or if a
10corporation, to an officer, director, or other key personnel of the
11corporation for the purpose of corrective action, or to any other
12person to the extent necessary to obtain information from that
13person for the purpose of an investigation by the Department of
14Managed Health Care.

15

SEC. 36.  

Section 7465 of the Government Code is amended
16to read:

17

7465.  

For the purposes of this chapter:

18(a) The term “financial institution” includes state and national
19banks, state and federal savings associations, trust companies,
20industrial loan companies, and state and federal credit unions. Such
21term shall not include a title insurer while engaging in the conduct
22of the “business of title insurance” as defined by Section 12340.3
23of the Insurance Code, an underwritten title company, or an escrow
24company.

25(b) The term “financial records” means any original or any copy
26of any record or document held by a financial institution pertaining
27to a customer of the financial institution.

28(c) The term “person” means an individual, partnership,
29corporation, limited liability company, association, trustbegin insert,end insert or any
30other legal entity.

31(d) The term “customer” means any person who has transacted
32business with or has used the services of a financial institution or
33for whom a financial institution has acted as a fiduciary.

34(e) The term “state agency” means every state office, officer,
35department, division, bureau, board, and commission or other state
36agency, including the Legislature.

37(f) The term “local agency” includes a county; city, whether
38general law or chartered; city and county; school district; municipal
39corporation; district; political subdivision; or any board,
40commission or agency thereof; or other local public agency.

P39   1(g) The term “supervisory agency” means any of the following:

2(1) The Department of Business Oversight.

3(2) The Controller.

4(3) The Administrator of Local Agency Security.

5(4) The Bureau of Real Estate.

6(5) The Department of Insurance.

7(h) The term “investigation” includes, but is not limited to, any
8inquiry by a peace officer, sheriff, or district attorney, or any
9inquiry made for the purpose of determining whether there has
10been a violation of any law enforceable by imprisonment, fine, or
11monetary liability.

12(i) The term “subpoena” includes subpoena duces tecum.

13

SEC. 37.  

Section 7474 of the Government Code is amended
14to read:

15

7474.  

(a) An officer, employee, or agent of a state or local
16agency or department thereof, may obtain financial records under
17paragraph (2) of subdivision (a) of Section 7470 pursuant to an
18administrative subpoena or summons otherwise authorized by law
19and served upon the financial institution only if:

20(1) The person issuing such administrative summons or
21subpoena has served a copy of the subpoena or summons on the
22customer pursuant to Chapter 4 (commencing with Section 413.10)
23of Title 5 of Part 2 of the Code of Civil Procedure, which copy
24may be served by an employee of the state or local agency or
25department thereof; and

26(2) The subpoena or summons includes the name of the agency
27or department in whose name the subpoena or summons is issued
28and the statutory purpose for which the information is to be
29obtained; and

30(3) Ten days after service pass without the customer giving
31notice to the financial institution that the customer has moved to
32quash the subpoena.

33(b) (1) In issuing an administrative subpoena or summons
34pursuant to subdivision (a), the Attorney General or the
35Commissioner of Business Oversight pursuant to the enforcement
36of statutes within his or her jurisdiction, or the district attorney of
37any county in connection with investigations of violations of
38antitrust law as authorized by Section 16759 of the Business and
39Professions Code, may petition a court of competent jurisdiction
40in the county in which the records are located, and the court, upon
P40   1a showing of a reasonable inference that a law subject to the
2 jurisdiction of the petitioning agency has been or is about to be
3violated, may order that service upon the customer pursuant to
4paragraph (1) of subdivision (a) and the 10-day period provided
5for in paragraph (3) of subdivision (a) be waived or shortened. For
6the purpose of this subdivision, an “inference” is a deduction that
7may reasonably be drawn by the Attorney General, the
8Commissioner of Business Oversight, or the district attorney from
9facts relevant to the investigation.

10(2) Such petition may be presented to the court in person or by
11telephoned oral statement which shall be recorded and transcribed.
12In the case of telephonic petition, the recording of the sworn oral
13statement and the transcribed statement shall be certified by the
14magistrate receiving it and shall be filed with the clerk of the court.

15(3) Where the court grants such petition, the court shall order
16the petitioning agency to notify the customer in writing of the
17examination of records within a period to be determined by the
18court but not to exceed 60 days of the agency’s receipt of any of
19the customer’s financial records. The notice shall specify the
20information otherwise required by paragraph (2) of subdivision
21(a), and shall also specify the financial records which were
22examined pursuant to the administrative subpoena or summons.
23Upon renewed petition, the time of notification may be extended
24for an additional 30-day period upon good cause to believe that
25such notification would impede the investigation. Thereafter, by
26application to a court upon a showing of extreme necessity for
27continued withholding of notification, such notification
28requirements may be extended for three additional 30-day periods.

29(4) The Attorney General shall not provide financial records
30obtained pursuant to the procedure authorized in this subdivision
31to a local law enforcement agency unless (i) that agency has
32independently obtained authorization to receive such financial
33records pursuant to the provisions of this chapter, or (ii) he or she
34obtains such records in an investigation conducted wholly
35independently of the local agency and not at its instigation or
36request.

37(c) Except as provided in this subdivision, nothing in this chapter
38shall preclude a financial institution from notifying a customer of
39the receipt of an administrative summons or subpoena. A court
40may order a financial institution to withhold notification to a
P41   1customer of the receipt of an administrative summons or subpoena
2when the court issues an order pursuant to subdivision (b) and
3makes a finding that notice to the customer by the financial
4institution would impede the investigation.

5(d) If a customer files a motion to quash an administrative
6subpoena or summons issued pursuant to subdivision (a), such
7proceedings shall be afforded priority on the court calendar and
8the matter shall be heard within 10 days from the filing of the
9motion to quash.

10

SEC. 38.  

Section 7480 of the Government Code is amended
11to read:

12

7480.  

Nothing in this chapter shall prohibit any of the
13following:

14(a) The dissemination of any financial information that is not
15identified with, or identifiable as being derived from, the financial
16records of a particular customer.

17(b) When any police or sheriff’s department or district attorney
18in this state certifies to a bank, credit union, or savings association
19in writing that a crime report has been filed that involves the
20alleged fraudulent use of drafts, checks, access cards, or other
21orders drawn upon any bank, credit union, or savings association
22in this state, the police or sheriff’s department or district attorney,
23a county adult protective services office when investigating the
24financial abuse of an elder or dependent adult, or a long-term care
25ombudsman when investigating the financial abuse of an elder or
26dependent adult, may request a bank, credit union, or savings
27association to furnish, and a bank, credit union, or savings
28association shall furnish, a statement setting forth the following
29information with respect to a customer account specified by the
30requesting party for a period 30 days prior to, and up to 30 days
31following, the date of occurrence of the alleged illegal act involving
32the account:

33(1) The number of items dishonored.

34(2) The number of items paid that created overdrafts.

35(3) The dollar volume of the dishonored items and items paid
36which created overdrafts and a statement explaining any credit
37arrangement between the bank, credit union, or savings association
38and customer to pay overdrafts.

39(4) The dates and amounts of deposits and debits and the account
40balance on these dates.

P42   1(5) A copy of the signature card, including the signature and
2any addresses appearing on a customer’s signature card.

3(6) The date the account opened and, if applicable, the date the
4account closed.

5(7) Surveillance photographs and video recordings of persons
6accessing the crime victim’s financial account via an automated
7teller machine (ATM) or from within the financial institution for
8dates on which illegal acts involving the account were alleged to
9have occurred. Nothing in this paragraph does any of the following:

10(A) Requires a financial institution to produce a photograph or
11video recording if it does not possess the photograph or video
12recording.

13(B) Affects any existing civil immunities as provided in Section
1447 of the Civil Code or any other provision of law.

15(8) A bank, credit union, or savings association that provides
16the requesting party with copies of one or more complete account
17statements prepared in the regular course of business shall be
18deemed to be in compliance with paragraphs (1), (2), (3), and (4).

19(c) When any police or sheriff’s department or district attorney
20in this state certifies to a bank, credit union, or savings association
21in writing that a crime report has been filed that involves the
22alleged fraudulent use of drafts, checks, access cards, or other
23orders drawn upon any bank, credit union, or savings association
24doing business in this state, the police or sheriff’s department or
25 district attorney, a county adult protective services office when
26investigating the financial abuse of an elder or dependent adult,
27or a long-term care ombudsman when investigating the financial
28abuse of an elder or dependent adult, may request, with the consent
29of the accountholder, the bank, credit union, or savings association
30to furnish, and the bank, credit union, or savings association shall
31furnish, a statement setting forth the following information with
32respect to a customer account specified by the requesting party for
33a period 30 days prior to, and up to 30 days following, the date of
34occurrence of the alleged illegal act involving the account:

35(1) The number of items dishonored.

36(2) The number of items paid that created overdrafts.

37(3) The dollar volume of the dishonored items and items paid
38which created overdrafts and a statement explaining any credit
39arrangement between the bank, credit union, or savings association
40and customer to pay overdrafts.

P43   1(4) The dates and amounts of deposits and debits and the account
2balance on these dates.

3(5) A copy of the signature card, including the signature and
4any addresses appearing on a customer’s signature card.

5(6) The date the account opened and, if applicable, the date the
6account closed.

7(7) Surveillance photographs and video recordings of persons
8accessing the crime victim’s financial account via an automated
9teller machine (ATM) or from within the financial institution for
10dates on which illegal acts involving this account were alleged to
11have occurred. Nothing in this paragraph does any of the following:

12(A) Requires a financial institution to produce a photograph or
13video recording if it does not possess the photograph or video
14recording.

15(B) Affects any existing civil immunities as provided in Section
1647 of the Civil Code or any other provision of law.

17(8) A bank, credit union, or savings association doing business
18in this state that provides the requesting party with copies of one
19or more complete account statements prepared in the regular course
20of business shall be deemed to be in compliance with paragraphs
21(1), (2), (3), and (4).

22(d) For purposes of subdivision (c), consent of the accountholder
23shall be satisfied if an accountholder provides to the financial
24institution and the person or entity seeking disclosure, a signed
25and dated statement containing all of the following:

26(1) Authorization of the disclosure for the period specified in
27subdivision (c).

28(2) The name of the agency or department to which disclosure
29is authorized and, if applicable, the statutory purpose for which
30the information is to be obtained.

31(3) A description of the financial records that are authorized to
32be disclosed.

33(e) (1) The Attorney General, a supervisory agency, the
34Franchise Tax Board, the State Board of Equalization, the
35Employment Development Department, the Controllerbegin insert,end insert or an
36inheritance tax referee when administering the Prohibition of Gift
37and Death Taxes (Part 8 (commencing with Section 13301) of
38Division 2 of the Revenue and Taxation Code), a police or sheriff’s
39department or district attorney, a county adult protective services
40office when investigating the financial abuse of an elder or
P44   1dependent adult, a long-term care ombudsman when investigating
2the financial abuse of an elder or dependent adult, a county welfare
3department when investigating welfare fraud, a county
4auditor-controller or director of finance when investigating fraud
5against the county, or the Department of Business Oversight when
6conducting investigations in connection with the enforcement of
7laws administered by the Commissioner of Business Oversightbegin insert,end insert
8 from requesting of an office or branch of a financial institution,
9and the office or branch from responding to a request, as to whether
10a person has an account or accounts at that office or branch and,
11if so, any identifying numbers of the account or accounts.

12(2) No additional information beyond that specified in this
13section shall be released to a county welfare department without
14either the accountholder’s written consent or a judicial writ, search
15warrant, subpoena, or other judicial order.

16(3) A county auditor-controller or director of finance who
17unlawfully discloses information he or she is authorized to request
18under this subdivision is guilty of the unlawful disclosure of
19confidential data, a misdemeanor, which shall be punishable as
20set forth in Section 7485.

21(f) The examination by, or disclosure to, any supervisory agency
22of financial records that relate solely to the exercise of its
23supervisory function. The scope of an agency’s supervisory
24function shall be determined by reference to statutes that grant
25authority to examine, audit, or require reports of financial records
26or financial institutions as follows:

27(1) With respect to the Commissioner of Business Oversight by
28reference to Division 1 (commencing with Section 99), Division
291.1 (commencing with Section 1000), Division 1.2 (commencing
30with Section 2000), Division 1.6 (commencing with Section 4800),
31Division 2 (commencing with Section 5000), Division 5
32(commencing with Section 14000), Division 7 (commencing with
33Section 18000), Division 15 (commencing with Section 31000),
34and Division 16 (commencing with Section 33000), of the Financial
35Code.

36(2) With respect to the Controller by reference to Title 10
37(commencing with Section 1300) of Part 3 of the Code of Civil
38Procedure.

39(3) With respect to the Administrator of Local Agency Security
40by reference to Article 2 (commencing with Section 53630) of
P45   1Chapter 4 of Part 1 of Division 2 of Title 5 of the Government
2Code.

3(g) The disclosure to the Franchise Tax Board of (1) the amount
4of any security interest that a financial institution has in a specified
5asset of a customer or (2) financial records in connection with the
6filing or audit of a tax return or tax information return that are
7required to be filed by the financial institution pursuant to Part 10
8(commencing with Section 17001), Part 11 (commencing with
9Section 23001), or Part 18 (commencing with Section 38001), of
10the Revenue and Taxation Code.

11(h) The disclosure to the State Board of Equalization of any of
12the following:

13(1) The information required by Sections 6702, 6703, 8954,
148957, 30313, 30315, 32383, 32387, 38502, 38503, 40153, 40155,
1541122, 41123.5, 43443, 43444.2, 44144, 45603, 45605, 46404,
16 46406, 50134, 50136, 55203, 55205, 60404, and 60407 of the
17Revenue and Taxation Code.

18(2) The financial records in connection with the filing or audit
19of a tax return required to be filed by the financial institution
20pursuant to Part 1 (commencing with Section 6001), Part 2
21(commencing with Section 7301), Part 3 (commencing with Section
228601), Part 13 (commencing with Section 30001), Part 14
23(commencing with Section 32001), and Part 17 (commencing with
24Section 37001), of Division 2 of the Revenue and Taxation Code.

25(3) The amount of any security interest a financial institution
26has in a specified asset of a customer, if the inquiry is directed to
27the branch or office where the interest is held.

28(i) The disclosure to the Controller of the information required
29by Section 7853 of the Revenue and Taxation Code.

30(j) The disclosure to the Employment Development Department
31of the amount of any security interest a financial institution has in
32a specified asset of a customer, if the inquiry is directed to the
33branch or office where the interest is held.

34(k) The disclosure by a construction lender, as defined in Section
358006 of the Civil Code, to the Registrar of Contractors, of
36information concerning the making of progress payments to a
37prime contractor requested by the registrar in connection with an
38investigation under Section 7108.5 of the Business and Professions
39Code.

P46   1(l) Upon receipt of a written request from a local child support
2agency referring to a support order pursuant to Section 17400 of
3the Family Code, a financial institution shall disclose the following
4information concerning the account or the person named in the
5 request, whom the local child support agency shall identify,
6whenever possible, by social security number:

7(1) If the request states the identifying number of an account at
8a financial institution, the name of each owner of the account.

9(2) Each account maintained by the person at the branch to
10which the request is delivered, and, if the branch is able to make
11a computerized search, each account maintained by the person at
12any other branch of the financial institution located in this state.

13(3) For each account disclosed pursuant to paragraphs (1) and
14(2), the account number, current balance, street address of the
15branch where the account is maintained, and, to the extent available
16through the branch’s computerized search, the name and address
17of any other person listed as an owner.

18(4) Whenever the request prohibits the disclosure, a financial
19institution shall not disclose either the request or its response, to
20an owner of the account or to any other person, except the officers
21and employees of the financial institution who are involved in
22responding to the request and to attorneys, employees of the local
23child support agencies, auditors, and regulatory authorities who
24have a need to know in order to perform their duties, and except
25as disclosure may be required by legal process.

26(5) No financial institution, or any officer, employee, or agent
27thereof, shall be liable to any person for (A) disclosing information
28in response to a request pursuant to this subdivision, (B) failing to
29notify the owner of an account, or complying with a request under
30this paragraph not to disclose to the owner, the request or disclosure
31under this subdivision, or (C) failing to discover any account owned
32by the person named in the request pursuant to a computerized
33search of the records of the financial institution.

34(6) The local child support agency may request information
35pursuant to this subdivision only when the local child support
36agency has received at least one of the following types of physical
37evidence:

38(A) Any of the following, dated within the last three years:

39(i) Form 599.

40(ii) Form 1099.

P47   1(iii) A bank statement.

2(iv) A check.

3(v) A bank passbook.

4(vi) A deposit slip.

5(vii) A copy of a federal or state income tax return.

6(viii) A debit or credit advice.

7(ix) Correspondence that identifies the child support obligor by
8name, the bank, and the account number.

9(x) Correspondence that identifies the child support obligor by
10name, the bank, and the banking services related to the account of
11the obligor.

12(xi) An asset identification report from a federal agency.

13(B) A sworn declaration of the custodial parent during the 12
14months immediately preceding the request that the person named
15in the request has had or may have had an account at an office or
16branch of the financial institution to which the request is made.

17(7) Information obtained by a local child support agency
18pursuant to this subdivision shall be used only for purposes that
19are directly connected with the administration of the duties of the
20local child support agency pursuant to Section 17400 of the Family
21Code.

22(m) (1) As provided in paragraph (1) of subdivision (c) of
23Section 666 of Title 42 of the United States Code, upon receipt of
24an administrative subpoena on the current federally approved
25interstate child support enforcement form, as approved by the
26federal Office of Management and Budget, a financial institution
27shall provide the information or documents requested by the
28administrative subpoena.

29(2) The administrative subpoena shall refer to the current federal
30Office of Management and Budget control number and be signed
31by a person who states that he or she is an authorized agent of a
32state or county agency responsible for implementing the child
33support enforcement program set forth in Part D (commencing
34with Section 651) of Subchapter IV of Chapter 7 of Title 42 of the
35United States Code. A financial institution may rely on the
36statements made in the subpoena and has no duty to inquire into
37the truth of any statement in the subpoena.

38(3) If the person who signs the administrative subpoena directs
39a financial institution in writing not to disclose either the subpoena
40or its response to any owner of an account covered by the subpoena,
P48   1the financial institution shall not disclose the subpoena or its
2response to the owner.

3(4) No financial institution, or any officer, employee, or agent
4thereof, shall be liable to any person for (A) disclosing information
5or providing documents in response to a subpoena pursuant to this
6subdivision, (B) failing to notify any owner of an account covered
7by the subpoena or complying with a request not to disclose to the
8owner, the subpoena or disclosure under this subdivision, or (C)
9failing to discover any account owned by the person named in the
10subpoena pursuant to a computerized search of the records of the
11financial institution.

12(n) The dissemination of financial information and records
13pursuant to any of the following:

14(1) Compliance by a financial institution with the requirements
15of Section 2892 of the Probate Code.

16(2) Compliance by a financial institution with the requirements
17of Section 2893 of the Probate Code.

18(3) An order by a judge upon a written ex parte application by
19 a peace officer showing specific and articulable facts that there
20are reasonable grounds to believe that the records or information
21sought are relevant and material to an ongoing investigation of a
22felony violation of Section 186.10 or of any felony subject to the
23enhancement set forth in Section 186.11.

24(A) The ex parte application shall specify with particularity the
25records to be produced, which shall be only those of the individual
26or individuals who are the subject of the criminal investigation.

27(B) The ex parte application and any subsequent judicial order
28shall be open to the public as a judicial record unless ordered sealed
29by the court, for a period of 60 days. The sealing of these records
30may be extended for 60-day periods upon a showing to the court
31that it is necessary for the continuance of the investigation.
32Sixty-day extensions may continue for up to one year or until
33termination of the investigation of the individual or individuals,
34whichever is sooner.

35(C) The records ordered to be produced shall be returned to the
36peace officer applicant or his or her designee within a reasonable
37time period after service of the order upon the financial institution.

38(D) Nothing in this subdivision shall preclude the financial
39institution from notifying a customer of the receipt of the order
40for production of records unless a court orders the financial
P49   1institution to withhold notification to the customer upon a finding
2that the notice would impede the investigation.

3(E) Where a court has made an order pursuant to this paragraph
4to withhold notification to the customer under this paragraph, the
5peace officer or law enforcement agency who obtained the financial
6information shall notify the customer by delivering a copy of the
7ex parte order to the customer within 10 days of the termination
8of the investigation.

9(4) An order by a judge issued pursuant to subdivision (c) of
10Section 532f of the Penal Code.

11(5) No financial institution, or any officer, employee, or agent
12thereof, shall be liable to any person for any of the following:

13(A) Disclosing information to a probate court pursuant to
14Sections 2892 and 2893.

15(B) Disclosing information in response to a court order pursuant
16to paragraph (3).

17(C) Complying with a court order under this subdivision not to
18disclose to the customer, the order, or the dissemination of
19information pursuant to the court order.

20(o) Disclosure by a financial institution to a peace officer, as
21defined in Section 830.1 of the Penal Code, pursuant to the
22following:

23(1) Paragraph (1) of subdivision (a) of Section 1748.95 of the
24Civil Code, provided that the financial institution has first complied
25with the requirements of paragraph (2) of subdivision (a) and
26subdivision (b) of Section 1748.95 of the Civil Code.

27(2) Paragraph (1) of subdivision (a) of Section 4002 of the
28Financial Code, provided that the financial institution has first
29complied with the requirements of paragraph (2) of subdivision
30(a) and subdivision (b) of Section 4002 of the Financial Code.

31(3) Paragraph (1) of subdivision (a) of Section 22470 of the
32Financial Code, provided that any financial institution that is a
33 finance lender has first complied with the requirements of
34paragraph (2) of subdivision (a) and subdivision (b) of Section
3522470 of the Financial Code.

36(p) When the governing board of the Public Employees’
37Retirement System or the State Teachers’ Retirement System
38certifies in writing to a financial institution that a benefit recipient
39has died and that transfers to the benefit recipient’s account at the
40financial institution from the retirement system occurred after the
P50   1benefit recipient’s date of death, the financial institution shall
2furnish the retirement system with the name and address of any
3coowner, cosigner, or any other person who had access to the funds
4in the account following the date of the benefit recipient’s death,
5or if the account has been closed, the name and address of the
6person who closed the account.

7(q) When the retirement board of a retirement system established
8under the County Employees Retirement Law of 1937 certifies in
9writing to a financial institution that a retired member or the
10beneficiary of a retired member has died and that transfers to the
11account of the retired member or beneficiary of a retired member
12at the financial institution from the retirement system occurred
13after the date of death of the retired member or beneficiary of a
14retired member, the financial institution shall furnish the retirement
15system with the name and address of any coowner, cosigner, or
16any other person who had access to the funds in the account
17following the date of death of the retired member or beneficiary
18of a retired member, or if the account has been closed, the name
19and address of the person who closed the account.

20(r) When the Franchise Tax Board certifies in writing to a
21financial institution that (1) a taxpayer filed a tax return that
22authorized a direct deposit refund with an incorrect financial
23institution account or routing number that resulted in all or a
24portion of the refund not being received, directly or indirectly, by
25the taxpayer; (2) the direct deposit refund was not returned to the
26Franchise Tax Board; and (3) the refund was deposited directly
27on a specified date into the account of an accountholder of the
28financial institution who was not entitled to receive the refund,
29then the financial institution shall furnish to the Franchise Tax
30Board the name and address of any coowner, cosigner, or any other
31person who had access to the funds in the account following the
32date of direct deposit refund, or if the account has been closed, the
33name and address of the person who closed the account.

34

SEC. 39.  

Chapter 9.7 (commencing with Section 8790) of
35Division 1 of Title 2 of the Government Code is repealed.

36

SEC. 40.  

The heading of Part 4.5 (commencing with Section
3713975) of Division 3 of Title 2 of the Government Code is amended
38to read:

39 

40PART 4.5.  TRANSPORTATION AGENCY

 

P51   1

SEC. 41.  

Section 13975.1 of the Government Code is amended
2and renumbered to read:

3

12896.  

(a) This section applies to every action brought in the
4name of the people of the State of California by the Commissioner
5of Business Oversight before, on, or after the effective date of this
6section, when enforcing provisions of those laws administered by
7the Commissioner of Business Oversight which authorize the
8Commissioner of Business Oversight to seek a permanent or
9preliminary injunction, restraining order, or writ of mandate, or
10the appointment of a receiver, monitor, conservator, or other
11designated fiduciary or officer of the court, except actions brought
12against any of the licensees specified inbegin delete subparagraphsend deletebegin insert paragraphsend insert
13 (1) through (8), inclusive, of subdivision (b) of Section 300 of the
14Financial Code that are governed by other law. Upon a proper
15showing, a permanent or preliminary injunction, restraining order,
16or writ of mandate shall be granted and a receiver, monitor,
17conservator, or other designated fiduciary or officer of the court
18may be appointed for the defendant or the defendant’s assets, or
19any other ancillary relief may be granted as appropriate. The court
20may order that the expenses and fees of the receiver, monitor,
21conservator, or other designated fiduciary or officer of the court,
22be paid from the property held by the receiver, monitor,
23conservator, or otherbegin delete court designatedend deletebegin insert court-designatedend insert fiduciary
24or officer, but neither the state, the Business, Consumer Services,
25 and Housing Agency, nor the Department of Business Oversight
26shall be liable for any of those expenses and fees, unless expressly
27provided for by written contract.

28(b) The receiver, monitor, conservator, or other designated
29fiduciary or officer of the court may do any of the following subject
30to the direction of the court:

31(1) Sue for, collect, receive, and take into possession all the real
32and personal property derived by any unlawful means, including
33property with which that property or the proceeds thereof has been
34commingled if that property or the proceeds thereof cannot be
35identified in kind because of the commingling.

36(2) Take possession of all books, records, and documents
37relating to any unlawfully obtained property and the proceeds
38thereof. In addition, they shall have the same right as a defendant
39to request, obtain, inspect, copy, and obtain copies of books,
P52   1records, and documents maintained by third parties that relate to
2unlawfully obtained property and the proceeds thereof.

3(3) Transfer, encumber, manage, control, and hold all property
4subject to the receivership, including the proceeds thereof, in the
5manner directed or ratified by the court.

6(4) Avoid a transfer of any interest in any unlawfully obtained
7property including the proceeds thereof to any person who
8committed, aided or abetted, or participated in the commission of
9unlawful acts or who had knowledge that the property had been
10unlawfully obtained.

11(5) Avoid a transfer of any interest in any unlawfully obtained
12property including the proceeds thereof made with the intent to
13hinder or delay the recovery of that property or any interest in it
14by the receiver or any person from whom the property was
15unlawfully obtained.

16(6) Avoid a transfer of any interest in any unlawfully obtained
17property including the proceeds thereof that was made within one
18year before the date of the entry of the receivership order if less
19than a reasonably equivalent value was given in exchange for the
20transfer, except that a bona fide transferee for value and without
21notice that the property had been unlawfully obtained may retain
22the interest transferred until the value given in exchange for the
23transfer is returned to the transferee.

24(7) Avoid a transfer of any interest in any unlawfully obtained
25property including the proceeds thereof made within 90 days before
26the date of the entry of the receivership order to a transferee from
27whom the defendant unlawfully obtained some property if (A) the
28receiver establishes that the avoidance of the transfer will promote
29a fair pro rata distribution of restitution among all people from
30whom defendants unlawfully obtained property and (B) the
31transferee cannot establish that the specific property transferred
32was the same property which had been unlawfully obtained from
33the transferee.

34(8) Exercise any power authorized by statute or ordered by the
35court.

36(c) No person with actual or constructive notice of the
37receivership shall interfere with the discharge of the receiver’s
38duties.

39(d) No person may file any action or enforce or create any lien,
40or cause to be issued, served, or levied any summons, subpoena,
P53   1attachment, or writ of execution against the receiver or any property
2subject to the receivership without first obtaining prior court
3approval upon motion with notice to the receiver and the
4Commissioner of Business Oversight. Any legal procedure
5described in this subdivision commenced without prior court
6approval is void except as to a bona fide purchaser or encumbrancer
7for value and without notice of the receivership. No person without
8notice of the receivership shall incur any liability for commencing
9or maintaining any legal procedure described by this subdivision.

10(e) The court has jurisdiction of all questions arising in the
11receivership proceedings and may make any orders and judgments
12as may be required, including orders after noticed motion by the
13receiver to avoid transfers as provided in paragraphs (4), (5), (6),
14and (7) of subdivision (b).

15(f) This section is cumulative to all other provisions of law.

16(g) If any provision of this section or the application thereof to
17any person or circumstances is held invalid, that invalidity shall
18not affect other provisions or applications of this section which
19can be given effect without the invalid provision or application,
20and to this end the provisions of this section are severable.

21(h) The recordation of a copy of the receivership order imparts
22constructive notice of the receivership in connection with any
23matter involving real property located in the county in which the
24receivership order is recorded.

25

SEC. 42.  

Section 13975.2 of the Government Code is amended
26to read:

27

13975.2.  

(a) This section applies to every action brought in
28the name of the people of the State of California by the Director
29of the Department of Managed Health Care before, on, or after the
30effective date of this section, when enforcing provisions of those
31laws administered by the Director of the Department of Managed
32Health Care which authorize the Director ofbegin insert the Department ofend insert
33 Managed Health Care to seek a permanent or preliminary
34injunction, restraining order, or writ of mandate, or the appointment
35of a receiver, monitor, conservator, or other designated fiduciary
36or officer of the court. Upon a proper showing, a permanent or
37preliminary injunction, restraining order, or writ of mandate shall
38be granted and a receiver, monitor, conservator, or other designated
39fiduciary or officer of the court may be appointed for the defendant
40or the defendant’s assets, or any other ancillary relief may be
P54   1granted as appropriate. The court may order that the expenses and
2fees of the receiver, monitor, conservator, or other designated
3fiduciary or officer of the court, be paid from the property held by
4the receiver, monitor, conservator, or otherbegin delete court designatedend delete
5begin insert court-designatedend insert fiduciary or officer, but neither the state, the
6Health and Human Services Agency, nor the Department of
7Managed Health Care shall be liable for any of those expenses and
8fees, unless expressly provided for by written contract.

9(b) The receiver, monitor, conservator, or other designated
10fiduciary or officer of the court may do any of the following subject
11to the direction of the court:

12(1) Sue for, collect, receive, and take into possession all the real
13and personal property derived by any unlawful means, including
14property with which that property or the proceeds thereof has been
15commingled if that property or the proceeds thereof cannot be
16identified in kind because of the commingling.

17(2) Take possession of all books, records, and documents
18relating to any unlawfully obtained property and the proceeds
19thereof. In addition, they shall have the same right as a defendant
20to request, obtain, inspect, copy, and obtain copies of books,
21records, and documents maintained by third parties that relate to
22unlawfully obtained property and the proceeds thereof.

23(3) Transfer, encumber, manage, control, and hold all property
24subject to the receivership, including the proceeds thereof, in the
25manner directed or ratified by the court.

26(4) Avoid a transfer of any interest in any unlawfully obtained
27property including the proceeds thereof to any person who
28committed, aided or abetted, or participated in the commission of
29unlawful acts or who had knowledge that the property had been
30unlawfully obtained.

31(5) Avoid a transfer of any interest in any unlawfully obtained
32property including the proceeds thereof made with the intent to
33hinder or delay the recovery of that property or any interest in it
34by the receiver or any person from whom the property was
35unlawfully obtained.

36(6) Avoid a transfer of any interest in any unlawfully obtained
37property including the proceeds thereof that was made within one
38year before the date of the entry of the receivership order if less
39than a reasonably equivalent value was given in exchange for the
40transfer, except that a bona fide transferee for value and without
P55   1notice that the property had been unlawfully obtained may retain
2the interest transferred until the value given in exchange for the
3transfer is returned to the transferee.

4(7) Avoid a transfer of any interest in any unlawfully obtained
5property including the proceeds thereof made within 90 days before
6the date of the entry of the receivership order to a transferee from
7whom the defendant unlawfully obtained some property if (A) the
8receiver establishes that the avoidance of the transfer will promote
9a fair pro rata distribution of restitution among all people from
10whom defendants unlawfully obtained property and (B) the
11transferee cannot establish that the specific property transferred
12was the same property that had been unlawfully obtained from the
13 transferee.

14(8) Exercise any power authorized by statute or ordered by the
15court.

16(c) No person with actual or constructive notice of the
17receivership shall interfere with the discharge of the receiver’s
18duties.

19(d) No person may file any action or enforce or create any lien,
20or cause to be issued, served, or levied any summons, subpoena,
21attachment, or writ of execution against the receiver or any property
22subject to the receivership without first obtaining prior court
23approval upon motion with notice to the receiver and the Director
24of the Department of Managed Health Care. Any legal procedure
25described in this subdivision commenced without prior court
26approval is void except as to a bona fide purchaser or encumbrancer
27for value and without notice of the receivership. No person without
28notice of the receivership shall incur any liability for commencing
29or maintaining any legal procedure described by this subdivision.

30(e) The court shall have jurisdiction of all questions arising in
31the receivership proceedings and may make any orders and
32judgments as may be required, including orders after noticed
33motion by the receiver to avoid transfers as provided in paragraphs
34(4), (5), (6), and (7) of subdivision (b).

35(f) This section is cumulative to all other provisions of law.

36(g) If any provision of this section or the application thereof to
37any person or circumstances is held invalid, that invalidity shall
38not affect other provisions or applications of this section that can
39be given effect without the invalid provision or application, and
40to this end the provisions of this section are severable.

P56   1(h) The recordation of a copy of the receivership order imparts
2constructive notice of the receivership in connection with any
3matter involving real property located in the county in which the
4receivership order is recorded.

5

SEC. 43.  

Section 13978.6 of the Government Code is amended
6and renumbered to read:

7

12895.  

(a) There is in the Business, Consumer Services, and
8Housing Agency a Department of Business Oversight containing
9the Division of Corporations, which has the responsibility for
10administering various laws. In order to effectively support the
11Division of Corporations in the administration of these laws, there
12is hereby established the State Corporations Fund. All expenses
13and salaries of the Division of Corporations shall be paid out of
14the State Corporations Fund. Therefore, notwithstanding any
15provision of any law administered by the Division of Corporations
16declaring that fees, reimbursements, assessments, or other money
17or amounts charged and collected by the Division of Corporations
18under these laws are to be delivered or transmitted to the Treasurer
19and deposited to the credit of the General Fund, all fees,
20reimbursements, assessments, and other money or amounts charged
21and collected under these laws shall be delivered or transmitted to
22the Treasurer and deposited to the credit of the State Corporations
23Fund.

24(b) Funds appropriated from the State Corporations Fund and
25made available for expenditure for any law or program of the
26Division of Corporations may come from the following:

27(1) Fees and any other amounts charged and collected pursuant
28to Section 25608 of the Corporations Code, except for fees and
29other amounts charged and collected pursuant to subdivisions (o)
30to (r), inclusive, of Section 25608 of the Corporations Code.

31(2) Fees collected pursuant to subdivisions (a), (b), (c), and (d)
32of Section 25608.1 of the Corporations Code.

33

SEC. 44.  

Section 13995.40.5 of the Government Code is
34amended to read:

35

13995.40.5.  

 Notwithstanding subdivision (d) of Section
3613995.40, the number of commissioners elected from each industry
37category shall be determined by the weighted percentage of
38assessments from that category, except that no more than six
39commissioners shall be elected from the passenger car rental
40category.

P57   1

SEC. 45.  

Chapter 5 (commencing with Section 13999) of Part
24.7 of Division 3 of Title 2 of the Government Code is repealed.

begin delete
3

SEC. 46.  

Section 51298 of the Government Code is amended
4to read:

5

51298.  

It is the intent of the Legislature in enacting this chapter
6to provide local governments with opportunities to attract large
7manufacturing facilities to invest in their communities and to
8encourage industries, such as high technology, aerospace,
9automotive, biotechnology, software, environmental sources, and
10others, to locate and invest in those facilities in California.

11(a) Commencing in the 1998-99 fiscal year, the governing body
12of a county, city and county, or city, may, by means of an ordinance
13or resolution approved by a majority of its entire membership,
14elect to establish a capital investment incentive program. In any
15county, city and county, or city in which the governing body has
16so elected, the county, city and county, or city shall, upon the
17approval by a majority of the entire membership of its governing
18body of a written request therefor, pay a capital investment
19incentive amount to the proponent of a qualified manufacturing
20facility for up to 15 consecutive fiscal years. A request for the
21payment of capital investment incentive amounts shall be filed by
22a proponent in writing with the governing body of an electing
23county, city and county, or city in the time and manner specified
24in procedures adopted by that governing body. In the case in which
25the governing body of an electing county, city and county, or city
26approves a request for the payment of capital investment incentive
27amounts, both of the following conditions shall apply:

28(1) The consecutive fiscal years during which a capital
29investment incentive amount is to be paid shall commence with
30the first fiscal year commencing after the date upon which the
31qualified manufacturing facility is certified for occupancy or, if
32no certification is issued, the first fiscal year commencing after
33the date upon which the qualified manufacturing facility
34commences operation.

35(2) In accordance with paragraph (4) of subdivision (d), the
36annual payment to a proponent of each capital investment incentive
37amount shall be contingent upon the proponent’s payment of a
38community services fee.

39(b) For purposes of this section:

P58   1(1) “Qualified manufacturing facility” means a proposed
2manufacturing facility that meets all of the following criteria:

3(A) The proponent’s initial investment in that facility, in real
4and personal property, necessary for the full and normal operation
5of that facility, made pursuant to the capital investment incentive
6program, that comprises any portion of that facility or has its situs
7at that facility, exceeds one hundred fifty million dollars
8($150,000,000). Compliance with this subparagraph shall be
9certified by the Governor’s Office of Business and Economic
10Development upon the agency’s approval of a proponent’s
11application for certification of a qualified manufacturing facility.
12An application for certification shall be submitted by a proponent
13to the agency in writing in the time and manner as specified by
14the agency.

15(B) The facility is to be located within the jurisdiction of the
16electing county, city and county, or city to which the request is
17made for payment of capital investment incentive amounts.

18(C) The facility is operated by any of the following:

19(i) A business described in Codes 3500 to 3899, inclusive, of
20the Standard Industrial Classification (SIC) Manual published by
21the United States Office of Management and Budget, 1987 edition,
22except that “January 1, 1997,” shall be substituted for “January 1,
231994,” in each place in which it appears.

24(ii) A business engaged in the recovery of minerals from
25geothermal resources, including the proportional amount of a
26geothermal electric generating plant that is integral to the recovery
27process by providing electricity for it.

28(iii) A business engaged in the manufacturing of parts or
29components related to the production of electricity using solar,
30wind, biomass, hydropower, or geothermal resources on or after
31July 1, 2010.

32(D) The proponent is either currently engaged in commercial
33production or engaged in the perfection of the manufacturing
34process, or the perfection of a product intended to be manufactured.

35(2) “Proponent” means a party or parties that meet all of the
36following criteria:

37(A) The party is named in the application to the county, city
38and county, or city within which the qualified manufacturing
39facility would be located for a permit to construct a qualified
40manufacturing facility.

P59   1(B) The party will be the fee owner of the qualified
2manufacturing facility upon the completion of that facility.
3Notwithstanding the previous sentence, the party may enter into
4a sale-leaseback transaction and nevertheless be considered the
5proponent.

6(C) If a proponent that is receiving capital investment incentive
7amounts subsequently leases the subject qualified manufacturing
8facility to another party, the lease may provide for the payment to
9that lessee of any portion of a capital investment incentive amount.
10Any lessee receiving any portion of a capital investment incentive
11amount shall also be considered a proponent for the purposes of
12subdivision (d).

13(3) “Capital investment incentive amount” means, with respect
14to a qualified manufacturing facility for a relevant fiscal year, an
15amount up to or equal to the amount of ad valorem property tax
16revenue derived by the participating local agency from the taxation
17of that portion of the total assessed value of that real and personal
18property described in subparagraph (A) of paragraph (1) that is in
19excess of one hundred fifty million dollars ($150,000,000).

20(4) “Manufacturing” means the activity of converting or
21conditioning property by changing the form, composition, quality,
22or character of the property for ultimate sale at retail or use in the
23manufacturing of a product to be ultimately sold at retail.
24Manufacturing includes any improvements to tangible personal
25property that result in a greater service life or greater functionality
26than that of the original property.

27(c) A city or special district may, upon the approval by a
28majority of the entire membership of its governing body, pay to
29the county, city and county, or city an amount equal to the amount
30of ad valorem property tax revenue allocated to that city or special
31district, but not the actual allocation, derived from the taxation of
32that portion of the total assessed value of that real and personal
33property described in subparagraph (A) of paragraph (1) of
34subdivision (b) that is in excess of one hundred fifty million dollars
35($150,000,000).

36(d) A proponent whose request for the payment of capital
37investment incentive amounts is approved by an electing county,
38city and county, or city shall enter into a community services
39agreement with that county, city and county, or city that includes,
40but is not limited to, all of the following provisions:

P60   1(1) A provision requiring that a community services fee be
2remitted by the proponent to the county, city and county, or city,
3in each fiscal year subject to the agreement, in an amount that is
4equal to 25 percent of the capital investment incentive amount
5calculated for that proponent for that fiscal year, except that in no
6fiscal year shall the amount of the community services fee exceed
7two million dollars ($2,000,000).

8(2) A provision specifying the dates in each relevant fiscal year
9upon which payment of the community services fee is due and
10delinquent, and the rate of interest to be charged to a proponent
11for any delinquent portion of the community services fee amount.

12(3) A provision specifying the procedures and rules for the
13determination of underpayments or overpayments of a community
14services fee, for the appeal of determinations of any underpayment,
15and for the refunding or crediting of any overpayment.

16(4) A provision specifying that a proponent is ineligible to
17receive a capital investment incentive amount if that proponent is
18currently delinquent in the payment of any portion of a community
19services fee amount, if the qualified manufacturing facility is
20constructed in a manner materially different from the facility as
21described in building permit application materials, or if the facility
22is no longer operated as a qualified manufacturing facility meeting
23the requirements of paragraph (1) of subdivision (b). If a proponent
24becomes ineligible to receive a capital investment incentive amount
25as a result of an agreement provision included pursuant to this
26subparagraph, the running of the number of consecutive fiscal
27years specified in an agreement made pursuant to subdivision (a)
28is not tolled during the period in which the proponent is ineligible.

29(5) A provision that sets forth a job creation plan with respect
30to the relevant qualified manufacturing facility. The plan shall
31specify the number of jobs to be created by that facility, and the
32types of jobs and compensation ranges to be created thereby. The
33plan shall also specify that for the entire term of the community
34services agreement, both of the following shall apply:

35(A) All of the employees working at the qualified manufacturing
36facility shall be covered by an employer-sponsored health benefits
37plan.

38(B) The average weekly wage, exclusive of overtime, paid to
39all of the employees working at the qualified manufacturing
P61   1facility, who are not management or supervisory employees, shall
2be not less than the state average weekly wage.

3For the purpose of this subdivision, “state average weekly wage”
4means the average weekly wage paid by employers to employees
5covered by unemployment insurance, as reported to the
6Employment Development Department for the four calendar
7quarters ending June 30 of the preceding calendar year.

8(6) (A)   In the case in which the proponent fails to operate the
9qualified manufacturing facility as required by the community
10services agreement, a provision that requires the recapture of any
11portion of any capital investment incentive amounts previously
12paid to the proponent equal to the lesser of the following:

13(i) All of the capital investment incentive amounts paid to the
14proponent, less all of the community services fees received from
15the proponent, and less any capital investment incentive amounts
16previously recaptured.

17(ii) The last capital investment incentive amount paid to the
18proponent, less the last community services fee received from the
19proponent, multiplied by 40 percent of the number of years
20remaining in the community services agreement, but not to exceed
2110 years, and less any capital investment incentive amounts
22previously recaptured.

23(B) If the proponent fails to operate the qualified manufacturing
24facility as required by the community services agreement, the
25county, city and county, or city may, upon a finding that good
26cause exists, waive any portion of the recapture of any capital
27investment incentive amount due under this subdivision. For the
28purpose of this subdivision, good cause includes, but is not limited
29to, the following:

30(i) The proponent has sold or leased the property to a person
31who has entered into an agreement with the county, city and
32county, or city to assume all of the responsibilities of the proponent
33under the community services agreement.

34(ii) The qualified manufacturing facility has been rendered
35inoperable and beyond repair as a result of an act of God.

36(C) For purposes of this subdivision, failure to operate a
37qualified manufacturing facility as required by the community
38services agreement includes, but is not limited to, failure to
39establish the number of jobs specified in the jobs creation plan
40created pursuant to paragraph (5).

P62   1(e) (1)   Each county, city and county, or city that elects to
2establish a capital investment incentive program shall notify the
3Governor’s Office of Business and Economic Development of its
4election to do so no later than June 30th of the fiscal year in which
5the election was made.

6(2) In addition to the information required to be reported
7pursuant to paragraph (1), each county, city and county, or city
8that has elected to establish a capital investment incentive program
9shall notify the Governor’s Office of Business and Economic
10Development each fiscal year no later than June 30th of the amount
11of any capital investment incentive payments made and the
12proponent of the qualified manufacturing facility to whom the
13 payments were made during that fiscal year.

14(3) The Governor’s Office of Business and Economic
15Development shall compile the information submitted by each
16county, city and county, and city pursuant to paragraphs (1) and
17(2) and submit a report to the Legislature containing this
18information no later than October 1, every two years commencing
19October 1, 2000.

end delete
20

begin deleteSEC. 47.end delete
21begin insertSEC. 46.end insert  

Section 65040.9 of the Government Code is amended
22to read:

23

65040.9.  

(a) On or before January 1, 2004, the Office of
24Planning and Research shall, if sufficient federal funds become
25available for this purpose, prepare and publish an advisory planning
26handbook for use by local officials, planners, and builders that
27explains how to reduce land use conflicts between the effects of
28civilian development and military readiness activities carried out
29on military installations, military operating areas, military training
30areas, military training routes, and military airspace, and other
31territory adjacent to those installations and areas.

32(b) At a minimum, the advisory planning handbook shall include
33advice regarding all of the following:

34(1) The collection and preparation of data and analysis.

35(2) The preparation and adoption of goals, policies, and
36standards.

37(3) The adoption and monitoring of feasible implementation
38measures.

39(4) Methods to resolve conflicts between civilian and military
40land uses and activities.

P63   1(5) Recommendations for cities and counties to provide drafts
2of general plan and zoning changes that may directly impact
3military facilities, and opportunities to consult with the military
4base personnel prior to approving development adjacent to military
5facilities.

6(c) In preparing the advisory planning handbook, the office shall
7consult with persons and organizations with knowledge and
8 experience in land use issues affecting military installations and
9activities.

10(d) The office may accept and expend any grants and gifts from
11any source, public or private, for the purposes of this section.

12

begin deleteSEC. 48.end delete
13begin insertSEC. 47.end insert  

Section 66620 of the Government Code is amended
14to read:

15

66620.  

The San Francisco Bay Conservation and Development
16Commission is hereby created. The commission shall consist of
1727 members, as follows:

18(a) One member appointed by the Division Engineer, United
19States Army Engineers, South Pacific Division, from his or her
20staff.

21(b) One member appointed by the Administrator of the United
22States Environmental Protection Agency, from his or her staff.

23(c) One member appointed by the Secretary of Transportation
24from his or her staff.

25(d) One member appointed by the Director of Finance, from his
26or her staff.

27(e) One member appointed by the Secretary of Resources, from
28his or her staff.

29(f) One member appointed by the State Lands Commission,
30who shall be a member of that commission or from its staff.

31(g) One member appointed by the San Francisco Bay Regional
32Water Quality Control Board, who shall be a member of that board.

33(h) Nine county representatives consisting of one member of
34the board of supervisors representative of each of the nine San
35Francisco Bay area counties, appointed by the board of supervisors
36in each county. Each county representative shall be a supervisor
37representing a supervisorial district which includes within its
38boundaries lands lying within San Francisco Bay.

P64   1(i) Four city representatives appointed by the Association of
2Bay Area Governments from among the residents of the bayside
3cities in each of the following areas:


4(1) North Bay--Marin, Sonoma, Napa, and Solano Counties;


5(2) East Bay--Contra Costa County (west of Pittsburg) and
6Alameda County north of the southern boundary of Hayward;


7(3) South Bay--Alameda County south of the southern
8boundary of Hayward, Santa Clara County, and San Mateo
9County south of the northern boundary of Redwood City;


10(4) West Bay--San Mateo County north of the northern
11boundary of Redwood City, and the City and County of San
12 Francisco.

13Each city representative shall be an elected city official.

14(j) Seven representatives of the public, who shall be residents
15of the San Francisco Bay area. Five of the representatives shall be
16appointed by the Governor and their appointments shall be subject
17to confirmation by the Senate. One of the representatives shall be
18appointed by the Committee on Rules of the Senate, and one by
19the Speaker of the Assembly.

20

begin deleteSEC. 49.end delete
21begin insertSEC. 48.end insert  

Section 44272.5 of the Health and Safety Code is
22amended to read:

23

44272.5.  

(a) The commission shall develop and adopt an
24investment plan to determine priorities and opportunities for the
25Alternative and Renewable Fuel and Vehicle Technology Program
26created pursuant to this chapter. The investment plan shall establish
27priorities for investment of funds and technologies to achieve the
28goals of this chapter and describe how funding will complement
29existing public and private investments, including existing state
30programs that further the goals of this chapter. The commission
31shall create and consult with an advisory body as it develops the
32investment plan. The advisory body is subject to the Bagley-Keene
33Open Meeting Act (Article 9 (commencing with Section 11120)
34of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
35Code). The commission shall, at a minimum, hold one public
36hearing on the advisory body’s recommendations prior to approving
37the investment plan.

38(b) Membership of the advisory body created pursuant to
39subdivision (a) shall include, but is not limited to, representatives
40of fuel and vehicle technology entities, labor organizations,
P65   1environmental organizations, community-based justice and public
2health organizations, recreational boaters, consumer advocates,
3academic institutions, workforce training groups, and private
4industry. The advisory body shall also include representatives from
5the Resources Agency, the Transportation Agency, the Labor and
6Workforce Development Agency, and the California Environmental
7Protection Agency.

8(c) The commission shall hold at least three public workshops
9in different regions of the state and one public hearing prior to
10approving the investment plan. The commission shall annually
11 update and approve the plan. The commission shall reconvene and
12consult with the advisory body created pursuant to subdivision (a)
13prior to annually updating and approving the plan.

14

begin deleteSEC. 50.end delete
15begin insertSEC. 49.end insert  

Section 12414.31 of the Insurance Code is amended
16to read:

17

12414.31.  

(a) (1) Whenever the commissioner takes any
18formal enforcement or disciplinary action directly against an
19employee of a title insurer, underwritten title company, or
20controlled escrow company, for malfeasance or misconduct
21committed by the employee in his or her performance of
22escrow-related services, upon the action becoming final the
23commissioner shall notify the Real Estate Commissioner and the
24Commissioner of Business Oversight of the action or actions taken.
25The purpose of this notification is to alert the departments that
26enforcement or disciplinary action has been taken, if the employee
27seeks or obtains employment with entities regulated by the
28departments.

29(2) The commissioner shall provide the Real Estate
30Commissioner and the Commissioner of Business Oversight, in
31addition to the notification of the action taken, with a copy of the
32written accusation, statement of issues, or order issued or filed in
33the matter and, at the request of the Real Estate Commissioner or
34Commissioner of Business Oversight, with any underlying factual
35material relevant to the enforcement or disciplinary action. Any
36confidential information provided by the commissioner to the
37Commissioner of Business Oversight or the Real Estate
38Commissioner shall not be made public pursuant to this section.
39Notwithstanding any other law, the disclosure of any underlying
40factual material to the Commissioner of Business Oversight or the
P66   1Real Estate Commissioner shall not operate as a waiver of
2confidentiality or any privilege that the commissioner may assert.

3(b) The commissioner shall establish and maintain, on the
4begin insert Internetend insert Web site maintained by the Department of Insurance, a
5separate and readily identifiable database of all persons who have
6been subject to any enforcement or disciplinary action that triggers
7the notification requirements of this section. The database shall
8also contain a direct link to the databases, described in Section
910176.1 of the Business and Professions Code and Section 17423.1
10of the Financial Code and required to be maintained on thebegin insert Internetend insert
11 Web sites of the Bureau of Real Estate and the Department of
12Business Oversight, respectively, of persons who have been subject
13to enforcement or disciplinary action for malfeasance or
14misconduct related to the escrow industry by the Commissioner
15of Business Oversight and the Real Estate Commissioner.

16(c) There shall be no liability on the part of, and no cause of
17action of any nature shall arise against, the State of California, the
18Department of Insurance, the Insurance Commissioner, any other
19state agency, or any officer, agent, employee, consultant, or
20contractor of the state, for the release of any false or unauthorized
21information pursuant to this section, unless the release of that
22information was done with knowledge and malice, or for the failure
23to release any information pursuant to this section.

24

begin deleteSEC. 51.end delete
25begin insertSEC. 50.end insert  

Section 12710 of the Insurance Code is amended to
26read:

27

12710.  

The California Major Risk Medical Insurance Program
28is hereby created in the Health and Welfare Agency. The program
29shall be managed by the Major Risk Medical Insurance Board.
30The board shall consist of seven members, five of whom shall be
31appointed as follows:

32The Governor shall appoint three members, subject to
33confirmation by the Senate, and shall designate one of these
34appointees as chair of the board. The Senate Committee on Rules
35shall appoint one member. The Speaker of the Assembly shall
36appoint one member. The terms of appointment shall be four years.

37The Secretary of California Health and Human Services, or his
38or her designee, shall serve on the board as ex officio, nonvoting
39members.

P67   1The board shall appoint an executive director for the board, who
2shall serve at the pleasure of the board. The executive director
3shall receive the salary established by the Department of Human
4Resources for exempt officials. The executive director shall
5administer the affairs of the board as directed by the board, and
6shall direct the staff of the board. The executive director may
7appoint, with the approval of the board, staff necessary to carry
8out the provisions of this part.

9

begin deleteSEC. 52.end delete
10begin insertSEC. 51.end insert  

Section 2802 of the Penal Code is amended to read:

11

2802.  

Commencing July 1, 2005, there is hereby continued in
12existence within the Department of Corrections and Rehabilitation
13a Prison Industry Board. The board shall consist of the following
1411 members:

15(a) The Secretary of the Department of Corrections and
16Rehabilitation, or his or her designee.

17(b) The Director of the Department of General Services, or his
18or her designee.

19(c) The Secretary of Transportation, or his or her designee.

20(d) The Speaker of the Assembly shall appoint two members
21to represent the general public.

22(e) The Senate Committee on Rules shall appoint two members
23to represent the general public.

24(f) The Governor shall appoint four members. Of these, two
25shall be representatives of organized labor, and two shall be
26representatives of industry. The initial term of one of the members
27appointed by the Speaker of the Assembly shall be two years, and
28the initial term of the other shall be three years. The initial term
29of one of the members appointed by the Senate Committee on
30Rules shall be two years, and the initial term of the other shall be
31three years. The initial terms of the four members appointed by
32the Governor shall be four years. All subsequent terms of all
33members shall be for four years. Each member’s term shall
34continue until the appointment and qualification of his or her
35successor.

36

begin deleteSEC. 53.end delete
37begin insertSEC. 52.end insert  

Section 22003 of the Public Utilities Code is amended
38to read:

P68   1

22003.  

Unless the context otherwise requires, the definitions
2and general provisions contained in this chapter govern the
3construction of this part.

4

begin deleteSEC. 54.end delete
5begin insertSEC. 53.end insert  

Section 22553.2 of the Public Utilities Code is
6repealed.



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