BILL ANALYSIS �
AB 2289
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2289 (Daly)
As Amended August 4, 2014
Majority vote
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|ASSEMBLY: |73-0 |(May 8, 2014) |SENATE: |32-0 |(August 14, |
| | | | | |2014) |
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Original Committee Reference: B. & F.
SUMMARY : Makes various changes to laws administered by the
Department of Business Oversight (DBO). Specifically, this
bill :
1)Authorizes DBO to accept electronic filings from licensees
under the Corporate Securities Law, Franchise Investment Law
(FIL), Check Sellers, Bill Payers and Prorators Law, Escrow
Agents Law, California Finance Lenders Law, and the Deferred
Deposit Transaction Law.
2)Provides, that the commissioner of DBO may by rule, or order
prescribe the circumstances under which to accept electronic
records and signatures.
3)Defines "electronic record" as an initial registration
application, registration renewal statement, preeffective
amendment, posteffective amendment, or material modification
and any other record created, generated, sent, communicated,
received, or stored by electronic means. "Electronic record"
also includes, but is not limited to, all of the following:
a) An application, amendment, supplement, and exhibit,
filed for any qualification, registration, order, permit,
certificate, license, consent, or other authority;
b) A financial statement, reports, or advertising;
c) An order, permit, certificate, license, consent, or
other authority;
d) A notice of public hearing, accusation, and statement of
issues, in connection with any application, qualification,
registration , order, permit, certificate, license,
AB 2289
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consent, or other authority;
e) A proposed decision of a hearing officer and a decision
of the commissioner;
f) The transcripts of a hearing;
g) A release, newsletter, interpretive opinion,
determination, or specific ruling; or
h) A correspondence between a party and the commissioner
relating to any of the documents listed above.
4)Defines "electronic signature" as an electronic sound, symbol,
or process attached to or logically associated with an
electronic record and executed or adopted by a person with the
intent to sign the electronic record.
5)Extends the Franchise application review period from 15
business days to 30 business days.
6)Provides that the 30-business day review does not begin until
the franchisor files a complete application.
7)Defines "complete application" under the FIL as an application
that contains appropriate filing fee, Uniform Franchise
Disclosure Document and all additional exhibits, including
financial statements in conformity with regulations of the
commissioner of DBO.
8)Defines "preeffective amendment" as an amendment to an
application that is filed before the effective date of the
registration of the sale of franchises.
9)Makes legislative findings and declarations that DBO has
implemented methods to file records electronically and is
encouraged to continue to expand its use of electronic filings
to the extent feasible, as budget resources, and equipment are
made available to accomplish that goal.
The Senate amendments make technical and clarifying changes.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
AB 2289
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COMMENTS : This bill contains two main reforms to the laws
administered by DBO. First, it allows for the electronic filing
of documents relating to several industries regulated by DBO.
Prior to its creation via the Governor's Reorganization Plan,
DBO was two departments, the Department of Corporations (DOC)
and Department of Financial Institutions. Since DOC embarked in
2008 on expanding its ability to accept electronic records from
both licensees and members of the public in order to reduce
administrative costs and save staff time. Even with the changed
proposed in this bill the commissioner could still require
certain documents to be filed in person if deemed necessary.
The second major reform provision of this bill concerns the FIL.
Under FIL, an initial franchise registration, and a franchise
renewal application automatically become effective at noon on
the 15th business day after filing. Typically, DBO will request
the applicant to voluntarily waive the 15-day limit in order to
have more time to review the applicant and associated documents.
Furthermore, Franchise applicant renewals are due on or before
April 20th, which leads to a massive influx of applications with
DBO in a short window of time (average of 1,053 applications).
This bill would extend the review deadline to 30 days and
provides that the deadline clock does not start unless the
applicant has turned in a completed application which includes
submission of the filing fee, Uniform Franchise Disclosure
Document, and other required documents such as most recent
financial statements.
Analysis Prepared by : Mark Farouk / B. & F. / (916) 319-3081
FN: 0004393