California 2011-2012 Regular Session Status: Enacted

SB 978 — Securities transactions: exemption from qualification requirements.

Last action — Chaptered by Secretary of State. Chapter 669, Statutes of 2012.

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Senate
  4. ✓
    Passed Assembly
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced January 23, 2012. Enacted.

Prognosis

Likely to advance 74% · moderate confidence

Where this bill stands today.

Odds of enactment

High

How often bills like it became law.

  • Enacted

    Current position in the legislative process.

  • 3 sponsors

    1 primary, 2 co-sponsors signed on.

  • Cleared a recorded vote

    Passed 9 recorded votes so far.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Summary

(1) Existing law, the Corporate Securities Law of 1968, regulates the offer and sale of securities in this state by the Commissioner of Corporations. Existing law requires an issuer of securities to qualify with the commissioner the offer and sale of securities unless the transaction is subject to one of several specified exemptions from the qualification requirements. A willful violation of these provisions is a crime. Existing law exempts from the qualification requirements the offer or sale of any security made to no more than 35 people, as specified, and allows the commissioner to require the issuer to file a notice of transactions. Existing law provides that the exemption remains available to an issuer that fails to file the notice or files the notice after the time specified by the commissioner. Existing law requires an issuer relying on that exemption to file a notice within 15 business days following discovery of the failure to timely file the notice, or after demand of the commissioner, whichever is earlier. This bill would require the commissioner to require the issuer to file a notice of transactions in connection with that exemption. Existing federal law defines the term "accredited investor," for purposes of regulating securities transactions, including determining whether an offer and sale of securities is required to be registered pursuant to the federal Securities Act of 1933. This bill would require the commissioner to require an issuer that relies upon a specified exemption from the qualification requirements and that is principally engaged in the business of purchasing, selling, financing, or brokering real estate, for an offering to any person who is not an accredited investor in a transaction that is not registered pursuant to the Securities Act of 1933, to provide information regarding the nature of the proposed offering on a form prescribed by the commissioner, as specified. That information would include, but not be limited to, the offering disclosure documents provided to prospective investors, and the names of the officers and directors of a corporate issuer and, in the case of other types of issuers, the names of other specified persons. The bill would also require the commissioner to prepare an annual report regarding the securities offerings and sales authorized by permit issued by the commissioner under specified provisions of existing law and to make the report publicly available by posting the report on the Internet Web site of the Department of Corporations. (2) Existing law exempts from the qualification requirements, subject to complying with specified requirements, a transaction that involves the sale of a series of notes secured directly by an interest in real property or the sale of undivided interests in a note secured directly by real property equivalent to a series transaction, having no more than 10 investors. Existing law requires a real estate broker to indicate in the real estate broker's transaction file the provisions of law pertaining to qualification or exemption from qualification under which a transaction is being conducted. Existing law requires a real estate broker to file certain information with the commissioner relative to conducting these transactions that are exempt from qualification. Existing law requires a real estate broker to submit a copy of the information in the real estate broker's transaction file relative to qualification or exemption from qualification for a transaction to any investor from whom the real estate broker obtains funds in connection with the transaction. This bill would require that a transaction that involves the sale of a note secured directly by an interest in real property or the sale of an undivided interest in a note secured directly by real property equivalent to a series transaction be conducted in compliance with those requirements. (3) Existing law, the Real Estate Law, requires a real estate broker negotiating a loan, as specified, secured by a lien on real property or a business opportunity or the sale of a real property sales contract or promissory note secured directly or collaterally by a lien on real property, to provide a disclosure statement, containing specified information regarding the proposed transaction, to a prospective lender or a prospective purchaser, respectively. A willful violation of the Real Estate Law is a crime. This bill would add to the information required to be included in the disclosure statement a statement that the broker has a responsibility to make reasonable efforts to determine that the loan or the purchase, respectively, is a suitable and appropriate investment for the lender or purchaser, respectively. Because this bill would expand the scope of existing crimes, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.

Bill Text

Action History

  1. Chaptered by Secretary of State. Chapter 669, Statutes of 2012.

  2. Approved by the Governor.

  3. Enrolled and presented to the Governor at 4:30 p.m.

  4. Assembly amendments concurred in. (Ayes 37. Noes 0. Page 4766.) Ordered to engrossing and enrolling.

  5. In Senate. Concurrence in Assembly amendments pending.

  6. Read third time. Passed. (Ayes 77. Noes 0. Page 6128.) Ordered to the Senate.

  7. Read second time. Ordered to third reading.

  8. Read second time and amended. Ordered to second reading.

  9. From committee: Do pass as amended. (Ayes 17. Noes 0.) (August 16).

  10. Set, first hearing. Referred to APPR. suspense file.

  11. From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 0.) (July 2). Re-referred to Com. on APPR.

  12. From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.

  13. Referred to Com. on B. & F.

  14. In Assembly. Read first time. Held at Desk.

  15. Read third time. Passed. (Ayes 38. Noes 0. Page 3751.) Ordered to the Assembly.

  16. Ordered to special consent calendar.

  17. Read second time and amended. Ordered to third reading.

  18. From committee: Do pass as amended. (Ayes 7. Noes 0. Page 3589.) (May 24).

  19. Set for hearing May 24.

  20. From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR.

  21. Placed on APPR. suspense file.

  22. Set for hearing May 7.

  23. From committee: Do pass and re-refer to Com. on APPR. (Ayes 8. Noes 0. Page 3259.) (April 23). Re-referred to Com. on APPR.

  24. Set for hearing April 23.

  25. From committee with author's amendments. Read second time and amended. Re-referred to Com. on B., P. & E.D.

  26. Re-referred to Com. on B., P. & E.D.

  27. From committee: Do pass and re-refer to Com. on RLS. (Ayes 6. Noes 0. Page 3119.) (April 11). Re-referred to Com. on RLS.

  28. From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.I.

  29. Set for hearing April 11.

  30. From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.I.

  31. Referred to Com. on B. & F.I.

  32. From printer. May be acted upon on or after February 23.

  33. Introduced. Read first time. To Com. on RLS. for assignment. To print.

Sponsors

  • Blakeslee · Cosponsor
  • Price · Cosponsor
  • Vargas · Primary

Sponsorship breakdown

Export CSV (upgrade) →

1 sponsors · 2 co-sponsors · 119 not signed on

Sponsors (1)

  • Vargas

Co-sponsors (2)

  • Blakeslee
  • Price

Not signed on (119)

119 members have not signed on to this bill.

Show all 119 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

Unfinished Business SB978 Vargas Concurrence

Passed 37 Yea · 0 Nay · 3 Other
Party YeaNayPresentNot Voting
Unaffiliated 34003
Republican 1000
Democratic 2000
Total 37003
% of votes cast 93%0%0%8%
How each member voted (40)
Member Party Vote
Hancock — Yea
Yee — Yea
Runner — Yea
Lowenthal — Yea
Negrete McLeod — Yea
Rubio — Yea
Evans — Yea
Cannella — Yea
De León — Not Voting
Fuller — Yea
Harman — Not Voting
Hernandez — Yea
Huff — Yea
Corbett — Yea
Dutton — Yea
Alquist — Yea
Anderson — Yea
Kehoe — Yea
Lieu — Yea
Liu — Yea
Pavley — Yea
Simitian — Yea
Steinberg — Yea
Vargas — Yea
Wolk — Yea
Wright — Yea
Blakeslee — Not Voting
Leno — Yea
Price — Yea
Walters — Yea
Wyland — Yea
Emmerson — Yea
Correa — Yea
DeSaulnier — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
La Malfa — Yea
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Yea

Official roll call →

SB 978 Vargas Senate Third Reading By DICKINSON

Passed 77 Yea · 0 Nay · 3 Other
Party YeaNayPresentNot Voting
Unaffiliated 74003
Democratic 1000
Republican 2000
Total 77003
% of votes cast 96%0%0%4%
How each member voted (80)
Member Party Vote
Gorell — Yea
Yamada — Yea
Feuer — Yea
Garrick — Yea
Gordon — Yea
John A. Pérez — Yea
Mitchell — Yea
Hagman — Yea
Halderman — Yea
Atkins — Yea
Butler — Yea
Hall — Yea
Hill — Yea
Huber — Yea
Campos — Yea
Portantino — Yea
Huffman — Yea
Jeffries — Yea
Carter — Yea
Allen — Yea
Lara — Yea
Logue — Yea
Bonilla — Yea
Mendoza — Yea
Fong — Yea
Ammiano — Yea
Blumenfield — Yea
Cedillo — Yea
Chesbro — Yea
Conway — Yea
Cook — Yea
Davis — Yea
Miller — Yea
Morrell — Yea
Nestande — Yea
Nielsen — Yea
Norby — Yea
Olsen — Yea
Pan — Yea
Silva — Yea
Skinner — Yea
Swanson — Yea
Torres — Yea
Wagner — Yea
Wieckowski — Yea
Williams — Yea
Fletcher — Yea
Fuentes — Yea
Galgiani — Yea
Harkey — Not Voting
Beall — Yea
Donnelly — Not Voting
Achadjian — Yea
Alejo — Yea
Block — Yea
Bradford — Yea
Brownley — Yea
Buchanan — Yea
Hayashi — Yea
Hueso — Yea
Knight — Yea
Ma — Yea
Mansoor — Yea
Monning — Yea
Perea — Yea
Smyth — Yea
Solorio — Yea
Valadao — Yea
Eng — Yea
Dickinson — Yea
Furutani — Yea
Gatto — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
Bonnie Lowenthal — Yea
Roger Hernández — Not Voting
V. Manuel Pérez — Yea
Calderon, Lisa Democratic Yea
Grove, Shannon Republican Yea
Jones, Brian W. Republican Yea

Official roll call →

Do pass as amended.

Passed 17 Yea · 0 Nay
Party YeaNayPresentNot Voting
Unaffiliated 16000
Democratic 1000
Total 17000
% of votes cast 100%0%0%0%
How each member voted (17)
Member Party Vote
Fuentes — Yea
Gatto — Yea
Hall — Yea
Mitchell — Yea
Harkey — Yea
Campos — Yea
Hill — Yea
Cedillo — Yea
Donnelly — Yea
Nielsen — Yea
Solorio — Yea
Wagner — Yea
Blumenfield — Yea
Bradford — Yea
Norby — Yea
Davis — Yea
Calderon, Lisa Democratic Yea

Official roll call →

Special Consent #12

Passed 38 Yea · 0 Nay · 2 Other
Party YeaNayPresentNot Voting
Unaffiliated 36001
Democratic 2000
Republican 0001
Total 38002
% of votes cast 95%0%0%5%
How each member voted (40)
Member Party Vote
Yee — Yea
Wyland — Yea
Cannella — Yea
Lowenthal — Yea
Corbett — Yea
De León — Yea
Evans — Yea
Negrete McLeod — Yea
Fuller — Yea
Rubio — Yea
Hancock — Yea
Runner — Not Voting
Hernandez — Yea
Dutton — Yea
Alquist — Yea
Anderson — Yea
Blakeslee — Yea
Kehoe — Yea
Leno — Yea
Liu — Yea
Price — Yea
Simitian — Yea
Steinberg — Yea
Vargas — Yea
Walters — Yea
Wright — Yea
Harman — Yea
Huff — Yea
Lieu — Yea
Pavley — Yea
Wolk — Yea
Emmerson — Yea
Correa — Yea
DeSaulnier — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
La Malfa — Yea
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Not Voting

Official roll call →

Do pass as amended.

Passed 7 Yea · 0 Nay
Party YeaNayPresentNot Voting
Unaffiliated 7000
Total 7000
% of votes cast 100%0%0%0%
How each member voted (7)
Member Party Vote
Kehoe — Yea
Dutton — Yea
Steinberg — Yea
Walters — Yea
Alquist — Yea
Lieu — Yea
Price — Yea

Official roll call →

Placed on Appropriations Suspense file.

Passed 7 Yea · 0 Nay
Party YeaNayPresentNot Voting
Unaffiliated 7000
Total 7000
% of votes cast 100%0%0%0%
How each member voted (7)
Member Party Vote
Dutton — Yea
Kehoe — Yea
Price — Yea
Steinberg — Yea
Walters — Yea
Alquist — Yea
Lieu — Yea

Official roll call →

Subjects

finance housing
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Frequently asked questions

What does SB 978 do?
(1) Existing law, the Corporate Securities Law of 1968, regulates the offer and sale of securities in this state by the Commissioner of Corporations. Existing law requires an issuer of securities to qualify with the commissioner the offer and sale of securities unless the transaction is subject to one of several specified exemptions from the qualification requirements. A willful violation of these provisions is a crime. Existing law exempts from the qualification requirements the offer or sale of any security made to no more than 35 people, as specified, and allows the commissioner to require the issuer to file a notice of transactions. Existing law provides that the exemption remains available to an issuer that fails to file the notice or files the notice after the time specified by the commissioner. Existing law requires an issuer relying on that exemption to file a notice within 15 business days following discovery of the failure to timely file the notice, or after demand of the commissioner, whichever is earlier. This bill would require the commissioner to require the issuer to file a notice of transactions in connection with that exemption. Existing federal law defines the term "accredited investor," for purposes of regulating securities transactions, including determining whether an offer and sale of securities is required to be registered pursuant to the federal Securities Act of 1933. This bill would require the commissioner to require an issuer that relies upon a specified exemption from the qualification requirements and that is principally engaged in the business of purchasing, selling, financing, or brokering real estate, for an offering to any person who is not an accredited investor in a transaction that is not registered pursuant to the Securities Act of 1933, to provide information regarding the nature of the proposed offering on a form prescribed by the commissioner, as specified. That information would include, but not be limited to, the offering disclosure documents provided to prospective investors, and the names of the officers and directors of a corporate issuer and, in the case of other types of issuers, the names of other specified persons. The bill would also require the commissioner to prepare an annual report regarding the securities offerings and sales authorized by permit issued by the commissioner under specified provisions of existing law and to make the report publicly available by posting the report on the Internet Web site of the Department of Corporations. (2) Existing law exempts from the qualification requirements, subject to complying with specified requirements, a transaction that involves the sale of a series of notes secured directly by an interest in real property or the sale of undivided interests in a note secured directly by real property equivalent to a series transaction, having no more than 10 investors. Existing law requires a real estate broker to indicate in the real estate broker's transaction file the provisions of law pertaining to qualification or exemption from qualification under which a transaction is being conducted. Existing law requires a real estate broker to file certain information with the commissioner relative to conducting these transactions that are exempt from qualification. Existing law requires a real estate broker to submit a copy of the information in the real estate broker's transaction file relative to qualification or exemption from qualification for a transaction to any investor from whom the real estate broker obtains funds in connection with the transaction. This bill would require that a transaction that involves the sale of a note secured directly by an interest in real property or the sale of an undivided interest in a note secured directly by real property equivalent to a series transaction be conducted in compliance with those requirements. (3) Existing law, the Real Estate Law, requires a real estate broker negotiating a loan, as specified, secured by a lien on real property or a business opportunity or the sale of a real property sales contract or promissory note secured directly or collaterally by a lien on real property, to provide a disclosure statement, containing specified information regarding the proposed transaction, to a prospective lender or a prospective purchaser, respectively. A willful violation of the Real Estate Law is a crime. This bill would add to the information required to be included in the disclosure statement a statement that the broker has a responsibility to make reasonable efforts to determine that the loan or the purchase, respectively, is a suitable and appropriate investment for the lender or purchaser, respectively. Because this bill would expand the scope of existing crimes, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.
Who sponsors SB 978?
SB 978 is sponsored by Blakeslee, Price, and Vargas.
What is the current status of SB 978?
This bill has been enacted into law. Introduced January 23, 2012. Enacted.
Where can I track SB 978?
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