Bill Text: CA AB1059 | 2009-2010 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Bankruptcy.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 500, Statutes of 2009. [AB1059 Detail]
Download: California-2009-AB1059-Introduced.html
Bill Title: Bankruptcy.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 500, Statutes of 2009. [AB1059 Detail]
Download: California-2009-AB1059-Introduced.html
BILL NUMBER: AB 1059 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Silva
FEBRUARY 27, 2009
An act to amend Sections 7113.5, 17027, 17028, 17511.4, 17550.52,
17919, 20021, 22903, and 24071 of the Business and Professions Code,
to amend Sections 1785.13, 1786.18, 1788.14, and 1812.206 of the
Civil Code, to amend Section 703.130 of the Code of Civil Procedure,
to amend Sections 1400, 1401, 1402, 1403, 6110, 6610, 8110, 8610,
9650, 9680, 12560, 12630, 15642, 23005, 25103, 25248, and 28710 of
the Corporations Code, to amend Sections 867, 1203, 1781, 1889, 6152,
12307.2, 16202, 16902, 17415, 18477, 31709, 34109, and 50319 of the
Financial Code, to amend Section 1058 of the Fish and Game Code, to
amend Section 58503.1 of the Food and Agricultural Code, to amend
Section 65863.7 and 65863.12 of the Government Code, to amend Section
1358.4, 1793.62, 129174.1, 25169.3, 25245, 25359.5, 25359.6, and
25396 of the Health and Safety Code, to amend Section 10192.4 and
11655 of the Insurance Code, to amend Section 15643 of the Probate
Code, to amend Section 4107 of the Public Contract Code, to amend
Section 11923 of the Revenue and Taxation Code, to amend Section 9185
of the Streets and Highways Code, and to amend Section 9859 of the
Vehicle Code, relating to bankruptcy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1059, as introduced, Silva. Bankruptcy.
Existing law contains various provisions related to the filing of
bankruptcy by an individual or corporation under federal bankruptcy
law.
This bill would make technical changes and changes to conform with
federal bankruptcy law to correct obsolete references.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
AB 1059, as introduced, Silva. Bankruptcy.
Existing law contains various provisions related to the filing of
bankruptcy by an individual or corporation under federal bankruptcy
law.
This bill would make technical changes and changes to conform with
federal bankruptcy law to correct obsolete references.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7113.5 of the Business and Professions Code is
amended to read:
7113.5. The avoidance or settlement by a licensee for less than
the full amount of the lawful obligations of the licensee incurred as
a contractor, whether by (a) composition, arrangement, or
reorganization with creditors under state law, (b) composition,
arrangement, or reorganization with creditors under any agreement or
understanding, (c) receivership as provided in Chapter 5 (commencing
at Section 564) of Title 7 of Part 2 of the Code of Civil Procedure,
(d) assignment for the benefit of creditors, (e) trusteeship, or (f)
dissolution, constitutes a cause for disciplinary action.
This section shall not apply to an individual settlement of the
obligation of a licensee by the licensee with a creditor that is not
a part of or in connection with a settlement with other creditors of
the licensee.
No disciplinary action shall be commenced against a licensee for
avoiding discharge of or settling in
bankruptcy , or by composition, arrangement, or
reorganization with creditors under federal law, the
licensee's lawful obligations incurred as a contractor for less than
the full amount of the obligations, so long as the licensee satisfies
all of those lawful obligations, to the extent the obligations are
not discharged under federal law.
SEC. 2. Section 17027 of the Business and Professions Code is
amended to read:
17027. In establishing the cost of a given article or product to
the distributor and vendor, the invoice cost of the article or
product purchased at a forced, bankrupt
bankruptcy, closeout sale, or other sale outside of the
ordinary channels of trade may not be used as a basis for justifying
a price lower than one based upon the replacement cost as of the date
of the sale of the article or product replaced through the ordinary
channels of trade, unless the article or product is kept separate
from goods purchased in the ordinary channels of trade and unless the
article or product is advertised and sold as merchandise purchased
at a forced, bankrupt bankruptcy,
closeout sale, or by means other than through the ordinary channels
of trade.
Such advertising shall state the conditions under which the goods
were purchased, and the quantity of the merchandise to be sold or
offered for sale.
SEC. 3. Section 17028 of the Business and Professions Code is
amended to read:
17028. "Ordinary channels of trade" means those ordinary, regular
and daily transactions in the mercantile trade whereby title to an
article or product, in no way damaged or deteriorated, is transferred
from one person to another.
"Ordinary channels of trade" does not include bankruptcy
sales of bankrupt stocks, closeout goods,
dents, sales of goods bought from a business or merchant retiring
from business, fire sales and sales of damaged or deteriorated goods,
which damage or deterioration results from any cause whatsoever.
This listing is not all inclusive but as example only.
SEC. 4. Section 17511.4 of the Business and Professions Code is
amended to read:
17511.4. Each filing pursuant to Section 17511.3 shall contain
the following information:
(a) The name or names of the seller, including the name under
which the seller is doing or intends to do business, if different
from the name of the seller, and the name of any parent or affiliated
organization (1) that will engage in business transactions with
purchasers relating to sales solicited by the seller or (2) that
accepts responsibility for statements made by, or acts of, the seller
relating to sales solicited by the seller.
(b) The seller's business form and place of organization and, if
the seller is a corporation, a copy of its articles of incorporation
and bylaws and amendments thereto, or, if a partnership, a copy of
the partnership agreement, or if operating under a fictitious
business name, the location where the fictitious name has been
registered. All the same information shall be included for any parent
or affiliated organization disclosed pursuant to subdivision (a).
(c) The complete street address or addresses of all locations,
designating the principal location from which the telephonic seller
will be conducting business. If the principal business location of
the seller is not in this state, then the seller shall also designate
which of its locations within this state is its main location in the
state.
(d) A listing of all telephone numbers to be used by the seller
and the address where each telephone using each of these telephone
numbers is located.
(e) The name of, and the office held by, the seller's officers,
directors, trustees, general and limited partners, sole proprietor,
and owners, as the case may be, and the names of those persons who
have management responsibilities in connection with the seller's
business activities.
(f) The complete address of the principal residence, the date of
birth, and the driver's license number and state of issuance of each
of the persons whose names are disclosed pursuant to subdivision (e).
(g) The name and principal residence address of each person the
telephonic seller leaves in charge at each location from which the
seller does business in this state, as defined in subdivision (a) of
Section 17511.3, and the business location which each of these
persons is or will be in charge of.
(h) A statement, meeting the requirements of this subdivision, as
to both the seller, whether a corporation, partnership, firm,
association, joint venture, or any other type of business entity (and
whether identified pursuant to subdivision (e) or (g) or not), and
as to any person identified pursuant to subdivision (e) or (g) who:
(1) Has been convicted of a felony or misdemeanor involving an
alleged violation of this article, or fraud, theft, embezzlement,
fraudulent conversion, or misappropriation of property. For purposes
of this paragraph, a plea of nolo contendere is a conviction.
(2) Has had entered against him or her a final judgment or order
in a civil or administrative action, including a stipulated judgment
or order, if the complaint or petition in the civil or administrative
action alleged acts constituting a violation of this article, fraud,
theft, embezzlement, fraudulent conversion, or misappropriation of
property, the use of untrue or misleading representations in an
attempt to sell or dispose of real or personal property, or the use
of unfair, unlawful, or deceptive business practices.
(3) Is subject to any currently effective injunction or
restrictive court order relating to business activity as the result
of an action brought by a federal, state, or local public agency or
unit thereof, including, but not limited to, an action affecting any
vocational license.
(4) Has at any time during the previous seven tax years
filed in bankruptcy, been adjudged a bankrupt been the
subject of an order for relief in bankruptcy , been
reorganized due to insolvency, or been a principal, director,
officer, trustee, general or limited partner, or had management
responsibilities of any other corporation, partnership, joint
venture, or business entity, that has so filed or was so
adjudicated or reorganized, been the subject of an
order for relief in bankruptcy during or within one year after
the period that the person held that position.
For purposes of paragraphs (1), (2), and (3), the statement
required by this subdivision shall identify the seller or person, the
court or administrative agency rendering the conviction, judgment,
or order, the docket number of the matter, the date of the
conviction, judgment, or order, and the name of the governmental
agency, if any, that brought the action resulting in the conviction,
judgment, or order. For purposes of paragraph (4), the statement
required by this subdivision shall include the name and location of
the seller or person filing in bankruptcy, adjudged a
bankrupt that has been the subject of an order for
relief in bankruptcy , or reorganized due to insolvency, and
shall include the date thereof, the court which exercised
jurisdiction, and the docket number of the matter.
(i) A list of the names, principal residence addresses, the date
of birth, and the driver's license number and state of issuance
thereof, of salespersons who solicit on behalf of the telephonic
seller and the names the salespersons use while so soliciting. No
salesperson shall use the same name as used by any other salesperson
soliciting for the telephonic seller and no telephonic seller shall
permit a salesperson to use the same name as used by any other
salesperson soliciting for the telephonic seller.
(j) A description of the items the seller is offering for sale and
a copy of all sales scripts the telephonic seller requires
salespersons to use when soliciting prospective purchasers, or if no
sales script is required to be used, a statement to that effect.
(k) A copy of all sales information and literature (including, but
not limited to, scripts, outlines, instructions, and information
regarding how to conduct telephonic sales, sample introductions,
sample closings, product information, and contest or premium-award
information) provided by the telephonic seller to salespersons or of
which the seller informs salespersons, and a copy of all written
materials the seller sends to any prospective or actual purchaser.
() If the telephonic seller represents or implies, or directs
salespersons to represent or imply, to purchasers that the purchaser
will receive certain specific items (including a certificate of any
type which the purchaser must redeem to obtain the item described in
the certificate) or one or more items from among designated items,
whether the items are denominated as gifts, premiums, bonuses,
prizes, or otherwise, the filing shall include the following:
(1) A list of the items offered.
(2) The value or worth of each item described to prospective
purchasers and the basis for the valuation.
(3) The price paid by the telephonic seller to its supplier for
each of these items and the name, address, and telephone number of
each item's supplier.
(4) If the purchaser is to receive fewer than all of the items
described by the seller, the filing shall include the following:
(A) The manner in which the telephonic seller decides which item
or items a particular prospective purchaser is to receive.
(B) The odds a single prospective purchaser has of receiving each
described item.
(C) The name and address of each recipient who has, during the
preceding 12 months (or if the seller has not been in business that
long, during the period the telephonic seller has been in business)
received the item having the greatest value and the item with the
smallest odds of being received.
(5) All rules, regulations, terms, and conditions a prospective
purchaser must meet in order to receive the item.
(m) If the telephonic seller is offering to sell any metal, stone,
or mineral, the filing shall include the following:
(1) The name, address, and telephone number of each of the seller'
s suppliers and a description of each metal, stone, or mineral
provided by the supplier.
(2) If possession of any metal, stone, or mineral is to be
retained by the seller or will not be transferred to the purchaser
until the purchaser has paid in full, the filing shall include the
following:
(A) The address of each location where the metal, stone, or
mineral will be kept.
(B) If not kept on premises owned by the seller or at an address
or addresses set forth in compliance with subdivision (c), the name
of the owner of the business at which the metal, stone, or mineral
will be kept.
(C) A copy of any contract or other document which evidences the
seller's right to store the metal, stone, or mineral at the address
or addresses designated pursuant to subparagraph (A).
(3) If the seller is not selling the metal, stone, or mineral from
its own inventory, but instead purchases the metal, stone, or
mineral to fill orders taken from purchasers, the filing shall
include copies of all contracts or other documents evidencing the
seller's ability to call upon suppliers to fill the seller's orders.
(4) If the seller represents to purchasers that the seller has
insurance or a surety bond of any type relating to a purchaser's
purchase of any metal, stone, or mineral from the seller, the filing
shall include a complete copy of all these insurance policies and
bonds.
(5) If the seller makes any representation as to the earning or
profit potential of purchases of any metal, stone, or mineral, the
filing shall include data to substantiate the claims made. If the
representation relates to previous sales made by the seller or a
related entity, substantiating data shall be based on the experiences
of at least 50 percent of the persons who have purchased the
particular metal, stone, or mineral from the seller or related entity
during the preceding six months (or if the seller or related entity
has not been in business that long, during the period the seller or
related entity has been in business) and shall include the raw data
upon which the representation is based, including, but not limited
to, all of the following:
(A) The length of time the seller or related entity has been
selling the particular metal, stone, or mineral being offered.
(B) The number of purchasers thereof from the seller or related
entity known to the seller or related entity to have made at least
the same earnings or profit as those represented.
(C) The percentage that the number disclosed pursuant to
subparagraph (B) represents of the total number of purchasers from
the seller or related entity of the particular metal, stone, or
mineral.
(n) If the telephonic seller is offering to sell an interest in
oil, gas, or mineral fields, wells, or exploration sites, the filing
shall include disclosure of the following:
(1) The seller's ownership interest, if any, in each field, well,
or site being offered for sale.
(2) The total number of interests to be sold in each field, well,
or site being offered for sale.
(3) If, in selling an interest in any particular field, well, or
site, reference is made to an investigation of these fields, wells,
or sites by the seller or anyone else, the filing shall include the
following:
(A) The name, business address, telephone number, and professional
credentials of the person or persons who made the investigation.
(B) A copy of the report and other documents relating to the
investigation prepared by the person or persons.
(4) If the seller makes any representation as to the earning or
profit potential of purchases of any interest in these fields, wells,
or sites, the filing shall include data to substantiate the claims
made. If the representation relates to previous sales made by the
seller or a related entity, the substantiating data shall be based on
the experiences of at least 50 percent of the purchasers of the
particular interests from the seller or the related entity during the
preceding six months (or if the seller has not been in business that
long, during the period the seller or related entity has been in
business) and shall include the raw data upon which the
representation is based, including, but not limited to, all of the
following:
(A) The length of time the seller or related entity has been
selling the particular interests in the fields, wells, or sites being
offered.
(B) The number of purchasers of the particular interests from the
seller or related entity known to the seller to have made, at least
the same earnings as those represented.
(C) The percentage the number disclosed pursuant to subparagraph
(B) represents of the total number of purchasers of the particular
interests from the seller or related entity.
(o) The name and address of the telephonic seller's agent in this
state, other than the Attorney General, authorized to receive service
of process in this state.
(p) If a person, based on paragraph (19) of subdivision (c) of
Section 17511.1, claims an exemption from having to file the
information required by subdivisions (a) to (o), inclusive, the
person shall file, on a form provided by the Attorney General, the
following information:
(1) The name or names of the person claiming the exemption,
including the name under which the person is doing or intends to do
business.
(2) The person's business form, and place of organization, whether
corporate or otherwise; or, if operating under a fictitious business
name, the location where the fictitious name has been registered.
(3) The complete street address of the person's retail locations,
and telephone numbers located therein and a statement as to how long
the person has been selling at retail from each location.
(4) A copy of the person's currently valid business license.
(5) A statement reflecting the dollar amount of the person's total
retail sales during the 12 months preceding the filing.
(6) A statement reflecting the dollar amount of the person's sales
made telephonically during the 12 months preceding the filing.
The filing shall be verified by a declaration signed under penalty
of perjury by each principal of the person claiming the exemption.
The declaration shall specify the date and location of signing.
If a person filing pursuant to subdivision (p) makes any
representation to a prospective purchaser as to the historical
movements or changes in the price or value of any coin or bullion,
the person shall maintain in its records sufficient data to
substantiate each representation. This data shall be retained in the
person's records for a period of at least three years after the last
date on which a representation is made and shall be made available
for inspection upon request by any governmental agency at each of its
business locations.
(q) If the telephonic seller represents or implies, or directs
salespersons to represent or imply, that the telephonic seller can,
or may be able to, make a loan or arrange or assist in arranging a
loan or to assist in providing information which may lead to the
obtaining of a loan, the filing shall include the following:
(1) The names and addresses of all persons who, in the previous 24
months, lent money to those who responded to the seller's
solicitations or lent money to the telephonic seller for the seller
to lend to those who responded to the seller's representations that
it could make a loan or arrange or assist in arranging a loan or
could assist in providing information which could lead to the
obtaining of a loan.
(2) The names and addresses of all persons who, in the previous 24
months, lent money to those who responded to the solicitations of
the seller's predecessor or the seller's officers, owners, or those
persons having present management responsibilities or to companies
with which they were associated, that they could make a loan or
arrange or assist in arranging a loan or could assist in providing
information which could lead to the obtaining of a loan or lent money
to the seller's predecessor or the seller's officers, owners, or
those persons having present management responsibilities or to
companies with which they were associated for them to lend to those
who responded to these representations.
(3) The names and addresses of all persons who have informed the
telephonic seller that they may be able to lend money, within the
next 12 months from the date of this registration, to persons
solicited by the seller or to the telephonic seller for the seller to
lend to those who respond to the seller's representations that it
can make a loan or arrange or assist in arranging a loan or can
assist in providing information which can lead to the obtaining of a
loan.
(4) Copies of all contracts between the seller and lenders or
prospective lenders who may lend money: (A) to the seller to lend to
individuals who, in connection with the seller's business activities,
respond to the seller's representations that it can make a loan or
arrange or assist in arranging a loan or can assist in providing
information which can lead to the obtaining of a loan; or (B)
directly to persons to whom the seller may represent that it can
arrange or assist in providing information which can lead to the
obtaining of a loan.
SEC. 5. Section 17550.52 of the Business and Professions Code is
amended to read:
17550.52. The Attorney General or his or her delegate may
determine that the Travel Consumer Restitution Corporation has failed
or ceased to operate upon a finding that any one of the following
has occurred with respect to the corporation:
(a) Was not created.
(b) Has been dissolved.
(c) Has ceased to operate.
(d) Is insolvent or bankrupt or been the
subject of an order for relief in bankruptcy .
(e) Has failed to pay its operating costs.
(f) Has failed to pay any claim or judgment in a timely manner.
(g) Has violated its articles of incorporation or any law of this
state.
(h) Has invested its funds in violation of this article.
(i) Has not levied assessments as required by this article.
(j) Has not diligently decided upon a claim made by a person
aggrieved.
(k) Has violated any section of this article.
() Has neglected or refused to submit its books, papers, and
affairs to the inspection of the office of the Attorney General.
SEC. 6. Section 17919 of the Business and Professions Code is
amended to read:
17919. (a) A fictitious business name statement may be executed,
filed, and published by the trustee in bankruptcy at any time after
bankruptcy where a failure to comply with the provisions of this
chapter would otherwise preclude the maintenance of an action to
recover any sums due to the bankrupt debtor
or bankruptcy estate or the partnership of which the
bankrupt debtor or bankruptcy estate was a
member.
(b) A fictitious business name statement may be executed, filed,
and published by the conservator, executor, or administrator at any
time after the appointment of a conservator for or death of any
individual or partner where a failure to comply with the provisions
of this chapter would otherwise preclude the maintenance of an action
to recover any sums due the conservatee or deceased person or the
partnership of which he was a member.
(c) A fictitious business name statement may be executed, filed,
and published by an assignee or purchaser of the business at any time
after the assignment or sale where a failure to comply with the
provisions of this chapter would otherwise preclude the maintenance
of an action to recover any sums due to the assignee or purchaser by
reason of the assignment or sale.
(d) The fictitious business name statement referred to in this
section shall be in substantially the same form as prescribed in
Section 17913, except:
(1) The person or persons who were doing business under the
fictitious business name shall be stated as such person or persons
existed (i) immediately prior to the bankruptcy, conservatorship, or
death or the assignment or sale of the business or (ii) at the time
they ceased to do business under the fictitious business name,
whichever is the earlier time.
(2) The statement shall include the following additional sentence:
"This statement has been executed pursuant to Section 17919 of the
Business and Professions Code."
(3) The person executing the statement shall (i) sign the
statement on behalf of the person or persons formerly doing business
under the fictitious business name, (ii) state his full name and the
street address of his place of business or, if he has none, of his
residence, and (iii) indicate whether he is a trustee in bankruptcy,
conservator, executor, or administrator or assignee or purchaser of
the business.
SEC. 7. Section 20021 of the Business and Professions Code is
amended to read:
20021. If during the period in which the franchise is in effect,
there occurs any of the following events which is relevant to the
franchise, immediate notice of termination without an opportunity to
cure, shall be deemed reasonable:
(a) The franchisee or the business to which the franchise relates
is declared bankrupt or has been the subject
of an order for relief in bankruptcy, judicially determined to
be insolvent, or all or a substantial part of the
assets thereof are assigned to or for the benefit of any creditor, or
the franchisee admits his inability to pay his debts as they come
due;
(b) The franchisee abandons the franchise by failing to operate
the business for five consecutive days during which the franchisee is
required to operate the business under the terms of the franchise,
or any shorter period after which it is not unreasonable under the
facts and circumstances for the franchisor to conclude that the
franchisee does not intend to continue to operate the franchise,
unless such failure to operate is due to fire, flood, earthquake or
other similar causes beyond the franchisee's control;
(c) The franchisor and franchisee agree in writing to terminate
the franchise;
(d) The franchisee makes any material misrepresentations relating
to the acquisition of the franchise business or the franchisee
engages in conduct which reflects materially and unfavorably upon the
operation and reputation of the franchise business or system;
(e) The franchisee fails, for a period of 10 days after
notification of noncompliance, to comply with any federal, state or
local law or regulation applicable to the operation of the franchise;
(f) The franchisee, after curing any failure in accordance with
Section 20020 engages in the same noncompliance whether or not such
noncompliance is corrected after notice;
(g) The franchisee repeatedly fails to comply with one or more
requirements of the franchise, whether or not corrected after notice;
(h) The franchised business or business premises of the franchise
are seized, taken over or foreclosed by a government official in the
exercise of his duties, or seized, taken over, or foreclosed by a
creditor, lienholder or lessor, provided that a final judgment
against the franchisee remains unsatisfied for 30 days (unless a
supersedeas or other appeal bond has been filed); or a levy of
execution has been made upon the license granted by the franchise
agreement or upon any property used in the franchised business, and
it is not discharged within five days of such levy;
(i) The franchisee is convicted of a felony or any other criminal
misconduct which is relevant to the operation of the franchise;
(j) The franchisee fails to pay any franchise
fees or other amounts due to the franchisor or its affiliate within
five days after receiving written notice that such fees are overdue;
or
(k) The franchisor makes a reasonable determination that continued
operation of the franchise by the franchisee will result in an
imminent danger to public health or safety.
SEC. 8. Section 22903 of the Business and Professions Code is
amended to read:
22903. (a) This section shall only apply to a dealer contract
between a dealer who is not a single-line dealer and a supplier who
is not a single-line supplier.
(b) Except where there are grounds for termination of a dealer
contract pursuant to paragraph (1), (2), (3), (4), (5), (6), (7), or
(8) of subdivision (c), a supplier shall give a dealer 180 days
written notice of the supplier's intent to terminate a dealer
contract. The notice shall include all reasons constituting good
cause for the termination and shall provide the dealer with 60 days
to cure any claimed deficiency. If the deficiency is cured within 60
days to the satisfaction of the supplier, which shall be determined
in good faith, the notice of termination shall be void. Except as
provided in subdivision (d), a supplier may not terminate a dealer
contract based on paragraph (12) of subdivision (c) unless the
supplier gives the dealer notice of that action at least one year
before the effective date of that action. If the dealer achieves the
supplier's requirements for reasonable standards or performance
objectives before the expiration of the one-year notice period, the
notice shall be void and the dealer contract shall continue in full
force and effect.
(c) No supplier, directly or through an officer, agent, or
employee, may terminate, cancel, fail to renew, or materially change
the competitive circumstances of a dealer contract without good
cause. In addition to the definition in subdivision (l) of Section
22901, good cause exists whenever the dealer has taken any of the
following actions:
(1) Transferred a controlling ownership interest in the dealership
without the consent of the supplier, who shall not withhold consent
unreasonably.
(2) Made a material misrepresentation or falsification of any
record.
(3) Filed a voluntary petition in bankruptcy or has had an
involuntary petition in bankruptcy filed against the dealer that has
not been discharged dismissed within 60
days after the filing or is insolvent or in receivership.
(4) Pleaded guilty to or has been convicted of a felony involving
an act of moral turpitude.
(5) Failed to operate in the normal course of business for seven
consecutive business days, without the consent of the supplier, or
has terminated the business.
(6) Relocated or established a new or additional dealer's place of
business without the supplier's consent.
(7) Materially defaulted under any chattel mortgage or other
security agreement between the dealer and the supplier, or there has
been a revocation of any guarantee of the dealer's present or future
obligations to the supplier. However, good cause does not exist if a
person revokes any guarantee in connection with or following the
transfer of that person's entire ownership interest in the dealer
unless the supplier requires that person to execute a new guarantee
of the dealer's present or future obligations in connection with that
transfer of ownership interest.
(8) Failed to satisfy any payment obligation as it became due and
payable to the supplier, failed to promptly account to the supplier
for any proceeds from the sale of equipment, or failed to hold those
proceeds in trust for the benefit of the supplier.
(9) Engaged in conduct that is injurious or detrimental to any of
the following:
(A) The dealer's customers. This includes, but is not limited to,
the following conduct: excessive pricing, misleading advertising,
failure to provide service and replacement parts, and failure to
perform warranty obligations.
(B) The public welfare.
(C) The representation or reputation of the supplier's product.
(10) Consistently failed to meet building and housekeeping
requirements, or failed to provide adequate sales, service, or parts
personnel commensurate with the dealer contract.
(11) Consistently failed to comply with the applicable licensing
laws pertaining to the products and services being represented for
and on the supplier's behalf.
(12) Consistently failed to meet and maintain the supplier's
requirements for reasonable standards and performance objectives, if
the supplier has given the dealer reasonable standards and
performance objectives that are based on the manufacturer's
experience in other comparable market areas.
(d) Notwithstanding subdivision (c), if the sales, service,
rental, and repair of a supplier's product represents the lesser of
10 percent or three hundred fifty thousand dollars ($350,000) of the
dealer's total gross annual revenue that includes, but is not limited
to, the sales, service, rental, or repair, for each dealer location,
the supplier may terminate a dealer contract based on paragraph (12)
of subdivision (c) upon providing the dealer with notice of that
action at least 180 days before the effective date of that action. If
the dealer achieves the supplier's requirements for reasonable
standards or performance objectives within 60 days of receipt of the
termination notice, the notice shall be void and the dealer contract
shall continue in full force and effect.
(e) Notwithstanding a dealer contract that provides for
exclusivity during the term of the contract, a supplier may begin
contract negotiations with a potential replacement dealer 60 days
prior to the expiration of the notice period that has been provided
pursuant to subdivisions (b) or (d) if the dealer failed to achieve
the supplier's requirements for reasonable standards or performance
objectives within 60 days of receipt of the termination notice.
Nothing in this subdivision shall authorize a replacement dealer to
conduct operations with a supplier during the term of a dealer
contract.
SEC. 9. Section 24071 of the Business and Professions Code is
amended to read:
24071. The license of one spouse may be transferred to the other
spouse when the application for transfer is made prior to the entry
of a final decree of divorce, and the license of a decedent, minor
ward, incompetent person, conservatee, bankrupt person
debtor in a bankruptcy case , person for whose
estate a receiver is appointed, or assignor for the benefit of
creditors may be transferred by or to the surviving partners of a
deceased licensee, the executor, administrator, conservator or
guardian of an estate of a licensee, the surviving spouse of a
deceased licensee in the event that the deceased licensee leaves no
estate to be administered, the trustee of a bankrupt estate of a
licensee, a receiver of the estate of a licensee, or an assignee for
the benefit of creditors of a licensee with the consent of the
assignor, or a license may be transferred by or to a receiver
appointed for a judgment debtor as provided by Section 708.630 of the
Code of Civil Procedure, or a license may be transferred to a
revocable living trust when the licensee is also the trustee, or a
license may be transferred between partners where no new partner is
being licensed, or a license may be transferred between corporations
whose outstanding shares of stock are owned by the same natural
persons, or a licensee may transfer upon compliance with Section
24073 any license to a corporation whose entire stock is owned by the
licensee, or his or her spouse, or a licensee may transfer upon
compliance with Section 24073 any license to a limited liability
company whose entire membership consists of the licensee, or his or
her spouse, or a license may be transferred from a corporation to a
person who owns, or whose spouse owns, the entire stock of the
corporation, and the fee for transfer of each license is fifty
dollars ($50). The regular transfer fee provided in Section 24072
shall be due and payable upon the subsequent transfer of 25 percent
of the stock in a corporation to which a license has been transferred
by a licensee or his or her spouse pursuant to this section, except
if the transfer of stock is from a parent to his or her child or
grandchild, in which case the fee shall be one-half of the regular
transfer fee. In no case shall a fee be charged for the transfer of
an importer's license. All money collected from the fees provided for
in this section shall be deposited in the Alcohol Beverage Control
Fund as provided in Section 25761.
Nothing in this section shall be deemed to authorize the formation
of a limited liability company composed of only one member in
violation of subdivision (b) of Section 17050 of the Corporations
Code.
SEC. 10. Section 1785.13 of the Civil Code is amended to read:
1785.13. (a) No consumer credit reporting agency shall make any
consumer credit report containing any of the following items of
information:
(1) Bankruptcies that, from the date of adjudication
the order for relief , antedate the report by
more than 10 years.
(2) Suits and judgments that, from the date of entry or renewal,
antedate the report by more than seven years or until the governing
statute of limitations has expired, whichever is the longer period.
(3) Unlawful detainer actions, unless the lessor was the
prevailing party. For purposes of this paragraph, the lessor shall be
deemed to be the prevailing party only if (A) final judgment was
awarded to the lessor (i) upon entry of the tenant's default, (ii)
upon the granting of the lessor's motion for summary judgment, or
(iii) following trial, or (B) the action was resolved by a written
settlement agreement between the parties that states that the
unlawful detainer action may be reported. In any other instance in
which the action is resolved by settlement agreement, the lessor
shall not be deemed to be the prevailing party for purposes of this
paragraph.
(4) Paid tax liens that, from the date of payment, antedate the
report by more than seven years.
(5) Accounts placed for collection or charged to profit and loss
that antedate the report by more than seven years.
(6) Records of arrest, indictment, information, misdemeanor
complaint, or conviction of a crime that, from the date of
disposition, release, or parole, antedate the report by more than
seven years. These items of information shall no longer be reported
if at any time it is learned that in the case of a conviction a full
pardon has been granted, or in the case of an arrest, indictment,
information, or misdemeanor complaint a conviction did not result.
(7) Any other adverse information that antedates the report by
more than seven years.
(b) The seven-year period specified in paragraphs (5) and (7) of
subdivision (a) shall commence to run, with respect to any account
that is placed for collection (internally or by referral to a third
party, whichever is earlier), charged to profit and loss, or
subjected to any similar action, upon the expiration of the 180-day
period beginning on the date of the commencement of the delinquency
that immediately preceded the collection activity, charge to profit
and loss, or similar action. Where more than one of these actions is
taken with respect to a particular account, the seven-year period
specified in paragraphs (5) and (7) shall commence concurrently for
all these actions on the date of the first of these actions.
(c) Any consumer credit reporting agency that furnishes a consumer
credit report containing information regarding any case involving a
consumer arising under the bankruptcy provisions of Title 11 of the
United States Code shall include an identification of the chapter of
Title 11 of the United States Code under which the case arose if that
can be ascertained from what was provided to the consumer credit
reporting agency by the source of the information.
(d) A consumer credit report shall not include any adverse
information concerning a consumer antedating the report by more than
10 years or that otherwise is prohibited from being included in a
consumer credit report.
(e) If a consumer credit reporting agency is notified by a
furnisher of credit information that an open-end credit account of
the consumer has been closed by the consumer, any consumer credit
report thereafter issued by the consumer credit reporting agency with
respect to that consumer, and that includes information respecting
that account, shall indicate the fact that the consumer has closed
the account. For purposes of this subdivision, "open-end credit
account" does not include any demand deposit account, such as a
checking account, money market account, or share draft account.
(f) Consumer credit reporting agencies shall not include medical
information in their files on consumers or furnish medical
information for employment, insurance, or credit purposes in a
consumer credit report without the consent of the consumer.
(g) A consumer credit reporting agency shall include in any
consumer credit report information, if any, on the failure of the
consumer to pay overdue child or spousal support, where the
information either was provided to the consumer credit reporting
agency pursuant to Section 4752 or has been provided to the consumer
credit reporting agency and verified by another federal, state, or
local governmental agency.
SEC. 11. Section 1786.18 of the Civil Code is amended to read:
1786.18. (a) Except as authorized under subdivision (b), an
investigative consumer reporting agency may not make or furnish any
investigative consumer report containing any of the following items
of information:
(1) Bankruptcies that, from the date of adjudication
the order for relief , antedate the report by
more than 10 years.
(2) Suits that, from the date of filing, and satisfied judgments
that, from the date of entry, antedate the report by more than seven
years.
(3) Unsatisfied judgments that, from the date of entry, antedate
the report by more than seven years.
(4) Unlawful detainer actions where the defendant was the
prevailing party or where the action is resolved by settlement
agreement.
(5) Paid tax liens that, from the date of payment, antedate the
report by more than seven years.
(6) Accounts placed for collection or charged to profit and loss
that antedate the report by more than seven years.
(7) Records of arrest, indictment, information, misdemeanor
complaint, or conviction of a crime that, from the date of
disposition, release, or parole, antedate the report by more than
seven years. These items of information shall no longer be reported
if at any time it is learned that, in the case of a conviction, a
full pardon has been granted or, in the case of an arrest,
indictment, information, or misdemeanor complaint, a conviction did
not result; except that records of arrest, indictment, information,
or misdemeanor complaints may be reported pending pronouncement of
judgment on the particular subject matter of those records.
(8) Any other adverse information that antedates the report by
more than seven years.
(b) The provisions of subdivision (a) are not applicable in either
of the following circumstances:
(1) If the investigative consumer report is to be used in the
underwriting of life insurance involving, or that may reasonably be
expected to involve, an amount of two hundred fifty thousand dollars
($250,000) or more.
(2) If the investigative consumer report is to be used by an
employer who is explicitly required by a governmental regulatory
agency to check for records that are prohibited by subdivision (a)
when the employer is reviewing a consumer's qualification for
employment.
(c) Except as otherwise provided in Section 1786.28, an
investigative consumer reporting agency shall not furnish an
investigative consumer report that includes information that is a
matter of public record and that relates to an arrest, indictment,
conviction, civil judicial action, tax lien, or outstanding judgment,
unless the agency has verified the accuracy of the information
during the 30-day period ending on the date on which the report is
furnished.
(d) An investigative consumer reporting agency shall not prepare
or furnish an investigative consumer report on a consumer that
contains information that is adverse to the interest of the consumer
and that is obtained through a personal interview with a neighbor,
friend, or associate of the consumer or with another person with whom
the consumer is acquainted or who has knowledge of the item of
information, unless either (1) the investigative consumer reporting
agency has followed reasonable procedures to obtain confirmation of
the information, from an additional source that has independent and
direct knowledge of the information, or (2) the person interviewed is
the best possible source of the information.
SEC. 12. Section 1788.14 of the Civil Code is amended to read:
1788.14. No debt collector shall collect or attempt to collect a
consumer debt by means of the following practices:
(a) Obtaining an affirmation from a debtor who has been
adjudicated a bankrupt, of a consumer debt which has been
discharged in such bankruptcy, without clearly and
conspicuously disclosing to the debtor, in writing, at the time such
affirmation is sought, the fact that the debtor is not legally
obligated to make such affirmation;
(b) Collecting or attempting to collect from the debtor the whole
or any part of the debt collector's fee or charge for services
rendered, or other expense incurred by the debt collector in the
collection of the consumer debt, except as permitted by law; or
(c) Initiating communications, other than statements of account,
with the debtor with regard to the consumer debt, when the debt
collector has been previously notified in writing by the debtor's
attorney that the debtor is represented by such attorney with respect
to the consumer debt and such notice includes the attorney's name
and address and a request by such attorney that all communications
regarding the consumer debt be addressed to such attorney, unless the
attorney fails to answer correspondence, return telephone calls, or
discuss the obligation in question. This subdivision shall not apply
where prior approval has been obtained from the debtor's attorney, or
where the communication is a response in the ordinary course of
business to a debtor's inquiry.
SEC. 13. Section 1812.206 of the Civil Code is amended to read:
1812.206. At least 48 hours prior to the execution of a seller
assisted marketing plan contract or agreement or at least 48 hours
prior to the receipt of any consideration, whichever occurs first,
the seller or his or her representative shall provide to the
prospective purchaser in writing a document entitled "SELLER ASSISTED
MARKETING PLAN INFORMATION SHEET." The seller may combine the
information required under this section with the information required
under Section 1812.205 and, if done, shall utilize the single title
"DISCLOSURES REQUIRED BY CALIFORNIA LAW," and the title page required
by Section 1812.205. If a combined document is used, it shall be
given at the time required by Section 1812.205, provided that this
time meets the 48-hour test of this section. The information sheet
required by this section shall contain the following:
(a) The name of and the office held by the seller's owners,
officers, directors, trustees and general or limited partners, as the
case may be, and the names of those individuals who have management
responsibilities in connection with the seller's business activities.
(b) A statement whether the seller, any person identified in
subdivision (a), and any other company managed by a person identified
in subdivision (a):
(1) Has been convicted of a felony or misdemeanor or pleaded nolo
contendere to a felony or misdemeanor charge if the felony or
misdemeanor involved an alleged violation of this title, fraud,
embezzlement, fraudulent conversion or misappropriation of property.
(2) Has been held liable in a civil action by final judgment or
consented to the entry of a stipulated judgment if the civil action
alleged a violation of this title, fraud, embezzlement, fraudulent
conversion or misappropriation of property or the use of untrue or
misleading representations in an attempt to sell or dispose of real
or personal property or the use of unfair, unlawful or deceptive
business practices.
(3) Is subject to any currently effective agreement, injunction,
or restrictive order, including, but not limited to, a "cease and
desist" order, an "assurance of discontinuance," or other comparable
agreement or order, relating to business activity as the result of an
action or investigation brought by a public agency or department,
including, but not limited to, an action affecting any vocational
license.
The statements required by paragraphs (1), (2) and (3) of this
subdivision shall set forth the terms of the agreement, or the court,
the docket number of the matter, the date of the conviction or of
the judgment and, when involved, the name of the governmental agency
that initiated the investigation or brought the action resulting in
the conviction or judgment.
(4) Has at any time during the previous seven fiscal years
filed in bankruptcy, been adjudged a bankrupt
been the subject of an order for relief in bankruptcy , been
reorganized due to insolvency, or been a principal, director,
officer, trustee, general or limited partner, or had management
responsibilities of any other person, as defined in subdivision (b)
of Section 1812.201, that has so filed or was so adjudicated
or reorganized, during or within one year after the period
that the individual held that position. If so, the name and location
of the person having so filed, or having been so adjudged
or reorganized, the date thereof, the court which exercised
jurisdiction, and the docket number of the matter shall be set
forth.
(c) The length of time the seller:
(1) Has sold seller assisted marketing plans.
(2) Has sold the specific seller assisted marketing plan being
offered to the purchaser.
(d) If the seller is required to secure a bond or establish a
trust account pursuant to the requirements of Section 1812.204, the
information sheet shall state either:
(1) "Seller has secured a bond issued by
________________________________________________,
(name and address of surety company)
a surety company admitted to do business in this state. Before
signing a contract to purchase this seller assisted marketing plan,
you should check with the surety company to determine the bond's
current status," or
(2) "Seller has deposited with the office of the Attorney General
information regarding its trust account. Before signing a contract to
purchase this seller assisted marketing plan, you should check with
the Attorney General to determine the current status of the trust
account."
(e) A copy of a recent, not more than 12 months old, financial
statement of the seller, together with a statement of any material
changes in the financial condition of the seller from the date
thereof. That financial statement shall either be audited or be under
penalty of perjury signed by one of the seller's officers,
directors, trustees or general or limited partners. The declaration
under penalty of perjury shall indicate that to the best of the
signatory's knowledge and belief the information in the financial
statement is true and accurate; the date of signature and the
location where signed shall also be indicated. Provided, however,
that where a seller is a subsidiary of another corporation which is
permitted by generally accepted accounting standards to prepare
financial statements on a consolidated basis, the above information
may be submitted in the same manner for the parent if the
corresponding financial statement of the seller is also provided and
the parent absolutely and irrevocably has agreed to guarantee all
obligations of the seller.
(f) An unexecuted copy of the entire seller assisted marketing
plan contract.
(g) For purposes of this section, "seller's owners" means any
individual who holds an equity interest of at least 10 percent in the
seller.
SEC. 14. Section 703.130 of the Code of Civil Procedure is amended
to read:
703.130. Pursuant to the authority of paragraph (1)
(2) of subsection (b) of Section 522 of Title 11
of the United States Code, the exemptions set forth in subsection
(d) of Section 522 of Title 11 of the United States Code (Bankruptcy)
are not authorized in this state.
SEC. 15. Section 1400 of the Corporations Code is amended to read:
1400. (a) Any domestic corporation with respect to which a
proceeding has been initiated under any applicable statute of the
United States, as now existing or hereafter enacted, relating to
reorganizations or arrangements of corporations,
has full power and authority to put into effect and carry out any
plan of reorganization or arrangement and the
orders of the court or judge entered in such proceeding and may take
any proceeding and do any act provided in the plan or directed by
such orders, without futher further
action by its board or shareholders. Such power and authority may be
exercised and such proceedings and acts may be taken, as may be
directed by such orders, by the trustee or trustees of such
corporation appointed in the reorganization or arrangement
proceeding (or a majority thereof), or if none is appointed
and acting, by officers of the corporation designated or a master or
other representative appointed by the court or judge, with like
effect as if exercised and taken by unanimous action of the board and
shareholders of the corporation.
(b) Such corporation may, in the manner provided in subdivision
(a), but without limiting the generality or effect of subdivision
(a), alter, amend or repeal its bylaws; constitute or reconstitute
its board and name, constitute or appoint directors and officers in
place of or in addition to all or some of the directors or officers
then in office; amend its articles; make any change in its capital
stock; make any other amendment, change, alteration or provision
authorized by this division; be dissolved, transfer all or part of
its assets or merge as permitted by this division, in which case,
however, no shareholder shall have any statutory dissenter's rights;
change the location of its principal executive office or remove or
appoint an agent to receive service of process; authorize and fix the
terms, manner and conditions of the issuance of bonds, debentures or
other obligations,
whether or not convertible into shares of any class or bearing
warrants or rights to purchase or subscribe to shares of any class;
or lease its property and franchises to any corporation, if permitted
by law.
SEC. 16. Section 1401 of the Corporations Code is amended to read:
1401. (a) A certificate of any amendment, change or alteration or
of dissolution or any agreement of merger made by such corporation
pursuant to Section 1400 and executed as provided in subdivision (b),
shall be filed and shall thereupon become effective in accordance
with its terms and the provisions of this chapter.
(b) Such certificate, agreement of merger or other instrument
shall be signed and verified, as may be directed by such orders of
the court or judge, by the trustee or trustees appointed in the
reorganization or arrangement proceeding (or a
majority thereof) or, if none is appointed and acting, by officers of
the corporation designated or by a master or other representative
appointed by the court or judge, and shall state that provision for
the making of such certificate, agreement or instrument is contained
in an order, identifying the same, of a court or judge having
jurisdiction of a proceeding under a statute of the United States for
the reorganization or arrangement of such
corporation.
SEC. 17. Section 1402 of the Corporations Code is amended to read:
1402. The provisions of this chapter shall cease to apply to a
corporation upon the entry of a final decree in the reorganization
or arrangement proceeding closing the case and
discharging the trustee or trustees, if any, whether or not
jurisdiction may be retained thereafter by the court for limited
purposes which do not relate to the consummation of the plan.
SEC. 18. Section 1403 of the Corporations Code is amended to read:
1403. For filing any certificate, agreement or other paper
pursuant to this chapter there shall be paid to the Secretary of
State the same fees as are payable by corporations not in
reorganization or arrangement proceedings upon the
filing of like certificates, agreements or other papers.
SEC. 19. Section 6110 of the Corporations Code is amended to read:
6110. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or
arrangements of corporations, shall be governed by the
provisions of Chapter 14 (commencing with Section 1400) of Division 1
of Title 1, and for this purpose the reference in Chapter 14 to
"shareholders" shall be deemed to be a reference to members and the
reference to "this division" shall be deemed to be a reference to
this part.
SEC. 20. Section 6610 of the Corporations Code is amended to read:
6610. (a) Any corporation may elect voluntarily to wind up and
dissolve (1) by approval of a majority of all members (Section 5033)
or (2) by approval of the board and approval of the members (Section
5034).
(b) Any corporation which comes within one of the following
descriptions may elect by approval of the board to wind up and
dissolve:
(1) A corporation which has been adjudicated a bankrupt
the subject of an order for relief in bankruptcy
.
(2) A corporation which has disposed of all of its assets and has
not conducted any activity for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
(3) A corporation which has no members.
(4) A corporation which is required to dissolve under provisions
of its articles adopted pursuant to subdivision (a), paragraph (2),
clause (i), of Section 5132.
SEC. 21. Section 8110 of the Corporations Code is amended to read:
8110. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or
arrangements of corporations, shall be governed by the
provisions of Chapter 14 (commencing with Section 1400) of Division 1
of Title 1, and for this purpose the reference in Chapter 14 to
"shareholders" shall be deemed to be a reference to members and the
reference to "this division" shall be deemed to be a reference to
this part.
SEC. 22. Section 8610 of the Corporations Code is amended to read:
8610. (a) Any corporation may elect voluntarily to wind up and
dissolve (1) by approval of a majority of all members (Section 5033),
or (2) by approval of the board and approval of the members (Section
5034).
(b) Any corporation which comes within one of the following
descriptions may elect by approval of the board to wind up and
dissolve:
(1) A corporation which has been adjudicated as bankrupt
the subject of an order for relief in bankruptcy
.
(2) A corporation which has disposed of all of its assets and has
not conducted any activity for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
(3) A corporation which has no members.
(4) A corporation which is required to dissolve under provisions
of its articles adopted pursuant to subdivision (a), paragraph (4),
clause (i) of Section 7132.
SEC. 23. Section 9650 of the Corporations Code is amended to read:
9650. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or
arrangements of corporations, shall be governed by the
provisions of Chapter 14 (commencing with Section 1400) of Division 1
of Title 1, and for this purpose the reference in Chapter 14 to
"shareholders" shall be deemed to be a reference to members and the
reference to "this division" shall be deemed to be a reference to
this part.
SEC. 24. Section 9680 of the Corporations Code is amended to read:
9680. (a) Chapters 16 (commencing with Section 6610) and 17
(commencing with Section 6710) of Part 2 apply to religious
corporations except for Sections 6610, 6614, 6710, 6711 and 6716.
(b) (1) Any corporation may elect voluntarily to wind up and
dissolve (A) by approval of a majority of all the members (Section
5033) or (B) by approval of the board and approval of the members
(Section 5034).
(2) Any corporation which comes within one of the following
descriptions may elect by approval of the board to wind up and
dissolve:
(A) A corporation which has been adjudicated a bankrupt
the subject of an order for relief in bankruptcy
.
(B) A corporation which has disposed of all its assets and has not
conducted any activity for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
(C) A corporation which has no members.
(D) A corporation which is required to dissolve under provisions
of its articles adopted pursuant to subparagraph (i) of paragraph (2)
of subdivision (a) of Section 9132.
(c) If a corporation is in the process of voluntary winding up,
the superior court of the proper county, upon the petition of (1) the
corporation, or (2) the authorized number (Section 5036), or (3) the
Attorney General, or (4) three or more creditors, and upon such
notice to the corporation and members and creditors as the court may
order, may take jurisdiction over the voluntary winding up proceeding
if that appears necessary for the protection of the assets of the
corporation. The court, if it assumes jurisdiction, may make such
orders as to any and all matters concerning the winding up of the
affairs of the corporation and the protection of its creditors and
its assets as justice and equity may require. Chapter 15 (commencing
with Section 6510) (except Sections 6510 and 6511) shall apply to
those court proceedings.
(d) The powers and duties of the directors (or other persons
appointed by the court pursuant to Section 6515) and officers after
commencement of a dissolution proceeding include, but are not limited
to, the following acts in the name and on behalf of the corporation:
(1) To elect officers and to employ agents and attorneys to
liquidate or wind up its affairs.
(2) To continue the conduct of the affairs of the corporation
insofar as necessary for the disposal or winding up thereof.
(3) To carry out contracts and collect, pay, compromise, and
settle debts and claims for or against the corporation.
(4) To defend suits brought against the corporation.
(5) To sue, in the name of the corporation, for all sums due or
owing to the corporation or to recover any of its property.
(6) To collect any amounts remaining unpaid on memberships or to
recover unlawful distributions.
(7) Subject to the provisions of Section 9142, to sell at public
or private sale, exchange, convey, or otherwise dispose of all or any
part of the assets of the corporation in an amount deemed reasonable
by the board without compliance with Section 9631, and to execute
bills of sale and deeds of conveyance in the name of the corporation.
(8) In general, to make contracts and to do any and all things in
the name of the corporation which may be proper or convenient for the
purposes of winding up, settling and liquidating the affairs of the
corporation.
(e) After complying with Section 6713:
(1) Except as provided in Section 6715, all of a corporation's
assets shall be disposed of on dissolution in conformity with its
articles or bylaws subject to complying with the provisions of any
trust under which such assets are held.
(2) Except as provided in subdivision (3), the disposition
required in subdivision (1) shall be made by decree of the superior
court of the proper county. The decree shall be made upon petition
therefor, upon 30 days' notice to the Attorney General, by any person
concerned in the dissolution.
(3) The disposition required in subdivision (1) may be made
without the decree of the superior court, subject to the rights of
persons concerned in the dissolution, if the Attorney General makes a
written waiver of objections to the disposition.
(f) A vacancy on the board may be filled during a winding up
proceeding in the manner provided in Section 9224.
(g) Chapter 15 (commencing with Section 6510) does not apply to
religious corporations except to the extent its provisions apply
under subdivision (d) of Section 6617, subdivision (c) of Section
6719, or subdivision (c) or (d) of this section.
SEC. 25. Section 12560 of the Corporations Code is amended to
read:
12560. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or
arrangements of corporations, shall be governed by the
provisions of Chapter 14 (commencing with Section 1400) of Division 1
of Title 1, and for this purpose the reference in Chapter 14 to
"shareholders" shall be deemed to be a reference to members and the
reference to "this division" shall be deemed to be a reference to
this part.
SEC. 26. Section 12630 of the Corporations Code is amended to
read:
12630. (a) Any corporation may elect voluntarily to wind up and
dissolve (1) by approval of a majority of all members (Section 12223)
or (2) by approval of the board and approval of the members (Section
12224).
(b) Any corporation which comes within one of the following
descriptions may elect by approval of the board to wind up and
dissolve:
(1) A corporation which has been adjudicated as bankrupt
the subject of an order for relief in bankruptcy
.
(2) A corporation which has disposed of all of its assets and has
not conducted any activity for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
(3) A corporation which has no members.
SEC. 27. Section 15642 of the Corporations Code is amended to
read:
15642. A person ceases to be a general partner of a limited
partnership upon the happening of any of the following events:
(a) The general partner withdraws from the limited partnership as
provided in Section 15662.
(b) The general partner is removed as a general partner.
(c) Unless otherwise provided in the partnership agreement, an
order for relief against the general partner is entered under Chapter
7 of the federal bankruptcy law, or the general partner: (1) makes a
general assignment for the benefit of creditors, (2) files a
voluntary petition under the federal bankruptcy law, (3) files a
petition or answer seeking for that partner any reorganization,
arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law, or
regulation, (4) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed
against that partner in any proceeding of this nature, or (5) seeks,
consents to, or acquiesces in the appointment of a trustee, receiver,
or liquidator of the general partner or of all or any substantial
part of that partner's properties.
(d) Unless otherwise provided in the partnership agreement, 60
days after the commencement of any proceeding against the general
partner seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any statute, law, or regulation, the proceeding has not been
dismissed, or if within 60 days after the appointment without that
partner's consent or acquiescence of a trustee, receiver, or
liquidator of the general partner or of all or any substantial part
of that partner's properties, the appointment is not vacated or
stayed, or within 60 days after the expiration of any such stay, the
appointment is not vacated.
(e) In the case of a general partner who is an individual, either
of the following:
(1) The death of that partner.
(2) The entry by a court of competent jurisdiction of an order
adjudicating the partner incompetent to manage the general partner's
estate.
(f) Unless otherwise provided in the partnership agreement, in the
case of a general partner who is acting as a general partner by
virtue of being a trustee of a trust, the termination of the trust
(but not merely the substitution of a new trustee, in which case the
new trustee automatically becomes the new general partner).
(g) Unless otherwise provided in the partnership agreement, in the
case of a general partner that is a separate partnership, the
dissolution of the separate partnership.
(h) In the case of a general partner that is a corporation, the
filing of a certificate of dissolution, or its equivalent, for the
corporation.
(i) In the case of a general partner that is an estate, the
distribution by the fiduciary of the estate's entire interest in the
limited partnership.
(j) In the case of a general partner that is a limited liability
company, the filing of a certificate of dissolution or its equivalent
for the limited liability company.
Notwithstanding the provisions of this section, a person who
ceases to be a general partner of a limited partnership, shall be
deemed to be acting as a general partner with respect to a third
party doing business with the limited partnership, until an amended
certificate of limited partnership is filed in accordance with
Section 15622.
SEC. 28. Section 23005 of the Corporations Code is amended to
read:
23005. The provisions of Sections 1400 and 1402 governing
bankruptcy reorganizations and arrangements for
corporations also apply to real estate investment trusts. For that
purpose where the term "corporation" is used in such sections it
shall also include the term "real estate investment trust", the terms
"director" or "board of directors" shall include "trustee" or "board
of trustees", the term "articles" shall include "declaration of
trust" and the term "capital stock" shall include "shares of
beneficial interest."
SEC. 29. Section 25103 of the Corporations Code is amended to
read:
25103. The following transactions are exempted from the
provisions of Section 25110 and Section 25120:
(a) Any negotiations or agreements prior to general solicitation
of approval by the holders of equity securities, and subject to that
approval, of (1) a change in the rights, preferences, privileges, or
restrictions of or on outstanding securities, (2) a merger,
consolidation, or sale of assets in consideration of the issuance of
securities, or (3) an entity conversion transaction.
(b) Any change in the rights, preferences, privileges, or
restrictions of or on outstanding securities or any entity conversion
transaction, unless the holders of at least 25 percent of the
outstanding shares or units of any class of securities that will be
directly or indirectly affected substantially and adversely by that
change or transaction have addresses in this state according to the
records of the issuer.
(c) Any exchange incident to a merger, consolidation, or sale of
assets in consideration of the issuance of securities of another
issuer, unless at least 25 percent of the outstanding securities of
any class, any holders of which are to receive securities in the
exchange, are held by persons who have addresses in this state
according to the records of the issuer of which they are holders.
This exemption is not available for a rollup transaction as defined
by Section 25014.6. The exemption is also not available for a
transaction excluded from the definition of rollup transaction by
virtue of paragraph (5) or (6) of subdivision (b) of Section 25014.6
if the transaction is one of a series of transactions that directly
or indirectly through acquisition or otherwise involves the
combination or reorganization of one or more rollup participants.
(d) For the purposes of subdivision (b) and subdivision (c) of
this section, (1) any securities held to the knowledge of the issuer
in the names of broker-dealers or nominees of broker-dealers and (2)
any securities controlled by any one person who controls directly or
indirectly 50 percent or more of the outstanding securities of that
class shall not be considered outstanding. The determination of
whether 25 percent of the outstanding securities are held by persons
having addresses in this state, for the purposes of subdivision (b)
and subdivision (c) of this section, shall be made as of the record
date for the determination of the security holders entitled to vote
on or consent to the action, if approval of those holders is
required, or, if not, as of the date of directors' approval of that
action.
(e) Any change (other than a stock split or reverse stock split)
in the rights, preferences, privileges, or restrictions of or on
outstanding equity securities, except the following if they
materially and adversely affect any class of equity securities: (1)
to add, change, or delete assessment provisions; (2) to change the
rights to dividends thereon; (3) to change the redemption provisions;
(4) to make them redeemable; (5) to change the amount payable on
liquidation; (6) to change, add, or delete conversion rights; (7) to
change, add, or delete voting rights; (8) to change, add, or delete
preemptive rights; (9) to change, add, or delete sinking fund
provisions; (10) to rearrange the relative priorities of outstanding
equity securities; (11) to impose, change, or delete restrictions
upon the transfer of equity securities in the organizational
documents for the entity; (12) to change the right of holders of
equity securities with respect to the calling of special meetings of
holders of equity securities; and (13) to change, add, or delete any
rights, preferences, privileges, or restrictions of, or on, the
outstanding shares or memberships of a mutual water company or other
corporation or entity organized primarily to provide services or
facilities to its shareholders or members. Changes in the rights,
preferences, privileges, or restrictions of or on outstanding equity
securities do not materially and adversely affect any class of
holders of equity securities within the meaning of this subdivision
if they arise from (i) the addition to articles of incorporation of
the provisions described or referred to in subdivision (a) of Section
158 upon the conversion of an existing corporation to a close
corporation pursuant to subdivision (b) of Section 158, (ii) the
deletion from the articles of incorporation of the provisions
described or referred to in subdivision (a) of Section 158 upon the
voluntary termination of close corporation status pursuant to
subdivisions (c) and (e) of Section 158, (iii) the involuntary
cessation of close corporation status pursuant to subdivision (e) of
Section 158, or (iv) the termination of a shareholders' agreement
pursuant to subdivision (b) of Section 300.
(f) Any stock split or reverse stock split, except the following:
(1) any stock split or reverse stock split if the corporation has
more than one class of shares outstanding and the split would have a
material effect on the proportionate interests of the respective
classes as to voting, dividends, or distributions; (2) any stock
split of a stock that is traded in the market and its market price as
of the date of directors' approval of the stock split adjusted to
give effect to the split was less than two dollars ($2) per share;
and (3) any reverse stock split if the corporation has the option of
paying cash for any fractional shares created by the reverse split
and as a result of that action the proportionate interests of the
shareholders would be substantially altered. Any shares issued upon a
stock split or reverse stock split exempted by this subdivision
shall be subject to any conditions previously imposed by the
commissioner applicable to the shares with respect to which they are
issued.
(g) Any change in the rights of outstanding debt securities,
except the following if they substantially and adversely affect any
class of securities: (1) to change the rights to interest thereon;
(2) to change their redemption provisions; (3) to make them
redeemable; (4) to extend the maturity thereof or to change the
amount payable thereon at maturity; (5) to change their voting
rights; (6) to change their conversion rights; (7) to change sinking
fund provisions; and (8) to make them subordinate to other
indebtedness.
(h) Any exchange incident to a merger, consolidation, or sale of
assets, other than a rollup transaction (as defined in Section
25014.6), in consideration of the issuance of equity securities of
another entity or any entity conversion transaction that meets the
following conditions:
(1) The exchange incident to a merger, consolidation, or sale of
assets or the entity conversion transaction, had the exchange
transaction involved the issuance of a security in a transaction
subject to the provisions of Section 25110, would have been exempt
from qualification by subdivision (f) of Section 25102, without
giving effect to paragraph (3) thereof, and either of the following
is applicable:
(A) (i) Not less than 75 percent of the outstanding equity
securities of each constituent or converting entity entitled to vote
on the proposed transaction voted in favor of the transaction, (ii)
not more than 10 percent of the outstanding equity securities of each
constituent or converting entity entitled to vote on the proposed
transaction voted against the transaction, and (iii) each constituent
or converting entity whose security holders are entitled to vote on
the proposed transaction is subject to a state statute that has
provisions for dissenters' rights for holders of equity securities
entitled to vote on the proposed transaction that do not vote in
favor of or voted against the transaction.
(B) (i) The transaction is solely for the purposes of changing the
issuer's state of incorporation or organization, or form of
organization, (ii) all the securities of the same class or series,
unless all the security holders of the class or series consent, are
treated equally, and (iii) the holders of nonredeemable voting equity
securities receive nonredeemable voting equity securities.
(2) The commissioner may, by rule, require the acquiring or
surviving entity to file a notice of transaction under this section.
However, the failure to file the notice or the failure to file the
notice within the time specified by the rule of the commissioner
shall not affect the availability of this exemption. An acquiring or
surviving entity that fails to file the notice as provided by rule of
the commissioner shall, within 15 business days after demand by the
commissioner, file the notice and pay to the commissioner a fee equal
to the fee payable had the transaction been qualified under Section
25110 or 25120.
(i) Any exchange of securities in connection with any merger or
consolidation or sale of corporate assets in consideration wholly or
in part of the issuance of securities or any entity conversion
transaction under, or pursuant to, a plan of reorganization
or arrangement that pursuant to the provisions of the
United States Bankruptcy Code (Title 11 of the United States Code)
has been confirmed or is subject to confirmation by the decree or
order of a court of competent jurisdiction.
SEC. 30. Section 25248 of the Corporations Code is amended to
read:
25248. (a) If the commissioner finds, as a result of any
examination or investigation or from any report made to the
commissioner, that any person subject to this part, other than an
investment adviser subject to Section 25230.1, is in an insolvent
condition, or is conducting a securities, broker-dealer, or
investment advisory business in such an unsafe, injurious, or
unauthorized manner as to render further operations hazardous to the
public or to customers, the commissioner may, by an order addressed
to and served by registered or certified mail or by personal service
on that person and on any other person having in his or her
possession or control any client funds, trust funds, or other
property deposited with that person, direct discontinuance of the
disbursement of client or trust funds by the parties or any of them,
the receipt of client or trust funds, or other business operations.
No person having in his or her possession any of these funds shall be
liable for failure to comply with the order unless he or she has
received written notice of the order. Subject to subdivision (b), the
order shall remain in effect until set aside by the commissioner, in
whole or in part, the person has been adjudged bankrupt
is the subject of an order for relief in bankruptcy
, or pursuant to Section 25253, the commissioner has assumed
possession of the broker-dealer or investment adviser.
(b) Within 15 days from the date of an
order pursuant to subdivision (a), the person may request a hearing
under the Administrative Procedure Act (Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code). Upon receipt of a request, the matter shall be set for hearing
to commence within 30 days after that receipt unless the person
subject to this division consents to a later date. If no hearing is
requested within 15 days after the mailing or service of the notice
and none is ordered by the commissioner, the failure to request a
hearing shall constitute a waiver of the right to a hearing. Neither
the request for a hearing nor the hearing itself shall stay the order
issued by the commissioner under subdivision (a).
SEC. 31. Section 28710 of the Corporations Code is amended to
read:
28710. The commissioner may issue an order suspending or revoking
the license of a licensee, if, after notice and a hearing, the
commissioner finds any of the following:
(a) That the licensee or any controlling person or affiliate of
the licensee has violated any provision of this division or of any
regulation or order issued under this division or any provision of
any other applicable law.
(b) That the licensee is conducting its business in an unsafe and
unsound manner.
(c) That the licensee is in a condition that it is unsafe or
unsound for it to transact business.
(d) That the licensee has ceased to transact business as a capital
access company.
(e) That the licensee is insolvent.
(f) That the licensee has suspended payment of its obligations,
has made an assignment for the benefit of its creditors, or has
admitted in writing its inability to pay its debts as they become
due.
(g) That the licensee has applied for an adjudication of
bankruptcy, reorganization, arrangement, or other relief under any
is the subject of an order for relief in bankruptcy or
has sought other similar relief under any other bankruptcy,
reorganization, insolvency, or moratorium law, or that any person has
applied for any of that relief under any of those laws against any
licensee and the licensee has by any affirmative act approved of or
consented to the action or the relief has been granted.
(h) That any fact or condition exists which, if it had existed at
the time when any licensee applied for its license, would have been
grounds for denying the application.
SEC. 32. Section 867 of the Financial Code is amended to read:
867. (a) Funds deposited in an account at a depository
institution shall be available on the second business day after the
business day on which those funds are deposited in the case of a
cashier's check, certified check, teller's check, or depository check
subject to the following:
(1) The check is endorsed only by the person to whom it was
issued.
(2) The check is deposited in a receiving depository institution
that is staffed by individuals employed by that institution.
(3) The check is deposited with a special deposit slip that
indicates it is a cashier's check, certified check, teller's check,
or depository check, as the case may be.
(4) The check is deposited into an account in the name of a
customer that has maintained any account with the receiving
depository institution for a period of 60 days or more.
(5) The face amount of the check is for five thousand dollars
($5,000) or less.
In the case of funds deposited on any business day in an account
at a depository institution by depository checks, the aggregate
amount of which exceeds five thousand dollars ($5,000), this
subdivision shall apply only with respect to the first five thousand
dollars ($5,000) of the aggregate amount.
(b) Subdivision (a) does not apply to a depository check if the
receiving depository institution reasonably believes that the check
is uncollectible from the originating depository institution. For
purposes of this subdivision, "reasonable cause to believe" requires
the existence of facts that would cause a well-grounded belief in the
mind of a reasonable person. These reasons shall include, but not be
limited to, a belief that (1) the drawer or drawee of the depository
check has been, or will imminently be, adjudicated a
bankrupt the subject of an order for relief in
bankruptcy or placed in receivership or (2) the depository
check may be involved in a fraud or in a scheme commonly known as
"kiting." In these situations, the depository institution electing to
proceed under this subdivision shall so notify the drawer and drawee
no later than the close of the next business day following deposit
of the depository check.
(c) For purposes of this section, the following terms have the
following meanings:
(1) "Account" means any demand deposit account and any other
similar transaction account at a depository institution.
(2) "Business day" means any day other than a Saturday, Sunday, or
legal holiday.
(3) "Cashier's check" means any check that is subject to the
following:
(A) The check is drawn on a depository institution.
(B) The check is signed by an officer or employee of the
depository institution.
(C) The check is a direct obligation of the depository
institution.
(4) "Certified check" means any check with respect to which a
depository institution certifies the following:
(A) That the signature on the check is genuine.
(B) The depository institution has set aside funds that are equal
to the amount of the check and will be used only to pay that check.
(5) "Depository check" means any cashier's check, certified check,
teller's check, and any other functionally equivalent instrument, as
determined by the Board of Governors of the Federal Reserve System
or the commissioner.
(6) "Depository institution" has the meaning given in clauses (i)
to (vi), inclusive, of Section 19(b)(1)(A) of the Federal Reserve
Act.
(7) "Teller's check" means any check issued by a depository
institution and drawn on another depository institution.
(d) Except for the specific circumstances and checks described in
this section, this section is not intended to restrict or preempt the
regulatory authority of the commissioner.
(e) In the event of a suspension or modification of any similar
provisions in the federal Expedited Funds Availability Act, the
effect of this section shall be similarly suspended or modified.
SEC. 33. Section 1203 of the Financial Code is amended to read:
1203. A commercial bank may hypothecate its assets in any manner
provided by law to secure the deposits of moneys of the United
States, of postal savings funds, of bankrupt
estates in bankruptcy cases , of the State of California,
or of any political subdivision, public corporation, or district of
the State of California. With the prior approval of the commissioner
a bank may hypothecate its assets to secure moneys payable to other
states.
SEC. 34. Section 1781 of the Financial Code is amended to read:
1781. If, after notice and a hearing, the commissioner finds any
of the following with respect to a foreign (other nation) bank that
is licensed to maintain an office, the commissioner may issue an
order suspending or revoking the license of the bank:
(a) That the bank has violated any provision of this division or
of any regulation or order issued under this division or any
provision of any other applicable law, regulation, or order;
(b) That the bank, in case it is licensed to transact business in
this state, is transacting the business in an unsafe or unsound
manner or, in any case, is transacting business elsewhere in an
unsafe or unsound manner;
(c) That the bank is in unsafe or unsound condition;
(d) That the bank has ceased to operate its office;
(e) That the bank is insolvent in that it has ceased to pay its
debts in the ordinary course of business, it cannot pay its debts as
they become due, or its liabilities exceed its assets;
(f) That the bank has suspended payment of its obligations, has
made an assignment for the benefit of its creditors, or has admitted
in writing its inability to pay its debts as they become due;
(g) That the bank has applied for an adjudication of
bankruptcy, reorganization, arrangement, or is the
subject of an order for relief in bankruptcy or has sought
other relief under any bankruptcy, reorganization, insolvency, or
moratorium law, or that any person has applied for any such relief
under any such law against the bank and the bank has by any
affirmative act approved of or consented to the action or the relief
has been granted;
(h) That a receiver, liquidator, or conservator has been appointed
for the bank or that any proceeding for such an appointment or any
similar proceeding has been initiated in the place where the bank is
domiciled;
(i) That the existence of the bank or the authority of the bank to
transact banking business under the laws of the place where the bank
is domiciled has been suspended or terminated; or
(j) That any fact or condition exists that, if it had existed at
the time when the bank applied for its license to transact business
in this state, would have been grounds for denying the application.
SEC. 35. Section 1889 of the Financial Code is amended to read:
1889. If, after notice and a hearing, the commissioner finds:
(a) That any licensee has violated any provision of this chapter
or of any regulation or order issued under this chapter or any
provision of any other applicable law;
(b) That any licensee is conducting its business in an unsafe or
unsound manner;
(c) That any licensee is in such condition that it is unsafe or
unsound for it to transact the business of selling in this state
payment instruments issued by it;
(d) That any licensee has ceased to transact the business of
selling in this state payment instruments issued by it;
(e) That any licensee is insolvent;
(f) That any licensee has suspended payment of its obligations,
has made an assignment for the benefit of its creditors, or has
admitted in writing its inability to pay its debts as they become
due;
(g) That any licensee has applied for an adjudication of
bankruptcy, reorganization, arrangement, or is the
subject of an order for relief in bankruptcy or has sought
other relief under any bankruptcy, reorganization, insolvency, or
moratorium law, or that any person has applied for any such relief
under any such law against any licensee and such licensee has by any
affirmative act approved of or consented to such action or such
relief has been granted; or
(h) That any fact or condition exists which, if it had existed at
the time when any licensee applied for its license, would have been
grounds for denying such application:
The commissioner may issue an order suspending or revoking the
license of such licensee.
SEC. 36. Section 6152 of the Financial Code is amended to read:
6152. (a) A director shall automatically cease to be a director
upon being adjudicated as bankrupt becoming
the subject of an order for relief in bankruptcy or upon
conviction of a criminal offense involving dishonesty or a breach of
trust.
(b) In the case of an association which converts from a mutual
association to a stock association, for a period of up to five years
from the date of the conversion, a director may not otherwise be
removed except for cause on the affirmative vote of a majority of the
votes of members or stockholders eligible to be cast at a legal
meeting.
SEC. 37. Section 12307.2 of the Financial Code is amended to read:
12307.2. If the commissioner finds as a result of an examination
or report that a licensee is insolvent or conducting business in such
an unsafe or injurious manner as to render its further operations
hazardous to the public, he may forthwith by an order addressed to
and served on the licensee by registered mail and on any other person
having funds of the licensee or its customers in his possession,
direct discontinuance of the disbursement of such funds and the
further conduct of business by the licensee. The order shall be
conditioned to remain in effect unless the commissioner fails to hold
a hearing within 15 days after receipt of a written request by the
licensee, until set aside by the commissioner in whole or in part,
until the licensee has been adjudged bankrupt
is the subject of an order for relief in bankruptcy , or
pursuant to a petition filed by the commissioner or other interested
person a receiver has been appointed by a court of competent
jurisdiction.
SEC. 38. Section 16202 of the Financial Code is amended to read:
16202. If, after notice and hearing, the commissioner finds any
of the following with respect to a foreign (other state) credit union
that is licensed to maintain an office in this state, the
commissioner may issue an order suspending or revoking the license of
the foreign (other state) credit union:
(a) That the foreign (other state) credit union has violated a
provision of this division or of any regulation or order issued under
this division or a provision of any other applicable law,
regulation, or order.
(b) That the foreign (other state) credit union is transacting the
business in this state or elsewhere in an unsafe or unsound manner.
(c) That the foreign (other state) credit union is in unsafe or
unsound condition.
(d) That the foreign (other state) credit union has ceased to
operate its office.
(e) That the foreign (other state) credit union is insolvent in
that it has ceased to pay its debts in the ordinary course of
business, it cannot pay its debts as they become due, or its
liabilities, including share accounts and certificates for funds,
exceed its assets.
(f) That the foreign (other state) credit union has suspended
payment of its obligations, has made an assignment for the benefit of
its creditors, or has admitted in writing its inability to pay its
debts as they become due.
(g) That the foreign (other state) credit union has
applied for an adjudication of bankruptcy, reorganization,
arrangement, or is the subject of an order for relief
in bankruptcy or has sought other relief under any bankruptcy,
reorganization, insolvency, or moratorium law, or that any person has
applied for such relief under any such law against the foreign
(other state) credit union, and the foreign (other state) credit
union has by any affirmative act approved of or consented to the
action or the relief has been granted.
(h) That a receiver, liquidator, or conservator has been appointed
for the foreign (other state) credit union or that any proceeding
for an appointment or any similar proceeding has been initiated in
the home state of the foreign (other state) credit union.
(i) That the existence of the foreign (other state) credit union
or the authority of the foreign (other state) credit union to
transact banking business under the laws of the home state of the
foreign (other state) credit union has been suspended or terminated.
(j) That any fact or condition exists that, if it had existed at
the time when the foreign (other state) credit union applied for
approval to transact business in this state, would have been grounds
for denying the application.
SEC. 39. Section 16902 of the Financial Code is amended to read:
16902. If, after notice and hearing, the commissioner finds any
of the following with respect to a foreign (other nation) credit
union that is licensed to maintain an office, the commissioner may
issue an order suspending or revoking the license of the foreign
(other nation) credit union.
(a) That the foreign (other nation) credit union has violated a
provision of this division or of any regulation or order issued under
this division or a provision of any other applicable law,
regulation, or order.
(b) That the foreign (other nation) credit union is transacting
the business in this state or elsewhere in an unsafe or unsound
manner.
(c) That the foreign (other nation) credit union is in unsafe or
unsound condition.
(d) That the foreign (other nation) credit union has ceased to
operate its office.
(e) That the foreign (other nation) credit union is insolvent in
that it has ceased to pay its debts in the ordinary course of
business, it cannot pay its debts as they become due, or its
liabilities exceed its assets.
(f) That the foreign (other nation) credit union has suspended
payment of its obligations, has made an assignment for the benefit of
its creditors, or has admitted in writing its inability to pay its
debts as they become due.
(g) That the foreign (other nation) credit union has
applied for an adjudication of bankruptcy, reorganization,
arrangement, or is the subject of an order for relief
in bankruptcy or has sought other relief under any bankruptcy,
reorganization, insolvency, or moratorium law, or that any person has
applied for such relief under any such law against the foreign
(other nation) credit union, and the foreign (other nation) credit
union has by any affirmative act approved of or consented to the
action or the relief has been granted.
(h) That a receiver, liquidator, or conservator has been appointed
for the foreign (other nation) credit union or that any proceeding
for an appointment or any similar proceeding has been initiated in
the home country of the foreign (other nation) credit union.
(i) That the existence of the foreign (other nation) credit union
or the authority of the foreign (other nation) credit union to
transact banking business under the laws of the home country of the
foreign (other nation) credit union has been suspended or terminated.
(j) That any fact or condition exists that, if it had existed at
the time when the foreign (other nation) credit union applied for
approval to transact business in this state, would have been grounds
for denying the application.
SEC. 40. Section 17415 of the Financial Code is amended to read:
17415. (a) If the commissioner, as a result of any examination or
from any report made to him or her, shall find that any person
subject to this division is in an insolvent condition, is conducting
escrow business in such an unsafe or injurious manner as to render
further operations hazardous to the public or to customers, has
failed to comply with the provisions of Section 17212.1 or 17414.1,
has permitted its tangible net worth to be lower than the minimum
required by law, has failed to maintain its liquid assets in excess
of current liabilities as set forth in Section 17210, or has failed
to comply with the bonding requirements of Chapter 2 (commencing with
Section 17200) of this division, the commissioner may, by an order
addressed to and served by registered or certified mail or by
personal service on such person and on any other person having in his
or her possession or control any escrowed funds, trust funds or
other property deposited in escrow with said person, direct
discontinuance of the disbursement of trust funds by the parties or
any of them, the receipt of trust funds, the delivery or recording of
documents received in escrow, or other business operations. No
person having in his or her possession any of these funds or
documents shall be liable for failure to comply with the order unless
he or she has received written notice of the order. Subject to
subdivision (b), the order shall remain in effect until set aside by
the commissioner in whole or in part, the person has been
adjudged bankrupt is the subject of an order for
relief in bankruptcy , or pursuant to Chapter 6 (commencing
with Section 17621) of this division the commissioner has assumed
possession of the escrow agent.
(b) Within 15 days from the date of an order pursuant to
subdivision (a), the person may request a hearing under the
Administrative Procedure Act, Chapter 5 (commencing with Section
11500) of Division 3 of Title 2 of the Government Code. Upon receipt
of a request, the matter shall be set for hearing to commence within
30 days after such receipt unless the person subject to this division
consents to a later date. If no hearing is requested within 15 days
after the mailing or service of such notice and none is ordered by
the commissioner, the failure to request a hearing shall constitute a
waiver of the right to a hearing. Neither the request for a hearing
nor the hearing itself shall stay the order issued by the
commissioner under subdivision (a).
SEC. 41. Section 18477 of the Financial Code is amended to read:
18477. "Thrift obligations" as used in this chapter include
principal invested in investment or thrift certificates however
evidenced, and unpaid interest thereon accrued as of the last
interest accrual date prior to the date the commissioner takes
possession of the property and business of a member or the date such
member is declared bankrupt the subject of an
order for relief in bankruptcy , whichever occurs sooner.
SEC. 42. Section 31709 of the Financial Code is amended to read:
31709. If, after notice and a hearing, the commissioner finds:
(a) That any licensee or any controlling person or affiliate of a
licensee has violated any provision of this division or of any
regulation or order issued under this division or any provision of
any other applicable law;
(b) That any licensee is conducting its business in an unsafe and
unsound manner;
(c) That any licensee is in such condition that it is unsafe or
unsound for it to transact business;
(d) That any licensee has ceased to transact business as a business
and industrial development corporation;
(e) That any licensee is insolvent;
(f) That any licensee has suspended payment of its obligations, has
made an assignment for the benefit of its creditors, or has admitted
in writing its inability to pay its debts as they become due;
(g) That any licensee has applied for an adjudication of
bankruptcy, reorganization, arrangement, or other is
the subject of an order for relief in bankruptcy or has sought
relief under any bankruptcy, reorganization, insolvency, or
moratorium law, or that any person has applied for any such relief
under any such law against any licensee and such licensee has by any
affirmative act approved of or consented to such action or such
relief has been granted; or
(h) That any fact or condition exists which, if it had existed at
the time when any licensee applied for its license, would have been
grounds for denying such application;
the commissioner may issue an order suspending or revoking the
license of such licensee.
SEC. 43. Section 34109 of the Financial Code is amended to read:
34109. If, after notice and a hearing, the commissioner finds:
(a) That any licensee has violated any provision of this division or
of any regulation or order issued under this division or any
provision of any other applicable law;
(b) That any licensee is conducting its business in an unsafe or
unsound manner;
(c) That any licensee is in such condition that it is unsafe or
unsound for it to transact the business of selling in this state
payment instruments issued by it;
(d) That any licensee has ceased to transact the business of selling
in this state payment instruments issued by it;
(e) That any licensee is insolvent;
(f) That any licensee has suspended payment of its obligations, has
made an assignment for the benefit of its creditors, or has admitted
in writing its inability to pay its debts as they become due;
(g) That any licensee has applied for an adjudication of
bankruptcy, reorganization, arrangement, or is the
subject of an order for relief in bankruptcy or has sought
other relief under any bankruptcy, reorganization, insolvency, or
moratorium law, or that any person has applied for any such relief
under any such law against any licensee and such licensee has by any
affirmative act approved of or consented to such action or such
relief has been granted; or
(h) That any fact or condition exists which, if it had existed at
the time when any licensee applied for its license, would have been
grounds for denying such application:
The commissioner may issue an order suspending or revoking the
license of such licensee.
SEC. 44. Section 50319 of the Financial Code is amended to read:
50319. (a) If the commissioner, as a result of any examination or
from any report made to him or her, shall find that any person
subject to this division is in an insolvent condition, is conducting
business in an unsafe or injurious manner that renders further
operations hazardous to the public or to customers, has failed to
comply with the provision of Section 50317, has permitted its
tangible net worth to be lower than the minimum required by law, or
has failed to comply with the bonding requirements of Section 50205,
the commissioner may, by an order addressed to and served by
registered or certified mail, or by personal service on that person,
and on any other person having in his or her possession or control
any trust funds or other property deposited in escrow with that
person, direct discontinuance of the disbursement, in whole or in
part, of trust funds held by the licensee and order the establishment
of a separate trust account for all subsequent trust funds received
by the licensee. No person having in his or her possession any of
these funds or documents shall be liable for failure to comply with
the order unless he or she has received written notice of the order.
Subject to subdivision (b), the order shall remain in effect until
set aside by the commissioner, or the person has been
adjudged bankrupt is the subject of an order for
relief in bankruptcy .
(b) Within 15 days from the date of an order pursuant to
subdivision (a), the person may request a hearing under the
Administrative Procedure Act (Chapter 5 (commencing with Section
11500) of Part 2 of Division 3 of Title 2 of the Government Code).
Upon receiving a request, the matter shall be set for hearing to
commence within 30 days after the receipt unless the person subject
to this division consents to a later date. If no hearing is requested
within 15 days after the mailing or service of the notice and none
is ordered by the commissioner, the failure to request a hearing
shall constitute a waiver of the right to a hearing. Neither the
request for a hearing nor the hearing itself shall stay the order
issued by the commissioner under subdivision (a).
SEC. 45. Section 1058 of the Fish and Game Code is amended to
read:
1058. In case of an assignment for the
benefit of creditors, receivership, or bankruptcy, the state shall
have a preferred claim against the license agent
assignee , receiver, or trustee for all moneys owing the
state for the issuing of licenses, permits, reservations, tags, and
other entitlements as provided in this code and shall not be estopped
from asserting that claim by reason of the commingling of funds or
otherwise.
SEC. 46. Section 58503.1 of the Food and Agricultural Code is
amended to read:
58503.1. In order to qualify as a food bank, an organization
shall meet all of the following minimum standards:
(a) It shall have access to storage facilities and refrigeration
equipment for the purpose of collecting, receiving, handling,
storing, and distributing donated agricultural products.
(b) It shall be incorporated as a nonprofit tax exempt
organization and be eligible as a charitable organization under
paragraph (3) of subsection (c) of Section 501 of Title 11
Title 26 of the United States Code or shall be
affiliated with such an organization.
(c) It shall maintain records for the proper control of inventory.
(d) It shall demonstrate the availability of adequate liability
insurance to cover the activities conducted pursuant to this chapter.
(e) It shall show local support through funding sources, letters
of endorsement, and a board of directors reflective of the community
and population to be served.
SEC. 47. Section 65863.7 of the Government Code is amended to
read:
65863.7. (a) Prior to the conversion of a mobilehome park to
another use, except pursuant to the Subdivision Map Act (Division 2
(commencing with Section 66410) of Title 7), or prior to closure of a
mobilehome park or cessation of use of the land as a mobilehome
park, the person or entity proposing the change in use shall file a
report on the impact of the conversion, closure, or cessation of use
upon the displaced residents of the mobilehome park to be converted
or closed. In determining the impact of the conversion, closure, or
cessation of use on displaced mobilehome park residents, the report
shall address the availability of adequate replacement housing in
mobilehome parks and relocation costs.
(b) The person proposing the change in use shall provide a copy of
the report to a resident of each mobilehome in the mobilehome park
at least 15 days prior to the hearing, if any, on the impact report
by the advisory agency, or if there is no advisory agency, by the
legislative body.
(c) When the impact report is filed prior to the closure or
cessation of use, the person or entity proposing the change shall
provide a copy of the report to a resident of each mobilehome in the
mobilehome park at the same time as the notice of the change is
provided to the residents pursuant to paragraph (2) of subdivision
(g) of Section 798.56 of the Civil Code.
(d) When the impact report is filed prior to the closure or
cessation of use, the person or entity filing the report or park
resident may request, and shall have a right to, a hearing before the
legislative body on the sufficiency of the report.
(e) The legislative body, or its delegated advisory agency, shall
review the report, prior to any change of use, and may require, as a
condition of the change, the person or entity to take steps to
mitigate any adverse impact of the conversion, closure, or cessation
of use on the ability of displaced mobilehome park residents to find
adequate housing in a mobilehome park. The steps required to be taken
to mitigate shall not exceed the reasonable costs of relocation.
(f) If the closure or cessation of use of a mobilehome park
results from an adjudication of the entry of
an order for relief in bankruptcy, the provisions of this
section shall not be applicable.
(g) The legislative body may establish reasonable fees pursuant to
Section 66016 to cover any costs incurred by the local agency in
implementing this section and Section 65863.8. Those fees shall be
paid by the person or entity proposing the change in use.
(h) This section is applicable to charter cities.
(i) This section is applicable when the closure, cessation, or
change of use is the result of a decision by a local governmental
entity or planning agency not to renew a conditional use permit or
zoning variance under which the mobilehome park has operated, or as a
result of any other zoning or planning decision, action, or
inaction. In this case, the local governmental agency is the person
proposing the change in use for the purposes of preparing the impact
report required by this section and is required to take steps to
mitigate the adverse impact of the change as may be required in
subdivision (e).
(j) This section is applicable when the closure, cessation, or
change of use is the result of a decision by an enforcement agency,
as defined in Section 18207 of the Health and Safety Code, to suspend
the permit to operate the mobilehome park. In this case, the
mobilehome park owner is the person proposing the change in use for
purposes of preparing the impact report required by this section and
is required to take steps to mitigate the adverse impact of the
change as may be required in subdivision (e).
SEC. 48. Section 65863.12 of the Government Code is amended to
read:
65863.12. (a) Prior to the conversion of a floating home marina
to another use, except pursuant to the Subdivision Map Act (Division
2 (commencing with Section 66410) of Title 7), or prior to closure of
a floating home marina or cessation of use of the land as a floating
home marina, the person or entity proposing the change in use shall
file a report on the impact of the conversion, closure, or cessation
of use upon the displaced residents of the floating home marina to be
converted or closed. In determining the impact of the conversion,
closure, or cessation of use on displaced floating home marina
residents, the report shall address the availability of adequate
replacement housing in floating home marinas and relocation costs.
(b) The person proposing the change in use shall provide a copy of
the report to a resident of each floating home in the floating home
marina at least 15 days prior to the hearing, if any, on the impact
report by the advisory agency, or if there is no advisory agency, by
the legislative body.
(c) When the impact report is filed prior to the closure or
cessation of use, the person or entity proposing the change shall
provide a copy of the report to a resident of each floating home in
the floating home marina at the same time as the notice of the change
is provided to the residents pursuant to subdivision (f) of Section
800.71 of the Civil Code.
(d) When the impact report is filed prior to the closure or
cessation of use, the person or entity filing the report or any
resident may request, and shall have a right to, a hearing before the
legislative body on the sufficiency of the report.
(e) The legislative body, or its delegated advisory agency, shall
review the report, prior to any change of use, and may require, as a
condition of the change, the person or entity to take steps to
mitigate any adverse impact of the conversion, closure, or cessation
of use on the ability of displaced floating home marina residents to
find adequate housing in a floating home marina. The steps required
to be taken to mitigate shall not exceed the reasonable costs of
relocation.
(f) If the closure or cessation of use of a floating home marina
results from an adjudication of the entry of
an order for relief in bankruptcy, the provisions of this
section shall not be applicable.
(g) The legislative body may establish reasonable fees pursuant to
Chapter 13 (commencing with Section 54990) of Part 1 of Division 2
of Title 5 to cover any costs incurred by the local agency in
implementing this section. Those fees shall be paid by the person or
entity proposing the change in use.
(h) This section is applicable to charter cities.
(i) This section is applicable when the closure, cessation, or
change of use is the result of a decision by a local governmental
entity or planning agency not to renew a conditional use permit or
zoning variance under which the floating home marina has operated, or
as a result of any other zoning or planning decision, action, or
inaction. However, a state or local governmental agency is not
required to take steps to mitigate the adverse impact of the change
pursuant to subdivision (e).
(j) This section applies to any floating home marina as defined in
Section 800.4 of the Civil Code, and to any marina or harbor (1)
which is managed by a nonprofit organization, the property, assets,
and profits of which may not inure to any individual or group of
individuals, but only to another nonprofit organization; (2) the
rules and regulations of which are set by majority vote of the
berthholders thereof; and (3) which contains berths for fewer than 25
floating homes.
SEC. 49. Section 1358.4 of the Health and Safety Code is amended
to read:
1358.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) An individual enrollee who seeks to contract for health
coverage, in the case of an individual Medicare supplement contract.
(2) An enrollee who seeks to obtain health coverage through a
group, in the case of a group Medicare supplement contract.
(b) "Bankruptcy" means that situation in which a Medicare
Advantage organization that is not an issuer has filed, or has had
filed against it, a petition for declaration of
under federal bankruptcy law and has ceased
doing business in the state.
(c) "Continuous period of creditable coverage" means the period
during which an individual was covered by creditable coverage, if
during the period of the coverage the individual had no breaks in
coverage greater than 63 days.
(d) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(Medicare).
(C) Title XIX of the federal Social Security Act (medicaid), other
than coverage consisting solely of benefits under Section 1928 of
that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (Section 2504(e) of Title 22 of the United States Code).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Services Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage for accident-only or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract or are otherwise not an integral part of the plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(e) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(f) "Insolvency" means when an issuer, licensed to transact the
business of a health care service plan in this state, has had a final
order of liquidation entered against it with a finding of insolvency
by a court of competent jurisdiction in the issuer's state of
domicile.
(g) "Issuer" means a health care service plan delivering, or
issuing for delivery, Medicare supplement contracts in this state,
but does not include entities subject to Article 6 (commencing with
Section 10192.1) of Chapter 1 of Division 2 of the Insurance Code.
(h) "Medicare" means the federal Health Insurance for the Aged
Act, Title XVIII of the Social Security Amendments of 1965, as
amended.
(i) "Medicare Advantage Plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
(j) "Medicare supplement contract" means a group or individual
plan contract of hospital and medical service associations or health
care service plans, other than a contract issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C.A. Section 1395mm) or an issued contract under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that is advertised, marketed, or designed primarily as a
supplement to reimbursements under Medicare for the hospital,
medical, or surgical expenses of persons eligible for Medicare.
"Contract" means "Medicare supplement contract," unless the context
requires otherwise. "Medicare supplement contract" does not include a
Medicare Advantage plan established under Medicare Part C, an
outpatient prescription drug plan established under Medicare Part D,
or a health care prepayment plan that provides benefits pursuant to
an agreement under subparagraph (A) of paragraph (1) of subsection
(a) of Section 1833 of the Social Security Act.
(k) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
SEC. 50. Section 1793.62 of the Health and Safety Code is amended
to read:
1793.62. (a) The department, administrator, or any interested
person, upon due notice to the parties, may petition the court for an
order terminating the rehabilitation proceedings when the
rehabilitation efforts have not been successful, the continuing care
retirement community has been sold at foreclosure sale, the provider
is the subject of an order for relief in bankruptcy, has
been declared bankrupt, or the provider has otherwise been shown to
be unable to perform its obligations under the continuing care
contracts.
(b) The court shall not issue the order requested pursuant to
subdivision (a) unless all of the following have occurred:
(1) There has been a full hearing and the court has determined
that the provider is unable to perform its contractual obligations.
(2) The administrator has given the court a full and complete
report and financial accounting signed by the administrator as being
a full and complete report and accounting.
(3) The court has determined that the residents of the continuing
care retirement community have been protected to the extent possible
and has made such orders in this regard as the court deems proper.
SEC. 51. Section 129174.1 of the Health and Safety Code is amended
to read:
129174.1. In the event a an obligor on a
loan insured by the office has gone into
is the subject of an order for relief in bankruptcy and
that a plan has been proposed for adoption
confirmation , upon a certification by the office that the
insurance is in place and would be in place if the plan were
adopted confirmed , then the office shall have
the right to vote on whether to accept or
reject the plan on behalf of the holders of the loan insured by
the office.
SEC. 52. Section 25169.3 of the Health and Safety Code is amended
to read:
25169.3. Before hazardous waste is transported from an abandoned
site to another disposal site, all of the following conditions shall
be met:
(a) The department shall conduct such tests, or cause such tests
to be completed by the responsible party, as are necessary to
determine the general chemical and mineral composition of hazardous
waste that is being transported.
(b) The hazardous waste hauler shall prepare a transportation and
safety plan outlining safety features and procedures to be used by
the hauler to protect the public during the transportation process.
(c) The department shall review and approve the transportation and
safety plan.
(d) The hazardous waste hauler shall, under penalty of perjury,
certify that he or she will follow the provisions of the
transportation and safety plan.
(e) The department shall issue a certificate to the hazardous
waste hauler certifying that the transportation and safety plan has
been approved by the department. The person transporting the waste
shall have the certificate in his or her possession while
transporting the waste. Such certificate shall be shown upon demand
to any department official, officer of the California Highway Patrol,
or any local health officer.
The term "abandoned site", as used in this section, means an
inactive waste disposal, treatment, or storage facility which cannot,
with reasonable effort, be traced to a specific owner; a site whose
owner has been determined bankrupt is the
subject of an order for relief in bankruptcy, or who has not
taken corrective action on or before the date specified in an order
issued pursuant to Section 25187; or a location where hazardous waste
has been illegally disposed.
(f) The requirements of this section shall not apply when the
hazardous waste disposal is the direct result of an accidental spill
or the department determines that emergency action is needed to
protect the environment or the public health.
SEC. 53. Section 25245 of the Health and Safety Code is amended to
read:
25245. (a) The department shall adopt, and revise when
appropriate, standards and regulations which shall do both of the
following:
(1) Specify the financial assurances to be provided by the owner
or operator of a hazardous waste facility that are necessary to
respond adequately to damage claims arising out of the operation of
that type of facility and to provide for the cost of closure and
subsequent maintenance of the facility, including, but not limited
to, the monitoring of groundwater and other aspects of the
environment after closure. If the facility is required to obtain a
permit under the federal act, the financial assurance shall be a
trust fund, surety bond, letter of credit, insurance, or any other
mechanism authorized under the federal act and the regulations
adopted pursuant to the federal act. If the facility is not required
to obtain a permit under the federal act, the financial assurance may
include any other equivalent financial arrangement acceptable to the
department.
(2) Provide that every hazardous waste facility can be closed and
maintained for at least 30 years subsequent to its closure in a
manner that protects human health and the environment and minimizes
or eliminates the escape of hazardous waste constituents, leachate,
contaminated rainfall, and waste decomposition products to ground and
surface waters and to the atmosphere.
(b) In adopting regulations pursuant to subdivision (a), to carry
out the purposes of this chapter, the department may specify policy
or other contractual terms, conditions, or defenses which are
necessary or are unacceptable in establishing evidence of financial
responsibility.
(1) If an owner or operator is in bankruptcy ,
reorganization, or other arrangement pursuant to Title 11
of the United States Code, or where, with reasonable diligence,
jurisdiction in any state or federal court cannot be obtained over an
owner or operator likely to be solvent at the time of judgment, any
claim arising from conduct for which this section requires evidence
of financial responsibility may be asserted directly against the
guarantor who provided the evidence of financial responsibility.
(2) The total liability of any guarantor is limited to the
aggregate amount which the guarantor has provided as evidence of
financial responsibility to the owner or operator under this chapter.
(3) This subdivision does not limit any other state or federal
statutory, contractual, or common law liability of a guarantor to the
owner or operator, including, but not limited to, the liability of
the guarantor for bad faith in either negotiating or in failing to
negotiate the settlement of any claim.
(4) This subdivision does not diminish the liability of any person
under Section 107 or 111 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C. Secs.
9607 and 9611).
(5) For purposes of this subdivision, "guarantor" means any
person, other than the owner or operator, who provides evidence of
financial responsibility for an owner or operator under this section.
SEC. 54. Section 25359.5 of the Health and Safety Code is amended
to read:
25359.5. (a) After making a determination, based upon a
preliminary site assessment that there has been a release of a
hazardous substance on, under, or into the land on a site, the
department or a county health officer shall order the property owner
to secure the site if all of the following conditions apply to that
site:
(1) The release does not comply with the terms of a current permit
or interim status document or regulation of the department.
(2) The site poses a public health risk if human contact is made
with the hazardous waste or the surrounding contaminated area.
(3) There is a likelihood of human or domestic animal contact.
(b) The order to secure the site shall require, within five days
after receiving notification of the order, the posting of the site
with signs. The order shall also require, within five days after
receiving notification of the order, that the site be enclosed with a
fence, unless it is physically and economically infeasible or unless
the fencing is unnecessary because it will not alleviate the danger
to the public health.
(c) If fencing is ordered, the fences shall be maintained at the
site to prevent unauthorized persons from gaining access to the site.
The signs shall be maintained and shall meet all of the following
requirements:
(1) The signs shall be bilingual, appropriate to the local area,
and may include international symbols, as required by the department.
(2) The signs shall have lettering which is legible from a
distance of at least 25 feet.
(3) The signs shall read: "Caution: Hazardous Substance Area,
Unauthorized Persons Keep Out" and shall have the name and phone
number of the department or the county health officer that ordered
the posting.
(4) The signs shall be visible from the surrounding contaminated
area and posted at each route of entry into the site, including those
routes which are likely to be used by unauthorized persons, at
access roads leading to the site, and facing navigable waterways
where appropriate.
(5) The signs shall be of a material able to withstand the
elements.
(d) A property owner who fails to comply with an order of the
department or the county health officer is subject to a civil penalty
of up to twenty-five thousand dollars ($25,000). In determining the
amount of a civil penalty to be imposed, the court shall consider all
relevant circumstances, including, but not limited to, the economic
assets of the property owner and whether the property owner has acted
in good faith.
If the property owner fails to secure and post the site, the
department or the county health officer shall secure and post the
site pursuant to subdivision (b) within 30 days of the expiration of
the five-day period and shall seek recovery of the costs of that
securing and posting from the property owner. If the site is an
abandoned site, as defined in Section 25359.6, if the site cannot be
traced to a specific owner, or if the owner has been
declared bankrupt is the subject of an order for
relief in bankruptcy , the department or the county health
officer shall secure and post the site, using any source of funds,
pursuant to subdivision (b).
(e) The department or the county health officer shall advise other
agencies on the public health risks and the need for fencing and
posting of sites when those agencies confirm the release of a
hazardous substance pursuant to subdivision (a).
(f) The remedies and
penalties specified in this section and Section 25359.6 are in
addition to, and do not affect, any other remedies, enforcement
actions, requirements, or penalties otherwise authorized by law.
SEC. 55. Section 25359.6 of the Health and Safety Code is amended
to read:
25359.6. (a) The director shall notify, within 20 working days,
each of the appropriate county health officers as to all the
potential abandoned sites of which the department has knowledge or
which the department is investigating for releases of hazardous
substances that may have occurred or might be occurring at abandoned
sites. The county health officers may request quarterly updates on
the status of the investigations of these sites.
As used in this section, "abandoned site" means an inactive
disposal, treatment, or storage facility which cannot, with
reasonable effort, be traced to a specific owner, a site whose owner
has been determined bankrupt is the subject
of an order for relief in bankruptcy , or a location where a
hazardous substance has been illegally disposed.
(b) Within 10 working days of the identification of an abandoned
site, the department or a county health officer shall notify the
other agency of the status of the site. The department and the county
health officer shall inform the other agency of orders to fence and
post these sites and the status of compliance with those orders. The
department or the county health officers may request quarterly
updates of the testing, enforcement action, and remedial or removal
actions that are proposed or ongoing.
SEC. 56. Section 25396 of the Health and Safety Code is amended to
read:
25396. Unless the context indicates otherwise, the following
definitions govern the construction of this chapter.
(a) "Affected community" means the local residents or workers
living or working, and owners of businesses operating, in proximity
to the site, who are, or may be, directly impacted by the conditions
at the site, or by any response action. "Affected community" also
includes the legislative body of the jurisdiction in which a site is
located.
(b) "Agency" means the California Environmental Protection Agency.
(c) "Arbitration panel" means the arbitration panel convened
pursuant to Section 25398.10.
(d) "Beneficial uses of water" means uses of the waters of the
state that are identified in the current State Water Resources
Control Board and California regional water quality control boards'
water quality control plans for the area in which the site is
located.
(e) "Department" means the Department of Toxic Substances Control.
(f) "Engineering controls" means measures to control or contain
migration of hazardous substances or to prevent, minimize or mitigate
environmental damage which may otherwise result from a release or
threatened release, including, but not limited to, caps, covers,
dikes, trenches, leachate collection systems, treatment systems, and
groundwater containment systems or procedures.
(g) "Federal act" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, (42 U.S.C. Sec.
9601 et seq.).
(h) "Fund administrator" means the state officer assigned the
responsibility of protecting the viability of the trust fund as the
representative of the state for the orphan share in all actions
concerning apportionment of liability if there is a potential
apportionment of liability to the orphan share for payment from the
trust fund.
(i) "Hazardous substance" shall have the same meaning as set forth
in Sections 25316 and 25317.
(j) (1) "Insolvent" means a person or entity who has received a
discharge of liability under Section 727, 944, or 1141
1141, 1228, or 1328 of Title 11 of the United
States Code, for pre-petition response costs relating to a site
selected for response actions pursuant to this chapter.
(2) Notwithstanding paragraph (1), a person or entity is not
insolvent with respect to any payment that the department receives or
will receive for any pre-petition response costs as a result of the
bankruptcy, or with respect to any post-petition response costs.
(k) "Interim endangerment" means conditions at a site which pose a
significant risk either of harm to human health or of serious
environmental damage unless immediate response action is initiated
before remedial action measures set forth in a remedial action plan
prepared for the site are implemented.
( ) "Land use controls" means recorded instruments restricting the
present and future uses of the site, including, but not limited to,
recorded easements, covenants, restrictions or servitudes, or any
combination thereof, as appropriate. Land use controls shall run with
the land from the date of recordation, shall bind all of the owners
of the land, and their heirs, successors, and assignees, and the
agents, employees, and lessees of the owners, heirs, successors, and
assignees, and shall be enforceable by the department pursuant to
Article 8 (commencing with Section 25180) of Chapter 6.5.
(m) "Orphan share" means that share of liability for the costs of
response actions apportioned to responsible persons who are insolvent
or cannot be identified or located. The department may adopt
regulations to further define a process to determine when a
responsible person cannot be identified or located.
(n) "Person" shall have the same meaning as set forth in Section
25319.
(o) "Planned use" means the reasonably expected future land uses
based on all of the following factors:
(1) The land use history of the site and surrounding properties,
the current land uses of the site and surrounding properties and
recent development patterns in the area where the site is located.
(2) Land use designations at the site and surrounding properties,
including current and likely future zoning and local land use plans
and the presence, if any, of groundwater and surface water recharge
areas.
(3) The potential for economic redevelopment.
(4) Current plans for the site by the property owner or owners.
(5) Affected community comments on the proposals for use of the
site.
(p) "Release" has the same meaning as set forth in Sections 25320
and 25321.
(q) "Remedy" or "remedial action" means actions that are necessary
to prevent, minimize, or mitigate damage that may result from a
release or threatened release of a hazardous substance and that, when
carried through to completion, allow a site to be permanently used
for its planned use without any significant risk to human health or
any significant potential for future environmental damage. "Remedy"
or "remedial action" includes, but is not limited to, all of the
following:
(1) Actions at the location of the release, such as storage,
confinement, perimeter protection using dikes, trenches, or ditches,
clay cover, neutralization, cleanup of released hazardous substances
and associated contaminated materials, recycling, reuse, diversion,
destruction, or segregation of reactive wastes, dredging, excavation,
repair, or replacement of leaking containers, collection of leachate
and runoff, onsite treatment or incineration, provision of
alternative water supplies, and any monitoring reasonably required to
ensure that these actions protect human health and safety, or the
environment.
(2) The costs of permanent relocation of residents and businesses
and community facilities where the Governor determines that, alone or
in combination with other measures, that relocation is more
cost-effective than, and environmentally preferable to, the
transportation, storage, treatment, destruction, or secure
disposition offsite of hazardous substances, or may otherwise be
necessary to protect human health and safety, or the environment.
(3) Offsite transport and offsite storage, treatment, destruction,
or secure disposition of hazardous substances and associated
contaminated materials.
(r) "Remove" or "removal" means the cleanup or removal of released
hazardous substances from the environment, those actions which may
be necessarily taken in the event of the threat or release of
hazardous substances into the environment, those actions which may be
necessary to monitor, assess, and evaluate the release, or threat of
release, of hazardous substances, the disposal of removed material,
and the taking of other actions which may be necessary to prevent,
minimize, or mitigate damage to human health and safety, or the
environment, which may otherwise result from a release or threat of
release. "Remove" or "removal" also includes, but is not limited to,
security fencing or other measures to limit access, provision of
alternative water supplies, and temporary evacuation and housing of
threatened individuals not otherwise provided.
(s) "Respond," "response," or "response action" means removal
actions, and remedial actions, including, but not limited to,
operation and maintenance measures.
(t) "Response costs" means all costs incurred by the state or any
responsible person in taking response actions under this chapter at a
specific site, including costs incurred by any state agency in
implementing and administering this chapter pursuant to the
limitations established in subdivision (f) of Section 25399, and in
overseeing response actions under this chapter. Those costs shall
include all costs incurred by the state in relation to any judicial
review of a decision of an arbitration panel pursuant to subdivision
(e) of Section 25398.10 or any arbitration conducted pursuant to this
chapter.
(u) "Responsible person" has the same meaning as set forth in
Section 25323.5 for "responsible party" or "liable person."
(v) "Secretary" means the Secretary for Environmental Protection.
(w) "Site" means any building, structure, installation, equipment,
pipe or pipeline (including any pipe into a sewer or publicly owned
treatment works), well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, rolling stock, or
aircraft, or any area where a hazardous substance has been deposited,
stored, disposed of, or placed, or otherwise come to be located; but
does not include any consumer product in consumer use or any vessel.
(x) "Site Designation Committee" or "committee" means the Site
Designation Committee created pursuant to Section 25261.
(y) "State board" means the State Water Resources Control Board.
(z) "Trust fund" means the Expedited Site Remediation Trust Fund
created pursuant to subdivision (a) of Section 25399.1.
SEC. 57. Section 10192.4 of the Insurance Code is amended to read:
10192.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) The person who seeks to contract for insurance benefits, in
the case of an individual Medicare supplement policy.
(2) The proposed certificate holder, in the case of a group
Medicare supplement policy.
(b) "Bankruptcy" means that situation in which a Medicare
Advantage organization that is not an issuer has filed, or has had
filed against it, a petition for declaration of
bankruptcy and has ceased doing business in the state.
(c) "Certificate" means a certificate issued for delivery in this
state under a group Medicare supplement policy.
(d) "Certificate form" means the form on which the certificate is
issued for delivery by the issuer.
(e) "Continuous period of creditable coverage" means the period
during which an individual was covered by creditable coverage, if
during the period of the coverage the individual had no breaks in
coverage greater than 63 days.
(f) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(Medicare).
(C) Title XIX of the federal Social Security Act (Medicaid), other
than coverage consisting solely of benefits under Section 1928 of
that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (Section 2504(e) of Title 22 of the United States Code).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Services Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage only for accident or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract of insurance or are otherwise not an integral part of the
plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract of insurance:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(g) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(h) "Insolvency" means when an issuer, licensed to transact the
business of insurance in this state, has had a final order of
liquidation entered against it with a finding of insolvency by a
court of competent jurisdiction in the issuer's state of domicile.
(i) "Issuer" includes insurance companies, fraternal benefit
societies, and any other entity delivering, or issuing for delivery,
Medicare supplement policies or certificates in this state, except
entities subject to Article 3.5 (commencing with Section 1358) of
Chapter 2.2 of Division 2 of the Health and Safety Code.
(j) "Medicare" means the Health Insurance for the Aged Act, Title
XVIII of the Social Security Amendments of 1965, as amended.
(k) "Medicare Advantage plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
() "Medicare supplement policy" means a group or individual policy
of health insurance, other than a policy issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C. Section 1395mm) or an issued policy under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that is advertised, marketed, or designed primarily as a
supplement to reimbursements under Medicare for the hospital,
medical, or surgical expenses of persons eligible for Medicare.
"Medicare supplement policy" does not include a Medicare Advantage
plan established under Medicare Part C, an outpatient prescription
drug plan established under Medicare Part D, or a health care
prepayment plan that provides benefits pursuant to an agreement under
subparagraph (A) of paragraph (1) of subsection (a) of Section 1833
of the Social Security Act.
(m) "Policy form" means the form on which the policy is issued for
delivery by the issuer.
(n) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
SEC. 58. Section 11655 of the Insurance Code is amended to read:
11655. Such policy shall not contain any provisions relieving the
insurer from payment when the employer becomes insolvent or
is discharged obtains a discharge in
bankruptcy, or otherwise, during the period that the policy is in
operation or the compensation remains owing.
SEC. 59. Section 15643 of the Probate Code is amended to read:
15643. There is a vacancy in the office of trustee in any of the
following circumstances:
(a) The person named as trustee rejects the trust.
(b) The person named as trustee cannot be identified or does not
exist.
(c) The trustee resigns or is removed.
(d) The trustee dies.
(e) A conservator or guardian of the person or estate of an
individual trustee is appointed.
(f) The trustee files a petition for adjudication of
bankruptcy or for approval of an arrangement, composition, or other
extension under the federal Bankruptcy Code, or a petition filed
against the trustee for any of these purposes is approved
is the subject of an order for relief in bankruptcy .
(g) A trust company's charter is revoked or powers are suspended,
if the revocation or suspension is to be in effect for a period of 30
days or more.
(h) A receiver is appointed for a trust company if the appointment
is not vacated within a period of 30 days.
SEC. 60. Section 4107 of the Public Contract Code is amended to
read:
4107. A prime contractor whose bid is accepted may not:
(a) Substitute a person as subcontractor in place of the
subcontractor listed in the original bid, except that the awarding
authority, or its duly authorized officer, may, except as otherwise
provided in Section 4107.5, consent to the substitution of another
person as a subcontractor in any of the following situations:
(1) When the subcontractor listed in the bid, after having had a
reasonable opportunity to do so, fails or refuses to execute a
written contract for the scope of work specified in the subcontractor'
s bid and at the price specified in the subcontractor's bid, when
that written contract, based upon the general terms, conditions,
plans, and specifications for the project involved or the terms of
that subcontractor's written bid, is presented to the subcontractor
by the prime contractor.
(2) When the listed subcontractor becomes bankrupt or
insolvent insolvent or the subject of an order for
relief in bankruptcy .
(3) When the listed subcontractor fails or refuses to perform his
or her subcontract.
(4) When the listed subcontractor fails or refuses to meet the
bond requirements of the prime contractor as set forth in Section
4108.
(5) When the prime contractor demonstrates to the awarding
authority, or its duly authorized officer, subject to the further
provisions set forth in Section 4107.5, that the name of the
subcontractor was listed as the result of an inadvertent clerical
error.
(6) When the listed subcontractor is not licensed pursuant to the
Contractors License Law.
(7) When the awarding authority, or its duly authorized officer,
determines that the work performed by the listed subcontractor is
substantially unsatisfactory and not in substantial accordance with
the plans and specifications, or that the subcontractor is
substantially delaying or disrupting the progress of the work.
(8) When the listed subcontractor is ineligible to work on a
public works project pursuant to Section 1777.1 or 1777.7 of the
Labor Code.
(9) When the awarding authority determines that a listed
subcontractor is not a responsible contractor.
Prior to approval of the prime contractor's request for the
substitution, the awarding authority, or its duly authorized officer,
shall give notice in writing to the listed subcontractor of the
prime contractor's request to substitute and of the reasons for the
request. The notice shall be served by certified or registered mail
to the last known address of the subcontractor. The listed
subcontractor who has been so notified has five working days within
which to submit written objections to the substitution to the
awarding authority. Failure to file these written objections
constitutes the listed subcontractor's consent to the substitution.
If written objections are filed, the awarding authority shall give
notice in writing of at least five working days to the listed
subcontractor of a hearing by the awarding authority on the prime
contractor's request for substitution.
(b) Permit a subcontract to be voluntarily assigned or transferred
or allow it to be performed by anyone other than the original
subcontractor listed in the original bid, without the consent of the
awarding authority, or its duly authorized officer.
(c) Other than in the performance of "change orders" causing
changes or deviations from the original contract, sublet or
subcontract any portion of the work in excess of one-half of 1
percent of the prime contractor's total bid as to which his or her
original bid did not designate a subcontractor.
SEC. 61. Section 11923 of the Revenue and Taxation Code is amended
to read:
11923. (a) Any tax imposed pursuant to this part shall not apply
to the making, delivering, or filing of conveyances to make effective
any plan of reorganization or adjustment that is any of the
following:
(1) Confirmed under the Federal Bankruptcy Act
Code , as amended.
(2) Approved in an equity receivership proceeding in a court
involving a railroad corporation, as defined in Section 101 of Title
11 of the United States Code, as amended.
(3) Approved in an equity receivership proceeding in a court
involving a corporation, as defined in Section 101 of Title 11 of the
United States Code, as amended.
(4) Whereby a mere change in identity, form, or place of
organization is effected.
(b) Subdivision (a) shall only apply if the making, delivery, or
filing of instruments of transfer or conveyances occurs within five
years from the date of the confirmation, approval, or change.
SEC. 62. Section 9185 of the Streets and Highways Code is amended
to read:
9185. Executors, administrators, special administrators and
guardians may consent for any property of the estate represented by
them. Any trustee of an express trust of land other than as security
for the payment of money may consent for all or any part of the land
held in such trust. A trustee in bankruptcy may consent for all or
any part of the property of the bankrupt
debtor . Such executors, administrators, guardians and trustees
are deemed owners of land within the meaning of this division.
SEC. 63. Section 9859 of the Vehicle Code is amended to read:
9859. All money received by an agent from the sale of
certificates of number or temporary certificates of number and use
tax shall be kept separate and apart from any other funds of the
agent, and shall at all times belong to the state.
In case of an assignment for the benefit of creditors,
receivership, or bankruptcy, the state shall have a preferred claim
against the agent assignee , receiver,
or trustee for all moneys owing the state for the sale of
certificates as provided in this code and any use tax, and shall not
be estopped from asserting such claim by reason of the commingling of
funds or otherwise.
SECTION 1. Section 7113.5 of the Business and Professions Code is
amended to read:
7113.5. The avoidance or settlement by a licensee for less than
the full amount of the lawful obligations of the licensee incurred as
a contractor, whether by (a) composition, arrangement, or
reorganization with creditors under state law, (b) composition,
arrangement, or reorganization with creditors under any agreement or
understanding, (c) receivership as provided in Chapter 5 (commencing
at Section 564) of Title 7 of Part 2 of the Code of Civil Procedure,
(d) assignment for the benefit of creditors, (e) trusteeship, or (f)
dissolution, constitutes a cause for disciplinary action.
This section shall not apply to an individual settlement of the
obligation of a licensee by the licensee with a creditor that is not
a part of or in connection with a settlement with other creditors of
the licensee.
No disciplinary action shall be commenced against a licensee for
avoiding discharge of or settling in
bankruptcy , or by composition, arrangement, or
reorganization with creditors under federal law, the
licensee's lawful obligations incurred as a contractor for less than
the full amount of the obligations, so long as the licensee satisfies
all of those lawful obligations, to the extent the obligations are
not discharged under federal law.
SEC. 2. Section 17027 of the Business and Professions Code is
amended to read:
17027. In establishing the cost of a given article or product to
the distributor and vendor, the invoice cost of the article or
product purchased at a forced, bankrupt
bankruptcy, closeout sale, or other sale outside of the
ordinary channels of trade may not be used as a basis for justifying
a price lower than one based upon the replacement cost as of the date
of the sale of the article or product replaced through the ordinary
channels of trade, unless the article or product is kept separate
from goods purchased in the ordinary channels of trade and unless the
article or product is advertised and sold as merchandise purchased
at a forced, bankrupt bankruptcy,
closeout sale, or by means other than through the ordinary channels
of trade.
Such advertising shall state the conditions under which the goods
were purchased, and the quantity of the merchandise to be sold or
offered for sale.
SEC. 3. Section 17028 of the Business and Professions Code is
amended to read:
17028. "Ordinary channels of trade" means those ordinary, regular
and daily transactions in the mercantile trade whereby title to an
article or product, in no way damaged or deteriorated, is transferred
from one person to another.
"Ordinary channels of trade" does not include bankruptcy
sales of bankrupt stocks, closeout goods,
dents, sales of goods bought from a business or merchant retiring
from business, fire sales and sales of damaged or deteriorated goods,
which damage or deterioration results from any cause whatsoever.
This listing is not all inclusive but as example only.
SEC. 4. Section 17511.4 of the Business and Professions Code is
amended to read:
17511.4. Each filing pursuant to Section 17511.3 shall contain
the following information:
(a) The name or names of the seller, including the name under
which the seller is doing or intends to do business, if different
from the name of the seller, and the name of any parent or affiliated
organization (1) that will engage in business transactions with
purchasers relating to sales solicited by the seller or (2) that
accepts responsibility for statements made by, or acts of, the seller
relating to sales solicited by the seller.
(b) The seller's business form and place of organization and, if
the seller is a corporation, a copy of its articles of incorporation
and bylaws and amendments thereto, or, if a partnership, a copy of
the partnership agreement, or if operating under a fictitious
business name, the location where the fictitious name has been
registered. All the same information shall be included for any parent
or affiliated organization disclosed pursuant to subdivision (a).
(c) The complete street address or addresses of all locations,
designating the principal location from which the telephonic seller
will be conducting business. If the principal business location of
the seller is not in this state, then the seller shall also designate
which of its locations within this state is its main location in the
state.
(d) A listing of all telephone numbers to be used by the seller
and the address where each telephone using each of these telephone
numbers is located.
(e) The name of, and the office held by, the seller's officers,
directors, trustees, general and limited partners, sole proprietor,
and owners, as the case may be, and the names of those persons who
have management responsibilities in connection with the seller's
business activities.
(f) The complete address of the principal residence, the date of
birth, and the driver's license number and state of issuance of each
of the persons whose names are disclosed pursuant to subdivision (e).
(g) The name and principal residence address of each person the
telephonic seller leaves in charge at each location from which the
seller does business in this state, as defined in subdivision (a) of
Section 17511.3, and the business location which each of these
persons is or will be in charge of.
(h) A statement, meeting the requirements of this subdivision, as
to both the seller, whether a corporation, partnership, firm,
association, joint venture, or any other type of business entity (and
whether identified pursuant to subdivision (e) or (g) or not), and
as to any person identified pursuant to subdivision (e) or (g) who:
(1) Has been convicted of a felony or misdemeanor involving an
alleged violation of this article, or fraud, theft, embezzlement,
fraudulent conversion, or misappropriation of property. For purposes
of this paragraph, a plea of nolo contendere is a conviction.
(2) Has had entered against him or her a final judgment or order
in a civil or administrative action, including a stipulated judgment
or order, if the complaint or petition in the civil or administrative
action alleged acts constituting a violation of this article, fraud,
theft, embezzlement, fraudulent conversion, or misappropriation of
property, the use of untrue or misleading representations in an
attempt to sell or dispose of real or personal property, or the use
of unfair, unlawful, or deceptive business practices.
(3) Is subject to any currently effective injunction or
restrictive court order relating to business activity as the result
of an action brought by a federal, state, or local public agency or
unit thereof, including, but not limited to, an action affecting any
vocational license.
(4) Has at any time during the previous seven tax years
filed in bankruptcy, been adjudged a bankrupt been the
subject of an order for relief in bankruptcy , been
reorganized due to insolvency, or been a principal, director,
officer, trustee, general or limited partner, or had management
responsibilities of any other corporation, partnership, joint
venture, or business entity, that has so filed or was so
adjudicated or reorganized, been the subject of an
order for relief in bankruptcy during or within one year after
the period that the person held that position.
For purposes of paragraphs (1), (2), and (3), the statement
required by this subdivision shall identify the seller or person, the
court or administrative agency rendering the conviction, judgment,
or order, the docket number of the matter, the date of the
conviction, judgment, or order, and the name of the governmental
agency, if any, that brought the action resulting in the conviction,
judgment, or order. For purposes of paragraph (4), the statement
required by this subdivision shall include the name and location of
the seller or person filing in bankruptcy, adjudged a
bankrupt that has been the subject of an order for
relief in bankruptcy , or reorganized due to insolvency, and
shall include the date thereof, the court which exercised
jurisdiction, and the docket number of the matter.
(i) A list of the names, principal residence addresses, the date
of birth, and the driver's license number and state of issuance
thereof, of salespersons who solicit on behalf of the telephonic
seller and the names the salespersons use while so soliciting. No
salesperson shall use the same name as used by any other salesperson
soliciting for the telephonic seller and no telephonic seller shall
permit a salesperson to use the same name as used by any other
salesperson soliciting for the telephonic seller.
(j) A description of the items the seller is offering for sale and
a copy of all sales scripts the telephonic seller requires
salespersons to use when soliciting prospective purchasers, or if no
sales script is required to be used, a statement to that effect.
(k) A copy of all sales information and literature (including, but
not limited to, scripts, outlines, instructions, and information
regarding how to conduct telephonic sales, sample introductions,
sample closings, product information, and contest or premium-award
information) provided by the telephonic seller to salespersons or of
which the seller informs salespersons, and a copy of all written
materials the seller sends to any prospective or actual purchaser.
() If the telephonic seller represents or implies, or directs
salespersons to represent or imply, to purchasers that the purchaser
will receive certain specific items (including a certificate of any
type which the purchaser must redeem to obtain the item described in
the certificate) or one or more items from among designated items,
whether the items are denominated as gifts, premiums, bonuses,
prizes, or otherwise, the filing shall include the following:
(1) A list of the items offered.
(2) The value or worth of each item described to prospective
purchasers and the basis for the valuation.
(3) The price paid by the telephonic seller to its supplier for
each of these items and the name, address, and telephone number of
each item's supplier.
(4) If the purchaser is to receive fewer than all of the items
described by the seller, the filing shall include the following:
(A) The manner in which the telephonic seller decides which item
or items a particular prospective purchaser is to receive.
(B) The odds a single prospective purchaser has of receiving each
described item.
(C) The name and address of each recipient who has, during the
preceding 12 months (or if the seller has not been in business that
long, during the period the telephonic seller has been in business)
received the item having the greatest value and the item with the
smallest odds of being received.
(5) All rules, regulations, terms, and conditions a prospective
purchaser must meet in order to receive the item.
(m) If the telephonic seller is offering to sell any metal, stone,
or mineral, the filing shall include the following:
(1) The name, address, and telephone number of each of the seller'
s suppliers and a description of each metal, stone, or mineral
provided by the supplier.
(2) If possession of any metal, stone, or mineral is to be
retained by the seller or will not be transferred to the purchaser
until the purchaser has paid in full, the filing shall include the
following:
(A) The address of each location where the metal, stone, or
mineral will be kept.
(B) If not kept on premises owned by the seller or at an address
or addresses set forth in compliance with subdivision (c), the name
of the owner of the business at which the metal, stone, or mineral
will be kept.
(C) A copy of any contract or other document which evidences the
seller's right to store the metal, stone, or mineral at the address
or addresses designated pursuant to subparagraph (A).
(3) If the seller is not selling the metal, stone, or mineral from
its own inventory, but instead purchases the metal, stone, or
mineral to fill orders taken from purchasers, the filing shall
include copies of all contracts or other documents evidencing the
seller's ability to call upon suppliers to fill the seller's orders.
(4) If the seller represents to purchasers that the seller has
insurance or a surety bond of any type relating to a purchaser's
purchase of any metal, stone, or mineral from the seller, the filing
shall include a complete copy of all these insurance policies and
bonds.
(5) If the seller makes any representation as to the earning or
profit potential of purchases of any metal, stone, or mineral, the
filing shall include data to substantiate the claims made. If the
representation relates to previous sales made by the seller or a
related entity, substantiating data shall be based on the experiences
of at least 50 percent of the persons who have purchased the
particular metal, stone, or mineral from the seller or related entity
during the preceding six months (or if the seller or related entity
has not been in business that long, during the period the seller or
related entity has been in business) and shall include the raw data
upon which the representation is based, including, but not limited
to, all of the following:
(A) The length of time the seller or related entity has been
selling the particular metal, stone, or mineral being offered.
(B) The number of purchasers thereof from the seller or related
entity known to the seller or related entity to have made at least
the same earnings or profit as those represented.
(C) The percentage that the number disclosed pursuant to
subparagraph (B) represents of the total number of purchasers from
the seller or related entity of the particular metal, stone, or
mineral.
(n) If the telephonic seller is offering to sell an interest in
oil, gas, or mineral fields, wells, or exploration sites, the filing
shall include disclosure of the following:
(1) The seller's ownership interest, if any, in each field, well,
or site being offered for sale.
(2) The total number of interests to be sold in each field, well,
or site being offered for sale.
(3) If, in selling an interest in any particular field, well, or
site, reference is made to an investigation of these fields, wells,
or sites by the seller or anyone else, the filing shall include the
following:
(A) The name, business address, telephone number, and professional
credentials of the person or persons who made the investigation.
(B) A copy of the report and other documents relating to the
investigation prepared by the person or persons.
(4) If the seller makes any representation as to the earning or
profit potential of purchases of any interest in these fields, wells,
or sites, the filing shall include data to substantiate the claims
made. If the representation relates to previous sales made by the
seller or a related entity, the substantiating data shall be based on
the experiences of at least 50 percent of the purchasers of the
particular interests from the seller or the related entity during the
preceding six months (or if the seller has not been in business that
long, during the period the seller or related entity has been in
business) and shall include the raw data upon which the
representation is based, including, but not limited to, all of the
following:
(A) The length of time the seller or related entity has been
selling the particular interests in the fields, wells, or sites being
offered.
(B) The number of purchasers of the particular interests from the
seller or related entity known to the seller to have made, at least
the same earnings as those represented.
(C) The percentage the number disclosed pursuant to subparagraph
(B) represents of the total number of purchasers of the particular
interests from the seller or related entity.
(o) The name and address of the telephonic seller's agent in this
state, other than the Attorney General, authorized to receive service
of process in this state.
(p) If a person, based on paragraph (19) of subdivision (c) of
Section 17511.1, claims an exemption from having to file the
information required by subdivisions (a) to (o), inclusive, the
person shall file, on a form provided by the Attorney General, the
following information:
(1) The name or names of the person claiming the exemption,
including the name under which the person is doing or intends to do
business.
(2) The person's business form, and place of organization, whether
corporate or otherwise; or, if operating under a fictitious business
name, the location where the fictitious name has been registered.
(3) The complete street address of the person's retail locations,
and telephone numbers located therein and a statement as to how long
the person has been selling at retail from each location.
(4) A copy of the person's currently valid business license.
(5) A statement reflecting the dollar amount of the person's total
retail sales during the 12 months preceding the filing.
(6) A statement reflecting the dollar amount of the person's sales
made telephonically during the 12 months preceding the filing.
The filing shall be verified by a declaration signed under penalty
of perjury by each principal of the person claiming the exemption.
The declaration shall specify the date and location of signing.
If a person filing pursuant to subdivision (p) makes any
representation to a prospective purchaser as to the historical
movements or changes in the price or value of any coin or bullion,
the person shall maintain in its records sufficient data to
substantiate each representation. This data shall be retained in the
person's records for a period of at least three years after the last
date on which a representation is made and shall be made available
for inspection upon request by any governmental agency at each of its
business locations.
(q) If the telephonic seller represents or implies, or directs
salespersons to represent or imply, that the telephonic seller can,
or may be able to, make a loan or arrange or assist in arranging a
loan or to assist in providing information which may lead to the
obtaining of a loan, the filing shall include the following:
(1) The names and addresses of all persons who, in the previous 24
months, lent money to those who responded to the seller's
solicitations or lent money to the telephonic seller for the seller
to lend to those who responded to the seller's representations that
it could make a loan or arrange or assist in arranging a loan or
could assist in providing information which could lead to the
obtaining of a loan.
(2) The names and addresses of all persons who, in the previous 24
months, lent money to those who responded to the solicitations of
the seller's predecessor or the seller's officers, owners, or those
persons having present management responsibilities or to companies
with which they were associated, that they could make a loan or
arrange or assist in arranging a loan or could assist in providing
information which could lead to the obtaining of a loan or lent money
to the seller's predecessor or the seller's officers, owners, or
those persons having present management responsibilities or to
companies with which they were associated for them to lend to those
who responded to these representations.
(3) The names and addresses of all persons who have informed the
telephonic seller that they may be able to lend money, within the
next 12 months from the date of this registration, to persons
solicited by the seller or to the telephonic seller for the seller to
lend to those who respond to the seller's representations that it
can make a loan or arrange or assist in arranging a loan or can
assist in providing information which can lead to the obtaining of a
loan.
(4) Copies of all contracts between the seller and lenders or
prospective lenders who may lend money: (A) to the seller to lend to
individuals who, in connection with the seller's business activities,
respond to the seller's representations that it can make a loan or
arrange or assist in arranging a loan or can assist in providing
information which can lead to the obtaining of a loan; or (B)
directly to persons to whom the seller may represent that it can
arrange or assist in providing information which can lead to the
obtaining of a loan.
SEC. 5. Section 17550.52 of the Business and Professions Code is
amended to read:
17550.52. The Attorney General or his or her delegate may
determine that the Travel Consumer Restitution Corporation has failed
or ceased to operate upon a finding that any one of the following
has occurred with respect to the corporation:
(a) Was not created.
(b) Has been dissolved.
(c) Has ceased to operate.
(d) Is insolvent or bankrupt or been the
subject of an order for relief in bankruptcy .
(e) Has failed to pay its operating costs.
(f) Has failed to pay any claim or judgment in a timely manner.
(g) Has violated its articles of incorporation or any law of this
state.
(h) Has invested its funds in violation of this article.
(i) Has not levied assessments as required by this article.
(j) Has not diligently decided upon a claim made by a person
aggrieved.
(k) Has violated any section of this article.
() Has neglected or refused to submit its books, papers, and
affairs to the inspection of the office of the Attorney General.
SEC. 6. Section 17919 of the Business and Professions Code is
amended to read:
17919. (a) A fictitious business name statement may be executed,
filed, and published by the trustee in bankruptcy at any time after
bankruptcy where a failure to comply with the provisions of this
chapter would otherwise preclude the maintenance of an action to
recover any sums due to the bankrupt debtor
or bankruptcy estate or the partnership of which the
bankrupt debtor or bankruptcy estate was a
member.
(b) A fictitious business name statement may be executed, filed,
and published by the conservator, executor, or administrator at any
time after the appointment of a conservator for or death of any
individual or partner where a failure to comply with the provisions
of this chapter would otherwise preclude the maintenance of an action
to recover any sums due the conservatee or deceased person or the
partnership of which he was a member.
(c) A fictitious business name statement may be executed, filed,
and published by an assignee or purchaser of the business at any time
after the assignment or sale where a failure to comply with the
provisions of this chapter would otherwise preclude the maintenance
of an action to recover any sums due to the assignee or purchaser by
reason of the assignment or sale.
(d) The fictitious business name statement referred to in this
section shall be in substantially the same form as prescribed in
Section 17913, except:
(1) The person or persons who were doing business under the
fictitious business name shall be stated as such person or persons
existed (i) immediately prior to the bankruptcy, conservatorship, or
death or the assignment or sale of the business or (ii) at the time
they ceased to do business under the fictitious business name,
whichever is the earlier time.
(2) The statement shall include the following additional sentence:
"This statement has been executed pursuant to Section 17919 of the
Business and Professions Code."
(3) The person executing the statement shall (i) sign the
statement on behalf of the person or persons formerly doing business
under the fictitious business name, (ii) state his full name and the
street address of his place of business or, if he has none, of his
residence, and (iii) indicate whether he is a trustee in bankruptcy,
conservator, executor, or administrator or assignee or purchaser of
the business.
SEC. 7. Section 20021 of the Business and Professions Code is
amended to read:
20021. If during the period in which the franchise is in effect,
there occurs any of the following events which is relevant to the
franchise, immediate notice of termination without an opportunity to
cure, shall be deemed reasonable:
(a) The franchisee or the business to which the franchise relates
is declared bankrupt or has been the subject
of an order for relief in bankruptcy, judicially determined to
be insolvent, or all or a substantial part of the
assets thereof are assigned to or for the benefit of any creditor, or
the franchisee admits his inability to pay his debts as they come
due;
(b) The franchisee abandons the franchise by failing to operate
the business for five consecutive days during which the franchisee is
required to operate the business under the terms of the franchise,
or any shorter period after which it is not unreasonable under the
facts and circumstances for the franchisor to conclude that the
franchisee does not intend to continue to operate the franchise,
unless such failure to operate is due to fire, flood, earthquake or
other similar causes beyond the franchisee's control;
(c) The franchisor and franchisee agree in writing to terminate
the franchise;
(d) The franchisee makes any material misrepresentations relating
to the acquisition of the franchise business or the franchisee
engages in conduct which reflects materially and unfavorably upon the
operation and reputation of the franchise business or system;
(e) The franchisee fails, for a period of 10 days after
notification of noncompliance, to comply with any federal, state or
local law or regulation applicable to the operation of the franchise;
(f) The franchisee, after curing any failure in accordance with
Section 20020 engages in the same noncompliance whether or not such
noncompliance is corrected after notice;
(g) The franchisee repeatedly fails to comply with one or more
requirements of the franchise, whether or not corrected after notice;
(h) The franchised business or business premises of the franchise
are seized, taken over or foreclosed by a government official in the
exercise of his duties, or seized, taken over, or foreclosed by a
creditor, lienholder or lessor, provided that a final judgment
against the franchisee remains unsatisfied for 30 days (unless a
supersedeas or other appeal bond has been filed); or a levy of
execution has been made upon the license granted by the franchise
agreement or upon any property used in the franchised business, and
it is not discharged within five days of such levy;
(i) The franchisee is convicted of a felony or any other criminal
misconduct which is relevant to the operation of the franchise;
(j) The franchisee fails to pay any franchise
fees or other amounts due to the franchisor or its affiliate within
five days after receiving written notice that such fees are overdue;
or
(k) The franchisor makes a reasonable determination that continued
operation of the franchise by the franchisee will result in an
imminent danger to public health or safety.
SEC. 8. Section 22903 of the Business and Professions Code is
amended to read:
22903. (a) This section shall only apply to a dealer contract
between a dealer who is not a single-line dealer and a supplier who
is not a single-line supplier.
(b) Except where there are grounds for termination of a dealer
contract pursuant to paragraph (1), (2), (3), (4), (5), (6), (7), or
(8) of subdivision (c), a supplier shall give a dealer 180 days
written notice of the supplier's intent to terminate a dealer
contract. The notice shall include all reasons constituting good
cause for the termination and shall provide the dealer with 60 days
to cure any claimed deficiency. If the deficiency is cured within 60
days to the satisfaction of the supplier, which shall be determined
in good faith, the notice of termination shall be void. Except as
provided in subdivision (d), a supplier may not terminate a dealer
contract based on paragraph (12) of subdivision (c) unless the
supplier gives the dealer notice of that action at least one year
before the effective date of that action. If the dealer achieves the
supplier's requirements for reasonable standards or performance
objectives before the expiration of the one-year notice period, the
notice shall be void and the dealer contract shall continue in full
force and effect.
(c) No supplier, directly or through an officer, agent, or
employee, may terminate, cancel, fail to renew, or materially change
the competitive circumstances of a dealer contract without good
cause. In addition to the definition in subdivision (l) of Section
22901, good cause exists whenever the dealer has taken any of the
following actions:
(1) Transferred a controlling ownership interest in the dealership
without the consent of the supplier, who shall not withhold consent
unreasonably.
(2) Made a material misrepresentation or falsification of any
record.
(3) Filed a voluntary petition in bankruptcy or has had an
involuntary petition in bankruptcy filed against the dealer that has
not been discharged dismissed within 60
days after the filing or is insolvent or in receivership.
(4) Pleaded guilty to or has been convicted of a felony involving
an act of moral turpitude.
(5) Failed to operate in the normal course of business for seven
consecutive business days, without the consent of the supplier, or
has terminated the business.
(6) Relocated or established a new or additional dealer's place of
business without the supplier's consent.
(7) Materially defaulted under any chattel mortgage or other
security agreement between the dealer and the supplier, or there has
been a revocation of any guarantee of the dealer's present or future
obligations to the supplier. However, good cause does not exist if a
person revokes any guarantee in connection with or following the
transfer of that person's entire ownership interest in the dealer
unless the supplier requires that person to execute a new guarantee
of the dealer's present or future obligations in connection with that
transfer of ownership interest.
(8) Failed to satisfy any payment obligation as it became due and
payable to the supplier, failed to promptly account to the supplier
for any proceeds from the sale of equipment, or failed to hold those
proceeds in trust for the benefit of the supplier.
(9) Engaged in conduct that is injurious or detrimental to any of
the following:
(A) The dealer's customers. This includes, but is not limited to,
the following conduct: excessive pricing, misleading advertising,
failure to provide service and replacement parts, and failure to
perform warranty obligations.
(B) The public welfare.
(C) The representation or reputation of the supplier's product.
(10) Consistently failed to meet building and housekeeping
requirements, or failed to provide adequate sales, service, or parts
personnel commensurate with the dealer contract.
(11) Consistently failed to comply with the applicable licensing
laws pertaining to the products and services being represented for
and on the supplier's behalf.
(12) Consistently failed to meet and maintain the supplier's
requirements for reasonable standards and performance objectives, if
the supplier has given the dealer reasonable standards and
performance objectives that are based on the manufacturer's
experience in other comparable market areas.
(d) Notwithstanding subdivision (c), if the sales, service,
rental, and repair of a supplier's product represents the lesser of
10 percent or three hundred fifty thousand dollars ($350,000) of the
dealer's total gross annual revenue that includes, but is not limited
to, the sales, service, rental, or repair, for each dealer location,
the supplier may terminate a dealer contract based on paragraph (12)
of subdivision (c) upon providing the dealer with notice of that
action at least 180 days before the effective date of that action. If
the dealer achieves the supplier's requirements for reasonable
standards or performance objectives within 60 days of receipt of the
termination notice, the notice shall be void and the dealer contract
shall continue in full force and effect.
(e) Notwithstanding a dealer contract that provides for
exclusivity during the term of the contract, a supplier may begin
contract negotiations with a potential replacement dealer 60 days
prior to the expiration of the notice period that has been provided
pursuant to subdivisions (b) or (d) if the dealer failed to achieve
the supplier's requirements for reasonable standards or performance
objectives within 60 days of receipt of the termination notice.
Nothing in this subdivision shall authorize a replacement dealer to
conduct operations with a supplier during the term of a dealer
contract.
SEC. 9. Section 24071 of the Business and Professions Code is
amended to read:
24071. The license of one spouse may be transferred to the other
spouse when the application for transfer is made prior to the entry
of a final decree of divorce, and the license of a decedent, minor
ward, incompetent person, conservatee, bankrupt person
debtor in a bankruptcy case , person for whose
estate a receiver is appointed, or assignor for the benefit of
creditors may be transferred by or to the surviving partners of a
deceased licensee, the executor, administrator, conservator or
guardian of an estate of a licensee, the surviving spouse of a
deceased licensee in the event that the deceased licensee leaves no
estate to be administered, the trustee of a bankrupt estate of a
licensee, a receiver of the estate of a licensee, or an assignee for
the benefit of creditors of a licensee with the consent of the
assignor, or a license may be transferred by or to a receiver
appointed for a judgment debtor as provided by Section 708.630 of the
Code of Civil Procedure, or a license may be transferred to a
revocable living trust when the licensee is also the trustee, or a
license may be transferred between partners where no new partner is
being licensed, or a license may be transferred between corporations
whose outstanding shares of stock are owned by the same natural
persons, or a licensee may transfer upon compliance with Section
24073 any license to a corporation whose entire stock is owned by the
licensee, or his or her spouse, or a licensee may transfer upon
compliance with Section 24073 any license to a limited liability
company whose entire membership consists of the licensee, or his or
her spouse, or a license may be transferred from a corporation to a
person who owns, or whose spouse owns, the entire stock of the
corporation, and the fee for transfer of each license is fifty
dollars ($50). The regular transfer fee provided in Section 24072
shall be due and payable upon the subsequent transfer of 25 percent
of the stock in a corporation to which a license has been transferred
by a licensee or his or her spouse pursuant to this section, except
if the transfer of stock is from a parent to his or her child or
grandchild, in which case the fee shall be one-half of the regular
transfer fee. In no case shall a fee be charged for the transfer of
an importer's license. All money collected from the fees provided for
in this section shall be deposited in the Alcohol Beverage Control
Fund as provided in Section 25761.
Nothing in this section shall be deemed to authorize the formation
of a limited liability company composed of only one member in
violation of subdivision (b) of Section 17050 of the Corporations
Code.
SEC. 10. Section 1785.13 of the Civil Code is amended to read:
1785.13. (a) No consumer credit reporting agency shall make any
consumer credit report containing any of the following items of
information:
(1) Bankruptcies that, from the date of adjudication
the order for relief , antedate the report by
more than 10 years.
(2) Suits and judgments that, from the date of entry or renewal,
antedate the report by more than seven years or until the governing
statute of limitations has expired, whichever is the longer period.
(3) Unlawful detainer actions, unless the lessor was the
prevailing party. For purposes of this paragraph, the lessor shall be
deemed to be the prevailing party only if (A) final judgment was
awarded to the lessor (i) upon entry of the tenant's default, (ii)
upon the granting of the lessor's motion for summary judgment, or
(iii) following trial, or (B) the action was resolved by a written
settlement agreement between the parties that states that the
unlawful detainer action may be reported. In any other instance in
which the action is resolved by settlement agreement, the lessor
shall not be deemed to be the prevailing party for purposes of this
paragraph.
(4) Paid tax liens that, from the date of payment, antedate the
report by more than seven years.
(5) Accounts placed for collection or charged to profit and loss
that antedate the report by more than seven years.
(6) Records of arrest, indictment, information, misdemeanor
complaint, or conviction of a crime that, from the date of
disposition, release, or parole, antedate the report by more than
seven years. These items of information shall no longer be reported
if at any time it is learned that in the case of a conviction a full
pardon has been granted, or in the case of an arrest, indictment,
information, or misdemeanor complaint a conviction did not result.
(7) Any other adverse information that antedates the report by
more than seven years.
(b) The seven-year period specified in paragraphs (5) and (7) of
subdivision (a) shall commence to run, with respect to any account
that is placed for collection (internally or by referral to a third
party, whichever is earlier), charged to profit and loss, or
subjected to any similar action, upon the expiration of the 180-day
period beginning on the date of the commencement of the delinquency
that immediately preceded the collection activity, charge to profit
and loss, or similar action. Where more than one of these actions is
taken with respect to a particular account, the seven-year period
specified in paragraphs (5) and (7) shall commence concurrently for
all these actions on the date of the first of these actions.
(c) Any consumer credit reporting agency that furnishes a consumer
credit report containing information regarding any case involving a
consumer arising under the bankruptcy provisions of Title 11 of the
United States Code shall include an identification of the chapter of
Title 11 of the United States Code under which the case arose if that
can be ascertained from what was provided to the consumer credit
reporting agency by the source of the information.
(d) A consumer credit report shall not include any adverse
information concerning a consumer antedating the report by more than
10 years or that otherwise is prohibited from being included in a
consumer credit report.
(e) If a consumer credit reporting agency is notified by a
furnisher of credit information that an open-end credit account of
the consumer has been closed by the consumer, any consumer credit
report thereafter issued by the consumer credit reporting agency with
respect to that consumer, and that includes information respecting
that account, shall indicate the fact that the consumer has closed
the account. For purposes of this subdivision, "open-end credit
account" does not include any demand deposit account, such as a
checking account, money market account, or share draft account.
(f) Consumer credit reporting agencies shall not include medical
information in their files on consumers or furnish medical
information for employment, insurance, or credit purposes in a
consumer credit report without the consent of the consumer.
(g) A consumer credit reporting agency shall include in any
consumer credit report information, if any, on the failure of the
consumer to pay overdue child or spousal support, where the
information either was provided to the consumer credit reporting
agency pursuant to Section 4752 or has been provided to the consumer
credit reporting agency and verified by another federal, state, or
local governmental agency.
SEC. 11. Section 1786.18 of the Civil Code is amended to read:
1786.18. (a) Except as authorized under subdivision (b), an
investigative consumer reporting agency may not make or furnish any
investigative consumer report containing any of the following items
of information:
(1) Bankruptcies that, from the date of adjudication
the order for relief , antedate the report by
more than 10 years.
(2) Suits that, from the date of filing, and satisfied judgments
that, from the date of entry, antedate the report by more than seven
years.
(3) Unsatisfied judgments that, from the date of entry, antedate
the report by more than seven years.
(4) Unlawful detainer actions where the defendant was the
prevailing party or where the action is resolved by settlement
agreement.
(5) Paid tax liens that, from the date of payment, antedate the
report by more than seven years.
(6) Accounts placed for collection or charged to profit and loss
that antedate the report by more than seven years.
(7) Records of arrest, indictment, information, misdemeanor
complaint, or conviction of a crime that, from the date of
disposition, release, or parole, antedate the report by more than
seven years. These items of information shall no longer be reported
if at any time it is learned that, in the case of a conviction, a
full pardon has been granted or, in the case of an arrest,
indictment, information, or misdemeanor complaint, a conviction did
not result; except that records of arrest, indictment, information,
or misdemeanor complaints may be reported pending pronouncement of
judgment on the particular subject matter of those records.
(8) Any other adverse information that antedates the report by
more than seven years.
(b) The provisions of subdivision (a) are not applicable in either
of the following circumstances:
(1) If the investigative consumer report is to be used in the
underwriting of life insurance involving, or that may reasonably be
expected to involve, an amount of two hundred fifty thousand dollars
($250,000) or more.
(2) If the investigative consumer report is to be used by an
employer who is explicitly required by a governmental regulatory
agency to check for records that are prohibited by subdivision (a)
when the employer is reviewing a consumer's qualification for
employment.
(c) Except as otherwise provided in Section 1786.28, an
investigative consumer reporting agency shall not furnish an
investigative consumer report that includes information that is a
matter of public record and that relates to an arrest, indictment,
conviction, civil judicial action, tax lien, or outstanding judgment,
unless the agency has verified the accuracy of the information
during the 30-day period ending on the date on which the report is
furnished.
(d) An investigative consumer reporting agency shall not prepare
or furnish an investigative consumer report on a consumer that
contains information that is adverse to the interest of the consumer
and that is obtained through a personal interview with a neighbor,
friend, or associate of the consumer or with another person with whom
the consumer is acquainted or who has knowledge of the item of
information, unless either (1) the investigative consumer reporting
agency has followed reasonable procedures to obtain confirmation of
the information, from an additional source that has independent and
direct knowledge of the information, or (2) the person interviewed is
the best possible source of the information.
SEC. 12. Section 1788.14 of the Civil Code is amended to read:
1788.14. No debt collector shall collect or attempt to collect a
consumer debt by means of the following practices:
(a) Obtaining an affirmation from a debtor who has been
adjudicated a bankrupt, of a consumer debt which has been
discharged in such bankruptcy, without clearly and
conspicuously disclosing to the debtor, in writing, at the time such
affirmation is sought, the fact that the debtor is not legally
obligated to make such affirmation;
(b) Collecting or attempting to collect from the debtor the whole
or any part of the debt collector's fee or charge for services
rendered, or other expense incurred by the debt collector in the
collection of the consumer debt, except as permitted by law; or
(c) Initiating communications, other than statements of account,
with the debtor with regard to the consumer debt, when the debt
collector has been previously notified in writing by the debtor's
attorney that the debtor is represented by such attorney with respect
to the consumer debt and such notice includes the attorney's name
and address and a request by such attorney that all communications
regarding the consumer debt be addressed to such attorney, unless the
attorney fails to answer correspondence, return telephone calls, or
discuss the obligation in question. This subdivision shall not apply
where prior approval has been obtained from the debtor's attorney, or
where the communication is a response in the ordinary course of
business to a debtor's inquiry.
SEC. 13. Section 1812.206 of the Civil Code is amended to read:
1812.206. At least 48 hours prior to the execution of a seller
assisted marketing plan contract or agreement or at least 48 hours
prior to the receipt of any consideration, whichever occurs first,
the seller or his or her representative shall provide to the
prospective purchaser in writing a document entitled "SELLER ASSISTED
MARKETING PLAN INFORMATION SHEET." The seller may combine the
information required under this section with the information required
under Section 1812.205 and, if done, shall utilize the single title
"DISCLOSURES REQUIRED BY CALIFORNIA LAW," and the title page required
by Section 1812.205. If a combined document is used, it shall be
given at the time required by Section 1812.205, provided that this
time meets the 48-hour test of this section. The information sheet
required by this section shall contain the following:
(a) The name of and the office held by the seller's owners,
officers, directors, trustees and general or limited partners, as the
case may be, and the names of those individuals who have management
responsibilities in connection with the seller's business activities.
(b) A statement whether the seller, any person identified in
subdivision (a), and any other company managed by a person identified
in subdivision (a):
(1) Has been convicted of a felony or misdemeanor or pleaded nolo
contendere to a felony or misdemeanor charge if the felony or
misdemeanor involved an alleged violation of this title, fraud,
embezzlement, fraudulent conversion or misappropriation of property.
(2) Has been held liable in a civil action by final judgment or
consented to the entry of a stipulated judgment if the civil action
alleged a violation of this title, fraud, embezzlement, fraudulent
conversion or misappropriation of property or the use of untrue or
misleading representations in an attempt to sell or dispose of real
or personal property or the use of unfair, unlawful or deceptive
business practices.
(3) Is subject to any currently effective agreement, injunction,
or restrictive order, including, but not limited to, a "cease and
desist" order, an "assurance of discontinuance," or other comparable
agreement or order, relating to business activity as the result of an
action or investigation brought by a public agency or department,
including, but not limited to, an action affecting any vocational
license.
The statements required by paragraphs (1), (2) and (3) of this
subdivision shall set forth the terms of the agreement, or the court,
the docket number of the matter, the date of the conviction or of
the judgment and, when involved, the name of the governmental agency
that initiated the investigation or brought the action resulting in
the conviction or judgment.
(4) Has at any time during the previous seven fiscal years
filed in bankruptcy, been adjudged a bankrupt
been the subject of an order for relief in bankruptcy , been
reorganized due to insolvency, or been a principal, director,
officer, trustee, general or limited partner, or had management
responsibilities of any other person, as defined in subdivision (b)
of Section 1812.201, that has so filed or was so adjudicated
or reorganized, during or within one year after the period
that the individual held that position. If so, the name and location
of the person having so filed, or having been so adjudged
or reorganized, the date thereof, the court which exercised
jurisdiction, and the docket number of the matter shall be set
forth.
(c) The length of time the seller:
(1) Has sold seller assisted marketing plans.
(2) Has sold the specific seller assisted marketing plan being
offered to the purchaser.
(d) If the seller is required to secure a bond or establish a
trust account pursuant to the requirements of Section 1812.204, the
information sheet shall state either:
(1) "Seller has secured a bond issued by
________________________________________________,
(name and address of surety company)
a surety company admitted to do business in this state. Before
signing a contract to purchase this seller assisted marketing plan,
you should check with the surety company to determine the bond's
current status," or
(2) "Seller has deposited with the office of the Attorney General
information regarding its trust account. Before signing a contract to
purchase this seller assisted marketing plan, you should check with
the Attorney General to determine the current status of the trust
account."
(e) A copy of a recent, not more than 12 months old, financial
statement of the seller, together with a statement of any material
changes in the financial condition of the seller from the date
thereof. That financial statement shall either be audited or be under
penalty of perjury signed by one of the seller's officers,
directors, trustees or general or limited partners. The declaration
under penalty of perjury shall indicate that to the best of the
signatory's knowledge and belief the information in the financial
statement is true and accurate; the date of signature and the
location where signed shall also be indicated. Provided, however,
that where a seller is a subsidiary of another corporation which is
permitted by generally accepted accounting standards to prepare
financial statements on a consolidated basis, the above information
may be submitted in the same manner for the parent if the
corresponding financial statement of the seller is also provided and
the parent absolutely and irrevocably has agreed to guarantee all
obligations of the seller.
(f) An unexecuted copy of the entire seller assisted marketing
plan contract.
(g) For purposes of this section, "seller's owners" means any
individual who holds an equity interest of at least 10 percent in the
seller.
SEC. 14. Section 703.130 of the Code of Civil Procedure is amended
to read:
703.130. Pursuant to the authority of paragraph (1)
(2) of subsection (b) of Section 522 of Title 11
of the United States Code, the exemptions set forth in subsection
(d) of Section 522 of Title 11 of the United States Code (Bankruptcy)
are not authorized in this state.
SEC. 15. Section 1400 of the Corporations Code is amended to read:
1400. (a) Any domestic corporation with respect to which a
proceeding has been initiated under any applicable statute of the
United States, as now existing or hereafter enacted, relating to
reorganizations or arrangements of corporations,
has full power and authority to put into effect and carry out any
plan of reorganization or arrangement and the
orders of the court or judge entered in such proceeding and may take
any proceeding and do any act provided in the plan or directed by
such orders, without futher further
action by its board or shareholders. Such power and authority may be
exercised and such proceedings and acts may be taken, as may be
directed by such orders, by the trustee or trustees of such
corporation appointed in the reorganization or arrangement
proceeding (or a majority thereof), or if none is appointed
and acting, by officers of the corporation designated or a master or
other representative appointed by the court or judge, with like
effect as if exercised and taken by unanimous action of the board and
shareholders of the corporation.
(b) Such corporation may, in the manner provided in subdivision
(a), but without limiting the generality or effect of subdivision
(a), alter, amend or repeal its bylaws; constitute or reconstitute
its board and name, constitute or appoint directors and officers in
place of or in addition to all or some of the directors or officers
then in office; amend its articles; make any change in its capital
stock; make any other amendment, change, alteration or provision
authorized by this division; be dissolved, transfer all or part of
its assets or merge as permitted by this division, in which case,
however, no shareholder shall have any statutory dissenter's rights;
change the location of its principal executive office or remove or
appoint an agent to receive service of process; authorize and fix the
terms, manner and conditions of the issuance of bonds, debentures or
other obligations,
whether or not convertible into shares of any class or bearing
warrants or rights to purchase or subscribe to shares of any class;
or lease its property and franchises to any corporation, if permitted
by law.
SEC. 16. Section 1401 of the Corporations Code is amended to read:
1401. (a) A certificate of any amendment, change or alteration or
of dissolution or any agreement of merger made by such corporation
pursuant to Section 1400 and executed as provided in subdivision (b),
shall be filed and shall thereupon become effective in accordance
with its terms and the provisions of this chapter.
(b) Such certificate, agreement of merger or other instrument
shall be signed and verified, as may be directed by such orders of
the court or judge, by the trustee or trustees appointed in the
reorganization or arrangement proceeding (or a
majority thereof) or, if none is appointed and acting, by officers of
the corporation designated or by a master or other representative
appointed by the court or judge, and shall state that provision for
the making of such certificate, agreement or instrument is contained
in an order, identifying the same, of a court or judge having
jurisdiction of a proceeding under a statute of the United States for
the reorganization or arrangement of such
corporation.
SEC. 17. Section 1402 of the Corporations Code is amended to read:
1402. The provisions of this chapter shall cease to apply to a
corporation upon the entry of a final decree in the reorganization
or arrangement proceeding closing the case and
discharging the trustee or trustees, if any, whether or not
jurisdiction may be retained thereafter by the court for limited
purposes which do not relate to the consummation of the plan.
SEC. 18. Section 1403 of the Corporations Code is amended to read:
1403. For filing any certificate, agreement or other paper
pursuant to this chapter there shall be paid to the Secretary of
State the same fees as are payable by corporations not in
reorganization or arrangement proceedings upon the
filing of like certificates, agreements or other papers.
SEC. 19. Section 6110 of the Corporations Code is amended to read:
6110. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or
arrangements of corporations, shall be governed by the
provisions of Chapter 14 (commencing with Section 1400) of Division 1
of Title 1, and for this purpose the reference in Chapter 14 to
"shareholders" shall be deemed to be a reference to members and the
reference to "this division" shall be deemed to be a reference to
this part.
SEC. 20. Section 6610 of the Corporations Code is amended to read:
6610. (a) Any corporation may elect voluntarily to wind up and
dissolve (1) by approval of a majority of all members (Section 5033)
or (2) by approval of the board and approval of the members (Section
5034).
(b) Any corporation which comes within one of the following
descriptions may elect by approval of the board to wind up and
dissolve:
(1) A corporation which has been adjudicated a bankrupt
the subject of an order for relief in bankruptcy
.
(2) A corporation which has disposed of all of its assets and has
not conducted any activity for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
(3) A corporation which has no members.
(4) A corporation which is required to dissolve under provisions
of its articles adopted pursuant to subdivision (a), paragraph (2),
clause (i), of Section 5132.
SEC. 21. Section 8110 of the Corporations Code is amended to read:
8110. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or
arrangements of corporations, shall be governed by the
provisions of Chapter 14 (commencing with Section 1400) of Division 1
of Title 1, and for this purpose the reference in Chapter 14 to
"shareholders" shall be deemed to be a reference to members and the
reference to "this division" shall be deemed to be a reference to
this part.
SEC. 22. Section 8610 of the Corporations Code is amended to read:
8610. (a) Any corporation may elect voluntarily to wind up and
dissolve (1) by approval of a majority of all members (Section 5033),
or (2) by approval of the board and approval of the members (Section
5034).
(b) Any corporation which comes within one of the following
descriptions may elect by approval of the board to wind up and
dissolve:
(1) A corporation which has been adjudicated as bankrupt
the subject of an order for relief in bankruptcy
.
(2) A corporation which has disposed of all of its assets and has
not conducted any activity for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
(3) A corporation which has no members.
(4) A corporation which is required to dissolve under provisions
of its articles adopted pursuant to subdivision (a), paragraph (4),
clause (i) of Section 7132.
SEC. 23. Section 9650 of the Corporations Code is amended to read:
9650. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or
arrangements of corporations, shall be governed by the
provisions of Chapter 14 (commencing with Section 1400) of Division 1
of Title 1, and for this purpose the reference in Chapter 14 to
"shareholders" shall be deemed to be a reference to members and the
reference to "this division" shall be deemed to be a reference to
this part.
SEC. 24. Section 9680 of the Corporations Code is amended to read:
9680. (a) Chapters 16 (commencing with Section 6610) and 17
(commencing with Section 6710) of Part 2 apply to religious
corporations except for Sections 6610, 6614, 6710, 6711 and 6716.
(b) (1) Any corporation may elect voluntarily to wind up and
dissolve (A) by approval of a majority of all the members (Section
5033) or (B) by approval of the board and approval of the members
(Section 5034).
(2) Any corporation which comes within one of the following
descriptions may elect by approval of the board to wind up and
dissolve:
(A) A corporation which has been adjudicated a bankrupt
the subject of an order for relief in bankruptcy
.
(B) A corporation which has disposed of all its assets and has not
conducted any activity for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
(C) A corporation which has no members.
(D) A corporation which is required to dissolve under provisions
of its articles adopted pursuant to subparagraph (i) of paragraph (2)
of subdivision (a) of Section 9132.
(c) If a corporation is in the process of voluntary winding up,
the superior court of the proper county, upon the petition of (1) the
corporation, or (2) the authorized number (Section 5036), or (3) the
Attorney General, or (4) three or more creditors, and upon such
notice to the corporation and members and creditors as the court may
order, may take jurisdiction over the voluntary winding up proceeding
if that appears necessary for the protection of the assets of the
corporation. The court, if it assumes jurisdiction, may make such
orders as to any and all matters concerning the winding up of the
affairs of the corporation and the protection of its creditors and
its assets as justice and equity may require. Chapter 15 (commencing
with Section 6510) (except Sections 6510 and 6511) shall apply to
those court proceedings.
(d) The powers and duties of the directors (or other persons
appointed by the court pursuant to Section 6515) and officers after
commencement of a dissolution proceeding include, but are not limited
to, the following acts in the name and on behalf of the corporation:
(1) To elect officers and to employ agents and attorneys to
liquidate or wind up its affairs.
(2) To continue the conduct of the affairs of the corporation
insofar as necessary for the disposal or winding up thereof.
(3) To carry out contracts and collect, pay, compromise, and
settle debts and claims for or against the corporation.
(4) To defend suits brought against the corporation.
(5) To sue, in the name of the corporation, for all sums due or
owing to the corporation or to recover any of its property.
(6) To collect any amounts remaining unpaid on memberships or to
recover unlawful distributions.
(7) Subject to the provisions of Section 9142, to sell at public
or private sale, exchange, convey, or otherwise dispose of all or any
part of the assets of the corporation in an amount deemed reasonable
by the board without compliance with Section 9631, and to execute
bills of sale and deeds of conveyance in the name of the corporation.
(8) In general, to make contracts and to do any and all things in
the name of the corporation which may be proper or convenient for the
purposes of winding up, settling and liquidating the affairs of the
corporation.
(e) After complying with Section 6713:
(1) Except as provided in Section 6715, all of a corporation's
assets shall be disposed of on dissolution in conformity with its
articles or bylaws subject to complying with the provisions of any
trust under which such assets are held.
(2) Except as provided in subdivision (3), the disposition
required in subdivision (1) shall be made by decree of the superior
court of the proper county. The decree shall be made upon petition
therefor, upon 30 days' notice to the Attorney General, by any person
concerned in the dissolution.
(3) The disposition required in subdivision (1) may be made
without the decree of the superior court, subject to the rights of
persons concerned in the dissolution, if the Attorney General makes a
written waiver of objections to the disposition.
(f) A vacancy on the board may be filled during a winding up
proceeding in the manner provided in Section 9224.
(g) Chapter 15 (commencing with Section 6510) does not apply to
religious corporations except to the extent its provisions apply
under subdivision (d) of Section 6617, subdivision (c) of Section
6719, or subdivision (c) or (d) of this section.
SEC. 25. Section 12560 of the Corporations Code is amended to
read:
12560. Any proceeding, initiated with respect to a corporation,
under any applicable statute of the United States, as now existing or
hereafter enacted, relating to reorganizations or
arrangements of corporations, shall be governed by the
provisions of Chapter 14 (commencing with Section 1400) of Division 1
of Title 1, and for this purpose the reference in Chapter 14 to
"shareholders" shall be deemed to be a reference to members and the
reference to "this division" shall be deemed to be a reference to
this part.
SEC. 26. Section 12630 of the Corporations Code is amended to
read:
12630. (a) Any corporation may elect voluntarily to wind up and
dissolve (1) by approval of a majority of all members (Section 12223)
or (2) by approval of the board and approval of the members (Section
12224).
(b) Any corporation which comes within one of the following
descriptions may elect by approval of the board to wind up and
dissolve:
(1) A corporation which has been adjudicated as bankrupt
the subject of an order for relief in bankruptcy
.
(2) A corporation which has disposed of all of its assets and has
not conducted any activity for a period of five years immediately
preceding the adoption of the resolution electing to dissolve the
corporation.
(3) A corporation which has no members.
SEC. 27. Section 15642 of the Corporations Code is amended to
read:
15642. A person ceases to be a general partner of a limited
partnership upon the happening of any of the following events:
(a) The general partner withdraws from the limited partnership as
provided in Section 15662.
(b) The general partner is removed as a general partner.
(c) Unless otherwise provided in the partnership agreement, an
order for relief against the general partner is entered under Chapter
7 of the federal bankruptcy law, or the general partner: (1) makes a
general assignment for the benefit of creditors, (2) files a
voluntary petition under the federal bankruptcy law, (3) files a
petition or answer seeking for that partner any reorganization,
arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law, or
regulation, (4) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed
against that partner in any proceeding of this nature, or (5) seeks,
consents to, or acquiesces in the appointment of a trustee, receiver,
or liquidator of the general partner or of all or any substantial
part of that partner's properties.
(d) Unless otherwise provided in the partnership agreement, 60
days after the commencement of any proceeding against the general
partner seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any statute, law, or regulation, the proceeding has not been
dismissed, or if within 60 days after the appointment without that
partner's consent or acquiescence of a trustee, receiver, or
liquidator of the general partner or of all or any substantial part
of that partner's properties, the appointment is not vacated or
stayed, or within 60 days after the expiration of any such stay, the
appointment is not vacated.
(e) In the case of a general partner who is an individual, either
of the following:
(1) The death of that partner.
(2) The entry by a court of competent jurisdiction of an order
adjudicating the partner incompetent to manage the general partner's
estate.
(f) Unless otherwise provided in the partnership agreement, in the
case of a general partner who is acting as a general partner by
virtue of being a trustee of a trust, the termination of the trust
(but not merely the substitution of a new trustee, in which case the
new trustee automatically becomes the new general partner).
(g) Unless otherwise provided in the partnership agreement, in the
case of a general partner that is a separate partnership, the
dissolution of the separate partnership.
(h) In the case of a general partner that is a corporation, the
filing of a certificate of dissolution, or its equivalent, for the
corporation.
(i) In the case of a general partner that is an estate, the
distribution by the fiduciary of the estate's entire interest in the
limited partnership.
(j) In the case of a general partner that is a limited liability
company, the filing of a certificate of dissolution or its equivalent
for the limited liability company.
Notwithstanding the provisions of this section, a person who
ceases to be a general partner of a limited partnership, shall be
deemed to be acting as a general partner with respect to a third
party doing business with the limited partnership, until an amended
certificate of limited partnership is filed in accordance with
Section 15622.
SEC. 28. Section 23005 of the Corporations Code is amended to
read:
23005. The provisions of Sections 1400 and 1402 governing
bankruptcy reorganizations and arrangements for
corporations also apply to real estate investment trusts. For that
purpose where the term "corporation" is used in such sections it
shall also include the term "real estate investment trust", the terms
"director" or "board of directors" shall include "trustee" or "board
of trustees", the term "articles" shall include "declaration of
trust" and the term "capital stock" shall include "shares of
beneficial interest."
SEC. 29. Section 25103 of the Corporations Code is amended to
read:
25103. The following transactions are exempted from the
provisions of Section 25110 and Section 25120:
(a) Any negotiations or agreements prior to general solicitation
of approval by the holders of equity securities, and subject to that
approval, of (1) a change in the rights, preferences, privileges, or
restrictions of or on outstanding securities, (2) a merger,
consolidation, or sale of assets in consideration of the issuance of
securities, or (3) an entity conversion transaction.
(b) Any change in the rights, preferences, privileges, or
restrictions of or on outstanding securities or any entity conversion
transaction, unless the holders of at least 25 percent of the
outstanding shares or units of any class of securities that will be
directly or indirectly affected substantially and adversely by that
change or transaction have addresses in this state according to the
records of the issuer.
(c) Any exchange incident to a merger, consolidation, or sale of
assets in consideration of the issuance of securities of another
issuer, unless at least 25 percent of the outstanding securities of
any class, any holders of which are to receive securities in the
exchange, are held by persons who have addresses in this state
according to the records of the issuer of which they are holders.
This exemption is not available for a rollup transaction as defined
by Section 25014.6. The exemption is also not available for a
transaction excluded from the definition of rollup transaction by
virtue of paragraph (5) or (6) of subdivision (b) of Section 25014.6
if the transaction is one of a series of transactions that directly
or indirectly through acquisition or otherwise involves the
combination or reorganization of one or more rollup participants.
(d) For the purposes of subdivision (b) and subdivision (c) of
this section, (1) any securities held to the knowledge of the issuer
in the names of broker-dealers or nominees of broker-dealers and (2)
any securities controlled by any one person who controls directly or
indirectly 50 percent or more of the outstanding securities of that
class shall not be considered outstanding. The determination of
whether 25 percent of the outstanding securities are held by persons
having addresses in this state, for the purposes of subdivision (b)
and subdivision (c) of this section, shall be made as of the record
date for the determination of the security holders entitled to vote
on or consent to the action, if approval of those holders is
required, or, if not, as of the date of directors' approval of that
action.
(e) Any change (other than a stock split or reverse stock split)
in the rights, preferences, privileges, or restrictions of or on
outstanding equity securities, except the following if they
materially and adversely affect any class of equity securities: (1)
to add, change, or delete assessment provisions; (2) to change the
rights to dividends thereon; (3) to change the redemption provisions;
(4) to make them redeemable; (5) to change the amount payable on
liquidation; (6) to change, add, or delete conversion rights; (7) to
change, add, or delete voting rights; (8) to change, add, or delete
preemptive rights; (9) to change, add, or delete sinking fund
provisions; (10) to rearrange the relative priorities of outstanding
equity securities; (11) to impose, change, or delete restrictions
upon the transfer of equity securities in the organizational
documents for the entity; (12) to change the right of holders of
equity securities with respect to the calling of special meetings of
holders of equity securities; and (13) to change, add, or delete any
rights, preferences, privileges, or restrictions of, or on, the
outstanding shares or memberships of a mutual water company or other
corporation or entity organized primarily to provide services or
facilities to its shareholders or members. Changes in the rights,
preferences, privileges, or restrictions of or on outstanding equity
securities do not materially and adversely affect any class of
holders of equity securities within the meaning of this subdivision
if they arise from (i) the addition to articles of incorporation of
the provisions described or referred to in subdivision (a) of Section
158 upon the conversion of an existing corporation to a close
corporation pursuant to subdivision (b) of Section 158, (ii) the
deletion from the articles of incorporation of the provisions
described or referred to in subdivision (a) of Section 158 upon the
voluntary termination of close corporation status pursuant to
subdivisions (c) and (e) of Section 158, (iii) the involuntary
cessation of close corporation status pursuant to subdivision (e) of
Section 158, or (iv) the termination of a shareholders' agreement
pursuant to subdivision (b) of Section 300.
(f) Any stock split or reverse stock split, except the following:
(1) any stock split or reverse stock split if the corporation has
more than one class of shares outstanding and the split would have a
material effect on the proportionate interests of the respective
classes as to voting, dividends, or distributions; (2) any stock
split of a stock that is traded in the market and its market price as
of the date of directors' approval of the stock split adjusted to
give effect to the split was less than two dollars ($2) per share;
and (3) any reverse stock split if the corporation has the option of
paying cash for any fractional shares created by the reverse split
and as a result of that action the proportionate interests of the
shareholders would be substantially altered. Any shares issued upon a
stock split or reverse stock split exempted by this subdivision
shall be subject to any conditions previously imposed by the
commissioner applicable to the shares with respect to which they are
issued.
(g) Any change in the rights of outstanding debt securities,
except the following if they substantially and adversely affect any
class of securities: (1) to change the rights to interest thereon;
(2) to change their redemption provisions; (3) to make them
redeemable; (4) to extend the maturity thereof or to change the
amount payable thereon at maturity; (5) to change their voting
rights; (6) to change their conversion rights; (7) to change sinking
fund provisions; and (8) to make them subordinate to other
indebtedness.
(h) Any exchange incident to a merger, consolidation, or sale of
assets, other than a rollup transaction (as defined in Section
25014.6), in consideration of the issuance of equity securities of
another entity or any entity conversion transaction that meets the
following conditions:
(1) The exchange incident to a merger, consolidation, or sale of
assets or the entity conversion transaction, had the exchange
transaction involved the issuance of a security in a transaction
subject to the provisions of Section 25110, would have been exempt
from qualification by subdivision (f) of Section 25102, without
giving effect to paragraph (3) thereof, and either of the following
is applicable:
(A) (i) Not less than 75 percent of the outstanding equity
securities of each constituent or converting entity entitled to vote
on the proposed transaction voted in favor of the transaction, (ii)
not more than 10 percent of the outstanding equity securities of each
constituent or converting entity entitled to vote on the proposed
transaction voted against the transaction, and (iii) each constituent
or converting entity whose security holders are entitled to vote on
the proposed transaction is subject to a state statute that has
provisions for dissenters' rights for holders of equity securities
entitled to vote on the proposed transaction that do not vote in
favor of or voted against the transaction.
(B) (i) The transaction is solely for the purposes of changing the
issuer's state of incorporation or organization, or form of
organization, (ii) all the securities of the same class or series,
unless all the security holders of the class or series consent, are
treated equally, and (iii) the holders of nonredeemable voting equity
securities receive nonredeemable voting equity securities.
(2) The commissioner may, by rule, require the acquiring or
surviving entity to file a notice of transaction under this section.
However, the failure to file the notice or the failure to file the
notice within the time specified by the rule of the commissioner
shall not affect the availability of this exemption. An acquiring or
surviving entity that fails to file the notice as provided by rule of
the commissioner shall, within 15 business days after demand by the
commissioner, file the notice and pay to the commissioner a fee equal
to the fee payable had the transaction been qualified under Section
25110 or 25120.
(i) Any exchange of securities in connection with any merger or
consolidation or sale of corporate assets in consideration wholly or
in part of the issuance of securities or any entity conversion
transaction under, or pursuant to, a plan of reorganization
or arrangement that pursuant to the provisions of the
United States Bankruptcy Code (Title 11 of the United States Code)
has been confirmed or is subject to confirmation by the decree or
order of a court of competent jurisdiction.
SEC. 30. Section 25248 of the Corporations Code is amended to
read:
25248. (a) If the commissioner finds, as a result of any
examination or investigation or from any report made to the
commissioner, that any person subject to this part, other than an
investment adviser subject to Section 25230.1, is in an insolvent
condition, or is conducting a securities, broker-dealer, or
investment advisory business in such an unsafe, injurious, or
unauthorized manner as to render further operations hazardous to the
public or to customers, the commissioner may, by an order addressed
to and served by registered or certified mail or by personal service
on that person and on any other person having in his or her
possession or control any client funds, trust funds, or other
property deposited with that person, direct discontinuance of the
disbursement of client or trust funds by the parties or any of them,
the receipt of client or trust funds, or other business operations.
No person having in his or her possession any of these funds shall be
liable for failure to comply with the order unless he or she has
received written notice of the order. Subject to subdivision (b), the
order shall remain in effect until set aside by the commissioner, in
whole or in part, the person has been adjudged bankrupt
is the subject of an order for relief in bankruptcy
, or pursuant to Section 25253, the commissioner has assumed
possession of the broker-dealer or investment adviser.
(b) Within 15 days from the date of an
order pursuant to subdivision (a), the person may request a hearing
under the Administrative Procedure Act (Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code). Upon receipt of a request, the matter shall be set for hearing
to commence within 30 days after that receipt unless the person
subject to this division consents to a later date. If no hearing is
requested within 15 days after the mailing or service of the notice
and none is ordered by the commissioner, the failure to request a
hearing shall constitute a waiver of the right to a hearing. Neither
the request for a hearing nor the hearing itself shall stay the order
issued by the commissioner under subdivision (a).
SEC. 31. Section 28710 of the Corporations Code is amended to
read:
28710. The commissioner may issue an order suspending or revoking
the license of a licensee, if, after notice and a hearing, the
commissioner finds any of the following:
(a) That the licensee or any controlling person or affiliate of
the licensee has violated any provision of this division or of any
regulation or order issued under this division or any provision of
any other applicable law.
(b) That the licensee is conducting its business in an unsafe and
unsound manner.
(c) That the licensee is in a condition that it is unsafe or
unsound for it to transact business.
(d) That the licensee has ceased to transact business as a capital
access company.
(e) That the licensee is insolvent.
(f) That the licensee has suspended payment of its obligations,
has made an assignment for the benefit of its creditors, or has
admitted in writing its inability to pay its debts as they become
due.
(g) That the licensee has applied for an adjudication of
bankruptcy, reorganization, arrangement, or other relief under any
is the subject of an order for relief in bankruptcy or
has sought other similar relief under any other bankruptcy,
reorganization, insolvency, or moratorium law, or that any person has
applied for any of that relief under any of those laws against any
licensee and the licensee has by any affirmative act approved of or
consented to the action or the relief has been granted.
(h) That any fact or condition exists which, if it had existed at
the time when any licensee applied for its license, would have been
grounds for denying the application.
SEC. 32. Section 867 of the Financial Code is amended to read:
867. (a) Funds deposited in an account at a depository
institution shall be available on the second business day after the
business day on which those funds are deposited in the case of a
cashier's check, certified check, teller's check, or depository check
subject to the following:
(1) The check is endorsed only by the person to whom it was
issued.
(2) The check is deposited in a receiving depository institution
that is staffed by individuals employed by that institution.
(3) The check is deposited with a special deposit slip that
indicates it is a cashier's check, certified check, teller's check,
or depository check, as the case may be.
(4) The check is deposited into an account in the name of a
customer that has maintained any account with the receiving
depository institution for a period of 60 days or more.
(5) The face amount of the check is for five thousand dollars
($5,000) or less.
In the case of funds deposited on any business day in an account
at a depository institution by depository checks, the aggregate
amount of which exceeds five thousand dollars ($5,000), this
subdivision shall apply only with respect to the first five thousand
dollars ($5,000) of the aggregate amount.
(b) Subdivision (a) does not apply to a depository check if the
receiving depository institution reasonably believes that the check
is uncollectible from the originating depository institution. For
purposes of this subdivision, "reasonable cause to believe" requires
the existence of facts that would cause a well-grounded belief in the
mind of a reasonable person. These reasons shall include, but not be
limited to, a belief that (1) the drawer or drawee of the depository
check has been, or will imminently be, adjudicated a
bankrupt the subject of an order for relief in
bankruptcy or placed in receivership or (2) the depository
check may be involved in a fraud or in a scheme commonly known as
"kiting." In these situations, the depository institution electing to
proceed under this subdivision shall so notify the drawer and drawee
no later than the close of the next business day following deposit
of the depository check.
(c) For purposes of this section, the following terms have the
following meanings:
(1) "Account" means any demand deposit account and any other
similar transaction account at a depository institution.
(2) "Business day" means any day other than a Saturday, Sunday, or
legal holiday.
(3) "Cashier's check" means any check that is subject to the
following:
(A) The check is drawn on a depository institution.
(B) The check is signed by an officer or employee of the
depository institution.
(C) The check is a direct obligation of the depository
institution.
(4) "Certified check" means any check with respect to which a
depository institution certifies the following:
(A) That the signature on the check is genuine.
(B) The depository institution has set aside funds that are equal
to the amount of the check and will be used only to pay that check.
(5) "Depository check" means any cashier's check, certified check,
teller's check, and any other functionally equivalent instrument, as
determined by the Board of Governors of the Federal Reserve System
or the commissioner.
(6) "Depository institution" has the meaning given in clauses (i)
to (vi), inclusive, of Section 19(b)(1)(A) of the Federal Reserve
Act.
(7) "Teller's check" means any check issued by a depository
institution and drawn on another depository institution.
(d) Except for the specific circumstances and checks described in
this section, this section is not intended to restrict or preempt the
regulatory authority of the commissioner.
(e) In the event of a suspension or modification of any similar
provisions in the federal Expedited Funds Availability Act, the
effect of this section shall be similarly suspended or modified.
SEC. 33. Section 1203 of the Financial Code is amended to read:
1203. A commercial bank may hypothecate its assets in any manner
provided by law to secure the deposits of moneys of the United
States, of postal savings funds, of bankrupt
estates in bankruptcy cases , of the State of California,
or of any political subdivision, public corporation, or district of
the State of California. With the prior approval of the commissioner
a bank may hypothecate its assets to secure moneys payable to other
states.
SEC. 34. Section 1781 of the Financial Code is amended to read:
1781. If, after notice and a hearing, the commissioner finds any
of the following with respect to a foreign (other nation) bank that
is licensed to maintain an office, the commissioner may issue an
order suspending or revoking the license of the bank:
(a) That the bank has violated any provision of this division or
of any regulation or order issued under this division or any
provision of any other applicable law, regulation, or order;
(b) That the bank, in case it is licensed to transact business in
this state, is transacting the business in an unsafe or unsound
manner or, in any case, is transacting business elsewhere in an
unsafe or unsound manner;
(c) That the bank is in unsafe or unsound condition;
(d) That the bank has ceased to operate its office;
(e) That the bank is insolvent in that it has ceased to pay its
debts in the ordinary course of business, it cannot pay its debts as
they become due, or its liabilities exceed its assets;
(f) That the bank has suspended payment of its obligations, has
made an assignment for the benefit of its creditors, or has admitted
in writing its inability to pay its debts as they become due;
(g) That the bank has applied for an adjudication of
bankruptcy, reorganization, arrangement, or is the
subject of an order for relief in bankruptcy or has sought
other relief under any bankruptcy, reorganization, insolvency, or
moratorium law, or that any person has applied for any such relief
under any such law against the bank and the bank has by any
affirmative act approved of or consented to the action or the relief
has been granted;
(h) That a receiver, liquidator, or conservator has been appointed
for the bank or that any proceeding for such an appointment or any
similar proceeding has been initiated in the place where the bank is
domiciled;
(i) That the existence of the bank or the authority of the bank to
transact banking business under the laws of the place where the bank
is domiciled has been suspended or terminated; or
(j) That any fact or condition exists that, if it had existed at
the time when the bank applied for its license to transact business
in this state, would have been grounds for denying the application.
SEC. 35. Section 1889 of the Financial Code is amended to read:
1889. If, after notice and a hearing, the commissioner finds:
(a) That any licensee has violated any provision of this chapter
or of any regulation or order issued under this chapter or any
provision of any other applicable law;
(b) That any licensee is conducting its business in an unsafe or
unsound manner;
(c) That any licensee is in such condition that it is unsafe or
unsound for it to transact the business of selling in this state
payment instruments issued by it;
(d) That any licensee has ceased to transact the business of
selling in this state payment instruments issued by it;
(e) That any licensee is insolvent;
(f) That any licensee has suspended payment of its obligations,
has made an assignment for the benefit of its creditors, or has
admitted in writing its inability to pay its debts as they become
due;
(g) That any licensee has applied for an adjudication of
bankruptcy, reorganization, arrangement, or is the
subject of an order for relief in bankruptcy or has sought
other relief under any bankruptcy, reorganization, insolvency, or
moratorium law, or that any person has applied for any such relief
under any such law against any licensee and such licensee has by any
affirmative act approved of or consented to such action or such
relief has been granted; or
(h) That any fact or condition exists which, if it had existed at
the time when any licensee applied for its license, would have been
grounds for denying such application:
The commissioner may issue an order suspending or revoking the
license of such licensee.
SEC. 36. Section 6152 of the Financial Code is amended to read:
6152. (a) A director shall automatically cease to be a director
upon being adjudicated as bankrupt becoming
the subject of an order for relief in bankruptcy or upon
conviction of a criminal offense involving dishonesty or a breach of
trust.
(b) In the case of an association which converts from a mutual
association to a stock association, for a period of up to five years
from the date of the conversion, a director may not otherwise be
removed except for cause on the affirmative vote of a majority of the
votes of members or stockholders eligible to be cast at a legal
meeting.
SEC. 37. Section 12307.2 of the Financial Code is amended to read:
12307.2. If the commissioner finds as a result of an examination
or report that a licensee is insolvent or conducting business in such
an unsafe or injurious manner as to render its further operations
hazardous to the public, he may forthwith by an order addressed to
and served on the licensee by registered mail and on any other person
having funds of the licensee or its customers in his possession,
direct discontinuance of the disbursement of such funds and the
further conduct of business by the licensee. The order shall be
conditioned to remain in effect unless the commissioner fails to hold
a hearing within 15 days after receipt of a written request by the
licensee, until set aside by the commissioner in whole or in part,
until the licensee has been adjudged bankrupt
is the subject of an order for relief in bankruptcy , or
pursuant to a petition filed by the commissioner or other interested
person a receiver has been appointed by a court of competent
jurisdiction.
SEC. 38. Section 16202 of the Financial Code is amended to read:
16202. If, after notice and hearing, the commissioner finds any
of the following with respect to a foreign (other state) credit union
that is licensed to maintain an office in this state, the
commissioner may issue an order suspending or revoking the license of
the foreign (other state) credit union:
(a) That the foreign (other state) credit union has violated a
provision of this division or of any regulation or order issued under
this division or a provision of any other applicable law,
regulation, or order.
(b) That the foreign (other state) credit union is transacting the
business in this state or elsewhere in an unsafe or unsound manner.
(c) That the foreign (other state) credit union is in unsafe or
unsound condition.
(d) That the foreign (other state) credit union has ceased to
operate its office.
(e) That the foreign (other state) credit union is insolvent in
that it has ceased to pay its debts in the ordinary course of
business, it cannot pay its debts as they become due, or its
liabilities, including share accounts and certificates for funds,
exceed its assets.
(f) That the foreign (other state) credit union has suspended
payment of its obligations, has made an assignment for the benefit of
its creditors, or has admitted in writing its inability to pay its
debts as they become due.
(g) That the foreign (other state) credit union has
applied for an adjudication of bankruptcy, reorganization,
arrangement, or is the subject of an order for relief
in bankruptcy or has sought other relief under any bankruptcy,
reorganization, insolvency, or moratorium law, or that any person has
applied for such relief under any such law against the foreign
(other state) credit union, and the foreign (other state) credit
union has by any affirmative act approved of or consented to the
action or the relief has been granted.
(h) That a receiver, liquidator, or conservator has been appointed
for the foreign (other state) credit union or that any proceeding
for an appointment or any similar proceeding has been initiated in
the home state of the foreign (other state) credit union.
(i) That the existence of the foreign (other state) credit union
or the authority of the foreign (other state) credit union to
transact banking business under the laws of the home state of the
foreign (other state) credit union has been suspended or terminated.
(j) That any fact or condition exists that, if it had existed at
the time when the foreign (other state) credit union applied for
approval to transact business in this state, would have been grounds
for denying the application.
SEC. 39. Section 16902 of the Financial Code is amended to read:
16902. If, after notice and hearing, the commissioner finds any
of the following with respect to a foreign (other nation) credit
union that is licensed to maintain an office, the commissioner may
issue an order suspending or revoking the license of the foreign
(other nation) credit union.
(a) That the foreign (other nation) credit union has violated a
provision of this division or of any regulation or order issued under
this division or a provision of any other applicable law,
regulation, or order.
(b) That the foreign (other nation) credit union is transacting
the business in this state or elsewhere in an unsafe or unsound
manner.
(c) That the foreign (other nation) credit union is in unsafe or
unsound condition.
(d) That the foreign (other nation) credit union has ceased to
operate its office.
(e) That the foreign (other nation) credit union is insolvent in
that it has ceased to pay its debts in the ordinary course of
business, it cannot pay its debts as they become due, or its
liabilities exceed its assets.
(f) That the foreign (other nation) credit union has suspended
payment of its obligations, has made an assignment for the benefit of
its creditors, or has admitted in writing its inability to pay its
debts as they become due.
(g) That the foreign (other nation) credit union has
applied for an adjudication of bankruptcy, reorganization,
arrangement, or is the subject of an order for relief
in bankruptcy or has sought other relief under any bankruptcy,
reorganization, insolvency, or moratorium law, or that any person has
applied for such relief under any such law against the foreign
(other nation) credit union, and the foreign (other nation) credit
union has by any affirmative act approved of or consented to the
action or the relief has been granted.
(h) That a receiver, liquidator, or conservator has been appointed
for the foreign (other nation) credit union or that any proceeding
for an appointment or any similar proceeding has been initiated in
the home country of the foreign (other nation) credit union.
(i) That the existence of the foreign (other nation) credit union
or the authority of the foreign (other nation) credit union to
transact banking business under the laws of the home country of the
foreign (other nation) credit union has been suspended or terminated.
(j) That any fact or condition exists that, if it had existed at
the time when the foreign (other nation) credit union applied for
approval to transact business in this state, would have been grounds
for denying the application.
SEC. 40. Section 17415 of the Financial Code is amended to read:
17415. (a) If the commissioner, as a result of any examination or
from any report made to him or her, shall find that any person
subject to this division is in an insolvent condition, is conducting
escrow business in such an unsafe or injurious manner as to render
further operations hazardous to the public or to customers, has
failed to comply with the provisions of Section 17212.1 or 17414.1,
has permitted its tangible net worth to be lower than the minimum
required by law, has failed to maintain its liquid assets in excess
of current liabilities as set forth in Section 17210, or has failed
to comply with the bonding requirements of Chapter 2 (commencing with
Section 17200) of this division, the commissioner may, by an order
addressed to and served by registered or certified mail or by
personal service on such person and on any other person having in his
or her possession or control any escrowed funds, trust funds or
other property deposited in escrow with said person, direct
discontinuance of the disbursement of trust funds by the parties or
any of them, the receipt of trust funds, the delivery or recording of
documents received in escrow, or other business operations. No
person having in his or her possession any of these funds or
documents shall be liable for failure to comply with the order unless
he or she has received written notice of the order. Subject to
subdivision (b), the order shall remain in effect until set aside by
the commissioner in whole or in part, the person has been
adjudged bankrupt is the subject of an order for
relief in bankruptcy , or pursuant to Chapter 6 (commencing
with Section 17621) of this division the commissioner has assumed
possession of the escrow agent.
(b) Within 15 days from the date of an order pursuant to
subdivision (a), the person may request a hearing under the
Administrative Procedure Act, Chapter 5 (commencing with Section
11500) of Division 3 of Title 2 of the Government Code. Upon receipt
of a request, the matter shall be set for hearing to commence within
30 days after such receipt unless the person subject to this division
consents to a later date. If no hearing is requested within 15 days
after the mailing or service of such notice and none is ordered by
the commissioner, the failure to request a hearing shall constitute a
waiver of the right to a hearing. Neither the request for a hearing
nor the hearing itself shall stay the order issued by the
commissioner under subdivision (a).
SEC. 41. Section 18477 of the Financial Code is amended to read:
18477. "Thrift obligations" as used in this chapter include
principal invested in investment or thrift certificates however
evidenced, and unpaid interest thereon accrued as of the last
interest accrual date prior to the date the commissioner takes
possession of the property and business of a member or the date such
member is declared bankrupt the subject of an
order for relief in bankruptcy , whichever occurs sooner.
SEC. 42. Section 31709 of the Financial Code is amended to read:
31709. If, after notice and a hearing, the commissioner finds:
(a) That any licensee or any controlling person or affiliate of a
licensee has violated any provision of this division or of any
regulation or order issued under this division or any provision of
any other applicable law;
(b) That any licensee is conducting its business in an unsafe and
unsound manner;
(c) That any licensee is in such condition that it is unsafe or
unsound for it to transact business;
(d) That any licensee has ceased to transact business as a business
and industrial development corporation;
(e) That any licensee is insolvent;
(f) That any licensee has suspended payment of its obligations, has
made an assignment for the benefit of its creditors, or has admitted
in writing its inability to pay its debts as they become due;
(g) That any licensee has applied for an adjudication of
bankruptcy, reorganization, arrangement, or other is
the subject of an order for relief in bankruptcy or has sought
relief under any bankruptcy, reorganization, insolvency, or
moratorium law, or that any person has applied for any such relief
under any such law against any licensee and such licensee has by any
affirmative act approved of or consented to such action or such
relief has been granted; or
(h) That any fact or condition exists which, if it had existed at
the time when any licensee applied for its license, would have been
grounds for denying such application;
the commissioner may issue an order suspending or revoking the
license of such licensee.
SEC. 43. Section 34109 of the Financial Code is amended to read:
34109. If, after notice and a hearing, the commissioner finds:
(a) That any licensee has violated any provision of this division or
of any regulation or order issued under this division or any
provision of any other applicable law;
(b) That any licensee is conducting its business in an unsafe or
unsound manner;
(c) That any licensee is in such condition that it is unsafe or
unsound for it to transact the business of selling in this state
payment instruments issued by it;
(d) That any licensee has ceased to transact the business of selling
in this state payment instruments issued by it;
(e) That any licensee is insolvent;
(f) That any licensee has suspended payment of its obligations, has
made an assignment for the benefit of its creditors, or has admitted
in writing its inability to pay its debts as they become due;
(g) That any licensee has applied for an adjudication of
bankruptcy, reorganization, arrangement, or is the
subject of an order for relief in bankruptcy or has sought
other relief under any bankruptcy, reorganization, insolvency, or
moratorium law, or that any person has applied for any such relief
under any such law against any licensee and such licensee has by any
affirmative act approved of or consented to such action or such
relief has been granted; or
(h) That any fact or condition exists which, if it had existed at
the time when any licensee applied for its license, would have been
grounds for denying such application:
The commissioner may issue an order suspending or revoking the
license of such licensee.
SEC. 44. Section 50319 of the Financial Code is amended to read:
50319. (a) If the commissioner, as a result of any examination or
from any report made to him or her, shall find that any person
subject to this division is in an insolvent condition, is conducting
business in an unsafe or injurious manner that renders further
operations hazardous to the public or to customers, has failed to
comply with the provision of Section 50317, has permitted its
tangible net worth to be lower than the minimum required by law, or
has failed to comply with the bonding requirements of Section 50205,
the commissioner may, by an order addressed to and served by
registered or certified mail, or by personal service on that person,
and on any other person having in his or her possession or control
any trust funds or other property deposited in escrow with that
person, direct discontinuance of the disbursement, in whole or in
part, of trust funds held by the licensee and order the establishment
of a separate trust account for all subsequent trust funds received
by the licensee. No person having in his or her possession any of
these funds or documents shall be liable for failure to comply with
the order unless he or she has received written notice of the order.
Subject to subdivision (b), the order shall remain in effect until
set aside by the commissioner, or the person has been
adjudged bankrupt is the subject of an order for
relief in bankruptcy .
(b) Within 15 days from the date of an order pursuant to
subdivision (a), the person may request a hearing under the
Administrative Procedure Act (Chapter 5 (commencing with Section
11500) of Part 2 of Division 3 of Title 2 of the Government Code).
Upon receiving a request, the matter shall be set for hearing to
commence within 30 days after the receipt unless the person subject
to this division consents to a later date. If no hearing is requested
within 15 days after the mailing or service of the notice and none
is ordered by the commissioner, the failure to request a hearing
shall constitute a waiver of the right to a hearing. Neither the
request for a hearing nor the hearing itself shall stay the order
issued by the commissioner under subdivision (a).
SEC. 45. Section 1058 of the Fish and Game Code is amended to
read:
1058. In case of an assignment for the
benefit of creditors, receivership, or bankruptcy, the state shall
have a preferred claim against the license agent
assignee , receiver, or trustee for all moneys owing the
state for the issuing of licenses, permits, reservations, tags, and
other entitlements as provided in this code and shall not be estopped
from asserting that claim by reason of the commingling of funds or
otherwise.
SEC. 46. Section 58503.1 of the Food and Agricultural Code is
amended to read:
58503.1. In order to qualify as a food bank, an organization
shall meet all of the following minimum standards:
(a) It shall have access to storage facilities and refrigeration
equipment for the purpose of collecting, receiving, handling,
storing, and distributing donated agricultural products.
(b) It shall be incorporated as a nonprofit tax exempt
organization and be eligible as a charitable organization under
paragraph (3) of subsection (c) of Section 501 of Title 11
Title 26 of the United States Code or shall be
affiliated with such an organization.
(c) It shall maintain records for the proper control of inventory.
(d) It shall demonstrate the availability of adequate liability
insurance to cover the activities conducted pursuant to this chapter.
(e) It shall show local support through funding sources, letters
of endorsement, and a board of directors reflective of the community
and population to be served.
SEC. 47. Section 65863.7 of the Government Code is amended to
read:
65863.7. (a) Prior to the conversion of a mobilehome park to
another use, except pursuant to the Subdivision Map Act (Division 2
(commencing with Section 66410) of Title 7), or prior to closure of a
mobilehome park or cessation of use of the land as a mobilehome
park, the person or entity proposing the change in use shall file a
report on the impact of the conversion, closure, or cessation of use
upon the displaced residents of the mobilehome park to be converted
or closed. In determining the impact of the conversion, closure, or
cessation of use on displaced mobilehome park residents, the report
shall address the availability of adequate replacement housing in
mobilehome parks and relocation costs.
(b) The person proposing the change in use shall provide a copy of
the report to a resident of each mobilehome in the mobilehome park
at least 15 days prior to the hearing, if any, on the impact report
by the advisory agency, or if there is no advisory agency, by the
legislative body.
(c) When the impact report is filed prior to the closure or
cessation of use, the person or entity proposing the change shall
provide a copy of the report to a resident of each mobilehome in the
mobilehome park at the same time as the notice of the change is
provided to the residents pursuant to paragraph (2) of subdivision
(g) of Section 798.56 of the Civil Code.
(d) When the impact report is filed prior to the closure or
cessation of use, the person or entity filing the report or park
resident may request, and shall have a right to, a hearing before the
legislative body on the sufficiency of the report.
(e) The legislative body, or its delegated advisory agency, shall
review the report, prior to any change of use, and may require, as a
condition of the change, the person or entity to take steps to
mitigate any adverse impact of the conversion, closure, or cessation
of use on the ability of displaced mobilehome park residents to find
adequate housing in a mobilehome park. The steps required to be taken
to mitigate shall not exceed the reasonable costs of relocation.
(f) If the closure or cessation of use of a mobilehome park
results from an adjudication of the entry of
an order for relief in bankruptcy, the provisions of this
section shall not be applicable.
(g) The legislative body may establish reasonable fees pursuant to
Section 66016 to cover any costs incurred by the local agency in
implementing this section and Section 65863.8. Those fees shall be
paid by the person or entity proposing the change in use.
(h) This section is applicable to charter cities.
(i) This section is applicable when the closure, cessation, or
change of use is the result of a decision by a local governmental
entity or planning agency not to renew a conditional use permit or
zoning variance under which the mobilehome park has operated, or as a
result of any other zoning or planning decision, action, or
inaction. In this case, the local governmental agency is the person
proposing the change in use for the purposes of preparing the impact
report required by this section and is required to take steps to
mitigate the adverse impact of the change as may be required in
subdivision (e).
(j) This section is applicable when the closure, cessation, or
change of use is the result of a decision by an enforcement agency,
as defined in Section 18207 of the Health and Safety Code, to suspend
the permit to operate the mobilehome park. In this case, the
mobilehome park owner is the person proposing the change in use for
purposes of preparing the impact report required by this section and
is required to take steps to mitigate the adverse impact of the
change as may be required in subdivision (e).
SEC. 48. Section 65863.12 of the Government Code is amended to
read:
65863.12. (a) Prior to the conversion of a floating home marina
to another use, except pursuant to the Subdivision Map Act (Division
2 (commencing with Section 66410) of Title 7), or prior to closure of
a floating home marina or cessation of use of the land as a floating
home marina, the person or entity proposing the change in use shall
file a report on the impact of the conversion, closure, or cessation
of use upon the displaced residents of the floating home marina to be
converted or closed. In determining the impact of the conversion,
closure, or cessation of use on displaced floating home marina
residents, the report shall address the availability of adequate
replacement housing in floating home marinas and relocation costs.
(b) The person proposing the change in use shall provide a copy of
the report to a resident of each floating home in the floating home
marina at least 15 days prior to the hearing, if any, on the impact
report by the advisory agency, or if there is no advisory agency, by
the legislative body.
(c) When the impact report is filed prior to the closure or
cessation of use, the person or entity proposing the change shall
provide a copy of the report to a resident of each floating home in
the floating home marina at the same time as the notice of the change
is provided to the residents pursuant to subdivision (f) of Section
800.71 of the Civil Code.
(d) When the impact report is filed prior to the closure or
cessation of use, the person or entity filing the report or any
resident may request, and shall have a right to, a hearing before the
legislative body on the sufficiency of the report.
(e) The legislative body, or its delegated advisory agency, shall
review the report, prior to any change of use, and may require, as a
condition of the change, the person or entity to take steps to
mitigate any adverse impact of the conversion, closure, or cessation
of use on the ability of displaced floating home marina residents to
find adequate housing in a floating home marina. The steps required
to be taken to mitigate shall not exceed the reasonable costs of
relocation.
(f) If the closure or cessation of use of a floating home marina
results from an adjudication of the entry of
an order for relief in bankruptcy, the provisions of this
section shall not be applicable.
(g) The legislative body may establish reasonable fees pursuant to
Chapter 13 (commencing with Section 54990) of Part 1 of Division 2
of Title 5 to cover any costs incurred by the local agency in
implementing this section. Those fees shall be paid by the person or
entity proposing the change in use.
(h) This section is applicable to charter cities.
(i) This section is applicable when the closure, cessation, or
change of use is the result of a decision by a local governmental
entity or planning agency not to renew a conditional use permit or
zoning variance under which the floating home marina has operated, or
as a result of any other zoning or planning decision, action, or
inaction. However, a state or local governmental agency is not
required to take steps to mitigate the adverse impact of the change
pursuant to subdivision (e).
(j) This section applies to any floating home marina as defined in
Section 800.4 of the Civil Code, and to any marina or harbor (1)
which is managed by a nonprofit organization, the property, assets,
and profits of which may not inure to any individual or group of
individuals, but only to another nonprofit organization; (2) the
rules and regulations of which are set by majority vote of the
berthholders thereof; and (3) which contains berths for fewer than 25
floating homes.
SEC. 49. Section 1358.4 of the Health and Safety Code is amended
to read:
1358.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) An individual enrollee who seeks to contract for health
coverage, in the case of an individual Medicare supplement contract.
(2) An enrollee who seeks to obtain health coverage through a
group, in the case of a group Medicare supplement contract.
(b) "Bankruptcy" means that situation in which a Medicare
Advantage organization that is not an issuer has filed, or has had
filed against it, a petition for declaration of
under federal bankruptcy law and has ceased
doing business in the state.
(c) "Continuous period of creditable coverage" means the period
during which an individual was covered by creditable coverage, if
during the period of the coverage the individual had no breaks in
coverage greater than 63 days.
(d) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(Medicare).
(C) Title XIX of the federal Social Security Act (medicaid), other
than coverage consisting solely of benefits under Section 1928 of
that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (Section 2504(e) of Title 22 of the United States Code).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Services Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage for accident-only or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract or are otherwise not an integral part of the plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(e) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(f) "Insolvency" means when an issuer, licensed to transact the
business of a health care service plan in this state, has had a final
order of liquidation entered against it with a finding of insolvency
by a court of competent jurisdiction in the issuer's state of
domicile.
(g) "Issuer" means a health care service plan delivering, or
issuing for delivery, Medicare supplement contracts in this state,
but does not include entities subject to Article 6 (commencing with
Section 10192.1) of Chapter 1 of Division 2 of the Insurance Code.
(h) "Medicare" means the federal Health Insurance for the Aged
Act, Title XVIII of the Social Security Amendments of 1965, as
amended.
(i) "Medicare Advantage Plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
(j) "Medicare supplement contract" means a group or individual
plan contract of hospital and medical service associations or health
care service plans, other than a contract issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C.A. Section 1395mm) or an issued contract under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that is advertised, marketed, or designed primarily as a
supplement to reimbursements under Medicare for the hospital,
medical, or surgical expenses of persons eligible for Medicare.
"Contract" means "Medicare supplement contract," unless the context
requires otherwise. "Medicare supplement contract" does not include a
Medicare Advantage plan established under Medicare Part C, an
outpatient prescription drug plan established under Medicare Part D,
or a health care prepayment plan that provides benefits pursuant to
an agreement under subparagraph (A) of paragraph (1) of subsection
(a) of Section 1833 of the Social Security Act.
(k) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
SEC. 50. Section 1793.62 of the Health and Safety Code is amended
to read:
1793.62. (a) The department, administrator, or any interested
person, upon due notice to the parties, may petition the court for an
order terminating the rehabilitation proceedings when the
rehabilitation efforts have not been successful, the continuing care
retirement community has been sold at foreclosure sale, the provider
is the subject of an order for relief in bankruptcy, has
been declared bankrupt, or the provider has otherwise been shown to
be unable to perform its obligations under the continuing care
contracts.
(b) The court shall not issue the order requested pursuant to
subdivision (a) unless all of the following have occurred:
(1) There has been a full hearing and the court has determined
that the provider is unable to perform its contractual obligations.
(2) The administrator has given the court a full and complete
report and financial accounting signed by the administrator as being
a full and complete report and accounting.
(3) The court has determined that the residents of the continuing
care retirement community have been protected to the extent possible
and has made such orders in this regard as the court deems proper.
SEC. 51. Section 129174.1 of the Health and Safety Code is amended
to read:
129174.1. In the event a an obligor on a
loan insured by the office has gone into
is the subject of an order for relief in bankruptcy and
that a plan has been proposed for adoption
confirmation , upon a certification by the office that the
insurance is in place and would be in place if the plan were
adopted confirmed , then the office shall have
the right to vote on whether to accept or
reject the plan on behalf of the holders of the loan insured by
the office.
SEC. 52. Section 25169.3 of the Health and Safety Code is amended
to read:
25169.3. Before hazardous waste is transported from an abandoned
site to another disposal site, all of the following conditions shall
be met:
(a) The department shall conduct such tests, or cause such tests
to be completed by the responsible party, as are necessary to
determine the general chemical and mineral composition of hazardous
waste that is being transported.
(b) The hazardous waste hauler shall prepare a transportation and
safety plan outlining safety features and procedures to be used by
the hauler to protect the public during the transportation process.
(c) The department shall review and approve the transportation and
safety plan.
(d) The hazardous waste hauler shall, under penalty of perjury,
certify that he or she will follow the provisions of the
transportation and safety plan.
(e) The department shall issue a certificate to the hazardous
waste hauler certifying that the transportation and safety plan has
been approved by the department. The person transporting the waste
shall have the certificate in his or her possession while
transporting the waste. Such certificate shall be shown upon demand
to any department official, officer of the California Highway Patrol,
or any local health officer.
The term "abandoned site", as used in this section, means an
inactive waste disposal, treatment, or storage facility which cannot,
with reasonable effort, be traced to a specific owner; a site whose
owner has been determined bankrupt is the
subject of an order for relief in bankruptcy, or who has not
taken corrective action on or before the date specified in an order
issued pursuant to Section 25187; or a location where hazardous waste
has been illegally disposed.
(f) The requirements of this section shall not apply when the
hazardous waste disposal is the direct result of an accidental spill
or the department determines that emergency action is needed to
protect the environment or the public health.
SEC. 53. Section 25245 of the Health and Safety Code is amended to
read:
25245. (a) The department shall adopt, and revise when
appropriate, standards and regulations which shall do both of the
following:
(1) Specify the financial assurances to be provided by the owner
or operator of a hazardous waste facility that are necessary to
respond adequately to damage claims arising out of the operation of
that type of facility and to provide for the cost of closure and
subsequent maintenance of the facility, including, but not limited
to, the monitoring of groundwater and other aspects of the
environment after closure. If the facility is required to obtain a
permit under the federal act, the financial assurance shall be a
trust fund, surety bond, letter of credit, insurance, or any other
mechanism authorized under the federal act and the regulations
adopted pursuant to the federal act. If the facility is not required
to obtain a permit under the federal act, the financial assurance may
include any other equivalent financial arrangement acceptable to the
department.
(2) Provide that every hazardous waste facility can be closed and
maintained for at least 30 years subsequent to its closure in a
manner that protects human health and the environment and minimizes
or eliminates the escape of hazardous waste constituents, leachate,
contaminated rainfall, and waste decomposition products to ground and
surface waters and to the atmosphere.
(b) In adopting regulations pursuant to subdivision (a), to carry
out the purposes of this chapter, the department may specify policy
or other contractual terms, conditions, or defenses which are
necessary or are unacceptable in establishing evidence of financial
responsibility.
(1) If an owner or operator is in bankruptcy ,
reorganization, or other arrangement pursuant to Title 11
of the United States Code, or where, with reasonable diligence,
jurisdiction in any state or federal court cannot be obtained over an
owner or operator likely to be solvent at the time of judgment, any
claim arising from conduct for which this section requires evidence
of financial responsibility may be asserted directly against the
guarantor who provided the evidence of financial responsibility.
(2) The total liability of any guarantor is limited to the
aggregate amount which the guarantor has provided as evidence of
financial responsibility to the owner or operator under this chapter.
(3) This subdivision does not limit any other state or federal
statutory, contractual, or common law liability of a guarantor to the
owner or operator, including, but not limited to, the liability of
the guarantor for bad faith in either negotiating or in failing to
negotiate the settlement of any claim.
(4) This subdivision does not diminish the liability of any person
under Section 107 or 111 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C. Secs.
9607 and 9611).
(5) For purposes of this subdivision, "guarantor" means any
person, other than the owner or operator, who provides evidence of
financial responsibility for an owner or operator under this section.
SEC. 54. Section 25359.5 of the Health and Safety Code is amended
to read:
25359.5. (a) After making a determination, based upon a
preliminary site assessment that there has been a release of a
hazardous substance on, under, or into the land on a site, the
department or a county health officer shall order the property owner
to secure the site if all of the following conditions apply to that
site:
(1) The release does not comply with the terms of a current permit
or interim status document or regulation of the department.
(2) The site poses a public health risk if human contact is made
with the hazardous waste or the surrounding contaminated area.
(3) There is a likelihood of human or domestic animal contact.
(b) The order to secure the site shall require, within five days
after receiving notification of the order, the posting of the site
with signs. The order shall also require, within five days after
receiving notification of the order, that the site be enclosed with a
fence, unless it is physically and economically infeasible or unless
the fencing is unnecessary because it will not alleviate the danger
to the public health.
(c) If fencing is ordered, the fences shall be maintained at the
site to prevent unauthorized persons from gaining access to the site.
The signs shall be maintained and shall meet all of the following
requirements:
(1) The signs shall be bilingual, appropriate to the local area,
and may include international symbols, as required by the department.
(2) The signs shall have lettering which is legible from a
distance of at least 25 feet.
(3) The signs shall read: "Caution: Hazardous Substance Area,
Unauthorized Persons Keep Out" and shall have the name and phone
number of the department or the county health officer that ordered
the posting.
(4) The signs shall be visible from the surrounding contaminated
area and posted at each route of entry into the site, including those
routes which are likely to be used by unauthorized persons, at
access roads leading to the site, and facing navigable waterways
where appropriate.
(5) The signs shall be of a material able to withstand the
elements.
(d) A property owner who fails to comply with an order of the
department or the county health officer is subject to a civil penalty
of up to twenty-five thousand dollars ($25,000). In determining the
amount of a civil penalty to be imposed, the court shall consider all
relevant circumstances, including, but not limited to, the economic
assets of the property owner and whether the property owner has acted
in good faith.
If the property owner fails to secure and post the site, the
department or the county health officer shall secure and post the
site pursuant to subdivision (b) within 30 days of the expiration of
the five-day period and shall seek recovery of the costs of that
securing and posting from the property owner. If the site is an
abandoned site, as defined in Section 25359.6, if the site cannot be
traced to a specific owner, or if the owner has been
declared bankrupt is the subject of an order for
relief in bankruptcy , the department or the county health
officer shall secure and post the site, using any source of funds,
pursuant to subdivision (b).
(e) The department or the county health officer shall advise other
agencies on the public health risks and the need for fencing and
posting of sites when those agencies confirm the release of a
hazardous substance pursuant to subdivision (a).
(f) The remedies and
penalties specified in this section and Section 25359.6 are in
addition to, and do not affect, any other remedies, enforcement
actions, requirements, or penalties otherwise authorized by law.
SEC. 55. Section 25359.6 of the Health and Safety Code is amended
to read:
25359.6. (a) The director shall notify, within 20 working days,
each of the appropriate county health officers as to all the
potential abandoned sites of which the department has knowledge or
which the department is investigating for releases of hazardous
substances that may have occurred or might be occurring at abandoned
sites. The county health officers may request quarterly updates on
the status of the investigations of these sites.
As used in this section, "abandoned site" means an inactive
disposal, treatment, or storage facility which cannot, with
reasonable effort, be traced to a specific owner, a site whose owner
has been determined bankrupt is the subject
of an order for relief in bankruptcy , or a location where a
hazardous substance has been illegally disposed.
(b) Within 10 working days of the identification of an abandoned
site, the department or a county health officer shall notify the
other agency of the status of the site. The department and the county
health officer shall inform the other agency of orders to fence and
post these sites and the status of compliance with those orders. The
department or the county health officers may request quarterly
updates of the testing, enforcement action, and remedial or removal
actions that are proposed or ongoing.
SEC. 56. Section 25396 of the Health and Safety Code is amended to
read:
25396. Unless the context indicates otherwise, the following
definitions govern the construction of this chapter.
(a) "Affected community" means the local residents or workers
living or working, and owners of businesses operating, in proximity
to the site, who are, or may be, directly impacted by the conditions
at the site, or by any response action. "Affected community" also
includes the legislative body of the jurisdiction in which a site is
located.
(b) "Agency" means the California Environmental Protection Agency.
(c) "Arbitration panel" means the arbitration panel convened
pursuant to Section 25398.10.
(d) "Beneficial uses of water" means uses of the waters of the
state that are identified in the current State Water Resources
Control Board and California regional water quality control boards'
water quality control plans for the area in which the site is
located.
(e) "Department" means the Department of Toxic Substances Control.
(f) "Engineering controls" means measures to control or contain
migration of hazardous substances or to prevent, minimize or mitigate
environmental damage which may otherwise result from a release or
threatened release, including, but not limited to, caps, covers,
dikes, trenches, leachate collection systems, treatment systems, and
groundwater containment systems or procedures.
(g) "Federal act" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, (42 U.S.C. Sec.
9601 et seq.).
(h) "Fund administrator" means the state officer assigned the
responsibility of protecting the viability of the trust fund as the
representative of the state for the orphan share in all actions
concerning apportionment of liability if there is a potential
apportionment of liability to the orphan share for payment from the
trust fund.
(i) "Hazardous substance" shall have the same meaning as set forth
in Sections 25316 and 25317.
(j) (1) "Insolvent" means a person or entity who has received a
discharge of liability under Section 727, 944, or 1141
1141, 1228, or 1328 of Title 11 of the United
States Code, for pre-petition response costs relating to a site
selected for response actions pursuant to this chapter.
(2) Notwithstanding paragraph (1), a person or entity is not
insolvent with respect to any payment that the department receives or
will receive for any pre-petition response costs as a result of the
bankruptcy, or with respect to any post-petition response costs.
(k) "Interim endangerment" means conditions at a site which pose a
significant risk either of harm to human health or of serious
environmental damage unless immediate response action is initiated
before remedial action measures set forth in a remedial action plan
prepared for the site are implemented.
( ) "Land use controls" means recorded instruments restricting the
present and future uses of the site, including, but not limited to,
recorded easements, covenants, restrictions or servitudes, or any
combination thereof, as appropriate. Land use controls shall run with
the land from the date of recordation, shall bind all of the owners
of the land, and their heirs, successors, and assignees, and the
agents, employees, and lessees of the owners, heirs, successors, and
assignees, and shall be enforceable by the department pursuant to
Article 8 (commencing with Section 25180) of Chapter 6.5.
(m) "Orphan share" means that share of liability for the costs of
response actions apportioned to responsible persons who are insolvent
or cannot be identified or located. The department may adopt
regulations to further define a process to determine when a
responsible person cannot be identified or located.
(n) "Person" shall have the same meaning as set forth in Section
25319.
(o) "Planned use" means the reasonably expected future land uses
based on all of the following factors:
(1) The land use history of the site and surrounding properties,
the current land uses of the site and surrounding properties and
recent development patterns in the area where the site is located.
(2) Land use designations at the site and surrounding properties,
including current and likely future zoning and local land use plans
and the presence, if any, of groundwater and surface water recharge
areas.
(3) The potential for economic redevelopment.
(4) Current plans for the site by the property owner or owners.
(5) Affected community comments on the proposals for use of the
site.
(p) "Release" has the same meaning as set forth in Sections 25320
and 25321.
(q) "Remedy" or "remedial action" means actions that are necessary
to prevent, minimize, or mitigate damage that may result from a
release or threatened release of a hazardous substance and that, when
carried through to completion, allow a site to be permanently used
for its planned use without any significant risk to human health or
any significant potential for future environmental damage. "Remedy"
or "remedial action" includes, but is not limited to, all of the
following:
(1) Actions at the location of the release, such as storage,
confinement, perimeter protection using dikes, trenches, or ditches,
clay cover, neutralization, cleanup of released hazardous substances
and associated contaminated materials, recycling, reuse, diversion,
destruction, or segregation of reactive wastes, dredging, excavation,
repair, or replacement of leaking containers, collection of leachate
and runoff, onsite treatment or incineration, provision of
alternative water supplies, and any monitoring reasonably required to
ensure that these actions protect human health and safety, or the
environment.
(2) The costs of permanent relocation of residents and businesses
and community facilities where the Governor determines that, alone or
in combination with other measures, that relocation is more
cost-effective than, and environmentally preferable to, the
transportation, storage, treatment, destruction, or secure
disposition offsite of hazardous substances, or may otherwise be
necessary to protect human health and safety, or the environment.
(3) Offsite transport and offsite storage, treatment, destruction,
or secure disposition of hazardous substances and associated
contaminated materials.
(r) "Remove" or "removal" means the cleanup or removal of released
hazardous substances from the environment, those actions which may
be necessarily taken in the event of the threat or release of
hazardous substances into the environment, those actions which may be
necessary to monitor, assess, and evaluate the release, or threat of
release, of hazardous substances, the disposal of removed material,
and the taking of other actions which may be necessary to prevent,
minimize, or mitigate damage to human health and safety, or the
environment, which may otherwise result from a release or threat of
release. "Remove" or "removal" also includes, but is not limited to,
security fencing or other measures to limit access, provision of
alternative water supplies, and temporary evacuation and housing of
threatened individuals not otherwise provided.
(s) "Respond," "response," or "response action" means removal
actions, and remedial actions, including, but not limited to,
operation and maintenance measures.
(t) "Response costs" means all costs incurred by the state or any
responsible person in taking response actions under this chapter at a
specific site, including costs incurred by any state agency in
implementing and administering this chapter pursuant to the
limitations established in subdivision (f) of Section 25399, and in
overseeing response actions under this chapter. Those costs shall
include all costs incurred by the state in relation to any judicial
review of a decision of an arbitration panel pursuant to subdivision
(e) of Section 25398.10 or any arbitration conducted pursuant to this
chapter.
(u) "Responsible person" has the same meaning as set forth in
Section 25323.5 for "responsible party" or "liable person."
(v) "Secretary" means the Secretary for Environmental Protection.
(w) "Site" means any building, structure, installation, equipment,
pipe or pipeline (including any pipe into a sewer or publicly owned
treatment works), well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, rolling stock, or
aircraft, or any area where a hazardous substance has been deposited,
stored, disposed of, or placed, or otherwise come to be located; but
does not include any consumer product in consumer use or any vessel.
(x) "Site Designation Committee" or "committee" means the Site
Designation Committee created pursuant to Section 25261.
(y) "State board" means the State Water Resources Control Board.
(z) "Trust fund" means the Expedited Site Remediation Trust Fund
created pursuant to subdivision (a) of Section 25399.1.
SEC. 57. Section 10192.4 of the Insurance Code is amended to read:
10192.4. The following definitions apply for the purposes of this
article:
(a) "Applicant" means:
(1) The person who seeks to contract for insurance benefits, in
the case of an individual Medicare supplement policy.
(2) The proposed certificate holder, in the case of a group
Medicare supplement policy.
(b) "Bankruptcy" means that situation in which a Medicare
Advantage organization that is not an issuer has filed, or has had
filed against it, a petition for declaration of
bankruptcy and has ceased doing business in the state.
(c) "Certificate" means a certificate issued for delivery in this
state under a group Medicare supplement policy.
(d) "Certificate form" means the form on which the certificate is
issued for delivery by the issuer.
(e) "Continuous period of creditable coverage" means the period
during which an individual was covered by creditable coverage, if
during the period of the coverage the individual had no breaks in
coverage greater than 63 days.
(f) (1) "Creditable coverage" means, with respect to an
individual, coverage of the individual provided under any of the
following:
(A) Any individual or group contract, policy, certificate, or
program that is written or administered by a health care service
plan, health insurer, fraternal benefits society, self-insured
employer plan, or any other entity, in this state or elsewhere, and
that arranges or provides medical, hospital, and surgical coverage
not designed to supplement other private or governmental plans. The
term includes continuation or conversion coverage.
(B) Part A or B of Title XVIII of the federal Social Security Act
(Medicare).
(C) Title XIX of the federal Social Security Act (Medicaid), other
than coverage consisting solely of benefits under Section 1928 of
that act.
(D) Chapter 55 of Title 10 of the United States Code (CHAMPUS).
(E) A medical care program of the Indian Health Service or of a
tribal organization.
(F) A state health benefits risk pool.
(G) A health plan offered under Chapter 89 of Title 5 of the
United States Code (Federal Employees Health Benefits Program).
(H) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the federal Public Health
Service Act, as amended by Public Law 104-191, the federal Health
Insurance Portability and Accountability Act of 1996.
(I) A health benefit plan under Section 5(e) of the federal Peace
Corps Act (Section 2504(e) of Title 22 of the United States Code).
(J) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(K) Any other creditable coverage as defined by subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Services Act
(42 U.S.C. Sec. 300gg(c)).
(2) "Creditable coverage" shall not include one or more, or any
combination of, the following:
(A) Coverage only for accident or disability income insurance, or
any combination thereof.
(B) Coverage issued as a supplement to liability insurance.
(C) Liability insurance, including general liability insurance and
automobile liability insurance.
(D) Workers' compensation or similar insurance.
(E) Automobile medical payment insurance.
(F) Credit-only insurance.
(G) Coverage for onsite medical clinics.
(H) Other similar insurance coverage, specified in federal
regulations, under which benefits for medical care are secondary or
incidental to other insurance benefits.
(3) "Creditable coverage" shall not include the following benefits
if they are provided under a separate policy, certificate, or
contract of insurance or are otherwise not an integral part of the
plan:
(A) Limited scope dental or vision benefits.
(B) Benefits for long-term care, nursing home care, home health
care, community-based care, or any combination thereof.
(C) Other similar, limited benefits as are specified in federal
regulations.
(4) "Creditable coverage" shall not include the following benefits
if offered as independent, noncoordinated benefits:
(A) Coverage only for a specified disease or illness.
(B) Hospital indemnity or other fixed indemnity insurance.
(5) "Creditable coverage" shall not include the following if
offered as a separate policy, certificate, or contract of insurance:
(A) Medicare supplemental health insurance as defined under
Section 1882(g)(1) of the federal Social Security Act.
(B) Coverage supplemental to the coverage provided under Chapter
55 of Title 10 of the United States Code.
(C) Similar supplemental coverage provided to coverage under a
group health plan.
(g) "Employee welfare benefit plan" means a plan, fund, or program
of employee benefits as defined in Section 1002 of Title 29 of the
United States Code (Employee Retirement Income Security Act).
(h) "Insolvency" means when an issuer, licensed to transact the
business of insurance in this state, has had a final order of
liquidation entered against it with a finding of insolvency by a
court of competent jurisdiction in the issuer's state of domicile.
(i) "Issuer" includes insurance companies, fraternal benefit
societies, and any other entity delivering, or issuing for delivery,
Medicare supplement policies or certificates in this state, except
entities subject to Article 3.5 (commencing with Section 1358) of
Chapter 2.2 of Division 2 of the Health and Safety Code.
(j) "Medicare" means the Health Insurance for the Aged Act, Title
XVIII of the Social Security Amendments of 1965, as amended.
(k) "Medicare Advantage plan" means a plan of coverage for health
benefits under Medicare Part C and includes:
(1) Coordinated care plans that provide health care services,
including, but not limited to, health care service plans (with or
without a point-of-service option), plans offered by
provider-sponsored organizations, and preferred provider
organizations plans.
(2) Medical savings account plans coupled with a contribution into
a Medicare Advantage medical savings account.
(3) Medicare Advantage private fee-for-service plans.
() "Medicare supplement policy" means a group or individual policy
of health insurance, other than a policy issued pursuant to a
contract under Section 1876 of the federal Social Security Act (42
U.S.C. Section 1395mm) or an issued policy under a demonstration
project specified in Section 1395ss(g)(1) of Title 42 of the United
States Code, that is advertised, marketed, or designed primarily as a
supplement to reimbursements under Medicare for the hospital,
medical, or surgical expenses of persons eligible for Medicare.
"Medicare supplement policy" does not include a Medicare Advantage
plan established under Medicare Part C, an outpatient prescription
drug plan established under Medicare Part D, or a health care
prepayment plan that provides benefits pursuant to an agreement under
subparagraph (A) of paragraph (1) of subsection (a) of Section 1833
of the Social Security Act.
(m) "Policy form" means the form on which the policy is issued for
delivery by the issuer.
(n) "Secretary" means the Secretary of the United States
Department of Health and Human Services.
SEC. 58. Section 11655 of the Insurance Code is amended to read:
11655. Such policy shall not contain any provisions relieving the
insurer from payment when the employer becomes insolvent or
is discharged obtains a discharge in
bankruptcy, or otherwise, during the period that the policy is in
operation or the compensation remains owing.
SEC. 59. Section 15643 of the Probate Code is amended to read:
15643. There is a vacancy in the office of trustee in any of the
following circumstances:
(a) The person named as trustee rejects the trust.
(b) The person named as trustee cannot be identified or does not
exist.
(c) The trustee resigns or is removed.
(d) The trustee dies.
(e) A conservator or guardian of the person or estate of an
individual trustee is appointed.
(f) The trustee files a petition for adjudication of
bankruptcy or for approval of an arrangement, composition, or other
extension under the federal Bankruptcy Code, or a petition filed
against the trustee for any of these purposes is approved
is the subject of an order for relief in bankruptcy .
(g) A trust company's charter is revoked or powers are suspended,
if the revocation or suspension is to be in effect for a period of 30
days or more.
(h) A receiver is appointed for a trust company if the appointment
is not vacated within a period of 30 days.
SEC. 60. Section 4107 of the Public Contract Code is amended to
read:
4107. A prime contractor whose bid is accepted may not:
(a) Substitute a person as subcontractor in place of the
subcontractor listed in the original bid, except that the awarding
authority, or its duly authorized officer, may, except as otherwise
provided in Section 4107.5, consent to the substitution of another
person as a subcontractor in any of the following situations:
(1) When the subcontractor listed in the bid, after having had a
reasonable opportunity to do so, fails or refuses to execute a
written contract for the scope of work specified in the subcontractor'
s bid and at the price specified in the subcontractor's bid, when
that written contract, based upon the general terms, conditions,
plans, and specifications for the project involved or the terms of
that subcontractor's written bid, is presented to the subcontractor
by the prime contractor.
(2) When the listed subcontractor becomes bankrupt or
insolvent insolvent or the subject of an order for
relief in bankruptcy .
(3) When the listed subcontractor fails or refuses to perform his
or her subcontract.
(4) When the listed subcontractor fails or refuses to meet the
bond requirements of the prime contractor as set forth in Section
4108.
(5) When the prime contractor demonstrates to the awarding
authority, or its duly authorized officer, subject to the further
provisions set forth in Section 4107.5, that the name of the
subcontractor was listed as the result of an inadvertent clerical
error.
(6) When the listed subcontractor is not licensed pursuant to the
Contractors License Law.
(7) When the awarding authority, or its duly authorized officer,
determines that the work performed by the listed subcontractor is
substantially unsatisfactory and not in substantial accordance with
the plans and specifications, or that the subcontractor is
substantially delaying or disrupting the progress of the work.
(8) When the listed subcontractor is ineligible to work on a
public works project pursuant to Section 1777.1 or 1777.7 of the
Labor Code.
(9) When the awarding authority determines that a listed
subcontractor is not a responsible contractor.
Prior to approval of the prime contractor's request for the
substitution, the awarding authority, or its duly authorized officer,
shall give notice in writing to the listed subcontractor of the
prime contractor's request to substitute and of the reasons for the
request. The notice shall be served by certified or registered mail
to the last known address of the subcontractor. The listed
subcontractor who has been so notified has five working days within
which to submit written objections to the substitution to the
awarding authority. Failure to file these written objections
constitutes the listed subcontractor's consent to the substitution.
If written objections are filed, the awarding authority shall give
notice in writing of at least five working days to the listed
subcontractor of a hearing by the awarding authority on the prime
contractor's request for substitution.
(b) Permit a subcontract to be voluntarily assigned or transferred
or allow it to be performed by anyone other than the original
subcontractor listed in the original bid, without the consent of the
awarding authority, or its duly authorized officer.
(c) Other than in the performance of "change orders" causing
changes or deviations from the original contract, sublet or
subcontract any portion of the work in excess of one-half of 1
percent of the prime contractor's total bid as to which his or her
original bid did not designate a subcontractor.
SEC. 61. Section 11923 of the Revenue and Taxation Code is amended
to read:
11923. (a) Any tax imposed pursuant to this part shall not apply
to the making, delivering, or filing of conveyances to make effective
any plan of reorganization or adjustment that is any of the
following:
(1) Confirmed under the Federal Bankruptcy Act
Code , as amended.
(2) Approved in an equity receivership proceeding in a court
involving a railroad corporation, as defined in Section 101 of Title
11 of the United States Code, as amended.
(3) Approved in an equity receivership proceeding in a court
involving a corporation, as defined in Section 101 of Title 11 of the
United States Code, as amended.
(4) Whereby a mere change in identity, form, or place of
organization is effected.
(b) Subdivision (a) shall only apply if the making, delivery, or
filing of instruments of transfer or conveyances occurs within five
years from the date of the confirmation, approval, or change.
SEC. 62. Section 9185 of the Streets and Highways Code is amended
to read:
9185. Executors, administrators, special administrators and
guardians may consent for any property of the estate represented by
them. Any trustee of an express trust of land other than as security
for the payment of money may consent for all or any part of the land
held in such trust. A trustee in bankruptcy may consent for all or
any part of the property of the bankrupt
debtor . Such executors, administrators, guardians and trustees
are deemed owners of land within the meaning of this division.
SEC. 63. Section 9859 of the Vehicle Code is amended to read:
9859. All money received by an agent from the sale of
certificates of number or temporary certificates of number and use
tax shall be kept separate and apart from any other funds of the
agent, and shall at all times belong to the state.
In case of an assignment for the benefit of creditors,
receivership, or bankruptcy, the state shall have a preferred claim
against the agent assignee , receiver,
or trustee for all moneys owing the state for the sale of
certificates as provided in this code and any use tax, and shall not
be estopped from asserting such claim by reason of the commingling of
funds or otherwise.
