Bill Text: CA AB1172 | 2021-2022 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Escrow agents: asset and accounting requirements.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2021-06-09 - Referred to Com. on B. & F.I. [AB1172 Detail]
Download: California-2021-AB1172-Amended.html
NOYES
Local Program:
NOYES
Bill Title: Escrow agents: asset and accounting requirements.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2021-06-09 - Referred to Com. on B. & F.I. [AB1172 Detail]
Download: California-2021-AB1172-Amended.html
|
Amended
IN
Assembly
April 08, 2021 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Assembly Bill
No. 1172
| Introduced by Assembly Member O’Donnell |
February 18, 2021 |
An act to amend Section 17210 of of, and to add Section 17406.0.1 to, the Financial Code, relating to escrow agents.
LEGISLATIVE COUNSEL'S DIGEST
AB 1172, as amended, O’Donnell.
Escrow agents: asset and accounting requirements.
Existing law, the Escrow Law, requires people engaging in business as escrow agents to be organized as corporations for that purpose, as specified, and appropriately licensed by the Commissioner of Financial Protection and Innovation. Existing law requires an escrow agent licensed on or after January 1, 1986, to maintain a tangible net worth of $50,000, including liquid assets of at least $25,000 in excess of current liabilities. Existing law required an escrow agent licensed before January 1, 1986, to maintain an increasing tangible net worth pursuant to a prescribed schedule, the amounts of which, by 1993, matched the requirements for escrow agents licensed on and after January 1, 1986.
This bill would delete obsolete provisions by deleting the tangible net worth schedule for escrow agents licensed before January 1, 1986, as described above,
and the distinctions in this context based on when an agent was licensed.
Existing law requires, among other requirements relating to submissions of financial statements to the commissioner, each escrow agent licensee to submit to the commissioner, at the licensee’s own expense, an audit report containing audited financial statements covering the calendar year or, if the licensee has an established fiscal year, then for that fiscal year, within 105 days after the close of the calendar or fiscal year, as applicable. Existing law makes it unlawful to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of any provision of the Escrow Law. Existing law also makes it unlawful for any person to knowingly make an untrue statement to
the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of the Escrow Law.
This bill would require the commissioner to exempt an escrow agent licensee from the provisions of Topic 842 of the Financial Accounting Standards Board’s Accounting Standards Update, relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensee’s own expense and in compliance with specified requirements, audited financial statements covering the current and immediately preceding calendar or fiscal years or, if the licensee has an established fiscal year, then for the current and immediately preceding fiscal years. The bill would provide that a licensee is exempt only until an independent accountant, third-party
contractor, or the commissioner conducts an audit of the licensee and deems the licensee’s financial records are not materially designated as qualified, as defined. By expanding the scope of a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 17210 of the Financial Code is amended to read:17210.
(a) An escrow agent shall maintain at all times a tangible net worth of fifty thousand dollars ($50,000), including liquid assets of at least twenty-five thousand dollars ($25,000) in excess of current liabilities.(b) The commissioner may determine by rule as to which assets constitute liquid assets and may also determine in an individual case by a specific written ruling whether a particular asset is a liquid asset within the meaning of this section.
(c) In the case of a licensed branch office, a tangible net worth in addition to that required by subdivision (a) shall be maintained at
an amount equal to 50 percent of the tangible net worth required by subdivision (a), except that licensees operating or applying for more than one branch office shall maintain an additional tangible net worth of at least 25 percent of the amount required by subdivision (a) for each branch office licensed after the first branch office location.
SEC. 2.
Section 17406.0.1 is added to the Financial Code, to read:17406.0.1.
(a) Unless the public interest requires otherwise, notwithstanding any other law, the commissioner shall exempt a licensee from the provisions of the Financial Accounting Standards Board’s Accounting Standards Update 2016-02, Leases (Topic 842), relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensee’s own expense and in compliance with paragraphs (1) and (2), audited financial statements covering the current and immediately preceding calendar or fiscal years or, if the licensee has an established fiscal year, then for the current and immediately preceding fiscal years.(1) The audited financial statements shall be or have been submitted within 105 days after the close of each respective
calendar or fiscal year, as applicable.
(2) The audited financial statements shall be materially designated as qualified by an independent accountant or third-party contractor and shall be completed in compliance with generally accepted accounting principles.
(b) A licensee shall be exempt pursuant to subdivision (a) only until an independent accountant, third-party contractor, or the commissioner conducts an audit of the licensee and deems the licensee’s financial records are not materially designated as qualified.
(c) For purposes of this section, “materially designated as qualified” shall be defined by the commissioner in accordance with how the term is used by the Financial Accounting Standards Board’s Accounting Standards Updates.
