Bill Text: NJ A2669 | 2010-2011 | Regular Session | Introduced
Bill Title: Transfers Bureau of Securities to Department of Banking and Insurance.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2010-05-13 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A2669 Detail]
Download: New_Jersey-2010-A2669-Introduced.html
Sponsored by:
Assemblyman GARY S. SCHAER
District 36 (Bergen, Essex and Passaic)
Assemblywoman DENISE M. COYLE
District 16 (Morris and Somerset)
Co-Sponsored by:
Assemblyman Chivukula
SYNOPSIS
Transfers Bureau of Securities to Department of Banking and Insurance.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the transfer of the Bureau of Securities to the Department of Banking and Insurance and revising parts of the statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) The Bureau of Securities, as established in the Division of Consumer Affairs in the Department of Law and Public Safety by section 8 of P.L.1971, c.134 (C.52:17B-125), together with its functions, powers and duties, is transferred to the Department of Banking and Insurance. The transfer shall be made in accordance with the provisions of the "State Agency Transfer Act," P.L.1971, c.375, (C.52:14D-1 et seq.).
2. Section 1 of P.L.1987, c.24 (C.17:9A-28.1) is amended to read as follows:
1. a. Notwithstanding any other provision of law to the contrary, a qualified bank may: (1) employ any broker-dealer which is registered with the federal Securities and Exchange Commission and with the Bureau of Securities in the [Division of Consumer Affairs in the Department of Law and Public Safety] Department of Banking and Insurance as a custodian for the qualified bank for any securities held by the qualified bank in its fiduciary capacity; and (2) register the securities in the name of the broker-dealer so employed.
b. Any broker-dealer employed pursuant to subsection a. of this section shall have the same power and shall be subject to the same restrictions with respect to the treatment of securities which it holds as custodian as any bank acting as custodian for a qualified bank. Any securities held by a broker-dealer pursuant to this act in which the broker-dealer does not have a lien for indebtedness due to it from an estate or trust may not be pledged, lent, hypothecated, or disposed of except upon specific instruction of the qualified bank acting in its fiduciary capacity.
(cf: P.L.1987, c.24, s.1)
3. Section 6 of P.L.1989, c.239 (C.45:15-16.32) is amended to read as follows:
6. a. Unless the method of disposition is adopted for the purpose of evasion of this act, the provisions of this act are not applicable to offers or dispositions of an interest in a subdivision:
(1) By an owner for his own account in a single or isolated transaction;
(2) Wholly for industrial or commercial purposes;
(3) Pursuant to court order;
(4) By any governmental agency;
(5) As cemetery lots or interests;
(6) Of less than 100 lots, parcels, units or interests;
(7) Where the common elements or interests, which would otherwise subject the offering to this act, are limited to the provision of unimproved, unencumbered open space, except where registration is required by the "Interstate Land Sales Full Disclosure Act," Pub.L.90-448 (15 U.S.C. s.1701 et seq.) with the Office of Interstate Land Sales Registration, in the Department of Housing and Urban Development; or
(8) In a development comprised wholly of rental units, where the relationship created is one of landlord and tenant.
b. Unless the method of disposition is adopted for the purpose of evasion of this act, the provisions of this act are not applicable to:
(1) Offers or dispositions of evidences of indebtedness secured by a mortgage or deed of trust of real estate;
(2) Offers or dispositions of securities or units of interest issued by a real estate investment trust regulated under any State or federal statute;
(3) Offers or dispositions of securities currently registered with the Bureau of Securities in the Department of [Law and Public Safety; or] Banking and Insurance; or
(4) Offers or dispositions of any interest in oil, gas or other minerals or any royalty interest therein if the offers or dispositions of such interests are regulated as securities by federal law or by the State Bureau of Securities.
c. The commission may, from time to time, pursuant to any rules and regulations promulgated pursuant to this act, exempt from any of the provisions of this act any subdivision or any lots in a subdivision, if it finds that the enforcement of this act with respect to that subdivision or the lots therein, is not necessary in the public interest, or required for the protection of purchasers, by reason of the small amount involved or the limited character of the offering.
d. A subdivider or developer who qualifies for and completes secondary registration pursuant to section 2 of P.L.2007, c.292 (C.45:15-16.30a) shall be exempt from the registration requirements of section 4 of P.L.1989, c.239 (C.45:15-16.30).
(cf: P.L.2007, c.292, s.1)
4. Section 4 of P.L.2006, c.63 (C.45:15-16.52) is amended to read as follows:
4. a. This act shall not apply to any of the following:
(1) Timeshare plans, whether or not an accommodation or component site is located in the State, consisting of 10 or fewer timeshare interests;
(2) Timeshare plans, whether or not an accommodation or component site is located in this State, the use of which extends over any period of three years or less. For purposes of determining the term of a timeshare plan, the period of any automatic renewal shall be included, unless a purchaser has the right to terminate the purchaser's participation in the timeshare plan at any time and receive a pro rata refund, or the purchaser receives a notice, not less than 30 days, but not more than 60 days, prior to the date of renewal, informing the purchaser of the right to terminate at any time prior to the date of automatic renewal;
(3) Timeshare plans, whether or not an accommodation or component site is located in the State, under which the prospective purchaser's total financial obligation will be equal to or less than $3,000 during the entire term of the timeshare plan;
(4) Component sites of specific timeshare interest multi-site timeshare plans that are neither located in nor offered for sale in this State, except that these component sites are still subject to the disclosure requirements of section 10 of this act;
(5) Offers or dispositions of securities or units of interest issued by a real estate investment trust regulated under any State or federal statute;
(6) Offers or dispositions of securities currently registered with the Bureau of Securities within [the Division of Consumer Affairs in] the Department of [Law and Public Safety] Banking and Insurance.
b. A person shall not be required to register as a developer under this act if:
(1) The person is an owner of a timeshare interest who has acquired the timeshare interest for the person's own use and occupancy and who later offers it for resale in a single or isolated transaction; or
(2) The person is a managing entity or an association that is not otherwise a developer of a timeshare plan in its own right, solely while acting as an association or under a contract with an association to offer or sell a timeshare interest transferred to the association through foreclosure, deed in lieu of foreclosure, or gratuitous transfer, if such acts are performed in the regular course of, or as an incident to, the management of the association for its own account in the timeshare plan.
c. If a developer has already registered a timeshare plan under this act, the developer may offer or dispose of an interest in a timeshare plan that is not registered under this act if the developer is offering a timeshare interest in the additional timeshare plan to a current timeshare interest owner of a timeshare interest in a timeshare plan created or operated by that same developer subject to the rules and regulations adopted by the commission.
d. The commission may, from time to time, pursuant to any rules and regulations adopted pursuant to this act, exempt from any of the provisions of this act any timeshare plan, if it finds that the enforcement of this act with respect to that plan is not necessary in the public interest, or required for the protection of purchasers, by reason of the small amount of the purchase price or the limited character of the offering.
(cf: P.L.2006, c.63, s.4)
5. Section 11 of P.L.1969, c.215 (C.45:22A-11) is amended to read as follows:
11. (a) The agency shall adopt, amend, or repeal such rules and regulations as are reasonably necessary for the enforcement of the provisions of this act, after a public hearing with notice thereof published once in a newspaper or newspapers with Statewide circulation not less than 5 days nor more than 15 days prior to the hearing and mailed to developers not less than 5 days nor more than 15 days prior to the public hearing. The Director of the Division on Aging, State Department of Community Affairs, shall advise the director of the agency concerning the promulgation or alteration of such rules. The rules shall include but not be limited to provisions for advertising standards to assure full and fair disclosure; provisions for escrow or trust agreements or other means reasonably to assure that all improvements referred to in the statement of record and advertising will be completed and that purchasers will receive the interest in land contracted for; provisions for operating procedures; rules of procedure to be followed in the conduct of all hearings; and other rules as are necessary and proper to effect the purpose of this act.
(b) The agency by rule or by an order, after reasonable notice to all developers covered by this act and a hearing, may require the filing of advertising material relating to retirement subdivision and community lands prior to its distribution.
(c) If it appears that a person has engaged or is about to engage in an act or practice constituting a violation of a provision of this act, or a rule or order hereunder, the agency, with or without prior administrative proceedings, may bring an action in the Chancery Division of the State Superior Court to enjoin the acts or practices and to enforce compliance with this act or any rule or order hereunder. Upon proper showing, injunctive relief or temporary restraining orders shall be granted, and a receiver may be appointed. The agency is not required to post a bond in any court proceedings.
(d) The agency may intervene in a suit involving subdivisions or community lands covered by this act. In such suit, the developer shall promptly furnish the agency notice of the suit and copies of all pleadings.
(e) The agency may:
(1) Accept registrations filed in other states or with the Federal Government, or with the Bureau of Securities, within the [Division of Consumer Affairs, Department of Law and Public Safety] Department of Banking and Insurance;
(2) Grant exemptions if allowed by rules promulgated under subsection (a);
(3) Contract with similar agencies in this State or other jurisdictions to perform investigative functions;
(4) Accept grants in aid from any source.
(f) The agency shall cooperate with similar agencies in other jurisdictions to establish uniform filing procedures, statements of record and forms, uniform public offering statements, advertising standards, rules and common administrative practices.
(cf: P.L.1975, c.335, s.3)
6. Section 19 of P.L.1967, c.93 (C.49:3-66) is amended to read as follows:
19. (a) This act shall be administered by the Bureau of Securities in the [Division of Consumer Affairs of the Department of Law and Public Safety] Department of Banking and Insurance. The principal executive officer of the bureau shall be a chief who is appointed by and serves at the pleasure of the [Attorney General] Commissioner of Banking and Insurance. The chief of the bureau shall have power to employ such officers and employees as may be necessary to carry out the purposes of this act and to define their duties;
(b) It shall be unlawful for any of the officers or employees of the bureau to use for personal benefit any information which is filed with or obtained by the bureau and which is not made public. No provision of this act authorizes any officers or employees of the bureau to disclose any such information except among themselves or when necessary or appropriate in a proceeding or investigation under this act. No provision of this act either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under subpoena directed to any of the officers or employees of the bureau.
(cf: P.L.1997, c.276, s.22)
7. Section 15 of P.L.1985, c.405 (C.49:3-66.1) is amended to read as follows:
15. The "Securities Enforcement Fund" in the [Division of Consumer Affairs of the Department of Law and Public Safety] Department of Banking and Insurance shall continue as a nonlapsing, revolving fund. All fees, penalties, costs, fines and other moneys collected pursuant to this act, shall be deposited in the fund. Moneys in the fund shall be used by the [Director of the Division of Consumer Affairs] Commissioner of Banking and Insurance to administer the provisions of this act and to investigate violations and to enforce the prohibitions of this act to protect the public. There shall be made available from the General Fund such additional amounts as may be required to carry out the provisions of this act.
All fees set by rule of the bureau chief pursuant to this act may be imposed for revenue if the fees, taken together, are reasonably related to the overall costs of carrying out the regulatory and administrative duties of the bureau as set forth in this act.
The fees set pursuant to the "Uniform Securities Law [(1967)] (1997)," P.L.1967, c.93 (C.49:3-47 et seq.) and supplements thereto which are in effect on the effective date of this act, but which are to be set by regulation pursuant to this act, shall remain in effect until the regulations promulgated pursuant to this act take effect.
An annual accounting of deposits to and withdrawals from the fund shall be made by the [Director of the Division of Consumer Affairs] Commissioner of Banking and Insurance and filed with [the Attorney General and bureau chief and] any State agency, as required by law.
(cf: P.L.1997, c.276, s.23)
8. Section 2 of P.L.1977, c.76 (C.49:5-2) is amended to read as follows:
2. Definitions
As used in this act, the following terms shall have the respective meanings hereinafter set forth, unless the context shall otherwise require:
a. An "associate" of a person means:
(1) Any corporation or other organization of which such person is an officer, director or partner, or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities;
(2) Any person who is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities of such person;
(3) Any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; or
(4) The spouse of such person, or any relative of such person or of such spouse who has the same home as such person.
(5) Any person acting jointly or in concert with the offeror for the purpose of acquiring, holding, or disposing of, or exercising any voting rights attached to the equity securities of a target company.
b. "Bureau" means the Bureau of Securities in the [Division of Consumer Affairs in the Department of Law and Public Safety] Department of Banking and Insurance.
c. "Equity security" means:
(1) Any stock or similar security carrying, at the time of the takeover offer, the right to vote on any matter by virtue of the articles of incorporation, bylaws or governing instrument of the target company or the right to vote for directors or person performing substantially similar functions by operation of law;
(2) Any security convertible with or without consideration into stock or a similar security, as described in [c.(1) above] paragraph (1) of subsection c. of this section;
(3) Any warrant or right to purchase stock or a similar security, as described in [c.(1) above] paragraph (1) of subsection c. of this section;
(4) Any security carrying any warrant or right to purchase stock or similar security, as described in [c.(1) above] paragraph (1) of subsection c. of this section; or
(5) Any other security which for the protection of investors is deemed an equity security pursuant to regulation of the bureau chief.
d. "Number of shares" means, with respect to any equity security which is not stock or a similar security, the number of shares of stock or a similar security, as described in [c.(1) above] paragraph (1) of subsection c. of this section:
(1) Into which such security is convertible; or
(2) Which such equity security evidences or carries the right to purchase.
e. "Offeror" means a person who makes or in any way participates in making a takeover offer, and includes all affiliates and associates of that person. The term does not include a financial institution or broker-dealer loaning funds or extending credit to any offeror in the ordinary course of its business, or any accountant, attorney, financial institution, broker-dealer, newspaper or magazine of general circulation, consultant, or other person furnishing information, services or advice to or performing ministerial or administrative duties for an offeror and not otherwise participating in the takeover offer.
f. "Offeree" means a record or beneficial owner of any equity security which an offeror acquires or offers to acquire in connection with a takeover offer.
g. "Person" includes an individual, a partnership, a corporation, an unincorporated association or a trust.
h. "Shares" means and includes any equity security, however its units are denominated.
i. A "securityholder" of a specified person is one who owns any security of such person, including common stock, preferred stock, debt obligations, and any other security convertible into or evidencing the right to acquire any of the foregoing.
j. A "subsidiary" of a company is any corporation whose outstanding stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation, irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency, is at the time owned by such company directly or indirectly.
k. An "offeror's presently owned shares" is the aggregate number of shares of a target company which are on the date of a takeover bid either beneficially owned or subject to a right of acquisition directly or indirectly, by the offeror and each associate of the offeror.
l. (1) A "takeover bid or takeover offer" is an offer made by an offeror directly or through an agent by advertisement or any other written or oral communication to offerees to purchase such number of shares of any class of equity securities of the target company that:
(a) Together with the offeror's presently owned shares of that class, will in the aggregate exceed 10% of the outstanding shares of such class; or
(b) Together with an offeror's presently owned shares of all classes of equity securities of the target company, will in the aggregate, after giving effect to all conversion and purchase rights held and to be acquired by the offeror, exceed 10% of the number of shares of stock or a similar security of the target company which will be outstanding.
(2) A "takeover bid" does not include, with respect to any class of securities of the target company:
(a) An isolated offer to purchase shares from individual shareholders not made to shareholders generally;
(b) An offer made by an issuer to purchase its own shares or shares of a subsidiary;
(c) An offer to purchase shares of a class not registered pursuant to s.12 of the [Securities Exchange Act of 1934] "Securities Exchange Act of 1934," (15 U.S.C. s. 78l);
(d) An offer made to not more than 10 persons in this State during any period of 12 consecutive months; or
(e) An offer as to which the target company, acting through its board of directors, recommends acceptance to its shareholders, provided that the terms thereof, including any inducements to officers or directors which are not made available to all shareholders, have been furnished to shareholders.
(f) An offer effected by or through a broker-dealer in the ordinary course of his business without solicitation of orders to sell equity securities of the target company;
(g) An offer, if the acquisition by the offeror, in the instant transaction and in all acquisitions of equity securities of the same class during the preceding 12 months, does not exceed 2% of that class of outstanding equity securities of the target company;
(h) An offer to purchase shares of a company whose capital assets do not exceed $5,000,000.00;
m. A "target company" is any corporation or other issuer of securities which is either organized under the laws of the state or has its principal place of business or substantial portion of its total assets in this State. A target company does not include:
(1) A domestic insurer subject to the provisions of P.L.1970, c.22 (C.17:27A-1 et seq.); or
(2) A bank in the possession of the Commissioner of Banking and Insurance pursuant to the provisions of [C.17:9A-266 et seq.] Article 42 of "The Banking Act of 1948," P.L.1948, c.67 (C.17:9A-266 et seq.); or
(3) A savings and loan association undergoing dissolution and liquidation pursuant to the provisions of [C.17:12B-288 et seq.] Article XVIII of the "Savings and Loan Act (1963)", P.L.1963, c.144 (C.17:12B-228 et seq.) and [C.17:12B-270] section 41 of P.L.1974, c.137 (C.17:12B-270).
(cf: P.L.1977, c.76, s.2)
9. Section 11 of P.L.1977, c.76 (C.49:5-11) is amended to read as follows:
11. Promulgation of Regulations
a. This act shall be administered by the Chief of the Bureau of Securities in the [Division of Consumer Affairs in the Department of Law and Public Safety] Department of Banking and Insurance, who may promulgate regulations necessary to carry out the purposes of this act, including regulations defining fraudulent, deceptive and manipulative acts and practices and other terms used herein.
b. The bureau chief shall set a filing fee for a disclosure statement filed by an offeror and the same amount for a request for hearing filed by a target company. Such fees may be set so as to raise sufficient revenue for funding the purposes of this act.
(cf: P.L.1977, c.76, s.11)
10. Section 8 of P.L.1971, c.134 (C.52:17B-125) is repealed.
11. This act shall take effect immediately.
STATEMENT
This bill transfers the Bureau of Securities from the Division of Consumer Affairs in the Department of Law and Public Safety to the Department of Banking and Insurance. The bill also makes certain technical changes.
