Financial regulation.

Removed the amendment to Corporations Code Section 31210, which had established that it is unlawful for a person to sell a franchise in California unless they are identified in a filed application, licensed as a real estate broker, licensed as a broker-dealer, or registered as a franchise broker. This also removed the requirement that franchise brokers must be registered even in exempt transactions.

The bill's opening description no longer lists Section 31210 among the Corporations Code sections being amended, reflecting the removal of that provision.

The state-mandated local program determination changed from 'yes' to 'no.' The previous version stated that by expanding the crime of perjury, the bill would impose a state-mandated local program. That language and its fiscal implications are removed.

Added a new digest paragraph (4) stating that the bill incorporates additional changes to Section 23016 of the Financial Code proposed by AB 2028, operative only if both bills are enacted and this bill is enacted last. This is a standard legislative coordination mechanism for concurrent bills amending the same section.

The provision requiring foreign government securities (bonds, notes, warrants) to be rated 'AA' or its equivalent or better by a nationally recognized statistical rating organization to be eligible for investment of surplus state funds is entirely removed from the bill.

The bill's introductory description of Corporations Code amendments is changed, appearing to narrow the list of sections being amended (Section 31210 may be removed from the stated scope, though its text remains in the body).

The fiscal finding on state-mandated local program changes from 'yes' to 'no,' meaning the bill no longer imposes a state-mandated local program that would require local governments to spend money or comply with state requirements.

Multiple section numbers are renumbered throughout the bill (e.g., old SEC. 3 becomes SEC. 2, old SEC. 4 becomes SEC. 3, old SEC. 5 becomes SEC. 4, old SEC. 6 becomes SEC. 5), indicating sections were removed or the structure was reorganized.

Removed a provision (former subdivision (b) of Section 31210) that exempted transactions qualifying under Chapter 1 of Part 2 of the Franchise Investment Law from the franchise sale restriction, unless the seller was a franchise broker. This means the franchise sale licensing/registration requirements now apply more broadly to exempt transactions, not just to franchise brokers operating in those transactions.

Expanded Section 331.5 of the Financial Code to require registrants (not just licensees) to establish and maintain an electronic service address for receiving communications from the commissioner. This broadens the population subject to the e-service address requirement and its associated fine structure (up to $50 per day, capped at $1,000).

Repositioned the securities filing fee schedule (Section 25608) within the bill text and renumbered line references throughout. No changes to actual fee amounts or fee structure.

New Corporations Code Section 25608 establishes a full securities fee schedule for DFPI, including tiered filing fees based on securities value ($25 to $300), qualification application fees ($200 plus 0.2% of value, capped at $2,500), broker-dealer certificate fees ($300) with annual minimum assessments ($75), investment adviser fees ($125), and examination/audit cost recovery fees.

Financial Code Section 2042 was amended to establish a tiered assessment structure for money transmitter licensees based on aggregate face amount of payment instruments and stored value sold, with a base rate not exceeding $1 per $1,000 face amount, and a proportional assessment for money transmission licensees.

New Financial Code Section 302 requires the commissioner to use NMLS (Nationwide Multistate Licensing System and Registry) forms and instructions whenever a statute or regulation requires licensure or registration through that system.

Amended Financial Code Section 331.5 requires all licensees and registrants to establish and maintain an electronic service address for receiving commissioner communications, authorizes the commissioner to send fee and assessment notices electronically (including via NMLS for applicable persons), and imposes fines of up to $50 per day (capped at $1,000) for failing to update the address.

Corporations Code Section 31210 was amended to remove the specific reference to 'Item 2 of a franchise disclosure document' and replace it with broader language ('Identified in an application or amended application filed with the commissioner'). Two new subdivisions were added making it unlawful for a franchise broker to sell a franchise unless registered, even when the broker would otherwise qualify under other categories (real estate license, broker-dealer license) or when the transaction is exempt.

Government Code Section 16430 (Pooled Money Investment Account) was modified in three ways: local government bond eligibility changed from 'top three ratings' to 'rating category of A or its equivalent or better'; foreign country sovereign securities raised from 'investment grade' to 'AA or its equivalent or better'; and commercial paper maturity extended from 270 days to 397 days with removal of the requirement that issuers deposit collateral securities worth at least 10% in excess of the state's investment.

Corporations Code Section 31526 was changed from requiring franchise brokers to provide disclosure for opportunities 'subject to registration pursuant to this division' to the broader phrase 'subject to this law,' expanding the scope of when the Uniform Franchise Broker Disclosure Document must be provided.