BILL NUMBER: AB 3342	ENROLLED
	BILL TEXT

	PASSED THE ASSEMBLY   AUGUST 28, 1996
	PASSED THE SENATE   AUGUST 20, 1996
	AMENDED IN SENATE   AUGUST 5, 1996
	AMENDED IN SENATE   JULY 1, 1996
	AMENDED IN SENATE   JUNE 20, 1996
	AMENDED IN SENATE   JUNE 4, 1996

INTRODUCED BY  Assembly Member Knowles

                        FEBRUARY 23, 1996

   An act to amend Sections 10250.2 and 10261 of, to add Sections
10238.8, 10239.36, 10250.25, 10250.51, 10250.52, 10250.53, 10250.54,
10250.56, and 10250.58 to, to repeal Sections 10238.3, 10238.4,
10238.45, and 10238.5 of, and to repeal Article 6 (commencing with
Section 10237) and Article 6.5 (commencing with Section 10239) of
Chapter 3 of Part 1 of Division 4 of, the Business and Professions
Code, and to add Section 25707 to the Corporations Code, relating to
real property.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 3342, Knowles.  Real estate:  real property securities dealers:
  time-share projects.
   (1) Existing law provides for regulation of real property
securities dealers by the Commissioner of Real Estate.  A person
acting as a real property securities dealer must be licensed as a
real estate broker, and a permit from the commissioner is required
before real property security may be sold by the issuer or real
property securities dealer to the public.  Existing law also provides
for conservatorship and liquidation proceedings, as specified, with
respect to real property securities dealers.
   This bill would repeal the provisions requiring a permit from the
commissioner before real property security may be sold, and would
provide that no conservatorship or liquidation proceeding shall be
commenced on or after the effective date of this act.
   The bill would also provide for the repeal of other existing
provisions regulating real property securities dealers upon
notification by the commissioner to the Secretary of State that the
last pending conservatorship or liquidation proceeding commenced
prior to the effective date of this act has been terminated.
   The bill would provide that certain permits, orders, and
conditions issued or imposed under these provisions prior to repeal
shall remain in effect, as specified.  Following the repeal, the
permits, orders, and conditions would be deemed to have been imposed
under the Corporate Securities Law of 1968.  The bill would enact
other transition provisions.
   (2) Existing law regulates the sale, lease, and offer for sale or
lease in this state of time-share projects situated outside this
state and qualified resort vacation clubs, as specified.  Existing
law provides that the provisions that regulate real property
securities dealers, which would be repealed by this bill, apply to
the sale or lease or offering of these time-share projects.
   This bill would enact provisions to replace the provisions that
would be repealed by this bill.  Among other things, it would do the
following:
   It would define the terms "sale" and "sell" with respect to these
time-share projects and vacation clubs to include an offer or attempt
to sell, a solicitation of a sale, a contract of sale, or an
exchange, as specified.
   It would require a subdivider or person offering one of these
interests for sale to first obtain a permit from the Real Estate
Commissioner, and would enact other related provisions.
   The bill would also authorize the commissioner to order a person
to desist and refrain from violating the laws governing these
activities, and would allow a person injured by a transaction that is
in violation of the law to recover damages, interest, and attorney's
fees, as specified.
   It would provide that certain acts are public offenses, punishable
by fine and imprisonment.
   (3) This bill would incorporate additional changes in Section
10250.2 of the Business and Professions Code, proposed by AB 2530, to
be operative only if AB 2530 and this bill are both chaptered and
become effective January 1, 1997, and this bill is chaptered last.
  (4)  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.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 10238.3 of the Business and Professions Code is
repealed.
  SEC. 2.  Section 10238.4 of the Business and Professions Code is
repealed.
  SEC. 3.  Section 10238.45 of the Business and Professions Code is
repealed.
  SEC. 4.  Section 10238.5 of the Business and Professions Code is
repealed.
  SEC. 5.  Section 10238.8 is added to Article 6 (commencing with
Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business
and Professions Code, to read:
   10238.8.  (a) This article shall remain operative as long as a
conservatorship or liquidation proceeding pursuant to Article 6.5
(commencing with Section 10239) of Chapter 3 of Division 4, that was
commenced prior to the effective date of the act enacting this
section, remains active.
   (b) Notwithstanding any other provision of this article, no
conservatorship or liquidation proceeding shall be commenced on or
after the effective date of the act enacting this section.
   (c) The commissioner shall determine when the last pending
proceeding described in subdivision (a) is terminated.  The
commissioner shall submit a notice of that determination to the
Secretary of State, and this article shall be repealed upon the
receipt of that notice by the Secretary of State.
  SEC. 6.  Section 10239.36 is added to Article 6.5 (commencing with
Section 10239) of Chapter 3 of Part 1 of Division 4 of the Business
and Professions Code, to read:
   10239.36.  (a) This article shall remain operative as long as a
conservatorship or liquidation proceeding pursuant to Article 6.5
(commencing with Section 10239) of Chapter 3 of Division 4, that was
commenced prior to the effective date of the act enacting this
section, remains active.
   (b) Notwithstanding any other provision of this article, no
conservatorship or liquidation proceeding shall be commenced on or
after the effective date of the act enacting this section.
   (c) The commissioner shall determine when the last pending
proceeding described in subdivision (a) is terminated.  The
commissioner shall submit a notice of that determination to the
Secretary of State, and this article shall be repealed upon the
receipt of that notice by the Secretary of State.
  SEC. 7.  Section 10250.2 of the Business and Professions Code is
amended to read:
   10250.2.  (a) The sale or lease, or the offering for sale or
lease, of lots or parcels in a subdivision shall be governed by this
article and Chapter 1 (commencing with Section 11000) of Part 2,
insofar as applicable.
   (b) The commissioner shall apply the provisions of Sections 11018
and 11018.5, after taking into consideration the differences in the
applicable laws of the various states with respect to subdivisions,
to afford substantially the same level of public protection to
purchasers of an interest in a subdivision offering governed by this
article as is afforded to purchasers of subdivision interests
situated entirely within this state.
   The commissioner may adopt regulations reasonably necessary to
enforce this article.
  SEC. 7.5.  Section 10250.2 of the Business and Professions Code is
amended to read:
   10250.2.  (a) The sale or lease, or the offering for sale or
lease, of lots or parcels in a subdivision shall be governed by this
article and Chapter 1 (commencing with Section 11000) of Part 2,
insofar as applicable.
   (b) Subject to the provisions of Sections 11018.8, 11018.9,
11018.10, 11018.11, and 10250.8, the commissioner shall apply the
provisions of Sections 11018 and 11018.5, after taking into
consideration the differences in the applicable laws of the various
states with respect to subdivisions, to afford substantially the same
level of public protection to purchasers of an interest in a
subdivision offering governed by this article as is afforded to
purchasers of subdivision interests situated entirely within this
state.
   The commissioner may adopt regulations reasonably necessary to
enforce this article.
  SEC. 8.  Section 10250.25 is added to the Business and Professions
Code, to read:
   10250.25.  As used in this article, "sale" or "sell" includes
every issuance, creation for resale, disposition, or attempt to
dispose of any interest in a subdivision for value and includes all
of the following, whether done directly or by circular letter,
advertisement, radio or television broadcast, or otherwise:  an offer
to sell, an attempt to sell, a solicitation of a sale, a contract of
sale, or an exchange.
  SEC. 9.  Section 10250.51 is added to the Business and Professions
Code, to read:
   10250.51.  Whenever the commissioner finds that any person is
violating the provisions of this article, that any person is
conducting business in an unsafe or injurious manner, that the
further sale of subdivision interests under the provisions of this
article would be unfair, unjust, or inequitable, or that the method
used in those sales would be a fraud upon the purchasers, the
commissioner may order the person to desist and refrain from
violating the provisions of this article or from further sales in
accordance with the procedures set forth in Section 10086.
  SEC. 10.  Section 10250.52 is added to the Business and Professions
Code, to read:
   10250.52.  No interest in a subdivision, as defined in Section
10250.1, shall be sold to the public unless either the subdivider or
person offering the interest for sale first obtains a permit from the
commissioner.
  SEC. 11.  Section 10250.53 is added to the Business and Professions
Code, to read:
   10250.53.  If the commissioner finds that the proposed offering of
interest in a subdivision, as defined in Section 10250.1, meets the
applicable requirements of this article, the commissioner shall issue
to the applicant a permit authorizing the sale or the offering for
sale of the subdivision interest upon those terms and conditions as
the commissioner may provide in the permit.  Otherwise, the
commissioner shall deny the application and refuse the permit, and
notify the applicant in writing of his or her decision.
  SEC. 12.  Section 10250.54 is added to the Business and Professions
Code, to read:
   10250.54.  Any applicant objecting to the denial of a permit or
the conditions of a permit may apply for a hearing and shall be
granted a hearing by the commissioner upon the legality or
reasonableness of the denial or the conditions.
  SEC. 13.  Section 10250.56 is added to the Business and Professions
Code, to read:
   10250.56.  Any person who does any of the following acts is guilty
of a public offense punishable by a fine not exceeding ten thousand
dollars ($10,000) or by imprisonment in the state prison, or in a
county jail, not exceeding one year, or by both fine and
imprisonment:
   (a) In any application to the commissioner or in any proceeding
before the commissioner, or in any examination, audit, or
investigation made by the commissioner or on his or her authority,
knowingly makes any false statement or representation, or, with
knowledge of its falsity, files or causes to be filed in the office
of the commissioner any false statement or representation in a
required report.
   (b) Issues, circulates, or publishes, or causes to be issued,
circulated, or published any advertisement, pamphlet, or circular
concerning any subdivision that contains any statement that is false
or misleading, or otherwise likely to deceive a reader thereof, with
knowledge that it contains a false, misleading, or deceptive
statement.
   (c) In any respect willfully violates or fails to comply with any
provision of this article, or willfully violates or fails, omits, or
neglects to obey, observe, or comply with any order, decision,
demand, requirement, or permit, or any part or provisions thereof, of
the commissioner under this article.
   (d) With one or more other persons, conspires to violate any
permit or order issued by the commissioner of any provision of this
article.
  SEC. 14.  Section 10250.58 is added to the Business and Professions
Code, to read:
   10250.58.  Every person sustaining an injury resulting from a
transaction subject to this article that was in violation of the
provisions of the article may recover in a civil action the amount of
the damages with interest, as awarded by the court, from the date of
the injury, and shall be entitled to be awarded reasonable attorney'
s fees.  The action shall be brought within three years from the date
of the transaction notwithstanding the date the injury was
discovered.
  SEC. 15.  Section 10261 of the Business and Professions Code is
amended to read:
   10261.  A person acting as a principal or agent may not in this
state sell or lease, or offer for sale or lease, interests in a
qualified resort vacation club, except as provided in this article,
in Article 8.5 (commencing with Section 10250), and Chapter 1
(commencing with Section 11000) of Part 2, insofar as is applicable.

  SEC. 16.  Section 25707 is added to the Corporations Code, to read:

   25707.  (a) All permits and orders issued under Article 6
(commencing with Section 10237) of Chapter 3 of Part 1 of Division 4
of the Business and Professions Code, and all conditions imposed
pursuant to those provisions, shall remain in effect for the period
of time that they would have remained in effect if those provisions
had not been repealed by the act enacting this section.  Following
the repeal of those provisions, the permits, orders, and conditions
shall be deemed to have been issued or imposed under this division.
An application to amend, extend, modify, revoke, or set aside a
permit or order shall be filed under this division and is subject to
this division.
   (b) An application pending under Article 6 (commencing with
Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business
and Professions Code, on the effective date of this section, shall be
processed by the Real Estate Commissioner subject to those
provisions as they were in effect on December 31, 1996, until each
application that was pending on the effective date of this section is
granted or denied by the Real Estate Commissioner.
   (c) Except as expressly provided by this section, all actions,
prosecutions, or proceedings under Article 6 (commencing with Section
10237) of Chapter 3 of Part 1 of Division 4 of the Business and
Professions Code that are pending prior to the effective date of this
section, or that otherwise could be initiated based on facts or
circumstances occurring prior to the effective date of this section,
shall be governed by those provisions.
   (d) No civil action may be brought to enforce any liability under
Article 6 (commencing with Section 10237) of Chapter 3 of Part 1 of
Division 4 of the Business and Professions Code, unless it is brought
within the period of limitations that applied to the action at the
time the action accrued.
   (e) Judicial review of orders under Article 6 (commencing with
Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business
and Professions Code that had not commenced prior to the effective
date of this section shall be governed by Section 25609, except that
no review proceeding shall be commenced unless the petition is filed
within the applicable period of limitations that applied to a review
proceeding when the order was issued.  Judicial review of an order of
the Real Estate Commissioner made pursuant to subdivision (b) shall
be governed by the provisions of law applicable to those proceedings
on December 31, 1996.
  SEC. 17.  Section 7.5 of this bill incorporates amendments to
Section 10250.2 of the Business and Professions Code proposed by both
this bill and AB 2530.  It shall only become operative if (1) both
bills are enacted and become effective on or before January 1, 1997,
(2) each bill amends Section 10250.2 of the Business and Professions
Code, and (3) this bill is enacted after AB 2530, in which case
Section 7 of this bill shall not become operative.
  SEC. 18.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
   Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.