Amended IN Assembly May 04, 2021 Amended IN Assembly April 08, 2021 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 1172Introduced by Assembly Member ODonnellFebruary 18, 2021 An act to amend Section 17210 of, and to add Section 17406.0.1 to, the Financial Code, relating to escrow agents. LEGISLATIVE COUNSEL'S DIGESTAB 1172, as amended, ODonnell. 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 licensees 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 Boards Accounting Standards Update, relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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, unless an independent public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified, as defined. to be not prepared in accordance with generally accepted accounting principles and specified rules of the commissioner. 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: YES Local Program: YES Bill TextThe 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 Boards Accounting Standards Update 2016-02, Leases (Topic 842), relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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.(2) The financial statements shall be prepared in accordance with generally accepted accounting principles and the audits shall be conducted in accordance with generally accepted auditing standards and the rules of the commissioner pursuant to Section 17406.(b) A licensee shall be exempt pursuant to subdivision (a) only until unless an independent accountant, third-party contractor, public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified. reports and financial statements to be not prepared in accordance with generally accepted accounting principles and the rules of the commissioner pursuant to Section 17406.(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 Boards Accounting Standards Updates.SEC. 3. 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.
Amended IN Assembly May 04, 2021 Amended IN Assembly April 08, 2021 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 1172Introduced by Assembly Member ODonnellFebruary 18, 2021 An act to amend Section 17210 of, and to add Section 17406.0.1 to, the Financial Code, relating to escrow agents. LEGISLATIVE COUNSEL'S DIGESTAB 1172, as amended, ODonnell. 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 licensees 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 Boards Accounting Standards Update, relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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, unless an independent public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified, as defined. to be not prepared in accordance with generally accepted accounting principles and specified rules of the commissioner. 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: YES Local Program: YES
Amended IN Assembly May 04, 2021 Amended IN Assembly April 08, 2021
Amended IN Assembly May 04, 2021
Amended IN Assembly April 08, 2021
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Assembly Bill
No. 1172
Introduced by Assembly Member ODonnellFebruary 18, 2021
Introduced by Assembly Member ODonnell
February 18, 2021
An act to amend Section 17210 of, and to add Section 17406.0.1 to, the Financial Code, relating to escrow agents.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 1172, as amended, ODonnell. 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 licensees 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 Boards Accounting Standards Update, relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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, unless an independent public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified, as defined. to be not prepared in accordance with generally accepted accounting principles and specified rules of the commissioner. 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.
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 licensees 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 Boards Accounting Standards Update, relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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, unless an independent public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified, as defined. to be not prepared in accordance with generally accepted accounting principles and specified rules of the commissioner. 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
## 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 Boards Accounting Standards Update 2016-02, Leases (Topic 842), relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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.(2) The financial statements shall be prepared in accordance with generally accepted accounting principles and the audits shall be conducted in accordance with generally accepted auditing standards and the rules of the commissioner pursuant to Section 17406.(b) A licensee shall be exempt pursuant to subdivision (a) only until unless an independent accountant, third-party contractor, public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified. reports and financial statements to be not prepared in accordance with generally accepted accounting principles and the rules of the commissioner pursuant to Section 17406.(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 Boards Accounting Standards Updates.SEC. 3. 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.
The people of the State of California do enact as follows:
## 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.
SECTION 1. Section 17210 of the Financial Code is amended to read:
### SECTION 1.
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.
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.
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.
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 Boards Accounting Standards Update 2016-02, Leases (Topic 842), relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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.(2) The financial statements shall be prepared in accordance with generally accepted accounting principles and the audits shall be conducted in accordance with generally accepted auditing standards and the rules of the commissioner pursuant to Section 17406.(b) A licensee shall be exempt pursuant to subdivision (a) only until unless an independent accountant, third-party contractor, public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified. reports and financial statements to be not prepared in accordance with generally accepted accounting principles and the rules of the commissioner pursuant to Section 17406.(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 Boards Accounting Standards Updates.
SEC. 2. Section 17406.0.1 is added to the Financial Code, to read:
### SEC. 2.
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 Boards Accounting Standards Update 2016-02, Leases (Topic 842), relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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.(2) The financial statements shall be prepared in accordance with generally accepted accounting principles and the audits shall be conducted in accordance with generally accepted auditing standards and the rules of the commissioner pursuant to Section 17406.(b) A licensee shall be exempt pursuant to subdivision (a) only until unless an independent accountant, third-party contractor, public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified. reports and financial statements to be not prepared in accordance with generally accepted accounting principles and the rules of the commissioner pursuant to Section 17406.(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 Boards Accounting Standards Updates.
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 Boards Accounting Standards Update 2016-02, Leases (Topic 842), relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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.(2) The financial statements shall be prepared in accordance with generally accepted accounting principles and the audits shall be conducted in accordance with generally accepted auditing standards and the rules of the commissioner pursuant to Section 17406.(b) A licensee shall be exempt pursuant to subdivision (a) only until unless an independent accountant, third-party contractor, public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified. reports and financial statements to be not prepared in accordance with generally accepted accounting principles and the rules of the commissioner pursuant to Section 17406.(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 Boards Accounting Standards Updates.
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 Boards Accounting Standards Update 2016-02, Leases (Topic 842), relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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.(2) The financial statements shall be prepared in accordance with generally accepted accounting principles and the audits shall be conducted in accordance with generally accepted auditing standards and the rules of the commissioner pursuant to Section 17406.(b) A licensee shall be exempt pursuant to subdivision (a) only until unless an independent accountant, third-party contractor, public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified. reports and financial statements to be not prepared in accordance with generally accepted accounting principles and the rules of the commissioner pursuant to Section 17406.(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 Boards Accounting Standards Updates.
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 Boards Accounting Standards Update 2016-02, Leases (Topic 842), relating to lease accounting requirements, if the licensee submits to the commissioner, at the licensees 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.
(2) The financial statements shall be prepared in accordance with generally accepted accounting principles and the audits shall be conducted in accordance with generally accepted auditing standards and the rules of the commissioner pursuant to Section 17406.
(b) A licensee shall be exempt pursuant to subdivision (a) only until unless an independent accountant, third-party contractor, public accountant or the commissioner conducts an audit of the licensee and deems the licensees financial records are not materially designated as qualified. reports and financial statements to be not prepared in accordance with generally accepted accounting principles and the rules of the commissioner pursuant to Section 17406.
(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 Boards Accounting Standards Updates.
SEC. 3. 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.
SEC. 3. 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.
SEC. 3. 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.
### SEC. 3.