Bill Summary for H 680 (2013-2014)

Summary date: 

May 9 2013

Bill Information:

View NCGA Bill Details2013-2014 Session
House Bill 680 (Public) Filed Tuesday, April 9, 2013
Intro. by Murry, Moffitt, Shepard, Hastings.

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Bill summary

House committee substitute makes the following changes to the 1st edition.

Amends GS 78-17 to add a new exemption to the list of transactions that are exempt from the registration and filing requirementsto includethe offer or sale of securities conducted in accordance with proposed GS 78A-17.1,the Invest NC exemption.

Recodifiesthe Invest NC exemptionas new GS 78A-17.1 (was, GS 78A-19). Clarifies that an offer or sale of a security by an issuer is exempt from registration requirements under GS 78-24 andfiling requirements under GS 78A-49(d) providing that the offer or sale is conducted in accordance with specified requirements.

Requires the issuer to file a notice with the Securities Administrator (Secretary of State) no less than 10 days before beginning to offer securities under the exemption. Requires the notice to include certain specified information including a disclosure statement to be provided to investors and an escrow agreement between the issuer and a North Carolina bank or depository institution. Requires that the funds received from investors be held until the minimum target offering amount is reached and that investors may cancel their purchase if the target is not reached. Directs the issuer to inform all purchasersunder this section that the securities have not been registered under federal or state securities law.Expands the language thatthe issuer must conspicuously display words as specified in this sectionon the cover page of thedocumentdisclosingspecifiedinformationas to making an investment decision.

Expands the list of requirements that must be met if the offer and sale of securitiesis made through an Internet web site toinclude provisions regarding notice, maintenance of records, and payments for the purchase of securities. Specifies requirements, which if met, exempts the website from the registration provisions of GS 78A-36. Also extends the exemption under GS 78A-36 to an executive officer, director, managing member, or person of similar status performing functions in the name of and on behalf of the issuer providing that such persons do not receive, directly or indirectly, any commission or remuneration for offering and selling the issuer's securities under this exemption.

Deletes provision that provides fora disqualification for the exemption allowed by this section if any of certain specifications apply to an issuer or a person affiliated with the issuer or offering within five years prior to the offering. Instead provides for disqualification for the exemption if an issuer or person affiliated with the issuer or offering is subject to any qualifications contained in 18 NCAC 06A. 1207(a)(1) through (a)(6) or contained in Rule 262 as promulgated under the Securities Act of 1933 (17 CFR 230.262).

Directs the Administrator to charge a nonrefundable filing fee of $150 for filing the exemption notice.

Makes a conforming change to GS 78A-49(d) regarding the informational filing requirement.

Requiresthe Secretary of State (Administrator) to adopt rules to implement this act within 12 months. Provides for a 15-day notice and comment period and requires the Administrator to hold at least one public hearing on the rules. Provides that the rules become effective on the first day of the month following the date the rules are adopted and sent to the Codifier of Rules for entry into the Administrative Code. Provides that this provision expires 12 months after the effective date of this act.

Replaces references to the authority and actions of the "Commissioner" with "Administrator" or its equivalent under this act, the "Secretary of State," wherever it occurs. Makes conforming changes.

Provides that this act is effective when it becomes law and expires on July 1, 2017.

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