HB 2889: To permit a fairness hearing exemption to the registration requirements of the Uniform Securities Act. - West Virginia

hb2889 s b_i am _1 4-2 adopted.htm → hb2889 s bnk amt _1 4-2 adopted.htm · 6 edits

MODERATE

The bill was amended to replace the entire original text with a new version that establishes a fairness hearing process for securities exchanges. The new version adds specific definitions for reorganization, recapitalization, and refinancing, creates a formal application process with fees capped at $500, sets 30-day and 10-day deadlines for hearings and findings, and authorizes the commissioner to recover hearing costs. This significantly expands the commissioner's regulatory authority over complex securities transactions.

Scope change

The bill now applies specifically to securities exchanges in reorganizations, recapitalizations, or refinancing involving corporations or limited liability companies organized or with principal business in West Virginia, rather than the broader general exemptions previously listed.

SCOPE

Replaced general securities exemptions with a focused fairness hearing process for specific corporate restructuring transactions.

DEFINITION

Added new definitions for 'reorganization,' 'recapitalization,' and 'refinancing' to clarify when the fairness hearing process applies.

REQUIREMENT

Created new application requirements including forms, supporting documents, and a $500 filing fee cap.

TIMELINE

Established specific deadlines: 30 days for holding hearings after complete application and 10 business days for issuing findings.

FISCAL

Authorized the commissioner to invoice applicants for costs of conducting fairness hearings and preparing findings.

ENFORCEMENT

Added procedures for notice requirements, hearing rights for affected parties, and commissioner authority to deny or revoke exemptions.

Committee Substitute for the Committee Substitute → hb2889 s b_i am _1 4-2 adopted.htm · 6 edits

MODERATE

The bill was amended to replace the previous Committee Substitute version with a new version that significantly expands the scope of exemptions and adds detailed procedures for fairness hearings. The new version clarifies definitions of reorganization, recapitalization, and refinancing, establishes specific timelines for hearings, and adds new transaction exemptions including isolated nonissuer transactions and offers to institutional buyers.

Scope change

The bill now applies to a broader range of securities transactions and adds specific procedural requirements for fairness hearings, while expanding the list of exempt transactions to include more types of nonissuer transactions and institutional sales.

DEFINITION

Added new section §32-4-402a that defines 'reorganization,' 'recapitalization,' and 'refinancing' to include readjustments by modification, exchange of securities, asset acquisitions, and mergers.

REQUIREMENT

Established a formal application process with specific deadlines: hearings must be held within 30 days of filing, and commissioners must issue decisions within 10 business days after the hearing.

ELIGIBILITY

Expanded transaction exemptions to include isolated nonissuer transactions, offers to institutional buyers, and transactions with up to 10 offerees under specific conditions.

FISCAL

Set a maximum filing fee cap of $500 for fairness hearing applications, replacing the previous unspecified fee structure.

ENFORCEMENT

Added procedures for commissioners to deny or revoke exemptions with notice, hearing opportunities, and written findings, plus provisions for summary orders pending final determination.

TECHNICAL

Updated cross-references to use current code section numbers (§32-3-301 and §32-4-403) and changed some formatting from 'section 301' to '§32-3-301' for consistency.

Committee Substitute → Committee Substitute for the Committee Substitute · 6 edits

MODERATE

This bill revision reorganizes the fairness hearing process for security exchanges into a more structured format with clearer definitions and streamlined procedures. The changes clarify eligibility criteria, establish specific timelines for hearing requests, and modify fee structures to provide more predictable costs for applicants.

Scope change

The bill maintains its core purpose of authorizing fairness hearings for security exchanges but restructures the statutory language to improve clarity and organization.

DEFINITION

Reorganized definitions of reorganization, recapitalization, and refinancing from paragraph format to numbered list format for better readability.

REQUIREMENT

Added explicit requirement that filing fees may not exceed $500, replacing the previous $500 flat fee with a cap.

Added requirement for Commissioner to issue findings within 10 business days after holding the fairness hearing.

TIMELINE

Modified hearing timeline requirements to specify hearings must occur within 30 days of complete application filing.

ENFORCEMENT

Added new subsection (h) clarifying that hearing costs may not exceed $5,000, replacing the previous range of $500-$5,000.

ELIGIBILITY

Modified exemption language in subsection (a)(13) to clarify that transactions are exempt if approved by Commissioner at hearing.

Enrolled Version → Committee Substitute · 3 edits

MINOR

The bill was amended to change the Commissioner of Securities to the Commissioner of the State Auditor as the official responsible for conducting fairness hearings on security exchanges. The text was also cleaned up to remove website navigation elements and formatting artifacts that appeared in the original enrolled version.

Scope change

The scope of responsibility shifted from the Commissioner of Securities to the Commissioner of the State Auditor for conducting fairness hearings on security exchange transactions.

ENFORCEMENT

Changed the official responsible for conducting fairness hearings from the Commissioner of Securities to the Commissioner of the State Auditor of West Virginia.

TECHNICAL

Removed website navigation links, menu items, and formatting artifacts that were embedded in the original enrolled version text.

Corrected minor formatting inconsistencies and citation styles throughout the document.

Engrossed Committee Substitute for the Committee Substitute → Enrolled Version · 5 edits · Apr 29, 2025

MODERATE

The bill was finalized into its enrolled version with minor formatting corrections and the addition of a new section (§32-4-402a) establishing a fairness hearing process for securities reorganizations. The text was cleaned up to remove website navigation elements and standardize formatting between the committee substitute and final enrolled versions.

Scope change

The scope of the bill remains focused on securities law exemptions, but the final version adds a new section authorizing the Commissioner of Securities to conduct fairness hearings for reorganization transactions.

REQUIREMENT

Added a new section (§32-4-402a) that authorizes the Commissioner of Securities to conduct fairness hearings for transactions involving the exchange of securities, claims, or property interests during reorganizations, recapitalizations, or refinancing.

Added a filing fee cap of $500 for applications related to fairness hearings and established a 30-day timeline for the Commissioner to hold hearings after receiving complete applications.

DEFINITION

Added specific definitions for 'reorganization,' 'recapitalization,' and 'refinancing' to clarify when the fairness hearing process applies.

TECHNICAL

Corrected formatting issues, removed website navigation elements, and standardized section numbering between the committee substitute and final enrolled versions.

FISCAL

Authorized the Commissioner to invoice applicants for costs associated with conducting fairness hearings and preparing findings.

Introduced Version → Engrossed Committee Substitute for the Committee Substitute · 6 edits · Apr 10, 2025

MODERATE

This bill was amended to modernize its language and expand the Commissioner's authority to conduct fairness hearings for securities exchanges. The changes include clarifying the bill's purpose, adding explicit authorization for remote hearings (video/telephone), increasing fee caps, and updating the bill type from 'amending' to 'amending and reenacting' an existing section.

Scope change

The bill's scope remains focused on securities exchange fairness hearings, but the applicability was clarified to explicitly exclude plans with no proposed securities issuance.

REQUIREMENT

Added explicit authorization for the Commissioner to conduct hearings via telephone, video conference, or other appropriate modes.

Added requirement that applicants provide evidence of notice to the Commissioner prior to the hearing.

FISCAL

Increased filing fee cap from $100 to $500 and hearing cost cap from $1,000 to $5,000.

DEFINITION

Updated language to clarify that the section does not apply to reorganization plans with no proposed securities issuance.

TECHNICAL

Changed bill type from 'amending' to 'amending and reenacting' §32-4-402 and added new section §32-4-402a.

ENFORCEMENT

Clarified that approved securities are exempt from registration requirements under §32-3-301.

To permit a fairness hearing exemption to the registration requirements of the Uniform Securities Act.

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