More than a decade ago, the California legislature added the Capital Access Company Law to the Corporations Code, Stats. 1998, c. 668 (S.B. 2189).  The intent of the law was to take advantage of an exemption to the Investment Company Act of 1940 that Congress added as part of the National Securities Markets Improvement Act of 1996.  Section 6(a)(5)(A) exempts "Any company that is not engaged in the business of issuing redeemable securities, the operations of which are subject to regulation by the State in which the company is organized under a statute governing entities that provide financial or managerial assistance to enterprises doing business, or proposing to do business, in that State" provided a number of conditions are satisfied (n.b. Section 939(c) of the Dodd-Frank Wall Street Reform and Consumer Protection Act amends one of these conditions).  To my knowledge, no other state has enacted a law to take advantage of this Investment Company Act exemption.  Although the Commissioner of Corporations adopted an application form and regulations (10 CCR § 280.100 et seq.), no companies have been licensed under the law.

Earlier this year, Senator Dutton introduced SB 1155 to address some of the perceived shortcomings of the initial Capital Access Company Law.  The bill appears on track for enactment this summer.  The fact that there is a Capital Access Law and a bill to improve that law represents the indefatigable efforts of my friend, Lee Petillon, who has been responsible for a number of key corporate and security law changes over the years.  Assuming SB 1155 becomes law, perhaps a capital access company will not be as rare a bird as the ivory-billed woodpecker.