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SB-25 Antitrust: premerger notification.(2025-2026)

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Date Published: 12/02/2024 09:00 PM
SB25:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill
No. 25

Introduced by Senator Umberg

December 02, 2024

An act to add Chapter 2.1 (commencing with Section 16780) to Part 2 of Division 7 of the Business and Professions Code, relating to business.


LEGISLATIVE COUNSEL'S DIGEST


SB 25, as introduced, Umberg. Antitrust: premerger notification.
Existing law generally prohibits restraints on competition and authorizes the Attorney General to bring an action on behalf of the state or of any of its political subdivisions or public agencies, as specified. Existing federal law, the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15 U.S.C. Sec. 18a), before an acquisition of voting securities or assets, requires both parties to file notification of the acquisition and additional documentary material with the Federal Trade Commission and the federal Department of Justice, if, as a result of the acquisition, the acquiring person would hold voting securities or assets in excess of a specified value, except as specified. Existing federal law prohibits disclosure of the filed information, except as relevant to an administrative or judicial action or proceeding.
This bill, the Uniform Antitrust Premerger Notification Act, would require any person who is required to file a notification pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 to additionally file a copy of the federal form with the Attorney General if the person has its principal place of business in this state or has annual net sales in this state of the goods or services involved in the transaction of at least 20% of the above-described filing threshold. The bill would also require the person to file or provide the additional documentary material required under federal law, as specified. The bill would prohibit the Attorney General from disclosing the filed information, as specified, and would authorize the Attorney General to impose a civil penalty for a violation of the filing requirement. The bill would provide that its provisions only apply to premerger notifications filed on or after January 1, 2026.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Chapter 2.1 (commencing with Section 16780) is added to Part 2 of Division 7 of the Business and Professions Code, to read:
CHAPTER  2.1. Uniform Antitrust Premerger Notification Act

16780.
 This act may be cited as the Uniform Antitrust Premerger Notification Act.

16781.
 For purposes of this act, the following definitions apply:
(a) “Additional documentary material” means the additional documentary material filed with a Hart-Scott-Rodino form.
(b) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(c) “Filing threshold” means the minimum size of a transaction that requires the transaction to be reported under the Hart-Scott-Rodino Act in effect when a person files a premerger notification.
(d) “Hart-Scott-Rodino Act” means Section 201 of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15 U.S.C. Sec. 18a), as amended.
(e) “Hart-Scott-Rodino form” means the form filed with a premerger notification, excluding additional documentary material.
(f) “Person” means an individual, estate, business or nonprofit entity, government or governmental subdivision, agency, or instrumentality, or other legal entity.
(g) “Premerger notification” means a notification filed under the Hart-Scott-Rodino Act with the Federal Trade Commission or the United States Department of Justice Antitrust Division, or a successor agency.
(h) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any other territory or possession subject to the jurisdiction of the United States.

16782.
 (a) A person filing a premerger notification shall file contemporaneously a complete electronic copy of the Hart-Scott-Rodino form with the Attorney General if either of the following apply:
(1) The person has its principal place of business in this state.
(2) The person or a person it controls directly or indirectly had annual net sales in this state of the goods or services involved in the transaction of at least 20 percent of the filing threshold.
(b) A person that files a form under paragraph (1) of subdivision (a) shall include with the filing a complete electronic copy of the additional documentary material.
(c) Upon request of the Attorney General, a person that filed a form under paragraph (2) of subdivision (a) shall provide a complete electronic copy of the additional documentary material to the Attorney General not later than seven days after receipt of the request.
(d) The Attorney General shall not charge a fee connected with the filing or providing the form or additional documentary material under this section.

16783.
 (a) Except as provided in subdivision (c) or Section 16784, the Attorney General shall not make public or disclose any of the following:
(1) A Hart-Scott-Rodino form filed under Section 16782.
(2) The additional documentary material filed or provided under Section 16782.
(3) A Hart-Scott-Rodino form or additional documentary material provided by the attorney general of another state.
(4) That the form or additional documentary material were filed or provided under Section 16782, or provided by the attorney general of another state.
(5) The merger proposed in the form.
(b) A form, additional documentary material, and other information listed in subdivision (a) are exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(c) Subject to a protective order entered by an agency, court, or judicial officer, the Attorney General may disclose a form, additional documentary material, or other information listed in subdivision (a) in an administrative proceeding or judicial action if the proposed merger is relevant to the proceeding or action.
(d) This act does not do any of the following:
(1) Limit any other confidentiality or information-security obligation of the Attorney General.
(2) Preclude the Attorney General from sharing information with the Federal Trade Commission or the United States Department of Justice Antitrust Division, or a successor agency.
(3) Preclude the Attorney General from sharing information with the attorney general of another state that has enacted the Uniform Antitrust Premerger Notification Act or a substantively equivalent act. The other state’s act must include confidentiality provisions at least as protective as the confidentiality provisions of the Uniform Antitrust Premerger Notification Act.

16784.
 (a) The Attorney General may disclose a Hart-Scott-Rodino form and additional documentary material filed or provided under Section 16782 to the attorney general of another state that enacts the Uniform Antitrust Premerger Notification Act or a substantively equivalent act. The other state’s act must include confidentiality provisions at least as protective as the confidentiality provisions of the Uniform Antitrust Premerger Notification Act.
(b) At least two business days before making a disclosure under subdivision (a), the Attorney General shall give notice of the disclosure to the person filing or providing the form or additional documentary material under Section 16782.

16785.
 The Attorney General may impose a civil penalty of not more than ten thousand dollars ($10,000) per day of noncompliance on a person that fails to comply with subdivisions (a), (b), or (c) of Section 16782. A civil penalty imposed under this section is subject to procedural requirements applicable to the Attorney General, including the requirements of due process.

16786.
 In applying and construing this act, a court shall consider the promotion of uniformity of the law among jurisdictions that enact it.

16787.
 This act applies only to a premerger notification filed on or after January 1, 2026.

SEC. 2.

 The Legislature finds and declares that Section 1 of this act, which adds Chapter 2.1 (commencing with Section 16780) to Part 2 of Division 7 of the Business and Professions Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
The premerger notification information and materials subject to this act are highly sensitive, future-looking business information. Release of these materials outside of law enforcement and investigatory purposes could cause material harm to the filing companies and foster securities law violations and anticompetitive conduct by third parties. This is why these filings are confidential at the federal level and must remain confidential at the state level.