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HB 271: "An Act relating to a money services business; relating to transmitting value that substitutes for money; relating to licensing requirements and registration through the Nationwide Multistate Licensing System and Registry; relating to surety bonding requirements; authorizing certain licensees to contract to use subdelegates for reloading funds onto stored-value cards; relating to record retention, reporting requirements, and enforcement provisions; relating to exemptions; relating to money services Internet activities; relating to definitions regarding the transmitting value, currency, and money transmission business activities; and providing for an effective date."

00 HOUSE BILL NO. 271 01 "An Act relating to a money services business; relating to transmitting value that 02 substitutes for money; relating to licensing requirements and registration through the 03 Nationwide Multistate Licensing System and Registry; relating to surety bonding 04 requirements; authorizing certain licensees to contract to use subdelegates for reloading 05 funds onto stored-value cards; relating to record retention, reporting requirements, and 06 enforcement provisions; relating to exemptions; relating to money services Internet 07 activities; relating to definitions regarding the transmitting value, currency, and money 08 transmission business activities; and providing for an effective date." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10 * Section 1. AS 06.55.101(a) is amended to read: 11 (a) Unless exempt under AS 06.55.802, a [A] person may not engage in the 12 business of money transmission or advertise, solicit, or hold the person out as

01 providing money transmission unless the person 02 (1) holds a money transmission license; or 03 (2) is an authorized delegate of a person who holds a money 04 transmission license. 05 * Sec. 2. AS 06.55.101(c) is amended by adding a new subsection to read: 06 (c) A person required to be licensed under AS 06.55.101 - 06.55.106 shall 07 register with the registry and maintain a valid unique identifier issued by the registry. 08 * Sec. 3. AS 06.55.102 is repealed and reenacted to read: 09 Sec. 06.55.102. Application for license. An application for a money 10 transmission license under this chapter must 11 (1) be in a format established by the department; 12 (2) contain complete information required by the department; 13 (3) include each control person's fingerprints for submission to the 14 Department of Public Safety or the Federal Bureau of Investigations and any 15 governmental agency or entity authorized to receive that information to obtain a report 16 of criminal justice information and a national criminal history record check; 17 (4) include personal history and experience in a format established by 18 the department to obtain 19 (A) an independent credit report from a consumer reporting 20 agency; and 21 (B) information related to administrative, civil, or criminal 22 findings by a governmental jurisdiction; 23 (5) contain other information or supporting material that the 24 department may require concerning the applicant, including the organization and 25 operations of an applicant for a money transmission license and the financial 26 responsibility, background, experience, and activities of the applicant; 27 (6) include a nonrefundable application fee and an initial license fee, as 28 established by the department; and 29 (7) include a surety bond as required by AS 06.55.104. 30 * Sec. 4. AS 06.55.104 is repealed and reenacted to read: 31 Sec. 06.55.104. Security. (a) A surety bond must accompany an application

01 for a money transmission license. The surety bond must be at least $25,000 and may 02 not exceed $1,000,000 as established by the department. 03 (b) The surety bond must be in a form satisfactory to the department and 04 payable to the state for the benefit of the state and any person or persons who suffer 05 loss due to a violation of this chapter by a licensee or a licensee's authorized delegate. 06 (c) The aggregate liability on a surety bond may not exceed the principal sum 07 of the bond. A claimant against a money transmission licensee may maintain an action 08 on the bond, or the department may maintain an action on behalf of the claimant. 09 (d) A surety bond must cover claims for as long as the department specifies, 10 but for at least five years after the date the money transmission licensee stops 11 providing money services in this state. The department may permit the amount of 12 security to be reduced or eliminated before the expiration of that time to the extent the 13 amount of the money transmission licensee's payment instruments or stored-value 14 obligations outstanding is reduced. 15 (e) The bond must be obtained from a surety company authorized to do 16 business in this state. 17 (f) If a money transmission licensee does not maintain a surety bond in the 18 amount required under (a) of this section, the department may issue an order under 19 AS 06.55.603. 20 * Sec. 5. AS 06.55.105 is repealed and reenacted to read: 21 Sec. 06.55.105. Issuance of license. (a) When an application is filed under 22 AS 06.55.102, the department shall investigate the applicant's financial condition and 23 responsibility, financial and business experience, competence, character, and general 24 fitness. The department may conduct an investigation of the applicant, the reasonable 25 cost of which the applicant shall pay. The department shall issue a money transmission 26 license to an applicant under AS 06.55.102 if the department finds that all of the 27 following conditions have been fulfilled: 28 (1) the applicant has complied with the requirements of this chapter for 29 obtaining the license; 30 (2) the financial condition and responsibility, financial and business 31 experience, competence, character, and general fitness of the applicant indicate that it

01 is in the interest of the public to permit the applicant to engage in money transmission; 02 and 03 (3) the applicant, including any employees or independent contractors 04 of the applicant, is not listed on the Specially Designated Nationals and Blocked 05 Persons List or any other Office of Foreign Assets Control sanctions list prepared by 06 the United States Department of the Treasury or designated successor agency. 07 (b) When an application for an original money transmission license under 08 AS 06.55.102 is complete, the department shall promptly notify the applicant in a 09 record of the date on which the application was determined to be complete and the 10 department shall approve or deny the application not later than 120 days after that 11 date. 12 (c) The department may for good cause extend the application period. 13 (d) An applicant whose application under AS 06.55.102 is denied by the 14 department under AS 06.55.101 - 06.55.106 may appeal, not later than 30 days after 15 receipt of the notice of the denial, and request a hearing. 16 (e) A license issued under AS 06.55.101 - 06.55.106 remains in effect until 17 December 31 of the year in which the license is issued, unless the license is revoked, 18 is suspended, or is surrendered. 19 * Sec. 6. AS 06.55.106 is repealed and reenacted to read: 20 Sec. 06.55.106. Renewal of license. (a) To renew a license, the licensee shall 21 submit to the department a 22 (1) renewal application at a time and in a format established by the 23 department; 24 (2) renewal fee as established by the department; and 25 (3) report identifying any changes in the information previously 26 provided and any additional information requested by the department. 27 (b) The department shall approve or deny the application for renewal of a 28 license not later than 60 days after the renewal application is filed. 29 * Sec. 7. AS 06.55 is amended by adding a new section to read: 30 Sec. 06.55.108. Annual assessment fee and annual report. (a) A licensee 31 shall pay an annual assessment fee as established by the department not later than the

01 annual assessment due date or, if the annual assessment due date is not a business day, 02 on the next business day. Annual assessment fees shall be established by the 03 department in regulation. 04 (b) A licensee shall submit an accurate annual report with the annual 05 assessment in a format established by the department. 06 (c) If a licensee does not file an annual report or pay its annual assessment by 07 the assessment due date, the department shall assess the licensee a late fee as 08 established by the department. 09 * Sec. 8. AS 06.55.201(a) is amended to read: 10 (a) Unless exempt under AS 06.55.802, a [A] person may not engage in the 11 business of currency exchange or advertise, solicit, or hold the person out as providing 12 currency exchange for which the person receives revenues equal or greater than five 13 percent of total revenues unless the person 14 (1) holds a currency exchange license; or 15 (2) holds a money transmission license [; OR 16 (3) IS AN AUTHORIZED DELEGATE OF A PERSON WHO 17 HOLDS A MONEY TRANSMISSION LICENSE]. 18 * Sec. 9. AS 06.55.201 is amended by adding a new subsection to read: 19 (c) A person required to be licensed under AS 06.201 - 06.55.206 must 20 register with the registry and maintain a valid unique identifier issued by the registry. 21 * Sec. 10. AS 06.55.202 is repealed and reenacted to read: 22 Sec. 06.55.202. Application for license. An application for a currency 23 exchange license must 24 (1) be in a format established by the department; 25 (2) contain complete information required by the department; 26 (3) include each control person's fingerprints for submission to the 27 Department of Public Safety or the Federal Bureau of Investigations and any 28 governmental agency or entity authorized to receive that information to obtain a report 29 of criminal justice information and a national criminal history record check. 30 (4) include personal history and experience in a format established by 31 the department to obtain

01 (A) an independent credit report from a consumer reporting 02 agency; and 03 (B) information related to administrative, civil, or criminal 04 findings by a governmental jurisdiction; 05 (5) contain other information or supporting material that the 06 department may require concerning the applicant, including the organization and 07 operations of an applicant for a currency exchange license and the financial 08 responsibility, background, experience, and activities of the applicant; 09 (6) include a nonrefundable application fee and an initial license fee, as 10 established by the department; 11 (7) include a surety bond as required by AS 06.55.206. 12 * Sec. 11. AS 06.55.203(a) is amended to read: 13 (a) When an application [FOR A CURRENCY EXCHANGE LICENSE] is 14 filed under AS 06.55.202 [AS 06.55.201 - 06.55.204], the department shall investigate 15 the applicant's financial condition and responsibility, financial and business 16 experience, competence, character, and general fitness. The department may conduct 17 an [ON-SITE] investigation of the applicant, the reasonable cost of which the 18 applicant shall pay. The department shall issue a currency exchange license to an 19 applicant under AS 06.55.202 [AS 06.55.201 - 06.55.204] if the department finds that 20 all of the following conditions have been fulfilled: 21 (1) the applicant has complied with the requirements of this chapter 22 for obtaining the license [AS 06.55.202]; and 23 (2) the financial condition and responsibility, financial and business 24 experience, competence, character, and general fitness [OF THE APPLICANT, AND 25 THE COMPETENCE, EXPERIENCE, CHARACTER, AND GENERAL FITNESS 26 OF THE EXECUTIVE OFFICERS, MANAGERS, DIRECTORS, AND PERSONS 27 IN CONTROL] of the applicant indicate that it is in the interest of the public to permit 28 the applicant to engage in currency exchange; and 29 (3) the applicant, including any employees or independent 30 contractors of the applicant, is not listed on the Specially Designated Nationals 31 and Blocked Persons List or any other Office of Foreign Assets Control sanctions

01 list prepared by the United States Department of the Treasury or designated 02 successor agency. 03 * Sec. 12. AS 06.55.203(b) is amended to read: 04 (b) When an application for an original currency exchange license under 05 AS 06.55.202 [AS 06.55.201 - 06.55.204] is complete, the department shall promptly 06 notify the applicant in a record of the date on which the application was determined to 07 be complete, and 08 [(1)] the department shall approve or deny the application not later 09 than [WITHIN] 120 days after that date [; OR 10 (2) IF THE APPLICATION IS NOT APPROVED OR DENIED 11 WITHIN 120 DAYS AFTER THAT DATE, 12 (A) THE APPLICATION IS APPROVED; AND 13 (B) THE DEPARTMENT SHALL ISSUE THE CURRENCY 14 EXCHANGE LICENSE UNDER AS 06.55.201 - 06.55.204 TO TAKE 15 EFFECT AS OF THE FIRST BUSINESS DAY AFTER EXPIRATION OF 16 THE PERIOD]. 17 * Sec. 13. AS 06.55.203(d) is amended to read: 18 (d) An applicant whose application under AS 06.55.202 is denied by the 19 department under AS 06.55.201 - 06.55.206 [AS 06.55.201 - 06.55.204] may appeal, 20 not later than [WITHIN] 30 days after receipt of the notice of the denial, [FROM 21 THE DENIAL] and request a hearing. 22 * Sec. 14. AS 06.55.203 is amended by adding a new subsection to read: 23 (e) A license issued under AS 06.55.201 - 06.55.206 remains in effect until 24 December 31 of the year in which the license is issued, unless the license is revoked, 25 is suspended, or is surrendered. 26 * Sec. 15. AS 06.55.204 is repealed and reenacted to read: 27 Sec. 06.55.204. Renewal of license. (a) To renew a license, the licensee shall 28 submit to the department a 29 (1) renewal application at a time and in a format established by the 30 department; 31 (2) renewal fee as established by the department; and

01 (3) report identifying any changes in the information previously 02 provided and any additional information requested by the department. 03 (b) The department shall approve or deny the application for renewal of a 04 license not later than 60 days after the renewal application is filed. 05 * Sec. 16. AS 06.55 is amended by adding a new section to article 2 to read: 06 Sec. 06.55.206. Security. (a) A surety bond must accompany an application 07 for a currency exchange license. The surety bond must be at least $25,000 and may not 08 exceed $1,000,000 as established by the department. 09 (b) The surety bond must be in a form satisfactory to the department and 10 payable to this state for the benefit of this state and any person or persons who suffer 11 loss due to a violation of this chapter by a licensee or a licensee's authorized delegate. 12 (c) The aggregate liability on a surety bond may not exceed the principal sum 13 of the bond. A claimant against a currency exchange licensee may maintain an action 14 on the bond, or the department may maintain an action on behalf of the claimant. 15 (d) A surety bond must cover claims for as long as the department specifies, 16 but for at least five years after the date the currency exchange licensee stops providing 17 currency exchange in this state. The department may permit the amount of security to 18 be reduced or eliminated before the expiration of that time to the extent the amount of 19 the currency exchange licensee's outstanding obligations in this state is reduced. 20 (e) The bond shall be obtained from a surety company authorized to do 21 business in this state. 22 (f) If a currency exchange licensee does not maintain a surety bond in the 23 amount required under (a) of this section, the department may issue an order under 24 AS 06.55.603. 25 * Sec. 17. AS 06.55 is amended by adding a new section to read: 26 Sec. 06.55.207. Annual assessment and annual report. (a) A licensee shall 27 pay an annual assessment as established by the department not later than the annual 28 assessment due date or, if the annual assessment due date is not a business day, on the 29 next business day. Annual assessment fees shall be established by the department. 30 (b) A licensee shall submit an accurate annual report with the annual 31 assessment in a format established by the department.

01 (c) If a licensee does not file an annual report or pay its annual assessment by 02 the assessment due date, the department shall assess the licensee a late fee as 03 established by the department. 04 * Sec. 18. AS 06.55.301(b) is amended to read: 05 (b) An authorized delegate shall remit all money owing to the money services 06 licensee under the terms of the contract between the money services licensee and the 07 authorized delegate. [IN THIS SUBSECTION, "REMIT" MEANS TO MAKE 08 DIRECT PAYMENTS OF MONEY TO A MONEY SERVICES LICENSEE OR ITS 09 REPRESENTATIVE AUTHORIZED TO RECEIVE MONEY OR TO DEPOSIT 10 MONEY IN A BANK IN AN ACCOUNT SPECIFIED BY THE MONEY 11 SERVICES LICENSEE.] 12 * Sec. 19. AS 06.55.301(d) is amended to read: 13 (d) An authorized delegate may not provide money services outside the scope 14 of activity permissible under the contract between the authorized delegate and the 15 money services licensee, except activity in which the authorized delegate is authorized 16 to engage under AS 06.55.101 - 06.55.206 [AS 06.55.101 - 06.55.204]. An authorized 17 delegate of a money services licensee holds in trust for the benefit of the money 18 services licensee all money net of fees received from money services. 19 * Sec. 20. AS 06.55.301 is amended by adding a new subsection to read: 20 (f) A money services licensee may conduct business regulated under this 21 chapter through an authorized delegate appointed by the licensee in accordance with 22 this section. A licensee is responsible for acts of the authorized delegate, of which the 23 licensee has or reasonably should have knowledge, that are conducted under the 24 authority granted by the licensee and that relate to the licensee's money services 25 business. 26 * Sec. 21. AS 06.55 is amended by adding a new section to article 3 to read: 27 Sec. 06.55.304. Limited authorization of subdelegate. (a) A money services 28 licensee may contract with another money services licensee to use that other licensee's 29 existing authorized delegate as a subdelegate to load funds onto the first licensee's 30 existing open-loop stored-value cards. If the subdelegate sells new open-loop stored- 31 value cards for the first licensee, that licensee shall add the subdelegate to the

01 licensee's authorized delegate roster. 02 (b) A money services licensee shall maintain all contracts under (a) of this 03 section as part of the licensee's books and records and make them available to the 04 department on request. 05 * Sec. 22. AS 06.55.401 is repealed and reenacted to read: 06 Sec. 06.55.401. Authority to conduct examinations. (a) A licensee or other 07 person subject to this chapter shall make available to the department, on request, the 08 place of business, books, records, accounts, safes, and vaults relating to the operations 09 of the licensee or other person subject to this chapter. The department may interview 10 any person, including control persons, officers, principals, employees, authorized 11 delegates, and customers of the licensee or other person subject to this chapter 12 concerning the licensee's or other person's business. 13 (b) The department may conduct an examination or investigation of the books, 14 accounts, records, papers, documents, files, and other information used in the business 15 of a money services licensee or its authorized delegates in conjunction with 16 representatives of other state agencies or agencies of another state or of the federal 17 government. The department may accept an examination report or an investigation 18 report of an agency of this state or of another state or of the federal government. 19 (c) A joint examination or investigation, or an acceptance of an examination 20 or investigation report, does not preclude the department from conducting an 21 examination or investigation under this chapter. A joint report or a report accepted 22 under this section is an official report of the department for all purposes. 23 (d) For the purpose of hearings, investigations, or other proceedings under this 24 chapter, the department or an officer designated by the department may administer 25 oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take 26 evidence, and require the production of books, papers, correspondence, memoranda, 27 agreements, or other documents or records that the department considers relevant or 28 material to the matter. Information obtained during an examination under this chapter 29 may be disclosed only as provided in AS 06.55.407. 30 (e) A person shall reimburse the department for reasonable costs incurred by 31 the department to conduct an examination or investigation under this section.

01 * Sec. 23. AS 06.55.402 is repealed and reenacted to read: 02 Sec. 06.55.402. Cooperation. The department may consult and cooperate with 03 other state and federal regulators in enforcing and administering this chapter. 04 * Sec. 24. AS 06.55.403(b) is repealed and reenacted to read: 05 (b) A money services licensee shall file with the department not later than 45 06 days after the end of each fiscal quarter a report containing information about the 07 licensee, its locations, authorized delegates, and any other information as required by 08 the department. The department shall establish the content and form of the report. 09 * Sec. 25. AS 06.55.403(c) is amended to read: 10 (c) A money services licensee shall file a report with the department not later 11 than [WITHIN] one business day after the money services licensee has reason to 12 know of the occurrence of one or more [ANY] of the following events: 13 (1) the filing of a petition by or against the money services licensee 14 under 11 U.S.C. 101 - 110 (Bankruptcy Code) for bankruptcy or reorganization; 15 (2) the filing of a petition by or against the money services licensee for 16 receivership, the commencement of any other judicial or administrative proceeding for 17 its dissolution or reorganization, or the making of a general assignment for the benefit 18 of its creditors; 19 (3) the commencement of a proceeding to revoke or suspend its money 20 services license in a state or country in which the money services licensee engages in 21 business or is licensed; 22 (4) the cancellation or other impairment of the money services 23 licensee's bond [OR OTHER SECURITY]; 24 (5) a charge against or conviction of the money services licensee or of 25 an officer, manager, director, or person in control of the money services licensee for a 26 felony; or 27 (6) a charge against or conviction of an authorized delegate for a 28 felony. 29 * Sec. 26. AS 06.55.403 is amended by adding a new subsection to read: 30 (d) The department may establish a late fee or other consequence for a money 31 services licensee who fails to file a report as required by this section.

01 * Sec. 27. AS 06.55.404(a) is amended to read: 02 (a) A money services licensee shall 03 (1) give the department notice in a record 30 days before [OF] a 04 proposed change of control and give the department notice in a record not later 05 than [WITHIN] 15 days after learning of the proposed change of control; 06 (2) request approval of the change of control by submitting the 07 information required by the department [ACQUISITION]; and 08 (3) submit a nonrefundable fee with the notice as required by the 09 department. 10 * Sec. 28. AS 06.55.404(d) is amended to read: 11 (d) When an application for a change of control [UNDER AS 06.55.401 - 12 06.55.407] is complete, the department shall notify the money services licensee in a 13 record of the date on which the request was determined to be complete, and 14 [(1)] the department shall approve or deny the request not later than 15 [WITHIN] 120 days after that date [; OR 16 (2) IF THE REQUEST IS NOT APPROVED OR DENIED WITHIN 17 120 DAYS AFTER THAT DATE, 18 (A) THE REQUEST IS APPROVED; AND 19 (B) THE DEPARTMENT SHALL PERMIT THE CHANGE 20 OF CONTROL UNDER THIS SECTION, TO TAKE EFFECT AS OF THE 21 FIRST BUSINESS DAY AFTER EXPIRATION OF THE PERIOD]. 22 * Sec. 29. AS 06.55.405(a) is amended to read: 23 (a) A [MONEY SERVICES] licensee shall maintain the following records for 24 determining its compliance with this chapter for at least five [THREE] years: 25 (1) a record of each payment instrument or stored-value obligation 26 sold; 27 (2) a general ledger posted at least monthly containing all asset, 28 liability, capital, income, and expense accounts; 29 (3) bank statements and bank reconciliation records; 30 (4) records of outstanding payment instruments and stored-value 31 obligations;

01 (5) records of each payment instrument and stored-value obligation 02 paid within the five-year [THREE-YEAR] period; 03 (6) a list of the last known names and addresses of all of the money 04 services licensee's authorized delegates; 05 (7) copies of all currency transaction reports and suspicious 06 activity reports filed in compliance with AS 06.55.406; and 07 (8) [(7)] any other records the department reasonably requires by 08 regulation. 09 * Sec. 30. AS 06.55.405(b) is repealed and reenacted to read: 10 (b) The items specified in (a) of this section must be provided in a format 11 established by the department. 12 * Sec. 31. AS 06.55.406 is repealed and reenacted to read: 13 Sec. 06.55.406. Money laundering reports. A money services licensee and an 14 authorized delegate shall file with the United States Department of the Treasury, or its 15 designated successor agency, all reports required by federal currency reporting, record 16 keeping, and suspicious transaction reporting requirements as set out in 31 U.S.C. 17 5311 - 5332 and other federal and state laws pertaining to money laundering. 18 * Sec. 32. AS 06.55.407(b) is amended to read: 19 (b) The department may disclose information that is not otherwise subject to 20 disclosure under (a) of this section to representatives of state or federal agencies who 21 agree in writing to [PROMISE IN A RECORD THAT THEY WILL] maintain the 22 confidentiality of the information or if the department finds that the release is 23 reasonably necessary for the protection of the public and in the interests of justice [, 24 AND THE MONEY SERVICES LICENSEE HAS BEEN GIVEN PREVIOUS 25 NOTICE BY THE DEPARTMENT OF ITS INTENT TO RELEASE THE 26 INFORMATION]. 27 * Sec. 33. AS 06.55.407(c) is amended to read: 28 (c) This section does not prohibit the department from disclosing to the public 29 (1) a list of money services licensees or authorized delegates, 30 including addresses and the names of contact individuals; 31 (2) the identity of a money services licensee or authorized delegate

01 subject to an emergency or final order of the department; or 02 (3) the aggregated financial data of [CONCERNING THOSE] money 03 services licensees. 04 * Sec. 34. AS 06.55.501(a) is amended to read: 05 (a) Except as provided in (b) of this section, a [A] money services licensee 06 shall maintain at all times permissible investments that have a market value computed 07 under generally accepted accounting principles of not less than the aggregate amount 08 of all of its outstanding payment instruments and stored-value obligations issued or 09 sold in all states and money transmitted from all states by the money services licensee. 10 * Sec. 35. AS 06.55.501(c) is repealed and reenacted to read: 11 (c) A permissible investment subject to this section, even if commingled with 12 other assets of the money services licensee, is considered by operation of law to be 13 held in trust for the benefit of any individual to whom an obligation arising under this 14 chapter is owed and may not be considered an asset or property of the licensee in the 15 event of bankruptcy, receivership, or a claim against the licensee unrelated to any of 16 the licensee's obligations under this chapter. 17 * Sec. 36. AS 06.55.601(a) is amended to read: 18 (a) The department may issue an order under AS 06.55.603 to suspend or 19 revoke a money services license, place a money services licensee in receivership, or 20 order a money services licensee to revoke the designation of an authorized delegate if 21 (1) the money services licensee violates this chapter or a regulation 22 adopted or an order issued under this chapter; 23 (2) the money services licensee did not permit or [DOES NOT] 24 cooperate with an examination or investigation by the department; 25 (3) the money services licensee engages in fraud, intentional 26 misrepresentation, or gross negligence; 27 (4) a money services licensee or an authorized delegate is convicted 28 of a violation of a state or federal anti-money laundering statute, or a law listed in 29 AS 06.55.860, or violates a regulation adopted or an order issued under this chapter, as 30 a result of the money services licensee's wilful misconduct or wilful blindness; 31 (5) the competence, experience, character, or general fitness of the

01 money services licensee, authorized delegate, person in control of a money services 02 licensee, or responsible person of the money services licensee or authorized delegate 03 indicates that it is not in the public interest to permit the person to provide money 04 services; 05 (6) the money services licensee engages in an unsafe or unsound 06 practice; 07 (7) the money services licensee is insolvent, suspends payment of its 08 obligations, or makes a general assignment for the benefit of its creditors; [OR] 09 (8) the money services licensee does not remove an authorized 10 delegate after the department issues and serves upon the money services licensee a 11 final order including a finding that the authorized delegate has violated this chapter; 12 (9) a fact or condition exists that, if it had been known at the time 13 the money services licensee applied for the license, would have been grounds for 14 denying the application; 15 (10) the money services licensee has engaged in false, misleading, 16 or deceptive advertising; 17 (11) the money services licensee has failed to pay a judgment 18 entered in favor of a claimant or creditor in an action arising out of the money 19 services licensee's activities under this chapter not later than the 30th day after 20 the date the stay of execution expires or is terminated, as applicable; or 21 (12) the money services licensee knowingly made a material 22 misstatement or has suppressed or withheld material information on an 23 application, request for approval, report, or other document required to be filed 24 with the department under this chapter. 25 * Sec. 37. AS 06.55.601(b) is amended to read: 26 (b) In determining whether a money services licensee is engaging in an unsafe 27 or unsound practice, the department may consider the size and condition of the money 28 services licensee's money transmission or currency exchange, the magnitude of the 29 loss or potential loss, the gravity of the violation of this chapter or an order issued 30 under this chapter, or an action taken against the money services licensee by this 31 state, another state, or the federal government, and the previous conduct of the

01 person involved. 02 * Sec. 38. AS 06.55.602(a) is amended to read: 03 (a) The department may issue an order under AS 06.55.603 to suspend or 04 revoke [SUSPENDING OR REVOKING] the designation of an authorized delegate 05 or the limited designation of a subdelegate if [THE DEPARTMENT FINDS THAT] 06 (1) the authorized delegate or subdelegate violated this chapter or a 07 regulation adopted or an order issued under this chapter or any other state or federal 08 law applicable to a money services business; 09 (2) the authorized delegate or subdelegate did not permit or 10 cooperate with an examination or investigation by the department; 11 (3) in connection with the operation of the delegate's business on 12 behalf of the money services licensee or any transaction subject to this chapter the 13 authorized delegate or subdelegate has engaged in fraud, intentional 14 misrepresentation, deceit, [OR] gross negligence, or an unfair or deceptive act or 15 practice; 16 (4) the authorized delegate or subdelegate is convicted of a violation 17 of a state or federal anti-money laundering statute or any law listed in AS 06.55.860; 18 (5) the competence, experience, character, or general fitness of the 19 authorized delegate, or subdelegate, or a person in control of the authorized delegate 20 or subdelegate indicates that it is not in the public interest to permit the authorized 21 delegate or subdelegate to provide money services; [OR] 22 (6) the authorized delegate is engaging in an unsafe or unsound 23 practice or 24 (7) the authorized delegate, a person in control of the authorized 25 delegate, or the subdelegate is listed on the Specially Designated Nationals and 26 Blocked Persons List, or any other Office of Foreign Assets Control sanctions list 27 prepared by the United States Department of the Treasury, or designated 28 successor agency. 29 * Sec. 39. AS 06.55.602(b) is amended to read: 30 (b) In determining whether an authorized delegate or subdelegate is engaging 31 in an unsafe or unsound practice, the department may consider the size and condition

01 of the authorized delegate's or subdelegate's provision of money services, the 02 magnitude of the loss or potential loss, the gravity of the violation of this chapter or a 03 regulation adopted or order issued under this chapter, an action taken against the 04 delegate or subdelegate by this state, another state, or the federal government, 05 and the previous conduct of the authorized delegate or subdelegate. 06 * Sec. 40. AS 06.55.603 is repealed and reenacted to read: 07 Sec. 06.55.603. Administrative orders. (a) If the department determines that a 08 violation of this chapter or an order issued under this chapter by a person licensed 09 under this chapter is likely to cause immediate and irreparable harm to the money 10 services licensee, its customers, or the public as a result of the violation, or cause 11 insolvency or significant dissipation of assets of the money services licensee, the 12 department may issue an administrative order. The order becomes effective on service 13 of the order on a person licensed under this chapter. 14 (b) The department may issue an order against a person licensed under this 15 chapter to 16 (1) stop providing money services; 17 (2) compel payment of restitution to damaged parties; 18 (3) require affirmative action to comply with this chapter or regulation 19 adopted under this chapter; and 20 (4) remove from office or prohibit from participation an officer, person 21 in control, or employee. 22 (c) An order remains effective and enforceable pending the completion of an 23 administrative proceeding under AS 06.55.701 or 06.55.702. 24 (d) A person licensed under this chapter who is served with an order may 25 petition the superior court for a judicial order setting aside, limiting, or suspending the 26 enforcement, operation, or effectiveness of the order pending the completion of an 27 administrative proceeding under AS 06.55.701 or 06.55.702. 28 * Sec. 41. AS 06.55.607(a) is repealed and reenacted to read: 29 (a) If the department has reason to believe that a person who is not a money 30 services licensee under AS 06.55.101, currency exchange licensee under 31 AS 06.55.201, authorized delegate under AS 06.55.301, or subdelegate under

01 AS 06.55.304 has violated or is violating AS 06.55.101 or 06.55.201, the department 02 may issue an order under AS 06.55.603. 03 * Sec. 42. AS 06.55.607(c) is amended to read: 04 (c) An order [TO CEASE AND DESIST] becomes effective upon service of 05 the order [IT] upon the person. 06 * Sec. 43. AS 06.55.607(d) is amended to read: 07 (d) An order [TO CEASE AND DESIST] remains effective and enforceable 08 pending the completion of an administrative proceeding under AS 06.55.701 and 09 06.55.702. 10 * Sec. 44. AS 06.55.607 is amended by adding a new subsection to read: 11 (g) An order issued by the department may include an additional monetary 12 penalty if the department has reason to believe that a person who is not a money 13 services licensee under AS 06.55.101, currency exchange licensee under 14 AS 06.55.201, authorized delegate under AS 06.55.301, or subdelegate under 15 AS 06.55.304 has violated or is violating AS 06.55.101 or 06.55.201. 16 * Sec. 45. AS 06.55.802 is amended to read: 17 Sec. 06.55.802. Exemptions [EXCLUSIONS]. This chapter does not apply to 18 (1) the United States or a department, an agency, or an instrumentality 19 of the United States; 20 (2) money transmission by the United States Postal Service or by a 21 contractor on behalf of the United States Postal Service; 22 (3) a state, a municipality, a county, or another governmental agency 23 or governmental subdivision of a state; 24 (4) a bank, a bank holding company, an office of an international 25 banking corporation, a branch of a foreign bank, a corporation organized under 12 26 U.S.C. 1861 - 1867 (Bank Service Company Act), or a corporation organized under 12 27 U.S.C. 611 - 633 (Edge Act) under the laws of a state or the United States, if it does 28 not issue, sell, or provide payment instruments or stored value through an authorized 29 delegate who is not a bank, a bank holding company, an office of an international 30 banking corporation, a branch of a foreign bank, a corporation organized under 12 31 U.S.C. 1861 - 1867 (Bank Service Company Act), or a corporation organized under 12

01 U.S.C. 611 - 633 (Edge Act) under the laws of a state or the United States; 02 (5) electronic funds transfer of governmental benefits for a federal, 03 state, or municipal agency or a state political subdivision by a contractor on behalf of 04 (A) the United States or a department, an agency, or an 05 instrumentality of the United States; or 06 (B) a state, or a department, an agency, or an instrumentality of 07 a state; 08 (6) a board of trade or a person who, in the ordinary course of 09 business, provides clearance and settlement services for a board of trade, to the extent 10 of the operation of the person for a board of trade; in this paragraph, "board of trade" 11 means a board of trade designated as a contract market under 7 U.S.C. 1 - 27f 12 (Commodity Exchange Act); 13 (7) a registered futures commission merchant under the federal 14 commodities laws, to the extent of the merchant's operation as a registered futures 15 commission merchant under the federal commodities laws; 16 (8) a person who provides clearance or settlement services under a 17 registration as a clearing agency or an exemption from the registration granted under 18 the federal securities laws, to the extent of the person's operation as a provider of 19 clearance or settlement services under a registration as a clearing agency or an 20 exemption from the registration granted under the federal securities laws; 21 (9) an operator of a payment system to the extent that the operator 22 provides processing, clearing, or settlement services, between or among persons 23 excluded by this section, in connection with wire transfers, credit card transactions, 24 debit card transactions, stored-value transactions, automated clearing house transfers, 25 or similar funds transfers; [OR] 26 (10) a person registered as a securities broker-dealer under federal or 27 state securities laws, to the extent of the person's operation as a securities broker- 28 dealer under federal or state securities laws; 29 (11) an insurance company, title insurance company, or escrow 30 agent to the extent that the entity is lawfully authorized to conduct business in 31 this state as an insurance company, title insurance company, or escrow agent and

01 to the extent that the entity engages in money transmission or currency exchange 02 as an ancillary service when conducting insurance, title insurance, or escrow 03 activity; or 04 (12) an attorney, to the extent that the attorney is lawfully 05 authorized to practice law in this state and to the extent that the attorney engages 06 in money transmission or currency exchange as an ancillary service to the 07 practice of law. 08 * Sec. 46. AS 06.55.810 is repealed and reenacted to read: 09 Sec. 06.55.810. Notices required. (a) A money services licensee shall provide 10 a customer with notice of how to file a complaint. The money services licensee shall 11 provide notice at each location where the money services licensee 12 (1) provides money services under this chapter; and 13 (2) has not designated an authorized delegate or subdelegate to provide 14 money services on behalf of the money services licensee at the location. 15 (b) An authorized delegate or subdelegate shall provide a notice of how to file 16 a complaint at each location where the authorized delegate or subdelegate provides 17 money services under this chapter. 18 (c) The notice required under this section must be in a content and format as 19 established by the department. 20 * Sec. 47. AS 06.55.820 is repealed and reenacted to read: 21 Sec. 06.55.820. Transmission, receipt, and refund. A money services 22 licensee who receives money or equivalent value for money transmission or currency 23 exchange shall comply with transmission, receipt, and refund provisions according to 24 federal law (Federal Remittance Transfer Rule, 12 C.F.R. Part 1005, Subpart B) and 25 any requirements established by the department. 26 * Sec. 48. AS 06.55 is amended by adding new sections to read: 27 Sec. 06.55.860. Compliance with federal requirements. A person subject to 28 this chapter shall conduct the person's money services activities in compliance with 29 (1) 31 U.S.C. 5311 - 5314 (Intelligence Reform and Terrorism 30 Prevention Act of 2004); 31 (2) 31 U.S.C. 5316 - 5329 (Money Laundering Control Act of 1986);

01 (3) 31 U.S.C. 5330 (Money Laundering Suppression Act of 1994); 02 (4) 31 U.S.C. 5331 - 5332 (International Money Laundering 03 Abatement and Financial Anti-Terrorism Act of 2001); 04 (5) 12 U.S.C. 1829b (Federal Deposit Insurance Act); 05 (6) 12 U.S.C. 1951 - 1959 (Bank Secrecy Act); 06 (7) 18 U.S.C. 981 - 982 (Money Laundering Control Act of 1986); and 07 (8) any other federal statute or regulation the purpose of which is to 08 regulate money transmission, currency exchange, or money services. 09 Sec. 06.55.870. Escheatment of property. A person subject to this chapter 10 shall comply with unclaimed property laws as defined in AS 34.45. 11 Sec. 06.55.880. Application to Internet activities. This chapter applies to a 12 person who engages in activities regulated under this chapter by using an Internet 13 website from within or outside the state. 14 * Sec. 49. AS 06.55 is amended by adding new sections to article 9 to read: 15 Sec. 06.55.900. Administration. (a) The department may require an applicant 16 or a licensee to submit information, documentation, or payment of a fee required under 17 this chapter through the registry in a format established by the department and 18 acceptable to the registry. 19 (b) The department may use the registry as a channeling agent for obtaining 20 information required for licensing purposes under this chapter, including 21 (1) criminal history record information from the Federal Bureau of 22 Investigation, the United States Department of Justice, or any other agency or entity 23 identified by the department; 24 (2) information related to administrative, civil, or criminal findings by 25 other states. 26 Sec. 06.55.920. Regulations. The department may adopt regulations under 27 AS 44.62 (Administrative Procedure Act) to implement this chapter. 28 * Sec. 50. AS 06.55.990 is repealed and reenacted to read: 29 Sec. 06.55.990. Definitions. In this chapter, unless the context indicates 30 otherwise, 31 (1) "applicant" means any person filing an application, a control

01 person, officer, director, manager, and owner applicant for a money services license; 02 (2) "authorized delegate" means a person to whom a money services 03 licensee designates to provide money services on behalf of the money services 04 licensee; 05 (3) "bank" means an institution organized under federal or state law 06 that 07 (A) accepts demand deposits or deposits that the depositor may 08 use for payment to third parties and engages in the business of making 09 commercial loans; or 10 (B) engages in credit card operations and maintains only one 11 office that accepts deposits, does not accept demand deposits or deposits that 12 the depositor may use for payments to third parties, does not accept a savings 13 or time deposit less than $100,000, and does not engage in the business of 14 making commercial loans; 15 (4) "control" means the 16 (A) ownership of, or the power to vote, directly or indirectly, at 17 least 10 percent of a class of voting securities or voting interests of a money 18 services licensee or person in control of a money services licensee; for 19 purposes of determining the percentage of a money services licensee controlled 20 by a person, the percentage consists of the person's interest aggregated with the 21 interest of any spouse, parent, or child of the person; 22 (B) power to elect a majority of officers, managers, directors, 23 trustees, or other persons exercising managerial authority of a money services 24 licensee or person in control of a money services licensee; or 25 (C) power to exercise directly or indirectly, a controlling 26 influence over the management or policies of a money services licensee or 27 person in control of a money services licensee; 28 (5) "currency" means the coin and paper money of the United States or 29 a foreign government that is 30 (A) designated as legal tender and circulates; and 31 (B) customarily used and accepted as a medium of exchange in

01 the country of issuance; 02 (6) "currency exchange" means receipt of revenues from the exchange 03 of money of one government for money of another government; 04 (7) "currency exchange license" means a license under AS 06.55.201 - 05 06.55.206; 06 (8) "currency exchange licensee" means a person who holds a currency 07 exchange license; 08 (9) "department" means the Department of Commerce, Community, 09 and Economic Development; 10 (10) "fiat currency" means government-issued currency that is 11 designated as legal tender in its country of issuance through government decree, 12 regulation, or law; 13 (11) "funds" means money or other value that may be accepted for 14 money; 15 (12) "informal value transfer system" 16 (A) means any system, mechanism, or network that receives 17 money for the purpose of making funds or an equivalent value payable to a 18 third party in another geographic location, whether or not in the same form; 19 and 20 (B) generally takes place outside of a conventional banking 21 system through nonbank financial institutions or other business entities whose 22 primary business activity may not be the transmission of money; 23 (13) "medium of exchange" means something commonly accepted in 24 exchange for goods and services and recognized as representing a standard of value; 25 (14) "monetary value" means a medium of exchange, whether or not 26 redeemable in money; 27 (15) "money" means a medium of exchange that is authorized or 28 adopted by the United States or a foreign government, including a monetary unit of 29 account established by an intergovernmental organization or by agreement between 30 two or more governments; 31 (16) "money laundering" means an activity criminalized by 18 U.S.C.

01 1956 or 1957, or an activity that would be criminalized by 18 U.S.C. 1956 or 1957 if it 02 occurred in the United States; 03 (17) "money services" means money transmission or currency 04 exchange; 05 (18) "money services license" means a currency exchange license or a 06 money transmission license; 07 (19) "money services licensee" means a person who holds a currency 08 exchange license or a money transmission license; 09 (20) "money transmission" means 10 (A) the acceptance and the transmission of currency, funds, or 11 other value that substitutes for currency from one person to another location or 12 person within the United States or to locations abroad, by any means, including 13 (i) a financial agency or institution; 14 (ii) an electronic funds transfer network; 15 (iii) wire; 16 (iv) facsimile; 17 (v) payment instrument; or 18 (vi) an informal value transfer system; 19 (B) selling, issuing, or acting as an intermediary for open-loop 20 stored-value devices and payment instruments; or 21 (C) a virtual currency business activity; 22 (21) "money transmission license" means a license under 23 AS 06.55.101 - 06.55.106; 24 (22) "money transmission licensee" means a person who holds a 25 money transmission license; 26 (23) "Nationwide Multistate Licensing System and Registry" means a 27 licensing system developed by the Conference of State Bank Supervisors and the 28 American Association of Residential Mortgage Regulators and owned and operated by 29 the State Regulatory Registry, LLC, or any successor or an affiliated entity, for the 30 licensing and registration of persons in the mortgage and other financial services 31 industries;

01 (24) "officer" means a president, a chair of the executive committee, a 02 chief financial officer, a chief compliance officer, a responsible individual, or another 03 individual who performs similar functions; in this paragraph, "responsible individual" 04 means an individual who is employed by a money services licensee and has principal 05 managerial authority over the provision of money services by the money services 06 licensee in this state; 07 (25) "open-loop stored value" means stored value redeemable at 08 (A) multiple, unaffiliated merchants or service providers; or 09 (B) automated teller machines; 10 (26) "outstanding" means 11 (A) with respect to a payment instrument, a payment 12 instrument that has been issued and sold in the United States directly by the 13 licensee, or sold by an authorized delegate or subdelegate of the licensee in the 14 United States and reported to the licensee, that has not yet been paid by or for 15 the licensee; 16 (B) with respect to a stored value, a stored value that has been 17 issued and sold in the United States directly by the licensee, or sold by an 18 authorized delegate or subdelegate of the licensee in the United States and 19 reported to the licensee, until the funds are deposited into the program's issuing 20 bank account; or 21 (C) with respect to transmission, a money transmission for 22 which the licensee, directly or through an authorized delegate of the licensee, 23 has received money or monetary value from the customer for transmission, but 24 has not yet completed the money transmission by delivering the money or 25 monetary value to the person designated by the customer or refunded the 26 money or monetary value to the customer; 27 (27) "payment instrument" 28 (A) means an electronic or written check, a draft, a money 29 order, a traveler's check, or other electronic or written instrument order for the 30 transmission or payment of money or monetary value, whether or not the 31 instrument is negotiable;

01 (B) does not include a credit card voucher, a letter of credit, or 02 any other instrument that is redeemable by the issuer in goods or services; 03 (28) "payment system" means any system enabling the transfer of 04 funds between parties; 05 (29) "person" means an individual, a corporation, a business trust, an 06 estate, a trust, a partnership, a limited liability company, an association, a joint 07 venture, a government, a governmental subdivision, an agency, or instrumentality, a 08 public corporation, or any other legal or commercial entity; 09 (30) "record" means information that is inscribed on a tangible 10 medium or that is stored in an electronic or other medium and is retrievable in 11 perceivable form; 12 (31) "registry" means the Nationwide Multistate Licensing System and 13 Registry; 14 (32) "remit" means to do one or more of the following: 15 (A) make direct payment of the funds to the licensee or its 16 representatives authorized to receive those funds; 17 (B) deposit the funds in a bank, credit union, or savings and 18 loan association, or other similar financial institution in an account specified 19 by the licensee; 20 (33) "state" means a state of the United States, the District of 21 Columbia, Puerto Rico, the United States Virgin Islands, or a territory or insular 22 possession subject to the jurisdiction of the United States; 23 (34) "stored value" 24 (A) means monetary value that is evidenced by an electronic 25 record that is prefunded and for which value is reduced on each use; 26 (B) includes prepaid access; in this subparagraph, 27 (i) "prepaid access" means access to fund or the value 28 of funds that have been paid in advance and can be retrieved or 29 transferred at some point in the future through an electronic device or 30 vehicle; 31 (ii) "electronic device or vehicle" includes a card code,

01 electronic serial number, mobile identification number, or personal 02 identification number; 03 (C) does not include an electronic record that is primarily 04 intended to be redeemable only for goods or services from a specified 05 merchant or set of affiliated merchants, or others involved in transactions 06 functionally related to the issuer or its affiliates; 07 (35) "subdelegate" means an authorized delegate that provides limited 08 money services on behalf of a licensee without having a direct contractual relationship 09 with that licensee; 10 (36) "unsafe or unsound practice" means a practice or conduct by a 11 money services licensee or an authorized delegate or subdelegate of the money 12 services licensee if the practice creates the likelihood of material loss, insolvency, or 13 dissipation of the money services licensee's assets, or otherwise materially prejudices 14 the interests of the money services licensee's customers; 15 (37) "virtual currency" 16 (A) means a digital representation of value that does not have 17 legal tender status in the United States but 18 (i) can be digitally traded and functions as a medium of 19 exchange, a unit of account, a store of value; or 20 (ii) is incorporated into payment system technology; 21 (B) shall be broadly construed to include digital units of 22 exchange that 23 (i) have a centralized repository; in this sub- 24 subparagraph, "centralized repository" means a single third-party 25 administrating authority that controls the system, issues the currency, 26 establishes the rules for the currency's use, maintains a central payment 27 ledger, and has authority to redeem the currency or withdraw it from 28 circulation; or 29 (ii) are decentralized, distributive, open-source, math- 30 based, peer-to-peer virtual currency with no central administrating 31 authority and no central monitoring or oversight; or

01 (iii) may be created or obtained by computing or 02 manufacturing effort; 03 (C) does not include digital units that are used 04 (i) solely within online gaming platforms with no 05 market or application outside of those gaming platforms; or 06 (ii) exclusively as part of a customer affinity or rewards 07 program, and can be applied solely as payment for purchases with the 08 issuer or other designated merchants, and that cannot be converted into, 09 or redeemed for, fiat currency; 10 (38) "virtual currency business activity" means the conduct of one or 11 more of the following types of activities in this state or involving a resident of this 12 state: 13 (A) receiving virtual currency for transmission; 14 (B) transmitting virtual currency; 15 (C) securing, storing, holding, or maintaining custody or 16 control of virtual currency on behalf of others; 17 (D) buying and selling virtual currency as or through a third 18 party; 19 (E) performing retail conversion services, including the 20 conversion or exchange of fiat currency or other value into virtual currency, 21 the conversion or exchange of virtual currency into fiat currency or other 22 value, or the conversion or exchange of one form of virtual currency into 23 another form of virtual currency; or 24 (F) controlling, administering, or issuing virtual currency. 25 * Sec. 51. AS 06.55 is amended to read: 26 Sec. 06.55.995. Short title. This chapter may be cited as the Alaska 27 [UNIFORM] Money Services Act. 28 * Sec. 52. AS 12.62.400(a) is amended by adding a new paragraph to read: 29 (18) licensure as a money transmission licensee or a currency 30 exchange licensee under AS 06.55. 31 * Sec. 53. AS 12.62.400 is amend by adding a new subsection to read:

01 (c) Notwithstanding (a) of this section, an applicant for a license under 02 AS 06.55 may submit the applicant's fingerprints to the Nationwide Multistate 03 Licensing System and Registry as defined in AS 06.55.990. 04 * Sec. 54. AS 06.55.103, 06.55.107, 06.55.404(g), 06.55.406(b), 06.55.607(f), 06.55.830, 05 06.55.840, 06.55.850(b), 06.55.850(c), 06.55.850(d), and 06.55.850(e) are repealed. 06 * Sec. 55. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 09 Economic Development may proceed to adopt regulations to implement this Act. The 10 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before July 1, 11 2016. 12 * Sec. 56. REVISOR'S INSTRUCTIONS. The Revisor of Statutes is requested to change 13 the 14 (1) chapter heading of AS 06.55 from "Alaska Uniform Money Services Act" 15 to "Alaska Money Services Act;" 16 (2) catch lines of 17 (A) AS 06.55.601 from "Suspension and revocation; receivership" to 18 "Suspension and revocation of licensees; receivership"; and 19 (B) AS 06.55.602 from "Suspension and revocation of authorized 20 delegates" to "Suspension and revocation of authorized delegates and subdelegates." 21 * Sec. 57. Section 55 of this Act takes effect immediately under AS 01.10.070(c). 22 * Sec. 58. Except as provided in sec. 57 of this Act, this Act takes effect July 1, 2016.