HB 408: "An Act relating to the business of money transmission; relating to money transmission licenses, licensure requirements, and registration through the Nationwide Multistate Licensing System; relating to the use of virtual currency for money transmission; relating to authorized delegates of a licensee; relating to acquisition of control of a license; relating to record retention and reporting requirements; authorizing the Department of Commerce, Community, and Economic Development to cooperate with other states in the regulation of money transmission; relating to permissible investments; relating to violations and enforcement of money transmission laws; relating to money transmission license exemptions; relating to payroll processing services; repealing currency exchange licenses; and providing for an effective date."
00 HOUSE BILL NO. 408 01 "An Act relating to the business of money transmission; relating to money transmission 02 licenses, licensure requirements, and registration through the Nationwide Multistate 03 Licensing System; relating to the use of virtual currency for money transmission; 04 relating to authorized delegates of a licensee; relating to acquisition of control of a 05 license; relating to record retention and reporting requirements; authorizing the 06 Department of Commerce, Community, and Economic Development to cooperate with 07 other states in the regulation of money transmission; relating to permissible 08 investments; relating to violations and enforcement of money transmission laws; relating 09 to money transmission license exemptions; relating to payroll processing services; 10 repealing currency exchange licenses; and providing for an effective date." 11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 12 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section
01 to read: 02 PURPOSE. The purpose of this Act is to replace existing state money transmission 03 laws to modernize licensure requirements, to add model language for the burgeoning virtual- 04 currency industry, to allow the Department of Commerce, Community, and Economic 05 Development to coordinate with other states in all areas of regulation, licensing, and 06 supervision, to standardize the types of activities that are subject to licensing, and to 07 modernize safety and soundness requirements. 08 * Sec. 2. AS 06.55.101(a) is amended to read: 09 (a) A person may not engage in the business of money transmission or 10 advertise, solicit, or hold itself [THE PERSON] out as providing money transmission 11 unless the person 12 (1) holds a [MONEY TRANSMISSION] license; [OR] 13 (2) is an authorized delegate of a person who holds a [MONEY 14 TRANSMISSION] license and is acting within the scope of that authority under a 15 written contract with the licensee; or 16 (3) is exempt under AS 06.55.802 and does not engage in money 17 transmission outside the scope of that exemption. 18 * Sec. 3. AS 06.55.102 is repealed and reenacted to read: 19 Sec. 06.55.102. Application for license. (a) An applicant for a license shall 20 submit 21 (1) an application in a form and in a medium prescribed by the 22 department; 23 (2) the application content required by the department, including 24 information concerning the applicant's organization and operations, financial 25 responsibility, background, experience, competence, and activities; 26 (3) any other information reasonably required by the department or 27 registry with respect to the applicant; 28 (4) an application fee; 29 (5) a license fee; and 30 (6) a surety bond or other security as required by AS 06.55.505. 31 (b) The department may waive a requirement of (a) of this section or permit an
01 applicant to submit other information in lieu of the required information. 02 (c) The department may change or update the application form and content in 03 accordance with applicable law to carry out the purposes of this chapter and maintain 04 consistency with registry licensing standards and practices. 05 * Sec. 4. AS 05.55.105 is repealed and reenacted to read: 06 Sec. 06.55.105. Issuance of license. (a) When an application for an initial 07 license under this chapter appears to include all required content and address all 08 matters required by the department, the application is considered complete, and the 09 department shall notify the applicant in a record of the date on which the application 10 was determined to be complete. The department shall approve or deny the application 11 within 120 days after the date the application was determined to be complete. If the 12 application is not approved or denied within 120 days after the completion date, 13 (1) the application is approved; and 14 (2) the license takes effect as of the first business day after expiration 15 of the 120-day period. 16 (b) The department may for good cause extend the application period. 17 (c) A determination by the department that an application is complete and is 18 accepted for processing means only that the application, on its face, appears to include 19 all required items, including a criminal background check, and address all required 20 matters. The department's determination is not an assessment of the substance of the 21 application or of the sufficiency of the information provided. 22 (d) When an application is filed and considered to be complete under (b) of 23 this section, the department shall investigate the applicant's financial condition and 24 responsibility, financial and business experience, competence, character, and general 25 fitness. The department may conduct an on-site investigation of the applicant, the 26 reasonable cost of which the applicant shall pay. The department shall issue a license 27 to an applicant if the department finds that 28 (1) the applicant has complied with AS 06.55.102, 06.55.109, and 29 applicable regulations; and 30 (2) the financial condition and responsibility, financial and business 31 experience, competence, character, and general fitness of the applicant, and the
01 competence, experience, character, and general fitness of the key individuals and 02 persons in control of the applicant indicate that it is in the interest of the public to 03 allow the applicant to engage in money transmission. 04 (e) If an applicant is subject to a multistate licensing process, the department 05 may 06 (1) accept the investigation results of a lead investigative state for the 07 purposes of (d) of this section; or 08 (2) investigate the applicant in accordance with (d) of this section and 09 the timeframes established by agreement through the multistate licensing process, 10 provided those timeframes comply with the application period set out in (a) of this 11 section. 12 (f) The department shall issue a formal written notice of a denial of a license 13 application within 30 days of the decision to deny the application. The department 14 shall set out in the notice of denial the specific reasons for the denial. An applicant 15 may appeal a denial within 30 days of receipt of the written notice of the denial and 16 may request a hearing. 17 (g) The initial license term begins on the day the application is approved. The 18 license expires on December 31 of the year in which the license is issued, unless 19 (1) the initial license date is between November 1 and December 31, in 20 which instance the initial license term runs through December 31 of the following 21 year; or 22 (2) the license is revoked, suspended, surrendered, or its term 23 otherwise adjusted in accordance with regulations adopted by the department. 24 * Sec. 5. AS 06.55.106 is repealed and reenacted to read: 25 Sec. 06.55.106. Renewal of license. (a) A license under this chapter must be 26 renewed annually. A licensee shall pay an annual renewal fee by the renewal filing 27 deadline established by the department. The renewal term is for a period of one year 28 and begins on January 1 of each year after the initial license term and expires on 29 December 31 of the year the renewal term begins. 30 (b) A licensee shall submit a renewal report with the renewal fee in a form and 31 in a medium prescribed by the department. The renewal report must describe each
01 material change in information submitted by the licensee in its initial license 02 application that has not been reported to the department. 03 (c) The department may for good cause grant an extension of the renewal 04 filing deadline. 05 (d) The department may utilize the registry to process license renewals 06 provided that use is consistent with this section. 07 * Sec. 6. AS 06.55 is amended by adding new sections to article 1 to read: 08 Sec. 06.55.108. Maintenance of license. (a) If a licensee does not continue to 09 meet the qualifications or satisfy the requirements that apply to an applicant for a new 10 money transmission license, the department may suspend or revoke the licensee's 11 license in accordance with this chapter or other applicable law. 12 (b) An applicant for a money transmission license must demonstrate that it 13 meets or will meet, and a money transmission licensee shall at all times meet, the 14 requirements of this chapter. 15 Sec. 06.55.109. Information requirements for certain individuals. (a) Any 16 individual in control of a licensee or applicant, any individual who seeks to acquire 17 control of a licensee, and each key individual shall furnish to the department through 18 the registry the following items: 19 (1) the individual's fingerprints for submission to the Federal Bureau 20 of Investigation and the department for purposes of a national criminal history record 21 check, unless the person currently resides outside the United States and has resided 22 outside the United States for the last 10 years; and 23 (2) personal history and experience in a form and in a medium 24 prescribed by the department to obtain the following: 25 (A) an independent credit report from a consumer reporting 26 agency, unless the individual does not have a social security number, in which 27 case, this requirement shall be waived; 28 (B) information related to any criminal convictions or pending 29 charges; and 30 (C) information related to any regulatory or administrative 31 action and any civil litigation involving claims of fraud, misrepresentation,
01 conversion, mismanagement of funds, breach of fiduciary duty, or breach of 02 contract. 03 (b) If the individual has resided outside the United States at any time in the 04 last 10 years, the individual shall also provide an investigative background report 05 prepared by an independent search firm that meets the following requirements: 06 (1) at a minimum, the search firm 07 (A) shall demonstrate that it has sufficient knowledge, 08 resources, and employs accepted and reasonable methodologies to conduct the 09 research of the background report; and 10 (B) may not be affiliated with or have an interest with the 11 individual it is researching; 12 (2) at a minimum, the investigative background report must be written 13 in English and contain the following: 14 (A) if available in the individual's current jurisdiction of 15 residency, a comprehensive credit report, or any equivalent information 16 obtained or generated by the independent search firm to accomplish such 17 report, including a search of the court data in the countries, provinces, states, 18 cities, towns, and contiguous areas where the individual resided and worked; 19 (B) criminal records information for the previous 10 years, 20 including felonies, misdemeanors, or similar convictions for violations of law 21 in the countries, provinces, states, cities, towns, and contiguous areas where 22 the individual resided and worked; 23 (C) employment history; 24 (D) media history, including an electronic search of national 25 and local publications, wire services, and business applications; and 26 (E) regulatory history related to financial services, including 27 money transmission, securities, banking, insurance, and mortgage-related 28 industries. 29 Sec. 06.55.110. Consistent state licensing. (a) To establish consistent 30 licensing between this state and other states, the department may 31 (1) implement all licensing provisions of this chapter in a manner that
01 is consistent with other states that have adopted multistate licensing processes; and 02 (2) participate in nationwide protocols for licensing cooperation and 03 coordination among state regulators provided that such protocols are consistent with 04 this chapter. 05 (b) In order to fulfill the purposes of this chapter, the department may 06 establish relationships or contracts with the registry or other entities designated by the 07 registry to enable the department to 08 (1) collect and maintain records; 09 (2) coordinate multistate licensing processes and supervision 10 processes; 11 (3) process fees; and 12 (4) facilitate communication between the department and money 13 transmission licensees or other persons subject to this chapter. 14 (c) The department may utilize the registry for all aspects of licensing in 15 accordance with this chapter, including for license applications, applications for 16 acquisitions of control, surety bonds, reporting, criminal background checks, credit 17 checks, fee processing, and examinations. 18 * Sec. 7. AS 06.55 is amended by adding new sections to article 2 to read: 19 Sec. 06.55.205. Scope. (a) The provisions of AS 06.55.205 - 06.55.290 do not 20 apply to the exchange, transfer, or storage of virtual currency or to virtual currency- 21 administration to the extent that activity is governed by 15 U.S.C. 1693 - 1693r 22 (Electronic Fund Transfer Act of 1978), 15 U.S.C. 78a - 78oo (Securities Exchange 23 Act of 1934), 7 U.S.C. 1 - 27f (Commodities Exchange Act of 1936), or AS 45.56.100 24 - 45.56.995 (Alaska Securities Act). 25 (b) The provisions of AS 06.55.205 - 06.55.290 do not apply to activity by 26 (1) a person who contributes only connectivity software or computing 27 power to a decentralized virtual currency or to a protocol governing transfer of the 28 digital representation of value; 29 (2) a person who provides only data storage or security services for a 30 business engaged in virtual-currency business activity and does not otherwise engage 31 in virtual-currency business activity on behalf of another person;
01 (3) a person who provides only to another person otherwise exempt 02 from this chapter virtual currency as one or more enterprise solutions used solely 03 among each other and has no agreement or relationship with a person that is an end- 04 user of virtual currency; 05 (4) a person using virtual currency, including creating, investing, 06 buying or selling, or obtaining virtual currency as payment for the purchase or sale of 07 goods or services, solely 08 (A) on the person's own behalf; 09 (B) for personal, family, or household purposes; or 10 (C) for academic purposes; 11 (5) a person whose virtual-currency business activity with or on behalf 12 of persons is reasonably expected to be valued, in the aggregate, on an annual basis at 13 $5,000 or less, measured by the dollar equivalent of virtual currency; 14 (6) an attorney providing escrow services to a person; 15 (7) a title insurance company providing escrow services to a person; 16 (8) a securities intermediary, as defined in AS 45.08.102, or a 17 commodity intermediary, as defined in 45.29.102, that 18 (A) does not engage in the ordinary course of business in 19 virtual-currency business activity with or on behalf of a person in addition to 20 maintaining securities accounts or commodities accounts and is regulated as a 21 securities intermediary or commodity intermediary under federal law, law of 22 this state other than this chapter, or law of another state; and 23 (B) affords a person protections comparable to those set out in 24 AS 06.55.110; 25 (9) a secured creditor under AS 45.29 or creditor with a judicial lien or 26 lien arising by operation of law on collateral that is virtual currency, if the virtual- 27 currency business activity of the creditor is limited to enforcement of the security 28 interest in compliance with AS 45.29 or lien in compliance with the law applicable to 29 the lien; 30 (10) virtual-currency control services vendor; or 31 (11) a person who does not receive compensation from a person for
01 (A) providing virtual-currency products or services; 02 (B) conducting virtual-currency business activity; or 03 (C) engaging in testing products or services with the person's 04 own funds. 05 (c) The department may determine that a person or class of persons, given 06 facts particular to the person or class, should be exempt from this chapter. 07 Sec. 06.55.206. Conditions precedent to engaging in virtual-currency 08 business activity. (a) A person may not engage in virtual-currency business activity or 09 hold itself out as being able to engage in virtual-currency business activity unless the 10 person is 11 (1) licensed in this state under AS 06.55.105; or 12 (2) exempt from licensing under AS 06.55.802. 13 (b) A person who is licensed to engage in virtual-currency business activity is 14 engaged in the business of money transmission and is subject to the requirements of 15 this chapter. 16 Sec. 06.55.207. Required disclosures. (a) A licensee that engages in virtual- 17 currency business activity shall provide to a person who uses the licensee's products or 18 service the disclosures required by (b) of this section and any additional disclosures 19 the department determines to be reasonably necessary for the protection of persons. 20 The department shall determine by regulation or order the time and form required for 21 disclosure. A disclosure required by this section must be made separately from any 22 other information provided by the licensee and in a clear and conspicuous manner in a 23 record the person may keep. A licensee may propose for the department's approval 24 alternate disclosures as more appropriate for its virtual-currency business activity with 25 or on behalf of persons. 26 (b) Before establishing a relationship with a person, a licensee shall disclose, 27 to the extent applicable to the virtual-currency business activity the licensee will 28 undertake with the person, 29 (1) a schedule of fees and charges the licensee may assess, the manner 30 by which fees and charges will be calculated if not set in advance and disclosed, and 31 the timing of the fees and charges;
01 (2) whether the product or service provided by the licensee is covered 02 by 03 (A) a form of insurance or is otherwise guaranteed against loss 04 by an agency of the United States 05 (i) up to the dollar equivalent of virtual currency 06 purchased from the licensee or for control of virtual currency by the 07 licensee as of the date of the placement or purchase, including the 08 maximum amount provided by insurance under the Federal Deposit 09 Insurance Corporation or otherwise available from the Securities 10 Investor Protection Corporation; or 11 (ii) if not provided at the dollar equivalent of virtual 12 currency purchased from the licensee or for control of virtual currency 13 by the licensee, the maximum amount of coverage for each person 14 expressed in the dollar equivalent of the virtual currency; or 15 (B) private insurance against theft or loss, including cyber 16 theft; 17 (3) the irrevocability of a transfer or exchange and any exception to 18 irrevocability; 19 (4) a description of 20 (A) liability for an unauthorized, mistaken, or accidental 21 transfer or exchange; 22 (B) the person's responsibility to provide notice to the licensee 23 of a transfer or exchange; 24 (C) the basis for any recovery by the person from the licensee 25 or registrant; 26 (D) general error resolution rights applicable to a transfer or 27 exchange; and 28 (E) the method for the person to update the person's contact 29 information with the licensee; 30 (5) that the date or time when a transfer or exchange is made and the 31 person's account is debited may differ from the date or time when the person initiates
01 an instruction to make the transfer or exchange; 02 (6) whether the person has a right to stop a pre-authorized payment or 03 revoke authorization for a transfer and the procedure to initiate a stop-payment order 04 or revoke authorization for a subsequent transfer; 05 (7) the person's right to receive a receipt, trade ticket, or other evidence 06 of a transfer or exchange; 07 (8) the person's right to at least 30 days' prior notice of a change in the 08 licensee's fee schedule, other terms and conditions of operating its virtual-currency 09 business activity with the person, and the policies applicable to the person's account; 10 and 11 (9) that virtual currency is not money. 12 (c) Except as provided in (d) of this section, at the conclusion of a virtual- 13 currency transaction with or on behalf of a person, a licensee shall provide the person 14 a confirmation in a record that contains 15 (1) the name and contact information of the licensee, including 16 information the person may need to ask a question or file a complaint; 17 (2) the type, value, date, precise time, and amount of the transaction; 18 and 19 (3) the fee charged for the transaction, including any charge for 20 conversion of virtual currency to money, bank credit, or other virtual currency. 21 (d) If a licensee discloses that it will provide a daily confirmation in the initial 22 disclosure under (c) of this section, the licensee may elect to provide a single, daily 23 confirmation for all transactions with or on behalf of a person on that day instead of a 24 confirmation for each transaction. 25 Sec. 06.55.208. Property interests and entitlements to virtual currency. (a) 26 A licensee that has control of virtual currency for one or more persons shall maintain 27 in its control an amount of each type of virtual currency sufficient to satisfy the 28 aggregate entitlements of the persons to the type of virtual currency. 29 (b) If a licensee violates (a) of this section, the property interests of the 30 persons in the virtual currency are pro rata property interests in the type of virtual 31 currency to which the persons are entitled, without regard to the time the persons
01 became entitled to the virtual currency or the licensee obtained control of the virtual 02 currency. 03 (c) The virtual currency referred to in this section is 04 (1) held for the persons entitled to the virtual currency; 05 (2) not property of the licensee; 06 (3) not subject to the claims of creditors of the licensee; and 07 (4) deemed a permissible investment under this chapter. 08 Sec. 06.55.209. Additional requirements and clarifications for virtual- 09 currency business activities. (a) A licensee engaged in a virtual-currency business 10 activity shall comply with all provisions of this chapter to the extent applicable to the 11 licensee's activities. 12 (b) A licensee engaged in a virtual-currency business activity may include in 13 its calculation of tangible net worth virtual currency, measured by the average value of 14 the virtual currency in the dollar equivalent over the previous six calendar months, 15 excluding control of virtual currency for a person entitled to the protections of 16 AS 06.55.208. 17 (c) A licensee shall maintain, for all virtual-currency business activity with or 18 on behalf of a person five years after the date of the activity, a record of 19 (1) each transaction of the licensee with or on behalf of the person or 20 for the licensee's account in this state, including 21 (A) the identity of the person; 22 (B) the form of the transaction; 23 (C) the amount, date, and payment instructions given by the 24 person; and 25 (D) the account number, name, and mailing address of the 26 resident, and, to the extent feasible, other parties to the transaction; 27 (2) the aggregate number of transactions and aggregate value of 28 transactions by the licensee with or on behalf of the person and for the licensee's 29 account in this state, expressed in the dollar equivalent of virtual currency for the 30 previous 12 calendar months; 31 (3) each transaction in which the licensee exchanges one form of
01 virtual currency for money or another form of virtual currency with or on behalf of the 02 person; 03 (4) a general ledger posted at least monthly that lists all assets, 04 liabilities, capital, income, and expenses of the licensee; 05 (5) each call report the licensee is required to create or provide to the 06 department or registry; 07 (6) bank statements and bank reconciliation records for the licensee 08 and the name, account number, and mailing address of each bank the licensee uses in 09 the conduct of its virtual-currency business activity with or on behalf of the person; 10 (7) a report of any dispute with the person; and 11 (8) a report of any virtual-currency business activity transaction with 12 or on behalf of the person that the licensee was unable to complete. 13 (d) A licensee shall maintain the records required by (c) of this section in a 14 form that enables the department to determine whether the licensee is in compliance a 15 court order, this chapter, or other law of this state. 16 Sec. 06.55.290. Definitions. In AS 06.55.205 - AS 06.55.290, 17 (1) "control of virtual currency," when used in reference to a 18 transaction or relationship involving virtual currency, means the power to execute 19 unilaterally or prevent indefinitely a virtual-currency transaction; 20 (2) "dollar equivalent" means the equivalent value of a particular 21 virtual currency in United States dollars shown on a virtual-currency exchange based 22 in the United States for a particular date or period specified in this chapter; 23 (3) "exchange" means to assume control of virtual currency from or on 24 behalf of a person, at least momentarily, to sell, trade, or convert 25 (A) virtual currency for money, bank credit, or one or more 26 forms of virtual currency or money; or 27 (B) bank credit for one or more forms of virtual currency; 28 (4) "transfer" means to assume control of virtual currency from or on 29 behalf of a person and to 30 (A) credit the virtual currency to the account of another person; 31 (B) move the virtual currency from one account of a person to
01 another account of the same person; or 02 (C) relinquish control of virtual currency to another person; 03 (5) "virtual currency" 04 (A) means a digital representation of value that 05 (i) is used as a medium of exchange, unit of account, or 06 store of value; and 07 (ii) is not money, whether or not denominated in 08 money; 09 (B) does not include 10 (i) a transaction in which a merchant grants, as part of 11 an affinity or rewards program, value that cannot be taken from or 12 exchanged with the merchant for money, bank credit, or virtual 13 currency; or 14 (ii) a digital representation of value issued by or on 15 behalf of a publisher and used solely within an online game, game 16 platform, or family of games sold by the same publisher or offered on 17 the same game platform; 18 (6) "virtual-currency administration" means issuing virtual currency 19 with the authority to redeem the currency for money, bank credit, or other virtual 20 currency; 21 (7) "virtual-currency business activity" means 22 (A) exchanging, transferring, or storing virtual currency or 23 engaging in virtual-currency administration, whether directly or through an 24 agreement with a vendor of virtual-currency control services; 25 (B) holding electronic precious metals or electronic certificates 26 representing interests in precious metals on behalf of another person or issuing 27 shares or electronic certificates representing interests in precious metals; or 28 (C) exchanging one or more digital representations of value 29 used within one or more online games, game platforms, or family of games for 30 (i) virtual currency offered by or on behalf of the same 31 publisher from which the original digital representation of value was
01 received; or 02 (ii) money or bank credit outside the online game, game 03 platform, or family of games offered by or on behalf of the same 04 publisher from which the original digital representation of value was 05 received; 06 (8) " virtual-currency control services vendor" means a person who has 07 control of virtual currency solely under an agreement with a person who, on behalf of 08 another person, assumes control of virtual currency. 09 * Sec. 8. AS 06.55.301 is repealed and reenacted to read: 10 Sec. 06.55.301. Relationship between licensee and authorized delegate. (a) 11 Before a licensee is authorized to conduct business through an authorized delegate or 12 allow a person to act as the licensee's authorized delegate, the licensee shall 13 (1) adopt, and update as necessary, written policies and procedures 14 reasonably designed to ensure that the licensee's authorized delegates comply with 15 applicable state and federal law; 16 (2) enter into a written contract that complies with (c) of this section; 17 and 18 (3) conduct a reasonable, risk-based background investigation 19 sufficient for the licensee to determine whether the authorized delegate has complied 20 and will likely comply with applicable state and federal law. 21 (b) An authorized delegate shall operate in compliance with this chapter. 22 (c) The written contract required by (a)(2) of this section must be signed by 23 the licensee and the authorized delegate and, at a minimum, must 24 (1) appoint the person signing the contract as the licensee's authorized 25 delegate with the authority to conduct money transmission on behalf of the licensee; 26 (2) set out the nature and scope of the relationship between the licensee 27 and the authorized delegate and the respective rights and responsibilities of the parties; 28 (3) require the authorized delegate to agree to comply with all 29 applicable state and federal laws, rules, and regulations pertaining to money 30 transmission, including this chapter and regulations implementing this chapter, 31 relevant provisions of the Bank Secrecy Act, and P.L. 107-56 (USA PATRIOT ACT);
01 (4) require the authorized delegate to remit and handle money and 02 monetary value in accordance with the terms of the contract; 03 (5) impose a trust on money and monetary value net of fees received 04 for money transmission for the benefit of the licensee; 05 (6) require the authorized delegate to prepare and maintain records as 06 required by this chapter or regulations implementing this chapter, or as reasonably 07 requested by the department; 08 (7) acknowledge that the authorized delegate consents to examination 09 or investigation by the department; 10 (8) state that the licensee is subject to regulation by the department and 11 that, as part of that regulation, the department may suspend or revoke an authorized 12 delegate designation or require the licensee to terminate an authorized delegate 13 designation; and 14 (9) acknowledge receipt of the written policies and procedures 15 required under (a)(1) of this section. 16 (d) If the licensee's license is suspended, revoked, surrendered, or expired, the 17 licensee shall, within five business days, provide documentation to the department that 18 the licensee has notified all applicable authorized delegates of the licensee whose 19 names are in a record filed with the department of the suspension, revocation, 20 surrender, or expiration of the license. Upon suspension, revocation, surrender, or 21 expiration of a license, applicable authorized delegates shall immediately cease to 22 provide money transmission as an authorized delegate of the licensee. 23 (e) An authorized delegate of a licensee holds in trust for the benefit of the 24 licensee all money net of fees received from money transmission. If an authorized 25 delegate commingles any funds received from money transmission with any other 26 funds or property owned or controlled by the authorized delegate, all commingled 27 funds and other property shall be considered held in trust in favor of the licensee in an 28 amount equal to the amount of money net of fees received from money transmission. 29 (f) In this section, "remit" means to make direct payments of money to a 30 licensee or its representative authorized to receive money or to deposit money in a 31 bank account specified by the licensee.
01 * Sec. 9. AS 06.55.302 is amended to read: 02 Sec. 06.55.302. Unauthorized activities. A person may not engage in the 03 business of money transmission on behalf of a person not licensed or exempt 04 [ACT AS AN AUTHORIZED DELEGATE FOR, OR OTHERWISE PROVIDE 05 MONEY SERVICES ON BEHALF OF, A PERSON WHO DOES NOT HOLD A 06 MONEY SERVICES LICENSE] under this chapter. A person who engages in the 07 business of money transmission on behalf of a person not licensed or exempt 08 under this chapter provides money transmission to the same extent as if the 09 person were a licensee and is jointly and severally liable with the unlicensed or 10 nonexempt person. 11 * Sec. 10. AS 06.55.401 is repealed and reenacted to read: 12 Sec. 06.55.401. Supervision. (a) The department may conduct an examination 13 or investigation of a licensee or authorized delegate or otherwise take independent 14 action authorized by this chapter, regulations implementing this chapter, and other 15 applicable law, including the Bank Secrecy Act, 15 U.S.C. 1693 - 1693r (Electronic 16 Fund Transfer Act of 1978), P.L. 106-102 (Gramm-Leach-Bliley Act), and P.L. 107- 17 56 (USA PATRIOT ACT). The department may 18 (1) conduct an on-site or off-site examination as the department 19 reasonably requires; 20 (2) conduct an examination in conjunction with an examination 21 conducted by representatives of other agencies of this state, another state, or the 22 federal government; 23 (3) accept the examination report of another agency of this state, 24 another state, or the federal government, or a report prepared by an independent 25 accounting firm; a report accepted under this paragraph will be considered for all 26 purposes to be an official report of the department; and 27 (4) summon and examine under oath a key individual or employee of a 28 licensee or authorized delegate and require that key individual or employee to produce 29 records regarding any matter related to the condition and business of the licensee or 30 authorized delegate. 31 (b) A licensee or authorized delegate shall provide, and the department shall
01 have complete access to, all records the department reasonably requires to conduct a 02 complete examination. The licensee or authorized delegate shall provide the records at 03 the location and in the format specified by the department. The department may utilize 04 multistate record production standards and examination procedures when such 05 standards will reasonably achieve the requirements of this section. 06 (c) Unless otherwise directed by the department, a licensee shall pay all costs 07 reasonably incurred in connection with an examination of the licensee or the licensee's 08 authorized delegates. 09 (d) Information obtained during an examination under this chapter may be 10 disclosed only as provided in AS 06.55.407. 11 * Sec. 11. AS 06.55.403(a) is repealed and reenacted to read: 12 (a) A licensee shall submit a report of condition within 45 days after the end 13 of the fiscal quarter or within an extended period of time that the department 14 prescribes. The report of condition must include 15 (1) financial information at the licensee level; 16 (2) nationwide and state-specific money transmission transaction 17 information in every jurisdiction in the United States where the licensee is licensed to 18 engage in money transmission; 19 (3) a permissible investments report; 20 (4) transaction destination country reporting for money received for 21 transmission, if applicable; and 22 (5) any other information the department reasonably requires with 23 respect to the licensee. 24 * Sec. 12. AS 06.55.403(b) is repealed and reenacted to read: 25 (b) A licensee shall submit a report of authorized delegates within 45 days 26 after the end of each fiscal quarter. The report of authorized delegates must include 27 each authorized delegate's 28 (1) company legal name; 29 (2) taxpayer employer identification number; 30 (3) principal provider identifier; 31 (4) physical address;
01 (5) mailing address; 02 (6) business conducted in other states, if any; 03 (7) fictitious or trade name, if any; 04 (8) contact person name, phone number, and electronic mail address; 05 (9) start date acting as licensee's authorized delegate; 06 (10) end date acting as licensee's authorized delegate, if applicable; 07 and 08 (11) any other information the department reasonably requires with 09 respect to the authorized delegate. 10 * Sec. 13. AS 06.55.403(c) is amended to read: 11 (c) A [MONEY SERVICES] licensee shall file a report with the department 12 within one business day after the [MONEY SERVICES] licensee has reason to know 13 of the occurrence of any of the following events: 14 (1) the filing of a petition by or against the [MONEY SERVICES] 15 licensee under 11 U.S.C. 101 - 110 (Bankruptcy Code) for bankruptcy or 16 reorganization; 17 (2) the filing of a petition by or against the [MONEY SERVICES] 18 licensee for receivership, the commencement of any other judicial or administrative 19 proceeding for its dissolution or reorganization, or the making of a general assignment 20 for the benefit of its creditors; 21 (3) the commencement of a proceeding to revoke or suspend its 22 [MONEY SERVICES] license in a state or country in which the [MONEY 23 SERVICES] licensee engages in business or is licensed; 24 (4) the cancellation or other impairment of the [MONEY SERVICES] 25 licensee's bond or other security; 26 (5) a charge against or conviction of the [MONEY SERVICES] 27 licensee or of a key individual [AN EXECUTIVE OFFICER, MANAGER, 28 DIRECTOR,] or person in control of the [MONEY SERVICES] licensee for a felony; 29 or 30 (6) a charge against or conviction of an authorized delegate for a 31 felony.
01 * Sec. 14. AS 06.55.403 is amended by adding a new subsection to read: 02 (d) The department may utilize the registry for the submission of reports 03 required by this section. 04 * Sec. 15. AS 06.55.404 is repealed and reenacted to read: 05 Sec. 06.55.404. Acquisition of control. (a) A person or group of persons 06 acting in concert seeking to acquire control of a licensee shall obtain the written 07 approval of the department before acquiring control. An individual is not deemed to 08 acquire control of a licensee when that individual becomes a key individual in the 09 ordinary course of business. 10 (b) A person or group of persons acting in concert seeking to acquire control 11 of a licensee shall, in cooperation with the licensee, 12 (1) submit an application in a form and in a medium prescribed by the 13 department that includes the information required by AS 06.55.412, as applicable; and 14 (2) submit a nonrefundable fee with the request for approval. 15 (c) The department may permit a licensee or the person, or group of persons 16 acting in concert, to submit some or all information required by the department under 17 (b)(1) of this section without using the registry. 18 (d) When an application for acquisition of control appears to include all 19 required content and address all matters required by the department, the application is 20 considered complete, and the department shall notify the applicant in a record of the 21 date on which the application was determined to be complete. The department shall 22 approve or deny the application within 120 days after the date the application was 23 determined to be complete. If the application is not approved or denied within 120 24 days after the completion date, 25 (1) the application is approved; and 26 (2) the person or group of persons acting in concert is not prohibited 27 from acquiring control. 28 (e) The department may for good cause extend the application period. 29 (f) A determination by the department that an application is complete and is 30 accepted for processing means only that the application, on its face, appears to include 31 all required items, including a criminal background check, and address all required
01 matters. The department's determination is not an assessment of the substance of the 02 application or of the sufficiency of the information provided. 03 (g) When an application is filed and considered to be complete under (d) of 04 this section, the department shall investigate the financial condition and responsibility, 05 financial and business experience, competence, character, and general fitness of the 06 person or group of persons acting in concert seeking to acquire control. The 07 department shall approve a request for acquisition of control if the department finds 08 that 09 (1) the requirements of (b) of this section have been met, as applicable; 10 and 11 (2) the financial condition and responsibility, financial and business 12 experience, competence, character, and general fitness of the person, or group of 13 persons acting in concert, seeking to acquire control, and the competence, experience, 14 character, and general fitness of the key individuals and persons that would be in 15 control of the licensee after the acquisition of control indicate that it is in the public 16 interest to permit the person, or group of persons acting in concert, to control the 17 licensee. 18 (h) If an applicant for approval to acquire control is subject to a multistate 19 licensing process, the department may 20 (1) accept the investigation results of a lead investigative state for the 21 purposes of (g) of this section; or 22 (2) investigate the applicant in accordance with (g) of this section and 23 the timeframes established by agreement through the multistate licensing process. 24 (i) The department shall issue a formal written notice of a denial of an 25 application for approval to acquire control within 30 days after the decision to deny 26 the application. The department shall set out in the notice of denial the specific reasons 27 for the denial. An applicant may appeal a denial within 30 days after receipt of the 28 written notice of the denial. 29 (j) The provisions of (a) and (b) of this section do not apply to 30 (1) a person who acts as a proxy for the sole purpose of voting at a 31 designated meeting of the shareholders or holders of voting shares or voting interests
01 of a licensee or a person in control of a licensee; 02 (2) a person who acquires control of a licensee by devise or descent; 03 (3) a person who acquires control of a licensee as a personal 04 representative, custodian, guardian, conservator, or trustee, or as an officer appointed 05 by a court of competent jurisdiction or by operation of law; 06 (4) a person who is exempt under AS 06.55.802(4); 07 (5) a person who the department, by regulation or order, determines to 08 be exempt from the requirements of (a) and (b) of this section because that exemption 09 is in the public interest; 10 (6) a public offering of securities of a licensee or a person in control of 11 a licensee; or 12 (7) an internal reorganization of a person in control of a licensee where 13 the ultimate person in control of the licensee remains the same. 14 (k) A person exempt from the requirements of (a) and (b) of this section, in 15 cooperation with the licensee, shall notify the department within 15 days after the 16 acquisition of control. 17 (l) Before filing an application for approval to acquire control of a licensee, a 18 person may request in writing a determination from the department as to whether the 19 person would be considered a person in control of a licensee upon consummation of a 20 proposed transaction. If the department determines that the person would not be a 21 person in control of a licensee, the proposed person and transaction are not subject to 22 the requirements of (a) and (b) of this section. 23 (m) If a multistate licensing process includes a determination made under (l) 24 of this section and an applicant is subject to the multistate licensing process, the 25 department may 26 (1) accept the control determination of a lead investigative state; or 27 (2) investigate the applicant in accordance with this section and the 28 timeframes established by agreement through the multistate licensing process. 29 (n) The requirements of (a) and (b) of this section do not apply to a person who 30 has complied with and received approval to engage in money transmission under this 31 chapter or was identified as a person in control in a prior application filed with and
01 approved by the department or by an accredited state in accordance with a multistate 02 licensing process, provided that 03 (1) the person has not had a license revoked or suspended or controlled 04 a licensee that has had a license revoked or suspended while the person was in control 05 of the licensee in the past five years; 06 (2) if the person is a licensee, the person is well managed and has 07 received at least a satisfactory rating for compliance at its most recent examination by 08 an accredited state if such rating was given; 09 (3) the licensee to be acquired is projected to meet the requirements of 10 this chapter, including AS 06.55.501, 06.55.505, and 06.55.506 after the acquisition of 11 control is completed, and if the person acquiring control is a licensee, that licensee is 12 also projected to meet the requirements of this chapter, including AS 06.55.501, 13 06.55.505, and 06.55.506, after the acquisition of control is completed; 14 (4) the licensee to be acquired will not implement any material 15 changes to its business plan as a result of the acquisition of control, and if the person 16 acquiring control is a licensee, that licensee also will not implement any material 17 changes to its business plan as a result of the acquisition of control; and 18 (5) the person provides notice of the acquisition in cooperation with 19 the licensee and attests to (1) - (4) of this subsection in a form and in a medium 20 prescribed by the department. 21 (o) If the notice required under (n)(5) of this section is not disapproved within 22 30 days after the date on which the notice was determined to be complete, the notice is 23 deemed approved. 24 (p) For purposes of determining the percentage of a person controlled by any 25 other person, the person's interest shall be aggregated with the interest of any other 26 immediate family member, including the person's spouse, parents, children, siblings, 27 relative by marriage, and any other person who shares such person's home. 28 * Sec. 16. AS 06.55.405(a) is amended to read: 29 (a) A [MONEY SERVICES] licensee shall maintain the following records for 30 determining its compliance with this chapter for at least five [THREE] years: 31 (1) a record of each outstanding money transmission [PAYMENT
01 INSTRUMENT OR STORED-VALUE] obligation sold; 02 (2) a general ledger posted at least monthly containing all asset, 03 liability, capital, income, and expense accounts; 04 (3) bank statements and bank reconciliation records; 05 (4) records of outstanding money transmission [PAYMENT 06 INSTRUMENTS AND STORED-VALUE] obligations; 07 (5) records of each outstanding money transmission [PAYMENT 08 INSTRUMENT AND STORED-VALUE] obligation paid within the five-year 09 [THREE-YEAR] period; 10 (6) a list of the last known names and addresses of all of the [MONEY 11 SERVICES] licensee's authorized delegates; and 12 (7) any other records the department reasonably requires by regulation. 13 * Sec. 17. AS 06.55.405(d) is amended to read: 14 (d) All records maintained by the [MONEY SERVICES] licensee as required 15 in (a) - (c) of this section are open to inspection by the department under 16 AS 06.55.401. 17 * Sec. 18. AS 06.55.406(a) is amended to read: 18 (a) A [MONEY SERVICES] licensee and an authorized delegate shall file 19 [WITH THE ATTORNEY GENERAL] all reports required by federal currency 20 reporting, record keeping, and suspicious transaction reporting requirements as set out 21 in Bank Secrecy Act [31 U.S.C. 5311] and other federal and state laws pertaining to 22 money laundering. The timely filing of a complete and accurate report required 23 under this section with the appropriate federal agency is deemed compliant with 24 the requirements of this section. 25 * Sec. 19. AS 06.55.407(a) is amended to read: 26 (a) Except as [OTHERWISE] provided in (b) of this section, all information 27 or reports obtained by the department from an applicant, [A] licensee, or [AN] 28 authorized delegate, and all information contained in or related to an examination, 29 investigation, operating report, or condition report prepared by, on behalf of, or 30 for the use of the department, or financial statements, balance sheets, or 31 authorized delegate information, are confidential and not subject to disclosure under
01 AS 40.25.100 - 40.25.295 [, INCLUDING 02 (1) ALL INFORMATION CONTAINED IN OR RELATED TO 03 EXAMINATION, INVESTIGATION, OPERATING, OR CONDITION REPORTS 04 PREPARED BY, ON BEHALF OF, OR FOR THE USE OF THE DEPARTMENT; 05 AND 06 (2) FINANCIAL STATEMENTS, BALANCE SHEETS, AND 07 AUTHORIZED DELEGATE INFORMATION]. 08 * Sec. 20. AS 06.55.407(b) is amended to read: 09 (b) The department may disclose information that is not otherwise subject to 10 disclosure under (a) of this section to representatives of state or federal agencies who 11 promise in a record that they will maintain the confidentiality of the information or if 12 the department finds that the release is reasonably necessary for the protection of the 13 public and in the interests of justice [, AND THE MONEY SERVICES LICENSEE 14 HAS BEEN GIVEN PREVIOUS NOTICE BY THE DEPARTMENT OF ITS 15 INTENT TO RELEASE THE INFORMATION]. 16 * Sec. 21. AS 06.55.407(c) is amended to read: 17 (c) This section does not prohibit the department from disclosing to the public 18 a list of [MONEY SERVICES] licensees or the aggregated financial or transactional 19 data concerning those [MONEY SERVICES] licensees. 20 * Sec. 22. AS 06.55.407(d) is amended to read: 21 (d) A [MONEY SERVICES] licensee or an authorized delegate may not 22 disclose to another person financial information provided to the [MONEY 23 SERVICES] licensee or the authorized delegate by a customer except when, and only 24 to the extent that, the disclosure is 25 (1) authorized in writing by the customer; 26 (2) required by federal, state, or local law; 27 (3) required by an order issued by a court or an administrative agency; 28 or 29 (4) part of the money transmission [SERVICES] transaction ordered 30 by the customer. 31 * Sec. 23. AS 06.55.407 is amended by adding a new subsection to read:
01 (f) Information contained in the records of the department that is not 02 confidential and may, upon request, be made available to the public on the 03 department's Internet website includes 04 (1) the name, business address, telephone number, and registry unique 05 identifier of a licensee; 06 (2) the business address of a licensee's registered agent for service; 07 (3) the name, business address, and telephone number of all authorized 08 delegates; 09 (4) the terms of or a copy of any bond filed by a licensee, provided that 10 confidential information, including the prices and fees for such bond, is redacted; 11 (5) copies of any nonconfidential final orders of the department 12 relating to any violation of this chapter or regulations implementing this chapter; and 13 (6) imposition of an administrative fine or penalty under this chapter. 14 * Sec. 24. AS 06.55 is amended by adding new sections to article 4 to read: 15 Sec. 06.55.408. Audited financials. (a) A licensee shall, within 90 days after 16 the end of each fiscal year or within any extended period of time that the department 17 prescribes, file with the department 18 (1) an audited financial statement of the licensee for the fiscal year 19 prepared in accordance with generally accepted accounting principles; and 20 (2) any other information the department reasonably requires. 21 (b) The audited financial statements must be prepared by an independent 22 certified public accountant or independent public accountant who is satisfactory to the 23 department. 24 (c) The audited financial statements must include a certificate of opinion of 25 the independent certified public accountant or independent public accountant that is 26 satisfactory in form and content to the department. If the certificate or opinion is 27 qualified, the department may order the licensee to take any action that the department 28 finds necessary to enable the independent certified public accountant or independent 29 public accountant to remove the qualification. 30 Sec. 06.55.409. Implementation. (a) To carry out the purposes of this chapter, 31 subject to AS 06.55.407, the department may
01 (1) enter into agreements or relationships with other government 02 officials or federal and state regulatory agencies and regulatory associations to 03 improve efficiencies and reduce regulatory burden by standardizing methods or 04 procedures, and sharing resources, records, or related information obtained under this 05 chapter; 06 (2) use, hire, contract, or employ analytical systems, methods, or 07 software to examine or investigate any person subject to this chapter; 08 (3) accept from other state or federal government agencies or officials 09 licensing, examination, or investigation reports made by those agencies or officials; 10 and 11 (4) accept audit reports made by an independent certified public 12 accountant or other qualified third-party auditor for an applicant or licensee and 13 incorporate the audit reports into any report of examination or investigation. 14 (b) The department has broad administrative authority to administer, interpret 15 and enforce this chapter, to adopt rules or regulations implementing this chapter, and 16 to recover the cost of administering and enforcing this chapter by imposing and 17 collecting proportionate and equitable fees and costs associated with applications, 18 examinations, investigations, and other actions required to achieve the purpose of this 19 chapter. 20 Sec. 06.55.410. Networked supervision. (a) The department may participate 21 in multistate supervisory processes established between states and coordinated through 22 the Conference of State Bank Supervisors and Money Transmitter Regulators 23 Association, as well as affiliates and successors thereof, for all licensees that hold 24 licenses in this state and other states. As a participant in multistate supervision, subject 25 to AS 06.55.407, the department may 26 (1) cooperate, coordinate, and share information with other state and 27 federal regulators; and 28 (2) enter into written contracts or agreements with other state and 29 federal regulators for the purposes of cooperating, coordinating, and sharing 30 information with those state and federal regulators. 31 (b) Nothing in this section constitutes a waiver of the department's authority to
01 conduct an examination or investigation or otherwise take independent action to 02 enforce compliance with applicable state or federal law. 03 (c) A joint examination or investigation, or acceptance of an examination or 04 investigation report, does not waive an examination assessment provided for in this 05 chapter. 06 Sec. 06.55.411. Relationship to federal law. (a) In the event that state money 07 transmission jurisdiction is conditioned on a federal law, any inconsistency between a 08 provision of this chapter and the federal law governing money transmission is 09 governed by the applicable federal law to the extent of the inconsistency. 10 (b) In the event of an inconsistency between this chapter and a federal law that 11 governs in accordance with (a) of this section, the department may provide interpretive 12 guidance that 13 (1) identifies the inconsistency; and 14 (2) identifies the appropriate means of compliance with federal law. 15 Sec. 06.55.412. Notice and information requirements for a change of key 16 individual. (a) A licensee adding or replacing a key individual shall 17 (1) provide notice in a manner prescribed by the department within 15 18 days after the effective date of the key individual's appointment; and 19 (2) provide the information required under AS 06.55.109 within 45 20 days after the effective date of the key individual's appointment. 21 (b) The department may issue a notice of disapproval of a key individual if the 22 department finds that the experience, competence, character, or integrity of the 23 individual would not be in the best interest of the public or the customers of the 24 licensee to permit the individual to be a key individual. The department shall issue a 25 notice of disapproval within 90 days after the department determines the notice 26 provided under (a) of this section to be complete. 27 (c) A notice of disapproval shall contain a statement of the basis for the 28 disapproval and be sent to the licensee and the disapproved individual. A licensee may 29 appeal a notice of disapproval within 30 days after receipt of the notice. 30 (d) If the notice provided under (a) of this section is not disapproved within 90 31 days after the date the notice was determined to be complete, the key individual is
01 deemed approved. 02 (e) If a multistate licensing process includes a key individual notice review 03 and disapproval process, and the licensee is subject to the multistate licensing process, 04 the department may 05 (1) accept the key individual notice review determination of another 06 state; or 07 (2) investigate the applicant in accordance with (b) of this section and 08 the timeframes established by agreement through the multistate licensing process. 09 * Sec. 25. AS 06.55.501 is amended to read: 10 Sec. 06.55.501. Maintenance of permissible investments. (a) A [MONEY 11 SERVICES] licensee shall maintain at all times permissible investments that have a 12 market value computed under generally accepted accounting principles of not less than 13 the aggregate amount of all of its outstanding money transmission [PAYMENT 14 INSTRUMENTS AND STORED VALUE] obligations [ISSUED OR SOLD IN ALL 15 STATES AND MONEY TRANSMITTED FROM ALL STATES BY THE MONEY 16 SERVICES LICENSEE]. 17 (b) Except for permissible investments listed in AS 06.55.502, the [THE] 18 department, with respect to any licensee [MONEY SERVICES LICENSEES], may by 19 rule or order limit the extent to which a specific [TYPE OF] investment maintained 20 by a licensee within a class of permissible investments may be considered a 21 permissible investment if the specific investment represents undue risk to the 22 customers that is not reflected in the market value of investments [, EXCEPT 23 FOR MONEY AND CERTIFICATES OF DEPOSIT ISSUED BY A BANK. THE 24 DEPARTMENT BY REGULATION MAY PRESCRIBE OR BY ORDER ALLOW 25 OTHER TYPES OF INVESTMENTS THAT THE DEPARTMENT DETERMINES 26 TO HAVE A SAFETY SUBSTANTIALLY EQUIVALENT TO OTHER 27 PERMISSIBLE INVESTMENTS]. 28 (c) Permissible investments, even if commingled with other assets of the 29 [MONEY SERVICES] licensee, are held in trust for the benefit of the purchasers and 30 holders of the [MONEY SERVICES] licensee's outstanding money transmission 31 [PAYMENT INSTRUMENTS AND STORED VALUE] obligations in the event of
01 the licensee's insolvency, bankruptcy, [OR] receivership, commencement of other 02 judicial or administrative proceedings for its dissolution or reorganization, or in 03 the event of an action by a creditor against the license who is not a beneficiary of 04 the statutory trust. No permissible investment impressed with a trust in 05 accordance with this subsection shall be subject to attachment, levy of execution, 06 or sequestration by order of any court, except for a beneficiary of the statutory 07 trust [OF THE MONEY SERVICES LICENSEE]. 08 * Sec. 26. AS 06.55.501 is amended by adding new subsections to read: 09 (d) Upon the establishment of a statutory trust under (c) of this section, or 10 when any funds are drawn on a letter of credit under AS 06.55.502(a)(4) and (d), the 11 department shall notify the applicable regulator of each state in which the licensee is 12 licensed to engage in money transmission, if any, of the establishment of the trust or 13 the funds drawn on the letter of credit, as applicable. Notice may be provided in 14 accordance with a multistate agreement or through the registry. Funds drawn on a 15 letter of credit and any other permissible investments held in trust for the benefit of the 16 purchasers and holders of the licensee's outstanding money transmission obligations 17 are deemed held in trust for the benefit of such purchasers and holders on a pro rata 18 and equitable basis in accordance with state law and the law of other states, as 19 applicable. Any statutory trust established under this section shall be terminated upon 20 extinguishment of all of the licensee's outstanding money transmission obligations. 21 (e) The department may by regulation, rule, or order allow other types of 22 investments that the department determines are of sufficient liquidity and quality to be 23 a permissible investment. The department may participate in efforts with other state 24 regulators to identify permissible investments. 25 * Sec. 27. AS 06.55.502(a) is amended to read: 26 (a) Except to the extent otherwise limited by the department under 27 AS 06.55.501, or as modified by rule or regulation of the department, the 28 following investments are permissible under AS 06.55.501: 29 (1) cash, demand deposits, savings deposits, funds in accounts held 30 for the benefit of a licensee's customers in a federally insured depository financial 31 institution, money market mutual funds, certificates [A CERTIFICATE] of
01 deposit, [OR A] senior debt obligations [OBLIGATION] of a federally [AN] insured 02 depository financial institution, and cash equivalents including Automated 03 Clearing House items in transit to the licensee and Automated Clearing House 04 items or international wires in transit to a payee, cash in transit via armored car, 05 cash in smart safes, cash in licensee-owned locations, and debit card or credit 06 card-funded transmission receivables owed by any bank [; IN THIS 07 PARAGRAPH, "INSURED DEPOSITORY INSTITUTION" HAS THE MEANING 08 GIVEN IN 12 U.S.C. 1813 (FEDERAL DEPOSIT INSURANCE ACT)]; 09 (2) [BANKER'S ACCEPTANCE OR BILL OF EXCHANGE THAT 10 IS ELIGIBLE FOR PURCHASE ON ENDORSEMENT BY A MEMBER BANK OF 11 THE FEDERAL RESERVE SYSTEM AND IS ELIGIBLE FOR PURCHASE BY A 12 FEDERAL RESERVE BANK; 13 (3)] an investment bearing a rating of one of the three highest grades as 14 defined by a nationally recognized organization that rates securities; 15 (3) [(4) AN INVESTMENT SECURITY THAT IS] an obligation of 16 the United States or a commission [DEPARTMENT], agency, or instrumentality of 17 the United States, [AN INVESTMENT IN] an obligation that is guaranteed fully as to 18 principal and interest by the United States, or [AN INVESTMENT IN] an obligation 19 of a state or a governmental subdivision, agency, or instrumentality of a state; 20 (4) the full drawable amount of an irrevocable standby letter of 21 credit that complies with (d) of this section; 22 (5) 100 percent of the surety bond provided for under 23 AS 06.55.505 that exceeds the average daily money transmission liability in this 24 state 25 [(5) RECEIVABLES THAT ARE PAYABLE TO A MONEY 26 SERVICES LICENSEE FROM ITS AUTHORIZED DELEGATES, IN THE 27 ORDINARY COURSE OF BUSINESS, UNDER CONTRACTS THAT ARE NOT 28 PAST DUE OR DOUBTFUL OF COLLECTION IF THE AGGREGATE AMOUNT 29 OF RECEIVABLES UNDER THIS PARAGRAPH DOES NOT EXCEED 20 30 PERCENT OF THE TOTAL PERMISSIBLE INVESTMENTS OF A MONEY 31 SERVICES LICENSEE AND THE MONEY SERVICES LICENSEE DOES NOT
01 HOLD AT ONE TIME RECEIVABLES UNDER THIS PARAGRAPH IN ANY 02 ONE PERSON AGGREGATING MORE THAN 10 PERCENT OF THE MONEY 03 SERVICES LICENSEE'S TOTAL PERMISSIBLE INVESTMENTS; AND 04 (6) A SHARE OR A CERTIFICATE ISSUED BY AN OPEN-END 05 MANAGEMENT INVESTMENT COMPANY THAT IS REGISTERED WITH THE 06 UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER 15 07 U.S.C. 80A-1 - 80A-64 (INVESTMENT COMPANY ACT OF 1940), AND WHOSE 08 PORTFOLIO IS RESTRICTED BY THE MANAGEMENT COMPANY'S 09 INVESTMENT POLICY TO INVESTMENTS SPECIFIED IN (1) - (4) OF THIS 10 SUBSECTION]. 11 * Sec. 28. AS 06.55.502(b) is repealed and reenacted to read: 12 (b) The following investments are permissible under AS 06.55.501 to the 13 extent specified: 14 (1) receivables that are payable to a licensee from its authorized 15 delegates in the ordinary course of business that are less than seven days old and do 16 not exceed 50 percent of the aggregate value of the licensee's total permissible 17 investments; receivables under this paragraph that are payable to a licensee from a 18 single authorized delegate in the ordinary course of business may not exceed 10 19 percent of the aggregate value of the licensee's total permissible investments; 20 (2) the following investments, not to exceed 20 percent per category 21 and a combined total of 50 percent of the aggregate value of the licensee's total 22 permissible investments: 23 (A) a short-term investment of no more than six months' 24 duration bearing an eligible rating; 25 (B) commercial paper bearing an eligible rating; 26 (C) a bill, note, bond, or debenture bearing an eligible rating; 27 (D) United States tri-party repurchase agreements collateralized 28 at 100 percent or more with federal government or agency securities, 29 municipal bonds, or other securities bearing an eligible rating; 30 (E) money market mutual funds rated less than "AAA" and 31 equal to or higher than "A-" by Standard & Poor's, or the equivalent from any
01 other eligible rating service; and 02 (F) a mutual fund or other investment fund composed solely 03 and exclusively of one or more permissible investments listed in 04 AS 06.55.502(a)(1) - (3); and 05 (3) cash held in accounts for the benefit of the licensee's customers at 06 foreign depository financial institutions, not to exceed 10 percent of the aggregate 07 value of the licensee's total permissible investments, if the licensee has received a 08 satisfactory rating in its most recent examination and the foreign depository financial 09 institution 10 (A) has an eligible rating; 11 (B) is registered under 26 U.S.C. 1471-1474 (Foreign Account 12 Tax Compliance Act); 13 (C) is not located in any country subject to sanctions from the 14 Office of Foreign Asset Control; and 15 (D) is not located in a high-risk or non-cooperative jurisdiction 16 as designated by the Financial Action Task Force. 17 * Sec. 29. AS 06.55.502 is amended by adding a new subsection to read: 18 (d) The letter of credit permitted under (a)(4) of this section 19 (1) must list the department as the beneficiary; 20 (2) must stipulate that the beneficiary need only draw a sight draft 21 under the letter of credit and present it to obtain funds up to the letter of credit amount 22 within 7 days of presentation of the items required by (7) of this subsection; 23 (3) must be issued by a federally insured depository financial 24 institution or a foreign bank that bears an eligible rating and is regulated, supervised, 25 and examined by federal or state regulatory authorities having regulatory authority 26 over banks, credit unions, and trust companies; 27 (4) must be irrevocable, unconditional, and indicate that it is not 28 subject to any condition or qualifications outside of the letter of credit; 29 (5) may not contain reference to any other agreements, documents or 30 entities, or otherwise provide for any security interest in the licensee; 31 (6) must contain an issue date and expiration date, and expressly
01 provide for automatic extension, without a written amendment, for an additional 02 period of one year from the present or each future expiration date, unless 03 (A) the issuer of the letter of credit notifies the department in 04 writing by certified or registered mail, courier mail, or other receipted means, 05 at least 60 days prior to any expiration date, that the irrevocable letter of credit 06 will not be extended; and 07 (B) the licensee demonstrates to the satisfaction of the 08 department that the licensee maintains and will maintain permissible 09 investments in accordance with this section upon the expiration of the letter of 10 credit; 11 (7) must provide that the issuer of the letter of credit will honor, at 12 sight, a presentation made by the beneficiary to the issuer of the following documents 13 on or prior to the expiration date of the letter of credit: 14 (A) the original letter of credit, including any amendments; and 15 (B) a written statement from the beneficiary stating whether 16 any of the following events have occurred: 17 (i) the filing of a petition by or against the licensee 18 under 11 U.S.C. Section 101 - 110 (Bankruptcy Code), for bankruptcy 19 or reorganization; 20 (ii) the filing of a petition by or against the licensee for 21 receivership, or the commencement of any other judicial or 22 administrative proceeding for its dissolution or reorganization; 23 (iii) the seizure of assets of a licensee by the department 24 pursuant to an emergency order issued in accordance with applicable 25 law, on the basis of an action, violation, or condition that has caused or 26 is likely to cause the insolvency of the licensee; or 27 (iv) the beneficiary has received notice of expiration or 28 non-extension of a letter of credit and the licensee failed to demonstrate 29 to the satisfaction of the beneficiary that the licensee will maintain 30 permissible investments in accordance with AS 06.55.501 upon the 31 expiration or non-extension of the letter of credit; and
01 (8) must comply with any other requirement or provision adopted by 02 rule or regulation of the department. 03 * Sec. 30. AS 06.55 is amended by adding new sections to article 5 to read: 04 Sec. 06.55.505. Security. (a) An applicant for a license shall provide, and a 05 licensee at all times shall maintain, security consisting of a surety bond in a form 06 satisfactory to the department or, with the department's approval, a deposit in 07 accordance with this section. 08 (b) The amount of the required security shall be an amount equal to 100 09 percent of the licensee's average daily money transmission liability in this state, 10 calculated for the most recent fiscal quarter, and shall be a minimum of $25,000 and 11 maximum of $1,000,000. 12 (c) A licensee that maintains a bond in the maximum amount provided for 13 under (b) of this section is not required to calculate its average daily money 14 transmission liability in this state for purposes of this section. 15 (d) A licensee may exceed the maximum required bond amount. 16 (e) The aggregate liability on a surety bond may not exceed the principal sum 17 of the bond. A claimant against a licensee may maintain an action on the bond, or the 18 department may maintain an action on behalf of the claimant. 19 (f) A surety bond must cover claims for as long as the department specifies, 20 but for at least five years after the date the licensee ceases to provide money 21 transmission in this state. The department may permit the amount of security to be 22 reduced or eliminated before the expiration of that time to the extent the amount of the 23 licensee's money transmission obligations outstanding in this state is reduced. The 24 department may permit a licensee to substitute another form of security acceptable to 25 the department for the security effective at the time the licensee ceases to provide 26 money transmission in this state. 27 (g) A surety bond must be obtained from a surety company authorized to do 28 business in this state. 29 Sec. AS 06.55.506. Net worth. (a) A licensee shall maintain at all times a 30 tangible net worth of 31 (1) the greater of $100,000 or three percent of total assets for the first
01 $100,000,000; 02 (2) two percent of additional assets for $100,000,001 to 03 $1,000,000,000; and 04 (3) 0.5 percent of additional assets for over $1,000,000,001. 05 (b) Tangible net worth must be demonstrated at initial application by the 06 applicant's most recent audited or unaudited financial statements. 07 (c) The department may exempt any applicant or licensee, in part or in whole, 08 from the requirements of this section. 09 * Sec. 31. AS 06.55.601 is amended to read: 10 Sec. 06.55.601. Suspension and revocation; receivership. (a) The 11 department may suspend or revoke a [MONEY SERVICES] license, place a 12 [MONEY SERVICES] licensee in receivership, or order a [MONEY SERVICES] 13 licensee to revoke the designation of an authorized delegate if 14 (1) the [MONEY SERVICES] licensee violates this chapter or a 15 regulation adopted or an order issued under this chapter; 16 (2) the [MONEY SERVICES] licensee does not cooperate with an 17 examination or investigation by the department; 18 (3) the [MONEY SERVICES] licensee engages in fraud, intentional 19 misrepresentation, or gross negligence; 20 (4) an authorized delegate is convicted of a violation of a state or 21 federal anti-money laundering statute, or violates a regulation adopted or an order 22 issued under this chapter, as a result of the [MONEY SERVICES] licensee's wilful 23 misconduct or wilful blindness; 24 (5) the competence, experience, character, or general fitness of the 25 [MONEY SERVICES] licensee, authorized delegate, person in control of a [MONEY 26 SERVICES] licensee, key individual, or responsible person of the [MONEY 27 SERVICES] licensee or authorized delegate indicates that it is not in the public 28 interest to permit the person to provide money transmission [SERVICES]; 29 (6) the [MONEY SERVICES] licensee engages in an unsafe or 30 unsound practice; 31 (7) the [MONEY SERVICES] licensee is insolvent, suspends payment
01 of its obligations, or makes a general assignment for the benefit of its creditors; or 02 (8) the [MONEY SERVICES] licensee does not remove an authorized 03 delegate after the department issues and serves upon the [MONEY SERVICES] 04 licensee a final order including a finding that the authorized delegate has violated this 05 chapter. 06 (b) In determining whether a [MONEY SERVICES] licensee is engaging in 07 an unsafe or unsound practice, the department may consider the size and condition of 08 the [MONEY SERVICES] licensee's money transmission, the magnitude of the loss, 09 the gravity of the violation of this chapter, and the previous conduct of the person 10 involved. 11 * Sec. 32. AS 06.55.601 is amended by adding a new subsection to read: 12 (c) A licensee may apply for relief from a suspension or revocation of its 13 license according to procedures prescribed by the department. 14 * Sec. 33. AS 06.55.602 is amended to read: 15 Sec. 06.55.602. Suspension and revocation of authorized delegates. (a) The 16 department may issue an order suspending or revoking the designation of an 17 authorized delegate if the department finds that 18 (1) the authorized delegate violated this chapter or a regulation adopted 19 or an order issued under this chapter; 20 (2) the authorized delegate did not cooperate with an examination or 21 investigation by the department; 22 (3) the authorized delegate engaged in fraud, intentional 23 misrepresentation, or gross negligence; 24 (4) the authorized delegate is convicted of a violation of a state or 25 federal anti-money laundering statute; 26 (5) the competence, experience, character, or general fitness of the 27 authorized delegate or a person in control of the authorized delegate indicates that it is 28 not in the public interest to permit the authorized delegate to provide money 29 transmission [SERVICES]; or 30 (6) the authorized delegate is engaging in an unsafe or unsound 31 practice.
01 (b) In determining whether an authorized delegate is engaging in an unsafe or 02 unsound practice, the department may consider the size and condition of the 03 authorized delegate's provision of money transmission [SERVICES], the magnitude 04 of the loss, the gravity of the violation of this chapter or a regulation adopted or order 05 issued under this chapter, and the previous conduct of the authorized delegate. 06 * Sec. 34. AS 06.55.602 is amended by adding a new subsection to read: 07 (c) An authorized delegate may apply for relief from a suspension or 08 revocation of designation as an authorized delegate according to procedures prescribed 09 by the department. 10 * Sec. 35. AS 06.55.603(a) is amended to read: 11 (a) If the department determines that a violation of this chapter or of a 12 regulation adopted or an order issued under this chapter by a [MONEY SERVICES] 13 licensee or authorized delegate is likely to cause immediate and irreparable harm to 14 the [MONEY SERVICES] licensee, its customers, or the public as a result of the 15 violation, or cause insolvency or significant dissipation of assets of the [MONEY 16 SERVICES] licensee, the department may issue an order requiring the [MONEY 17 SERVICES] licensee or authorized delegate to cease and desist from the violation. 18 The order becomes effective on service of it on the [MONEY SERVICES] licensee or 19 authorized delegate. 20 * Sec. 36. AS 06.55.603(b) is amended to read: 21 (b) The department may issue an order against a [MONEY SERVICES] 22 licensee to cease and desist from providing money transmission [SERVICES] 23 through an authorized delegate who is the subject of a separate order by the 24 department. 25 * Sec. 37. AS 06.55.603(d) is amended to read: 26 (d) A [MONEY SERVICES] licensee or an authorized delegate who is served 27 with an order to cease and desist may petition the superior court for a judicial order 28 setting aside, limiting, or suspending the enforcement, operation, or effectiveness of 29 the order pending the completion of an administrative proceeding under AS 06.55.601 30 or 06.55.602. 31 * Sec. 38. AS 06.55.605 is amended to read:
01 Sec. 06.55.605. Civil penalties. The department may assess a civil penalty 02 against a person who violates this chapter or a regulation adopted or an order issued 03 under this chapter in an amount not to exceed $1,000 per [EACH] day for each day 04 the violation is outstanding, plus the department's costs and expenses for the 05 investigation and prosecution of the matter, including reasonable attorney's fees. 06 * Sec. 39. AS 06.55.606 is amended to read: 07 Sec. 06.55.606. Criminal penalties. (a) A person who intentionally makes a 08 false statement, misrepresentation, or false certification in a record filed or required to 09 be maintained under this chapter or who intentionally makes a false entry or omits a 10 material entry in such a record [FILED OR REQUIRED TO BE MAINTAINED 11 UNDER THIS CHAPTER] is guilty of a class C felony. 12 (b) A person who knowingly engages in an activity for which a [MONEY 13 SERVICES] license is required under this chapter without being licensed [AS A 14 MONEY SERVICES LICENSEE] and who receives more than $500 in compensation 15 within a 30-day period from this activity is guilty of a class C felony. 16 (c) A person who knowingly engages in an activity for which a [MONEY 17 SERVICES] license is required under this chapter without being licensed [AS A 18 MONEY SERVICES LICENSEE] and who receives no more than $500 in 19 compensation within a 30-day period from this activity is guilty of a class A 20 misdemeanor. 21 * Sec. 40. AS 06.55.607(a) is amended to read: 22 (a) If the department has reason to believe that a person has violated or is 23 violating AS 06.55.101 [OR 06.55.201], the department may issue an order to show 24 cause why an order to cease and desist should not issue requiring that the person cease 25 and desist from the violation of AS 06.55.101 [OR 06.55.201]. 26 * Sec. 41. AS 06.55.607(e) is amended to read: 27 (e) A person who is served with an order to cease and desist for violating 28 AS 06.55.101 [OR 06.55.201] may petition the superior court for a judicial order 29 setting aside, limiting, or suspending the enforcement, operation, or effectiveness of 30 the order pending the completion of an administrative proceeding under AS 06.55.701 31 and 06.55.702.
01 * Sec. 42. AS 06.55.702(a) is amended to read: 02 (a) Except as otherwise provided in AS 06.55.603 and 06.55.607 [AND IN (b) 03 OF THIS SECTION], the department may not suspend or revoke a [MONEY 04 SERVICES] license, place a [MONEY SERVICES] licensee in receivership, issue an 05 order to cease and desist, suspend or revoke the designation of an authorized delegate, 06 or assess a civil penalty without notice and an opportunity to be heard. The department 07 shall also hold a hearing when requested to hold a hearing by an applicant whose 08 application for a [MONEY SERVICES] license is denied. 09 * Sec. 43. AS 06.55.802 is amended to read: 10 Sec. 06.55.802. Exemptions [EXCLUSIONS]. This chapter does not apply to 11 (1) the United States or a department, [AN] agency, [OR AN] 12 instrumentality, or agent of the United States; 13 (2) money transmission by the United States Postal Service or by an 14 agent [A CONTRACTOR ON BEHALF] of the United States Postal Service; 15 (3) a state, a municipality, a county, or another governmental agency 16 or governmental subdivision of a state, or its agent; 17 (4) a federally insured depository financial institution, bank, a bank 18 holding company, an office of an international banking corporation, a branch of a 19 foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 20 Company Act), or a corporation organized under 12 U.S.C. 611 - 633 (Edge Act) 21 under the laws of a state or the United States, if it does not issue, sell, or provide 22 payment instruments or stored value through an authorized delegate who is not a bank, 23 a bank holding company, an office of an international banking corporation, a branch of 24 a foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 25 Company Act), or a corporation organized under 12 U.S.C. 611 - 633 (Edge Act) 26 under the laws of a state or the United States; 27 (5) electronic funds transfer of governmental benefits for a federal, 28 state, or municipal agency or a state political subdivision by a contractor on behalf of 29 (A) the United States or a department, an agency, or an 30 instrumentality of the United States; or 31 (B) a state, or a department, an agency, or an instrumentality of
01 a state; 02 (6) a board of trade or a person who, in the ordinary course of 03 business, provides clearance and settlement services for a board of trade, to the extent 04 of the operation of the person for a board of trade; in this paragraph, "board of trade" 05 means a board of trade designated as a contract market under 7 U.S.C. 1 - 27f 06 (Commodity Exchange Act); 07 (7) a registered futures commission merchant under the federal 08 commodities laws, to the extent of its operation as such a merchant [THE 09 MERCHANT'S OPERATION AS A REGISTERED FUTURES COMMISSION 10 MERCHANT UNDER THE FEDERAL COMMODITIES LAWS]; 11 (8) a person who provides clearance or settlement services under a 12 registration as a clearing agency or an exemption from the registration granted under 13 the federal securities laws, to the extent of the person's operation as a provider of 14 clearance or settlement services under a registration as a clearing agency or an 15 exemption from the registration granted under the federal securities laws; 16 (9) an operator of a payment system to the extent that the operator 17 provides processing, clearing, or settlement services, between or among persons 18 exempted [EXCLUDED] by this section, in connection with wire transfers, credit 19 card transactions, debit card transactions, stored-value transactions, automated 20 clearinghouse transfers, or similar funds transfers; [OR] 21 (10) a person registered as a securities broker-dealer under federal or 22 state securities laws, to the extent of the person's operation as a securities broker- 23 dealer; 24 (11) an individual employed by a licensee, authorized delegate, or 25 any person exempted from the licensing requirements of this chapter when acting 26 within the scope of employment and under the supervision of the licensee, 27 authorized delegate, or exempted person as an employee and not as an 28 independent contractor; 29 (12) a person expressly appointed as a third-party service provider 30 to or agent of an entity exempt under (4) of this section, solely to the extent that 31 (A) such service provider or agent is engaging in money
01 transmission on behalf of and in accordance with a written agreement 02 with the exempt entity that sets forth the specific functions that the service 03 provider or agent is to perform; and 04 (B) the exempt entity assumes all risk of loss and all legal 05 responsibility for satisfying the outstanding money transmission 06 obligations owed to purchasers and holders of the outstanding money 07 transmission obligations upon receipt of the purchaser's or holder's 08 money or monetary value by the service provider or agent; 09 (13) a person appointed as an agent of a payee to collect and 10 process a payment from a payor to the payee for goods or services, other than 11 money transmission itself, provided to the payor by the payee, provided that 12 (A) there exists a written agreement between the payee and 13 the agent directing the agent to collect and process payments from payors 14 on the payee's behalf; 15 (B) the payee holds the agent out to the public as accepting 16 payments for goods or services on the payee's behalf; and 17 (C) payment for the goods and services is treated as 18 received by the payee upon receipt by the agent so that the payor's 19 obligation is extinguished and there is no risk of loss to the payor if the 20 agent fails to remit the funds to the payee; 21 (14) a person who acts as an intermediary by processing payments 22 between an entity that has directly incurred an outstanding money transmission 23 obligation to a sender and the sender's designated recipient, provided that the 24 entity 25 (A) is properly licensed or exempt from licensing 26 requirements under this chapter; 27 (B) provides a receipt, electronic record, or other written 28 confirmation to the sender identifying the entity as the provider of money 29 transmission in the transaction; and 30 (C) bears sole responsibility to satisfy the outstanding 31 money transmission obligation to the sender, including the obligation to
01 make the sender whole in connection with any failure to transmit the 02 funds to the sender's designated recipient; 03 (15) an insurance company, title insurance company, or escrow 04 agent, to the extent that the entity is lawfully authorized to conduct business in 05 this state as an insurance company, title insurance company, or escrow agent and 06 to the extent that the entity engages in money transmission as an ancillary service 07 when conducting insurance, title insurance, or escrow activity; 08 (16) an attorney, to the extent that the attorney is lawfully 09 authorized to practice law in this state and engages in money transmission as an 10 ancillary service to the practice of law; or 11 (17) a person exempt by regulation or order if the department 12 finds that the exemption is in the public interest and that the regulation of the 13 person is not necessary for the purposes of this chapter [UNDER FEDERAL OR 14 STATE SECURITIES LAWS]. 15 * Sec. 44. AS 06.55 is amended by adding a new section to read: 16 Sec. 06.55.803. Authority to require demonstration of exemption. The 17 department may require a person who claims to be exempt from licensing under 18 AS 06.55.802 provide information and documentation to the department 19 demonstrating the claimed exemption. 20 * Sec. 45. AS 06.55.810 is amended to read: 21 Sec. 06.55.810. Notices required. (a) A [MONEY SERVICES] licensee shall 22 provide customers with notice of how to file a complaint. A licensee shall provide 23 notice [DISPLAY A SIGN] at each location where the [MONEY SERVICES] 24 licensee 25 (1) provides money transmission services under this chapter; and 26 (2) has not designated an authorized delegate to provide money 27 transmission services on behalf of the [MONEY SERVICES] licensee at the location. 28 (b) An authorized delegate shall provide customers with notice of how to 29 file a complaint. An authorized delegate shall provide notice [DISPLAY A SIGN] 30 at each location where the authorized delegate provides money transmission services 31 under this chapter.
01 (c) The notice [SIGN] required by (a) or (b) of this section must be in a 02 format and contain information required by the department [SHALL BE 03 DISPLAYED AT ALL TIMES IN FULL VIEW OF PERSONS VISITING THE 04 LOCATION AND SHALL GIVE THE DEPARTMENT'S ADDRESS AND THE 05 DEPARTMENT'S TELEPHONE NUMBER FOR RECEIVING CALLS 06 REGARDING COMPLAINTS AND OTHER CONCERNS ABOUT MONEY 07 SERVICES LICENSEES, AUTHORIZED DELEGATES, AND THE MONEY 08 SERVICES PROVIDED BY MONEY SERVICES LICENSEES AND 09 AUTHORIZED DELEGATES]. 10 * Sec. 46. AS 06.55.810 is amended by adding a new subsection to read: 11 (d) A licensee or authorized delegate shall include on a receipt or disclose on 12 the licensee's Internet website or mobile application the name and phone number of 13 the department and a statement that the licensee's customers can contact the 14 department with questions or complaints about the licensee's money transmission 15 services. 16 * Sec. 47. AS 06.55.830 is repealed and reenacted to read: 17 Sec. 06.55.830. Receipt. (a) Except as provided in (d) of this section, a 18 licensee or licensee's authorized delegate shall provide the sender a receipt for money 19 received for transmission. The receipt must be in English and in any other language 20 principally used by the licensee or authorized delegate to advertise, solicit, or 21 negotiate, either orally or in writing, for a transaction conducted. The receipt must 22 contain the following information, as applicable: 23 (1) the name of the sender; 24 (2) the name of the designated recipient; 25 (3) the date of the transaction; 26 (4) the unique transaction or identification number; 27 (5) the name of the licensee, registry unique identifier, the licensee's 28 business address, and the licensee's customer service telephone number; 29 (6) the dollar amount of the transaction; 30 (7) any fee charged by the licensee to the sender for the transaction; 31 and
01 (8) any taxes collected by the licensee from the sender for the 02 transaction. 03 (b) For a transaction conducted in person, the receipt may be provided 04 electronically if the sender requests or agrees to receive an electronic receipt. For a 05 transaction conducted electronically or by phone, a receipt may be provided 06 electronically. All electronic receipts must be provided in a retainable form. 07 (c) For purposes of this section, "receipt" means a paper receipt, electronic 08 record, or other written confirmation. 09 (d) This section does not apply to 10 (1) money received for transmission subject to 12 C.F.R. Part 1005, 11 Subpart B; 12 (2) money received for transmission that is not primarily for personal, 13 family, or household purposes; 14 (3) money received for transmission in accordance with a written 15 agreement between the licensee and payee to process payments for goods or services 16 provided by the payee; or 17 (4) payroll processing services. 18 * Sec. 48. AS 06.55 is amended by adding a new section to read: 19 Sec. 06.55.835. Timely transmission. (a) A licensee shall forward all money 20 received for transmission in accordance with the terms of the agreement between the 21 licensee and the sender unless the licensee has a reasonable basis to believes that the 22 sender may be a victim of fraud or that a crime or violation of law, rule, or regulation 23 has occurred, is occurring, or may occur. 24 (b) If a licensee fails to forward money received for transmission in 25 accordance with this section, the licensee must respond to inquiries by the sender with 26 the reason for the failure unless providing a response would violate a state or federal 27 law, rule, or regulation. 28 * Sec. 49. AS 06.55.840 is repealed and reenacted to read: 29 Sec. 06.55.840. Refunds. (a) Except as provided in (b) of this section, a 30 licensee shall refund to the sender, within 10 days after receipt of the sender's written 31 request for a refund, all money received for transmission unless any of the following
01 occurs: 02 (1) the money has been forwarded within 10 days after the date on 03 which the money was received for transmission; 04 (2) instructions have been given committing an equivalent amount of 05 money to the person designated by the sender within 10 days after the date on which 06 the money was received for transmission; 07 (3) the agreement between the licensee and the sender instructs the 08 licensee to forward the money at a time that is beyond 10 days after the date on which 09 the money was received for transmission; if funds have not yet been forwarded in 10 accordance with the terms of the agreement between the licensee and the sender, the 11 licensee shall issue a refund in accordance with the other provisions of this section; 12 (4) the refund is requested for a transaction that the licensee has not 13 completed based on a reasonable belief that a crime or violation of law, rule, or 14 regulation has occurred, is occurring, or may occur; or 15 (5) the refund request does not 16 (A) identify the sender's name and 17 (i) address; or 18 (ii) telephone number; or 19 (B) identify the particular transaction to be refunded in the 20 event the sender has multiple transactions outstanding. 21 (b) This section does not apply to: 22 (1) money received for transmission subject to 12 C.F.R. Part 1005, 23 Subpart B; or 24 (2) money received for transmission in accordance with a written 25 agreement between the licensee and payee to process payments for goods or services 26 provided by the payee. 27 * Sec. 50. AS 06.55 is amended by adding a new section to read: 28 Sec. 06.55.845. Disclosures for payroll processing services. (a) A licensee 29 that provides payroll processing services shall 30 (1) issue reports to clients detailing client payroll obligations in 31 advance of the payroll funds being deducted from an account; and
01 (2) make available worker paystubs or an equivalent statement to 02 workers. 03 (b) This section does not apply to a licensee providing payroll processing 04 services where the licensee's client designates the intended recipients to the licensee 05 and is responsible for providing the disclosures required by this section. 06 * Sec. 51. AS 06.55.850(b) is amended to read: 07 (b) The department shall establish fee levels under (a) of this section so that 08 the total amount of fees collected for [BOTH] money transmission licenses [AND 09 CURRENCY EXCHANGE LICENSES] under this chapter approximately equals the 10 department's actual total regulatory costs for [BOTH] money transmission licenses 11 [AND CURRENCY EXCHANGE LICENSES. THE DEPARTMENT SHALL SET 12 THE FEE LEVELS SO THAT THE FEE LEVELS FOR [BOTH] MONEY 13 TRANSMISSION LICENSES AND CURRENCY EXCHANGE LICENSES ARE 14 THE SAME]. 15 * Sec. 52. AS 06.55.990(1) is amended to read: 16 (1) "authorized delegate" means a person whom a [MONEY 17 SERVICES] licensee designates to engage in [PROVIDE] money transmission 18 [SERVICES] on behalf of the [MONEY SERVICES] licensee; 19 * Sec. 53. AS 06.55.990(3) is amended to read: 20 (3) "control" means 21 (A) the ownership of, or the power to vote, directly or 22 indirectly, at least 10 [25] percent of the [A CLASS OF] voting securities or 23 voting interests of a [MONEY SERVICES] licensee or person in control of a 24 [MONEY SERVICES] licensee, unless the owner is a passive investor; 25 (B) the power to elect or appoint a majority of executive 26 officers, managers, directors, trustees, or other persons exercising managerial 27 authority of a [MONEY SERVICES] licensee or person in control of a 28 [MONEY SERVICES] licensee; or 29 (C) the power to exercise directly or indirectly, a controlling 30 influence over the management or policies of a [MONEY SERVICES] 31 licensee or person in control of a [MONEY SERVICES] licensee;
01 * Sec. 54. AS 06.55.990(15) is amended to read: 02 (15) "money transmission" means selling or issuing payment 03 instruments or stored value to a person located in this state, [OR] receiving money 04 or monetary value for transmission from a person located in this state, currency 05 exchange, or payroll processing services, but does not include the provision solely 06 of [DELIVERY,] online services, telecommunications services, or network access; 07 * Sec. 55. AS 06.55.990(16) is amended to read: 08 (16) "money transmission license" means a license under 09 AS 06.55.101 - 06.55.110 [AS 06.55.101 - 06.55.107 OR AN APPROVAL UNDER 10 AS 06.55.103]; 11 * Sec. 56. AS 06.55.990(19) is amended to read: 12 (19) "payment instrument" means a written or electronic check, [A] 13 draft, [A] money order, [A] traveler's check, or other written or electronic 14 [ANOTHER] instrument for the transmission or payment of money or monetary value, 15 whether or not negotiable, but does not include stored value, a credit card voucher, a 16 letter of credit, [OR] an instrument that is redeemable by the issuer in goods or 17 services, or other instrument not sold to the public but issued and distributed as 18 part of a loyalty, rewards, or promotional program; 19 * Sec. 57. AS 06.55.990(20) is amended to read: 20 (20) "person" means an individual, general partnership, limited 21 partnership, [A] corporation, [A BUSINESS] trust, [AN ESTATE, A TRUST, A 22 PARTNERSHIP, A] limited liability company, [AN] association, [A] joint stock 23 corporation [VENTURE, A GOVERNMENT, A GOVERNMENTAL 24 SUBDIVISION, AN AGENCY, OR AN INSTRUMENTALITY, A PUBLIC 25 CORPORATION], or any other legal or corporate [COMMERCIAL] entity 26 identified by the department; 27 * Sec. 58. AS 06.55.990(22) is amended to read: 28 (22) "state" means a state of the United States, the District of 29 Columbia, Puerto Rico, the United States Virgin Islands, a United States military 30 installation that is located in a foreign country, or a territory or insular possession 31 subject to the jurisdiction of the United States;
01 * Sec. 59. AS 06.55.990(23) is amended to read: 02 (23) "stored value" means monetary value representing a claim 03 against the issuer that is evidenced by an electronic or digital record and that is 04 intended and accepted as a means of redemption for money or monetary value, 05 or payment for goods or services; "stored value" includes "prepaid access" as 06 defined in 31 C.F.R. 1010.100, but does not include a payment instrument or 07 closed loop stored value, or stored value not sold to the public but issued and 08 distributed as part of a loyalty, rewards, or promotional program; 09 * Sec. 60. AS 06.55.990(24) is amended to read: 10 (24) "unsafe or unsound practice" means a practice or conduct by a 11 [MONEY TRANSMISSION] licensee or an authorized delegate that [OF THE 12 MONEY TRANSMISSION LICENSEE IF THE PRACTICE] creates the likelihood 13 of material loss, insolvency, or dissipation of the [MONEY TRANSMISSION] 14 licensee's assets, or otherwise materially prejudices the interests of the [MONEY 15 TRANSMISSION] licensee's customers. 16 * Sec. 61. AS 06.55.990 is amended by adding new paragraphs to read: 17 (25) "acting in concert" means persons knowingly acting together with 18 a common goal of jointly acquiring control of a licensee whether or not under an 19 express agreement; 20 (26) "average daily money transmission liability" means the amount of 21 the licensee's outstanding money transmission obligations in this state at the end of 22 each day in a given period of time, added together and divided by the total number of 23 days in the given period of time; for purposes of calculating average daily money 24 transmission liability under this chapter, the given period of time will be the fiscal 25 quarters ending March 31, June 30, September 30, and December 31; 26 (27) "Bank Secrecy Act" means 31 U.S.C. 5311 and its implementing 27 regulations; 28 (28) "closed loop stored value" means stored value that is redeemable 29 by the issuer only for goods or services provided by the issuer or its affiliate, or 30 franchisees of the issuer or its affiliate, except to the extent required by applicable law 31 to be redeemable in cash for its cash value;
01 (29) "eligible rating" means a credit rating of any of the three highest 02 rating categories provided by an eligible rating service, whereby each category may 03 include rating category modifiers such as "plus" or "minus" for Standard & Poor's, or 04 the equivalent for any other eligible rating service; eligible ratings may include long- 05 term credit ratings if the rating is equal to A- or higher by Standard & Poor's, or the 06 equivalent from any other eligible rating service; eligible ratings may include short- 07 term credit ratings if the rating is equal to or higher than A-2 or SP-2 by Standard & 08 Poor's, or the equivalent from any other eligible rating service; if ratings differ among 09 eligible rating services, the highest rating will apply when determining whether a 10 security bears an eligible rating; 11 (30) "eligible rating service" means any Nationally Recognized 12 Statistical Rating Organization, as defined by the United States Securities and 13 Exchange Commission, and any other organization designated by the department by 14 rule or order; 15 (31) "federally insured depository financial institution" means a bank, 16 credit union, savings and loan association, trust company, savings association, savings 17 bank, industrial bank, or industrial loan company organized under the laws of the 18 United States or any state of the United States that has federally insured deposits; 19 (32) "in this state" means at a physical location within this state for a 20 transaction requested in person; for a transaction requested electronically or by phone, 21 the provider of money transmission may determine if the person requesting the 22 transaction is in this state by relying on other information provided by the person 23 regarding the location of the individual's residential address or a business entity's 24 principal place of business or other physical address, and any records associated with 25 the person that the provider of money transmission may have that indicate such 26 location, including an address associated with an account; 27 (33) "individual" means a natural person; 28 (34) "key individual" means any individual ultimately responsible for 29 establishing or directing policies and procedures of the licensee, including an 30 executive officer, manager, director, or trustee; 31 (35) "licensee" means a person licensed under this chapter;
01 (36) "accredited state" means a state agency that is accredited by the 02 Conference of State Bank Supervisors and Money Transmitter Regulators Association 03 for money transmission licensing and supervision; 04 (37) "multistate licensing process" means any agreement entered into 05 by and among state regulators relating to coordinated processing of applications for 06 money transmission licenses, applications for the acquisition of control of a licensee, 07 control determinations, or notice and information requirements for a change of key 08 individuals; 09 (38) "outstanding money transmission obligations" means 10 (A) a payment instrument or stored value issued or sold by the 11 licensee to a person located in the United States, or reported as sold by an 12 authorized delegate of the licensee to a person that is located in the United 13 States, that has not yet been paid or refunded by or for the licensee, or 14 escheated in accordance with applicable abandoned property laws; or 15 (B) money received for transmission by the licensee or an 16 authorized delegate in the United States from a person located in the United 17 States that has not been received by the payee or refunded to the sender, or 18 escheated in accordance with applicable abandoned property laws; for the 19 purposes of this paragraph, "in the United States" includes, to the extent 20 applicable, a person in any state, territory, or possession of the United States, 21 the District of Columbia, the Commonwealth of Puerto Rico, or a United 22 States military installation that is located in a foreign country; 23 (39) "passive investor" means a person who 24 (A) does not have the power to elect a majority of key 25 individuals or executive officers, managers, directors, trustees, or other persons 26 exercising managerial authority of a person in control of a licensee; 27 (B) is not employed by and does not have any managerial 28 duties of the licensee or person in control of a licensee; 29 (C) does not have the power to exercise, directly or indirectly, a 30 controlling influence over the management or policies of a licensee or person 31 in control of a licensee; and
01 (i) attests to (A) - (C) of this paragraph in a form and in 02 a medium prescribed by the department; or 03 (ii) commits to the passivity characteristics of (A) - (C) 04 of this paragraph in a written document; 05 (40) "payroll processing services" means receiving money for 06 transmission under a contract with a person to deliver wages or salaries, make 07 payment of payroll taxes to state and federal agencies, make payments relating to 08 employee benefit plans, or make distributions of other authorized deductions from 09 wages or salaries; "payroll processing services" does not include an employer 10 performing payroll processing services on its own behalf or on behalf of its affiliate, or 11 a professional employment organization subject to regulation under other applicable 12 state law; 13 (41) "receiving money for transmission" or "money received for 14 transmission" means receiving money or monetary value in the United States for 15 transmission within or outside the United States by electronic or other means; 16 (42) "registry" means the Nationwide Multistate Licensing System and 17 Registry, a licensing system owned and operated by the State Regulatory Registry, 18 LLC, or any successor or affiliated entity, for the licensing and registration of persons 19 in the mortgage and other financial services industries; 20 (43) "tangible net worth" means the aggregate assets of a licensee 21 excluding all intangible assets, less liabilities, as determined in accordance with 22 generally accepted accounting principles. 23 * Sec. 62. AS 06.55.995 is amended to read: 24 Sec. 06.55.995. Short title. This chapter may be cited as the Alaska Uniform 25 Money Transmission Modernization [SERVICES] Act. 26 * Sec. 63. AS 06.55.103, 06.55.104, 06.55.107, 06.55.201, 06.55.202, 06.55.203, 06.55.204, 27 06.55.402, 06.55.502(c), 06.55.702(b), 06.55.820, 06.55.850(e), 06.55.890, 06.55.990(5), 28 06.55.990(6), 06.55.990(8), 06.55.990(9), 06.55.990(12), 06.55.990(13), 06.55.990(14), and 29 06.55.990(18) are repealed. 30 * Sec. 64. The uncodified law of the State of Alaska is amended by adding a new section to 31 read:
01 TRANSITION. Contracts, rights, liabilities, and obligations created by or under a law 02 repealed or amended by this Act, and in effect on the day before the effective date of the 03 repeal or amendment, remain in effect notwithstanding this Act's taking effect. 04 * Sec. 65. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 TRANSITION: CURRENT MONEY SERVICES LICENSES. A money services 07 licensee operating under a valid license or approval under a statute repealed or amended by 08 this Act may continue to operate under that license or approval until such time as the licensee 09 renews its current license or for 18 months after the effective date of this Act, whichever is 10 later. 11 * Sec. 66. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION: PAYROLL PROCESSORS. A person providing payroll processing 14 services in this state without a license will not be considered in violation of AS 06.55.101 if 15 the person applies for a license within six months of the effective date of this Act. The 16 Department of Commerce, Community, and Economic Development may for good cause 17 extend the transition period in conjunction with the extension of an application period. 18 * Sec. 67. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 21 Economic Development may adopt regulations to implement this Act. The regulations take 22 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 23 law implemented by the regulations. 24 * Sec. 68. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 REVISOR'S INSTRUCTIONS. The revisor of statutes is instructed to change the 27 heading of 28 (1) AS 06.55 from "Alaska Uniform Money Services Act" to "Alaska Uniform 29 Money Transmission Modernization Act"; 30 (2) article 2 of AS 06.55 from "Currency Exchange Licenses" to "Virtual 31 Currency";
01 (3) article 5 of AS 06.55 from "Permissible Investments" to "Prudential 02 Standards"; and 03 (4) AS 06.55.406 from "Money laundering reports" to "Bank Secrecy Act 04 reports." 05 * Sec. 69. Section 67 of this Act takes effect immediately under AS 01.10.070(c). 06 * Sec. 70. Except as provided in sec. 69 of this Act, this Act takes effect January 1, 2023.