SB 84: "An Act relating to the business of money transmission; relating to money transmission licenses, licensure requirements, and registration through the Nationwide Multistate Licensing System and Registry; 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 SENATE BILL NO. 84 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 and Registry; relating to the use of virtual currency for money 04 transmission; relating to authorized delegates of a licensee; relating to acquisition of 05 control of a license; relating to record retention and reporting requirements; 06 authorizing the Department of Commerce, Community, and Economic Development to 07 cooperate with other states in the regulation of money transmission; relating to 08 permissible investments; relating to violations and enforcement of money transmission 09 laws; relating to money transmission license exemptions; relating to payroll processing 10 services; 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 regulation, licensing, and supervision, to 06 standardize the types of activities that are subject to licensing, and to modernize safety and 07 soundness requirements for money transmission. 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 licensee and is acting within the 14 scope of that authority under a written contract with the licensee; or 15 (3) is exempt under AS 06.55.802 and does not engage in money 16 transmission outside the scope of that exemption [PERSON WHO HOLDS A 17 MONEY TRANSMISSION LICENSE]. 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; the application must contain information on the applicant's organization, 23 operations, financial responsibility, background, experience, competence, and 24 activities; 25 (2) any other information reasonably required by the department or 26 registry with respect to the applicant; 27 (3) an application fee; 28 (4) an initial license fee; and 29 (5) a surety bond or other security as required by AS 06.55.505. 30 (b) The department may waive a requirement of (a)(1) - (4) of this section or 31 permit an applicant to submit other information in lieu of the required information.
01 * Sec. 4. AS 06.55.105 is repealed and reenacted to read: 02 Sec. 06.55.105. Issuance of license. (a) When an application for an initial 03 license under this chapter appears to include all required content and address all 04 matters required by the department, the application is considered complete, and the 05 department shall notify the applicant in a record of the date on which the application 06 was determined to be complete. The department shall approve or deny the application 07 within 120 days after the date the application was determined to be complete. If the 08 application is not approved or denied within 120 days after the completion date, 09 (1) the application is approved; and 10 (2) the license takes effect as of the first business day after expiration 11 of the 120-day period. 12 (b) The department may for good cause extend the period for approving or 13 denying an application under (a) of this section. 14 (c) A determination by the department that an application is complete and the 15 application being accepted for processing means only that the application, on its face, 16 appears to include all required items, including a criminal background check, and 17 address all required matters. The department's determination is not an assessment of 18 the substance of the application or of the sufficiency of the information provided. 19 (d) When an application is filed and considered to be complete under (a) of 20 this section, the department shall investigate the applicant's financial condition, 21 financial responsibility, financial experience, business experience, competence level, 22 character, and general fitness. The department may conduct an on-site investigation of 23 the applicant, the reasonable cost of which the applicant shall pay. The department 24 shall issue a license to an applicant if the department finds that 25 (1) the applicant has complied with AS 06.55.102, 06.55.109, and 26 applicable regulations; and 27 (2) the financial condition, financial responsibility, financial 28 experience, business experience, competence level, character, and general fitness of 29 the applicant, and the experience, competence level, character, and general fitness of 30 the key individuals and persons in control of the applicant indicate that it is in the 31 public interest to allow the applicant to engage in money transmission.
01 (e) If an applicant is subject to a multistate licensing process, the department 02 may 03 (1) accept the investigation results of a lead investigative state for the 04 purposes of (d) of this section; or 05 (2) investigate the applicant in accordance with (d) of this section and 06 the timeframes established by agreement through the multistate licensing process, 07 provided those timeframes comply with the application period set out in (a) of this 08 section. 09 (f) The department shall issue a formal written notice of a denial of a license 10 application within 30 days of the decision to deny the application. The department 11 shall set out in the notice of denial the specific reasons for the denial. An applicant 12 may appeal a denial to the department within 30 days of receipt of the written notice 13 of the denial and may request a hearing. 14 (g) The initial license term begins on the day the application is approved. The 15 license expires on December 31 of the year in which the license is issued, unless 16 (1) the initial license date is between November 1 and December 31, in 17 which instance the initial license term runs through December 31 of the following 18 year; or 19 (2) the license is revoked, suspended, surrendered, or its term 20 otherwise adjusted in accordance with regulations adopted by the department. 21 * Sec. 5. AS 06.55.106 is repealed and reenacted to read: 22 Sec. 06.55.106. Renewal of license. (a) A licensee shall renew its license 23 annually. A licensee shall pay an annual renewal fee by the renewal filing deadline 24 established by the department. The renewal term is for a period of one year and begins 25 on January 1 of each year after the initial license term and expires on December 31 of 26 the year the renewal term begins. 27 (b) A licensee shall submit a renewal report with the renewal fee in a form and 28 in a medium prescribed by the department. The renewal report must describe each 29 material change in information submitted by the licensee in the licensee's initial 30 license application that has not been reported to the department. 31 (c) The department may for good cause grant an extension of the renewal
01 filing deadline. 02 (d) The department may use the registry to process license renewals. 03 * Sec. 6. AS 06.55 is amended by adding new sections to article 1 to read: 04 Sec. 06.55.108. Maintenance of license. (a) A licensee shall at all times meet 05 the requirements of this chapter. 06 (b) If a licensee does not continue to meet the qualifications or satisfy the 07 requirements that apply to an applicant for a new license, the department may suspend 08 or revoke the licensee's license in accordance with this chapter or other applicable law. 09 Sec. 06.55.109. Information requirements for certain individuals. (a) An 10 individual in control of a licensee or applicant, an individual who seeks to acquire 11 control of a licensee, and each key individual shall furnish to the department through 12 the registry the following items: 13 (1) the individual's fingerprints for submission to the Federal Bureau 14 of Investigation to obtain a national criminal history record check, unless the 15 individual currently resides outside the United States and has resided outside the 16 United States for the last 10 years; and 17 (2) personal history and experience in a form and in a medium 18 prescribed by the department, including 19 (A) an independent credit report from a consumer reporting 20 agency, unless the individual does not have a social security number; 21 (B) information related to a criminal conviction or pending 22 charges; and 23 (C) information related to any regulatory or administrative 24 action and any civil litigation involving claims of fraud, misrepresentation, 25 conversion, mismanagement of funds, breach of fiduciary duty, or breach of 26 contract. 27 (b) If the individual has resided outside the United States for four or more 28 years in the 10 years before the date of furnishing the information under (a) of this 29 section, the individual shall also provide an investigative background report prepared 30 by an independent search firm. The independent search firm may not be affiliated with 31 or have an interest in the individual it is researching. At a minimum, the investigative
01 background report must 02 (1) demonstrate that the independent search firm has sufficient 03 knowledge, resources, and employs accepted and reasonable methodologies to conduct 04 the research of the background report; 05 (2) be written in English and contain the following: 06 (A) if available in the individual's current jurisdiction of 07 residency, a comprehensive credit report or equivalent information obtained or 08 generated by the independent search firm to accomplish a comprehensive 09 credit report, including a search of the court data in the countries, provinces, 10 states, cities, towns, and contiguous areas where the individual has resided and 11 worked; 12 (B) criminal records information for the previous 10 years, 13 including felonies, misdemeanors, or similar convictions for violations of law 14 in the countries, provinces, states, cities, towns, and contiguous areas where 15 the individual has resided and worked; 16 (C) employment history; 17 (D) media history, including an electronic search of national 18 and local publications, wire services, and business applications; and 19 (E) regulatory history related to financial services, including 20 money transmission, securities, banking, insurance, and mortgage-related 21 industries. 22 Sec. 06.55.110. Consistent state licensing. (a) To establish consistent 23 licensing between this state and other states, the department may 24 (1) implement all licensing provisions of this chapter in a manner that 25 is consistent with other states that have adopted multistate licensing processes; and 26 (2) participate in nationwide protocols for licensing cooperation and 27 coordination among state regulators if the nationwide protocols are consistent with this 28 chapter. 29 (b) To fulfill the purposes of this chapter, the department may establish 30 relationships or contracts with the registry or other entities designated by the registry 31 to enable the department to
01 (1) collect and maintain records; 02 (2) coordinate multistate licensing processes and supervision 03 processes; 04 (3) process fees; and 05 (4) facilitate communication between the department and licensees or 06 other persons subject to this chapter. 07 (c) The department may use the registry for all aspects of licensing in 08 accordance with this chapter, including license applications, applications for 09 acquisitions of control, surety bonds, reporting, criminal background checks, credit 10 checks, fee processing, and examinations. 11 * Sec. 7. AS 06.55 is amended by adding new sections to read: 12 Article 1A. Virtual Currency Business Activity. 13 Sec. 06.55.150. Requirements for engaging in virtual currency business 14 activity. (a) A person may not engage in virtual currency business activity or hold 15 itself out as being able to engage in virtual currency business activity unless the person 16 is 17 (1) licensed under this chapter; or 18 (2) exempt from licensing under AS 06.55.802. 19 (b) A person that is licensed to engage in virtual currency business activity is 20 engaged in the business of money transmission and is subject to the requirements of 21 this chapter. 22 Sec. 06.55.155. Required disclosures. (a) A licensee that engages in virtual 23 currency business activity shall provide to a person that uses the licensee's products or 24 service the disclosures required by (b) of this section and any additional disclosures 25 the department determines to be reasonably necessary for the protection of persons. 26 The department shall determine by regulation or order the time and form required for 27 disclosure. A disclosure required by this section must be made separately from any 28 other information provided by the licensee and in a clear and conspicuous manner in a 29 record the person may keep. A licensee may propose for the department's approval 30 alternative disclosures as more appropriate for its virtual currency business activity. 31 (b) Before establishing a relationship with a person, a licensee shall disclose,
01 to the extent applicable to the virtual currency business activity the licensee will 02 undertake with the person, 03 (1) a schedule of fees and charges the licensee may assess, the manner 04 by which the fees and charges will be calculated if not set in advance and disclosed, 05 and the timing of the fees and charges; 06 (2) whether the product or service provided by the licensee is covered 07 by 08 (A) a form of insurance or is otherwise guaranteed against loss 09 by an agency of the United States 10 (i) up to the dollar equivalent of virtual currency 11 purchased from the licensee or for control of virtual currency by the 12 licensee as of the date of the placement or purchase, including the 13 maximum amount provided by insurance under the Federal Deposit 14 Insurance Corporation or otherwise available from the Securities 15 Investor Protection Corporation; or 16 (ii) if not provided at the dollar equivalent of virtual 17 currency purchased from the licensee or for control of virtual currency 18 by the licensee, the maximum amount of coverage for each person 19 expressed in the dollar equivalent of the virtual currency; or 20 (B) private insurance against theft or loss, including cyber 21 theft; 22 (3) the irrevocability of a virtual currency transfer or virtual currency 23 exchange and any exception to irrevocability; 24 (4) a description of 25 (A) liability for an unauthorized, mistaken, or accidental virtual 26 currency transfer or virtual currency exchange; 27 (B) the person's responsibility to provide notice to the licensee 28 of a virtual currency transfer or virtual currency exchange; 29 (C) the basis for any recovery by the person from the licensee 30 or registrant; 31 (D) general error resolution rights applicable to a virtual
01 currency transfer or virtual currency exchange; and 02 (E) the method for the person to update the person's contact 03 information with the licensee; 04 (5) that the date or time when a virtual currency transfer or virtual 05 currency exchange is made and the person's account is debited may differ from the 06 date or time when the person initiates an instruction to make the transfer or exchange; 07 (6) whether the person has a right to stop a pre-authorized payment or 08 revoke authorization for a virtual currency transfer and the procedure to initiate a stop- 09 payment order or revoke authorization for a subsequent virtual currency transfer; 10 (7) the person's right to receive a receipt, trade ticket, or other evidence 11 of a virtual currency transfer or virtual currency exchange; 12 (8) the person's right to at least 30 days' prior notice of a change in the 13 licensee's fee schedule, other terms and conditions of operating the licensee's virtual- 14 currency business activity with the person, and the policies applicable to the person's 15 account; and 16 (9) that virtual currency is not money, that other persons are not 17 required to take payment in virtual currency, that the value of virtual currency can 18 change, and that virtual currency may not be backed by a governmental agency. 19 (c) Except as provided in (d) of this section, at the conclusion of a virtual 20 currency transaction with or on behalf of a person, a licensee shall provide the person 21 a confirmation in a record that contains 22 (1) the name and contact information of the licensee, including 23 information the person may need to ask a question or file a complaint; 24 (2) the type, value, date, precise time, and amount of the transaction; 25 and 26 (3) the fee charged for the transaction, including any charge for 27 conversion of virtual currency to money, bank credit, or other virtual currency. 28 (d) If a licensee discloses that it will provide a daily confirmation in the initial 29 disclosure under (c) of this section, the licensee may elect to provide a single, daily 30 confirmation for all transactions with or on behalf of a person on that day instead of a 31 confirmation for each transaction.
01 Sec. 06.55.160. Property interests and entitlements to virtual currency. (a) 02 A licensee that has control of virtual currency for a person shall maintain in the 03 licensee's control an amount of each type of virtual currency sufficient to satisfy the 04 aggregate entitlements of the person to the type of virtual currency. 05 (b) If a licensee violates (a) of this section, the property interests of the person 06 in the virtual currency are pro rata property interests in the type of virtual currency to 07 which the person is entitled, without regard to the time the person became entitled to 08 the virtual currency or the licensee obtained control of the virtual currency. 09 (c) The virtual currency referred to in this section is 10 (1) held for the person entitled to the virtual currency; 11 (2) not property of the licensee; 12 (3) not subject to the claims of creditors of the licensee; and 13 (4) considered a permissible investment under this chapter. 14 Sec. 06.55.165. Additional requirements and clarifications for virtual 15 currency business activities. (a) A licensee engaged in a virtual currency business 16 activity shall comply with all provisions of this chapter to the extent applicable to the 17 licensee's activities. 18 (b) A licensee engaged in a virtual currency business activity may include 19 virtual currency in the licensee's calculation of tangible net worth, except virtual 20 currency controlled by a person entitled to the protections of AS 06.55.160. The 21 virtual currency is measured by the average value of the virtual currency expressed in 22 the dollar equivalent over the previous six calendar months. 23 (c) For five years after the date of virtual currency business activity with or on 24 behalf of a person, a licensee shall maintain a record of 25 (1) each transaction of the licensee with or on behalf of the person or 26 for the licensee's account in this state, including 27 (A) the identity of the person; 28 (B) the form of the transaction; 29 (C) the amount, date, and payment instructions given by the 30 person; and 31 (D) the account number, name, and mailing address of the
01 resident, and to the extent feasible, other parties to the transaction; 02 (2) the aggregate number of transactions and aggregate value of 03 transactions by the licensee with or on behalf of the person and for the licensee's 04 account in this state, expressed in the dollar equivalent of virtual currency for the 05 previous 12 calendar months; 06 (3) each transaction in which the licensee engaged in a virtual currency 07 exchange of one form of virtual currency for money or another form of virtual 08 currency with or on behalf of the person; 09 (4) a general ledger posted at least monthly that lists all assets, 10 liabilities, capital, income, and expenses of the licensee; 11 (5) each report required to be submitted under AS 06.55.403; 12 (6) bank statements and bank reconciliation records for the licensee 13 and the name, account number, and mailing address of each bank the licensee uses in 14 the conduct of its virtual currency business activity with or on behalf of the person; 15 (7) a report of any dispute with the person; and 16 (8) a report of any virtual currency business activity transaction with or 17 on behalf of the person that the licensee was unable to complete. 18 (d) A licensee shall maintain the records required by (c) of this section in a 19 form that enables the department to determine whether the licensee is in compliance 20 with a court order, this chapter, or other law of this state. 21 Sec. 06.55.170. Scope. (a) The provisions of AS 06.55.150 - 06.55.165 do not 22 apply to a virtual currency exchange, a virtual currency transfer, virtual currency 23 storage, or virtual currency administration to the extent the activity is governed by 15 24 U.S.C. 1693 - 1693r (Electronic Fund Transfer Act of 1978), 15 U.S.C. 78a - 78qq 25 (Securities Exchange Act of 1934), 7 U.S.C. 1 - 27f (Commodity Exchange Act), or 26 AS 45.56.100 - 45.56.995 (Alaska Securities Act). 27 (b) The provisions of AS 06.55.150 - 06.55.165 do not apply to activity by 28 (1) a person that contributes only connectivity software or computing 29 power to a decentralized virtual currency or to a protocol governing virtual currency 30 transfer of the digital representation of value; 31 (2) a person that provides only data storage or security services for a
01 business engaged in virtual currency business activity and does not otherwise engage 02 in virtual currency business activity on behalf of another person; 03 (3) a person that provides only to another person otherwise exempt 04 from this chapter virtual currency as one or more enterprise solutions used solely 05 between each other and has no agreement or relationship with a person that is an end 06 user of virtual currency; 07 (4) a person using virtual currency, including creating, investing, 08 buying or selling, or obtaining virtual currency as payment for the purchase or sale of 09 goods or services, solely 10 (A) on the person's own behalf; 11 (B) for personal, family, or household purposes; or 12 (C) for academic purposes; 13 (5) a person that engages in virtual currency business activity that is 14 reasonably expected to be valued, in the aggregate, on an annual basis at $5,000 or 15 less, measured by the dollar equivalent of virtual currency; 16 (6) an attorney providing escrow services to a person; 17 (7) a title insurance company providing escrow services to a person; 18 (8) a securities intermediary, as defined in AS 45.08.102, or a 19 commodity intermediary, as defined in 45.29.102, that 20 (A) does not engage in the ordinary course of business in 21 virtual currency business activity with or on behalf of a person in addition to 22 maintaining securities accounts or commodities accounts and is regulated as a 23 securities intermediary or commodity intermediary under federal law, the law 24 of this state other than this chapter, or the law of another state; and 25 (B) affords a person protections comparable to those set out in 26 AS 06.55.160; 27 (9) a secured creditor under AS 45.29 or creditor with a judicial lien or 28 lien arising by operation of law on collateral that is virtual currency, if the virtual 29 currency business activity of the creditor is limited to enforcement of the security 30 interest in compliance with AS 45.29 or the law applicable to the lien; 31 (10) a virtual currency control services vendor; or
01 (11) a person that does not receive compensation from a person for 02 (A) providing virtual currency products or services; 03 (B) conducting virtual currency business activity; or 04 (C) engaging in testing products or services with the person's 05 own funds. 06 (c) The department may determine, based on facts particular to the person or 07 class of persons, that a person or class of persons is exempt from this chapter. 08 * Sec. 8. AS 06.55.301 is repealed and reenacted to read: 09 Sec. 06.55.301. Relationship between licensee and authorized delegate. (a) 10 Before a licensee is authorized to conduct business through an authorized delegate or 11 to allow a person to act as the licensee's authorized delegate, the licensee shall 12 (1) adopt, and update as necessary, written policies and procedures 13 reasonably designed to ensure that the authorized delegate complies with applicable 14 state and federal law; 15 (2) enter into a written contract that complies with (c) of this section; 16 and 17 (3) conduct a reasonable, risk-based background investigation 18 sufficient for the licensee to determine whether the authorized delegate has complied 19 and will likely comply with applicable state and federal law. 20 (b) An authorized delegate shall operate in compliance with this chapter. 21 (c) The written contract required by (a)(2) of this section must be signed by 22 the licensee and the authorized delegate and, at a minimum, must 23 (1) appoint the person signing the contract as the licensee's authorized 24 delegate with the authority to conduct money transmission on behalf of the licensee; 25 (2) set out the nature and scope of the relationship between the licensee 26 and the authorized delegate and the respective rights and responsibilities of the parties; 27 (3) require the authorized delegate to agree to comply with all 28 applicable state and federal laws, rules, and regulations pertaining to money 29 transmission, including this chapter and regulations implementing this chapter, 30 relevant provisions of the Bank Secrecy Act, and P.L. 107-56 (USA PATRIOT ACT); 31 (4) require the authorized delegate to remit and handle money and
01 monetary value in accordance with the terms of the contract; 02 (5) establish a trust for the benefit of the licensee on money and 03 monetary value after deducting fees received for money transmission; 04 (6) require the authorized delegate to prepare and maintain records as 05 required by this chapter or regulations implementing this chapter, or as reasonably 06 requested by the department; 07 (7) acknowledge that the authorized delegate consents to examination 08 or investigation by the department; 09 (8) state that the licensee is subject to regulation by the department and 10 that, as part of that regulation, the department may suspend or revoke an authorized 11 delegate designation or require the licensee to terminate an authorized delegate 12 designation; and 13 (9) acknowledge receipt of the written policies and procedures 14 required under (a)(1) of this section. 15 (d) If the licensee's license is suspended, revoked, surrendered, or expired, the 16 licensee shall, within five business days, provide documentation to the department that 17 the licensee has notified all applicable authorized delegates of the licensee whose 18 names are in a record filed with the department of the suspension, revocation, 19 surrender, or expiration. Upon suspension, revocation, surrender, or expiration of a 20 license, applicable authorized delegates shall immediately stop providing money 21 transmission as an authorized delegate of the licensee. 22 (e) An authorized delegate of a licensee holds in trust for the benefit of the 23 licensee all money net of fees received from money transmission. If an authorized 24 delegate commingles any funds received from money transmission with any other 25 funds or property owned or controlled by the authorized delegate, all commingled 26 funds and other property shall be considered held in trust in favor of the licensee in an 27 amount equal to the amount of money net of fees received from money transmission. 28 (f) An authorized delegate may not use a subdelegate to conduct money 29 transmission on behalf of a licensee. 30 (g) In this section, "remit" means to make direct payments of money to a 31 licensee or its representative authorized to receive money or to deposit money in a
01 bank account specified by the licensee. 02 * Sec. 9. AS 06.55.302 is amended to read: 03 Sec. 06.55.302. Unauthorized activities. A person may not engage in the 04 business of money transmission on behalf of a person that is not licensed or 05 exempt [ACT AS AN AUTHORIZED DELEGATE FOR, OR OTHERWISE 06 PROVIDE MONEY SERVICES ON BEHALF OF, A PERSON WHO DOES NOT 07 HOLD A MONEY SERVICES LICENSE] under this chapter. A person that engages 08 in the business of money transmission on behalf of a person not licensed or 09 exempt under this chapter provides money transmission to the same extent as if 10 the person were a licensee and is jointly and severally liable with the unlicensed 11 or nonexempt person. 12 * Sec. 10. AS 06.55.401 is repealed and reenacted to read: 13 Sec. 06.55.401. Supervision; examination. (a) The department may conduct 14 an examination of a licensee or authorized delegate or otherwise take independent 15 action authorized by this chapter, regulations implementing this chapter, and other 16 applicable law, including the Bank Secrecy Act, 15 U.S.C. 1693 - 1693r (Electronic 17 Fund Transfer Act of 1978), P.L. 106-102 (Gramm-Leach-Bliley Act), and P.L. 107- 18 56 (USA PATRIOT ACT). The department may 19 (1) conduct an on-site or off-site examination as the department 20 reasonably requires; 21 (2) conduct an examination in conjunction with an examination 22 conducted by representatives of other agencies of this state, another state, or the 23 federal government; 24 (3) accept the examination report of another agency of this state, 25 another state, or the federal government, or a report prepared by an independent 26 accounting firm; a report accepted under this paragraph will be considered for all 27 purposes to be an official report of the department; and 28 (4) summon and examine under oath a key individual or employee of a 29 licensee or authorized delegate and require the key individual or employee to produce 30 records regarding any matter related to the condition and business of the licensee or 31 authorized delegate.
01 (b) A licensee or authorized delegate shall provide, and the department shall 02 have complete access to, all records the department reasonably requires to conduct a 03 complete examination. The licensee or authorized delegate shall provide the records at 04 the location and in the format specified by the department. The department may use 05 multistate record production standards and examination procedures when the standards 06 and procedures will reasonably achieve the requirements of this section. 07 (c) Unless otherwise directed by the department, a licensee shall pay all costs 08 reasonably incurred in connection with an examination of the licensee or the licensee's 09 authorized delegate. 10 (d) Information obtained during an examination under this chapter may be 11 disclosed only as provided in AS 06.55.407. 12 * Sec. 11. AS 06.55.403(a) is repealed and reenacted to read: 13 (a) A licensee shall submit a report of the licensee's financial condition within 14 45 days after the end of each quarter of the calendar year or within an extended period 15 that the department prescribes. The report of condition must include 16 (1) financial information at the licensee's level; 17 (2) nationwide and state-specific money transmission transaction 18 information in every jurisdiction in the United States where the licensee is licensed to 19 engage in money transmission; 20 (3) a permissible investments report; 21 (4) transaction destination country reporting for money received for 22 transmission, if applicable; and 23 (5) any other information the department reasonably requires with 24 respect to the licensee. 25 * Sec. 12. AS 06.55.403(b) is repealed and reenacted to read: 26 (b) A licensee shall submit a report of the licensee's authorized delegates 27 within 45 days after the end of each quarter of the calendar year. The report of 28 authorized delegates must include the following information about each authorized 29 delegate: 30 (1) legal name; 31 (2) taxpayer employer identification number or social security number;
01 (3) principal provider identifier; 02 (4) physical address; 03 (5) mailing address; 04 (6) business conducted in other states, if any; 05 (7) fictitious name, alias, or other trade name, if any; 06 (8) contact person name, telephone number, and electronic mail 07 address; 08 (9) the date the authorized delegate began acting as the licensee's 09 authorized delegate; 10 (10) the date the authorized delegate stopped acting as the licensee's 11 authorized delegate, if applicable; and 12 (11) any other information the department reasonably requires with 13 respect to the authorized delegate. 14 * Sec. 13. AS 06.55.403(c) is amended to read: 15 (c) A [MONEY SERVICES] licensee shall file a report with the department 16 within one business day after the [MONEY SERVICES] licensee has reason to know 17 of the occurrence of any of the following events: 18 (1) the filing of a petition by or against the [MONEY SERVICES] 19 licensee under 11 U.S.C. 101 - 112 [11 U.S.C. 101 - 110] (Bankruptcy Code) for 20 bankruptcy or reorganization; 21 (2) the filing of a petition by or against the [MONEY SERVICES] 22 licensee for receivership, the commencement of any other judicial or administrative 23 proceeding for its dissolution or reorganization, or the making of a general assignment 24 for the benefit of its creditors; 25 (3) the commencement of a proceeding to revoke or suspend its 26 [MONEY SERVICES] license in a state or country in which the [MONEY 27 SERVICES] licensee engages in business or is licensed; 28 (4) the cancellation or other impairment of the [MONEY SERVICES] 29 licensee's bond or other security; 30 (5) a charge against or conviction of the [MONEY SERVICES] 31 licensee or of a key individual [AN EXECUTIVE OFFICER, MANAGER,
01 DIRECTOR,] or person in control of the [MONEY SERVICES] licensee for a felony; 02 or 03 (6) a charge against or conviction of an authorized delegate for a 04 felony. 05 * Sec. 14. AS 06.55.403 is amended by adding a new subsection to read: 06 (d) The department may use the registry for the submission of reports required 07 by this section. 08 * Sec. 15. AS 06.55.404 is repealed and reenacted to read: 09 Sec. 06.55.404. Control; acquisition; passive investor. (a) A person or group 10 of persons acting in concert seeking to acquire control of a licensee shall obtain the 11 written approval of the department before acquiring control. An individual is not 12 deemed to acquire control of a licensee when that individual becomes a key individual 13 in the ordinary course of business. 14 (b) A person or group of persons acting in concert seeking to acquire control 15 of a licensee shall, in cooperation with the licensee, 16 (1) submit an application in a form and in a medium prescribed by the 17 department that includes the information required by AS 06.55.412, as applicable; and 18 (2) submit a nonrefundable fee with the request for approval. 19 (c) The department may permit a licensee or the person, or group of persons 20 acting in concert, to submit some or all information required by the department under 21 (b)(1) of this section without using the registry. 22 (d) When an application for acquisition of control appears to include all 23 required content and address all matters required by the department, the application is 24 considered complete, and the department shall notify the applicant in a record of the 25 date on which the department determines the application is complete. The department 26 shall approve or deny the application within 120 days after the date the application 27 was determined to be complete. If the application is not approved or denied within 120 28 days after the completion date, 29 (1) the application is approved; and 30 (2) the person or group of persons acting in concert is not prohibited 31 from acquiring control.
01 (e) The department may for good cause extend the period for approving or 02 denying an application under (d) of this section. 03 (f) A determination by the department that an application is complete and the 04 application being accepted for processing means only that the application, on its face, 05 appears to include all required items, including a criminal background check, and 06 address all required matters. The department's determination is not an assessment of 07 the substance of the application or of the sufficiency of the information provided. 08 (g) When an application is filed and considered to be complete under (d) of 09 this section, the department shall investigate the financial condition, financial 10 responsibility, financial experience, business experience, competence level, character, 11 and general fitness of the person or group of persons acting in concert seeking to 12 acquire control. The department shall approve a request for acquisition of control if 13 the department finds that 14 (1) the requirements of (b) of this section have been met, as applicable; 15 and 16 (2) the financial condition, financial responsibility, financial 17 experience, business experience, competence level, character, and general fitness of 18 the person or group of persons acting in concert seeking to acquire control, and the 19 experience, competence level, character, and general fitness of the key individuals and 20 persons that would be in control of the licensee after the acquisition of control indicate 21 that it is in the public interest to permit the person or group of persons acting in 22 concert to control the licensee. 23 (h) If an applicant for approval to acquire control is subject to a multistate 24 licensing process, the department may 25 (1) accept the investigation results of a lead investigative state for the 26 purposes of (g) of this section; or 27 (2) investigate the applicant in accordance with (g) of this section and 28 the timeframes established by agreement through the multistate licensing process, 29 provided those timeframes comply with the application period set out in (d) of this 30 section. 31 (i) The department shall issue a formal written notice of a denial of an
01 application for approval to acquire control within 30 days after the decision to deny 02 the application. The department shall set out in the notice of denial the specific reasons 03 for the denial. An applicant may appeal a denial within 30 days after receiving the 04 written notice of the denial. 05 (j) The requirements of (a) and (b) of this section do not apply to 06 (1) a person that acts as a proxy for the sole purpose of voting at a 07 designated meeting of the shareholders or holders of voting shares or voting interests 08 of a licensee or a person in control of a licensee; 09 (2) a person that acquires control of a licensee by devise or descent; 10 (3) a person that acquires control of a licensee as a personal 11 representative, custodian, guardian, conservator, or trustee, or as an officer appointed 12 by a court of competent jurisdiction or by operation of law; 13 (4) a person that is exempt under AS 06.55.802(4); 14 (5) a person that the department, by regulation or order, determines to 15 be exempt from the requirements of (a) and (b) of this section because that exemption 16 is in the public interest; 17 (6) a public offering of securities of a licensee or a person in control of 18 a licensee; or 19 (7) an internal reorganization of a person in control of a licensee where 20 the ultimate person in control of the licensee remains the same. 21 (k) A person exempt from the requirements of (a) and (b) of this section, in 22 cooperation with the licensee, shall notify the department within 15 days after the 23 acquisition of control. 24 (l) Before filing an application for approval to acquire control of a licensee, a 25 person may request in writing a determination from the department as to whether the 26 person would be considered a person in control of a licensee upon consummation of a 27 proposed transaction. If the department determines that the person would not be a 28 person in control of a licensee, the proposed person and transaction are not subject to 29 the requirements of (a) and (b) of this section. 30 (m) If a multistate licensing process includes a determination made under (l) 31 of this section and an applicant is subject to the multistate licensing process, the
01 department may 02 (1) accept the control determination of a lead investigative state; or 03 (2) investigate the applicant in accordance with this section and the 04 timeframes established by agreement through the multistate licensing process. 05 (n) The requirements of (a) and (b) of this section do not apply to a person that 06 has complied with and received approval to engage in money transmission under this 07 chapter or was identified as a person in control in a previous application filed with and 08 approved by the department, or by an accredited state in accordance with a multistate 09 licensing process, if 10 (1) in the previous five years, the person has not had a license revoked 11 or suspended or controlled a licensee that has had a license revoked or suspended 12 while the person was in control of the licensee; 13 (2) the person is a licensee, is well managed, and has received at least a 14 satisfactory rating for compliance at the person's most recent examination by an 15 accredited state if a rating was given; 16 (3) the licensee to be acquired is projected to meet the requirements of 17 this chapter, including AS 06.55.501, 06.55.505, and 06.55.510, after the acquisition 18 of control is completed, and, if the person acquiring control is a licensee, the licensee 19 is also projected to meet the requirements of this chapter, including AS 06.55.501, 20 06.55.505, and 06.55.510, after the acquisition of control is completed; 21 (4) the licensee to be acquired will not implement any material 22 changes to the licensee's business plan as a result of the acquisition of control, and, if 23 the person acquiring control is a licensee, the licensee also will not implement any 24 material changes to the licensee's business plan as a result of the acquisition of control; 25 and 26 (5) the person provides notice of the acquisition in cooperation with 27 the licensee and attests to (1) - (4) of this subsection in a form and in a medium 28 prescribed by the department. 29 (o) If the notice required under (n)(5) of this section is not disapproved within 30 30 days after the date on which the notice was determined to be complete, the notice is 31 considered to be approved.
01 (p) A person is presumed to exercise a controlling influence when the person 02 holds the power to vote, directly or indirectly, at least 25 percent of the outstanding 03 voting shares or voting interests of a licensee or person in control of a licensee. To 04 determine the percentage of a person controlled by any other person, the interest of the 05 person presumed to have a controlling interest shall be aggregated with the interest of 06 any other immediate family member, including the person's spouse, parents, children, 07 siblings, relative by marriage, and any other person who shares the home of the person 08 presumed to have a controlling interest. 09 (q) A passive investor is not considered to have control under this chapter. To 10 be a passive investor, a person 11 (1) may not have the power to elect a majority of key individuals or 12 executive officers, managers, directors, trustees, or other persons exercising 13 managerial authority of a person in control of a licensee; 14 (2) may not be employed by or have managerial duties of the licensee 15 or person in control of a licensee; 16 (3) may not have the power to exercise, directly or indirectly, a 17 controlling influence over the management or policies of a licensee or person in 18 control of a licensee; and 19 (4) shall attest to (1) - (3) of this subsection in a form and in a medium 20 prescribed by the department or in a written affidavit. 21 * Sec. 16. AS 06.55.405(a) is amended to read: 22 (a) A [MONEY SERVICES] licensee shall maintain the following records for 23 determining its compliance with this chapter for at least five [THREE] years: 24 (1) a record of each outstanding money transmission [PAYMENT 25 INSTRUMENT OR STORED-VALUE] obligation sold; 26 (2) a general ledger posted at least monthly containing all asset, 27 liability, capital, income, and expense accounts; 28 (3) bank statements and bank reconciliation records; 29 (4) records of outstanding money transmission [PAYMENT 30 INSTRUMENTS AND STORED-VALUE] obligations; 31 (5) records of each outstanding money transmission [PAYMENT
01 INSTRUMENT AND STORED-VALUE] obligation paid within the five-year 02 [THREE-YEAR] period; 03 (6) a list of the last known names and addresses of all of the [MONEY 04 SERVICES] licensee's authorized delegates; and 05 (7) any other records the department reasonably requires by regulation. 06 * Sec. 17. AS 06.55.405(d) is amended to read: 07 (d) All records maintained by the [MONEY SERVICES] licensee as required 08 in (a) - (c) of this section are open to inspection by the department under 09 AS 06.55.401. 10 * Sec. 18. AS 06.55.406(a) is amended to read: 11 (a) A [MONEY SERVICES] licensee and an authorized delegate shall file 12 with the appropriate federal agency [ATTORNEY GENERAL] all reports required by 13 federal currency reporting, record keeping, and suspicious transaction reporting 14 requirements as set out in the Bank Secrecy Act [31 U.S.C. 5311] and other federal 15 and state laws pertaining to money laundering. 16 * Sec. 19. AS 06.55.407(a) is amended to read: 17 (a) Except as [OTHERWISE] provided in (b) and (f) of this section, all 18 information or reports obtained by the department from an applicant, [A] licensee, or 19 [AN] authorized delegate, all information contained in or related to an 20 examination, investigation, operating report, or condition report prepared by, on 21 behalf of, or for the use of the department, and financial statements, balance 22 sheets, or authorized delegate information, are confidential and not subject to 23 disclosure under AS 40.25.100 - 40.25.295 [, INCLUDING 24 (1) ALL INFORMATION CONTAINED IN OR RELATED TO 25 EXAMINATION, INVESTIGATION, OPERATING, OR CONDITION REPORTS 26 PREPARED BY, ON BEHALF OF, OR FOR THE USE OF THE DEPARTMENT; 27 AND 28 (2) FINANCIAL STATEMENTS, BALANCE SHEETS, AND 29 AUTHORIZED DELEGATE INFORMATION]. 30 * Sec. 20. AS 06.55.407(b) is amended to read: 31 (b) The department may disclose information that is not otherwise subject to
01 disclosure under (a) of this section to representatives of state or federal agencies who 02 promise in a record that they will maintain the confidentiality of the information or if 03 the department finds that the release is reasonably necessary for the protection of the 04 public and in the interests of justice [, AND THE MONEY SERVICES LICENSEE 05 HAS BEEN GIVEN PREVIOUS NOTICE BY THE DEPARTMENT OF ITS 06 INTENT TO RELEASE THE INFORMATION]. 07 * Sec. 21. AS 06.55.407(c) is amended to read: 08 (c) This section does not prohibit the department from disclosing to the public 09 a list of [MONEY SERVICES] licensees or the aggregated financial or transactional 10 data concerning those [MONEY SERVICES] licensees. 11 * Sec. 22. AS 06.55.407(d) is amended to read: 12 (d) A [MONEY SERVICES] licensee or an authorized delegate may not 13 disclose to another person financial information provided to the [MONEY 14 SERVICES] licensee or the authorized delegate by a customer except when, and only 15 to the extent that, the disclosure is 16 (1) authorized in writing by the customer; 17 (2) required by federal, state, or local law; 18 (3) required by an order issued by a court or an administrative agency; 19 or 20 (4) part of the money transmission [SERVICES] transaction ordered 21 by the customer. 22 * Sec. 23. AS 06.55.407 is amended by adding a new subsection to read: 23 (f) Information contained in the records of the department that is not 24 confidential and may, upon request, be made available to the public on the 25 department's Internet website includes 26 (1) the name, business address, telephone number, and unique registry 27 identifier of a licensee; 28 (2) the business address of a licensee's registered agent for service; 29 (3) the name, business address, and telephone number of all authorized 30 delegates; 31 (4) the terms of or a copy of any bond filed by a licensee, if that
01 confidential information, including the prices and fees for the bond, is redacted; 02 (5) copies of any nonconfidential final orders of the department 03 relating to any violation of this chapter or regulations implementing this chapter; and 04 (6) imposition of an administrative fine or penalty under this chapter. 05 * Sec. 24. AS 06.55 is amended by adding new sections to article 4 to read: 06 Sec. 06.55.408. Audited financials. (a) A licensee shall, within 90 days after 07 the end of the licensee's fiscal year or within any extended period that the department 08 establishes, file with the department 09 (1) an audited financial statement of the licensee for the licensee's 10 fiscal year prepared in accordance with generally accepted accounting principles; and 11 (2) any other information the department reasonably requires. 12 (b) The audited financial statement must be prepared by an independent 13 certified public accountant or independent public accountant who is satisfactory to the 14 department. 15 (c) The audited financial statement must include a certificate of opinion of the 16 independent certified public accountant or independent public accountant that is 17 satisfactory in form and content to the department. If the certificate of opinion is 18 qualified, the department may order the licensee to take any action that the department 19 finds necessary to enable the independent certified public accountant or independent 20 public accountant to remove the qualification. 21 Sec. 06.55.409. Implementation. (a) To carry out the purposes of this chapter, 22 subject to AS 06.55.407, the department may 23 (1) enter into an agreement or relationship with a government official 24 or federal or state regulatory agency or regulatory association to improve efficiency 25 and reduce regulatory burden by standardizing methods or procedures, and sharing 26 resources, records, or related information obtained under this chapter; 27 (2) use, hire, contract, or employ analytical systems, methods, or 28 software to examine or investigate a person subject to this chapter; 29 (3) accept from a state or federal government agency or official 30 licensing, examination, or investigation reports made by the agency or official; and 31 (4) accept an audit report made by an independent certified public
01 accountant or independent public accountant that is satisfactory to the department for 02 an applicant or licensee and incorporate the audit reports into a report of examination 03 or investigation. 04 (b) The department has broad administrative authority to administer, interpret 05 and enforce this chapter, to adopt regulations implementing this chapter, and to 06 recover the cost of administering and enforcing this chapter by imposing and 07 collecting proportionate and equitable fees and costs associated with applications, 08 examinations, investigations, and other actions required to achieve the purpose of this 09 chapter. 10 Sec. 06.55.410. Networked supervision. (a) The department may participate 11 in multistate supervisory processes established between and among states and 12 coordinated through a nationally recognized organization acceptable to the department 13 for regulation of licensees that hold licenses in this state and other states. As a 14 participant in multistate supervision, subject to AS 06.55.407, the department may 15 (1) cooperate, coordinate, and share information with other state and 16 federal regulators; and 17 (2) enter into written contracts or agreements with other state and 18 federal regulators for the purposes of cooperating, coordinating, and sharing 19 information with those state and federal regulators. 20 (b) Nothing in this section constitutes a waiver of the department's authority to 21 conduct an examination or investigation or otherwise take independent action to 22 enforce compliance with applicable state or federal law. 23 (c) A joint examination or investigation, or acceptance of an examination or 24 investigation report, does not waive an examination assessment provided for in this 25 chapter. 26 Sec. 06.55.411. Relationship to federal law. (a) If state money transmission 27 jurisdiction is conditioned on a federal law, any inconsistency between a provision of 28 this chapter and the federal law governing money transmission is governed by the 29 applicable federal law to the extent of the inconsistency. 30 (b) When a federal law governs to the extent of an inconsistency in 31 accordance with (a) of this section, the department may provide interpretive guidance
01 that 02 (1) identifies the inconsistency; and 03 (2) identifies the appropriate means of compliance with federal law. 04 Sec. 06.55.412. Notice and information requirements for a change of key 05 individual. (a) A licensee adding or replacing a key individual shall 06 (1) provide notice in a manner prescribed by the department within 15 07 days after the effective date of the key individual's appointment; and 08 (2) provide the information required under AS 06.55.109 within 45 09 days after the effective date of the key individual's appointment. 10 (b) The department may issue a notice of disapproval of a key individual if the 11 department finds that the individual's experience, competence level, character, or 12 integrity indicate that it would not be in the best interest of the public or the customers 13 of the licensee to permit the individual to be a key individual. The department shall 14 issue a notice of disapproval within 90 days after determining the notice provided 15 under (a) of this section is complete. 16 (c) A notice of disapproval shall contain a statement of the basis for the 17 disapproval and be sent to the licensee and the disapproved individual. A licensee may 18 appeal a notice of disapproval within 30 days after receipt of the notice. 19 (d) If the notice provided under (a) of this section is not disapproved within 90 20 days after the date the notice was determined to be complete, the key individual is 21 considered to be approved. 22 (e) If a multistate licensing process includes a key individual notice review 23 and disapproval process, and the licensee is subject to the multistate licensing process, 24 the department may 25 (1) accept the key individual notice review determination of another 26 state; or 27 (2) investigate the applicant in accordance with (b) of this section and 28 the timeframes established by agreement through the multistate licensing process. 29 * Sec. 25. AS 06.55.501 is amended to read: 30 Sec. 06.55.501. Maintenance of permissible investments. (a) A [MONEY 31 SERVICES] licensee shall maintain at all times permissible investments that have a
01 market value computed under generally accepted accounting principles of not less than 02 the aggregate amount of all of its outstanding money transmission [PAYMENT 03 INSTRUMENTS AND STORED VALUE] obligations [ISSUED OR SOLD IN ALL 04 STATES AND MONEY TRANSMITTED FROM ALL STATES BY THE MONEY 05 SERVICES LICENSEE]. 06 (b) Except for permissible investments listed in AS 06.55.502, the [THE] 07 department, with respect to any licensee [MONEY SERVICES LICENSEES], may by 08 regulation or order limit the extent to which a specific [TYPE OF] investment 09 maintained by a licensee within a class of permissible investments may be 10 considered a permissible investment [, EXCEPT FOR MONEY AND 11 CERTIFICATES OF DEPOSIT ISSUED BY A BANK. THE DEPARTMENT BY 12 REGULATION MAY PRESCRIBE OR BY ORDER ALLOW OTHER TYPES OF 13 INVESTMENTS THAT THE DEPARTMENT DETERMINES TO HAVE A 14 SAFETY SUBSTANTIALLY EQUIVALENT TO OTHER PERMISSIBLE 15 INVESTMENTS]. 16 (c) Permissible investments, even if commingled with other assets of the 17 [MONEY SERVICES] licensee, are held in trust for the benefit of the purchasers and 18 holders of the [MONEY SERVICES] licensee's outstanding money transmission 19 [PAYMENT INSTRUMENTS AND STORED VALUE] obligations in the event of 20 the licensee's insolvency, bankruptcy, [OR] receivership, commencement of other 21 judicial or administrative proceedings for the licensee's dissolution or 22 reorganization, or in the event of an action by a creditor against the license who 23 is not a beneficiary of the statutory trust. A permissible investment impressed 24 with a trust in accordance with this subsection is not subject to attachment, levy 25 of execution, or sequestration by a court, unless the attachment, levy of execution, 26 or sequestration is for a beneficiary of the statutory trust [OF THE MONEY 27 SERVICES LICENSEE]. 28 * Sec. 26. AS 06.55.501 is amended by adding new subsections to read: 29 (d) Upon the establishment of a statutory trust under (c) of this section, or 30 when funds are drawn on a letter of credit under AS 06.55.502(a)(4) or 06.55.503, the 31 department shall notify the applicable regulator of each state in which the licensee is
01 licensed to engage in money transmission, if any, of the establishment of the trust or 02 the funds drawn on the letter of credit, as applicable. Notice may be provided in 03 accordance with a multistate agreement or through the registry. Funds drawn on a 04 letter of credit and any other permissible investments held in trust for the benefit of the 05 purchasers and holders of the licensee's outstanding money transmission obligations 06 are considered to be held in trust for the benefit of the purchasers and holders on a pro 07 rata and equitable basis in accordance with state law and the law of other states, as 08 applicable. A statutory trust established under this section shall be terminated upon 09 extinguishment of all the licensee's outstanding money transmission obligations. 10 (e) The department may by regulation or order allow other types of 11 investments that the department determines are of sufficient liquidity and quality to be 12 a permissible investment. The department may participate in efforts with other state 13 regulators to identify permissible investments. 14 * Sec. 27. AS 06.55.502(a) is amended to read: 15 (a) Except to the extent otherwise limited by the department under 16 AS 06.55.501, or as modified by a regulation of the department, the following 17 investments are permissible under AS 06.55.501: 18 (1) cash, demand deposits, savings deposits, funds in accounts held 19 for the benefit of a licensee's customers in a federally insured depository financial 20 institution, money market mutual funds, certificates [A CERTIFICATE] of 21 deposit, [OR A] senior debt obligations [OBLIGATION] of a federally [AN] insured 22 depository financial institution, and cash equivalents, including automated 23 clearing house items in transit to the licensee and automated clearing house items 24 or international wires in transit to a payee, cash in transit by armored car, cash 25 in smart safes, cash in licensee-owned locations, and transmission receivables 26 owed by a bank and funded by a credit card or debit card [; IN THIS 27 PARAGRAPH, "INSURED DEPOSITORY INSTITUTION" HAS THE MEANING 28 GIVEN IN 12 U.S.C. 1813 (FEDERAL DEPOSIT INSURANCE ACT)]; 29 (2) [BANKER'S ACCEPTANCE OR BILL OF EXCHANGE THAT 30 IS ELIGIBLE FOR PURCHASE ON ENDORSEMENT BY A MEMBER BANK OF 31 THE FEDERAL RESERVE SYSTEM AND IS ELIGIBLE FOR PURCHASE BY A
01 FEDERAL RESERVE BANK; 02 (3)] an investment bearing a rating of one of the three highest grades as 03 defined by a nationally recognized organization that rates securities; 04 (3) [(4) AN INVESTMENT SECURITY THAT IS] an obligation of 05 the United States or a commission [DEPARTMENT], agency, or instrumentality of 06 the United States, [AN INVESTMENT IN] an obligation that is guaranteed fully as to 07 principal and interest by the United States, or [AN INVESTMENT IN] an obligation 08 of a state or a governmental subdivision, agency, or instrumentality of a state; 09 (4) the full drawable amount of an irrevocable standby letter of 10 credit that complies with AS 06.55.503; 11 (5) 100 percent of the surety bond provided for under 12 AS 06.55.505 that exceeds the average daily money transmission liability in this 13 state 14 [(5) RECEIVABLES THAT ARE PAYABLE TO A MONEY 15 SERVICES LICENSEE FROM ITS AUTHORIZED DELEGATES, IN THE 16 ORDINARY COURSE OF BUSINESS, UNDER CONTRACTS THAT ARE NOT 17 PAST DUE OR DOUBTFUL OF COLLECTION IF THE AGGREGATE AMOUNT 18 OF RECEIVABLES UNDER THIS PARAGRAPH DOES NOT EXCEED 20 19 PERCENT OF THE TOTAL PERMISSIBLE INVESTMENTS OF A MONEY 20 SERVICES LICENSEE AND THE MONEY SERVICES LICENSEE DOES NOT 21 HOLD AT ONE TIME RECEIVABLES UNDER THIS PARAGRAPH IN ANY 22 ONE PERSON AGGREGATING MORE THAN 10 PERCENT OF THE MONEY 23 SERVICES LICENSEE'S TOTAL PERMISSIBLE INVESTMENTS; AND 24 (6) A SHARE OR A CERTIFICATE ISSUED BY AN OPEN-END 25 MANAGEMENT INVESTMENT COMPANY THAT IS REGISTERED WITH THE 26 UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER 15 27 U.S.C. 80A-1 - 80A-64 (INVESTMENT COMPANY ACT OF 1940), AND WHOSE 28 PORTFOLIO IS RESTRICTED BY THE MANAGEMENT COMPANY'S 29 INVESTMENT POLICY TO INVESTMENTS SPECIFIED IN (1) - (4) OF THIS 30 SUBSECTION]. 31 * Sec. 28. AS 06.55.502(b) is repealed and reenacted to read:
01 (b) Unless modified by the department by regulation, the following 02 investments are permissible under (a) of this section to the extent specified: 03 (1) receivables that are payable to a licensee from its authorized 04 delegates in the ordinary course of business that are less than seven days old and do 05 not exceed 50 percent of the aggregate value of the licensee's total permissible 06 investments; receivables under this paragraph that are payable to a licensee from a 07 single authorized delegate in the ordinary course of business may not exceed 10 08 percent of the aggregate value of the licensee's total permissible investments; 09 (2) the following investments, not to exceed 20 percent for each 10 category and a combined total of 50 percent of the aggregate value of the licensee's 11 total permissible investments: 12 (A) a short-term investment of not more than six months' 13 duration bearing an eligible rating; 14 (B) commercial paper bearing an eligible rating; 15 (C) a bill, note, bond, or debenture bearing an eligible rating; 16 (D) United States tri-party repurchase agreements collateralized 17 at 100 percent or more by federal government or agency securities, municipal 18 bonds, or other securities bearing an eligible rating; 19 (E) money market mutual funds rated by an eligible rating 20 service selected by the department as appropriate for this purpose at a rate 21 determined by the department; and 22 (F) a mutual fund or other investment fund composed solely 23 and exclusively of one or more permissible investments listed in (a)(1) - (3) of 24 this section; and 25 (3) cash held in accounts for the benefit of the licensee's customers at 26 foreign depository financial institutions, not to exceed 10 percent of the aggregate 27 value of the licensee's total permissible investments, if the licensee has received a 28 satisfactory rating in the licensee's most recent examination and the foreign depository 29 financial institution 30 (A) has an eligible rating; 31 (B) is registered under 26 U.S.C. 1471 - 1474 (Foreign
01 Account Tax Compliance Act); 02 (C) is not located in any country subject to sanctions from the 03 United States Department of the Treasury, Office of Foreign Asset Control; 04 and 05 (D) is not located in a high-risk or non-cooperative jurisdiction 06 as designated by the Financial Action Task Force. 07 * Sec. 29. AS 06.55 is amended by adding new sections to article 5 to read: 08 Sec. 06.55.503. Letter of credit. (a) A letter of credit permitted under 09 AS 06.55.502(a)(4) 10 (1) must list the department as the beneficiary; 11 (2) must stipulate that the beneficiary is only required to draw a sight 12 draft under the letter of credit and present it to obtain funds up to the letter of credit 13 amount within seven days after presenting the items required by (7) of this subsection; 14 (3) must be issued by 15 (A) a federally insured depository financial institution; 16 (B) a foreign bank that is authorized under federal law to 17 maintain a federal agency or federal branch office in a state; or 18 (C) a foreign bank that 19 (i) is authorized under state law to maintain a branch in 20 a state; 21 (ii) bears an eligible rating or whose parent company 22 bears an eligible rating; and 23 (iii) is regulated, supervised, and examined by federal 24 or state authorities having regulatory authority over banks, credit 25 unions, and trust companies; 26 (4) must be irrevocable, unconditional, and indicate that the letter of 27 credit is not subject to any condition or qualifications outside of the letter of credit; 28 (5) may not contain reference to any other agreements, documents, or 29 entities, or otherwise provide for any security interest in the licensee; 30 (6) must contain an issue date and expiration date, and expressly 31 provide for automatic extension, without a written amendment, for an additional
01 period of one year from the present or each future expiration date, unless the issuer of 02 the letter of credit notifies the department in writing by certified or registered mail, 03 courier mail, or by other means of notice that provides a receipt, at least 60 days 04 before an expiration date, that the irrevocable letter of credit will not be extended; and 05 (7) must provide that the issuer of the letter of credit will honor, at 06 sight, a presentation made by the beneficiary to the issuer of the following documents 07 on or before the expiration date of the letter of credit: 08 (A) the original letter of credit, including any amendments; and 09 (B) a written statement from the beneficiary stating whether 10 one or more of the following events have occurred: 11 (i) the filing of a petition by or against the licensee 12 under 11 U.S.C. Section 101 - 112 (Bankruptcy Code), for bankruptcy 13 or reorganization; 14 (ii) the filing of a petition by or against the licensee for 15 receivership, or the commencement of any other judicial or 16 administrative proceeding for the licensee's dissolution or 17 reorganization; 18 (iii) the seizure of assets of a licensee under an 19 emergency order issued by the department, or by the applicable 20 regulator of each state in which the licensee is licensed to engage in 21 money transmission, in accordance with applicable law, on the basis of 22 an action, violation, or condition that has caused or is likely to cause 23 the insolvency of the licensee; or 24 (iv) the beneficiary received notice of expiration or non- 25 extension of a letter of credit and the licensee failed to demonstrate to 26 the satisfaction of the beneficiary that the licensee will maintain 27 permissible investments in accordance with AS 06.55.501 upon the 28 expiration or non-extension of the letter of credit. 29 (b) In the event of any notice of expiration or non-extension of a letter of 30 credit issued under (a) of this section, the licensee shall be required to demonstrate to 31 the satisfaction of the department, 15 days prior to expiration, that the licensee
01 maintains and will maintain permissible investments in accordance with AS 06.55.501 02 upon expiration of the letter of credit. If the licensee is not able to do so, the 03 department may draw on the letter of credit in an amount up to the amount necessary 04 to meet the licensee's requirements to maintain permissible investments in accordance 05 with AS 06.55.501. Any such draw shall be offset against the licensee's outstanding 06 money transmission obligations. The drawn funds shall be held in trust by the 07 department or the department's designated agent, to the extent authorized by law, as 08 agent for the benefit of the purchasers and holders of the licensee's outstanding money 09 transmission obligations. 10 (c) The department may designate an agent to serve on the department's behalf 11 as beneficiary to a letter of credit so long as the agent and letter of credit meet 12 requirements established by the department. The department's agent may serve as 13 agent for multiple licensing authorities for a single irrevocable letter of credit if the 14 proceeds of the drawable amount for the purposes of AS 06.55.502(a)(4) are assigned 15 to the department. 16 (d) The department may participate in multistate processes designed to 17 facilitate the issuance and administration of letters of credit, including services 18 provided by the registry. 19 Sec. 06.55.505. Security. (a) An applicant for a license shall provide, and a 20 licensee at all times shall maintain, security consisting of a surety bond in a form 21 satisfactory to the department or, with the department's approval, a deposit in 22 accordance with this section. 23 (b) The amount of the required security shall be determined by the department 24 by regulation or order. The amount of the required security shall be proportional to the 25 licensee's average daily money transmission liability in this state up to a maximum of 26 $1,000,000. 27 (c) A licensee that maintains a bond in the maximum amount provided for 28 under (b) of this section is not required to calculate its average daily money 29 transmission liability in this state for purposes of this section. 30 (d) A licensee may exceed the maximum required bond amount. 31 (e) The aggregate liability on a surety bond may not exceed the principal sum
01 of the bond. A claimant against a licensee may maintain an action on the bond, or the 02 department may maintain an action on behalf of the claimant. 03 (f) A surety bond must cover claims for as long as the department specifies, 04 but at least for the five years after the date the licensee stops providing money 05 transmission in this state. The department may permit the amount of security to be 06 reduced or eliminated before the expiration of that time to the extent the amount of the 07 licensee's outstanding money transmission obligations in this state is reduced. The 08 department may permit a licensee to substitute another form of security acceptable to 09 the department for the security effective at the time the licensee stops providing 10 money transmission in this state. 11 (g) An applicant for a license or a licensee shall obtain a surety bond required 12 under this section from a surety company authorized to do business in this state. 13 Sec. AS 06.55.510. Net worth. (a) A licensee shall maintain at all times a 14 tangible net worth of 15 (1) the greater of $35,000 or three percent of total assets for the first 16 $100,000,000; 17 (2) two percent of additional assets for $100,000,001 to 18 $1,000,000,000; and 19 (3) 0.5 percent of additional assets for over $1,000,000,001. 20 (b) Tangible net worth must be demonstrated at initial application by the 21 applicant's most recent audited or unaudited financial statements. 22 (c) The department may exempt any applicant or licensee, in whole or in part, 23 from the requirements of this section. 24 * Sec. 30. AS 06.55.601 is amended to read: 25 Sec. 06.55.601. Suspension and revocation; receivership. (a) The 26 department may suspend or revoke a [MONEY SERVICES] license, place a 27 [MONEY SERVICES] licensee in receivership, or order a [MONEY SERVICES] 28 licensee to revoke the designation of an authorized delegate if 29 (1) the [MONEY SERVICES] licensee violates this chapter or a 30 regulation adopted or an order issued under this chapter; 31 (2) the [MONEY SERVICES] licensee does not cooperate with an
01 examination or investigation by the department; 02 (3) the [MONEY SERVICES] licensee engages in fraud, intentional 03 misrepresentation, or gross negligence; 04 (4) an authorized delegate is convicted of a violation of a state or 05 federal anti-money laundering statute, or violates a regulation adopted or an order 06 issued under this chapter, as a result of the [MONEY SERVICES] licensee's wilful 07 misconduct or wilful blindness; 08 (5) the competence level, experience, character, or general fitness of 09 the [MONEY SERVICES] licensee, authorized delegate, person in control of a 10 [MONEY SERVICES] licensee, key individual, or responsible person of the 11 [MONEY SERVICES] licensee or authorized delegate indicates that it is not in the 12 public interest to permit the person to provide money transmission [SERVICES]; 13 (6) the [MONEY SERVICES] licensee engages in an unsafe or 14 unsound practice; 15 (7) the [MONEY SERVICES] licensee is insolvent, suspends payment 16 of its obligations, or makes a general assignment for the benefit of its creditors; or 17 (8) the [MONEY SERVICES] licensee does not remove an authorized 18 delegate after the department issues and serves on [UPON] the [MONEY SERVICES] 19 licensee a final order that includes [INCLUDING] a finding that the authorized 20 delegate has violated this chapter. 21 (b) In determining whether a [MONEY SERVICES] licensee is engaging in 22 an unsafe or unsound practice, the department may consider the size and condition of 23 the [MONEY SERVICES] licensee's money transmission, the magnitude of the loss, 24 the gravity of the violation of this chapter, and the previous conduct of the person 25 involved. 26 * Sec. 31. AS 06.55.601 is amended by adding a new subsection to read: 27 (c) A licensee may apply for relief from a suspension or revocation of its 28 license according to procedures prescribed by the department. 29 * Sec. 32. AS 06.55.602 is amended to read: 30 Sec. 06.55.602. Suspension and revocation of authorized delegates. (a) The 31 department may issue an order suspending or revoking the designation of an
01 authorized delegate if the department finds that 02 (1) the authorized delegate violated this chapter or a regulation adopted 03 or an order issued under this chapter; 04 (2) the authorized delegate did not cooperate with an examination or 05 investigation by the department; 06 (3) the authorized delegate engaged in fraud, intentional 07 misrepresentation, or gross negligence; 08 (4) the authorized delegate is convicted of a violation of a state or 09 federal anti-money laundering statute; 10 (5) the competence level, experience, character, or general fitness of 11 the authorized delegate or a person in control of the authorized delegate indicates that 12 it is not in the public interest to permit the authorized delegate to provide money 13 transmission [SERVICES]; or 14 (6) the authorized delegate is engaging in an unsafe or unsound 15 practice. 16 (b) In determining whether an authorized delegate is engaging in an unsafe or 17 unsound practice, the department may consider the size and condition of the 18 authorized delegate's provision of money transmission [SERVICES], the magnitude 19 of the loss, the gravity of the violation of this chapter or a regulation adopted or order 20 issued under this chapter, and the previous conduct of the authorized delegate. 21 * Sec. 33. AS 06.55.602 is amended by adding a new subsection to read: 22 (c) An authorized delegate may apply for relief from a suspension or 23 revocation of designation as an authorized delegate according to procedures prescribed 24 by the department. 25 * Sec. 34. AS 06.55.603(a) is amended to read: 26 (a) If the department determines that a violation of this chapter or of a 27 regulation adopted or an order issued under this chapter by a [MONEY SERVICES] 28 licensee or authorized delegate is likely to cause immediate and irreparable harm to 29 the [MONEY SERVICES] licensee, its customers, or the public as a result of the 30 violation, or cause insolvency or significant dissipation of assets of the [MONEY 31 SERVICES] licensee, the department may issue an order requiring the [MONEY
01 SERVICES] licensee or authorized delegate to cease and desist from the violation. 02 The order becomes effective on service of it on the [MONEY SERVICES] licensee or 03 authorized delegate. 04 * Sec. 35. AS 06.55.603(b) is amended to read: 05 (b) The department may issue an order against a [MONEY SERVICES] 06 licensee to cease and desist from providing money transmission [SERVICES] 07 through an authorized delegate who is the subject of a separate order by the 08 department. 09 * Sec. 36. AS 06.55.603(d) is amended to read: 10 (d) A [MONEY SERVICES] licensee or an authorized delegate who is served 11 with an order to cease and desist may petition the superior court for a judicial order 12 setting aside, limiting, or suspending the enforcement, operation, or effectiveness of 13 the order pending the completion of an administrative proceeding under AS 06.55.601 14 or 06.55.602. 15 * Sec. 37. AS 06.55.605 is amended to read: 16 Sec. 06.55.605. Civil penalties. The department may assess a civil penalty 17 against a person that [WHO] violates this chapter or a regulation adopted or an order 18 issued under this chapter in an amount not to exceed $1,000 a [EACH] day for each 19 day the violation is outstanding, plus the department's costs and expenses for the 20 investigation. 21 * Sec. 38. AS 06.55.606(b) is amended to read: 22 (b) A person who knowingly engages in an activity for which a [MONEY 23 SERVICES] license is required under this chapter without being [LICENSED AS] a 24 [MONEY SERVICES] licensee and who receives more than $500 in compensation 25 within a 30-day period from this activity is guilty of a class C felony. 26 * Sec. 39. AS 06.55.606(c) is amended to read: 27 (c) A person who knowingly engages in an activity for which a [MONEY 28 SERVICES] license is required under this chapter without being licensed [AS A 29 MONEY SERVICES LICENSEE] and who receives not [NO] more than $500 in 30 compensation within a 30-day period from this activity is guilty of a class A 31 misdemeanor.
01 * Sec. 40. AS 06.55.607(a) is amended to read: 02 (a) If the department has reason to believe that a person has violated or is 03 violating AS 06.55.101 [OR 06.55.201], the department may issue an order to show 04 cause why an order to cease and desist should not issue requiring that the person cease 05 and desist from the violation of AS 06.55.101 [OR 06.55.201]. 06 * Sec. 41. AS 06.55.607(e) is amended to read: 07 (e) A person that [WHO] is served with an order to cease and desist for 08 violating AS 06.55.101 [OR 06.55.201] may petition the superior court for a judicial 09 order setting aside, limiting, or suspending the enforcement, operation, or 10 effectiveness of the order pending the completion of an administrative proceeding 11 under AS 06.55.701 and 06.55.702. 12 * Sec. 42. AS 06.55.702(a) is amended to read: 13 (a) Except as otherwise provided in AS 06.55.603 and 06.55.607 [AND IN (b) 14 OF THIS SECTION], the department may not suspend or revoke a [MONEY 15 SERVICES] license, place a [MONEY SERVICES] licensee in receivership, issue an 16 order to cease and desist, suspend or revoke the designation of an authorized delegate, 17 or assess a civil penalty without notice and an opportunity to be heard. The department 18 shall also hold a hearing when requested to hold a hearing by an applicant whose 19 application for a [MONEY SERVICES] license is denied. 20 * Sec. 43. AS 06.55.802 is amended to read: 21 Sec. 06.55.802. Exemptions [EXCLUSIONS]. This chapter does not apply to 22 (1) the United States or a department, [AN] agency, [OR AN] 23 instrumentality, or agent of the United States; 24 (2) money transmission by the United States Postal Service or by an 25 agent [A CONTRACTOR ON BEHALF] of the United States Postal Service; 26 (3) a state, a municipality, a county, or another governmental agency 27 or governmental subdivision of a state, or its agent; 28 (4) a federally insured depository financial institution, bank, a bank 29 holding company, an office of an international banking corporation, a branch of a 30 foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 31 Company Act), or a corporation organized under 12 U.S.C. 611 - 633 (Edge Act)
01 under the laws of a state or the United States, if it does not issue, sell, or provide 02 payment instruments or stored value through an authorized delegate who is not a bank, 03 a bank holding company, an office of an international banking corporation, a branch of 04 a foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 05 Company Act), or a corporation organized under 12 U.S.C. 611 - 633 (Edge Act) 06 under the laws of a state or the United States; an institution regulated by the Farm 07 Credit Association; or a subsidiary or affiliate of a financial institution, if the 08 subsidiary or affiliate is owned and controlled by a depository institution and 09 regulated by a federal banking agency; in this paragraph, "federal banking 10 agency" means the Board of Governors of the Federal Reserve System, the 11 Comptroller of the Currency, the director of the Office of Thrift Supervision, the 12 National Credit Union Administration, and the Federal Deposit Insurance 13 Corporation; 14 (5) electronic funds transfer of governmental benefits for a federal, 15 state, or municipal agency or a state political subdivision by a contractor on behalf of 16 (A) the United States or a department, an agency, or an 17 instrumentality of the United States; or 18 (B) a state, or a department, an agency, or an instrumentality of 19 a state; 20 (6) a board of trade or a person that [WHO], in the ordinary course of 21 business, provides clearance and settlement services for a board of trade, to the extent 22 of the operation of the person for a board of trade; in this paragraph, "board of trade" 23 means a board of trade designated as a contract market under 7 U.S.C. 1 - 27f 24 (Commodity Exchange Act); 25 (7) a registered futures commission merchant under the federal 26 commodities laws, to the extent of the merchant's operation as a registered futures 27 commission merchant under the federal commodities laws; 28 (8) a person that [WHO] provides clearance or settlement services 29 under a registration as a clearing agency or an exemption from the registration granted 30 under the federal securities laws, to the extent of the person's operation as a provider 31 of clearance or settlement services under a registration as a clearing agency or an
01 exemption from the registration granted under the federal securities laws; 02 (9) an operator of a payment system to the extent that the operator 03 provides processing, clearing, or settlement services, between or among persons 04 exempted [EXCLUDED] by this section, in connection with wire transfers, credit 05 card transactions, debit card transactions, stored-value transactions, automated 06 clearinghouse transfers, or similar funds transfers; [OR] 07 (10) a person registered as a securities broker-dealer under federal or 08 state securities laws, to the extent of the person's operation as a securities broker- 09 dealer; 10 (11) an individual employed by a licensee, an authorized delegate, 11 or a person exempt from the licensing requirements of this chapter when the 12 individual is acting within the scope of employment and under the supervision of 13 the licensee, authorized delegate, or exempt person as an employee and not as an 14 independent contractor; 15 (12) a person expressly appointed as a third-party service provider 16 to or agent of an entity exempt under (4) of this section, solely to the extent that 17 (A) the service provider or agent is engaging in money 18 transmission on behalf of and in accordance with a written agreement 19 with the exempt entity that sets out the specific functions that the service 20 provider or agent is to perform; and 21 (B) the exempt entity assumes all risk of loss and all legal 22 responsibility for satisfying the outstanding money transmission 23 obligations owed to purchasers and holders of the outstanding money 24 transmission obligations upon receipt of the purchaser's or holder's 25 money or monetary value by the service provider or agent; 26 (13) a person appointed as an agent of a payee to collect and 27 process a payment from a payor to the payee for goods or services, other than 28 money transmission services, provided to the payor by the payee, if 29 (A) the payee and the agent have a written agreement 30 directing the agent to collect and process payments from payors on the 31 payee's behalf;
01 (B) the payee holds the agent out to the public as accepting 02 payments for goods or services on the payee's behalf; and 03 (C) payment for the goods and services is treated as 04 received by the payee upon receipt by the agent, the payor's obligation is 05 extinguished, and there is no risk of loss to the payor if the agent fails to 06 remit the funds to the payee; 07 (14) a person that acts as an intermediary by processing payments 08 between an entity that has directly incurred an outstanding money transmission 09 obligation to a sender and the sender's designated recipient if the entity 10 (A) is a licensee or exempt from the licensing requirements 11 of this chapter; 12 (B) provides a receipt, electronic record, or other written 13 confirmation to the sender identifying the entity as the provider of money 14 transmission in the transaction; and 15 (C) bears sole responsibility to satisfy the outstanding 16 money transmission obligation to the sender, including the obligation to 17 make the sender whole in connection with any failure to transmit the 18 funds to the sender's designated recipient; 19 (15) an entity that is an insurance company, title insurance 20 company, or escrow agent, to the extent that the entity is lawfully authorized to 21 conduct business in this state as an insurance company, title insurance company, 22 or escrow agent and to the extent that the entity engages in money transmission 23 as an ancillary service when conducting insurance, title insurance, or escrow 24 activity; 25 (16) an attorney, to the extent that the attorney is lawfully 26 authorized to practice law in this state and engages in money transmission as an 27 ancillary service to the practice of law; 28 (17) a person exempt by regulation or order if the department 29 finds that the exemption is in the public interest and that the regulation of the 30 person is not necessary for the purposes of this chapter; or 31 (18) a person providing payroll processing services; in this
01 paragraph, 02 (A) "payroll processing services" means receiving money 03 for transmission under a contract with a person to deliver wages or 04 salaries, make payment of payroll taxes to state and federal agencies, 05 make payments relating to employee benefit plans, or make distributions 06 of other authorized deductions from wages or salaries; 07 (B) "receiving money for transmission" means receiving 08 money or monetary value in the United States for transmission within or 09 outside the United States by electronic or other means [UNDER FEDERAL 10 OR STATE SECURITIES LAWS]. 11 * Sec. 44. AS 06.55 is amended by adding a new section to read: 12 Sec. 06.55.803. Authority to require demonstration of exemption. The 13 department may require a person who claims to be exempt from licensing under 14 AS 06.55.802 to provide information and documentation to the department 15 demonstrating the claimed exemption. 16 * Sec. 45. AS 06.55.810 is amended to read: 17 Sec. 06.55.810. Notices required. (a) A [MONEY SERVICES] licensee shall 18 provide customers with notice of how to file a complaint. A licensee shall provide 19 notice [DISPLAY A SIGN] at each location where the [MONEY SERVICES] 20 licensee 21 (1) provides money transmission [SERVICES] under this chapter; 22 and 23 (2) has not designated an authorized delegate to provide money 24 transmission [SERVICES] on behalf of the [MONEY SERVICES] licensee at the 25 location. 26 (b) An authorized delegate shall provide customers with notice of how to 27 file a complaint. An authorized delegate shall provide notice [DISPLAY A SIGN] 28 at each location where the authorized delegate provides money transmission 29 [SERVICES] under this chapter. 30 (c) The notice [SIGN] required by (a) or (b) of this section must be in a 31 format and contain information required by the department [SHALL BE
01 DISPLAYED AT ALL TIMES IN FULL VIEW OF PERSONS VISITING THE 02 LOCATION AND SHALL GIVE THE DEPARTMENT'S ADDRESS AND THE 03 DEPARTMENT'S TELEPHONE NUMBER FOR RECEIVING CALLS 04 REGARDING COMPLAINTS AND OTHER CONCERNS ABOUT MONEY 05 SERVICES LICENSEES, AUTHORIZED DELEGATES, AND THE MONEY 06 SERVICES PROVIDED BY MONEY SERVICES LICENSEES AND 07 AUTHORIZED DELEGATES]. 08 * Sec. 46. AS 06.55.810 is amended by adding a new subsection to read: 09 (d) A licensee or authorized delegate shall include on a receipt or disclose on 10 the licensee's Internet website or mobile application the name and telephone number 11 of the department and a statement that the licensee's customers can contact the 12 department with questions or complaints about the licensee's money transmission. In 13 this subsection, "mobile application" means a software application developed 14 specifically for use on small, wireless computing devices. 15 * Sec. 47. AS 06.55 is amended by adding a new section to read: 16 Sec. 06.55.815. In-state determination. For a transaction requested 17 electronically or by telephone, the licensee or authorized delegate may determine if the 18 person requesting the transaction is in this state by relying on other information 19 provided by the person regarding the location of the person's residential address or 20 principal place of business or other physical address, and any records associated with 21 the person that the licensee or authorized delegate may have that indicate the location, 22 including an address associated with an account. 23 * Sec. 48. AS 06.55.830 is repealed and reenacted to read: 24 Sec. 06.55.830. Receipt. (a) Except as provided in (c) of this section, a 25 licensee or licensee's authorized delegate shall provide the sender a receipt for money 26 received for transmission. The receipt must be in English and in any other language 27 principally used by the licensee or authorized delegate to advertise, solicit, or 28 negotiate, either orally or in writing, for a transaction conducted. The receipt must 29 contain the following information, as applicable: 30 (1) the name of the sender; 31 (2) the name of the designated recipient;
01 (3) the date of the transaction; 02 (4) the unique transaction or identification number; 03 (5) the name of the licensee, unique registry identifier, the licensee's 04 business address, and the licensee's customer service telephone number; 05 (6) the dollar amount of the transaction; 06 (7) any fee charged by the licensee to the sender for the transaction; 07 (8) any taxes collected by the licensee from the sender for the 08 transaction; and 09 (9) the exchange rate, if any, used by the provider for the transaction. 10 (b) For a transaction conducted in person, the receipt may be provided 11 electronically if the sender requests or agrees to receive an electronic receipt. For a 12 transaction conducted electronically or by telephone, a receipt may be provided 13 electronically. All electronic receipts must be provided in a retainable form. 14 (c) This section does not apply to 15 (1) money received for transmission subject to 12 C.F.R. Part 1005, 16 Subpart B; 17 (2) money received for transmission that is not primarily for personal, 18 family, or household purposes; 19 (3) money received for transmission in accordance with a written 20 agreement between the licensee and payee to process payments for goods or services 21 provided by the payee; 22 (4) an individual consumer transferring funds to reload stored value to 23 the consumer's account through a point of sale transaction; or 24 (5) stored value transactions exempted by the department by regulation 25 or order. 26 (d) In this section, "receipt" means a paper receipt, electronic record, or other 27 written confirmation. 28 * Sec. 49. AS 06.55 is amended by adding a new section to read: 29 Sec. 06.55.835. Timely transmission. (a) A licensee shall forward all money 30 received for transmission in accordance with the terms of the agreement between the 31 licensee and the sender unless the licensee has a reasonable belief that the sender may
01 be a victim of fraud or that a crime or violation of law, rule, or regulation has 02 occurred, is occurring, or may occur. 03 (b) If a licensee fails to forward money received for transmission in 04 accordance with this section, the licensee must respond to inquiries by the sender with 05 the reason for the failure unless providing a response would violate a state or federal 06 law, rule, or regulation. 07 * Sec. 50. AS 06.55.840 is repealed and reenacted to read: 08 Sec. 06.55.840. Refunds. (a) Except as provided in (b) of this section, a 09 licensee shall refund to the sender, within 10 days after receipt of the sender's written 10 request for a refund, all money received for transmission unless 11 (1) the money has been forwarded within 10 days after the date on 12 which the money was received for transmission; 13 (2) within 10 days after the date on which the money was received for 14 transmission, instructions have been given committing an equivalent amount of money 15 to the person designated by the sender; 16 (3) the agreement between the licensee and the sender instructs the 17 licensee to forward the money at a time that is beyond 10 days after the date on which 18 the money was received for transmission; if money has not yet been forwarded in 19 accordance with the terms of the agreement between the licensee and the sender, the 20 licensee shall issue a refund in accordance with this section; 21 (4) the refund is requested for a transaction that the licensee has not 22 completed based on a reasonable belief that a crime or violation of law, rule, or 23 regulation has occurred, is occurring, or may occur; or 24 (5) the refund request does not 25 (A) identify the sender's name and 26 (i) address; or 27 (ii) telephone number; or 28 (B) identify the particular transaction to be refunded in the 29 event the sender has multiple transactions outstanding. 30 (b) This section does not apply to 31 (1) money received for transmission subject to 12 C.F.R. Part 1005,
01 Subpart B; or 02 (2) money received for transmission in accordance with a written 03 agreement between the licensee and payee to process payments for goods or services 04 provided by the payee. 05 * Sec. 51. AS 06.55.850(b) is amended to read: 06 (b) The department shall establish fee levels under (a) of this section so that 07 the [TOTAL AMOUNT OF] fees collected for [BOTH MONEY TRANSMISSION] 08 licenses are sufficient to cover the cost of administration of [AND CURRENCY 09 EXCHANGE LICENSES UNDER] this chapter. The fees may include 10 (1) an annual renewal fee consistent with (f) of this section; 11 (2) a late fee for the late payment of a fee established by the 12 department; 13 (3) an hourly investigation fee to cover the costs of an investigation 14 of the books and records of a licensee or other person subject to this chapter; 15 (4) a nonrefundable application fee to cover the costs of processing 16 license applications; 17 (5) an initial license fee to cover the period from the day the 18 application is approved to the end of the calendar year in which the license is 19 initially granted; and 20 (6) a transaction fee to cover the administrative cost associated 21 with processing changes in control, changes of address, and other administrative 22 changes [APPROXIMATELY EQUALS THE DEPARTMENT'S ACTUAL TOTAL 23 REGULATORY COSTS FOR BOTH MONEY TRANSMISSION LICENSES AND 24 CURRENCY EXCHANGE LICENSES. THE DEPARTMENT SHALL SET THE 25 FEE LEVELS SO THAT THE FEE LEVELS FOR BOTH MONEY 26 TRANSMISSION LICENSES AND CURRENCY EXCHANGE LICENSES ARE 27 THE SAME]. 28 * Sec. 52. AS 06.55.850(c) is amended to read: 29 (c) The department shall annually review each fee level to determine whether 30 the fees collected [REGULATORY COSTS] are sufficient to cover the cost of 31 administration of this chapter [APPROXIMATELY EQUAL TO FEE
01 COLLECTIONS]. If the review indicates that fee collections [AND REGULATORY 02 COSTS] are not sufficient to cover the cost of administration of this chapter 03 [APPROXIMATELY EQUAL], the department shall calculate fee adjustments and 04 adopt regulations under (a) of this section to implement the adjustments. 05 * Sec. 53. AS 06.55.850 is amended by adding a new subsection to read: 06 (f) An annual renewal fee must be based on a licensee's total volume of money 07 transmission in this state, calculated in dollars or dollar equivalents. An annual 08 renewal fee shall be determined by the department by regulation or order. 09 * Sec. 54. AS 06.55.990(1) is amended to read: 10 (1) "authorized delegate" means a person that a [MONEY 11 SERVICES] licensee designates to engage in [PROVIDE] money transmission 12 [SERVICES] on behalf of the [MONEY SERVICES] licensee; 13 * Sec. 55. AS 06.55.990(3) is amended to read: 14 (3) "control" means 15 (A) [THE OWNERSHIP OF, OR] the power to vote, directly 16 or indirectly, at least 25 percent of the [A CLASS OF] outstanding voting 17 shares [SECURITIES] or voting interests of a [MONEY SERVICES] licensee 18 or of a person that has the power to vote, directly or indirectly, at least 25 19 percent of the voting securities or voting interests [IN CONTROL] of a 20 [MONEY SERVICES] licensee, unless the person with the power to vote is 21 a passive investor as described under AS 06.55.404(q); 22 (B) the power to elect or appoint a majority of key 23 individuals, executive officers, managers, directors, trustees, or other persons 24 exercising managerial authority of a [MONEY SERVICES] licensee or person 25 in control of a [MONEY SERVICES] licensee; or 26 (C) the power to exercise, directly or indirectly, a controlling 27 influence over the management or policies of a [MONEY SERVICES] 28 licensee or person in control of a [MONEY SERVICES] licensee; 29 * Sec. 56. AS 06.55.990(15) is amended to read: 30 (15) "money transmission" 31 (A) means
01 (i) selling or issuing payment instruments or stored 02 value to a person located in this state; 03 (ii) [, OR] receiving money or monetary value for 04 transmission from a person located in this state; 05 (iii) engaging in virtual currency exchange; or 06 (iv) engaging in virtual currency business activity; 07 (B) [, BUT] does not mean [INCLUDE] the provision solely of 08 [DELIVERY,] online services, telecommunications services, or network 09 access; 10 * Sec. 57. AS 06.55.990(19) is amended to read: 11 (19) "payment instrument" means a written or electronic check, [A] 12 draft, [A] money order, [A] traveler's check, or other written or electronic 13 [ANOTHER] instrument for the transmission or payment of money or monetary value, 14 whether or not negotiable, but does not mean stored value, [INCLUDE] a credit card 15 voucher, a letter of credit, [OR] an instrument that is redeemable by the issuer in 16 goods or services, or other instrument not sold to the public but issued and 17 distributed as part of a loyalty, rewards, or promotional program; 18 * Sec. 58. AS 06.55.990(20) is amended to read: 19 (20) "person" means an individual, general partnership, limited 20 partnership, [A] corporation, [A BUSINESS] trust, [AN ESTATE, A TRUST, A 21 PARTNERSHIP, A] limited liability company, [AN] association, [A] joint stock 22 corporation [VENTURE, A GOVERNMENT, A GOVERNMENTAL 23 SUBDIVISION, AN AGENCY, OR AN INSTRUMENTALITY, A PUBLIC 24 CORPORATION], or any other legal or corporate [COMMERCIAL] entity 25 identified by the department; 26 * Sec. 59. AS 06.55.990(22) is amended to read: 27 (22) "state" means a state of the United States, the District of 28 Columbia, Puerto Rico, the United States Virgin Islands, a United States military 29 installation that is located in a foreign country, or a territory or insular possession 30 subject to the jurisdiction of the United States; 31 * Sec. 60. AS 06.55.990(23) is amended to read:
01 (23) "stored value" 02 (A) means 03 (i) monetary value representing a claim against the 04 issuer that is evidenced by an electronic or digital record and that is 05 intended and accepted as a means of redemption for money or 06 monetary value, or payment for goods or services; or 07 (ii) prepaid access as defined in 31 C.F.R. 1010.100; 08 (B) does not mean a payment instrument, a closed-loop 09 stored value, or monetary value not sold to the public but issued and 10 distributed as part of a loyalty, rewards, or promotional program; 11 * Sec. 61. AS 06.55.990(24) is amended to read: 12 (24) "unsafe or unsound practice" means a practice or conduct by a 13 [MONEY TRANSMISSION] licensee or an authorized delegate that [OF THE 14 MONEY TRANSMISSION LICENSEE IF THE PRACTICE] creates the likelihood 15 of material loss, insolvency, or dissipation of the [MONEY TRANSMISSION] 16 licensee's assets, or otherwise materially prejudices the interests of the [MONEY 17 TRANSMISSION] licensee's customers. 18 * Sec. 62. AS 06.55.990 is amended by adding new paragraphs to read: 19 (25) "accredited state" means a state agency that is accredited by the 20 Conference of State Bank Supervisors and Money Transmitter Regulators Association 21 for money transmission licensing and supervision; 22 (26) "acting in concert" means persons knowingly acting together with 23 a common goal of jointly acquiring control of a licensee whether or not under an 24 express agreement; 25 (27) "average daily money transmission liability" means the amount of 26 the licensee's outstanding money transmission obligations in this state at the end of 27 each day in a given period, added together and divided by the total number of days in 28 the given period; in this paragraph, "given period" means a calendar year quarter 29 ending March 31, June 30, September 30, or December 31; 30 (28) "Bank Secrecy Act" means 31 U.S.C. 5311 - 5336 and its 31 implementing regulations;
01 (29) "closed-loop stored value" means stored value that is redeemable 02 by the issuer only for goods or services provided by the issuer or its affiliate, or 03 franchisees of the issuer or its affiliate, except to the extent required by applicable law 04 to be redeemable in cash for its cash value; 05 (30) "control of virtual currency," when used in reference to a 06 transaction or relationship involving virtual currency, means the power to execute 07 unilaterally or prevent indefinitely a virtual currency transaction; 08 (31) "dollar equivalent" means the equivalent value of a particular 09 virtual currency in United States dollars shown on a virtual currency exchange based 10 in the United States for a particular date or period specified in this chapter; in this 11 paragraph, "virtual currency exchange" means an organization that provides a market 12 for the exchange of virtual currency; 13 (32) "eligible rating" means a short-term or long-term credit rating 14 determined by the department that is based on any of the three highest rating 15 categories provided by an eligible rating service; 16 (33) "eligible rating service" means a nationally recognized statistical 17 rating organization, as determined by the United States Securities and Exchange 18 Commission, and any other nationally recognized statistical rating organization 19 designated by the department by regulation; 20 (34) "federally insured depository financial institution" means a bank, 21 credit union, savings and loan association, trust company, savings association, savings 22 bank, industrial bank, or industrial loan company organized under the laws of the 23 United States or any state of the United States that has federally insured deposits; 24 (35) "in this state" means at a physical location within this state for a 25 transaction requested in person; 26 (36) "individual" means a natural person; 27 (37) "key individual" means an individual ultimately responsible for 28 establishing or directing policies and procedures of the licensee, including an 29 executive officer, manager, director, or trustee; 30 (38) "license" means a license issued under AS 06.55.105; 31 (39) "licensee" means a person licensed under AS 06.55.105;
01 (40) "money received for transmission" means money or monetary 02 value received in the United States for transmission within or outside the United States 03 by electronic or other means; 04 (41) "multistate licensing process" means an agreement entered into by 05 and among state regulators relating to coordinated processing of applications for 06 licenses, applications for the acquisition of control of a licensee, control 07 determinations, or notice and information requirements for a change of key 08 individuals; 09 (42) "outstanding money transmission obligation" means 10 (A) a payment instrument or stored value issued or sold by a 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; in this 19 paragraph, "in the United States" means, to the extent applicable, a person in a 20 state, territory, or possession of the United States, the District of Columbia, the 21 Commonwealth of Puerto Rico, or a United States military installation that is 22 located in a foreign country; 23 (43) "registry" means the Nationwide Multistate Licensing System and 24 Registry, a licensing system owned and operated by the State Regulatory Registry, 25 LLC, or any successor or affiliated entity, for the licensing and registration of persons 26 in the mortgage and other financial services industries; 27 (44) "tangible net worth" means the aggregate assets of a licensee 28 excluding all intangible assets, less liabilities, as determined in accordance with 29 generally accepted accounting principles; 30 (45) "virtual currency" 31 (A) means a digital representation of value that
01 (i) is used as a medium of exchange, unit of account, or 02 store of value; and 03 (ii) is not money, whether or not denominated in 04 money; 05 (B) does not mean 06 (i) a transaction in which a merchant grants, as part of 07 an affinity or rewards program, value that cannot be taken from or 08 exchanged with the merchant for money, bank credit, or virtual 09 currency; or 10 (ii) a digital representation of value issued by or on 11 behalf of a publisher and used solely within an online game, game 12 platform, or family of games sold by the same publisher or offered on 13 the same game platform; 14 (46) "virtual currency business activity" means 15 (A) exchanging, transferring, or storing virtual currency or 16 engaging in virtual currency administration, whether directly or through an 17 agreement with a virtual currency control services vendor; in this 18 subparagraph, "virtual currency administration" means issuing virtual currency 19 with the authority to redeem the currency for money, bank credit, or other 20 virtual currency; 21 (B) holding electronic precious metals or electronic certificates 22 representing interests in precious metals on behalf of another person or issuing 23 shares or electronic certificates representing interests in precious metals; or 24 (C) exchanging one or more digital representations of value 25 used within one or more online games, game platforms, or family of games for 26 (i) virtual currency offered by or on behalf of the same 27 publisher from which the original digital representation of value was 28 received; or 29 (ii) money or bank credit outside the online game, game 30 platform, or family of games offered by or on behalf of the same 31 publisher from which the original digital representation of value was
01 received; 02 (47) "virtual currency control services vendor" means a person that has 03 control of virtual currency solely under an agreement with a person that, on behalf of 04 another person, assumes control of virtual currency; 05 (48) "virtual currency exchange" means to 06 (A) assume control of virtual currency from or on behalf of a 07 person, at least momentarily; or 08 (B) sell, trade, or convert 09 (i) virtual currency for money, bank credit, or one or 10 more forms of virtual currency or money; or 11 (ii) bank credit for one or more forms of virtual 12 currency; 13 (49) "virtual currency transfer" means to assume control of virtual 14 currency from or on behalf of a person and to 15 (A) credit the virtual currency to the account of another person; 16 (B) move the virtual currency from one account of a person to 17 another account of the same person; or 18 (C) relinquish control of virtual currency to another person. 19 * Sec. 63. AS 06.55.995 is amended to read: 20 Sec. 06.55.995. Short title. This chapter may be cited as the Alaska Uniform 21 Money Transmission Modernization [SERVICES] Act. 22 * Sec. 64. AS 12.62.400(b) is amended to read: 23 (b) Notwithstanding (a) of this section, an applicant for a license under 24 AS 06.60 and an applicant for a license, to acquire control of a license, or to act as 25 a key individual under AS 06.55 may submit the applicant's fingerprints to the 26 Nationwide Mortgage Licensing System and Registry. In this subsection, "Nationwide 27 Mortgage Licensing System and Registry" has the meaning given in 12 U.S.C. 5102. 28 * Sec. 65. AS 06.55.103, 06.55.104, 06.55.107, 06.55.201, 06.55.202, 06.55.203, 06.55.204, 29 06.55.402, 06.55.406(b), 06.55.502(c), 06.55.702(b), 06.55.820, 06.55.850(e), 06.55.890, 30 06.55.990(5), 06.55.990(6), 06.55.990(8), 06.55.990(9), 06.55.990(12), 06.55.990(13), 31 06.55.990(14), 06.55.990(16), 06.55.990(17), and 06.55.990(18) are repealed.
01 * Sec. 66. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 TRANSITION. Contracts, rights, liabilities, and obligations created by or under a law 04 repealed or amended by this Act, and in effect on the day before the effective date of the 05 repeal or amendment, remain in effect notwithstanding this Act taking effect. 06 * Sec. 67. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 TRANSITION: CURRENT MONEY SERVICES LICENSES. A person that has a 09 valid money services license or approval on December 31, 2023, may continue to operate 10 under that license or approval until the licensee renews the license under AS 06.55.106, as 11 repealed and reenacted by sec. 5 of this Act, or through July 1, 2025, whichever is later. In 12 this section, 13 (1) "approval" means approval under AS 06.55.103, as that section 14 read on December 31, 2023; 15 (2) "money services license" has the meaning given in AS 06.55.990, 16 as that section read on December 31, 2023. 17 * Sec. 68. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 20 Economic Development may adopt regulations to implement this Act. The regulations take 21 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 22 law implemented by the regulations. 23 * Sec. 69. Section 68 of this Act takes effect immediately under AS 01.10.070(c). 24 * Sec. 70. Except as provided in sec. 69 of this Act, this Act takes effect January 1, 2024.