CSSB 84(FIN): "An Act relating to the business of money transmission; relating to licenses for money transmission, licensure requirements, and registration through a nationwide multistate licensing system; relating to the use of virtual currency for money transmission; relating to authorized delegates of a licensee; relating to acquisition of control of a license; relating to record retention and reporting requirements; authorizing the Department of Commerce, Community, and Economic Development to cooperate with other states in the regulation of money transmission; relating to permissible investments; relating to violations and enforcement of money transmission laws; relating to exemptions to money transmission licensure requirements; relating to payroll processing services; relating to currency exchange licenses; amending Rules 79 and 82, Alaska Rules of Civil Procedure; and providing for an effective date."
00 CS FOR SENATE BILL NO. 84(FIN) 01 "An Act relating to the business of money transmission; relating to licenses for money 02 transmission, licensure requirements, and registration through a nationwide multistate 03 licensing system; relating to the use of virtual currency for money transmission; relating 04 to authorized delegates of a licensee; relating to acquisition of control of a license; 05 relating to record retention and reporting requirements; authorizing the Department of 06 Commerce, Community, and Economic Development to cooperate with other states in 07 the regulation of money transmission; relating to permissible investments; relating to 08 violations and enforcement of money transmission laws; relating to exemptions to 09 money transmission licensure requirements; relating to payroll processing services; 10 relating to currency exchange licenses; amending Rules 79 and 82, Alaska Rules of Civil 11 Procedure; and providing for an effective date." 12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
01 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 02 to read: 03 PURPOSE. The purpose of this Act is to replace existing state money transmission 04 laws to modernize licensure requirements, to add model language for the burgeoning virtual 05 currency industry, to allow the Department of Commerce, Community, and Economic 06 Development to coordinate with other states in all areas of regulation, licensing, and 07 supervision of money transmission, to standardize the types of activities that are subject to 08 licensing, and to modernize safety and soundness requirements for money transmission. 09 * Sec. 2. AS 06.55.101 is amended to read: 10 Sec. 06.55.101. License required. (a) A person may not engage in the 11 business of money transmission or advertise, solicit, or hold itself [THE PERSON] out 12 as providing money transmission unless the person 13 (1) holds a [MONEY TRANSMISSION] license; [OR] 14 (2) is an authorized delegate of a licensee and is acting within the 15 scope of that authority under a written contract with the licensee; or 16 (3) is exempt under AS 06.55.802 and does not engage in money 17 transmission outside the scope of that exemption [PERSON WHO HOLDS A 18 MONEY TRANSMISSION LICENSE]. 19 (b) A [MONEY TRANSMISSION] license is not transferable or assignable. 20 * Sec. 3. AS 06.55.102 is repealed and reenacted to read: 21 Sec. 06.55.102. Application for license. (a) An applicant for a license shall 22 submit 23 (1) an application in a form and in a medium prescribed by the 24 department; the application must contain information on the applicant's organization 25 and operations, financial responsibility, background, competence level, experience, 26 and activities; 27 (2) any other information reasonably required by the department or 28 registry with respect to the applicant; 29 (3) the application fee established by the department; 30 (4) the license fee established by the department; and 31 (5) a surety bond or other security as required by AS 06.55.505.
01 (b) The department may waive a requirement of (a)(1) - (4) of this section or 02 permit an applicant to submit other information in lieu of the required information. 03 * Sec. 4. AS 06.55.105 is repealed and reenacted to read: 04 Sec. 06.55.105. Issuance of license. (a) When an application for an initial 05 license under this chapter appears to include all required information and address all 06 matters required by the department, the application is considered complete, and the 07 department shall notify the applicant in a record of the date on which the application 08 was determined to be complete. The department shall approve or deny the application 09 within 120 days after the date the application was determined to be complete. If the 10 application is not approved or denied within 120 days after the completion date, 11 (1) the application is approved; and 12 (2) the license takes effect on the first business day after expiration of 13 the 120-day period. 14 (b) The department may for good cause extend the application period. 15 (c) A determination by the department that an application is complete and is 16 accepted for processing means only that the application, on its face, appears to include 17 all required items, including a criminal background check, and address all required 18 matters. The department's determination is not an assessment of the substance of the 19 application or of the sufficiency of the information provided. 20 (d) When an application is filed and considered to be complete under (c) of 21 this section, the department shall investigate the applicant's financial condition, 22 financial responsibility, financial experience, business experience, competence level, 23 character, and general fitness. The department may conduct an on-site investigation of 24 the applicant, and the applicant shall pay the reasonable cost of the on-site 25 investigation. The department shall issue a license to an applicant if the department 26 finds that 27 (1) the applicant has complied with AS 06.55.102, 06.55.109, and 28 applicable regulations; and 29 (2) the financial condition, financial responsibility, financial 30 experience, financial business experience, competence level, character, and general 31 fitness of the applicant, and the experience, competence level, character, and general
01 fitness of the key individuals and persons in control of the applicant indicate that it is 02 in the interest of the public to allow the applicant to engage in money transmission. 03 (e) If an applicant is subject to a multistate licensing process, the department 04 may 05 (1) for the purposes of (d) of this section, accept the investigation 06 results of a state that is the lead investigator in the multistate licensing process; or 07 (2) investigate the applicant in accordance with (d) of this section and 08 the time frames established by agreement through the multistate licensing process, if 09 those time frames comply with the application approval period set out in (a) of this 10 section. 11 (f) The department shall issue a formal written notice of a denial of a license 12 application within 30 days after the decision to deny the application. The department 13 shall set out in the notice of denial the specific reasons for the denial. An applicant 14 may appeal a denial within 30 days after receiving the written notice of the denial and 15 may request a hearing. 16 (g) The initial license term begins on the day the application is approved. The 17 license expires on December 31 of the year in which the license is issued, unless 18 (1) the initial license is issued between November 1 and December 31, 19 in which case the initial license term runs through December 31 of the following year; 20 or 21 (2) the license is revoked, suspended, surrendered, or its term 22 otherwise adjusted in accordance with regulations adopted by the department. 23 (h) An applicant for a license shall demonstrate that it meets or will meet the 24 requirements of this chapter. 25 * Sec. 5. AS 06.55.106 is repealed and reenacted to read: 26 Sec. 06.55.106. Renewal of license. (a) A licensee shall renew a license 27 annually. A licensee shall pay an annual renewal fee by the renewal filing deadline 28 established by the department. The renewal term is for a period of one year and begins 29 on January 1 of each year after the initial license term and expires on December 31 of 30 the year the renewal term begins. 31 (b) A licensee shall submit a renewal report with the renewal fee in a form and
01 in a medium prescribed by the department. The renewal report must describe each 02 material change in information submitted by the licensee in the licensee's initial 03 license application that the licensee has not reported to the department. 04 (c) The department may for good cause grant an extension of the renewal 05 filing deadline. 06 (d) The department may use the registry to process license renewals if the use 07 is consistent with this section. 08 * Sec. 6. AS 06.55 is amended by adding new sections to article 1 to read: 09 Sec. 06.55.108. Maintenance of license. (a) A licensee shall at all times meet 10 the requirements of this chapter. 11 (b) If a licensee does not continue to meet the qualifications or satisfy the 12 requirements that apply to an applicant for a new license, the department may suspend 13 or revoke the licensee's license in accordance with this chapter or other applicable law. 14 Sec. 06.55.109. Information requirements for certain individuals. (a) An 15 individual in control of a licensee or applicant, an individual who seeks to acquire 16 control of a licensee, and each key individual shall furnish to the department through 17 the registry the following items: 18 (1) the individual's fingerprints for submission to the Federal Bureau 19 of Investigation to obtain a national criminal history record check unless the individual 20 currently resides outside the United States and has resided outside the United States 21 for the past 10 years; and 22 (2) personal history and experience in a form and in a medium 23 prescribed by the department, including 24 (A) an independent credit report from a consumer reporting 25 agency, unless the individual does not have a social security number; 26 (B) information related to a criminal conviction or pending 27 charges; and 28 (C) information related to any regulatory or administrative 29 action and any civil litigation involving claims of fraud, misrepresentation, 30 conversion, mismanagement of funds, breach of fiduciary duty, or breach of 31 contract.
01 (b) If the individual has resided outside the United States at any time in the 10 02 years before the date of furnishing the information under (a) of this section, the 03 individual shall also provide an investigative background report prepared by an 04 independent search firm. The independent search firm may not be affiliated with or 05 have an interest in the individual the firm is researching. At a minimum, the 06 investigative background report must 07 (1) demonstrate that the independent search firm has sufficient 08 knowledge, resources, and employs accepted and reasonable methodologies to conduct 09 the research of the background report; 10 (2) be written in English and contain the following: 11 (A) if available in the individual's current jurisdiction of 12 residency, a comprehensive credit report, or equivalent information obtained or 13 generated by the independent search firm to accomplish a comprehensive 14 credit report, including a search of the court data in the countries, provinces, 15 states, cities, towns, and contiguous areas where the individual has resided and 16 worked; 17 (B) criminal records information for the previous 10 years, 18 including felonies, misdemeanors, or similar convictions for violations of law 19 in the countries, provinces, states, cities, towns, and contiguous areas where 20 the individual has resided and worked; 21 (C) employment history; 22 (D) media history, including an electronic search of national 23 and local publications, wire services, and business applications; and 24 (E) regulatory history related to financial services, including 25 money transmission, securities, banking, insurance, and mortgage-related 26 industries. 27 Sec. 06.55.110. Consistent state licensing. (a) To establish consistent 28 licensing between this state and other states, the department may 29 (1) implement all licensing provisions of this chapter in a manner that 30 is consistent with other states that have adopted multistate licensing processes; and 31 (2) participate in nationwide protocols for licensing cooperation and
01 coordination among state regulators if the nationwide protocols for licensing 02 cooperation and coordination are consistent with this chapter. 03 (b) To fulfill the purposes of this chapter, the department may establish 04 relationships or contracts with the registry or other entities designated by the registry 05 to enable the department to 06 (1) collect and maintain records; 07 (2) coordinate multistate licensing processes and supervision 08 processes; 09 (3) process fees; and 10 (4) facilitate communication between the department and licensees or 11 other persons subject to this chapter. 12 (c) The department may use the registry for all aspects of licensing in 13 accordance with this chapter, including license applications, applications for 14 acquisitions of control, surety bonds, reporting, criminal background checks, credit 15 checks, fee processing, and examinations. 16 * Sec. 7. AS 06.55 is amended by adding new sections to read: 17 Article 1A. Virtual Currency Business Activity. 18 Sec. 06.55.150. Requirements for engaging in virtual currency business 19 activity. (a) A person may not engage in virtual currency business activity or hold 20 itself out as being able to engage in virtual currency business activity unless the person 21 is 22 (1) licensed under this chapter; or 23 (2) exempt from licensing under AS 06.55.802. 24 (b) A person that is licensed to engage in virtual currency business activity is 25 engaged in the business of money transmission and is subject to the requirements of 26 this chapter. 27 Sec. 06.55.155. Required disclosures. (a) A licensee that engages in virtual 28 currency business activity shall provide to a person that uses the licensee's products or 29 service the disclosures required by (b) of this section and any additional disclosures 30 the department determines to be reasonably necessary for the protection of persons. 31 The department shall determine by regulation or order the time and form required for
01 disclosure. A disclosure required by this section must be made separately from any 02 other information provided by the licensee and in a clear and conspicuous manner in a 03 record the person may keep. A licensee may propose for the department's approval 04 alternate disclosures as more appropriate for its virtual currency business activity. 05 (b) Before establishing a relationship with a person, a licensee shall disclose, 06 to the extent applicable to the virtual currency business activity the licensee will 07 undertake with the person, 08 (1) a schedule of fees and charges the licensee may assess, the manner 09 by which fees and charges will be calculated if not set in advance and disclosed, and 10 the timing of the fees and charges; 11 (2) whether the product or service provided by the licensee is covered 12 by 13 (A) a form of insurance or is otherwise guaranteed against loss 14 by an agency of the United States 15 (i) up to the dollar equivalent of virtual currency 16 purchased from the licensee or for control of virtual currency by the 17 licensee as of the date of the placement or purchase, including the 18 maximum amount provided by insurance under the Federal Deposit 19 Insurance Corporation or otherwise available from the Securities 20 Investor Protection Corporation; or 21 (ii) if not provided at the dollar equivalent of virtual 22 currency purchased from the licensee or for control of virtual currency 23 by the licensee, the maximum amount of coverage for each person 24 expressed in the dollar equivalent of the virtual currency; or 25 (B) private insurance against theft or loss, including cyber 26 theft; 27 (3) the irrevocability of a virtual currency transfer or virtual currency 28 exchange and any exception to irrevocability; 29 (4) a description of 30 (A) liability for an unauthorized, mistaken, or accidental virtual 31 currency transfer or virtual currency exchange;
01 (B) the person's responsibility to provide notice to the licensee 02 of a virtual currency transfer or virtual currency exchange; 03 (C) the basis for any recovery by the person from the licensee 04 or registrant; 05 (D) general error resolution rights applicable to a virtual 06 currency transfer or virtual currency exchange; and 07 (E) the method for the person to update the person's contact 08 information with the licensee; 09 (5) that the date or time when a virtual currency transfer or virtual 10 currency exchange is made and the person's account is debited may differ from the 11 date or time when the person initiates an instruction to make the transfer or exchange; 12 (6) whether the person has a right to stop a preauthorized payment or 13 revoke authorization for a virtual currency transfer and the procedure to initiate a stop- 14 payment order or revoke authorization for a later virtual currency transfer; 15 (7) the person's right to receive a receipt, trade ticket, or other evidence 16 of a virtual currency transfer or virtual currency exchange; 17 (8) the person's right to at least 30 days' notice of a change in the 18 licensee's fee schedule, other terms and conditions of operating the licensee's virtual 19 currency business activity with the person, and the policies applicable to the person's 20 account; and 21 (9) that virtual currency is not money, that other persons are not 22 required to take payment in virtual currency, that the value of virtual currency can 23 change, and that virtual currency is not backed by a governmental agency. 24 (c) Except as provided in (d) of this section, at the conclusion of a virtual 25 currency transaction with or on behalf of a person, a licensee shall provide the person 26 a confirmation in a record that contains 27 (1) the name and contact information of the licensee, including 28 information the person may need to ask a question or file a complaint; 29 (2) the type, value, date, precise time, and amount of the transaction; 30 and 31 (3) the fee charged for the transaction, including any charge for
01 conversion of virtual currency to money, bank credit, or another virtual currency. 02 (d) If a licensee discloses that it will provide a daily confirmation in the initial 03 disclosure under (c) of this section, the licensee may elect to provide a single, daily 04 confirmation for all transactions with or on behalf of a person on that day instead of a 05 confirmation for each transaction. 06 Sec. 06.55.160. Property interests and entitlements to virtual currency. (a) 07 A licensee that has control of virtual currency for a person shall maintain in the 08 licensee's control an amount of each type of virtual currency sufficient to satisfy the 09 aggregate entitlements of the person to the type of virtual currency. 10 (b) If a licensee violates (a) of this section, the property interests of the person 11 in the virtual currency are pro rata property interests in the type of virtual currency to 12 which the person is entitled, without regard to the time the person became entitled to 13 the virtual currency or the licensee obtained control of the virtual currency. 14 (c) The virtual currency referred to in this section is 15 (1) held for the person entitled to the virtual currency; 16 (2) not property of the licensee; 17 (3) not subject to the claims of creditors of the licensee; and 18 (4) considered a permissible investment under this chapter. 19 Sec. 06.55.165. Additional requirements and clarifications for virtual 20 currency business activities. (a) A licensee engaged in a virtual currency business 21 activity shall comply with all provisions of this chapter to the extent applicable to the 22 licensee's activities. 23 (b) A licensee engaged in a virtual currency business activity may include 24 virtual currency in the licensee's calculation of tangible net worth, except virtual 25 currency controlled by a person entitled to the protections of AS 06.55.160. The 26 virtual currency is measured by the average value of the virtual currency expressed in 27 the dollar equivalent over the previous six calendar months. 28 (c) For five years after the date of virtual currency business activity with or on 29 behalf of a person, a licensee shall maintain a record of 30 (1) each transaction of the licensee with or on behalf of the person or 31 for the licensee's account in this state, including
01 (A) the identity of the person; 02 (B) the form of the transaction; 03 (C) the amount, date, and payment instructions given by the 04 person; and 05 (D) the account number, name, and mailing address of the 06 resident, and, to the extent feasible, other parties to the transaction; 07 (2) the aggregate number of transactions and aggregate value of 08 transactions by the licensee with or on behalf of the person and for the licensee's 09 account in this state, expressed in the dollar equivalent of virtual currency for the 10 previous 12 calendar months; 11 (3) each transaction in which the licensee engaged in a virtual currency 12 exchange of one form of virtual currency for money or another form of virtual 13 currency with or on behalf of the person; 14 (4) a general ledger posted at least monthly that lists all assets, 15 liabilities, capital, income, and expenses of the licensee; 16 (5) each report required to be submitted under AS 06.55.403; 17 (6) bank statements and bank reconciliation records for the licensee 18 and the name, account number, and mailing address of each bank the licensee uses in 19 the conduct of its virtual currency business activity with or on behalf of the person; 20 (7) a report of any dispute with the person; and 21 (8) a report of any virtual currency business activity transaction with or 22 on behalf of the person that the licensee was unable to complete. 23 (d) A licensee shall maintain the records required by (c) of this section in a 24 form that enables the department to determine whether the licensee is in compliance 25 with a court order, this chapter, or other law of this state. 26 Sec. 06.55.170. Scope of application. (a) The provisions of AS 06.55.150 - 27 06.55.165 do not apply to a virtual currency exchange, a virtual currency transfer, 28 virtual currency storage, or virtual currency administration to the extent the activity is 29 governed by 15 U.S.C. 1693 - 1693r (Electronic Fund Transfer Act of 1978), 15 30 U.S.C. 78a - 78qq (Securities Exchange Act of 1934), 7 U.S.C. 1 - 27f (Commodity 31 Exchange Act), or AS 45.56.100 - 45.56.995 (Alaska Securities Act).
01 (b) The provisions of AS 06.55.150 - 06.55.165 do not apply to activity by 02 (1) a person that contributes only connectivity software or computing 03 power to a decentralized virtual currency or to a protocol governing virtual currency 04 transfer of the digital representation of value; 05 (2) a person that provides only data storage or security services for a 06 business engaged in virtual currency business activity and does not otherwise engage 07 in virtual currency business activity on behalf of another person; 08 (3) a person that provides only to another person otherwise exempt 09 from this chapter virtual currency as one or more enterprise solutions used solely 10 between each other and has no agreement or relationship with a person that is an end 11 user of virtual currency; 12 (4) a person using virtual currency, including creating, investing, 13 buying, or selling, or obtaining virtual currency as payment for the purchase or sale of 14 goods or services, solely 15 (A) on the person's own behalf; 16 (B) for personal, family, or household purposes; or 17 (C) for academic purposes; 18 (5) a person that has virtual currency business activity with or on 19 behalf of a person reasonably expected to be valued, in the aggregate, on an annual 20 basis at $5,000 or less, measured by the dollar equivalent of virtual currency; 21 (6) an attorney providing escrow services to a person; 22 (7) a title insurance company providing escrow services to a person; 23 (8) a securities intermediary, as defined in AS 45.08.102, or a 24 commodity intermediary, as defined in AS 45.29.102, that 25 (A) does not engage in the ordinary course of business in 26 virtual currency business activity with or on behalf of a person in addition to 27 maintaining securities accounts or commodities accounts and is regulated as a 28 securities intermediary or commodity intermediary under federal law, the law 29 of this state other than this chapter, or the law of another state; and 30 (B) affords a person protections comparable to those set out in 31 AS 06.55.160;
01 (9) a secured creditor under AS 45.29 or creditor with a judicial lien or 02 lien arising by operation of law on collateral that is virtual currency, if the virtual 03 currency business activity of the creditor is limited to enforcement of the security 04 interest in compliance with AS 45.29 or the law applicable to the lien; 05 (10) a virtual currency control services vendor; 06 (11) a person that does not receive compensation from a person for 07 (A) providing virtual currency products or services; 08 (B) conducting virtual currency business activity; or 09 (C) engaging in testing products or services with the person's 10 own funds. 11 (c) The department may determine, based on facts particular to the person or 12 class of persons, that a person or class of persons is exempt from this chapter. 13 * Sec. 8. AS 06.55.301 is repealed and reenacted to read: 14 Sec. 06.55.301. Relationship between licensee and authorized delegate. (a) 15 Before a licensee is authorized to conduct business through an authorized delegate or 16 to allow a person to act as the licensee's authorized delegate, the licensee shall 17 (1) adopt, and update as necessary, written policies and procedures 18 reasonably designed to ensure that the authorized delegate complies with applicable 19 state and federal law; 20 (2) enter into a written contract that complies with (c) of this section; 21 and 22 (3) conduct a reasonable, risk-based background investigation 23 sufficient for the licensee to determine whether the authorized delegate has complied 24 and is likely to comply with applicable state and federal law. 25 (b) An authorized delegate shall operate in compliance with this chapter. 26 (c) The written contract required by (a)(2) of this section must be signed by 27 the licensee and the authorized delegate and, at a minimum, must 28 (1) appoint the person signing the contract as the licensee's authorized 29 delegate with the authority to conduct money transmission on behalf of the licensee; 30 (2) set out the nature and scope of the relationship between the licensee 31 and the authorized delegate and the respective rights and responsibilities of the parties;
01 (3) require the authorized delegate to agree to comply with all 02 applicable state and federal laws, rules, and regulations pertaining to money 03 transmission, including this chapter and regulations implementing this chapter, 04 relevant provisions of the Bank Secrecy Act, and P.L. 107-56 (USA PATRIOT Act); 05 (4) require the authorized delegate to remit and handle money and 06 monetary value in accordance with the terms of the contract; 07 (5) establish a trust for the benefit of the licensee on money and 08 monetary value after deducting fees received for money transmission; 09 (6) require the authorized delegate to prepare and maintain records as 10 required by this chapter or regulations implementing this chapter, or as reasonably 11 requested by the department; 12 (7) acknowledge that the authorized delegate consents to examination 13 or investigation by the department; 14 (8) state that the licensee is subject to regulation by the department and 15 that, as part of that regulation, the department may suspend or revoke an authorized 16 delegate designation or require the licensee to terminate an authorized delegate 17 designation; and 18 (9) acknowledge receipt of the written policies and procedures 19 required under (a)(1) of this section. 20 (d) If the licensee's license is suspended, revoked, surrendered, or expired, the 21 licensee shall, within five business days, provide documentation to the department that 22 the licensee has notified all applicable authorized delegates of the licensee whose 23 names are in a record filed with the department of the suspension, revocation, 24 surrender, or expiration of the license. Upon suspension, revocation, surrender, or 25 expiration of a license, applicable authorized delegates shall immediately stop 26 providing money transmission as an authorized delegate of the licensee. 27 (e) An authorized delegate of a licensee holds in trust for the benefit of the 28 licensee all money after deducting fees received from money transmission. If an 29 authorized delegate commingles any funds received from money transmission with 30 any other funds or property owned or controlled by the authorized delegate, all 31 commingled funds and other property shall be considered held in trust in favor of the
01 licensee in an amount equal to the amount of money net of fees received from money 02 transmission. 03 (f) In this section, "remit" means to make direct payments of money to a 04 licensee or its representative authorized to receive money or to deposit money in a 05 bank account specified by the licensee. 06 * Sec. 9. AS 06.55.302 is amended to read: 07 Sec. 06.55.302. Unauthorized activities. A person may not engage in the 08 business of money transmission on behalf of a person that is not licensed or 09 exempt [ACT AS AN AUTHORIZED DELEGATE FOR, OR OTHERWISE 10 PROVIDE MONEY SERVICES ON BEHALF OF, A PERSON WHO DOES NOT 11 HOLD A MONEY SERVICES LICENSE] under this chapter. A person that engages 12 in the business of money transmission on behalf of a person not licensed or 13 exempt under this chapter provides money transmission to the same extent as if 14 the person were a licensee and is jointly and severally liable with the unlicensed 15 or nonexempt person. 16 * Sec. 10. AS 06.55.401 is repealed and reenacted to read: 17 Sec. 06.55.401. Supervision; examination; investigation. (a) The department 18 may conduct an examination or investigation of a licensee or authorized delegate or 19 otherwise take independent action authorized by this chapter, regulations 20 implementing this chapter, and other applicable law, including the Bank Secrecy Act, 21 15 U.S.C. 1693 - 1693r (Electronic Fund Transfer Act), P.L. 106-102 (Gramm-Leach- 22 Bliley Act), and P.L. 107-56 (USA PATRIOT Act). The department may 23 (1) conduct an on-site or off-site examination as the department 24 reasonably requires; 25 (2) conduct an examination in conjunction with an examination 26 conducted by representatives of other agencies of this state, another state, or the 27 federal government; 28 (3) accept the examination report of another agency of this state, 29 another state, or the federal government, or a report prepared by an independent 30 accounting firm; a report accepted under this paragraph is considered for all purposes 31 to be an official report of the department; and
01 (4) summon and examine under oath a key individual or employee of a 02 licensee or authorized delegate and require the key individual or employee to produce 03 records regarding any matter related to the condition and business of the licensee or 04 authorized delegate. 05 (b) A licensee or authorized delegate shall provide, and the department shall 06 have complete access to, all records the department reasonably requires to conduct a 07 complete examination. The licensee or authorized delegate shall provide the records at 08 the location and in the format specified by the department. The department may use 09 multistate record production standards and examination procedures when the 10 multistate record production standards and examination procedures will reasonably 11 achieve the requirements of this section. 12 (c) Unless otherwise directed by the department, a licensee shall pay all costs 13 reasonably incurred in connection with an examination of a licensee or a licensee's 14 authorized delegate. 15 (d) Information obtained during an examination under this chapter may be 16 disclosed only as provided in AS 06.55.407. 17 * Sec. 11. AS 06.55.403(a) is repealed and reenacted to read: 18 (a) A licensee shall submit a report of the licensee's financial condition within 19 45 days after the end of each quarter of the calendar year or within an extended period 20 that the department establishes. The report of condition must include 21 (1) financial information at the licensee's level; 22 (2) nationwide and state-specific money transmission transaction 23 information in every jurisdiction in the United States where the licensee is licensed to 24 engage in money transmission; 25 (3) a permissible investments report; 26 (4) transaction destination country reporting for money received for 27 transmission, if applicable; and 28 (5) any other information the department reasonably requires with 29 respect to the licensee. 30 * Sec. 12. AS 06.55.403(b) is repealed and reenacted to read: 31 (b) A licensee shall submit a report of the licensee's authorized delegates
01 within 45 days after the end of each quarter of the calendar year. The report of 02 authorized delegates must include the following information about each authorized 03 delegate: 04 (1) if the authorized delegate is an entity, the legal name of the entity; 05 if the authorized delegate is an individual, the legal name of the individual; 06 (2) taxpayer employer identification number; 07 (3) principal provider identifier; 08 (4) physical address; 09 (5) mailing address; 10 (6) business conducted in other states, if any; 11 (7) a trade name or other name used by the individual that is not 12 individual's legal name; 13 (8) contact person name, telephone number, and electronic mail 14 address; 15 (9) the date the authorized delegate began acting as the licensee's 16 authorized delegate; 17 (10) the date the authorized delegate stopped acting as the licensee's 18 authorized delegate, if applicable; and 19 (11) any other information the department reasonably requires with 20 respect to the authorized delegate. 21 * Sec. 13. AS 06.55.403(c) is amended to read: 22 (c) A [MONEY SERVICES] licensee shall file a report with the department 23 within one business day after the [MONEY SERVICES] licensee has reason to know 24 of the occurrence of any of the following events: 25 (1) the filing of a petition by or against the [MONEY SERVICES] 26 licensee under 11 U.S.C. 101 - 112 [11 U.S.C. 101 - 110] (Bankruptcy Code) for 27 bankruptcy or reorganization; 28 (2) the filing of a petition by or against the [MONEY SERVICES] 29 licensee for receivership, the commencement of any other judicial or administrative 30 proceeding for its dissolution or reorganization, or the making of a general assignment 31 for the benefit of its creditors;
01 (3) the commencement of a proceeding to revoke or suspend its 02 [MONEY SERVICES] license in a state or country in which the [MONEY 03 SERVICES] licensee engages in business or is licensed; 04 (4) the cancellation or other impairment of the [MONEY SERVICES] 05 licensee's bond or other security; 06 (5) a charge against or conviction of the [MONEY SERVICES] 07 licensee or of a key individual [AN EXECUTIVE OFFICER, MANAGER, 08 DIRECTOR,] or person in control of the [MONEY SERVICES] licensee for a felony; 09 or 10 (6) a charge against or conviction of an authorized delegate for a 11 felony. 12 * Sec. 14. AS 06.55.403 is amended by adding a new subsection to read: 13 (d) The department may use the registry for the submission of reports required 14 by this section. 15 * Sec. 15. AS 06.55.404 is repealed and reenacted to read: 16 Sec. 06.55.404. Control; acquisition; passive investor. (a) A person or group 17 of persons acting in concert seeking to acquire control of a licensee shall obtain the 18 written approval of the department before acquiring control. An individual is not 19 considered to acquire control of a licensee when the individual becomes a key 20 individual in the ordinary course of business. 21 (b) A person, or group of persons acting in concert, seeking to acquire control 22 of a licensee shall, in cooperation with the licensee, 23 (1) submit an application in a form and in a medium prescribed by the 24 department that includes the information required by AS 06.55.412, as applicable; and 25 (2) submit a nonrefundable fee with the request for approval. 26 (c) The department may permit a licensee or the person, or group of persons 27 acting in concert, to submit some or all information required by the department under 28 (b)(1) of this section without using the registry. 29 (d) When an application for acquisition of control appears to include all 30 required information and to address all matters required by the department, the 31 application is considered complete, and the department shall notify the applicant in a
01 record of the date on which the department determines the application is complete. 02 The department shall approve or deny the application within 120 days after the date 03 the application was determined to be complete. If the application is not approved or 04 denied within 120 days after the completion date, 05 (1) the application is approved; and 06 (2) the person or group of persons acting in concert is not prohibited 07 from acquiring control. 08 (e) The department may for good cause extend the period for approving or 09 denying an application under (d) of this section. 10 (f) A determination by the department that an application is complete and is 11 accepted for processing means only that the application, on its face, appears to include 12 all required items, including a criminal background check, and address all required 13 matters. The department's determination is not an assessment of the substance of the 14 application or of the sufficiency of the information provided. 15 (g) When an application is filed and considered to be complete under (d) of 16 this section, the department shall investigate the financial condition, financial 17 responsibility, financial experience, business experience, competence level, character, 18 and general fitness of the person or group of persons acting in concert seeking to 19 acquire control. The department shall approve a request for acquisition of control if 20 the department finds that 21 (1) the requirements of (b) of this section have been met, as applicable; 22 and 23 (2) the financial condition, financial responsibility, financial 24 experience, business experience, competence level, character, and general fitness of 25 the person, or group of persons acting in concert, seeking to acquire control, and the 26 experience, competence level, character, and general fitness of the key individuals and 27 persons that would be in control of the licensee after the acquisition of control indicate 28 that it is in the public interest to permit the person, or group of persons acting in 29 concert, to control the licensee. 30 (h) If an applicant for approval to acquire control is subject to a multistate 31 licensing process, the department may
01 (1) accept the investigation results of a lead investigative state for the 02 purposes of (g) of this section; or 03 (2) investigate the applicant in accordance with (g) of this section and 04 the time frames established by agreement through the multistate licensing process. 05 (i) The department shall issue a formal written notice of a denial of an 06 application for approval to acquire control within 30 days after the decision to deny 07 the application. The department shall set out in the notice of denial the specific reasons 08 for the denial. An applicant may appeal a denial within 30 days after receiving the 09 written notice of the denial. 10 (j) The requirements of (a) and (b) of this section do not apply to 11 (1) a person that acts as a proxy for the sole purpose of voting at a 12 designated meeting of the shareholders or holders of voting shares or voting interests 13 of a licensee or a person in control of a licensee; 14 (2) a person that acquires control of a licensee by devise or descent; 15 (3) a person that acquires control of a licensee as a personal 16 representative, custodian, guardian, conservator, or trustee, or as an officer appointed 17 by a court of competent jurisdiction or by operation of law; 18 (4) a person that is exempt under AS 06.55.802(4); 19 (5) a person that the department, by regulation or order, determines to 20 be exempt from the requirements of (a) and (b) of this section because that exemption 21 is in the public interest; 22 (6) a public offering of securities of a licensee or a person in control of 23 a licensee; or 24 (7) an internal reorganization of a person in control of a licensee where 25 the ultimate person in control of the licensee remains the same. 26 (k) A person exempt from the requirements of (a) and (b) of this section, in 27 cooperation with the licensee, shall notify the department within 15 days after the 28 acquisition of control. 29 (l) Before filing an application for approval to acquire control of a licensee, a 30 person may request in writing a determination from the department as to whether the 31 person would be considered a person in control of a licensee upon consummation of a
01 proposed transaction. If the department determines that the person would not be a 02 person in control of a licensee, the proposed person and transaction are not subject to 03 the requirements of (a) and (b) of this section. 04 (m) If a multistate licensing process includes a determination made under (l) 05 of this section and an applicant is subject to the multistate licensing process, the 06 department may 07 (1) accept the control determination of a lead investigative state; or 08 (2) investigate the applicant in accordance with this section and the 09 time frames established by agreement through the multistate licensing process. 10 (n) The requirements of (a) and (b) of this section do not apply to a person that 11 has complied with and received approval to engage in money transmission under this 12 chapter or who has identified as a person in control in a previous application filed with 13 and approved by the department or by an accredited state in accordance with a 14 multistate licensing process, if 15 (1) in the previous five years, the person has not had a license revoked 16 or suspended or controlled a licensee that has had a license revoked or suspended 17 while the person was in control of the licensee; 18 (2) the person is a licensee, the person is well managed and has 19 received at least a satisfactory rating for compliance at the person's most recent 20 examination by an accredited state if a rating was given; 21 (3) the licensee to be acquired is projected to meet the requirements of 22 this chapter, including AS 06.55.501, 06.55.505, and 06.55.510 after the acquisition of 23 control is completed, and if the person acquiring control is a licensee, the licensee is 24 also projected to meet the requirements of this chapter, including AS 06.55.501, 25 06.55.505, and 06.55.510, after the acquisition of control is completed; 26 (4) the licensee to be acquired will not implement any material 27 changes to the licensee's business plan as a result of the acquisition of control, and if 28 the person acquiring control is a licensee, the licensee also will not implement any 29 material changes to the licensee's business plan as a result of the acquisition of control; 30 and 31 (5) the person provides notice of the acquisition in cooperation with
01 the licensee and attests to (1) - (4) of this subsection in a form and in a medium 02 prescribed by the department. 03 (o) If the notice required under (n)(5) of this section is not disapproved within 04 30 days after the date on which the notice was determined to be complete, the notice is 05 considered to be approved. 06 (p) A person is presumed to exercise a controlling influence when the person 07 holds the power to vote, directly or indirectly, at least 10 percent of the outstanding 08 voting shares or voting interests of a licensee or person in control of a licensee. To 09 determine the percentage of a person controlled by any other person, the interest of the 10 person presumed to have a controlling interest shall be aggregated with the interest of 11 any other immediate family member, including the person's spouse, parents, children, 12 siblings, relative by marriage, and any other person who shares the home of the person 13 presumed to have a controlling interest. 14 (q) A passive investor is not considered to have control under this chapter. To 15 be a passive investor, a person 16 (1) may not have the power to elect a majority of key individuals or 17 executive officers, managers, directors, trustees, or other persons exercising 18 managerial authority of a person in control of a licensee; 19 (2) may not be employed by or have managerial duties of the licensee 20 or person in control of a licensee; 21 (3) may not have the power to exercise, directly or indirectly, a 22 controlling influence over the management or policies of a licensee or person in 23 control of a licensee; and 24 (4) shall attest to (1) - (3) of this subsection on a form and in a medium 25 prescribed by the department, or commit to the requirements of (1) - (3) of this 26 subsection in a written document. 27 * Sec. 16. AS 06.55.405(a) is amended to read: 28 (a) A [MONEY SERVICES] licensee shall maintain the following records for 29 determining its compliance with this chapter for at least five [THREE] years: 30 (1) a record of each outstanding money transmission [PAYMENT 31 INSTRUMENT OR STORED-VALUE] obligation sold;
01 (2) a general ledger posted at least monthly containing all asset, 02 liability, capital, income, and expense accounts; 03 (3) bank statements and bank reconciliation records; 04 (4) records of outstanding money transmission [PAYMENT 05 INSTRUMENTS AND STORED-VALUE] obligations; 06 (5) records of each outstanding money transmission [PAYMENT 07 INSTRUMENT AND STORED-VALUE] obligation paid within the five-year 08 [THREE-YEAR] period; 09 (6) a list of the last known names and addresses of all of the [MONEY 10 SERVICES] licensee's authorized delegates; and 11 (7) any other records the department reasonably requires by regulation. 12 * Sec. 17. AS 06.55.405(d) is amended to read: 13 (d) All records maintained by the [MONEY SERVICES] licensee as required 14 in (a) - (c) of this section are open to inspection by the department under 15 AS 06.55.401. 16 * Sec. 18. AS 06.55.406(a) is amended to read: 17 (a) A [MONEY SERVICES] licensee and an authorized delegate shall file 18 with the appropriate federal agency [ATTORNEY GENERAL] all reports required 19 by federal currency reporting, record keeping, and suspicious transaction reporting 20 requirements as set out in the Bank Secrecy Act [31 U.S.C. 5311] and other federal 21 and state laws pertaining to money laundering. The timely filing of a complete and 22 accurate report required under this section with the appropriate federal agency 23 is considered to be in compliance with the requirements of this section. 24 * Sec. 19. AS 06.55.407(a) is amended to read: 25 (a) Except as [OTHERWISE] provided in (b) of this section, all information 26 or reports obtained by the department from an applicant, [A] licensee, or [AN] 27 authorized delegate, all information contained in or related to an examination, 28 investigation, operating report, or condition report prepared by, on behalf of, or 29 for the use of the department, and financial statements, balance sheets, or 30 authorized delegate information, are confidential and not subject to disclosure under 31 AS 40.25.100 - 40.25.295 [, INCLUDING
01 (1) ALL INFORMATION CONTAINED IN OR RELATED TO 02 EXAMINATION, INVESTIGATION, OPERATING, OR CONDITION REPORTS 03 PREPARED BY, ON BEHALF OF, OR FOR THE USE OF THE DEPARTMENT; 04 AND 05 (2) FINANCIAL STATEMENTS, BALANCE SHEETS, AND 06 AUTHORIZED DELEGATE INFORMATION]. 07 * Sec. 20. AS 06.55.407(b) is amended to read: 08 (b) The department may disclose information that is not otherwise subject to 09 disclosure under (a) of this section to representatives of state or federal agencies who 10 promise in a record that they will maintain the confidentiality of the information or if 11 the department finds that the release is reasonably necessary for the protection of the 12 public and in the interests of justice [, AND THE MONEY SERVICES LICENSEE 13 HAS BEEN GIVEN PREVIOUS NOTICE BY THE DEPARTMENT OF ITS 14 INTENT TO RELEASE THE INFORMATION]. 15 * Sec. 21. AS 06.55.407(c) is amended to read: 16 (c) This section does not prohibit the department from disclosing to the public 17 a list of [MONEY SERVICES] licensees or the aggregated financial or transactional 18 data concerning those [MONEY SERVICES] licensees. 19 * Sec. 22. AS 06.55.407(d) is amended to read: 20 (d) A [MONEY SERVICES] licensee or an authorized delegate may not 21 disclose to another person financial information provided to the [MONEY 22 SERVICES] licensee or the authorized delegate by a customer except when, and only 23 to the extent that, the disclosure is 24 (1) authorized in writing by the customer; 25 (2) required by federal, state, or local law; 26 (3) required by an order issued by a court or an administrative agency; 27 or 28 (4) part of the money transmission [SERVICES] transaction ordered 29 by the customer. 30 * Sec. 23. AS 06.55.407 is amended by adding a new subsection to read: 31 (f) Information contained in the records of the department that is not
01 confidential and may, upon request, be made available to the public on the 02 department's Internet website includes 03 (1) the name, business address, telephone number, and unique registry 04 identifier of a licensee; 05 (2) the business address of a licensee's registered agent for service; 06 (3) the name, business address, and telephone number of all authorized 07 delegates; 08 (4) the terms or a copy of any bond filed by a licensee, if that 09 confidential information, including the prices and fees for the bond, is redacted; 10 (5) copies of any nonconfidential final orders of the department 11 relating to any violation of this chapter or regulations implementing this chapter; and 12 (6) imposition of an administrative fine or penalty under this chapter. 13 * Sec. 24. AS 06.55 is amended by adding new sections to article 4 to read: 14 Sec. 06.55.408. Audited financial statements. (a) A licensee shall, within 90 15 days after the end of the licensee's fiscal year or within any extended period that the 16 department establishes, file with the department 17 (1) an audited financial statement of the licensee for the fiscal year 18 prepared in accordance with generally accepted accounting principles; and 19 (2) other information the department reasonably requires. 20 (b) The audited financial statements must be prepared by an independent 21 certified public accountant or independent public accountant who is satisfactory to the 22 department. 23 (c) The audited financial statements must include a certificate of opinion of 24 the independent certified public accountant or independent public accountant that is 25 satisfactory in form and content to the department. If the certificate or opinion is 26 qualified, the department may order the licensee to take any action that the department 27 finds necessary to enable the independent certified public accountant or independent 28 public accountant to remove the qualification. 29 Sec. 06.55.409. Implementation. (a) To carry out the purposes of this chapter, 30 subject to AS 06.55.407, the department may 31 (1) enter into an agreement or relationship with a government official
01 or federal or state regulatory agency or regulatory association to improve efficiency 02 and reduce regulatory burden by standardizing methods or procedures, and sharing 03 resources, records, or related information obtained under this chapter; 04 (2) use, hire, contract, or employ analytical systems, methods, or 05 software to examine or investigate a person subject to this chapter; 06 (3) accept from a state or federal government agency or official 07 licensing, examination, or investigation reports made by the agency or official; and 08 (4) accept an audit report made by an independent certified public 09 accountant or independent public accountant that is satisfactory to the department for 10 an applicant or licensee and incorporate the audit reports into a report of examination 11 or investigation. 12 (b) The department has broad administrative authority to administer, interpret 13 and enforce this chapter, to adopt regulations implementing this chapter, and to 14 recover the cost of administering and enforcing this chapter by imposing and 15 collecting proportionate and equitable fees and costs associated with applications, 16 examinations, investigations, and other actions required to achieve the purposes of this 17 chapter. 18 Sec. 06.55.410. Networked supervision. (a) The department may participate 19 in multistate supervisory processes established between and among states and 20 coordinated through an organization determined by the department to be a nationally 21 recognized organization in supervisory processes establishment and coordination 22 between and among states for all licensees that hold licenses in this state and other 23 states. As a participant in multistate supervision, subject to AS 06.55.407, the 24 department may 25 (1) cooperate, coordinate, and share information with other state and 26 federal regulators; and 27 (2) enter into written contracts or agreements with other state and 28 federal regulators for the purposes of cooperating, coordinating, and sharing 29 information with state and federal regulators. 30 (b) Nothing in this section constitutes a waiver of the department's authority to 31 conduct an examination or investigation or otherwise take independent action to
01 enforce compliance with applicable state or federal law. 02 (c) A joint examination or investigation, or acceptance of an examination or 03 investigation report, does not waive an examination assessment provided for in this 04 chapter. 05 Sec. 06.55.411. Relationship to federal law. (a) If state money transmission 06 jurisdiction is conditioned on a federal law, any inconsistency between a provision of 07 this chapter and the federal law governing money transmission is governed by the 08 applicable federal law to the extent of the inconsistency. 09 (b) If an inconsistency between this chapter and a federal law that governs in 10 accordance with (a) of this section, the department may provide interpretive guidance 11 that 12 (1) identifies the inconsistency; and 13 (2) identifies the appropriate means of compliance with federal law. 14 Sec. 06.55.412. Notice and information requirements for a change of key 15 individual. (a) A licensee adding or replacing a key individual shall 16 (1) provide notice in a manner prescribed by the department within 15 17 days after the effective date of the key individual's appointment; and 18 (2) provide the information required under AS 06.55.109 within 45 19 days after the effective date of the key individual's appointment. 20 (b) The department may issue a notice of disapproval of a key individual if the 21 department finds that the experience, competence level, character, or integrity of the 22 individual would not be in the best interest of the public or the customers of the 23 licensee to permit the individual to be a key individual. The department shall issue a 24 notice of disapproval within 90 days after the department determines the notice 25 provided under (a) of this section to be complete. 26 (c) A notice of disapproval shall contain a statement of the basis for the 27 disapproval and be sent to the licensee and the disapproved individual. A licensee may 28 appeal a notice of disapproval within 30 days after receipt of the notice. 29 (d) If the notice provided under (a) of this section is not disapproved within 90 30 days after the date the notice was determined to be complete, the key individual is 31 considered to be approved.
01 (e) If a multistate licensing process includes a key individual notice review 02 and disapproval process, and the licensee is subject to the multistate licensing process, 03 the department may 04 (1) accept the key individual notice review determination of another 05 state; or 06 (2) investigate the applicant in accordance with (b) of this section and 07 the time frames established by agreement through the multistate licensing process. 08 * Sec. 25. AS 06.55.501 is amended to read: 09 Sec. 06.55.501. Maintenance of permissible investments. (a) A [MONEY 10 SERVICES] licensee shall maintain at all times permissible investments that have a 11 market value computed under generally accepted accounting principles of not less than 12 the aggregate amount of all of its outstanding money transmission [PAYMENT 13 INSTRUMENTS AND STORED VALUE] obligations [ISSUED OR SOLD IN ALL 14 STATES AND MONEY TRANSMITTED FROM ALL STATES BY THE MONEY 15 SERVICES LICENSEE]. 16 (b) Except for permissible investments listed in AS 06.55.502, the [THE] 17 department, with respect to any licensee [MONEY SERVICES LICENSEES], may by 18 regulation or order limit the extent to which a specific [TYPE OF] investment 19 maintained by a licensee within a class of permissible investments may be 20 considered a permissible investment [, EXCEPT FOR MONEY AND 21 CERTIFICATES OF DEPOSIT ISSUED BY A BANK. THE DEPARTMENT BY 22 REGULATION MAY PRESCRIBE OR BY ORDER ALLOW OTHER TYPES OF 23 INVESTMENTS THAT THE DEPARTMENT DETERMINES TO HAVE A 24 SAFETY SUBSTANTIALLY EQUIVALENT TO OTHER PERMISSIBLE 25 INVESTMENTS]. 26 (c) Permissible investments, even if commingled with other assets of the 27 [MONEY SERVICES] licensee, are held in trust for the benefit of the purchasers and 28 holders of the [MONEY SERVICES] licensee's outstanding money transmission 29 [PAYMENT INSTRUMENTS AND STORED VALUE] obligations in the event of 30 the licensee's insolvency, bankruptcy, [OR] receivership, commencement of other 31 judicial or administrative proceedings for its dissolution or reorganization, or in
01 the event of an action by a creditor against the licensee who is not a beneficiary of 02 the statutory trust. A permissible investment impressed with a trust in 03 accordance with this subsection is not subject to attachment, levy of execution, or 04 sequestration by a court, unless the attachment, levy of execution, or 05 sequestration is for a beneficiary of the statutory trust [OF THE MONEY 06 SERVICES LICENSEE]. 07 * Sec. 26. AS 06.55.501 is amended by adding new subsections to read: 08 (d) Upon the establishment of a statutory trust under (c) of this section, or 09 when funds are drawn on a letter of credit under AS 06.55.502(a)(4) and 06.55.503, 10 the department shall notify the applicable regulator of each state in which the licensee 11 is licensed to engage in money transmission, if any, of the establishment of the trust or 12 the funds drawn on the letter of credit, as applicable. Notice may be provided in 13 accordance with a multistate agreement or through the registry. Funds drawn on a 14 letter of credit and any other permissible investments held in trust for the benefit of the 15 purchasers and holders of the licensee's outstanding money transmission obligations 16 are considered to be held in trust for the benefit of the purchasers and holders of the 17 licensee's outstanding money transmission obligations on a pro rata and equitable 18 basis in accordance with state law and the law of other states, as applicable. A 19 statutory trust established under this section shall be terminated upon extinguishment 20 of all of the licensee's outstanding money transmission obligations. 21 (e) The department may by regulation or order allow other types of 22 investments that the department determines are of sufficient liquidity and quality to be 23 a permissible investment. The department may participate in efforts with other state 24 regulators to identify permissible investments. 25 * Sec. 27. AS 06.55.502(a) is amended to read: 26 (a) Except to the extent otherwise limited by the department under 27 AS 06.55.501, or as modified by a regulation of the department, the following 28 investments are permissible under AS 06.55.501: 29 (1) cash, demand deposits, savings deposits, funds in accounts held 30 for the benefit of a licensee's customers in a federally insured depository financial 31 institution, money market mutual funds, certificates [A CERTIFICATE] of
01 deposit, [OR A] senior debt obligations [OBLIGATION] of a federally [AN] insured 02 depository financial institution, and cash equivalents, including automated 03 clearing house items in transit to the licensee and automated clearing house items 04 or international wires in transit to a payee, cash in transit by armored car, cash 05 in smart safes, cash in licensee-owned locations, and transmission receivables 06 owed by a bank and funded by a debit card or credit card; 07 (2) [; IN THIS PARAGRAPH, "INSURED DEPOSITORY 08 INSTITUTION" HAS THE MEANING GIVEN IN 12 U.S.C. 1813 (FEDERAL 09 DEPOSIT INSURANCE ACT); 10 (2) BANKER'S ACCEPTANCE OR BILL OF EXCHANGE THAT IS 11 ELIGIBLE FOR PURCHASE ON ENDORSEMENT BY A MEMBER BANK OF 12 THE FEDERAL RESERVE SYSTEM AND IS ELIGIBLE FOR PURCHASE BY A 13 FEDERAL RESERVE BANK; 14 (3)] an investment bearing a rating of one of the three highest grades as 15 defined by a nationally recognized organization that rates securities; 16 (3) [(4) AN INVESTMENT SECURITY THAT IS] an obligation of 17 the United States or a commission [DEPARTMENT], agency, or instrumentality of 18 the United States, [AN INVESTMENT IN] an obligation that is guaranteed fully as to 19 principal and interest by the United States, or [AN INVESTMENT IN] an obligation 20 of a state or a governmental subdivision, agency, or instrumentality of a state; 21 (4) the full drawable amount that can be drawn on an irrevocable 22 standby letter of credit that complies with AS 06.55.503; 23 (5) 100 percent of the surety bond provided for under 24 AS 06.55.505 that exceeds the average daily money transmission liability in this 25 state 26 [(5) RECEIVABLES THAT ARE PAYABLE TO A MONEY 27 SERVICES LICENSEE FROM ITS AUTHORIZED DELEGATES, IN THE 28 ORDINARY COURSE OF BUSINESS, UNDER CONTRACTS THAT ARE NOT 29 PAST DUE OR DOUBTFUL OF COLLECTION IF THE AGGREGATE AMOUNT 30 OF RECEIVABLES UNDER THIS PARAGRAPH DOES NOT EXCEED 20 31 PERCENT OF THE TOTAL PERMISSIBLE INVESTMENTS OF A MONEY
01 SERVICES LICENSEE AND THE MONEY SERVICES LICENSEE DOES NOT 02 HOLD AT ONE TIME RECEIVABLES UNDER THIS PARAGRAPH IN ANY 03 ONE PERSON AGGREGATING MORE THAN 10 PERCENT OF THE MONEY 04 SERVICES LICENSEE'S TOTAL PERMISSIBLE INVESTMENTS; AND 05 (6) A SHARE OR A CERTIFICATE ISSUED BY AN OPEN-END 06 MANAGEMENT INVESTMENT COMPANY THAT IS REGISTERED WITH THE 07 UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER 15 08 U.S.C. 80A-1 - 80A-64 (INVESTMENT COMPANY ACT OF 1940), AND WHOSE 09 PORTFOLIO IS RESTRICTED BY THE MANAGEMENT COMPANY'S 10 INVESTMENT POLICY TO INVESTMENTS SPECIFIED IN (1) - (4) OF THIS 11 SUBSECTION]. 12 * Sec. 28. AS 06.55.502(b) is repealed and reenacted to read: 13 (b) In addition to the investments permissible under (a) of this section, the 14 following investments are permissible under (a) of this section, to the extent specified: 15 (1) receivables that are payable to a licensee from the licensee's 16 authorized delegates in the ordinary course of business that are less than seven days 17 old and do not exceed 50 percent of the aggregate value of the licensee's total 18 permissible investments; receivables under this paragraph that are payable to a 19 licensee from a single authorized delegate in the ordinary course of business may not 20 exceed 10 percent of the aggregate value of the licensee's total permissible 21 investments; 22 (2) the following investments, not to exceed 20 percent for each 23 category and a combined total of 50 percent of the aggregate value of the licensee's 24 total permissible investments: 25 (A) a short-term investment of not more than six months' 26 duration bearing an eligible rating; 27 (B) commercial paper bearing an eligible rating; 28 (C) a bill, note, bond, or debenture bearing an eligible rating; 29 (D) United States tri-party repurchase agreements collateralized 30 at 100 percent or more by federal government or agency securities, municipal 31 bonds, or other securities bearing an eligible rating;
01 (E) money market mutual funds rated by a rating service 02 selected by the department as appropriate for this purpose at a rate determined 03 by the department; and 04 (F) a mutual fund or other investment fund composed solely 05 and exclusively of one or more permissible investments listed in (a)(1) - (3) of 06 this section; and 07 (3) cash held in accounts for the benefit of the licensee's customers at 08 foreign depository financial institutions, not to exceed 10 percent of the aggregate 09 value of the licensee's total permissible investments, if the licensee has received a 10 satisfactory rating in the licensee's most recent examination and the foreign depository 11 financial institution 12 (A) has an eligible rating; 13 (B) is registered under 26 U.S.C. 1471-1474 (Foreign Account 14 Tax Compliance Act); 15 (C) is not located in any country subject to sanctions from the 16 United States Department of the Treasury Office of Foreign Assets Control; 17 and 18 (D) is not located in a high-risk or non-cooperative jurisdiction 19 as designated by the Financial Action Task Force. 20 * Sec. 29. AS 06.55 is amended by adding new sections to article 5 to read: 21 Sec. 06.55.503. Letter of credit. (a) The letter of credit permitted under 22 AS 06.55.502(a)(4) 23 (1) must list the department as the beneficiary; 24 (2) must stipulate that the beneficiary is only required to draw a sight 25 draft under the letter of credit and present it to obtain funds up to the letter of credit 26 amount within seven days after presenting the items required by (7) of this subsection; 27 (3) must be issued by a federally insured depository financial 28 institution or a foreign bank that bears an eligible rating and is regulated, supervised, 29 and examined by federal or state regulatory authorities having regulatory authority 30 over banks, credit unions, and trust companies; 31 (4) must be irrevocable, unconditional, and indicate that the letter of
01 credit is not subject to any condition or qualifications outside of the letter of credit; 02 (5) may not contain reference to any other agreements, documents or 03 entities, or otherwise provide for any security interest in the licensee; 04 (6) must contain an issue date and expiration date, and expressly 05 provide for automatic extension, without a written amendment, for an additional 06 period of one year from the present or each future expiration date, unless the issuer of 07 the letter of credit notifies the department in writing by certified or registered mail, 08 courier mail, or other means of notice that provides a receipt, at least 60 days before 09 an expiration date, that the irrevocable letter of credit will not be extended; and 10 (7) must provide that the issuer of the letter of credit will honor, at 11 sight, a presentation made by the beneficiary to the issuer of the following documents 12 on or before the expiration date of the letter of credit: 13 (A) the original letter of credit, including any amendments; and 14 (B) a written statement from the beneficiary stating whether 15 one or more of the following events have occurred: 16 (i) the filing of a petition by or against the licensee 17 under 11 U.S.C. Section 101 - 112 (Bankruptcy Code), for bankruptcy 18 or reorganization; 19 (ii) the filing of a petition by or against the licensee for 20 receivership, or the commencement of any other judicial or 21 administrative proceeding for the licensee's dissolution or 22 reorganization; 23 (iii) the seizure of assets of a licensee by the department 24 under an emergency order issued in accordance with applicable law, 25 based on an action, violation, or condition that has caused or is likely to 26 cause the insolvency of the licensee; or 27 (iv) the beneficiary received notice of expiration or non- 28 extension of a letter of credit and the licensee failed to demonstrate to 29 the satisfaction of the beneficiary that the licensee will maintain 30 permissible investments in accordance with AS 06.55.501 or this 31 section upon the expiration or non-extension of the letter of credit.
01 (b) In the event of any notice of expiration or non-extension of a letter of 02 credit issued under (a) of this section, the licensee shall be required to demonstrate to 03 the satisfaction of the department, 15 days before expiration, that the licensee 04 maintains and will maintain permissible investments in accordance with AS 06.55.501 05 upon expiration of the letter of credit. If the licensee is not able to do so, the 06 department may draw on the letter of credit in an amount up to the amount necessary 07 to meet the licensee's requirements to maintain permissible investments in accordance 08 with AS 06.55.501. A draw must be offset against the licensee's outstanding money 09 transmission obligations. The drawn funds must be held in trust by the department or 10 the department's designated agent, to the extent authorized by law, as agent for the 11 benefit of the purchasers and holders of the licensee's outstanding money transmission 12 obligations. 13 (c) The department may designate an agent to serve on the department's behalf 14 as beneficiary to a letter of credit if the agent and letter of credit meet the requirements 15 established by the department. The department's agent may serve as agent for multiple 16 licensing authorities for a single irrevocable letter of credit if the proceeds of the 17 drawable amount for the purposes of AS 06.55.502(a)(4) are assigned to the 18 department. 19 (d) The department may participate in multistate processes designed to 20 facilitate the issuance and administration of letters of credit, including services 21 provided by the registry. 22 Sec. 06.55.505. Security. (a) An applicant for a license shall provide, and a 23 licensee at all times shall maintain, security consisting of a surety bond in a form 24 satisfactory to the department or, with the department's approval, a deposit in 25 accordance with this section. 26 (b) The department shall determine the amount of the required security by 27 regulation or order. The amount of the required security must be proportional to the 28 licensee's average daily money transmission liability in this state up to a maximum of 29 $1,000,000. 30 (c) A licensee that maintains a bond in the maximum amount provided for 31 under (b) of this section is not required to calculate its average daily money
01 transmission liability in this state for purposes of this section. 02 (d) A licensee may exceed the maximum required bond amount. 03 (e) The aggregate liability on a surety bond may not exceed the principal sum 04 of the bond. A claimant against a licensee may maintain an action on the bond, or the 05 department may maintain an action on behalf of the claimant. 06 (f) A surety bond must cover claims for as long as the department specifies, 07 but at least for the five years after the date the licensee stops providing money 08 transmission in this state. The department may permit the amount of security to be 09 reduced or eliminated before the expiration of that time to the extent the amount of the 10 licensee's outstanding money transmission obligations in this state is reduced. The 11 department may permit a licensee to substitute another form of security acceptable to 12 the department for the security effective at the time the licensee stops providing 13 money transmission in this state. 14 (g) An applicant for a license or a licensee shall obtain the surety bond 15 required under this section from a surety company authorized to do business in this 16 state. 17 Sec. 06.55.510. Net worth. (a) A licensee shall maintain at all times a tangible 18 net worth of 19 (1) the greater of $35,000 or three percent of total assets for the first 20 $100,000,000; 21 (2) two percent of additional assets for $100,000,001 to 22 $1,000,000,000; and 23 (3) 0.5 percent of additional assets for over $1,000,000,001. 24 (b) Tangible net worth must be demonstrated at initial application by the 25 applicant's most recent audited or unaudited financial statements. 26 (c) The department may exempt an applicant or licensee, in part or in whole, 27 from the requirements of this section. 28 * Sec. 30. AS 06.55.601 is amended to read: 29 Sec. 06.55.601. Suspension and revocation; receivership. (a) The 30 department may suspend or revoke a [MONEY SERVICES] license, place a 31 [MONEY SERVICES] licensee in receivership, or order a [MONEY SERVICES]
01 licensee to revoke the designation of an authorized delegate if 02 (1) the [MONEY SERVICES] licensee violates this chapter or a 03 regulation adopted or an order issued under this chapter; 04 (2) the [MONEY SERVICES] licensee does not cooperate with an 05 examination or investigation by the department; 06 (3) the [MONEY SERVICES] licensee engages in fraud, intentional 07 misrepresentation, or gross negligence; 08 (4) an authorized delegate is convicted of a violation of a state or 09 federal anti-money laundering statute, or violates a regulation adopted or an order 10 issued under this chapter, as a result of the [MONEY SERVICES] licensee's wilful 11 misconduct or wilful blindness; 12 (5) the competence level, experience, character, or general fitness of 13 the [MONEY SERVICES] licensee, authorized delegate, person in control of a 14 [MONEY SERVICES] licensee, key individual, or responsible person of the 15 [MONEY SERVICES] licensee or authorized delegate indicates that it is not in the 16 public interest to permit the person to provide money transmission [SERVICES]; 17 (6) the [MONEY SERVICES] licensee engages in an unsafe or 18 unsound practice; 19 (7) the [MONEY SERVICES] licensee is insolvent, suspends payment 20 of its obligations, or makes a general assignment for the benefit of its creditors; or 21 (8) the [MONEY SERVICES] licensee does not remove an authorized 22 delegate after the department issues and serves on [UPON] the [MONEY SERVICES] 23 licensee a final order that includes [INCLUDING] a finding that the authorized 24 delegate has violated this chapter. 25 (b) In determining whether a [MONEY SERVICES] licensee is engaging in 26 an unsafe or unsound practice, the department may consider the size and condition of 27 the [MONEY SERVICES] licensee's money transmission, the magnitude of the loss, 28 the gravity of the violation of this chapter, and the previous conduct of the person 29 involved. 30 * Sec. 31. AS 06.55.601 is amended by adding a new subsection to read: 31 (c) A licensee may apply for relief from a suspension or revocation of the
01 licensee's license according to procedures prescribed by the department. 02 * Sec. 32. AS 06.55.602 is amended to read: 03 Sec. 06.55.602. Suspension and revocation of authorized delegates. (a) The 04 department may issue an order suspending or revoking the designation of an 05 authorized delegate if the department finds that 06 (1) the authorized delegate violated this chapter or a regulation adopted 07 or an order issued under this chapter; 08 (2) the authorized delegate did not cooperate with an examination or 09 investigation by the department; 10 (3) the authorized delegate engaged in fraud, intentional 11 misrepresentation, or gross negligence; 12 (4) the authorized delegate is convicted of a violation of a state or 13 federal anti-money laundering statute; 14 (5) the competence level, experience, character, or general fitness of 15 the authorized delegate or a person in control of the authorized delegate indicates that 16 it is not in the public interest to permit the authorized delegate to provide money 17 transmission [SERVICES]; or 18 (6) the authorized delegate is engaging in an unsafe or unsound 19 practice. 20 (b) In determining whether an authorized delegate is engaging in an unsafe or 21 unsound practice, the department may consider the size and condition of the 22 authorized delegate's provision of money transmission [SERVICES], the magnitude 23 of the loss, the gravity of the violation of this chapter or a regulation adopted or order 24 issued under this chapter, and the previous conduct of the authorized delegate. 25 * Sec. 33. AS 06.55.602 is amended by adding a new subsection to read: 26 (c) An authorized delegate may apply for relief from a suspension or 27 revocation of designation as an authorized delegate according to procedures prescribed 28 by the department. 29 * Sec. 34. AS 06.55.603(a) is amended to read: 30 (a) If the department determines that a violation of this chapter or of a 31 regulation adopted or an order issued under this chapter by a [MONEY SERVICES]
01 licensee or authorized delegate is likely to cause immediate and irreparable harm to 02 the [MONEY SERVICES] licensee, its customers, or the public as a result of the 03 violation, or cause insolvency or significant dissipation of assets of the [MONEY 04 SERVICES] licensee, the department may issue an order requiring the [MONEY 05 SERVICES] licensee or authorized delegate to cease and desist from the violation. 06 The order becomes effective on service of it on the [MONEY SERVICES] licensee or 07 authorized delegate. 08 * Sec. 35. AS 06.55.603(b) is amended to read: 09 (b) The department may issue an order against a [MONEY SERVICES] 10 licensee to cease and desist from providing money transmission [SERVICES] 11 through an authorized delegate who is the subject of a separate order by the 12 department. 13 * Sec. 36. AS 06.55.603(d) is amended to read: 14 (d) A [MONEY SERVICES] licensee or an authorized delegate who is served 15 with an order to cease and desist may petition the superior court for a judicial order 16 setting aside, limiting, or suspending the enforcement, operation, or effectiveness of 17 the order pending the completion of an administrative proceeding under AS 06.55.601 18 or 06.55.602. 19 * Sec. 37. AS 06.55.605 is amended to read: 20 Sec. 06.55.605. Civil penalties. The department may assess a civil penalty 21 against a person that [WHO] violates this chapter or a regulation adopted or an order 22 issued under this chapter in an amount not to exceed $1,000 a [EACH] day for each 23 day the violation is outstanding, plus the department's costs and expenses for the 24 investigation and prosecution of the matter, including reasonable attorney fees. 25 * Sec. 38. AS 06.55.606(b) is amended to read: 26 (b) A person who knowingly engages in an activity for which a [MONEY 27 SERVICES] license is required under this chapter without being licensed [AS A 28 MONEY SERVICES LICENSEE] and who receives more than $500 in compensation 29 within a 30-day period from this activity is guilty of a class C felony. 30 * Sec. 39. AS 06.55.606(c) is amended to read: 31 (c) A person who knowingly engages in an activity for which a [MONEY
01 SERVICES] license is required under this chapter without being [LICENSED AS] a 02 [MONEY SERVICES] licensee and who receives not [NO] more than $500 in 03 compensation within a 30-day period from this activity is guilty of a class A 04 misdemeanor. 05 * Sec. 40. AS 06.55.607(a) is amended to read: 06 (a) If the department has reason to believe that a person has violated or is 07 violating AS 06.55.101 [OR 06.55.201], the department may issue an order to show 08 cause why an order to cease and desist should not issue requiring that the person cease 09 and desist from the violation of AS 06.55.101 [OR 06.55.201]. 10 * Sec. 41. AS 06.55.607(e) is amended to read: 11 (e) A person that [WHO] is served with an order to cease and desist for 12 violating AS 06.55.101 [OR 06.55.201] may petition the superior court for a judicial 13 order setting aside, limiting, or suspending the enforcement, operation, or 14 effectiveness of the order pending the completion of an administrative proceeding 15 under AS 06.55.701 and 06.55.702. 16 * Sec. 42. AS 06.55.702(a) is amended to read: 17 (a) Except as otherwise provided in AS 06.55.603 and 06.55.607 [AND IN (b) 18 OF THIS SECTION], the department may not suspend or revoke a [MONEY 19 SERVICES] license, place a [MONEY SERVICES] licensee in receivership, issue an 20 order to cease and desist, suspend or revoke the designation of an authorized delegate, 21 or assess a civil penalty without notice and an opportunity to be heard. The department 22 shall also hold a hearing when requested to hold a hearing by an applicant whose 23 application for a [MONEY SERVICES] license is denied. 24 * Sec. 43. AS 06.55.802 is amended to read: 25 Sec. 06.55.802. Exemptions [EXCLUSIONS]. This chapter does not apply to 26 (1) the United States or a department, [AN] agency, [OR AN] 27 instrumentality, or agent of the United States; 28 (2) money transmission by the United States Postal Service or by an 29 agent [A CONTRACTOR ON BEHALF] of the United States Postal Service; 30 (3) a state, a municipality, a county, or another governmental agency 31 or governmental subdivision of a state, or its agent;
01 (4) a federally insured depository financial institution, a bank, a 02 bank holding company, an office of an international banking corporation, a branch of a 03 foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 04 Company Act), or a corporation organized under 12 U.S.C. 611 - 633 (Edge Act) 05 under the laws of a state or the United States, if it does not issue, sell, or provide 06 payment instruments or stored value through an authorized delegate who is not a bank, 07 a bank holding company, an office of an international banking corporation, a branch of 08 a foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 09 Company Act), [OR] a corporation organized under 12 U.S.C. 611 - 633 (Edge Act) 10 under the laws of a state or the United States, an institution regulated by the Farm 11 Credit Association, or a subsidiary or affiliate of a financial institution if the 12 subsidiary or affiliate is owned and controlled by a depository institution and 13 regulated by a federal banking agency; in this paragraph, "federal banking 14 agency" means the Board of Governors of the Federal Reserve System, the 15 United States Comptroller of the Currency, the director of the Office of Thrift 16 Supervision, the National Credit Union Administration, and the Federal Deposit 17 Insurance Corporation; 18 (5) electronic funds transfer of governmental benefits for a federal, 19 state, or municipal agency or a state political subdivision by a contractor on behalf of 20 (A) the United States or a department, an agency, or an 21 instrumentality of the United States; or 22 (B) a state, or a department, an agency, or an instrumentality of 23 a state; 24 (6) a board of trade or a person that [WHO], in the ordinary course of 25 business, provides clearance and settlement services for a board of trade, to the extent 26 of the operation of the person for a board of trade; in this paragraph, "board of trade" 27 means a board of trade designated as a contract market under 7 U.S.C. 1 - 27f 28 (Commodity Exchange Act); 29 (7) a registered futures commission merchant under the federal 30 commodities laws, to the extent of the merchant's operation as a registered futures 31 commission merchant under the federal commodities laws;
01 (8) a person that [WHO] provides clearance or settlement services 02 under a registration as a clearing agency or an exemption from the registration granted 03 under the federal securities laws, to the extent of the person's operation as a provider 04 of clearance or settlement services under a registration as a clearing agency or an 05 exemption from the registration granted under the federal securities laws; 06 (9) an operator of a payment system to the extent that the operator 07 provides processing, clearing, or settlement services, between or among persons 08 exempted [EXCLUDED] by this section, in connection with wire transfers, credit 09 card transactions, debit card transactions, stored-value transactions, automated 10 clearinghouse transfers, or similar funds transfers; [OR] 11 (10) a person registered as a securities broker-dealer under federal or 12 state securities laws, to the extent of the person's operation as a securities broker- 13 dealer; 14 (11) an individual employed by a licensee, authorized delegate, or 15 a person exempt from the licensing requirements of this chapter when the 16 individual is acting within the scope of employment and under the supervision of 17 the licensee, authorized delegate, or exempt person and not as an independent 18 contractor; 19 (12) a person expressly appointed as a third-party service provider 20 to or agent of an entity exempt under (4) of this section, solely to the extent that 21 (A) the service provider or agent is engaging in money 22 transmission on behalf of and in accordance with a written agreement 23 with the exempt entity that sets out the specific functions that the service 24 provider or agent is to perform; and 25 (B) the exempt entity assumes all risk of loss and all legal 26 responsibility for satisfying the outstanding money transmission 27 obligations owed to purchasers and holders of the outstanding money 28 transmission obligations upon receipt of the purchaser's or holder's 29 money or monetary value by the service provider or agent; 30 (13) a person appointed as an agent of a payee to collect and 31 process a payment from a payor to the payee for goods or services, other than
01 money transmission services, provided to the payor by the payee, if 02 (A) the payee and the agent have a written agreement 03 directing the agent to collect and process payments from payors on the 04 payee's behalf; 05 (B) the payee holds the agent out to the public as accepting 06 payments for goods or services on the payee's behalf; and 07 (C) payment for the goods and services is treated as 08 received by the payee upon receipt by the agent and the payor's obligation 09 is extinguished, and there is no risk of loss to the payor if the agent fails to 10 remit the funds to the payee; 11 (14) a person that acts as an intermediary by processing payments 12 between an entity that has directly incurred an outstanding money transmission 13 obligation to a sender and the sender's designated recipient, if the person acting 14 as an intermediary 15 (A) is a licensee or exempt from the licensing requirements 16 under this chapter; 17 (B) provides a receipt, electronic record, or other written 18 confirmation to the sender identifying the entity as the provider of money 19 transmission in the transaction; and 20 (C) bears sole responsibility to satisfy the outstanding 21 money transmission obligation to the sender, including the obligation to 22 remedy a failure to transmit the funds to the sender's designated 23 recipient; 24 (15) an entity that is an insurance company, title insurance 25 company, or escrow agent, to the extent that the entity is lawfully authorized to 26 conduct business in this state as an insurance company, title insurance company, 27 or escrow agent and to the extent that the entity engages in money transmission 28 as an ancillary service when conducting insurance, title insurance, or escrow 29 activity; 30 (16) an attorney, to the extent that the attorney is lawfully 31 authorized to practice law in this state and engages in money transmission as an
01 ancillary service to the practice of law; or 02 (17) a person exempt by regulation or order of the department if 03 the department finds that the exemption is in the public interest and that the 04 regulation of the person is not necessary for the purposes of this chapter; 05 (18) a person providing payroll processing services; in this 06 paragraph, 07 (A) "payroll processing services" means receiving money 08 for transmission under a contract with a person to deliver wages or 09 salaries, make payment of payroll taxes to state and federal agencies, 10 make payments relating to employee benefit plans, or make distributions 11 of other authorized deductions from wages or salaries; 12 (B) "receiving money for transmission" means receiving 13 money or monetary value in the United States for transmission within or 14 outside the United States by electronic or other means [UNDER FEDERAL 15 OR STATE SECURITIES LAWS]. 16 * Sec. 44. AS 06.55 is amended by adding a new section to read: 17 Sec. 06.55.803. Authority to require demonstration of exemption. The 18 department may require a person that claims to be exempt from licensing under 19 AS 06.55.802 to provide information and documentation to the department 20 demonstrating the claimed exemption. 21 * Sec. 45. AS 06.55.810 is amended to read: 22 Sec. 06.55.810. Notices required. (a) A [MONEY SERVICES] licensee shall 23 provide customers with notice of how to file a complaint. A licensee shall provide 24 notice [DISPLAY A SIGN] at each location where the [MONEY SERVICES] 25 licensee 26 (1) provides money transmission [SERVICES] under this chapter; 27 and 28 (2) has not designated an authorized delegate to provide money 29 transmission [SERVICES] on behalf of the [MONEY SERVICES] licensee at the 30 location. 31 (b) An authorized delegate shall provide customers with notice of how to
01 file a complaint. An authorized delegate shall provide notice [DISPLAY A SIGN] 02 at each location where the authorized delegate provides money transmission 03 [SERVICES] under this chapter. 04 (c) The notice [SIGN] required by (a) or (b) of this section must be in a 05 format and contain information required by the department [SHALL BE 06 DISPLAYED AT ALL TIMES IN FULL VIEW OF PERSONS VISITING THE 07 LOCATION AND SHALL GIVE THE DEPARTMENT'S ADDRESS AND THE 08 DEPARTMENT'S TELEPHONE NUMBER FOR RECEIVING CALLS 09 REGARDING COMPLAINTS AND OTHER CONCERNS ABOUT MONEY 10 SERVICES LICENSEES, AUTHORIZED DELEGATES, AND THE MONEY 11 SERVICES PROVIDED BY MONEY SERVICES LICENSEES AND 12 AUTHORIZED DELEGATES]. 13 * Sec. 46. AS 06.55.810 is amended by adding a new subsection to read: 14 (d) A licensee or authorized delegate shall include on a receipt or disclose on 15 the licensee's Internet website or mobile application the name and telephone number 16 of the department and a statement that the licensee's customers can contact the 17 department with questions or complaints about the licensee's money transmission. In 18 this subsection, "mobile application" means a software application developed 19 specifically for use on small, wireless computing devices. 20 * Sec. 47. AS 06.55 is amended by adding a new section to read: 21 Sec. 06.55.815. In-state determination. For a transaction requested 22 electronically or by telephone, the provider of money transmission may determine 23 whether the person requesting the transaction is in this state by relying on other 24 information provided by the person regarding the location of the person's residential 25 address or principal place of business or other physical address, and any records 26 associated with the person that the provider of money transmission may have that 27 indicate the location, including an address associated with an account. 28 * Sec. 48. AS 06.55.830 is repealed and reenacted to read: 29 Sec. 06.55.830. Receipt. (a) Except as provided in (d) of this section, a 30 licensee or a licensee's authorized delegate shall provide the sender a receipt for 31 money received for transmission. The receipt must be in English and in any other
01 language principally used by the licensee or authorized delegate to advertise, solicit, or 02 negotiate, either orally or in writing, for the transaction conducted. The receipt must 03 contain the following information, as applicable: 04 (1) the name of the sender; 05 (2) the name of the designated recipient; 06 (3) the date of the transaction; 07 (4) the unique transaction or identification number; 08 (5) the name of the licensee, unique registry identifier, the licensee's 09 business address, and the licensee's customer service telephone number; 10 (6) the dollar amount of the transaction; 11 (7) any fee charged by the licensee to the sender for the transaction; 12 (8) any taxes collected by the licensee from the sender for the 13 transaction; and 14 (9) the exchange rate, if any, used by the provider for the transaction. 15 (b) For a transaction conducted in person, the receipt may be provided 16 electronically if the sender requests or agrees to receive an electronic receipt. For a 17 transaction conducted electronically or by telephone, a receipt may be provided 18 electronically. All electronic receipts must be provided in a retainable form. 19 (c) This section does not apply to 20 (1) money received for transmission that is subject to 12 C.F.R. Part 21 1005, Subpart B; 22 (2) money received for transmission that is not primarily for personal, 23 family, or household purposes; 24 (3) money received for transmission in accordance with a written 25 agreement between the licensee and payee to process payments for goods or services 26 provided by the payee; 27 (4) an individual consumer transferring funds to reload stored value on 28 the consumer's account through a point of sale transaction; or 29 (5) a stored-value transaction exempted by the department by 30 regulation or order. 31 (d) In this section, "receipt" means a paper receipt, electronic record, or other
01 written confirmation. 02 * Sec. 49. AS 06.55 is amended by adding a new section to read: 03 Sec. 06.55.835. Timely transmission. (a) A licensee shall forward all money 04 received for transmission in accordance with the terms of the agreement between the 05 licensee and the sender unless the licensee has a reasonable cause to believe that the 06 sender may be a victim of fraud or that a crime or violation of law, rule, or regulation 07 has occurred, is occurring, or may occur. 08 (b) If a licensee fails to forward money received for transmission in 09 accordance with this section, the licensee must respond to inquiries by the sender with 10 the reason for the failure unless providing a response would violate a state or federal 11 law, rule, or regulation. 12 * Sec. 50. AS 06.55.840 is repealed and reenacted to read: 13 Sec. 06.55.840. Refunds. (a) Except as provided in (b) of this section, a 14 licensee shall refund to the sender, within 10 days after receipt of the sender's written 15 request for a refund, all money received for transmission unless 16 (1) the money has been forwarded within 10 days after the date on 17 which the money was received for transmission; 18 (2) within 10 days after the date on which the money was received for 19 transmission, instructions have been given committing an equivalent amount of money 20 to the person designated by the sender; 21 (3) the agreement between the licensee and the sender instructs the 22 licensee to forward the money at a time that is beyond 10 days after the date on which 23 the money was received for transmission; if money has not yet been forwarded in 24 accordance with the terms of the agreement between the licensee and the sender, the 25 licensee shall issue a refund in accordance with this section; 26 (4) the refund is requested for a transaction that the licensee has not 27 completed based on a reasonable belief that a crime or violation of law, rule, or 28 regulation has occurred, is occurring, or may occur; or 29 (5) the refund request does not 30 (A) identify the sender's name and 31 (i) address; or
01 (ii) telephone number; or 02 (B) identify the particular transaction to be refunded in the 03 event the sender has multiple transactions outstanding. 04 (b) This section does not apply to: 05 (1) money received for transmission subject to 12 C.F.R. Part 1005, 06 Subpart B; or 07 (2) money received for transmission in accordance with a written 08 agreement between the licensee and payee to process payments for goods or services 09 provided by the payee. 10 * Sec. 51. AS 06.55.850(b) is amended to read: 11 (b) The department shall establish fee levels under (a) of this section so that 12 the total amount of fees collected for [BOTH MONEY TRANSMISSION] licenses 13 [AND CURRENCY EXCHANGE LICENSES] under this chapter approximately 14 equals the department's actual total regulatory costs for [BOTH MONEY 15 TRANSMISSION] licenses [AND CURRENCY EXCHANGE LICENSES. THE 16 DEPARTMENT SHALL SET THE FEE LEVELS SO THAT THE FEE LEVELS 17 FOR BOTH MONEY TRANSMISSION LICENSES AND CURRENCY 18 EXCHANGE LICENSES ARE THE SAME]. 19 * Sec. 52. AS 06.55.850 is amended by adding a new subsection to read: 20 (f) The department shall set an annual renewal fee based on a licensee's total 21 volume of money transmission in the state, calculated in dollars or dollar equivalents. 22 * Sec. 53. AS 06.55.990(1) is amended to read: 23 (1) "authorized delegate" means a person that [WHOM] a [MONEY 24 SERVICES] licensee designates to engage in [PROVIDE] money transmission 25 [SERVICES] on behalf of the [MONEY SERVICES] licensee; 26 * Sec. 54. AS 06.55.990(3) is amended to read: 27 (3) "control" means 28 (A) the ownership of, or the power to vote, directly or 29 indirectly, at least 25 percent of the outstanding [A CLASS OF] voting 30 shares [SECURITIES] or voting interests of a [MONEY SERVICES] licensee 31 or of a person that owns or has the power to vote, directly or indirectly, at
01 least 25 percent of the voting shares or voting interests [IN CONTROL] of 02 a [MONEY SERVICES] licensee unless the person with the power to vote is 03 a passive investor as described in AS 06.55.404(q); 04 (B) the power to elect or appoint a majority of executive 05 officers, managers, directors, trustees, or other persons exercising managerial 06 authority of a [MONEY SERVICES] licensee or person in control of a 07 [MONEY SERVICES] licensee; or 08 (C) the power to exercise directly or indirectly, a controlling 09 influence over the management or policies of a [MONEY SERVICES] 10 licensee or person in control of a [MONEY SERVICES] licensee; 11 * Sec. 55. AS 06.55.990(15) is amended to read: 12 (15) "money transmission" 13 (A) means 14 (i) selling or issuing payment instruments or stored 15 value to a person located in this state; 16 (ii) [, OR] receiving money or monetary value for 17 transmission to the state, from the state, or within the state; 18 (iii) engaging in virtual currency exchange; or 19 (iv) engaging in virtual currency business activity; 20 (B) [, BUT] does not mean [INCLUDE] the provision solely of 21 [DELIVERY,] online services, telecommunications services, or network 22 access; 23 * Sec. 56. AS 06.55.990(19) is amended to read: 24 (19) "payment instrument" means a written or electronic check, [A] 25 draft, [A] money order, [A] traveler's check, or other written or electronic 26 [ANOTHER] instrument for the transmission or payment of money or monetary value, 27 whether or not negotiable, but does not mean stored value, [INCLUDE] a credit card 28 voucher, a letter of credit, [OR] an instrument that is redeemable by the issuer in 29 goods or services, or other instrument not sold to the public but issued and 30 distributed as part of a loyalty, rewards, or promotional program; 31 * Sec. 57. AS 06.55.990(20) is amended to read:
01 (20) "person" means an individual, general partnership, limited 02 partnership, [A] corporation, [A BUSINESS] trust, [AN ESTATE, A TRUST, A 03 PARTNERSHIP, A] limited liability company, [AN] association, [A] joint stock 04 corporation [VENTURE, A GOVERNMENT, A GOVERNMENTAL 05 SUBDIVISION, AN AGENCY, OR AN INSTRUMENTALITY, A PUBLIC 06 CORPORATION], or any other legal or corporate [COMMERCIAL] entity 07 identified by the department; 08 * Sec. 58. AS 06.55.990(22) is amended to read: 09 (22) "state" means a state of the United States, the District of 10 Columbia, Puerto Rico, the United States Virgin Islands, a United States military 11 installation that is located in a foreign country, or a territory or insular possession 12 subject to the jurisdiction of the United States; 13 * Sec. 59. AS 06.55.990(23) is amended to read: 14 (23) "stored value" 15 (A) means 16 (i) monetary value representing a claim against the 17 issuer that is evidenced by an electronic or digital record and that is 18 intended and accepted as a means of redemption for money or 19 monetary value, or payment for goods or services; 20 (ii) prepaid access as defined in 31 C.F.R. 1010.100; 21 (B) does not mean a payment instrument or a closed-loop 22 stored value, or a stored value not sold to the public but issued and 23 distributed as part of a loyalty, rewards, or promotional program; 24 * Sec. 60. AS 06.55.990(24) is amended to read: 25 (24) "unsafe or unsound practice" means a practice or conduct by a 26 [MONEY TRANSMISSION] licensee or an authorized delegate that [OF THE 27 MONEY TRANSMISSION LICENSEE IF THE PRACTICE] creates the likelihood 28 of material loss, insolvency, or dissipation of the [MONEY TRANSMISSION] 29 licensee's assets, or otherwise materially prejudices the interests of the [MONEY 30 TRANSMISSION] licensee's customers. 31 * Sec. 61. AS 06.55.990 is amended by adding new paragraphs to read:
01 (25) "accredited state" means a state agency that is accredited by an 02 organization that the department determines is a nationally recognized association of 03 state bank supervisors and money transmitter regulators for money transmission 04 licensing and supervision; 05 (26) "acting in concert" means persons knowingly acting together with 06 a common goal of jointly acquiring control of a licensee whether or not under an 07 express agreement; 08 (27) "average daily money transmission liability" means the amount of 09 the licensee's outstanding money transmission obligations in this state at the end of 10 each day in a given period, added together and divided by the total number of days in 11 the given period; in this paragraph, "given period" means a calendar year quarter 12 ending March 31, June 30, September 30, or December 31; 13 (28) "Bank Secrecy Act" means 31 U.S.C. 5311 - 5336 and its 14 implementing regulations; 15 (29) "closed-loop stored value" means stored value that is redeemable 16 by the issuer only for goods or services provided by the issuer or its affiliate, or 17 franchisees of the issuer or its affiliate, except to the extent required by applicable law 18 to be redeemable in cash for its cash value; 19 (30) "control of virtual currency," when used in reference to a 20 transaction or relationship involving virtual currency, means the power to execute 21 unilaterally or prevent indefinitely a virtual currency transaction; 22 (31) "dollar equivalent" means the equivalent value of a particular 23 virtual currency in United States dollars shown on a virtual currency exchange based 24 in the United States for a particular date or period specified in this chapter; in this 25 paragraph, "virtual currency exchange" means an organization that provides a market 26 for the exchange of virtual currency; 27 (32) "eligible rating" means a short-term or long-term credit rating 28 determined by the department that is based on any of the three highest rating 29 categories provided by an eligible rating service; 30 (33) "eligible rating service" means a nationally recognized statistical 31 rating organization, as determined by the United States Securities and Exchange
01 Commission, and any other nationally recognized statistical rating organization 02 designated by the department by regulation; 03 (34) "federally insured depository financial institution" means a bank, 04 credit union, savings and loan association, trust company, savings association, savings 05 bank, industrial bank, or industrial loan company organized under the laws of the 06 United States or any state that has federally insured deposits; 07 (35) "individual" means a natural person; 08 (36) "in this state" means at a physical location within this state for a 09 transaction requested in person; 10 (37) "key individual" means an individual ultimately responsible for 11 establishing or directing policies and procedures of the licensee, including an 12 executive officer, manager, director, or trustee; 13 (38) "license" means a license issued under AS 06.55.105; 14 (39) "licensee" means a person licensed under AS 06.55.105; 15 (40) "money received for transmission" means money or monetary 16 value received in the United States for transmission within or outside the United States 17 by electronic or other means; 18 (41) "multistate licensing process" means an agreement entered into by 19 and among state regulators relating to coordinated processing of applications for 20 licenses, applications for the acquisition of control of a licensee, control 21 determinations, or notice and information requirements for a change of key 22 individuals; 23 (42) "outstanding money transmission obligation" means 24 (A) a payment instrument or stored value issued or sold by a 25 licensee to a person located in the United States, or reported as sold by an 26 authorized delegate of the licensee to a person that is located in the United 27 States, that has not yet been paid or refunded by or for the licensee, or 28 escheated in accordance with applicable abandoned property laws; or 29 (B) money received for transmission by the licensee or an 30 authorized delegate in the United States from a person located in the United 31 States that has not been received by the payee or refunded to the sender, or
01 escheated in accordance with applicable abandoned property laws; in this 02 paragraph, "in the United States" means, to the extent applicable, a person in a 03 state, territory, or possession of the United States, the District of Columbia, the 04 Commonwealth of Puerto Rico, or a United States military installation that is 05 located in a foreign country; 06 (43) "registry" means a nationwide organization that the department 07 determines is a nationally recognized multistate licensing system to use as a multistate 08 licensing process; 09 (44) "tangible net worth" means the aggregate assets of a licensee 10 excluding all intangible assets, less liabilities, as determined in accordance with 11 generally accepted accounting principles; 12 (45) "virtual currency" 13 (A) means a digital representation of value that 14 (i) is used as a medium of exchange, unit of account, or 15 store of value; and 16 (ii) is not money, whether or not denominated in 17 money; 18 (B) does not mean 19 (i) a transaction in which a merchant grants, as part of 20 an affinity or rewards program, value that cannot be taken from or 21 exchanged with the merchant for money, bank credit, or virtual 22 currency; or 23 (ii) a digital representation of value issued by or on 24 behalf of a publisher and used solely within an online game, game 25 platform, or family of games sold by the same publisher or offered on 26 the same game platform; 27 (46) "virtual currency administration" means issuing virtual currency 28 with the authority to redeem the currency for money, bank credit, or other virtual 29 currency; 30 (47) "virtual currency business activity" means 31 (A) exchanging, transferring, or storing virtual currency or
01 engaging in virtual currency administration, whether directly or through an 02 agreement with a virtual currency control services vendor; 03 (B) holding electronic precious metals or electronic certificates 04 representing interests in precious metals on behalf of another person or issuing 05 shares or electronic certificates representing interests in precious metals; or 06 (C) exchanging one or more digital representations of value 07 used within one or more online games, game platforms, or family of games for 08 (i) virtual currency offered by or on behalf of the same 09 publisher from which the original digital representation of value was 10 received; or 11 (ii) money or bank credit outside the online game, game 12 platform, or family of games offered by or on behalf of the same 13 publisher from which the original digital representation of value was 14 received; 15 (48) "virtual currency control services vendor" means a person that has 16 control of virtual currency solely under an agreement with a person that, on behalf of 17 another person, assumes control of virtual currency; 18 (49) "virtual currency exchange" means to 19 (A) assume control of virtual currency from or on behalf of a 20 person, at least momentarily; 21 (B) sell, trade, or convert 22 (i) virtual currency for money, bank credit, or one or 23 more forms of virtual currency or money; or 24 (ii) bank credit for one or more forms of virtual 25 currency; 26 (50) "virtual currency transfer" means to assume control of virtual 27 currency from or on behalf of a person and to 28 (A) credit the virtual currency to the account of another person; 29 (B) move the virtual currency from one account of a person to 30 another account of the same person; or 31 (C) relinquish control of virtual currency to another person.
01 * Sec. 62. AS 06.55.995 is amended to read: 02 Sec. 06.55.995. Short title. This chapter may be cited as the Alaska Uniform 03 Money Transmission Modernization [SERVICES] Act. 04 * Sec. 63. AS 12.62.400(b) is amended to read: 05 (b) Notwithstanding (a) of this section, an applicant for a license under 06 AS 06.60 or a person controlling a licensee or an applicant for a license under 07 AS 06.55, seeking to acquire control of a licensee under AS 06.55, or acting as a 08 key individual under AS 06.55 may submit the applicant's fingerprints to the 09 Nationwide Mortgage Licensing System and Registry. In this subsection, "Nationwide 10 Mortgage Licensing System and Registry" has the meaning given in 12 U.S.C. 5102. 11 * Sec. 64. AS 06.55.103, 06.55.104, 06.55.107, 06.55.201, 06.55.202, 06.55.203, 06.55.204, 12 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, 13 06.55.990(5), 06.55.990(6), 06.55.990(8), 06.55.990(9), 06.55.990(12), 06.55.990(13), 14 06.55.990(14), 06.55.990(16), 06.55.990(17), and 06.55.990(18) are repealed. 15 * Sec. 65. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 INDIRECT COURT RULE AMENDMENT. AS 06.55.605, as amended by sec. 37 of 18 this Act, has the effect of changing Rules 79 and 82, Alaska Rules of Civil Procedure, by 19 changing the award of court costs and attorney fees in certain cases. 20 * Sec. 66. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 TRANSITION. Contracts, rights, liabilities, and obligations created by or under a law 23 repealed or amended by this Act, and in effect on the day before the effective date of the 24 repeal or amendment, remain in effect notwithstanding this Act taking effect. 25 * Sec. 67. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 TRANSITION: CURRENT MONEY SERVICES LICENSEES. A person that has a 28 valid money services license or approval on December 31, 2023, may continue to operate 29 under that license or approval until the licensee renews the license under AS 06.55.106, 30 enacted by sec. 5 of this Act, or through July 1, 2025, whichever is later. In this section, 31 (1) "approval" means approval under AS 06.55.103, as that section read on
01 December 31, 2023; 02 (2) "money services licensee" has the meaning given in AS 06.55.990, as that 03 section read on December 31, 2023. 04 * Sec. 68. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 07 Economic Development may adopt regulations to implement this Act. The regulations take 08 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 09 law implemented by the regulations. 10 * Sec. 69. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 CONDITIONAL EFFECT. AS 06.55.605, as amended by sec. 37 of this Act, takes 13 effect only if sec. 65 of this Act receives the two-thirds majority vote of each house required 14 by art. IV, sec. 15, Constitution of the State of Alaska. 15 * Sec. 70. Section 68 of this Act takes effect immediately under AS 01.10.070(c). 16 * Sec. 71. Except as provided in sec. 70 of this Act, this Act takes effect January 1, 2025.