CSSB 84(JUD): "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(JUD) 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 the 17 following items: 18 (1) the individual's fingerprints; the department shall submit the 19 fingerprints to the Department of Public Safety to obtain a national criminal history 20 record check under AS 12.62.400; and 21 (2) personal history and experience in a form and in a medium 22 prescribed by the department, including 23 (A) an independent credit report from a consumer reporting 24 agency, unless the individual does not have a social security number; 25 (B) information related to a criminal conviction or pending 26 charges; and 27 (C) information related to any regulatory or administrative 28 action and any civil litigation involving claims of fraud, misrepresentation, 29 conversion, mismanagement of funds, breach of fiduciary duty, or breach of 30 contract. 31 (b) If the individual has resided outside the United States at any time in the 10
01 years before the date of furnishing the information under (a) of this section, the 02 individual shall also provide an investigative background report prepared by an 03 independent search firm. The independent search firm may not be affiliated with or 04 have an interest in the individual the firm is researching. At a minimum, the 05 investigative background report must 06 (1) demonstrate that the independent search firm has sufficient 07 knowledge, resources, and employs accepted and reasonable methodologies to conduct 08 the research of the background report; 09 (2) be written in English and contain the following: 10 (A) if available in the individual's current jurisdiction of 11 residency, a comprehensive credit report, or equivalent information obtained or 12 generated by the independent search firm to accomplish a comprehensive 13 credit report, including a search of the court data in the countries, provinces, 14 states, cities, towns, and contiguous areas where the individual has resided and 15 worked; 16 (B) criminal records information for the previous 10 years, 17 including felonies, misdemeanors, or similar convictions for violations of law 18 in the countries, provinces, states, cities, towns, and contiguous areas where 19 the individual has resided and worked; 20 (C) employment history; 21 (D) media history, including an electronic search of national 22 and local publications, wire services, and business applications; and 23 (E) regulatory history related to financial services, including 24 money transmission, securities, banking, insurance, and mortgage-related 25 industries. 26 Sec. 06.55.110. Consistent state licensing. (a) To establish consistent 27 licensing between this state and other states, the department may 28 (1) implement all licensing provisions of this chapter in a manner that 29 is consistent with other states that have adopted multistate licensing processes; and 30 (2) participate in nationwide protocols for licensing cooperation and 31 coordination among state regulators if the nationwide protocols for licensing
01 cooperation and coordination are consistent with this chapter. 02 (b) To fulfill the purposes of this chapter, the department may establish 03 relationships or contracts with the registry or other entities designated by the registry 04 to enable the department to 05 (1) collect and maintain records; 06 (2) coordinate multistate licensing processes and supervision 07 processes; 08 (3) process fees; and 09 (4) facilitate communication between the department and licensees or 10 other persons subject to this chapter. 11 (c) The department may use the registry for all aspects of licensing in 12 accordance with this chapter, including license applications, applications for 13 acquisitions of control, surety bonds, reporting, criminal background checks, credit 14 checks, fee processing, and examinations. 15 * Sec. 7. AS 06.55 is amended by adding new sections to read: 16 Article 1A. Virtual Currency Business Activity. 17 Sec. 06.55.150. Requirements for engaging in virtual currency business 18 activity. (a) A person may not engage in virtual currency business activity or hold 19 itself out as being able to engage in virtual currency business activity unless the person 20 is 21 (1) licensed under this chapter; or 22 (2) exempt from licensing under AS 06.55.802. 23 (b) A person that is licensed to engage in virtual currency business activity is 24 engaged in the business of money transmission and is subject to the requirements of 25 this chapter. 26 Sec. 06.55.155. Required disclosures. (a) A licensee that engages in virtual 27 currency business activity shall provide to a person that uses the licensee's products or 28 service the disclosures required by (b) of this section and any additional disclosures 29 the department determines to be reasonably necessary for the protection of persons. 30 The department shall determine by regulation or order the time and form required for 31 disclosure. A disclosure required by this section must be made separately from any
01 other information provided by the licensee and in a clear and conspicuous manner in a 02 record the person may keep. A licensee may propose for the department's approval 03 alternate disclosures as more appropriate for its virtual currency business activity. 04 (b) Before establishing a relationship with a person, a licensee shall disclose, 05 to the extent applicable to the virtual currency business activity the licensee will 06 undertake with the person, 07 (1) a schedule of fees and charges the licensee may assess, the manner 08 by which fees and charges will be calculated if not set in advance and disclosed, and 09 the timing of the fees and charges; 10 (2) whether the product or service provided by the licensee is covered 11 by 12 (A) a form of insurance or is otherwise guaranteed against loss 13 by an agency of the United States 14 (i) up to the dollar equivalent of virtual currency 15 purchased from the licensee or for control of virtual currency by the 16 licensee as of the date of the placement or purchase, including the 17 maximum amount provided by insurance under the Federal Deposit 18 Insurance Corporation or otherwise available from the Securities 19 Investor Protection Corporation; or 20 (ii) if not provided at the dollar equivalent of virtual 21 currency purchased from the licensee or for control of virtual currency 22 by the licensee, the maximum amount of coverage for each person 23 expressed in the dollar equivalent of the virtual currency; or 24 (B) private insurance against theft or loss, including cyber 25 theft; 26 (3) the irrevocability of a virtual currency transfer or virtual currency 27 exchange and any exception to irrevocability; 28 (4) a description of 29 (A) liability for an unauthorized, mistaken, or accidental virtual 30 currency transfer or virtual currency exchange; 31 (B) the person's responsibility to provide notice to the licensee
01 of a virtual currency transfer or virtual currency exchange; 02 (C) the basis for any recovery by the person from the licensee 03 or registrant; 04 (D) general error resolution rights applicable to a virtual 05 currency transfer or virtual currency exchange; and 06 (E) the method for the person to update the person's contact 07 information with the licensee; 08 (5) that the date or time when a virtual currency transfer or virtual 09 currency exchange is made and the person's account is debited may differ from the 10 date or time when the person initiates an instruction to make the transfer or exchange; 11 (6) whether the person has a right to stop a preauthorized payment or 12 revoke authorization for a virtual currency transfer and the procedure to initiate a stop- 13 payment order or revoke authorization for a later virtual currency transfer; 14 (7) the person's right to receive a receipt, trade ticket, or other evidence 15 of a virtual currency transfer or virtual currency exchange; 16 (8) the person's right to at least 30 days' notice of a change in the 17 licensee's fee schedule, other terms and conditions of operating the licensee's virtual 18 currency business activity with the person, and the policies applicable to the person's 19 account; and 20 (9) that virtual currency is not money, that other persons are not 21 required to take payment in virtual currency, that the value of virtual currency can 22 change, and that virtual currency is not backed by a governmental agency. 23 (c) Except as provided in (d) of this section, at the conclusion of a virtual 24 currency transaction with or on behalf of a person, a licensee shall provide the person 25 a confirmation in a record that contains 26 (1) the name and contact information of the licensee, including 27 information the person may need to ask a question or file a complaint; 28 (2) the type, value, date, precise time, and amount of the transaction; 29 and 30 (3) the fee charged for the transaction, including any charge for 31 conversion of virtual currency to money, bank credit, or another virtual currency.
01 (d) If a licensee discloses that it will provide a daily confirmation in the initial 02 disclosure under (c) of this section, the licensee may elect to provide a single, daily 03 confirmation for all transactions with or on behalf of a person on that day instead of a 04 confirmation for each transaction. 05 Sec. 06.55.160. Property interests and entitlements to virtual currency. (a) 06 A licensee that has control of virtual currency for a person shall maintain in the 07 licensee's control an amount of each type of virtual currency sufficient to satisfy the 08 aggregate entitlements of the person to the type of virtual currency. 09 (b) If a licensee violates (a) of this section, the property interests of the person 10 in the virtual currency are pro rata property interests in the type of virtual currency to 11 which the person is entitled, without regard to the time the person became entitled to 12 the virtual currency or the licensee obtained control of the virtual currency. 13 (c) The virtual currency referred to in this section is 14 (1) held for the person entitled to the virtual currency; 15 (2) not property of the licensee; 16 (3) not subject to the claims of creditors of the licensee; and 17 (4) considered a permissible investment under this chapter. 18 Sec. 06.55.165. Additional requirements and clarifications for virtual 19 currency business activities. (a) A licensee engaged in a virtual currency business 20 activity shall comply with all provisions of this chapter to the extent applicable to the 21 licensee's activities. 22 (b) A licensee engaged in a virtual currency business activity may include 23 virtual currency in the licensee's calculation of tangible net worth, except virtual 24 currency controlled by a person entitled to the protections of AS 06.55.160. The 25 virtual currency is measured by the average value of the virtual currency expressed in 26 the dollar equivalent over the previous six calendar months. 27 (c) For five years after the date of virtual currency business activity with or on 28 behalf of a person, a licensee shall maintain a record of 29 (1) each transaction of the licensee with or on behalf of the person or 30 for the licensee's account in this state, including 31 (A) the identity of the person;
01 (B) the form of the transaction; 02 (C) the amount, date, and payment instructions given by the 03 person; and 04 (D) the account number, name, and mailing address of the 05 resident, and, to the extent feasible, other parties to the transaction; 06 (2) the aggregate number of transactions and aggregate value of 07 transactions by the licensee with or on behalf of the person and for the licensee's 08 account in this state, expressed in the dollar equivalent of virtual currency for the 09 previous 12 calendar months; 10 (3) each transaction in which the licensee engaged in a virtual currency 11 exchange of one form of virtual currency for money or another form of virtual 12 currency with or on behalf of the person; 13 (4) a general ledger posted at least monthly that lists all assets, 14 liabilities, capital, income, and expenses of the licensee; 15 (5) each report required to be submitted under AS 06.55.403; 16 (6) bank statements and bank reconciliation records for the licensee 17 and the name, account number, and mailing address of each bank the licensee uses in 18 the conduct of its virtual currency business activity with or on behalf of the person; 19 (7) a report of any dispute with the person; and 20 (8) a report of any virtual currency business activity transaction with or 21 on behalf of the person that the licensee was unable to complete. 22 (d) A licensee shall maintain the records required by (c) of this section in a 23 form that enables the department to determine whether the licensee is in compliance 24 with a court order, this chapter, or other law of this state. 25 Sec. 06.55.170. Scope of application. (a) The provisions of AS 06.55.150 - 26 06.55.165 do not apply to a virtual currency exchange, a virtual currency transfer, 27 virtual currency storage, or virtual currency administration to the extent the activity is 28 governed by 15 U.S.C. 1693 - 1693r (Electronic Fund Transfer Act of 1978), 15 29 U.S.C. 78a - 78qq (Securities Exchange Act of 1934), 7 U.S.C. 1 - 27f (Commodity 30 Exchange Act), or AS 45.56.100 - 45.56.995 (Alaska Securities Act). 31 (b) The provisions of AS 06.55.150 - 06.55.165 do not apply to activity by
01 (1) a person that contributes only connectivity software or computing 02 power to a decentralized virtual currency or to a protocol governing virtual currency 03 transfer of the digital representation of value; 04 (2) a person that provides only data storage or security services for a 05 business engaged in virtual currency business activity and does not otherwise engage 06 in virtual currency business activity on behalf of another person; 07 (3) a person that provides only to another person otherwise exempt 08 from this chapter virtual currency as one or more enterprise solutions used solely 09 between each other and has no agreement or relationship with a person that is an end 10 user of virtual currency; 11 (4) a person using virtual currency, including creating, investing, 12 buying, or selling, or obtaining virtual currency as payment for the purchase or sale of 13 goods or services, solely 14 (A) on the person's own behalf; 15 (B) for personal, family, or household purposes; or 16 (C) for academic purposes; 17 (5) a person that has virtual currency business activity with or on 18 behalf of a person reasonably expected to be valued, in the aggregate, on an annual 19 basis at $5,000 or less, measured by the dollar equivalent of virtual currency; 20 (6) an attorney providing escrow services to a person; 21 (7) a title insurance company providing escrow services to a person; 22 (8) a securities intermediary, as defined in AS 45.08.102, or a 23 commodity intermediary, as defined in AS 45.29.102, that 24 (A) does not engage in the ordinary course of business in 25 virtual currency business activity with or on behalf of a person in addition to 26 maintaining securities accounts or commodities accounts and is regulated as a 27 securities intermediary or commodity intermediary under federal law, the law 28 of this state other than this chapter, or the law of another state; and 29 (B) affords a person protections comparable to those set out in 30 AS 06.55.160; 31 (9) a secured creditor under AS 45.29 or creditor with a judicial lien or
01 lien arising by operation of law on collateral that is virtual currency, if the virtual 02 currency business activity of the creditor is limited to enforcement of the security 03 interest in compliance with AS 45.29 or the law applicable to the lien; 04 (10) a virtual currency control services vendor; 05 (11) a person that does not receive compensation from a person for 06 (A) providing virtual currency products or services; 07 (B) conducting virtual currency business activity; or 08 (C) engaging in testing products or services with the person's 09 own funds. 10 (c) The department may determine, based on facts particular to the person or 11 class of persons, that a person or class of persons is exempt from this chapter. 12 * Sec. 8. AS 06.55.301 is repealed and reenacted to read: 13 Sec. 06.55.301. Relationship between licensee and authorized delegate. (a) 14 Before a licensee is authorized to conduct business through an authorized delegate or 15 to allow a person to act as the licensee's authorized delegate, the licensee shall 16 (1) adopt, and update as necessary, written policies and procedures 17 reasonably designed to ensure that the authorized delegate complies with applicable 18 state and federal law; 19 (2) enter into a written contract that complies with (c) of this section; 20 and 21 (3) conduct a reasonable, risk-based background investigation 22 sufficient for the licensee to determine whether the authorized delegate has complied 23 and is likely to comply with applicable state and federal law. 24 (b) An authorized delegate shall operate in compliance with this chapter. 25 (c) The written contract required by (a)(2) of this section must be signed by 26 the licensee and the authorized delegate and, at a minimum, must 27 (1) appoint the person signing the contract as the licensee's authorized 28 delegate with the authority to conduct money transmission on behalf of the licensee; 29 (2) set out the nature and scope of the relationship between the licensee 30 and the authorized delegate and the respective rights and responsibilities of the parties; 31 (3) require the authorized delegate to agree to comply with all
01 applicable state and federal laws, rules, and regulations pertaining to money 02 transmission, including this chapter and regulations implementing this chapter, 03 relevant provisions of the Bank Secrecy Act, and P.L. 107-56 (USA PATRIOT Act); 04 (4) require the authorized delegate to remit and handle money and 05 monetary value in accordance with the terms of the contract; 06 (5) establish a trust for the benefit of the licensee on money and 07 monetary value after deducting fees received for money transmission; 08 (6) require the authorized delegate to prepare and maintain records as 09 required by this chapter or regulations implementing this chapter, or as reasonably 10 requested by the department; 11 (7) acknowledge that the authorized delegate consents to examination 12 or investigation by the department; 13 (8) state that the licensee is subject to regulation by the department and 14 that, as part of that regulation, the department may suspend or revoke an authorized 15 delegate designation or require the licensee to terminate an authorized delegate 16 designation; and 17 (9) acknowledge receipt of the written policies and procedures 18 required under (a)(1) of this section. 19 (d) If the licensee's license is suspended, revoked, surrendered, or expired, the 20 licensee shall, within five business days, provide documentation to the department that 21 the licensee has notified all applicable authorized delegates of the licensee whose 22 names are in a record filed with the department of the suspension, revocation, 23 surrender, or expiration of the license. Upon suspension, revocation, surrender, or 24 expiration of a license, applicable authorized delegates shall immediately stop 25 providing money transmission as an authorized delegate of the licensee. 26 (e) An authorized delegate of a licensee holds in trust for the benefit of the 27 licensee all money after deducting fees received from money transmission. If an 28 authorized delegate commingles any funds received from money transmission with 29 any other funds or property owned or controlled by the authorized delegate, all 30 commingled funds and other property shall be considered held in trust in favor of the 31 licensee in an amount equal to the amount of money net of fees received from money
01 transmission. 02 (f) In this section, "remit" means to make direct payments of money to a 03 licensee or its representative authorized to receive money or to deposit money in a 04 bank account specified by the licensee. 05 * Sec. 9. AS 06.55.302 is amended to read: 06 Sec. 06.55.302. Unauthorized activities. A person may not engage in the 07 business of money transmission on behalf of a person that is not licensed or 08 exempt [ACT AS AN AUTHORIZED DELEGATE FOR, OR OTHERWISE 09 PROVIDE MONEY SERVICES ON BEHALF OF, A PERSON WHO DOES NOT 10 HOLD A MONEY SERVICES LICENSE] under this chapter. A person that engages 11 in the business of money transmission on behalf of a person not licensed or 12 exempt under this chapter provides money transmission to the same extent as if 13 the person were a licensee and is jointly and severally liable with the unlicensed 14 or nonexempt person. 15 * Sec. 10. AS 06.55.401 is repealed and reenacted to read: 16 Sec. 06.55.401. Supervision; examination; investigation. (a) The department 17 may conduct an examination or investigation of a licensee or authorized delegate or 18 otherwise take independent action authorized by this chapter, regulations 19 implementing this chapter, and other applicable law, including the Bank Secrecy Act, 20 15 U.S.C. 1693 - 1693r (Electronic Fund Transfer Act), P.L. 106-102 (Gramm-Leach- 21 Bliley Act), and P.L. 107-56 (USA PATRIOT Act). The department may 22 (1) conduct an on-site or off-site examination as the department 23 reasonably requires; 24 (2) conduct an examination in conjunction with an examination 25 conducted by representatives of other agencies of this state, another state, or the 26 federal government; 27 (3) accept the examination report of another agency of this state, 28 another state, or the federal government, or a report prepared by an independent 29 accounting firm; a report accepted under this paragraph is considered for all purposes 30 to be an official report of the department; and 31 (4) summon and examine under oath a key individual or employee of a
01 licensee or authorized delegate and require the key individual or employee to produce 02 records regarding any matter related to the condition and business of the licensee or 03 authorized delegate. 04 (b) A licensee or authorized delegate shall provide, and the department shall 05 have complete access to, all records the department reasonably requires to conduct a 06 complete examination. The licensee or authorized delegate shall provide the records at 07 the location and in the format specified by the department. The department may use 08 multistate record production standards and examination procedures when the 09 multistate record production standards and examination procedures will reasonably 10 achieve the requirements of this section. 11 (c) Unless otherwise directed by the department, a licensee shall pay all costs 12 reasonably incurred in connection with an examination of a licensee or a licensee's 13 authorized delegate. 14 (d) Information obtained during an examination under this chapter may be 15 disclosed only as provided in AS 06.55.407. 16 * Sec. 11. AS 06.55.403(a) is repealed and reenacted to read: 17 (a) A licensee shall submit a report of the licensee's financial condition within 18 45 days after the end of each quarter of the calendar year or within an extended period 19 that the department establishes. The report of condition must include 20 (1) financial information at the licensee's level; 21 (2) nationwide and state-specific money transmission transaction 22 information in every jurisdiction in the United States where the licensee is licensed to 23 engage in money transmission; 24 (3) a permissible investments report; 25 (4) transaction destination country reporting for money received for 26 transmission, if applicable; and 27 (5) any other information the department reasonably requires with 28 respect to the licensee. 29 * Sec. 12. AS 06.55.403(b) is repealed and reenacted to read: 30 (b) A licensee shall submit a report of the licensee's authorized delegates 31 within 45 days after the end of each fiscal quarter. The report of authorized delegates
01 must include the following information about each authorized delegate: 02 (1) if the authorized delegate is an entity, the legal name of the entity; 03 if the authorized delegate is an individual, the legal name of the individual; 04 (2) taxpayer employer identification number; 05 (3) principal provider identifier; 06 (4) physical address; 07 (5) mailing address; 08 (6) business conducted in other states, if any; 09 (7) a trade name or other name used by the individual that is not 10 individual's legal name; 11 (8) contact person name, telephone number, and electronic mail 12 address; 13 (9) the date the authorized delegate began acting as the licensee's 14 authorized delegate; 15 (10) the date the authorized delegate stopped acting as the licensee's 16 authorized delegate, if applicable; and 17 (11) any other information the department reasonably requires with 18 respect to the authorized delegate. 19 * Sec. 13. AS 06.55.403(c) is amended to read: 20 (c) A [MONEY SERVICES] licensee shall file a report with the department 21 within one business day after the [MONEY SERVICES] licensee has reason to know 22 of the occurrence of any of the following events: 23 (1) the filing of a petition by or against the [MONEY SERVICES] 24 licensee under 11 U.S.C. 101 - 112 [11 U.S.C. 101 - 110] (Bankruptcy Code) for 25 bankruptcy or reorganization; 26 (2) the filing of a petition by or against the [MONEY SERVICES] 27 licensee for receivership, the commencement of any other judicial or administrative 28 proceeding for its dissolution or reorganization, or the making of a general assignment 29 for the benefit of its creditors; 30 (3) the commencement of a proceeding to revoke or suspend its 31 [MONEY SERVICES] license in a state or country in which the [MONEY
01 SERVICES] licensee engages in business or is licensed; 02 (4) the cancellation or other impairment of the [MONEY SERVICES] 03 licensee's bond or other security; 04 (5) a charge against or conviction of the [MONEY SERVICES] 05 licensee or of a key individual [AN EXECUTIVE OFFICER, MANAGER, 06 DIRECTOR,] or person in control of the [MONEY SERVICES] licensee for a felony; 07 or 08 (6) a charge against or conviction of an authorized delegate for a 09 felony. 10 * Sec. 14. AS 06.55.403 is amended by adding a new subsection to read: 11 (d) The department may use the registry for the submission of reports required 12 by this section. 13 * Sec. 15. AS 06.55.404 is repealed and reenacted to read: 14 Sec. 06.55.404. Control; acquisition; passive investor. (a) A person or group 15 of persons acting in concert seeking to acquire control of a licensee shall obtain the 16 written approval of the department before acquiring control. An individual is not 17 considered to acquire control of a licensee when the individual becomes a key 18 individual in the ordinary course of business. 19 (b) A person, or group of persons acting in concert, seeking to acquire control 20 of a licensee shall, in cooperation with the licensee, 21 (1) submit an application in a form and in a medium prescribed by the 22 department that includes the information required by AS 06.55.412, as applicable; and 23 (2) submit a nonrefundable fee with the request for approval. 24 (c) The department may permit a licensee or the person, or group of persons 25 acting in concert, to submit some or all information required by the department under 26 (b)(1) of this section without using the registry. 27 (d) When an application for acquisition of control appears to include all 28 required information and to address all matters required by the department, the 29 application is considered complete, and the department shall notify the applicant in a 30 record of the date on which the department determines the application is complete. 31 The department shall approve or deny the application within 120 days after the date
01 the application was determined to be complete. If the application is not approved or 02 denied within 120 days after the completion date, 03 (1) the application is approved; and 04 (2) the person or group of persons acting in concert is not prohibited 05 from acquiring control. 06 (e) The department may for good cause extend the period for approving or 07 denying an application under (d) of this section. 08 (f) A determination by the department that an application is complete and is 09 accepted for processing means only that the application, on its face, appears to include 10 all required items, including a criminal background check, and address all required 11 matters. The department's determination is not an assessment of the substance of the 12 application or of the sufficiency of the information provided. 13 (g) When an application is filed and considered to be complete under (d) of 14 this section, the department shall investigate the financial condition, financial 15 responsibility, financial experience, business experience, competence level, character, 16 and general fitness of the person or group of persons acting in concert seeking to 17 acquire control. The department shall approve a request for acquisition of control if 18 the department finds that 19 (1) the requirements of (b) of this section have been met, as applicable; 20 and 21 (2) the financial condition, financial responsibility, financial 22 experience, business experience, competence level, character, and general fitness of 23 the person, or group of persons acting in concert, seeking to acquire control, and the 24 experience, competence level, character, and general fitness of the key individuals and 25 persons that would be in control of the licensee after the acquisition of control indicate 26 that it is in the public interest to permit the person, or group of persons acting in 27 concert, to control the licensee. 28 (h) If an applicant for approval to acquire control is subject to a multistate 29 licensing process, the department may 30 (1) accept the investigation results of a lead investigative state for the 31 purposes of (g) of this section; or
01 (2) investigate the applicant in accordance with (g) of this section and 02 the time frames established by agreement through the multistate licensing process. 03 (i) The department shall issue a formal written notice of a denial of an 04 application for approval to acquire control within 30 days after the decision to deny 05 the application. The department shall set out in the notice of denial the specific reasons 06 for the denial. An applicant may appeal a denial within 30 days after receiving the 07 written notice of the denial. 08 (j) The requirements of (a) and (b) of this section do not apply to 09 (1) a person that acts as a proxy for the sole purpose of voting at a 10 designated meeting of the shareholders or holders of voting shares or voting interests 11 of a licensee or a person in control of a licensee; 12 (2) a person that acquires control of a licensee by devise or descent; 13 (3) a person that acquires control of a licensee as a personal 14 representative, custodian, guardian, conservator, or trustee, or as an officer appointed 15 by a court of competent jurisdiction or by operation of law; 16 (4) a person that is exempt under AS 06.55.802(4); 17 (5) a person that the department, by regulation or order, determines to 18 be exempt from the requirements of (a) and (b) of this section because that exemption 19 is in the public interest; 20 (6) a public offering of securities of a licensee or a person in control of 21 a licensee; or 22 (7) an internal reorganization of a person in control of a licensee where 23 the ultimate person in control of the licensee remains the same. 24 (k) A person exempt from the requirements of (a) and (b) of this section, in 25 cooperation with the licensee, shall notify the department within 15 days after the 26 acquisition of control. 27 (l) Before filing an application for approval to acquire control of a licensee, a 28 person may request in writing a determination from the department as to whether the 29 person would be considered a person in control of a licensee upon consummation of a 30 proposed transaction. If the department determines that the person would not be a 31 person in control of a licensee, the proposed person and transaction are not subject to
01 the requirements of (a) and (b) of this section. 02 (m) If a multistate licensing process includes a determination made under (l) 03 of this section and an applicant is subject to the multistate licensing process, the 04 department may 05 (1) accept the control determination of a lead investigative state; or 06 (2) investigate the applicant in accordance with this section and the 07 time frames established by agreement through the multistate licensing process. 08 (n) The requirements of (a) and (b) of this section do not apply to a person that 09 has complied with and received approval to engage in money transmission under this 10 chapter or who has identified as a person in control in a previous application filed with 11 and approved by the department or by an accredited state in accordance with a 12 multistate licensing process, if 13 (1) in the previous five years, the person has not had a license revoked 14 or suspended or controlled a licensee that has had a license revoked or suspended 15 while the person was in control of the licensee; 16 (2) the person is a licensee, the person is well managed and has 17 received at least a satisfactory rating for compliance at the person's most recent 18 examination by an accredited state if a rating was given; 19 (3) the licensee to be acquired is projected to meet the requirements of 20 this chapter, including AS 06.55.501, 06.55.505, and 06.55.510 after the acquisition of 21 control is completed, and if the person acquiring control is a licensee, the licensee is 22 also projected to meet the requirements of this chapter, including AS 06.55.501, 23 06.55.505, and 06.55.510, after the acquisition of control is completed; 24 (4) the licensee to be acquired will not implement any material 25 changes to the licensee's business plan as a result of the acquisition of control, and if 26 the person acquiring control is a licensee, the licensee also will not implement any 27 material changes to the licensee's business plan as a result of the acquisition of control; 28 and 29 (5) the person provides notice of the acquisition in cooperation with 30 the licensee and attests to (1) - (4) of this subsection in a form and in a medium 31 prescribed by the department.
01 (o) If the notice required under (n)(5) of this section is not disapproved within 02 30 days after the date on which the notice was determined to be complete, the notice is 03 considered to be approved. 04 (p) A person is presumed to exercise a controlling influence when the person 05 holds the power to vote, directly or indirectly, at least 10 percent of the outstanding 06 voting shares or voting interests of a licensee or person in control of a licensee. To 07 determine the percentage of a person controlled by any other person, the interest of the 08 person presumed to have a controlling interest shall be aggregated with the interest of 09 any other immediate family member, including the person's spouse, parents, children, 10 siblings, relative by marriage, and any other person who shares the home of the person 11 presumed to have a controlling interest. 12 (q) A passive investor is not considered to have control under this chapter. To 13 be a passive investor, a person 14 (1) may not have the power to elect a majority of key individuals or 15 executive officers, managers, directors, trustees, or other persons exercising 16 managerial authority of a person in control of a licensee; 17 (2) may not be employed by or have managerial duties of the licensee 18 or person in control of a licensee; 19 (3) may not have the power to exercise, directly or indirectly, a 20 controlling influence over the management or policies of a licensee or person in 21 control of a licensee; and 22 (4) shall attest to (1) - (3) of this subsection on a form and in a medium 23 prescribed by the department, or commit to the requirements of (1) - (3) of this 24 subsection in a written document. 25 * Sec. 16. AS 06.55.405(a) is amended to read: 26 (a) A [MONEY SERVICES] licensee shall maintain the following records for 27 determining its compliance with this chapter for at least five [THREE] years: 28 (1) a record of each outstanding money transmission [PAYMENT 29 INSTRUMENT OR STORED-VALUE] obligation sold; 30 (2) a general ledger posted at least monthly containing all asset, 31 liability, capital, income, and expense accounts;
01 (3) bank statements and bank reconciliation records; 02 (4) records of outstanding money transmission [PAYMENT 03 INSTRUMENTS AND STORED-VALUE] obligations; 04 (5) records of each outstanding money transmission [PAYMENT 05 INSTRUMENT AND STORED-VALUE] obligation paid within the five-year 06 [THREE-YEAR] period; 07 (6) a list of the last known names and addresses of all of the [MONEY 08 SERVICES] licensee's authorized delegates; and 09 (7) any other records the department reasonably requires by regulation. 10 * Sec. 17. AS 06.55.405(d) is amended to read: 11 (d) All records maintained by the [MONEY SERVICES] licensee as required 12 in (a) - (c) of this section are open to inspection by the department under 13 AS 06.55.401. 14 * Sec. 18. AS 06.55.406(a) is amended to read: 15 (a) A [MONEY SERVICES] licensee and an authorized delegate shall file 16 with the appropriate federal agency [ATTORNEY GENERAL] all reports required 17 by federal currency reporting, record keeping, and suspicious transaction reporting 18 requirements as set out in the Bank Secrecy Act [31 U.S.C. 5311] and other federal 19 and state laws pertaining to money laundering. The timely filing of a complete and 20 accurate report required under this section with the appropriate federal agency 21 is considered to be in compliance with the requirements of this section. 22 * Sec. 19. AS 06.55.407(a) is amended to read: 23 (a) Except as [OTHERWISE] provided in (b) of this section, all information 24 or reports obtained by the department from an applicant, [A] licensee, or [AN] 25 authorized delegate, all information contained in or related to an examination, 26 investigation, operating report, or condition report prepared by, on behalf of, or 27 for the use of the department, and financial statements, balance sheets, or 28 authorized delegate information, are confidential and not subject to disclosure under 29 AS 40.25.100 - 40.25.295 [, INCLUDING 30 (1) ALL INFORMATION CONTAINED IN OR RELATED TO 31 EXAMINATION, INVESTIGATION, OPERATING, OR CONDITION REPORTS
01 PREPARED BY, ON BEHALF OF, OR FOR THE USE OF THE DEPARTMENT; 02 AND 03 (2) FINANCIAL STATEMENTS, BALANCE SHEETS, AND 04 AUTHORIZED DELEGATE INFORMATION]. 05 * Sec. 20. AS 06.55.407(b) is amended to read: 06 (b) The department may disclose information that is not otherwise subject to 07 disclosure under (a) of this section to representatives of state or federal agencies who 08 promise in a record that they will maintain the confidentiality of the information or if 09 the department finds that the release is reasonably necessary for the protection of the 10 public and in the interests of justice [, AND THE MONEY SERVICES LICENSEE 11 HAS BEEN GIVEN PREVIOUS NOTICE BY THE DEPARTMENT OF ITS 12 INTENT TO RELEASE THE INFORMATION]. 13 * Sec. 21. AS 06.55.407(c) is amended to read: 14 (c) This section does not prohibit the department from disclosing to the public 15 a list of [MONEY SERVICES] licensees or the aggregated financial or transactional 16 data concerning those [MONEY SERVICES] licensees. 17 * Sec. 22. AS 06.55.407(d) is amended to read: 18 (d) A [MONEY SERVICES] licensee or an authorized delegate may not 19 disclose to another person financial information provided to the [MONEY 20 SERVICES] licensee or the authorized delegate by a customer except when, and only 21 to the extent that, the disclosure is 22 (1) authorized in writing by the customer; 23 (2) required by federal, state, or local law; 24 (3) required by an order issued by a court or an administrative agency; 25 or 26 (4) part of the money transmission [SERVICES] transaction ordered 27 by the customer. 28 * Sec. 23. AS 06.55.407 is amended by adding a new subsection to read: 29 (f) Information contained in the records of the department that is not 30 confidential and may, upon request, be made available to the public on the 31 department's Internet website includes
01 (1) the name, business address, telephone number, and unique registry 02 identifier of a licensee; 03 (2) the business address of a licensee's registered agent for service; 04 (3) the name, business address, and telephone number of all authorized 05 delegates; 06 (4) the terms or a copy of any bond filed by a licensee, if that 07 confidential information, including the prices and fees for the bond, is redacted; 08 (5) copies of any nonconfidential final orders of the department 09 relating to any violation of this chapter or regulations implementing this chapter; and 10 (6) imposition of an administrative fine or penalty under this chapter. 11 * Sec. 24. AS 06.55 is amended by adding new sections to article 4 to read: 12 Sec. 06.55.408. Audited financial statements. (a) A licensee shall, within 90 13 days after the end of each calendar year or within any extended period that the 14 department establishes, file with the department 15 (1) an audited financial statement of the licensee for the calendar year 16 prepared in accordance with generally accepted accounting principles; and 17 (2) other information the department reasonably requires. 18 (b) The audited financial statements must be prepared by an independent 19 certified public accountant or independent public accountant who is satisfactory to the 20 department. 21 (c) The audited financial statements must include a certificate of opinion of 22 the independent certified public accountant or independent public accountant that is 23 satisfactory in form and content to the department. If the certificate or opinion is 24 qualified, the department may order the licensee to take any action that the department 25 finds necessary to enable the independent certified public accountant or independent 26 public accountant to remove the qualification. 27 Sec. 06.55.409. Implementation. (a) To carry out the purposes of this chapter, 28 subject to AS 06.55.407, the department may 29 (1) enter into an agreement or relationship with a government official 30 or federal or state regulatory agency or regulatory association to improve efficiency 31 and reduce regulatory burden by standardizing methods or procedures, and sharing
01 resources, records, or related information obtained under this chapter; 02 (2) use, hire, contract, or employ analytical systems, methods, or 03 software to examine or investigate a person subject to this chapter; 04 (3) accept from a state or federal government agency or official 05 licensing, examination, or investigation reports made by the agency or official; and 06 (4) accept an audit report made by an independent certified public 07 accountant or independent public accountant that is satisfactory to the department for 08 an applicant or licensee and incorporate the audit reports into a report of examination 09 or investigation. 10 (b) The department has broad administrative authority to administer, interpret 11 and enforce this chapter, to adopt regulations implementing this chapter, and to 12 recover the cost of administering and enforcing this chapter by imposing and 13 collecting proportionate and equitable fees and costs associated with applications, 14 examinations, investigations, and other actions required to achieve the purposes of this 15 chapter. 16 Sec. 06.55.410. Networked supervision. (a) The department may participate 17 in multistate supervisory processes established between and among states and 18 coordinated through an organization determined by the department to be a nationally 19 recognized organization in supervisory processes establishment and coordination 20 between and among states for all licensees that hold licenses in this state and other 21 states. As a participant in multistate supervision, subject to AS 06.55.407, the 22 department may 23 (1) cooperate, coordinate, and share information with other state and 24 federal regulators; and 25 (2) enter into written contracts or agreements with other state and 26 federal regulators for the purposes of cooperating, coordinating, and sharing 27 information with state and federal regulators. 28 (b) Nothing in this section constitutes a waiver of the department's authority to 29 conduct an examination or investigation or otherwise take independent action to 30 enforce compliance with applicable state or federal law. 31 (c) A joint examination or investigation, or acceptance of an examination or
01 investigation report, does not waive an examination assessment provided for in this 02 chapter. 03 Sec. 06.55.411. Relationship to federal law. (a) If state money transmission 04 jurisdiction is conditioned on a federal law, any inconsistency between a provision of 05 this chapter and the federal law governing money transmission is governed by the 06 applicable federal law to the extent of the inconsistency. 07 (b) If an inconsistency between this chapter and a federal law that governs in 08 accordance with (a) of this section, the department may provide interpretive guidance 09 that 10 (1) identifies the inconsistency; and 11 (2) identifies the appropriate means of compliance with federal law. 12 Sec. 06.55.412. Notice and information requirements for a change of key 13 individual. (a) A licensee adding or replacing a key individual shall 14 (1) provide notice in a manner prescribed by the department within 15 15 days after the effective date of the key individual's appointment; and 16 (2) provide the information required under AS 06.55.109 within 45 17 days after the effective date of the key individual's appointment. 18 (b) The department may issue a notice of disapproval of a key individual if the 19 department finds that the experience, competence level, character, or integrity of the 20 individual would not be in the best interest of the public or the customers of the 21 licensee to permit the individual to be a key individual. The department shall issue a 22 notice of disapproval within 90 days after the department determines the notice 23 provided under (a) of this section to be complete. 24 (c) A notice of disapproval shall contain a statement of the basis for the 25 disapproval and be sent to the licensee and the disapproved individual. A licensee may 26 appeal a notice of disapproval within 30 days after receipt of the notice. 27 (d) If the notice provided under (a) of this section is not disapproved within 90 28 days after the date the notice was determined to be complete, the key individual is 29 considered to be approved. 30 (e) If a multistate licensing process includes a key individual notice review 31 and disapproval process, and the licensee is subject to the multistate licensing process,
01 the department may 02 (1) accept the key individual notice review determination of another 03 state; or 04 (2) investigate the applicant in accordance with (b) of this section and 05 the time frames established by agreement through the multistate licensing process. 06 * Sec. 25. AS 06.55.501 is amended to read: 07 Sec. 06.55.501. Maintenance of permissible investments. (a) A [MONEY 08 SERVICES] licensee shall maintain at all times permissible investments that have a 09 market value computed under generally accepted accounting principles of not less than 10 the aggregate amount of all of its outstanding money transmission [PAYMENT 11 INSTRUMENTS AND STORED VALUE] obligations [ISSUED OR SOLD IN ALL 12 STATES AND MONEY TRANSMITTED FROM ALL STATES BY THE MONEY 13 SERVICES LICENSEE]. 14 (b) Except for permissible investments listed in AS 06.55.502, the [THE] 15 department, with respect to any licensee [MONEY SERVICES LICENSEES], may by 16 regulation or order limit the extent to which a specific [TYPE OF] investment 17 maintained by a licensee within a class of permissible investments may be 18 considered a permissible investment [, EXCEPT FOR MONEY AND 19 CERTIFICATES OF DEPOSIT ISSUED BY A BANK. THE DEPARTMENT BY 20 REGULATION MAY PRESCRIBE OR BY ORDER ALLOW OTHER TYPES OF 21 INVESTMENTS THAT THE DEPARTMENT DETERMINES TO HAVE A 22 SAFETY SUBSTANTIALLY EQUIVALENT TO OTHER PERMISSIBLE 23 INVESTMENTS]. 24 (c) Permissible investments, even if commingled with other assets of the 25 [MONEY SERVICES] licensee, are held in trust for the benefit of the purchasers and 26 holders of the [MONEY SERVICES] licensee's outstanding money transmission 27 [PAYMENT INSTRUMENTS AND STORED VALUE] obligations in the event of 28 the licensee's insolvency, bankruptcy, [OR] receivership, commencement of other 29 judicial or administrative proceedings for its dissolution or reorganization, or in 30 the event of an action by a creditor against the licensee who is not a beneficiary of 31 the statutory trust. A permissible investment impressed with a trust in
01 accordance with this subsection is not subject to attachment, levy of execution, or 02 sequestration by a court, unless the attachment, levy of execution, or 03 sequestration is for a beneficiary of the statutory trust [OF THE MONEY 04 SERVICES LICENSEE]. 05 * Sec. 26. AS 06.55.501 is amended by adding new subsections to read: 06 (d) Upon the establishment of a statutory trust under (c) of this section, or 07 when funds are drawn on a letter of credit under AS 06.55.502(a)(4) and (d), the 08 department shall notify the applicable regulator of each state in which the licensee is 09 licensed to engage in money transmission, if any, of the establishment of the trust or 10 the funds drawn on the letter of credit, as applicable. Notice may be provided in 11 accordance with a multistate agreement or through the registry. Funds drawn on a 12 letter of credit and any other permissible investments held in trust for the benefit of the 13 purchasers and holders of the licensee's outstanding money transmission obligations 14 are considered to be held in trust for the benefit of the purchasers and holders of the 15 licensee's outstanding money transmission obligations on a pro rata and equitable 16 basis in accordance with state law and the law of other states, as applicable. A 17 statutory trust established under this section shall be terminated upon extinguishment 18 of all of the licensee's outstanding money transmission obligations. 19 (e) The department may by regulation or order allow other types of 20 investments that the department determines are of sufficient liquidity and quality to be 21 a permissible investment. The department may participate in efforts with other state 22 regulators to identify permissible investments. 23 * Sec. 27. AS 06.55.502(a) is amended to read: 24 (a) Except to the extent otherwise limited by the department under 25 AS 06.55.501, or as modified by a regulation of the department, the following 26 investments are permissible under AS 06.55.501: 27 (1) cash, demand deposits, savings deposits, funds in accounts held 28 for the benefit of a licensee's customers in a federally insured depository financial 29 institution, money market mutual funds, certificates [A CERTIFICATE] of 30 deposit, [OR A] senior debt obligations [OBLIGATION] of a federally [AN] insured 31 depository financial institution, and cash equivalents, including automated
01 clearing house items in transit to the licensee and automated clearing house items 02 or international wires in transit to a payee, cash in transit by armored car, cash 03 in smart safes, cash in licensee-owned locations, and transmission receivables 04 owed by a bank and funded by a debit card or credit card; 05 (2) [; IN THIS PARAGRAPH, "INSURED DEPOSITORY 06 INSTITUTION" HAS THE MEANING GIVEN IN 12 U.S.C. 1813 (FEDERAL 07 DEPOSIT INSURANCE ACT); 08 (2) BANKER'S ACCEPTANCE OR BILL OF EXCHANGE THAT IS 09 ELIGIBLE FOR PURCHASE ON ENDORSEMENT BY A MEMBER BANK OF 10 THE FEDERAL RESERVE SYSTEM AND IS ELIGIBLE FOR PURCHASE BY A 11 FEDERAL RESERVE BANK; 12 (3)] an investment bearing a rating of one of the three highest grades as 13 defined by a nationally recognized organization that rates securities; 14 (3) [(4) AN INVESTMENT SECURITY THAT IS] an obligation of 15 the United States or a commission [DEPARTMENT], agency, or instrumentality of 16 the United States, [AN INVESTMENT IN] an obligation that is guaranteed fully as to 17 principal and interest by the United States, or [AN INVESTMENT IN] an obligation 18 of a state or a governmental subdivision, agency, or instrumentality of a state; 19 (4) the full drawable amount that can be drawn on an irrevocable 20 standby letter of credit that complies with (d) of this section; 21 (5) 100 percent of the surety bond provided for under 22 AS 06.55.505 that exceeds the average daily money transmission liability in this 23 state 24 [(5) RECEIVABLES THAT ARE PAYABLE TO A MONEY 25 SERVICES LICENSEE FROM ITS AUTHORIZED DELEGATES, IN THE 26 ORDINARY COURSE OF BUSINESS, UNDER CONTRACTS THAT ARE NOT 27 PAST DUE OR DOUBTFUL OF COLLECTION IF THE AGGREGATE AMOUNT 28 OF RECEIVABLES UNDER THIS PARAGRAPH DOES NOT EXCEED 20 29 PERCENT OF THE TOTAL PERMISSIBLE INVESTMENTS OF A MONEY 30 SERVICES LICENSEE AND THE MONEY SERVICES LICENSEE DOES NOT 31 HOLD AT ONE TIME RECEIVABLES UNDER THIS PARAGRAPH IN ANY
01 ONE PERSON AGGREGATING MORE THAN 10 PERCENT OF THE MONEY 02 SERVICES LICENSEE'S TOTAL PERMISSIBLE INVESTMENTS; AND 03 (6) A SHARE OR A CERTIFICATE ISSUED BY AN OPEN-END 04 MANAGEMENT INVESTMENT COMPANY THAT IS REGISTERED WITH THE 05 UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER 15 06 U.S.C. 80A-1 - 80A-64 (INVESTMENT COMPANY ACT OF 1940), AND WHOSE 07 PORTFOLIO IS RESTRICTED BY THE MANAGEMENT COMPANY'S 08 INVESTMENT POLICY TO INVESTMENTS SPECIFIED IN (1) - (4) OF THIS 09 SUBSECTION]. 10 * Sec. 28. AS 06.55.502(b) is repealed and reenacted to read: 11 (b) In addition to the investments permissible under (a) of this section, the 12 following investments are permissible under (a) of this section, to the extent specified: 13 (1) receivables that are payable to a licensee from the licensee's 14 authorized delegates in the ordinary course of business that are less than seven days 15 old and do not exceed 50 percent of the aggregate value of the licensee's total 16 permissible investments; receivables under this paragraph that are payable to a 17 licensee from a single authorized delegate in the ordinary course of business may not 18 exceed 10 percent of the aggregate value of the licensee's total permissible 19 investments; 20 (2) the following investments, not to exceed 20 percent for each 21 category and a combined total of 50 percent of the aggregate value of the licensee's 22 total permissible investments: 23 (A) a short-term investment of not more than six months' 24 duration bearing an eligible rating; 25 (B) commercial paper bearing an eligible rating; 26 (C) a bill, note, bond, or debenture bearing an eligible rating; 27 (D) United States tri-party repurchase agreements collateralized 28 at 100 percent or more by federal government or agency securities, municipal 29 bonds, or other securities bearing an eligible rating; 30 (E) money market mutual funds rated by a rating service 31 selected by the department as appropriate for this purpose at a rate determined
01 by the department; and 02 (F) a mutual fund or other investment fund composed solely 03 and exclusively of one or more permissible investments listed in (a)(1) - (3) of 04 this section; and 05 (3) cash held in accounts for the benefit of the licensee's customers at 06 foreign depository financial institutions, not to exceed 10 percent of the aggregate 07 value of the licensee's total permissible investments, if the licensee has received a 08 satisfactory rating in the licensee's most recent examination and the foreign depository 09 financial institution 10 (A) has an eligible rating; 11 (B) is registered under 26 U.S.C. 1471-1474 (Foreign Account 12 Tax Compliance Act); 13 (C) is not located in any country subject to sanctions from the 14 United States Department of the Treasury Office of Foreign Assets Control; 15 and 16 (D) is not located in a high-risk or non-cooperative jurisdiction 17 as designated by the Financial Action Task Force. 18 * Sec. 29. AS 06.55 is amended by adding new sections to article 5 to read: 19 Sec. 06.55.503. Letter of credit. (a) The letter of credit permitted under 20 AS 06.55.502(a)(4) 21 (1) must list the department as the beneficiary; 22 (2) must stipulate that the beneficiary is only required to draw a sight 23 draft under the letter of credit and present it to obtain funds up to the letter of credit 24 amount within seven days after presenting the items required by (7) of this subsection; 25 (3) must be issued by a federally insured depository financial 26 institution or a foreign bank that bears an eligible rating and is regulated, supervised, 27 and examined by federal or state regulatory authorities having regulatory authority 28 over banks, credit unions, and trust companies; 29 (4) must be irrevocable, unconditional, and indicate that the letter of 30 credit is not subject to any condition or qualifications outside of the letter of credit; 31 (5) may not contain reference to any other agreements, documents or
01 entities, or otherwise provide for any security interest in the licensee; 02 (6) must contain an issue date and expiration date, and expressly 03 provide for automatic extension, without a written amendment, for an additional 04 period of one year from the present or each future expiration date, unless the issuer of 05 the letter of credit notifies the department in writing by certified or registered mail, 06 courier mail, or other means of notice that provides a receipt, at least 60 days before 07 an expiration date, that the irrevocable letter of credit will not be extended; and 08 (7) must provide that the issuer of the letter of credit will honor, at 09 sight, a presentation made by the beneficiary to the issuer of the following documents 10 on or before the expiration date of the letter of credit: 11 (A) the original letter of credit, including any amendments; and 12 (B) a written statement from the beneficiary stating whether 13 one or more of the following events have occurred: 14 (i) the filing of a petition by or against the licensee 15 under 11 U.S.C. Section 101 - 112 (Bankruptcy Code), for bankruptcy 16 or reorganization; 17 (ii) the filing of a petition by or against the licensee for 18 receivership, or the commencement of any other judicial or 19 administrative proceeding for the licensee's dissolution or 20 reorganization; 21 (iii) the seizure of assets of a licensee by the department 22 under an emergency order issued in accordance with applicable law, 23 based on an action, violation, or condition that has caused or is likely to 24 cause the insolvency of the licensee; or 25 (iv) the beneficiary received notice of expiration or non- 26 extension of a letter of credit and the licensee failed to demonstrate to 27 the satisfaction of the beneficiary that the licensee will maintain 28 permissible investments in accordance with AS 06.55.501 or this 29 section upon the expiration or non-extension of the letter of credit. 30 (b) In the event of any notice of expiration or non-extension of a letter of 31 credit issued under (a) of this section, the licensee shall be required to demonstrate to
01 the satisfaction of the department, 15 days before expiration, that the licensee 02 maintains and will maintain permissible investments in accordance with AS 06.55.501 03 upon expiration of the letter of credit. If the licensee is not able to do so, the 04 department may draw on the letter of credit in an amount up to the amount necessary 05 to meet the licensee's requirements to maintain permissible investments in accordance 06 with AS 06.55.501. A draw must be offset against the licensee's outstanding money 07 transmission obligations. The drawn funds must be held in trust by the department or 08 the department's designated agent, to the extent authorized by law, as agent for the 09 benefit of the purchasers and holders of the licensee's outstanding money transmission 10 obligations. 11 (c) The department may designate an agent to serve on the department's behalf 12 as beneficiary to a letter of credit if the agent and letter of credit meet the requirements 13 established by the department. The department's agent may serve as agent for multiple 14 licensing authorities for a single irrevocable letter of credit if the proceeds of the 15 drawable amount for the purposes of AS 06.55.502(a)(4) are assigned to the 16 department. 17 (d) The department may participate in multistate processes designed to 18 facilitate the issuance and administration of letters of credit, including services 19 provided by the registry. 20 Sec. 06.55.505. Security. (a) An applicant for a license shall provide, and a 21 licensee at all times shall maintain, security consisting of a surety bond in a form 22 satisfactory to the department or, with the department's approval, a deposit in 23 accordance with this section. 24 (b) The department shall determine the amount of the required security by 25 regulation or order. The amount of the required security must be proportional to the 26 licensee's average daily money transmission liability in this state up to a maximum of 27 $1,000,000. 28 (c) A licensee that maintains a bond in the maximum amount provided for 29 under (b) of this section is not required to calculate its average daily money 30 transmission liability in this state for purposes of this section. 31 (d) A licensee may exceed the maximum required bond amount.
01 (e) The aggregate liability on a surety bond may not exceed the principal sum 02 of the bond. A claimant against a licensee may maintain an action on the bond, or the 03 department may maintain an action on behalf of the claimant. 04 (f) A surety bond must cover claims for as long as the department specifies, 05 but at least for the five years after the date the licensee stops providing money 06 transmission in this state. The department may permit the amount of security to be 07 reduced or eliminated before the expiration of that time to the extent the amount of the 08 licensee's outstanding money transmission obligations in this state is reduced. The 09 department may permit a licensee to substitute another form of security acceptable to 10 the department for the security effective at the time the licensee stops providing 11 money transmission in this state. 12 (g) An applicant for a license or a licensee shall obtain the surety bond 13 required under this section from a surety company authorized to do business in this 14 state. 15 Sec. 06.55.510. Net worth. (a) A licensee shall maintain at all times a tangible 16 net worth of 17 (1) the greater of $35,000 or three percent of total assets for the first 18 $100,000,000; 19 (2) two percent of additional assets for $100,000,001 to 20 $1,000,000,000; and 21 (3) 0.5 percent of additional assets for over $1,000,000,001. 22 (b) Tangible net worth must be demonstrated at initial application by the 23 applicant's most recent audited or unaudited financial statements. 24 (c) The department may exempt an applicant or licensee, in part or in whole, 25 from the requirements of this section. 26 * Sec. 30. AS 06.55.601 is amended to read: 27 Sec. 06.55.601. Suspension and revocation; receivership. (a) The 28 department may suspend or revoke a [MONEY SERVICES] license, place a 29 [MONEY SERVICES] licensee in receivership, or order a [MONEY SERVICES] 30 licensee to revoke the designation of an authorized delegate if 31 (1) the [MONEY SERVICES] licensee violates this chapter or a
01 regulation adopted or an order issued under this chapter; 02 (2) the [MONEY SERVICES] licensee does not cooperate with an 03 examination or investigation by the department; 04 (3) the [MONEY SERVICES] licensee engages in fraud, intentional 05 misrepresentation, or gross negligence; 06 (4) an authorized delegate is convicted of a violation of a state or 07 federal anti-money laundering statute, or violates a regulation adopted or an order 08 issued under this chapter, as a result of the [MONEY SERVICES] licensee's wilful 09 misconduct or wilful blindness; 10 (5) the competence level, experience, character, or general fitness of 11 the [MONEY SERVICES] licensee, authorized delegate, person in control of a 12 [MONEY SERVICES] licensee, key individual, or responsible person of the 13 [MONEY SERVICES] licensee or authorized delegate indicates that it is not in the 14 public interest to permit the person to provide money transmission [SERVICES]; 15 (6) the [MONEY SERVICES] licensee engages in an unsafe or 16 unsound practice; 17 (7) the [MONEY SERVICES] licensee is insolvent, suspends payment 18 of its obligations, or makes a general assignment for the benefit of its creditors; or 19 (8) the [MONEY SERVICES] licensee does not remove an authorized 20 delegate after the department issues and serves on [UPON] the [MONEY SERVICES] 21 licensee a final order that includes [INCLUDING] a finding that the authorized 22 delegate has violated this chapter. 23 (b) In determining whether a [MONEY SERVICES] licensee is engaging in 24 an unsafe or unsound practice, the department may consider the size and condition of 25 the [MONEY SERVICES] licensee's money transmission, the magnitude of the loss, 26 the gravity of the violation of this chapter, and the previous conduct of the person 27 involved. 28 * Sec. 31. AS 06.55.601 is amended by adding a new subsection to read: 29 (c) A licensee may apply for relief from a suspension or revocation of the 30 licensee's license according to procedures prescribed by the department. 31 * Sec. 32. AS 06.55.602 is amended to read:
01 Sec. 06.55.602. Suspension and revocation of authorized delegates. (a) The 02 department may issue an order suspending or revoking the designation of an 03 authorized delegate if the department finds that 04 (1) the authorized delegate violated this chapter or a regulation adopted 05 or an order issued under this chapter; 06 (2) the authorized delegate did not cooperate with an examination or 07 investigation by the department; 08 (3) the authorized delegate engaged in fraud, intentional 09 misrepresentation, or gross negligence; 10 (4) the authorized delegate is convicted of a violation of a state or 11 federal anti-money laundering statute; 12 (5) the competence level, experience, character, or general fitness of 13 the authorized delegate or a person in control of the authorized delegate indicates that 14 it is not in the public interest to permit the authorized delegate to provide money 15 transmission [SERVICES]; or 16 (6) the authorized delegate is engaging in an unsafe or unsound 17 practice. 18 (b) In determining whether an authorized delegate is engaging in an unsafe or 19 unsound practice, the department may consider the size and condition of the 20 authorized delegate's provision of money transmission [SERVICES], the magnitude 21 of the loss, the gravity of the violation of this chapter or a regulation adopted or order 22 issued under this chapter, and the previous conduct of the authorized delegate. 23 * Sec. 33. AS 06.55.602 is amended by adding a new subsection to read: 24 (c) An authorized delegate may apply for relief from a suspension or 25 revocation of designation as an authorized delegate according to procedures prescribed 26 by the department. 27 * Sec. 34. AS 06.55.603(a) is amended to read: 28 (a) If the department determines that a violation of this chapter or of a 29 regulation adopted or an order issued under this chapter by a [MONEY SERVICES] 30 licensee or authorized delegate is likely to cause immediate and irreparable harm to 31 the [MONEY SERVICES] licensee, its customers, or the public as a result of the
01 violation, or cause insolvency or significant dissipation of assets of the [MONEY 02 SERVICES] licensee, the department may issue an order requiring the [MONEY 03 SERVICES] licensee or authorized delegate to cease and desist from the violation. 04 The order becomes effective on service of it on the [MONEY SERVICES] licensee or 05 authorized delegate. 06 * Sec. 35. AS 06.55.603(b) is amended to read: 07 (b) The department may issue an order against a [MONEY SERVICES] 08 licensee to cease and desist from providing money transmission [SERVICES] 09 through an authorized delegate who is the subject of a separate order by the 10 department. 11 * Sec. 36. AS 06.55.603(d) is amended to read: 12 (d) A [MONEY SERVICES] licensee or an authorized delegate who is served 13 with an order to cease and desist may petition the superior court for a judicial order 14 setting aside, limiting, or suspending the enforcement, operation, or effectiveness of 15 the order pending the completion of an administrative proceeding under AS 06.55.601 16 or 06.55.602. 17 * Sec. 37. AS 06.55.605 is amended to read: 18 Sec. 06.55.605. Civil penalties. The department may assess a civil penalty 19 against a person that [WHO] violates this chapter or a regulation adopted or an order 20 issued under this chapter in an amount not to exceed $1,000 a [EACH] day for each 21 day the violation is outstanding, plus the department's costs and expenses for the 22 investigation and prosecution of the matter, including reasonable attorney fees. 23 * Sec. 38. AS 06.55.606(b) is amended to read: 24 (b) A person who knowingly engages in an activity for which a [MONEY 25 SERVICES] license is required under this chapter without being licensed [AS A 26 MONEY SERVICES LICENSEE] and who receives more than $500 in compensation 27 within a 30-day period from this activity is guilty of a class C felony. 28 * Sec. 39. AS 06.55.606(c) is amended to read: 29 (c) A person who knowingly engages in an activity for which a [MONEY 30 SERVICES] license is required under this chapter without being [LICENSED AS] a 31 [MONEY SERVICES] licensee and who receives not [NO] more than $500 in
01 compensation within a 30-day period from this activity is guilty of a class A 02 misdemeanor. 03 * Sec. 40. AS 06.55.607(a) is amended to read: 04 (a) If the department has reason to believe that a person has violated or is 05 violating AS 06.55.101 [OR 06.55.201], the department may issue an order to show 06 cause why an order to cease and desist should not issue requiring that the person cease 07 and desist from the violation of AS 06.55.101 [OR 06.55.201]. 08 * Sec. 41. AS 06.55.607(e) is amended to read: 09 (e) A person that [WHO] is served with an order to cease and desist for 10 violating AS 06.55.101 [OR 06.55.201] may petition the superior court for a judicial 11 order setting aside, limiting, or suspending the enforcement, operation, or 12 effectiveness of the order pending the completion of an administrative proceeding 13 under AS 06.55.701 and 06.55.702. 14 * Sec. 42. AS 06.55.702(a) is amended to read: 15 (a) Except as otherwise provided in AS 06.55.603 and 06.55.607 [AND IN (b) 16 OF THIS SECTION], the department may not suspend or revoke a [MONEY 17 SERVICES] license, place a [MONEY SERVICES] licensee in receivership, issue an 18 order to cease and desist, suspend or revoke the designation of an authorized delegate, 19 or assess a civil penalty without notice and an opportunity to be heard. The department 20 shall also hold a hearing when requested to hold a hearing by an applicant whose 21 application for a [MONEY SERVICES] license is denied. 22 * Sec. 43. AS 06.55.802 is amended to read: 23 Sec. 06.55.802. Exemptions [EXCLUSIONS]. This chapter does not apply to 24 (1) the United States or a department, [AN] agency, [OR AN] 25 instrumentality, or agent of the United States; 26 (2) money transmission by the United States Postal Service or by an 27 agent [A CONTRACTOR ON BEHALF] of the United States Postal Service; 28 (3) a state, a municipality, a county, or another governmental agency 29 or governmental subdivision of a state, or its agent; 30 (4) a federally insured depository financial institution, a bank, a 31 bank holding company, an office of an international banking corporation, a branch of a
01 foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 02 Company Act), or a corporation organized under 12 U.S.C. 611 - 633 (Edge Act) 03 under the laws of a state or the United States, if it does not issue, sell, or provide 04 payment instruments or stored value through an authorized delegate who is not a bank, 05 a bank holding company, an office of an international banking corporation, a branch of 06 a foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 07 Company Act), [OR] a corporation organized under 12 U.S.C. 611 - 633 (Edge Act) 08 under the laws of a state or the United States, an institution regulated by the Farm 09 Credit Association, or a subsidiary or affiliate of a financial institution if the 10 subsidiary or affiliate is owned and controlled by a depository institution and 11 regulated by a federal banking agency; in this paragraph, "federal banking 12 agency" means the Board of Governors of the Federal Reserve System, the 13 United States Comptroller of the Currency, the director of the Office of Thrift 14 Supervision, the National Credit Union Administration, and the Federal Deposit 15 Insurance Corporation; 16 (5) electronic funds transfer of governmental benefits for a federal, 17 state, or municipal agency or a state political subdivision by a contractor on behalf of 18 (A) the United States or a department, an agency, or an 19 instrumentality of the United States; or 20 (B) a state, or a department, an agency, or an instrumentality of 21 a state; 22 (6) a board of trade or a person that [WHO], in the ordinary course of 23 business, provides clearance and settlement services for a board of trade, to the extent 24 of the operation of the person for a board of trade; in this paragraph, "board of trade" 25 means a board of trade designated as a contract market under 7 U.S.C. 1 - 27f 26 (Commodity Exchange Act); 27 (7) a registered futures commission merchant under the federal 28 commodities laws, to the extent of the merchant's operation as a registered futures 29 commission merchant under the federal commodities laws; 30 (8) a person that [WHO] provides clearance or settlement services 31 under a registration as a clearing agency or an exemption from the registration granted
01 under the federal securities laws, to the extent of the person's operation as a provider 02 of clearance or settlement services under a registration as a clearing agency or an 03 exemption from the registration granted under the federal securities laws; 04 (9) an operator of a payment system to the extent that the operator 05 provides processing, clearing, or settlement services, between or among persons 06 exempted [EXCLUDED] by this section, in connection with wire transfers, credit 07 card transactions, debit card transactions, stored-value transactions, automated 08 clearinghouse transfers, or similar funds transfers; [OR] 09 (10) a person registered as a securities broker-dealer under federal or 10 state securities laws, to the extent of the person's operation as a securities broker- 11 dealer; 12 (11) an individual employed by a licensee, authorized delegate, or 13 a person exempt from the licensing requirements of this chapter when the 14 individual is acting within the scope of employment and under the supervision of 15 the licensee, authorized delegate, or exempt person and not as an independent 16 contractor; 17 (12) a person expressly appointed as a third-party service provider 18 to or agent of an entity exempt under (4) of this section, solely to the extent that 19 (A) the service provider or agent is engaging in money 20 transmission on behalf of and in accordance with a written agreement 21 with the exempt entity that sets out the specific functions that the service 22 provider or agent is to perform; and 23 (B) the exempt entity assumes all risk of loss and all legal 24 responsibility for satisfying the outstanding money transmission 25 obligations owed to purchasers and holders of the outstanding money 26 transmission obligations upon receipt of the purchaser's or holder's 27 money or monetary value by the service provider or agent; 28 (13) a person appointed as an agent of a payee to collect and 29 process a payment from a payor to the payee for goods or services, other than 30 money transmission services, provided to the payor by the payee, if 31 (A) the payee and the agent have a written agreement
01 directing the agent to collect and process payments from payors on the 02 payee's behalf; 03 (B) the payee holds the agent out to the public as accepting 04 payments for goods or services on the payee's behalf; and 05 (C) payment for the goods and services is treated as 06 received by the payee upon receipt by the agent and the payor's obligation 07 is extinguished, and there is no risk of loss to the payor if the agent fails to 08 remit the funds to the payee; 09 (14) a person that acts as an intermediary by processing payments 10 between an entity that has directly incurred an outstanding money transmission 11 obligation to a sender and the sender's designated recipient, if the person acting 12 as an intermediary 13 (A) is a licensee or exempt from the licensing requirements 14 under this chapter; 15 (B) provides a receipt, electronic record, or other written 16 confirmation to the sender identifying the entity as the provider of money 17 transmission in the transaction; and 18 (C) bears sole responsibility to satisfy the outstanding 19 money transmission obligation to the sender, including the obligation to 20 remedy a failure to transmit the funds to the sender's designated 21 recipient; 22 (15) an entity that is an insurance company, title insurance 23 company, or escrow agent, to the extent that the entity is lawfully authorized to 24 conduct business in this state as an insurance company, title insurance company, 25 or escrow agent and to the extent that the entity engages in money transmission 26 as an ancillary service when conducting insurance, title insurance, or escrow 27 activity; 28 (16) an attorney, to the extent that the attorney is lawfully 29 authorized to practice law in this state and engages in money transmission as an 30 ancillary service to the practice of law; or 31 (17) a person exempt by regulation or order of the department if
01 the department finds that the exemption is in the public interest and that the 02 regulation of the person is not necessary for the purposes of this chapter; 03 (18) a person providing payroll processing services; in this 04 paragraph, 05 (A) "payroll processing services" means receiving money 06 for transmission under a contract with a person to deliver wages or 07 salaries, make payment of payroll taxes to state and federal agencies, 08 make payments relating to employee benefit plans, or make distributions 09 of other authorized deductions from wages or salaries; 10 (B) "receiving money for transmission" means receiving 11 money or monetary value in the United States for transmission within or 12 outside the United States by electronic or other means [UNDER FEDERAL 13 OR STATE SECURITIES LAWS]. 14 * Sec. 44. AS 06.55 is amended by adding a new section to read: 15 Sec. 06.55.803. Authority to require demonstration of exemption. The 16 department may require a person that claims to be exempt from licensing under 17 AS 06.55.802 to provide information and documentation to the department 18 demonstrating the claimed exemption. 19 * Sec. 45. AS 06.55.810 is amended to read: 20 Sec. 06.55.810. Notices required. (a) A [MONEY SERVICES] licensee shall 21 provide customers with notice of how to file a complaint. A licensee shall provide 22 notice [DISPLAY A SIGN] at each location where the [MONEY SERVICES] 23 licensee 24 (1) provides money transmission [SERVICES] under this chapter; 25 and 26 (2) has not designated an authorized delegate to provide money 27 transmission [SERVICES] on behalf of the [MONEY SERVICES] licensee at the 28 location. 29 (b) An authorized delegate shall provide customers with notice of how to 30 file a complaint. An authorized delegate shall provide notice [DISPLAY A SIGN] 31 at each location where the authorized delegate provides money transmission
01 [SERVICES] under this chapter. 02 (c) The notice [SIGN] required by (a) or (b) of this section must be in a 03 format and contain information required by the department [SHALL BE 04 DISPLAYED AT ALL TIMES IN FULL VIEW OF PERSONS VISITING THE 05 LOCATION AND SHALL GIVE THE DEPARTMENT'S ADDRESS AND THE 06 DEPARTMENT'S TELEPHONE NUMBER FOR RECEIVING CALLS 07 REGARDING COMPLAINTS AND OTHER CONCERNS ABOUT MONEY 08 SERVICES LICENSEES, AUTHORIZED DELEGATES, AND THE MONEY 09 SERVICES PROVIDED BY MONEY SERVICES LICENSEES AND 10 AUTHORIZED DELEGATES]. 11 * Sec. 46. AS 06.55.810 is amended by adding a new subsection to read: 12 (d) A licensee or authorized delegate shall include on a receipt or disclose on 13 the licensee's Internet website or mobile application the name and telephone number 14 of the department and a statement that the licensee's customers can contact the 15 department with questions or complaints about the licensee's money transmission. In 16 this subsection, "mobile application" means a software application developed 17 specifically for use on small, wireless computing devices. 18 * Sec. 47. AS 06.55 is amended by adding a new section to read: 19 Sec. 06.55.815. In-state determination. For a transaction requested 20 electronically or by telephone, the provider of money transmission may determine 21 whether the person requesting the transaction is in this state by relying on other 22 information provided by the person regarding the location of the person's residential 23 address or principal place of business or other physical address, and any records 24 associated with the person that the provider of money transmission may have that 25 indicate the location, including an address associated with an account. 26 * Sec. 48. AS 06.55.830 is repealed and reenacted to read: 27 Sec. 06.55.830. Receipt. (a) Except as provided in (d) of this section, a 28 licensee or a licensee's authorized delegate shall provide the sender a receipt for 29 money received for transmission. The receipt must be in English and in any other 30 language principally used by the licensee or authorized delegate to advertise, solicit, or 31 negotiate, either orally or in writing, for the transaction conducted. The receipt must
01 contain the following information, as applicable: 02 (1) the name of the sender; 03 (2) the name of the designated recipient; 04 (3) the date of the transaction; 05 (4) the unique transaction or identification number; 06 (5) the name of the licensee, unique registry identifier, the licensee's 07 business address, and the licensee's customer service telephone number; 08 (6) the dollar amount of the transaction; 09 (7) any fee charged by the licensee to the sender for the transaction; 10 (8) any taxes collected by the licensee from the sender for the 11 transaction; and 12 (9) the exchange rate, if any, used by the provider for the transaction. 13 (b) For a transaction conducted in person, the receipt may be provided 14 electronically if the sender requests or agrees to receive an electronic receipt. For a 15 transaction conducted electronically or by telephone, a receipt may be provided 16 electronically. All electronic receipts must be provided in a retainable form. 17 (c) This section does not apply to 18 (1) money received for transmission that is subject to 12 C.F.R. Part 19 1005, Subpart B; 20 (2) money received for transmission that is not primarily for personal, 21 family, or household purposes; 22 (3) money received for transmission in accordance with a written 23 agreement between the licensee and payee to process payments for goods or services 24 provided by the payee; 25 (4) an individual consumer transferring funds to reload stored value on 26 the consumer's account through a point of sale transaction; or 27 (5) a stored-value transaction exempted by the department by 28 regulation or order. 29 (d) In this section, "receipt" means a paper receipt, electronic record, or other 30 written confirmation. 31 * Sec. 49. AS 06.55 is amended by adding a new section to read:
01 Sec. 06.55.835. Timely transmission. (a) A licensee shall forward all money 02 received for transmission in accordance with the terms of the agreement between the 03 licensee and the sender unless the licensee has a reasonable cause to believe that the 04 sender may be a victim of fraud or that a crime or violation of law, rule, or regulation 05 has occurred, is occurring, or may occur. 06 (b) If a licensee fails to forward money received for transmission in 07 accordance with this section, the licensee must respond to inquiries by the sender with 08 the reason for the failure unless providing a response would violate a state or federal 09 law, rule, or regulation. 10 * Sec. 50. AS 06.55.840 is repealed and reenacted to read: 11 Sec. 06.55.840. Refunds. (a) Except as provided in (b) of this section, a 12 licensee shall refund to the sender, within 10 days after receipt of the sender's written 13 request for a refund, all money received for transmission unless 14 (1) the money has been forwarded within 10 days after the date on 15 which the money was received for transmission; 16 (2) within 10 days after the date on which the money was received for 17 transmission, instructions have been given committing an equivalent amount of money 18 to the person designated by the sender; 19 (3) the agreement between the licensee and the sender instructs the 20 licensee to forward the money at a time that is beyond 10 days after the date on which 21 the money was received for transmission; if money has not yet been forwarded in 22 accordance with the terms of the agreement between the licensee and the sender, the 23 licensee shall issue a refund in accordance with this section; 24 (4) the refund is requested for a transaction that the licensee has not 25 completed based on a reasonable belief that a crime or violation of law, rule, or 26 regulation has occurred, is occurring, or may occur; or 27 (5) the refund request does not 28 (A) identify the sender's name and 29 (i) address; or 30 (ii) telephone number; or 31 (B) identify the particular transaction to be refunded in the
01 event the sender has multiple transactions outstanding. 02 (b) This section does not apply to: 03 (1) money received for transmission subject to 12 C.F.R. Part 1005, 04 Subpart B; or 05 (2) money received for transmission in accordance with a written 06 agreement between the licensee and payee to process payments for goods or services 07 provided by the payee. 08 * Sec. 51. AS 06.55.850(b) is amended to read: 09 (b) The department shall establish fee levels under (a) of this section so that 10 the total amount of fees collected for [BOTH MONEY TRANSMISSION] licenses 11 [AND CURRENCY EXCHANGE LICENSES] under this chapter approximately 12 equals the department's actual total regulatory costs for [BOTH MONEY 13 TRANSMISSION] licenses [AND CURRENCY EXCHANGE LICENSES. THE 14 DEPARTMENT SHALL SET THE FEE LEVELS SO THAT THE FEE LEVELS 15 FOR BOTH MONEY TRANSMISSION LICENSES AND CURRENCY 16 EXCHANGE LICENSES ARE THE SAME]. 17 * Sec. 52. AS 06.55.850 is amended by adding a new subsection to read: 18 (f) The department shall set an annual renewal fee based on a licensee's total 19 volume of money transmission in the state, calculated in dollars or dollar equivalents. 20 * Sec. 53. AS 06.55.990(1) is amended to read: 21 (1) "authorized delegate" means a person that [WHOM] a [MONEY 22 SERVICES] licensee designates to engage in [PROVIDE] money transmission 23 [SERVICES] on behalf of the [MONEY SERVICES] licensee; 24 * Sec. 54. AS 06.55.990(3) is amended to read: 25 (3) "control" means 26 (A) the ownership of, or the power to vote, directly or 27 indirectly, at least 10 [25] percent of the [A CLASS OF] voting securities or 28 voting interests of a [MONEY SERVICES] licensee or of a person that owns 29 or has the power to vote, directly or indirectly, at least 10 percent of the 30 voting securities or voting interests [IN CONTROL] of a [MONEY 31 SERVICES] licensee, unless the person is a passive investor; in this
01 paragraph, "passive investor" under AS 06.55.404(q); 02 (B) the power to elect or appoint a majority of executive 03 officers, managers, directors, trustees, or other persons exercising managerial 04 authority of a [MONEY SERVICES] licensee or person in control of a 05 [MONEY SERVICES] licensee; or 06 (C) the power to exercise directly or indirectly, a controlling 07 influence over the management or policies of a [MONEY SERVICES] 08 licensee or person in control of a [MONEY SERVICES] licensee; 09 * Sec. 55. AS 06.55.990(15) is amended to read: 10 (15) "money transmission" 11 (A) means 12 (i) selling or issuing payment instruments or stored 13 value to a person located in this state; 14 (ii) [, OR] receiving money or monetary value for 15 transmission to the state, from the state, or within the state; 16 (iii) engaging in virtual currency exchange; or 17 (iv) engaging in virtual currency business activity; 18 (B) [, BUT] does not mean [INCLUDE] the provision solely of 19 [DELIVERY,] online services, telecommunications services, or network 20 access; 21 * Sec. 56. AS 06.55.990(19) is amended to read: 22 (19) "payment instrument" means a written or electronic check, [A] 23 draft, [A] money order, [A] traveler's check, or other written or electronic 24 [ANOTHER] instrument for the transmission or payment of money or monetary value, 25 whether or not negotiable, but does not mean stored value, [INCLUDE] a credit card 26 voucher, a letter of credit, [OR] an instrument that is redeemable by the issuer in 27 goods or services, or other instrument not sold to the public but issued and 28 distributed as part of a loyalty, rewards, or promotional program; 29 * Sec. 57. AS 06.55.990(20) is amended to read: 30 (20) "person" means an individual, general partnership, limited 31 partnership, [A] corporation, [A BUSINESS] trust, [AN ESTATE, A TRUST, A
01 PARTNERSHIP, A] limited liability company, [AN] association, [A] joint stock 02 corporation [VENTURE, A GOVERNMENT, A GOVERNMENTAL 03 SUBDIVISION, AN AGENCY, OR AN INSTRUMENTALITY, A PUBLIC 04 CORPORATION], or any other legal or corporate [COMMERCIAL] entity 05 identified by the department; 06 * Sec. 58. AS 06.55.990(22) is amended to read: 07 (22) "state" means a state of the United States, the District of 08 Columbia, Puerto Rico, the United States Virgin Islands, a United States military 09 installation that is located in a foreign country, or a territory or insular possession 10 subject to the jurisdiction of the United States; 11 * Sec. 59. AS 06.55.990(23) is amended to read: 12 (23) "stored value" 13 (A) means 14 (i) monetary value representing a claim against the 15 issuer that is evidenced by an electronic or digital record and that is 16 intended and accepted as a means of redemption for money or 17 monetary value, or payment for goods or services; 18 (ii) prepaid access as defined in 31 C.F.R. 1010.100; 19 (B) does not mean a payment instrument or a closed-loop 20 stored value, or a stored value not sold to the public but issued and 21 distributed as part of a loyalty, rewards, or promotional program; 22 * Sec. 60. AS 06.55.990(24) is amended to read: 23 (24) "unsafe or unsound practice" means a practice or conduct by a 24 [MONEY TRANSMISSION] licensee or an authorized delegate that [OF THE 25 MONEY TRANSMISSION LICENSEE IF THE PRACTICE] creates the likelihood 26 of material loss, insolvency, or dissipation of the [MONEY TRANSMISSION] 27 licensee's assets, or otherwise materially prejudices the interests of the [MONEY 28 TRANSMISSION] licensee's customers. 29 * Sec. 61. AS 06.55.990 is amended by adding new paragraphs to read: 30 (25) "accredited state" means a state agency that is accredited by an 31 organization that the department determines is a nationally recognized association of
01 state bank supervisors and money transmitter regulators for money transmission 02 licensing and supervision; 03 (26) "acting in concert" means persons knowingly acting together with 04 a common goal of jointly acquiring control of a licensee whether or not under an 05 express agreement; 06 (27) "average daily money transmission liability" means the amount of 07 the licensee's outstanding money transmission obligations in this state at the end of 08 each day in a given period, added together and divided by the total number of days in 09 the given period; in this paragraph, "given period" means a calendar year quarter 10 ending March 31, June 30, September 30, or December 31; 11 (28) "Bank Secrecy Act" means 31 U.S.C. 5311 - 5336 and its 12 implementing regulations; 13 (29) "closed-loop stored value" means stored value that is redeemable 14 by the issuer only for goods or services provided by the issuer or its affiliate, or 15 franchisees of the issuer or its affiliate, except to the extent required by applicable law 16 to be redeemable in cash for its cash value; 17 (30) "control of virtual currency," when used in reference to a 18 transaction or relationship involving virtual currency, means the power to execute 19 unilaterally or prevent indefinitely a virtual currency transaction; 20 (31) "dollar equivalent" means the equivalent value of a particular 21 virtual currency in United States dollars shown on a virtual currency exchange based 22 in the United States for a particular date or period specified in this chapter; in this 23 paragraph, "virtual currency exchange" means an organization that provides a market 24 for the exchange of virtual currency; 25 (32) "eligible rating" means a short-term or long-term credit rating 26 determined by the department that is based on any of the three highest rating 27 categories provided by an eligible rating service; 28 (33) "eligible rating service" means a nationally recognized statistical 29 rating organization, as determined by the United States Securities and Exchange 30 Commission, and any other nationally recognized statistical rating organization 31 designated by the department by regulation;
01 (34) "federally insured depository financial institution" means a bank, 02 credit union, savings and loan association, trust company, savings association, savings 03 bank, industrial bank, or industrial loan company organized under the laws of the 04 United States or any state that has federally insured deposits; 05 (35) "individual" means a natural person; 06 (36) "in this state" means at a physical location within this state for a 07 transaction requested in person; 08 (37) "key individual" means an individual ultimately responsible for 09 establishing or directing policies and procedures of the licensee, including an 10 executive officer, manager, director, or trustee; 11 (38) "license" means a license issued under AS 06.55.105; 12 (39) "licensee" means a person licensed under AS 06.55.105; 13 (40) "money received for transmission" means money or monetary 14 value received in the United States for transmission within or outside the United States 15 by electronic or other means; 16 (41) "multistate licensing process" means an agreement entered into by 17 and among state regulators relating to coordinated processing of applications for 18 licenses, applications for the acquisition of control of a licensee, control 19 determinations, or notice and information requirements for a change of key 20 individuals; 21 (42) "outstanding money transmission obligation" means 22 (A) a payment instrument or stored value issued or sold by a 23 licensee to a person located in the United States, or reported as sold by an 24 authorized delegate of the licensee to a person that is located in the United 25 States, that has not yet been paid or refunded by or for the licensee, or 26 escheated in accordance with applicable abandoned property laws; or 27 (B) money received for transmission by the licensee or an 28 authorized delegate in the United States from a person located in the United 29 States that has not been received by the payee or refunded to the sender, or 30 escheated in accordance with applicable abandoned property laws; in this 31 paragraph, "in the United States" means, to the extent applicable, a person in a
01 state, territory, or possession of the United States, the District of Columbia, the 02 Commonwealth of Puerto Rico, or a United States military installation that is 03 located in a foreign country; 04 (43) "registry" means a nationwide organization that the department 05 determines is a nationally recognized multistate licensing system to use as a multistate 06 licensing process; 07 (44) "tangible net worth" means the aggregate assets of a licensee 08 excluding all intangible assets, less liabilities, as determined in accordance with 09 generally accepted accounting principles; 10 (45) "virtual currency" 11 (A) means a digital representation of value that 12 (i) is used as a medium of exchange, unit of account, or 13 store of value; and 14 (ii) is not money, whether or not denominated in 15 money; 16 (B) does not mean 17 (i) a transaction in which a merchant grants, as part of 18 an affinity or rewards program, value that cannot be taken from or 19 exchanged with the merchant for money, bank credit, or virtual 20 currency; or 21 (ii) a digital representation of value issued by or on 22 behalf of a publisher and used solely within an online game, game 23 platform, or family of games sold by the same publisher or offered on 24 the same game platform; 25 (46) "virtual currency administration" means issuing virtual currency 26 with the authority to redeem the currency for money, bank credit, or other virtual 27 currency; 28 (47) "virtual currency business activity" means 29 (A) exchanging, transferring, or storing virtual currency or 30 engaging in virtual currency administration, whether directly or through an 31 agreement with a virtual currency control services vendor;
01 (B) holding electronic precious metals or electronic certificates 02 representing interests in precious metals on behalf of another person or issuing 03 shares or electronic certificates representing interests in precious metals; or 04 (C) exchanging one or more digital representations of value 05 used within one or more online games, game platforms, or family of games for 06 (i) virtual currency offered by or on behalf of the same 07 publisher from which the original digital representation of value was 08 received; or 09 (ii) money or bank credit outside the online game, game 10 platform, or family of games offered by or on behalf of the same 11 publisher from which the original digital representation of value was 12 received; 13 (48) "virtual currency control services vendor" means a person that has 14 control of virtual currency solely under an agreement with a person that, on behalf of 15 another person, assumes control of virtual currency; 16 (49) "virtual currency exchange" means to 17 (A) assume control of virtual currency from or on behalf of a 18 person, at least momentarily; 19 (B) sell, trade, or convert 20 (i) virtual currency for money, bank credit, or one or 21 more forms of virtual currency or money; or 22 (ii) bank credit for one or more forms of virtual 23 currency; 24 (50) "virtual currency transfer" means to assume control of virtual 25 currency from or on behalf of a person and to 26 (A) credit the virtual currency to the account of another person; 27 (B) move the virtual currency from one account of a person to 28 another account of the same person; or 29 (C) relinquish control of virtual currency to another person. 30 * Sec. 62. AS 06.55.995 is amended to read: 31 Sec. 06.55.995. Short title. This chapter may be cited as the Alaska Uniform
01 Money Transmission Modernization [SERVICES] Act. 02 * Sec. 63. AS 12.62.400(a) is amended by adding a new paragraph to read: 03 (23) controlling a licensee or an applicant for a license under 04 AS 06.55, seeking to acquire control of a licensee under AS 06.55, or acting as a key 05 individual under AS 06.55. 06 * Sec. 64. AS 06.55.103, 06.55.104, 06.55.107, 06.55.201, 06.55.202, 06.55.203, 06.55.204, 07 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, 08 06.55.990(5), 06.55.990(6), 06.55.990(8), 06.55.990(9), 06.55.990(12), 06.55.990(13), 09 06.55.990(14), 06.55.990(16), 06.55.990(17), and 06.55.990(18) are repealed. 10 * Sec. 65. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 INDIRECT COURT RULE AMENDMENT. AS 06.55.605, as amended by sec. 37 of 13 this Act, has the effect of changing Rules 79 and 82, Alaska Rules of Civil Procedure, by 14 changing the award of court costs and attorney fees in certain cases. 15 * Sec. 66. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 TRANSITION. Contracts, rights, liabilities, and obligations created by or under a law 18 repealed or amended by this Act, and in effect on the day before the effective date of the 19 repeal or amendment, remain in effect notwithstanding this Act taking effect. 20 * Sec. 67. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 TRANSITION: CURRENT MONEY SERVICES LICENSEES. A person that has a 23 valid money services license or approval on December 31, 2023, may continue to operate 24 under that license or approval until the licensee renews the license under AS 06.55.106, 25 enacted by sec. 5 of this Act, or through July 1, 2025, whichever is later. In this section, 26 (1) "approval" means approval under AS 06.55.103, as that section read on 27 December 31, 2023; 28 (2) "money services licensee" has the meaning given in AS 06.55.990, as that 29 section read on December 31, 2023. 30 * Sec. 68. The uncodified law of the State of Alaska is amended by adding a new section to 31 read:
01 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 02 Economic Development may adopt regulations to implement this Act. The regulations take 03 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 04 law implemented by the regulations. 05 * Sec. 69. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 CONDITIONAL EFFECT. AS 06.55.605, as amended by sec. 37 of this Act, takes 08 effect only if sec. 65 of this Act receives the two-thirds majority vote of each house required 09 by art. IV, sec. 15, Constitution of the State of Alaska. 10 * Sec. 70. Section 68 of this Act takes effect immediately under AS 01.10.070(c). 11 * Sec. 71. Except as provided in sec. 70 of this Act, this Act takes effect January 1, 2024.