HCS CSSB 86(FIN): "An Act relating to the business of money transmission; relating to licenses for money transmission, licensure requirements, and registration through a nationwide multistate licensing system; relating to the use of virtual currency for money transmission; relating to authorized delegates of a licensee; relating to acquisition of control of a license; relating to record retention and reporting requirements; authorizing the Department of Commerce, Community, and Economic Development to cooperate with other states in the regulation of money transmission; relating to permissible investments; relating to violations and enforcement of money transmission laws; relating to exemptions to money transmission licensure requirements; relating to payroll processing services; relating to currency exchange licenses; relating to abandoned virtual currency; amending Rules 79 and 82, Alaska Rules of Civil Procedure; and providing for an effective date."
00 HOUSE CS FOR CS FOR SENATE BILL NO. 86(FIN) 01 "An Act relating to the business of money transmission; relating to licenses for money 02 transmission, licensure requirements, and registration through a nationwide multistate 03 licensing system; relating to the use of virtual currency for money transmission; relating 04 to authorized delegates of a licensee; relating to acquisition of control of a license; 05 relating to record retention and reporting requirements; authorizing the Department of 06 Commerce, Community, and Economic Development to cooperate with other states in 07 the regulation of money transmission; relating to permissible investments; relating to 08 violations and enforcement of money transmission laws; relating to exemptions to 09 money transmission licensure requirements; relating to payroll processing services; 10 relating to currency exchange licenses; relating to abandoned virtual currency; 11 amending Rules 79 and 82, Alaska Rules of Civil Procedure; and providing for an 12 effective date."
01 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 02 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 03 to read: 04 PURPOSE. The purpose of secs. 1 - 65 and 75 - 78 of this Act is to replace existing 05 state money transmission laws to modernize licensure requirements, to add model language 06 for the burgeoning virtual currency industry, to allow the Department of Commerce, 07 Community, and Economic Development to coordinate with other states in all areas of 08 regulation, licensing, and supervision of money transmission, to standardize the types of 09 activities that are subject to licensing, and to modernize safety and soundness requirements 10 for money transmission. 11 * Sec. 2. AS 06.55.101 is amended to read: 12 Sec. 06.55.101. License required. (a) A person may not engage in the 13 business of money transmission or advertise, solicit, or hold itself [THE PERSON] out 14 as providing money transmission unless the person 15 (1) holds a [MONEY TRANSMISSION] license; [OR] 16 (2) is an authorized delegate of a licensee and is acting within the 17 scope of that authority under a written contract with the licensee; or 18 (3) is exempt under AS 06.55.802 and does not engage in money 19 transmission outside the scope of that exemption [PERSON WHO HOLDS A 20 MONEY TRANSMISSION LICENSE]. 21 (b) A [MONEY TRANSMISSION] license is not transferable or assignable. 22 * Sec. 3. AS 06.55.102 is repealed and reenacted to read: 23 Sec. 06.55.102. Application for license. (a) An applicant for a license shall 24 submit 25 (1) an application in a form and in a medium prescribed by the 26 department; the application must contain information on the applicant's organization 27 and operations, financial responsibility, background, competence level, experience, 28 and activities; 29 (2) any other information reasonably required by the department or 30 registry with respect to the applicant; 31 (3) the application fee established by the department;
01 (4) the license fee established by the department; and 02 (5) a surety bond or other security as required by AS 06.55.505. 03 (b) The department may waive a requirement of (a)(1) - (4) of this section or 04 permit an applicant to submit other information in lieu of the required information. 05 * Sec. 4. AS 06.55.105 is repealed and reenacted to read: 06 Sec. 06.55.105. Issuance of license. (a) When an application for an initial 07 license under this chapter appears to include all required information and address all 08 matters required by the department, the application is considered complete, and the 09 department shall notify the applicant in a record of the date on which the application 10 was determined to be complete. The department shall approve or deny the application 11 within 120 days after the date the application was determined to be complete. If the 12 application is not approved or denied within 120 days after the completion date, 13 (1) the application is approved; and 14 (2) the license takes effect on the first business day after expiration of 15 the 120-day period. 16 (b) The department may for good cause extend the application period. 17 (c) A determination by the department that an application is complete and is 18 accepted for processing means only that the application, on its face, appears to include 19 all required items, including a criminal background check, and address all required 20 matters. The department's determination is not an assessment of the substance of the 21 application or of the sufficiency of the information provided. 22 (d) When an application is filed and considered to be complete under (c) of 23 this section, the department shall investigate the applicant's financial condition, 24 financial responsibility, financial experience, business experience, competence level, 25 character, and general fitness. The department may conduct an on-site investigation of 26 the applicant, and the applicant shall pay the reasonable cost of the on-site 27 investigation. The department shall issue a license to an applicant if the department 28 finds that 29 (1) the applicant has complied with AS 06.55.102, 06.55.109, and 30 applicable regulations; and 31 (2) the financial condition, financial responsibility, financial
01 experience, financial business experience, competence level, character, and general 02 fitness of the applicant, and the experience, competence level, character, and general 03 fitness of the key individuals and persons in control of the applicant indicate that it is 04 in the interest of the public to allow the applicant to engage in money transmission. 05 (e) If an applicant is subject to a multistate licensing process, the department 06 may 07 (1) for the purposes of (d) of this section, accept the investigation 08 results of a state that is the lead investigator in the multistate licensing process; or 09 (2) investigate the applicant in accordance with (d) of this section and 10 the time frames established by agreement through the multistate licensing process, if 11 those time frames comply with the application approval period set out in (a) of this 12 section. 13 (f) The department shall issue a formal written notice of a denial of a license 14 application within 30 days after the decision to deny the application. The department 15 shall set out in the notice of denial the specific reasons for the denial. An applicant 16 may appeal a denial within 30 days after receiving the written notice of the denial and 17 may request a hearing. 18 (g) The initial license term begins on the day the application is approved. The 19 license expires on December 31 of the year in which the license is issued, unless 20 (1) the initial license is issued between November 1 and December 31, 21 in which case the initial license term runs through December 31 of the following year; 22 or 23 (2) the license is revoked, suspended, surrendered, or its term 24 otherwise adjusted in accordance with regulations adopted by the department. 25 (h) An applicant for a license shall demonstrate that the applicant meets or 26 will meet the requirements of this chapter. 27 * Sec. 5. AS 06.55.106 is repealed and reenacted to read: 28 Sec. 06.55.106. Renewal of license. (a) A licensee shall renew a license 29 annually. A licensee shall pay an annual renewal fee by the renewal filing deadline 30 established by the department. The renewal term is for a period of one year and begins 31 on January 1 of each year after the initial license term and expires on December 31 of
01 the year the renewal term begins. 02 (b) A licensee shall submit a renewal report with the renewal fee in a form and 03 in a medium prescribed by the department. The renewal report must describe each 04 material change in information submitted by the licensee in the licensee's initial 05 license application that the licensee has not reported to the department. 06 (c) The department may for good cause grant an extension of the renewal 07 filing deadline. 08 (d) The department may use the registry to process license renewals if the use 09 is consistent with this section. 10 * Sec. 6. AS 06.55 is amended by adding new sections to article 1 to read: 11 Sec. 06.55.108. Maintenance of license. (a) A licensee shall at all times meet 12 the requirements of this chapter. 13 (b) If a licensee does not continue to meet the qualifications or satisfy the 14 requirements that apply to an applicant for a new license, the department may suspend 15 or revoke the licensee's license in accordance with this chapter or other applicable law. 16 Sec. 06.55.109. Information requirements for certain individuals. (a) An 17 individual in control of a licensee or applicant, an individual who seeks to acquire 18 control of a licensee, and each key individual shall furnish to the department through 19 the registry the following items: 20 (1) the individual's fingerprints for submission to the Federal Bureau 21 of Investigation to obtain a national criminal history record check unless the individual 22 currently resides outside the United States and has resided outside the United States 23 for the past 10 years; and 24 (2) personal history and experience in a form and in a medium 25 prescribed by the department, including 26 (A) an independent credit report from a consumer reporting 27 agency, unless the individual does not have a social security number; 28 (B) information related to a criminal conviction or pending 29 charges; and 30 (C) information related to any regulatory or administrative 31 action and any civil litigation involving claims of fraud, misrepresentation,
01 conversion, mismanagement of funds, breach of fiduciary duty, or breach of 02 contract. 03 (b) If the individual has resided outside the United States at any time in the 10 04 years before the date of furnishing the information under (a) of this section, the 05 individual shall also provide an investigative background report prepared by an 06 independent search firm. The independent search firm may not be affiliated with or 07 have an interest in the individual the firm is researching. At a minimum, the 08 investigative background report must 09 (1) demonstrate that the independent search firm has sufficient 10 knowledge, resources, and employs accepted and reasonable methodologies to conduct 11 the research of the background report; 12 (2) be written in English and contain the following: 13 (A) if available in the individual's current jurisdiction of 14 residency, a comprehensive credit report, or equivalent information obtained or 15 generated by the independent search firm to accomplish a comprehensive 16 credit report, including a search of the court data in the countries, provinces, 17 states, cities, towns, and contiguous areas where the individual has resided and 18 worked; 19 (B) criminal records information for the previous 10 years, 20 including felonies, misdemeanors, or similar convictions for violations of law 21 in the countries, provinces, states, cities, towns, and contiguous areas where 22 the individual has resided and worked; 23 (C) employment history; 24 (D) media history, including an electronic search of national 25 and local publications, wire services, and business applications; and 26 (E) regulatory history related to financial services, including 27 money transmission, securities, banking, insurance, and mortgage-related 28 industries. 29 Sec. 06.55.110. Consistent state licensing. (a) To establish consistent 30 licensing between this state and other states, the department may 31 (1) implement all licensing provisions of this chapter in a manner that
01 is consistent with other states that have adopted multistate licensing processes; and 02 (2) participate in nationwide protocols for licensing cooperation and 03 coordination among state regulators if the nationwide protocols for licensing 04 cooperation and coordination are consistent with this chapter. 05 (b) To fulfill the purposes of this chapter, the department may establish 06 relationships or contracts with the registry or other entities designated by the registry 07 to enable the department to 08 (1) collect and maintain records; 09 (2) coordinate multistate licensing processes and supervision 10 processes; 11 (3) process fees; and 12 (4) facilitate communication between the department and licensees or 13 other persons subject to this chapter. 14 (c) The department may use the registry for all aspects of licensing in 15 accordance with this chapter, including license applications, applications for 16 acquisitions of control, surety bonds, reporting, criminal background checks, credit 17 checks, fee processing, and examinations. 18 * Sec. 7. AS 06.55 is amended by adding new sections to read: 19 Article 1A. Virtual Currency Business Activity. 20 Sec. 06.55.150. Requirements for engaging in virtual currency business 21 activity. (a) A person may not engage in virtual currency business activity or hold 22 itself out as being able to engage in virtual currency business activity unless the person 23 is 24 (1) licensed under this chapter; or 25 (2) exempt from licensing under AS 06.55.802. 26 (b) A person that is licensed to engage in virtual currency business activity is 27 engaged in the business of money transmission and is subject to the requirements of 28 this chapter. 29 Sec. 06.55.155. Required disclosures. (a) A licensee that engages in virtual 30 currency business activity shall provide to a person that uses the licensee's products or 31 service the disclosures required by (b) of this section and any additional disclosures
01 the department determines to be reasonably necessary for the protection of persons. 02 The department shall determine by regulation or order the time and form required for 03 disclosure. A disclosure required by this section must be made separately from any 04 other information provided by the licensee and in a clear and conspicuous manner in a 05 record the person may keep. A licensee may propose for the department's approval 06 alternate disclosures as more appropriate for its virtual currency business activity. 07 (b) Before establishing a relationship with a person, a licensee shall disclose, 08 to the extent applicable to the virtual currency business activity the licensee will 09 undertake with the person, 10 (1) a schedule of fees and charges the licensee may assess, the manner 11 by which fees and charges will be calculated if not set in advance and disclosed, and 12 the timing of the fees and charges; 13 (2) whether the product or service provided by the licensee is covered 14 by 15 (A) a form of insurance or is otherwise guaranteed against loss 16 by an agency of the United States 17 (i) up to the dollar equivalent of virtual currency 18 purchased from the licensee or for control of virtual currency by the 19 licensee as of the date of the placement or purchase, including the 20 maximum amount provided by insurance under the Federal Deposit 21 Insurance Corporation or otherwise available from the Securities 22 Investor Protection Corporation; or 23 (ii) if not provided at the dollar equivalent of virtual 24 currency purchased from the licensee or for control of virtual currency 25 by the licensee, the maximum amount of coverage for each person 26 expressed in the dollar equivalent of the virtual currency; or 27 (B) private insurance against theft or loss, including cyber 28 theft; 29 (3) the irrevocability of a virtual currency transfer or virtual currency 30 exchange and any exception to irrevocability; 31 (4) a description of
01 (A) liability for an unauthorized, mistaken, or accidental virtual 02 currency transfer or virtual currency exchange; 03 (B) the person's responsibility to provide notice to the licensee 04 of a virtual currency transfer or virtual currency exchange; 05 (C) the basis for any recovery by the person from the licensee 06 or registrant; 07 (D) general error resolution rights applicable to a virtual 08 currency transfer or virtual currency exchange; and 09 (E) the method for the person to update the person's contact 10 information with the licensee; 11 (5) that the date or time when a virtual currency transfer or virtual 12 currency exchange is made and the person's account is debited may differ from the 13 date or time when the person initiates an instruction to make the transfer or exchange; 14 (6) whether the person has a right to stop a preauthorized payment or 15 revoke authorization for a virtual currency transfer and the procedure to initiate a stop- 16 payment order or revoke authorization for a later virtual currency transfer; 17 (7) the person's right to receive a receipt, trade ticket, or other evidence 18 of a virtual currency transfer or virtual currency exchange; 19 (8) the person's right to at least 30 days' notice of a change in the 20 licensee's fee schedule, other terms and conditions of operating the licensee's virtual 21 currency business activity with the person, and the policies applicable to the person's 22 account; and 23 (9) that other persons are not required to take payment in virtual 24 currency, that the value of virtual currency can change, and that virtual currency is not 25 backed by a governmental agency. 26 (c) Except as provided in (d) of this section, at the conclusion of a virtual 27 currency transaction with or on behalf of a person, a licensee shall provide the person 28 a confirmation in a record that contains 29 (1) the name and contact information of the licensee, including 30 information the person may need to ask a question or file a complaint; 31 (2) the type, value, date, precise time, and amount of the transaction;
01 and 02 (3) the fee charged for the transaction, including any charge for 03 conversion of virtual currency to money, bank credit, or another virtual currency. 04 (d) If a licensee discloses that the licensee will provide a daily confirmation in 05 the initial disclosure under (c) of this section, the licensee may elect to provide a 06 single, daily confirmation for all transactions with or on behalf of a person on that day 07 instead of a confirmation for each transaction. 08 Sec. 06.55.160. Property interests and entitlements to virtual currency. (a) 09 A licensee that has control of virtual currency for a person shall maintain in the 10 licensee's control an amount of each type of virtual currency sufficient to satisfy the 11 aggregate entitlements of the person to the type of virtual currency. 12 (b) If a licensee violates (a) of this section, the property interests of the person 13 in the virtual currency are pro rata property interests in the type of virtual currency to 14 which the person is entitled, without regard to the time the person became entitled to 15 the virtual currency or the licensee obtained control of the virtual currency. 16 (c) The virtual currency referred to in this section is 17 (1) held for the person entitled to the virtual currency; 18 (2) not property of the licensee; 19 (3) not subject to the claims of creditors of the licensee; and 20 (4) considered a permissible investment to the extent specified under 21 AS 06.55.502(b)(4). 22 Sec. 06.55.165. Additional requirements and clarifications for virtual 23 currency business activities. (a) A licensee engaged in a virtual currency business 24 activity shall comply with all provisions of this chapter to the extent applicable to the 25 licensee's activities. 26 (b) A licensee engaged in a virtual currency business activity may include 27 virtual currency in the licensee's calculation of tangible net worth, except virtual 28 currency controlled by a person entitled to the protections of AS 06.55.160. The 29 virtual currency is measured by the average value of the virtual currency expressed in 30 the dollar equivalent over the previous six calendar months. 31 (c) For five years after the date of virtual currency business activity with or on
01 behalf of a person, a licensee shall maintain a record of 02 (1) each transaction of the licensee with or on behalf of the person or 03 for the licensee's account in this state, including 04 (A) the identity of the person; 05 (B) the form of the transaction; 06 (C) the amount, date, and payment instructions given by the 07 person; and 08 (D) the account number, name, and mailing address of the 09 person, and, to the extent feasible, other parties to the transaction; 10 (2) the aggregate number of transactions and aggregate value of 11 transactions by the licensee with or on behalf of the person and for the licensee's 12 account in this state, expressed in the dollar equivalent of virtual currency for the 13 previous 12 calendar months; 14 (3) each transaction in which the licensee engaged in a virtual currency 15 exchange of one form of virtual currency for money or another form of virtual 16 currency with or on behalf of the person; 17 (4) a general ledger posted at least monthly that lists all assets, 18 liabilities, capital, income, and expenses of the licensee; 19 (5) each report required to be submitted under AS 06.55.403; 20 (6) bank statements and bank reconciliation records for the licensee 21 and the name, account number, and mailing address of each bank the licensee uses in 22 the conduct of its virtual currency business activity with or on behalf of the person; 23 (7) a report of any dispute with the person; and 24 (8) a report of any virtual currency business activity transaction with or 25 on behalf of the person that the licensee was unable to complete. 26 (d) A licensee shall maintain the records required by (c) of this section in a 27 form that enables the department to determine whether the licensee is in compliance 28 with a court order, this chapter, or other law of this state. 29 Sec. 06.55.170. Scope of application. (a) The provisions of AS 06.55.150 - 30 06.55.165 do not apply to activity by 31 (1) a person that contributes only connectivity software or computing
01 power to a decentralized virtual currency or to a protocol governing virtual currency 02 transfer of the digital representation of value; 03 (2) a person that provides only data storage or security services for a 04 business engaged in virtual currency business activity and does not otherwise engage 05 in virtual currency business activity on behalf of another person; 06 (3) a person that provides only to another person otherwise exempt 07 from this chapter virtual currency as one or more enterprise solutions used solely 08 between each other and has no agreement or relationship with a person that is an end 09 user of virtual currency; 10 (4) a person using virtual currency, including creating, investing, 11 buying, or selling, or obtaining virtual currency as payment for the purchase or sale of 12 goods or services, solely 13 (A) on the person's own behalf; 14 (B) for personal, family, or household purposes; or 15 (C) for academic purposes; 16 (5) a person that has virtual currency business activity with or on 17 behalf of a person reasonably expected to be valued, in the aggregate, at $5,000 or less 18 annually, measured by the dollar equivalent of virtual currency; 19 (6) an attorney providing escrow services to a person; 20 (7) a title insurance company providing escrow services to a person; 21 (8) a securities intermediary, as defined in AS 45.08.102, or a 22 commodity intermediary, as defined in AS 45.29.102, that 23 (A) does not engage in the ordinary course of business in 24 virtual currency business activity with or on behalf of a person in addition to 25 maintaining securities accounts or commodities accounts and is regulated as a 26 securities intermediary or commodity intermediary under federal law, the law 27 of this state other than this chapter, or the law of another state; and 28 (B) affords a person protections comparable to those set out in 29 AS 06.55.160; 30 (9) a secured creditor under AS 45.29 or creditor with a judicial lien or 31 lien arising by operation of law on collateral that is virtual currency, if the virtual
01 currency business activity of the creditor is limited to enforcement of the security 02 interest in compliance with AS 45.29 or the law applicable to the lien; 03 (10) a virtual currency control services vendor; 04 (11) a person that does not receive compensation from a person for 05 (A) providing virtual currency products or services; 06 (B) conducting virtual currency business activity; or 07 (C) engaging in testing products or services with the person's 08 own funds. 09 (b) The department may determine, based on facts particular to the person or 10 class of persons, that a person or class of persons is exempt from this chapter. 11 * Sec. 8. AS 06.55.301 is repealed and reenacted to read: 12 Sec. 06.55.301. Relationship between licensee and authorized delegate. (a) 13 Before a licensee is authorized to conduct business through an authorized delegate or 14 to allow a person to act as the licensee's authorized delegate, the licensee shall 15 (1) adopt, and update as necessary, written policies and procedures 16 reasonably designed to ensure that the authorized delegate complies with applicable 17 state and federal law; 18 (2) enter into a written contract that complies with (c) of this section; 19 and 20 (3) conduct a reasonable, risk-based background investigation 21 sufficient for the licensee to determine whether the authorized delegate has complied 22 and is likely to comply with applicable state and federal law. 23 (b) An authorized delegate shall operate in compliance with this chapter. 24 (c) The written contract required by (a)(2) of this section must be signed by 25 the licensee and the authorized delegate and, at a minimum, must 26 (1) appoint the person signing the contract as the licensee's authorized 27 delegate with the authority to conduct money transmission on behalf of the licensee; 28 (2) set out the nature and scope of the relationship between the licensee 29 and the authorized delegate and the respective rights and responsibilities of the parties; 30 (3) require the authorized delegate to agree to comply with all 31 applicable state and federal laws, rules, and regulations pertaining to money
01 transmission, including this chapter and regulations implementing this chapter, 02 relevant provisions of the Bank Secrecy Act, and P.L. 107-56 (USA PATRIOT Act); 03 (4) require the authorized delegate to remit and handle money and 04 monetary value in accordance with the terms of the contract; 05 (5) establish a trust for the benefit of the licensee on money and 06 monetary value after deducting fees received for money transmission; 07 (6) require the authorized delegate to prepare and maintain records as 08 required by this chapter or regulations implementing this chapter, or as reasonably 09 requested by the department; 10 (7) acknowledge that the authorized delegate consents to examination 11 or investigation by the department; 12 (8) state that the licensee is subject to regulation by the department and 13 that, as part of that regulation, the department may suspend or revoke an authorized 14 delegate designation or require the licensee to terminate an authorized delegate 15 designation; and 16 (9) acknowledge receipt of the written policies and procedures 17 required under (a)(1) of this section. 18 (d) If the licensee's license is suspended, revoked, surrendered, or expired, the 19 licensee shall, within five business days, provide documentation to the department that 20 the licensee has notified all applicable authorized delegates of the licensee whose 21 names are in a record filed with the department of the suspension, revocation, 22 surrender, or expiration of the license. Upon suspension, revocation, surrender, or 23 expiration of a license, applicable authorized delegates shall immediately stop 24 providing money transmission as an authorized delegate of the licensee. 25 (e) An authorized delegate of a licensee holds in trust for the benefit of the 26 licensee all money after deducting fees received from money transmission. If an 27 authorized delegate commingles any funds received from money transmission with 28 any other funds or property owned or controlled by the authorized delegate, all 29 commingled funds and other property shall be considered held in trust in favor of the 30 licensee in an amount equal to the amount of money net of fees received from money 31 transmission.
01 (f) In this section, "remit" means to make direct payments of money to a 02 licensee or its representative authorized to receive money or to deposit money in a 03 bank account specified by the licensee. 04 * Sec. 9. AS 06.55.302 is amended to read: 05 Sec. 06.55.302. Unauthorized activities. A person may not engage in the 06 business of money transmission on behalf of a person that is not licensed or 07 exempt [ACT AS AN AUTHORIZED DELEGATE FOR, OR OTHERWISE 08 PROVIDE MONEY SERVICES ON BEHALF OF, A PERSON WHO DOES NOT 09 HOLD A MONEY SERVICES LICENSE] under this chapter. A person that engages 10 in the business of money transmission on behalf of a person not licensed or 11 exempt under this chapter provides money transmission to the same extent as if 12 the person were a licensee and is jointly and severally liable with the unlicensed 13 or nonexempt person. 14 * Sec. 10. AS 06.55.401 is repealed and reenacted to read: 15 Sec. 06.55.401. Supervision; examination; investigation. (a) The department 16 may conduct an examination or investigation of a licensee or authorized delegate or 17 otherwise take independent action authorized by this chapter, regulations 18 implementing this chapter, and other applicable law, including the Bank Secrecy Act, 19 15 U.S.C. 1693 - 1693r (Electronic Fund Transfer Act), P.L. 106-102 (Gramm-Leach- 20 Bliley Act), and P.L. 107-56 (USA PATRIOT Act). The department may 21 (1) conduct an on-site or off-site examination as the department 22 reasonably requires; 23 (2) conduct an examination in conjunction with an examination 24 conducted by representatives of other agencies of this state, another state, or the 25 federal government; 26 (3) accept the examination report of another agency of this state, 27 another state, or the federal government, or a report prepared by an independent 28 accounting firm; a report accepted under this paragraph is considered for all purposes 29 to be an official report of the department; and 30 (4) summon and examine under oath a key individual or employee of a 31 licensee or authorized delegate and require the key individual or employee to produce
01 records regarding any matter related to the condition and business of the licensee or 02 authorized delegate. 03 (b) A licensee or authorized delegate shall provide, and the department shall 04 have complete access to, records necessary for the department to conduct a complete 05 examination. The licensee or authorized delegate shall provide the records at the 06 location and in the format specified by the department. The department may use 07 multistate record production standards and examination procedures when the 08 multistate record production standards and examination procedures will reasonably 09 achieve the requirements of this section. 10 (c) Unless otherwise directed by the department, a licensee shall pay all costs 11 reasonably incurred in connection with an examination of a licensee or a licensee's 12 authorized delegate. 13 (d) Information obtained during an examination under this chapter may be 14 disclosed only as provided in AS 06.55.407. 15 * Sec. 11. AS 06.55.403(a) is repealed and reenacted to read: 16 (a) A licensee shall submit a report of the licensee's financial condition within 17 45 days after the end of each quarter of the calendar year or within an extended period 18 that the department establishes. The report of condition must include 19 (1) financial information at the licensee's level; 20 (2) nationwide and state-specific money transmission transaction 21 information in every jurisdiction in the United States where the licensee is licensed to 22 engage in money transmission; 23 (3) a permissible investments report; 24 (4) transaction destination country reporting for money received for 25 transmission, if applicable; and 26 (5) any other information the department reasonably requires with 27 respect to the licensee. 28 * Sec. 12. AS 06.55.403(b) is repealed and reenacted to read: 29 (b) A licensee shall submit a report of the licensee's authorized delegates 30 within 45 days after the end of each quarter of the calendar year. The report of 31 authorized delegates must include the following information about each authorized
01 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(a)(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) Records [ALL RECORDS] maintained by the [MONEY SERVICES] 12 licensee as required in (a) - (c) of this section are open to inspection by the department 13 only as permitted under 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 the licensee's fiscal 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 fiscal 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(a), the 15 [THE] department, with respect to any licensee [MONEY SERVICES LICENSEES], 16 may by regulation or order limit the extent to which a specific [TYPE OF] 17 investment maintained by a licensee within a class of permissible investments may 18 be 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 06.55.503, 08 the department shall notify the applicable regulator of each state in which the licensee 09 is 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) The [EXCEPT TO THE EXTENT OTHERWISE LIMITED BY THE 25 DEPARTMENT UNDER AS 06.55.501, THE] following investments are permissible 26 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 rated AAA by an eligible rating service, 30 certificates [A CERTIFICATE] of deposit, [OR A] senior debt obligations 31 [OBLIGATION] of a federally [AN] insured depository financial institution, and
01 cash equivalents, including automated clearing house items in transit to the 02 licensee and automated clearing house items or international wires in transit to a 03 payee, cash in transit by armored car, cash in smart safes, cash in licensee-owned 04 locations, and transmission receivables owed by a bank and funded by a debit 05 card or credit card; 06 (2) [; IN THIS PARAGRAPH, "INSURED DEPOSITORY 07 INSTITUTION" HAS THE MEANING GIVEN IN 12 U.S.C. 1813 (FEDERAL 08 DEPOSIT INSURANCE ACT); 09 (2) BANKER'S ACCEPTANCE OR BILL OF EXCHANGE THAT IS 10 ELIGIBLE FOR PURCHASE ON ENDORSEMENT BY A MEMBER BANK OF 11 THE FEDERAL RESERVE SYSTEM AND IS ELIGIBLE FOR PURCHASE BY A 12 FEDERAL RESERVE BANK; 13 (3)] an investment bearing a rating of one of the three highest grades as 14 defined by a nationally recognized organization that rates securities; 15 (3) [(4) AN INVESTMENT SECURITY THAT IS] an obligation of 16 the United States or a commission [DEPARTMENT], agency, or instrumentality of 17 the United States, [AN INVESTMENT IN] an obligation that is guaranteed fully as to 18 principal and interest by the United States, or [AN INVESTMENT IN] an obligation 19 of a state or a governmental subdivision, agency, or instrumentality of a state; 20 (4) the full drawable amount that can be drawn on an irrevocable 21 standby letter of credit that complies with AS 06.55.503; 22 (5) 100 percent of the surety bond provided for under 23 AS 06.55.505 that exceeds the average daily money transmission liability in this 24 state 25 [(5) RECEIVABLES THAT ARE PAYABLE TO A MONEY 26 SERVICES LICENSEE FROM ITS AUTHORIZED DELEGATES, IN THE 27 ORDINARY COURSE OF BUSINESS, UNDER CONTRACTS THAT ARE NOT 28 PAST DUE OR DOUBTFUL OF COLLECTION IF THE AGGREGATE AMOUNT 29 OF RECEIVABLES UNDER THIS PARAGRAPH DOES NOT EXCEED 20 30 PERCENT OF THE TOTAL PERMISSIBLE INVESTMENTS OF A MONEY 31 SERVICES LICENSEE AND THE MONEY SERVICES LICENSEE DOES NOT
01 HOLD AT ONE TIME RECEIVABLES UNDER THIS PARAGRAPH IN ANY 02 ONE PERSON AGGREGATING MORE THAN 10 PERCENT OF THE MONEY 03 SERVICES LICENSEE'S TOTAL PERMISSIBLE INVESTMENTS; AND 04 (6) A SHARE OR A CERTIFICATE ISSUED BY AN OPEN-END 05 MANAGEMENT INVESTMENT COMPANY THAT IS REGISTERED WITH THE 06 UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER 15 07 U.S.C. 80a-1 - 80a-64 (INVESTMENT COMPANY ACT OF 1940), AND WHOSE 08 PORTFOLIO IS RESTRICTED BY THE MANAGEMENT COMPANY'S 09 INVESTMENT POLICY TO INVESTMENTS SPECIFIED IN (1) - (4) OF THIS 10 SUBSECTION]. 11 * Sec. 28. AS 06.55.502(b) is repealed and reenacted to read: 12 (b) In addition to the investments permissible under (a) of this section, the 13 following investments are permissible under (a) of this section, to the extent specified: 14 (1) receivables that are payable to a licensee from the licensee's 15 authorized delegates in the ordinary course of business that are less than seven days 16 old and do not exceed 50 percent of the aggregate value of the licensee's total 17 permissible investments; receivables under this paragraph that are payable to a 18 licensee from a single authorized delegate in the ordinary course of business may not 19 exceed 10 percent of the aggregate value of the licensee's total permissible 20 investments; 21 (2) the following investments, not to exceed 20 percent for each 22 category and a combined total of 50 percent of the aggregate value of the licensee's 23 total permissible investments: 24 (A) a short-term investment of not more than six months' 25 duration bearing an eligible rating; 26 (B) commercial paper bearing an eligible rating; 27 (C) a bill, note, bond, or debenture bearing an eligible rating; 28 (D) United States tri-party repurchase agreements collateralized 29 at 100 percent or more by federal government or agency securities, municipal 30 bonds, or other securities bearing an eligible rating; 31 (E) money market mutual funds rated equal to or higher than
01 A- and less than AAA by an eligible rating service; and 02 (F) a mutual fund or other investment fund composed solely 03 and exclusively of one or more permissible investments listed in (a)(1) - (3) of 04 this section; 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 noncooperative jurisdiction 17 as designated by the Financial Action Task Force; and 18 (4) virtual currency is only a permissible investment for outstanding 19 money transmission obligations of virtual currency. 20 * Sec. 29. AS 06.55 is amended by adding new sections to article 5 to read: 21 Sec. 06.55.503. Letter of credit. (a) The letter of credit permitted under 22 AS 06.55.502(a)(4) 23 (1) must list the department as the beneficiary; 24 (2) must stipulate that the beneficiary is only required to draw a sight 25 draft under the letter of credit and present it to obtain funds up to the letter of credit 26 amount within seven days after presenting the items required by (7) of this subsection; 27 (3) must be issued by a federally insured depository financial 28 institution or a foreign bank that bears an eligible rating and is regulated, supervised, 29 and examined by federal or state regulatory authorities having regulatory authority 30 over banks, credit unions, and trust companies; 31 (4) must be irrevocable, unconditional, and indicate that the letter of
01 credit is not subject to any condition or qualifications outside of the letter of credit; 02 (5) may not contain reference to any other agreements, documents or 03 entities, or otherwise provide for any security interest in the licensee; 04 (6) must contain an issue date and expiration date, and expressly 05 provide for automatic extension, without a written amendment, for an additional 06 period of one year from the present or each future expiration date, unless the issuer of 07 the letter of credit notifies the department in writing by certified or registered mail, 08 courier mail, or other means of notice that provides a receipt, at least 60 days before 09 an expiration date, that the irrevocable letter of credit will not be extended; and 10 (7) must provide that the issuer of the letter of credit will honor, at 11 sight, a presentation made by the beneficiary to the issuer of the following documents 12 on or before the expiration date of the letter of credit: 13 (A) the original letter of credit, including any amendments; and 14 (B) a written statement from the beneficiary stating whether 15 one or more of the following events have occurred: 16 (i) the filing of a petition by or against the licensee 17 under 11 U.S.C. Section 101 - 112 (Bankruptcy Code), for bankruptcy 18 or reorganization; 19 (ii) the filing of a petition by or against the licensee for 20 receivership, or the commencement of any other judicial or 21 administrative proceeding for the licensee's dissolution or 22 reorganization; 23 (iii) the seizure of assets of a licensee by the department 24 under an emergency order issued in accordance with applicable law, 25 based on an action, violation, or condition that has caused or is likely to 26 cause the insolvency of the licensee; or 27 (iv) the beneficiary received notice of expiration or non- 28 extension of a letter of credit and the licensee failed to demonstrate to 29 the satisfaction of the beneficiary that the licensee will maintain 30 permissible investments in accordance with AS 06.55.501 or this 31 section upon the expiration or non-extension of the letter of credit.
01 (b) In the event of any notice of expiration or non-extension of a letter of 02 credit issued under (a) of this section, the licensee shall be required to demonstrate to 03 the satisfaction of the department, 15 days before expiration, that the licensee 04 maintains and will maintain permissible investments in accordance with AS 06.55.501 05 upon expiration of the letter of credit. If the licensee is not able to do so, the 06 department may draw on the letter of credit in an amount up to the amount necessary 07 to meet the licensee's requirements to maintain permissible investments in accordance 08 with AS 06.55.501. A draw must be offset against the licensee's outstanding money 09 transmission obligations. The drawn funds must be held in trust by the department or 10 the department's designated agent, to the extent authorized by law, as agent for the 11 benefit of the purchasers and holders of the licensee's outstanding money transmission 12 obligations. 13 (c) The department may designate an agent to serve on the department's behalf 14 as beneficiary to a letter of credit if the agent and letter of credit meet the requirements 15 established by the department. The department's agent may serve as agent for multiple 16 licensing authorities for a single irrevocable letter of credit if the proceeds of the 17 drawable amount for the purposes of AS 06.55.502(a)(4) are assigned to the 18 department. 19 (d) The department may participate in multistate processes designed to 20 facilitate the issuance and administration of letters of credit, including services 21 provided by the registry. 22 Sec. 06.55.505. Security. (a) An applicant for a license shall provide, and a 23 licensee at all times shall maintain, security consisting of a surety bond in a form 24 satisfactory to the department or, with the department's approval, a deposit in 25 accordance with this section. 26 (b) The department shall determine the amount of the required security by 27 regulation or order. The amount of the required security must be proportional to the 28 licensee's average daily money transmission liability in this state up to a maximum of 29 $1,000,000. 30 (c) A licensee that maintains a bond in the maximum amount provided for 31 under (b) of this section is not required to calculate its average daily money
01 transmission liability in this state for purposes of this section. 02 (d) A licensee may exceed the maximum required bond amount. 03 (e) The aggregate liability on a surety bond may not exceed the principal sum 04 of the bond. A claimant against a licensee may maintain an action on the bond, or the 05 department may maintain an action on behalf of the claimant. 06 (f) A surety bond must cover claims for as long as the department specifies, 07 but at least for the five years after the date the licensee stops providing money 08 transmission in this state. The department may permit the amount of security to be 09 reduced or eliminated before the expiration of that time to the extent the amount of the 10 licensee's outstanding money transmission obligations in this state is reduced. The 11 department may permit a licensee to substitute another form of security acceptable to 12 the department for the security effective at the time the licensee stops providing 13 money transmission in this state. 14 (g) An applicant for a license or a licensee shall obtain the surety bond 15 required under this section from a surety company authorized to do business in this 16 state. 17 Sec. 06.55.510. Net worth. (a) A licensee shall maintain at all times a tangible 18 net worth of 19 (1) the greater of $35,000 or three percent of total assets for the first 20 $100,000,000; 21 (2) two percent of additional assets for $100,000,001 to 22 $1,000,000,000; and 23 (3) 0.5 percent of additional assets for over $1,000,000,001. 24 (b) Tangible net worth must be demonstrated at initial application by the 25 applicant's most recent audited or unaudited financial statements. 26 (c) The department may exempt an applicant or licensee, in part or in whole, 27 from the requirements of this section. 28 * Sec. 30. AS 06.55.601 is amended to read: 29 Sec. 06.55.601. Suspension and revocation; receivership. (a) The 30 department may suspend or revoke a [MONEY SERVICES] license, place a 31 [MONEY SERVICES] licensee in receivership, or order a [MONEY SERVICES]
01 licensee to revoke the designation of an authorized delegate if 02 (1) the [MONEY SERVICES] licensee violates this chapter or a 03 regulation adopted or an order issued under this chapter; 04 (2) the [MONEY SERVICES] licensee does not cooperate with an 05 examination or investigation by the department; 06 (3) the [MONEY SERVICES] licensee engages in fraud, intentional 07 misrepresentation, or gross negligence; 08 (4) an authorized delegate is convicted of a violation of a state or 09 federal anti-money laundering statute, or violates a regulation adopted or an order 10 issued under this chapter, as a result of the [MONEY SERVICES] licensee's wilful 11 misconduct or wilful blindness; 12 (5) the competence level, experience, character, or general fitness of 13 the [MONEY SERVICES] licensee, authorized delegate, person in control of a 14 [MONEY SERVICES] licensee, key individual, or responsible person of the 15 [MONEY SERVICES] licensee or authorized delegate indicates that it is not in the 16 public interest to permit the person to provide money transmission [SERVICES]; 17 (6) the [MONEY SERVICES] licensee engages in an unsafe or 18 unsound practice; 19 (7) the [MONEY SERVICES] licensee is insolvent, suspends payment 20 of its obligations, or makes a general assignment for the benefit of its creditors; or 21 (8) the [MONEY SERVICES] licensee does not remove an authorized 22 delegate after the department issues and serves on [UPON] the [MONEY SERVICES] 23 licensee a final order that includes [INCLUDING] a finding that the authorized 24 delegate has violated this chapter. 25 (b) In determining whether a [MONEY SERVICES] licensee is engaging in 26 an unsafe or unsound practice, the department may consider the size and condition of 27 the [MONEY SERVICES] licensee's money transmission, the magnitude of the loss, 28 the gravity of the violation of this chapter, and the previous conduct of the person 29 involved. 30 * Sec. 31. AS 06.55.601 is amended by adding a new subsection to read: 31 (c) A licensee may apply for relief from a suspension or revocation of the
01 licensee's license according to procedures prescribed by the department. 02 * Sec. 32. AS 06.55.602 is amended to read: 03 Sec. 06.55.602. Suspension and revocation of authorized delegates. (a) The 04 department may issue an order suspending or revoking the designation of an 05 authorized delegate if the department finds that 06 (1) the authorized delegate violated this chapter or a regulation adopted 07 or an order issued under this chapter; 08 (2) the authorized delegate did not cooperate with an examination or 09 investigation by the department; 10 (3) the authorized delegate engaged in fraud, intentional 11 misrepresentation, or gross negligence; 12 (4) the authorized delegate is convicted of a violation of a state or 13 federal anti-money laundering statute; 14 (5) the competence level, experience, character, or general fitness of 15 the authorized delegate or a person in control of the authorized delegate indicates that 16 it is not in the public interest to permit the authorized delegate to provide money 17 transmission [SERVICES]; or 18 (6) the authorized delegate is engaging in an unsafe or unsound 19 practice. 20 (b) In determining whether an authorized delegate is engaging in an unsafe or 21 unsound practice, the department may consider the size and condition of the 22 authorized delegate's provision of money transmission [SERVICES], the magnitude 23 of the loss, the gravity of the violation of this chapter or a regulation adopted or order 24 issued under this chapter, and the previous conduct of the authorized delegate. 25 * Sec. 33. AS 06.55.602 is amended by adding a new subsection to read: 26 (c) An authorized delegate may apply for relief from a suspension or 27 revocation of designation as an authorized delegate according to procedures prescribed 28 by the department. 29 * Sec. 34. AS 06.55.603(a) is amended to read: 30 (a) If the department determines that a violation of this chapter or of a 31 regulation adopted or an order issued under this chapter by a [MONEY SERVICES]
01 licensee or authorized delegate is likely to cause immediate and irreparable harm to 02 the [MONEY SERVICES] licensee, its customers, or the public as a result of the 03 violation, or cause insolvency or significant dissipation of assets of the [MONEY 04 SERVICES] licensee, the department may issue an order requiring the [MONEY 05 SERVICES] licensee or authorized delegate to cease and desist from the violation. 06 The order becomes effective on service of it on the [MONEY SERVICES] licensee or 07 authorized delegate. 08 * Sec. 35. AS 06.55.603(b) is amended to read: 09 (b) The department may issue an order against a [MONEY SERVICES] 10 licensee to cease and desist from providing money transmission [SERVICES] 11 through an authorized delegate who is the subject of a separate order by the 12 department. 13 * Sec. 36. AS 06.55.603(d) is amended to read: 14 (d) A [MONEY SERVICES] licensee or an authorized delegate who is served 15 with an order to cease and desist may petition the superior court for a judicial order 16 setting aside, limiting, or suspending the enforcement, operation, or effectiveness of 17 the order pending the completion of an administrative proceeding under AS 06.55.601 18 or 06.55.602. 19 * Sec. 37. AS 06.55.605 is amended to read: 20 Sec. 06.55.605. Civil penalties. The department may assess a civil penalty 21 against a person that [WHO] violates this chapter or a regulation adopted or an order 22 issued under this chapter in an amount not to exceed $10,000 a [$1,000 EACH] day 23 for each day the violation is outstanding. 24 * Sec. 38. AS 06.55.605 is amended by adding a new subsection to read: 25 (b) A person that is found liable for a civil penalty under (a) of this section 26 shall also be liable to the department for the department's costs and expenses for 27 investigating and prosecuting the matter, including reasonable attorney fees. 28 * Sec. 39. AS 06.55.606(b) is amended to read: 29 (b) 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 more than $500 in compensation
01 within a 30-day period from this activity is guilty of a class C felony. 02 * Sec. 40. AS 06.55.606(c) is amended to read: 03 (c) A person who knowingly engages in an activity for which a [MONEY 04 SERVICES] license is required under this chapter without being [LICENSED AS] a 05 [MONEY SERVICES] licensee and who receives not [NO] more than $500 in 06 compensation within a 30-day period from this activity is guilty of a class A 07 misdemeanor. 08 * Sec. 41. AS 06.55.607(a) is amended to read: 09 (a) If the department has reason to believe that a person has violated or is 10 violating AS 06.55.101 [OR 06.55.201], the department may issue an order to show 11 cause why an order to cease and desist should not issue requiring that the person cease 12 and desist from the violation of AS 06.55.101 [OR 06.55.201]. 13 * Sec. 42. AS 06.55.607(e) is amended to read: 14 (e) A person that [WHO] is served with an order to cease and desist for 15 violating AS 06.55.101 [OR 06.55.201] may petition the superior court for a judicial 16 order setting aside, limiting, or suspending the enforcement, operation, or 17 effectiveness of the order pending the completion of an administrative proceeding 18 under AS 06.55.701 and 06.55.702. 19 * Sec. 43. AS 06.55.702(a) is amended to read: 20 (a) Except as otherwise provided in AS 06.55.603 and 06.55.607 [AND IN (b) 21 OF THIS SECTION], the department may not suspend or revoke a [MONEY 22 SERVICES] license, place a [MONEY SERVICES] licensee in receivership, issue an 23 order to cease and desist, suspend or revoke the designation of an authorized delegate, 24 or assess a civil penalty without notice and an opportunity to be heard. The department 25 shall also hold a hearing when requested to hold a hearing by an applicant whose 26 application for a [MONEY SERVICES] license is denied. 27 * Sec. 44. AS 06.55.802 is amended to read: 28 Sec. 06.55.802. Exemptions [EXCLUSIONS]. This chapter does not apply to 29 (1) the United States or a department, [AN] agency, [OR AN] 30 instrumentality, or agent of the United States; 31 (2) money transmission by the United States Postal Service or by an
01 agent [A CONTRACTOR ON BEHALF] of the United States Postal Service; 02 (3) a state, a municipality, a county, or another governmental agency 03 or governmental subdivision of a state, or its agent; 04 (4) a federally insured depository financial institution, a bank, a 05 bank holding company, an office of an international banking corporation, a branch of a 06 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, if it does not issue, sell, or provide 09 payment instruments or stored value through an authorized delegate who is not a bank, 10 a bank holding company, an office of an international banking corporation, a branch of 11 a foreign bank, a corporation organized under 12 U.S.C. 1861 - 1867 (Bank Service 12 Company Act), [OR] a corporation organized under 12 U.S.C. 611 - 633 (Edge Act) 13 under the laws of a state or the United States, an institution regulated by the Farm 14 Credit Association, or a subsidiary or affiliate of a financial institution if the 15 subsidiary or affiliate is owned and controlled by a depository institution and 16 regulated by a federal banking agency; in this paragraph, "federal banking 17 agency" means the Board of Governors of the Federal Reserve System, the 18 United States Comptroller of the Currency, the director of the Office of Thrift 19 Supervision, the National Credit Union Administration, and the Federal Deposit 20 Insurance Corporation; 21 (5) electronic funds transfer of governmental benefits for a federal, 22 state, or municipal agency or a state political subdivision by a contractor on behalf of 23 (A) the United States or a department, an agency, or an 24 instrumentality of the United States; or 25 (B) a state, or a department, an agency, or an instrumentality of 26 a state; 27 (6) a board of trade or a person that [WHO], in the ordinary course of 28 business, provides clearance and settlement services for a board of trade, to the extent 29 of the operation of the person for a board of trade; in this paragraph, "board of trade" 30 means a board of trade designated as a contract market under 7 U.S.C. 1 - 27f 31 (Commodity Exchange Act);
01 (7) a registered futures commission merchant under the federal 02 commodities laws, to the extent of the merchant's operation as a registered futures 03 commission merchant under the federal commodities laws; 04 (8) a person that [WHO] provides clearance or settlement services 05 under a registration as a clearing agency or an exemption from the registration granted 06 under the federal securities laws, to the extent of the person's operation as a provider 07 of clearance or settlement services under a registration as a clearing agency or an 08 exemption from the registration granted under the federal securities laws; 09 (9) an operator of a payment system to the extent that the operator 10 provides processing, clearing, or settlement services, between or among persons 11 exempted [EXCLUDED] by this section, in connection with wire transfers, credit 12 card transactions, debit card transactions, stored-value transactions, automated 13 clearinghouse transfers, or similar funds transfers; [OR] 14 (10) a person registered as a securities broker-dealer under federal or 15 state securities laws, to the extent of the person's operation as a securities broker- 16 dealer; 17 (11) an individual employed by a licensee, authorized delegate, or 18 a person exempt from the licensing requirements of this chapter when the 19 individual is acting within the scope of employment and under the supervision of 20 the licensee, authorized delegate, or exempt person and not as an independent 21 contractor; 22 (12) a person expressly appointed as a third-party service provider 23 to or agent of an entity exempt under (4) of this subsection, solely to the extent 24 that 25 (A) the service provider or agent is engaging in money 26 transmission on behalf of and in accordance with a written agreement 27 with the exempt entity that sets out the specific functions that the service 28 provider or agent is to perform; and 29 (B) the exempt entity assumes all risk of loss and all legal 30 responsibility for satisfying the outstanding money transmission 31 obligations owed to purchasers and holders of the outstanding money
01 transmission obligations upon receiving the purchaser's or holder's money 02 or monetary value by the service provider or agent; 03 (13) a person appointed as an agent of a payee to collect and 04 process a payment from a payor to the payee for goods or services, other than 05 money transmission services, provided to the payor by the payee, if 06 (A) the payee and the agent have a written agreement 07 directing the agent to collect and process payments from payors on the 08 payee's behalf; 09 (B) the payee holds the agent out to the public as accepting 10 payments for goods or services on the payee's behalf; and 11 (C) payment for the goods and services is treated as 12 received by the payee upon receipt by the agent and the payor's obligation 13 is extinguished, and there is no risk of loss to the payor if the agent fails to 14 remit the funds to the payee; 15 (14) a person that acts as an intermediary by processing payments 16 between an entity that has directly incurred an outstanding money transmission 17 obligation to a sender and the sender's designated recipient, if the person acting 18 as an intermediary 19 (A) is a licensee or exempt from the licensing requirements 20 under this chapter; 21 (B) provides a receipt, electronic record, or other written 22 confirmation to the sender identifying the entity as the provider of money 23 transmission in the transaction; and 24 (C) bears sole responsibility to satisfy the outstanding 25 money transmission obligation to the sender, including the obligation to 26 remedy a failure to transmit the funds to the sender's designated 27 recipient; 28 (15) an entity that is an insurance company, title insurance 29 company, or escrow agent, to the extent that the entity is lawfully authorized to 30 conduct business in this state as an insurance company, title insurance company, 31 or escrow agent and to the extent that the entity engages in money transmission
01 as an ancillary service when conducting insurance, title insurance, or escrow 02 activity; 03 (16) an attorney, to the extent that the attorney is lawfully 04 authorized to practice law in this state and engages in money transmission as an 05 ancillary service to the practice of law; or 06 (17) a person exempt by regulation or order of the department if 07 the department finds that the exemption is in the public interest and that the 08 regulation of the person is not necessary for the purposes of this chapter [UNDER 09 FEDERAL OR STATE SECURITIES LAWS]. 10 * Sec. 45. AS 06.55.802 is amended by adding a new subsection to read: 11 (b) The department may adopt regulations that exempt a person providing 12 payroll processing services from all or some of the provisions of this chapter when the 13 volume of the money transmissions received by the person are minor compared to the 14 volume of money transmissions generally received by a person licensed under this 15 chapter. In this subsection, 16 (1) "money transmission" means receiving money or monetary value 17 in the United States for transmission within or outside the United States; 18 (2) "payroll processing services" means money transmissions received 19 under a contract with a person for the purpose of delivering wages or salaries, making 20 payments of payroll taxes to state and federal agencies, making payments relating to 21 employee benefit plans, or making distributions of other authorized deductions from 22 wages or salaries. 23 * Sec. 46. AS 06.55 is amended by adding a new section to read: 24 Sec. 06.55.803. Authority to require demonstration of exemption. The 25 department may require a person that claims to be exempt from licensing under 26 AS 06.55.802 to provide information and documentation to the department 27 demonstrating the claimed exemption. 28 * Sec. 47. AS 06.55.810 is amended to read: 29 Sec. 06.55.810. Notices required. (a) A [MONEY SERVICES] licensee shall 30 provide customers with notice of how to file a complaint. A licensee shall provide 31 notice [DISPLAY A SIGN] at each location where the [MONEY SERVICES]
01 licensee 02 (1) provides money transmission [SERVICES] under this chapter; 03 and 04 (2) has not designated an authorized delegate to provide money 05 transmission [SERVICES] on behalf of the [MONEY SERVICES] licensee at the 06 location. 07 (b) An authorized delegate shall provide customers with notice of how to 08 file a complaint. An authorized delegate shall provide notice [DISPLAY A SIGN] 09 at each location where the authorized delegate provides money transmission 10 [SERVICES] under this chapter. 11 (c) The notice [SIGN] required by (a) or (b) of this section must be in a 12 format and contain information required by the department [SHALL BE 13 DISPLAYED AT ALL TIMES IN FULL VIEW OF PERSONS VISITING THE 14 LOCATION AND SHALL GIVE THE DEPARTMENT'S ADDRESS AND THE 15 DEPARTMENT'S TELEPHONE NUMBER FOR RECEIVING CALLS 16 REGARDING COMPLAINTS AND OTHER CONCERNS ABOUT MONEY 17 SERVICES LICENSEES, AUTHORIZED DELEGATES, AND THE MONEY 18 SERVICES PROVIDED BY MONEY SERVICES LICENSEES AND 19 AUTHORIZED DELEGATES]. 20 * Sec. 48. AS 06.55.810 is amended by adding a new subsection to read: 21 (d) A licensee or authorized delegate shall include on a receipt or disclose on 22 the licensee's Internet website or mobile application the name and telephone number 23 of the department and a statement that the licensee's customers can contact the 24 department with questions or complaints about the licensee's money transmission. In 25 this subsection, "mobile application" means a software application developed 26 specifically for use on small, wireless computing devices. 27 * Sec. 49. AS 06.55 is amended by adding a new section to read: 28 Sec. 06.55.815. In-state determination. For a transaction requested 29 electronically or by telephone, the provider of money transmission may determine 30 whether the person requesting the transaction is in this state by relying on other 31 information provided by the person regarding the location of the person's residential
01 address or principal place of business or other physical address, and any records 02 associated with the person that the provider of money transmission may have that 03 indicate the location, including an address associated with an account. 04 * Sec. 50. AS 06.55.830 is repealed and reenacted to read: 05 Sec. 06.55.830. Receipt. (a) Except as provided in (d) of this section, a 06 licensee or a licensee's authorized delegate shall provide the sender a receipt for 07 money received for transmission. The receipt must be in English and in any other 08 language principally used by the licensee or authorized delegate to advertise, solicit, or 09 negotiate, either orally or in writing, for the transaction conducted. The receipt must 10 contain the following information, as applicable: 11 (1) the name of the sender; 12 (2) the name of the designated recipient; 13 (3) the date of the transaction; 14 (4) the unique transaction or identification number; 15 (5) the name of the licensee, unique registry identifier, the licensee's 16 business address, and the licensee's customer service telephone number; 17 (6) the dollar amount of the transaction; 18 (7) any fee charged by the licensee to the sender for the transaction; 19 (8) any taxes collected by the licensee from the sender for the 20 transaction; and 21 (9) the exchange rate, if any, used by the provider for the transaction. 22 (b) For a transaction conducted in person, the receipt may be provided 23 electronically if the sender requests or agrees to receive an electronic receipt. For a 24 transaction conducted electronically or by telephone, a receipt may be provided 25 electronically. All electronic receipts must be provided in a retainable form. 26 (c) This section does not apply to 27 (1) money received for transmission that is subject to 12 C.F.R. Part 28 1005, Subpart B; 29 (2) money received for transmission that is not primarily for personal, 30 family, or household purposes; 31 (3) money received for transmission in accordance with a written
01 agreement between the licensee and payee to process payments for goods or services 02 provided by the payee; 03 (4) an individual consumer transferring funds to reload stored value on 04 the consumer's account through a point of sale transaction; or 05 (5) a stored-value transaction exempted by the department by 06 regulation or order. 07 (d) In this section, "receipt" means a paper receipt, electronic record, or other 08 written confirmation. 09 * Sec. 51. AS 06.55 is amended by adding a new section to read: 10 Sec. 06.55.835. Timely transmission. (a) A licensee shall forward all money 11 received for transmission in accordance with the terms of the agreement between the 12 licensee and the sender unless the licensee has a reasonable cause to believe that the 13 sender may be a victim of fraud or that a crime or violation of law, rule, or regulation 14 has occurred, is occurring, or may occur. 15 (b) If a licensee fails to forward money received for transmission in 16 accordance with this section, the licensee must respond to inquiries by the sender with 17 the reason for the failure unless providing a response would violate a state or federal 18 law, rule, or regulation. 19 * Sec. 52. AS 06.55.840 is repealed and reenacted to read: 20 Sec. 06.55.840. Refunds. (a) Except as provided in (b) of this section, a 21 licensee shall refund to the sender, within 10 days after receipt of the sender's written 22 request for a refund, all money received for transmission unless 23 (1) the money has been forwarded within 10 days after the date on 24 which the money was received for transmission; 25 (2) within 10 days after the date on which the money was received for 26 transmission, instructions have been given committing an equivalent amount of money 27 to the person designated by the sender; 28 (3) the agreement between the licensee and the sender instructs the 29 licensee to forward the money at a time that is beyond 10 days after the date on which 30 the money was received for transmission; if money has not yet been forwarded in 31 accordance with the terms of the agreement between the licensee and the sender, the
01 licensee shall issue a refund in accordance with this section; 02 (4) the refund is requested for a transaction that the licensee has not 03 completed based on a reasonable belief that a crime or violation of law, rule, or 04 regulation has occurred, is occurring, or may occur; or 05 (5) the refund request does not 06 (A) identify the sender's name and 07 (i) address; or 08 (ii) telephone number; or 09 (B) identify the particular transaction to be refunded in the 10 event the sender has multiple transactions outstanding. 11 (b) This section does not apply to: 12 (1) money received for transmission subject to 12 C.F.R. Part 1005, 13 Subpart B; or 14 (2) money received for transmission in accordance with a written 15 agreement between the licensee and payee to process payments for goods or services 16 provided by the payee. 17 * Sec. 53. AS 06.55.850(b) is amended to read: 18 (b) The department shall establish fee levels under (a) of this section so that 19 the total amount of fees collected for [BOTH MONEY TRANSMISSION] licenses 20 [AND CURRENCY EXCHANGE LICENSES] under this chapter approximately 21 equals the department's actual total regulatory costs for [BOTH MONEY 22 TRANSMISSION] licenses [AND CURRENCY EXCHANGE LICENSES. THE 23 DEPARTMENT SHALL SET THE FEE LEVELS SO THAT THE FEE LEVELS 24 FOR BOTH MONEY TRANSMISSION LICENSES AND CURRENCY 25 EXCHANGE LICENSES ARE THE SAME]. 26 * Sec. 54. AS 06.55.850 is amended by adding a new subsection to read: 27 (f) The department shall set an annual renewal fee based on a licensee's total 28 volume of money transmission in the state, calculated in dollars or dollar equivalents. 29 * Sec. 55. AS 06.55.990(1) is amended to read: 30 (1) "authorized delegate" means a person that [WHOM] a [MONEY 31 SERVICES] licensee designates to engage in [PROVIDE] money transmission
01 [SERVICES] on behalf of the [MONEY SERVICES] licensee; 02 * Sec. 56. AS 06.55.990(3) is amended to read: 03 (3) "control" means 04 (A) the ownership of, or the power to vote, directly or 05 indirectly, at least 10 [25] percent of the outstanding [A CLASS OF] voting 06 shares [SECURITIES] or voting interests of a [MONEY SERVICES] licensee 07 or of a person that owns or has the power to vote, directly or indirectly, at 08 least 10 percent of the voting shares or voting interests [IN CONTROL] of 09 a [MONEY SERVICES] licensee unless the person with the power to vote is 10 a passive investor as described in AS 06.55.404(q); 11 (B) the power to elect or appoint a majority of executive 12 officers, managers, directors, trustees, or other persons exercising managerial 13 authority of a [MONEY SERVICES] licensee or person in control of a 14 [MONEY SERVICES] licensee; or 15 (C) the power to exercise directly or indirectly, a controlling 16 influence over the management or policies of a [MONEY SERVICES] 17 licensee or person in control of a [MONEY SERVICES] licensee; 18 * Sec. 57. AS 06.55.990(15) is amended to read: 19 (15) "money transmission" 20 (A) means 21 (i) selling or issuing payment instruments or stored 22 value to a person located in this state; 23 (ii) [, OR] receiving money or monetary value for 24 transmission to the state, from the state, or within the state; 25 (iii) engaging in virtual currency exchange; or 26 (iv) engaging in virtual currency business activity; 27 (B) [, BUT] does not mean [INCLUDE] the provision solely of 28 [DELIVERY,] online services, telecommunications services, or network 29 access; 30 * Sec. 58. AS 06.55.990(19) is amended to read: 31 (19) "payment instrument" means a written or electronic check, [A]
01 draft, [A] money order, [A] traveler's check, or other written or electronic 02 [ANOTHER] instrument for the transmission or payment of money or monetary value, 03 whether or not negotiable, but does not mean stored value, [INCLUDE] a credit card 04 voucher, a letter of credit, [OR] an instrument that is redeemable by the issuer in 05 goods or services, or other instrument not sold to the public but issued and 06 distributed as part of a loyalty, rewards, or promotional program; 07 * Sec. 59. AS 06.55.990(20) is amended to read: 08 (20) "person" means an individual, general partnership, limited 09 partnership, [A] corporation, [A BUSINESS] trust, [AN ESTATE, A TRUST, A 10 PARTNERSHIP, A] limited liability company, [AN] association, [A] joint stock 11 corporation [VENTURE, A GOVERNMENT, A GOVERNMENTAL 12 SUBDIVISION, AN AGENCY, OR AN INSTRUMENTALITY, A PUBLIC 13 CORPORATION], or any other legal or corporate [COMMERCIAL] entity 14 identified by the department; 15 * Sec. 60. AS 06.55.990(22) is amended to read: 16 (22) "state" means a state of the United States, the District of 17 Columbia, Puerto Rico, the United States Virgin Islands, a United States military 18 installation that is located in a foreign country, or a territory or insular possession 19 subject to the jurisdiction of the United States; 20 * Sec. 61. AS 06.55.990(23) is amended to read: 21 (23) "stored value" 22 (A) means 23 (i) monetary value representing a claim against the 24 issuer that is evidenced by an electronic or digital record and that is 25 intended and accepted as a means of redemption for money or 26 monetary value, or payment for goods or services; 27 (ii) prepaid access as defined in 31 C.F.R. 1010.100; 28 (B) does not mean a payment instrument or a closed-loop 29 stored value, or a stored value not sold to the public but issued and 30 distributed as part of a loyalty, rewards, or promotional program; 31 * Sec. 62. AS 06.55.990(24) is amended to read:
01 (24) "unsafe or unsound practice" means a practice or conduct by a 02 [MONEY TRANSMISSION] licensee or an authorized delegate that [OF THE 03 MONEY TRANSMISSION LICENSEE IF THE PRACTICE] creates the likelihood 04 of material loss, insolvency, or dissipation of the [MONEY TRANSMISSION] 05 licensee's assets, or otherwise materially prejudices the interests of the [MONEY 06 TRANSMISSION] licensee's customers. 07 * Sec. 63. AS 06.55.990 is amended by adding new paragraphs to read: 08 (25) "accredited state" means a state agency that is accredited by an 09 organization that the department determines is a nationally recognized association of 10 state bank supervisors and money transmitter regulators for money transmission 11 licensing and supervision; 12 (26) "acting in concert" means persons knowingly acting together with 13 a common goal of jointly acquiring control of a licensee whether or not under an 14 express agreement; 15 (27) "average daily money transmission liability" means the amount of 16 the licensee's outstanding money transmission obligations in this state at the end of 17 each day in a given period, added together and divided by the total number of days in 18 the given period; in this paragraph, "given period" means a calendar year quarter 19 ending March 31, June 30, September 30, or December 31; 20 (28) "Bank Secrecy Act" means 31 U.S.C. 5311 - 5336 and its 21 implementing regulations; 22 (29) "closed-loop stored value" means stored value that is redeemable 23 by the issuer only for goods or services provided by the issuer or its affiliate, or 24 franchisees of the issuer or its affiliate, except to the extent required by applicable law 25 to be redeemable in cash for its cash value; 26 (30) "control of virtual currency," when used in reference to a 27 transaction or relationship involving virtual currency, means the power to execute 28 unilaterally or prevent indefinitely a virtual currency transaction; 29 (31) "dollar equivalent" means the equivalent value of a particular 30 virtual currency in United States dollars shown on a virtual currency exchange based 31 in the United States for a particular date or period specified in this chapter; in this
01 paragraph, "virtual currency exchange" means an organization that provides a market 02 for the exchange of virtual currency; 03 (32) "eligible rating" means a short-term or long-term credit rating 04 determined by the department that is based on any of the three highest rating 05 categories provided by an eligible rating service; 06 (33) "eligible rating service" means a nationally recognized statistical 07 rating organization, as determined by the United States Securities and Exchange 08 Commission, and any other nationally recognized statistical rating organization 09 designated by the department by regulation; 10 (34) "federally insured depository financial institution" means a bank, 11 credit union, savings and loan association, trust company, savings association, savings 12 bank, industrial bank, or industrial loan company organized under the laws of the 13 United States or any state that has federally insured deposits; 14 (35) "individual" means a natural person; 15 (36) "in this state" means at a physical location within this state for a 16 transaction requested in person; 17 (37) "key individual" means an individual ultimately responsible for 18 establishing or directing policies and procedures of the licensee, including an 19 executive officer, manager, director, or trustee; 20 (38) "license" means a license issued under AS 06.55.105; 21 (39) "licensee" means a person licensed under AS 06.55.105; 22 (40) "money received for transmission" means money or monetary 23 value received in the United States for transmission within or outside the United States 24 by electronic or other means; 25 (41) "multistate licensing process" means an agreement entered into by 26 and among state regulators relating to coordinated processing of applications for 27 licenses, applications for the acquisition of control of a licensee, control 28 determinations, or notice and information requirements for a change of key 29 individuals; 30 (42) "outstanding money transmission obligation" means 31 (A) a payment instrument or stored value issued or sold by a
01 licensee to a person located in the United States, or reported as sold by an 02 authorized delegate of the licensee to a person that is located in the United 03 States, that has not yet been paid or refunded by or for the licensee, or 04 escheated in accordance with applicable abandoned property laws; or 05 (B) money received for transmission by the licensee or an 06 authorized delegate in the United States from a person located in the United 07 States that has not been received by the payee or refunded to the sender, or 08 escheated in accordance with applicable abandoned property laws; in this 09 paragraph, "in the United States" means, to the extent applicable, a person in a 10 state, territory, or possession of the United States, the District of Columbia, the 11 Commonwealth of Puerto Rico, or a United States military installation that is 12 located in a foreign country; 13 (43) "registry" means a nationwide organization that the department 14 determines is a nationally recognized multistate licensing system to use as a multistate 15 licensing process; 16 (44) "tangible net worth" means the aggregate assets of a licensee 17 excluding all intangible assets, less liabilities, as determined in accordance with 18 generally accepted accounting principles; 19 (45) "virtual currency" 20 (A) means a digital representation of value that 21 (i) is used as a medium of exchange, unit of account, or 22 store of value; and 23 (ii) is not money, whether or not denominated in 24 money; 25 (B) does not mean 26 (i) a transaction in which a merchant grants, as part of 27 an affinity or rewards program, value that cannot be taken from or 28 exchanged with the merchant for money, bank credit, or virtual 29 currency; or 30 (ii) a digital representation of value issued by or on 31 behalf of a publisher and used solely within an online game, game
01 platform, or family of games sold by the same publisher or offered on 02 the same game platform; 03 (46) "virtual currency administration" means issuing virtual currency 04 with the authority to redeem the currency for money, bank credit, or other virtual 05 currency; 06 (47) "virtual currency business activity" means 07 (A) exchanging, transferring, or storing virtual currency or 08 engaging in virtual currency administration, whether directly or through an 09 agreement with a virtual currency control services vendor; 10 (B) holding electronic precious metals or electronic certificates 11 representing interests in precious metals on behalf of another person or issuing 12 shares or electronic certificates representing interests in precious metals; or 13 (C) exchanging one or more digital representations of value 14 used within one or more online games, game platforms, or family of games for 15 (i) virtual currency offered by or on behalf of the same 16 publisher from which the original digital representation of value was 17 received; or 18 (ii) money or bank credit outside the online game, game 19 platform, or family of games offered by or on behalf of the same 20 publisher from which the original digital representation of value was 21 received; 22 (48) "virtual currency control services vendor" means a person that has 23 control of virtual currency solely under an agreement with a person that, on behalf of 24 another person, assumes control of virtual currency; 25 (49) "virtual currency exchange" means to 26 (A) assume control of virtual currency from or on behalf of a 27 person, at least momentarily; 28 (B) sell, trade, or convert 29 (i) virtual currency for money, bank credit, or one or 30 more forms of virtual currency or money; or 31 (ii) bank credit for one or more forms of virtual
01 currency; 02 (50) "virtual currency transfer" means to assume control of virtual 03 currency from or on behalf of a person and to 04 (A) credit the virtual currency to the account of another person; 05 (B) move the virtual currency from one account of a person to 06 another account of the same person; or 07 (C) relinquish control of virtual currency to another person. 08 * Sec. 64. AS 06.55.995 is amended to read: 09 Sec. 06.55.995. Short title. This chapter may be cited as the Alaska Uniform 10 Money Transmission Modernization [SERVICES] Act. 11 * Sec. 65. AS 12.62.400(b) is amended to read: 12 (b) Notwithstanding (a) of this section, an applicant for a license under 13 AS 06.60 or a person controlling a licensee or an applicant for a license under 14 AS 06.55, seeking to acquire control of a licensee under AS 06.55, or acting as a 15 key individual under AS 06.55 may submit the applicant's fingerprints to the 16 Nationwide Mortgage Licensing System and Registry. In this subsection, "Nationwide 17 Mortgage Licensing System and Registry" has the meaning given in 12 U.S.C. 5102. 18 * Sec. 66. AS 34.45 is amended by adding a new section to read: 19 Sec. 34.45.165. Virtual currency. (a) Virtual currency is presumed abandoned 20 five years after the later of the following: 21 (1) the date on which the holder of the virtual currency last sends a 22 written or electronic communication to the apparent owner that is returned as 23 undeliverable; or 24 (2) the date on which the apparent owner last exercises an act of 25 ownership in the virtual currency. 26 (b) The presumption in (a) of this section does not apply if the apparent owner 27 sends a written or electronic communication to the holder of the virtual currency in the 28 preceding five years. 29 (c) In this section, "an act of ownership in the virtual currency" includes 30 (1) performing a transaction using the virtual currency or account in 31 which the virtual currency is held, including buying or selling the virtual currency or
01 making deposits into or withdrawals from the account; 02 (2) electronically accessing the virtual currency or account in which 03 the virtual currency is held; 04 (3) performing an activity using another virtual currency or account in 05 which the virtual currency is held that is owned by the apparent owner if the holder of 06 the virtual currency or account is also the holder of the other virtual currency or 07 account; or 08 (4) taking another action that reasonably demonstrates to the holder of 09 the virtual currency or account in which the virtual currency is held that the apparent 10 owner knows the property exists. 11 * Sec. 67. AS 34.45.280(b) is amended to read: 12 (b) The report must be made on a form bearing a notice that statements are 13 made under penalty of unsworn falsification and must include 14 (1) except with respect to traveler's checks and money orders, the 15 name, if known, and last known address, if any, of each person appearing from the 16 records of the holder to be the owner of property, the value of which is $100 or more, 17 presumed abandoned under AS 34.45.110 - 34.45.430 and other statutes specifically 18 made subject to this reporting requirement; 19 (2) in the case of unclaimed money amounting to $100 or more, held 20 or owing under a life or endowment insurance policy or annuity contract, the full name 21 and last known address of the insured or annuitant and of the beneficiary or other 22 person who is entitled to the proceeds according to the records of the insurance 23 company holding or owing the funds; 24 (3) in the case of the contents of a safe deposit box or other 25 safekeeping repository or of other tangible personal property, a description of the 26 property and the place where it is held and may be inspected by the department and 27 any amounts owing to the holder; 28 (4) in the case of virtual currency, the type of virtual currency, 29 quantity of virtual currency, valuation of the virtual currency in dollars on the 30 date that the virtual currency was presumed abandoned, and whether the holder 31 of the virtual currency has full control of the necessary private keys required to
01 transfer the virtual currency; 02 (5) [(4)] the nature and identifying number, if any, or description of the 03 property and the amount appearing from the records to be due; items of value under 04 $100 each may be reported in the aggregate; 05 (6) [(5)] the date the property became payable, demandable, or 06 returnable, and the date of the last transaction with the apparent owner with respect to 07 the property; and 08 (7) [(6)] other information that the department prescribes by regulation 09 as necessary for the administration of this chapter. 10 * Sec. 68. AS 34.45.320(a) is amended to read: 11 (a) Except as otherwise provided in (b) or (e) of this section, a person who is 12 required to file a report under AS 34.45.280, shall, at the time of filing the report 13 under that section, pay or deliver to the administrator all of the property shown on the 14 report and remaining unclaimed by the apparent owner. Upon written request showing 15 good cause, the administrator may postpone the payment or delivery upon the terms or 16 conditions the administrator considers necessary and appropriate. The property paid or 17 delivered to the administrator must include all interest, dividends, increments, and 18 accretions due, payable, or distributable on the property at the time of filing the report. 19 If payment or delivery is postponed, the property paid or delivered to the administrator 20 must include all interest, dividends, increments, and accretions due, payable, or 21 distributable on the day that the property is paid or delivered to the administrator. 22 * Sec. 69. AS 34.45.320 is amended by adding a new subsection to read: 23 (e) The holder of a virtual currency shall pay or deliver the virtual currency to 24 the administrator in the native form of the virtual currency. If the holder is unable to 25 pay or deliver the virtual currency to the administrator, the holder shall maintain 26 possession of the virtual currency until the holder is able to pay or deliver the virtual 27 currency, the requirements under (b) of this section are met, or an election not to 28 receive custody of the virtual currency is made by the department under 29 AS 34.45.410(a). If payment or delivery of the virtual currency to the administrator is 30 not practical or the administrator holding the virtual currency is uneconomical despite 31 the best efforts of the administrator, the administrator may postpone delivery of the
01 virtual currency upon the terms or conditions the administrator considers necessary 02 and appropriate. 03 * Sec. 70. AS 34.45.380 is amended by adding a new subsection to read: 04 (g) If a holder is in possession of virtual currency because payment or delivery 05 was postponed under AS 34.45.320(a) or (e), a person, excluding another state, 06 claiming an interest in the virtual currency may file a claim in the form and bearing 07 the notice required under (a) of this section. If the claim is allowed and the holder is 08 able to pay or deliver the virtual currency, the holder shall pay or deliver the virtual 09 currency to the claimant upon receiving notice from the department. If the holder pays 10 or delivers the virtual currency to the claimant in good faith under this subsection and 11 another person subsequently claims the virtual currency from the holder or another 12 state claims the virtual currency under the laws of the other state relating to escheat or 13 unclaimed property, the department shall defend the holder against the claim and 14 indemnify the holder against liability on the claim upon receiving written notice of the 15 claim. 16 * Sec. 71. AS 34.45.390(c) is amended to read: 17 (c) The department shall require a state, before recovering property under this 18 section, to agree to indemnify this state, this state's [AND ITS] officers and 19 employees, and, if applicable, a holder paying or delivering possession of virtual 20 currency under (d) of this section against liability on a claim for the property. 21 * Sec. 72. AS 34.45.390 is amended by adding a new subsection to read: 22 (d) If a holder is in possession of virtual currency because payment or delivery 23 was postponed under AS 34.45.320(a) or (e), another state may make a claim to 24 recover abandoned virtual currency in the form required under (b) of this section. The 25 department shall allow the claim if the department determines that the other state is 26 entitled to the abandoned virtual currency under (a) of this section. If the claim is 27 allowed and the holder is able to pay or deliver the virtual currency, the holder shall 28 pay or deliver possession of the virtual currency to the other state upon receiving 29 notice from the department. 30 * Sec. 73. AS 34.45.760(11) is amended to read: 31 (11) "intangible property"
01 (A) includes 02 (i) money, checks, drafts, warrants, deposits, interest, 03 dividends, [AND] income, and virtual currency; 04 (ii) credit balances, customer overpayments, gift 05 certificates, security deposits, refunds, credit memos, unpaid wages, 06 and unidentified remittances; 07 (iii) stocks and other intangible equity interests in 08 business associations; 09 (iv) money deposited to redeem stocks, bonds, coupons, 10 and other securities, or to make distributions; 11 (v) amounts due and payable under the terms of 12 insurance policies; 13 (vi) amounts distributable from a trust or custodial fund 14 established under a plan to provide health, welfare, pension, vacation, 15 severance, retirement, death, stock purchase, profit-sharing, employee 16 savings, supplemental unemployment insurance, or similar benefits; 17 and 18 (vii) amounts due and payable as mineral proceeds; 19 (B) does not include 20 (i) unused airline tickets; 21 (ii) shares of stock issued by a corporation organized 22 under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act) or 23 unclaimed dividends payable on the shares of stock; or 24 (iii) overpaid contributions by employers to the 25 unemployment compensation fund under AS 23.20.130; 26 * Sec. 74. AS 34.45.760 is amended by adding new paragraphs to read: 27 (20) "blockchain" includes data that is 28 (A) shared across a peer-to-peer network to create a ledger of 29 verified transactions or information among network participants that is 30 linked together using cryptography to maintain the integrity of the 31 ledger and execute other functions; or
01 (B) distributed among network participants automatically to 02 concurrently update the network participants on the state of a ledger 03 and other functions; 04 (21) "private key" means a unique element of cryptographic data used 05 for signing transactions on a blockchain and that is known to the owner of the element; 06 (22) "virtual currency" has the meaning given in AS 06.55.990. 07 * Sec. 75. AS 06.55.103, 06.55.104, 06.55.107, 06.55.201, 06.55.202, 06.55.203, 06.55.204, 08 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, 09 06.55.990(5), 06.55.990(6), 06.55.990(8), 06.55.990(9), 06.55.990(12), 06.55.990(13), 10 06.55.990(14), 06.55.990(16), 06.55.990(17), and 06.55.990(18) are repealed. 11 * Sec. 76. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 INDIRECT COURT RULE AMENDMENT. AS 06.55.605(b), enacted by sec. 38 of 14 this Act, has the effect of changing Rules 79 and 82, Alaska Rules of Civil Procedure, by 15 changing the award of court costs and attorney fees in certain cases. 16 * Sec. 77. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 TRANSITION: EXISTING CONTRACTS, RIGHTS, LIABILITIES, AND 19 OBLIGATIONS. Contracts, rights, liabilities, and obligations created by or under a law 20 repealed or amended by secs. 1 - 65 and 75 - 78 of this Act, and in effect on the day before the 21 effective date of the repeal or amendment, remain in effect notwithstanding secs. 1 - 65 and 22 75 - 78 of this Act taking effect. 23 * Sec. 78. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 TRANSITION: CURRENT MONEY SERVICES LICENSEES. A person that has a 26 valid money services license or approval on June 30, 2027, may continue to operate under that 27 license or approval until the licensee renews the license under AS 06.55.106, enacted by sec. 28 5 of this Act, or through July 1, 2028, whichever is later. In this section, 29 (1) "approval" means approval under AS 06.55.103, as that section read on 30 June 30, 2027; 31 (2) "money services licensee" has the meaning given in AS 06.55.990, as that
01 section read on June 30, 2027. 02 * Sec. 79. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 TRANSITION: REGULATIONS. (a) The Department of Commerce, Community, 05 and Economic Development may adopt regulations necessary to implement the changes made 06 secs. 1 - 65 and 75 - 78 of this Act. The regulations take effect under AS 44.62 07 (Administrative Procedure Act), but not before the effective date of the law implemented by 08 the regulation. 09 (b) The Department of Revenue may adopt regulations necessary to implement the 10 changes made by secs. 66 - 74 of this Act. The regulations take effect under AS 44.62 11 (Administrative Procedure Act), but not before the effective date of the law implemented by 12 the regulation. 13 * Sec. 80. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 CONDITIONAL EFFECT. AS 06.55.605(b), enacted by sec. 38 of this Act, takes 16 effect only if sec. 76 of this Act receives the two-thirds majority vote of each house required 17 by art. IV, sec. 15, Constitution of the State of Alaska. 18 * Sec. 81. Section 79 of this Act takes effect immediately under AS 01.10.070(c). 19 * Sec. 82. Sections 1 - 65 and 75 - 78 of this Act take effect July 1, 2027.