View Daily Data Tracking History
View Bill Text
View Statement of Purpose / Fiscal Impact
H0023........................................................by MR. SPEAKER
Requested by: Department of Finance
SECURITIES - Amends existing law to delete the requirement that
fingerprints accompany applications for registration as a securities
broker-dealer, salesman or investment advisor; to delete the requirement
that a written examination be given at least twice each year; to delete the
examination requirement; to delete the exemption from the Securities Act
for securities issued or guaranteed by a railroad, other common carrier,
public utility or holding company which is subject to the jurisdiction of
the Interstate Commerce Commission; and to provide that the registration
fee shall not exceed five hundred dollars.
01/08 House intro - 1st rdg - to printing
Rpt prt - to Bus
02/20 Rpt out - to Gen Ord
Ret'd to Bus
03/02 Rpt out - rec d/p - to 2nd rdg
03/05 2nd rdg - to 3rd rdg
03/06 3rd rdg - PASSED - 60-3-7
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bradford, Bruneel, Campbell, Clark, Collins, Crow, Cuddy, Denney,
Ellis, Ellsworth, Eskridge, Field(13), Gagner, Gould, Hadley,
Hammond, Higgins, Hornbeck, Jones, Kellogg, Kendell, Kunz, Lake,
Loertscher, Mader, Marley, McKague, Meyer, Montgomery, Mortensen,
Moss, Moyle, Pearce, Pomeroy, Ridinger, Roberts, Robison, Sali,
Schaefer, Sellman, Shepherd, Smith, Smylie, Stevenson, Stone, Swan,
Tilman, Trail, Wheeler, Wood, Young, Mr. Speaker
NAYS -- Chase, Henbest, Jaquet
Absent and excused -- Callister, Deal, Field(20), Harwood, Langford,
Pischner, Raybould
Floor Sponsor -- Higgins
Title apvd - to Senate
03/07 Senate intro - 1st rdg - to Com/HuRes
03/14 Rpt out - rec d/p - to 2nd rdg
03/15 2nd rdg - to 3rd rdg
03/20 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Branch, Boatright, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough, King-Barrutia, Lee,
Lodge, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen,
Stegner, Stennett, Thorne, Wheeler, Whitworth, Williams,
NAYS -- None
Absent and excused -- None
Floor Sponsor -- Ipsen
Title apvd - to House
03/21 To enrol
03/22 Rpt enrol - Sp signed - Pres signed - to Gov
03/23 Governor signed
Session Law Chapter 131
Effective: 07/01/01
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-sixth Legislature First Regular Session - 2001IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 23 BY MR. SPEAKER Requested by: Department of Finance 1 AN ACT 2 RELATING TO THE IDAHO SECURITIES ACT; AMENDING SECTION 30-1407, IDAHO CODE, TO 3 STRIKE THE REQUIREMENT THAT FINGERPRINTS ACCOMPANY APPLICATIONS FOR REGIS- 4 TRATION, TO STRIKE THE REQUIREMENT THAT A WRITTEN EXAMINATION BE GIVEN AT 5 LEAST TWICE A YEAR AND TO STRIKE EXCEPTIONS TO THE EXAMINATION REQUIRE- 6 MENT; AMENDING SECTION 30-1434, IDAHO CODE, TO STRIKE THE EXEMPTION FROM 7 THE SECURITIES ACT FOR SECURITIES ISSUED OR GUARANTEED BY A RAILROAD, 8 OTHER COMMON CARRIER, PUBLIC UTILITY OR HOLDING COMPANY WHICH IS SUBJECT 9 TO THE JURISDICTION OF THE INTERSTATE COMMERCE COMMISSION AND TO MAKE 10 TECHNICAL CORRECTIONS; AND AMENDING SECTION 30-1437, IDAHO CODE, TO PRO- 11 VIDE THE REGISTRATION FEE SHALL NOT EXCEED FIVE HUNDRED DOLLARS. 12 Be It Enacted by the Legislature of the State of Idaho: 13 SECTION 1. That Section 30-1407, Idaho Code, be, and the same is hereby 14 amended to read as follows: 15 30-1407. APPLICATION FOR REGISTRATION -- FINGERPRINTS, WRITTEN EXAMINA- 16 TION, BOND, WAIVER, MINIMUM CAPITAL REQUIRED -- EFFECT OF BROKER-DEALER REGIS- 17 TRATION ON PARTNERS' OFFICES. (1) A broker-dealer, salesman or investment 18 adviser or investment adviser representative shall apply for registration by 19 filing with the director or an organization which the director by rule desig- 20 nates an application in such form as the director shall prescribe and payment 21 of the fee prescribed in section 30-1437, Idaho Code.Such application shall22be accompanied by the fingerprints of the applicant, unless waived by the23director.24 (2) (a) A registered investment adviser shall file with the director a 25 bond of a surety company duly authorized to transact business in this 26 state, said bond to be in the sum of twenty-five thousand dollars 27 ($25,000) and conditioned upon faithful compliance with the provisions of 28 this chapter by the investment adviser, or its agents, such that upon 29 failure to so comply by the investment adviser, or its agents, the surety 30 company shall be liable to any and all persons who may suffer loss by rea- 31 son thereof. Except that an investment adviser that has its principal 32 place of business in a state other than this state shall be excluded from 33 these bonding requirements provided that such investment adviser is regis- 34 tered as an investment adviser in the state where it maintains its princi- 35 pal place of business and is in compliance with such state's bonding 36 requirements. 37 (b) Upon a proper showing, the director, in his discretion, may waive the 38 surety bond requirement of an investment adviser or an investment adviser 39 applicant who satisfies both of the following conditions: 40 (i) The investment adviser will not have custody of or discretionary 41 authority over client funds or securities; and 42 (ii) The investment adviser includes a provision in all investment 43 advisory contracts which states that the investment adviser will not 2 1 have custody of or discretionary authority over client funds or secu- 2 rities, as required by section 30-1405(2), Idaho Code. 3 (c) Any salesman acting as agent for an issuer or issuers shall file with 4 the director a bond of a surety company duly authorized to transact busi- 5 ness in this state, said bond to be in the sum of ten thousand dollars 6 ($10,000) and conditioned upon faithful compliance with the provisions of 7 this act by the salesman, such that upon failure to so comply by the 8 salesman the surety company shall be liable to any and all persons who may 9 suffer loss by reason thereof. Provided, however, that the obligation of 10 the surety bond must be maintained at all times in the amount therein pro- 11 vided; and provided further, that a certificate of deposit issued by any 12 bank in the state of Idaho and assigned to the director in an amount equal 13 to the bond which would otherwise be required may be accepted by the 14 director in lieu of a bond, if the certificate of deposit is maintained at 15 all times in the amount and manner herein provided during the term for 16 which the registration is effective and for three (3) years thereafter. 17 (3) The director may by rule or order require a minimum capital for reg- 18 istered broker-dealers, subject to the limitations of section 15 of the secu- 19 rities exchange act of 1934, and establish minimum financial requirements for 20 investment advisers, subject to the limitations of section 222 of the invest- 21 ment advisers act of 1940, which may include different requirements for those 22 investment advisers who maintain custody of clients' funds or securities or 23 who have discretionary authority over same and those investment advisers who 24 do not. Except that an investment adviser that has its principal place of 25 business in a state other than this state shall be excluded from these minimum 26 financial requirements provided that such investment adviser is registered as 27 an investment adviser in the state where it maintains its principal place of 28 business and is in compliance with such state's minimum financial or net capi- 29 tal requirements, as the case may be. 30 (4) The director shall require as a condition of registration that the 31 applicant (and, if the applicant is a corporation or partnership, all offi- 32 cers, directors or partners doing securities business in this state) pass a 33 written examination in such form as the director shall prescribe as evidence 34 of knowledge of the securities business: Provided, that not more than two (2) 35 officers of an issuer may be registered as salesmen for a particular original 36 offering of the issuer's securities without being required to pass such writ- 37 ten examination or file a salesman's bond as required by section 38 30-1407(2)(c), Idaho Code; and provided further, that no such officer may 39 again register within five (5) years as such salesman for this or any other 40 issuer without passing the written examination.Such examination shall be41given twice a year or at such more frequent intervals as the director shall42direct.43(5) Any person who is licensed to sell securities or conduct a securities44business in this state and (a) is a member or registered representative of a45member of the New York Stock Exchange, the American Stock Exchange, the Mid-46west Stock Exchange, the Pacific Coast Stock Exchange, or the National Associ-47ation of Securities Dealers or any other exchange registered with the Securi-48ties and Exchange Commission and approved by the director; or, (b) has suc-49cessfully completed the general examination for nonmembers of the National50Association of Securities Dealers, commonly known as the SECO examination,51shall not be required to pass an examination given by the director as a condi-52tion of registration.53 SECTION 2. That Section 30-1434, Idaho Code, be, and the same is hereby 54 amended to read as follows: 3 1 30-1434. EXEMPT SECURITIES. (1) Sections 30-1416 through 30-1433A inclu- 2 sive, Idaho Code, shall not apply to: 3 (a) any security including a revenue obligation issued or guaranteed by 4 the United States, any state, any political subdivision of a state or any 5 agency or corporate or other instrumentality of one (1) or more of the 6 foregoing, or any certificate of deposit for any of the foregoing, 7 (b) any security issued or guaranteed by Canada, any Canadian province, 8 any political subdivision of any such province, any agency or corporate or 9 other instrumentality of one (1) or more of the foregoing or any other 10 foreign government with which the United States currently maintains diplo- 11 matic relations if the security is recognized as a valid obligation by the 12 issuer or guarantor, 13 (c) any security issued by and representing an interest in or a debt of, 14 or guaranteed by, any bank organized under the laws of the United States 15 or any bank, savings institution or trust company organized or chartered 16 as such and under the jurisdiction and supervision of the superintendent 17 of banks of any state, 18 (d) any security issued by and representing an interest in or a debt of, 19 or guaranteed by, any federal savings and loan association or any building 20 and loan or similar association organized under the laws of any state and 21 authorized to do business in this state, 22 (e) any insurance or endowment policy or annuity contract or optional 23 annuity contract, issued by a corporation subject to the supervision of 24 the director of the department of insurance, 25 (f) any security issued or guaranteed by any federal credit union or any 26 credit union, industrial loan association or similar association organized 27 and supervised under the laws of this state, 28 (g) any security issued or guaranteed by any railroad, other common car- 29 rier, public utility or holding company which is: 30 (i)Subject to the jurisdiction of the interstate commerce commis-31sion,32(ii)A registered holding company under the Public Utility Holding 33 Company Act of 1935 or a subsidiary of such a company within the 34 meaning of that act, 35 (iii) Regulated with respect to its rates and charges by a govern- 36 mental authority of the United States or any state or municipality, 37 or 38 (ivii) Regulated with respect to the issuance or guarantee of the 39 security by a governmental authority of the United States, any state, 40 Canada or any Canadian province; also equipment trust certificates in 41 respect to equipment conditionally sold or leased to a railroad or 42 public utility, if other securities issued by such railroad or public 43 utility would be exempt under this subsection, 44 (h) any security listed or approved for listing upon notice of issuance 45 on the New York Stock Exchange, the American Stock Exchange, the Midwest 46 Stock Exchange or any other stock exchange registered with the United 47 States securities and exchange commission and approved by the director, 48 any other security of the same issuer which is of senior or substantially 49 equal rank, any security called for by subscription rights or warrants so 50 listed or approved or any warrant or right to purchase or subscribe of the 51 foregoing, 52 (i) any security issued by any person organized and operated not for pri- 53 vate profit but exclusively for religious, educational, benevolent, chari- 54 table, fraternal, social, athletic or reformatory purposes, also any secu- 55 rities issued by a community-sponsored or owned industrial corporation or 4 1 foundation organized for the purpose of promoting growth and/or economic 2 development of the community, 3 (j) any commercial paper which arises out of a current transaction or the 4 proceeds of which have been or are to be used for current transaction and 5 which evidences an obligation to pay cash within nine (9) months of the 6 date of issuance, exclusive of days of grace, or any renewal of such 7 paper which is likewise limited or any guarantee of such paper or of any 8 such renewal when such commercial paper is sold to the banks or insurance 9 companies, 10 (k) any investment contract issued in connection with an employee's stock 11 purchase, savings, pension, profit-sharing or similar benefit plan, 12 (l) any security issued by a nonprofit cooperative corporation organized 13 pursuant to this title, if no expenditure is made by or on its behalf in 14 connection with the issuance or sale of its securities other than the 15 actual expenses of organization, calling or holding meetings of incorpora- 16 tors or shareholders, printing, mailing, and taxes, 17 (m) any security issued by a domestic or foreign corporation, partner- 18 ship, trust or association engaged in actual mining operations or the 19 exploration and development of mining properties in this state, whether or 20 not sold through a broker-dealer, provided the following conditions are 21 met: 22 (i) The term "actual mining operations" within the meaning of this 23 subsection does not include the development or production of gas or 24 oil; 25 (ii) The total amount of the securities to be offered and sold does 26 not exceed five hundred thousand dollars ($500,000) in any twelve 27 (12) month period; 28 (iii) All sales brochures, pamphlets, advertisements and literatures29 are filed with the director prior to being used; 30 (iv) At least eightyper centpercent (80%) of the gross amount paid 31 by the purchasers of the securities is used in actual mining opera- 32 tions or for actual exploration and development expenses, including 33 legal, accounting, engineering and geological expenses; and 34 (v) The issuer shall file a report in a form prescribed by the 35 director and at such times that the director by rule may provide, not 36 to exceed once every three (3) months, stating the number of shares 37 or amount of other securities sold, the number of purchasers, the 38 amount of money obtained by the issuer from the sales, and the manner 39 in which the moneys have been expended. 40 (2) Provided, that any person shall give notice in the form prescribed by 41 the director of his intention to avail himself of the exemption afforded by 42 paragraphs(d), (e), (f), (i), (k), (l) or (m) of subsection (1) of this sec- 43 tion thirty (30) days prior to the first offer or sale to be made thereunder. 44 The director may by order deny or revoke the exemption specified in such sub- 45 sections with respect to a specific security. Upon the entry of such an order 46 the director shall promptly notify all interested parties that it has been 47 entered and of the reasons therefor and that within twenty (20) days of the 48 receipt of a written request the matter will be set for hearing. If no hearing 49 is requested and none is ordered by the director the order will remain in 50 effect until it is modified or vacated by the director. If a hearing is 51 requested or ordered the director, after notice of an opportunity for hearing 52 to all interested persons, may modify or vacate the order or extend it until 53 final determination. No order under said subsections may operate retroac- 54 tively. No person may be considered to have violated this chapter by reason of 55 any offer or sale effected after the entry of an order under said subsections 5 1 if he sustains the burden of proof that he did not know, and in the exercise 2 of reasonable care, could not have known of the order. 3 SECTION 3. That Section 30-1437, Idaho Code, be, and the same is hereby 4 amended to read as follows: 5 30-1437. FEES. Fees shall be fixed by the director and shall be paid in 6 advance under the provisions of this chapter, but shall not exceed the fol- 7 lowing: 8 (1) (a) Except as otherwise provided herein, for the initial registration 9 of securities by notification or coordination or qualification or for a 10 notice filing pursuant to section 30-1433A(1), Idaho Code, there shall be 11 paid to the director or to an organization designated by the director, a 12 registration fee of not more than five hundred dollars ($500) notwith- 13 standing the number of shares registered. The notice filing fee for shares 14 of a unit investment trust shall be two hundred dollars ($200) notwith- 15 standing the number of shares to be offered or sold. 16 (b) Each series or portfolio of an investment company offering shall be 17 required to make a separate notice filing under section 30-1433A(1), Idaho 18 Code. Separate notice filings for classes of an investment company are not 19 required so long as classes are used solely as a method of distinguishing 20 payment plans within a series or portfolio. 21 (c) Unless renewed as provided in subparagraph (d) of this subsection or 22 additional time is granted by the director, the notice filing of a unit 23 investment trust shall expire eighteen (18) months from the date received 24 by the department. The notice filing of all other investment companies 25 shall expire two (2) months after the last day of the issuer's next fiscal 26 year end. The registration of all other offerings shall expire one (1) 27 year from the date registration is granted by the director. If the issuer 28 is an investment company, other than a unit investment trust, with a fis- 29 cal year end which falls within thirty (30) days after the effectiveness 30 of a notice filing, such shares may be lawfully offered or sold until two 31 (2) months after the last day of the following fiscal year of the issuer. 32 No registration or notice filing may be renewed at any time after the reg- 33 istration or notice filing has expired. 34 (d) For the renewal of a registration or notice filing made pursuant to 35 section 30-1433A, Idaho Code, a renewal fee shall be paid to the director 36 in an amount fixed by the director not to exceed the amount specified in 37 subparagraph (a) of this subsection for the securities of the issuer. 38 (e) When an application for registration of securities is denied or with- 39 drawn the director shall retain all fees paid by the applicant. 40 (2) For filing an annual statement the fee shall not exceed ten dollars 41 ($10.00). 42 (3) For registration of a broker-dealer or investment adviser or for a 43 notice filing made pursuant to section 30-1406(4), Idaho Code, the fee shall 44 not exceed one hundred dollars ($100) for original registration or for an ini- 45 tial notice filing and one hundred dollars ($100) for each annual renewal 46 thereof. When an application is denied or withdrawn the director shall retain 47 the fee. 48 (4) For registration of a salesman or investment adviser representative 49 the fee shall not exceed twenty dollars ($20.00) for the original registration 50 with each employer and twenty dollars ($20.00) for each annual renewal. When 51 an application is denied or an application or notice filing is withdrawn the 52 director shall retain the fee. 53 (5) For certified copies of any documents filed with the director the fee 6 1 shall be the cost to the department as determined by the director. 2 (6) For each examination, exemption, opinion letter or notice filing 3 under section 30-1433A(2) and (3), Idaho Code, the fee shall not exceed fifty 4 dollars ($50.00), which fee shall not be refundable. 5 All fees, fines, examination and miscellaneous charges collected by the 6 director pursuant to the Idaho securities act shall be deposited into the 7 finance administrative account pursuant to section 67-2702, Idaho Code.
STATEMENT OF PURPOSE
RS 10528
This legislation proposes to amend the Idaho Securities Act
to delete outdated language or make other non-substantive
changes. The proposed amendments will delete references to
the S.E.C.O. examination and Interstate Commerce Commission,
both of which no longer exist, eliminate the requirement for
fingerprint cards to be submitted with certain applications,
exclude certain investment advisers from the Act's bonding
requirements, and clarify the fee provisions for securities
registration.
FISCAL NOTE
No fiscal impact.
CONTACT
Name: Marilyn Chastain, Department of Finance
Phone: 332-8070
Statement of Purpose/Fiscal Note Bill No. H23