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H0523...........................................................by BUSINESS
BANKS - Amends and repeals existing law relating to banking to delete
sections relating to the capital structure of banks and the authority of
the director of the Department of Finance regarding reserves; to revise the
definition of "victim"; to provide for control of the Bank Act over other
designated laws; to remove a recording requirement; to revise the banks
subject to certain reserve requirements; and to remove restrictions on
redeemed or otherwise purchased portion of a bank's own capital stock for
specified purposes.
02/12 House intro - 1st rdg - to printing
02/13 Rpt prt - to Bus
02/20 Rpt out - rec d/p - to 2nd rdg
02/21 2nd rdg - to 3rd rdg
02/22 3rd rdg - PASSED - 61-1-8
AYES -- Anderson, Barrett, Bayer, Bell, Bilbao, Black, Block, Bock,
Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez, Chew,
Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Harwood,
Henbest, Henderson, Jaquet, Killen, King, Labrador, Lake, LeFavour,
Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer, Moyle,
Nielsen, Nonini, Pasley-Stuart, Patrick, Pence, Ringo, Roberts,
Ruchti, Sayler, Schaefer, Shepherd(02), Shepherd(08), Shirley,
Shively, Smith(30)(Stanek), Thayn, Thomas, Trail, Vander Woude,
Wills, Wood(35), Mr. Speaker
NAYS -- Rusche
Absent and excused -- Andrus, Bedke, Kren, Raybould, Smith(24),
Snodgrass, Stevenson, Wood(27)
Floor Sponsor - Luker
Title apvd - to Senate
02/25 Senate intro - 1st rdg - to Com/HuRes
02/29 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/06 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Bair, Bastian, Bilyeu, Burkett, Cameron, Coiner,
Corder, Darrington, Davis, Fulcher, Geddes, Goedde, Hammond,
Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- Broadsword, Gannon
Floor Sponsor - Andreason
Title apvd - to House
03/07 To enrol
03/10 Rpt enrol - Sp signed
03/11 Pres signed - To Governor
03/17 Governor signed
Session Law Chapter 140
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 523 BY BUSINESS COMMITTEE 1 AN ACT 2 RELATING TO BANKING; REPEALING SECTION 26-307, IDAHO CODE, RELATING TO ADDI- 3 TION TO CAPITAL STRUCTURE OF BANK, AND SECTION 26-603, IDAHO CODE, RELAT- 4 ING TO AUTHORITY OF THE DIRECTOR OF THE DEPARTMENT OF FINANCE REGARDING 5 RESERVES; AMENDING SECTION 19-5304, IDAHO CODE, TO REVISE THE DEFINITION 6 OF "VICTIM"; AMENDING SECTION 26-201, IDAHO CODE, TO PROVIDE FOR CONTROL 7 OF THE BANK ACT OVER OTHER DESIGNATED LAWS; AMENDING SECTION 26-203, IDAHO 8 CODE, TO REMOVE A RECORDING REQUIREMENT; AMENDING SECTION 26-601, IDAHO 9 CODE, TO REMOVE CERTAIN RESERVE REQUIREMENTS AND TO REVISE THE BANKS THAT 10 ARE SUBJECT TO CERTAIN RESERVE REQUIREMENTS; AMENDING SECTION 26-602, 11 IDAHO CODE, TO REVISE TERMINOLOGY AND TO MAKE A TECHNICAL CORRECTION; 12 AMENDING SECTION 26-702, IDAHO CODE, TO REMOVE RESTRICTIONS ON REDEEMED OR 13 OTHERWISE PURCHASED PORTION OF A BANK'S OWN CAPITAL STOCK AND TO PROVIDE 14 FOR REDEMPTION OR PURCHASE OF A BANK'S OWN CAPITAL STOCK FOR SPECIFIED 15 PURPOSES; AND AMENDING SECTION 26-708, IDAHO CODE, TO REVISE A CODE REFER- 16 ENCE. 17 Be It Enacted by the Legislature of the State of Idaho: 18 SECTION 1. That Sections 26-307 and 26-603, Idaho Code, be, and the same 19 are hereby repealed. 20 SECTION 2. That Section 19-5304, Idaho Code, be, and the same is hereby 21 amended to read as follows: 22 19-5304. RESTITUTION FOR CRIME VICTIMS -- ORDERS TO BE SEPARATE -- WHEN 23 RESTITUTION IS NOT APPROPRIATE -- OTHER REMEDIES -- EVIDENTIARY HEARINGS -- 24 DEFINITIONS. (1) As used in this chapter: 25 (a) "Economic loss" includes, but is not limited to, the value of prop- 26 erty taken, destroyed, broken, or otherwise harmed, lost wages, and direct 27 out-of-pocket losses or expenses, such as medical expenses resulting from 28 the criminal conduct, but does not include less tangible damage such as 29 pain and suffering, wrongful death or emotional distress. 30 (b) "Found guilty of any crime" shall mean a finding by a court that a 31 defendant has committed a criminal act and shall include an entry of a 32 plea of guilty, an order withholding judgment, suspending sentence, or 33 entry of judgment of conviction for a misdemeanor or felony. 34 (c) "Value" shall be as defined in section 18-2402(11), Idaho Code. 35 (d) "Property" shall be as defined in section 18-2402(8), Idaho Code. 36 (e) "Victim" shall mean: 37 (i) The directly injured victim which means a person or entity, who 38 suffers economic loss or injury as the result of the defendant's 39 criminal conduct and shall also include the immediate family of a 40 minor and the immediate family of the actual victim in homicide 41 cases; 42 (ii) Any health care provider who has provided medical treatment to 2 1 a directly injured victim if such treatment is for an injury result- 2 ing from the defendant's criminal conduct, and who has not been 3 otherwise compensated for such treatment by the directly injured 4 victim or the immediate family of the directly injured victim; 5 (iii) The account established pursuant to the crime victims compensa- 6 tion act, chapter 10, title 72, Idaho Code, from which payment was 7 made to or on behalf of a directly injured victim pursuant to the 8 requirements of Idaho law as a result of the defendant's criminal 9 conduct; 10 (iv) A person or entity who suffers economic loss because such per- 11 son or entity has made payments to or on behalf of a directly injured 12 victim pursuant to a contract including, but not limited to, an 13 insurance contract, or payments to or on behalf of a directly injured 14 victim to pay or settle a claim or claims against such person or 15 entity in tort or pursuant to statute and arising from the crime. 16 (2) Unless the court determines that an order of restitution would be 17 inappropriate or undesirable, it shall order a defendant found guilty of any 18 crime which results in an economic loss to the victim to make restitution to 19 the victim. An order of restitution shall be a separate written order in 20 addition to any other sentence the court may impose, including incarceration, 21 and may be complete, partial, or nominal. The court may also include restitu- 22 tion as a term and condition of judgment of conviction; however, if a court 23 orders restitution in the judgment of conviction and in a separate written 24 order, a defendant shall not be required to make restitution in an amount 25 beyond that authorized by this chapter. Restitution shall be ordered for any 26 economic loss which the victim actually suffers. The existence of a policy of 27 insurance covering the victim's loss shall not absolve the defendant of the 28 obligation to pay restitution. 29 (3) If the court determines that restitution is inappropriate or undesir- 30 able or if only partial or nominal restitution is ordered, it shall enter an 31 order articulating the reasons therefor on the record. 32 (4) If a separate written order of restitution is issued, an order of 33 restitution shall be for an amount certain and shall be due and owing at the 34 time of sentencing or at the date the amount of restitution is determined, 35 whichever is later. An order of restitution may provide for interest from the 36 date of the economic loss or injury. 37 (5) The court may order the defendant to pay restitution to the victim in 38 any case, regardless of whether the defendant is incarcerated or placed on 39 probation. The court may order the defendant to pay all or a part of the res- 40 titution ordered to the court to be distributed by the court to the victims in 41 a manner the court deems just. 42 (6) Restitution orders shall be entered by the court at the time of sen- 43 tencing or such later date as deemed necessary by the court. Economic loss 44 shall be based upon the preponderance of evidence submitted to the court by 45 the prosecutor, defendant, victim or presentence investigator. Each party 46 shall have the right to present such evidence as may be relevant to the issue 47 of restitution, and the court may consider such hearsay as may be contained in 48 the presentence report, victim impact statement or otherwise provided to the 49 court. 50 (7) The court, in determining whether to order restitution and the amount 51 of such restitution, shall consider the amount of economic loss sustained by 52 the victim as a result of the offense, the financial resources, needs and 53 earning ability of the defendant, and such other factors as the court deems 54 appropriate. The immediate inability to pay restitution by a defendant shall 55 not be, in and of itself, a reason to not order restitution. 3 1 (8) In determining restitution, where it appears that more than one (1) 2 person is responsible for a crime that results in economic loss to a victim, 3 and one (1) or more of the suspects or defendants are not found, apprehended, 4 charged, convicted or ordered to pay restitution, the court may require the 5 remaining defendant or defendants, who are convicted of or plead guilty to the 6 crime, to be jointly and severally responsible for the entire economic loss to 7 the victim. 8 (9) The court may, with the consent of the parties, order restitution to 9 victims, and/or any other person or entity, for economic loss or injury for 10 crimes which are not adjudicated or are not before the court. 11 (10) A defendant, against whom a restitution order has been entered, may, 12 within forty-two (42) days of the entry of the order of restitution, request 13 relief from the restitution order in accordance with the Idaho rules of civil 14 procedure relating to relief from final orders. 15 (11) An order of restitution shall not preclude the victim from seeking 16 any other legal remedy. 17 (12) Every presentence report shall include a full statement of economic 18 loss suffered by the victim or victims of the defendant's crime or crimes. 19 (13) If there is more than one (1) victim, the restitution order shall 20 provide that the directly injured victim(s) be fully compensated for so much 21 of the loss caused by the defendant's criminal conduct which has not been paid 22 by a third party, including persons referred to in subsection (1)(e)(ii), 23 (iii) and (iv) of this section. 24 SECTION 3. That Section 26-201, Idaho Code, be, and the same is hereby 25 amended to read as follows: 26 26-201. GENERAL CORPORATION LAWS APPLICABLE. Except as otherwise provided 27 herein, the general business corporation laws of this state shall apply to all 28 corporations organized and operating under the bank act. In the event of any 29 conflict between the provisions of the bank act and the provisions of the gen- 30 eral business corporation laws, the laws governing limited liability compa- 31 nies, partnerships and other business associations and entities, or the laws 32 governing entity mergers, acquisitions, conversions, domestications, interest 33 exchanges and divisions, the bank act shall control. 34 SECTION 4. That Section 26-203, Idaho Code, be, and the same is hereby 35 amended to read as follows: 36 26-203. ARTICLES OF INCORPORATION -- FORM. Proposed articles of incorpo- 37 ration of a banking corporation shall be in a form acceptable to the director, 38 and must be submitted to the director for approval as to form and content 39 before the same are filed for record in the offices of the secretary of state; 40and county recorder;provided that no bank shall be required to have the word 41 "corporation" in its corporate name. The articles may include a provision 42 which eliminates or limits the personal liability of the directors of the bank 43 in accordance with section 30-1-202, Idaho Code, provided that such provision 44 shall not eliminate or limit the liability of a director under section 45 26-213(5), Idaho Code. 46 SECTION 5. That Section 26-601, Idaho Code, be, and the same is hereby 47 amended to read as follows: 48 26-601. RESERVE. Every bank, not a member of the Federal Reserve System,49shall have on hand each day as a reserve, an amount equal to at least ten per4 1cent (10%) of its net demand deposits and four per cent (4%) of its savings2and time deposits. Said reserve shall be in cash in its vaults or held on3deposit subject to check with any other bank or banks which shall have been4approved by the director as reserve depositories and shall be computed5biweekly in the following manner: on the basis of average daily net deposit6balances and average daily cash in its vaults or held on deposit in reserve7depositories subject to check during the prior biweekly period. Biweekly8periods shall end at the close of business on days to be fixed by the direc-9tor. Notwithstanding the above, upon an annual showing by a bank, not a member10of the Federal Reserve System, that it is subject to the reserve requirements11of the Federal Reserve Act, the director may waive the reserve requirements of12this act.13Any bank which is or becomes a member of the Federal Reserve System,orga- 14 nized under the laws of this state and authorized to receive deposits shall 15 comply with the reserve requirements of the Federal Reserve act. 16 SECTION 6. That Section 26-602, Idaho Code, be, and the same is hereby 17 amended to read as follows: 18 26-602. DIMINUTION OF RESERVE. (1) When the reserve of any bank falls 19 below the amount required by section 26-601, Idaho Code, fora biweeklyany 20 reporting period, the bank shall immediately restore its reserve to the amount 21 required by section 26-601, Idaho Code, and in addition: 22 (a) If a bank is deficient in reserve for two (2) nonconsecutivebiweekly23 reporting periods in a calendar year, the bank shall pay to the department 24 of finance at the end of the secondbiweeklyreporting period a fine of 25 three hundred dollars ($300). 26 (b) If a bank is deficient in reserves for three (3) nonconsecutive 27biweeklyreporting periods in a calendar year, the bank shall pay to the 28 department of finance at the end of the thirdbiweeklyreporting period a 29 fine equal to five percent (5%) of the dollar amount by which it was defi- 30 cient in reserves for the thirdbiweeklyreporting period or five hundred 31 dollars ($500), whichever is greater. 32 (c) If a bank is deficient in reserves for more than three (3) 33 nonconsecutivebiweeklyreporting periods or for two (2) or more consecu- 34 tive reporting periods in a calendar year, the director shall proceed as 35 provided in section 26-1115, Idaho Code. The bank shall not increase its 36 loans or discounts until its reserve is fully restored and the director 37 may by order set a minimum level of cash reserves which the bank must 38 maintain until such time as the director has reason to believe that the 39 bank will comply with the reserve requirements of section 26-601, Idaho 40 Code. 41 (2) The penalties set out in subsection (1) of this section are not 42 exclusive. The director may in proper cases proceed in his discretion as pro- 43 vided in section 26-1115, Idaho Code, or chapter 10, title 26, Idaho Code. 44 SECTION 7. That Section 26-702, Idaho Code, be, and the same is hereby 45 amended to read as follows: 46 26-702. BANK STOCK. (1) Except as provided in subsection (2) of this sec- 47 tion, no bank shall accept as collateral, nor make any loans or discounts on 48 the security of nor purchase any shares of its own capital stock. No bank 49 shall purchase the shares of any other bank wherever organized, or situated, 50 except stock of federal reserve banks. A bank may acquire a security interest 51 in or purchase its own stock if the acquisition is necessary to prevent loss 5 1 upon a debt previously contracted in good faith and the stock so purchased or 2 acquired shall within six (6) months from the date of acquirement be sold or 3 disposed of at public or private sale. After the expiration of six (6) months 4 any such stock shall not be considered as a part of the assets of such bank. 5 (2) With the written approval of the director, a bank may redeem or 6 otherwise purchasea portionshares of its own capital stock if the director 7 finds that such redemption or purchase does not impair the capital structure 8 of the bank as required by section 26-205, Idaho Code, is for legitimate cor- 9 porate purposes and not for speculation, is not for an unreasonable price, 10 does not conflict with the articles of incorporation or the bylaws of the 11 bank, and is not otherwise detrimental to the bank or to the public interest,12provided, however, (i) that a bank may not hold its capital stock so redeemed13or purchased for a period longer than twelve (12) months from the date of such14redemption or purchase, and (ii) a bank shall not retain at any one time a15total number of shares of its capital stock so redeemed or purchased in excess16of seven per cent (7%) of the total number of shares of its capital stock then17issued and outstanding. Legitimate corporate purposes for acquiring and hold- 18 ing of treasury stock may include: 19 (a) To have shares available for use in connection with employee stock 20 option, bonus, purchase or similar plans; 21 (b) To sell to a director for the purpose of acquiring qualifying shares; 22 (c) To purchase a director's qualifying shares upon cessation of the 23 director's service in that capacity if there is no ready market for the 24 shares; 25 (d) To reduce the number of shareholders to qualify as a subchapter S 26 corporation; 27 (e) To reduce costs associated with shareholder communications and meet- 28 ings; 29 (f) To facilitate a bank's shareholder dividend reinvestment plan; or 30 (g) Any other legitimate corporate purpose as may be approved by the 31 director. 32 SECTION 8. That Section 26-708, Idaho Code, be, and the same is hereby 33 amended to read as follows: 34 26-708. VALUATION OF ASSETS. No bank shall enter or at any time carry on 35 its books any of its assets at a valuation exceeding their actual cost to the 36 bank; nor shall the value of any of its assets be increased on the books of 37 the bank without the written consent of the director. Additional charges, 38 delinquency charges and other similar charges on consumer credit transactions 39 permitted by and made in compliance with theUniform ConsumerIdaho Credit 40 Code and added to the principal balance of the loan, shall not come within the 41 prohibition of this section.
STATEMENT OF PURPOSE
RS 17907
The purpose of this bill is to amend the Idaho Bank Act to
address several items best described as "housekeeping", and
to clarify when a bank may be considered a "victim" of a
crime, eligible to receive restitution if the judge imposes
restitution as a part of the criminal's sentence. Changes
include:
Making it clear that a person who suffers economic loss
because that person paid money to a crime victim to settle a
claim arising from the crime is also a victim, in whose
favor a restitution order may be entered; making it clear
that in the event of any conflict between the Idaho Bank Act
and the general business corporation laws, the Bank Act
controls; eliminating an obsolete requirement that banks
file their Articles of Incorporation in the county
recorder's office; eliminating obsolete capital requirements
for establishing branch banks; making bank reserve
requirements under state law consistent with those under
federal law; correcting obsolete references to the reporting
periods of banks; clarifying the standards applicable to a
bank's request for permission from the Director of Finance
to repurchase some of its own capital stock, and removing
the arbitrary limit on the amount of capital stock which may
be repurchased and on the period of time it may be retained
(subject to the Director's approval); and correcting an
obsolete reference to the Uniform Consumer Credit Code.
FISCAL NOTE
This bill will have no impact on the general fund.
Contacts:
Name: Representative Max Black
Phone: (208) 332-1139
Name: Representative Lynn Luker
(208) 332-1000
Name: Patrick V. Collins
Hawley Troxell Ennis & Hawley LLP
Counsel for the Idaho Bankers Association
Phone: (208) 388-4828
STATEMENT OF PURPOSE/FISCAL NOTE H 523