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S1253.......................................by COMMERCE AND HUMAN RESOURCES
SECURITIES ACT - Amends existing law relating to the Uniform Securities Act
to revise exempt transactions; and to delete obsolete language.
01/11 Senate intro - 1st rdg - to printing
01/14 Rpt prt - to Com/HuRes
02/04 Rpt out - rec d/p - to 2nd rdg
02/05 2nd rdg - to 3rd rdg
02/07 3rd rdg - PASSED - 32-0-3
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Cameron,
Coiner, Corder, Darrington, Fulcher, Gannon, Geddes, Goedde, Hammond,
Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
Malepeai(Sagness), McGee, McKague, Pearce, Richardson, Schroeder,
Siddoway, Stegner, Stennett(Thorson), Werk
NAYS -- None
Absent and excused -- Burkett, Davis, McKenzie
Floor Sponsor - Cameron
Title apvd - to House
02/08 House intro - 1st rdg - to Bus
03/04 Rpt out - rec d/p - to 2nd rdg
03/05 2nd rdg - to 3rd rdg
03/11 3rd rdg - PASSED - 64-0-6
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon,
Chavez, Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
Harwood, Jaquet, Killen, King, Kren, Labrador, Lake, LeFavour,
Loertscher, Luker, Marriott, Mathews, McGeachin, Nielsen, Nonini,
Pasley-Stuart, Patrick, Pence, Raybould, Ringo, Ruchti, Rusche,
Sayler, Schaefer, Shepherd(02), Shepherd(08), Shirley, Shively,
Smith(30), Snodgrass, Stevenson, Thayn, Thomas, Trail, Vander Woude,
Wills, Wood(27), Wood(35), Mr. Speaker
NAYS -- None
Absent and excused -- Henbest, Henderson, Mortimer, Moyle, Roberts,
Smith(24)
Floor Sponsor - Patrick
Title apvd - to Senate
03/12 To enrol
03/13 Rpt enrol - Pres signed - Sp signed
03/14 To Governor
03/17 Governor signed
Session Law Chapter 143
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE SENATE SENATE BILL NO. 1253 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO THE UNIFORM SECURITIES ACT; AMENDING SECTION 30-14-202, IDAHO 3 CODE, TO REVISE EXEMPT TRANSACTIONS; AMENDING SECTION 30-14-412, IDAHO 4 CODE, TO MAKE A TECHNICAL CORRECTION; AND AMENDING SECTION 30-14-611, 5 IDAHO CODE, TO DELETE OBSOLETE LANGUAGE. 6 Be It Enacted by the Legislature of the State of Idaho: 7 SECTION 1. That Section 30-14-202, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 30-14-202. EXEMPT TRANSACTIONS. The following transactions are exempt 10 from the requirements of sections 30-14-301 through 30-14-306, Idaho Code, and 11 section 30-14-504, Idaho Code: 12 (1) An isolated nonissuer transaction, whether or not effected by or 13 through a broker-dealer; 14 (2) A nonissuer transaction by or through a broker-dealer registered, or 15 exempt from registration under this chapter, and a resale transaction by a 16 sponsor of a unit investment trust registered under the investment company act 17 of 1940, in a security of a class that has been outstanding in the hands of 18 the public for at least ninety (90) days, if, at the date of the transaction: 19 (a) The issuer of the security is engaged in business, the issuer is not 20 in the organizational stage or in bankruptcy or receivership, and the 21 issuer is not a blank check, blind pool, or shell company that has no spe- 22 cific business plan or purpose or has indicated that its primary business 23 plan is to engage in a merger or combination of the business with, or an 24 acquisition of, an unidentified person; 25 (b) The security is sold at a price reasonably related to its current 26 market price; 27 (c) The security does not constitute the whole or part of an unsold 28 allotment to, or a subscription or participation by, the broker-dealer as 29 an underwriter of the security or a redistribution; 30 (d) A nationally recognized securities manual or its electronic equiva- 31 lent designated by any rule adopted or an order issued under this chapter 32 or a record filed with the securities and exchange commission that is pub- 33 licly available contains: 34 (i) A description of the business and operations of the issuer; 35 (ii) The names of the issuer's executive officers and the names of 36 the issuer's directors, if any; 37 (iii) An audited balance sheet of the issuer as of a date within 38 eighteen (18) months before the date of the transaction or, in the 39 case of a reorganization or merger when the parties to the reorgani- 40 zation or merger each had an audited balance sheet, a pro forma bal- 41 ance sheet for the combined organization; and 42 (iv) An audited income statement for each of the issuer's two (2) 43 immediately previous fiscal years or for the period of existence of 2 1 the issuer, whichever is shorter, or, in the case of a reorganization 2 or merger when each party to the reorganization or merger had audited 3 income statements, a pro forma income statement; and 4 (e) Any one (1) of the following requirements is met: 5 (i) The issuer of the security has a class of equity securities 6 listed on a national securities exchange registered under section 6 7 of the securities exchange act of 1934 or designated for trading on 8 the national association of securities dealers automated quotation 9 system; 10 (ii) The issuer of the security is a unit investment trust regis- 11 tered under the investment company act of 1940; 12 (iii) The issuer of the security, including its predecessors, has 13 been engaged in continuous business for at least three (3) years; or 14 (iv) The issuer of the security has total assets of at least two 15 million dollars ($2,000,000) based on an audited balance sheet as of 16 a date within eighteen (18) months before the date of the transaction 17 or, in the case of a reorganization or merger when the parties to the 18 reorganization or merger each had such an audited balance sheet, a 19 pro forma balance sheet for the combined organization; 20 (3) A nonissuer transaction by or through a broker-dealer registered or 21 exempt from registration under this chapter in a security of a foreign issuer 22 that is a margin security defined in regulations or rules adopted by the board 23 of governors of the federal reserve system; 24 (4) A nonissuer transaction by or through a broker-dealer registered or 25 exempt from registration under this chapter in an outstanding security if the 26 guarantor of the security files reports with the securities and exchange com- 27 mission under the reporting requirements of section 13 or 15(d) of the securi- 28 ties exchange act of 1934 (15 U.S.C. 78m or 78o(d)); 29 (5) A nonissuer transaction by or through a broker-dealer registered or 30 exempt from registration under this chapter in a security that: 31 (a) Is rated at the time of the transaction by a nationally recognized 32 statistical rating organization in one (1) of its four (4) highest rating 33 categories; or 34 (b) Has a fixed maturity or a fixed interest or dividend, if: 35 (i) A default has not occurred during the current fiscal year or 36 within the three (3) previous fiscal years of the issuer or any pre- 37 decessor, in the payment of principal, interest, or dividends on the 38 security; and 39 (ii) The issuer is engaged in business, is not in the organizational 40 stage or in bankruptcy or receivership, and is not and has not been 41 within the previous twelve (12) months a blank check, blind pool, or 42 shell company that has no specific business plan or purpose or has 43 indicated that its primary business plan is to engage in a merger or 44 combination of the business with, or an acquisition of, an unidenti- 45 fied person; 46 (6) A nonissuer transaction by or through a broker-dealer registered or 47 exempt from registration under this chapter effecting an unsolicited order or 48 offer to purchase; 49 (7) A nonissuer transaction executed by a bona fide pledgee without the 50 purpose of evading this chapter; 51 (8) A nonissuer transaction by a federal covered investment adviser with 52 investments under management in excess of one hundred million dollars 53 ($100,000,000) acting in the exercise of discretionary authority in a signed 54 record for the account of others; 55 (9) A transaction in a security, whether or not the security or transac- 3 1 tion is otherwise exempt, in exchange for one (1) or more bona fide outstand- 2 ing securities, claims, or property interests, or partly in such exchange and 3 partly for cash, if the terms and conditions of the issuance and exchange or 4 the delivery and exchange and the fairness of the terms and conditions have 5 been approved by the administrator after a hearing as provided in section 6 30-14-202A, Idaho Code, or otherwise; 7 (10) A transaction between the issuer or other person on whose behalf the 8 offering is made and an underwriter, or among underwriters; 9 (11) A transaction in a note, bond, debenture or other evidence of indebt- 10 edness secured by a mortgage or other security agreement if:11(a) Tthe note, bond, debenture or other evidence of indebtedness is 12 offered and sold with the mortgage or other security agreement as a unit; 13(b) A general solicitation or general advertisement of the transaction is14not made; and15(c) A commission or other remuneration is not paid or given, directly or16indirectly, to a person not registered under this chapter as a broker-17dealer or as an agent;18 (12) A transaction by an executor, administrator of an estate, sheriff, 19 marshal, receiver, trustee in bankruptcy, guardian or conservator; 20 (13) A sale or offer to sell to: 21 (a) An institutional investor; 22 (b) A federal covered investment adviser; or 23 (c) Any other person exempted by a rule adopted or an order issued under 24 this chapter; 25 (14) A sale or an offer to sell securities of an issuer, if the transac- 26 tion is part of a single issue in which: 27 (a) Not more than ten (10) purchasers are present in this state during 28 any twelve (12) consecutive months, other than those designated in subsec- 29 tion (13) of this section; 30 (b) A general solicitation or general advertising is not made in connec- 31 tion with the offer to sell or sale of the securities; 32 (c) A commission or other remuneration is not paid or given, directly or 33 indirectly, to a person other than a broker-dealer registered under this 34 chapter or an agent registered under this chapter for soliciting a pro- 35 spective purchaser in this state; and 36 (d) The issuer reasonably believes that all the purchasers in this state, 37 other than those designated in subsection (13) of this section, are pur- 38 chasing for investment; 39 (15) A transaction under an offer to existing security holders of the 40 issuer, including persons that at the date of the transaction are holders of 41 convertible securities, options or warrants, if a commission or other remuner- 42 ation, other than a standby commission, is not paid or given, directly or 43 indirectly, for soliciting a security holder in this state; 44 (16) An offer to sell, but not a sale, of a security not exempt from reg- 45 istration under the securities act of 1933 if: 46 (a) A registration or offering statement or similar record as required 47 under the securities act of 1933 has been filed, but is not effective, or 48 the offer is made in compliance with rule 165 adopted under the securities 49 act of 1933 (17 CFR 230.165); and 50 (b) A stop order of which the offeror is aware has not been issued 51 against the offeror by the administrator or the securities and exchange 52 commission, and an audit, inspection or proceeding that is public and that 53 may culminate in a stop order is not known by the offeror to be pending; 54 (17) An offer to sell, but not a sale, of a security exempt from registra- 55 tion under the securities act of 1933 if: 4 1 (a) A registration statement has been filed under this chapter, but is 2 not effective; 3 (b) A solicitation of interest is provided in a record to offerees in 4 compliance with a rule adopted by the administrator under this chapter; 5 and 6 (c) A stop order of which the offeror is aware has not been issued by the 7 administrator under this chapter and an audit, inspection or proceeding 8 that may culminate in a stop order is not known by the offeror to be pend- 9 ing; 10 (18) A transaction involving the distribution of the securities of an 11 issuer to the security holders of another person in connection with a merger, 12 consolidation, exchange of securities, sale of assets, or other reorganization 13 to which the issuer, or its parent or subsidiary and the other person, or its 14 parent or subsidiary, are parties; 15 (19) A rescission offer, sale or purchase under section 30-14-510, Idaho 16 Code; 17 (20) An offer or sale of a security to a person not a resident of this 18 state and not present in this state if the offer or sale does not constitute a 19 violation of the laws of the state or foreign jurisdiction in which the 20 offeree or purchaser is present and is not part of an unlawful plan or scheme 21 to evade this chapter; 22 (21) Employees' stock purchase, savings, option, profit-sharing, pension, 23 or similar employees' benefit plan, including any securities, plan interests, 24 and guarantees issued under a compensatory benefit plan or compensation con- 25 tract, contained in a record, established by the issuer, its parents, its 26 majority-owned subsidiaries, or the majority-owned subsidiaries of the 27 issuer's parent for the participation of their employees including offers or 28 sales of such securities to: 29 (a) Directors; general partners; trustees, if the issuer is a business 30 trust; officers; consultants; and advisers; 31 (b) Family members who acquire such securities from those persons through 32 gifts or domestic relations orders; 33 (c) Former employees, directors, general partners, trustees, officers, 34 consultants and advisers if those individuals were employed by or provid- 35 ing services to the issuer when the securities were offered; and 36 (d) Insurance agents who are exclusive insurance agents of the issuer, or 37 the issuer's subsidiaries or parents, or who derive more than fifty per- 38 cent (50%) of their annual income from those organizations; 39 (22) A transaction involving: 40 (a) A stock dividend or equivalent equity distribution, whether the cor- 41 poration or other business organization distributing the dividend or 42 equivalent equity distribution is the issuer or not, if nothing of value 43 is given by stockholders or other equity holders for the dividend or 44 equivalent equity distribution other than the surrender of a right to a 45 cash or property dividend if each stockholder or other equity holder may 46 elect to take the dividend or equivalent equity distribution in cash, 47 property or stock; 48 (b) An act incident to a judicially approved reorganization in which a 49 security is issued in exchange for one (1) or more outstanding securities, 50 claims, or property interests, or partly in such exchange and partly for 51 cash; or 52 (c) The solicitation of tenders of securities by an offeror in a tender 53 offer in compliance with rule 162 adopted under the securities act of 1933 54 (17 CFR 230.162); or 55 (23) A nonissuer transaction in an outstanding security by or through a 5 1 broker-dealer registered or exempt from registration under this chapter, if 2 the issuer is a reporting issuer in a foreign jurisdiction designated by this 3 subsection or by a rule adopted or an order issued under this chapter; has 4 been subject to continuous reporting requirements in the foreign jurisdiction 5 for not less than one hundred eighty (180) days before the transaction; and 6 the security is listed on the foreign jurisdiction's securities exchange that 7 has been designated by this subsection or by a rule adopted or an order issued 8 under this chapter, or is a security of the same issuer that is of senior or 9 substantially equal rank to the listed security or is a warrant or right to 10 purchase or subscribe to any of the foregoing. For purposes of this subsec- 11 tion, Canada, together with its provinces and territories, is a designated 12 foreign jurisdiction and the Toronto stock exchange, inc., is a designated 13 securities exchange. After an administrative hearing in compliance with chap- 14 ter 52, title 67, Idaho Code, the administrator, by rule adopted or an order 15 issued under this chapter, may revoke the designation of a securities exchange 16 under this subsection, if the administrator finds that revocation is necessary 17 or appropriate in the public interest and for the protection of investors. 18 SECTION 2. That Section 30-14-412, Idaho Code, be, and the same is hereby 19 amended to read as follows: 20 30-14-412. DENIAL, REVOCATION, SUSPENSION, WITHDRAWAL, RESTRICTION, CON- 21 DITION OR LIMITATION OF REGISTRATION. (a) Disciplinary conditions -- Appli- 22 cants. If the administrator finds that the order is in the public interest and 23 subsection (d) of this section authorizes the action, an order issued under 24 this chapter may deny an application, or may condition or limit registration 25 of an applicant to be a broker-dealer, agent, investment adviser or investment 26 adviser representative, and, if the applicant is a broker-dealer or investment 27 adviser,ofor a partner, officer, director or person having a similar status 28 or performing similar functions, or a person directly or indirectly in con- 29 trol, of the broker-dealer or investment adviser. 30 (b) Disciplinary conditions -- Registrants. If the administrator finds 31 that the order is in the public interest and subsection (d) of this section 32 authorizes the action, an order issued under this chapter may revoke, suspend, 33 condition or limit the registration of a registrant and, if the registrant is 34 a broker-dealer or investment adviser,ofor a partner, officer, director or 35 person having a similar status or performing similar functions, or a person 36 directly or indirectly in control, of the broker-dealer or investment adviser. 37 Provided however, the administrator may not: 38 (1) Institute a revocation or suspension proceeding under this subsection 39 based on an order issued under a law of another state that is reported to 40 the administrator or a designee of the administrator more than one (1) 41 year after the date of the order on which it is based; or 42 (2) Under subsection (d)(5)(A) or (B) of this section, issue an order on 43 the basis of an order issued under the securities act of another state 44 unless the other order was based on conduct for which subsection (d) of 45 this section would authorize the action had the conduct occurred in this 46 state. 47 (c) Disciplinary penalties -- Registrants. If the administrator finds 48 that the order is in the public interest and subsections (d)(1) through (6), 49 (8), (9), (10), (12) or (13) of this section authorizes the action, an order 50 under this chapter may censure, impose a bar or suspension from association 51 with a broker-dealer or investment adviser registered in this state, or impose 52 a civil penalty in an amount not to exceed five thousand dollars ($5,000) for 53 each violation, on a registrant and, if the registrant is a broker-dealer or 6 1 investment adviser, a partner, officer, director or person having a similar 2 status or performing similar functions, or a person directly or indirectly in 3 control, of the broker-dealer or investment adviser. 4 (d) Grounds for discipline. A person may be disciplined under subsections 5 (a) through (c) of this section if the person: 6 (1) Has filed an application for registration in this state under this 7 chapter or the predecessor act within the previous ten (10) years, which, 8 as of the effective date of registration or as of any date after filing in 9 the case of an order denying effectiveness, was incomplete in any material 10 respect or contained a statement that, in light of the circumstances under 11 which it was made, was false or misleading with respect to a material 12 fact; 13 (2) Willfully violated or willfully failed to comply with this chapter or 14 the predecessor act or a rule adopted or an order issued under this chap- 15 ter or the predecessor act within the previous ten (10) years; 16 (3) Has been convicted of any felony or within the previous ten (10) 17 years has been convicted of a misdemeanor involving a security, a commod- 18 ity future or option contract, or an aspect of a business involving secu- 19 rities, commodities, investments, franchises, insurance, banking or 20 finance; 21 (4) Is enjoined or restrained by a court of competent jurisdiction in an 22 action instituted by the administrator under this chapter or the predeces- 23 sor act, a state, the securities and exchange commission, or the United 24 States from engaging in or continuing an act, practice or course of busi- 25 ness involving an aspect of a business involving securities, commodities, 26 investments, franchises, insurance, banking or finance; 27 (5) Is the subject of an order, issued after notice and opportunity for 28 hearing by: 29 (A) The securities, depository institution, insurance or other 30 financial services regulator of a state or by the securities and 31 exchange commission or other federal agency denying, revoking, bar- 32 ring or suspending registration as a broker-dealer, agent, investment 33 adviser, federal covered investment adviser, or investment adviser 34 representative; 35 (B) The securities regulator of a state or the securities and 36 exchange commission against a broker-dealer, agent, investment 37 adviser, investment adviser representative, or federal covered 38 investment adviser; 39 (C) The securities and exchange commission or a self-regulatory 40 organization suspending or expelling the registrant from membership 41 in the self-regulatory organization; 42 (D) A court adjudicating a United States postal service fraud order; 43 (E) The insurance regulator of a state denying, suspending or revok- 44 ing registration as an insurance agent; or 45 (F) A depository institution regulator suspending or barring the 46 person from the depository institution business; 47 (6) Is the subject of an adjudication or determination, after notice and 48 opportunity for hearing, by the securities and exchange commission, the 49 commodity futures trading commission; the federal trade commission; a fed- 50 eral depository institution regulator, or a depository institution, insur- 51 ance or other financial services regulator of a state that the person 52 willfully violated the securities act of 1933, the securities exchange act 53 of 1934, the investment advisers act of 1940, the investment company act 54 of 1940, or the commodity exchange act, the securities or commodities law 55 of a state, or a federal or state law under which a business involving 7 1 investments, franchises, insurance, banking or finance is regulated; 2 (7) Is insolvent, either because the person's liabilities exceed the 3 person's assets or because the person cannot meet the person's obliga- 4 tions as they mature, provided however that the administrator may not 5 enter an order against an applicant or registrant under this paragraph (7) 6 without a finding of insolvency as to the applicant or registrant; 7 (8) Refuses to allow or otherwise impedes the administrator from conduct- 8 ing an audit or inspection under section 30-14-411(d), Idaho Code, or 9 refuses access to a registrant's office to conduct an audit or inspection 10 under section 30-14-411(d), Idaho Code; 11 (9) Has failed to reasonably supervise an agent, investment adviser rep- 12 resentative or other individual, if the agent, investment adviser repre- 13 sentative or other individual was subject to the person's supervision and 14 committed a violation of this chapter or the predecessor act or a rule 15 adopted or an order issued under this chapter or the predecessor act 16 within the previous ten (10) years; 17 (10) Has not paid the proper filing fee within thirty (30) days after hav- 18 ing been notified by the administrator of a deficiency, provided however 19 that the administrator shall vacate an order under this paragraph (10) 20 when the deficiency is corrected; 21 (11) After notice and opportunity for a hearing, has been found within the 22 previous ten (10) years: 23 (A) By a court of competent jurisdiction to have willfully violated 24 the laws of a foreign jurisdiction under which the business of secu- 25 rities, commodities, investment, franchises, insurance, banking or 26 finance is regulated; 27 (B) To have been the subject of an order of a securities regulator 28 of a foreign jurisdiction denying, revoking or suspending the right 29 to engage in the business of securities as a broker-dealer, agent, 30 investment adviser, investment adviser representative or similar per- 31 son; or 32 (C) To have been suspended or expelled from membership by or partic- 33 ipation in a securities exchange or securities association operating 34 under the securities laws of a foreign jurisdiction; 35 (12) Is the subject of a cease and desist order issued by the securities 36 and exchange commission or issued under the securities, commodities, 37 investment, franchise, banking, finance or insurance laws of a state; 38 (13) Has engaged in dishonest or unethical practices in the securities, 39 commodities, investment, franchise, banking, finance or insurance business 40 within the previous ten (10) years; or 41 (14) Is not qualified on the basis of factors such as training, experience 42 and knowledge of the securities business. Provided however, in the case of 43 an application by an agent for a broker-dealer that is a member of a self- 44 regulatory organization or by an individual for registration as an invest- 45 ment adviser representative, a denial order may not be based on this para- 46 graph (14) if the individual has successfully completed all examinations 47 required by subsection (e) of this section. The administrator may require 48 an applicant for registration under section 30-14-402 or 30-14-404, Idaho 49 Code, who has not been registered in a state within the two (2) years pre- 50 ceding the filing of an application in this state to successfully complete 51 an examination. 52 (e) Examinations. A rule adopted or an order issued under this chapter 53 may require that an examination, including an examination developed or 54 approved by an organization of securities regulators, be successfully com- 55 pleted by a class of individuals or all individuals. An order issued under 8 1 this chapter may waive, in whole or in part, an examination as to an individ- 2 ual and a rule adopted under this chapter may waive, in whole or in part, an 3 examination as to a class of individuals if the administrator determines that 4 the examination is not necessary or appropriate in the public interest and for 5 the protection of investors. 6 (f) Summary process. The administrator may suspend or deny an application 7 summarily; restrict, condition, limit or suspend a registration; or censure, 8 bar, or impose a civil penalty on a registrant before final determination of 9 an administrative proceeding. Upon the issuance of an order, the administrator 10 shall promptly notify each person subject to the order that the order has been 11 issued, the reasons for the action, and that within fifteen (15) days after 12 the receipt of a request in a record from the person the matter will be sched- 13 uled for a hearing. If a hearing is not requested and none is ordered by the 14 administrator within thirty (30) days after the date of service of the order, 15 the order becomes final by operation of law. If a hearing is requested or 16 ordered, the administrator, after notice of and opportunity for hearing to 17 each person subject to the order, may modify or vacate the order or extend the 18 order until final determination. 19 (g) Procedural requirements. An order issued may not be issued under this 20 section, except under subsection (f) of this section, without: 21 (1) Appropriate notice to the applicant or registrant; 22 (2) Opportunity for hearing; and 23 (3) Findings of fact and conclusions of law in a record in accordance 24 with chapter 52, title 67, Idaho Code. 25 (h) Control person liability. A person that controls, directly or indi- 26 rectly, a person not in compliance with this section may be disciplined by 27 order of the administrator under subsections (a) through (c) of this section 28 to the same extent as the noncomplying person, unless the controlling person 29 did not know, and in the exercise of reasonable care could not have known, of 30 the existence of conduct that is a ground for discipline under this section. 31 (i) Limit on investigation or proceeding. The administrator may not 32 institute a proceeding under subsection (a), (b) or (c) of this section based 33 solely on material facts actually known by the administrator unless an inves- 34 tigation or the proceeding is instituted within one (1) year after the admin- 35 istrator actually acquires knowledge of the material facts. 36 SECTION 3. That Section 30-14-611, Idaho Code, be, and the same is hereby 37 amended to read as follows: 38 30-14-611. SERVICE OF PROCESS. (a) Signed consent to service of process. 39From September 1, 2004, through June 30, 2005, all persons applying for regis-40tration or making a notice filing shall submit to the administrator a signed41consent to service of process.A consent appointing the administrator the 42 person's agent for service of process in a noncriminal action or proceeding 43 against the person, or the person's successor or personal representative under 44 this chapter or a rule adopted or an order issued under this chapter after the 45 consent is filed, has the same force and validity as if the service were made 46 personally on the person filing the consent. From July 1, 2005, and thereaf- 47 ter, registrants shall be required to submit a consent to service of process 48 only if there has been a material change. 49 (b) Conduct constituting appointment of agent for service. If a person, 50 including a nonresident of this state, engages in an act, practice, or course 51 of business prohibited or made actionable by this chapter or a rule adopted or 52 an order issued under this chapter and the person has not filed a consent to 53 service of process under subsection (a) of this section, the act, practice, 9 1 or course of business constitutes the appointment of the administrator as the 2 person's agent for service of process in a noncriminal action or proceeding 3 against the person or the person's successor or personal representative. 4 (c) Procedure for service of process. Service under subsection (a) or (b) 5 of this section may be made by providing a copy of the process to the office 6 of the administrator, but it is not effective unless: 7 (1) The plaintiff, which may be the administrator, promptly sends notice 8 of the service and a copy of the process, return receipt requested, to the 9 defendant or respondent at the address set forth in the consent to service 10 of process or, if a consent to service of process has not been filed, at 11 the last known address, or takes other reasonable steps to give notice; 12 and 13 (2) The plaintiff files an affidavit of compliance with this subsection 14 in the action or proceeding on or before the return day of the process, if 15 any, or within the time that the court, or the administrator in a proceed- 16 ing before the administrator, allows. 17 (d) Service in administrative proceedings or civil actions by administra- 18 tor. Service pursuant to subsection (c) of this section may be used in a pro- 19 ceeding before the administrator or by the administrator in a civil action in 20 which the administrator is the moving party. 21 (e) Opportunity to defend. If process is served under subsection (c) of 22 this section, the court, or the administrator in a proceeding before the 23 administrator, shall order continuances as are necessary or appropriate to 24 afford the defendant or respondent reasonable opportunity to defend.
STATEMENT OF PURPOSE
RS 17329
These changes are intended to correct and update statutory
language. Specifically, (1)the proposed changes to Idaho Code
30-14-202(11) will bring the statute's language into conformity
with an order issued by the Director of Finance in 2005 when it
became clear that the new Uniform Securities Act language
deviated from language in the prior Idaho Securities Act causing
disruption to local securities issuers; (2) correcting "of" to
"or" in Idaho Code 30-14-412 (a) and (b); and, (3) eliminating
transition language in Idaho Code 30-14-611 that is no longer
applicable to any situation.
FISCAL NOTE
No fiscal impact.
CONTACT
Name: Marilyn Chastain
Agency: Finance, Dept. of
Phone: 332-8070
STATEMENT OF PURPOSE/FISCAL NOTE S 1253