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H0448...........................................................by BUSINESS
IDAHO ESCROW ACT - Amends and repeals existing law relating to the Idaho
Escrow Act to clarify grounds for application denial; to revise
requirements regarding trust fund accounts; to provide additional remedies;
and to repeal a provision relating to initial licensing and compliance.
02/01 House intro - 1st rdg - to printing
02/04 Rpt prt - to Bus
02/29 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/06 3rd rdg - PASSED - 56-10-4
AYES -- Anderson, Andrus, Bayer, Bell, Bilbao, Block, Bock, Boe,
Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez, Chew, Clark,
Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Henbest, Jaquet,
Killen, King, Kren, Labrador, Lake, LeFavour, Mathews, McGeachin,
Mortimer, Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Ringo,
Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02), Shirley,
Shively, Smith(30), Smith(24), Snodgrass, Stevenson, Thomas, Trail,
Wills, Wood(27), Mr. Speaker
NAYS -- Barrett, Harwood, Loertscher, Luker, Marriott, Nielsen,
Shepherd(08), Thayn, Vander Woude, Wood(35)
Absent and excused -- Bedke, Black, Henderson, Moyle
Floor Sponsor - Crane
Title apvd - to Senate
03/07 Senate intro - 1st rdg - to Com/HuRes
03/19 Rpt out - rec d/p - to 2nd rdg
03/20 2nd rdg - to 3rd rdg
Rls susp - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, 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 -- None
Floor Sponsor - Stegner
Title apvd - to House
03/21 To enrol - Rpt enrol - Sp signed
03/24 Pres signed
03/25 To Governor
03/31 Governor signed
Session Law Chapter 311
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 448 BY BUSINESS COMMITTEE 1 AN ACT 2 RELATING TO THE IDAHO ESCROW ACT; AMENDING SECTION 30-907, IDAHO CODE, TO 3 CLARIFY GROUNDS FOR LICENSE APPLICATION DENIAL; AMENDING SECTION 30-914, 4 IDAHO CODE, TO REVISE REQUIREMENTS REGARDING TRUST FUND ACCOUNTS; AMENDING 5 SECTION 30-920, IDAHO CODE, TO REVISE REMEDIES; AND REPEALING SECTION 6 30-935, IDAHO CODE, RELATING TO INITIAL LICENSING AND COMPLIANCE. 7 Be It Enacted by the Legislature of the State of Idaho: 8 SECTION 1. That Section 30-907, Idaho Code, be, and the same is hereby 9 amended to read as follows: 10 30-907. DIRECTOR'S ISSUANCE OR DENIAL OF LICENSE. (1) The director shall 11 receive and act upon all applications for licenses to engage in business as an 12 escrow agency under this chapter. If the director finds that all requirements 13 of statute and rule have been met and all applicable fees paid, and the appli- 14 cant is not otherwise unqualified for licensure, the director shall issue a 15 license to the applicant. 16 (2) An application for a license as an escrow agency shall be in writing 17 and filed with the director in such form as is prescribed by the director, 18 shall include such information as the director may reasonably require, and 19 shall be verified on oath by the applicant. Such information shall be updated 20 and filed with the director as necessary to keep the information current. The 21 application for licensure shall be accompanied by an application fee of three 22 hundred fifty dollars ($350). When an application for licensure is denied or 23 withdrawn, the director shall retain all fees paid by the applicant. 24 (3) An application for an escrow agency license under this chapter may be 25 denied if the director finds that: 26 (a) The escrow agency's business was or will be formed for any business 27 other than legitimate escrow services, or proposes to use a name that is 28 misleading or in conflict with the name of an existing licensee; 29 (b) Any incorporator, officer, director, member, general partner, 30 employee or agent of the escrow agency applicant has been: 31 (i) Convicted of, or received a withheld judgment for, any felony; 32or a misdemeanor involving dishonesty or moral turpitude;or 33 (ii) Convicted of, or received a withheld judgment for, a misde- 34 meanor involving dishonesty or moral turpitude; or 35 (iii) Committed any crime or act involving dishonesty, fraud or 36 deceit, which crime or act is substantially related to the qualifica- 37 tions, functions or duties of a person engaged in an escrow business; 38 (c) There is no natural person possessing a minimum of three (3) years of 39 supervisory experience in relation to an escrow business supervising each 40 escrow agency office; 41 (d) The applicant or any officer, director, member, general partner, 42 employee or agent of the applicant has demonstrated lack of fitness to 43 transact escrow business; 2 1 (e) The applicant has made any false statement of a material fact in the 2 application for a license; or 3 (f) The applicant, any officer, director, member, general partner or any 4 person owning or controlling, directly or indirectly, ten percent (10%) or 5 more of the outstanding equity securities of the applicant has violated 6 any provision of this chapter or rules promulgated thereunder, or any sim- 7 ilar regulatory scheme in this state or in any foreign jurisdiction. 8 SECTION 2. That Section 30-914, Idaho Code, be, and the same is hereby 9 amended to read as follows: 10 30-914. ACCOUNTS TO BE MAINTAINED -- RECORDS OPEN TO INSPECTION -- RETEN- 11 TION OF RECORDS -- TRUST ACCOUNT -- INTEREST ON ESCROW ACCOUNTS. (1) Each 12 licensee shall maintain sufficient books, accounts and records readily acces- 13 sible to the department for the department to determine at any time the 14 licensee's financial condition, what duties and responsibilities the licensee 15 has undertaken to perform and whether it is properly performing all such 16 duties, and any other information considered necessary by the director to 17 determine whether the licensee is operating in a safe, competent and lawful 18 manner. The books, records and accounts shall be maintained in accordance with 19 generally accepted accounting principles and sound business practice. 20 (2) For each individual escrow account, the licensee shall maintain the 21 escrow agreement and all amendments, all instructions affecting the agreement, 22 all related correspondence, and an individual ledger reflecting all activity 23 pertinent to that account. 24 (3) Each licensee shall continuously maintain the following general 25 accounts: 26 (a) A general ledger reflecting assets, liabilities, income, expenses and 27 equity accounts; 28 (b) An escrow liability control ledger for all escrow accounts; 29 (c) A cash receipts and disbursements journal; and 30 (d) Copies of all receipts and disbursements used as a medium of posting 31 to individual escrow accounts. 32 (4) (a) Every licensee shall keep a separate escrow trust fund account 33 established at a financial institutionlocated in Idahoapproved by the 34 director, in which shall be kept separate, distinct and apart and segre- 35 gated from the licensee's own funds, all funds or moneys of clients which 36 are being held in trust by the licensee pending the closing of an escrow 37 transaction or the full performance of the escrow agreement. All trust 38 funds shall be deposited not later than the first banking day following 39 receipt thereof. Such funds, when deposited, shall be designated as 40 "escrow accounts" or given some other appropriate designation indicating 41 that the funds are not the funds of the licensee. 42 (b) Every licensee shall maintain all other assets or property received 43 pursuant to an escrow in accordance with a written escrow agreement in a 44 manner which will reasonably preserve and protect the property from loss, 45 theft or damage, and which will otherwise comply with all duties and 46 responsibilities of a fiduciary or bailee generally. 47 (5) The records referenced in this section shall be reconciled at least 48 monthly. 49 (6) All records referenced in this section shall be maintained by the 50 licensee for seven (7) years following the close of each account. 51 (7) Any interest received on funds deposited with an escrow agency in 52 connection with an escrow must be paid over to the depositing party to the 53 escrow and may not be transferred to an account of the escrow agency. This 3 1 section shall not limit the right of the escrow agency to contract with the 2 depositing party with respect to the interest received on the deposits by 3 independent agreement. 4 SECTION 3. That Section 30-920, Idaho Code, be, and the same is hereby 5 amended to read as follows: 6 30-920. REMEDIES. (1) Whenever it appears to the director that any person 7 has engaged in or is about to engage in any act or practice constituting a 8 violation of any provision of this chapter or any rule or order thereunder, is 9 conducting its business in an unsafe and injurious manner, or that its capital 10 or assets are impaired, the director may in his discretion: 11 (a) Order the person to cease and desist from the violation of any provi- 12 sion of this chapter, rule or order thereunder; 13 (b) Issue an order revoking or suspending the licensee's escrow agency 14 license; 15 (c) After notice and the opportunity for a hearing, except as otherwise 16 provided in this chapter, issue an order imposing a civil penalty not to 17 exceed five thousand dollars ($5,000) for each violation of this chapter 18 or any rule or order thereunder; 19 (d) After notice and the opportunity for a hearing, issue an order of 20 restitution to any person for loss of money or property resulting from a 21 violation of this chapter; and 22 (e) Issue an order, pursuant to section 67-5247, Idaho Code, impounding 23 the accounts, including all operating and trust accounts, of any licensee 24 or person required to be licensed under this chapter. 25 (2) In addition to such remedies, the director may bring an action in the 26 fourth district court in and for Ada county or in such other court as the 27 director deems appropriate. Upon a proper showing, the court may: 28 (a)GrantIssue a permanent or temporary injunction, restraining order, 29followed by a preliminary injunction and a permanent injunction for the30department or receiver to exercise control of, operate or liquidate an31escrow agency's business in this state, or such other injunctive relief as32appropriate; andor declaratory judgment; 33 (b) Order other appropriate or ancillary relief, which may include: 34 (i) An asset freeze, accounting, writ of attachment, writ of gen- 35 eral or specific execution, and appointment of a receiver or conser- 36 vator, that may be the director, for the defendant or the defendant's 37 assets; 38 (ii) Ordering the director to take charge and control of a 39 defendant's property, including investment accounts and accounts in a 40 financial institution, rents and profits; to collect debts; and to 41 acquire and dispose of property; 42 (c) Issue an order of restitution to any person for loss of money or 43 property resulting from a violation of this chapter; and 44 (d) Except as otherwise provided by this chapter, impose a civil penalty 45 not to exceed five thousand dollars ($5,000) for each violation. 46 (3) The court may not require the director to post a bond. 47 SECTION 4. That Section 30-935, Idaho Code, be, and the same is hereby 48 repealed.
STATEMENT OF PURPOSE
RS 17327C1
The purpose of this bill is to amend the Idaho Escrow Act to
include consumer restitution and other civil remedies the
Department can seek against an Escrow agency in an action to
enforce the Act. This legislative idea would also provide that
escrow trust fund accounts may be established at financial
institutions approved by the director, in place of the current
requirement that the financial institution be "located" in
Idaho.
FISCAL NOTE
No fiscal impact
CONTACT
Name: Michael Larsen
Agency: Finance, Dept. of
Phone: (208) 332-8060
STATEMENT OF PURPOSE/FISCAL NOTE H 448