HB3479ham001 103RD GENERAL ASSEMBLY

Rep. Mark L. Walker

Filed: 3/21/2023

10300HB3479ham001 LRB103 29212 BMS 59307 a

AMENDMENT TO HOUSE BILL 3479

AMENDMENT NO. ______. Amend House Bill 3479 on page 14, line 8, after "(7)", by inserting "or (16)"; and

on page 23, line 2, by deleting "that"; and

on page 25, line 7, by deleting "next"; and

on page 26, line 21, by deleting "next"; and

on page 31, line 16, by replacing "FBI" with "Federal Bureau of Investigation"; and

on page 32, line 19, by replacing "Illinois" with "the Department"; and

on page 51, line 21, by replacing "Between" with "between"; and

on page 57, line 10, by replacing "after" with "of"; and

on page 58, by deleting lines 14 through 23; and

on page 58, line 24, by replacing "(c)" with "(b)"; and

on page 59, immediately below line 23, by inserting the following:

"(c) This Section does not apply to:

(1) money received for transmission subject to the federal Remittance Rule, 12 CFR Part 1005, Subpart B, as amended or recodified from time to time;

(2) money received for transmission pursuant to a written agreement between the licensee and payee to process payments for goods or services provided by the payee;

(3) payroll processing services; or

(4) as authorized in the Secretary's sole discretion."; and

by replacing line 10 on page 68 through line 6 on page 69 with the following:

"(i) the original letter of credit, including any amendments; and

(ii) A written statement from the beneficiary stating that any of the following events have occurred:

(I) the filing of a petition by or against the licensee under the United States Bankruptcy Code, 11 U.S.C. Sections 101 through 110, as amended or recodified from time to time, for bankruptcy or reorganization;

(II) the filing of a petition by or against the licensee for receivership, or the commencement of any other judicial or administrative proceeding for its dissolution or reorganization;

(III) the seizure of assets of a licensee by the Secretary pursuant to an emergency order issued in accordance with applicable law, on the basis of an action, violation, or condition that has caused or is likely to cause the insolvency of the licensee; or

(IV) the beneficiary has received notice of expiration or nonextension of a letter of credit and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee will maintain permissible investments in accordance with subsection (a) of Section 10-3 upon the expiration or nonextension of the letter of credit."; and

on page 74, line 7, by replacing "willful blindness" with "grossly negligent inattention to its legal obligations"; and

on page 78, immediately below line 11, by inserting the following: "Section 11-4. Orders to cease and desist; civil penalties.

(a) If the Secretary determines that a licensee, an authorized delegate, or any other person has engaged or is engaged in practices contrary to this Act, the rules adopted under this Act, or an order issued under this Act, the Secretary may issue an order requiring the licensee or authorized delegate to cease and desist from the violation. The order becomes effective upon service of it upon the licensee or authorized delegate.

(b) The Secretary may issue an order against a licensee to cease and desist from providing money transmission through an authorized delegate that is the subject of a separate order by the Secretary.

(c) The Secretary may, in addition to or without the issuance of a cease and desist order, assess a penalty of up to $1,000 against a licensee or other person for each violation of this Act, the rules adopted under this Act, or an order issued under this Act as set forth in Section 11-6. The issuance of an order under this Section shall not be a prerequisite to the taking of any action by the Secretary under this Section or any other Section of this Act.

(d) The Secretary shall issue a formal written notice of the cease and desist order, setting forth the specific reasons for the order and serve the licensee or the authorized delegate, either personally or by certified mail. Service by certified mail shall be deemed completed when the notice is deposited in United States mail."; and

on page 81, line 20, by replacing "they conflict" with "this Act conflicts"; and

on page 81, line 21, by replacing "establish" with "this Act establishes"; and

on page 84, by replacing lines 18 through 21 with the following:

""Confidential supervisory information" means information or documents obtained by employees, agents, or representatives of the Department in the course of any examination, investigation, audit, visit, registration, certification, review, licensing, or any other regulatory or supervisory activity pursuant to this Act, and any record prepared or obtained by the Department to the extent that the record summarizes or contains information derived from any report, document, or record described in this Act."; and

on page 86, immediately below line 11, by inserting the following:

"Digital asset business activity" does not include the development and dissemination of software in and of itself."; and

on page 95, lines 21 through 23, by replacing "Financial Protection Fund" each time it appears with "Digital Assets Regulation Fund"; and

on page 96, lines 5 and 6, by replacing "Financial Protection Fund" with "Digital Assets Regulation Fund"; and

on page 106, lines 3 through 5, by deleting ". The telephone line shall be operative 24 hours per day, Monday through Sunday"; and

on page 112, line 14, by replacing "State" with "state"; and

on page 112, by deleting lines 22 through 26; and

on page 121, line 3, after "Regulations,", by inserting "or a charter as a New York State limited purpose trust company with approval to conduct virtual currency business under the New York Banking Law,"; and

on page 121, line 3, after "license", by inserting "or approval"; and

on page 123, line 1, by replacing "State" with "state"; and

on page 131, line 5, by replacing "State" with "state"; and

on page 142, line 16, by replacing "Article" with "Section"; and

on page 147, line 15, after "under", by inserting "this"; and

on page 148, lines 12 and 13, by replacing "student loan servicing transaction" with "digital asset business activity"; and

on page 152, line 2, by replacing "State" with "state"; and

by replacing line 23 on page 153 through line 11 on page 154 with the following:

"(a) Confidential supervisory information shall, unless made a matter of public record, not be subject to disclosure under the Freedom of Information Act, and shall only be subject to disclosure pursuant to subpoena or court order as provided in subsection (e)."; and

on page 154, line 17, by replacing "State" with "state"; and

on page 154, by replacing line 20 through line 23 with "under this Act (1) shall not be subject to disclosure under the Freedom of Information Act, and (2) to the extent the records contain confidential supervisory information, shall only be subject to disclosure pursuant to subpoena or court order as provided in subsection (e)."; and

on page 155, lines 10 through 14, by replacing "State" each time it appears with "state"; and

on page 158, lines 6 and 7, by deleting "and any other financial law administered by the Department"; and

on page 159, line 10, by deleting "; applicability"; and

by deleting line 19 on page 159 through line 2 on page 160; and

on page 160, immediately below line 2, by inserting the following:

"Section 135-10. Transition period.

(a) A covered person engaging in digital asset business activity without a license under this Act shall not be considered in violation of Section 115-5 until January 1, 2025.

(b) A covered person engaging in digital asset business activity shall not be considered in violation of Sections 105-5, 105-10, and 105-20 until January 1, 2024.

(c) A covered exchange shall not be considered in violation of Section 105-15 until January 1, 2025.

(d) Notwithstanding the foregoing, the Department may adopt rules pursuant to this Act upon this Act becoming law with such rules not to take effect earlier than January 1, 2024."; and

on page 169, line 20, by replacing "Financial Protection Fund" with "Digital Assets Regulation Fund"; and

on page 197, line 12, by replacing "like" with "like".