HB1272: HB1272 Banking and finance; licensing of payment stablecoin issuers; provisions

26 LC 62 0349/AP House Bill 1272 (AS PASSED HOUSE AND SENATE) By: Representatives Jones of the 25th, Hilton of the 48th, Douglas of the 78th, Williamson of the 112th, Mitchell of the 88th, and others A BILL TO BE ENTITLED AN ACT To amend Title 7 of the Official Code of Georgia Annotated, relating to banking and finance,1 s o a s t o p r o v i d e f o r u s e o f c e r t a i n t e r m s i n t h e a d v e r t i s e m e n t and place of business of2 licensed payment stablecoin issuers; to provide for licensing of payment stablecoin issuers;3 to provide for rules and regulations; to provide for applicatio n procedures; to provide for4 requirements for licensed payment stablecoin issuers; to provid e for license renewal; to5 provide for information sharing with certain entities; to prohi bit unlicensed persons from6 issuing payment stablecoin; to provide for the Department of Banking and Finance to request7 and receive conviction data; to provide for certain disqualifying conditions for licensure; to8 provide for procedures for denying applications; to provide for appeals; to provide for certain9 fees and assessments; to provide for certain certifications to the department; to require10 licensed payment stablecoin issuers to maintain certain reserves; to provide for procedures11 for failure by a licensed payment stablecoin issuer to meet cer tain reserves; to provide for12 certain capital requirements; to provide for reserves to be hel d in trust for consumers; to13 provide for certain disclosures; to provide for treatment as a financial institution; to provide14 for certain activities in which licensed payment stablecoin issuers can participate; to prohibit15 certain activities; to provide for annual financial statements; to provide for requirements for16 annual financial statements; to provide for examination and inv estigation of licensed17 payment stablecoin issuers; to provide for powers of the department relating to examination18 H. B. 1272 - 1 - 26 LC 62 0349/AP and investigation; to provide for third-party examination or in vestigation; to provide for19 payment of certain fees and costs of examination and investigation; to provide for suspension20 or revocation of a license and procedures therefor; to provide for cease and desist orders; to21 provide for removal of certain officers and members; to provide for a short title; to provide22 for legislative purpose and intent; to provide for definitions; to provide for related matters;23 to provide for an effective date and applicability; to repeal c onflicting laws; and for other24 purposes.25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:26 SECTION 1.27 Title 7 of the Official Code of Georgia Annotated, relating to banking and finance, is28 amended by revising subparagraphs (K) and (L) of and adding a n ew subparagraph to29 paragraph (21) of Code Section 7-1-4, relating to definitions r egarding purposes and30 preliminary matters, to read as follows:31 "(K) Federal credit unions for the purposes of Part 6 of Articl e 2 of this chapter,32 relating to deposits, safe-deposit agreements, and money received for transmission, and33 Article 8 of this chapter, relating to multiple-party accounts; and34 (L) Banks and credit unions chartered by states other than Geo rgia, national banks,35 federal credit unions, and federal savings and loan association s for the purposes of36 paragraph (1) of Code Section 7-1-650, provided that such insti tutions have federal37 deposit insurance; and38 (M) Licensed payment stablecoin issuers as defined by Code Sec tion 7-11-3 for the39 purpose of the following provisions:40 (i) Code Section 7-1-2, relating to findings of the General Assembly;41 (ii) Code Section 7-1-8, relating to supplementary principles of law;42 (iii) Code Section 7-1-37, relating to restrictions on officials and personnel;43 H. B. 1272 - 2 - 26 LC 62 0349/AP (iv) Code Section 7-1-70, relating to disclosure of information;44 (v) Code Section 7-1-90, relating to judicial review of department actions;45 (vi) Code Sections 7-1-113 and 7-1-114, relating to voluntary dissolution;46 (vii) Code Sections 7-1-150 through 7-1-225, relating to recei vership powers and47 procedures; and48 (viii) Code Sections 7-1-910 through 7-1-917, relating to reco rds and reports of49 currency transactions."50 SECTION 2.51 Said title is further amended in Article 2, relating to banks and trust companies, by revising52 paragraph (2) of subsection (c) of and adding a new subsection to Code Section 7-1-243,53 relating to restrictions on banking and trust nomenclature, to read as follows:54 "(b.1) Except as provided in subsection (c) of this Code section, no person or corporation,55 except a federal qualified payment stablecoin issuer or a licen sed payment stablecoin56 issuer, as such terms are defined in Code Section 7-11-3, shall use the words 'stablecoin'57 or 'payment stablecoin' upon any sign at its place of business or elsewhere, or in any form58 of marketing, including, but not limited to, its letterheads, billheads, blank checks, blank59 notes, receipts, certificates, circulars, advertisements, or an y other written or printed60 matter."61 "(2) Prohibit advertisement in media distributed in or transmit ted into this state by62 persons or corporations lawfully engaged in the banking, credit union, or trust business,63 or persons or corporations lawfully issuing payment stablecoins outside of this state; or"64 SECTION 3.65 Said title is further amended by adding a new chapter to read as follows:66 H. B. 1272 - 3 - 26 LC 62 0349/AP "CHAPTER 1167 7-11-1.68 This chapter shall be known and may be cited as the 'Georgia Payment Stablecoin Act.'69 7-11-2.70 (a) The purpose of this chapter is to enact Section 4(c) of th e Guiding and Establishing71 National Innovation for U.S. Stablecoins Act, Pub. L. No. 119-27.72 (b) It is the intent of the General Assembly that this chapter;73 (1) Provides for the regulation of payment stablecoins;74 (2) Enables financial service providers in this state the oppo rtunity to issue payment75 stablecoins;76 (3) Ensures the law of this state is substantially similar to the GENIUS Act; and77 (4) Empower the department to issue regulations to implement f ederal regulations78 promulgated to implement the GENIUS Act.79 7-11-3.80 As used in this chapter, the term:81 (1) 'Department' means the Department of Banking and Finance.82 (2) 'Digital asset' means any digital representation of value that is recorded on a83 cryptographically secured distributed ledger.84 (3) 'Distributed ledger' means technology in which data is shared across a network that85 creates a public digital ledger of verified transactions or inf ormation among network86 participants and cryptography is u sed to link the data to maint ain the integrity of the87 public ledger and execute other functions.88 H. B. 1272 - 4 - 26 LC 62 0349/AP (4) 'Federal qualified payment stablecoin issuer' means an entity approved by the federal89 Office of the Comptroller of the Currency pursuant to the GENIUS Act to issue payment90 stablecoins.91 (5) 'GENIUS Act' means the Guiding and Establishing National I nnovation for U.S.92 Stablecoins Act, Pub. L. No. 119-27, as amended.93 (6) 'Licensed payment stablecoin issuer' means a payment stabl ecoin issuer that is94 incorporated or organized under the laws of Georgia or the laws of a foreign country and95 that holds a license pursuant to this chapter.96 (7) 'Payment stablecoin' means a digital asset that:97 (A) Is designed or marketed to be used as a means of payment or settlement;98 (B) The issuer of which undertakes to convert, redeem, or repu rchase for a fixed99 amount of monetary value; and100 (C) Is not legal tender, a deposit, or a security registered under federal securities laws.101 (8) 'Payment stablecoin issuer' means a person that issues a payment stablecoin.102 (9) 'Permitted payment stablecoin issuer' means a subsidiary o f an insured depository103 institution that has been approved to issue payment stablecoins as described in Section 5104 of the GENIUS Act, a licensed payment stablecoin issuer, a fede ral qualified payment105 stablecoin issuer, or a state qualified payment stablecoin issuer.106 (10) 'Person' means an individual, corporation, limited liabil ity company, partnership,107 association, trust, or any other entity.108 (11) 'State payment stablecoin regulator' means a state agency of another state that has109 primary regulatory and supervisory authority in such state over payment stablecoin110 issuers.111 (12) 'State qualified payment stablecoin issuer' means a payment stablecoin issuer that112 is legally established under the laws of a state and approved to issue payment stablecoins113 by a state payment stablecoin regulator.114 (13)(A) 'Ultimate equitable owner' means a person that, directly or indirectly:115 H. B. 1272 - 5 - 26 LC 62 0349/AP (i) Owns a 10 percent or more interest in a corporation or any other form of business116 organization;117 (ii) Owns 10 percent or more of the voting shares of any corpo ration or any other118 form of business organization; or119 (iii) Exerts control over a corporation or any other form of b usiness organization,120 regardless of whether such person owns or controls such interest through one or more121 natural persons or one or more proxies, powers of attorney, nominees, corporations,122 associations, limited liability companies, partnerships, trusts, joint stock companies,123 or other entities or devices, or any combination thereof.124 (B) For purposes of determining ultimate equitable ownership b y an individual, the125 individual's interest shall be aggregated with the interest of any other immediate family126 member, including the individual's spouse, parents, children, s iblings, mothers- and127 fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and any other128 individual who shares such individual's home.129 7-11-4.130 (a) The department may make reasonable rules and regulations, not inconsistent with law,131 for:132 (1) The interpretation of this chapter, including, but not limited to, language to achieve133 substantial similarity with the provisions of the GENIUS Act; and134 (2) The enforcement of this chapter, including, but not limite d to, prescribing135 administrative fines for violations of this chapter and of any rules promulgated by the136 department pursuant to this chapter.137 (b) The department shall by rule prescribe application, licens ing, examination, and138 supervision fees or assessments.139 (c) The department shall:140 H. B. 1272 - 6 - 26 LC 62 0349/AP (1) Receive, review, and consider for approval applications from any person that seeks141 to issue payment stablecoins as a licensed payment stablecoin issuer;142 (2) Establish a process and framework for the licensing, regul ation, examination, and143 supervision of licensed payment stablecoin issuers;144 (3) Issue regulations consistent with the process and framework established pursuant to145 paragraph (2) of this subsection; and146 (4) Accept and process applications pursuant to the regulations issued in paragraph (3)147 of this subsection.148 (d) The department may initiate receivership proceedings again st a licensed payment149 stablecoin issuer pursuant to Code Section 7-1-150. If such proceedings are initiated, the150 department has the powers, authorities, and duties prescribed b y Code Sections 7-1-150151 through 7-1-225.152 (e) The department may initiate conservatorship proceedings against a licensed payment153 stablecoin issuer pursuant to Code Section 7-1-640. If such proceedings are initiated, the154 department has the powers, authorities, and duties prescribed b y Code Sections 7-1-640155 through 7-1-645.156 7-11-5.157 (a) The department may share information on an ongoing basis w i t h t h e B o a r d o f158 Governors of the Federal Reserve System with respect to license d payment stablecoin159 issuers, including a copy of the initial application and any accompanying documents.160 (b) The department may enter into a memorandum of understandin g with the Board of161 Governors of the Federal Reserve System under which the Board o f Governors of the162 Federal Reserve System may participate in the supervision, examination, and enforcement163 of the GENIUS Act with respect to licensed payment stablecoin issuers.164 H. B. 1272 - 7 - 26 LC 62 0349/AP 7-11–6.165 (a) It shall be unlawful for any person other than a permitted payment stablecoin issuer to166 issue a payment stablecoin in this state.167 (b) Beginning July 18, 2028, it shall be unlawful to offer or sell a payment stablecoin168 unless the payment stablecoin is issued by a licensed payment stablecoin issuer, a permitted169 payment stablecoin issuer, or a state qualified payment stablecoin issuer.170 (c) This Code section shall not apply to:171 (1) The direct transfer of digital assets between two individu als acting on their own172 behalf and for their own lawful purposes, without the involvement of an intermediary;173 (2) Any transaction involving the receipt of digital assets by an individual between an174 account owned by the individual in the United States and an acc ount owned by the175 individual abroad that are offered by the same parent company; or176 (3) Any transaction by means of a software or hardware wallet that facilitates an177 individual's own custody of digital assets.178 7-11-7.179 (a) A licensed payment stablecoin issuer shall at all times maintain an office in this state.180 (b) Within one year after the date it begins operations, a licensed payment stablecoin issuer181 shall have the minimum number of employees in this state as det ermined by the182 commissioner to assure the continued and substantive presence o f the licensed payment183 stablecoin issuer in this state for the purpose of conducting i ts corporate affairs and184 operations.185 7-11-8.186 (a) The department is authorized to:187 (1) Participate in the Nationwide Multistate Licensing System and Registry;188 H. B. 1272 - 8 - 26 LC 62 0349/AP (2) Enter into operating agreements and other contracts necessary for the department's189 participation in the Nationwide Multistate Licensing System and Registry;190 (3) Disclose or cause to be disclosed without liability, via t he Nationwide Multistate191 Licensing System and Registry, applicant and licensed payment s tablecoin issuer192 information, including, but not limited to, violations of this chapter and enforcement193 actions;194 (4) Request that the Nationwide Multistate Licensing System an d Registry adopt an195 appropriate privacy, data security, and security breach notification policy that is in full196 compliance with existing state and federal law; and197 (5) Establish and adopt, by rule or regulation, requirements f or participation by198 applicants and licensed payment stablecoin users in the Nationwide Multistate Licensing199 System and Registry upon the department's determination that ea ch requirement is200 consistent with both the public interest and purposes of this chapter.201 (b) The department shall enact rules and regulations establish ing a process whereby202 licensed payment stablecoin issuers may challenge information entered by the department203 on the Nationwide Multistate Licensing System and Registry.204 (c) Irrespective of its participation in the Nationwide Multis tate Licensing System and205 Registry, the department shall retain full and exclusive author ity over determinations of206 whether to grant, renew, suspend, or revoke licenses issued under this chapter. Nothing in207 this Code section shall be construed to reduce or otherwise limit such authority.208 (d) Information disclosed through the Nationwide Multistate Li censing System and209 Registry is deemed to be disclosed directly to the department a nd is subject to the210 provisions of Code Section 7-1-70. Such information shall not be disclosed to the public211 and shall remain privileged and confidential pursuant to Code Section 7-1-70.212 7-11-9.213 (a) Each applicant for a license under this chapter shall:214 H. B. 1272 - 9 - 26 LC 62 0349/AP (1) Submit an application in writing, which is made under oath and in such form as the215 department may prescribe;216 (2) Provide to the Nationwide Multistate Licensing System and Registry the following217 information:218 (A) The legal name and principle office address of the person applying for the license;219 (B) The name, residence, and business address of each director , ultimate equitable220 owner, and executive officer; and221 (C) The location where the initial registered office will be located in this state, if any;222 and223 (3) Submit such other data, financial statements, and pertinen t information as the224 department may require with respect to the applicant, its direc tors, trustees, officers,225 members, ultimate equitable owners, subsidiaries, or affiliates.226 (b) The application for license shall be filed with:227 (1) An investigation and supervision fee established by the department through rule or228 regulation which shall not be refundable but which, if the license is granted, shall satisfy229 the fee requirement for the first licensed year or the remaining part thereof;230 (2) Any other items required by this chapter; and231 (3) Other information as may be required by the department.232 (c) The department shall pay all fees received from licensed p ayment stablecoin issuers233 and applicants related to applications, licenses, and renewals to the Office of the State234 Treasurer; provided, however, that the department may net such fees to recover the cost of235 participation in the Nationwide Multistate Licensing System and Registry.236 (d) The department shall enact rules and regulations regarding the time frame by which237 all persons shall submit an original or renewal application for licensure through the238 Nationwide Multistate Licensing System and Registry.239 (e) A substantially complete application shall be evaluated by the department using the240 factors listed in Code Section 7-11-10.241 H. B. 1272 - 10 - 26 LC 62 0349/AP 7-11-10.242 (a) As used in this Code section, the term 'conviction data' m eans a record of a finding,243 verdict, or plea of guilty or nolo contendere with regard to any crime, regardless of whether244 an appeal of the conviction has been sought.245 (b) In evaluating initial applications received from prospecti ve licensed payment246 stablecoin issuers or renewal applications for licensed payment stablecoin issuers, the247 department shall consider various factors, including, but not limited to:248 (1) The ability of the applicant, based on financial condition and resources, to meet the249 requirements prescribed by this chapter;250 (2)(A) Whether an individual who has been convicted of a felon y offense involving251 conversion, theft, money laundering, financing of terrorism, bribery, dishonesty, false252 statements or omissions, perjury, extortion, breach of trust, f orgery, counterfeiting,253 embezzlement, insider trading, tax evasion, kickbacks, identity theft, cybercrime, cyber254 attacks, social engineering, fraud, including but not limited to check fraud, credit card255 fraud, mortgage fraud, medical fraud, corporate fraud, bank account fraud, point of sale256 fraud, currency fraud, bank fraud, and securities fraud, or a felony directly related to the257 financial services business is serving as an officer, director, or ultimate equitable owner258 of the applicant.259 (B)(i) For the purposes of this chapter, a person shall be dee med to have been260 convicted of a crime if such person has pleaded guilty or nolo contendere to a charge261 before a court or federal magistrate or have been found guilty by the decision or262 judgment of a court or federal magistrate or by the verdict of a jury, irrespective of263 the pronouncement of sentence or the suspension of such sentence. Additionally, a264 person shall be deemed to have been convicted of a crime regardless of whether first265 offender treatment without adjudication of guilt pursuant to the charge was entered266 or an adjudication or sentence was otherwise withheld or not entered on that charge.267 H. B. 1272 - 11 - 26 LC 62 0349/AP (ii) A person shall be deemed to have been convicted of a crime unless and until the268 plea of guilty or nolo contendere or the decision, judgment, or verdict has been set269 aside, reversed, or otherwise abrogated by lawful judicial process, or until probation,270 sentence, or both probation and sentence of a first offender wi thout adjudication of271 guilt have been successfully completed and documented or unless t h e p e r s o n272 convicted of the crime shall have received a pardon from the President of the United273 States or the governor or other pardoning authority in the juri sdiction where the274 conviction occurred.275 (C) The department shall be authorized to obtain conviction data with respect to any276 applicant or licensed payment stablecoin issuer; and any person who is a director,277 officer, or ultimate equitable owner of an applicant or license d payment stablecoin278 issuer. Criminal history record checks may be requested by the department through the279 Georgia Crime Information Center and the Federal Bureau of Inve stigation. The280 department shall have the authority to receive the results of s uch checks. The281 department may use the Nationwide Multistate Licensing System a nd Registry as a282 channeling agent for the submission of fingerprints to the Fede ral Bureau of283 Investigation and any governmental agency or entity authorized to receive such284 information for a state, national, and international criminal history background check285 and the receipt of such checks by the department. Fees required for a criminal history286 record check by the Georgia Crime Information Center or the Fed eral Bureau of287 Investigation shall be paid by the applicant or licensed payment stablecoin issuer.288 (D)(i) Upon request by the department, each applicant or licensed payment stablecoin289 issuer and each person who is a director, officer, or ultimate equitable owner of an290 applicant or licensed payment stablecoin issuer shall submit to the department291 fingerprints, the required records search fees, and such other information as may be292 required;293 H. B. 1272 - 12 - 26 LC 62 0349/AP (ii) Fees for background checks that the department administers shall be submitted294 to the department by applicants and licensed payment stablecoin issuers together with295 fingerprints, and the department is authorized to net such fees to recover any costs296 incurred by the department related to running the background checks;297 (iii) Upon receipt of fingerprints, fees, and other required i nformation from the298 department, the Georgia Crime Information Center shall promptly transmit299 fingerprints to the Federal Bureau of Investigation for a search of bureau records and300 an appropriate report and promptly conduct a search of its own records and records301 to which it has access;302 (iv) The Georgia Crime Information Center shall notify the department in writing of303 any derogatory finding, including, but not limited to, any conviction data regarding304 the fingerprint records check, or if there is no such finding;305 (v) All conviction data received by the department shall be used by the department306 for the exclusive purpose of carrying out the responsibilities of this chapter, shall not307 be a public record, shall be confidential, and shall not be disclosed to any other person308 or agency except to any person or agency which otherwise has a legal right to inspect309 such data; and310 (vi) All such records shall be maintained by the department pu rsuant to laws311 regarding such records and the rules and regulations of the Geo rgia Crime312 Information Center and the Federal Bureau of Investigation, as applicable;313 (3) The competence, experience, financial responsibility, character, integrity, and general314 fitness of the applicant and of the ultimate equitable owners, officers, and directors of the315 applicant, its subsidiaries, and parent company, including:316 (A) The record of those ultimate equitable owners, officers, a nd directors of317 compliance with laws and regulation; and318 H. B. 1272 - 13 - 26 LC 62 0349/AP (B) The ability of those ultimate equable owners, officers, and directors to fulfill any319 commitments to and any conditions imposed by the department in connection with the320 application at issue and any prior applications;321 (4) Whether the redemption policy of the applicant meets the s tandards under Code322 Section 7-11-21;323 (5) Any other factors established under federal law or regulat ions as applying to state324 qualified payment stablecoin users; and325 (6) Any other factors established by this chapter or regulatio n of the department326 implementing this chapter.327 7-11-11.328 (a) No later than 120 days after receiving a substantially com plete application, the329 department shall render a decision on the application.330 (b) An application shall be deemed substantially complete when all required fees have331 been paid, all portions of the application have been completed, and the department has332 sufficient information to determine whether the applicant satisfies the factors described in333 Code Section 7-11-10.334 (c) Not later than 30 days after receiving an application, the department shall notify the335 applicant as to whether the department considers the applicatio n to be substantially336 complete, and, if the application is not substantially complete, the additional information337 the applicant shall provide in order for the application to be considered substantially338 complete.339 (d) An application considered substantially complete remains s ubstantially complete340 unless there is a material change in circumstances that requires the department to treat the341 application as a new application.342 H. B. 1272 - 14 - 26 LC 62 0349/AP (e) If the department fails to render a decision on a substantially complete application with343 120 days of deeming such application substantially complete, th e application shall be344 deemed approved.345 7-11-12.346 (a) The department shall deny an application for licensure if:347 (1) The department determines that the applicant does not sati sfy the factors listed in348 Code Section 7-11-10 or that the applicant is operating or would operate in an unsafe or349 unsound manner;350 (2) Such applicant is subject to a final cease and desist order that has been issued within351 the preceding five years if such order was based on a violation of this chapter; or352 (3) Such applicant had a license issued pursuant to this chapt er revoked within the353 previous five years.354 (b) The issuance of a payment stablecoin on an open, public, or centralized network shall355 not be a valid ground for denial of an application.356 (c)(1) As used in this subsection, the term 'email address of record' means the email357 address that the applicant has designated as his or her email address for regulatory contact358 on file with the Nationwide Multistate Licensing System and Registry.359 (2) Notice of the department's intent to deny an application for a license shall be given360 to the applicant, sent by registered or certified mail or statu tory overnight delivery361 addressed to the principal place of business of such applicant or to the email address of362 record of such applicant. If a person refuses to accept service of the notice by registered363 or certified mail or statutory overnight delivery, the notice or denial shall be served by364 the commissioner, or the commissioner's authorized representati ve, under any other365 method of lawful service, and the person shall be personally liable to the commissioner366 for a sum equal to the actual costs incurred to serve the notic e or order. This liability367 shall be paid upon notice and demand by the commissioner or the commissioner's368 H. B. 1272 - 15 - 26 LC 62 0349/AP representative and shall be assessed and collected in the same manner as other fees or369 fines administered by the commissioner.370 (d) Within 30 days of the date of the notice of intention to d eny an application, the371 applicant may request in writing a hearing to contest the denia l. If a hearing is not372 requested within 30 days of such notice of intention, the department shall enter the denial.373 (e) If a timely request for a hearing pursuant to subsection ( d) of this Code section is374 received by the department, the department shall notice a time and place at which the375 applicant may appear for a hearing.376 (f) The department shall issue a final decision on the applica tion not later than 60 days377 after the date of the hearing.378 (g) The department shall state the ground upon which it denied the application and such379 denial shall be effective on the date of issuance. A copy of the denial shall be sent by mail380 addressed to the principal place of business of the applicant or licensed payment stablecoin381 user.382 (h) A decision by the department denying the application shall be subject to review in383 accordance with Chapter 13 of Title 50, the 'Georgia Administrative Procedure Act.'384 (i) Whenever the department initiates an administrative action against an applicant, the385 department may pursue such action to its conclusion despite the fact that an applicant may386 withdraw its application.387 (j) Judicial review of any final decision the department enter ed pursuant to the Code388 section shall be available solely in the superior court of the county of domicile of the389 department.390 (k) The denial of an application pursuant to this Code section shall not prohibit an391 applicant from filing a subsequent application.392 7-11-13.393 The department shall:394 H. B. 1272 - 16 - 26 LC 62 0349/AP (1) Notify the General Assembly upon receipt of the first application filed pursuant to395 this chapter; and396 (2) Annually report to the General Assembly on any substantially complete applications397 that have been pending for 180 days or more since the date the initial application was398 filed and for which the applicant has been informed that the ap plication remains399 incomplete.400 7-11-14.401 A permitted payment stablecoin issuer is not required to obtain any other license or charter402 to issue payment stablecoins or to offer, sell, or redeem such payment stablecoin. Issuance403 of payment stablecoin shall not be considered to be money transmission as defined by Code404 Section 7-1-680. To the extent a permitted payment stablecoin issuer that is not a licensed405 payment stablecoin issuer engages in activity that satisfies th e definition of money406 transmission other than the issuing of a payment stablecoin and offering, selling, or407 redeeming such stablecoin, such permitted payment stablecoin issuer will be required to408 obtain a license to conduct money transmission.409 7-11-15.410 (a) Except as otherwise provided for in this chapter, all lice nses issued pursuant to this411 chapter shall expire on December 31 of each year, and each application for renewal shall412 be made annually on or before December 1 of each year.413 (b) A license may be renewed by filing an application substantially conforming with the414 requirements of Code Section 7-11-9 and department rules and re gulations. No415 investigation fee shall be payable in connection with such renewal application; provided,416 however, that an annual license fee established by the department shall be paid with each417 renewal application and shall not be refunded or prorated.418 H. B. 1272 - 17 - 26 LC 62 0349/AP (c) The department is authorized to establish an annual assess ment to further defray the419 cost of supervision and such assessment shall not be refunded or prorated.420 7-11-16.421 (a) Not later than 180 days after approval of an application a nd at the time of filing a422 renewal application thereafter, each licensed payment stablecoin issuer shall submit to the423 department a certification that the issuer has implemented anti -money laundering and424 economic sanctions compliance programs that are reasonably desi gned to prevent the425 licensed payment stablecoin issuer from facilitating money laundering, in particular, money426 laundering for cartels and organizations designated as foreign terrorist organizations.427 (b) The department shall make such certifications available to the Secretary of the428 Treasury upon request.429 (c)(1) The department may revoke the license of a licensed pay ment stablecoin issuer430 that does not submit a certification pursuant to subsection (a) of this Code section.431 (2)(A) Any person that knowingly submits a false certification shall be subject to Code432 Section 16-10-20.433 (B) If a person knowingly violates this Code section, the depa rtment may refer the434 matter to the Attorney General or the United States Attorney General.435 7-11-17.436 (a) A licensed payment stablecoin issuer shall maintain identifiable reserves backing the437 outstanding payment stablecoins of the licensed payment stablecoin issuer on at least a one438 to one basis, which reserves are composed of:439 (1) United States coins and currency or money standing to the credit of an account with440 a federal reserve bank;441 (2) Funds held as demand deposits, or other deposits that may be withdrawn upon442 request at any time, or insured shares at an insured depository institution subject to443 H. B. 1272 - 18 - 26 LC 62 0349/AP limitations established by the Federal Deposit Insurance Corpor ation and the National444 Credit Union Administration, as applicable, to address safety and soundness risks of such445 insured depository institution;446 (3) Treasury bills, notes, or bonds:447 (A) With a remaining maturity of 93 days or less; or448 (B) Issued with a maturity of 93 days or less;449 (4) Money received under repurchase agreements, with the permitted payment stablecoin450 issuer acting as a seller of securities and with an overnight maturity, that are backed by451 Treasury bills with a maturity of 93 days or less;452 (5) Reverse repurchase agreements, with the permitted payment stablecoin issuer acting453 as a purchaser of securities a nd with an overnight maturity, th at are collateralized by454 Treasury notes, bills, or bonds on an overnight basis, subject to collateralization in line455 with standard market terms that are;456 (A) Tri-party;457 (B) Centrally cleared through a clearing agency registered wit h the Securities and458 Exchange Commission; or459 (C) Bilateral with a counterparty that the issuer has determin ed to be adequately460 credit-worthy even in the event of severe market stress;461 (6) Securities issued by an investment company registered unde r Section 8(a) of the462 federal Investment Company Act of 1940, or other registered government money market463 fund, and that are invested solely in underlying assets describ ed in paragraphs (1)464 through (5) of this subsection;465 (7) Any other similarly liquid federal government issued asset approved by the primary466 federal payment stablecoin regulator in consultation with the department; or467 (8) Any reserve described in paragraphs (1) through (3) or paragraphs (6) and (7) of this468 subsection in tokenized form, provided that such reserves comply with all applicable laws469 and regulations.470 H. B. 1272 - 19 - 26 LC 62 0349/AP (b)(1) Licensed payment stablecoin issuers shall publish the monthly composition of the471 issuer's reserves on the website of the issuer. Such publication shall include:472 (A) The total number of outstanding payment stablecoins issued by the issuer; and473 (B) The amount and composition of the reserves described in su bsection (a) of this474 Code section, including the average tenor and geographic location of custody of each475 category of reserve instrument.476 (2) Each month, the chief executive officer and the chief financial officer of a licensed477 payment stablecoin issuer shall submit a certification as to the accuracy of the monthly478 report to the department in such form and manner as required by the department.479 (3) Any person who submits a certification pursuant to paragraph (2) of this subsection480 knowing that such certification is false shall be subject to the same criminal penalties as481 those set forth in Code Section 16-10-20.482 (c) Reserves required under this Code section may not be pledg ed, rehypothecated, or483 reused by the licensed payment stablecoin issuer, either directly or indirectly, except for484 the purpose of:485 (1) Satisfying margin obligations in connection with investments in permitted reserves486 pursuant to paragraphs (4) and (5) of subsection (a) of this Code section.487 (2) Satisfying obligations associated with the use, receipt, o r provision of standard488 custodial services; or489 (3) Creating liquidity to meet reasonable expectations of requ ests to redeem payment490 stablecoins, such that reserves in the form of Treasury bills m ay be sold as purchase491 securities for repurchase agreements with a maturity date of 93 days or less, provided that492 either:493 (A) The repurchase agreements are cleared by a clearing agency registered with the494 Securities and Exchange Commission; or495 (B) The licensed payment stablecoin issuer receives the prior approval of the496 department.497 H. B. 1272 - 20 - 26 LC 62 0349/AP 7-11-18.498 (a) In the event a licensed payment stablecoin issuer fails to maintain identifiable reserves499 required by Code section 7-11-17, the licensed payment stablecoin issuer shall:500 (1) Calculate the mark-to-market value of all reserve assets;501 (2) If the mark-to-market value of all reserve assets is less than the amount needed for502 a one to one reserve requirement, the licensed payment stablecoin issuer shall:503 (A) Inject capital into the reserve holdings at an amount required to ensure the one to504 one reserve is maintained; or505 (B) Halt redemptions, hold all reserves to maturity, and distr ibute the reserve to506 payment stablecoin holders in accordance with the terms provided by the GENIUS Act.507 (b)(1) If a licensed payment stablecoin issuer fails to mainta in identifiable reserves508 required by Code Section 7-11-17 and the licensed payment stabl ecoin issuer fails to509 comply with subsection (a) of this Code section, the department may order the licensed510 payment stablecoin issuer to halt redemptions.511 (2) Failure of a licensed payment stablecoin issuer to halt redemptions when ordered by512 the department may result in a dditional acti on by the departmen t, including, but not513 limited to, license revocation or receivership.514 (c) A reserve is presumed to meet the one to one requirement o f the GENIUS Act if the515 payment stablecoin maintains its peg to the reference asset.516 (d) If a payment stablecoin's value falls below 100 percent of the reference asset, the517 licensed payment stablecoin issuer is required to comply with subsection (a) of this Code518 section in a timeframe that reduces the likelihood of a potential run on the reserve assets.519 7-11-19.520 The department shall establish by rule minimum capital requirem ents, liquidity and risk521 standards, governance standards, third-party risk management re quirements, and522 operational risk and information technology risk standards for applicants and licensed523 H. B. 1272 - 21 - 26 LC 62 0349/AP payment stablecoin issuers. Such standards shall meet or excee d the requirements of524 Section (4)(A) of the GENIUS Act and the related regulations promulgated by the federal525 payment stablecoin regulators.526 7-11-20.527 (a) Each licensed payment stablecoin issuer shall hold the res erves required by Code528 Section 7-11-17 in trust for the benefit of the holders of such payment stablecoins in the529 event of insolvency, the filing of a petition by or against the licensee under the United530 States Bankruptcy Code, the filing of a petition by or against the licensee for receivership,531 the commencement of any other judicial or administrative proceeding for its dissolution or532 reorganization, or in the event of an action by a creditor against the licensee who is not a533 beneficiary of the statutory trust.534 (b) No reserve impressed with a trust pursuant to this Code se ction shall be subject to535 attachment, levy of execution, or sequestration by order of any court, except for a536 beneficiary of the statutory trust.537 (c) A licensed payment stablecoin issuer and its officers shal l have a fiduciary duty to538 preserve and account for its reserves as contemplated by this Code section.539 7-11-21.540 (a) Each licensed payment stablecoin issuer shall publicly dis close such issuer's541 redemption policy.542 (b) A licensed payment stablecoin issuer's redemption policy shall, at a minimum:543 (1) Establish clear and conspicuous procedures for timely rede mption of outstanding544 payment stablecoins;545 (2) Publicly, clearly, and conspicuously disclose in plain lan guage all fees associated546 with purchasing or redeeming the payment stablecoins, provided that such fees can only547 be changed upon not less than seven days prior notice to consumers. Such notice shall548 H. B. 1272 - 22 - 26 LC 62 0349/AP provide that the consumer can redeem prior to the effective dat e of the change at the549 existing rate; and550 (3) Comply with this chapter, the GENIUS Act, and any applicab le state or federal551 regulations.552 7-11-22.553 (a) A licensed payment stablecoin issuer shall be treated as a financial institution for the554 purposes of the federal Bank Secrecy Act of 1970 and shall be subject to all federal laws555 applicable to a financial institution located in the United Sta tes relating to economic556 sanctions, prevention of money laundering, customer identificat ion, and due diligence,557 including, but not limited to:558 (1) Maintenance of an effective anti-money laundering program, which shall include559 appropriate risk assessments and designation of an officer to supervise the program;560 (2) Retention of appropriate records;561 (3) Monitoring and reporting of any suspicious transactions re levant to possible562 violations of laws or regulation;563 (4) Technical capabilities, policies, and procedures to block, freeze, and reject specific564 or impermissible transactions that violate federal or state laws, rules, or regulations;565 (5) Maintenance of an effective customer identification program, including identification566 and verification of account holders with the permitted payment stablecoin issuer,567 high-value transactions, and appropriate enhanced due diligence; and568 (6) Maintenance of effective economic sanctions compliance pro grams, which at a569 minimum shall include verification of sanctions lists consistent with federal law.570 (b) Licensed payment stablecoin issuers shall comply with the provisions of Code571 Sections 7-1-970 through 7-1-917.572 H. B. 1272 - 23 - 26 LC 62 0349/AP 7-11-23.573 (a) A licensed payment stablecoin issuer shall only:574 (1) Issue payment stablecoins;575 (2) Redeem payment stablecoins;576 (3) Manage related reserves, including purchasing, selling, and holding reserve assets or577 providing custodial services for reserve assets consistent with federal and state law;578 (4) Provide custodial or safekeeping services for payment stablecoins, required reserves,579 or private keys of payment stablecoins consistent with this chapter; and580 (5) Undertake other activities that directly support any of the activities listed in this Code581 section, or that are incidental t o such activities, with the ex press permission of the582 department; provided, however, that the claims of payment stablecoin holders are senior583 to any potential claims of nonpayment stablecoin creditors with respect to reserve assets.584 (b) A licensed payment stablecoin issuer that engages in other activities not authorized by585 this Code section may be subject to revocation or suspension of such license.586 7-11-24.587 A licensed payment stablecoin issuer shall not provide services to a customer on the588 condition that such customer obtain an additional paid product or service from the licensed589 payment stablecoin issuer or any of its subsidiaries, or on the condition that such customer590 agree not to obtain a product or service from a competitor.591 7-11-25.592 A licensed payment stablecoin issuer shall not:593 (1) Use any name or combination of terms that are:594 (A) Barred by the GENIUS Act;595 (B) Related to this state or the government of this state; or596 (C) Barred by Code Section 7-1-243 as a corporate name; and597 H. B. 1272 - 24 - 26 LC 62 0349/AP (2) Market a payment stablecoin in such a way that a reasonable person would perceive598 the payment stablecoin to be:599 (A) Legal tender, as described in 31 U.S.C. Section 5103;600 (B) Issued by the United States or by this state;601 (C) Guaranteed or approved by the government of the United States or the government602 of this state;603 (D) Insured or guaranteed by a governmental entity, including, but not limited to, by604 the Federal Deposit Insurance Corporation or the National Credi t Union605 Administration; or606 (E) Backed by deposits that are federally insured.607 7-11-26.608 (a) A licensed payment stablecoin issuer shall prepare, in acc ordance with generally609 accepted accounting principles, an annual financial statement w hich shall include the610 disclosure of any related part y transaction, as defined by such generally accepted611 accounting principles.612 (b) A registered public accounting firm acceptable to the department shall perform an audit613 of the annual financial statements. Such audit shall be conduc ted with all applicable614 auditing standards established by the Public Company Accounting Oversight Board,615 including those relating to auditor independence, internal cont rols, and related party616 transactions.617 (c) Each licensed payment stablecoin issuer shall submit such audited financial statements618 annually to the department.619 H. B. 1272 - 25 - 26 LC 62 0349/AP 7-11-27.620 No licensed payment stablecoin issuer shall pay the holder of any payment stablecoin any621 form of interest or yield, whether in cash, tokens, or other co nsideration, solely in622 connection with the holding, use, or retention of such payment stablecoin.623 7-11-28.624 Each licensed payment stablecoin issuer shall submit to the department an annual report625 listing:626 (1) The financial condition of the licensed payment stablecoin issuer;627 (2) The systems of the licensed payment stablecoin issuer for monitoring and controlling628 financial and operating risks;629 (3) Compliance by the licensed payment stablecoin issuer with this chapter; and630 (4) The compliance of the licensed payment stablecoin issuer with the requirements of631 the federal Bank Secrecy Act of 1970 and with laws authorizing the imposition of632 sanctions implemented by the federal Secretary of the Treasury.633 7-11-29.634 (a) The department shall investigate and examine a licensed payment stablecoin issuer in635 order to assess:636 (1) The nature of the operations and financial condition of th e licensed payment637 stablecoin issuer;638 (2) The financial, operational, technological, and other risks associated with the licensed639 payment stablecoin issuer that may pose a threat to the:640 (A) Safety and soundness of the licensed payment stablecoin issuer; or641 (B) The stability of the financial system of the United States or this state;642 (3) The systems of the licensed payment stablecoin issuer for monitoring and controlling643 the risks described in subsection (b) of this Code section; and644 H. B. 1272 - 26 - 26 LC 62 0349/AP (4) Compliance with state and federal laws and regulations.645 (b)(1) The department shall examine or investigate all license d payment stablecoin646 issuers at least once each year and may examine or investigate any licensed payment647 stablecoin issuer more frequently at any time it deems such action necessary or desirable.648 (2) At least annually, such examination or investigation shall consist of a comprehensive649 review of accounts, records, and affairs of the licensed payment stablecoin issuer.650 (3) To aid in its examination or investigation of a licensed payment stablecoin issuer, the651 department may conduct an examination or investigation of the l icensed payment652 stablecoin issuer's holding companies, subsidiaries, affiliates , or support organizations653 provide material services to the licensed payment stablecoin issuer or that the failure of654 such entities would have a material impact on the services prov ided by the licensed655 payment stablecoin issuer.656 (c) Notwithstanding subsections (b) and (d) of this Code secti on, the department may,657 consistent with the purposes of this chapter and the rules enacted pursuant to this chapter,658 alter the examination frequency and scope in order to assure th at appropriate time and659 attention are devoted to the supervision of troubled entities regulated by the department or660 to minimize the examination burden on well-managed licensed payment stablecoin issuers661 which have consistently been operated with safe and sound practices.662 (d) In addition to any other authority set forth under this chapter, the department shall be663 authorized to conduct investigations and examinations of applic ants, licensed payment664 stablecoin issuers, ultimate equitable owners, officers, and directors as follows:665 (1) The department shall have the authority to access, receive , and use any books,666 accounts, records, files, documents, information, or evidence, including, but not limited667 to:668 (A) Criminal, civil, and administrative history information, including nonconviction669 data;670 H. B. 1272 - 27 - 26 LC 62 0349/AP (B) Personal history and experience information, including, bu t not limited to,671 independent credit reports;672 (C) For an individual who has resided outside of the United St ates, an international673 investigative background report prepared by a competent indepen dent search firm,674 which shall include at a minimum comprehensive credit, criminal, employment, medial,675 and financial services regulatory history information; and676 (D) Any other documents, information, or evidence the department deems relevant to677 the inquiry, examination, or investigation, regardless of the l ocation, possession,678 control, or custody of such documents, information, or evidence;679 (2) Each licensed payment stablecoin issuer or person subject to this chapter shall make680 available to the department, upon request, any books and records relating to the issuance681 of payment stablecoins;682 (3) No licensed payment stablecoin issuer or person subject to investigation or683 examination pursuant to this chapter shall knowingly withhold, abstract, remove,684 mutilate, destroy, or secrete any books, records, documents, fi les, computer records,685 evidence, or other information; and686 (4) To carry out the purposes of this Code section, the department may:687 (A) Enter into agreements or relationships with other governme nt officials or688 regulatory associations in order to improve efficiencies and reduce regulatory burden689 by sharing resources, documents, records, information, or evide nce or by utilizing690 standardized or uniform methods or procedures;691 (B) Accept and rely on examination or investigation reports made by other government692 officials made within or outside this state;693 (C) Accept audit reports or portions of audit reports made by an independent certified694 public accountant on behalf of the licensed payment stablecoin issuer or person subject695 to this chapter covering the same general subject matter as the audit and may696 H. B. 1272 - 28 - 26 LC 62 0349/AP incorporate the audit report in the report of examination, repo rt of investigation, or697 other writing of the department; and698 (D) Use, hire, contract, or employ analytical systems, methods, or software.699 (e)(1) Each licensed payment stablecoin issuer shall pay an ex amination fee as700 established by the rules and regulations of the department to c over the costs of an701 examination or investigation.702 (2) To aid the department in examining or investigating a licensed payment stablecoin703 issuer or its holding companies, affiliates, or subsidiaries, t he department may retain a704 third-party expert to assist with such examination or investigation. The third-party expert705 shall analyze the accounts, records, affairs, systems, data, or information requested by the706 department and provide results to the department.707 (3) Any fees or costs associated with a third-party expert retained to aid the department708 with the examination or investigation of the licensed payment stablecoin issuer shall be709 paid by the licensed payment stablecoin issuer.710 (f) If a department enters into an agreement with a third-part y expert for the purpose of711 aiding the department in evaluating a payment stablecoin issuer application or examining712 or investigating a licensed payment stablecoin issuer, the agreement may provide:713 (1) All fees and costs incurred by the third-party expert shall be paid by the applicant or714 licensed payment stablecoin issuer;715 (2) The fees may vary depending on the services provided by such third-party expert but716 as set forth in a general fee schedule;717 (3) The purpose of the agreement is to aid the department in determining if the applicant718 or licensed payment stablecoin issuer, its holding companies, and affiliates have complied719 with this chapter, any rules and regulations promulgated pursuant to this chapter, and are720 operating in a safe and sound manner;721 H. B. 1272 - 29 - 26 LC 62 0349/AP (4) The department shall direct the focus and scope of such third-party expert's analysis,722 including, but not limited to, the accounts, records, affairs, data, or information to be723 reviewed;724 (5) The third-party expert shall produce at least one detailed report to the department725 which shall reach conclusions about its review and provide support for any conclusions726 in the report;727 (6) The third-party expert shall have access to all of the rec ords of the applicant or728 licensed payment stablecoin issuer, its holding companies, subsidiaries, and affiliates that729 the department may review;730 (7) All information reviewed by the third-party expert shall b e confidential and not731 subject to disclosure other than to the department or as may otherwise be required by law;732 and733 (8) All services shall be performed in accordance with applicable professional standards.734 (g) The department may:735 (1) Make such public or private examination or investigation w ithin or outside of this736 state as it deems necessary to determine whether any person has violated this chapter, any737 rule or regulation, or order issued under this chapter, to aid in the enforcement of this738 chapter, or to assist in prescribing rules and regulations pursuant to this chapter;739 (2) Require or permit any person to file a statement in writing, under oath or otherwise,740 as to all the facts and circumstances concerning the matter to be investigated;741 (3) Request any financial data from an applicant or licensed payment stablecoin issuer;742 (4) Conduct an on-site examination of a licensed payment stabl ecoin issuer at any743 location of the licensed payment stablecoin issuer without prior notice to such licensed744 payment stablecoin issuer. The licensed payment stablecoin iss uer shall pay all745 reasonably incurred costs of the examination. The department i s authorized to net its746 out-of-state travel expenses incurred as a result of an examination or investigation of a747 H. B. 1272 - 30 - 26 LC 62 0349/AP licensed payment stablecoin issuer against payment from the licensed payment stablecoin748 issuer.749 (h) For the purpose of conducting any examination or investigation pursuant to this Code750 section, the department shall have the power to:751 (1) Administer oaths;752 (2) Call any party to testify under oath in the course of an examination or investigation;753 (3) Require attendance of witnesses;754 (4) Require the production of books, accounts, records, documents, and papers; and755 (5) Issue subpoenas for witnesses for the production of documentary evidence for such756 purposes. Such subpoenas may be served by certified mail or st atutory overnight757 delivery, return receipt requested, to the addressee's business mailing address or by758 examiners appointed by the department, or shall be directed for service to the sheriff of759 the county where such witness resides or is found or where the person in custody of any760 books, accounts, records, documents, or papers resides or is found.761 (i) The department may issue and apply to enforce subpoenas in this state at the request762 of any government agency, department, organization, or entity r egulating payment763 stablecoins in another state if the activities constituting the alleged violation for which the764 information is sought would be a violation of this chapter if t he alleged activities had765 occurred in this state.766 (j) In case of refusal to obey a subpoena issued under this chapter to any person, a court767 of appropriate jurisdiction, upon application by the department, may issue to the person an768 order requiring him or her to appear before the court to show cause why he or she should769 not be held in contempt for refusal to obey the subpoena. Failure to obey a subpoena may770 be punished as contempt by the court.771 (k)(1) Examinations and investigations conducted pursuant to t his chapter and772 information obtained by the department in the course of conduct ing its duties pursuant773 H. B. 1272 - 31 - 26 LC 62 0349/AP to this chapter are confidential, except as provided in this su bsection, pursuant to the774 provisions of Code Section 7-1-70.775 (2) In addition to the exceptions set forth in subsection (b) of Code Section 7-1-70, the776 department is authorized to share information obtained under this chapter with other state777 and federal regulatory agencies or law enforcement authorities. T h e s a f e g u a r d s t o778 confidentiality already in place within such agencies or authorities shall be deemed to be779 adequate for the purposes of this paragraph.780 (3) The commissioner, or a designated examiner, may disclose s uch information as is781 necessary to conduct a civil or administrative investigation or proceeding.782 (4) Information contained in the records of the department tha t is not confidential and783 may be made available to the public either on the department's website, upon receipt of784 a written request, or in the Nationwide Multistate Licensing System and Registry shall785 include:786 (A) The name, business address, telephone number, facsimile nu mber, and unique787 identifier of a licensed payment stablecoin issuer;788 (B) The names and titles of the principal officers or directors;789 (C) The name of the owner or owners;790 (D) The business address of a licensed payment stablecoin issuer's registered agent for791 service;792 (E) Information concerning any violation of this chapter, any rule or regulation, or any793 order issued pursuant to this chapter, provided that the inform ation is derived from a794 final decision of the department; and795 (F) Imposition of an administrative fine or penalty pursuant to this chapter.796 (l) The authority to conduct an examination or investigation as provided for in this Code797 section shall remain in effect whether a licensed payment stablecoin issuer or person acts798 or claims to act pursuant to any licensing or registration law of this state or claims to act799 without such authority.800 H. B. 1272 - 32 - 26 LC 62 0349/AP (m) In the absence of malice, fraud, or bad faith, a person is not subject to civil liability801 arising out of furnishing the department with any information required by this chapter or802 required by the department under the authority granted in this chapter. No civil cause of803 action of any nature shall arise against a person for any information:804 (1) Relating to suspected prohibited conduct furnished to or r eceived from law805 enforcement officials, their agents, or employees or to or from other regulatory licensing806 authorities;807 (2) Furnished to or received from other persons subject to the provisions of this chapter;808 or809 (3) Furnished in complaints filed with the department.810 (n) The commissioner or any employee or agent of the department shall not be subject to811 civil liability, and no civil cause of action of any nature shall exist against such individuals812 arising out of the performance of activities or duties pursuant to this chapter or by813 publication of any report of activities pursuant to this Code section.814 7-11-30.815 (a)(1) Except as provided in this Code section, no person or group of persons acting in816 concert shall become an ultimate equitable owner of any license d payment stablecoin817 issuer through acquisition or other change in control as a resu lt of such acquisition or818 other change in control unless such person or group of persons acting in concert has first819 received approval for such acquisition, change in control, or designation as an executive820 officer from the department.821 (2) To obtain such approval, such person or group of persons acting in concert shall:822 (A) File an application with the department in such form as th e department may823 prescribe from time to time;824 (B) Provide such other information as the department may requi re concerning the825 financial responsibility, background, experience, and activitie s of the applicant, its826 H. B. 1272 - 33 - 26 LC 62 0349/AP directors and executive officers, if a corporation, and its members, if applicable, and of827 any proposed new directors, executive officers, members, or ultimate equitable owners828 of the licensed payment stablecoin issuer; and829 (C) Pay such application fee as the department may prescribe.830 (b) The department may prescribe additional requirements for t he approval of such831 acquisition, change in control, or designation as an executive officer as a result of such832 acquisition or other change in control through rules and regulations.833 (c) If the application is denied, the department shall notify the applicant in writing of the834 denial and the reasons for such denial.835 7-11-31.836 (a)(1) The department is authorized to suspend or revoke a license issued pursuant to this837 chapter if it finds that any grounds exist that would require o r warrant the denial of an838 application for the issuance of a license.839 (2) The department may also suspend or revoke a license if it finds the licensed payment840 stablecoin issuer has:841 (A) Violated:842 (i) This chapter or any regulation or decision issued pursuant to this chapter;843 (ii) The GENIUS Act; or844 (iii) Any condition imposed by the department in writing;845 (B) Committed any fraud or engaged in any dishonest activities;846 (C) Made a false statement in an application or failed to give a true reply to a question847 in an application or renewal;848 (D) Demonstrated incompetency or untrustworthiness to act as a licensed payment849 stablecoin issuer;850 H. B. 1272 - 34 - 26 LC 62 0349/AP (E) Failed to pay a judgment recovered in any court by a claim ant or creditor in an851 action arising out of the licensed payment stablecoin issuer's business in this state852 within 30 days after such judgment becomes final;853 (F) Purposefully withheld, deleted, destroyed, or altered information requested by an854 examiner of the department or made false statements or misrepre sentations to the855 department;856 (G) Operated in an unsafe or unsound manner; or857 (H) Made a general assignment for the benefit of its creditors, suspended payment of858 its obligations, or is insolvent.859 (b) The department may revoke a license if the licensed paymen t stablecoin issuer is860 subject to a final cease and desist order that has been issued within the five proceeding861 years if such order was based on a violation of this chapter.862 (c)(1) As used in this subsection, the term 'email address of record' means the email863 address that the licensed payment stablecoin issuer designated as the email address for864 regulatory contact on file with the Nationwide Multistate Licensing System and Registry.865 (2) Notice of the department's intention to suspend or revoke a license shall be given to866 the licensed payment stablecoin issuer, sent by registered or certified main or statutory867 overnight delivery addressed to the principal place of business of such licensed payment868 stablecoin issuer or sent to the email address of record of the licensed payment stablecoin869 issuer.870 (3) If a person refuses to accept service of the notice of intention to suspend or revoke871 by certified mail or statutory overnight delivery, the notice s hall be served by the872 commissioner or the commissioner's authorized representative pu rsuant to any other873 method of lawful service, and the person shall be personally liable to the commissioner874 for a sum equal to the actual costs incurred to serve the notice. This liability shall be paid875 upon notice and demand by the commissioner or commissioner's representative and shall876 H. B. 1272 - 35 - 26 LC 62 0349/AP be assessed and collected in the same manner as other fees or fines administered by the877 commissioner.878 (d) Within 30 days of the date of notice of intention to suspe nd or revoke, the licensed879 payment stablecoin issuer may request a hearing to contest the order in writing. If a880 hearing is not requested within 30 days of such notice of inten tion, the department shall881 enter a final decision on the suspension or revocation of the license.882 (e) If the department receives a timely request for a hearing, the department shall notice883 a time and place at which the licensed payment stablecoin issuer may appear for a hearing884 within 30 days of the receipt of such request.885 (f) Not later than 60 days after the date of the hearing, the department shall issue a final886 decision on the suspension or revocation.887 (g) Any final decision of the department suspending or revoking a license shall state the888 grounds upon which such suspension or revocation is based and shall be effective on the889 date of issuance. A copy of the final decision shall be forwar ded promptly by mail890 addressed to the principal place of business of the licensed payment stablecoin issuer, the891 authorized agent of said issuer, or the licensed payment stablecoin issuer.892 (h) Any decision by the department suspending or revoking a license shall be subject to893 review pursuant to Chapter 13 of Title 50, the 'Georgia Administrative Procedure Act.'894 (i) Judicial review of any final decision of the department entered pursuant to this chapter895 shall be available solely in the superior court of the county of domicile of the department.896 (j) Whenever the department initiates an administrative action against a licensed payment897 stablecoin issuer, the department may pursue such action to its conclusion even if a898 licensed payment stablecoin issuer withdraws or surrenders its license.899 7-11-32.900 (a) The department is authorized to issue an order requiring a licensed payment stablecoin901 issuer to cease and desist immediately from unauthorized activi ties whenever it shall902 H. B. 1272 - 36 - 26 LC 62 0349/AP appear to the department that the licensed payment stablecoin issuer has violated any law903 of this state, any applicable federal law or regulation, or any decision, order, or regulation904 of the department. Such cease and desist order shall be final 20 days after it is issued,905 unless the licensed payment stablecoin issuer submits a written request for a hearing within906 such 20 day period.907 (b) The department may issue an order requiring a person to cease and desist immediately908 from unauthorized activities whenever it shall appear to the department that the person has909 engaged in activities requiring a license pursuant to this chapter and such person is not a910 licensed or permitted stablecoin issuer. Such cease and desist order shall be final 30 days911 from the date of issuance, and there shall be no opportunity for an administrative hearing. 912 If the proper license or authority to engage in such activities is obtained and provided to913 the department within the 30 day period, such order shall be rescinded by the department.914 (c) Any cease and desist order issued pursuant to this Code section shall be in writing, sent915 by registered or certified mail or statutory overnight delivery, and addressed to the person's916 business address or, if the person is an individual, to the individual's personal address.917 (d) Any hearing authorized under this Code section shall be co nducted in pursuant to918 Chapter 13 of Title 50, the 'Georgia Administrative Procedure Act.'919 (e) Judicial review of any final order entered by the department pursuant to this chapter920 shall be available solely in the superior court of the county of domicile of the department.921 7-11-33.922 (a) Whenever a person fails to comply with the terms of a fina l decision or order of the923 department issued pursuant to this chapter, the department, through the Attorney General924 and upon three days' notice to such person, petition the superior court where the person is925 domiciled for an order directing such person to obey the final decision or order within a926 period of time as shall be fixed by the court. Upon the filing of a petition, the court shall927 allow a motion to show cause as to why it should not be granted. After a hearing on the928 H. B. 1272 - 37 - 26 LC 62 0349/AP merits or after a failure of such person to appear when ordered , the court shall grant the929 petition of the department upon a finding that the order of the department was properly930 issued.931 (b)(1) Any person who violates the terms of any final decision or order issued pursuant932 to this chapter shall be liable for a civil penalty not to exceed $1,000.00. Each day the933 violation continues shall constitute a separate offense.934 (2) In determining the amount of the penalty, the department shall take into account:935 (A) The appropriateness of the penalty relative to the financi al resources of such936 person;937 (B) Good faith efforts of such person to comply with the order;938 (C) The severity of the violation;939 (D) The history of previous violations by such person; and940 (E) Any other factors or circumstances that contributed to the violation.941 (3) The department is authorized to compromise, modify, or refund any penalty which942 has been imposed pursuant to this Code section.943 (4) Any person penalized pursuant to this subsection shall hav e the right to request a944 hearing within ten days of notification of such penalty has been served upon such person. 945 Otherwise, such penalty shall be considered final except as to judicial review as provided946 in Code Section 7-1-90.947 7-11-34.948 The department shall be authorized to remove a director, office r, employee, ultimate949 equitable owner, or controlling stockholder of a licensed payment stablecoin issuer from950 the position or office he or she holds, and prohibit further participation in the affairs of the951 licensed payment stablecoin issuer and any entity supervised, licensed, or registered with952 the department if the department determines that:953 H. B. 1272 - 38 - 26 LC 62 0349/AP (1) The director, officer, employee, or controlling stockholder has knowingly committed954 a violation or attempted a violation of this chapter, the GENIUS Act, or any regulation,955 decision, or order issued pursuant to this chapter; or956 (2) The director, officer, employee, or controlling stockholder has knowingly committed957 a violation of a federal or state law or regulation, including, but not limited to,958 Subchapter II of Chapter 53 of Title 31 of the United States Code."959 SECTION 4.960 Subject to appropriations by the General Assembly, this Act shall become effective upon the961 earlier of:962 (1) January 18, 2027; or963 (2) 120 days after the issuance of final implementing regulations for the GENIUS Act.964 SECTION 5.965 All laws and parts of laws in conflict with this Act are repealed.966 H. B. 1272 - 39 -