Report Title:

Relating to Fees Paid to the Division of Financial Institutions

Description:

Provides a supplemental source of income to complement revenue received from the franchise tax to sufficiently fund the Division of Financial Institutions.

THE SENATE

S.B. NO.

2735

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO FEES PAID TO THE DIVISION OF FINANCIAL INSTITUTIONS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 412, Hawaii Revised Statutes, is amended by adding to part I of article 2 a new section to be appropriately designated and to read as follows:

"§412:2- Assessments; collection. (a) The commissioner may charge and collect assessments from each financial institution or financial institution holding company under the supervision of the commissioner, which shall be calculated at a rate that may vary annually but shall not exceed the maximum rates provided below for each type of financial institution.

(1) For each bank, savings bank, savings and loan association, foreign bank, depository financial services loan company, and out-of-state state financial institution with a branch under the supervision of the commissioner, a semiannual assessment payable on July 1 and January 1 of each fiscal year, computed upon the financial institution's total assets shown on its unaudited financial statement as of the preceding December 31 and June 30, respectively, as follows:

MAXIMUM SEMIANNUAL ASSESSMENT FEE

TOTAL ASSETS

(in millions)

ASSESSMENT

Over

But Not Over

This Amount

(in dollars)

Plus

Of Excess Over (in millions)

0

2

0

0.001605718

0

2

20

3,211

0.000200717

2

20

100

6,824

0.000160572

20

100

200

19,670

0.000104372

100

200

1,000

30,107

0.000088314

200

1,000

2,000

100,758

0.000072257

1,000

2,000

6,000

173,015

0.000064230

2,000

6,000

20,000

429,935

0.000054651

6,000

20,000

40,000

1,195,049

0.000050403

20,000

40,000

 

2,203,109

0.000033005

40,000

(2) For each credit union, an annual assessment of which one-half of the assessment amount is payable on July 1 and January 1 of each fiscal year, computed upon the credit union's total assets shown on its unaudited financial statement as of the preceding December 31, as follows:

MAXIMUM ANNUAL ASSESSMENT FEE

TOTAL ASSETS (in dollars)

ASSESSMENT

Over

But Not

Over

This Amount

(in

dollars)

Plus

Of Excess Over

(in

dollars)

0

500,000

0

   

500,000

750,000

100

   

750,000

516,617,700

0

0.00022365

 

516,617,700

1,563,277,403

115,541.55

0.00006518

516,617,700

1,563,277,403

 

183,762.83

0.00002175

1,563,277,403

(3) For each financial institution holding company, an annual assessment of $1,000 shall be payable on January 31 of each year.

(4) For each nondepository financial services loan company, a semiannual assessment payable on July 1 and January 1 each fiscal year, computed upon the nondepository financial services loan company's total outstanding loan balances, installment sales contract balances, and lease financing receivable balances shown on its most recent unaudited financial statement filed pursuant to section 412:3-112; provided that:

(A) The assessment shall not exceed $1,000 on the first $1,000,000 of the amount of the total outstanding loan balances, installment sales contract balances, and lease financing receivable balances less unearned finance charges, plus 25 cents per thousand dollars on the remaining outstanding balances;

(B) "Total outstanding loan balances, installment sales contract balances, and lease financing receivable balances" means the balances of all loans, installment sales contracts, and lease financing receivables originated in this State and sold, plus the balances of all loans, installment sales contracts, and lease financing receivables acquired and held by the nondepository financial services loan company in this State; and

(C) On the financial statement filed with the commissioner pursuant to section 412:3-112, a nondepository financial services loan company shall report the total outstanding loan balances, total outstanding installment sales contract balances, total lease financing receivable balances, total unearned finance charges, and total balances of loans, installment sales contracts, and lease financing receivables originated in this State and sold within the six-month period covered by the unaudited financial statement.

The commissioner may increase, decrease, or repeal any maximum rate of assessment provided in this section when necessary pursuant to rules adopted in accordance with chapter 91.

(b) Before June 1 of each year, the commissioner shall prescribe by written order the actual rates of the assessments to be collected for the fiscal year beginning July 1. The actual rates shall not exceed the maximum rates provided in subsection (a). The actual rates shall be intended to permit the commissioner to collect an assessment amount sufficient in the commissioner's judgment to meet all of the expenses of the division. In setting the actual assessment rates, a primary consideration shall be the budget allocation amount appropriated by the legislature for the division of financial institutions for the corresponding annual period. Reasonable notice of the actual assessment rates shall be given to all interested parties. All written orders of the commissioner for the purpose of prescribing assessments shall not be subject to chapter 91.

(c) On or before the dates specified below, the commissioner shall send to the affected financial institution or financial institution holding company a statement of the amount of the assessment that will be next due under subsection (a):

(1) December 1 and June 1, for each bank, savings bank, savings and loan association, foreign bank, depository financial services loan company, and out-of-state state financial institution with a branch under supervision of the commissioner;

(2) June 1, for each credit union;

(3) December 1 and June 1, for each nondepository financial services loan company; and

(4) January 1, for each financial institution holding company.

(d) For purposes of determining the amount of the assessments on financial institutions that have one or more out-of-state branch offices:

(1) The assets of out-of-state branch offices shall be excluded from total assets; provided that the commissioner may order the assets of out-of-state branch offices to be included in total assets to the extent that it is necessary in the commissioner's judgment to meet expenses of the division incurred on account of out-of-state branch offices; and

(2) If the commissioner finds that a financial institution allocated any asset to an out-of-state branch office for the purpose, in whole or in part, of reducing its assessment, the commissioner may, for purposes of calculating the assessment on the financial institution, reallocate the asset to the financial institution's principal office.

(e) A Hawaii financial institution that fails to make a payment required by this section shall be subject to an administrative fine of not more than $250 per day for each day it is in violation of this section. This fine, together with the assessment due under this section, may be recovered pursuant to section 412:2-611 and shall be deposited into the compliance resolution fund established pursuant to section 26-9(o).

(f) All assessments collected by the commissioner under this section shall be deposited in the compliance resolution fund established pursuant to section 26-9(o)."

SECTION 2. Section 241-7, Hawaii Revised Statutes, is amended to read as follows:

"§241-7 Disposition of funds. All taxes collected under this chapter shall be state realizations; provided that, by June 30 of each fiscal year, [the] a sum [of] not to exceed $2,000,000 shall be deposited with the director of finance to the credit of the compliance resolution fund as established pursuant to section 26-9(o)."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2002.

INTRODUCED BY:

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