HOUSE BILL NO. 639

INTRODUCED BY B. SIMON

A BILL FOR AN ACT ENTITLED: "AN ACT SUBMITTING THE LICENSE APPLICATION FEE FOR DEFERRED DEPOSIT LENDERS TO THE ELECTORATE; PROVIDING A CONTINGENT VOIDNESS PROVISION; AND PROVIDING AN EFFECTIVE DATE."

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

NEW SECTION. Section 1. License -- business locations -- rules. (1) A person may not engage in or offer to engage in the business of making deferred deposit loans unless licensed by the department.

(2) An applicant for a license to engage in the business of making deferred deposit loans shall pay to the department a license application fee of $375.

(3) The department may not issue or renew a license unless findings are made that:

(a) the financial responsibility, experience, character, and general fitness of the applicant warrant the belief that the business will be operated lawfully and fairly and within the provisions of [sections 1 through 15 of House Bill No. 526];

(b) the applicant has unencumbered assets of at least $25,000 for each location;

(c) the applicant has provided a sworn statement that the applicant will not in the future, directly or indirectly, use a criminal process to collect the payment of deferred deposit loans or any civil process to collect the payment of deferred deposit loans not generally available to creditors to collect the loans in default; and

(d) other information that the department considers necessary has been provided.

(4) A license may not be issued for longer than 1 year, and a renewal of a license may not be provided if the licensee has violated a provision of [sections 1 through 15 of House Bill No. 526].

(5) Each licensee shall post a bond in the amount of $10,000 for each location. The bond must continue in effect for 2 years after the licensee ceases operation in the state. The bond must be available to pay damages and penalties to consumers harmed by any violation of [sections 1 through 15 of House Bill No. 526].

(6) More than one place of business may not be maintained under the same license, but the department may issue more than one license to the same licensee upon compliance with the provisions of this section governing issuance of a single license.

NEW SECTION. Section 2. Submission to electorate. This act shall be submitted to the qualified electors of Montana at the tax election to be held in 1999 by printing on the ballot the full title of this act and the following:

SHALL THE INITIAL DEFERRED DEPOSIT LENDER LICENSE APPLICATION FEE TAX BE ESTABLISHED AT $375 IN THE FOLLOWING MANNER?

[]	FOR establishing the deferred deposit lender license application fee tax at $375.

[]	AGAINST establishing the deferred deposit lender license application fee tax at $375.

NEW SECTION. Section 3. Contingent voidness. (1) If Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana constitution, is declared invalid, then this act is void.

(2) If LC 1842 is submitted to and not approved by the electorate, then this act is void.

NEW SECTION. Section 4. Effective date. This act is effective on approval by the electorate.

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