State Bills Enacted

STATE BILLS ENACTED WEEK ENDING JUNE 14, 2007

Broker Dealers New Hampshire HB 889 requires broker-dealers and investment advisers to establish and maintain supervisory procedures that are designed to achieve compliance with all applicable securities laws and statutes. The responsibility for such supervisory procedure shall be determined by various factors, including but not limited to: the firm’s size, organizational structure, and scope of business activities, and the number and location of offices; the nature and complexity of procedures and services offered; the volume of business conducted; the number of agents and investment advisors assigned to a location; whether a location has an on-site principal; whether the office is a non- branch location and the disciplinary history of its agents and investment adviser representatives

Identity Theft New Hampshire HB 227 permits a victim of identity theft to bring a private action for damages and to use the judgment to correct related public and private records

STATE BILLS ENACTED 2007 LEGISLATIVE SESSION

Variable Annuities Indiana SB 171 amends current law to adopt the NAIC Suitability Model for the sale of variable annuities for all consumers.

Montana SB 535 adopts NAIC’s suitability model for the sale of variable annuities for all consumers.

Nebraska LB 117 amends the Insurance Code to adopt the NAIC Suitability Model for the sale of variable annuities for all consumers.

North Dakota SB 2155 adopts the NAIC Suitability Model in recommending the purchase of annuities to all consumers.

Texas HB 2761 adopts the NAIC Suitability Model for the sale of variable annuities for all consumers

Uniform Securities Act Indiana HB 1555 repeals the current securities regulation and establishes: (1) registration and filing requirements for securities offerings; and (2) registration requirements for securities professionals. The bill also establishes and restricts penalties, liability, and disciplinary actions for violations of registration, filing, and other requirements concerning securities and securities professionals and makes: (1) fraudulent practices involving securities unlawful; and (2) conforming changes.

1 Maine LD 332 amends the USA by allowing the securities administrator to appoint a presiding officer over disciplinary hearings and to make proposed findings of fact.

Vermont SB 91 restores the following powers of the Securities Commissioner concerning fees imposed for processing registration exemptions and the ability to impose notice filing and notice filing fees with respect to federal covered securities.

Naked Short Selling Utah SB 277 repeals the short selling legislation adopted last year (SB 3004) when the law was challenged on several independent grounds, including federal preemption and Commerce Clause violations. The bill goes into effect on April 30, 2007.

Broker Dealers Tennessee SB 2170 clarifies circumstances under which the commissioner of commerce and insurance may order, deny, suspend, or revoke a registration to sell securities in this state.

Virginia HB 2023 reenacts section 13.1.514 of the Securities Code relating to securities that are exempted from registration requirements.

Virginia HB 2024 reenacts section 13.1.504 of the Securities Code relating to registration requirements for broker-dealers.

Hedge Funds Texas SB 1447 prohibits that not more than 5% of the value of total investments of the Texas Teachers Retirement Fund may be invested in hedge funds.

Violations Against the Elderly Hawaii HB 1306 establishes additional securities violations when the act is directed against seniors (62 or older) to include imposing administrative penalties not to exceed $50,000 and civil penalties not to exceed $50,000 for each violation.

Hawaii SB 1400 requires financial institutions to report suspected instances of financial abuse directed towards, targeting, or committed against the elderly to the Department of Human Services and requires the DHS to notify the reporting institutions of suspected cases over which it does not have jurisdiction.

Financial Literacy California ACR 40 declares the month of April 2007 as Financial Literacy Month, in order to raise public awareness about the need for increased financial literacy.

Colorado SB 161 provides for a supplemental appropriation to the department of education that creates funding for financial literacy.

2 Georgia HR 825 urges the state and national officials to support the goals and ideals of "Financial Literacy Month."

Idaho HCR 10 urges the State Board of Education to integrate the principles of basic personal finance into the public school curricula in Idaho.

Mississippi SB 2324 implements a financial literacy program for grades 10 or 11 and shall include, but is not limited to, areas of personal business and finance.

New Mexico HB 1205 requires that financial literacy be offered as an elective.

Oklahoma HB 1476 requires personal financial literacy education to be taught in public schools in the state; listing areas of instruction; requiring students to fulfill passport requirements in order to graduate from high school.

Pennsylvania HR 206 establishes a resolution designating the month of April 2007 as "Financial Literacy Month" in Pennsylvania.

Texas HB 2007 encourages banks to develop and promote financial literacy and community outreach programs.

Virginia HB 2513 expands the subjects that may be covered in financial literacy courses to include savings and investments, predatory lending practices and interest rates, consumer fraud, and identity theft and protection.

Washington HB 1980 provides for the appropriation of funds to be made available for financial literacy and the superintendent of public schools shall make available to school districts the list of identified financial literacy skills, knowledge, instructional materials, assessments, and other relevant information.

Corporate Governance-Shareholder Rights North Dakota HB 1340 provides a governance structure for publicly traded corporations that gives shareholders greater rights than they currently have under other state laws. The new law is optional and will be available for corporations incorporated under North Dakota law after July 1, 2007. The legislation is designed to be more responsive to shareholders by adopting corporate governance reforms which include among the following: greater access to proxy statements, regular shareholder meetings, stricter requirements for individuals serving on boards and greater enforcement powers for the Secretary of State.

Pensions/Retirement Arkansas SB 5 allows tax-free distributions from individual retirement plans for charitable purposes as adopted in the federal internal revenue code.

Investment Advisors/Financial Planners South Dakota SB 97 revises certain miscellaneous provisions of the trust statutes.

3 Utah SB 138 increases fines and penalties for investment advisors who violate the “Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local Entities Act” to include a civil penalty of $1,000 for each day of noncompliance and $5,000 for each day of noncompliance for the firm where the investment adviser is employed.

Information Privacy Maine LD 1428 establishes that financial institutions and credit unions are permitted to disclose financial records to the Department of Health and Human Services when there reasonable cause to suspect that an incapacitated or dependent adult has been or is at substantial risk of abuse, neglect or exploitation.

Maryland HB 208 requires specified businesses, when destroying a customer's records that contain personal information of the customer, to take specified steps to protect against unauthorized access.

Minnesota HB 1758 provides that no businesses that accepts an access device in connection with a transaction shall retain the card security code data i.e. the PIN verification code.

Montana SB 192 creates the offense of criminal invasion of personal privacy and the criminal offense of unlawful electronic monitoring of a person's location.

Montana SB 121 prohibits the sale and restricting the disclosure and use of tax return information by a tax return preparation.

Nevada AB 114 requires solicitors to verify addresses on applications for credit when offering credit cards by mail and provides for a civil action for crimes involving the theft of personal identifying information.

Nevada AB 600 authorizes a person to request a governmental agency to redact or maintain in a confidential manner his/her personal information in documents submitted to the governmental agency.

North Dakota HB 1507 exempts electronic mail addresses and telephone numbers from open records requirements.

Oregon HB 2090 authorizes the Secretary of State to refuse to file certain documents if documents contain Social Security numbers, state identification numbers, driver license numbers, credit card or debit card numbers or account numbers that have not been redacted.

Pennsylvania HR 70 establishes a resolution creating a select committee to investigate and review the policies, procedures and practices in place by the various Commonwealth agencies, authorities, boards, commissions, councils, departments and offices and the

4 entities they license or regulate to protect the personal health, financial and other sensitive data of the citizens of Pennsylvania.

Utah SB 140 modifies the definition of personal identifying information and provides that it is a felony of the second degree when a person fraudulently uses personal identifying information and that use results, directly or indirectly, in bodily injury to another person.

Utah HB 432 requires the attorney general to maintain an Internet website to assist victims of identity-Related crimes.

Identity Theft Georgia SB 236 requires notification by certain state agencies upon a breach of security regarding an individual’s personal information.

Hawaii HR 198 requests the attorney general and the identity theft task force to identify ways in which the process of notarizing documents can be improved to reduce identity theft.

Maryland HB 1036 prohibits a person from claiming to be another person without the consent of that person with the intent of soliciting, requesting, persuading, or taking any other action to induce another to provide personal identifying information or a payment device number.

Montana HB 630 establishes that the fraudulent electronic misrepresentation of "Phishing," is a crime of identity theft.

Oklahoma HB 1329 makes it unlawful for any person to use with fraudulent intent the personal identity of another person, living or dead, or any information relating to the personal identity of another person, living or dead, to obtain or attempt to obtain credit or anything of value.

Tennessee HB 1944 removes the provision that permits a course on personal finance to satisfy instruction requirement on the free enterprise system.

Utah SCR 1 urges the United States Congress to pass identity theft and fraud legislation related to the intentional misuse of a Social Security number by an individual or a company.

Social Security Freeze Arkansas HB 2215 permits placing a security freeze on a person's consumer report, to provide procedures for the placement and removal of the security freeze, and to provide notice of the right to obtain a security freeze.

Indiana SB 412 Specifies the circumstances under which a state educational institution may disclose a Social Security number to a contractor or other person.

5 Indiana SB 403 provides that a consumer may prevent access to the consumer's consumer report by requesting that a consumer reporting agency place a security freeze on the consumer report.

Montana SB 116 provides identity theft protection and allows consumers to limit access to their own credit reports and provides for temporary lifting of security freezes.

New Mexico SB 165 provides for a security freeze on the release of consumer credit information.

Nebraska LB 674 allows a consumers to place a security freeze on the release of consumer credit when the individual has been involved in identity theft.

Nevada AB 24 prohibits a credit reporting agency from charging elderly consumers a fee to release their consumer reports and places security freezes from their credit files and reduces the amount of fees that may be charged by credit reporting agencies.

North Dakota HB 1417 provide for a security freeze on consumer credit information and establishes penalties for violations.

Tennessee HB 200 allows consumers to place a security freeze on his/her consumer report by making a request in writing or by electronic means, including through an Internet web site, to a consumer reporting agency at either the physical address or Internet web site designated by the agency to receive such requests.

Washington SB 5826 allows a consumer to elect to place a security freeze on his/her credit report by making a request in writing by certified mail to a consumer reporting agency.

West Virginia SB 428 provides for a procedure for consumers to implement a security freeze to prohibit a consumer-reporting agency from releasing all or any part of the consumer's credit report or any information derived from it to entities with whom the consumer has no existing credit relationship without the express authorization of the consumer.

Miscellaneous Financial Services Bills Tennessee HB 1351 amends the Uniform Trust Code to allow for the transfers of assets to a trust fund.

Indicates most recently added changes to document