COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

LR No.: 1406-01

Bill No.: HB 380

Subject: Uniform Securities Act

Type: Original

Date: February 24, 2003

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 4 pages.

ASSUMPTION

Officials of the Office of Secretary of State- Administrative Rules Division stated that this proposal would require the Securities Division to promulgate new rules. The rules would be published in the Missouri Register and the Code of State Regulations. Officials stated that the estimated publication cost of a page in the Code of State Regulations is $27, and the cost of publication in the Missouri Register is estimated to be $23. Officials stated that the cost of this proposal in future years is unknown and would depend upon the frequency and length of rules filed, amended, rescinded, or withdrawn. Officials estimate the first FY 2004 cost at ($5,535) and is unknown for FY 2005, and FY 2006.

Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.

Officials of the Office of Attorney General assume no fiscal impact.

Officials of the Department of Labor and Industrial Relations assume no fiscal impact.

ASSUMPTION (continued)

Officials of the Office of State Court Administrator assume this proposal would have no fiscal impact on the Courts.

Officials of the Department of Insurance assume no fiscal impact.

Officials of the Department of Corrections stated that this proposal has a penalty provision for certain violations. The violation is for a class A misdemeanor. Officials stated that fiscal impact would be $0 to minimal fiscal impact.

Oversight assumes strict compliance with the laws contained in this proposal and assumes no fiscal impact to the Department of Corrections.

FISCAL IMPACT - Small Business

Fiscal impact to small businesses is unknown.

DESCRIPTION

This act adopts the Uniform Securities Act. The act contains the following Articles:

This bill substantially revises and modernizes the securities regulation laws, incorporating many provisions of the Uniform Securities Act. In its main provisions, the bill:

(1) Authorizes the Secretary of State to seek court orders requiring violators to disgorge illicit profits, pay restitution, and pay into the Investor Education and Protection Fund, which the bill establishes;

DESCRIPTION (continued)

(2) Increases criminal fines to $1 million;

(3) Requires banks with on-premise brokerage firms to comply with federal rules;

(4) Modernizes, simplifies, and broadens exemptions from securities registration with the state;

(5) Promotes consistency with other states and the Securities and Exchange Commission in the definition of "security";

(6) Authorizes civil prosecution of individuals who materially aid in violations; and

(7) Adds civil penalties of $10,000 for one violation and up to $1 million for more than one violation.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Office of Attorney General

Office of Secretary of State- Securities

Department of Labor and Industrial Relations

Office of State Courts Administrator

Department of Insurance

Department of Corrections

Mickey Wilson, CPA

Director

February 24, 2003