Florida Senate - 2007                      COMMITTEE AMENDMENT
    Bill No. SB 2084
                        Barcode 664816
                            CHAMBER ACTION
              Senate                               House
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11  The Committee on Banking and Insurance (Bennett) recommended
12  the following amendment:
13  
14         Senate Amendment (with title amendment) 
15         Delete everything after the enacting clause
16  
17  and insert:  
18         Section 1.  Present subsection (7) through (19) of
19  section 520.02, Florida Statutes, are redesignated as
20  subsections (8) through (20), respectively, and a new
21  subsection (7) is added to that section, to read:
22         520.02  Definitions.--In this act, unless the context
23  or subject matter otherwise requires:
24         (7)  "Guaranteed asset protection products" means loan,
25  lease, or retail installment contract terms, or modifications
26  or addendums to loan, lease, or retail installment contracts,
27  under which a creditor agrees to waive a customer's liability
28  for payment of some or all of the amount by which the debt
29  exceeds the value of the collateral. This product is not
30  insurance for purposes of the Florida Insurance Code. This
31  subsection applies to all such guaranteed asset protection
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Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 products issued before October 1, 2007. 2 Section 2. Subsection (11) is added to section 520.07, 3 Florida Statutes, to read: 4 520.07 Requirements and prohibitions as to retail 5 installment contracts.-- 6 (11) In conjunction with entering into a new retail 7 installment contract or contract for a loan, a motor vehicle 8 retail installment seller, as defined in s. 520.02(10), sales 9 finance company, as defined in s. 520.02(18), or retail 10 lessors, as defined in s. 521.003(8), and their assignees may 11 offer, for a fee or otherwise, optional guaranteed asset 12 protection products in accordance with this chapter. The motor 13 vehicle retail installment seller, sales finance company, or 14 retail lessor may not require the purchase of a guaranteed 15 asset protection product as a condition for making the loan. 16 In order to offer any guaranteed asset protection product, the 17 motor vehicle retail installment seller, sales finance 18 company, or retail lessor, and their assignees, must comply 19 with the following: 20 (a) The cost of a guaranteed asset protection product, 21 with respect to any loan covered by the product, may not 22 exceed the amount of the indebtedness. 23 (b) Any contract or agreement pertaining to a 24 guaranteed asset protection product is governed by this 25 section. 26 (c) The guaranteed asset protection product is 27 considered an obligation of any person who purchases or 28 otherwise acquires the loan contract covering the product. 29 (d) Entities providing guaranteed asset protection 30 products shall provide readily understandable disclosures that 31 detail eligibility requirements, conditions, refunds, and 2 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 exclusions. The disclosures must state that the purchase of 2 the product is optional. The disclosures must be in plain 3 language and of a type face and size that are easy to read. 4 (e) Entities must provide a copy of the executed 5 guaranteed asset protection product contract to the buyer. The 6 entity bears the burden of proving that the contract was 7 provided to the buyer. 8 (f) Entities may not offer a contract for a guaranteed 9 asset protection product which contains terms giving the 10 entity the right to unilaterally modify the contract unless: 11 1. The modification is favorable to the buyer and is 12 made without an additional charge to the buyer; or 13 2. The buyer is notified of any proposed change and is 14 provided a reasonable opportunity to cancel the contract 15 without penalty before the change takes effect. 16 (g) If a contract for a guaranteed asset protection 17 product is terminated, the entity must refund to the buyer any 18 unearned fees paid for the contract unless the contract 19 provides otherwise. A refund is not due to a consumer who 20 receives a benefit under such product. In order to receive a 21 refund, the buyer must notify the entity of the event 22 terminating the contract and request a refund within 90 days 23 after the occurrence of the event terminating the contract. 24 Any entity may offer a buyer a contract that does not provide 25 for a refund only if the entity also offers that buyer a bona 26 fide option to purchase a comparable contract that provides 27 for a refund. 28 Section 3. Subsection (3) of section 520.35, Florida 29 Statutes, is amended to read: 30 520.35 Revolving accounts.-- 31 (3) Notwithstanding the provisions of any other law, 3 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 the seller under a revolving account may charge, receive, and 2 collect a finance charge which may not exceed 15 cents per $10 3 per month, computed on all amounts unpaid under the revolving 4 account from month to month (which need not be a calendar 5 month) or other regular period, and a delinquency charge not 6 to exceed $25 $10 for each payment in default for a period of 7 not less than 10 days, if the charge is agreed upon, in 8 writing, between the parties before imposing any charge. If 9 the amount of the finance charge so computed is less than $1 10 for any such month, a finance charge of $1 for any such month 11 may be charged, received, and collected. If the regular 12 period is other than such monthly period or if the unpaid 13 amount is less than or greater than $5, the permitted finance 14 charge shall be computed proportionately. Such finance charge 15 may be computed for all unpaid balances within a range of not 16 in excess of $10 on the basis of the median amount within such 17 range, if as so computed such finance charge is applied to all 18 unpaid balances within such range. 19 Section 4. Paragraph (r) is added to subsection (1) of 20 section 624.605, Florida Statutes, to read: 21 624.605 "Casualty insurance" defined.-- 22 (1) "Casualty insurance" includes: 23 (r) Insurance for debt-cancellation 24 products.--Insurance that a creditor may purchase against the 25 risk of financial loss from the use of debt-cancellation 26 products with consumer loans, leases, or retail installment 27 contracts. 28 1. For purposes of this paragraph, the term 29 "debt-cancellation product" means loan, lease, or retail 30 installment contract terms, or modifications to loan, lease, 31 or retail installment contracts, under which a creditor agrees 4 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 to cancel or suspend all or part of a customer's obligation to 2 make payments upon the occurrence of specified events and 3 includes, but is not limited to, debt-cancellation contracts, 4 debt-suspension agreements, and guaranteed asset-protection 5 contracts. 6 2. Debt-cancellation products may be offered by 7 financial institutions, as defined in s. 655.005(1)(h), 8 insured depository institutions, as defined in 12 U.S.C. s. 9 1813(c), and subsidiaries of such institutions, as provided in 10 the financial institution codes, or by other business entities 11 as may be specifically authorized by law, and such products 12 are not insurance for purposes of the Florida Insurance Code. 13 Section 5. Subsection (3) of section 627.553, Florida 14 Statutes, is amended to read: 15 627.553 Debtor groups.--The lives of a group of 16 individuals may be insured under a policy issued to a creditor 17 or its parent holding company, or to a trustee or trustees or 18 agent designated by two or more creditors, which creditor, 19 holding company, affiliate, trustee or trustees, or agent 20 shall be deemed the policyholder, to insure debtors of the 21 creditor or creditors, subject to the following requirements: 22 (3) The amount of insurance on the life of any debtor 23 shall at no time exceed the amount owed by the debtor her or 24 him which is repayable in installments to the creditor or 25 $50,000, whichever is less, except that loans not exceeding 1 26 year's duration shall not be subject to such limits. However, 27 on such loans not exceeding 1 year's duration, the limit of 28 coverage shall not exceed $50,000 with any one insurer. 29 Section 6. Paragraph (b) of subsection (1) of section 30 627.679, Florida Statutes, is amended to read: 31 627.679 Amount of insurance; disclosure.-- 5 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 (1) 2 (b) The total amount of credit life insurance on the 3 life of any debtor with respect to any loan or loans covered 4 in one or more insurance policies shall at no time exceed the 5 amount of indebtedness $50,000 with any one creditor, except 6 that loans not exceeding 1 year's duration shall not be 7 subject to such limits, and on such loans not exceeding 1 8 year's duration, the limits of coverage shall not exceed 9 $50,000 with any one insurer. 10 Section 7. Subsection (2) of section 627.681, Florida 11 Statutes, is amended to read: 12 627.681 Term and evidence of insurance.-- 13 (2) The term of credit disability insurance on any 14 debtor insured under this section shall not exceed the term of 15 indebtedness 10 years, and for credit transactions that exceed 16 60 months, coverage shall not exceed 60 monthly indemnities. 17 Section 8. Paragraphs (g) and (h) of subsection (1) of 18 section 665.005, Florida Statutes, are amended, and paragraph 19 (t) is added to that subsection, to read: 20 655.005 Definitions.-- 21 (1) As used in the financial institutions codes, 22 unless the context otherwise requires, the term: 23 (g) "Federal financial institution" means a federally 24 or nationally chartered or organized financial institution 25 association, bank, savings bank, or credit union. 26 (h) "Financial institution" means a state or federal 27 savings or thrift association, bank, savings bank, trust 28 company, international bank agency, international banking 29 organization, international branch, international 30 representative office, or international administrative office, 31 or credit union, or an agreement corporation operating under 6 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 s. 25 of the Federal Reserve Act, 12 U.S.C. ss. 601 et seq., 2 or an Edge Act corporation organized under s. 25(a) of the 3 Federal Reserve Act, 12 U.S.C. ss. 611 et seq. 4 (t) "Debt-cancellation products" means loan, lease, or 5 retail installment contract terms, or modifications or addenda 6 to loan, lease, or retail installment contracts, under which a 7 creditor agrees to cancel or suspend all or part of a 8 customer's obligation to make payments upon the occurrence of 9 specified events and includes, but is not limited to, 10 debt-cancellation contracts, debt-suspension agreements, and 11 guaranteed asset-protection contracts offered by financial 12 institutions, insured depository institutions, as defined in 13 12 U.S.C. s. 1813(c), and subsidiaries of such institutions. 14 Section 9. Subsection (1) of section 655.79, Florida 15 Statutes, is amended to read: 16 655.79 Deposits and accounts in two or more names; 17 presumption as to vesting on death.-- 18 (1) Unless otherwise expressly provided in a contract, 19 agreement, or signature card executed in connection with the 20 opening or maintenance of an account, including a certificate 21 of deposit, a deposit account in the names of two or more 22 persons shall be presumed to have been intended by such 23 persons to provide that, upon the death of any one of them, 24 all rights, title, interest, and claim in, to, and in respect 25 of such deposit account, less all proper setoffs and charges 26 in favor of the institution, vest in the surviving person or 27 persons. Any deposit or account made in the name of two 28 persons who are husband and wife shall be considered a tenancy 29 by the entirety unless otherwise specified in writing. 30 Section 10. Section 655.947, Florida Statutes, is 31 created to read: 7 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 655.947 Debt-cancellation products.-- 2 (1) Debt-cancellation products may be offered, and a 3 fee may be charged, by financial institutions and subsidiaries 4 of financial institutions subject to this section and the 5 rules and orders of the commission or office. As used in this 6 section, the term "financial institutions" includes those 7 institutions defined in s. 655.005(1), insured depository 8 institutions, as defined in 12 U.S.C. s. 1813, and 9 subsidiaries of these institutions. 10 (2) A financial institution must manage the risks 11 associated with debt-cancellation products in accordance with 12 prudent safety and soundness principles. A financial 13 institution must establish and maintain effective 14 risk-management and control processes over its 15 debt-cancellation products and programs. These processes must 16 include appropriate recognition and financial reporting of 17 income, expenses, assets, and liabilities, and appropriate 18 treatment of all expected and unexpected losses associated 19 with the products. Each financial institution should also 20 assess the adequacy of its internal control and risk- 21 mitigation activities in view of the nature and scope of its 22 debt-cancellation products and programs. 23 (3) The commission shall adopt rules pursuant to ss. 24 120.536(1) and 120.54 to administer this section, which rules 25 must be consistent with 12 C.F.R. part 37, as amended. 26 (4) For purposes of this section and any rules adopted 27 pursuant to this section, a periodic payment option is not 28 required to be offered for any debt-cancellation product 29 designed to protect a customer against a deficiency between 30 the outstanding loan or lease amount and the value of the 31 motor vehicle that is used as collateral for the loan or 8 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 lease. 2 Section 11. Section 655.954, Florida Statutes, is 3 amended to read: 4 655.954 Financial institution loans; credit cards.-- 5 (1) Notwithstanding any other provision of law, a 6 financial institution shall have the power to make loans or 7 extensions of credit to any person on a credit card or 8 overdraft financing arrangement and to charge, in any billing 9 cycle, interest on the outstanding amount at a rate that is 10 specified in a written agreement, between the financial 11 institution and borrower, governing the credit card account. 12 Such credit card agreement may modify any terms or conditions 13 of such credit card account upon prior written notice of such 14 modification as specified by the terms of the agreement 15 governing the credit card account or by the Truth in Lending 16 Act, 15 U.S.C. ss. 1601 et seq as amended, and the rules and 17 regulations adopted thereunder. Any such notice provided by a 18 financial institution shall specify that the borrower has the 19 right to surrender the credit card whereupon the borrower 20 shall have the right to continue to pay off the borrower's 21 credit card account in the same manner and under the same 22 terms and conditions as then in effect. The borrower's 23 failure to surrender the credit card prior to the 24 modifications becoming effective shall constitute a consent to 25 the modifications. 26 (2) In conjunction with entering into any contract or 27 agreement for a loan, line of credit, or loan extension, a 28 financial institution, an insured depository institution, as 29 defined in 12 U.S.C. s. 1813, and subsidiaries of these 30 institutions, may offer, for a fee or otherwise, optional 31 debt-cancellation products under s. 655.947 and the rules 9 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 adopted under that section. The financial institution may not 2 require a person to purchase a debt-cancellation product as a 3 condition for a loan, line of credit, or loan extension. 4 (3)(2) For the purpose of this section, the term: 5 (a) "Billing cycle" has the same meaning as ascribed 6 to it under the federal Truth in Lending Act, as amended, 15 7 U.S.C. ss. 1601 et seq., and the associated regulations which 8 are in effect as of June 30, 2007 1992. 9 (b) "Interest" means those charges considered a 10 finance charge under the federal Truth in Lending Act, as 11 amended, 15 U.S.C. ss. 1601 et seq., and the associated 12 regulations which are in effect as of June 30, 2007 1992. 13 Section 12. Subsection (2) of section 658.21, Florida 14 Statutes, is amended to read: 15 658.21 Approval of application; findings 16 required.--The office shall approve the application if it 17 finds that: 18 (2) The proposed capitalization is in such amount as 19 the office deems adequate, but in no case may the total 20 capital accounts at opening for a bank be less than $8 $6 21 million if the proposed bank is to be located in any county 22 which is included in a metropolitan statistical area, or $4 23 million if the proposed bank is to be located in any other 24 county. The total capital accounts at opening for a trust 25 company may not be less than $3 $2 million. The organizing 26 directors of the proposed bank must directly own or control at 27 least the lesser of $3 million or 25 percent of the bank's 28 total capital accounts proposed at opening as approved by the 29 office. If the proposed bank will be owned by a single-bank 30 holding company, the organizing directors of the proposed bank 31 collectively must directly own or control at least an amount 10 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 of the single-bank holding company's capital accounts equal to 2 the lesser of $3 million or 25 percent of the proposed bank's 3 total capital accounts proposed at opening as approved by the 4 office. If the proposed bank will be owned by an existing 5 multibank holding company, the proposed directors must have a 6 substantial capital investment in the holding company, as 7 determined by the office. However, the investment is not 8 required to exceed the amount otherwise required for a 9 single-bank holding company application. Of total capital 10 accounts at opening, as noted in the application or amendments 11 or changes to the application, at least 25 percent of the 12 capital shall be directly owned or controlled by the 13 organizing directors of the bank. Directors of banks owned by 14 single-bank holding companies shall have direct ownership or 15 control of at least 25 percent of the bank holding company's 16 capital accounts. The office may disallow illegally obtained 17 currency, monetary instruments, funds, or other financial 18 resources from the capitalization requirements of this 19 section. The proposed stock offering must comply with the 20 requirements of ss. 658.23-658.25 and 658.34-658.37. 21 Section 13. Section 658.34, Florida Statutes, is 22 amended to read: 23 658.34 Shares of capital stock.-- 24 (1) A bank or trust company shall issue its capital 25 stock with par value of not more than $100 nor less than $1 26 per share. 27 (2) A No bank or trust company may not shall issue any 28 shares of capital stock at a price less than par value, and 29 prior to issuance, any such shares must be fully paid in cash. 30 (3) With the approval of the office, a bank or trust 31 company may issue preferred stock of one or more classes in an 11 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 amount and with a par value as approved by the office. 2 (4) With the approval of the office, a bank or trust 3 company may issue less than all the number of shares of any of 4 its capital stock authorized by its articles of incorporation. 5 Such authorized but unissued shares may be issued only for the 6 following purposes: 7 (a) To provide for stock options and warrants as 8 provided in s. 658.35. 9 (b) To declare or pay a stock dividend; however, any 10 such stock dividend must comply with the provisions of this 11 section and s. 658.37. 12 (c) To increase the capital of the bank or trust 13 company, with the approval of the office. 14 (5) A financial institution may not issue or sell 15 stock of the same class which creates different rights, 16 options, warrants, or benefits among the purchasers or 17 stockholders of that class of stock. This subsection does not 18 prohibit the financial institution from creating uniform 19 restrictions on the transfer of stock as permitted in s. 20 607.0627. 21 Section 14. Subsection (2) of section 658.36, Florida 22 Statutes, is amended to read: 23 658.36 Changes in capital.-- 24 (2) A Any state bank or trust company may, with the 25 approval of the office, provide for an increase in its capital 26 stock only if the state bank or trust company files a written 27 notice 15 days before the increase. 28 Section 15. Subsections (2) and (5) of section 658.44, 29 Florida Statutes, are amended to read: 30 658.44 Approval by stockholders; rights of dissenters; 31 preemptive rights.-- 12 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 (2) Written notice of the meeting of, or proposed 2 written consent action by, the stockholders of each 3 constituent state bank or state trust company shall be given 4 to each stockholder of record, whether or not entitled to 5 vote, and whether the meeting is an annual or a special 6 meeting or whether the vote is to be by written consent 7 pursuant to s. 607.0704, and the notice shall state that the 8 purpose or one of the purposes of the meeting, or of the 9 proposed action by the stockholders without a meeting, is to 10 consider the proposed plan of merger and merger agreement. 11 Except to the extent provided otherwise with respect to 12 stockholders of a resulting bank or trust company pursuant to 13 subsection (7), the notice shall also state that dissenting 14 stockholders, including those not entitled to vote but 15 dissenting as set forth in paragraph (c), will be entitled to 16 payment in cash of the value of only those shares held by the 17 stockholders: 18 (a) Which at a meeting of the stockholders are voted 19 against the approval of the plan of merger and merger 20 agreement; 21 (b) As to which, if the proposed action is to be by 22 written consent of stockholders pursuant to s. 607.0704, such 23 written consent is not given by the holder thereof; or 24 (c) With respect to which the holder thereof has given 25 written notice to the constituent state bank or trust company, 26 at or prior to the meeting of the stockholders or on or prior 27 to the date specified for action by the stockholders without a 28 meeting pursuant to s. 607.0704 in the notice of such proposed 29 action, that the stockholder dissents from the plan of merger 30 and merger agreement, and which shares are not voted for 31 approval of the plan or written consent given under paragraph 13 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 (a) or paragraph (b). 2 3 Hereinafter in this section, the term "dissenting shares" 4 means and includes only those shares, which may be all or less 5 than all the shares of any class owned by a stockholder, 6 described in paragraphs (a), (b), and (c). 7 (5) The fair value, as defined in s. 607.1301(4), of 8 dissenting shares of each constituent state bank or state 9 trust company, the owners of which have not accepted an offer 10 for such shares made pursuant to subsection (3), shall be 11 determined as of the effective date of the merger under ss. 12 607.1326-607.1331, except as the procedures for notice and 13 demand are otherwise provided in this section. by three 14 appraisers, one to be selected by the owners of at least 15 two-thirds of such dissenting shares, one to be selected by 16 the board of directors of the resulting state bank, and the 17 third to be selected by the two so chosen. The value agreed 18 upon by any two of the appraisers shall control and be final 19 and binding on all parties. If, within 90 days from the 20 effective date of the merger, for any reason one or more of 21 the appraisers is not selected as herein provided, or the 22 appraisers fail to determine the value of such dissenting 23 shares, the office shall cause an appraisal of such dissenting 24 shares to be made which will be final and binding on all 25 parties. The expenses of appraisal shall be paid by the 26 resulting state bank or trust company. 27 Section 16. This act shall take effect October 1, 28 2007. 29 30 31 14 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 ================ T I T L E A M E N D M E N T =============== 2 And the title is amended as follows: 3 Delete everything before the enacting clause 4 5 and insert: 6 A bill to be entitled 7 An act relating to financial services; amending 8 s. 520.02, F.S.; defining the term "guaranteed 9 asset protection products"; amending s. 520.07, 10 F.S.; setting forth requirements and 11 prohibitions for selling guaranteed asset 12 protection products; amending s. 520.35, F.S.; 13 revising the fee for a delinquency charge; 14 amending s. 624.605, F.S.; including 15 debt-cancellation products under casualty 16 insurance; providing a definition; authorizing 17 certain entities to offer debt-cancellation 18 products under certain circumstances; 19 specifying that such products are not 20 insurance; amending ss. 627.553 and 627.679, 21 F.S.; revising limitations on the amount of 22 authorized insurance for debtors; amending s. 23 627.681, F.S.; revising a limitation on the 24 term of credit disability insurance; amending 25 s. 655.005, F.S.; redefining the terms "federal 26 financial institution" and "financial 27 institution"; defining the term 28 "debt-cancellation products"; amending s. 29 655.79, F.S.; providing that a deposit account 30 by a husband and wife is a tenancy by the 31 entirety; creating s. 655.947, F.S.; providing 15 1:26 PM 04/06/07 s2084c-bi21-k0a
Florida Senate - 2007 COMMITTEE AMENDMENT Bill No. SB 2084 Barcode 664816 1 a definition; authorizing financial 2 institutions to offer debt-cancellation 3 products; authorizing a fee; requiring the 4 Financial Services Commission to adopt rules; 5 providing that a periodic payment option is not 6 required for certain debt-cancellation 7 products; amending s. 655.954, F.S.; 8 authorizing a financial institution to offer a 9 debt-cancellation product but not as a 10 requirement of receiving a loan; amending s. 11 658.21, F.S.; revising an ownership of capital 12 criterion for capital accounts at financial 13 institutions and one-bank holding companies; 14 amending s. 658.34, F.S.; prohibiting certain 15 stock issuance practices for banks; amending s. 16 658.36, F.S.; requiring a state bank or trust 17 company to file a written notice before 18 increasing its capital stock; amending s. 19 658.44, F.S.; revising criteria for determining 20 the value of dissenting shares of certain 21 entities; providing an effective date. 22 23 24 25 26 27 28 29 30 31 16 1:26 PM 04/06/07 s2084c-bi21-k0a