HOUSE BILL NO. 127
AS AMENDED BY HOUSE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 5, TITLE 6 AND TITLE 30 OF THE DELAWARE CODE, TO PROVIDE EXEMPTION FROM TAXATION AND INTEREST RATE LIMITATIONS FOR INTERNATIONAL BANKING TRANSACTIONS AND INTERNATIONAL BANKING FACILITIES, AND TO PROVIDE EXEMPTION FROM RESERVE REQUIREMENTS FOR DEPOSITS RELATING TO INTERNATIONAL BANKING FACILITIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE: Section 1. This Act may be referred to as "The International Banking Development Act,"
Section 2. Amend Section 101, Title 5, Delaware Code by adding thereto new subsections (7), (8), (9) and (10), as follows:
"(7) 'Banking organization' Means:
(a) A bank organized and existing under the laws of this State;
(b) A national bank organized and existing as a national banking association pursuant to the provisions of the National Bank Act, 12 U.S.C. Sections 21 et seq., and maintaining its principal office in this State;
(c) An Edge Act corporation organized pursuant to the provisions of Section 25(a) of the Federal Reserve Act, 12 U.S.C. Sections 611 et seq., and maintaining an office in this State; or
(d) A federal agency licensed pursuant to Sections 4 and 5 of the International Bank Act of 1978 to maintain an office in this State.
(8) 'International banking facility' means a set of asset and liability accounts, segregated on the books and records of a banking organization, that includes only international banking facility deposits, borrowings, and extensions of credit.
(9) 'International banking transaction' means:
(a) The financing of the exportation from, or the importation into, the United States or between jurisdictions abroad of tangible property or services;
(b) The financing of the production, preparation, storage, or transportation of tangible personal property or services which are identifiable as being directly and solely for export from, or import into, the United States or between jurisdictions abroad;
(c) The financing of contracts, projects, or activities to be performed substantially abroad, except those transactions secured by a mortgage, deed of trust, or other lien upon real property located in this State;
(d) The receipt of deposits or borrowings or the extensions of credit by an international banking facility, except the loan or deposit of funds secured by mortgage, deed of trust, or other lien upon real property located in this State; or
(e) The entering into foreign exchange trading or hedging transactions in connection with the activities described in paragraphs (a) through (d).
(10) The terms 'deposit, 'borrowing,' and ' extension of credit' as they relate to the activities of international banking facilities shall have the meanings ascribed to them in pertinent regulations adopted by the Board of Governors of the Federal Reserve System, as such regulations may be amended from time to time."
Section 3. Amend Section 907, Title 5, Delaware Code by adding a new subsection (e) as follows:
"(e) For purposes of subsection (b), 'deposits' as they relate to activities of international banking facilities shall not be included in the terms 'demand deposits' or 'time deposits' as such terms are defined in subsection (a)."
Section 4. Amend Section 919, Title 5, Delaware Code by adding a new subsection (c) as follows:
"(c) The requirements of subsections (a) and (b) shall not apply to 'deposits' as they relate to the activities of international banking facilities."
Section 5. Amend Title 5, Chapter 9, Subchapter I, Delaware Code by adding a new Section 936 as follows:
"§936. International Banking Facilities
The Commissioner may by rule except from the terms 'deposit,' borrowing,' and 'extension of credit' as contained in Section 101(10) of this Title any class of transactions if he finds that its Inclusion would not be in the public interest. Any class of transactions otherwise Included in Section 101(10) of this Title shall be deemed by the Commissioner to be in the public interest if it promotes an environment conducive to the conduct of international banking business in this State, and does not constitute an unsafe, unsound or anticompetitive banking practice.
Section 6. Amend Section 1101, Title 5, Delaware Code, by striking all of the words and punctuation commencing with the phrase "interest income" and ending with the word and punctuation "thereto.", and by substituting in lie thereof the words and punctuation "the following:" and new sbusections (a), (b), (c) and (d), which new subsections shall read as follows:
"(a) the interest income from obligations of the State and its political subdividions, as well as any dividends and contributions to net income from subsidiaries;
(b) the net income shown on the books of account of any non-United States branch office established pursuant to Section 771 of this chapter in the case of a bank or trust company or established pursuant to federal law in the case of a national bank, provided that at least 80 percent of the gross income of such non-United States branch office constitutes income from sources without the United States as defined under Section 862(a) of the Internal Revenue Code of 1954 as amended or any successor provision thereto;
(c) the gross income derived from international banking transactions (as defined in Section 101 of Title 5 of this Code) after subtracting therefrom any expenses or other deductions attributable thereto; and
(d) the gross income of an international banking facility (as defined in Section 101 of Title 5 of this Code) less any expenses or other deductions attributable thereto."
Section 7. Amend Title 6, Delaware Code by adding a new Section 2307 as follows: "§2307. International Banking Transactions
The provisions of this Chapter and the provisions of any other law of this State limiting the rate or amount of interest, discount, points, finance charges, service charges, or other charges which may be charged, taken, collected, received, or reserved shall not apply to any international banking facility extension of crecit, as such terms are contained in Section 101 of Title 5 of this Code."
Section 8. Amend Section 1903, Title 30, Delaware Code by adding at the end of subsection (a) a new paragraph 8 as follows:
"8. The 'eligible net income' of an Edge Act corporation organized pursuant to the provisions of Section 25(a) of the Federal Reserve Act, 12 U.S.C. Sections 611 et seq. The eligible net income of an Edge Act corporation shall be the net income from any international banking facility of such corporation each computed as described in Section 1101(c) and (d), Title 5, of this Code."
Section 9. If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalid provision or application.
Section 10. This Act shall take effect immediately upon its adoption.
Approved June 6, 1983.