SENATE BILL NO. 238
AN ACT TO AMEND TITLES 5, 6 AND 30 OF THE DELAWARE CODE BY REVISING THE PROVISIONS OF THE DELAWARE BANKING LAWS RESTRICTING PARTICIPATION BY BANKS IN EXPORT TRADING COMPANIES; AND BY PROVIDING STATE ANTITRUST EXEMPTION FOR ACTIVITIES OF EXPORT TRADING COMPANIES PERMITTED BY FEDERAL LAW; BY PROVIDING AN EXEMPTION FROM THE TAXATION OF NET INCOME FOR EXPORT TRADING COMPANIES; AND BY PROVIDING FOR THE EXEMPTION OF EXPORT TRADING COMPANIES FROM THE PROVISIONS OF THE MERCANTILE TAX.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Thu Act may be referred to u "The Export Trading Company Act".
Section 2. Amend Title 5, Delaware Code, by adding a new Chapter 12 as follows:
"CHAPTER 12. BANK OWNERSHIP AND PARTICIPATION IN EXPORT TRADING COMPANY ACT.
§1201. Participation by Banks Located in the State of Delaware in Export Trading Companies
Notwithstanding any other provision of this Chapter, banks regulated hereunder may invest or otherwise participate in the capital and financing of, management, direction and advising of export trade companies as defined and to the extent permitted by Federal Law 15 U.S.C. 4001 et seq. Whatever may be done by such banks hereunder may be done directly or indirectly by contractual arrangements or by subsidiary and affiliate companies owned or controlled alone or together with other persons to the extent permitted by law, and may be delegated to their officers, employees or other trustees or persons appointed to such effect."
Section 3. Amend Title 6, Delaware Code, by adding a new Chapter 74 as follows:
"CHAPTER 74. EXPORT TRADING COMPANIES
(a) As used in this Chapter:
The terms 'export trade', 'services', 'export trade services'. 'export trading company', 'State', 'United States', and 'antitrust laws' shall have the same meaning as such terms are defined in the Federal Law, 15 U.S.C. 4002.
(b) 'Director' shall mean the Director of the Delaware Development Office or his delegates. 5
§7402. Income and Mercantile Tax Exemption
An Export Trading Company, with Registered Office or other office or offices in the State of Delaware, shall be exempt from income and mercantile tax to the extent set forth under the provisions of Chapters 19 and 23 of Title 30 of this Code. For purposes of this Chapter. an Export Trading Company shall be deemed to have an office in the State of Delaware if, subject to rules and regulations of the Director, it performs export trade services.
§7403. Ouallfication for Exemption
(a) Any company or association proposing to qualify as an Export Trading Company under this Chapter shall fUe an application with the Director for approval. Such application shall contain such information u the Director may by regulation require, and shall specifically acknowledge applicant's agreement to be bound by the conditions set forth in rules and regulations issued pursuant to this section.
(b) In determining whether to approve an application for qualification u an Export Trading Company, the Director shall consider:
Whether the organization satisfies in its stated purposes the basic aim of encouraging and expanding export trade; whether the activities undertaken in Delaware will be a significant factor in or contribute significantly to encouraging export trade; whether the tax exemption provided hereunder will serve as a significant incentive and aid to encouraging export trade, and whether export trade opportunities will be improved and initiated, particularly for small- and medium-sized producers, by creation of the Export Trading Company.
(c) The Director may adopt rules and regulations and issue orders under this Chapter for the following purposes; to prescribe information or forms required in connection with an application; to establish procedures in connection with approvals and the filing of required reports; and to issue orders and establish procedures governing such issuances pursuant to and under this Chapter.
(d) The Director upon the determination that any Export Trading Company qualified under this Chapter or doing business in this State is in violation of the conditions set forth in this Chapter or regulations, rules, or orders issued pursuant thereto, may order such Export Trading Company to take steps to remedy such violation or disqualify said company as an Export Trading Company under this section.
§7404. Antitrust Exemption
The remedies and causes of action provided under the laws of the United States, to the exclusion of any remedies provided under the Delaware Antitrust Act, Delaware Code, Title 6, §2101 through 2114, shall apply to any conduct or activity of an Export Trading Company qualified under this chapter relating to export trade."
Section 4. Amend §1902(b), Title 30, Delaware Code by adding a new subparagraph (13) to read as follows:
"(13) Every export trading company as defined in §7401, Title 6 of this Code."
Section 5. Amend §2301, Title 30 of the Delaware Code by adding a new subsection (r) as follows:
"(r) Export trading companies as defined in §7401, Title 6 of this Code shall be exempt from Payment of fees as set forth in subsection (d) of this section."
Section 6. This Act shall become effective for taxable years beginning after June 30, 1985.
Approved July 12, 1985.