H.B. 141 International Money Transmission Amendments: transcript

Thank you, Mr. Chair and members of the committee. And I have a first substitute. I'd like to speak to that, if that's all right. Yes. So the committee heard this bill last year. Essentially what it does is it puts a 2% tax on foreign remittances or wire transfers that are going, um, from Utah overseas. If you don't show a government, um, issued id, um, those IDs are all listed out in the bill now, since we heard this last year. Um, we actually ha it was included in the big beautiful bill. So there is now a federal component that corresponds to this. Um, so there's a couple differences between the way that we do it federally. What they say is, if you're sending money overseas, it's a 2% tax period, end of story. Um, I like to think that Utah does it a little bit better. So the Utah way that I'm proposing is if you show that ID up front, you never pay the tax. Um, this is really going after, we're hoping to go after the cartel money. We know we've had an increase in fentanyl coming through the state, other drugs, and originally we were considering directing the revenue collected under this bill to law enforcement activity. But given the state of the budget thought it would be more appropriate to push that to the general fund. Um, it does exempt depository institutions the same way that the federal version does. Um, banks already verify, ID credit unions already verify id, and really, we're just trying to figure out who's sending money. Um, we're not trying to go after someone who's just sending small amounts back to their family. Um, but even Venmo has ID requirements if you're gonna be sending more than $300 a week. So if you've got id great. No tax. If you are trying to send a large amount of money anonymously, there's a tax, and I'm happy to answer questions.

Good afternoon, chair Eliason and members of the House Revenue and Taxation Committee. My name is Hoodie Rosenberg. I'm based in New York, and I serve as the Deputy Director of State Government Affairs for the American FinTech Council, a FC. Thank you. Providing me with the opportunity to testify in opposition to HB 1 41. Today, a standard-based organization, A FC, is the largest trade association representing financial technology, FinTech companies, and innovative banks. Our mission is to pro promote transparent, inclusive, and centric financial financial system by supporting responsible innovation and in financial services and encouraging sound public policy. Our members are lowering the cost of financial transactions, allowing them to help meet demand for high quality, affordable products, specifically payments providers specializing in cross-border transfers play a critical role in the financial lives of millions of Americans, offering fast, affordable, and transparent alternatives to traditional international wire services. These companies increase competition lower costs and expand access to secure regulated payment options, particularly from immigrants and underserved communities who rely on remittances to support family members abroad. The inclusion of attacks on remittances and cross-border payments in the bill would've harmful unintended consequences for the existing regulatory framework, local businesses, and ultimately for the citizens of Utah. A FC proactively engages with state and federal financial services regulators to improve their understanding of innovative financial products and services. The patchwork approach, remittance regulations of remittance regulation exacerbated by this bill, creates a substantial compliance burden for responsible providers without improving consumer outcomes or enforcement clarity. The state remittance tax proposed in this bill duplicates the existing 1% tax under the one beautiful Bail Act, and would burden both consumers and financial institutions. The addition of state remittance taxes adds cost, reduces transparency, and ultimately pushes these transactions underground. Keeping remittances in the regulated financial system ensures oversight through robust A-M-L-K-Y-C and sanctioned screening standards. State remittance taxes raise costs for lawful senders, discourage use of licensed providers, and push transfers into unregulated or informal channels, reducing oversight and increasing risk. The opposite of what poly makers intend. According to research, every additional 1% in fees reduces formal remittance volume by around 1.6%. In other words, layering a 3% state tax on top of the new 1% pre levy could shrink the formal traceable remittance market by about six to 7%, shifting millions of dollars toward unregulated alternatives. Given the above concerns, a FC respectfully opposes the legislation and request the legislature reject HB 1 41. Thank you again for the opportunity to raise our concerns and oppose this bill.

Thank you. Um, my name's Kathy Tomski, and I am the Executive Director of the Money Service Business Association. I'm coming to you right now from, uh, Tampa, Florida Chair members of the committee, thank you for the opportunity to speak. I'm here on behalf of a broad coalition of financial services companies, uh, small businesses and consumer facing organizations who strongly oppose HB 1 41. Our concern is straightforward. This bill will not stop elicit finance. Instead, it will reduce law enforcement visibility, burden Utah families and harm small businesses. First, HB 1 41 makes Utah less safe licensed money transmitters already operate under some of the strictest compliance rules in the country. As noted previously, K-Y-C-A-M-L monitoring, sanction screening, and suspicious activity reports. These tools give law enforcement the visibility they need. When you add a new tax. People don't stop sending money, they simply stop using regulated channels. Second, the bill duplicates federal requirements and creates conflicting obligations. Providers already comply with Federal remittance transfer rule and the Bank Secrecy Act. A new state level tax and reporting system adds cost and confusion without improving enforcement. Third, it is a regressive tax on ordinary utahans. Now, I note that, um, uh, Congressman Grisha noticed that if you showed your id, you would not have to pay the tax upfront, which was not our understanding privately. But this tax does apply to military families, missionaries, parents paying tuition or medical bills, and seniors helping relatives abroad, they must carry their, uh, documentation around with them in order to be excluded from that tax. If they don't, the refunds are complicated and rarely used. So for most of the people, this becomes a permanent surcharge on legitimate everyday transactions. Finally, the the bill hurts. Small businesses, grocery stores, pharmacies, and local retailers would be required to collect the tax, maintain records, and face the audit exposure. Many will simply stop offering the remittance services, reducing access for communities, and reducing the foot traffic for their local businesses that they receive other funds for. For these reasons, we respectfully urge you to vote no on house Bill 1 41. We stand ready to work with lawmakers and stakeholders on approaches that strengthen rather than weaken Utah's financial safety and consumer protections. Thank you for your time.

Thanks. Thank you. Mo Hickey, uh, executive Director of Voices for Utah Children. Uh, and we are opposing this bill as it currently stands. We believe it places a financial strain on working families. Many of the families that we're discussing rely on international money transfers to manage shared expenses, or to respond to emergencies. These transfers are not discretionary luxuries, they're essential tools for their financial stability. The bills ID requirements create a significant hurdle for many hourly workers and those using alternative banking services. By blocking families from regulated financial systems, we inadvertently push them toward underground or predatory options that are less safe and more expensive. Even a small tax or fee increases felt deeply by families already balancing the rising cost of rent, childcare, and groceries. While the revenue generated by this bill may be modest for the state, the harm to individual household stability is real and predictable. Utah should be trying to remove barriers for working families, not creating new ones. Please keep these transactions in a regulated system that are safer for the state and the consumer. Adding a 2% tax and strict ID barriers to these regulated channels, the bill may push families toward unregulated informal systems. Thank you for your time.

Thank you, Mr. Chair. I move that house Bill 1 41 International Money Transmission amendments before to the house with a favorable recommendation. There's a sub, like to adopt this first substitute. Oh, your motion is to adopt the first substitute.

Adopt the sub. That was part of my negotiations with our other body.

Thank you. I move the house. Bill 1 41 first substitute International Money Transmission Amendments forwarded to the house with a favorable recommendation.

Awesome. I'll waive.

Thank you, Mr. Chair. I do appreciate the sponsor bringing this bill forward. Um, we heard this bill last year, and I did vote against it last year, and I still stand in the same position of opposing this bill. I really, you know, as much as I am very much against any kind of illicit criminal activity, cartel activity, I worry that this does ensnare, you know, families especially, who are trying to support, uh, families back at their home in their own foreign home. Um, I think it's an equitable, it, it, it is also a privacy issue for folks as well, if they have to present id. So for those same reasons from last year, I still do oppose this bill, but I do appreciate the sponsor bringing this forward again.

Thank you, Mr. Chair. Um, I just, I have nothing but respect for the good representative, so I appreciate your comments. I did wanna take just a moment to respond to some of the public comment that was made. Um, if you've got a bank account at a bank or a credit union, it's not gonna impact you. Um, there's a whole list of IDs, including, we had a, the ambassador from, I wanna say it was Guatemala, reach out last year. So diplomatic IDs are included. Um, anyway, it's been a, a really fun experience and I appreciate you guys letting me sit here again.

Thank you Mr. Speaker. Um, so this bill is a 2% tax on foreign remittances if you do not show a state issued id. So essentially what that means is if you go to wire money from the state of Utah to a foreign country, you will have to pay a 2% fee on top of your money that you're sending. Now if you have an id, which is listed out as a whole bunch of different options, driver's licenses, um, resident alien cards, concealed carry permits, it's everything that we have in our tax statute, but it also includes your H two A and H two B visas because we don't wanna hurt the agriculture community and diplomats. Funny enough, um, if you show one of those, you never have to see the fee. Um, this, since we visited this last year, this provision has been added federally. There is a 1% tax that was included in the big beautiful bill. Um, however, they do not give you the option to opt out of the fee, but since we're Utah and we do it better, we do have that option. And that concludes my presentation.

Thank you Mr. Speaker. We'll to sponsor yield to two questions, a series of questions. Representative Gricius will yield to a series of questions.

So, uh, to the sponsor, are there people who are using this for criminal purposes to avoid being detected and be able to transfer money across country lines? Absolutely. If we see that, especially as we've seen an uptick in fentanyl and drugs moving through the state. Thank you Mr. Speaker. Um, on the list of approved documents, would a passport issued by a foreign country, uh, be acceptable as an, as a form of id?

Um, thank you for the question Mr. Speaker. The answer is potentially no, depending on what accompanying documents you have to go along with that passport. Um, for example, a foreign diplomat would obviously have a foreign passport but they would be exempted under this as would anyone carrying a resident alien card. So it would depend on the specific circumstance.

Uh, Mr. Speaker, would a driving privilege card be an acceptable form of identification?

Thank you Mr. Speaker. It would not. And that is three questions.

Oh, sorry. Thank you Mr. Speaker.

Thank you with the sponsor yield to an unlimited number of questions. Representative gracious, we yield to a unlimited series of questions. No, but I'll give him one. Got one question representative. My question has two parts. The first part, does this have any impact on using cryptocurrency or stable coins to remit money? And the second part, if there is a person legally authorized to work in the United States, for example, many of our tech workers, are they under this bill? Are they no longer allowed to do money? Uh, international money trends? Uh, transmissions.

Thank you for the question. The answer to the first part of that question is no. And the answer to the second part is if they're legally authorized to work here, they would be exempted.

But is would the good sponsor allow a third part to the first question? Representative gracious, will you yield to another question? You

What form of of identification if they do not have a United States passport? If, if they're a authorized to to work here but not a US citizen, what form of identification could be used to to do that?

Um, there are specific visas that are included. If you look at lines 61 through 71 or 72, my apol apologies in the bill it does outline which types of identification would qualify that is consistent with other areas of our tax code.

Thank you Mr. Speaker. I would just rise in support of the good colleagues work on this. This is actually her second year running this bill and she's been working through uh, any concerns that, uh, were had in this chamber on the other side, um, in the other chamber. And this is important colleagues, when we look at human trafficking, drug cartels, drug cells, drug trafficking, this is really important in terms of a public safety perspective and also making sure that we are being good stewards of the taxpayers dollars but also the process that we outline and have that authority to do. And I'd ask for my colleagues to support it.

Thank you Mr. Speaker. I would just like to say $656 billion leave this country via foreign remittances every single year. Um, and even Venmo requires identification if you're gonna send more than $299. Um, so I don't think it's too much to ask for us to say you can still send your money anonymously, but there's a 2% off the top and we do want that to go help with law enforcement and kind of try to cut down on some of those more nefarious activities. And then in conclusion, I'm gonna try this 'cause it worked a couple bills ago. It's a good bill. Thank you representative gracious voting.