Legislature(2017 - 2018)BARNES 124

01/26/2018 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 240 PHARMACY BENEFITS MANAGERS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 180 MONEY SERVICES BUSINESS: REQS; LICENSING; TELECONFERENCED
Moved HB 180 Out of Committee
-- Public Testimony --
+= HB 273 EXTEND: MARIJUANA CONTROL BOARD TELECONFERENCED
Moved HB 273 Out of Committee
-- Public Testimony --
+= HB 274 EXTEND: BD OF PSYCHOLOGISTS/PSYCH ASSOC. TELECONFERENCED
Moved HB 274 Out of Committee
-- Public Testimony --
+= HB 275 EXTEND: BOARD OF MASSAGE THERAPISTS TELECONFERENCED
Moved HB 275 Out of Committee
-- Public Testimony --
        HB 180-MONEY SERVICES BUSINESS: REQS; LICENSING;                                                                    
                                                                                                                                
3:17:20 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
HOUSE BILL  NO. 180, "An  Act relating to money  transmission and                                                               
currency  exchange  businesses;  relating to  transmitting  value                                                               
that substitutes  for money;  relating to  licensing requirements                                                               
and  registration  through  the Nationwide  Multistate  Licensing                                                               
System  and Registry;  relating to  surety bonding  requirements;                                                               
authorizing  certain licensees  to contract  to use  subdelegates                                                               
for reloading  funds on certain  stored-value cards;  relating to                                                               
record   retention,  reporting   requirements,  and   enforcement                                                               
provisions; relating  to exemptions;  relating to  money services                                                               
Internet   activities;  relating   to   transmitting  value   and                                                               
currency; and providing for an effective date."                                                                                 
                                                                                                                                
3:17:50 PM                                                                                                                    
                                                                                                                                
MARY SCHLOSSER, Staff, Representative  Zach Fansler, Alaska State                                                               
Legislature,  presented  HB  180   on  behalf  of  Representative                                                               
Fansler, prime sponsor.  She stated  that HB 180 would update the                                                               
Alaska Money Services Act, passed  in 2007.  Due to technological                                                               
advances over  the previous eleven  years, current  statutes were                                                               
outdated.    The Act  provided  a  legal framework  for  currency                                                               
exchange  and  money transmission  functions.    It would  update                                                               
licensing and record  keeping as well as  deter illegal behavior.                                                               
Additionally, it would support Alaska  businesses by removing the                                                               
50 percent  outside firm discount and  encourage small businesses                                                               
by  replacing  the $25  thousand  net  worth requirement  with  a                                                               
surety bond.   It would broaden the definition  of money services                                                               
to  include virtual  currency such  as  Bitcoin.   The Act  would                                                               
update enforcement  provisions and require background  checks for                                                               
all control persons,  as well as increase  records retention from                                                               
three to five  years for greater transparency.   Finally, the Act                                                               
would  require the  use of  the  Nationwide Multistate  Licensing                                                               
System  (NMLS)  currently  used  by  over  90  percent  of  money                                                               
services businesses in other states.                                                                                            
                                                                                                                                
3:22:04 PM                                                                                                                    
                                                                                                                                
FRED  PARADY,   Deputy  Commissioner,  Department   of  Commerce,                                                               
Community,  and  Economic  Development,  described  the  proposed                                                               
legislation.  He began that the  primary thing HB 180 would do is                                                               
modernize the statute,  adopted in 2007 and  which technology has                                                               
rendered  obsolete.   This has  left the  industry and  consumers                                                               
without   clearly  defined   regulatory  requirements,   and  the                                                               
department  without the  mechanisms  it needs  to protect  Alaska                                                               
consumers.                                                                                                                      
                                                                                                                                
MR. PARADY continued that the  proposed legislation would seek to                                                               
encompass current technology; changes  in terminology; the use of                                                               
alternative payment  systems to conduct business;  and allow some                                                               
room  within the  statute  for the  evolution  of money  services                                                               
transactions.   Of interest to  rural Alaska, HB 180  would allow                                                               
the limited use  of a subdelegate to load a  prepaid card and the                                                               
locations available  for consumers to receive  that service would                                                               
be increased across rural Alaska.                                                                                               
                                                                                                                                
MR.  PARADY added  that HB  180 would  conform to  the Nationwide                                                               
Multistate Licensing  System [NMLS] and registry,  currently used                                                               
by  over 90  percent  of the  licensees  transacting business  in                                                               
other states.   The NMLS standardizes annual  reporting dates and                                                               
the 5-year reporting term.                                                                                                      
                                                                                                                                
MR.  PARADY underlined  that the  proposed bill  would remove  an                                                               
unfair   financial  and   licensing  advantage   to  out-of-state                                                               
entities which  had been  allowed to  come in  with a  50 percent                                                               
discount on  their licensing fee  which has proven to  be unfair.                                                               
However, the  proposed bill  would remove  the $25,000  net worth                                                               
requirement for a  business to maintain.  It  would also increase                                                               
the surety  bond requirement from  [a] half million dollars  to a                                                               
million  dollars.    A  surety bond  required  would  range  from                                                               
$25,000   to  $1   million,  and   the  criteria   defining  that                                                               
requirement would  be set in  regulation.  HB 180  would increase                                                               
that surety bond  maximum amount and would also  establish a bond                                                               
requirement for currency exchange licensees.                                                                                    
                                                                                                                                
MR.  PARADY stated  that  HB  180 would  add  a background  check                                                               
component for all control persons  and would expand the number of                                                               
people  who have  to submit  to that  background check  to ensure                                                               
compliance with federal registries  regarding terrorism and money                                                               
laundering.  It would add  a requirement for an annual assessment                                                               
for each licensee.                                                                                                              
                                                                                                                                
MR. PARADY offered that the  department could provide consumers a                                                               
list of  money services  businesses, their  authorized delegates,                                                               
and  consumer   contact  information  for   consumer  complaints.                                                               
Additionally, HB 180 would allow  for suspension orders and other                                                               
orders   that   fall   short  of   cease   and   desist   orders.                                                               
Additionally,  the   proposed  bill   would  expand  a   list  of                                                               
exemptions,  namely attorneys  and insurance  companies for  whom                                                               
money transmission is ancillary to their core business activity.                                                                
                                                                                                                                
3:28:22 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO   opened  public   testimony  on   HB  180.     After                                                               
ascertaining  that no  one wished  to testify,  he closed  public                                                               
testimony.                                                                                                                      
                                                                                                                                
3:28:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL moved to report  HB 180 out of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There  being no  objection, HB  180 was  reported from  the House                                                               
Labor and Commerce Standing Committee.                                                                                          

Document Name Date/Time Subjects
HB180 Money Services Business 1.22.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 180
HB180 Sectional Analysis 5.2.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 180
HB180 Sponsor Statement 5.2.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 180
HB180 Support Document Money Services Act Powerpoint 5.8.17.pptx HL&C 1/26/2018 3:15:00 PM
HB 180
HB180 ver. A 5.2.17.PDF HL&C 1/26/2018 3:15:00 PM
HB 180
HB180 HLC Follow Up 5.15.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 180
HB180 Support Document Money Services Act Powerpoint 5.8.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 180
HB180 Fiscal note DCCED-DBS 1.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 180
HB273 Ver D 01.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 273
HB273 Fiscal Note DCCED-CBPL 1.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 273
HB273 Legislative Audit 01.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 273
HB273 Sponsor Statement 01.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 273
HB274 Sponsor Statement.pdf HL&C 1/26/2018 3:15:00 PM
HB 274
HB274 Version D.PDF HL&C 1/26/2018 3:15:00 PM
HB 274
HB275 Sponsor Statement 01.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 275
HB275 Version D 01.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 275
HB275 Fiscal Note DCCED-CBPL 1.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 275
HB275 Legislative Audit 10.11.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 275
HB240 Supporting Documents- PBM Business Model, 5.11.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Supporting Documents- PowerPoint, 5.11.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Supporting Documents- Storybook, 5.11.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 ver A.PDF HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Fiscal note DCCED DOI 1.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Fiscal note DOA DRB 1.18.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Sectional Analysis ver A 5.4.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Sponsor Statement 5.4.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Supporting Document-Response to Fiscal Notes 5.16.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Supporting Documents- Newsweek Article 5.16.17.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Opposition Letters 1.25.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Support Letters 1.25.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB275 Oppostion Letters 1.25.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 275
HB275 Support Letters 1.25.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 275
HB273 Support letters 1.19.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 273
HB240 opposition letter AHIP.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Supporting Documents-Time To Lift the Curtain On PBM Wheeling and Dealing 1.25.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Support Letters 1.26.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Supporting Document PowerPoint 1.26.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB240 Opposition Letters 1.26.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 240
HB275 Oppostion Letters 1.26.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 275
HB275 Support Letters 1.26.18.pdf HL&C 1/26/2018 3:15:00 PM
HB 275