Legislature(2009 - 2010)BARNES 124

03/30/2009 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 175 INSURANCE TELECONFERENCED
Moved CSHB 175(L&C) Out of Committee
*+ HB 145 MORTGAGE LENDING TELECONFERENCED
Heard & Held
*+ HB 177 MARINE & MOTORIZED RECREATIONAL PRODUCTS TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 30, 2009                                                                                         
                           3:16 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Mark Neuman, Vice Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative John Coghill                                                                                                     
Representative Bob Lynn                                                                                                         
Representative Robert L. "Bob" Buch                                                                                             
Representative Lindsey Holmes                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
HOUSE BILL NO. 175                                                                                                              
"An   Act   relating   to  insurance,   including   treating   as                                                               
confidential  certain information  submitted to  the director  of                                                               
insurance    by   the    National   Association    of   Insurance                                                               
Commissioners; clarifying  conditions for the release  of insurer                                                               
deposits;  defining travel  insurance that  may be  sold under  a                                                               
travel insurance limited  producer license; establishing criteria                                                               
for licensing  of nonresident  independent adjusters  as resident                                                               
adjusters;  exempting  rewards  under  a  wellness  program  from                                                               
treatment  as   insurance  discrimination  or   rebating;  making                                                               
certain insurance required of  the Comprehensive Health Insurance                                                               
Association permissive  rather than mandatory; providing  for the                                                               
administration  of loss  reimbursement policies  and payments  to                                                               
guaranty  associations  during   insolvency  proceedings;  making                                                               
certain  provisions relating  to statements  on applications  and                                                               
guaranteed   renewability   for   individual   health   insurance                                                               
applicable to  hospital and medical service  corporations; making                                                               
public certain forms and related  documents filed for approval by                                                               
a  hospital  or  medical  service corporation  after  the  filing                                                               
becomes effective;  relating to deposits of  self-funded multiple                                                               
employer  welfare   arrangements;  repealing  reasons   that  the                                                               
director of  insurance may use to  deny or revoke a  license; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED CSHB 175(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
                                                                                                                                
HOUSE BILL NO. 145                                                                                                              
"An Act relating  to the regulation of  residential real property                                                               
mortgage lending,  including the  licensing of  mortgage lenders,                                                               
mortgage brokers,  and mortgage  loan originators  and compliance                                                               
with  certain  federal  laws  relating  to  residential  mortgage                                                               
lending; and providing for an effective date."                                                                                  
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 177                                                                                                              
"An Act relating to marine products and motorized recreational                                                                  
products; and providing for an effective date."                                                                                 
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
BILL: HB 175                                                                                                                  
SHORT TITLE: INSURANCE                                                                                                          
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
03/09/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/09/09       (H)       L&C, FIN                                                                                               
03/11/09       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/11/09       (H)       Heard & Held                                                                                           
03/11/09       (H)       MINUTE(L&C)                                                                                            
03/13/09       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/16/09       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/16/09       (H)       Scheduled But Not Heard                                                                                
03/20/09       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/20/09       (H)       Heard & Held                                                                                           
03/20/09       (H)       MINUTE(L&C)                                                                                            
03/30/09       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 145                                                                                                                  
SHORT TITLE: MORTGAGE LENDING                                                                                                   
SPONSOR(s): REPRESENTATIVE(s) LYNN                                                                                              
                                                                                                                                
02/23/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/23/09       (H)       L&C, FIN                                                                                               
03/30/09       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LINDA HALL, Director                                                                                                            
Division of Insurance, Anchorage Office                                                                                         
Department of Community & Economic Development (DCCED)                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  during the discussion of                                                             
HB 175.                                                                                                                         
                                                                                                                                
TYSON FICK, Legislative Liaison                                                                                                 
Office of the Commissioner                                                                                                      
Department  of   Commerce,  Community,  &   Economic  Development                                                               
(DCCED)                                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 145.                                                               
                                                                                                                                
LORIE HOVANEC, Director                                                                                                         
Division of Banking and Securities (DBS)                                                                                        
Department  of   Commerce,  Community,  &   Economic  Development                                                               
(DCCED)                                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified  in   support  of  HB  145  and                                                             
presented the  committee substitute  during the discussion  of HB
145.                                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:16:46 PM                                                                                                                    
                                                                                                                              
CHAIR KURT  OLSON called  the House  Labor and  Commerce Standing                                                             
Committee meeting to order at  3:16 p.m.  Representatives Holmes,                                                               
Lynn,  Neuman, and  Olson  were  present at  the  call to  order.                                                               
Representatives  Buch,  Chenault,  and  Coghill  arrived  as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
3:17:03 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  indicated the sponsor  of HB 177 requested  that the                                                               
bill be removed from today's calendar.                                                                                          
                                                                                                                                
HB 175-INSURANCE                                                                                                              
                                                                                                                                
3:17:26 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE  BILL NO.  175, "An  Act relating  to insurance,  including                                                               
treating  as confidential  certain information  submitted to  the                                                               
director of  insurance by the  National Association  of Insurance                                                               
Commissioners; clarifying  conditions for the release  of insurer                                                               
deposits;  defining travel  insurance that  may be  sold under  a                                                               
travel insurance limited  producer license; establishing criteria                                                               
for licensing  of nonresident  independent adjusters  as resident                                                               
adjusters;  exempting  rewards  under  a  wellness  program  from                                                               
treatment  as   insurance  discrimination  or   rebating;  making                                                               
certain insurance required of  the Comprehensive Health Insurance                                                               
Association permissive  rather than mandatory; providing  for the                                                               
administration  of loss  reimbursement policies  and payments  to                                                               
guaranty  associations  during   insolvency  proceedings;  making                                                               
certain  provisions relating  to statements  on applications  and                                                               
guaranteed   renewability   for   individual   health   insurance                                                               
applicable to  hospital and medical service  corporations; making                                                               
public certain forms and related  documents filed for approval by                                                               
a  hospital  or  medical  service corporation  after  the  filing                                                               
becomes effective;  relating to deposits of  self-funded multiple                                                               
employer  welfare   arrangements;  repealing  reasons   that  the                                                               
director of  insurance may use to  deny or revoke a  license; and                                                               
providing for an effective date."   [Before the committee was the                                                               
Version S.]                                                                                                                     
                                                                                                                                
3:18:16 PM                                                                                                                    
                                                                                                                                
LINDA HALL,  Director, Division  of Insurance,  Anchorage Office,                                                               
Department of  Community &  Economic Development  (DCCED), stated                                                               
that  the   committee  substitute  Version  S   removes  previous                                                               
Sections 25  and 26  relating to insolvencies.   She  pointed out                                                               
that Section  11 of  the bill permits  the Division  of Insurance                                                               
director  to order  a  summary  suspension of  a  license if  the                                                               
director finds  that protection of the  public requires emergency                                                               
action and incorporates  the finding in an order.   She indicated                                                               
that  she   asked  for  this   authority  in  cases   of  extreme                                                               
emergencies.    She  stated  that is  the  only  provision  which                                                               
represents a policy change.                                                                                                     
                                                                                                                                
3:19:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COGHILL indicated  that he  spent some  time with                                                               
the  director  of  the  Division of  Insurance  and  agrees  that                                                               
additional  statutory authority  is needed.   He  stated that  he                                                               
tried to imagine a different  director and circumstances in which                                                               
someone might misuse this authority.   He offered his belief that                                                               
enough  safeguards  are   in  the  bill  to   prevent  misuse  of                                                               
authority.                                                                                                                      
                                                                                                                                
3:20:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN referred to the  bill title and asked which                                                               
information is confidential information.                                                                                        
                                                                                                                                
MS.  HALL referred  to Section  1 of  Version S.   She  stated AS                                                               
21.06.060  lists records  that must  be kept  confidential.   She                                                               
indicated  AS  21.06.060(f)(2)  adds   to  the  list  proprietary                                                               
information or  records established by a  showing satisfactory to                                                               
the   director.      Thus,  the   new   paragraph   would   allow                                                               
confidentiality for proprietary or  trade secrets.  Additionally,                                                               
a change  was made to  paragraph (4)  that would remove  the term                                                               
"financial"  from the  analysis  rations and  examinations.   She                                                               
explained  that   the  division  receives  analysis   ratios  and                                                               
examination  synopses  from  the National  Association  Insurance                                                               
Commissioners,  which   is  other   states'  information.     She                                                               
mentioned the Division of Insurance  has signed a confidentiality                                                               
statement  that it  will not  release other  states' information.                                                               
Thus,  this change  would  allow the  division  to obtain  market                                                               
conduct information.                                                                                                            
                                                                                                                                
REPRESENTATIVE  NEUMAN asked  what the  insurance term  is for  a                                                               
record check examining home insurance claims.                                                                                   
                                                                                                                                
3:23:34 PM                                                                                                                    
                                                                                                                                
MS. HALL answered that Representative  Neuman is referring to the                                                               
[Comprehensive Loss Underwriting Exchange]  C.L.U.E. report.  She                                                               
explained  that  would   be  considered  personally  identifiable                                                               
consumer information.  She offered  her belief the division would                                                               
not release to the public  confidential consumer information that                                                               
was collected in the course  of conducting business.  She related                                                               
that those types  of reports would generally be  in the insurance                                                               
company records and not in the division's records.                                                                              
                                                                                                                                
3:24:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  asked whether  the consumer's  identity is                                                               
protected.                                                                                                                      
                                                                                                                                
MS.  HALL  answered  that  the  division  does  not  perform  any                                                               
profiling.   She explained that  the division would  perform some                                                               
rating underwriting through the use  of credit scoring.  However,                                                               
the  division does  not  receive  detailed consumer  information,                                                               
which  by statute  is  confidential.   She  related the  division                                                               
reviews standards.   She stated that the  rating and underwriting                                                               
laws prohibit unfair discrimination.                                                                                            
                                                                                                                                
3:25:07 PM                                                                                                                    
                                                                                                                                
MS. HALL,  in response to  Representative Neuman,  explained that                                                               
the Division  of Insurance does not  collect personal information                                                               
so it  would not have the  ability to disseminate it.   She added                                                               
that under  public records  laws, the division  does not  have to                                                               
collect  and create  reports that  it does  not already  collect.                                                               
She opined the division does not collect personal information.                                                                  
                                                                                                                                
CHAIR OLSON  offered his  belief that  the problem  was corrected                                                               
last year and  pertained to a different department  that had been                                                               
releasing confidential information.                                                                                             
                                                                                                                                
3:26:16 PM                                                                                                                    
                                                                                                                                
MS.  HALL, in  response to  Representative Neuman,  explained the                                                               
only opposition  received on  HB 175  related to  provisions that                                                               
have been removed from the bill.                                                                                                
                                                                                                                                
3:26:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH  commented that the committee  held extensive                                                               
discussions on  HB 175  a month  ago and  his concerns  have been                                                               
addressed.   He  inquired as  to  whether any  other issues  have                                                               
arisen that would need to be addressed before next session.                                                                     
                                                                                                                                
MS.  HALL  related  her  understanding   that  only  three  weeks                                                               
remained of  the legislative  session.  She  answered she  had no                                                               
additional matters with respect to HB 175.                                                                                      
                                                                                                                                
3:28:14 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after first  determining  no  one else  wished  to                                                               
testify, closed public testimony on HB 175.                                                                                     
                                                                                                                                
REPRESENTATIVE NEUMAN moved to report  the CS for HB 175, Version                                                               
26-LS0579\S, Bailey,  3/16/09, out  of committee  with individual                                                               
recommendations and  the accompanying  fiscal note.   There being                                                               
no  objection, the  CSHB  175(L&C) was  reported  from the  House                                                               
Labor and Commerce Standing Committee.                                                                                          
                                                                                                                                
3:29:23 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:29 p.m. to 3:31 p.m.                                                                       
                                                                                                                                
HB 145-MORTGAGE LENDING                                                                                                       
                                                                                                                                
3:31:18 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the final order of  business would be                                                               
HOUSE  BILL  NO. 145,  "An  Act  relating  to the  regulation  of                                                               
residential  real   property  mortgage  lending,   including  the                                                               
licensing  of mortgage  lenders, mortgage  brokers, and  mortgage                                                               
loan  originators  and  compliance   with  certain  federal  laws                                                               
relating to  residential mortgage  lending; and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
3:31:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN  made  a  motion to  adopt  the  committee                                                               
substitute  (CS)  for  HB 145,  Version  26-LS0598\E,  Bannister,                                                               
3/30/09, as the work draft.                                                                                                     
                                                                                                                                
CHAIR OLSON objected for the  purposes of discussion.  [Version E                                                               
was before the committee.]                                                                                                      
                                                                                                                                
3:32:09 PM                                                                                                                    
                                                                                                                                
TYSON  FICK, Legislative  Liaison,  Office  of the  Commissioner,                                                               
Department  of   Commerce,  Community,  &   Economic  Development                                                               
(DCCED),  stated  that HB  145  makes  many changes  to  mortgage                                                               
lending  statutes to  bring the  state into  compliance with  the                                                               
federal Secure  and Fair Enforcement  for Mortgage  Licensing Act                                                               
of 2008, also  referred to as the SAFE Mortgage  Licensing Act of                                                               
2008  (SAFE  Act).    This  bill resulted  from  efforts  by  the                                                               
sponsor, the  Department of  Law (DOL),  the Division  of Banking                                                               
and  Securities, Department  of Commerce,  Community, &  Economic                                                               
Development   (DCCED),   industry    representatives,   and   the                                                               
legislative drafters.                                                                                                           
                                                                                                                                
3:33:11 PM                                                                                                                    
                                                                                                                                
LORIE  HOVANEC,  Director,  Division of  Banking  and  Securities                                                               
(DBS), Department of Commerce,  Community, & Economic Development                                                               
(DCCED),  offered  the  division's   support  for  the  committee                                                               
substitute  Version   E.    She  explained   that  the  committee                                                               
substitute  will  bring  current  mortgage  lending  statutes  in                                                               
compliance  with federal  law.   Congress passed  a new  law that                                                               
required  the division  to revise  its current  statute.   In the                                                               
interim the DCCED  added back into the bill what  is necessary to                                                               
grant authority for policy changes  and to incorporate as much of                                                               
the SAFE Act  into law as possible.  She  highlighted the banking                                                               
industry was  concerned that the  division might make  changes by                                                               
regulation instead  of by statute.   She offered the  Division of                                                               
Banking  and Securities'  support for  the committee  substitute,                                                               
Version E.                                                                                                                      
                                                                                                                                
3:35:15 PM                                                                                                                    
                                                                                                                                
MS. HOVANEC emphasized  the need for compliance  with federal law                                                               
by July  30, 2009.  She  explained that the federal  law consists                                                               
of two  parts.  First is  to bring the statutes  into compliance.                                                               
Second  is  to  join  the national  mortgage  licensing  database                                                               
registry system,  referred to as the  National Mortgage Licensing                                                               
System (NMLS).   She further  explained that states can  join the                                                               
NMLS  prior  to  the  effective  date  of  their  statute.    She                                                               
indicated that  the NMLS is activated  by groups of states.   She                                                               
noted  that Alaska,  along with  six or  seven other  states will                                                               
join the  NMLS licensing system on  August 1, 2009.   She offered                                                               
her belief  if HB 145 does  not pass that the  division will need                                                               
some authorization  to join  the NMLS.   Additionally,  under the                                                               
federal  statutes,  the  U.S. Department  of  Housing  and  Urban                                                               
Development (HUD)  will regulate mortgage licensing.   She opined                                                               
the DCCED  does not  wish to  have that  occur.   She highlighted                                                               
that  the  state  could  apply  for an  extension,  but  the  HUD                                                               
standards  are not  yet set  up.   She related  her understanding                                                               
that no  states have applied  for an  extension.  She  hoped that                                                               
the legislature could  support HB 145.  Further,  two sections of                                                               
the bill do not refer to  mandated changes.  She referred members                                                               
to item  10 in  members' packets,  titled "Talking  Points- Lorie                                                               
Hovanec,  Director, Division  of  Banking and  Securities."   She                                                               
offered  to   discuss  the  talking   points,  but   related  her                                                               
preference to have committee members  digest the bill and discuss                                                               
the points at a later date.                                                                                                     
                                                                                                                                
3:38:36 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON remarked  that HB 145 has been expanded  from 9 to 36                                                               
pages.   He inquired as to  whether she has prepared  a sectional                                                               
analysis for the bill.                                                                                                          
                                                                                                                                
MS. HOVANEC related  that she received a copy of  Version E about                                                               
an  hour ago  so she  has not  had time  to revise  the sectional                                                               
analysis to correspond to the  committee substitute.  She offered                                                               
to provide a sectional analysis for the next meeting.                                                                           
                                                                                                                                
3:39:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HOLMES  mentioned   that  she   appreciates  the                                                               
forthcoming details.   She said  she did  not see a  fiscal note,                                                               
but recalled reading the state  would share implementation costs.                                                               
She inquired as to the financial implications for the state.                                                                    
                                                                                                                                
MS.  HOVANEC  answered that  the  initial  cost would  likely  be                                                               
$50,000,  the  minimum  fee  to  join  based  on  the  number  of                                                               
licensees.   She explained that  the state is just  now licensing                                                               
mortgage  lender   broker,  and  orginators.     Thereafter,  the                                                               
licensing  system  is industry  supported.    She mentioned  some                                                               
initial training sessions may be  necessary for staff to learn to                                                               
operate the  system, but by the  third year the fiscal  note is a                                                               
zero fiscal note.  She referred  to a fiscal note from the DCCED,                                                               
Banking  and   Securities  approved  by  Commissioner   Notti  on                                                               
3/11/09.                                                                                                                        
                                                                                                                                
3:40:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN referred  to  page 3,  lines 18-21,  which                                                               
read,  "For the  purpose of  participating in  the registry,  the                                                               
department  may  waive  or  modify,  in  whole  or  in  part,  by                                                               
regulation  or order,  any or  all  of the  requirements of  this                                                               
chapter ... "  He opined this appears to be a blanket waiver.                                                                   
                                                                                                                                
MS.  HOVANEC related  her  understanding the  purpose  is in  the                                                               
event  of an  unexpected change  that  the state  can modify  via                                                               
regulation.   She highlighted that this  specific waiver language                                                               
is derived  from the model state  language approved by HUD.   She                                                               
offered to  review the intent of  the provision.  In  response to                                                               
Chair Olson, Ms.  Hovanec agreed that this is the  first time the                                                               
language has been proposed to the legislature.                                                                                  
                                                                                                                                
3:42:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH asked for the  reason for the federal changes                                                               
incorporated in the SAFE Act.                                                                                                   
                                                                                                                                
MS. HOVANEC offered  her belief that the federal  law changed due                                                               
to the mortgage lending issues  and problems precipitated some of                                                               
the  financial  crises.   She  expressed  her  understanding  the                                                               
former director,  Mark Davis, related that  the draft legislation                                                               
included some  items the federal government  was considering such                                                               
as  pre-licensing,   educational  requirements,   and  background                                                               
checks.                                                                                                                         
                                                                                                                                
3:43:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH  offered his belief  that this is a  "work in                                                               
progress" and some provisions may need to be adjusted.                                                                          
                                                                                                                                
MS. HOVANEC  recalled a Congressional  report that  indicated the                                                               
state  and  federal  government  will  work  together  on  credit                                                               
transactions.   She highlighted that  the division  has attempted                                                               
to  keep some  of  the statutory  requirements  for licensing  in                                                               
regulation in  anticipation of changes  the division may  need to                                                               
adapt to next few years.                                                                                                        
                                                                                                                                
3:45:12 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  inquired as to  who developed the  model legislation                                                               
and if it has been adopted by other states.                                                                                     
                                                                                                                                
MS.  HOVANEC answered  yes, that  as of  a month  ago, two  other                                                               
states  have  enacted  their  legislation,  using  a  substantial                                                               
portion  of the  model language.   She  explained that  the model                                                               
language was developed by the  entities tasked under the SAFE Act                                                               
with creating  the NMLS registry.   The Conference of  State Bank                                                               
Supervisors (CSBS), and [the  American Association of Residential                                                               
Mortgage  Regulators] (AARMR)  developed the  system and  to date                                                               
over 20  governmental agencies  are using the  NMLS system.   She                                                               
offered to forward HB 145 to the CSBS for review.                                                                               
                                                                                                                                
3:47:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT asked who is  requesting HB 145.  He                                                                    
opined one reason that some  lending institutions are in the                                                                    
position  they currently  are in  is the  institutions moved                                                                    
away  from  good  business practices  by  loaning  money  to                                                                    
people  who were  a credible  risk.   He further  opined the                                                                    
federal government  told them to  lend money to  anyone that                                                                    
wanted  to buy  a  home.   He  expressed  concern about  the                                                                    
source  of   the  changes,   particularly  if   the  federal                                                                    
government is the source of the bill.  He said:                                                                                 
                                                                                                                                
     If it is  the bankers whose job it is  to turn a profit                                                                    
     for their  stockholders and their shareholders,  then I                                                                    
     feel a  lot more  comfort in  that.   But, I  think the                                                                    
     biggest reason we're in the  position we are in is that                                                                    
     we had  the federal government determine  what was best                                                                    
     for the citizens of the U.S.  and now we find what they                                                                    
     promoted is definitely  going to be with us  for a long                                                                    
     period of time, Mr. Chairman.                                                                                              
                                                                                                                                
3:48:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  pointed out  the House  Resources Standing                                                               
Committee just  passed three resolutions  "that told  the federal                                                               
government  to stay  out  of  our business."    He  asked if  the                                                               
provisions requirements  background checks and  fingerprints, are                                                               
subject to privacy clauses.                                                                                                     
                                                                                                                                
MS.  HOVANEC  offered   to  report  back  to   the  committee  on                                                               
confidentiality.  She related that  the provisions are similar to                                                               
current statute.   She  stated that  under the  current statutes,                                                               
fingerprint  cards  are submitted  to  the  Department of  Public                                                               
Safety.   While she  said she  was not  certain, she  offered her                                                               
belief that  the statutes  contain provisions  for some  level of                                                               
confidentiality.   She  stressed that  the whole  purpose of  the                                                               
NMLS  and registry  is  to prevent  someone who  "may  not be  an                                                               
upstanding member  of the industry" from  transacting business in                                                               
one state  from moving to  another part  of the country  to start                                                               
another  operation.   She opined  that running  background checks                                                               
creates more transparency and better consumer protection.                                                                       
                                                                                                                                
3:50:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  asked whether  any "profiling"  can happen                                                               
as a result of the bill.                                                                                                        
                                                                                                                                
MS.  HOVANEC   answered  that   the  background   information  is                                                               
performed by  the national licensing  system, and is sent  to the                                                               
state to examiners in the  Division of Banking and Securities who                                                               
make the  licensing determination.  She  mentioned that licensing                                                               
examiners  may  also  run  their  own  check  of  records.    She                                                               
highlighted that the state licenses individuals.                                                                                
                                                                                                                                
3:51:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  referred to page 5  and 6 of HB  145 which                                                               
relates to  examination fees that  may be assessed.   He inquired                                                               
as to whether the fee has been determined.                                                                                      
                                                                                                                                
MS.  HOVANEC  offered  her  belief   that  the  division  is  not                                                               
anticipating changing educational testing fees at this time.                                                                    
                                                                                                                                
3:53:01 PM                                                                                                                    
                                                                                                                                
MS. HOVANEC,  in response to  Representative Neuman,  stated that                                                               
the state  statute became effective  on July  1, 2008.   The SAFE                                                               
Act became  effective on  July 30,  2008.   She related  that the                                                               
DCCED has  worked with the Department  of Law since then  to make                                                               
some of the changes that would be required under the SAFE Act.                                                                  
                                                                                                                                
3:54:18 PM                                                                                                                    
                                                                                                                                
MS. HOVANEC,  in response to  Chair Olson, stated the  reason the                                                               
longer bill was  not previously submitted is due to  the lag time                                                               
in  obtaining approval  for the  provisions  in Version  E.   She                                                               
said, "Believe me, it certainly was  not my preference.  I've put                                                               
in  70  hours  just  this  past week  and  all  weekend,  so,  my                                                               
apologies."                                                                                                                     
                                                                                                                                
3:54:54 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  indicated the committee  did not even have  24 hours                                                               
advance notice to review the  committee substitute.  He announced                                                               
that  HB  145,  Version  E,   would  be  held  over  for  further                                                               
consideration.                                                                                                                  
                                                                                                                                
3:55:22 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
3:55 p.m.                                                                                                                       
                                                                                                                                

Document Name Date/Time Subjects
01 HB145 ver A.pdf HL&C 3/30/2009 3:15:00 PM
HB 145
02 CSHB145 Sponsor Statement ver R.pdf HL&C 3/30/2009 3:15:00 PM
HB 145
03 CS for HB145 ver R.pdf HL&C 3/30/2009 3:15:00 PM
HB 145
04 HB145 SAFE Act Overview.pdf HL&C 3/30/2009 3:15:00 PM
HB 145
06 HB145 SAFE Act--Frequently Asked Questions.pdf HL&C 3/30/2009 3:15:00 PM
HB 145
08 HB145 Leg Legal Memo ver E.pdf HL&C 3/30/2009 3:15:00 PM
HB 145
09 CS HB145 ver E.pdf HL&C 3/30/2009 3:15:00 PM
HB 145
07 CSHB145 ver E - Presentation to L&C by Laurie Hovanec.pdf HL&C 3/30/2009 3:15:00 PM
HB 145
05 HB145 SAFE Act side by side with Model Language.pdf HL&C 3/30/2009 3:15:00 PM