Legislature(2007 - 2008)SENATE FINANCE 532

05/10/2007 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 6:00 p.m.--
+= SB 104 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Moved CSSB 104(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                            MINUTES                                                                                           
                    SENATE FINANCE COMMITTEE                                                                                  
                          May 10, 2007                                                                                        
                           1:51 p.m.                                                                                          
                                                                                                                                
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair  Bert  Stedman  convened the  meeting  at  approximately                                                               
1:51:48 PM.                                                                                                                   
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Fred Dyson                                                                                                              
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
Also  Attending: SENATOR  JOHNNY  ELLIS;  SENATOR HOLLIS  FRENCH;                                                             
REPRESENTATIVE  BOB  LYNN;  MARK  DAVIS,  Director,  Division  of                                                               
Banking  &  Securities,  Department of  Commerce,  Community  and                                                               
Economic  Development; PAT  GALVIN,  Commissioner, Department  of                                                               
Revenue;  STEVE PORTER,  Staff to  Senator  Bert Stedman;  MARCIA                                                               
DAVIS,   Deputy  Commissioner,   Department  of   Revenue;  KEVIN                                                               
BREELAND,  President, Alaska  Mortgage  Bankers Association,  and                                                               
Partner  and  Mortgage  Loan  Originator,  Residential  Mortgage;                                                               
PETER  EASAW,   Primerica  Financial  Services;   JULIE  GRANGER,                                                               
Primerica Financial Services; LYNNEA OLSEN, Citigroup                                                                           
                                                                                                                                
Attending  via Teleconference:  From  an  Offnet Location:  SIMON                                                             
KEYMER,  American Financial  Services  Association; From  Mat-Su:                                                               
JEFFREY  SMITH, Primerica  Financial  Services; PHYLISS  HOFFMAN,                                                               
Primerica  Financial  Services;   From  Anchorage:  FRED  LAURION                                                               
Primerica Financial Services;  LAIRD JENKINS, Primerica Financial                                                               
Services;  CARL  MCINTYRE,  Primerica  Financial  Services;  JOHN                                                               
PEEK,  Primerica  Financial  Services; MIKE  CLAYBORN,  Primerica                                                               
Financial  Services; JULIA  COSTER,  Assistant Attorney  General,                                                               
Commercial/Fair  Business  Section, Civil  Division  (Anchorage),                                                               
Department of Law; DUSTIN  SHANNON, Primerica Financial Services;                                                               
JOHN  MARTIN,  Alaska  Mortgage  Solution,  and  Past  President,                                                               
Alaska  Mortgage Brokers  Association;  ROGER PRINCE,  Securities                                                               
Examiner,  Division  of  Banking,  Securities  and  Corporations,                                                               
Department of Commerce, Community  and Economic Development; From                                                               
Fairbanks:  NICOLE  STRELTSOVA,   Primerica  Financial  Services;                                                               
LAVADA  CHRISTINASON, Primerica  Financial Services;  ROSE BAADE,                                                               
Primerica  Financial   Services;  JENNIFER   MACOMBER,  Primerica                                                               
Financial  Services;  RON  HUNT,  Primerica  Financial  Services;                                                               
DENNIS  SHINN,  Primerica  Financial Services;  CURTIS  MACOMBER,                                                               
Primerica Financial Services;  DAVID MUELLER, Primerica Financial                                                               
Services; BETTY  KETZLER Primerica Financial  Services; DOTHORTHY                                                               
JONES, Primerica Financial  Services; MAUREEN MISEWICZ, Primerica                                                               
Financial   Services;   JONATHAN  BOURNE,   Primerica   Financial                                                               
Services                                                                                                                        
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
HB 162-MORTGAGE LENDING                                                                                                         
                                                                                                                                
The Committee  heard from the  bill's sponsor, the  Department of                                                               
Commerce, Community  and Economic Development, and  the industry.                                                               
A  committee substitute  was adopted,  and the  bill was  held in                                                               
Committee.                                                                                                                      
                                                                                                                                
SB 104-NATURAL GAS PIPELINE PROJECT                                                                                             
                                                                                                                                
The Committee heard  from the Department of  Revenue. A committee                                                               
substitute  and  eight  amendments  were adopted,  and  the  bill                                                               
reported from Committee.                                                                                                        
                                                                                                                                
1:51:56 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR HOUSE BILL NO. 162(L&C)                                                                                             
     "An  Act relating  to  mortgage  lenders, mortgage  brokers,                                                               
     mortgage  originators,  state  agents  who  collect  program                                                               
     administration  fees,  and  other   persons  who  engage  in                                                               
     activities  relating   to  mortgage  lending;   relating  to                                                               
     mortgage loan  activities; relating  to an  originator fund;                                                               
     relating  to fees  for  mortgage  loan transactions;  making                                                               
     certain  violations  unfair  trade  practices;  relating  to                                                               
     persons who are  licensed under the Alaska  Small Loans Act;                                                               
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
AT EASE 1:52:18 PM / 1:54:11 PM                                                                                             
                                                                                                                                
Senator  Elton  moved  to   adopt  Finance  committee  substitute                                                               
Version  25-LS0070\N,  Bannister,  dated  May  8,  2007,  as  the                                                               
working document.                                                                                                               
                                                                                                                                
There being  no objection, the  Version "N"  committee substitute                                                               
was ADOPTED as the working document.                                                                                            
                                                                                                                                
1:54:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BOB  LYNN,  the  bill's sponsor  and  a  licensed                                                               
Alaska  real  estate  broker, contended  that  the  largest  real                                                               
estate loan  typically committed to  by an individual is  the one                                                               
utilized to finance the purchase  of their home. Nonetheless, few                                                               
people understand  the "hidden mechanisms and  inner workings" of                                                               
mortgage  loans or  keep abreast  of "ever-changing"  federal and                                                               
state mortgage  laws. Not finding  the right loan with  the right                                                               
terms "could be a very expensive 30 year mistake."                                                                              
                                                                                                                                
Representative  Lynn  became  aware  of the  intricacies  of  the                                                               
mortgage business  when he became  a licensed realtor.  "The most                                                               
important thing I know about mortgages is what I don't know."                                                                   
                                                                                                                                
Representative Lynn  recounted that when  he made his  first home                                                               
real estate  sale, he  purposely arranged for  the home  buyer to                                                               
meet with an  experienced mortgage lender; one he  believed to be                                                               
honest,  knowledgeable about  the law,  and qualified  to arrange                                                               
the proper loan and address any problem that arose.                                                                             
                                                                                                                                
Representative Lynn considered finding  the right mortgage lender                                                               
to be  as important as finding  the perfect home for  his client.                                                               
This is "exactly why" he sponsored this bill.                                                                                   
                                                                                                                                
Representative  Lynn noted  that this  bill is  supported by  the                                                               
Alaska Mortgage Bankers Association,  the Alaska Mortgage Brokers                                                               
Association,   the   Alaska  Independent   Lenders   Association,                                                               
realtors from  across the  State, and the  Division of  Banking &                                                               
Securities in the Department of  Commerce, Community and Economic                                                               
Development.                                                                                                                    
                                                                                                                                
Representative Lynn  pointed out  that Alaska  is the  only state                                                               
that does not  regulate the mortgage loan industry.  There are no                                                               
licensing  or training  requirements  for people  working in  the                                                               
mortgage  industry.  This  is nonsensical  since  the  State  has                                                               
licensing  and  training  requirements  for  tattoo  artists  and                                                               
hairdressers. No  background checks  or periodic  examinations by                                                               
the Division  of Banking  & Securities  are conducted.  This bill                                                               
would "fix that."                                                                                                               
                                                                                                                                
1:57:29 PM                                                                                                                    
                                                                                                                                
Representative  Lynn  favored  licensing  any  entity,  large  or                                                               
small, making  a home loan  in the State.  The goal should  be to                                                               
provide  "a   level  playing  field"  in   the  mortgage  lending                                                               
industry. This  is contrary  to the opinion  of those  wishing to                                                               
"exempt affiliates"  and companies that operate  via the internet                                                               
from outside Alaska.                                                                                                            
                                                                                                                                
Representative   Lynn  characterized   state  and   federal  loan                                                               
origination laws  as complex and  ever-changing. "One must  be an                                                               
expert  to speak  with any  kind  of competence  on the  subject"                                                               
addressed in this legislation.                                                                                                  
                                                                                                                                
1:58:13 PM                                                                                                                    
                                                                                                                                
Representative Lynn  informed the Committee that  Mark Davis with                                                               
the Department  of Commerce,  Community and  Economic Development                                                               
and industry professionals were  available to further address the                                                               
intricacies of the subject and the bill before the Committee.                                                                   
                                                                                                                                
1:58:35 PM                                                                                                                    
                                                                                                                                
Representative  Lynn deemed  this a  consumer protection  bill of                                                               
"great importance". He asked the Committee to support the bill.                                                                 
                                                                                                                                
1:58:51 PM                                                                                                                    
                                                                                                                                
MARK  DAVIS,   Director,  Division   of  Banking   &  Securities,                                                               
Department  of  Commerce,   Community  and  Economic  Development                                                               
specified that this bill would  require the licensing of mortgage                                                               
bankers,   brokers,   and    originators.   No   such   licensing                                                               
requirements currently exist in Alaska.                                                                                         
                                                                                                                                
Mr.  Davis  noted  that  even though  ten  federal  statutes  are                                                               
applicable  to this  industry, the  absent of  a State  licensing                                                               
requirement prevents the State from  ensuring "that the mortgages                                                               
being done in this State were in compliance with those laws."                                                                   
                                                                                                                                
Mr.  Davis  explained  that  this  bill  would  allow  for  State                                                               
examination  and investigation  of licensees  and would  prohibit                                                               
certain  acts  such  as  deceptive  advertising.  It  would  also                                                               
require  licensees  to comply  with  federal  laws including  the                                                               
Truth in  Lending Act and  the Real Estate  Settlement Procedures                                                               
Act  of  1974   (RESPA).  In  addition,  the   bill  would  allow                                                               
disciplinary action  against any  licensee conducting  a mortgage                                                               
loan in violation of these laws.                                                                                                
                                                                                                                                
Mr.  Davis  informed that  the  bill  would provide  a  mechanism                                                               
through which  the State could  examine licensees to  ensure they                                                               
followed  the law  and  met  educational requirements.  Predatory                                                               
practices, specifically  the practice referred to  as "flipping",                                                               
would be prohibited.  Flipping is a practice in  which a property                                                               
is refinanced within  a 12-month period. This practice  is not in                                                               
the best interest of the borrower.                                                                                              
                                                                                                                                
Mr. Davis contended  that "the best deterrence was  not the force                                                               
of  the law",  it  was  education. "If  people  are educated  and                                                               
understand the laws then they are able to comply with them."                                                                    
                                                                                                                                
2:00:42 PM                                                                                                                    
                                                                                                                                
To that  point, Mr. Davis  specified that the bill  would mandate                                                               
continuing  education  to  ensure  that people  in  the  mortgage                                                               
industry  have "the  minimum standard  of education."  This is  a                                                               
requirement imposed on numerous professions.                                                                                    
                                                                                                                                
Mr.   Davis  revealed   that  during   recent  Division-sponsored                                                               
investment  and  financial  education seminars  conducted  in  13                                                               
communities throughout  the State, numerous complaints  about the                                                               
mortgage lending industry surfaced.                                                                                             
                                                                                                                                
Mr.  Davis  opined that  the  incorporation  of federal  mortgage                                                               
laws" into  this legislation  avoided the  creation of  "a second                                                               
layer  of regulation,"  as,  in essence,  the  licensee would  be                                                               
required "to follow  the laws they should  already be following."                                                               
The decision to incorporate federal  mortgage laws was based on a                                                               
report  compiled by  the State  of Maine.  That report  concluded                                                               
"that  the  best  reform  Maine could  make  for  their  mortgage                                                               
licensing would be to re-incorporate  those federal mortgage laws                                                               
in the State law."                                                                                                              
                                                                                                                                
Mr.  Davis stated  that  the  deceptive advertising  prohibitions                                                               
would ensure  that accurate information on  loan percentage rates                                                               
and the  type of loan  qualifying for  a specified rate  would be                                                               
provided.                                                                                                                       
                                                                                                                                
2:02:17 PM                                                                                                                    
                                                                                                                                
Mr.  Davis recounted  that legislation  was adopted  a few  years                                                               
earlier  that  allowed  the  Division  to  license  and  regulate                                                               
deferred deposit lenders commonly  referred to as payday lenders.                                                               
Since  that time,  ten lenders  have left  the profession:  "some                                                               
voluntarily,  some by  order". However,  "30  new companies  have                                                               
entered the industry and rates have gone down."                                                                                 
                                                                                                                                
Mr.  Davis   noted  that  the  payday   lender  legislation  also                                                               
contained  restitution language.  As a  result, the  Division has                                                               
been able  to collect in  excess of "$700,000 in  restitution for                                                               
people  who  took  out  loans  that  were  in  violation  of  the                                                               
Statute."  This bill  contains "similar  restitutions provision,"                                                               
which would  allow the State to  "make people whole who  had been                                                               
harmed by predatory lending practices."                                                                                         
                                                                                                                                
2:03:01 PM                                                                                                                    
                                                                                                                                
Mr. Davis noted that the  majority of the exemptions specified in                                                               
the  bill follow  federal  law. State  banks  and other  entities                                                               
currently  subject to  regulation would  not be  subject to  this                                                               
bill.                                                                                                                           
                                                                                                                                
Mr. Davis agreed with Representative  Lynn's assessment that this                                                               
bill  would   create  "a  more  level   playing  field."  Lending                                                               
practices  of  banks  operating  in  the  State  are  subject  to                                                               
Division   supervision;  however,   there  are   mortgages  being                                                               
processed "by  other companies that  may be affiliated  with that                                                               
bank that are not being regulated."                                                                                             
                                                                                                                                
Mr. Davis advised  that the Division was in support  of the bill,                                                               
"as  important financial  transactions should  be licensed."  The                                                               
education   requirements  and   criminal  background   checks  on                                                               
licensees are also important components.                                                                                        
                                                                                                                                
Mr.   Davis   also  specified   that   the   Federal  Bureau   of                                                               
Investigations (FBI),  which is  currently conducting  a mortgage                                                               
investigation in  the State,  has issued  a favorable  opinion on                                                               
the bill, as documented in a [unspecified] newspaper article.                                                                   
                                                                                                                                
Mr. Davis emphasized  that the adoption of this  bill would allow                                                               
the Division to respond to consumer complaints.                                                                                 
                                                                                                                                
Mr. Davis  concluded by  stating that  the bill's  combination of                                                               
licensing  and continuing  education  requirements would  improve                                                               
mortgage lending industry operations in the State.                                                                              
                                                                                                                                
2:04:26 PM                                                                                                                    
                                                                                                                                
Senator Dyson inquired to the cost  and time required to obtain a                                                               
mortgage lender's license.                                                                                                      
                                                                                                                                
Mr. Davis estimated that the  initial cost would be approximately                                                               
$1,000.  This would  include  a $250  one-time  licensing fee,  a                                                               
biannual licensing  fee of $500, and  annual continuing education                                                               
costs  of  approximately  $200.  Many states  allow  the  use  of                                                               
internet training  programs. There are also  companies that would                                                               
contract with the State to provide training.                                                                                    
                                                                                                                                
Mr.  Davis advised  that the  bill would  create a  commission to                                                               
assist the  Department in developing the  training component. The                                                               
goal would be to keep costs to a minimum.                                                                                       
                                                                                                                                
2:05:43 PM                                                                                                                    
                                                                                                                                
Senator  Dyson  asked an  estimate  of  the  time that  would  be                                                               
required to complete the training requirements.                                                                                 
                                                                                                                                
Mr.  Davis expressed  that a  specific number  of training  hours                                                               
would  be  required.  Internet   training  programs  are  favored                                                               
because a person  could do them at their  convenience. While this                                                               
would  be subject  to the  "honor system",  internet training  is                                                               
currently permitted  for other professions, including  Alaska Bar                                                               
Association training.                                                                                                           
                                                                                                                                
2:06:25 PM                                                                                                                    
                                                                                                                                
Senator Dyson cited the argument  that the enactment of this bill                                                               
could  limit competition.  That  would be  detrimental to  Alaska                                                               
consumers  as they  might not  be able  to access  the best  deal                                                               
available.                                                                                                                      
                                                                                                                                
Mr. Davis disagreed.  The Division receives calls  each week from                                                               
mortgage loan entities inquiring  to the State's mortgage lending                                                               
licensure  requirements. There  are two  reactions to  being told                                                               
there were none:  some say okay with it while  others say they'll                                                               
wait until some are established.                                                                                                
                                                                                                                                
Mr. Davis  reminded the  Committee that  more payday  lenders are                                                               
operating  in  the State  now  than  before  the State  began  to                                                               
license and regulate that industry.                                                                                             
                                                                                                                                
Mr. Davis also pointed out that  there is no shortage of mortgage                                                               
lending  companies   in  the  State.  Like   the  payday  lending                                                               
legislation,  this  bill  would also  require  internet  mortgage                                                               
lenders  to  abide by  Alaska  law.  Two internet  payday  lender                                                               
entities went  out of business  due to their inability  to comply                                                               
with State law.                                                                                                                 
                                                                                                                                
2:07:36 PM                                                                                                                    
                                                                                                                                
Senator Thomas, describing  this as a long and  difficult bill to                                                               
read,  asked whether  interest-only loans  were addressed  in the                                                               
bill.                                                                                                                           
                                                                                                                                
Mr.  Davis  clarified  that  the  "bill  does  not  prohibit  any                                                               
particular type of  lending", with the exception  of flipping, as                                                               
addressed  earlier  in  the discussion.  The  bill  does  however                                                               
require  lenders  to  comply  with   federal  law,  refrain  from                                                               
deceptive practices, and fully disclose loan terms.                                                                             
                                                                                                                                
Mr. Davis  allowed that even  thought certain types of  loans are                                                               
riskier than  others the  bill would  not curtail  loan products.                                                               
Thus, experienced borrowers  would continue to have  a variety of                                                               
loan products to choose from.                                                                                                   
                                                                                                                                
Mr.  Davis  informed  the  Committee   that  while  the  Division                                                               
wholeheartedly supports  the State enacting a  predatory loan law                                                               
that  law  should   not  occur  until  after   the  State  enacts                                                               
legislation  requiring money  transmitters and  mortgages lenders                                                               
to be licensed.                                                                                                                 
                                                                                                                                
Mr.  Davis communicated  that banning  interest-only loans  might                                                               
limit  some people's  ability to  utilize  a loan  that might  be                                                               
appropriate  for them.  Nonetheless,  certain  people should  not                                                               
consider interest-only loans. "That's  the reason RESPA and Truth                                                               
in Lending and other statutes require disclosure.                                                                               
                                                                                                                                
Mr.   Davis  advised   that  testimony   before   the  House   of                                                               
Representatives  on this  topic indicated  "that there  have been                                                               
repeated  violations of  RESPA  at closings  in  Alaska and  they                                                               
often pertain to lack of disclosure."                                                                                           
                                                                                                                                
2:09:15 PM                                                                                                                    
                                                                                                                                
Senator Thomas clarified  his question. He was  not implying that                                                               
interest-only loans should  be banned, but rather  that some type                                                               
of warning ought to be provided.                                                                                                
                                                                                                                                
Mr.   Davis  expressed   that   the   prohibition  of   deceptive                                                               
advertising  would  help  address this  concern.  Some  deceptive                                                               
advertising  does   not  disclose   the  mechanics   involved  in                                                               
establishing the  actual interest rates.  Thus, one of  the goals                                                               
of  this legislation  is to  educate consumers  about terminology                                                               
such as "a  reset rate" that might be referenced  in the terms of                                                               
a loan and how it might affect the loan they are agreeing to.                                                                   
                                                                                                                                
2:10:07 PM                                                                                                                    
                                                                                                                                
Senator Elton  asked for  clarification about  the $150  fee that                                                               
would be charged  for a person to retake the  competency test, as                                                               
specified  in Section  1 Section  06.60.040. Competency  testing.                                                               
(a), page 6  line 11 of Version "N". It  is unclear whether there                                                               
would be a fee for the initial test.                                                                                            
                                                                                                                                
Mr.  Davis replied  that in  an  effort to  keep an  individual's                                                               
costs to  a minimal, the cost  of taking the competency  test the                                                               
first time  would be covered  in the fees collected  to establish                                                               
the  educational program.  A fee  would  only be  charged if  the                                                               
person failed the first test and had to retake it.                                                                              
                                                                                                                                
Senator Elton suggested  that the language be  changed to clarify                                                               
no fee would be charged for the first test.                                                                                     
                                                                                                                                
Mr. Davis agreed. Further discussion in this regard would occur.                                                                
                                                                                                                                
Senator Huggins  commended Mr. Davis  on the effort  the Division                                                               
exerted on the bill. Legislation  considered the previous year on                                                               
this  issue recommended  exempting  people who  conducted six  or                                                               
less  loans annually  from the  licensing requirements.  He asked                                                               
whether that recommendation was included in this legislation.                                                                   
                                                                                                                                
2:12:14 PM                                                                                                                    
                                                                                                                                
Mr. Davis affirmed  the bill contained a  provision which allowed                                                               
for "a very small exemptions  for mortgage lenders" who conducted                                                               
six or  less loans a year.  However, they would still  be subject                                                               
to  the  enforcement  provisions  of  the  bill;  they  would  be                                                               
"required  to register,"  comply with  "all the  dictates of  the                                                               
bill and be subject to examination upon a complaint."                                                                           
                                                                                                                                
2:12:39 PM                                                                                                                    
                                                                                                                                
Senator  Dyson  understood  that   the  majority  of  "bad  loan"                                                               
problems could  be attributable to  an "organization  that offers                                                               
many  financial  products  and services"  and  hires  "part  time                                                               
employees to sell those services".  This might include insurance,                                                               
real estate sales, and investment services.                                                                                     
                                                                                                                                
2:13:33 PM                                                                                                                    
                                                                                                                                
Mr. Davis  affirmed that as  being part of the  problem. However,                                                               
the  Division has  received complaints  about loans  made through                                                               
larger  entities  including  federal  banks  and  large  mortgage                                                               
companies.                                                                                                                      
                                                                                                                                
2:13:59 PM                                                                                                                    
                                                                                                                                
Senator Olson surmised that the  process of licensing individuals                                                               
would be a  "cumbersome" task. He questioned  whether this impact                                                               
was  adequately reflected  in the  fiscal notes  accompanying the                                                               
bill.                                                                                                                           
                                                                                                                                
Mr. Davis  agreed the  licensing task  would be  labor intensive.                                                               
Nonetheless,  it  would be  appropriate  action.  He agreed  with                                                               
Representative  Lynn that  buying  a  home is  one  of "the  most                                                               
important financial commitments" a  person could make. The person                                                               
offering  a  mortgage  loan  service should  have  "the  type  of                                                               
licensing required of an insurance  agent, a securities agent, or                                                               
an  investment advisor."  Requiring loan  originators to  undergo                                                               
background checks  and take education  courses will  help prevent                                                               
"a lot of the problems" that have been experienced.                                                                             
                                                                                                                                
Mr. Davis disclosed  that four cases involving  the mortgage loan                                                               
industry  have  been filed  in  United  States Federal  Court  in                                                               
Anchorage in the  last month. This "is indicative  of the problem                                                               
we have in the State."                                                                                                          
                                                                                                                                
Senator  Olson asked  whether having  the licensing  requirements                                                               
proposed in  this legislation in  place would have  prevented the                                                               
events depicted in  the articles [copies on file]  printed in the                                                               
Alaska Daily News newspaper on April 21 and May 3, 2007.                                                                        
                                                                                                                                
Mr. Davis  hoped that would  be the case. Individuals  seeking to                                                               
acquire a  license would undergo  a background check  which would                                                               
likely  alert authorities  about  prior  suspect activities.  The                                                               
background check activity has been  helpful in other professions,                                                               
such as security broker dealers.                                                                                                
                                                                                                                                
2:16:07 PM                                                                                                                    
                                                                                                                                
Senator   Thomas  asked   whether  the   non-profit  organization                                                               
exemptions referenced  in paragraph (5) of  Section 1, subsection                                                               
Sec. 06.60.015.Exemptions; requirements  of registration., page 3                                                               
lines 9 through 12, referred  to exemptions allowed under federal                                                               
law  and  well as  non-profit  housing  authorities such  as  the                                                               
Alaska Housing  Finance Corporation (AHFC) and  the Tlingit Haida                                                               
Housing Authority.                                                                                                              
                                                                                                                                
2:16:44 PM                                                                                                                    
                                                                                                                                
Mr. Davis affirmed that to be correct.                                                                                          
                                                                                                                                
Senator Thomas  acknowledged. He  then asked  whether individuals                                                               
who  work for  an exempted  institution such  as a  bank licensed                                                               
under   federal  law   would   be  exempt   from  the   licensing                                                               
requirements of this bill.                                                                                                      
                                                                                                                                
2:17:15 PM                                                                                                                    
                                                                                                                                
Mr. Davis  clarified that those  employees would not  be required                                                               
to  be  licensed,  however  "they would  be  subject  to  general                                                               
supervision". For  example, when  conducting an examination  of a                                                               
State bank, the  Division would review the  bank's loan portfolio                                                               
including  its  mortgage  loan  files, to  ensure  the  bank  was                                                               
compliant with  federal law,  the Truth  in Advertising  Act, and                                                               
RESPA regulations.                                                                                                              
                                                                                                                                
Mr. Davis noted  that the rating given a bank  by the Division is                                                               
based  on its  compliance  record. That  rating  "has a  profound                                                               
affect on the  bank's ability to raise money."  Banks have reason                                                               
to maintain a high rating.                                                                                                      
                                                                                                                                
Senator Thomas  deduced therefore  that a  loan officer  would be                                                               
responsible for individuals reporting to them.                                                                                  
                                                                                                                                
Mr. Davis affirmed.                                                                                                             
                                                                                                                                
2:18:21 PM                                                                                                                    
                                                                                                                                
SIMON  KEYMER,  American  Financial Services  Association  (AFSA)                                                               
testified via teleconference  from an offnet location.  AFSA is a                                                               
financial trade  association based in Washington  DC. Its members                                                               
include mortgage lenders and  other "financial services companies                                                               
who provide credit to consumers and small businesses."                                                                          
                                                                                                                                
Mr. Keymer  communicated AFSA's "grave  concern" about  the bill,                                                               
as written. He  encouraged the Committee to  review the amendment                                                               
language recommendations  [copy not on file]  the Association had                                                               
provided which mirror  language in the mortgage  lending bill, SB                                                               
272  that passed  the Senate  the previous  year. Else  wise, the                                                               
recommendation would be to hold  this bill in Committee until the                                                               
next Legislative session in order  to allow time for its "complex                                                               
technical and legal issues" to be further scrutinized.                                                                          
                                                                                                                                
Mr. Keymer pointed  out that holding the bill  in Committee would                                                               
not be  detrimental since  the licensing  provisions in  the bill                                                               
would not be implemented until 2009.                                                                                            
                                                                                                                                
Mr.  Keymer communicated  that AFSA  believes  the best  approach                                                               
would be  to license "large  multi-state lenders", but  provide a                                                               
licensing  exemption  to  their  employees.  This  would  balance                                                               
consumer protection  needs with a  wide array of  consumer credit                                                               
options. This bill, in its current  form, could lead to a "flawed                                                               
law" that  would require  it to be  re-addressed during  the next                                                               
session.                                                                                                                        
                                                                                                                                
Mr. Keymer  highlighted some of the  consumer protection language                                                               
proposed  by  AFSA:  a  company  would be  required  to  sign  an                                                               
agreement  with   the  Department  of  Commerce,   Community  and                                                               
Economic  Development  "stating  that   they  would  accept  full                                                               
responsibility  for  ensuring  that  the employee  acts  in  full                                                               
compliance with  this chapter." The agreement  might also require                                                               
a  company   to  conduct  employee  background   checks,  provide                                                               
continuing  education, and  other items  deemed important  by the                                                               
Department.                                                                                                                     
                                                                                                                                
2:20:34 PM                                                                                                                    
                                                                                                                                
Mr. Keyner  pointed out  that the  Department could  retain their                                                               
"ability to  examine the  company to  ensure compliance  with the                                                               
Act". Other  recommendations by AFSA include  requiring a company                                                               
to secure  a bond,  at a  level specified  by the  Department, to                                                               
address any  cost the  State or  a person  might experience  as a                                                               
result of a violation of this chapter.                                                                                          
                                                                                                                                
Mr.  Keyner  stated  that,  in  its current  form,  the  bill  is                                                               
contrary  to  actions of  other  states.  Fewer than  ten  states                                                               
require  employees of  large  multi-State  mortgage companies  to                                                               
acquire  individual licenses.  Doing  so significantly  increases                                                               
the  administrative burden  on  lenders  and regulators;  lenders                                                               
would be forced to pass costs on to consumers.                                                                                  
                                                                                                                                
Mr.  Keyner  urged the  Committee  to  recognize the  differences                                                               
between  small  and  large  interstate  and  intrastate  mortgage                                                               
lending companies. AFSA members  are typically big companies that                                                               
are  licensed  in  multiple  states and  have  large  numbers  of                                                               
employees.  They are  concerned  about their  reputation and  are                                                               
often affiliated with a company  regulated by the Federal Reserve                                                               
Board.  These   are  the  reasons  they   conduct  pre-employment                                                               
screening including background checks  and provide education, and                                                               
compliance training.                                                                                                            
                                                                                                                                
Mr. Keyner  urged the Committee  to adopt the  amendment language                                                               
proposed by ASFA.                                                                                                               
                                                                                                                                
2:22:56 PM                                                                                                                    
                                                                                                                                
KEVIN  BREELAND, President,  Alaska Mortgage  Bankers Association                                                               
and Partner  and Mortgage  Loan Originator,  Residential Mortgage                                                               
Alaska,  shared his  extensive background  in  the mortgage  loan                                                               
profession.  Alaska  is the  only  state  that does  not  require                                                               
mortgage lender  licensing for companies. 26  states require some                                                               
form  of licensing  for mortgage  loan originators.  All that  is                                                               
currently required in Alaska is a business license.                                                                             
                                                                                                                                
Mr.  Breeland stated  that except  for the  non-licensed mortgage                                                               
loan  originator,  a  typical real  estate  transaction  involves                                                               
numerous licensed individuals including,  for example, a licensed                                                               
real  estate  agent,  a  licensed   home  inspector,  a  licensed                                                               
engineer if such service is  required, and a licensed real estate                                                               
appraiser.  Any construction  work required  would be  done by  a                                                               
licensed and bonded  contractor and any new  construction must be                                                               
inspected by a licensed or  certified inspector or a municipal or                                                               
borough  inspector.   The  title  work  on   the  transaction  is                                                               
performed by a  licensed title company under  the jurisdiction of                                                               
the insurance commission.                                                                                                       
                                                                                                                                
2:25:58 PM                                                                                                                    
                                                                                                                                
Mr. Breeland  thought that everyone  in the  industry, regardless                                                               
of their length  of experience, should take  competency tests. He                                                               
also  contended that  the 2009  effective date  specified in  the                                                               
bill would provide  sufficient time for those in  the industry to                                                               
comply with its regulations.                                                                                                    
                                                                                                                                
2:26:54 PM                                                                                                                    
                                                                                                                                
Mr. Breeland characterized  this as "an industry  bill brought to                                                               
you by  industry. It  is a collaborated  effort," eight  years in                                                               
the  making, involving  the Alaska  Mortgage Bankers  Association                                                               
and the  Alaska Mortgage  Brokers Association.  The bill  has the                                                               
support of AARP,  the Alaska Association of  Realtors, the Alaska                                                               
Home  Builders Association,  the Alaska  Land Title  Association,                                                               
the Appraiser  Institute, Alaska Chapter, the  Anchorage Board of                                                               
Realtors,  the  Valley  Board  of  Realtors,  and  the  Anchorage                                                               
Homebuilders Association.  He urged the Committee  to support the                                                               
bill.                                                                                                                           
                                                                                                                                
2:27:34 PM                                                                                                                    
                                                                                                                                
PETER   EASAW,  Primerica   Financial   Services,  reviewed   his                                                               
background  in  the mortgage  industry.  This  bill would  be  "a                                                               
disservice  to" Primerica  and  its  customers. Primerica  offers                                                               
personalized "financial solutions" to  its customers and believes                                                               
in  educating  its customers  prior  to  selling or  proposing  a                                                               
product to them.                                                                                                                
                                                                                                                                
Mr.  Easaw  considered  this legislation  a  duplication  of  the                                                               
efforts currently administered by  Primerica. The company already                                                               
strives to educate its clients,  provides continuing education to                                                               
its employees, and has a mission of doing "what's right".                                                                       
                                                                                                                                
Mr. Easaw strongly  believed this bill would  prevent people from                                                               
having  the same  opportunity he  has  had with  his company.  He                                                               
urged a no vote on the bill in its current form.                                                                                
                                                                                                                                
2:30:17 PM                                                                                                                    
                                                                                                                                
Senator Dyson asked Mr. Easaw to  discuss what he would change in                                                               
the bill.                                                                                                                       
                                                                                                                                
Mr.  Easaw  supported licensing  a  company  as opposed  to  each                                                               
individual working for it.                                                                                                      
                                                                                                                                
2:30:51 PM                                                                                                                    
                                                                                                                                
JULIE GRANGER, Primerica Financial Services, introduced herself.                                                                
                                                                                                                                
Co-Chair Stedman asked  Ms. Granger to clarify  her capacity with                                                               
Primerica.                                                                                                                      
                                                                                                                                
Ms.  Granger  worked  at Primerica's  corporate  head  office  in                                                               
Atlanta  Georgia  and  was  testifying today  on  behalf  of  the                                                               
company and its 150 Alaskan employees.                                                                                          
                                                                                                                                
Co-Chair Stedman, observing that  the public testimony ledger for                                                               
this bill  included numerous  Primerica employees,  asked whether                                                               
the  company closed  its  offices  today in  order  to allow  its                                                               
employees to testify on the bill.                                                                                               
                                                                                                                                
Ms. Granger responded no. Primerica  employees elected to testify                                                               
because they were  "passionate about the service  that we provide                                                               
to  Alaska borrowers."  They are  concerned  that their  services                                                               
might be  jeopardized by  some of the  requirements in  the bill.                                                               
The hope is that a workable  solution could be achieved; one that                                                               
would protect consumers  and allow the Department  to examine the                                                               
industry to  ensure there  were no problems  with the  company or                                                               
its services.                                                                                                                   
                                                                                                                                
In  response to  a question  from Co-Chair  Stedman, Ms.  Granger                                                               
affirmed the company sent her to  testify on the bill and express                                                               
how important Alaska is to Primerica.                                                                                           
                                                                                                                                
Co-Chair Stedman  specified that  his questions were  intended to                                                               
assist  him in  understanding the  nature of  the testimony  that                                                               
would be provided by other Primerica employees.                                                                                 
                                                                                                                                
Ms.  Granger expressed  that the  number  of Primerica  employees                                                               
willing to  testify today  should be viewed  as an  indication of                                                               
the  importance of  the bill  and  concern about  its effects  on                                                               
their livelihood.                                                                                                               
                                                                                                                                
2:32:51 PM                                                                                                                    
                                                                                                                                
Senator Olson inquired to Primerica's position on the bill.                                                                     
                                                                                                                                
Ms.  Granger  expressed  support   for  regulating  the  mortgage                                                               
industry in  the State;  however, the company  did not  favor the                                                               
bill as  written. She  was optimistic  that a  workable solution,                                                               
one  that  would  protect  consumers  and  allow  for  regulatory                                                               
oversight, was obtainable.                                                                                                      
                                                                                                                                
2:33:30 PM                                                                                                                    
                                                                                                                                
Senator Olson concluded from the  testimony that the changes made                                                               
in  the Version  "N"  committee substitute  did  not address  the                                                               
company's concern about the bill.                                                                                               
                                                                                                                                
2:33:38 PM                                                                                                                    
                                                                                                                                
Ms. Granger affirmed.                                                                                                           
                                                                                                                                
Co-Chair  Stedman asked  that the  company provide  his office  a                                                               
list of concerns specific to Version "N".                                                                                       
                                                                                                                                
Ms. Granger agreed.                                                                                                             
                                                                                                                                
2:34:05 PM                                                                                                                    
                                                                                                                                
Senator  Huggins  deduced  that  the company  had  been  actively                                                               
involved in legislation on this issue in other states.                                                                          
                                                                                                                                
Ms.  Granger  confirmed that  to  be  the  case. 26  states  have                                                               
enacted legislation  in this regard.  While the recent  trend has                                                               
been  to require  individual licensing,  the majority  of the  26                                                               
states  that  have  enacted  mortgage  lending  legislation  have                                                               
recognized  the  company's  "good  compliance  history"  and  the                                                               
uniqueness of its  business model. They have  allowed the company                                                               
to  be licensed  and  accountable for  its  employees instead  of                                                               
requiring employees to hold individual licenses.                                                                                
                                                                                                                                
Ms.  Granger   reiterated  that  the  company's   reputation  and                                                               
financial success are affected by its agents' actions.                                                                          
                                                                                                                                
Senator  Huggins   asked  the  number  of   states  that  require                                                               
individual licensing.                                                                                                           
                                                                                                                                
Ms.  Granger  stated  that  fewer than  ten  states  the  company                                                               
operates in  require individual licensing;  several of  those are                                                               
simply registrations wherein the  company just provides a listing                                                               
of its employees. This listing is  utilized by the state to track                                                               
where individuals  are employed. While a  multitude of approaches                                                               
have been taken, the majority  of states have endeavored to reach                                                               
a reasonable solution.                                                                                                          
                                                                                                                                
Senator Huggins asked  Ms. Granger to identify  components of the                                                               
bill deemed particularly onerous.                                                                                               
                                                                                                                                
2:35:47 PM                                                                                                                    
                                                                                                                                
Ms. Granger responded that the  company's business model requires                                                               
them to screen  its agents. This would  include background checks                                                               
and internal  auditing. The  company is  also subject  to federal                                                               
law since  its loans involve federal  lenders. Insurance products                                                               
sold by the company must  also comply with insurance and security                                                               
regulations.                                                                                                                    
                                                                                                                                
Ms. Granger declared that this  legislation, in its current form,                                                               
would produce "another level of  regulation that does not provide                                                               
any additional benefit to consumers".                                                                                           
                                                                                                                                
Ms. Granger declared  that Primerica "is stepping  up" in support                                                               
of  State  licensing  and  regulations.  The  money  raised  from                                                               
licensing  fees  will  support the  State's  mortgage  regulation                                                               
efforts. The amendment Primerica supports is "fiscally neutral".                                                                
                                                                                                                                
2:36:49 PM                                                                                                                    
                                                                                                                                
Senator Thomas  understood that Primerica, as  the owner company,                                                               
supported  having the  company, rather  than individuals,  assume                                                               
the  entirety of  licensing  responsibilities  specified in  this                                                               
bill. He  noted that the  only element missing from  the mortgage                                                               
lending  legislation   considered  the  previous  year   was  the                                                               
determination of who would be applying for the license.                                                                         
                                                                                                                                
Senator Thomas asked for further  information about why Primerica                                                               
considered  individual  licensing   requirements  so  burdensome;                                                               
specifically whether  it was the cost  associated with individual                                                               
licensing  or whether  the employment  status of  the individuals                                                               
working  for  it would  change  from  being independent  contract                                                               
agents to being employees.                                                                                                      
                                                                                                                                
2:37:37 PM                                                                                                                    
                                                                                                                                
Ms. Granger  responded that  Primerica has  successfully utilized                                                               
the independent  contract agent business model  for approximately                                                               
30  years. The  company  sees it  as  "a way  to  cut costs"  and                                                               
thereby  support  its ability  "to  market  to middle  and  lower                                                               
income consumers who have very low transaction amounts".                                                                        
                                                                                                                                
2:38:18 PM                                                                                                                    
                                                                                                                                
Senator Elton  appreciated Ms.  Granger's testimony.  Rather than                                                               
protecting  consumers  from  companies such  as  Primerica  which                                                               
might have "all the controls  in place", the purpose of licensing                                                               
"is to protect  the consumer from bad actors".  Thus, his concern                                                               
is  that  implementing  something   that  helps  a  company  like                                                               
Primerica would "open the door  for companies that might not have                                                               
the same kind of controls".                                                                                                     
                                                                                                                                
Ms.  Granger stated  that  this concern  had  been raised  during                                                               
deliberations on  the bill in  the House. There was  concern that                                                               
the amendment proposed  by Primerica was "not  narrow enough" and                                                               
that  other companies  would not  perform in  the same  manner as                                                               
Primerica.                                                                                                                      
                                                                                                                                
Ms.  Granger advised  that  the amendment  has  been narrowed  in                                                               
scope  in that  it would  now  apply "to  exclusive agents".  The                                                               
company would be required to pay  licensing fees and also hold an                                                               
insurance license.  The amendment is now  significantly different                                                               
than the one offered in the House.                                                                                              
                                                                                                                                
2:40:09 PM                                                                                                                    
                                                                                                                                
Ms.  Granger emphasized  that "the  solution" being  proposed has                                                               
worked in other states.                                                                                                         
                                                                                                                                
2:40:45 PM                                                                                                                    
                                                                                                                                
Senator Elton  asked that, after  review, the  Department provide                                                               
its  recommendation  on  the  amendment   being  offered  by  the                                                               
industry.                                                                                                                       
                                                                                                                                
2:41:03 PM                                                                                                                    
                                                                                                                                
In response  to a question  from Senator Olson,  Co-Chair Stedman                                                               
clarified  that the  amendment  being discussed  "is  not on  the                                                               
table".                                                                                                                         
                                                                                                                                
2:41:15 PM                                                                                                                    
                                                                                                                                
LYNNEA OLSEN,  Citigroup, informed  the Committee  that Citigroup                                                               
is  the  parent company  to  Primerica.  She traveled  here  from                                                               
California to  testify on  behalf of  Citigroup in  opposition to                                                               
the  bill  in  its  current  form.  Citigroup  strongly  supports                                                               
regulation   of   the   mortgage  industry   and   has   actively                                                               
participated in  establishing "high thresholds" for  the industry                                                               
in other states  in its desire to uphold  its reputation, enhance                                                               
its  economic  viability,  and provide  appropriate  products  to                                                               
consumers.                                                                                                                      
                                                                                                                                
Ms. Olsen cited Citigroup's willingness  to continue working with                                                               
the State  to reach a  solution that would benefit  the Primerica                                                               
business  model.   This  would  include  corporate   rather  than                                                               
individual  licensure.  She  reminded  the  Committee  that  that                                                               
concept  had been  included in  the mortgage  lending legislation                                                               
considered the previous year.                                                                                                   
                                                                                                                                
Ms.  Olsen   stressed  that  corporate  licensure   would  ensure                                                               
consumer   protection.  The   company  would   commit  to   being                                                               
responsible for any  violation of State Statute and  would file a                                                               
surety  bond  with the  State.  In  addition, the  company  would                                                               
pledge "to make  any borrower whole" if they  suffered an injury.                                                               
They  would also  pledge that  the company  and its  agents would                                                               
comply  with  State  law.  The company  was  confident  that  its                                                               
business model,  which includes such things  as internal training                                                               
and auditing, would be able to uphold its commitments.                                                                          
                                                                                                                                
2:43:34 PM                                                                                                                    
                                                                                                                                
Ms.  Olsen also  considered  corporate  licensure an  appropriate                                                               
mechanism as  it would  allow the State  to review  the company's                                                               
operations through  routine, spot, or periodic  audits. She urged                                                               
that  the  bill  be  held  in  Committee  in  order  for  further                                                               
discussion to occur.  Primerica has a good business  model and it                                                               
would be  disappointing were its  Alaska operations  and consumer                                                               
services limited.                                                                                                               
                                                                                                                                
Co-Chair  Stedman, noting  that a  number of  individuals working                                                               
with Primerica had signed up  to testify, asked, in consideration                                                               
of time  that those  individuals limit  their remarks  to whether                                                               
they support or  oppose the legislation. They  should only expand                                                               
their  remarks  if  they  had   something  "new  to  add  to  the                                                               
discussion".                                                                                                                    
                                                                                                                                
2:45:05 PM                                                                                                                    
                                                                                                                                
JEFFREY  SMITH,   Primerica  Financial  Services   testified  via                                                               
teleconference from  Mat-Su in opposition  to the bill.  It would                                                               
place a  "huge financial  burden on my  small business".  This in                                                               
turn would be detrimental to his clients.                                                                                       
                                                                                                                                
2:45:29 PM                                                                                                                    
                                                                                                                                
PHYLISS  HOFFMAN,  Primerica  Financial Services,  testified  via                                                               
teleconference from  Mat-Su in opposition to  the bill. Primerica                                                               
agents are  internally monitored,  must meet  internal continuing                                                               
education  requirements, and  must  comply  with regulations.  "A                                                               
duplicate mortgage  loan originator  license makes  absolutely no                                                               
sense." The  services provided by  Primerica agents to  people in                                                               
this State are appreciated.                                                                                                     
                                                                                                                                
Co-Chair Stedman repeated his request  that Primerica agents keep                                                               
their comments on point.                                                                                                        
                                                                                                                                
2:48:02 PM                                                                                                                    
                                                                                                                                
FRED  LAURION,   Primerica  Financial  Services,   testified  via                                                               
teleconference from  Anchorage and  elaborated on  the importance                                                               
the  company  places on  educating  the  consumer. Anything  that                                                               
might hamper the company's ability  to operate in the State would                                                               
be detrimental to  that effort. He opposed the  bill, as written,                                                               
and urged  the Committee  to either amend  or postpone  action on                                                               
it.                                                                                                                             
                                                                                                                                
2:49:37 PM                                                                                                                    
                                                                                                                                
LAIRD  JENKINS,  Primerica   Financial  Services,  testified  via                                                               
teleconference  from  Anchorage in  opposition  to  the bill,  as                                                               
written.                                                                                                                        
                                                                                                                                
2:49:53 PM                                                                                                                    
                                                                                                                                
CARL  MCINTYRE,  Primerica   Financial  Services,  testified  via                                                               
teleconference from Anchorage. He opposed the bill as written.                                                                  
                                                                                                                                
2:50:12 PM                                                                                                                    
                                                                                                                                
JOHN   PEEK,   Primerica   Financial  Services,   testified   via                                                               
teleconference  from Anchorage  and  spoke in  opposition to  the                                                               
bill,  as  written.  The  company provides  a  great  service  to                                                               
residents of the State.                                                                                                         
                                                                                                                                
2:50:36 PM                                                                                                                    
                                                                                                                                
MIKE  CLAYBORN,  Primerica   Financial  Services,  testified  via                                                               
teleconference from Anchorage. He opposed the bill as written.                                                                  
                                                                                                                                
JULIA   COSTER,  Assistant   Attorney  General,   Commercial/Fair                                                               
Business Section,  Civil Division (Anchorage), Department  of Law                                                               
testified  via teleconference  from  Anchorage  and informed  the                                                               
Committee she was available to answer questions.                                                                                
                                                                                                                                
2:51:00 PM                                                                                                                    
                                                                                                                                
DUSTIN  SHANNON,  Primerica  Financial  Services,  testified  via                                                               
teleconference  from  Anchorage  in  opposition to  the  bill  as                                                               
written. While  receiving his economics degree  at the University                                                               
of  Alaska   Anchorage,  he  became  aware   of  the  "unintended                                                               
consequences" that  sometimes occur when the  government attempts                                                               
to protect the consumer. He was  opposed to the bill, as written.                                                               
Increasing overhead  expenses on individuals might  dissuade them                                                               
from participating in this business.                                                                                            
                                                                                                                                
2:52:06 PM                                                                                                                    
                                                                                                                                
JOHN  MARTIN,  Alaska  Mortgage  Solution,  and  Past  President,                                                               
Alaska    Mortgage    Brokers    Association,    testified    via                                                               
teleconference   from  Anchorage.   Recent  media   attention  on                                                               
mortgage loan  fraud in the  State has contributed to  the effort                                                               
behind  this   bill.  People  in   the  mortgage   loan  industry                                                               
"recognize  the  need  for  change"  and  have  assisted  in  the                                                               
development  of  "this  industry bill".  "This  bill  effectively                                                               
addresses  our concerns;"  particularly in  respect to  licensing                                                               
mortgage companies and, specifically, mortgage loan originators.                                                                
                                                                                                                                
Mr. Martin clarified  that the bill would not  require people who                                                               
process or underwrite loans to be licensed.                                                                                     
                                                                                                                                
Mr. Martin  asserted that  the bill  has broad  industry support.                                                               
Other  professional organizations  also recognize  the importance                                                               
of  this legislation  and the  protection  it can  afford to  our                                                               
residents.                                                                                                                      
                                                                                                                                
Mr.  Martin   declared  that  the  bill   is  "revenue  neutral".                                                               
Furthermore,  this "straight  forward" bill  would "not  place an                                                               
undue burden or cost on business."                                                                                              
                                                                                                                                
Mr. Martin  reiterated that  the bill  would license  an industry                                                               
that is currently unregulated.                                                                                                  
                                                                                                                                
Mr. Martin  stated that  the licensing  fee being  proposed would                                                               
cost a  large multi-state lender, for  example, approximately $20                                                               
each  month. Those  entities would  save money  by not  having to                                                               
conduct  background   checks  or  provide   continuing  education                                                               
programs to their  associates, as that effort  would be conducted                                                               
under  State  oversight.  This savings  could  be  beneficial  to                                                               
consumers.                                                                                                                      
                                                                                                                                
Mr. Martin  also noted that  this legislation would  require each                                                               
mortgage  loan originator  to be  "responsible  for paying  their                                                               
very own  low fees" which  would amount  to less than  one dollar                                                               
per day.                                                                                                                        
                                                                                                                                
Mr. Martin  considered the best features  of the bill to  be that                                                               
the State would conduct licensee  background checks and establish                                                               
industry  performance standards.  He  supported the  bill in  its                                                               
current form; it would protect the citizens of the State.                                                                       
                                                                                                                                
2:55:04 PM                                                                                                                    
                                                                                                                                
ROGER   PRINCE,  Securities   Examiner,   Division  of   Banking,                                                               
Securities  and Corporations,  Department of  Commerce, Community                                                               
and  Economic  Development   testified  via  teleconference  from                                                               
Anchorage and informed  the Committee he was  available to answer                                                               
questions.                                                                                                                      
                                                                                                                                
2:55:28 PM                                                                                                                    
                                                                                                                                
NICOLE  STRELTSOVA, Primerica  Financial Services,  testified via                                                               
teleconference from Fairbanks in opposition to the bill.                                                                        
                                                                                                                                
2:56:00 PM                                                                                                                    
                                                                                                                                
LAVADA CHRISTINASON, Primerica  Financial Services, testified via                                                               
teleconference from Fairbanks and opposed the bill as written.                                                                  
                                                                                                                                
2:56:19 PM                                                                                                                    
                                                                                                                                
ROSE   BAADE,  Primerica   Financial   Services,  testified   via                                                               
teleconference  from Fairbanks  and  spoke in  opposition to  the                                                               
bill  as written.  She  urged the  Committee  to either  postpone                                                               
action on the bill or amend it.                                                                                                 
                                                                                                                                
2:56:33 PM                                                                                                                    
                                                                                                                                
JENNIFER  MACOMBER, Primerica  Financial Services,  testified via                                                               
teleconference  from  Fairbanks in  opposition  to  the bill,  as                                                               
written.                                                                                                                        
                                                                                                                                
2:56:52 PM                                                                                                                    
                                                                                                                                
RON   HUNT,   Primerica    Financial   Services   testified   via                                                               
teleconference from  Fairbanks and voiced opposition  to the bill                                                               
as written.                                                                                                                     
                                                                                                                                
2:57:12 PM                                                                                                                    
                                                                                                                                
DENNIS  SHINN,   Primerica  Financial  Services,   testified  via                                                               
teleconference  from  Fairbanks in  opposition  to  the bill,  as                                                               
written.                                                                                                                        
                                                                                                                                
2:57:37 PM                                                                                                                    
                                                                                                                                
CURTIS  MACOMBER,  Primerica  Financial Services,  testified  via                                                               
teleconference from Fairbanks and opposed the bill, as written.                                                                 
                                                                                                                                
2:58:08 PM                                                                                                                    
                                                                                                                                
DAVID  MUELLER,  Primerica   Financial  Services,  testified  via                                                               
teleconference  from  Fairbanks  in  opposition to  the  bill  as                                                               
written.                                                                                                                        
                                                                                                                                
2:58:22 PM                                                                                                                    
                                                                                                                                
BETTY   KETZLER  Primerica   Financial  Services   testified  via                                                               
teleconference from Fairbanks in opposition to the bill.                                                                        
                                                                                                                                
2:58:39 PM                                                                                                                    
                                                                                                                                
DOTHORTHY  JONES,  Primerica  Financial Services,  testified  via                                                               
teleconference  from Fairbanks  and  spoke in  opposition to  the                                                               
bill, as written.                                                                                                               
                                                                                                                                
2:59:08 PM                                                                                                                    
                                                                                                                                
MAUREEN  MISEWICZ, Primerica  Financial  Services, testified  via                                                               
teleconference  from Fairbanks  and  spoke in  opposition to  the                                                               
bill as written.  The bill should be amended  in consideration of                                                               
Primerica's business model.                                                                                                     
                                                                                                                                
2:59:33 PM                                                                                                                    
                                                                                                                                
JONATHAN  BOURNE,  Primerica  Financial Services,  testified  via                                                               
teleconference from Fairbanks and opposed the bill as written.                                                                  
                                                                                                                                
3:00:30 PM                                                                                                                    
                                                                                                                                
Senator  Olson asked  Roger Prince  whether the  Division was  in                                                               
support of the bill.                                                                                                            
                                                                                                                                
Mr.  Prince deferred  to  Mr. Davis  to speak  on  behalf of  the                                                               
Department; however, Mr. Davis was no longer available.                                                                         
                                                                                                                                
Co-Chair Stedman ordered the bill HELD in Committee.                                                                            
                                                                                                                                
RECESS TO CALL OF THE CHAIR 3:01:30 PM / 6:23:56 PM                                                                         
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 104(FIN)                                                                                            
     "An  Act  relating to  the  Alaska  Gasline Inducement  Act;                                                               
     providing inducements for the  construction of a natural gas                                                               
     pipeline  and shippers  that commit  to  use that  pipeline;                                                               
     establishing  the  Alaska  Gasline Inducement  Act  matching                                                               
     contribution   fund;  providing   for   an  Alaska   Gasline                                                               
     Inducement  Act coordinator;  making conforming  amendments;                                                               
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the 20th hearing  for this  bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
6:24:56 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  move to adopt the  Finance committee substitute                                                               
Version 25-GS1060\T, Bullock, dated May  10, 2007, as the working                                                               
document.                                                                                                                       
                                                                                                                                
Without  objection,  the  Version "T"  committee  substitute  was                                                               
ADOPTED as the working document.                                                                                                
                                                                                                                                
6:25:24 PM                                                                                                                    
                                                                                                                                
               Chapter 90. Alaska Gasline Inducement Act.                                                                       
                                                                                                                                
STEVE  PORTER,  Staff  to Senator  Bert  Stedman,  discussed  the                                                               
changes  the  Version  "T" committee  substitute  would  make  to                                                               
provisions of  Chapter 90,  added to  AS 43 by  Section 1  of the                                                               
bill.                                                                                                                           
                                                                                                                                
     Article 2. Alaska Gasline Inducement Act License.                                                                          
                                                                                                                                
          Section 43.90.110. Natural gas pipeline project                                                                       
          construction inducement.                                                                                              
                                                                                                                                
Mr.  Porter stated  that  the  first change  in  Version "T",  as                                                               
compared  to the  previous Finance  committee substitute  Version                                                               
25-GS1060\N,  was  in  Article 2,  Section  43.90.110  subsection                                                               
(a)(1).  The words  "in  the form  of  reimbursements" was  added                                                               
following "contributions" on page 2, line 17.                                                                                   
                                                                                                                                
6:26:25 PM                                                                                                                    
                                                                                                                                
MARCIA  DAVIS,   Deputy  Commissioner,  Department   of  Revenue,                                                               
informed  the  Committee  that   this  "technical"  change  would                                                               
strengthen  language   pertaining  to  the  $500   million  grant                                                               
reimbursement monies  provided by the  State to the  licensee. It                                                               
would require  "adequate support and identification  of the costs                                                               
before  monies are  provided  for  that particular  expenditure".                                                               
Requesting  "reimbursement monies  for an  expenditure that  does                                                               
not meet the qualifications as  a qualified expenditure" would be                                                               
a violation.                                                                                                                    
                                                                                                                                
6:28:36 PM                                                                                                                    
                                                                                                                                
Mr.  Porter  noted  that  the  word  "match"  was  replaced  with                                                               
"reimburse" in two sections of  Section 43.90.110: page 2 line 24                                                               
of  subsection  (a)(1)(A)  and  page  2  line  29  of  subsection                                                               
(a)(1)(B). This change would  further clarify provisions relating                                                               
to qualified expenditures.                                                                                                      
                                                                                                                                
Mr.  Porter   also  noted  that   the  language   "pursuing  firm                                                               
transportation commitments in a  binding open season, to securing                                                               
financing for the project, or"  was inserted following the phrase                                                               
"reasonably related  to" in subsection  (a)(1)(C), page 3  line 4                                                               
of  this  section,  in  order "to  expand"  the  activities  "the                                                               
licensee  could actually  perform  during" the  five year  period                                                               
immediately following receipt of the license.                                                                                   
                                                                                                                                
6:29:56 PM                                                                                                                    
                                                                                                                                
Senator Dyson  asked whether changing  from a  matching situation                                                               
to a  reimbursement scenario,  as specified  by the  revisions to                                                               
Section  43.90.110, subsections  (a)(1)(A)  and  (B), would  have                                                               
"the affect of  cutting in half the amount of  money for the work                                                               
that would be done during this period."                                                                                         
                                                                                                                                
          (1)   subject   to    appropriation,   state   matching                                                               
     contributions  in  the form  of  reimbursements  in a  total                                                               
     amount  not to  exceed  $500,000,000, paid  to the  licensee                                                               
     during the  five-year period immediately following  the date                                                               
     the license is awarded;…                                                                                                   
                                                                                                                                
Ms. Davis  identified "the  actual language  change" as  being in                                                               
subsection  (a)(1), page  2 lines  17  through 19.  She read  the                                                               
language and expressed the following.                                                                                           
                                                                                                                                
     …the actual  matching percentage  is still  in play.  So, if                                                               
     they  say,  I want  a  match  prior  to  open season  of  40                                                               
     percent, it would  be a reimbursement up to  the 40 percent.                                                               
     So the percentage level of match  is still in play. The only                                                               
     thing  that  the addition  of  the  word reimburse  does  is                                                               
     affect the timing, so that  the State isn't paying the match                                                               
     at the  initial outlay of  cash by that licensee  but rather                                                               
     its   after  they've   outlaid,  provided   the  documentary                                                               
     support,  then we  provide  the  reimbursement that's  still                                                               
     subject to those caps of percentages.                                                                                      
                                                                                                                                
Senator Dyson appreciated the clarification.                                                                                    
                                                                                                                                
6:31:31 PM                                                                                                                    
                                                                                                                                
     Section 43.90.130. Application requirements.                                                                               
                                                                                                                                
Mr. Porter  next directed attention  to paragraph (1)  of Section                                                               
43.90.130,  page  3  beginning  on   line  26.  The  phrase  "the                                                               
applicant shall file with the  commissioners the number of copies                                                               
of the application, and any  amended application, required by the                                                               
commissioners; at the same time  the copies of the application or                                                               
an  amended application  are filed  with  the commissioners,  the                                                               
applicant shall provide six copies  of the application or amended                                                               
application  to the  presiding  officer of  each  chamber of  the                                                               
legislature" was  added following  "request for  applications" in                                                               
paragraph (1), page 3 line 31.                                                                                                  
                                                                                                                                
6:32:21 PM                                                                                                                    
                                                                                                                                
     Section 43.90.160. Notice, review, and comment.                                                                            
                                                                                                                                
          (c) After the commissioners determine that the                                                                        
     applications are complete under AS 43.90.140, ….                                                                           
                                                                                                                                
Mr.  Porter advised  that the  change in  subsection (c)  of this                                                               
section was  to pluralize "the  application is complete"  to read                                                               
"the applications are complete", as reflected on page 12 line 3.                                                                
                                                                                                                                
Ms.  Davis  noted  that  this language  had  been  pluralized  in                                                               
previous versions of  the bill. Changing it from  the singular to                                                               
the  plural recognized  that all  license  applications would  be                                                               
received at one time rather than at staggered times.                                                                            
                                                                                                                                
6:34:07 PM                                                                                                                    
                                                                                                                                
     Section 43.90.170. Application evaluation and ranking.                                                                     
                                                                                                                                
          (b) When evaluating the net present value of                                                                          
     anticipated  cash flow  to the  state  from the  applicant's                                                               
     project   proposal,   the   commissioners   shall   use   an                                                               
     undiscounted  value and,  at a  minimum,  discount rates  of                                                               
     two, five, six, and eight percent, and consider                                                                            
                                                                                                                                
Mr.  Porter stated  that the  discount  rate of  six percent  was                                                               
added to subsection (b) page 12 line 20.                                                                                        
                                                                                                                                
6:34:49 PM                                                                                                                    
                                                                                                                                
     Section 43.90.200. Certification by regulatory authority                                                                   
     and project sanction.                                                                                                      
                                                                                                                                
          (a) A licensee that is awarded a certificate of public                                                                
     convenience  and necessity  from  a  regulatory agency  with                                                               
     jurisdiction over  the project shall accept  the certificate                                                               
     on or before the date  the order granting the certificate is                                                               
     no longer subject to judicial review.                                                                                      
                                                                                                                                
6:35:43 PM                                                                                                                    
                                                                                                                                
Mr. Porter  stated that, as  a clarifying measure, the  words "on                                                               
or before the  date" were added following the  first reference to                                                               
"the certificate"  in subsection  (a) page 15  line 4.  The words                                                               
"or earlier at the licensee's  discretion" were deleted following                                                               
"judicial review" at the end of the subsection, page 15 line 5.                                                                 
                                                                                                                                
Mr.  Porter  informed  the  Committee   that  the  term  "amended                                                               
certificate" was utilized throughout  the previous version of the                                                               
bill. That term is deleted  entirely from Version "T" by changing                                                               
the definition  of certificate to  include "both  certificate and                                                               
language  sufficient  to  cover  amended  certificate  as  well."                                                               
Further discussion on this change would be forthcoming.                                                                         
                                                                                                                                
          (f) In this section, "effective date of the                                                                           
     certificate of  public convenience and necessity"  means the                                                               
     earlier of  the date the  order granting the  certificate is                                                               
     not  longer  subject to  judicial  review  or the  date  the                                                               
     licensee accepts the certificate.                                                                                          
                                                                                                                                
Mr. Porter advised  that two changes were made  to subsection (f)                                                               
of  this  section.  The  words "the  earlier  of"  were  inserted                                                               
following "means"  on page 16 line  3 and the words  "or the date                                                               
the  licensee  accepts  the  certificate"  were  added  following                                                               
"review" on line 4.                                                                                                             
                                                                                                                                
6:37:30 PM                                                                                                                    
                                                                                                                                
          (e) The transfer and assignments under (d) of this                                                                    
     section as a result of failure  to comply with (a) or (b) of                                                               
     this section  are at  no cost  to the  state or  the state's                                                               
     designee.  A transfer  under (c)  of this  section shall  be                                                               
     subject to  the state's payment  to the licensee of  the net                                                               
     amount  of expenditures  incurred and  paid by  the licensee                                                               
     that  are  qualified expenditures  for  the  purposes of  AS                                                               
     43.90.110.                                                                                                                 
                                                                                                                                
Ms.  Davis advised  that the  phrase  "is at  the licensee's  net                                                               
cost" were  deleted and  replaced with "shall  be subject  to the                                                               
state's  payment   to  the   licensee  of   the  net   amount  of                                                               
expenditures  incurred   and  paid  by  the   licensee  that  are                                                               
qualified expenditures"  following "A transfer under  (c) of this                                                               
section" on page 15 line 30.                                                                                                    
                                                                                                                                
6:38:17 PM                                                                                                                    
                                                                                                                                
     Section  43.90.210.  Amendment  of or  modification  to  the                                                               
     project plan. Subject to the  approval of the commissioners,                                                               
     a  licensee may  amend or  modify  its project  plan if  the                                                               
     amendments or  modifications improve  the net  present value                                                               
     of the  project to  the state, are  necessary because  of an                                                               
     order   or  requirement   by   a   regulatory  agency   with                                                               
     jurisdiction over the  project or by the Alaska  Oil and Gas                                                               
     Conservation  Commission, or  the amendment  or modification                                                               
     is necessary  because of  changed circumstances  outside the                                                               
     licensee's  control and  not  reasonably foreseeable  before                                                               
     the  license  was  issued.   An  amendment  or  modification                                                               
     approved  under this  section must  be  consistent with  the                                                               
     requirements of  AS 43.90.130 and,  except for  an amendment                                                               
     or modification required because  of an order or requirement                                                               
     of a  regulatory agency with  jurisdiction over  the project                                                               
     or by  the Alaska Oil  and Gas Conservation  Commission, may                                                               
     not substantially diminish  the value of the  project to the                                                               
     state or the project's likelihood of success.                                                                              
                                                                                                                                
Mr.  Porter  informed  that  the words  "an  order  issued"  were                                                               
deleted following "jurisdiction  over the project or"  on page 16                                                               
lines 9 and 15 of this section.                                                                                                 
                                                                                                                                
Ms Davis advised  that the phrase "net present"  was also deleted                                                               
following "may not  substantially diminish the" on  line 16. This                                                               
phrase was inadvertently included in  the previous version of the                                                               
bill as the result of a technical drafting error.                                                                               
                                                                                                                                
6:39:33 PM                                                                                                                    
                                                                                                                                
     Section 43.90.220.  Records, reports, conditions,  and audit                                                               
     requirements.                                                                                                              
                                                                                                                                
               (2) receive all relevant notices when and as                                                                     
     issued and  information when  and as  sent to  the governing                                                               
     body or bodies and equity holders;                                                                                         
                                                                                                                                
Mr. Porter stated  that the words "when and as"  were inserted in                                                               
subsection (d)(2), page 17 line 4, of this section.                                                                             
                                                                                                                                
6:40:03 PM                                                                                                                    
                                                                                                                                
     Section 43.90.240. Abandonment of project.                                                                                 
                                                                                                                                
          (b) If the commissioners and the licensee do not agree                                                                
     that the  project is uneconomic,  the disagreement  shall be                                                               
     settled by arbitration administered by…..                                                                                  
                                                                                                                                
Mr. Porter stated that the phrase  "or the licensee find that the                                                               
project  is  uneconomic  and  the  other  parties  disagree"  was                                                               
deleted  and  replaced  with  "and the  licensee  do  not  agree"                                                               
following "commissioners"  on page 18  line 26 of  subsection (b)                                                               
of  this section  in  order to  clarify  that "commissioners  and                                                               
licensees don't make findings, they disagree".                                                                                  
                                                                                                                                
6:40:51 PM                                                                                                                    
                                                                                                                                
               Article 3. Resource Inducements.                                                                                 
                                                                                                                                
     Section 43.90.300. Qualification for resource inducements.                                                                 
                                                                                                                                
Mr. Porter  stated that the  word "inducement" was  pluralized to                                                               
"inducements" on page 20, line 27 of the section title.                                                                         
                                                                                                                                
     Section 43.90.310. Royalty inducement.                                                                                     
          (c) To claim the inducement under (b) of this section,                                                                
     a lessee or other person  qualified under AS 43.90.300 shall                                                               
     agree, on an application form  provided by the Department of                                                               
     Natural Resources, that the lessee  or other person, and the                                                               
     lessee's or other  person's affiliates, successors, assigns,                                                               
     and  agents will  not  protest  or appeal  a  filing by  the                                                               
     licensee to roll in expansion costs  of the mainline up to a                                                               
     level that  is required  in AS  43.90.130(7) if  the Federal                                                               
     Energy  Regulatory Commission  does  not  have a  rebuttable                                                               
     presumption in  effect that  rolled-in treatment  applies to                                                               
     the cost of the expansion  of the project. The agreement not                                                               
     to protest may  not preclude the lessee or  other person, or                                                               
     the  lessee's  or  other  person's  affiliates,  successors,                                                               
     assigns,  and agents  from protesting  a filing  to roll  in                                                               
     mainline expansion  costs that  licensee is not  required to                                                               
     propose and support under AS 43.90.130(7).                                                                                 
                                                                                                                                
     Section 43.90.320. Gas production tax exemption.                                                                           
          (c) The person claiming the exemption under this                                                                      
     section  shall  agree  that the  person,  and  the  person's                                                               
     affiliates,  successors,   assigns,  and  agents   will  not                                                               
     protest  or appeal  a  filing  by the  licensee  to roll  in                                                               
     mainline expansion costs  up to the level  that the licensee                                                               
     is required to  propose an support under  AS 43.90.130(7) if                                                               
     the  Federal Energy  Regulatory Commission  does not  have a                                                               
     rebuttable  presumption in  effect that  rolled-in treatment                                                               
     applies to  the cost  of the expansion  of the  project. The                                                               
     agreement required  under this  subsection may  not preclude                                                               
     the   person,  or   the  person's   affiliates,  successors,                                                               
     assigns, and  agents, from  protesting a  filing to  roll in                                                               
     mainline expansion  costs that  licensee is not  required to                                                               
     propose and support under AS 43.90.130(7).                                                                                 
                                                                                                                                
     Section 43.90.330. Inducement vouchers.                                                                                    
          (d) A person that receives a voucher under this                                                                       
     section   and  a   gas  producer   that  receives   resource                                                               
     inducements under a voucher shall  agree that the person and                                                               
     the   gas   producer   and  their   respective   affiliates,                                                               
     successors, assigns, or agents will  not protest or appeal a                                                               
     filing by  the licensee to roll-in  mainline expansion costs                                                               
     up to  the level  that the licensee  is required  to propose                                                               
     and  support under  AS 43.90.130(7)  if  the Federal  Energy                                                               
     Regulatory   Commission   does   not   have   a   rebuttable                                                               
     presumption in  effect that  rolled-in treatment  applies to                                                               
     the  cost of  the expansion  of the  project. The  agreement                                                               
     required under  this subsection may not  preclude the person                                                               
     or gas producer or  their respective affiliates, successors,                                                               
     assigns,  or  agents from  protesting  a  filing to  roll-in                                                               
     mainline expansion  costs that the licensee  is not required                                                               
     to propose and support under AS 43.90.130(7).                                                                              
                                                                                                                                
Mr.  Porter  stated  that  the  clause  "if  the  Federal  Energy                                                               
Regulatory Commission  does not have a  rebuttable presumption in                                                               
effect  that  rolled-in treatment  applies  to  the cost  of  the                                                               
expansion of the project." has  been inserted following the first                                                               
reference to "AS 43.90.130(7)" in  three subsections of the bill:                                                               
Section 43.90.310.  Royalty inducement., subsection (c),  page 23                                                               
line  8;  Section  43.90.320.   Gas  production  tax  exemption.,                                                               
subsection  (c),   page  24,  line  9;   and  Section  43.90.330.                                                               
Inducement vouchers., subsection (d), page 25 line 9.                                                                           
                                                                                                                                
          Article 4. Miscellaneous Provisions.                                                                                  
                                                                                                                                
     Section  43.90.400. Alaska  Gasline Inducement  Act matching                                                               
     contribution fund; disbursements; audits.                                                                                  
                                                                                                                                
          (c) The commissioners shall adopt regulations that                                                                    
     provide  for application  to receive  matching contributions                                                               
     in the form of reimbursements  for qualified expenditures as                                                               
     provided under AS 43.90.110, and ……                                                                                        
                                                                                                                                
Mr. Porter stated that the phase "in the form of reimbursements"                                                                
was inserted following "contributions" in subsection (c) page 25                                                                
line 30 of Section 43.90.400.                                                                                                   
                                                                                                                                
6:43:14 PM                                                                                                                    
                                                                                                                                
     Section 43.90.440. Licensed project assurances.                                                                            
                                                                                                                                
          (a) Except as otherwise provided in this chapter, the                                                                 
     state  grants a  licensee assurances  that the  licensee has                                                               
     exclusive enjoyment  of the inducements provided  under this                                                               
     chapter before the commencement of commercial operations….                                                                 
                                                                                                                                
Mr. Porter pointed out that the word "operation" in Section                                                                     
43.90.440, subsection (a) page 26 line 22 was pluralized to                                                                     
"operations" in this version of the bill.                                                                                       
                                                                                                                                
6:43:32 PM                                                                                                                    
                                                                                                                                
               Article 5. General Provisions.                                                                                   
                                                                                                                                
     Section 43.90.900. Definitions.                                                                                            
                                                                                                                                
               (4)"certificate   of    public   convenience   and                                                               
     necessity" and  "certificate" mean  a certificate  of public                                                               
     convenience  and  necessity  issued by  the  Federal  Energy                                                               
     Regulatory  Commission  or   the  Regulatory  Commission  of                                                               
     Alaska,  and   a  certificate   of  public   convenience  of                                                               
     necessity   issued   by   the  Federal   Energy   Regulatory                                                               
     Commission under 15  U.S.C. 719 et seq.  (Alaska Natural Gas                                                               
     Transportation Act of  1976) that is amended  to comply with                                                               
     the terms of the license;                                                                                                  
                                                                                                                                
Mr. Porter stated that, as mentioned earlier, the definitions of                                                                
"certificate   of   public   convenience   and   necessity"   and                                                               
"certificate"  were changed  to accommodate  the deletion  of the                                                               
term "amended  certificate" from this  version of the  bill. This                                                               
definition is depicted in paragraph  (4), page 28 line 31 through                                                               
page 29 line 5, of Section 43.90.900.                                                                                           
                                                                                                                                
6:44:55 PM                                                                                                                    
                                                                                                                                
               (17) "open season" means the process that                                                                        
     complies with  18 C.F.R. Part  157, Subpart B  (Open Seasons                                                               
     for Alaska  Natural Gas Transportation Projects)  or similar                                                               
     procedures for soliciting  commitments for pipeline capacity                                                               
     under the  regulations, policies, rules or  precedent of the                                                               
     Regulatory Commission of Alaska;                                                                                           
                                                                                                                                
Mr. Porter also advised that  the language "or similar procedures                                                               
for  soliciting  commitments  for  pipeline  capacity  under  the                                                               
regulations,  policies,  rules  or precedent  of  the  Regulatory                                                               
Commission  of  Alaska" was  added  to  the definition  of  "open                                                               
season",  as  depicted  in  paragraph  (17)  of  the  Definitions                                                               
section, page 30 line 9.                                                                                                        
                                                                                                                                
6:45:35 PM                                                                                                                    
                                                                                                                                
This  concluded  the overview  of  the  changes included  in  the                                                               
Version "T" committee substitute.                                                                                               
                                                                                                                                
AT EASE 6:46:34 PM / 6:50:31 PM                                                                                             
                                                                                                                                
Amendment #1: This amendment  inserts "lobbying costs," following                                                               
"overhead costs," in Section 43.90.110(a)(1)(C),  page 3 line 10,                                                               
of  Article   2.  Chapter  90.  Alaska   Gasline  Inducement  Act                                                               
License., added to AS 43 by Section 1.                                                                                          
                                                                                                                                
Co-Chair Stedman moved and objected for discussion.                                                                             
                                                                                                                                
Co-Chair Stedman  explained that this amendment  would disqualify                                                               
lobbying costs from being a  qualified expenditure, as defined in                                                               
this subsection.                                                                                                                
                                                                                                                                
6:51:03 PM                                                                                                                    
                                                                                                                                
PATRICK    GALVIN,   Commissioner,    Department   of    Revenue,                                                               
communicated  that   the  Department   did  not  object   to  the                                                               
amendment.                                                                                                                      
                                                                                                                                
Co-Chair Stedman removed his objection.                                                                                         
                                                                                                                                
6:52:26 PM                                                                                                                    
                                                                                                                                
There being no further objection, Amendment #1 was ADOPTED.                                                                     
                                                                                                                                
Amendment  #2:  This  amendment increases  the  "five-year"  time                                                               
period specified in  Section 43.90.110(a)(1), page 2  line 19, of                                                               
Article 2.  Chapter 90. Alaska  Gasline Inducement  Act License.,                                                               
added to AS 43 by Section 1, to a "seven-year" time period.                                                                     
                                                                                                                                
Co-Chair Stedman moved and objected for discussion.                                                                             
                                                                                                                                
6:53:26 PM                                                                                                                    
                                                                                                                                
Commissioner Galvin advised that  subsection (a)(1) addressed the                                                               
time period in  which qualified expenditures would  be matched by                                                               
the  State. The  amendment  would increase  that  time period  to                                                               
seven years after the issuance of the license.                                                                                  
                                                                                                                                
Commissioner Galvin spoke as follows.                                                                                           
                                                                                                                                
     In  response  to  testimony   and  information  provided  by                                                               
     potential  applicants, its  been requested  to provide  more                                                               
     flexibility  in terms  of  both  the time  line  and in  the                                                               
     ability of  applicants to potentially have  costs associated                                                               
     with the actual FERC  [Federal Energy Regulatory Commission]                                                               
     determination timeframe,  if there's additional  costs while                                                               
     FERC may  be considering  an application and  also providing                                                               
     potentially more  time between an  open season and  when the                                                               
     beginning  …  engineering  and other  field  work  would  be                                                               
     undertaken to  pursue the FERC  certificate that  this would                                                               
     provide  more  flexibility  for applicants  and  potentially                                                               
     increase   our  pool   of  applicants   by  providing   this                                                               
     flexibility.                                                                                                               
                                                                                                                                
6:54:42 PM                                                                                                                    
                                                                                                                                
Senator  Huggins stated  he  would "counter-intuitively"  support                                                               
the amendment  in spite of  his concern  that it might  have "the                                                               
potential net effect of expanding the timeline."                                                                                
                                                                                                                                
6:55:13 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman maintained his objection to the amendment.                                                                     
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN  FAVOR:  Senator  Olson,   Senator  Huggins,  Senator  Thomas,                                                               
Senator Dyson, Senator Elton and Co-Chair Hoffman                                                                               
                                                                                                                                
OPPOSED: Co-Chair Stedman                                                                                                       
                                                                                                                                
The motion PASSED (6-1)                                                                                                         
                                                                                                                                
Amendment #2 was ADOPTED.                                                                                                       
                                                                                                                                
6:56:07 PM                                                                                                                    
                                                                                                                                
Amendment #3: This amendment deletes  "80" and inserts "90" in AS                                                               
43.90.110(a)(1)(B), page 2  line 30. The language  would read, in                                                               
part, as follows.                                                                                                               
                                                                                                                                
               (B) after the close of the first binding open                                                                    
     season, the  state shall reimburse the  licensee's qualified                                                               
     expenditures  at   the  level  specified  in   the  license;                                                               
     however, the  state's matching  contribution may  not exceed                                                               
     90 percent of the qualified expenditures …                                                                                 
                                                                                                                                
Co-Chair Stedman moved and objected for discussion.                                                                             
                                                                                                                                
6:56:46 PM                                                                                                                    
                                                                                                                                
Commissioner Galvin  explained that  this amendment  pertained to                                                               
the timeframe in which an  applicant could establish the level of                                                               
the  State's matching  contribution rate  after the  initial open                                                               
season. The adoption of this  amendment would increase that level                                                               
to no more than 90 percent of the qualified expenditures.                                                                       
                                                                                                                                
Commissioner Galvin continued as follows.                                                                                       
                                                                                                                                
     Again, it is something that  the applicant will establish in                                                               
     their   proposal.  This   provides   more  flexibility   for                                                               
     applicants  to potentially  put more  of the  weight on  the                                                               
     State. It  is being responsive to  primarily concerns raised                                                               
     by  TransCanada in  terms of  recognizing  the risk  sharing                                                               
     after an  open season  and concern with  regard to  the fact                                                               
     that its  primarily the  State's desire  and in  the State's                                                               
     interest  to  have the  project  continue  to move  forward,                                                               
     whereas the  company may see  a different risk  profile, and                                                               
     allowing for  the State to take  on more of that  weight may                                                               
     again  encourage more  applications, which  is the  ultimate                                                               
     goal,  and  recognizing,  also,  that  the  State's  cap  on                                                               
     expenditures remains at $500 million.                                                                                      
                                                                                                                                
Commissioner Galvin  considered "it appropriate to  be responsive                                                               
to  the desire  for flexibility  in  that area  with the  primary                                                               
desire to increase the potential pool of applicants."                                                                           
                                                                                                                                
6:58:24 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman thought  that changes, such as  the one proposed                                                               
in  this amendment,  have been  made to  "attract more  midstream                                                               
participants"   such   as   potential  pipeline   builders   like                                                               
TransCanada and Enbridge.                                                                                                       
                                                                                                                                
6:59:57 PM                                                                                                                    
                                                                                                                                
Commissioner  Galvin expressed  that,  over the  past few  weeks,                                                               
numerous  changes  have  been  made   "to  the  bill  to  attract                                                               
additional  applicants"  in  an effort  "to  eliminate  potential                                                               
barriers" identified by producers  and others. Concerns raised by                                                               
TransCanada and  others about such things  as upstream activities                                                               
have been  addressed. More  changes would  be anticipated  in the                                                               
endeavor to make  the Alaska Gasline Inducement  Act (AGIA) "more                                                               
flexible for all potential participants."                                                                                       
                                                                                                                                
7:00:34 PM                                                                                                                    
                                                                                                                                
Senator  Huggins  appreciated  the  Commissioner's  "candor"  and                                                               
hoped  that the  actions taken  in the  bill "would  attract more                                                               
applicants."  Nonetheless,   he  would  be  voting   against  the                                                               
amendment because  he was uncomfortable  being told by  a company                                                               
that, the in order to get  them to apply, the State must increase                                                               
its matching contribution level to 90 percent.                                                                                  
                                                                                                                                
7:01:14 PM                                                                                                                    
                                                                                                                                
Commissioner Galvin  clarified that "neither TransCanada  nor any                                                               
other applicant  has stated if  this changed  from 80 to  90 that                                                               
they  would come."  The  overall  effort is  to  make AGIA  "more                                                               
attractive" and  "to be  responsive to  our applicant  pool." The                                                               
issue addressed in  this amendment "was identified as  an area of                                                               
concern."                                                                                                                       
                                                                                                                                
Senator  Huggins  appreciated   the  clarification.  Nonetheless,                                                               
"when it  comes to dollars and  cents, I have a  little different                                                               
value system. So I'm a no vote."                                                                                                
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR:  Senator Olson, Senator Thomas,  Senator Dyson, Senator                                                               
Elton and Co-Chair Hoffman                                                                                                      
                                                                                                                                
OPPOSED: Senator Huggins and Co-Chair Stedman                                                                                   
                                                                                                                                
The motion PASSED (5-2)                                                                                                         
                                                                                                                                
Amendment #3 was ADOPTED.                                                                                                       
                                                                                                                                
7:03:01 PM                                                                                                                    
                                                                                                                                
Amendment  #4:   This  amendment  deletes  "and"   following  "AS                                                               
43.90.130(9);"  on  page  12  line   31  of  Article  2,  Section                                                               
43.90.170(b)(5) of Chapter  90, added to AS 43 by  Section 1, and                                                               
adds a new paragraph that reads as follows.                                                                                     
                                                                                                                                
               (6) economic value resulting from payments                                                                       
     required to  be made  to the  state under  the terms  of the                                                               
     proposal;                                                                                                                  
                                                                                                                                
Co-Chair Stedman moved and objected for discussion.                                                                             
                                                                                                                                
7:03:40 PM                                                                                                                    
                                                                                                                                
Commissioner Galvin  stated that  this amendment would  allow the                                                               
State  to  consider  a  variety  of  applicant  payment  options.                                                               
Further clarifying remarks were provided as follows.                                                                            
                                                                                                                                
     If an applicant were to  propose, as part of their proposal,                                                               
     making  payments to  the  State,  either in  the  form of  a                                                               
     passive equity interest, where the  payment would be made as                                                               
     part  of some  profit  sharing or  payments  based upon  the                                                               
     revenues  generated   by  the  project,  or,   as  the  port                                                               
     authority has indicated, they would  create a profit sharing                                                               
     opportunity  for the  State,  or if  the  applicant were  to                                                               
     propose  some sort  of repayment  in a  form of  just a  set                                                               
     payment as opposed to something based upon revenues.                                                                       
                                                                                                                                
     All of  those would  be something  that could  be considered                                                               
     and  evaluated as  part of  the net  present value  economic                                                               
     evaluation criteria. And,  we believe that this  is the most                                                               
     responsive way  to capture some  of those areas  of interest                                                               
     and also to provide flexibility from the applicants.                                                                       
                                                                                                                                
     But,  make it  clear that  within the  bill the  requirement                                                               
     that any  State contribution will  reduce the rate  base and                                                               
     thereby  reduce  the tariff  remains:  that  this is  not  a                                                               
     substitute  where the  State  contribution  will become  the                                                               
     loan and  will end up being  paid by the shippers  when they                                                               
     make  their tariff  payments. This  would be  something that                                                               
     would be offered by the  licensee out of their proceeds from                                                               
     the project  and would be offered  as a way of  making their                                                               
     proposal  more attractive  and  more  likely to  potentially                                                               
     succeed in the competitive bidding process.                                                                                
                                                                                                                                
7:06:03 PM                                                                                                                    
                                                                                                                                
In  response  to a  concern  voiced  by Senator  Elton,  Co-Chair                                                               
Stedman  stated   that  any   language  issues   associated  with                                                               
inserting this new paragraph into  the bill would be addressed by                                                               
the bill's drafters.                                                                                                            
                                                                                                                                
7:06:41 PM                                                                                                                    
                                                                                                                                
Senator  Olson asked  whether  the net  affect  of the  amendment                                                               
would be to  provide an opportunity "to have  an increased bottom                                                               
line for the State."                                                                                                            
                                                                                                                                
Commissioner  Galvin responded  in the  affirmative. "This  would                                                               
anticipate  that if  the licensee  were to  propose making  these                                                               
payments  it would  result in  an increased  bottom line  for the                                                               
State. We would get more value out of the project."                                                                             
                                                                                                                                
7:07:08 PM                                                                                                                    
                                                                                                                                
Senator  Huggins  complimented  the  Commissioner  on  developing                                                               
amendment  language that  would  provide an  opportunity for  the                                                               
State to further benefit from the project.                                                                                      
                                                                                                                                
Co-Chair Stedman removed his objection.                                                                                         
                                                                                                                                
There being no further objection, Amendment #4 was ADOPTED.                                                                     
                                                                                                                                
7:07:53 PM                                                                                                                    
                                                                                                                                
Amendment  #5:   This  amendment   inserts  the   word  "maximum"                                                               
following  "the" in  Article  2,  Section 43.90.130.  Application                                                               
requirements, subparagraph (15) on page  9 line 21 of Chapter 90,                                                               
added to  AS 43 by Section  1. The language would  read, in part,                                                               
as follows.                                                                                                                     
                                                                                                                                
               (15) to the maximum extent permitted by law,                                                                     
     commit to…                                                                                                                 
                                                                                                                                
Co-Chair Stedman moved Amendment #5.                                                                                            
                                                                                                                                
There being no objection, Amendment #5 was ADOPTED.                                                                             
                                                                                                                                
7:09:22 PM                                                                                                                    
                                                                                                                                
Commissioner  Galvin addressed  another  area of  concern in  the                                                               
bill; specifically language added to  paragraph (1) of Article 2,                                                               
Section  43.90.130. Application  requirements.,  page  3 line  30                                                               
through page 4, line 4 that reads, in part, as follows.                                                                         
                                                                                                                                
          …the applicant  shall file  with the  commissioners the                                                               
          number of  copies of the  application, and  any amended                                                               
          application,  required  by  the commissioners;  at  the                                                               
          same time the  copies of the application  or an amended                                                               
          application  are  filed  with  the  commissioners,  the                                                               
          applicant shall  provide six copies of  the application                                                               
          or  amended application  to  the  presiding officer  of                                                               
          each chamber of the legislature;                                                                                      
                                                                                                                                
Commissioner   Galvin  was   particularly  concerned   about  the                                                               
language  requiring  the applicant  to  provide  copies of  their                                                               
application  to the  presiding  officer of  each  chamber of  the                                                               
legislature.  The concern  is that  this action  could compromise                                                               
the integrity of the process. It  is imperative that there be "no                                                               
opportunity for one  of the applicants, who that  point still has                                                               
the opportunity  to amend  their application,  to have  access to                                                               
information provided by a competing applicant."                                                                                 
                                                                                                                                
Commissioner Galvin declared that  the commissioners must be able                                                               
to keep the applications "secure" and "within their control".                                                                   
                                                                                                                                
Co-Chair  Stedman advised  that  forthcoming  Amendment #6  might                                                               
address this concern.                                                                                                           
                                                                                                                                
AT EASE 7:11:54 PM / 7:24:26 PM                                                                                             
                                                                                                                                
Amendment   #6:  This   amendment  deletes   the  ";"   following                                                               
"legislature" on  page 4 line 4  of subsection (1) of  Article 2,                                                               
Section 43.90.130 of  Chapter 90 added to AS 43  by Section 1 and                                                               
inserts new language as follows.                                                                                                
                                                                                                                                
          in a sealed envelope, and such envelope shall not be                                                                  
     opened  and the  contents distributed  until the  receipt by                                                               
     the presiding officers  of each chamber of  notice, that the                                                               
     commissioners have determined  the applications are complete                                                               
     under AS  43.90.140 and the  presiding officer may  open the                                                               
     envelop after  signing a confidentiality agreement  under AS                                                               
     43.90.160(c).                                                                                                              
                                                                                                                                
Co-Chair Stedman moved and objected for discussion.                                                                             
                                                                                                                                
Co-Chair  Stedman   thought  this  language  would   address  the                                                               
confidentially  concern  arising  from providing  copies  of  the                                                               
applications  to the  presiding officer  of each  chamber of  the                                                               
Legislature.                                                                                                                    
                                                                                                                                
7:25:26 PM                                                                                                                    
                                                                                                                                
Commissioner  Galvin  advised that  the  issue  "still causes  us                                                               
concern." He elaborated as follows.                                                                                             
                                                                                                                                
     …the Executive Branch is  still responsible for implementing                                                               
     the  laws. And,  as part  of  that, we  are responsible  for                                                               
     implementing  the  AGIA  process.   And,  that  process  has                                                               
     safeguards with regard to both  the flow of the applications                                                               
     and the  retention of the confidential  materials. What this                                                               
     does,  is it  goes  outside of  the  process and  additional                                                               
     language  that,  as  far  as  I'm  aware,  is  unprecedented                                                               
     anywhere else  in State procedure,  to have  the information                                                               
     provided simultaneously  to the Executive Branch  and to the                                                               
     presiding officers.                                                                                                        
                                                                                                                                
     Now, there's  no limitation in  here on, once  the presiding                                                               
     officers  open   these,  whether  they  are   bound  to  not                                                               
     distribute the  confidential information  as is  provided in                                                               
     other sections  with regard to the  commissioners. It states                                                               
     that the  commissioners can only provide  the information to                                                               
     others once those others within  the Legislature have signed                                                               
     a confidentially  agreements provided by  the commissioners.                                                               
     This  does not  have those  safeguards built  into it.  It's                                                               
     coming  in  from  a completely  different  angle.  I  cannot                                                               
     understand the motivations given  that this information will                                                               
     basically be available to the  Legislature at the exact same                                                               
     time  under  this as  under  this  other provision,  as  the                                                               
     existing provision.                                                                                                        
                                                                                                                                
7:27:22 PM                                                                                                                    
                                                                                                                                
Commissioner   Galvin  advised   that  the   Department  of   Law                                                               
recommends the  existing bill language and  has "established that                                                               
it's got  the safeguards necessary  to ensure that  the integrity                                                               
of the  process remains. This  is not  worked out in  that regard                                                               
and there are potential loopholes that I can already see."                                                                      
                                                                                                                                
Commissioner Galvin  noted that, in  addition to the  question of                                                               
confidentiality, the  inclusion of an amended  application in the                                                               
requirement is  troublesome because "no  where in the bill  do we                                                               
talk about them being able to submit an amended application."                                                                   
                                                                                                                                
Commissioner  Galvin pointed  out  that  the application  process                                                               
currently  involves   the  submittal  of  an   application,  with                                                               
additional  information  to  be  provided  as  requested  by  the                                                               
commissioners. "That  information would  then be made  public, as                                                               
well  as the  correspondence,  when the  applications are  deemed                                                               
complete. This just is basically  additional process that's being                                                               
tacked on  here late  in the  day without us  being able  to work                                                               
through the  various pitfalls  that may  be associated  with this                                                               
additional process that,  again, I'm not aware  of anywhere else"                                                               
in the bill.                                                                                                                    
                                                                                                                                
Commissioner  Galvin  urged  the   Committee  to  return  to  the                                                               
language in the original version of  the bill as it would provide                                                               
the Legislature  "full access  to the  information once  its been                                                               
complete,  full  access  to  the  confidential  information,  and                                                               
ensures that  there isn't any  question after the fact  about the                                                               
integrity of the information flow."                                                                                             
                                                                                                                                
AT EASE 7:29:28 PM / 7:30:07 PM                                                                                             
                                                                                                                                
Without objection, Co-Chair Stedman WITHDREW Amendment #6.                                                                      
                                                                                                                                
Conceptual Amendment  #8: This  amendment deletes  "the applicant                                                               
shall file  with the  commissioners the number  of copies  of the                                                               
application,  and  any  amended   application,  required  by  the                                                               
commissioners; at the same time  the copies of the application or                                                               
an  amended application  are files  with  the commissioners,  the                                                               
applicant shall provide six copies  of the application or amended                                                               
application  to the  presiding  officer of  each  chamber of  the                                                               
legislature" following "applications;" on  page 3 line 30 through                                                               
page 4 line  4 of paragraph (1) of Article  2, Section 43.90.130.                                                               
Application  requirements.  in  Chapter  90 added  to  AS  43  by                                                               
Section 1                                                                                                                       
                                                                                                                                
Co-Chair Stedman moved and objected for further discussion.                                                                     
                                                                                                                                
7:32:34 PM                                                                                                                    
                                                                                                                                
No   discussion  forthcoming,   Co-Chair   Stedman  removed   his                                                               
objection.                                                                                                                      
                                                                                                                                
There  being no  further objection,  Conceptual Amendment  #8 was                                                               
ADOPTED.                                                                                                                        
                                                                                                                                
7:33:18 PM                                                                                                                    
                                                                                                                                
Amendment #7: This amendment inserts  "an amendment to" following                                                               
"and" in paragraph (4), page 29,  line 2 of Section 1, Article 5,                                                               
Section 43.90.900. Definitions,  of Chapter 90 added to  AS 43 by                                                               
Section 1.                                                                                                                      
                                                                                                                                
The amendment  also deletes "that  is amended to comply  with the                                                               
terms   of   the   license"  following   "(Alaska   Natural   Gas                                                               
Transportation Act  of 1976)"  on page  29, line  4 of  that same                                                               
paragraph.                                                                                                                      
                                                                                                                                
The changes proposed in the amendment would read as follows.                                                                    
                                                                                                                                
               (4) "certificate of public convenience and                                                                       
     necessity" and  "certificate" mean  a certificate  of public                                                               
     convenience  and  necessity  issued by  the  Federal  Energy                                                               
     Regulatory  Commission  or   the  Regulatory  Commission  of                                                               
     Alaska,  and  an  amendment  to   a  certificate  of  public                                                               
     convenience  of  necessity  issued  by  the  Federal  Energy                                                               
     Regulatory Commission  under 15  U.S.C. 719 et  seq. (Alaska                                                               
     Natural Gas Transportation Act of 1976);                                                                                   
                                                                                                                                
Co-Chair Stedman moved and objected for discussion.                                                                             
                                                                                                                                
7:33:27 PM                                                                                                                    
                                                                                                                                
Commissioner  Galvin explained  that, as  mentioned earlier,  the                                                               
term "or amended certificate" accompanied  all references made to                                                               
a FERC certificate  in previous bill versions.  A "global change"                                                               
was  made in  this  committee  substitute in  that  the term  "or                                                               
amended certificate"  was omitted, and  the concept of  that term                                                               
was added to the definition of "certificate".                                                                                   
                                                                                                                                
Commissioner  Galvin communicated,  however, that  the Department                                                               
has determined that  the manner in which  the amended certificate                                                               
is referenced  in that definition  could "be  clarified further".                                                               
This is the purpose of the amendment.                                                                                           
                                                                                                                                
In  response to  a question  from Co-Chair  Stedman, Commissioner                                                               
Galvin affirmed that the Department supported the amendment.                                                                    
                                                                                                                                
Co-Chair Stedman removed his objection.                                                                                         
                                                                                                                                
There being no other objection, Amendment #7 was ADOPTED.                                                                       
                                                                                                                                
No further amendments were offered.                                                                                             
                                                                                                                                
AT EASE 7:35:33 PM / 7:36:56 PM                                                                                             
                                                                                                                                
7:37:24 PM                                                                                                                    
                                                                                                                                
Senator Dyson was pleased with  the Committee's bill and with the                                                               
cooperation  provided  by  the Administration  in  the  endeavor.                                                               
While  he  would  have  welcomed  having  the  bill  reviewed  by                                                               
Legislative  consultants,   he  was   sympathetic  to   the  time                                                               
constraint placed on Committee actions.                                                                                         
                                                                                                                                
7:38:21 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman appreciated Senator  Dyson's remarks. The amount                                                               
of time he, Co-Chair Hoffman,  and Senator Huggins spent "working                                                               
through  the details"  of the  bill, with  the assistance  of the                                                               
Administration, is evidenced by the  limited number and nature of                                                               
the amendments offered today.                                                                                                   
                                                                                                                                
7:39:06 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman   moved  to  report  the   Version  25-GS1060\T                                                               
committee substitute, as amended,  from Committee with individual                                                               
recommendations and accompanying fiscal notes.                                                                                  
                                                                                                                                
7:39:27 PM                                                                                                                    
                                                                                                                                
There  being  no  objection,  CS  SB104(FIN)  was  REPORTED  from                                                               
Committee with  six previous  fiscal notes:  zero fiscal  note #2                                                               
from the Division of Oil  & Gas, Department of Natural Resources;                                                               
$2,226,000 fiscal  note #3 from  the Department of  Revenue; zero                                                               
fiscal note  #4 from  the Department  of Commerce,  Community and                                                               
Economic Development; zero fiscal note  #5 from the Department of                                                               
Administration;  $302,100 fiscal  note #6,  from the  Division of                                                               
Oil  &  Gas,  Department  of Natural  Resources;  and  $6,500,000                                                               
capital expenditure fiscal  note #7 from the  Department of Labor                                                               
and Workforce Development.                                                                                                      
                                                                                                                                
                                                                                                                                
7:40:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  conducted housekeeping  on the  following day's                                                               
Committee schedule.                                                                                                             
                                                                                                                              
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Bert Stedman adjourned the meeting at 7:40:48 PM.                                                                    

Document Name Date/Time Subjects