Legislature(2019 - 2020)BELTZ 105 (TSBldg)
05/10/2019 01:30 PM Senate LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB106 | |
| HB104 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 106 | TELECONFERENCED | |
| *+ | HB 104 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
May 10, 2019
1:30 p.m.
MEMBERS PRESENT
Senator Lora Reinbold, Chair
Senator Mia Costello, Vice Chair
Senator Click Bishop
Senator Chris Birch
Senator Elvi Gray-Jackson
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 106
"An Act relating to renewal of insurance coverage for homeowners
and renters; and providing for an effective date."
- MOVED CSSB 106(L&C) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 104(L&C) AM
"An Act relating to exemptions from mortgage lender, mortgage
broker, and mortgage loan originator licensing requirements; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 106
SHORT TITLE: HOMEOWNER/RENTER INSURANCE RENEWAL
SPONSOR(s): SENATOR(s) BEGICH
04/10/19 (S) READ THE FIRST TIME - REFERRALS
04/10/19 (S) L&C
05/07/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/07/19 (S) Heard & Held
05/07/19 (S) MINUTE(L&C)
05/09/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/09/19 (S) Heard & Held
05/09/19 (S) MINUTE(L&C)
05/10/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 104
SHORT TITLE: MORTGAGE LOAN ORIGINATOR LICENSING
SPONSOR(s): REPRESENTATIVE(s) WILSON
03/25/19 (H) READ THE FIRST TIME - REFERRALS
03/25/19 (H) L&C
04/10/19 (H) L&C AT 3:15 PM BARNES 124
04/10/19 (H) Bills Previously Heard/Scheduled
04/17/19 (H) L&C AT 3:15 PM BARNES 124
04/17/19 (H) EXTEND BOARD OF MARINE PILOTS
04/26/19 (H) L&C AT 3:15 PM BARNES 124
04/26/19 (H) Heard & Held
04/26/19 (H) MINUTE(L&C)
04/29/19 (H) L&C AT 3:15 PM BARNES 124
04/29/19 (H) Moved CSHB 104(L&C) Out of Committee
04/29/19 (H) MINUTE(L&C)
05/01/19 (H) L&C RPT CS(L&C) NT 2DP 5NR
05/01/19 (H) DP: HANNAN, LEDOUX
05/01/19 (H) NR: REVAK, STUTES, TALERICO, FIELDS,
WOOL
05/10/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR TOM BEGICH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor on SB 106.
REPRESENTATIVE TAMMIE WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of HB 104.
PATRICE WALSH, Director
Division of Banking and Securities
Department of Commerce, Community and Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 104.
NADINE WINTERS, Executive Director
Fairbanks Neighborhood Housing Service (FNHS)
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 104.
STACY HARVILL, Associate Broker
Liaison
Legislative Committee
Alaska Association of Realtors
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 104.
ACTION NARRATIVE
1:30:52 PM
CHAIR LORA REINBOLD called the Senate Labor and Commerce
Standing Committee meeting to order at 1:30 p.m. Present at the
call to order were Senators Costello, Gray-Jackson, Birch and
Chair Reinbold.
SB 106-HOMEOWNER/RENTER INSURANCE RENEWAL
1:32:04 PM
CHAIR REINBOLD announced that the first order of business would
be SENATE BILL NO. 106, "An Act relating to renewal of insurance
coverage for homeowners and renters; and providing for an
effective date."
{Before the committee was the proposed committee substitute (CS)
for SB 106( ), 31-LS0476\M, Version M.]
1:32:31 PM
SENATOR COSTELLO explained that her amendment would have added
in commercial businesses. She said that she has held discussions
but has decided not to incorporate her amendment into the bill.
She thanked the sponsor for working with her on this matter.
1:33:35 PM
SENATOR COSTELLO withdrew Amendment 1, work order M.2 previously
adopted at the 5/9/19 meeting, work order 31-LS0476\M.2, Marx,
5/8/19.
AMENDMENT 1
OFFERED IN THE SENATE BY SENATOR COSTELLO
TO: CSSB 106( ), Draft Version "M"
Page 1, line 1, following "Act":
Insert "relating to cancellation and renewal of
commercial property insurance coverage;"
Page 1, following line 3:
Insert a new bill section to read:
"* Section 1. AS 21.36.210 is amended by adding a
new subsection to read:
(g) An insurer may not exercise its right to
cancel a policy of commercial property insurance
solely based on notice, receipt, or payment of a claim
under the policy unless the insurer has paid a claim
under the policy within the three-year period
immediately preceding the notice, receipt, or
payment."
Page 1, line 4:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill sections accordingly.
Page 2, line 12, following "homeowner's":
Insert "or commercial property"
Page 3, following line 13:
Insert a new bill section to read:
"* Sec. 5. AS 21.36.310 is amended by adding a new
paragraph to read:
(6) "commercial property insurance" means
property insurance as described in AS 21.12.060 that
is "business or commercial insurance" as defined in
this section."
Renumber the following bill sections accordingly.
Page 3, lines 16 - 18:
Delete all material and insert:
"APPLICABILITY. AS 21.36.210(g), enacted by sec.
1 of this Act, AS 21.36.240, as amended by secs. 2 and
3 of this Act, AS 21.36.310(4), as amended by sec. 4
of this Act, and AS 21.36.310(6), enacted by sec. 5 of
this Act, apply to an insurance policy or contract
entered into or renewed on or after the effective date
of secs. 1 - 5 of this Act."
Page 3, line 25:
Delete "Section 5"
Insert "Section 7"
Page 3, line 26:
Delete "sec. 6"
Insert "sec. 8"
CHAIR REINBOLD asked to place on the record that the committee
received letters of opposition from the National Association of
Mutual Insurance Companies, and the American Property Casualty
Insurance Association to Amendment 1. She understood their
concerns. However, this matter needs to be addressed. Many
businesses in her community want to close down due to theft and
crime. She urged everyone to work together with local businesses
and insurance companies to reduce the rampant theft in Alaska's
communities.
CHAIR REINBOLD removed her objection.
Amendment 1, previously adopted, was withdrawn.
1:35:20 PM
CHAIR REINBOLD moved to adopt Amendment 2, work order 31-
LS0476\M.4, Marx, 5/9/19.
AMENDMENT 2
OFFERED IN THE SENATE BY SENATOR REINBOLD
TO: CSSB 106( ), Draft Version "M"
Page 2, lines 11 - 15:
Delete all material and insert:
"(b) In addition to the requirements in (a) of this
section, an insurer may not fail to renew a homeowner's
insurance policy based solely on the earliest claim made by
the insured within the three-year period immediately
preceding the policy's annual anniversary if the claim
arises from a criminal act committed by a third party. In
this subsection, "homeowner's insurance" includes coverage
described in AS 21.36.460(i)(7)(B) and (C)."
SENATOR COSTELLO objected for discussion purposes.
CHAIR REINBOLD read Amendment 2.
1:36:19 PM
SENATOR TOM BEGICH, Alaska State Legislature, Juneau, explained
that the two changes in Amendment 2 were worked out through
discussions with the insurance industry. First, Amendment 2
would ensure that failure to renew a homeowner's insurance
policy is not based solely on the earliest claim made. He
characterized it as giving the insurance agency little more
flexibility related to issues outside of the scope of a criminal
act. He said that Amendment 2 narrowed it down to criminal acts
committed by a third party. He clarified that a criminal act
could be committed by a party within a home and a claim could be
made. However, that is a different issue entirely. In this
instance it relates to situations in which a person is the
victim of a crime that the person was unaware of. He said he
wholly supports this amendment. He encouraged members to adopt
the amendment.
1:37:42 PM
SENATOR BIRCH raised a procedural question. He asked whether
action the committee took at the last hearing on Amendment 1 was
rescinded.
1:38:34 PM
SENATOR COSTELLO pointed out Amendment 2 was before the
committee.
CHAIR REINBOLD asked members to consider the motion before them,
which is Amendment 2.
SENATOR COSTELLO withdrew her objection.
1:38:47 PM
SENATOR BIRCH clarified that this limits it to criminal acts
committed by a third party, which is a fairly narrow limit.
SENATOR BEGICH answered that is correct.
CHAIR REINBOLD heard no further objections and Amendment 2 was
adopted.
CHAIR REINBOLD solicited a motion to rescind the committee's
action on Amendment 1.
1:39:35 PM
SENATOR COSTELLO made a motion to rescind the committee's action
to adopt Amendment 1, work order 31-LS0476\M.2, Marx, 5/8/19,
which was previously adopted by the committee on 5/19/19.
There being no objection, the Senate Labor and Commerce Standing
Committee's action to adopt Amendment 1 was rescinded.
CHAIR REINBOLD indicated SB 106, as amended, was before the
committee.
1:39:55 PM
SENATOR COSTELLO moved to report SB 106, work order 31-LS0476\M,
as amended, from committee with individual recommendations and
attached fiscal note.
CHAIR REINBOLD found no objection and the committee substitute
for SB 106 (L&C) was reported from the Senate Labor and Commerce
Standing Committee Standing Committee.
1:40:35 PM
At-ease.
HB 104-MORTGAGE LOAN ORIGINATOR LICENSING
1:43:26 PM
CHAIR REINBOLD reconvened the meeting and announced that the
final order of business would be CS FOR HOUSE BILL NO. 104(L&C)
am, "An Act relating to exemptions from mortgage lender,
mortgage broker, and mortgage loan originator licensing
requirements; and providing for an effective date."
1:44:05 PM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, Juneau,
paraphrased from her sponsor statement on HB 104, which read as
follows:
The current Alaska SAFE Act allows a seller to finance
his or her residence. If a person had more than one
residence (a second home for example) they could sell
and finance it themselves without a license under AS
06.60.015(b)(3). If the second home had been rented it
would be considered an income property and the seller
would be required to have a mortgage loan originator
license in order to seller finance it.
CSHB104(L&C) would allow a person to seller-finance
up to 5 of their own properties which are secured by a
dwelling, whether they are an income property or not.
Interior and more rural community property owners have
parcels with trailers or cabins on them; some with
water and electric, some without. These types of
properties are historically difficult to finance
through the traditional mortgage process and many
times lenders require more money down, shorter loan
terms, higher interest rates, and in some cases, will
not finance them at all. Those wishing to take on the
responsibility of home ownership and establish roots
in the community may find, for many reasons, that they
do not qualify for a traditional mortgage. Seller
financing is another tool that can be utilized to make
it affordable for one to realize their dream of having
a place they can finally call their home. Seller
financing is a reasonable and practical option for
both sellers and buyers of these type properties.
CSHB 104 would give more opportunity for the dream of
home ownership to those who might not otherwise
realize it and would relieve the financial burden of
bona fide non-profit organizations assisting Alaskans
in making their dream come true.
1:46:09 PM
REPRESENTATIVE WILSON said that she discovered that many people
are doing seller financing with their income property believing
that it was legal in Alaska to do so. Unfortunately, one person
found out through the court system that it is not. She said that
she discovered it was an issue throughout Alaska. She remarked
that very few people believed it was not possible to seller
finance properties. For example, a person might rent a home for
five years and decide to purchase it but could not do so without
having a mortgage loan originator license. This bill would allow
people to self-finance their residential loan.
1:46:52 PM
SENATOR COSTELLO clarified that the bill before the committee
was the committee substitute (CS) for HB 104 (L&C) am, work
order LS0275/S.A. Chair Reinbold objected for discussion
purposes.
1:47:32 PM
CHAIR REINBOLD opened public testimony on HB 104.
1:47:51 PM
PATRICE WALSH, Director, Division of Banking and Securities,
Department of Commerce, Community and Economic Development
(DCCED), Anchorage, stated the division's support for the bill.
1:49:00 PM
NADINE WINTERS, Executive Director, Fairbanks Neighborhood
Housing Service (FNHS), Fairbanks, spoke in support of HB 104.
She stated that FNHS provides affordable rental housing and
provides second mortgage payment assistance for income-eligible
first-time home buyers. The FNHS specifically supports the non-
profit exemption provision. Although the organization only
provides mission-driven second mortgages under market rates, it
is regulated like a bank that does first mortgages at market
rate. As a small organization, it can be difficult to comply.
For example, last year the FNHS closed 13 loans at zero percent
through a federal funding source targeted specifically for
people who are at 80 percent of area-median income. She
characterized their organization as a mission-driven process
whose funders specifically direct what can and cannot be done.
She said that having another layer of regulation is onerous and
problematic for them. The federal Secure and Fair Enforcement
for Mortgage Licensing (SAFE) Act was amended in 2010 to allow
states to exempt nonprofits such as theirs. She reported that 22
states have an exemption and 24 states have conditions similar
to ones in HB 104.
MS. WINTERS reiterated support for the bill, stating that it
would be immensely helpful. She predicted it would impact four
or five other non-profits that do the same thing. The FNHS does
not compete with banks since it offers a totally separate
product. In fact, FNHS actually enhances what the banks do
because with the closing costs and down payment assistance, more
people can afford to buy homes.
SENATOR BIRCH echoed her sentiments. He remarked that allowing a
seller to finance his/her residence increases flexibility and
improve lives for many.
1:51:31 PM
STACY HARVILL, Associate Broker, Liaison, Legislative Committee,
Alaska Association of Realtors, Fairbanks, spoke in support of
HB 104.
1:52:10 PM
CHAIR REINBOLD after first determining no one wished to testify,
closed public testimony on HB 104.
1:52:20 PM
REPRESENTATIVE WILSON read a list of bona fide nonprofit
organizations that would be affected by the bill, including
Anchorage Habitat for Humanity, Mat-Su Habitat for Humanity,
Alaska Community Development Corporation, Fairbanks Neighborhood
Housing Services, Rural Alaska Community Action Program, and
Alaska EnTech Capital, LLC.
She explained that individuals found out that private mortgage
contracts were not legal. She said that some title companies
were not moving forward with processing and that individuals
were not able to move into their homes. She said she was
surprised when she discovered this but would like people to be
able to have their own homes in ways that they can afford.
CHAIR REINBOLD asked for further clarification that her comments
reflected changes between bill version U and Version S. She
referred to work order 31-LS0275\S, page 1, lines 13-14, which
read, ";or (5) a bona fide nonprofit organization.
REPRESENTATIVE WILSON agreed. She said that this issue was
brought to her attention by the Division of Banking and
Securities. The original bill did not contain the nonprofit
provision, which would allow nonprofits to assist more
individuals in obtaining financing for homes. In further
response to Chair Reinbold, she said that one additional change
was made on the House floor to ensure that that a grandfather
provision was added to ensure that anyone who was currently in a
mortgage contract would not lose their home since these
individuals purchased their homes in good faith.
[HB 104 was held in committee.]
1:54:58 PM
CHAIR REINBOLD reviewed upcoming committee announcements.
1:55:23 PM
SENATOR BIRCH remarked that the legislature is tight on time. He
offered his support to move the bill.
CHAIR REINBOLD expressed an interest in holding the bill over,
in part, to allow Senator Bishop to review the fiscal note at
the next hearing.
1:56:39 PM
SENATOR GRAY-JACKSON thanked the sponsor for bringing the bill
forward. She also appreciated that the stakeholders were
involved in the process.
[HB 104 was held in committee.]
1:57:39 PM
There being no further business to come before the committee,
Chair Reinbold adjourned the Senate Labor and Commerce Standing
Committee meeting at 1:57 p.m.