Legislature(2015 - 2016)

2016-01-21 Senate Journal

Full Journal pdf

2016-01-21                     Senate Journal                      Page 1636
SB 152                                                                                                                        
SENATE BILL NO. 152 BY THE SENATE RULES COMMITTEE                                                                               
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
          "An Act relating to a money services business;                                                                        
          relating to transmitting value that substitutes for                                                                   
          money; relating to licensing requirements and                                                                         

2016-01-21                     Senate Journal                      Page 1637
          registration through the Nationwide Multistate                                                                        
          Licensing System and Registry; relating to surety                                                                     
          bonding requirements; authorizing certain licensees                                                                   
          to contract to use subdelegates for reloading funds                                                                   
          onto stored-value cards; relating to record retention,                                                                
          reporting requirements, and enforcement provisions;                                                                   
          relating to exemptions; relating to money services                                                                    
          Internet activities; relating to definitions regarding                                                                
          the transmitting value, currency, and money                                                                           
          transmission business activities; and providing for an                                                                
          effective date."                                                                                                      
was read the first time and referred to the Labor and Commerce                                                                  
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, zero, Department of Commerce, Community                                                                     
  and Economic Development                                                                                                      
Governor's transmittal letter dated January 18:                                                                                 
Dear President Meyer:                                                                                                           
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to money services                                                               
businesses and modernizing the statutes to reflect new forms of                                                                 
money, payment systems, and technology.                                                                                         
The bill would modify AS 06.55 related to money services businesses                                                             
in order to update the aged money services businesses laws to                                                                   
recognize and support new means of money transmission, including                                                                
the use of other values that substitute for money. Moreover, the                                                                
proposed revisions would eliminate redundant or outdated references                                                             
and practices. Due to the number of changes, the Alaska Uniform                                                                 
Money Services Act would become the Alaska Money Services Act.                                                                  
Currently, AS 06.55 regulates money services businesses, which                                                                  
include money transmitters, issuers of traveler's checks, money orders,                                                         
or stored value (prepaid cards), sellers or redeemers of traveler's                                                             
checks, money orders or stored value, and currency exchangers.                                                                  

2016-01-21                     Senate Journal                      Page 1638
A modernization of the existing AS 06.55 would ease access to                                                                   
reloading of prepaid cards to persons in rural Alaska that use these                                                            
services and provide for the use of the Nationwide Multistate                                                                   
Licensing System and Registry (NMLS). The NMLS allows states to                                                                 
share important information about licensed money services businesses                                                            
and their activity, and its use eases the application process for a money                                                       
services business, both for licensing and subsequent filings, which                                                             
allows the Department of Commerce, Community, and Economic                                                                      
Development (department) to more easily regulate licensees located                                                              
within and outside of the state.                                                                                                
Additionally, the proposed revisions would allow for more effective                                                             
examinations of money services businesses doing business in the state.                                                          
The department would be able to respond quicker to complaints filed                                                             
by the Alaska public against money services businesses by eliminating                                                           
a lengthy pre-exam notification. The bill would establish higher                                                                
bonding limits for licensees. Additionally, the language would clarify                                                          
that all persons, licensed or not, that engage in money services are                                                            
subject to daily penalties for violations of the Alaska Money Services                                                          
Act. This would ensure that the State holds violators accountable and                                                           
increases protection for consumers.                                                                                             
Since its adoption in 2007, the money services business world has                                                               
changed dramatically to include new technology and advanced means                                                               
of transmitting funds between parties, including virtual currencies                                                             
such as bitcoin. The proposed revisions would provide a new                                                                     
definition for "money transmission" that includes the transmission of                                                           
other values that substitute for money. This broad definition would                                                             
allow the department to continue its regulation of emerging payment                                                             
systems and respond to potential violations of AS 06.55 quickly.                                                                
I urge your prompt and favorable action on this measure.                                                                        
Bill Walker