Legislature(2021 - 2022)GRUENBERG 120
04/27/2021 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB163 | |
| HB102 | |
| HB157 | |
| HB118 | |
| HB5 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 163 | TELECONFERENCED | |
| += | HB 102 | TELECONFERENCED | |
| += | HB 157 | TELECONFERENCED | |
| += | HB 118 | TELECONFERENCED | |
| += | HB 5 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 163-FORM OF SIGNATURE ON VEHICLE TITLE
3:08:15 PM
CHAIR KREISS-TOMKINS announced that the first order of business
would be HOUSE BILL NO. 163, "An Act relating to vehicle title
applications."
3:08:43 PM
REPRESENTATIVE CALVIN SCHRAGE, Alaska State Legislature, as
prime sponsor, introduced HB 163. He paraphrased the sponsor
statement, which read as follows [original punctuation
provided]:
House Bill 163 eliminates the current requirement for
ink signatures on applications for titles and title
transfers within the Department of Motor Vehicles. HB
163 gives flexibility to the DMV to begin using
electronic signatures.
HB 163 does not force the use of electronic
signatures. AS 28.10.211(b) states that "applications
for title or transfer of title must contain the
signature in ink of the owner, or if there is more
than one owner, the signature in ink of at least one
of the owners and the name of each owner stated in the
conjunctive or in the disjunctive." HB 163 deletes the
words "in ink" in both places.
Under the Uniform Electronic Transactions Act of 2004
(AS 09.80.010-09.80.195) electronic signatures satisfy
the general definition of a signature unless otherwise
prohibited. Since the current statute explicitly
requires "ink" signatures for title applications, the
DMV cannot accept electronic signatures.
HB 163 will give the Department the latitude to
determine for itself if it wants to accept electronic
signatures in the cases of title transfers and title
applications. Covid has taught us that electronic
signatures can provide extra convenience to Alaskans
in remote or rural parts of the state and can provide
long-term efficiencies for the DMV.
3:11:42 PM
LAUREN MACVAY, Chief Executive Officer, True North Federal
Credit Union, said she was speaking in favor of HB 163. She
stated that although simple, the bill would open the door to a
significant amount of progress. She explained that electronic
signature was used for many important things in Alaska; however,
vehicle titling required a "wet" signature. She reported that a
growing number of other states were implementing electronic lien
and titling solutions to various degrees, but the "in ink"
language in AS 28.10.211(b)(1) was preventing Alaska from
exploring the benefits of modern technology, which had impacts
on the DMV and its operation, as well as True North and its
members. She explained that "ESign" had enabled True North to
acquire members all throughout the state, despite its branches
being in Juneau and Anchorage. Further, True North could open
new memberships and close consumer and home equity loans
electronically, which was a huge benefit when the pandemic hit.
She emphasized that the credit union could not, however,
complete any loan electronically that required a title
application to secure the lien. When that occurred, the loan
was held up until the original signatures were obtained.
Another option, she explained, was to put the burden of securing
the title work back on the borrower, then closing the loan and
providing the borrower with the title application, from which
point that individual would be required to go through the DMV
process. She added that in that scenario, the title would be
forwarded back to the credit union at the end. She said neither
scenario was a good option, and both created inconveniences for
everyone involved. She stated that if True North was able to
secure electronic signature of title paperwork, the process
would be far more convenient for members and more efficient for
the credit union. She reiterated that by removing the words "in
ink" from statute, the proposed legislation would remove the
critical first barrier to progress. She encouraged the
committee to move the bill forward for that reason.
3:14:55 PM
REPRESENTATIVE TARR sought to understand the relationship
between the Division of Motor Vehicle (DMV) component and the
bank component. She specifically inquired about a scenario
involving a cash transaction at the DMV.
3:15:40 PM
JEFFERY SCHMITZ, Director, Division of Motor Vehicles,
Department of Administration, asked Representative Tarr to
rephrase her question.
REPRESENTATIVE TARR proposed a scenario in which someone was
[buying] a car from another individual with cash and without the
involvement of a bank. She asked how the title transfer would
occur in that circumstance.
MR. SCHMITZ stressed that the proposed legislation would only
remove the impairment created by the "in ink" requirement;
further, the business procedures that would be implemented after
changing the language had not been vetted in detail due to the
current statutory language. He reiterated that there had been
no evaluation on how a title transfer or cash transaction would
actually transpire; therefore, he declined to comment on that
scenario. He maintained that the proposed legislation would
simply "open the door" to vetting the process. He surmised that
a customer-to-customer transaction would likely be completed via
portal and the DMV would be informed that the transfer occurred.
3:18:57 PM
REPRESENTATIVE CLAMAN understood that in order to borrow money
from True North to buy a car, the loan could be completed
electronically; however, the title transfer would require its
physical presence at the DMV for a signature. He asked if that
was correct.
MS. MACVAY answered, "Yes." She explained that the loan note
could be signed electronically, but the loan would not be
disbursed until the title application was received with the
signed title in hand.
REPRESENTATIVE CLAMAN understood that the next step in borrowing
involved placing a lien on the title, which would be released
after the loan was paid off entirely. He questioned how that
process would change if electronic signatures were allowed.
MS. MACVAY said currently, when a borrower paid off a car loan,
the lien on the title would be signed off and released. The
title would then be mailed back to the borrower. However, she
noted that people did not always open their mail from financial
institutions, which had resulted in titles being thrown away.
REPRESENTATIVE CLAMAN asked how electronic signature would
change that process.
MS. MACVAY indicated that there were many answers to that
question depending on the type of system the [DMV] would set up
and how [True North] would interface with it. She explained
that there were purely electronic lien and titling systems
through which the lien could be released. That type of
paperless system would be much faster and more efficient, she
said; consequently, she believed that the end game should an
entirely paperless method.
3:23:21 PM
REPRESENTATIVE CLAMAN considered a scenario in which the
borrower sold the car before the loan was paid off. He asked
how electronic signature would allow the old owner to get
his/her lien released and allow the new owner to receive the
title as expeditiously as possible.
MS. MACVAY believed electronic signature would be beneficial
because True North would be able to note that the lien had been
satisfied, which would allow the owner and the buyer to complete
the transaction.
3:25:07 PM
REPRESENTATIVE SCHRAGE expressed his appreciation for the
opportunity to present HB 163. He said he looked forward to
seeing the bill advance in the near future, as it would provide
flexibility to the DMV and help Alaskans better conduct their
businesses, as well as modernize state statute.
CHAIR KREISS-TOMKINS announced [that HB 163 was held over.]