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 [included in the committee packet], 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.
[The committee heard invited testimony.]
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 the option
to provide an 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 Division of Motor Vehicles
(DMV) and its operation, as well as True North and its members.
She explained that "ESign" had enabled True North to acquire
members 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.
MS. MACVAY shared that another option 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 signatures for 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 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, 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
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 be 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.]