02/23/2012 01:30 PM Senate LABOR & COMMERCE

         SB 122-REAL ESTATE TRANSFER FEES/TITLE PLANTS                                                                      
                                                                                                                                
2:04:56 PM                                                                                                                    
CHAIR EGAN announced consideration of SB 122.                                                                                   
                                                                                                                                
DANA  OWEN, staff  to the  Senate Labor  and Commerce  Committee,                                                               
said  at  the  last  hearing  on  this  bill  they  discussed  an                                                               
amendment that  would be forthcoming  and it would  answer issues                                                               
that had been raised amongst title insurers.                                                                                    
                                                                                                                                
SENATOR  PASKVAN moved  to adopt  Amendment 1  to CSSB  122(CRA),                                                               
version 27-LS0789\B.                                                                                                            
                                                                                                                                
CHAIR EGAN objected for discussion.                                                                                             
                                                                                                                                
MR.  OWEN explained  that the  one goal  of the  amendment is  to                                                               
anchor title searches to the  State of Alaska. Concerns have been                                                               
expressed  to  their  office  that   because  there  is  so  much                                                               
offshoring of  this kind of  "back office"  sort of work  that we                                                               
would lose our  ability to have title insurance  searches done by                                                               
somebody who has  an actual connection to Alaska  and whose local                                                               
knowledge may  prove instrumental in  making sure that  the title                                                               
searches  are defensible.  In order  to do  that, this  amendment                                                               
adds  a requirement  that  a title  insurance  contract can't  be                                                               
issued until  an examination  has been done  by a  licensed title                                                               
insurance limited  producer. Among  the requirements to  become a                                                               
licensed title insurance limited producer  is one that you have a                                                               
locus (physical presence) of business  in the state. This doesn't                                                               
guarantee that  with online technology  people outside  the state                                                               
couldn't do the research, but it  would at least mandate that one                                                               
person or  a business located  in Alaska has the  final authority                                                               
to approve it.                                                                                                                  
                                                                                                                                
The second  section of the  bill requires that a  title insurance                                                               
limited producer  must be a  resident of  the State of  Alaska. A                                                               
memo in  their packets argues  that this  may be in  violation of                                                               
the privileges  and immunities clause  of the  U.S. Constitution.                                                               
Anytime  Alaska  residency is  required,  this  issue is  raised.                                                               
Bills in the past have passed  with these kinds of provisions and                                                               
the committee  could decide  to embrace  that. This  language has                                                               
been  vetted  between  two  contending   factions  in  the  title                                                               
industry, both of which are okay with this now.                                                                                 
                                                                                                                                
2:08:56 PM                                                                                                                    
SENATOR  MENARD  said  she  wanted   to  hear  from  MatSu  Title                                                               
Insurance.                                                                                                                      
                                                                                                                                
2:10:22 PM                                                                                                                    
MIKE  PRICE, owner,  Fidelity Title  Insurance  in Anchorage  and                                                               
Mat-Su Title Insurance in Wasilla  said he is currently president                                                               
of  the  Alaska  Land  Title  Association  and  that  the  CS  is                                                               
acceptable to  all members of  the industry and they  support its                                                               
passage.  He  said  about  13  states  had  passed  very  similar                                                               
legislation  in  the  last  three  or  four  years  that  specify                                                               
residents of  their states  will be  the only  licensed examiners                                                               
within  those  states.  Since the  last  committee  meeting,  he,                                                               
personally, had  been solicited three  times from India  and that                                                               
is the kind of thing they are trying to prohibit.                                                                               
                                                                                                                                
SENATOR  MENARD  said   it's  comforting  to  hear   that  he  is                                                               
satisfied.                                                                                                                      
                                                                                                                                
CHAIR  EGAN  asked  Ms.  Hall  what she  thought  of  the  latest                                                               
version.                                                                                                                        
                                                                                                                                
2:12:35 PM                                                                                                                    
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Commerce, Community  and Economic  Development (DCCED),  said she                                                               
was pleased to  hear Mr. Price testify that  industry agrees with                                                               
this  version, and  she is  especially supportive  of Section  1,                                                               
because  it  clarifies  there  has  to be  at  least  a  physical                                                               
location from  which to  do the title  examination search  in the                                                               
state.  Language in  Section 2  about off  shore outsourcing  was                                                               
strictly  a  legislative  call,  she  said,  and  she  understood                                                               
industry's concerns about it.                                                                                                   
                                                                                                                                
2:13:49 PM                                                                                                                    
SENATOR  PASKVAN moved  to report  CSSB 122(L&C),  as amended  by                                                               
amendment  B.2, from  committee  with individual  recommendations                                                               
and attached zero  fiscal note. There were no  objections, and it                                                               
was so ordered.