Legislature(2021 - 2022)ADAMS 519

05/14/2021 09:00 AM FINANCE

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Audio Topic
09:05:40 AM Start
09:06:15 AM HB163
09:20:26 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 163 FORM OF SIGNATURE ON VEHICLE TITLE TELECONFERENCED
Moved HB 163 Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 85 FINANCIAL INSTITUTIONS; LIABILITY TELECONFERENCED
<Bill Hearing Canceled>
                  HOUSE FINANCE COMMITTEE                                                                                       
                       May 14, 2021                                                                                             
                         9:05 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:05:40 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Merrick called the House Finance Committee meeting                                                                     
to order at 9:05 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen                                                                                                   
Representative Steve Thompson                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Bryce Edgmon                                                                                                     
Representative Adam Wool                                                                                                        
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative Calvin Schrage, Sponsor                                                                                          
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Lauren MacVay, CEO, True North Federal Credit Union;                                                                            
Jeffrey Schmitz, Director, Division of Motor Vehicles,                                                                          
Department of Administration.                                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 163    FORM OF SIGNATURE ON VEHICLE TITLE                                                                                    
                                                                                                                                
          HB 163 was REPORTED out of committee with a "do                                                                       
          pass" recommendation and with one new zero fiscal                                                                     
          note from the Department of Administration.                                                                           
                                                                                                                                
Co-Chair Merrick reviewed the meeting agenda.                                                                                   
                                                                                                                                
HOUSE BILL NO. 163                                                                                                            
                                                                                                                                
     "An Act relating to vehicle title applications."                                                                           
                                                                                                                                
9:06:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CALVIN SCHRAGE, SPONSOR, thanked the                                                                             
committee for the opportunity to present the bill. He                                                                           
introduced the bill with prepared remarks:                                                                                      
                                                                                                                                
     House  Bill 163  will  eliminate  the current  language                                                                    
     that all  signatures for  title applications  and title                                                                    
     transfers  be signed  in ink.  This does  not create  a                                                                    
     directive for the DMV  to accept electronic signatures,                                                                    
     but it does empower them to  do so if they see fit. The                                                                    
     bill  uses  a  narrow  approach  and  only  amends  the                                                                    
     statute governing title  transfers and applications for                                                                    
     titles, and  it gives those  who are involved  in title                                                                    
     applications more leeway.                                                                                                  
                                                                                                                                
     In 2004, the legislature  passed the Uniform Electronic                                                                    
     Transactions Act. This act had  been recommended by the                                                                    
     Uniform Law  Commission to remove barriers  to commerce                                                                    
     and  to  bring Alaska  statutes  into  the modern  era.                                                                    
     Today  in Alaska,  electronic  signatures are  accepted                                                                    
     for  PFD  applications,  real estate  conveyances,  and                                                                    
     obtaining  of  notary  signatures among  other  things;                                                                    
     however, they  are not accepted for  title transfers of                                                                    
     motor   vehicles.  Electronic   signatures  have   been                                                                    
     crucial  to   keeping  businesses  afloat   during  the                                                                    
     pandemic   and   provide  important   conveniences   to                                                                    
     Alaskans  in remote  parts of  the  state. For  further                                                                    
     background,  the  Uniform Electronic  Transactions  Act                                                                    
     applies  to all  electronic  transactions except  those                                                                    
     explicitly  exempted or  where  existing law  indicates                                                                    
     electronic signatures cannot suffice.                                                                                      
                                                                                                                                
     Exemptions  include  wills,  cancellations  of  utility                                                                    
     services,  foreclosures,  evictions,  product  recalls,                                                                    
     and notifications of  hazardous materials. The original                                                                    
     law carved  out these instances of  urgent matters, but                                                                    
     it did  not include  title transfers;  however, because                                                                    
     DMV statute on title transfers  uses the words "in ink"                                                                    
     in their statutes,  it has come to be  included in that                                                                    
     same group.                                                                                                                
                                                                                                                                
     House  Bill 163  ends this  exemption and  empowers the                                                                    
     relevant parties to decide for  themselves if they will                                                                    
     accept   electronic  signatures.   To  reiterate,   the                                                                    
     Uniform   Electronic   Transactions  Act   leaves   the                                                                    
     discretion  of accepting  electronic signatures  to the                                                                    
     relevant  departments and  without House  Bill 163  the                                                                    
     DMV   cannot  begin   the  process   of  looking   into                                                                    
     administering electronic signatures. This  law is a new                                                                    
     tool  in  the  toolbox  for  DMV and  it  is  simply  a                                                                    
     preapproval  for  the   department  that  will  prevent                                                                    
     delays in the future.                                                                                                      
                                                                                                                                
Representative Schrage listed individuals available online                                                                      
to testify. He brought attention to the new zero fiscal                                                                         
note.                                                                                                                           
                                                                                                                                
9:09:07 AM                                                                                                                    
                                                                                                                                
LAUREN MACVAY, CEO, TRUE NORTH FEDERAL CREDIT UNION (via                                                                        
teleconference), provided remarks on the bill with a                                                                            
prepared statement:                                                                                                             
                                                                                                                                
     Thank  you  for the  opportunity  to  speak before  you                                                                    
     today in favor  of House Bill 163. It's  a simple bill,                                                                    
     but it  will open the  door to a significant  amount of                                                                    
     progress. As  Representative Schrage noted, we  can use                                                                    
     electronic  signature  in   many  important  things  in                                                                    
     Alaska,  but one  thing we  cannot do  is sign  a title                                                                    
     application with the DMV; it  needs this original "wet"                                                                    
     signature.  A  growing  number   of  other  states  are                                                                    
     implementing  electronic lien  and title  inclusions to                                                                    
     various degrees  and configurations,  but the  "in ink"                                                                    
     language  in AS  28 prevents  our state  from exploring                                                                    
     the  benefits  of  this  modern  technology.  This  has                                                                    
     impacts on the DMV and  its operations I'm sure, but it                                                                    
     also  impacts True  North and  our members  and frankly                                                                    
     every other financial institution.                                                                                         
                                                                                                                                
     True  North   has  branch   locations  in   Juneau  and                                                                    
     Anchorage, but  we have  members throughout  the state.                                                                    
     One of the ways that we  can do that is by utilizing e-                                                                    
     sign  and   with  that  technology  we   can  open  new                                                                    
     memberships and  we can close consumer  and home equity                                                                    
     loans electronically. This was  a huge benefit when the                                                                    
     pandemic hit. It allowed our  members to continue to do                                                                    
     their  borrowing  business  from the  safety  of  their                                                                    
     homes and  offices. It's also  a benefit  for borrowers                                                                    
     not near a  branch and allows us  to provide convenient                                                                    
     service regardless of location,  clearly for members in                                                                    
     remote  communities, that's  a  win. But  one thing  we                                                                    
     cannot complete electronically is  any loan requiring a                                                                    
     title application  to secure  our lien unless  a dealer                                                                    
     is  handling   the  title  loan.  The   impact  on  the                                                                    
     membership is that when that  situation comes up, which                                                                    
     is  usually in  a  person-to-person sales  transaction,                                                                    
     the loan is  held up until the  original signatures can                                                                    
     be obtained.                                                                                                               
                                                                                                                                
     Our other option  is to put the burden  on securing the                                                                    
     title  work on  the  borrower, requiring  them to  deal                                                                    
     with  the DMV  paperwork and  forward us  the completed                                                                    
     title  in  the end.  That  opens  the door  to  delays,                                                                    
     headaches,  mistakes. Neither  one of  these is  a good                                                                    
     option. Both create inconvenience  for all involved. If                                                                    
     we were  able to simple secure  electronic signature on                                                                    
     DMV   paperwork,  our   process  would   be  far   more                                                                    
     convenient for our members and  much more efficient for                                                                    
     us and probably for the DMV.                                                                                               
                                                                                                                                
     I know the proposed changes  to House Bill 163 will not                                                                    
     suddenly   remedy  the   situation  and   that  there's                                                                    
     significant work  to be done  by the DMV to  assess and                                                                    
     implement  new  systems.  But  by  removing  those  two                                                                    
     little  words  "in ink,"  the  bill  would remove  that                                                                    
     critical first barrier to progress  and I encourage you                                                                    
     to move House Bill 163 forward for that reason.                                                                            
                                                                                                                                
Ms. MacVay thanked the committee for its time.                                                                                  
                                                                                                                                
9:12:11 AM                                                                                                                    
                                                                                                                                
Representative Carpenter asked for the Division of Motor                                                                        
Vehicles' (DMV) assessment on the impact of the bill.                                                                           
                                                                                                                                
Co-Chair Merrick noted that the committee would hear from                                                                       
DMV after public testimony.                                                                                                     
                                                                                                                                
Co-Chair Merrick OPENED and CLOSED public testimony.                                                                            
                                                                                                                                
9:13:05 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:14:05 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Merrick asked DMV to review the fiscal note.                                                                           
                                                                                                                                
JEFFREY  SCHMITZ,  DIRECTOR,  DIVISION  OF  MOTOR  VEHICLES,                                                                    
DEPARTMENT OF ADMINISTRATION  (via teleconference), reviewed                                                                    
the  department's zero  fiscal note.  The bill  would remove                                                                    
the  words "in  ink" and  would not  financially impact  the                                                                    
division.   The   fiscal   note  had   been   changed   from                                                                    
indeterminate to zero based on the bill language.                                                                               
                                                                                                                                
Representative  Carpenter  asked  how   moving  from  a  wet                                                                    
signature  to  a  digital signature  would  impact  everyday                                                                    
Alaskans  dealing with  [vehicle]  titles. He  asked if  the                                                                    
legislation would decrease the burden for Alaskans.                                                                             
                                                                                                                                
Mr. Schmitz clarified that the bill  did not move from a wet                                                                    
signature to an electronic  signature. He explained that the                                                                    
bill would remove the requirement  for an ink signature. The                                                                    
change would allow  the DMV to begin vetting  the process to                                                                    
explore electronic signatures and  titling. He detailed that                                                                    
it would  be a first step  to allow the division  to examine                                                                    
the technology  and business process.  He explained  that it                                                                    
was  too  early  in  the  process  to  be  able  to  specify                                                                    
efficiencies  that  would be  created  and  how the  process                                                                    
would  be easier  for Alaskans.  The division  believed both                                                                    
things would be true in  the future once a complete solution                                                                    
was in place.                                                                                                                   
                                                                                                                                
Mr. Schmitz  reiterated that  the bill was  a first  step to                                                                    
allow  DMV  to begin  to  vet  what  the business  flow  and                                                                    
process would look  like. The bill would also  enable DMV to                                                                    
begin  to  engage  its  partners  including  credit  unions,                                                                    
banks,  auction  houses,   dealerships,  people  who  handle                                                                    
titles,  and  consumers  to  work on  a  solution  that  was                                                                    
amenable  to all  parties. The  work  would include  working                                                                    
together  to  understand  timelines, cost,  and  all  things                                                                    
involved  in   arriving  at  a  solution.   Ultimately,  DMV                                                                    
believed  the  change  would  create  efficiencies  for  the                                                                    
public  when  transferring   vehicles.  Additionally,  there                                                                    
would be  efficiencies in the  processing of  paperwork. For                                                                    
example,  individuals may  not have  to go  into the  DMV to                                                                    
transfer a title  after purchasing a new  vehicle. He stated                                                                    
that individuals  may be able to  save a trip to  the DMV in                                                                    
the  future.  He  reported that  the  technology  was  being                                                                    
implemented in some other states.  He stated that the option                                                                    
was relatively  new; the  idea had  existed for  many years,                                                                    
but the concept was coming to fruition in the present day.                                                                      
                                                                                                                                
Mr. Schmitz  noted there were numerous  questions that would                                                                    
be involved  including state-to-state  interoperability. For                                                                    
example, whether a person could  transfer their Alaska title                                                                    
to  a different  state  and vice  versa.  He explained  that                                                                    
items involved in the process  would all require vetting. He                                                                    
relayed that the  bill would allow DMV to  begin the process                                                                    
because  it  would  remove  the  restriction  requiring  ink                                                                    
signatures on the documents.                                                                                                    
                                                                                                                                
9:18:17 AM                                                                                                                    
                                                                                                                                
Representative  LeBon asked  for  verification  that at  one                                                                    
time title transfers had required a notary or witness.                                                                          
                                                                                                                                
Mr. Schmitz  replied in  the negative. He  was not  aware of                                                                    
any  time where  a  witness  or notary  was  required for  a                                                                    
vehicle transfer. He explained that  if a vehicle had a lien                                                                    
or  loan  from  a  lending  institution,  depending  on  the                                                                    
institution's policy, the document may be notarized.                                                                            
                                                                                                                                
Representative  LeBon remarked  on  the  letters of  support                                                                    
from the Alaska Credit Union  League and the Alaska Banker's                                                                    
Association. He  stated it was  an endorsement to  have both                                                                    
groups come together. He supported the legislation.                                                                             
                                                                                                                                
Co-Chair  Foster MOVED  to REPORT  HB 163  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  163 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation and  with one new  zero fiscal note  from the                                                                    
Department of Administration.                                                                                                   
                                                                                                                                
Co-Chair  Merrick reviewed  the schedule  for the  afternoon                                                                    
meeting.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
9:20:26 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:20 a.m.                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
HB 163 Sponsor Statement .pdf HFIN 5/14/2021 9:00:00 AM
HB 163
HB 163 Support Letters 4.14.21.pdf HFIN 5/14/2021 9:00:00 AM
HB 163