Legislature(2021 - 2022)BELTZ 105 (TSBldg)

04/20/2022 01:30 PM Senate LABOR & COMMERCE

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Audio Topic
01:32:52 PM Start
01:33:34 PM Confirmation Hearing(s)
01:38:55 PM SB238
02:58:45 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
Alaska Worker's Compensation Board
- Matthew Barth
Board of Certified Direct-Entry Midwives
- Hannah St. George
<Above Item Removed from Agenda>
*+ SB 238 MONEY TRANSMISSION; VIRTUAL CURRENCY TELECONFERENCED
Moved SB 238 Out of Committee
-- Invited & Public Testimony --
+ SB 175 HEALTH CARE SERVICES BY TELEHEALTH TELECONFERENCED
Scheduled but Not Heard
-- Invited & Public Testimony --
+= SB 197 DIRECT HEALTH CARE AGREEMENTS TELECONFERENCED
<Bill Hearing Canceled>
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
           SB 238-MONEY TRANSMISSION; VIRTUAL CURRENCY                                                                      
                                                                                                                                
1:38:55 PM                                                                                                                    
CHAIR  COSTELLO announced  the consideration  of SENATE  BILL NO.                                                               
238  "An Act  relating  to the  business  of money  transmission;                                                               
relating to money  transmission licenses, licensure requirements,                                                               
and  registration  through  the Nationwide  Multistate  Licensing                                                               
System;  relating  to  the  use of  virtual  currency  for  money                                                               
transmission;  relating to  authorized delegates  of a  licensee;                                                               
relating  to acquisition  of control  of a  license; relating  to                                                               
record  retention  and  reporting requirements;  authorizing  the                                                               
Department of  Commerce, Community,  and Economic  Development to                                                               
cooperate  with   other  states   in  the  regulation   of  money                                                               
transmission;  relating to  permissible investments;  relating to                                                               
violations and  enforcement of money transmission  laws; relating                                                               
to  money transmission  license exemptions;  relating to  payroll                                                               
processing  services; repealing  currency exchange  licenses; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
1:39:24 PM                                                                                                                    
ROBERT  SCHMIDT, Director,  Division of  Banking and  Securities,                                                               
Department  of  Commerce,   Community  and  Economic  Development                                                               
(DCCED), Anchorage,  Alaska, delivered a PowerPoint  to introduce                                                               
SB 238. He displayed slide 2 and made the following points:                                                                     
                                                                                                                                
   - The Division of Banking and Securities serves as the                                                                       
     primary regulator  for the more than  150 money transmitters                                                               
     in  Alaska  who  are  guided by  the  Alaska  Uniform  Money                                                               
     Services Act (AS 06.55). The  legislature passed this law in                                                               
     2007 and it was implemented in 2008.                                                                                       
   - SB 238 amends and modernizes the Uniform Money Transmission                                                                
     Modernization  Act.  It  provides the  legal  framework  for                                                               
     Alaska's  money transmission  functions to  include currency                                                               
     exchange,  transfer   or  wiring  money,  and   loading  and                                                               
     reloading  payment   instruments,  including   stored  value                                                               
     cards.                                                                                                                     
   - The law that passed in 2007 did not contemplate                                                                            
     cryptocurrency, Bitcoin, Ethereum, DogeCoin,  or the rate of                                                               
     money service business expansion  and innovations. Alaska is                                                               
     not  currently among  the 28  states  that regulate  virtual                                                               
     currency,  which is  a top  tool  of rogue  actors to  evade                                                               
     sanctions.                                                                                                                 
   - SB   238   updates   the   licensing,   recordkeeping,   and                                                               
     enforcement  provisions   to  support  these   new  business                                                               
     activities,  while  protecting  Alaska consumers.  The  bill                                                               
     adopts relevant  sections of the Uniform  Money Transmission                                                               
     Modernization Act. This is the  model law that was developed                                                               
     by  state  regulators  and  the  Conference  of  State  Bank                                                               
     Supervisors (CSBS), with input from industry stakeholders.                                                                 
                                                                                                                                
CHAIR COSTELLO asked for an explanation of cryptocurrency.                                                                      
                                                                                                                                
1:42:42 PM                                                                                                                    
MR.  SCHMIDT began  with an  explanation of  the origin  of money                                                               
transmission,  which came  about  when people  entrusted a  third                                                               
party  to  transmit  their  money   to  someone  in  an  entirely                                                               
different location. For  example, in the 1880s  someone in Boston                                                               
might  give the  Western Union  office $20  to transmit  to their                                                               
cousin in San Francisco. It  quickly became clear that regulation                                                               
was necessary because  people were giving what could be  a lot of                                                               
money to  a third party  to transmit  and trusting that  it would                                                               
get to the right recipient.                                                                                                     
                                                                                                                                
MR. SCHMIDT  warned that his explanation  of cryptocurrency might                                                               
seem unbelievable.  He directed attention  to slide 4  that shows                                                               
both a chart  and a colored bar graph to  highlight the growth in                                                               
the number  of money  transmitter/currency exchange  licenses the                                                               
State  of Alaska  has  issued from  calendar  year 2017  (CY2017)                                                               
through CY2021. In CY2017 the  state issued 91 money transmission                                                               
licenses and in CY2021 the number  of those licenses had grown to                                                               
153.                                                                                                                            
                                                                                                                                
MR.  SCHMIDT  explained  that  there are  three  kinds  of  money                                                               
transmitters.    One   only    transmits   government-issued/fiat                                                               
currency; the  second handles only cryptocurrency;  and the third                                                               
handles  both  real and  virtual  currency.  He highlighted  that                                                               
transmitters that  only handle virtual currency  are not licensed                                                               
or regulated by the Division  of Banking and Securities, so there                                                               
is  no reporting.  Businesses that  do  fiat money  transmissions                                                               
must have a  money transmission license. Businesses  that do both                                                               
receive a license to transmit  money, but not to transmit virtual                                                               
currency; these businesses report to the division.                                                                              
                                                                                                                                
1:45:08 PM                                                                                                                    
MR. SCHMIDT directed attention to  the colored bar graph on slide                                                               
5 that shows the volume  of reported money transmission in Alaska                                                               
over a  three-year period. In  2019 the reported volume  of money                                                               
transmission in  Alaska was $1.68  billion; in 2020  it increased                                                               
to  $2.8  billion; and  in  2021  the  reported volume  of  money                                                               
transmission in Alaska exploded to $7.1 billion.                                                                                
                                                                                                                                
MR. SCHMIDT  directed attention to the  bar graph on slide  6. It                                                               
shows  the monetary  value of  virtual  currency transmission  in                                                               
Alaska reported  to the Division  of Banking and  Securities over                                                               
the  same three-year  timeframe. [These  are the  businesses that                                                               
deal  with both  fiat currency  and virtual  currency.] In  2019,                                                               
$33.6  million in  virtual currency  transmission  in Alaska  was                                                               
reported to  the division;  in 2020 that  grew to  $91.7 billion;                                                               
and in 2021 the volume  of virtual currency transmitted in Alaska                                                               
and reported to the division exploded to $2.3 billion.                                                                          
                                                                                                                                
He said  the real  nub of  slide 6  is that  it does  not include                                                               
transmissions from  businesses that only handle  virtual currency                                                               
because  they  do not  report  to  the  Division of  Banking  and                                                               
Securities.  The  division believes  that  the  actual volume  of                                                               
virtual  transmissions in  Alaska  is  significantly higher  than                                                               
slide 6 indicates.                                                                                                              
                                                                                                                                
1:46:46 PM                                                                                                                    
MR.  SCHMIDT  turned  to  slide 11  and  provided  the  following                                                               
definition"                                                                                                                     
                                                                                                                                
     Virtual  currency   is  a  money-like  asset   that  is                                                                    
     managed, stored, or exchanged  on a computer system and                                                                    
     is   transmitted  on the internet. Virtual  currency is                                                                    
     issued and  controlled by its  developers and  used and                                                                    
     accepted   electronically  among   the  members   of  a                                                                    
     specific virtual community that  is accepted by natural                                                                    
     or  legal persons  as a  means  of payment  and can  be                                                                    
     stored, transferred, or traded electronically.                                                                             
                                                                                                                                
MR. SCHMIDT  stated that a lot  of what gives money  value is the                                                               
fact that it  is backed by a government. It  has intrinsic value.                                                               
That isn't  the case for  other things  that might be  traded. He                                                               
cited the examples  of 1) a kid on the  playground who has pieces                                                               
of  gum to  trade, and  2) a  work of  art. These  items have  no                                                               
intrinsic  value but  they  do  have value  in  the  eyes of  the                                                               
beholder.  The piece  of art  may  be worth  millions of  dollars                                                               
simply because people say it has that value.                                                                                    
                                                                                                                                
1:49:32 PM                                                                                                                    
MR. SCHMIDT explained  that the first Bitcoin was  created when a                                                               
computer  was  used  to  solve  a  problem.  The  problem  became                                                               
exponentially  more  difficult  to   solve  to  create  the  next                                                               
Bitcoin.  When people  are mining  Bitcoins, their  computers are                                                               
performing extremely difficult computations  that have no purpose                                                               
other than  to generate  Bitcoin. Bitcoin mining  takes a  lot of                                                               
electricity   when  people   have  multiple   racks  of   servers                                                               
(computers spinning  at billions  or trillions of  operations per                                                               
second)  to perform  the task  whose  only point  is to  generate                                                               
Bitcoin. When people question the  reason for paying attention to                                                               
virtual currency,  he points out  that there was $2.3  billion of                                                               
reported Alaska virtual currency transmission  in 2021 and it was                                                               
not regulated.                                                                                                                  
                                                                                                                                
MR. SCHMIDT  stated that the  takeaway from the  presentation and                                                               
the purpose of SB 238 is to  keep Alaska from being a conduit for                                                               
virtual currency  into countries like Russia,  North Korea, Iran,                                                               
Somalia, and others.                                                                                                            
                                                                                                                                
1:50:01 PM                                                                                                                    
MR. SCHMIDT  returned to slide  3 to  review what was  covered in                                                               
the 2008  Alaska Uniform  Money Services Act.  The slide  read as                                                               
follows:                                                                                                                        
                                                                                                                                
     • Money transmitters (wiring of funds)                                                                                     
       • Issuers of traveler's checks, money orders, or                                                                         
        stored valued cards                                                                                                     
      • Sellers or redeemers of traveler's checks, money                                                                        
        orders, or stored value cards                                                                                           
     • Currency dealers or exchangers; to include virtual                                                                       
        currency and related products                                                                                           
                                                                                                                                
MR.   SCHMIDT  stated   that  SB   238  updates   the  licensing,                                                               
recordkeeping,    and   enforcement    provisions   to    support                                                               
cryptocurrency  business   activities  while   protecting  Alaska                                                               
consumers.  He highlighted  that  in the  past  the division  has                                                               
found  licensed  transmitters of  fiat  currency  that have  poor                                                               
compliance  with  the Bank  Secrecy  Act  and Office  of  Foreign                                                               
Assets Control that identifies  suspicious activity and prohibits                                                               
doing business with individuals  and companies that conduct money                                                               
laundering  or have  been sanctioned  for affiliating  with rogue                                                               
countries. He stressed  the potential for Alaskans  to be scammed                                                               
by companies that  do not have a compliance  management system in                                                               
place. He relayed that Alaska  participates on a multistate money                                                               
transmitter examination  team that uses a  risk-based approach to                                                               
streamline state  supervision to be more  effective and efficient                                                               
in utilizing  state resources. He  explained that  an examination                                                               
consists of  a review  of a company's  compliance with  state and                                                               
federal  laws  and regulations  in  areas  likely to  affect  the                                                               
safety  and   soundness  of   the  licensee.   Utilizing  network                                                               
supervision with other states, as  allowed in SB 238, would allow                                                               
the  division to  reduce regulatory  burdens  by conducting  less                                                               
frequent examinations.                                                                                                          
                                                                                                                                
1:52:08 PM                                                                                                                    
MR.  SCHMIDT  briefly  reviewed  slides  4-6  that  he  described                                                               
earlier.  He highlighted  that  in  CY2021 40  of  the 153  money                                                               
transmitter  licensees conducted  virtual currency  business that                                                               
is  not  currently  regulated.   Today,  online  transactions  in                                                               
virtual  currency  are  a  common  means  of  exchanging  and  or                                                               
transferring  payment  of  value.  He stressed  that  SB  238  is                                                               
necessary  to  appropriately   regulate  money  transmitters  and                                                               
protect Alaska consumers.  He directed attention to  slide 5 that                                                               
shows the  6,250 percent increase in  reported money transmission                                                               
volume  in  Alaska in  three  years.  He  noted that  the  totals                                                               
include  money transmission,  payment instruments,  stored value,                                                               
and virtual  currency. This does not  include business activities                                                               
from  individuals  and  businesses  that  only  deal  in  virtual                                                               
currency.                                                                                                                       
                                                                                                                                
MR.  SCHMIDT described  slide  6  as the  most  important in  the                                                               
presentation. It shows  the 6,782 percent increase  in the volume                                                               
of reported  annual virtual currency transmission  in Alaska from                                                               
2019  to 2021  by companies  that are  licensed to  conduct money                                                               
transmissions   in   Alaska   and   also   have   virtual   money                                                               
transmissions. He said it is  important it note that the reported                                                               
virtual currency transmissions grew  2,420 percent in 2021 alone.                                                               
These  transactions  have  fundamentally  changed  the  financial                                                               
services world  and are growing  exponentially in Alaska.  SB 238                                                               
will add virtual  currency activities to the  definition of money                                                               
transmission,  which  will  allow  the Division  of  Banking  and                                                               
Securities to  regulate this activity  that accounted  for almost                                                               
one-third of  the total  money transmission  volume in  Alaska in                                                               
2021.  He said  he drilled  down on  the data  and found  further                                                               
reason  for concern  that by  virtue of  the lack  of regulation,                                                               
Alaska is  already targeted  as a  wild place  to go  for virtual                                                               
currency transmission and a haven to avoid sanction.                                                                            
                                                                                                                                
1:55:31 PM                                                                                                                    
CHAIR COSTELLO  asked, if  SB 238  were to  pass, what  would the                                                               
division be able to do that  it can't now; how would the division                                                               
reach out to  the relevant entities, and would they  have to stop                                                               
current activities awaiting licensing.                                                                                          
                                                                                                                                
MR. SCHMIDT  answered that there  would be  transition provisions                                                               
so   business  would   not  be   interrupted.  Virtual   currency                                                               
transmissions would  be treated much  the same way as  real money                                                               
transmissions. The  individual or  business would have  to submit                                                               
an application and demonstrate  financial liquidity. The division                                                               
performs  background  checks  on the  principals  and  thereafter                                                               
examines the  books and records of  a money transmitter on  a set                                                               
schedule. The examinations may be  performed by a team of states,                                                               
each  looking  at  different  aspects  of  the  examination.  The                                                               
division  would conduct  examinations of  the books,  records and                                                               
internal controls for  local Mom and Pop shops. He  noted that in                                                               
recent  years  the division  identified  a  small business  money                                                               
transmitter that  did little to  comply with Banking  Secrecy Act                                                               
provisions and  specialized in  sending money  to customers  in a                                                               
rogue nation.                                                                                                                   
                                                                                                                                
1:57:47 PM                                                                                                                    
SENATOR STEVENS asked what the penalties are for not reporting.                                                                 
                                                                                                                                
MR. SCHMIDT deferred the question to Tracy Reno.                                                                                
                                                                                                                                
1:58:31 PM                                                                                                                    
TRACY  RENO,  Chief  of Examinations,  Division  of  Banking  and                                                               
Securities,  Department  of   Commerce,  Community  and  Economic                                                               
Development  (DCCED), Anchorage,  Alaska, stated  that there  are                                                               
civil penalties for  an applicant who conducts  business prior to                                                               
licensure.  The monetary  value  of the  penalty  depends on  the                                                               
number  of  unlicensed  transactions conducted  and  whether  the                                                               
individual   cooperated  or   withheld  information   during  the                                                               
investigation.                                                                                                                  
                                                                                                                                
SENATOR STEVENS  asked how the  division learns  about unlicensed                                                               
activities.                                                                                                                     
                                                                                                                                
MS.  RENO   answered  that  the  division   uses  the  nationwide                                                               
multistate  licensing system  (NMLS),  sometimes  a complaint  is                                                               
filed,  and  investigators  also  search the  internet  for  this                                                               
activity.                                                                                                                       
                                                                                                                                
SENATOR  STEVENS   how  many  individuals  in   the  division  do                                                               
examinations                                                                                                                    
                                                                                                                                
MS. RENO  answered that  one fulltime  and one  parttime examiner                                                               
conduct   examinations   of    money   transmissions,   and   two                                                               
investigators work in enforcement.                                                                                              
                                                                                                                                
2:00:49 PM                                                                                                                    
CHAIR COSTELLO passed the gavel to Senator Micciche.                                                                            
                                                                                                                                
ACTING CHAIR MICCICHE how the  division regulates something whose                                                               
only value is based on supply and demand.                                                                                       
                                                                                                                                
MR. SCHMIDT  answered that the  bill will ensure that  the people                                                               
who are sending and receiving  the virtual currency are following                                                               
the rules  and checking  lists from the  Office of  Foreign Asset                                                               
Control to  ensure that inappropriate people  are neither sending                                                               
nor receiving  and are  not using  Alaska as  a conduit  for such                                                               
transmissions.                                                                                                                  
                                                                                                                                
ACTING CHAIR MICCICHE  noted the fluctuation of  a single Bitcoin                                                               
from a few hundred dollars to  $68,000 to about $41,000. He asked                                                               
if the division  was seeking to ensure that  the transactions are                                                               
legal and  not attributed  to laundering  or business  with rogue                                                               
nations, but without  delving into how the value of  a Bitcoin is                                                               
derived.                                                                                                                        
                                                                                                                                
MR.   SCHMIDT   replied   the    division   wants   to   regulate                                                               
cryptocurrency  transmissions  because  it  is  being  used  like                                                               
money. The intention  is to ensure that it is  not used for money                                                               
laundering or to funnel money inappropriately to rogue nations.                                                                 
                                                                                                                                
2:03:41 PM                                                                                                                    
MS. RENO  added the division  wants to know how  the transactions                                                               
are conducted,  where the currency  comes from, who  the currency                                                               
is  sent to,  are the  recipients on  a sanctions  list, are  the                                                               
parties tracking  and maintaining the records,  and is suspicious                                                               
activity reported. Records are kept  when money transactions take                                                               
place, whether  it's virtual or  fiat currency, and  the division                                                               
is  making sure  that policies  and procedures  are followed  and                                                               
that they can track and trace the transactions appropriately.                                                                   
                                                                                                                                
SENATOR  MICCICHE  noted  the  huge  rise  in  valuation  over  a                                                               
relatively short  time and  asked if  there was  a chance  that a                                                               
large portion of the value  of cryptocurrency was associated with                                                               
international money laundering.                                                                                                 
                                                                                                                                
2:05:25 PM                                                                                                                    
MR. SCHMIDT  opined that the  perception of  anonymity associated                                                               
with virtual currency was a significant part of its value.                                                                      
                                                                                                                                
SENATOR STEVENS  questioned whether the  art market was  really a                                                               
good comparison since  the provenance of paintings  are known and                                                               
they have a history of being traded.                                                                                            
                                                                                                                                
MR. SCHMIDT countered that there  was an equivalent provenance in                                                               
cryptocurrency  because  there  are  registries  that  track  the                                                               
virtual currency  through all its different  owners. For example,                                                               
a Bitcoin or  fraction thereof can be traced back  to the time it                                                               
was mined.                                                                                                                      
                                                                                                                                
CHAIR  COSTELLO asked  him to  talk about  the national  database                                                               
that the division uses to check licensing.                                                                                      
                                                                                                                                
MR. SCHMIDT  explained that  the Nationwide  Multistate Licensing                                                               
System was  developed as a  result of  the housing crisis  in the                                                               
late  2000s   and  originally  called  the   Nationwide  Mortgage                                                               
Licensing. NMLS  is now  a nationwide  platform that  is business                                                               
friendly  because it  is uniform  and thus  compatible throughout                                                               
all states that  use the system. He  deferred further explanation                                                               
to Tracy Reno.                                                                                                                  
                                                                                                                                
2:09:11 PM                                                                                                                    
MS.  RENO added  that the  division uses  NMLS for  the licensing                                                               
application process  and fee  payments. Should  SB 238  pass, the                                                               
division  would also  have the  ability to  do background  checks                                                               
through  the FBI,  which would  be  a great  timesaver. It  would                                                               
automate  background checks  so  the division  could  see who  is                                                               
running  the  companies,  who  owns  the  companies,  the  entire                                                               
company  record, along  with any  enforcement actions.  Consumers                                                               
would  be able  to search  that database  to see  which licensees                                                               
have  enforcement  issues in  other  states.  Going forward,  the                                                               
division would also  like to add the other  industries it touches                                                               
to streamline processes and ensure  everyone is treated the same,                                                               
which would reduce regulatory burdens for companies.                                                                            
                                                                                                                                
2:10:25 PM                                                                                                                    
CHAIR COSTELLO asking whether the department could use NMLS to                                                                  
do background checks for military spouses who want to transfer                                                                  
their professional licenses to Alaska.                                                                                          
                                                                                                                                
MR. SCHMIDT said he didn't know that there was interoperability                                                                 
outside the financial industry.                                                                                                 
                                                                                                                                
2:11:13 PM                                                                                                                    
MR. SCHMIDT returned to the presentation, speaking to slide 7,                                                                  
Fiscal Impact and Request for Additional Staff:                                                                                 
                                                                                                                                
     The Division of Banking and Securities (DBS) Receipts                                                                    
                           vs. Budget                                                                                         
                                                                                                                              
        • Receipts in FY2012 were $12.8 million. The FY2012                                                                     
          budget was $3.5 million.                                                                                              
        • Receipts in FY2021 were $19.6 million. The FY2021                                                                     
          budget was $4 million. [Receipts in CY 2021 were                                                                      
          $21.5 million.]                                                                                                       
        • Over the last 9 years, DBS receipts have grown                                                                        
          53% while the budget has only grown 14%.                                                                              
                                                                                                                                
     DBS  is requesting  five full-time  positions with  the                                                                    
     passage of this  bill: Three in FY2023,  one in FY2024,                                                                    
     and  one in  FY2025. The  total operating  expenditures                                                                    
     for DBS including the added  personnel are estimated to                                                                    
     be $401.5 in FY2023 increasing to $617.1 in FY2025.                                                                        
                                                                                                                                
     New    program    receipt    revenue    is    estimated                                                                    
     conservatively   at  $110,000   for   35  new   license                                                                    
     applications. DBS anticipates  revenue from assessments                                                                    
     set in  regulation will cover all  costs of supervision                                                                    
     of  the  industry  and  additional  staffing.  [Program                                                                    
     receipts are  estimated to range from  $750,000 to $1.2                                                                    
     million.]                                                                                                                  
                                                                                                                                
MR. SCHMIDT paraphrased slide 8, Why Change the Act? It read as                                                                 
follows:                                                                                                                        
                                                                                                                                
     • The current law has not kept up with the industry's                                                                      
        explosive growth and innovation.                                                                                        
     • Consumer protection is insufficient; cryptocurrency                                                                      
        is one of the top risks for consumer fraud.                                                                             
     • Virtual currency is not included in  the definition                                                                      
        of money transmission.                                                                                                  
                                                                                                                                
2:13:41 PM                                                                                                                    
MR. SCHMIDT made the following points, based on slide 9, What                                                                   
Does HB 408/SB 238 do?                                                                                                          
                                                                                                                                
 - Reduces regulatory burden by streamlining initial                                                                            
    licensing  and  license   renewal  by  using   NMLS  for                                                                    
    submitting license  applications, filing  documents, and                                                                    
    fee payments.                                                                                                               
 - Removes the currency exchange license type and adds                                                                          
    "currency  exchange"   to   the   definition  of   money                                                                    
    transmission, so only one license is needed.                                                                                
 - Protects Alaska consumers by conducting criminal                                                                             
    background  checks  through  the  Nationwide  Multistate                                                                    
    Licensing System (NMLS)  on individuals who  control the                                                                    
    money transmission business. The division currently does                                                                    
    background  checks  using  third-party  software,  which                                                                    
    takes about 140 staff hours per year.                                                                                       
 - Ensures regulatory costs of supervision keep pace with                                                                       
    growth by  allowing  a  volume-based  assessment  to  be                                                                    
    implemented. Licensees  will be  required to  report the                                                                    
    volume of  money transmissions,  which will  ensure that                                                                    
    licensees are treated equitably based on their volume of                                                                    
    business in the state.                                                                                                      
 - Broadens the definition of money transmission to include                                                                     
    virtual  currency  transactions   and  other   means  of                                                                    
    transferring monetary value to better protect Alaskans.                                                                     
                                                                                                                                
MR. SCHMIDT highlighted that the bill was drafted with input                                                                    
from the money transmission industry.                                                                                           
                                                                                                                                
2:15:50 PM                                                                                                                    
MR. SCHMIDT paraphrased slide 10, HB 408/SB 238 Protects                                                                        
Consumers:                                                                                                                      
                                                                                                                                
        • Require licensees to comply with federal laws,                                                                        
          including suspicious activity reporting.                                                                              
        • Increase the record retention schedule to five                                                                        
          years for greater transparency.                                                                                       
        • Allow criminal background checks to be run on                                                                         
          licensees.                                                                                                            
        • Update enforcement provisions by allowing a                                                                           
          broader spectrum of orders to be issued.                                                                              
        • Ensure DBS can coordinate with other states in                                                                        
          all   areas   of    regulation,   licensing,   and                                                                    
          supervision to reduce regulatory burden on the                                                                        
          industry and more effectively utilize regulator                                                                       
          resources.                                                                                                            
        • Define crypto/virtual currency money transmission                                                                     
          activities   and   allow   regulation   of   those                                                                    
          activities (aka "virtual currency," Bitcoin,                                                                          
          Ethereum, DogeCoin).                                                                                                  
                                                                                                                                
2:16:46 PM                                                                                                                    
MR.  SCHMIDT concluded  the presentation  with the  definition of                                                               
virtual currency on slide 11:                                                                                                   
                                                                                                                                
     Definition  of  virtual   currency:  Cryptocurrency  or                                                                  
     virtual  currency  means  a digital  representation  of                                                                    
     value that  is used  as a medium  of exchange,  unit of                                                                    
     account, or store  of value; and is  not money, whether                                                                    
     or not denominated in money. AS 06.55.290(5)                                                                               
                                                                                                                                
MR.  SCHMIDT highlighted  that there  are recent  efforts to  tie                                                               
virtual currencies to  real currencies to make  them more stable,                                                               
but the fact remains that its value  is much like the Mona Lisa                                                                 
it's because people say it has value.                                                                                           
                                                                                                                                
SENATOR STEVENS asked  how important it is to pass  the bill this                                                               
year.                                                                                                                           
                                                                                                                                
MR. SCHMIDT answered  that his  staff has been crystal clear that                                                               
this bill  and modernizing money  transmission is  the divisions                                                                
number one priority.  The incomplete 2021 data on  the volume and                                                               
dollar  amounts of  virtual currency  transmissions far  exceeded                                                               
any  expectations. He  expressed concern  that by  not regulating                                                               
virtual  currency,  Alaska  may   well  attract  a  problem.  The                                                               
preference is to  work through the well  thought-out framework of                                                               
this legislation,  but if  it doesn't pass  the division  will be                                                               
looking   at   regulating   virtual   currency   through   agency                                                               
rulemaking. It is that critically important.                                                                                    
                                                                                                                                
SENATOR STEVENS said he understands  the urgency and he hopes the                                                               
bill passes.                                                                                                                    
                                                                                                                                
CHAIR COSTELLO asked if there was a House companion to SB 238.                                                                  
                                                                                                                                
MR. SCHMIDT answered yes; HB 408  is currently in the House Labor                                                               
and Commerce Committee.                                                                                                         
                                                                                                                                
CHAIR COSTELLO asked if he was aware of any opposition.                                                                         
                                                                                                                                
2:20:47 PM                                                                                                                    
MR.  SCHMIDT said  he was  surprised to  learn that  a nationwide                                                               
payroll processor  filed a  letter of  opposition. He  noted that                                                               
the industry  generally was subject  to the current  law because,                                                               
depending  on the  business model,  they are  handling consumers'                                                               
funds. At  the same time,  money transmitters  nationwide support                                                               
this legislation.                                                                                                               
                                                                                                                                
2:22:24 PM                                                                                                                    
SENATOR  STEVENS  asked  if  other  states  have  passed  similar                                                               
legislation.                                                                                                                    
                                                                                                                                
MR.  SCHMIDT  answered  that  West   Virginia  passed  the  model                                                               
legislation, which was  approved by the Conference  of State Bank                                                               
Supervisors last fall, and legislation  is pending in a number of                                                               
other states across the political spectrum.                                                                                     
                                                                                                                                
CHAIR COSTELLO  thanked him  for his attention  to the  issue and                                                               
expressed appreciation that he visited  her office to discuss the                                                               
bill.                                                                                                                           
                                                                                                                                
MR. SCHMIDT advised  that he was in Juneau through  this week and                                                               
would be happy to speak to the members individually.                                                                            
                                                                                                                                
CHAIR  COSTELLO asked  Ms. Reno  to give  a brief  review of  the                                                               
sectional   analysis,   highlighting   the  sections   that   are                                                               
critically important.                                                                                                           
                                                                                                                                
2:23:52 PM                                                                                                                    
TRACY RENO,  Chief of  Examinations for  the Division  of Banking                                                               
and  Securities paraphrased  the  sectional analysis  for SB  238                                                               
that read as follows:                                                                                                           
                                                                                                                                
     Section 1  adds a section of  uncodified law expressing                                                                  
     the purpose of the bill.                                                                                                   
                                                                                                                              
     Section  2 amends  AS 06.55.101(a)  which contains  the                                                                  
     requirement  that  a  person  may  not  engage  in  the                                                                    
     business of  money transmission  without a  license. It                                                                    
     is  amended  to  insert  a citation  to  the  exemption                                                                    
     statute,  AS   06.55.802,  and   to  clarify   that  an                                                                    
     authorized delegate  may not engage in  the business of                                                                    
     money  transmission  if  the  actions  taken  would  be                                                                    
     outside  the  scope  of   authority  conferred  by  the                                                                    
     written contract required by  AS 06.55.301, as repealed                                                                    
     and reenacted pursuant to Section 8.                                                                                       
                                                                                                                              
     Section 3 repeals and reenacts  AS 06.55.102 to conform                                                                  
     with the  Conference of  State Bank  Supervisors (CSBS)                                                                    
     Uniform  Money  Transmission  Modernization  Act  ("the                                                                    
     model  law").  This  section provides  the  application                                                                    
     requirements  for  a  money  transmission  license  and                                                                    
     allows  the  Department  of  Commerce,  Community,  and                                                                    
     Economic  Development ("the  department") to  change or                                                                    
     update   the   form   to  maintain   consistency   with                                                                    
     Nationwide  Multistate  Licensing   System  &  Registry                                                                    
     ("NMLS"   or   "registry")  licensing   standards   and                                                                    
     practices.                                                                                                                 
                                                                                                                              
     Section 4 repeals and reenacts  AS 06.55.105 to conform                                                                  
     with  the   model  law.   This  section   contains  the                                                                    
     department's  license  issuance procedures,  timelines,                                                                    
     license terms, and due  process procedures. It provides                                                                    
     that  if  the  applicant  is subject  to  a  multistate                                                                    
     licensing  process,  the   department  may  accept  the                                                                    
     investigation results of a lead investigation state.                                                                       
                                                                                                                                
     Section 5 repeals and reenacts  AS 06.55.106 to conform                                                                  
     with  the model  law. It  contains license  renewal and                                                                    
     renewal   reporting  requirements.   As  repealed   and                                                                    
     reenacted, AS  06.55.106 presents  a change  to license                                                                    
     renewals, renewal  reporting, and  renewal terminology.                                                                    
     In conjunction  with proposed changes to  AS 06.55.850,                                                                    
     conforming to the  model law also presents  a change to                                                                    
     fees collected  by the department. These  changes align                                                                    
     with  the model  law's goal  of uniform  application of                                                                    
     money transmission  laws for licensees that  operate in                                                                    
     more than one state.                                                                                                       
                                                                                                                                
2:25:39 PM                                                                                                                    
     Section  6  amends AS  06.55  to  add new  sections  AS                                                                  
     06.55.108, AS 06.55.109, and AS  06.55.110 to Article 1                                                                    
     to conform with the model law.                                                                                             
                                                                                                                                
          AS   06.55.108  concerns   maintenance  of   money                                                                  
          transmission licenses. It  provides that licensees                                                                    
          must  continue  to  meet the  qualifications  that                                                                    
          apply to  new applicants, and that  the department                                                                    
          may  suspend or  revoke  a license  if a  licensee                                                                    
          fails to do so.                                                                                                       
                                                                                                                                
          AS  06.55.109  concerns  information  requirements                                                                  
          for  certain  individuals. This  section  contains                                                                    
          information     submission    requirements     for                                                                    
          individuals   in   control    of   applicants   or                                                                    
          licensees,  and "key  individuals"  as defined  by                                                                    
          the  bill.  It  also  contains  background  report                                                                    
          requirements  applicable to  individuals who  have                                                                    
          resided outside  of the United States  in the last                                                                    
          ten years.                                                                                                            
                                                                                                                                
2:26:08 PM                                                                                                                    
          AS 06.55.110 concerns  consistent state licensing.                                                                  
          It  grants   the  department  discretion   to  (1)                                                                    
          implement licensing provisions  and protocols in a                                                                    
          manner that  is consistent with other  states that                                                                    
          have adopted  a multistate licensing  process, (2)                                                                    
          establish relationships or  contracts that enables                                                                    
          the  department to  collect and  maintain records,                                                                    
          coordinate    licensing,    process   fees,    and                                                                    
          communicate with  licensees, and (3)  utilize NMLS                                                                    
          for all aspects of licensing.                                                                                         
                                                                                                                                
        Section 7 amends AS 06.55 to add new sections to                                                                      
     Article 2 concerning virtual currency.                                                                                     
                                                                                                                                
          AS 06.55.205 concerns the scope  of AS 06.55.205 -                                                                  
          AS  06.55.290  and  contains a  list  of  exempted                                                                    
          activities. Notably, paragraph  (b)(5) contains an                                                                    
          exemption  applicable  to persons  whose  virtual-                                                                    
          currency  business activities  on an  annual basis                                                                    
          are  expected to  be measured  at $5,000  or less,                                                                    
          measured  by  the  dollar  equivalent  of  virtual                                                                    
          currency.  Subsection  (c) grants  the  department                                                                    
          discretionary   authority  to   create  additional                                                                    
          exemptions  for  specific  persons or  classes  of                                                                    
          persons.                                                                                                              
                                                                                                                              
          AS  06.55.206  concerns  conditions  precedent  to                                                                  
          engaging  in  virtual-currency business  activity.                                                                    
          This   section   provides  that   virtual-currency                                                                    
          business  activity  is   money  transmission,  and                                                                    
          therefore,  unless the  virtual currency  business                                                                    
          activity   is  exempt   under  AS   06.55.802,  it                                                                    
          requires a money transmission license.                                                                                
                                                                                                                              
          AS 06.55.207 concerns  required disclosures. These                                                                  
          disclosures  are in  addition  to  the notice  and                                                                    
          receipt   requirements   for  money   transmission                                                                    
          licensees found at AS  06.55.810 and AS 06.55.830.                                                                    
          Subsection  (a) grants  the department  discretion                                                                    
          to require additional  disclosures and to regulate                                                                    
          the  time   and  form  required   for  disclosure.                                                                    
          Subsection (a)  also allows a licensee  to propose                                                                    
          alternative disclosures that  are more appropriate                                                                    
          to its business operations.                                                                                           
                                                                                                                                
                                                                                                                                
     2:27:50 PM                                                                                                             
     MS. RENO highlighted AS 06.55.208 in Section 7 as                                                                          
     particularly important.                                                                                                    
                                                                                                                              
          AS  06.55.208  concerns   property  interests  and                                                                  
          entitlements to virtual  currency. AS 06.55.208(a)                                                                    
          requires   the   virtual-currency  business   with                                                                    
          "control"  over virtual  currency  to maintain  an                                                                    
          amount   of   each   type  of   virtual   currency                                                                    
          sufficient to  satisfy the  aggregate entitlements                                                                    
          of the  persons to each type  of virtual currency.                                                                    
          This section places the  interests of customers of                                                                    
          a licensee  over the interests  of creditors  of a                                                                    
          licensee.                                                                                                             
                                                                                                                                
          AS 06.55.208 is modeled off  of Section 502 of the                                                                  
          Uniform Regulation of  Virtual Currency Businesses                                                                    
          Act ("URVCBA"). 1 Official  comment to Uniform Law                                                                    
          Commission's ("ULC") URVCBA  provides that Section                                                                    
          502 (proposed  AS 06.55.208)  is based  on Uniform                                                                    
          Commercial Code ("UCC")  Sections 8-503 and 8-5042                                                                    
          and that  it is intended  to protect the  owner of                                                                    
          virtual currency that is  entrusted to a licensee.                                                                    
          Unlike  the URVCBA,  the abridged  version in  the                                                                    
          model  law  does not  create  a  private right  of                                                                    
          action,  and instead  all  enforcement of  virtual                                                                    
          currency   violations   is  by   the   department.                                                                    
          Official  commentary further  describes that  this                                                                    
          section  "takes  the  virtual currency  under  the                                                                    
          control  of a  licensee off  the balance  sheet of                                                                    
          the  virtual  currency  business  and  beyond  the                                                                    
          business'  right  to deal  with  it  as their  own                                                                    
          property.  This formulation  reduces the  need for                                                                    
          greater  net  worth  ?  without  sacrificing  user                                                                    
          protection."                                                                                                          
                                                                                                                              
          AS 06.55.209 concerns  additional requirements and                                                                  
          clarifications   for  virtual   currency  business                                                                    
          activities.  Subsection  (b)   allows  a  licensee                                                                    
          engaged in  virtual-currency business  activity to                                                                    
          include  virtual  currency  in  its  tangible  net                                                                    
          worth calculation,  measured by the  average value                                                                    
          of the  dollar equivalent of the  virtual currency                                                                    
          for the preceding six  months. Subsections (c) and                                                                    
          (d) contain  record keeping  requirements specific                                                                    
          to  virtual-currency businesses  and resemble  the                                                                    
          record keeping requirements of AS 06.55.405.                                                                          
                                                                                                                              
          AS  06.55.210 contains  definitions applicable  to                                                                  
          the virtual  currency sections.  It is  helpful to                                                                    
          note that  when hyphenated,  "virtual-currency" is                                                                    
          an  adjective   or  modifier,  as   distinct  from                                                                    
          "virtual  currency"  as  defined  in  proposed  AS                                                                    
          06.55.290(5) to  signify a  digital representation                                                                    
          of value that is not money.                                                                                           
                                                                                                                                
     Section 8 repeals and  reenacts AS 06.55.301 concerning                                                                  
     the relationship  between a licensee and  an authorized                                                                    
     delegate to  conform with the  model law. It  creates a                                                                    
     requirement  that   prior  to  use  of   an  authorized                                                                    
     delegate,   a   licensee   must  adopt   policies   and                                                                    
     procedures   consistent  with   applicable  state   and                                                                    
     federal  law and  must enter  into  a written  contract                                                                    
     with   the  authorized   delegate  that   contains  the                                                                    
     provisions  required by  (c) of  this section.  It also                                                                    
     contains provisions  linking the  authorized delegate's                                                                    
     activities with those of the  licensee in the event the                                                                    
     licensee's license  is suspended  and for  operation of                                                                    
     the chapter's statutory trust provisions.                                                                                  
                                                                                                                                
2:29:10 PM                                                                                                                    
     Section 9  amends AS 06.55.302  concerning unauthorized                                                                  
     activities  to  add  a   joint  and  several  liability                                                                    
     provision  applicable to  persons who  engage in  money                                                                    
     transmission on behalf of an unlicensed person.                                                                            
                                                                                                                                
     Section   10   repeals   and  reenacts   AS   06.55.401                                                                  
     concerning  supervision.  This   section  contains  the                                                                    
     department's  powers with  respect  to examination  and                                                                    
     investigation of a licensee  or authorized delegate. It                                                                    
     allows the department to  accept examination reports of                                                                    
     other   states,   the   federal   government,   or   an                                                                    
     independent accounting  firm. It requires  licensees to                                                                    
     pay   all  costs   associated  with   examinations  and                                                                    
     references  the  confidentiality   requirements  of  AS                                                                    
     06.55.407.  It eliminates  the existing  requirement of                                                                    
     AS 06.55.401(a) that a notice  be sent to a licensee 45                                                                    
     days prior to the annual examination.                                                                                      
                                                                                                                              
2:30:05 PM                                                                                                                  
[MS. RENO skipped to Sections 17-18.]                                                                                         
                                                                                                                              
     Sections  11   -  14  repeal   and  reenact   or  amend                                                                  
     subsections of  AS 06.55.403  for consistency  with the                                                                    
     model   law.  As   reenacted,  AS   06.55.403  requires                                                                    
     quarterly  reports of  condition to  be submitted  by a                                                                    
     licensee for  its own  activities (subsection  (a)) and                                                                    
     the activities of  its authorized delegates (subsection                                                                    
     (b)).  It  maintains  existing requirements  for  rapid                                                                    
     reporting  to  the  department upon  knowledge  of  the                                                                    
     filing of  a bankruptcy petition, proceeding  to revoke                                                                    
     or suspend a license in  another state or country, bond                                                                    
     cancellation,  and criminal  charges brought  against a                                                                    
     licensee, authorized  delegate, or "key  individual" or                                                                    
     other person in  control of the licensee.  It also adds                                                                    
     a subsection  allowing the  department to  utilize NMLS                                                                    
     for reports required by AS 06.55.403.                                                                                      
                                                                                                                                
          "Key  individual"  is  a term  introduced  by  the                                                                    
          model law in  Section 62 of the  bill, proposed AS                                                                    
          06.55.990(34)    and    means   "any    individual                                                                    
          ultimately   responsible   for   establishing   or                                                                    
          directing   policies   and   procedures   of   the                                                                    
          licensee,   including    an   executive   officer,                                                                    
          manager, director,  or trustee."  This terminology                                                                    
          replaces the repealed term "executive officer."                                                                       
                                                                                                                                
     Section   15   repeals   and  reenacts   AS   06.55.404                                                                  
     concerning   acquisition   of   control  of   a   money                                                                    
     transmission  licensee.  This   is  a  lengthy  section                                                                    
     containing  procedural and  reporting requirements  for                                                                    
     acquisition  or transfer  of control  of licensees.  It                                                                    
     contains  exceptions for  acquisition  of control  that                                                                    
     are   not  subject   to   the   section,  for   example                                                                    
     transitions  that  occur  in  the  ordinary  course  of                                                                    
     business,  and the  list found  at  subsection (j).  It                                                                    
     contains  discretionary provisions  for the  department                                                                    
     for ease and flexibility  of administration, as well as                                                                    
     utilization of  NMLS. Subsections (n) and  (o) create a                                                                    
     streamlined acquisition of control process.                                                                                
                                                                                                                                
          AS 06.55.404 adds a new subsection (p) regarding                                                                      
          aggregation of interest of ownership for family                                                                       
          members for consistency with the Model Law.                                                                           
                                                                                                                                
     2:30:06 PM                                                                                                               
     Sections 16  - 17 amend  subsections (a) and (d)  of AS                                                                  
     06.55.405  for  consistency  with  the  model  law.  AS                                                                    
     06.55.405  concerns   record  keeping   obligations  of                                                                    
     licensees. Subsection  (a) is  amended to  increase the                                                                    
     recordkeeping time period  from 3 years to  5 years and                                                                    
     to make conforming language  changes. Subsection (d) is                                                                    
     amended to make conforming language changes.                                                                               
                                                                                                                                
2:30:26 PM                                                                                                                    
     Section  18   amends  AS  06.55.406(a).   AS  06.55.406                                                                  
     concerns  "money  laundering  reports" -  this  heading                                                                    
     would  be  retitled  "Bank  Secrecy  Act  reports"  for                                                                    
     consistency  with the  model  law.  The primary  change                                                                    
     made  by this  amendment is  to remove  the requirement                                                                    
     that  certain  money  laundering, record  keeping,  and                                                                    
     suspicious transaction reporting  requirements be filed                                                                    
     with   the   Attorney   General.  This   amendment   is                                                                    
     consistent  with the  model law  and  may reflect  that                                                                    
     compliance  with   federal  reporting   obligations  is                                                                    
     sufficient.                                                                                                                
                                                                                                                                
[MS. RENO skipped Sections 19-22.]                                                                                              
                                                                                                                                
     Sections 19 - 22 amend  subsections of AS 06.55.407 for                                                                    
     consistency with the model law.                                                                                            
                                                                                                                                
     Section  23  adds  a new  subsection  to  AS  06.55.407                                                                    
     concerning when department records  may be made public.                                                                    
     AS  06.55.407 concerns  confidentiality, and  the edits                                                                    
     clarify   what   information  is   confidential,   what                                                                    
     information  may be  made public.  The amendments  also                                                                    
     remove  "money  services"  and  add  "transmission"  to                                                                    
     conform with  the license type changes  contemplated by                                                                    
     the bill.                                                                                                                  
                                                                                                                                
2:30:58 PM                                                                                                                    
     Section  24 amends  AS  06.55 to  add  new sections  to                                                                  
     Article  4. Each  of these  sections are  components of                                                                    
     the model law.                                                                                                             
                                                                                                                                
          AS 06.55.408 concerns audited financials. This                                                                      
          section requires licensees to submit an annual                                                                        
          audited financial statement  to the department and                                                                    
          the requirements  applicable to  audited financial                                                                    
          statements.                                                                                                           
                                                                                                                                
          AS  06.55.409   concerns  implementation   of  the                                                                  
          chapter.  Subsection  (a)  grants  the  department                                                                    
          discretion  to enter  into  agreements with  other                                                                    
          state    and   federal    agencies   to    improve                                                                    
          efficiencies  and  reduce  regulatory  burden;  to                                                                    
          contract,   hire,   or    purchase   software   to                                                                    
          facilitate  investigations;  to accept  licensing,                                                                    
          examination,  or  investigation  reports  made  by                                                                    
          federal  or state  agencies; and  to accept  audit                                                                    
          reports  of independent  CPAs or  qualified third-                                                                    
          party   auditors.   Subsection  (b)   grants   the                                                                    
          department   broad   discretion   to   administer,                                                                    
          interpret,  and  enforce  the  chapter,  to  adopt                                                                    
          rules and  regulations, and  to recover  its costs                                                                    
          through imposition and collection of fees.                                                                            
                                                                                                                                
          AS 06.55.410 concerns  networked supervision. This                                                                  
          section  expands   the  department's   ability  to                                                                    
          participate  in multistate  supervisory processes,                                                                    
          including joint investigation.                                                                                        
                                                                                                                                
          AS  06.55.411  concerns  relationship  to  federal                                                                  
          law.  It   provides  that  in  the   event  of  an                                                                    
          inconsistency between  state and federal  law, the                                                                    
          federal  law   governs  to   the  extent   of  the                                                                    
          inconsistency.  It also  allows the  department to                                                                    
          issue      clarifying      guidance      regarding                                                                    
          inconsistencies to assist  licensees in compliance                                                                    
          with  both the  federal law  and applicable  state                                                                    
          law.                                                                                                                  
                                                                                                                                
          AS  06.55.412  concerns   notice  and  information                                                                  
          requirements  for a  change  in control  of a  key                                                                    
          individual.  This  section  is a  regulatory  tool                                                                    
          similar to  the requirements of AS  06.55.403 that                                                                    
          contains    the   requirements    and   procedures                                                                    
          applicable  when  licensees  add or  replace  "key                                                                    
          individuals."  The  department  may  disapprove  a                                                                    
          change of  key individual if the  department finds                                                                    
          that  the individual's  experience, character,  or                                                                    
          integrity  would not  be in  the best  interest of                                                                    
          the public or the licensee's customers.                                                                               
                                                                                                                                
2:31:21 PM                                                                                                                    
CHAIR  COSTELLO  asked Ms.  Reno  to  return  to Section  18  and                                                               
explain the reason for removing  the requirement to file a report                                                               
with  the Alaska  attorney general  and instead  rely on  federal                                                               
reporting.                                                                                                                      
                                                                                                                                
MS.  RENO  explained that  federal  requirements  under the  Bank                                                               
Secrecy Act  are already in  place to report  suspicious activity                                                               
to the  US Department of  Treasury and state law  enforcement has                                                               
access to  that database.  She opined  that it's  duplicative and                                                               
burdensome to also  require a report to be filed  with the Office                                                               
of the Attorney General.                                                                                                        
                                                                                                                                
2:33:14 PM                                                                                                                    
MS. RENO continued the sectional analysis for SB 238:                                                                           
                                                                                                                                
     Sections  25 -  30 make  revisions to  Article 5  of AS                                                                  
     06.55   to   rename   and  broaden   its   scope   from                                                                    
     "Permissible  Investments"  to "Prudential  Standards."                                                                    
     In accordance  with this change, two  existing sections                                                                    
     (AS  06.55.104  and  AS  06.55.107)  are  repealed  and                                                                    
     reenacted, as revised, to fit within this new Article.                                                                     
                                                                                                                                
          Section   25  amends   AS  06.55.501,   concerning                                                                  
          maintenance   of   permissible  investments,   for                                                                    
          consistency  with  the  model law.  It  amends  AS                                                                    
          06.55.501(b)  to  allow  the department  to  limit                                                                    
          specific  investments  held  by licensees  due  to                                                                    
          risk  concerns,   with  the  exception   of  those                                                                    
          permissible  investments listed  in AS  06.55.102.                                                                    
          It  amends  AS   06.55.501(c)  to  add  additional                                                                    
          language   to   protect   the   beneficiaries   of                                                                    
          statutory  trusts  from  actions by  creditors  of                                                                    
          licensees.                                                                                                            
                                                                                                                                
          Section  26  amends  AS 06.55.501  to  add  a  new                                                                  
          subsection   (d)   concerning  establishment   and                                                                    
          termination  of   statutory  trusts   and  related                                                                    
          department  obligations.   It  also  adds   a  new                                                                    
          subsection  (e)  that  allows  the  department  to                                                                    
          allow  additional permissible  investments and  to                                                                    
          participate   with  other   state  regulators   to                                                                    
          identify permissible investments.                                                                                     
                                                                                                                                
          Sections 27 - 28 amend  subsections (a) and (b) of                                                                  
          AS 06.55.502,  concerning permissible investments,                                                                    
          for  consistency with  the  model law.  Subsection                                                                    
          (a)  creates  a  list of  permissible  investments                                                                    
          that   may  be   amended   or   modified  by   the                                                                    
          department.   Subsection  (b)   is  repealed   and                                                                    
          reenacted to  contain a  list of  investments that                                                                    
          are  permissible to  the  extent specified  within                                                                    
          allowable  aggregate  values for  each  investment                                                                    
          category  as a  component  of  a licensee's  total                                                                    
          investment portfolio.                                                                                                 
                                                                                                                                
               The    revisions   to    AS   06.55.502(a)(1)                                                                    
               incorporate   cash    equivalents   including                                                                    
               Automated  Clearing  House   (ACH)  items  in                                                                    
               transit  to  licensees  and payees,  cash  in                                                                    
               transit  via  armored   car,  cash  in  smart                                                                    
               safes, cash in  licensee-owned locations, and                                                                    
               debit    card   or    credit   card    funded                                                                    
               transmission  receivables owed  by any  bank.                                                                    
               The   inclusion   of  these   specific   cash                                                                    
               equivalent  types  is  intended  by  CSBS  to                                                                    
               resolve  disagreement  between  industry  and                                                                    
               states   regarding   derecognition  of   cash                                                                    
               transactions   in   transit  for   accounting                                                                    
               purposes.  Because  ACH   funds  are  in  the                                                                    
               banking  system, the  model law  defines cash                                                                    
               in   transit  via   ACH   as  a   permissible                                                                    
               investment,  thereby ensuring  that licensees                                                                    
               are not  obligated to raise  additional funds                                                                    
               to  cover  funds  that  are  in  the  banking                                                                    
               system.                                                                                                          
                                                                                                                                
               AS 06.55.502(a) would also  be amended to add                                                                    
               paragraph  (4) to  include letters  of credit                                                                    
               as   a   permissible  investment   type.   In                                                                    
               conjunction with Section  29, which lists the                                                                    
               requirements  for letters  of credit  allowed                                                                    
               by  AS   06.55.502(a)(4),  the   addition  of                                                                    
               letters  of credit  is  intended  by CSBS  to                                                                    
               create  a  mechanism  that allows  states  to                                                                    
               make consumers  whole without  seizing assets                                                                    
               through bankruptcy.  In consideration  that a                                                                    
               licensee may operate  in multiple states, the                                                                    
               letter  of  credit   is  intended  as  single                                                                    
               vehicle  to allow  recovery,  as needed,  for                                                                    
               customers in various states.                                                                                     
                                                                                                                                
               Finally, AS 06.55.502(a) is amended to allow                                                                     
               excess bonding as a permissible investment                                                                       
               type.                                                                                                            
                                                                                                                                
     Section 29 amends AS 06.55.502 to add a new subsection                                                                   
        (d) containing the requirements for permissible                                                                         
     letters of credit.                                                                                                         
                                                                                                                                
2:34:39 PM                                                                                                                    
       Section 30 amends AS 06.55 to add new sections to                                                                      
      Article 5. As described above, existing versions of                                                                       
     these statutes can be found in Article 1.                                                                                  
                                                                                                                                
          AS   06.55.505   concerns  applicable   forms   of                                                                  
          security   (AS  06.55.104).   As  proposed,   this                                                                    
          section  is a  hybrid  of the  model and  existing                                                                    
          law.  It  adopts  the model  law's  approach  that                                                                    
          requires  licensees to  hold a  security bond,  or                                                                    
          with the  department's approval, a deposit,  in an                                                                    
          amount  equal  to  the  licensee's  average  daily                                                                    
          money  transmission  liability  in the  state.  To                                                                    
          avoid   calculation   of   average   daily   money                                                                    
          transmission liability, licensees  may hold a bond                                                                    
          in  the maximum  amount  of  $1,000,000. The  bill                                                                    
          varies from  the model law in  the following ways:                                                                    
          (1)  the  model law  would  set  the maximum  bond                                                                    
          amount  at  $500,000;  (2) it  requires  that  the                                                                    
          surety  bond be  obtained  from  a surety  company                                                                    
          authorized to  do business in  Alaska; and  (3) it                                                                    
          requires that surety bond to  be maintained for as                                                                    
          long  as the  department  specifies,  but no  less                                                                    
          than 5 years.                                                                                                         
                                                                                                                                
          AS  06.55.506 concerns  net worth  (AS 06.55.107).                                                                  
          It  is  a  significant   expansion  of  net  worth                                                                    
          requirements   from  existing   law,  which   only                                                                    
          requires  applicants to  maintain a  net worth  of                                                                    
          $25,000  in  accordance  with  generally  accepted                                                                    
          accounting principles. This  section would require                                                                    
          licensees  to maintain  tangible  net worth  based                                                                    
          upon  tiered  levels  of  total  assets  held.  It                                                                    
          requires  applicants to  demonstrate net  worth at                                                                    
          application  and allows  the department  to exempt                                                                    
          applicants   or    licensees   from    net   worth                                                                    
          requirements.                                                                                                         
                                                                                                                                
2:35:40 PM                                                                                                                    
[MS. RENO skipped Sections 31-34.]                                                                                              
                                                                                                                                
     Section  31 amends  AS 06.55.601  for consistency  with                                                                  
     the model  law. These  changes are limited  to deletion                                                                    
     of  unnecessary language  and insertion  of new  terms,                                                                    
     such   as   "key   individual"   and   replacement   of                                                                    
     "transmission" for "services."                                                                                             
                                                                                                                                
     Section  32  amends  AS  06.55.601   by  adding  a  new                                                                  
     subsection  allowing a  licensee  to  apply for  relief                                                                    
     from suspension or revocation of a license.                                                                                
                                                                                                                              
     Section  33 amends  AS 06.55.602  concerning suspension                                                                  
     and revocation of  authorized delegates for consistency                                                                    
     with  the  model  law.  These   edits  are  limited  to                                                                    
     replacing "money services" with "money transmission."                                                                      
                                                                                                                              
     Section  34  amends  AS  06.55.602   by  adding  a  new                                                                  
     subsection  allowing an  authorized  delegate to  apply                                                                    
     for  relief   from  a   suspension  or   revocation  of                                                                    
     designation as an authorized delegate.                                                                                     
                                                                                                                                
2:35:45 PM                                                                                                                    
     Sections 35 - 37 amend  subsections of AS 06.55.603 for                                                                  
     consistency  with  the  model   law.  These  edits  are                                                                    
     limited   to  conforming   language  changes   such  as                                                                    
     deletion   of  "money   services"   and  insertion   of                                                                    
     "transmission."                                                                                                            
                                                                                                                                
     Section  38   amends  AS  06.55.605   concerning  civil                                                                  
     penalties to  allow the department to  assess its costs                                                                    
     and   expenses  for   investigation  and   prosecution,                                                                    
     including  attorney's  fees,  as   part  of  the  civil                                                                    
     penalty assessment allowed under this section.                                                                             
                                                                                                                                
     Section  39  amends  AS 06.55.606  concerning  criminal                                                                    
     penalties  for consistency  with the  model law.  These                                                                    
     amendments are limited to insertion  of the word "such"                                                                    
     and deletion of unnecessary language.                                                                                      
                                                                                                                                
2:36:40 PM                                                                                                                    
MS. RENO described Sections 40-41 as particularly important to                                                                  
streamline licensing for both staff and industry.                                                                               
                                                                                                                                
     Sections 40 -  41 amend subsections of  AS 06.55.607 to                                                                    
     remove  citations to  AS 06.55.201,  which is  repealed                                                                    
     pursuant to Section 64.  Existing AS 06.55.201 contains                                                                    
     the   currency  exchange   license  requirement.   This                                                                    
     license type has  been eliminated in the  bill in favor                                                                    
     of one license  type, for which currency  exchange is a                                                                    
     permissible activity.                                                                                                      
                                                                                                                                
     Section 42  amends AS 06.55.702(a)  concerning hearings                                                                  
     for consistency  with the  model law.  These amendments                                                                    
     are  limited  to deletion  of  "money  services" and  a                                                                    
     citation  to  AS  06.55.702(b), which  is  repealed  by                                                                    
     Section 64 of the bill.                                                                                                    
                                                                                                                                
2:37:30 PM                                                                                                                    
     Section  43 amends  AS 06.55.802  for consistency  with                                                                  
     the  model   law.  This  section   extensively  revises                                                                    
     existing    AS     06.55.802    concerning    licensing                                                                    
     "exclusions." In  addition to  renaming the  section to                                                                    
     "Exemptions,"  proposed Section  43 would  add six  new                                                                    
     exemption types  and would allow the  department to add                                                                    
     additional exemptions  if "in the public  interest" and                                                                    
     if regulation  is unnecessary for  the purposes  of the                                                                    
     chapter.  Some of  the exemptions  are  added to  allow                                                                    
     businesses  that  provide   money  transmission  as  an                                                                    
     ancillary  service are  not required  to hold  licenses                                                                    
     (e.g.   insurance  companies,   title  companies,   and                                                                    
     attorneys).  Others   identify  employees,  third-party                                                                    
     services    providers,    agents   of    payees,    and                                                                    
     intermediaries  as  exempt  in  certain  circumstances.                                                                    
     Though  the   list  of   exemption  is   lengthy,  CSBS                                                                    
     recommends  consistent adoption  of exemptions  so that                                                                    
     compliance regimes are consistent from state-to-state.                                                                     
                                                                                                                                
[MS. RENO skipped Sections 44-46.]                                                                                              
                                                                                                                                
     Section 44 amends  AS 06.55 by adding a  new section AS                                                                  
     06.55.803 allowing  the department to require  a person                                                                    
     who  claims an  exemption  to  provide information  and                                                                    
     documentation in support thereof.                                                                                          
                                                                                                                                
     Section  45  amends  AS 06.55.810  concerning  required                                                                  
     notices.   The   amendments   require   licensees   and                                                                    
     authorized delegates to  provide customers with notices                                                                    
     of how  to file a  complaint and allows  the department                                                                    
     to establish  the format  and content  requirements for                                                                    
     notices.                                                                                                                   
                                                                                                                                
     Section  46  amends  AS  06.55.810   by  adding  a  new                                                                  
     subsection  that  requires   licensees  and  authorized                                                                    
     delegates include  on a  receipt or  through disclosure                                                                    
     on the  licensee's website  or mobile  application, the                                                                    
     name  and   phone  number  of  the   department  and  a                                                                    
     statement  that customers  may  contact the  department                                                                    
     with  questions or  complaints  about  the licensee  or                                                                    
     authorized delegate's services.                                                                                            
                                                                                                                                
2:38:26 PM                                                                                                                    
     Section   47  repeals   and   reenacts  AS   06.55.830,                                                                  
     concerning  receipts, for  consistency  with the  model                                                                    
     law. Subsections  (a) - (c) contain  content and format                                                                    
     requirements  for   transaction  receipts   and  define                                                                    
     "receipt"  for purposes  of the  section. Receipts  are                                                                    
     required  to  be  in English  and  any  other  language                                                                    
     principally   used  by   the  licensee   or  authorized                                                                    
     delegate  to   negotiate  the   transaction  conducted.                                                                    
     Subsection  (d)  contains  exceptions  to  the  receipt                                                                    
     requirement.                                                                                                               
                                                                                                                                
     Section 48  amends AS  06.55 to add  a new  section, AS                                                                  
     06.55.835,   concerning   timely   transmission.   This                                                                    
     section is new to the  model law and requires licensees                                                                    
     to   forward  money   received   for  transmission   in                                                                    
     accordance with the agreement  between the licensee and                                                                    
     sender unless  the licensee has  a reasonable  basis to                                                                    
     believe the  sender may be  a victim of fraud  or other                                                                    
     crime.  The licensee  is also  required  to respond  to                                                                    
     inquiries  from  the sender  with  the  reason for  the                                                                    
     failure to forward money unless  doing so would violate                                                                    
     a state or federal law.                                                                                                    
                                                                                                                                
     Section   49   repeals   and  reenacts   AS   06.55.840                                                                  
     concerning  refunds  to  contain the  language  of  the                                                                    
     model law.                                                                                                                 
                                                                                                                                
2:39:27 PM                                                                                                                    
     Section  50 amends  AS 06.55  to add  a new  section AS                                                                  
     06.55.845 concerning  required disclosures  for payroll                                                                    
     processing    services.    Subsection   (a)    contains                                                                    
     disclosure  requirements  and subsection  (b)  provides                                                                    
     that  the  disclosure  requirements  do  not  apply  in                                                                    
     certain circumstances.                                                                                                     
                                                                                                                                
     Sections  53  -  60  amend   definitions  found  in  AS                                                                  
     06.55.990  for consistency  with the  model law.  These                                                                    
     changes  include incorporation  of the  words "in  this                                                                    
     state" to  ensure AS 06.55 protects  Alaskan consumers.                                                                    
     Revisions are  made to align  the language of  AS 06.55                                                                    
     with the model law,  including an exception for loyalty                                                                    
     reward cards,  amends the definition  of control  to at                                                                    
     least 10%  of ownership, and the  amended definition of                                                                    
     "stored value."                                                                                                            
                                                                                                                                
2:40:32 PM                                                                                                                    
     Section 61  amends AS 06.55.990 to  add definitions for                                                                  
     terms introduced by the model  law. These terms include                                                                    
     "acting in concert,"  "average daily money transmission                                                                    
     liability,"  "Bank Secrecy  Act,"  "closed loop  stored                                                                    
     value," "control," "eligible  rating," "eligible rating                                                                    
     service," "in  this state," "key  individual," "passive                                                                    
     investor,"    "payroll   processing    services,"   and                                                                    
     "tangible net worth."                                                                                                      
                                                                                                                                
     Section 62  amends AS 06.55.995  to refer to  the model                                                                  
     law   as   the   Alaska  Uniform   Money   Transmission                                                                    
     Modernization Act  instead of the Alaska  Uniform Money                                                                    
     Services Act.                                                                                                              
                                                                                                                              
     Section 63  repeals a number  of sections of  AS 06.55.                                                                  
     As described  above, AS 06.55.104 and  AS 06.55.107 are                                                                    
     repealed   and  reenacted   in  Article   5  concerning                                                                    
     prudential standards.  All of the statutes  in existing                                                                    
     Article  2 concerning  currency  exchange licenses  are                                                                    
     repealed,  and  currency  exchange  was  added  to  the                                                                    
     definition  of "money  transmission."  Section 64  also                                                                    
     repeals  AS   06.55.890,  which   contains  definitions                                                                    
     applicable   to  AS   06.55.820   -  06.55.840;   these                                                                    
     definitions   are   no   longer   necessary   following                                                                    
     amendment  to   these  sections.  Section   64  repeals                                                                    
     definitions  for  "currency   exchange"  and  "currency                                                                    
     exchange  licensee" as  no  longer  necessary. It  also                                                                    
     repeals  the   definitions  for   "executive  officer,"                                                                    
     "mobile  location," "money  services," "money  services                                                                    
     license,"     "money     services    licensee,"     and                                                                    
     "outstanding."                                                                                                             
                                                                                                                                
2:41:15 PM                                                                                                                    
     Sections 64  - 68 are transitional  provisions amending                                                                  
     uncodified  law  to  avoid interference  with  existing                                                                    
     contracts, to allow a transition  period for holders of                                                                    
     current money  services licenses,  to add  a transition                                                                    
     period  for payroll  processors, to  allow adoption  of                                                                    
     transitional  regulations  by  the department,  and  to                                                                    
       instruct the revisor of statutes to amend certain                                                                        
     headings.                                                                                                                  
                                                                                                                              
      Section 69 provides for an immediate effective date                                                                     
      for Section 67, which would allow the department to                                                                       
     begin the regulation promulgation process.                                                                                 
                                                                                                                                
2:41:52 PM                                                                                                                    
      Section 70 provides for an effective date of January                                                                    
     1, 2023.                                                                                                                   
                                                                                                                                
2:42:27 PM                                                                                                                    
CHAIR COSTELLO opened public testimony  on SB 238; she found none                                                               
and closed public testimony.                                                                                                    
                                                                                                                                
2:42:42 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:43:20 PM                                                                                                                    
CHAIR COSTELLO reconvened the meeting.                                                                                          
                                                                                                                                
2:43:33 PM                                                                                                                    
THOR  STACEY,  Alaska  State  Director,  National  Federation  of                                                               
Independent  Business (NFIB),  Juneau, Alaska,  stated that  NFIB                                                               
does not  have a vetted position  on SB 238. He  highlighted that                                                               
his counterparts at  NFIB indicated that the  efforts to regulate                                                               
cryptocurrency were gaining traction  across the country for many                                                               
of the reasons  raised today. He stated that  the biggest problem                                                               
was  to   understand  where  cryptocurrency  was   going  or  the                                                               
potential   to  use   it  counter   to  national   interests.  He                                                               
highlighted  that the  secondary problem  is related  to consumer                                                               
protection.  For  instance,  if   a  money  transmitter  loses  a                                                               
person's cryptocurrency,  the person  would have no  recourse. He                                                               
noted  that   NFIB  considers  matters  from   a  small  business                                                               
perspective. He  indicated that some small  businesses were money                                                               
transmitters  or consumers,  so  they can  be  defrauded by  lost                                                               
cryptocurrency  by  a  money   transmitter  service.  Thus,  NFIB                                                               
believes  the  bill  was requested  by  large  money-transmitting                                                               
interests,  so it  raises a  cautionary  flag. Thus  far, he  was                                                               
unaware that  anyone from the  small business community  had come                                                               
forward   to   NFIB  or   any   regulatory   agency  asking   for                                                               
cryptocurrency regulation.                                                                                                      
                                                                                                                                
2:45:35 PM                                                                                                                    
MR.  STACEY  reported  that  the state  figures  show  a  rapidly                                                               
expanding sector from  2019 to 2021 had gone from  $31 million to                                                               
$2.3   billion  of   declared  cryptocurrency   transactions.  He                                                               
recalled testimony  from the state  regulator identified it  as a                                                               
caution, but  it is a growing  sector of the economy  that brings                                                               
potential opportunities.  NFIB does not want  small businesses to                                                               
be left out.                                                                                                                    
                                                                                                                                
2:46:25 PM                                                                                                                    
MR. STACEY expressed concern that  the bill has other reforms for                                                               
all currencies,  including fiat currency,  so it was  not limited                                                               
to cryptocurrency.                                                                                                              
                                                                                                                                
MR.  STACY  referred  to  Section   7,  proposed  changes  to  AS                                                               
06.55.205, which  provides an exemption  for a  $5,000 threshold.                                                               
He asked for the rationale  for the $5,000 threshold. He wondered                                                               
what would  happen to  a smaller business  if that  threshold was                                                               
exceeded.  He  stated that  AS  06.55.208  would require  virtual                                                               
currency  businesses  with  control   over  virtual  currency  to                                                               
maintain an  amount of each  type of virtual  currency sufficient                                                               
to satisfy aggregate entitlements. He  offered his view that this                                                               
meant that  if a business  was transmitting one bitcoin,  it must                                                               
have one bitcoin  in reserve. He wondered if there  might be some                                                               
rolling average  or another approach to  take, especially because                                                               
many  types of  cryptocurrency exist  so it  might be  an onerous                                                               
barrier for a smaller business.                                                                                                 
                                                                                                                                
2:48:16 PM                                                                                                                    
MR. STACEY  noted that  NFIB had  concerns about  other sections,                                                               
but Section 30 captured some  of NFIB's concerns about regulatory                                                               
barriers.  He highlighted  concern about  increasing the  $25,000                                                               
net worth to a tiered  structure based on transactions because it                                                               
could be hard on small  businesses. He noted that some family-run                                                               
businesses,   especially  immigrant   families  or   cruise  ship                                                               
crewmembers, send money to their  families in other countries. He                                                               
commented  that  those communities  were  typically  served by  a                                                               
small-money  transmitter  business  they trust.  He  wondered  if                                                               
consumer protection  and transparency  were the goals,  why would                                                               
the  net worth  be raised  if a  lower net-worth  segment in  the                                                               
money  transmitter industry  was not  identified as  problematic.                                                               
Some  provisions appear  to raise  barriers  and potentially  cut                                                               
smaller businesses out of the rapidly-growing sector.                                                                           
                                                                                                                                
MR.  STACEY indicated  that NFIB  does not  oppose licensure  but                                                               
does  not   want  fiat   or  cryptocurrency   money  transmitters                                                               
supporting interests  counter to national security  interests. He                                                               
commented that the bill was lengthy  and that bill does more than                                                               
add cryptocurrency to the money transmitter license.                                                                            
                                                                                                                                
2:50:41 PM                                                                                                                    
CHAIR COSTELLO offered  her view that Section 30  would allow the                                                               
department to exempt applicants from those requirements.                                                                        
                                                                                                                                
MR.  STACEY   responded  that  the  testimony   provided  by  the                                                               
department gave  specific instances for the  exemption, including                                                               
title agencies  and certain kinds  of professional  services that                                                               
may hold  funds in escrow for  a short time. He  offered his view                                                               
that the exemptions  in Section 30 relate to  small businesses as                                                               
money-transfer  transmitters  but  would  apply  to  professional                                                               
service providers that hold money in escrow.                                                                                    
                                                                                                                                
2:51:35 PM                                                                                                                    
companies brought this forward. He  pointed out that the Division                                                               
of Banking and Securities brought  this bill forward. He wondered                                                               
what he based his concern on.                                                                                                   
                                                                                                                                
MR. STACEY,  based on his  conversations with the state,  said he                                                               
understands  that   a  national  trade  association,   the  Money                                                               
Transmitter  Regulators  Association (MTRA),  approached  various                                                               
states to introduce  regulatory bills such as SB  238. Still, the                                                               
key  proponents   behind  this  effort  were   the  larger  money                                                               
transmitter companies, including Pay Pal, Zelle, and Venmo.                                                                     
                                                                                                                                
2:53:00 PM                                                                                                                    
CHAIR  COSTELLO asked  Mr.  Schmidt to  respond  to the  question                                                               
regarding the exemptions in Section 30.                                                                                         
                                                                                                                                
2:53:27 PM                                                                                                                    
MR.  SCHMIDT responded  that nothing  that  Mr. Stacey  mentioned                                                               
raised a  red flag,  and the division  certainly wants  to assist                                                               
small  businesses.  He  acknowledged   that  he  might  view  the                                                               
increased  transmission of  cryptocurrency  as  alarming, but  he                                                               
could see  businesses viewing that  growth as an  opportunity. He                                                               
said  he  was  open  to  a  conversation  about  the  appropriate                                                               
threshold  in Alaska.  The Conference  of State  Bank Supervisors                                                               
(CSBS)  promulgated  the model  bill,  while  working with  money                                                               
transmitters. He acknowledged that it  was accurate to say it was                                                               
the larger  money transmitters who were  at the table or  part of                                                               
the discussion between the CSBS  and the industry. He also agreed                                                               
with  Mr. Stacey's  comment that  the smaller  money transmitters                                                               
were  specializing in  specific communities  within Alaska  where                                                               
English was not their first language.                                                                                           
                                                                                                                                
2:55:14 PM                                                                                                                    
CHAIR COSTELLO asked whether the  department could exempt certain                                                               
applicants from the net worth requirements.                                                                                     
                                                                                                                                
MR. SCHMIDT deferred to Ms. Reno.                                                                                               
                                                                                                                                
2:55:33 PM                                                                                                                    
MS. RENO referred  to page 36, lines 7-8, to  Sec. 06.55.506 (c),                                                               
"The department may exempt any  applicant or licensee, in part or                                                               
in whole, from the requirements of this section."                                                                               
                                                                                                                                
CHAIR COSTELLO noted  that Mr. Schmidt gave  specific examples of                                                               
who  might  be exempted,  and  Mr.  Stacey mentioned  that  small                                                               
businesses might  not meet the  threshold. She asked  whether the                                                               
bill was  drafted to allow  the division to exempt  certain small                                                               
businesses.                                                                                                                     
                                                                                                                                
MR. SCHMIDT answered yes.                                                                                                       
                                                                                                                                
MS. RENO agreed.                                                                                                                
                                                                                                                                
2:56:26 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:56:43 PM                                                                                                                    
CHAIR COSTELLO reconvened the meeting.                                                                                          
                                                                                                                                
2:56:48 PM                                                                                                                    
SENATOR MICCICHE moved  to report SB 238,  work order 32-GS2312\A                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
CHAIR COSTELLO found  no objection, and SB 238  was reported from                                                               
the Senate Labor and Commerce Standing Committee.                                                                               
                                                                                                                                
SENATOR  MICCICHE  noted that  the  committee  had reviewed  what                                                               
would typically  be under the  purview of the  finance committee,                                                               
so he  was comfortable to  have it  further reviewed by  the next                                                               
committee of referral, the Senate Finance Committee.                                                                            
                                                                                                                                
SENATOR STEVENS  agreed with  Senator Micciche  that most  of the                                                               
issues that needed  to be addressed were ones  the Senate Finance                                                               
Committee was better equipped to handle.                                                                                        

Document Name Date/Time Subjects
SB 175 v. G.PDF SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Sponsor Statement v. I 3.1.2022.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Sectional Analysis V. G.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Explanation of Changes v. I -G.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Supporting Doc Pay Parity 4.4.22.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Fiscal Note 242 - Dept. of Health.PDF SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Fiscal Note 2360 - DCCED.PDF SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Fiscal Note 2665 - Dept. of Health.PDF SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Fiscal Note 3234 - Dept. of Health.PDF SL&C 4/20/2022 1:30:00 PM
SB 175
SB 238 v. A.PDF SL&C 4/20/2022 1:30:00 PM
SB 238
SB 238 Transmittal Letter 3.23.22.pdf SL&C 4/20/2022 1:30:00 PM
SB 238
SB 238 Sectional Analysis v. A.pdf SL&C 4/20/2022 1:30:00 PM
SB 238
SB 238 Fiscal Note 2808 - DCCED.PDF SL&C 4/20/2022 1:30:00 PM
SB 238
SB 238 Supporting - White Paper.pdf SL&C 4/20/2022 1:30:00 PM
SB 238
SB 238 Presentation 4.11.2022.pdf SL&C 4/20/2022 1:30:00 PM
SB 238
Matthew Barth Application_Redacted.pdf SL&C 4/20/2022 1:30:00 PM
GOVERNOR'S APPOINTEES
Matthew Barth Resume_Redacted.pdf SL&C 4/20/2022 1:30:00 PM
GOVERNOR'S APPOINTEES
SB 175 Written Testimony - APF.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB175 Written Testimony - Allergy, Asthma and Immunology Center.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Written Testimony 4.19.22.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Written Testimony - NAMI.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Written Testimony - Health TIE.pdf SL&C 4/20/2022 1:30:00 PM
SB 175
SB 175 Written Testimony - APRN Alliance.pdf SL&C 4/20/2022 1:30:00 PM
SB 175