SENATE BILL NO. 86 "An Act relating to the business of money transmission; relating to licenses for money transmission, licensure requirements, and registration through a 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 exemptions to money transmission licensure requirements; relating to payroll processing services; relating to currency exchange licenses; amending Rules 79 and 82, Alaska Rules of Civil Procedure; and providing for an effective date." 9:02:22 AM Senator Jesse Kiehl, Sponsor, explained that SB 86 was a modernization of laws related to cryptocurrency. He mentioned other customer protections in the bill. He discussed a tiered fee structure that would be based on volume. He thought the bill was well crafted to avoid double-regulation. He clarified that nothing in the bill stifled innovation. There were no rules and no limits on risk Alaskans could take on Bitcoin. He mentioned that DCCED Director of Banking and Securities was present. 9:10:43 AM Senator Kaufman asked if there was any situation in which the transfer of money was not included in the bill. Senator Kiehl used the example of a payroll processor, which was not included in the bill. 9:13:20 AM ROBERT SCHMIDT, DIRECTOR, DIVISION OF BANKING AND SECURITIES, DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT, explained that his division was responsible for regulating the issues outlined in the bill. He stated that the first mobile payment application was when PayPal released its beta version in 2008 for the Blackberry, and stated that most of what was money transmission currently was not present when the law was written. He expressed that the current statutory framework in the state, and affirmed that the bill would protect consumers as the sponsor suggested. He used the example of selling artwork. 9:19:32 AM Mr. Schmidt addressed a fiscal note from DCCED Division of Banking and Securities, OMB Component 2808. He was pleased to report that the program that regulated money transmission did not pay for itself. He described the industry as one of "minnows and whales", and emphasized that the net effect of the bill would be positive for the state. 9:27:04 AM Mr. Schmidt summarized that the committee would hear from industry representatives. Co-Chair Hoffman OPENED public testimony. 9:28:49 AM ADAM ATLAS, ADVISOR, MONEY SERVICES BUSINESS ASSOCIATION, MARYLAND (via teleconference), testified in support of the bill. 9:32:55 AM ADAM FLEISCHER, COUNSEL, MONEY SERVICES ROUNDTABLE, WASHINGTON DC (via teleconference), spoke in support of the legislation. Co-Chair Hoffman CLOSED public testimony. Senator Kiehl addressed the fiscal note. SB 86 was HEARD and HELD in committee for further consideration.