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." 9:23:25 AM Co-Chair Hoffman relayed that the committee had heard the bill on April 1, 2025, and had taken public testimony. 9:23:55 AM Senator Jesse Kiehl, Sponsor, offered a sponsor statement: Cryptocurrency transactions have exploded in number and value in recent years. While many Alaskans are doing well, others have lost tens of millions of dollars' worth of value in recent cryptocurrency exchange collapses. Alaska has basic safety and soundness laws for businesses that transmit money electronically, but they were written in 2007, before cryptocurrency existed. So Alaskans today don't often know if a business holding and moving their assets is one that gets a basic check-up by the state, or one that can operate with no rules. SB 86 modernizes our laws to protect Alaskans, keep a lid on red tape, and let our state cooperate with others for maximum efficiency. The bill transitions Alaska to a new model law developed jointly by the Conference of State Bank Supervisors and industry groups. Already adopted by 26 states, it will apply to both cash and crypto and will 1) license money services businesses to keep fraudsters out of the corporate office, 2) examine the books to make sure they have enough money or crypto to cover what customers entrust to them, and 3) prevent diversion of customers' assets. The federal government leaves this job to the states, so SB 86 lets Alaska regulators collaborate with colleagues from other states and use modern tools like the Nationwide Multistate Licensing System and Registry to increase efficiency and reduce costs. But it does not doubleregulate businesses like banks or brokerages that already have safety rules to follow. The bill also updates fees for money service businesses. Today, multinational money transmitters and Alaska mom-and-pop establishments pay the same 'one-size-fits all' license fees. SB 86 will ramp the charge up or down based on volume so it's not a barrier to new businesses. Importantly, SB 86 protects Alaskans' assets without regard to technology, so the next innovation in value can flourish just as safely as the ones we have today. Co-Chair Stedman MOVED to ADOPT proposed committee substitute for SB 86, Work Draft 34-LS0305\T (Gunther, 3/28/25). Co-Chair Hoffman OBJECTED for discussion. 9:25:54 AM COLE OSOWSKI, INTERN, SENATOR JESSE KIEHL, discussed an Explanation of Changes document (copy on file): The following changes were made from Version I to Version T of Senate Bill 86: ? Page 9, line 21: Deleted redundant language "that virtual currency is not money." ? Page 16, line 6: Replaced "all records the department reasonably requires" with "records necessary for the department" to clarify the scope of the records subject to departmental examination. ? Page 23, line 13: Replaced "All records" with "Records" for conciseness. ? Page 23, line 15; Inserted "only as permitted" for consistency and to restrict the scope of record inspections to those specified in statute. ? Page 38, line 22: Increased daily maximum civil penalty from $1,000 to $10,000, to conform with other existing civil penalties like mortgage licensees. ? Page 55, lines 6-11: Added transitional regulatory authority. ? Page 55, lines 17-18: Updated the effective date to July 1, 2026 to allow enough time to adopt regulations. 9:26:35 AM Co-Chair Stedman clarified that the CS was Version T. Co-Chair Hoffman WITHDREW his OJBECTION. There being NO OBJECTION, it was so ordered. Co-Chair Stedman MOVED to report CSSB 86(FIN) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSSB 86(FIN) was REPORTED out of committee with four "do pass" recommendations and two "no recommendation" recommendations, and with one previously published fiscal impact note: FN 1(CED). 9:27:34 AM AT EASE 9:29:11 AM RECONVENED