Bill Summary – FastDemocracy

State of Alaska
                                                        Fiscal Note
                                                                                         Bill Version:                    HB 408
 2022 Legislative Session
                                                                                         Fiscal Note Number:              1
                                                                                         (H) Publish Date:                4/4/2022
 Identifier:       LL0312-3-DCCED-DBS-03-18-22                            Department:        Department of Commerce, Community and
 Title:            MONEY TRANSMISSION; VIRTUAL CURRENCY                                      Economic Development
 Sponsor:          RLS BY REQUEST OF THE GOVERNOR                         Appropriation: Banking and Securities
 Requester: Rules by Request of the Governor                              Allocation:        Banking and Securities
                                                                          OMB Component Number:               2808
 Expenditures/Revenues
 Note: Amounts do not include inflation unless otherwise noted below.                                                           (Thousands of Dollars)
                                                 Included in
                                    FY2023       Governor's
                                Appropriation      FY2023                                       Out-Year Cost Estimates
                                  Requested       Request
 OPERATING EXPENDITURES               FY 2023        FY 2023       FY 2024                 FY 2025           FY 2026            FY 2027         FY 2028
 Personal Services                       309.0                        432.8                  519.6             519.6              519.6           519.6
 Travel                                     7.5                        10.0                    12.5              12.5               12.5           12.5
 Services                                 55.0                         60.0                    75.0              75.0               75.0           75.0
 Commodities                              30.0                         10.0                    10.0
 Capital Outlay
 Grants & Benefits
 Miscellaneous
 Total Operating                         401.5            0.0         512.8                   617.1             607.1             607.1             607.1
 Fund Source (Operating Only)
 1005 GF/Prgm (DGF)                        401.5                           512.8              617.1             607.1             607.1             607.1
 Total                                     401.5             0.0           512.8              617.1             607.1             607.1             607.1
 Positions
 Full-time                                    3.0                                4.0             5.0                5.0              5.0              5.0
 Part-time
 Temporary
 Change in Revenues
 1005 GF/Prgm (DGF)                        110.0                           512.8              617.1             607.1             607.1             607.1
 Total                                     110.0             0.0           512.8              617.1             607.1             607.1             607.1
 Estimated SUPPLEMENTAL (FY2022) cost:                              0.0                (separate supplemental appropriation required)
 Estimated CAPITAL (FY2023) cost:                                   0.0                (separate capital appropriation required)
 Does the bill create or modify a new fund or account?       No
 (Supplemental/Capital/New Fund - discuss reasons and fund source(s) in analysis section)
 ASSOCIATED REGULATIONS
 Does the bill direct, or will the bill result in, regulation changes adopted by your agency?            Yes
 If yes, by what date are the regulations to be adopted, amended or repealed?                            01/02/23
 Why this fiscal note differs from previous version/comments:
 Not applicable, initial version.
 Prepared By:            Robert H. Schmidt, Director                                                           Phone:         (907)269-5469
 Division:               Banking and Securities                                                                Date:          03/16/2022 01:00 PM
 Approved By:            Micaela Fowler, Administrative Services Director                                      Date:          03/18/22
 Agency:                 Department of Commerce, Community, and Economic Development
Printed 4/4/2022                                                   Page 1 of 2                                                         Control Code: ldRRp
                                                                                                                       HB 408 - Fiscal Note 1
                                                   FISCAL NOTE ANALYSIS
STATE OF ALASKA                                                                      BILL NO. LL0312-3
2022 LEGISLATIVE SESSION
Analysis
   This legislation allows the Division of Banking and Securities to become current with the rapidly changing money services
   industry, including virtual currency/cryptocurrency. It modernizes AS 06.55, Alaska Uniform Money Services Act, by
   adopting pertinent sections of a Uniform Money Transmission Modernization Act, a model law drafted and developed by
   the Conference of State Bank Supervisors (CSBS) and industry representatives. The bill will reduce regulatory burden and
   bring uniformity across states for core licensing and examination processes. Further, it will clarify the division's authority
   to regulate virtual currencies. The total volume of virtual currency transmissions exceeded $2.3 billion for calendar year
   2021 as reported by current licensees. Virtual currency transmission in Alaska has grown 6,782% since 2019.
   This bill clarifies licensure requirements for companies conducting financial services activities in Alaska, particularly in the
   financial technology space such as online transmission of virtual currencies and payroll processing via stored value cards.
   The bill expands and clarifies business activities exempt from licensure and supervision by the division. The bill
   incorporates language that allows the division to fully utilize the Nationwide Multistate Licensing System (NMLS) online
   registry including the system's criminal background checks. The changes allow the division to coordinate more effectively
   with other states and leverage resources to reduce regulatory burden on licensees.
   New program receipt revenue is estimated to be a minimum of $110.0 for 35 new license applications. It is difficult to
   anticipate the number of new applications and annual renewal fees, and resulting revenue, for future years. However, the
   division expects to adopt an assessment fee model through new regulations that would ensure actual costs of regulation
   would be covered through annual program receipts. Costs in excess of revenue in FY2024 will be supported from existing
   program receipt collections.
   The division will require additional staff and support costs to respond to the growth in money services activities, the
   complexity of new business models, and use of thirdparty partnerships. The positions will allow the division to implement
   the new law, incorporate changes in the operation of the NMLS, develop proficiency in the examination of electronic
   systems, and assessment of cybersecurity measures in a highrisk environment.
   Personal Services:                $309.0 in FY2023 for three positions: Financial Registration Examiner (range 14),
                                     Financial Examiner 1/2 flex (range 17/19), Financial Examiner 3 (range 21)
                                     $432.8 in FY2024 for four positions total: those added in FY2023, as well as
                                     Financial Examiner 3 (range 21)
                                     $519.6 in FY2024FY2028 for five positions total: those added in FY2023 and
                                     FY2024, as well as Financial Registration Examiner (range 14)
   Travel:                           $2.5 in travel costs per position in each fiscal year to travel to outofstate
                                     trainings necessary to implement and comply with this Act
   Services:                         $10.0 in FY2023 for Department of Law regulations review
                                     $45.0 in FY2023 for core services and allocated costs ($15.0/position/year)
                                     $60.0 in FY2024 for core services and allocated costs ($15.0/position/year)
                                     $75.0 in FY2025FY2028 for core services and allocated costs ($15.0/position/year)
   Commodities:                      $30.0 in FY2024 for initial setup costs ($10.0/position)
                                     $10.0 in FY2025 for initial setup costs ($10.0/position)
                                     $10.0 in FY2025 for initial setup costs ($10.0/position)
(Revised 11/23/2021 OMB/LFD)                                                                                             Page 2 of 2
LL0312-3-DCCED-DBS-03-18-22                                       Page 2 of 2                                                Control Code: ldRRp
Statutes affected: 
HB0408A, AM HB 408, introduced 04/04/2022: 06.55.101, 06.55.802, 06.55.102, 06.55.505, 05.55.105, 06.55.105, 06.55.109, 06.55.106, 06.55.205, 06.55.290, U.S.C, 45.56.100, 45.56.995, 45.08.102, 45.29.102, 06.55.110, 06.55.206, 06.55.207, 06.55.208, 06.55.209, 06.55.301, 06.55.302, 06.55.401, 06.55.407, 06.55.403, 06.55.404, 06.55.412, 06.55.501, 06.55.506, 06.55.405, 06.55.406, 40.25.100, 40.25.295, 06.55.410, 06.55.411, 06.55.502, 06.55.601, 06.55.602, 06.55.603, 06.55.605, 06.55.606, 06.55.607, 06.55.201, 06.55.701, 06.55.702, 06.55.810, 06.55.830, C.F.R, 06.55.840, 06.55.850, 06.55.990, 06.55.107, 06.55.103, 06.55.995, 06.55.104, 06.55.202, 06.55.203, 06.55.204, 06.55.402, 06.55.820, 06.55.890