Prepared by: Representative Norman Rokeberg
Updated: March 12, 1999

Section 1: Purpose of the Act is to assure the public that their money will be safe when delivered to a settlement agent for a residential real property transaction. "Residential real property" is defined to mean real property on which is located a building containing one to four dwelling units in Section 3.

Section 2. Amends AS 21.66.250 (in the chapter on title insurance companies) to make its trust fund provisions subject to the proposed new chapter on escrow transactions.

Section 3. Establishes a new chapter on escrow transactions.

• Sec. 34.80.010. States that the money in an escrow transaction does not belong to the settlement agent and cannot be used to satisfy a claim against the agent. Prohibits using escrow money for anything other than what the escrow transaction agreement calls for.
• Sec. 34.80.020. Directs a settlement agent to segregate on the records of the settlement agent the money of one escrow transaction from all other. Requires the settlement agent to deposit escrow money in a bank or other financial institution in this state.
• Sec. 34.80.030. Prohibits collecting or paying interest on escrow money unless the parties agree to do so.
• Sec. 34.80.040.
1. Establishes the circumstances when a settlement agent may pay out escrow money.
3. Prohibits paying out escrow money on the same business day as when the checks, drafts, money orders, and transfers are deposited, unless the money is received for deposit in certain forms, e.g. cash, or interbank electronic transfer.