04/21/1995 09:35 AM Senate FIN

                                                                               
       SENATE BILL NO. 131                                                     
       "An Act relating to investments by fiduciaries."                        
                                                                               
  Vernon Sales,  Executive Vice  President, Key  Trust Co  for                 
  Alaska, representing  Alaska Bankers  Association, spoke  by                 
  teleconference to the committee.  He stated that the purpose                 
  of SB  131 is to  provide more investment  opportunities for                 
  the  Alaskan consumer.    The investment  opportunities  are                 
  defined  by:  1)  expanding  on  current state  statutes  in                 
  reference   to   common  funds   by   including  the   term,                 
  "affiliate", and 2)  using new language to the state statute                 
  to specifically allow for  the use of mutual funds.   Mutual                 
  funds are investment pools that  are created to accept  sums                 
  of  money  in   various  amounts,     from  individuals   in                 
  institutions.  These  funds are  then made available  across                 
  state  lines  throughout  the   country.  Common  funds  are                 
  conceptually the same, they  accept large sums of  money but                 
  they are normally not made available across state  lines. By                 
  adding the word  affiliate into the common trust  fund code,                 
  the banks could  offer to Alaskans  the same funds that  are                 
  currently available  to customers in Washington,  Oregon and                 
  Utah.    The  proposed changes  expand  the  opportunity for                 
  investments for consumers in Alaska.                                         
                                                                               
  Senator  Sharp  asked  if  the  bank trust  fiduciaries  are                 
  allowed  to  invest trust  funds into  equity stock  at this                 
  time?   Mr. Sales responded that  State statutes would allow                 
  specifically  for common  stocks, it  does not  specifically                 
  name mutual funds.   He stated that mutual funds  spread the                 
  risks, and provide for diversification.                                      
                                                                               
  Senator Rieger  stated that his concern related  to the bill                 
  restricting other  entities being fiduciaries  and trustees.                 
  In studying the bill, it  turns out that it is nothing  more                 
  than a clean up  of financial institution trusts.   He feels                 
  it is worth passing.                                                         
                                                                               
                                                                               
  Senator  Phillips  MOVED  to adopt  SB  131  with individual                 
  recommendations.    No objections  being  heard, SB  131 was                 
  REPORTED OUT of  committee with  "no recommendations" and  a                 
  zero  fiscal  note   from  the  Dept  Commerce   &  Economic                 
  Development.