03/07/2003 08:10 AM House JUD
| Audio | Topic |
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 7, 2003
8:10 a.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Tom Anderson, Vice Chair
Representative John Coghill
Representative Jim Holm
Representative Ralph Samuels
Representative Les Gara
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CONFIRMATION HEARING
Violent Crimes Compensation Board
Leroy J. Barker - Anchorage
- CONFIRMATION ADVANCED
HOUSE BILL NO. 64
"An Act relating to court approval of the purchase of structured
settlements."
- MOVED CSHB 64(JUD) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 64
SHORT TITLE:PURCHASE OF STRUCTURED SETTLEMENTS
SPONSOR(S): REPRESENTATIVE(S)FOSTER
Jrn-Date Jrn-Page Action
01/27/03 0075 (H) READ THE FIRST TIME -
REFERRALS
01/27/03 0075 (H) STA, JUD
02/11/03 (H) STA AT 8:00 AM CAPITOL 102
02/11/03 (H) Heard & Held
MINUTE(STA)
02/20/03 (H) STA AT 8:00 AM CAPITOL 102
02/20/03 (H) Moved CSHB 64(STA) Out of
Committee
MINUTE(STA)
02/24/03 0283 (H) STA RPT CS(STA) 5DP 1NR 1AM
02/24/03 0283 (H) DP: GRUENBERG, HOLM, LYNN,
DAHLSTROM,
02/24/03 0283 (H) WEYHRAUCH; NR: BERKOWITZ; AM:
SEATON
02/24/03 0283 (H) FN1: ZERO(CED)
02/24/03 0283 (H) REFERRED TO JUDICIARY
03/03/03 (H) JUD AT 1:00 PM CAPITOL 120
03/03/03 (H) -- Meeting Canceled --
03/05/03 (H) JUD AT 1:00 PM CAPITOL 120
03/05/03 (H) Heard & Held -- Recessed to
03/07/03 8:00 am --
MINUTE(JUD)
03/07/03 (H) JUD AT 8:00 AM CAPITOL 120
WITNESS REGISTER
LEROY J. BARKER, Appointee
to the Violent Crimes Compensation Board (VCCB)
Anchorage, Alaska
POSITION STATEMENT: Testified as appointee to the Violent
Crimes Compensation Board.
PAUL LaBOLLE, Staff
to Representative Richard Foster
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 64 on behalf of the sponsor,
Representative Foster.
AL TAMAGNI, SR., Member
National Structured Settlements Trade Association (NSSTA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 64 and responded
to questions.
RANDY DYER, Executive Vice President
National Structured Settlements Trade Association (NSSTA)
Washington, D.C.
POSITION STATEMENT: Assisted with the presentation of HB 64.
JOHN L. GEORGE, Lobbyist
for American Council of Life Insurers (ACLI)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 64.
PAUL GROSSI, Director
Central Office
Division of Workers' Compensation
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Responded to questions during discussion of
HB 64.
ACTION NARRATIVE
TAPE 03-17, SIDE A
Number 0001
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting, which had been recessed on 3/5/03, back to
order at 8:10 a.m. Representatives McGuire, Anderson, Holm,
Coghill, Samuels, and Gruenberg were present at the call to
order. Representative Gara arrived as the meeting was in
progress.
CONFIRMATION HEARING
Violent Crimes Compensation Board
Number 0054
CHAIR McGUIRE announced that the committee would first consider
the appointment of Leroy J. Barker to the Violent Crimes
Compensation Board.
Number 0082
LEROY J. BARKER, Appointee, Violent Crimes Compensation Board
(VCCB), relayed that he'd agreed to serve on the VCCB after
being asked by staff to James Clark, Chief of Staff for Governor
Murkowski. Referring to his resume, he noted that he has had
criminal law experience, which he feels to be an important part
of the criminal justice system. He said that he is looking
forward to working on the VCCB.
REPRESENTATIVE GRUENBERG said he is glad that a person of Mr.
Barker's caliber has been nominated and is willing to volunteer.
Number 0179
REPRESENTATIVE GRUENBERG made a motion to advance from committee
the nomination of Leroy J. Barker as appointee to the Violent
Crimes Compensation Board. There being no objection, the
confirmation was advanced from the House Judiciary Standing
Committee.
HB 64 - PURCHASE OF STRUCTURED SETTLEMENTS
Number 0203
CHAIR McGUIRE announced that the final order of business would
be HOUSE BILL NO. 64, "An Act relating to court approval of the
purchase of structured settlements." [Before the committee was
CSHB 64(STA).]
Number 0227
PAUL LaBOLLE, Staff to Representative Richard Foster, Alaska
State Legislature, said on behalf of the sponsor, Representative
Foster, that HB 64 was introduced for two reasons. The first
being that it had been brought to the sponsor's attention by
some of the state's trial lawyers that recipients of structured
settlements, out in Savoonga and Gamble, for example, have had
their structured settlements purchased by less than well-meaning
factoring companies for a fraction of their value - deeply
discounted, for example, at 20 cents on the dollar. Noting that
the purpose of a structured settlement is to provide a recipient
with a continuous flow of cash so that he/she does not become a
burden on the state, he relayed that the recipients who sold
their structured settlements got their small lump sum of cash,
spent it all up, and are now back on welfare.
MR. LaBOLLE said that the second reason for introducing HB 64
relates to "the federal law pertaining to it," and noted that a
copy of that law is included in members' packets. He offered
that that federal law simply says that a tax of 40 percent of
the factoring discount is imposed on anyone who acquires
structured settlement payment rights in a structured settlement
factoring transaction. He explained that the only way that this
tax can be waived is if the transaction is approved in an
applicable state court in a qualified order, and noted that HB
64 would act as that qualified order.
CHAIR McGUIRE mentioned that members' packets include a handout
listing the structured settlement protection statutes of other
states. She asked whether HB 64 is patterned after any
particular state's statute.
MR. LaBOLLE said, "In a way, yes, but not particularly; the
National Structured [Settlements] Trade Association (NSSTA) has
a model, ... which many of the other states have used - ... each
going with it to a certain degree and others ... differing from
it in other places." In response to the question of how CSHB
64(STA) differs from the original bill, he referred to page 3,
line 20, of CSHB 64(STA), and indicated that the language, "or
where the payee is domiciled" has been added after the word
"maintained". He explained that this change was requested by
the "state courts," and confirmed that this language now
conforms to language found on page 1, lines 11-12.
CHAIR McGUIRE, in response to questions, relayed that there are
three zero fiscal notes for CSHB 64(STA).
Number 0660
AL TAMAGNI, SR., Member, National Structured Settlements Trade
Association (NSSTA), said that the NSSTA strongly supports HB 64
and thinks it is a good, consumer protection measure that will
benefit a significant number of people in Alaska who are being
preyed upon by out of state vendors that purchase structured
settlements at a substantial discount in the secondary market.
He observed that as more states pass laws similar to HB 64, the
focus of companies that purchase structured settlements shifts
to those states which have yet to enact such laws. He
encouraged the committee to pass HB 64.
Number 0657
RANDY DYER, Executive Vice President, National Structured
Settlements Trade Association (NSSTA), relayed that the NSSTA
has been following this issue for the past five years and has
been working towards developing coalitions to support this [type
of] legislation, adding that these coalitions include trial
lawyers, defense lawyers, the insurance industry, and
"disability groups." He went on to say:
The purpose of the federal bill is to establish a
hammer on the practices of the factoring companies:
it's a 40 percent excise tax on the transaction. And
it's a tax that cannot be passed on to the victim of
the factoring transaction because it is a tax on the
difference between the amount of money paid to the
victim and the total undiscounted payments that are
taken from the victim. So, if you try to give the
victim less to accommodate the tax, you'd simply
increase your tax. So that tax is intended to put the
brakes on these transactions. The second part of the
federal bill allows an escape from the tax, and the
escape from the tax is ... if you go to court and get
a court order that meets certain minimum requirements.
The bill that's before you meets those minimum
requirements. The third part of the [federal] bill
protects everyone's tax-favored circumstances in a
structured settlement; as you know, people who receive
structured settlements receive them tax free in
recognition of their physical injuries.
The bill before you does a few things. First of all,
it requires court oversight. We've looked at many
options and we just believe that the court is the
proper venue to oversee these transactions. There's a
requirement that the transaction be determined to be
in the best interest of the payee. The court must
also find that the transaction doesn't contravene
other applicable laws. As you know, for example,
workers' compensation payments may not be sold or
encumbered; there are laws restricting the sale of
workers' compensation payments in all 50 states -
Alabama criminalizes anyone who would try to buy
someone's workers' [compensation] payments. So,
there's a requirement that those kinds of state
restrictions be looked at by the court.
Number 0842
MR. DYER also said:
As you know, ... the requirement is that they go to a
local court, to make this as easy as possible. We
have now several years' experience with this process,
and we haven't found it to be burdensome in any way.
What little cost there is to the consumer is more than
made up by the savings in what they receive by having
the court oversight. The factoring companies are
required to disclose the terms of their transaction;
they're required to make a present value calculation
using an applicable federal rate published by the
Internal Revenue Service [IRS] so people have some
idea of what their payments are worth. [Payees are]
... asked to seek professional advice; we feel very
strongly about that. And, most importantly, the bill
before you doesn't authorize these transactions, [it]
simple creates a mechanism whereby people who need to
engage in a factoring transaction may do so.
REPRESENTATIVE GRUENBERG referred to a document he received from
the Association of Trial Lawyers of America (ATLA) that includes
and compares the model Act created by the National Conference of
Insurance Legislators (NCOIL) - the Model Structured Settlement
Transfers Protection Act - and the model Act created by the
National Structured Settlements Trade Association (NSSTA) and
the National Association of Settlement Purchasers (NASP) - the
Model State Structured Settlement Protection Act. He noted that
HB 64 appears to be modeled on the NCOIL model Act.
MR. DYER said that there are several versions of the NCOIL model
Act and he does not know which one is included in the
aforementioned document, adding that he, himself, wrote the
comparison in that document.
REPRESENTATIVE GRUENBERG asked, "Assume for the purposes of
discussion that we have the NCOIL version, is there anything in
the other version [the NSSTA/NASP version] that is important or
that you would recommend that we consider?" For example, he
added, he'd noticed that there is a provision "that would give
jurisdiction in this state, also, if the company that's
purchasing the structured settlements is domiciled in Alaska;
... it would increase the ... long-arm jurisdiction of this
Act."
Number 1117
MR. DYER replied:
Again, understand that much of this is driven by the
federal Act. And the way the federal Act, which was
enacted ... a year ago January, was written, it took
into consideration states that have not yet passed
their own state model Act, and it created
jurisdictional issues such that if Alaska, for
example, were not to pass this Act, ... then Alaskans
could still engage in factoring transactions, but
you'd have to find some other state that does have the
law and you'd have to find a nexus there. For
example, if the factoring company were located in a
state that had the law, you could use the laws of that
state. Similarly, [if] the annuity provider's state
has such a law, you could use that state. Our purpose
is to have Alaskan's be governed by Alaska law and not
the laws of Connecticut, for example; so the bill
before you would do that.
REPRESENTATIVE GRUENBERG asked Mr. Dyer to continue with his
comparison of the two versions.
The committee took an at-ease from 8:29 a.m. to 8:32 a.m. for
the purpose of copying and distributing the aforementioned
document.
MR. DYER continued:
I think the NSSTA/NASP model Act is the latest
version; that is to say, [there] were several
iterations of model Acts over years. That's the most
recent one, and it is intended to be a simpler, more
streamlined version. There are some complexities in
the NCOIL model Act, for example, in the disclosure
area. ... I believe you'd find it ... at the top of
page 7, where the disclosure ... begins, "the
quotient, expressed as a percentage, obtained by
dividing the net ...." ... We're not sure, now that
we've had some experience, that that sort of complex
iteration adds much to the disclosures that are
contained in the model Act that's on the left [the
NSSTA/NASP version]. There are things like that,
where the NCOIL model Act offers certain complexities
that have been simplified in the later model Act.
But, having said that, let me say the NCOIL model Act
will work; if that's the one you have before you, it
will work, it will do the job.
Number 1320
REPRESENTATIVE GRUENBERG asked Mr. Dyer whether he would
recommend inserting any of the language from the newer version
into [HB 64]. He remarked that during the break, Mr. LaBolle
had mentioned that [HB 64] contains a requirement that the
[payee] have an expert advisor, adding that he, personally,
thinks this requirement is very important but may not be in the
"later Act."
MR. DYER replied:
I would agree with you that that iteration is
stronger. I would also say that it was our concern
that we didn't want to unduly burden Alaskans with
having to pay other people, and the requirement in one
version of the model said that you had to speak to
certain professionals - a CPA [certified public
accountant] and so forth. We feel that if people,
particularly people who've suffered a physical injury,
can go back to their original attorney and get advice
on this transaction, that's all that required.
REPRESENTATIVE GRUENBERG asked whether the language Mr. Dyer
referred to, which begins, "the quotient, expressed as a
percentage ..." was included in HB 64.
MR. LaBOLLE referred to page 2 of the bill, and indicated that
[subparagraph (G), beginning on line 18] contains similar though
not identical language.
MR. DYER reiterated that this language involves some fairly
complex maneuvers; that over the years, the NSSTA has come to
believe that the simpler version of the disclosure, as contained
in the NSSTA/NASP version, is sufficient; and that the language
in HB 64 will work. The language in the NSSTA/NASP version, he
remarked, was merely changed in an attempt to make it simpler
and easier to understand.
CHAIR McGUIRE, turning to the requirement that a payee receive
independent professional advice, noted that HB 64 stipulates
that the person providing this service is not, in any manner,
affiliated with or compensated by the transferee.
MR. DYER mentioned that there has been the problem of factoring
companies going to their victims and providing them with the
name of a lawyer who is paid by the factoring companies to give
the victims the advice the factoring companies want them to
receive. He acknowledged that the language in HB 64 pertaining
to this issue is much stronger [than in the NSSTA/NASP version].
Number 1520
MR. DYER, with the goal of continuing on with his comparison,
turned to page 5 of the comparison document, specifically the
portion that contains a comparison between Section 4 of the
NSSTA/NASP version and Section 3 of the NCOIL version.
CHAIR McGUIRE, to clarify, noted that corresponding language can
be found on page 1, Section 1, of HB 64.
MR. DYER said:
The first provision that the court has to find is, in
[the NCOIL version] ..., that, "the transfer complies
with the requirements of Sections 3-6 and will not
contravene other applicable law". In the [NSSTA/NASP
version] ..., it says, "the transfer does not
contravene any applicable statute or [the] order of
[any] court or other [government] authority". We
believe that the language in the [NSSTA/NASP version]
... was clearer, but, again, I'm going to tell you
that I think the language you have will work.
REPRESENTATIVE GRUENBERG asked whether it would be important to
include in HB 64 the language "or the order of any court".
MR. DYER replied:
Well, you could argue that the phrase, "other
applicable law" would apply to all kinds of applicable
law including court orders including contract law, and
that the language ... [in the NSSTA/NASP version]
specifies three kinds of law. And so, the language
... [in the NSSTA/NASP version], while more specific,
is also more narrow. So, that's ... a tradeoff.
REPRESENTATIVE GRUENBERG said he would like to ensure that no
one can use the argument that a court order isn't a law; thus he
is pondering whether it would be advisable to add, "or the order
of any court".
MR. DYER surmised that such language would be a useful addition.
MR. LaBOLLE asked whether such language would include court
orders from other states, or just Alaskan and federal court
orders.
REPRESENTATIVE GRUENBERG offered his interpretation that it
would include any court order unless specified otherwise. He
added, "Normally, if it's a final order of another court, it
would be entitled to full faith and credit."
Number 1719
CHAIR McGUIRE asked whether including court orders from other
states would lessen the [payee's] protections.
MR. DYER responded:
What if, for example, ... the case before the Alaska
court involved an injury to a minor who was injured
and whose case was settled in Ohio and subsequently
moved to Alaska. Should the orders of the original
court in that case be respected in the Alaska court in
making the determination? I would think that you want
that, ... if you're dealing with a minor,
particularly.
REPRESENTATIVE GRUENBERG offered his understanding that such an
order would be entitled to full faith and credit under the
constitution, in any event; thus they would be bound to follow
any such final order.
MR. DYER noted, however, that by including it in statute, the
judges will be alerted to specifically look for "such things."
He added that the factoring companies are not always upfront
about such orders.
REPRESENTATIVE GRUENBERG next turned to the language, "or other
[government] authority", which is included in the NSSTA/NASP
version. He opined that such language "sounds awfully vague."
MR. DYER said that the intent behind including that language was
to encompass entities such as the Workers' Compensation Board,
for example. He opined that the orders of a workers'
compensation board should be respected, adding that cases that
never come before a judge may simply have come before a workers'
compensation board.
REPRESENTATIVE GRUENBERG said he would have to check to see
whether such language is the type of language that the
Legislative Affairs' Legal and Research Services Division would
ordinarily use. He sought confirmation that Mr. Dyer is
referring to the order of an administrative agency - an
administrative order.
Number 1871
MR. DYER answered in the affirmative. He then turned to page 11
of the comparison document, and noted that there is language in
the NCOIL version - Section 5 - that is not included in the
NSSTA/NASP version. He explained that this language is intended
to protect parties who may not be directly involved in the
transfer but who may be peripherally affected by it, for
example, the annuity provider. He added, "You can see that
there are protections against the annuity provider being dragged
back into the middle of a disagreement between the person that
uses the services of the factoring company and the factoring
company." He said that this concept stems from a case in
Florida in which an individual sold his/her payments, and after
realizing that it was a bad deal, went back into court and sued
the annuity provider who was not even aware that the payments
had been sold; in that case, the court ordered the annuity
provider to make duplicate payments to the individual that had
sold the payments, and to seek redress from the factoring
company. This language in Section 5 is intended to prevent such
from happening again.
REPRESENTATIVE GRUENBERG noted that in HB 64, language to that
effect can be found on page 4, lines 11-14. He then referred to
page 12 of the comparison, and noted that in the NSSTA/NASP
version, its provisions may not be waived by a payee; that in
the NCOIL version, only Sections 2-4 may not be waived, by
anyone; and that in HB 64, none of its provisions may be waived
by anyone.
MR. DYER acknowledged that the language in HB 64 regarding
waivers provides the broader protection.
CHAIR McGUIRE asked Mr. Dyer whether he has any further
suggestions [for changes to HB 64].
MR. DYER said no, adding that he hopes the legislation gets
enacted.
Number 2082
JOHN L. GEORGE, Lobbyist for American Council of Life Insurers
(ACLI), said simply, "We are the companies that provide the
annuities that fund structured settlements, and we
wholeheartedly support this protection of consumers."
Number 2110
PAUL GROSSI, Director, Central Office, Division of Workers'
Compensation, Department of Labor & Workforce Development, in
response to a question, noted that HB 64 only applies to
workers' compensation in a limited way because, under AS
23.31.060, most workers' compensation benefits are not
assignable. He added, however, that when [claims] are settled,
and settled with an annuity, then HB 64 would apply. In
response to another question, he relayed that such cases are not
common, adding that most of the time claims are settled with
payment of a lump sum.
REPRESENTATIVE GRUENBERG, referring to page 1, line 14, asked
Mr. Grossi whether adding the words ", the orders of any court
or administrative agency," after "09.68,230" would cover
workers' compensation orders.
MR. GROSSI said he believes it would.
MR. TAMAGNI offered his opinion that the best place for the
making of all decisions regarding any assignments is at the
superior court level, and that it would be best "to eliminate
the administrative agencies" due to their lack of expertise in
understanding these transactions.
MR. DYER agreed that the superior court, certainly, would be
more familiar with the terms of the structured settlement. He
pointed out, however, that the discussion they are having
regarding the contravention language is whether to use the
general term of "other applicable law" or the more specific
terminology of "applicable state laws, orders of any court or
administrative agency". He opined that although the
determination itself would be made by the court, there should be
some inclusion of language which would ensure that the orders of
a workers' compensation authority are complied with.
REPRESENTATIVE COGHILL suggested that language on page 3, lines
25-26, would already do that.
REPRESENTATIVE GRUENBERG pointed out, however, that the proposed
additional language they are discussing would be inserted on
page 1, line 14, in the compliance section of the bill, that is,
the section of the bill that stipulates what aspects a factoring
transaction must comply with. He noted that the language on
page 3, lines 25-26, on the other hand, refers only to who will
receive notice of the proposed transaction.
TAPE 03-17, SIDE B
Number 2399
REPRESENTATIVE GRUENBERG asked Mr. Dyer whether he, when
discussing what aspects should be complied with regarding
administrative agencies, had in mind anything other than a
workers' compensation authority.
MR. DYER said no, adding that he was mainly concerned that the
court be required to recognize the laws concerning workers'
compensation payments. He remarked that in the NSSTA/NASP
version, this was accomplished by including reference to that
type of authority in both the non-contravention language and the
notification language.
REPRESENTATIVE GRUENBERG surmised, then, that Mr. Dyer's concern
is already addressed, since the laws - both statutes and
regulations - concerning workers' compensation payments would be
included in the term "other applicable state and federal law",
which is located on page 1, line 14.
MR. DYER agreed. In response to a question, he indicated that
including a reference to court orders - on page 1, line 14 -
would be a good addition.
MR. TAMAGNI, in response to a question, indicated that such a
change would be acceptable to him. He added that he merely
wants to be sure that all factoring transactions will be
referred to superior court.
REPRESENTATIVE GRUENBERG assured Mr. Tamagni that language on
page 1 [lines 8-9] stipulates just that.
REPRESENTATIVE COGHILL asked whether the "timelines" in HB 64
are sufficient.
MR. TAMAGNI said he believed that they are.
MR. DYER remarked that the timelines are sufficient in other
states, but acknowledged that perhaps this might not be true in
Alaska given its "size and breadth."
REPRESENTATIVE COGHILL opined that many of the cases that HB 64
is designed to address will occur in rural Alaska.
CHAIR McGUIRE, to clarify, indicated that the timelines
Representative Coghill is referring to can be found on [page 1,
line 15, which has a 10-day requirement]; page 3, line 23, which
has a 20-day requirement; and page 4, line 7, which has a 15-day
requirement.
Number 2109
MR. DYER explained that the purpose of creating the
aforementioned timelines was to allow everyone sufficient time
to get notice and take appropriate action, ensuring that
everybody's rights are cared for, noting that in some cases,
this could include the dependents of the victim of the factoring
transaction. On the other hand, he remarked, one of the reasons
a person may look to a factoring transaction might involve a
pressing need to receive money at an early time; for example, to
pay medical expenses. He surmised that it would be acceptable
to extend the current timelines.
REPRESENTATIVE COGHILL, referring to the 10-day requirement on
Page 1, line 15, noted that this pertains to when a transferee
will provide the disclosure statement to the payee. He asked if
proof must be shown regarding when that disclosure statement was
provided.
MR. DYER said yes, the factoring company must prove, in court,
that the appropriate information has been provided more than ten
days before the effective date of the contract. This timeline
ensures that a payee is given enough to time to fully consider
all the details of the pending transaction.
REPRESENTATIVE GRUENBERG noted that according to Alaska law,
"service is complete when it is mailed, not when it is
received." He surmised that the term "provided" would be read
the same way, as the date when something was mailed. Given the
size of Alaska, he remarked, he would feel more comfortable if
the bill specifically stipulated that the date in question is
the date on which the "payee has received" the disclosure
statement.
MR. LaBOLLE agreed. In closing, he noted that the NCOIL version
is the stronger version because the NSSTA/NASP version was
developed as part of a compromise between the NSSTA and the
settlement purchasers.
Number 1923
REPRESENTATIVE GRUENBERG made a motion to adopt Conceptual
Amendment 1: on page 1, line 14, after "09.68.230" add ", the
orders of any court,". There being no objection, Conceptual
Amendment 1 was adopted.
Number 1881
REPRESENTATIVES GRUENBERG and COGHILL made a motion to adopt
Conceptual Amendment 2: on page 2, line 1, delete "the
transferee has provided to," and on page 2, line 2, after
"payee" insert "has received by certified mail, return receipt
requested or other equally certain proof of service, from the
transferee". There being no objection, Conceptual Amendment 2
was adopted.
MR. LaBOLLE, in response to a question, surmised that with the
adoption of Conceptual Amendment 2, the 10-day time period
stipulated on page 1, line 15, will be sufficient.
Number 1705
CHAIR McGUIRE made a motion to adopt Amendment 3, on page 3,
line 23, delete "20" and insert "30". There being no objection,
Amendment 3 was adopted.
Number 1701
CHAIR McGUIRE made a motion to adopt Amendment 4, on page 4,
line 7, delete "15" and insert "20".
MR. LaBOLLE opined that "increasing the amount of time required
for receipt of responses ... would limit the oppositions to the
transfer, rather than limiting the transfer itself."
Number 1671
CHAIR McGUIRE withdrew Amendment 4.
REPRESENTATIVE GARA asked whether the issue has been raised
regarding ensuring that the process remains simple enough that
someone who has very little money can engage in it without an
attorney or without a filing fee.
CHAIR McGUIRE said that issue had not yet been addressed.
REPRESENTATIVE GARA said:
I had discussed with ... the sponsor of the bill the
possibility of sending a letter of intent along with
this bill - that might not come through this meeting
because we'd like to pass the bill through, but that
the sponsor might attach as this bill makes it through
the process - to deal with these problems where the
people who deal with these structured settlements tend
to be people who have very little money. And while we
hope that people don't sell these structured
settlements too often because they tend to be very bad
deals when they do, if they do, we don't [want] to add
the insult to injury of making somebody hire an
attorney to get their $20,000 or their $10,000,
because that would be expensive. And we hope that
maybe there wouldn't be a filing fee to deal with
this, and we'd hope that somebody who lives in the
bush wouldn't have to buy a plane ticket to come to
court to deal with something like this. These are
people who have very little money in the first place.
So, in concept, I would like to ask the sponsor to
consider attaching a letter of intent that would go
with the bill.
REPRESENTATIVE GRUENBERG opined that the superior court judges
that would be dealing with this proposed law will never see a
letter of intent. He said that he supports what Representative
Gara is trying to accomplish, and asked him whether he would be
willing, via a conceptual amendment, to include such language as
an intent section at the beginning of the bill.
REPRESENTATIVE GARA asked whether the sponsor would be amenable
to the addition an intent section that would relay:
To the extent possible, no filing fee be charged to
people who use this process; that a process be
established that people could navigate without an
attorney, if possible; and that a process be
established that [allows those] who do not live near
courts to deal with these things over the telephone.
Number 1510
MR. LaBOLLE said that he would have to see the specific language
first before agreeing to it. He asked whether the portion of
the intent language regarding not needing to hire an attorney
would be contrary to the requirement in the bill that a payee
receive professional advice.
REPRESENTATIVE GARA said he did not want to interfere with that
requirement. He elaborated: "You could conceivably do all
these things without hiring an attorney. In practice, many
attorneys, I think, will do this for free for people."
CHAIR McGUIRE posited that the term "independent professional
advice", as used on page 2, lines 26-27, could be interpreted to
mean the advice of an attorney, a certified public accountant,
an actuary, or another licensed professional. She said that she
would be uncomfortable adding an intent section that she has not
yet seen the exact wording of. She asked Representative Gara to
work with the sponsor on this issue, with the view to perhaps
have something specific available to offer on the House floor.
MR. DYER remarked that although the heart of the suggested
intent language is in the right place, the last thing the
committee would want is for there to be no one going before the
court but the victim and the factoring company. That's a
license for mischief, he opined, adding that although they may
be talking about people with very little money, those people
will have less money if only the factoring company shows up in
court with them. He said that according to the NSSTA's
experience, if victims go back to their original attorney, that
attorney will do it for nothing because it is a relatively easy
thing to do. If victims do have to go to a [different]
attorney, he pointed out, the few hundred dollars doing so costs
them will more than be made up for by the increase in what they
receive from the factoring companies.
REPRESENTATIVE SAMUELS agreed with that point.
Number 1359
REPRESENTATIVE GARA withdrew his suggestion regarding adding an
intent section.
REPRESENTATIVE GRUENBERG suggested that perhaps a provision
could be added that requires the transferee to pay the filing
fee, rather than the payee.
Number 1337
REPRESENTATIVE SAMUELS moved to report CSHB 64(STA), as amended,
out of committee with individual recommendations and the
accompanying zero fiscal notes. There being no objection, CSHB
64(JUD) was reported from the House Judiciary Standing
Committee.
REPRESENTATIVE GRUENBERG remarked that he would like to see CSHB
64(JUD) before it goes to the floor.
CHAIR McGUIRE said, "So noted."
ADJOURNMENT
Number 1319
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 9:28 a.m.
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