Legislature(1999 - 2000)
02/09/2000 03:18 PM House L&C
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 9, 2000
3:18 p.m.
MEMBERS PRESENT
Representative Andrew Halcro, Vice Chairman
Representative Lisa Murkowski
Representative John Harris
Representative Sharon Cissna
MEMBERS ABSENT
Representative Norman Rokeberg
Representative Tom Brice
Representative Jerry Sanders
COMMITTEE CALENDAR
HOUSE BILL NO. 239
"An Act relating to the Uniform Commercial Code; relating to
secured transactions; amending Rule 79, Alaska Rules of Civil
Procedure; and providing for an effective date."
- MOVED CSHB 239(L&C) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 239
SHORT TITLE: UCC SECURED TRANSACTIONS
Jrn-Date Jrn-Page Action
5/14/99 1410 (H) READ THE FIRST TIME - REFERRAL(S)
5/14/99 1410 (H) L&C, JUD
2/09/00 (H) MINUTE(L&C)
WITNESS REGISTER
ART PETERSON, Private Attorney
Uniform Law Commissioner for Alaska
National Conference of Commissioners on Uniform State Laws
The Ebner Building
350 North Franklin Street
Juneau, Alaska 99801
POSITION STATEMENT: Answered questions regarding HB 239.
JERRY KURTZ, Uniform Law Commissioner
1050 Beach Lane
Anchorage, Alaska 99507
POSITION STATEMENT: Testified in favor of HB 239.
SHARON YOUNG, State Recorder
Department of Natural Resources
Division of Support Services
State Recorder's Office
3601 C Street, Suite 114
Anchorage, Alaska 99503-5947
POSITION STATEMENT: Answered questions regarding HB 239.
BRYAN MERRELL, Underwriter
First American Title Insurance Company
3035 C Street
Anchorage, Alaska 99503
POSITION STATEMENT: Commented on HB 239.
STEVE WEISE, Attorney
Heller, Ehrman & Associates
601 South Figueroa Street, 40th Floor
Los Angeles, California 90017
POSITION STATEMENT: Answered questions regarding HB 239.
JERRY WEAVER, Secretary
Alaska Bankers Association
P.O. Box 100600
Anchorage, Alaska 99510
POSITION STATEMENT: Testified in favor of HB 239.
NANCY USERA, Senior Vice President
Alaska USA Federal Credit Union
P.O. Box 196613
Anchorage, Alaska 99519
POSITION STATEMENT: Testified in favor of HB 239.
MARY ELLEN BEARDSLEY, Assistant Attorney General
Department of Law
1031 West 4th Avenue, Suite 200
Anchorage, Alaska 99501-1994
POSITION STATEMENT: Testified in favor of HB 239.
MARY ANN ROWE, President
Kachemak Bay Title Agency
P.O. Box 15156 Fritz Creek
Homer, Alaska 99603
POSITION STATEMENT: Testified in favor of HB 239.
ACTION NARRATIVE
TAPE 00-11, SIDE A
Number 0001
VICE-CHAIR ANDREW HALCRO called the House Labor and Commerce
Standing Committee meeting to order at 3:18 p.m. Members present
at the call to order were Representatives Halcro, Murkowski,
Harris, and Cissna. Representatives Sanders and Brice were absent.
Representative Rokeberg was excused.
HB 239-UCC SECURED TRANSACTIONS
VICE-CHAIR HALCRO announced the first order of business is HOUSE
BILL NO. 239, "An Act relating to the Uniform Commercial Code;
relating to secured transactions; amending Rule 79, Alaska Rules of
Civil Procedure; and providing for an effective date."
Number 0053
REPRESENTATIVE MURKOWSKI explained HB 239 had been assigned during
the session interim to a subcommittee consisting of herself and
Representatives Rokeberg and Cissna. The subcommittee held a
meeting on September 8, 1999 in conjunction with the Alaska
Business Law Section and subsequent to that meeting they
transmitted copies of HB 239 to all interested parties. The
subcommittee has received comments regarding HB 239 from the
Business Law Section, the Corporate Law Section and the Bankruptcy
Section of the Alaska Bar Association, independent law firms, the
State Recorder's Office, banks, banker's associations, credit
unions, escrow associations, title agencies, Office of the U.S.
Trustee and the Attorney General's office.
REPRESENTATIVE MURKOWSKI announced that Draft
G\Lauterbach/Bannister is a product of the subcommittee review.
She made a motion to adopt the proposed CS for HB 239, version
1-LS0455\G, Lauterbach/Bannister, 1/14/00, as a work draft. There
being no objection, proposed CSHB 239 was before the committee.
Number 0179
REPRESENTATIVE MURKOWSKI noted that the document before the
committee is a product of many years of effort on the part of
national state commissioners of the Uniform Commercial Code (UCC).
She said Alaska adopted the UCC, Article 9, Secured Transactions,
in 1962. The latest revision was adopted in 1972 and Alaska is now
long overdue for another revision. She explained the proposed CS
brings Article 9, Secured Transactions, into the twenty-first
century by recognizing that the financial world has changed since
the UCC was adopted many years ago.
REPRESENTATIVE MURKOWSKI informed the committee she has prepared a
ten-page overview which explains what secured transactions are, how
they work, and how the new changes affect the current UCC, Article
9. She said the 1998 UCC revisions are expanding the scope of
Article 9; therefore, she will discuss perfection issues, choice of
law, consumer transactions; whether debtor or consumer, update of
filing systems (there is a full national commitment to centralized
filing), and default enforcement provisions.
Number 0606
ART PETERSON, Private Attorney and Uniform Law Commissioner for
Alaska, National Conference of Commissioners on Uniform State Laws,
said he supported Representative Murkowski's presentation. He
informed the committee there had a been a few amendments to Article
9 since its initial adoption in 1962, but there has not been a
comprehensive revision until this time. He further stated the
proposed CS updates Article 9, expands its scope and brings Alaska
into the modern commercial world.
JERRY KURTZ, Uniform Law Commissioner, testified via teleconference
from Anchorage, but deferred his testimony to Sharon Young.
Number 0720
SHARON YOUNG, State Recorder, Department of Natural Resources,
testified via teleconference from Anchorage. She stated the
Department of Natural Resources (DNR) is very interested in the
proposed CS because it has the potential of streamlining the State
Recorder process. She explained that DNR had limited their review
of the proposed CS to the filing provisions.
Number 1830
BRYAN MERRELL, Underwriter, First American Title Insurance Company,
testified via teleconference from Anchorage. He said his company
has been underwriting insurance policies in Alaska since 1965. He
focused on security relating to assignments of mortgages and deeds
of trust. He noted there is a slight conflict between the terms of
the proposed changes to Article 9, section 45.09.308(e) and
45.09.502, wherein the Recording Act of the new proposed UCC would
seem to permit UCC filings to perfect interests in mortgages and
deeds of trust; whereas the current Recording Act would seem to
require actual recording in the recorder's records. He suggested
to Representative Murkowski in a letter of September 27, 1999 that
those two sections be harmonized to conform with the expectations
of people who deal with residential/commercial loans. He
explained, in order to perfect an assignment of a mortgage or deed
of trust, someone has to record the assignment in the recorder's
records rather than with the UCC office. He requested that an
amendment be considered before HB 239 passes because he thinks it
is important to avoid confusion that may arise in the real estate
and lending industries.
Number 0985
REPRESENTATIVE MURKOWSKI promised to speak with Mr. Merrell by
telephone sometime later this week to discuss his concern with HB
239.
Number 1020
MR. KURTZ said he represents the Alaska Delegation of Commissioners
to the National Conference of Commissioners of Uniform State Laws,
which, in conjunction with the American Law Institute, sponsors the
UCC. He explained that Article 9 had been drafted years ago in
order to consolidate all old acts and common law concerning
promissory notes, loans, commercial transactions, sales and
anything involving the purchase or sale of personal property. He
reiterated it is very important the proposed CS be adopted,
hopefully this session. He said a national effort is being made to
convince all states to adopt Article 9 and start using it by July
1, 2001. At the present time, seven states have adopted Article 9
of the UCC and a bill to adopt it has been introduced in 19 states.
MR. KURTZ emphasized the main reason for this huge nationwide
effort to pass Article 9 is because of filing provisions. He
informed the committee that any time a piece of personal property
is the subject of a credit transaction, where and how to file that
transaction is a critical problem. He believes this attempt to
standardize transaction filings by revising Article 9 is imperative
since so many personal property transactions are taking place
across state lines and worldwide. He said commissioners from the
Alaska Delegation of Commissioners will study the proposed CS to
determine when and if Alaska should adopt Article 9 of the UCC.
MR. KURTZ first noted he does not think Article 9 would change the
balance between creditors and debtors. Secondly, he feels the
filing provisions of the proposed CS are absolutely critical to
promote business in Alaska and control the cost of operating the
recording office's filing responsibility.
Number 1487
STEVE WEISE, Attorney, Heller, Ehrman & Associates, testified via
teleconference from Los Angeles, California. He stated he is
available to answer questions from the committee.
Number 1516
JERRY WEAVER, Secretary, Alaska Bankers Association, testified via
teleconference from Anchorage. He stated the original Article 9 of
the UCC worked well for commerce in Alaska for many years. He
noted that bank attorneys, commissioners, and the recorder's office
all feel the revised Article 9 is better and his association
agrees. Mr. Weaver, representing the Alaska Bankers Association,
said he supports and endorses the proposed CS and hopes it will
move quickly in order to meet the 2001 deadline.
Number 1588
NANCY USERA, Senior Vice President, Alaska USA Federal Credit
Union, said Alaska USA Federal Credit Union is the leading provider
for consumer credit in the State of Alaska. She is also anxious to
see the proposed CS pass soon. Because of the July 1, 2001
national deadline for implementing Article 9 of the UCC, she
believes it would be very desirable to commence training financial
institutions as soon as possible after passage of the proposed CS.
She presented a letter of support for the proposed CS and a
reference if the committee would like to consult Mr. Tom Green,
Senior Vice President, Alaska USA Federal Credit Union. She also
said she agreed with the amendments submitted by the recorder's
office.
VICE-CHAIR HALCRO asked if the recorder's office amendments had
been incorporated into the proposed CS.
REPRESENTATIVE MURKOWSKI replied yes.
Number 1688
MARY ELLEN BEARDSLEY, Assistant Attorney General, Department of
Law, testified via teleconference from Anchorage. She said the
Department of Law supports the proposed CS because it promotes
uniformity throughout the 50 states.
Number 1714
MARY ANN ROWE, President, Kachemak Bay Title Agency, testified via
teleconference from Homer. She stated she is co-chair of the
legislative committee for the Alaska Lands and Title Association
and represents them regarding the proposed CS. She informed the
committee that she had reviewed the proposed CS with her committee.
She pointed out she is only interested in the part of the proposed
CS which affects the title industry and asked the committee to turn
to pages 37-39. She directed the committee's attention to page 37,
Section 45.09.308(e), which deals with perfection of a security
interest in a mortgage or lien against real or personal property.
She stated the association she represents does not feel this would
be a hindrance or an encumbrance to the title industry standard or
practice since it is viewed by them as a personal contract. She
believes the proposed CS is good and would streamline title
insurance industry processes. She encourages and supports passage
of the proposed CS.
Number 1796
REPRESENTATIVE HARRIS made a motion to move CSHB 239, 1-LS0455\G,
Lauterbach/Bannister, 1/14/00, out of committee with individual
recommendations and the attached fiscal note. There being no
objection, CSHB 239(L&C) moved from the House Labor and Commerce
Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at 3:50
p.m.
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