Legislature(1995 - 1996)
04/29/1996 03:06 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE April 29, 1996 3:06 p.m. MEMBERS PRESENT Representative Pete Kott, Chairman Representative Beverly Masek Representative Jerry Sanders Representative Brian Porter Representative Kim Elton Representative Gene Kubina MEMBERS ABSENT Representative Norman Rokeberg, Vice Chairman COMMITTEE CALENDAR HOUSE BILL NO. 550 "An Act relating to investments by fiduciaries; and providing for an effective date." - MOVED HB 550 OUT OF COMMITTEE PRESENTATION: Proposed changes in regulations of Alaska Workers' Compensation Board - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HB 550 SHORT TITLE: INVESTMENTS BY FIDUCIARIES SPONSOR(S): LABOR & COMMERCE BY REQUEST JRN-DATE JRN-PG ACTION 04/10/96 3676 (H) READ THE FIRST TIME - REFERRAL(S) 04/10/96 3676 (H) LABOR & COMMERCE 04/29/96 (H) L&C AT 3:00 PM CAPITOL 17 WITNESS REGISTER GEORGE DOZIER, Legislative Assistant to Representative Pete Kott Alaska State Legislature Capitol Building, Room 432 Juneau, Alaska 99801 Telephone: (907) 465-3306 POSITION STATEMENT: Gave sponsor statement for HB 550. ACTION NARRATIVE TAPE 96-41, SIDE A Number 001 The House Labor and Commerce Standing Committee was called to order by Chairman Pete Kott at 3:06 p.m. Members present at the call to order were Representatives Masek, Porter, Kubina, Elton, Sanders and Kott. HB 550 - INVESTMENTS BY FIDUCIARIES Number 119 CHAIRMAN PETE KOTT announced the committee would address HB 550, "An Act relating to investments by fiduciaries; and providing for an effective date." He said there is also a Senate version of the bill which has been bogged down in the Senate Finance Committee. The Senate has asked that the House move their version of the bill. Number 196 GEORGE DOZIER, Legislative Assistant to Representative Pete Kott, came before the committee to address HB 550, sponsored by the House Labor and Commerce Committee. He said the current state of the law is that if a bank assumes a fiduciary responsibility for investing trust funds, banks are accorded leave to invest trust funds in United States securities. Some states have construed that phrase to mean just simply treasury bills and not permit investment in bonds that are issued by agencies of the United States government. Mr. Dozier explained HB 550 defines that phrase to include United States governmental agencies as opposed to treasury bonds. It also permits banks to not only make those investments directly with United States governmental agencies, but also to invest in financial institutions that invest in United States governmental securities. The protection is accorded to the extent that only those companies that exclusively invest in U.S. governmental securities are covered. He stated that is his understanding of the bill. CHAIRMAN KOTT said that is also his understanding of the bill. He said, "So essentially in the second thought, you could invest in a bank - you could invest your funds in an investment company that have portfolios that are restricted to those obligations regarding the U.S. government." MR. DOZIER indicated that is correct. CHAIRMAN KOTT explained that the bill basically clarifies statute. As mentioned by Mr. Dozier, under present law, the banks may invest in those obligations of the United States. Many states have construed that "yes" as meaning investing in U.S. treasuries. The bill makes it clear that there are other vehicles out there such as other bonds like U.S. savings bonds. Number 403 REPRESENTATIVE KIM ELTON questioned whether it includes municipal bonds. CHAIRMAN KOTT said he doesn't think municipal bonds are included. REPRESENTATIVE PORTER said, "Agencies or municipalities of the United States." REPRESENTATIVE ELTON said that isn't construed the way we construe a school district. REPRESENTATIVE PORTER said a school district isn't a political subdivision. Number 481 REPRESENTATIVE PORTER made a motion to move HB 550 out of committee with individual recommendations and a zero attached fiscal note. CHAIRMAN KOTT asked if there was an objection. Hearing none, HB 550 moved out of the House Labor and Commerce Committee. Chairman Kott indicated if there is anything more to the bill, he would bring it back to committee. ADJOURNMENT Number 585 CHAIRMAN KOTT adjourned the House Labor and Commerce Committee meeting at 3:14 p.m.