Legislature(2013 - 2014)BELTZ 105 (TSBldg)

04/03/2013 01:30 PM JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 65 RETIREMENT PLANS; ROTH IRAS; PROBATE TELECONFERENCED
Heard & Held
+ HB 9 SECURED TRANSACTIONS AND FUNDS TRANSFERS TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
+= HB 69 EXEMPT FIREARMS FROM FEDERAL REGULATION TELECONFERENCED
Moved SCS CSHB 69(JUD) Out of Committee
+= HB 83 FEDERAL LAWS & EXECUTIVE ORDERS TELECONFERENCED
Moved CSHB 83(JUD) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         April 3, 2013                                                                                          
                           1:46 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator John Coghill, Chair                                                                                                     
Senator Fred Dyson                                                                                                              
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lesil McGuire, Vice Chair                                                                                               
Senator Donald Olson                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 83(JUD)                                                                                 
"An  Act  relating  to  certain  federal  statutes,  regulations,                                                               
presidential  executive  orders   and  actions,  and  secretarial                                                               
orders  and  actions; relating  to  the  duties of  the  attorney                                                               
general; and providing for an effective date."                                                                                  
                                                                                                                                
     - MOVED CSHB  83(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 69(JUD)                                                                                 
"An  Act exempting  certain  firearms,  firearm accessories,  and                                                               
ammunition  in  this  state from  federal  regulation;  declaring                                                               
certain   federal  statutes,   regulations,  rules,   and  orders                                                               
unconstitutional under the Constitution of  the United States and                                                               
unenforceable  in this  state; providing  criminal penalties  for                                                               
federal officials  who enforce  or attempt  to enforce  a federal                                                               
statute, regulation,  rule, or order regulating  certain firearms                                                               
and  firearm accessories  in  this state;  and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
     - MOVED SCS CSHB  69(JUD) OUT OF COMMITTEE                                                                                 
                                                                                                                                
HOUSE BILL NO. 9                                                                                                                
"An  Act  relating  to secured  transactions  under  the  Uniform                                                               
Commercial  Code  and  to  the  regulation  of  funds  transfers,                                                               
including  remittance  transfers,  under the  Uniform  Commercial                                                               
Code and federal law; and providing for an effective date."                                                                     
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 65                                                                                                              
"An  Act relating  to property  exemptions for  retirement plans,                                                               
individual  retirement amending  Rule 64,  Alaska Rules  of Civil                                                               
Procedure, and  Rule 301(a), Alaska  Rules of accounts,  and Roth                                                               
IRAs;  relating  to  transfers of  individual  retirement  plans;                                                               
relating  to  Evidence."  the rights  of  judgment  creditors  of                                                               
members of  limited liability companies  and partners  of limited                                                               
liability  partnerships; relating  to the  Uniform Probate  Code,                                                               
including  pleadings, orders,  liability, and  notices under  the                                                               
Uniform Probate  Code and  the Alaska  Principal and  Income Act,                                                               
the  appointment of  trust property,  the Alaska  Uniform Prudent                                                               
Investor Act, co-trustees, trust  protectors, and trust advisors;                                                               
relating to the Alaska Principal  and Income Act; relating to the                                                               
Alaska  Uniform   Transfers  to  Minors  Act;   relating  to  the                                                               
disposition of  human remains;  relating to  the tax  on insurers                                                               
for life insurance policies; relating  to insurable interests for                                                               
certain   insurance  policies;   relating   to  restrictions   on                                                               
transfers   of  trust   interests;   relating  to   discretionary                                                               
interests  in  irrevocable  trusts;  relating  to  the  community                                                               
property of married persons; and                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB  65                                                                                                                  
SHORT TITLE: RETIREMENT PLANS; ROTH IRAS; PROBATE                                                                               
SPONSOR(s): SENATOR(s) COGHILL                                                                                                  
                                                                                                                                
02/27/13       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/27/13       (S)       L&C, JUD                                                                                               
03/21/13       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/21/13       (S)       Heard & Held                                                                                           
03/21/13       (S)       MINUTE(L&C)                                                                                            
03/26/13       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/26/13       (S)       Moved CSSB  65(L&C) Out of Committee                                                                   
03/26/13       (S)       MINUTE(L&C)                                                                                            
03/27/13       (S)       L&C RPT CS  2DP 2NR  SAME TITLE                                                                        
03/27/13       (S)       DP: DUNLEAVY, ELLIS                                                                                    
03/27/13       (S)       NR: OLSON, MICCICHE                                                                                    
04/01/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
04/01/13       (S)       Heard & Held                                                                                           
04/01/13       (S)       MINUTE(JUD)                                                                                            
04/03/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: HB   9                                                                                                                  
SHORT TITLE: SECURED TRANSACTIONS AND FUNDS TRANSFERS                                                                           
SPONSOR(s): REPRESENTATIVE(s) GRUENBERG                                                                                         
                                                                                                                                
01/16/13       (H)       PREFILE RELEASED 1/7/13                                                                                
01/16/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/13       (H)       L&C, JUD                                                                                               
02/20/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
02/20/13       (H)       Moved Out of Committee                                                                                 
02/20/13       (H)       MINUTE(L&C)                                                                                            
02/22/13       (H)       L&C RPT 3DP 3NR                                                                                        
02/22/13       (H)       DP: REINBOLD, JOSEPHSON, OLSON                                                                         
02/22/13       (H)       NR: CHENAULT, SADDLER, MILLETT                                                                         
03/13/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/13/13       (H)       Moved Out of Committee                                                                                 
03/13/13       (H)       MINUTE(JUD)                                                                                            
03/14/13       (H)       JUD RPT 4DP 2NR                                                                                        
03/14/13       (H)       DP: GRUENBERG, FOSTER, LEDOUX, LYNN                                                                    
03/14/13       (H)       NR: PRUITT, KELLER                                                                                     
03/25/13       (H)       TRANSMITTED TO (S)                                                                                     
03/25/13       (H)       VERSION: HB   9                                                                                        
03/27/13       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/27/13       (S)       JUD                                                                                                    
04/03/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: HB  69                                                                                                                  
SHORT TITLE: EXEMPT FIREARMS FROM FEDERAL REGULATION                                                                            
SPONSOR(s): REPRESENTATIVE(s) CHENAULT                                                                                          
                                                                                                                                
01/16/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/13       (H)       JUD                                                                                                    
01/18/13       (H)       BILL REPRINTED 1/17/13                                                                                 
02/08/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/08/13       (H)       Heard & Held                                                                                           
02/08/13       (H)       MINUTE(JUD)                                                                                            
02/18/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/18/13       (H)       Moved CSHB  69(JUD) Out of Committee                                                                   
02/18/13       (H)       MINUTE(JUD)                                                                                            
02/20/13       (H)       JUD RPT CS(JUD) NT  6DP 1NR                                                                            
02/20/13       (H)       DP: MILLETT, PRUITT, LYNN, FOSTER,                                                                     
                         LEDOUX, KELLER                                                                                         
02/20/13       (H)       NR: GRUENBERG                                                                                          
02/27/13       (H)       TRANSMITTED TO (S)                                                                                     
02/27/13       (H)       VERSION: CSHB 69(JUD)                                                                                  
02/28/13       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/28/13       (S)       JUD                                                                                                    
03/15/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/15/13       (S)       Heard & Held                                                                                           
03/15/13       (S)       MINUTE(JUD)                                                                                            
03/18/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/18/13       (S)       Heard & Held                                                                                           
03/18/13       (S)       MINUTE(JUD)                                                                                            
03/20/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/20/13       (S)       -- MEETING CANCELED --                                                                                 
03/25/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/25/13       (S)       Heard & Held                                                                                           
03/25/13       (S)       MINUTE(JUD)                                                                                            
03/29/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/29/13       (S)       Heard & Held                                                                                           
03/29/13       (S)       MINUTE(JUD)                                                                                            
04/01/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
04/01/13       (S)       Heard & Held                                                                                           
04/01/13       (S)       MINUTE(JUD)                                                                                            
04/03/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: HB  83                                                                                                                  
SHORT TITLE: FEDERAL LAWS & EXECUTIVE ORDERS                                                                                    
SPONSOR(s): REPRESENTATIVE(s) KELLER                                                                                            
                                                                                                                                
01/22/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/22/13       (H)       JUD                                                                                                    
02/08/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/08/13       (H)       Heard & Held                                                                                           
02/08/13       (H)       MINUTE(JUD)                                                                                            
02/18/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/18/13       (H)       Scheduled But Not Heard                                                                                
02/25/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/25/13       (H)       Scheduled But Not Heard                                                                                
02/27/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/27/13       (H)       Heard & Held                                                                                           
02/27/13       (H)       MINUTE(JUD)                                                                                            
03/04/13       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/04/13       (H)       Moved CSHB  83(JUD) Out of Committee                                                                   
03/04/13       (H)       MINUTE(JUD)                                                                                            
03/05/13       (H)       JUD RPT CS(JUD) NT 5DP                                                                                 
03/05/13       (H)       DP: MILLETT, GRUENBERG, PRUITT, FOSTER,                                                                
                         KELLER                                                                                                 
03/13/13       (H)       TRANSMITTED TO (S)                                                                                     
03/13/13       (H)       VERSION: CSHB 83(JUD)                                                                                  
03/15/13       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/15/13       (S)       JUD                                                                                                    
03/29/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/29/13       (S)       Heard & Held                                                                                           
03/29/13       (S)       MINUTE(JUD)                                                                                            
04/01/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
04/01/13       (S)       Heard & Held                                                                                           
04/01/13       (S)       MINUTE(JUD)                                                                                            
04/03/13       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JIM POUND, Staff                                                                                                                
Representative Wes Keller                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Opposed the proposed amendment to HB 83.                                                                  
                                                                                                                                
DEBORAH BEHR, Chief Assistant Attorney General                                                                                  
Legislation and Regulation Section                                                                                              
Civil Division                                                                                                                  
Department of Law                                                                                                               
Chair                                                                                                                           
Alaska Uniform Law Delegation                                                                                                   
National Conference of Commissioners on Uniform State Laws                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided supporting information related to                                                                
HB 9.                                                                                                                           
                                                                                                                                
STACY SCHUBERT, Director                                                                                                        
Government Relations and Public Affairs                                                                                         
Alaska Housing Finance Corporation (AHFC                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 9.                                                                             
                                                                                                                                
ERIC HAVELOCK, Multifamily Underwriting Supervisor                                                                              
Alaska Housing Finance Corporation                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 9.                                                                             
                                                                                                                                
LUKE FANNING, Vice President                                                                                                    
First National Bank Alaska                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 9.                                                                             
                                                                                                                                
CHAD HUTCHINSON, Staff                                                                                                          
Senator John Coghill                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided information related to SB 65.                                                                    
                                                                                                                                
DAVID SHAFTEL, Attorney                                                                                                         
Anchorage, Alaska                                                                                                               
                                                                                                                                
POSITION STATEMENT:  Provided information and  answered questions                                                             
related to SB 65.                                                                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:46:52 PM                                                                                                                    
CHAIR  JOHN   COGHILL  called   the  Senate   Judiciary  Standing                                                             
Committee meeting  to order at 1:46  p.m. Present at the  call to                                                               
order were Senators Dyson, Wielechowski, and Chair Coghill.                                                                     
                                                                                                                                
             HB  83-FEDERAL LAWS & EXECUTIVE ORDERS                                                                         
                                                                                                                                
1:47:22 PM                                                                                                                    
CHAIR  COGHILL announced  the  consideration of  HB  83. "An  Act                                                               
relating to  certain federal statutes,  regulations, presidential                                                               
executive  orders   and  actions,  and  secretarial   orders  and                                                               
actions;  relating to  the duties  of the  attorney general;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
He reminded the members that  CSHB 83(JUD), version O, was before                                                               
the  committee  and  a  motion to  adopt  proposed  Amendment  1,                                                               
labeled 28-LS0328\O.1 was awaiting action.                                                                                      
                                                                                                                                
1:47:44 PM                                                                                                                    
JIM POUND,  Staff, Representative Wes  Keller, sponsor of  HB 83,                                                               
drew  attention to  a  report  from the  Department  of Law  that                                                               
discusses  legal actions  against  the  federal government  since                                                               
2008. He  relayed the  bill sponsor's  opinion of  the amendment,                                                               
which is  that it is  unfriendly and unnecessary. Mr.  Pound said                                                               
he personally believes it is an effort to delay the legislation.                                                                
                                                                                                                                
1:48:39 PM                                                                                                                    
SENATOR  WIELECHOWSKI  called  a  point of  order.  He  said  the                                                               
statement is offensive,  and if he wanted to delay  the bill he'd                                                               
walk out of the meeting because he was making the quorum.                                                                       
                                                                                                                                
CHAIR COGHILL cautioned against reading in motives.                                                                             
                                                                                                                                
MR. POUND apologized.                                                                                                           
                                                                                                                                
MR. POUND  reported that the  Department of Law advised  that the                                                               
amendment does  not affect the  fiscal note. He said  he believes                                                               
that current  statutory language  in AS  44.23.020(b)(7)(A) makes                                                               
the amendment  unnecessary. That  language talks about  an annual                                                               
report to  the legislature  from the  attorney general  about the                                                               
work and expenditures  of the office. He further  opined that the                                                               
issue of the amendment was  of little concern to most legislators                                                               
and  could  be  brought  up during  finance  subcommittees  under                                                               
missions  and measures.  He  asked the  committee  to reject  the                                                               
amendment.                                                                                                                      
                                                                                                                                
1:49:58 PM                                                                                                                    
SENATOR  WIELECHOWSKI countered  that the  amendment simply  asks                                                               
the  attorney general  to  provide a  summary  of the  litigation                                                               
between the  state and  the federal  government, a  discussion of                                                               
the  legal  issues,   the  cost  of  the  case,   and  the  final                                                               
disposition.  He  said  it  is   good  government  to  have  this                                                               
information and  every legislator should be  interested in having                                                               
it.                                                                                                                             
                                                                                                                                
CHAIR  COGHILL said  he  was sympathetic  to  the amendment,  but                                                               
would   vote   against   it   based   on   the   bill   sponsor's                                                               
recommendation.                                                                                                                 
                                                                                                                                
1:52:08 PM                                                                                                                    
A roll call  vote was taken. Senator Wielechowski  voted in favor                                                               
of Amendment 1  and Senators Dyson and Coghill  voted against it.                                                               
Therefore, Amendment 1 failed by a 1:2 vote.                                                                                    
                                                                                                                                
CHAIR COGHILL solicited a motion.                                                                                               
                                                                                                                                
1:53:22 PM                                                                                                                    
SENATOR  DYSON moved  to  report CSHB  83(JUD),  version O,  from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note(s).                                                                                                                        
                                                                                                                                
CHAIR  COGHILL  announced  that without  objection  CSHB  83(JUD)                                                               
moved from the Senate Judiciary Standing Committee.                                                                             
                                                                                                                                
         HB  69-EXEMPT FIREARMS FROM FEDERAL REGULATION                                                                     
                                                                                                                                
1:53:59 PM                                                                                                                    
CHAIR  COGHILL announced  the  consideration of  HB  69. "An  Act                                                               
prohibiting  state and  municipal agencies  from using  assets to                                                               
implement or  aid in  the implementation  of the  requirements of                                                               
certain  federal statutes,  regulations, rules,  and orders  that                                                               
are  applied to  infringe on  a person's  right to  bear arms  or                                                               
right  to   due  process  or   that  implement  or  aid   in  the                                                               
implementation  of the  federal REAL  ID Act  of 2005;  exempting                                                               
certain  firearms, firearm  accessories, and  ammunition in  this                                                               
state   from  federal   regulation;  declaring   certain  federal                                                               
statutes, regulations,  rules, and orders  unconstitutional under                                                               
the Constitution of  the United States and  unenforceable in this                                                               
state; requiring  the attorney general  to file any  legal action                                                               
to  prevent  implementation  of a  federal  statute,  regulation,                                                               
rule, or  order that  violates the  rights of  a resident  of the                                                               
state; and providing for an effective date."                                                                                    
                                                                                                                                
He noted  that the Senate  committee substitute (CS),  version I,                                                               
was before the committee.                                                                                                       
                                                                                                                                
1:54:36 PM                                                                                                                    
REPRESENTATIVE MIKE  CHENAULT, sponsor of  HB 69, stated  that he                                                               
may  not  agree  with  everything  in  the  current  CS,  but  he                                                               
understands the  concerns the committee and  the attorney general                                                               
have with the legislation.                                                                                                      
                                                                                                                                
CHAIR COGHILL  said the committee heard  some vehement opposition                                                               
to the changes,  but he continues to feel they  are important. He                                                               
solicited a motion.                                                                                                             
                                                                                                                                
1:56:02 PM                                                                                                                    
SENATOR DYSON  moved to report Senate  CS for CS for  HB 69(JUD),                                                               
version  I, from  committee with  individual recommendations  and                                                               
attached fiscal note(s).                                                                                                        
                                                                                                                                
CHAIR COGHILL announced that without  objection, SCS CSHB 69(JUD)                                                               
moved from the Senate Judiciary Standing Committee.                                                                             
                                                                                                                                
1:56:34 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
        HB   9-SECURED TRANSACTIONS AND FUNDS TRANSFERS                                                                     
                                                                                                                                
2:00:07 PM                                                                                                                    
CHAIR  COGHILL  announced the  consideration  of  HB 9.  "An  Act                                                               
relating  to secured  transactions under  the Uniform  Commercial                                                               
Code  and  to  the  regulation   of  funds  transfers,  including                                                               
remittance  transfers,  under  the Uniform  Commercial  Code  and                                                               
federal law; and providing for an effective date."                                                                              
                                                                                                                                
2:01:14 PM                                                                                                                    
REPRESENTATIVE MAX  GRUENBERG, Alaska State  Legislature, sponsor                                                               
of  HB 9,  stated that  this  legislation is  important and  time                                                               
sensitive, because July  1, 2013 is a  nationwide effective date.                                                               
The  bill updates  two articles  of the  Uniform Commercial  Code                                                               
(UCC). These are Article 9  on secure transactions and Article 4A                                                               
on funds transfer. He reported no opposition to the bill.                                                                       
                                                                                                                                
2:03:21 PM                                                                                                                    
DEBORAH BEHR,  Chief Assistant Attorney General,  Legislation and                                                               
Regulation  Section,  Civil  Division,  Department  of  Law,  and                                                               
Chair,  Alaska Uniform  Law Delegations,  National Conference  of                                                               
Commissioners  on Uniform  State Laws  (NCCUSL), Juneau,  Alaska,                                                               
said  the Alaska  statutes  assigned DOL  the  duty of  promoting                                                               
uniform  laws in  Alaska  where uniformity  among  the states  is                                                               
important.  The  state has  been  a  member  of the  Uniform  Law                                                               
Commission  for over  100 years.  She described  the Uniform  Law                                                               
Commission  as a  states' rights  organization,  in which  states                                                               
meet annually to propose uniform  solutions to state legislatures                                                               
to address  common problems where  uniformity across  state lines                                                               
is desirable. One area is commerce.                                                                                             
                                                                                                                                
Because businesses buy and sell  products and borrow money across                                                               
state lines, all  the states have adopted  the Uniform Commercial                                                               
Code (UCC)  to ensure reliability and  predictability of business                                                               
transactions. The purpose  of the bill is to  update two articles                                                               
of the  UCC. These  pertain to Article  9 on  secure transactions                                                               
and Article 4A on funds transfer.                                                                                               
                                                                                                                                
She  highlighted four  major changes  and provided  examples. The                                                               
first amendment  to Article 9  deals with misspellings  of names.                                                               
She explained  that she  and her  husband are  in the  process of                                                               
buying a car.  As part of the  process, they got a  loan and gave                                                               
the  creditor a  security interest  in the  car in  the event  of                                                               
default.  The  UCC  commissioners   have  found  that  names  are                                                               
sometimes  misspelled  in  these  documents  and  this  makes  it                                                               
difficult for  the creditor  to recover  the asset  - the  car in                                                               
this example.  To address  this problem  the UCC  has recommended                                                               
that all states  create a safe harbor for creditors  if they look                                                               
at the person's  current driver's license or state  ID card. This                                                               
is a protection to the consumer as well.                                                                                        
                                                                                                                                
MS. BEHR  said the second  update to  Article 9 makes  changes to                                                               
the definition of "registered organization."  For example, if she                                                               
were to  obtain a  loan to  start a  small business  in Anchorage                                                               
called  Behr's Bikes  to sell  bikes in  Alaska, Washington,  and                                                               
Oregon  there  would  be  a question  about  where  the  security                                                               
agreement  would be  filed. This  update says  that the  date and                                                               
location  where the  business was  formed determines  where those                                                               
documents will be filed. In this example it would be in Alaska.                                                                 
                                                                                                                                
The  third  update  to  Article  9  relates  to  "after  acquired                                                               
property." Using the  same example of Behr's  Bikes in Anchorage,                                                               
she  hypothesized  that  she  moved   the  business  to  Arizona,                                                               
purchased  additional merchandise,  but kept  the same  loan. The                                                               
legal  issue  that  arises  in this  circumstance  is  where  the                                                               
creditor would  look for that security  agreement. This amendment                                                               
says that the creditor may rely  on the filing in Alaska for four                                                               
months.  She  noted  that  36 states  have  adopted  these  three                                                               
changes and they're pending in 13 more jurisdictions.                                                                           
                                                                                                                                
MS. BEHR  said the final  changes relate to  remittance transfers                                                               
in UCC Article  4A. She noted a letter of  support in the packets                                                               
from  the  Alaska Bankers  Association  and  explained that  it's                                                               
often unclear  whether these electronic transfers  are covered by                                                               
state or federal law. The Article  4A changes have been passed by                                                               
14 jurisdictions and  are pending in 21  jurisdictions. She noted                                                               
that the packets included a sectional analysis of HB 9.                                                                         
                                                                                                                                
SENATOR WIELECHOWSKI  asked if there  would be a  walk-through of                                                               
the bill.                                                                                                                       
                                                                                                                                
CHAIR COGHILL stated his preference to take testimony first.                                                                    
                                                                                                                                
2:11:02 PM                                                                                                                    
STACY  SCHUBERT,   Director,  Government  Relations   and  Public                                                               
Affairs,  Alaska Housing  Finance  Corporation (AHFC),  explained                                                               
that  AHFC uses  Article  9  of the  Uniform  Commercial Code  in                                                               
securing  some collateral  when  financing multifamily  projects.                                                               
The collateral  for things like kitchen  appliances and furniture                                                               
is perfected through the recording of a UCC financing statement.                                                                
                                                                                                                                
She said  that HB 9 will  enhance AHFC's secured position  in two                                                               
ways. It  will provide  greater guidance  as to  the name  of the                                                               
debtor on  the financing  statement and  it will  provide greater                                                               
protection  for  an existing  secured  creditor  when the  debtor                                                               
moves to another  state or merges with another  entity. She noted                                                               
that Mr. Havelock could answer technical questions.                                                                             
                                                                                                                                
CHAIR COGHILL asked where that provision was in the bill.                                                                       
                                                                                                                                
MS. SCHUBERT said she didn't have a  copy of the bill in front of                                                               
her.                                                                                                                            
                                                                                                                                
CHAIR COGHILL asked Mr. Havelock  if he could identify where that                                                               
provision was in the bill.                                                                                                      
                                                                                                                                
2:13:03 PM                                                                                                                    
ERIC  HAVELOCK,   Multifamily  Underwriting   Supervisor,  Alaska                                                               
Housing Finance  Corporation, said that Ms.  Schubert was talking                                                               
about  the  sections   that  make  changes  to   Article  9,  and                                                               
Representative  Gruenberg could  identify the  exact location  in                                                               
the bill.                                                                                                                       
                                                                                                                                
2:13:42 PM                                                                                                                    
LUKE FANNING,  Vice President, First  National Bank  Alaska, said                                                               
he  was  representing the  Alaska  Bankers  Association (ABA)  in                                                               
support of HB 9. It  provides necessary amendments to Articles 4A                                                               
and  9  of  the  Uniform Commercial  Code.  This  legislation  is                                                               
necessary to address amendments made in  2010 to Article 9 of the                                                               
UCC. HB 9 also clarifies  the relationship between UCC Article 4A                                                               
and the  federal Electronic  Funds Transfer Act.  If the  bill is                                                               
not passed  this session,  Alaska will  be inconsistent  with the                                                               
financial practices in  the rest of the country.  Failure to pass                                                               
the bill  could result  in additional  costs and  uncertainty for                                                               
Alaska businesses and financial services customers.                                                                             
                                                                                                                                
CHAIR  COGHILL noted  that Paula  Kelsey from  the Department  of                                                               
Natural Resources (DNR) was available to answer questions.                                                                      
                                                                                                                                
2:16:19 PM                                                                                                                    
CHAIR COGHILL asked Ms. Behr to  explain the process to get a UCC                                                               
law in place and where there was potential for modification.                                                                    
                                                                                                                                
MS. BEHR explained  that the Uniform Law  delegates meet annually                                                               
to  discuss potential  changes in  an open  process. The  banking                                                               
community and consumer  groups help develop the bill  and then it                                                               
is recommended to state legislatures,  as she is doing today. She                                                               
said  it  is  unusual  for   the  commissioners  to  recommend  a                                                               
particular  date,   but  for  secure  transactions   it  is  very                                                               
important in that things happen on  the same date. Almost all the                                                               
states have adopted or have this legislation pending.                                                                           
                                                                                                                                
CHAIR  COGHILL  asked where  the  suggested  changes fit  in  the                                                               
articles.                                                                                                                       
                                                                                                                                
MS. BEHR said they apply to Article 9 and Article 4A.                                                                           
                                                                                                                                
CHAIR COGHILL asked Mr. Henning if he had anything to add.                                                                      
                                                                                                                                
MR. HENNING  explained that  the Uniform  Law Commission  and the                                                               
American Law Institute develop the  UCC articles in a deliberate,                                                               
open process,  and make recommendations  to the states.  They are                                                               
not law. He  explained that a major revision of  Article 9 of the                                                               
UCC  became effective  in all  the states  on July  1, 2001.  The                                                               
provisions  in  HB  9  are   technical  clarifications  of  those                                                               
revisions.  They seek  to resolve  the practical  problems facing                                                               
lenders  and borrowers  in the  marketplace. He  highlighted that                                                               
the  legislature  has  the  full  authority  to  modify  the  UCC                                                               
recommendations embodied in HB 9, but  it would put Alaska out of                                                               
step with other states.                                                                                                         
                                                                                                                                
2:22:09 PM                                                                                                                    
MS. BEHR provided the following sectional analysis of HB 9:                                                                     
                                                                                                                                
Sections  1  and  2  address  the amendments  to  Article  4A  to                                                               
maintain  coverage   under  state   law  for  certain   types  of                                                               
remittance  transfers  in  commercial transactions.  The  banking                                                               
community supports this language.                                                                                               
                                                                                                                                
Sections  3 through  7 update  definitions  in Article  9 of  the                                                               
Uniform Commercial  Code relating  to secured  transactions. Some                                                               
changes  update language  on electronic  commerce to  comply with                                                               
the Uniform  Electronic Transactions Act. Others  reflect updates                                                               
on   certificates  of   title  and   recognize  that   there  are                                                               
alternatives in  other states.  Sections 5  and 6  recognize that                                                               
there are new  business organizations in Alaska  and other states                                                               
that are  not formed  under the corporation  law, but  are formed                                                               
under  other process  of  Alaska law  such  as limited  liability                                                               
companies. If  there is  confusion about  the official  name, the                                                               
names  on  record  with  the   department  of  commerce  will  be                                                               
examined.                                                                                                                       
                                                                                                                                
Section  8  sets out  a  general  test  to demonstrate  who  owns                                                               
electronic chattel paper.                                                                                                       
                                                                                                                                
Section  9 makes  a technical  change and  recognizes in  statute                                                               
that  designating  a state  of  location  of an  organization  or                                                               
agency includes the location of the home office.                                                                                
                                                                                                                                
Section  10 makes  technical changes  to conform  to the  revised                                                               
definition of certificate of title.                                                                                             
                                                                                                                                
Section 11  relates to  when a debtor  changes location  from one                                                               
state  to another.  It  provides a  four-month  grace period  for                                                               
after-move  acquired collateral  that  current  law provides  for                                                               
pre-move collateral.                                                                                                            
                                                                                                                                
Sections 12 and 13 make  technical changes in language to conform                                                               
to other provisions of the Uniform Commercial code, Article 9.                                                                  
                                                                                                                                
Section 14  addresses the priority  of security  creditors. These                                                               
technical changes protect the new priority rule in the bill.                                                                    
                                                                                                                                
Sections 15  and 16 clarify  that a  secured party that  takes an                                                               
assignment of a  payment as collateral for an  obligation may use                                                               
the remedies under Article 9.                                                                                                   
                                                                                                                                
Sections 17 through 19 provide clarity  on the name of the debtor                                                               
to  be used  in  a  financing statement  for  different types  of                                                               
debtors, such  as registered  organizations, trusts,  decedent of                                                               
estate, or individual debtors.                                                                                                  
                                                                                                                                
Section 20  makes technical changes  to conform to the  new rules                                                               
governing individual debtor names on financing statements.                                                                      
                                                                                                                                
Section 21 makes a technical  change to parallel other provisions                                                               
of the section.  The change is needed for  ease of administration                                                               
by filing offices.                                                                                                              
                                                                                                                                
Sections 22 through 24 change  the term "correction statement" to                                                               
"information  statement" to  avoid giving  the impression  that a                                                               
filing  of the  statement  has  a legal  effect  of correcting  a                                                               
problem.  The changes  also allow  a secured  party of  record to                                                               
file an  information statement  regarding a  filed record  if the                                                               
secured party believes that the  person that filed the record was                                                               
not entitled to do so under  Article 9. Without this change, only                                                               
a debtor could file such a statement.                                                                                           
                                                                                                                                
Section 25  says that in order  for a secured party  to record an                                                               
affidavit  to facilitate  foreclosure  on a  mortgage serving  as                                                               
collateral for  a promissory note,  the secured party  must state                                                               
in the affidavit that the mortgagor is in default.                                                                              
                                                                                                                                
Sections 26 sets out an applicability provision for the Act.                                                                    
                                                                                                                                
Sections  27 through  33 set  out transition  provisions for  the                                                               
Act.                                                                                                                            
                                                                                                                                
Section 34  instructs the Department  of Natural  Resources (DNR)                                                               
on implementation of the Act.                                                                                                   
                                                                                                                                
Section  35 provides  a savings  clause for  an action,  case, or                                                               
proceeding commenced before July 1, 2013.                                                                                       
                                                                                                                                
Section  36  provides  an  immediate   effective  date  of  these                                                               
instructions.                                                                                                                   
                                                                                                                                
Section 37  provides an effective  date of  July 1, 2013  for the                                                               
Act. This avoids implementation issues across the states.                                                                       
                                                                                                                                
2:29:23 PM                                                                                                                    
MR.  HENNING  said that  many  of  the provisions  resolve  minor                                                               
ambiguities or address definitional changes.                                                                                    
                                                                                                                                
CHAIR  COGHILL  stated  that  he  would hold  HB  9  for  further                                                               
consideration.                                                                                                                  
                                                                                                                                
2:30:58 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
          SB  65-RETIREMENT PLANS; ROTH IRAS; PROBATE                                                                       
                                                                                                                                
2:35:57 PM                                                                                                                    
CHAIR   COGHILL  reconvened   the  meeting   and  announced   the                                                               
consideration of SB  65. "An Act relating  to property exemptions                                                               
for retirement  plans, individual  retirement accounts,  and Roth                                                               
IRAs;  relating  to  transfers of  individual  retirement  plans;                                                               
relating  to  the rights  of  judgment  creditors of  members  of                                                               
limited  liability companies  and partners  of limited  liability                                                               
partnerships;  relating to  the Uniform  Probate Code,  including                                                               
pleadings,  orders,  liability,  and notices  under  the  Uniform                                                               
Probate  Code  and  the  Alaska Principal  and  Income  Act,  the                                                               
appointment  of  trust  property,   the  Alaska  Uniform  Prudent                                                               
Investor Act, co-trustees, trust  protectors, and trust advisors;                                                               
relating to the Alaska Principal  and Income Act; relating to the                                                               
Alaska  Uniform   Transfers  to  Minors  Act;   relating  to  the                                                               
disposition  of human  remains; relating  to insurable  interests                                                               
for  certain  insurance  policies; relating  to  restrictions  on                                                               
transfers   of  trust   interests;   relating  to   discretionary                                                               
interests  in  irrevocable  trusts;  relating  to  the  community                                                               
property of married  persons; and amending Rule  64, Alaska Rules                                                               
of Civil Procedure, and Rule 301(a), Alaska Rules of Evidence."                                                                 
                                                                                                                                
CHAIR COGHILL  moved to adopt  the proposed  committee substitute                                                               
(CS), labeled 28-LS0473\O. He explained  that it removes what was                                                               
Section 37 in version C, and asked if there was objection.                                                                      
                                                                                                                                
SENATOR WIELECHOWSKI asked what Section 37 did.                                                                                 
                                                                                                                                
2:37:41 PM                                                                                                                    
CHAD HUTCHINSON, Staff,  Senator John Coghill, sponsor  of SB 65,                                                               
explained that  Section 37  amends AS  21.09.210(m). He  read the                                                               
subsection (m) as follows:                                                                                                      
                                                                                                                                
          (m) The tax imposed under this section for a                                                                      
     single[AN  INDIVIDUAL] life insurance policy  or for a                                                            
     group or other type of  policy that insures the life of                                                                
     one or more  individuals shall be computed  at the rate                                                                
     of                                                                                                                         
                  (1) 2.7 percent of policy year premium up                                                                     
     to $100,000; and                                                                                                           
                  (2) one-tenth of one percent of policy                                                                        
     year premium exceeding $100,000.                                                                                           
                                                                                                                                
MR.  HUTCHINSON deferred  to  Beth Chapman  or  David Shaftel  to                                                               
explain what that means and why it was eliminated.                                                                              
                                                                                                                                
CHAIR  COGHILL said  the  policy  call was  to  avoid the  fiscal                                                               
impact this year.                                                                                                               
                                                                                                                                
MR. HUTCHINSON agreed,  and added that it could be  taken up in a                                                               
separate bill in the future.                                                                                                    
                                                                                                                                
2:38:51 PM                                                                                                                    
CHAIR COGHILL  found no objection  and stated that version  O was                                                               
before the  committee. He  directed attention  to the  new fiscal                                                               
note,  and  stated his  intention  to  take  action on  the  bill                                                               
tomorrow.                                                                                                                       
                                                                                                                                
2:39:46 PM                                                                                                                    
MR.  HUTCHINSON  addressed   the  question  Senator  Wielechowski                                                               
raised  during  the last  hearing  regarding  the single  subject                                                               
rule.   He   explained   that  he   corresponded   with   Senator                                                               
Wielechowski's office and sent a  legal opinion that was prepared                                                               
by Representative Thompson for House  Bill 292. It was introduced                                                               
last year and was substantially  similar to SB 65. Mr. Hutchinson                                                               
said  he,  too, reviewed  the  opinion  and cross-referenced  the                                                               
cases stated in the memorandum on the Westlaw database.                                                                         
                                                                                                                                
He  highlighted  that  the  single   subject  rule  has  a  broad                                                               
interpretation, and an act generally  qualifies under the rule as                                                               
long as there  is a logical connection  or popular understanding.                                                               
The  Alaska Supreme  Court has  heard  eight of  these cases  and                                                               
seven  were  deemed  to  have  qualified  because  of  the  broad                                                               
interpretation. The  case that did  not qualify under  the single                                                               
subject  rule  tried  to  include  both oil  taxes  and  a  clean                                                               
election program. He opined that  SB 65 would qualify because the                                                               
subjects  all  address  trusts and  family  or  estate  financial                                                               
planning matters.                                                                                                               
                                                                                                                                
2:42:16 PM                                                                                                                    
SENATOR  WIELECHOWSKI said  the  opinion  that Legislative  Legal                                                               
Services issued  certainly raises the question  about whether the                                                               
bill  violates   the  single  subject  rule.   He  suggested  the                                                               
committee could manage the risk  by removing the offending parts.                                                               
He warned  that some attorney would  challenge it if there  was a                                                               
lot of money involved.                                                                                                          
                                                                                                                                
2:43:49 PM                                                                                                                    
DAVID  SHAFTEL, Attorney,  Anchorage, Alaska,  said the  group of                                                               
estate planning attorneys  and trust officers that  has worked to                                                               
improve the laws in this  area has received similar opinions from                                                               
Legislative Legal  Services nearly  every time  a bill  like this                                                               
has been introduced. One particular  attorney feels an obligation                                                               
to  bring  the  issue  up   because  it  is  a  possibility.  Mr.                                                               
Hutchinson  and  other  attorneys  believe that  it  won't  be  a                                                               
problem, and  the Supreme Court has  taken a broad view  on these                                                               
challenges.  He acknowledged  that there  was a  small risk  that                                                               
some  attorney would  make  an  argument in  the  future, but  it                                                               
wasn't a realistic concern. The  bill has 17 subjects but they're                                                               
all related to family and estate planning.                                                                                      
                                                                                                                                
2:48:02 PM                                                                                                                    
CHAIR COGHILL asked  if he had been working in  this venue for 16                                                               
years.                                                                                                                          
                                                                                                                                
MR. SHAFTEL clarified that he  began working with the legislature                                                               
in 1997, but he's been practicing in Alaska for about 40 years.                                                                 
                                                                                                                                
CHAIR COGHILL asked if the single  subject rule had always been a                                                               
topic of conversation.                                                                                                          
                                                                                                                                
MR. SHAFTEL said yes.                                                                                                           
                                                                                                                                
CHAIR COGHILL asked if there had been a court challenge.                                                                        
                                                                                                                                
MR. SHAFTEL  said not in the  area of estate planning  and estate                                                               
and trust administration.                                                                                                       
                                                                                                                                
SENATOR WIELECHOWSKI  said it's  a risk but  he wouldn't  push it                                                               
any further.                                                                                                                    
                                                                                                                                
2:50:10 PM                                                                                                                    
CHAIR COGHILL said he intended to have a sectional analysis at                                                                  
the next hearing.                                                                                                               
                                                                                                                                
He held SB 65 in committee.                                                                                                     
                                                                                                                                
2:53:15 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Coghill adjourned the Senate Judiciary Standing Committee                                                                 
meeting at 2:53 p.m.                                                                                                            

Document Name Date/Time Subjects
HB9-(28-LS0035-N).pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9 Sectional.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9- Sectional Summary by Leg Legal.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9-Sponsor Statement(1).pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9 Spporting Document- UCC Article 9 Amendments (2010) Summary.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9 Supporting Document- UCC Article 4A Amendments (2012) Summary.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9 Supporting Document- UCC Article 4A Amendments Legislative Fact Sheet.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9 Supporting Document- UCC Article 9 Amendments Legislative Fact Sheet.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9 Supporting Documents- Letter Joe Everhart 1-28-13.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9- Fiscal Note-DNR-REC-2-15-13.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
HB9- Fiscal Note- LAW-CIV-02-15-13.pdf SJUD 4/3/2013 1:30:00 PM
HB 9
Federal Litigation for 2008 to Present from DOL.pdf SJUD 4/3/2013 1:30:00 PM
HB 83
SB065CS(JUD)-DCCED-DOI-04-02-13.pdf SJUD 4/3/2013 1:30:00 PM
SB 65