Legislature(1993 - 1994)
04/19/1993 01:00 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ACTION NARRATIVE
TAPE 93-64, SIDE A
Number 000
The House Judiciary Standing Committee meeting was called to
order at 1:31 p.m. on April 19, 1993. A quorum was not
present; therefore, a work session remained in progress
until a quorum was established. Chairman Porter announced
that all individuals who wished to testify via
teleconference wanted to address SB 149. He said that it
was his intention to hold a joint hearing on SB 149, SB 86,
and SB 112, Uniform Commercial Code Revisions.
SB 86 FUND TRANSFERS UNDER THE UCC
SB 112 UNIFORM COMMERCIAL CODE REVISIONS
SB 149 REVISION OF BANKING CODE
CHAIRMAN PORTER announced that when SB 149 was heard by the
Labor and Commerce Committee, a provision allowing banks to
enter the insurance business was removed. He noted that it
was not the committee's intention to reinsert that
provision.
Number 067
BILL KELDER, LEGISLATIVE AIDE TO SEN. JAY KERTTULA, the
PRIME SPONSOR of SB 86 and SB 112, said that the two pieces
of legislation were companion bills modifying and
modernizing the state's Uniform Commercial Code (UCC). He
noted that 45 other states had already implemented most of
the changes contained in the two bills. Alaska, he said,
needed to "catch up" to those other states in order that
businesses outside of Alaska would feel comfortable doing
business in Alaska.
MR. KELDER stated that SB 86 created a new Chapter 14 for
the UCC, and pertained to the electronic transfer of funds
for business purposes. He commented that, on a given day
nationally, one trillion dollars changed hands in this
manner. But, he said, Alaska's UCC had not been modified to
take this practice into account. He noted that the
governor's office, the attorney general, the Division of
Banking, and the Department of Natural Resources' recorder's
office supported SB 86. Additionally, he said, the banking
community and the business community endorsed the
legislation. He expressed his opinion that SB 86 would help
to reduce litigation.
MR. KELDER said that all of the changes made to the original
SB 112 were merely technical in nature. He said that SB 112
represented changes to the UCC which would accommodate the
changes made in SB 86 regarding electronic funds transfers,
and also updated other sections of the UCC. A section
pertaining to bulk sales was being deleted from the UCC, he
said, because it was out-of-date. Beyond that, he added,
SB 112 updated the UCC and made other technical changes.
Number 165
REP. PHILLIPS asked Mr. Kelder if any attempts had been made
last year to change the UCC.
Number 170
MR. KELDER replied that he was not aware of any such
attempts. He said that in approximately 1989, the federal
government decided that the UCC needed to be updated to
reflect current technology. Uniform Law commissioners from
all of the states came together to develop a model law.
States were given until 1994 to come into compliance with
the model law, he said. If states failed to do so, he said,
then the federal government could take over enforcement of
the UCC.
Number 187
REP. PHILLIPS asked if failure to enact SB 112 and SB 86
would mean that Alaska would be under the purview of federal
banking codes and laws. She asked Mr. Kelder how many
states had adopted UCC updates.
MR. KELDER replied that 45 states had done so. He noted
that Alaska had until 1994 to enact the UCC update.
Number 207
ART PETERSON, A UNIFORM LAW COMMISSIONER FOR ALASKA, said
that SB 86 and SB 112 contained the most recent proposals of
the Uniform Law Conference, a national organization. He
said that all states had uniform commercial codes and needed
to keep them up-to-date. He commented that Alaska was
getting further and further behind on the issue of
electronic fund transfers, putting Alaska businesses at a
serious disadvantage. He noted that SB 112 contained three
basic parts: personal property leasing, negotiable
instruments, and bulk sales. He said that Alaska was also
falling behind with regard to these areas. He stated that
the dollar amount of business done in these areas was
staggering, resulting in a disadvantage to the state's
businesses.
(REP. DAVIDSON and REP. KOTT arrived at approximately 1:45
p.m. A quorum was obtained.)
Number 307
MR. PETERSON summarized his earlier comments for the benefit
of Rep. Kott and Rep. Davidson. He noted that SB 86 and
SB 112 embodied current thinking of the Uniform Law
Conference. He said that if the bills were not enacted, the
federal government might intervene. He stated that federal
law already regulated consumer electronic funds transfers.
He said that both bills recognized that business was now
sometimes transacted by electronic impulses. He commented
that the state needed to enact laws relating to this
business practice. He noted that bulk sales provisions
would be repealed because changes in business practices had
negated the need for those provisions.
Number 370
REP. GREEN asked why some states had not yet enacted the
changes proposed by the Uniform Law Conference.
Number 376
MR. PETERSON replied that there had been some concerns
regarding the negotiable instruments portion of the Uniform
Law Conference's recommendations, but those issues had been
largely resolved. He said that other issues of concern had
been resolved in one manner or another. Regarding why other
states had not yet enacted the Uniform Law Conference
proposals, he said that most states probably did not
perceive that it was urgent to do so.
Number 408
REP. PHILLIPS asked Mr. Peterson to explain the difference
between the Senate Labor and Commerce Committee's version of
SB 112 and the Senate Judiciary Committee's version.
Number 414
MR. PETERSON mentioned that the committee members had in
their bill packets a list of the changes between the two
versions of SB 112. He said that all of the changes were
tiny, technical changes.
Number 437
REP. DAVIDSON made a motion to move SB 86 and SB 112 out of
committee with individual recommendations and attached
fiscal notes. There being no objection, it was so ordered.
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