01/27/1998 01:38 PM Senate L&C

                    SB 195 - COMMON LAW LIENS                                  
                                                                               
CHAIRMAN LEMAN announced SB 195 to be up for consideration and that            
it was introduced by request through the Rules Committee.                      
                                                                               
MR. TIM BENINTENDI, Staff to the Senate Rules Committee, explained             
that SB 195 addresses the emerging problem of filing of nuisance               
liens in this State with the intention of retribution.  Such liens             
have been filed against property owned by public officials and                 
others who have fallen in disfavor with certain groups or                      
individuals who embrace an opposing philosophical or political                 
view.  The liens rarely have true commercial foundation, but are               
used as a harassment tactic.  The practice has now surfaced in                 
Alaska as several municipal officials can attest from the                      
Municipality of Anchorage.                                                     
                                                                               
SB 195 makes it a misdemeanor to record a non-consensual common law            
lien without court approval.  It would ease the process of                     
releasing a lien and would provide for filing a notice of invalid              
lien by attorneys of public officials.  It would also set out                  
penalties against those who file such nuisance liens.  It has two              
$0 fiscal notes and has a wide variety of support in the public                
sector.                                                                        
                                                                               
CHAIRMAN LEMAN asked if the Department of Law would represent                  
someone in the legislative branch of government.                               
                                                                               
MR. BENINTENDI said that the Legislative Legal Department would                
represent them.  He understands that municipal attorneys would                 
represent their people.                                                        
                                                                               
MR. WOOLIVER, Alaska Court System, testified that the court system             
asked for this bill to be introduced to address this growing                   
problem of recording common law liens against real and personal                
property in Alaska which is an enormous problem in some other                  
states.  Although these liens are meaningless, they still cloud                
title that is typically discovered when someone goes to sell or                
borrow against their property.  Typically these liens are for                  
several hundred thousand, if not millions, of dollars.  No action              
can be taken on a property until this lien is cleared up.                      
                                                                               
In the past generally one has to file a lawsuit to get these                   
resolved.  Suing someone for a common law lien can be frustrating              
experience because they don't believe they are subject to the                  
jurisdiction of the court and you end up in a paper war in addition            
to trying to get a lien removed, Mr. Wooliver said.                            
                                                                               
Under current law there are several ways people can legitimately               
file liens and this bill doesn't seek to frustrate those.  For                 
example there are material liens, mechanics liens, fishermen liens,            
etc. and all of these liens are typically tied to a specific piece             
of property for work done on the property.  There is an actual tie             
between the lien and what the person has done.                                 
                                                                               
Common law liens are not accompanied by any kind of valid court                
judgement and aren't tied to work done or goods or services                    
provided. They are typically filed against public officials who                
have run afoul of someone who has recorded the lien.                           
                                                                               
SB 195 seeks to address this problem in three ways.  First there               
are expedited procedures to have a lien removed or declared invalid            
if one is filed against a person.  There are two aspects to that.              
An attorney representing an official could record a notice of                  
invalid lien and it would become invalid and not have to go to                 
court.  The second option is for someone who is not an official who            
can petition the court and attach an affidavit explaining the                  
predicament.  The the court can have a hearing within 20 days.  If             
the person doesn't show up, the court enters a notice of invalid               
lien and records that.  If a person does show up and the court                 
finds this is an invalid lien, then court records a notice of                  
invalid lien and the person who is the lien claimant would pay                 
costs and actual and reasonable attorney fees.                                 
                                                                               
The second prong is that it provides for civil damages and third,              
it makes the filing of a bogus common law lien a class A                       
misdemeanor.                                                                   
                                                                               
Number 525                                                                     
                                                                               
MR. CLIFF JOHN GROH, Municipality of Anchorage, strongly supported             
this bill.  He explained there have been 43 false liens filed                  
against municipal officials in Anchorage.  These filings are                   
getting to be more common.  He explained some of the financing                 
problems one can run into with liens filed on their properties.                
                                                                               
MS. SHARON YOUNG, State Recorder, testified in addition to Mr.                 
Groh's testimony that these types of liens are definitely becoming             
more frequent in Alaska as everywhere else in the United States.               
They are definitely becoming a tool with which people are using the            
public record to get at people they are discontent with.                       
                                                                               
She definitely supports this bill from the standpoint of the                   
recording system in general.                                                   
                                                                               
TAPE 98-2, SIDE B                                                              
                                                                               
MS. YOUNG said she did not want recorders placed in the role of                
having to review documents for substantive content or validity.                
That concern is resolved with this bill.                                       
                                                                               
CHAIRMAN LEMAN asked if her office sends a notice to an owner when             
a lien is filed.                                                               
                                                                               
MS. YOUNG replied that there is no notice provision by her office.             
                                                                               
SENATOR MACKIE moved to pass SB 195 out of committee with                      
individual recommendations.  There were no objections and it was so            
ordered.