03/09/2006 01:30 PM Senate TRANSPORTATION

              SB 300-MOTOR VEHICLE NEGATIVE EQUITY                                                                          
                                                                                                                                
CHAIR HUGGINS announced SB 300 to be up for discussion.                                                                         
                                                                                                                                
SENATOR  RALPH SEEKINS,  sponsor of  SB 300,  explained that  the                                                               
intent was to put Alaskan-based  in-house financing on an "upside                                                               
down position"  for vehicles on  equal footing with  banks. Banks                                                               
are  primarily regulated  by federal  law  and the  non-regulated                                                               
institutions  have to  comply  with state  law.  This bill  would                                                               
eliminate  any   question  about   whether  practices   of  these                                                               
financial institutions would  comply with state law  and put them                                                               
on an equal  footing with federal law. He  clarified his comments                                                               
with illustrations.                                                                                                             
                                                                                                                                
SENATOR FRENCH asked what the  outstanding prior balance referred                                                               
to.                                                                                                                             
                                                                                                                                
SENATOR SEEKINS  replied that it referred  to a car that  was not                                                               
worth as  much as the outstanding  loan amount on it.  He said it                                                               
is critical  to disclose these  amounts on a lease  because those                                                               
are regulated differently  and it could be  considered a personal                                                               
loan  if it's  not  disclosed properly.  It  is called  "negative                                                               
equity" in the auto business.                                                                                                   
                                                                                                                                
2:00:10 PM                                                                                                                    
CHAIR HUGGINS  reiterated that SB  300 removes the  question that                                                               
this kind of transaction complies with  state law. He asked if he                                                               
heard of any opposition.                                                                                                        
                                                                                                                                
SENATOR SEEKINS said  he hadn't heard of any  objections. He even                                                               
asked  Ed  Sniffen,  Assistant  Attorney  General,  who  said  he                                                               
thought it was good legislation.                                                                                                
                                                                                                                                
CHAIR  HUGGINS  noted that  he  had  an  E-mail from  the  Alaska                                                               
Bankers Association stating it had no objection to it.                                                                          
                                                                                                                                
2:01:04 PM                                                                                                                    
SENATOR  KOOKESH  moved to  report  SB  300 from  committee  with                                                               
individual  recommendations   and  attached  zero   fiscal  note.                                                               
Without  objection,   SB  300  was   reported  from   the  Senate                                                               
Transportation Standing Committee.