Legislature(1993 - 1994)

04/19/1993 01:00 PM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  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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