03/07/1994 01:15 PM House JUD

  HB 439 - UNIFORM FRAUDULENT TRANSFER ACT                                     
                                                                               
  Number 226                                                                   
                                                                               
  CHAIRMAN PORTER asked if MARY ELLEN BEARDSLEY and JERRY                      
  KURTZ were on line via teleconference.  Ms. Beardsley                        
  confirmed that she was present on line.  Chairman Porter                     
  said, "Well, we have Mary Ellen at least.  I would like                      
  to now, if we could, quickly, take up the Fraudulent                         
  Transfers Act, HB 439.  We have, at least first, Mary Ellen                  
  Beardsley from the Department of Law to tell us about the                    
  act and maybe we have Jerry Kurtz and maybe we don't.  Mary                  
  Ellen, welcome and please tell us about the bill."                           
                                                                               
  Number 230                                                                   
                                                                               
  MARY ELLEN BEARDSLEY, Department of Law, spoke via                           
  teleconference from Anchorage.  She said, "I would like to                   
  defer to Mr. Kurtz, who is here.  Let him do his                             
  presentation first, and then I will speak after him."                        
                                                                               
  Number 231                                                                   
                                                                               
  JERRY KURTZ, Uniform Law Commission, testified via                           
  teleconference from Anchorage.  [Testimony is difficult to                   
  hear due to chronic foreground noise.]  He said, "Because I                  
  don't know many of the people on the committee, I will very                  
  briefly give you some [indisc.] background and try and keep                  
  my remarks [indisc.] fairly limited.  I hope that when I do                  
  so you will ask any questions that you have [indisc.]....                    
                                                                               
  "I am also [indisc.].  I have practiced law in Alaska for                    
  about 30 years, or more, and in the last 25 years I have                     
  primarily worked in commercial and business problems.  I am                  
  here representing the Uniform Law Commission of the United                   
  States, and I am a representative on that commission                         
  appointed by the Governor of Alaska, and have been since                     
  1989.  Prior to that time I was with the Alaska [indisc.]                    
  Commission for about eight years, and in both of these                       
  positions I have worked primarily with efforts to improve                    
  laws rather than to push them in favor of one direction of                   
  another.                                                                     
                                                                               
  "I am strongly in favor of HB 439 because I think it would                   
  be a substantial improvement in Alaska law.  At this point                   
  it's worth briefly explaining what we're talking about.                      
  Fraudulent conveyances are not necessarily criminally                        
  fraudulent conveyances.  In fact, it is a term of ours that                  
  usually does not involve criminal actions.  But the                          
  fraudulent conveyance is a transfer of money, a substantial                  
  proportion of [indisc.] property, or an item of [indisc.]                    
  property, that is deliberately made to deprive [indisc.]                     
  creditors of the property.  Or it's made under circumstances                 
  where most people would think it was only fair to let                        
  creditors have the property.                                                 
                                                                               
  "Typical fraudulent conveyance occurs when someone has                       
  borrowed a great deal of money or promised to do something                   
  under a contract, and realizes that they aren't going to                     
  make it [indisc.].  People who relied upon that person's                     
  [indisc. -financial?] statement or their [indisc.] as                        
  property owners, when they entered the agreement, or loaned                  
  the money, suddenly find that there is no property there.                    
  Now, Alaska's law in this area is very, very old, indeed.                    
  It goes back to the Statute of Elizabeth, which was a                        
  statute in England and..."                                                   
                                                                               
  CHAIRMAN PORTER interjected, "Jay, we're about 15 minutes                    
  past the end of the committee time, and I've got a couple of                 
  people who can stay for about five minutes, but otherwise,                   
  they've got to scoot.  Could we get the executive summary?"                  
                                                                               
  MR. KURTZ said, "The executive summary is that it is                         
  strongly in the interest of this state, [indisc.] most of                    
  us, to try to promote a fair commercial climate, a business                  
  climate and a more constructive legal climate.  This bill                    
  will help do that.  It's substantially the law now of every                  
  state west of the Mississippi except Louisiana, Iowa,                        
  Kansas, Wyoming and Alaska.  In other words, we're not only                  
  not in coordination with those states, we are grossly behind                 
  them.  26 states adopted the old Uniform Act which went into                 
  effect in 1918.  32 states [indisc.] have adopted this new                   
  version, which was first [indisc.] in 1984.  Alaska is still                 
  operating under the law of Elizabeth.  It will, I think,                     
  help everybody except the deadbeat who is really trying to                   
  hide stuff, to not only know what the law is, but to enforce                 
  agreements that are [indisc.] agreements."                                   
                                                                               
  CHAIRMAN PORTER stated, "Jerry, thank you very much.  What                   
  is the wish of the committee?"                                               
                                                                               
  Number 322                                                                   
                                                                               
  REP. PHILLIPS commented, "Mr. Chairman, anything that moves                  
  us out of the Elizabethan age... I'd move that we move the                   
  bill out of committee with individual recommendations."                      
                                                                               
  CHAIRMAN PORTER said, "We have a motion to move.  Is there                   
  discussion?"                                                                 
                                                                               
  REP. JAMES stated, "Let's move this bill out of here, it's a                 
  good bill."                                                                  
                                                                               
  CHAIRMAN PORTER asked, "Is there objection?"  There being no                 
  objection, HB 439 was moved out of committee.