Legislature(1993 - 1994)
04/19/1993 01:00 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.