03/27/2000 03:30 PM House L&C

HB 376-MECHANIC/MATERIALMEN LIENS                                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG  announced the first order of  business would be                                                              
HOUSE  BILL  NO.  376,  "An  Act  increasing  the  duration  of  a                                                              
mechanic's or  materialman's lien to  one year; and  providing for                                                              
an effective date."  He indicated  no action would be taken on the                                                              
bill today.                                                                                                                     
                                                                                                                                
Number 0118                                                                                                                     
                                                                                                                                
BRYAN  MERRELL,  State  Counsel and  Underwriter,  First  American                                                              
Title  Insurance   Company,  testified  via   teleconference  from                                                              
Anchorage.  He commented:                                                                                                       
                                                                                                                                
     Our  interest  in  this  bill   simply  relates  to  the                                                                   
     interests  of our  primary  customers:  the real  estate                                                                   
     agents   and  brokers,   lenders   and  their   clients;                                                                   
     borrowers,  buyers  and sellers  of  real estate.    The                                                                   
     extension  provisions  set   forth  in  the  bill  would                                                                   
     essentially  double   the  time  frame  for   which  the                                                                   
     mechanic's  liens  duration would  last,  and I  haven't                                                                   
     heard any of the rationale as  yet for why that would be                                                                   
     a good idea.                                                                                                               
                                                                                                                                
     I can certainly  think of some reasons why  it would not                                                                   
     be  a good  idea (indisc.--loud  noises)  ... the  whole                                                                   
     idea behind  having the mechanic's  lien statute  was to                                                                   
     give contractors,  or those  who improve real  property,                                                                   
     the ability  to lien the  property without having  to go                                                                   
     through a  judicial process until  after the lien  is of                                                                   
     record.  The  process, as set up in Alaska,  is meant to                                                                   
     be a relatively  quick one.  That is, you  get your shot                                                                   
     at having a lien on the property,  but then have to take                                                                   
     action  in a fairly  short period  of time  in order  to                                                                   
     enforce your rights against the property.                                                                                  
                                                                                                                                
     I can't think of any really  good reason to extend that.                                                                   
     It   would    potentially   slow   down    real   estate                                                                   
     transactions,   particularly  those   relating  to   new                                                                   
     construction.  It would affect  the business of builders                                                                   
     and  of lenders  in that  there would  be an  additional                                                                   
     period of time for which they  would have to either bond                                                                   
     around   those   mechanic's    liens   or   have   their                                                                   
     transactions  put on hold until  those liens  went away.                                                                   
     And so many  times, it seems to me, in  my experience of                                                                   
     working in the field, the liens,  when they're recorded,                                                                   
     aren't  particularly  well thought  out  and very  often                                                                   
     aren't  valid necessarily, either  because there  really                                                                   
     wasn't  any debt  that was  owing or  because the  party                                                                   
     that  was  attempting to  use  the mechanic's  lien  law                                                                   
     simply didn't have the right to do that.                                                                                   
                                                                                                                                
     So, at  this time,  First American,  and I believe,  the                                                                   
     majority  of  the  members  of  the  Alaska  Land  Title                                                                   
     Association  - [of]  which First American  is a  member,                                                                   
     I'm on  the Board  of Directors -  don't feel like  that                                                                   
     the  bill is  a  good idea.   And  we're  still sort  of                                                                   
     waiting  to hear from  someone why it's  a good  idea to                                                                   
     try and extend these liens.                                                                                                
                                                                                                                                
CHAIRMAN  ROKEBERG  said he  believes  that  is why  the  sponsor,                                                              
Representative Joe  Green, did not have the committee  take action                                                              
on the bill  today.  He suggested  that Mr. Merrell  contact Kevin                                                              
Jardell, staff to Representative Green.  [HB 376 was held over.]