02/08/2005 08:00 AM House STATE AFFAIRS

HB  90-STATE TREASURY WARRANTS                                                                                                
                                                                                                                                
CHAIR  SEATON announced  that  the first  order  of business  was                                                               
HOUSE  BILL NO.  90,  "An  Act requiring  warrants  drawn by  the                                                               
Department  of Administration  against the  state treasury  to be                                                               
negotiable instruments."                                                                                                        
                                                                                                                                
8:04:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG,  speaking on behalf of  the House State                                                               
Affairs Standing  Committee, sponsor  of HB  90, stated  that the                                                               
proposed  legislation is  the same  as House  Bill 373  from last                                                               
year and  would codify the  supreme court's decision  in National                                                             
Bank  of Alaska  v. Univentures  1231 site  824 P.2d  1377 Alaska                                                             
1992.     The  bill  would  make   treasury  warrants  negotiable                                                               
instruments within the meaning of  AS 45.03.104(a) in the Uniform                                                               
Commercial Code.   Representative  Gruenberg explained  that this                                                               
will cure  in statute a  problem that had  to be litigated  up to                                                               
the  supreme court  to  ensure that  treasury  warrants were  not                                                               
dishonored in  the technical commercial sense,  so that financial                                                               
institutions were  not left "holding  the bag" when  people would                                                               
negotiate  [treasury  warrants] and  the  state  would refuse  to                                                               
honor them.                                                                                                                     
                                                                                                                                
8:06:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG,   in  response  to  a   question  from                                                               
Representative Gardner, said he is  not aware of anyone who would                                                               
oppose  this  legislation.    He said  last  year's  bill  passed                                                               
through  the House  and resided  in the  Senate Rules  Committee,                                                               
where, he  surmised, time ran out.   In response to  a comment by                                                               
Representative Gatto,  he said he  hopes the House will  pass the                                                               
bill and it will make it through  the Senate.  He said [HB 90] is                                                               
good business.                                                                                                                  
                                                                                                                                
8:07:49 AM                                                                                                                    
                                                                                                                                
KIM  GARNERO,  Director,  Division   of  Finance,  Department  of                                                               
Administration, noted  that since the supreme  court decision the                                                               
state has  administered its  warrants as  negotiable instruments,                                                               
thus, no  administrative changes would  be necessary as  a result                                                               
of HB 90.  She offered to answer questions from the committee.                                                                  
                                                                                                                                
8:08:52 AM                                                                                                                    
                                                                                                                                
MICHELLE PREBULA, Cash Manager,  Treasury Division, Department of                                                               
Revenue,  in response  to a  question from  Representative Gatto,                                                               
provided a brief  description of her job and noted  that there is                                                               
a staff of  six, including herself.  In response  to Chair Seaton                                                               
regarding  whether anything  has been  left out  of the  proposed                                                               
legislation, she said she thinks HB  90 will do what the division                                                               
wants it to and is a good bill.                                                                                                 
                                                                                                                                
8:10:17 AM                                                                                                                    
                                                                                                                                
MS.  GARNERO noted  that  two years  ago  the legislature  passed                                                               
House Bill  109, which changed  the warrant clearing  process for                                                               
stale dated  warrants.  She said,  "This will be the  final tweak                                                               
necessary for it."                                                                                                              
                                                                                                                                
8:10:44 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  noted  that   [HB  90]  was  basically                                                               
drafted by the administration.                                                                                                  
                                                                                                                                
8:11:01 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON,  after  ascertaining  that there  was  no  one  to                                                               
testify, closed public testimony.                                                                                               
                                                                                                                                
8:11:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  moved to  report HB  90 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
note.   There being  no objection,  HB 90  was reported  from the                                                               
House State Affairs Standing Committee.