Legislature(1993 - 1994)
03/02/1993 02:35 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATOR KELLY introduced CS FOR SENATE BILL NO. 112(L&C) (UNIFORM COMMERCIAL CODE REVISIONS), sponsored by SENATOR JAY KERTTULA, and invited ARTHUR PETERSON, Uniform Law Commissioner for Alaska, to explain the bill. MR. PETERSON explained that although he was now an attorney in private practice with Dillon & Findley, he was appearing in his role as a Uniform Law Commissioner for Alaska, and he strongly supported SB 112. MR. PETERSON said the bill was a faithful adherence to the national uniform versions and covers three areas: (1) a new article 2A on personal property leasing (Section 125 of the bill), (2) amendments to the UCC's articles 3 and 4, regarding negotiable instruments, bank deposits, and collections (Sections 14 through 117 and 127 of the bill), and (3) repeal of UCC's article 6 on bulk sales (Section 127 of the bill). He explained Alaska's numbering system was different, and he preferred to refer to the article numbers. Number 382 MR. PETERSON said the Labor and Commerce Committee Substitute for SB 112 before the committee was a faithful reproduction, which makes a couple of technical corrections. He noted an additional typo on line 27, which would insert "lessor or" in front of "lessee," and he said he had discussed it with the drafting department. MR. PETERSON said there was presently no law on the subject of Personal Property Leasing, which means that any questions that arise go to litigation depending on the disagreement, go to the courts, and provide activity for attorneys, when statutory authority should provide the necessary guidance. He reviewed the items that fall under personal property and said the current absence of these rules inspires litigation. He explained a national system was needed since commerce was conducted across state lines. MR. PETERSON noted that the Negotiable Instruments articles of the UCC had not been revised in about 30 or 40 years, and he reviewed the proliferation of negotiable instruments from 9 billion in the late 1950 to 48 billion checks now. He explained SB 112 recognized the need to provide a number of simple and fair answers on a national basis. In the Bulk Sales area, MR. PETERSON noted it was a sale out of the ordinary course of business or a "bulk transfer," and he explained, under the old law, there was a great concern for the creditors, leaving the buyers to fend for themselves. He described new laws have partially overlapped article 6, and more sophisticated and wide-spread inventory financing under article 9 of the UCC have provided even more significant protection for creditors. He reviewed a letter from a group of 16 Alaska business law attorneys listing their reasons for unanimously supporting SB 112. Number 447 SENATOR LINCOLN asked MR. PETERSON to point out the difference between the original bill and the changes made in the Labor and Commerce Committee. MR. PETERSON listed the changes which dealt with the insertion of words to avoid changing the citations every time another chapter is added, to correct typos, to promote consistency with the national version, to resolve inconsistencies, to correct significant punctuation, and to add relevant language. Number 511 SENATOR LINCOLN discussed some of the inconsistent language with MR. PETERSON, and MR. PETERSON agreed she was correct. SENATOR RIEGER had a question on page 93 with the use of the word, unconscionability, and MR. PETERSON directed him to line 15 (d) to read the modification to be sure the national approach prevails, within the context of Alaska Rule of Civil Procedure 82 dealing with a consumer lease. SENATOR RIEGER was still concerned with an "unconscionable clause" in a contract, and he gave an example of its use being a blank check in a contract. MR. PETERSON used a similar example to explain the need for a nationally uniform system of rights and obligations. SENATOR KELLY said the bill would be discussed at the next meeting, and he invited GERALD KURTZ, a Uniform Law Commissioner in Alaska, to testify from his off-net site in Anchorage. MR. KURTZ explained that in addition to a tremendous increase in the number of checks, electronic transfers have become the way of doing business without any modification of the law. He suggested, in the personal property leasing, to read a few car ads to get an idea of personal property leasing on the car business. He said those two areas of the legislation were catching up with the times and need to be adopted. Number 565 In response to SENATOR RIEGER's question on the attorney's fees, said the key word in the legislation was "reasonable," and he claimed a typical Alaskan judge is quick to crawl all over an attorney who tries to continue litigation where there is no reason. They continued a discussion of attorney fees. SENATOR KELLY checked with MR. KIRKPATRICK, MR. CRANDALL, TAPE 93-16, SIDE B Number 001 and GARY AMANDOLA for their opinions on the bill.
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