Legislature(1995 - 1996)

04/23/1996 04:02 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
               SB 323 INVESTMENTS BY FIDUCIARIES                              
                                                                              
 SENATOR KELLY announced  SB 323  to be up for consideration.                  
                                                                               
 ROD SHIPLEY, Senior Vice President and Trust Manager for the                  
 National Bank of Alaska, said he was responsible for all of NBA's             
 fiduciary activities.  He said that SB 323 updates and clarifies              
 provisions in Title 13 and amends Title 6, the Alaska Banking Code.           
                                                                               
 MR. SHIPLEY said that 35 states have enacted legislation the same             
 as SB 131 which Governor Knowles signed in April '96.  The                    
 obligations of the U.S. Government has been interpreted in the 35             
 other states to include agencies or instrumentalities such as                 
 federate securities corporations.  However, a minority of states              
 have interpreted obligations of the U.S. Government to include only           
 treasury obligations.  SB 323 removes the ambiguity.  Agencies or             
 instrumentalities of the U.S. Government include the Federal Home             
 Administration (FHA), General Services Administration, U.S.                   
 Maritime Association, and Small Business Administration, the                  
 Government and National Mortgage Association, Housing and Urban               
 Development, Farms Home Administration, the Federal National                  
 Mortgage Association, the Federal Home Loan Mortgage Corporation,             
 Federal Land Bank, Central Bank For Cooperatives, the Federal                 
 Intermediate Credit Bank, Student Loan Marketing Association, and             
 the Federal Home Loan Banks.                                                  
                                                                               
 SB 323 also provides for fiduciary investment or interest in other            
 investment companies whose portfolios are restricted to obligations           
 of the U.S. Government.  This amendment is aimed at capturing the             
 administrative efficiencies and cost savings generated by very                
 recent structural changes in the manner in which some investment              
 companies conduct their business.                                             
 Section two achieves consistency between Title 6 and Title 13.  It            
 clearly establishes a law which pertains to entities which operate            
 simultaneously under both titles.                                             
                                                                               
 Number 159                                                                    
                                                                               
 SENATOR TORGERSON questioned the effective date of sections 3 and             
 4.                                                                            
                                                                               
 KEVIN SULLIVAN, Federated Securities, Inc., explained that the                
 effective date ties in with SB 131, the underlying piece of                   
 legislation this is speaking to.  There will be no window in time             
 when SB 131 goes into effect based upon when it was signed by the             
 Governor.                                                                     
                                                                               
 SENATOR TORGERSON moved SB 323 from committee with individual                 
 recommendations.  There were no objections and it was so ordered.             

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