Legislature(1995 - 1996)
04/29/1996 03:06 PM House L&C
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 29, 1996
3:06 p.m.
MEMBERS PRESENT
Representative Pete Kott, Chairman
Representative Beverly Masek
Representative Jerry Sanders
Representative Brian Porter
Representative Kim Elton
Representative Gene Kubina
MEMBERS ABSENT
Representative Norman Rokeberg, Vice Chairman
COMMITTEE CALENDAR
HOUSE BILL NO. 550
"An Act relating to investments by fiduciaries; and providing for
an effective date."
- MOVED HB 550 OUT OF COMMITTEE
PRESENTATION: Proposed changes in regulations of Alaska Workers'
Compensation Board
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 550
SHORT TITLE: INVESTMENTS BY FIDUCIARIES
SPONSOR(S): LABOR & COMMERCE BY REQUEST
JRN-DATE JRN-PG ACTION
04/10/96 3676 (H) READ THE FIRST TIME - REFERRAL(S)
04/10/96 3676 (H) LABOR & COMMERCE
04/29/96 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS REGISTER
GEORGE DOZIER, Legislative Assistant
to Representative Pete Kott
Alaska State Legislature
Capitol Building, Room 432
Juneau, Alaska 99801
Telephone: (907) 465-3306
POSITION STATEMENT: Gave sponsor statement for HB 550.
ACTION NARRATIVE
TAPE 96-41, SIDE A
Number 001
The House Labor and Commerce Standing Committee was called to order
by Chairman Pete Kott at 3:06 p.m. Members present at the call to
order were Representatives Masek, Porter, Kubina, Elton, Sanders
and Kott.
HB 550 - INVESTMENTS BY FIDUCIARIES
Number 119
CHAIRMAN PETE KOTT announced the committee would address HB 550,
"An Act relating to investments by fiduciaries; and providing for
an effective date." He said there is also a Senate version of the
bill which has been bogged down in the Senate Finance Committee.
The Senate has asked that the House move their version of the bill.
Number 196
GEORGE DOZIER, Legislative Assistant to Representative Pete Kott,
came before the committee to address HB 550, sponsored by the House
Labor and Commerce Committee. He said the current state of the law
is that if a bank assumes a fiduciary responsibility for investing
trust funds, banks are accorded leave to invest trust funds in
United States securities. Some states have construed that phrase
to mean just simply treasury bills and not permit investment in
bonds that are issued by agencies of the United States government.
Mr. Dozier explained HB 550 defines that phrase to include United
States governmental agencies as opposed to treasury bonds. It also
permits banks to not only make those investments directly with
United States governmental agencies, but also to invest in
financial institutions that invest in United States governmental
securities. The protection is accorded to the extent that only
those companies that exclusively invest in U.S. governmental
securities are covered. He stated that is his understanding of the
bill.
CHAIRMAN KOTT said that is also his understanding of the bill. He
said, "So essentially in the second thought, you could invest in
a bank - you could invest your funds in an investment company that
have portfolios that are restricted to those obligations regarding
the U.S. government."
MR. DOZIER indicated that is correct.
CHAIRMAN KOTT explained that the bill basically clarifies statute.
As mentioned by Mr. Dozier, under present law, the banks may invest
in those obligations of the United States. Many states have
construed that "yes" as meaning investing in U.S. treasuries. The
bill makes it clear that there are other vehicles out there such as
other bonds like U.S. savings bonds.
Number 403
REPRESENTATIVE KIM ELTON questioned whether it includes municipal
bonds.
CHAIRMAN KOTT said he doesn't think municipal bonds are included.
REPRESENTATIVE PORTER said, "Agencies or municipalities of the
United States."
REPRESENTATIVE ELTON said that isn't construed the way we construe
a school district.
REPRESENTATIVE PORTER said a school district isn't a political
subdivision.
Number 481
REPRESENTATIVE PORTER made a motion to move HB 550 out of committee
with individual recommendations and a zero attached fiscal note.
CHAIRMAN KOTT asked if there was an objection. Hearing none, HB
550 moved out of the House Labor and Commerce Committee. Chairman
Kott indicated if there is anything more to the bill, he would
bring it back to committee.
ADJOURNMENT
Number 585
CHAIRMAN KOTT adjourned the House Labor and Commerce Committee
meeting at 3:14 p.m.
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