01/27/2006 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB338 | |
| HB295 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | HB 295 | ||
| = | HB 338 | ||
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
January 27, 2006
3:24 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Gabrielle LeDoux
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
Representative Pete Kott
COMMITTEE CALENDAR
HOUSE BILL NO. 338
"An Act relating to applications, qualifications, and criminal
history and background checks for a certificate of fitness for
explosives handlers; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 295
"An Act adopting the Uniform Fraudulent Transfer Act and
relating to fraudulent transfers of property."
- MOVED CSHB 295(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 338
SHORT TITLE: CERTIF. OF FITNESS FOR EXPLOSIVE HANDLERS
SPONSOR(S): REPRESENTATIVE(S) CHENAULT, LYNN
01/09/06 (H) PREFILE RELEASED 12/30/05
01/09/06 (H) READ THE FIRST TIME - REFERRALS
01/09/06 (H) L&C, FIN
01/18/06 (H) L&C AT 3:15 PM CAPITOL 17
01/18/06 (H) Heard & Held
01/18/06 (H) MINUTE(L&C)
01/27/06 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 295
SHORT TITLE: UNIFORM FRAUDULENT TRANSFER ACT
SPONSOR(S): REPRESENTATIVE(S) ANDERSON
05/02/05 (H) READ THE FIRST TIME - REFERRALS
05/02/05 (H) L&C, JUD
05/04/05 (H) L&C AT 2:00 PM CAPITOL 17
05/04/05 (H) Scheduled But Not Heard
01/18/06 (H) L&C AT 3:15 PM CAPITOL 17
01/18/06 (H) Scheduled But Not Heard
01/27/06 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
GREG O'CLARAY, COMMISSIONER
Department of Labor and Workforce Development
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 338.
LYNN LEVENGOOD, Attorney
Fairbanks, Alaska
POSITION STATEMENT: Offered to provide information on HB 295.
MICHELLE BOUTIN, Attorney
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 295.
HEATH HILYARD, Staff
to Representative Tom Anderson
Alaska State Legislature
POSITION STATEMENT: Presented HB 295 on behalf of Representative
Anderson, sponsor.
ACTION NARRATIVE
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:24:14 PM. Representatives
Anderson, Crawford, Guttenberg and Rokeberg were present at the
call to order. Representatives LeDoux and Lynn arrived as the
meeting was in progress.
HB 338-CERTIF. OF FITNESS FOR EXPLOSIVE HANDLERS
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 338, "An Act relating to applications,
qualifications, and criminal history and background checks for a
certificate of fitness for explosives handlers; and providing
for an effective date."
CHAIR ANDERSON said he is intending to hold HB 338 because of
problems. Members of labor organizations have asked it to be
held, saying they would like to work with Commissioner O'Claray.
GREG O'CLARAY, COMMISSIONER, Department of Labor and Workforce
Development, said he is willing to work with those who have
concerns. He said sometimes providence sends messages, and
heeding them is the right course. He noted a recent incident
under investigation: on January 9, 2006 an explosive handler
detonated a blast that sent rock and debris into the playground
and building of the North Star Elementary School in Kodiak. He
said that five-pound boulders flew up to 400 feet and damaged
the roof of the school. Rocks landed over the entire playground
where children had been playing just 30 minutes before, he
added. Every circumstance can't be monitored, but he speculated
that proper safety precautions were not taken.
COMMISSIONER O'CLARAY said fingerprints are required for school
bus drivers, attorneys, insurance agents, and "the list goes
on." He said the state has no authority in statute to check
backgrounds on individuals who use explosives. He said it is
not the desire to restrict someone from seeking gainful
employment, but "we have a public safety concern about this
particular certification." He asked that the bill move, but the
department is willing to work with those who have difficulty it.
3:28:41 PM
CHAIR ANDERSON said the committee does not want unsafe
mishandling of explosives, and this bill is important to address
it. He said the bill will be held until next week.
3:29:20 PM
HB 295-UNIFORM FRAUDULENT TRANSFER ACT
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 295, "An Act adopting the Uniform Fraudulent
Transfer Act and relating to fraudulent transfers of property."
3:30:13 PM
LYNN LEVENGOOD, Attorney, Fairbanks, said he is a member of the
National Conference of Commissioners on Uniform State Law, which
is an expert body to help create uniform state laws. He said
the most notable law is the Uniform Commercial Code, and he
added that there are many other uniform acts that states have
adopted. He noted that HB 295 was originally drafted by the
National Conference by a subcommittee of experts. He said he is
not an expert in the field but offered to contact the original
drafters to answer questions for the committee.
3:32:29 PM
CHAIR ANDERSON said Michelle Boutin was the person who
originally contacted him to sponsor HB 295.
MICHELLE BOUTIN, Attorney, Anchorage, said she specializes in
commercial law and bankruptcy, and she has worked first hand on
fraudulent conveyance matters. She stated she fully supports
the adoption of HB 295, and 42 other states have done so.
Current Alaska statute contains only one sentence on the issue,
and attorneys need more guidance as to what a fraudulent
conveyance is, she said. She opined that it is like driving
down the road without a roadmap. She said she recently
represented a bankruptcy trustee, and the debtor in bankruptcy
was a corporation which was owned by one person. That
individual "saw what was coming down the road", transferred all
the corporate assets to herself, and filed for bankruptcy for
the company.
MS. BOUTIN brought a fraudulent conveyance action against the
owner, seeking to recover the property that was fraudulently
conveyed and put it back into the bankruptcy estate so it could
be liquidated for the benefit of the creditor. The case went to
trial, and under "some existing Alaska case law" the judge found
authority for "the shareholder, even though the debtor was
insolvent, to prefer herself, and transfer the assets to herself
because she claimed to have made some loans to the corporation.
So she too was a creditor of the corporation, so it was okay for
her to orchestrate this so that she received all the assets and
the other creditors did not." She said the judge wrote that had
Alaska had the Uniform Fraudulent Transfer Act (UFTA) in place,
he would have found it fraudulent. "He sort of was begging us
to see that Alaska does something and passes the Uniform
Fraudulent Transfer Act." She noted that the outcome of her
case would have been far more equitable, and she has made it a
personal mission to get the act passed. She said the law would
fit in with the current climate of promoting individual
responsibility, as seen in the sweeping changes to the
bankruptcy code last fall.
3:37:58 PM
CHAIR ANDERSON said the bill will go to judiciary, which will
assess its legal aspects. This bill will remedy the ability of
someone to escape a debt, he noted.
3:39:13 PM
REPRESENTATIVE GUTTENBERG, referring to a letter to the
committee from Ms. Boutin, said he will have questions about
business practices and the reason why fraudulent activity wasn't
found in her case. He also referred to the third paragraph of
the sponsor statement, which states that the UFTA "creates a
right of action for any creditor against any debtor and any
other person who receives property from the debtor in a
fraudulent manner." He asked if there is any place in statute
where there is a similar action for a debtor against a creditor.
3:40:34 PM
MS. BOUTIN said she is not aware that there is a cause of action
arising out of the UFTA that a debtor can bring against a
creditor.
CHAIR ANDERSON said the question is why isn't there an ability
for a debtor to go against a creditor, "but what was the
original purpose of the UFTA?"
3:41:09 PM
MS. BOUTIN said the original purpose of the UFTA "is concerning
transfers fraudulent as to present and future creditors." She
said, just like Alaska's current statute, it is a remedy for
creditors to recover assets that debtors have fraudulently
transferred away. She said if debtors are harmed with regard to
assets being taken away, there may be another type of remedy.
3:42:19 PM
CHAIR ANDERSON said there are probably other mechanisms, but
"this isn't the one in this state or any other state."
MS. BOUTIN said that is correct, and she noted that there is
also a look-back provision for future creditors.
3:43:07 PM
REPRESENTATIVE ROKEBERG asked if Ms. Boutin reviewed HB 295 in
the context of Alaska statute, and if she is comfortable with
the way the bill is drafted.
3:43:41 PM
MS. BOUTIN said she fully supports the bill, and thinks it was
taken directly from what has been proposed by the committee for
uniform laws. She said a section had been inadvertently left
out of one version, and didn't know if it had been fixed.
HEATH HILYARD, Staff to Representative Tom Anderson, sponsor of
HB 295, said he has a blank committee substitute that includes
that section that was left out of the original version.
MS. BOUTIN said she "100 percent supports" the current version.
REPRESENTATIVE ROKEBERG said the current Alaska law was adopted
in 1949. He noted that he has seen this bill several times in
the past, and it "unfortunately hasn't made it through." He
asked if the bill conforms to the newest bankruptcy act.
MS. BOUTIN said it is not the same at all, but it doesn't have
to be, because once a party is in bankruptcy then the federal
laws control what happens in the bankruptcy case. "In fitting
with the political climate, right now, of making people more
responsible, they expanded under the federal law the fraudulent
transfer remedies that the bankruptcy trustee or creditor would
have once an entity does file for bankruptcy." She said the
laws are not the same; the bankruptcy look-back period is only
two years and does not track the UFTA. She said that is okay
because there is a separate remedy that the bankruptcy trustee
has once a party files. The trustee can bring a fraudulent
conveyance action either under the bankruptcy code or bring any
actions under state law. "So the trustee has both, and if
Alaska passes the UFTA, the trustee can either use the
bankruptcy federal fraudulent conveyance statute or he can use
the Alaska UFTA statute."
3:47:12 PM
CHAIR ANDERSON moved to adopt Version G. Seeing no objection,
Version G was before the committee.
MR. HILYARD said the inserted section is on page 7, beginning at
line 27. It had been accidentally omitted, and that is the only
change, he said.
3:47:56 PM
REPRESENTATIVE ROKEBERG said Ms. Boutin suggested there is an
ability to choose to use federal or Alaska law.
MS. BOUTIN said if there is a bankruptcy, that is true, but if
there is not one, then the creditor can only use Alaska law.
REPRESENTATIVE ROKEBERG spoke of the bankruptcy that Ms. Boutin
described with the judge deferring to state statute. So it is
necessary to have Alaska law to assist you to accomplish your
objectives, is that correct? he asked.
MS. BOUTIN said, "Yes."
3:49:16 PM
MR. LEVENGOOD said the new bankruptcy code is very new, and he
will call Chicago and get back to Chair Anderson.
3:50:01 PM
CHAIR ANDERSON said the bill is technical, and it is difficult
to find problems until you "sink your teeth into it."
MR. HILYARD said that in looking through "both the Uniform Law
Commission's information provided and the National Conference of
State Legislatures (NCSL), this is the most recent act that I
have been able to find."
CHAIR ANDERSON said the bill emulated the NCSL version.
MR. HILYARD said he believes the model act provided on the NCSL
website was taken from the Uniform Law Commission, and he said
he doesn't believe there was a second version.
3:51:48 PM
CHAIR ANDERSON suggested moving the bill to the House Judiciary
Standing Committee to work on.
REPRESENTATIVE ROKEBERG said the former uniform law
commissioner, Art Peterson, is in Juneau.
3:52:46 PM
MS. BOUTIN said that when this bill was introduced before,
Alaska was in the process of implementing new trust statutes and
there was concern regarding how the two would mesh. She said
trust law attorneys have lived with that statute for a while, so
she assumes that many of those concerns are gone.
3:53:22 PM
CHAIR ANDERSON said he will contact Art Peterson.
REPRESENTATIVE ROKEBERG moved to report CSHB 295, Version 24-
LS0843\G, Bannister, 1/20/06, out of committee with individual
recommendations and the accompanying fiscal notes. Hearing no
objection, CSHB 295 (L&C) was reported out of the House Labor
and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:54:01 PM.
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