04/17/2009 01:30 PM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB101 | |
| HB129 | |
| HB201 | |
| HB102 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 101 | TELECONFERENCED | |
| + | HB 102 | TELECONFERENCED | |
| + | HB 129 | TELECONFERENCED | |
| + | HB 201 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
April 17, 2009
1:35 p.m.
MEMBERS PRESENT
Senator Hollis French, Chair
Senator Bill Wielechowski, Vice Chair
Senator Lesil McGuire
Senator Gene Therriault
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 101(JUD)
"An Act exempting the full value of life insurance and annuity
contracts from levy to satisfy a debt, and amending the
description of earnings, income, cash, and other assets relating
to garnishment of life insurance proceeds payable upon the death
of an insured."
HEARD AND HELD
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 129(RLS)
"An Act relating to the authority of the Real Estate Commission
to revoke licenses of persons convicted of certain crimes."
MOVED CSHB 129(RLS) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 201(JUD)
"An Act relating to the expiration date of a concealed handgun
permit."
MOVED CSHB 201 (JUD) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 102(JUD)
"An Act relating to the Uniform Commercial Code, to the general
provisions of the Uniform Commercial Code, to documents of title
under the Uniform Commercial Code, to the Uniform Electronic
Transactions Act, to lease-purchases of personal property, to
the contractual duty to act fairly and in good faith, and to
carrier, warehouse, and animal care liens; amending Rules 403
and 902, Alaska Rules of Evidence; and providing for an
effective date."
MOVED SCS CSHB 102(JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 101
SHORT TITLE: EXEMPTIONS: LIFE INSURANCE; ANNUITIES
SPONSOR(s): REPRESENTATIVE(s) COGHILL
01/30/09 (H) READ THE FIRST TIME - REFERRALS
01/30/09 (H) L&C, JUD
02/18/09 (H) L&C AT 3:15 PM BARNES 124
02/18/09 (H) Moved Out of Committee
02/18/09 (H) MINUTE(L&C)
02/20/09 (H) L&C RPT 3DP 3NR
02/20/09 (H) DP: LYNN, CHENAULT, COGHILL
02/20/09 (H) NR: BUCH, HOLMES, OLSON
03/02/09 (H) JUD AT 1:00 PM CAPITOL 120
03/02/09 (H) Heard & Held
03/02/09 (H) MINUTE(JUD)
03/16/09 (H) JUD AT 8:00 AM CAPITOL 120
03/16/09 (H) Heard & Held
03/16/09 (H) MINUTE(JUD)
03/19/09 (H) JUD AT 1:00 PM CAPITOL 120
03/19/09 (H) Moved CSHB 101(JUD) Out of Committee
03/19/09 (H) MINUTE(JUD)
03/23/09 (H) JUD RPT CS(JUD) NT 6DP
03/23/09 (H) DP: LYNN, GRUENBERG, COGHILL,
DAHLSTROM, GATTO, RAMRAS
04/03/09 (H) TRANSMITTED TO (S)
04/03/09 (H) VERSION: CSHB 101(JUD)
04/06/09 (S) READ THE FIRST TIME - REFERRALS
04/06/09 (S) L&C, JUD
04/14/09 (S) L&C AT 1:00 PM BELTZ 211
04/14/09 (S) Moved CSHB 101(JUD) Out of Committee
04/14/09 (S) MINUTE(L&C)
04/15/09 (S) L&C RPT 4DP 1NR
04/15/09 (S) DP: PASKVAN, MEYER, THOMAS, DAVIS
04/15/09 (S) NR: BUNDE
04/17/09 (S) JUD AT 1:30 PM BELTZ 211
BILL: HB 129
SHORT TITLE: POWER TO REVOKE REAL ESTATE LICENSES
SPONSOR(s): RAMRAS
02/13/09 (H) READ THE FIRST TIME - REFERRALS
02/13/09 (H) L&C
03/02/09 (H) L&C AT 3:15 PM BARNES 124
03/02/09 (H) Moved Out of Committee
03/02/09 (H) MINUTE(L&C)
03/05/09 (H) L&C RPT 5DP
03/05/09 (H) DP: LYNN, BUCH, COGHILL, HOLMES, NEUMAN
03/24/09 (H) RLS AT 5:00 PM CAPITOL 120
03/24/09 (H) Moved CSHB 129(RLS) Out of Committee
03/24/09 (H) MINUTE(RLS)
03/25/09 (H) RLS RPT CS(RLS) NT 4DP 2NR
03/25/09 (H) DP: KERTTULA, GARDNER, OLSON, COGHILL
03/25/09 (H) NR: MILLETT, HERRON
03/25/09 (H) RETURNED TO RLS COMMITTEE
03/27/09 (H) TRANSMITTED TO (S)
03/27/09 (H) VERSION: CSHB 129(RLS)
03/30/09 (S) READ THE FIRST TIME - REFERRALS
03/30/09 (S) L&C, JUD
04/09/09 (S) L&C AT 1:00 PM BELTZ 211
04/09/09 (S) Moved CSHB 129(RLS) Out of Committee
04/09/09 (S) MINUTE(L&C)
04/10/09 (S) L&C RPT 5DP
04/10/09 (S) DP: PASKVAN, MEYER, THOMAS, BUNDE,
DAVIS
04/17/09 (S) JUD AT 1:30 PM BELTZ 211
BILL: HB 201
SHORT TITLE: CONCEALED HANDGUN PERMITS
SPONSOR(s): JOHNSON
03/23/09 (H) READ THE FIRST TIME - REFERRALS
03/23/09 (H) JUD
04/01/09 (H) JUD AT 1:00 PM CAPITOL 120
04/01/09 (H) Moved CSHB 201(JUD) Out of Committee
04/01/09 (H) MINUTE(JUD)
04/02/09 (H) JUD RPT CS(JUD) 6DP
04/02/09 (H) DP: LYNN, GRUENBERG, COGHILL,
DAHLSTROM, GATTO, RAMRAS
04/13/09 (H) TRANSMITTED TO (S)
04/13/09 (H) VERSION: CSHB 201(JUD)
04/14/09 (S) READ THE FIRST TIME - REFERRALS
04/14/09 (S) JUD
04/17/09 (S) JUD AT 1:30 PM BELTZ 211
BILL: HB 102
SHORT TITLE: UNIFORM COMMERCIAL CODE
SPONSOR(s): LABOR & COMMERCE
01/30/09 (H) READ THE FIRST TIME - REFERRALS
01/30/09 (H) L&C, JUD
02/13/09 (H) L&C AT 3:15 PM BARNES 124
02/13/09 (H) Moved Out of Committee
02/13/09 (H) MINUTE(L&C)
02/16/09 (H) L&C RPT 5NR
02/16/09 (H) NR: LYNN, BUCH, NEUMAN, CHENAULT, OLSON
02/16/09 (H) L&C AT 3:15 PM BARNES 124
02/16/09 (H) <Bill Hearing Canceled>
03/16/09 (H) JUD AT 1:00 PM CAPITOL 120
03/16/09 (H) Moved CSHB 102(JUD) Out of Committee
03/16/09 (H) MINUTE(JUD)
03/18/09 (H) JUD RPT CS(JUD) NT 3DP 4NR
03/18/09 (H) DP: GRUENBERG, HOLMES, RAMRAS
03/18/09 (H) NR: LYNN, COGHILL, GATTO, DAHLSTROM
03/23/09 (H) TRANSMITTED TO (S)
03/23/09 (H) VERSION: CSHB 102(JUD)
03/25/09 (S) READ THE FIRST TIME - REFERRALS
03/25/09 (S) L&C, JUD
04/14/09 (S) L&C AT 1:00 PM BELTZ 211
04/14/09 (S) Moved CSHB 102(JUD) Out of Committee
04/14/09 (S) MINUTE(L&C)
04/15/09 (S) L&C RPT 4DP 1NR
04/15/09 (S) DP: PASKVAN, MEYER, THOMAS, DAVIS
04/15/09 (S) NR: BUNDE
04/17/09 (S) JUD AT 1:30 PM BELTZ 211
WITNESS REGISTER
AMANDA MORTENSEN, Intern
to Representative John Coghill
Alaska Capitol Building
Juneau, AK
POSITION STATEMENT: Introduced HB 101 on behalf of the sponsor.
LINDA HULBERT, Associate
New York Life Insurance Company
Fairbanks, AK
POSITION STATEMENT: Testified in support of HB 101.
DENNIS BAILEY, Attorney
Legislative Legal and Research Services
Legislative Affairs Agency
Juneau, AK
POSITION STATEMENT: Provided information related to HB 101.
REPRESENTATIVE JAY RAMRAS
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 129.
MARGARET DOWLING, staff
to Representative Jay Ramras
Alaska Capitol Building
Juneau, AK
POSITION STATEMENT: Introduced HB 129 on behalf of the sponsor.
GAYLE HORETSKI, Attorney
Civil Division
Commercial/Fair Business Section
Department of Law
Juneau, AK
POSITION STATEMENT: Provided explanation for HB 129.
SHARON WALSH, Executive Administrator
Alaska Real Estate Commission
Alaska Association of Realtors
POSITION STATEMENT: Testified in support of HB 129.
REPRESENTATIVE CRAIG JOHNSON
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 201.
KATHRYN MONFREDA, Chief
Criminal Records and Identification Bureau
Division of Statewide Services
Department of Public Safety,
POSITION STATEMENT: Provided clarification on HB 201.
REPRESENTATIVE MAX GRUENBERG
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 102.
TERRY THURBON, State Delegate
Uniform Law Commission
Juneau, AK
POSITION STATEMENT: Explained provisions in HB 102.
ACTION NARRATIVE
1:35:28 PM
CHAIR HOLLIS FRENCH called the Senate Judiciary Standing
Committee meeting to order at 1:35 p.m. Present at the call to
order were Senators Wielechowski, McGuire and French. Senator
Therriault arrived soon thereafter.
HB 101-EXEMPTIONS: LIFE INSURANCE; ANNUITIES
1:35:56 PM
CHAIR FRENCH announced the consideration of HB 101. [Before the
committee was CSHB 101(JUD).]
AMANDA MORTENSEN, Intern to Representative John Coghill,
speaking on behalf of the sponsor, explained that HB 101 would
exempt the full value of life insurance and annuity contracts
from levy to satisfy unsecured debt. This bill would protect
Alaskan families and their ability to plan for the future. For
example, if "person A" were to hit "person B" with a car,
"person B" could sue for the assets of "person A". This bill
would protect "person A's" life insurance and annuity contract
so that his/her family could survive in the event of "person
A's" death. However, "person B" would not be prevented from
pursuing "person A's" other assets to fulfill a settlement
award. Additionally, HB 101 would protect the death benefits of
the spouse or a dependent of the debtor in the event the debtor
survives.
While retirement plans currently are creditor protected under
federal laws, this bill will help in instances in which the
employer does not provide the employee with a retirement plan.
The employee could use an annuity as a retirement plan and
provide financial security for themselves and their families.
Given the uncertainty of the Social Security system, this bill
is particularly important to help Alaska families to
legitimately provide for their future. She related that HB 101
falls under AS 09.38.015 Property exempt without limitation.
1:37:37 PM
Senator Therriault joined the committee.
MS. MORTENSEN explained that Section 1 removes the $10,000
exemption cap on life insurance and annuities. Section 2 removes
the language "or payable" to clarify a potential ambiguity that
would allow garnishment of death benefits prior to a person's
death. Section 3 repeals AS 09.38.025(a) because the exemption
of unmatured life insurance and annuity contracts now falls
under the category of "property exempt without limitation" in AS
09.38.015. Section 4 is an applicability section that states
that this will apply only to a debt that is created on or after
the effective date of this Act.
SENATOR WIELECHOWSKI asked if $100,000 in unpaid child support
could be removed from someone's $1 million life insurance policy
under this bill.
MS. MORTENSEN replied child support can be garnished from exempt
property under AS 09.38.65(a)(1)(A).
SENATOR WIELECHOWSKI asked if there is a list of things that
could be garnished that would not be covered by this bill.
1:39:26 PM
MS. MORTENSEN said the list includes: child support; unpaid
earnings of up to one month's compensation or the fulltime
equivalent for personal services of an employee; state or local
taxes; a levy against exempt property to enforce a claim for the
purchase price of the property or a loan made for the express
purpose of enabling an individual to purchase the property and
use it for that purpose; labor or materials furnished to make,
repair, improve, preserve, store, or transport the property; and
a special assessment imposed to defray costs of a public
improvement benefitting the property.
CHAIR FRENCH asked if the answer is yes or no to Senator
Wielechowski's question about whether or not the deceased's
annuity contract could be garnished to pay unpaid child support.
MS. MORTENSEN replied she would defer to Linda Hulbert to speak
to death benefits.
1:40:59 PM
CHAIR FRENCH asked if there has been opposition to the bill.
MS. MORTENSEN replied there hasn't been that much opposition;
most people see it as a benefit to Alaska families.
CHAIR FRENCH said he likes the general idea. He reviewed the
list of exempt property under Sec.09.38.015(a) and asked what is
included under paragraph (11), benefits paid or payable under AS
47.45.301 - 47.45.309.
1:42:20 PM
MS. MORTENSEN deferred to Mr. Bailey.
CHAIR FRENCH suggested the committee might consider imposing an
upper limit on the exemptions. He related that he typically
falls on the side of protecting consumers, but he's mindful of
the creditor who may have loaned a person $1 million based on
the strength of a contract, and suddenly they can't collect.
SENATOR WIELECHOWSKI noted that Ms. Mortensen said there hasn't
been much opposition to the bill and asked if there has been any
opposition.
MS. MORTENSEN explained that the main concerns related to the
potential for someone to use this fraudulently. But in other
states it's been proven that the courts don't allow fraudulent
transfers and hiding of money.
SENATOR WIELECHOWSKI asked if anyone has testified against the
bill.
MS. MORTENSEN answered no.
SENATOR WIELECHOWSKI assumed that if someone took out a loan and
used their life insurance policy as collateral, the heirs could
collect the life insurance.
MS. MORTENSEN deferred to Ms. Hulbert.
1:44:09 PM
SENATOR MCGUIRE noted that timing typically arises as an issue
in bankruptcy proceedings and suggested including language to
exclude blatant attempts to hide assets.
MS. MORTENSEN said Linda Hulbert could talk about that and
Dennis Bailey could say if other statutes address timing.
CHAIR FRENCH added that there may be a superseding section of
law that prohibits fraud.
1:45:22 PM
SENATOR THERRIAULT offered that the fraudulent transfer
provisions would speak to that.
LINDA HULBERT, Associate, New York Life Insurance Company,
testified in support of HB 101. She stated that today employers
are assuming less responsibility for employees so people need to
assume more for themselves. Individuals need to plan for the
wellbeing of their family and they need to plan for their own
retirement. HB 101 offers the same protection of life insurance
and annuities for planning as other states such as Florida and
Texas. She related that there is a specific Fraudulent Transfers
Act that is clearly defined by the court so anyone who enters
into this in any fraudulent manner would not find their assets
protected.
1:47:33 PM
MS. HULBERT explained that anyone can collaterally assign a life
insurance policy or annuity contract; in that event the creditor
comes before anything is paid to the individual or beneficiary.
She opined that this makes it clear that this bill does not
create a problem with creditors. Creditors can ask for and
receive collateral assignments so this doesn't mean that it
cannot be used to pledge against a loan. It means that if a
family enters into a legitimate planning process, they can rest
assured that either for retirement purposes or purposes of
taking care of loved ones that this is protected for them. This
is a critical planning tool, she said. To her knowledge the bill
hasn't received any negative testimony; there have been
questions about fraudulent transfers and abuse. "I think this is
very unlikely to be abused because of the careful protections
that our state has structured," she said. This bill isn't
designed for the very wealthy; this bill is for the majority of
Alaska citizens who want to accept responsibility for planning
and need protections for that.
1:49:11 PM
CHAIR FRENCH asked the difference between an unmatured life
insurance contract and a matured life insurance contract.
MS. HULBERT explained that a matured contract is when someone
has died and an unmatured contract is when someone hasn't died
yet.
CHAIR FRENCH asked if other states that have a similar law have
imposed an upper limit on the exemption.
MS. HULBERT said no. She added that the bill originally was to
be drafted only for insurance, but Linda Hall, the director of
the division of insurance, suggested it should be used for both
insurance and annuities because both are sound planning
techniques. Other states have included both and have not
encountered difficulties.
1:50:22 PM
SENATOR WIELECHOWSKI said it would be helpful to have examples
of the debts that are being exempted.
MS. HULBERT said the question is difficult to answer. She
continued:
Perhaps if there was a car accident and you were sued
and it went beyond the limits of your insurance you
could take other people's assets. But you couldn't
take their defined benefit plan - their retirement
plan - because that's federally protected. But if you
didn't have access to a federally defined retirement
plan and you had an annuity, then you could take that
person's potential annuity. Whereas this way if they'd
set aside money for retirement it would be protected
like their 401(k) or their defined benefit would be,"
she said.
SENATOR WIELECHOWSKI asked if debts other than lawsuits would be
exempt.
MS. HULBERT said she would defer to an attorney, but she hasn't
encountered that circumstance. I feel that people are more
secure knowing that they can plan, she added.
1:52:13 PM
SENATOR THERRIAULT asked if she knows what AS 47.45.301 -
47.45.309 reference.
CHAIR FRENCH said he just looked that up and they reference the
cash assistance payments to Alaska seniors.
SENATOR THERRIAULT recapped that a 401(k) and retirement plans
are protected under federal law and there isn't an upper limit.
None of the states with this type legislation have passed an
upper limit because if people don't have access to those
retirement plans they can use this as a component of retirement
planning. He asked if that's correct.
MS. HULBERT replied that's right. She related that many small
businesses no longer contribute to 401(k)s or offer retirement
plans because federal requirements have made the management
costs substantial. This bill is a needed mechanism that will
allow people to begin to plan for themselves and their families.
1:54:19 PM
CHAIR FRENCH asked Mr. Bailey if a person would be without a
remedy if they did not make an express statement regarding
collateral assignment in the debt instrument.
DENNIS BAILEY, Attorney, Legislative Legal and Research
Services, Legislative Affairs Agency, replied this is not a
question about whether or not they would have a remedy, but they
would not be able to collect against annuity contracts.
CHAIR FRENCH thanked him for the clarification.
MR. BAILEY referenced the discussion about the list of
exemptions under section .015 and that they're fairly nominal.
He offered clarification that under the exemption statute there
are other items that are exempt. Specifically, the Alaska
statute provides exemption for retirement plans.
CHAIR FRENCH asked if that's in subsection (b) to AS 09.36.015.
MR. BAILEY replied they are separately listed. The exemption for
retirement plans is under AS 09.38.017; there is an exemption
for homestead; and there is an exemption for a home.
CHAIR FRENCH recapped that categories of exemptions currently
exist in statute other than the nominal ones referenced earlier.
MR. BAILEY stated agreement.
1:57:17 PM
CHAIR FRENCH closed public testimony. He stated that he has
continuing questions about how this will work and he will hold
HB 101 in committee.
HB 129-POWER TO REVOKE REAL ESTATE LICENSES
1:57:39 PM
CHAIR FRENCH announced the consideration of HB 129. [Before the
committee was CSHB 129(RLS).] He welcomed the sponsor, his
counterpart in the House, and apologized that he didn't have a
cookie to offer.
REPRESENTATIVE JAY RAMRAS, sponsor of HB 129, introduced
Margaret Dowling who will explain the details of the bill.
CHAIR FRENCH asked for the record to reflect that Senator
Therriault brought Representative Ramras a cookie.
MARGARET DOWLING, staff to Representative Jay Ramras, said HB
129 makes a simple, but needed, correction to existing law that
says that the Alaska Real Estate Commission must revoke the
license of a real estate broker or associate broker who has been
convicted of forgery, theft, extortion, conspiracy to defraud
creditors, or fraud. The commission can refuse to grant a
license or deny renewal of a license on the same grounds. The
problem is that the law does not apply to Alaska's 1,460
licensed sales people; it applies only to the 411 associate
brokers and 483 brokers in the state.
This issue was brought to the sponsor's attention by the Real
Estate Commission. She opined that this is a field where
customers place faith in an agent's trustworthiness; these
people have unfettered access to clients' homes, and they often
assist clients with sometimes complicated negotiations and
financial transactions. HB 129 will empower the Real Estate
Commission to appropriately regulate this profession, which will
protect both the profession and the public.
2:01:28 PM
CHAIR FRENCH disclosed that his wife is a real estate licensee.
He remarked that he thought that in the recent past real estate
agents, brokers and sales persons were renamed as licensees, but
he now sees that pertains to a different part of the real estate
statutes. He asked for enlightenment.
MS. DOWLING responded she only knows is that under this section
the individuals are referred to as sales persons, brokers, and
associate brokers.
2:03:13 PM
SENATOR THERRIAULT pointed out that bills typically are
prospectively applicable, but this bill is applicable both
prospectively and retrospectively.
MS. DOWLING said that clarifies the intent, which is to protect
the public. It enhances the regulatory scheme so that the Real
Estate Commission can police the profession.
SENATOR THERRIAULT asked if this would affect a person who had a
felony conviction 10 years ago.
MS. DOWLING explained that the existing statute states that a
person who is convicted of a felony is barred from receiving a
license for seven years from the date they complete their
sentence.
2:04:44 PM
SENATOR MCGUIRE asked if she has looked into the
constitutionality of that provision because she recalls that you
can place terms on or after the effective date, but you can't
reach back to prior criminal acts.
MS. DOWLING said she would defer questions about ex post facto
laws to Gayle Horetski, but it's the sponsor's view that this
does not increase punishment for a crime. This enhances an
existing regulatory scheme so that the state's interest in
protecting the public can be met. She reiterated that sales
people have unfettered access to peoples' homes and they assist
in sometimes complicated financial transactions. The public
assumes that the person they are dealing with will be
trustworthy.
2:06:12 PM
CHAIR FRENCH clarified that this does not increase any criminal
punishment that has already been imposed.
GAYLE HORETSKI, Attorney, Civil Division, Commercial/Fair
Business Section, Department of Law, said HB 129 makes a minor
change to existing law. Currently brokers and associate brokers
are under these provisions and the bill adds sales persons to
the existing law. The existing law provides that if a person is
convicted of certain offenses the Real Estate Commission shall
revoke their license. "So you have a revoked license or this
doesn't even apply," she said.
CHAIR FRENCH asked her to say that again.
MS. HORETSKI explained that this doesn't apply in and of itself
to convictions. It applies to people whose licenses have been
revoked because of their conviction. Page 3, paragraph (10) says
the commission shall revoke the license of a broker or associate
broker who has been convicted of a felony or other crime. You
have the criminal conviction and then the commission has to take
a separate step to file an accusation and revoke the license.
Once the license is revoked based on the conviction, the person
cannot get relicensed until seven years after they have served
their sentence.
CHAIR FRENCH posed the circumstance of someone who was convicted
five years ago of a DUI and asked if this bill would allow the
commission to revoke that person's license if they are currently
practicing real estate in the state of Alaska.
MS. HORETSKI directed attention to page 3, line 20, and said
only if it is the commission's judgment that it affects the
ability of that person to practice.
CHAIR FRENCH observed that there is something of an ex post
facto issue because it's a conviction from the past for which
someone is being repenalized. He added that it's his analysis
that it's not a criminal penalty so it's not an issue.
2:09:30 PM
MS. HORETSKI said from a legal standpoint this is not a penalty
issue at all. A person does not have a constitutional right to a
license unless they meet the criteria. If a person gets a
license then they would have a property interest.
CHAIR FRENCH said he agrees, but someone who is making a good
living as a real estate agent might have a different view.
MS. HORETSKI added that the purpose of licensing a profession is
to set a minimum standard below which the public can be
confident that the person has not fallen. That doesn't mean he
or she will be any good at what they do, but if the person does
not meet the minimum criteria for initial licensure or renewal,
he or she is not entitled to hold the license. She reiterated
that this isn't an issue of punishment. This is a public
regulatory measure.
2:11:07 PM
SENATOR MCGUIRE cautioned that this is ripe for litigation
because revoking someone's license is certainly an economic
penalty. When the legislature wanted to register all individuals
in the state who were prior sex offenders, the court said
absolutely not. It was an ex post facto problem to try to reach
back. If the underlying statute has that language applying to
brokers she said she would be curious to know if the commission
has had to address that. If this were to pass it's likely that
sales people in this state will have their real estate licenses
revoked, she said. It's a risk the sponsor takes.
2:12:54 PM
MS. HORETSKI offered the view that that exact reason is the
purpose for the language in the bill that makes it clear that it
is intended to apply to offenses that occurred before the
effective date of the bill. She continued:
As you know under our state law, the idea that
something is retroactively or retrospectively applied
does not make it unconstitutional. But there is a
state statute that says that that intent in intended
that it should be exclusively stated. So it's an
attempt to minimize the legal issues on appeal or if
it's challenged that that language clarifying the
legislation's intent was added. And we're really glad
that that language is in there because it does clarify
the scope…
MS. HORETSKI related that this has come up in other
circumstances such as driver's licenses and situations where the
licensure criteria for a particular profession has been upgraded
or narrowed. There is an affect and people do drop out, but the
courts have by-and-large said that the legislature can change
the criteria if it's a rational requirement. If that weren't the
case, standards wouldn't rise over the years.
2:14:57 PM
SENATOR MCGUIRE said that makes sense, but this isn't about
raising professional requirements. This is about reaching back
into someone's criminal record. Criminal and civil penalties and
offenses are treated differently. The trigger here is if
additional burden is placed on a person's criminal past.
CHAIR FRENCH said he agrees with Ms. Horetski but Senator
McGuire's point is valid because economic pain is real. He
suggested the committee imagine a somewhat analogous situation
of a state that employs teachers that are only required to have
a high school education and a college degree. Assume that system
works for 20 years when it suddenly comes to light that 50 sex
offenders are teaching in the schools. A decision is made to
raise the bar and require a high school education, a degree from
college, and a record free of being a sex offender. The effect
of the bill would be to strip teaching certificates from all the
sex offenders and legislators would readily sign off on that.
The sex offenders might complain, but they'd be told that's
tough luck. The bar has been raised.
SENATOR MCGUIRE warned that that may work, but they will sue.
2:17:22 PM
CHAIR FRENCH asked Ms. Walsh if the Real Estate Commission looks
at criminal histories of individuals who come before the
commission seeking sales person, associate broker, and broker
licensure.
SHARON WALSH, Executive Administrator, Alaska Real Estate
Commission, Alaska Association of Realtors, answered no and they
don't do fingerprinting either. Applicants fill out a self-
disclosure form.
CHAIR FRENCH asked if she has any reason to believe that this
would apply to licensees currently working in the state who have
disqualifying felony convictions.
MS. WALSH replied she knows of one case.
2:18:23 PM
REPRESENTATIVE RAMRAS related that he believes that case is the
reason the commission contacted him asking for clarification.
The intent of the bill is to give the commission the authority
to police their own because this is a profession that thrives on
trust.
CHAIR FRENCH closed public testimony. He said he is comfortable
with the state of the bill and solicited a motion.
2:19:41 PM
SENATOR MCGUIRE moved to report HB 129 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, CSHB 129(RLS) moved from the Senate
Judiciary Standing Committee.
At ease 2:19 pm.
HB 201-CONCEALED HANDGUN PERMITS
2:21:30 PM
CHAIR FRENCH announced the consideration of HB 201. [Before the
committee was CSHB 201(JUD).]
REPRESENTATIVE CRAIG JOHNSON, sponsor of HB 201, said the bill
comes from a constituent who asked for notification from the
Department of Public Safety (DPS) when his concealed handgun
permit expires. He said he's of the belief that people who have
a permit should have some responsibility so he had the bill
drafted to have the concealed handgun permit expire on a
person's birthday in the fifth year following issuance of the
permit. There is a period of transition and the length of the
initial permit may be adjusted to four years, but it will not be
issued for a period of more than five years, he said. Although
Alaska doesn't have a concealed handgun law, 34 states have
reciprocity with Alaska and permit holders must be compliant.
SENATOR WIELECHOWSKI asked if there could be a situation where a
person's permit would expire in less than five years.
REPRESENTATIVE JOHNSON responded it could expire in four years.
The bill says it can't be more than five years. He said he
believes people will jump on this because of the simplicity.
CHAIR FRENCH asked if it's a fielder's choice for the permit
holder.
REPRESENTATIVE JOHNSON responded he believes they'd have that
option, but he'd defer to someone from the department.
2:24:06 PM
CHAIR FRENCH asked the department representative if the statute
says the permit must expire on the person's birthday or if it's
optional.
KATHRYN MONFREDA, Chief, Criminal Records and Identification
Bureau, Division of Statewide Services, Department of Public
Safety, said her duties include oversight of the concealed
handgun permit program and her reading of the statute is that
the permit must expire on the person's birthday. "We wouldn't be
giving permit holders a choice," she said.
CHAIR FRENCH commented that he thinks clarity is a good thing.
2:25:33 PM
CHAIR FRENCH expressed appreciation to Ms. Monfreda for her
long-standing and important public service.
SENATOR WIELECHOWSKI asked what it costs to renew a permit.
MS. MONFREDA replied the cost is $25.
SENATOR WIELECHOWSKI mentioned the potential for outcry from
someone who had to renew sooner than five years.
MS. MONFREDA explained that permit holders will receive a permit
for four years and however many months it is until their next
birthday. That could be four years and one month or four years
and eleven months depending on when the person applies.
CHAIR FRENCH observed that the variability is to get the term
set to coincide with the person's birthday.
MS. MONFREDA added that the variability would only be on the
first renewal or issue. Subsequent renewals would be set at five
years.
CHAIR FRENCH closed public testimony and asked the will of the
committee.
2:27:01 PM
SENATOR WIELECHOWSKI moved to report CS for HB 201 from
committee with individual recommendations and attached fiscal
note(s). There being no objection, CSHB 201(JUD) moved from the
Senate Judiciary Standing Committee.
At ease 2:27 pm.
HB 102-UNIFORM COMMERCIAL CODE
2:28:18 PM
CHAIR FRENCH announced the consideration of HB 102. [Before the
committee was CSHB 102(JUD).]
REPRESENTATIVE GRUENBERG, sponsor of HB 102, introduced Ms.
Thurbon and explained she is appearing today as the commissioner
on state laws and she will answer the questions. HB 102 is at
the request of the members of the Alaska Commission on Uniform
State Laws and it updates Articles 1 and 7 of the Uniform
Commercial Code (UCC). Article 1 provides definitions and
general provisions for the UCC. Article 7 pertains to warehouse
receipts, bills of lading, and other documents of title. The
bill makes a number of technical changes to these Articles to
bring Alaska into alignment with over 30 states. He explained
that the uniform laws are drafted and revised by the
commissioners who are several hundred people from around the
country and include law professors, top attorneys, judges, and
members of the attorneys general staff. These commercial codes
are updated every few years to make sure that they keep up with
technology.
2:31:25 PM
REPRESENTATIVE GRUENBERG said there is a provision in Article 1
that requires in all UCC dealings there be a duty of good faith
and fair dealing. There are a number of Alaska Supreme Court
cases that require that in the execution and performance of
contracts.
CHAIR FRENCH added that it applies to any commercial contract.
REPRESENTATIVE GRUENBERG said yes; that is codified in Section
1.
Title 34.35 Liens, has an old statute that deals with
warehousing and talks about storing oats, grains, and cattle.
That statute is being updated and cross referenced to UCC
Article 7.
2:33:02 PM
SENATOR WIELECHOWSKI thanked Representative Gruenberg his work
on the UCC. It's a lot of work and requires attention to detail.
"I know that's something you certainly have a reputation for and
I appreciate you doing this," he said.
REPRESENTATIVE GRUENBERG introduced his staff and said he isn't
aware of any opposition to the bill. It's been vetted through
the bar association business law section, specifically the folks
who represent warehousemen.
CHAIR FRENCH said he's pleased to see the good faith provision
in Section 1; it's good to make it explicit. He noted that the
phrase "covenant of good faith and fair dealing" has been recast
to say "have a duty to act fairly and in good faith" and asked
if those are equivalent.
REPRESENTATIVE GRUENBERG responded, "Absolutely." He added that
he and legislative attorney Theresa Bannister crafted that
phrase.
2:35:21 PM
TERRY THURBON, State Delegate, Uniform Law Commission, said
updating the UCC has been a legislative priority this year to
get up to speed with what other states have done. For example,
the warehouse provisions are amendments that have been available
since 2003. The general provisions in Article 1 have been
available since 2001. Respectively, Article 1 provisions have
been adopted in 35 states and three states other than Alaska
have introductions this year. 32 states have already adopted the
warehousing provisions and three states other than Alaska have
amendments to adopt this year. "We're getting toward truly
having uniformity with these updates," she said. All 50 states
have some version of various titles of the UCC.
MS. THURBON offered that the bill is quite long, but it's quite
simple in the sense that the substantive changes are relatively
few. Much of the 60 pages update terminology and make conforming
changes to fit with the few substantive changes.
The UCC provisions start in Section 8 and she will only speak to
those UCC provisions. Apart from the modernization of the
warehousing provisions in Article 7 that Representative
Gruenberg described, there are a handful of changes in Article
1, which are the UCC general provisions.
2:37:57 PM
MS. THURBON said the committee that was charged with updating
the general provisions found a handful of problems that weren't
discovered until people tried to live with the general
provisions. In part that's because the other Articles of the UCC
that deal with secure transactions, leases, and sales have
evolved over time while the general provisions have not been
updated. When the committee looked at updating the general
provisions it found five or six places that needed substantive
changes. One was as simple as clarifying the scope of the
applicability of these general provisions to make it clear that
they only apply to UCC covered transactions. Previously there
was a frauds provision in statute, which deals with when you
have to have an agreement in writing in order for it to be
enforceable. Previously the provision seemed to reach beyond the
UCC covered transactions to be a general statute of frauds.
That's been cleaned up. That's the kind of thing that this
revision does. It also made a better selection on the choice of
laws. Previously, the only choice of laws that folks could make
for which law applies to govern their transactions was that the
law had to have some connection to the parties. With a couple of
protective exceptions to protect consumers and some other public
policy oriented protections, these updates allow sophisticated
folks who want to enter into a commercial transaction to
designate any law as the governing law.
As Representative Gruenberg mentioned, the good faith provision
in the UCC was updated to define good faith as honesty in fact
and the observance of reasonable commercial standards of fair
dealings. It tracks a bit better with what was done with the
good faith concept and some of the other provisions of the UCC.
2:40:38 PM
The changes to the warehousing provisions allow for the use of
electronic documents of title and evidence of ownership in the
transfer of title. This is widely supported by the warehousing
and transportation sectors that are already using electronic
documents of title. The laws in some states simply haven't yet
caught up with that.
CHAIR FRENCH noted that this is somewhat similar to the
revisor's bill that the committee recently heard. The bill is
enormous and full of technical language and at some level you
just have to trust the experts who have vetted it. That being
said, he related that he likes to conduct an acid test. He
explained that he turns to a random page in the bill and asks a
pointed question or two. If that area stands up to scrutiny, he
gets the feeling that a few segments of the bill have been
closely examined. I trust you, Representative Gruenberg, and the
experts who brought the bill but we do have our duties of due
diligence, he said.
2:42:04 PM
CHAIR FRENCH directed attention to page 28, line 19, Section 33,
pertaining to liability for nonreceipt or misdescription. He
noted that "or" replaces "of" at the beginning of line 19 and
asked if she agrees that that's the right substitution.
MS. THURBON said she sees his concern.
REPRESENTATIVE GRUENBERG remarked, "That's weird."
CHAIR FRENCH suggested that it's a series of marks or labels.
REPRESENTATIVE GRUENBERG offered that Ms. Bannister may have a
technical answer.
MS. THURBON said she can make sense of the sentence with the
substitution. Without looking at the drafting comments that the
conference put together she can imagine that they were perhaps
trying to characterize kind quantity or condition as something
that would be a description in and of itself on the packaging,
or on the document of title. It may be an intentional correction
whereas "of" may have been viewed as having been a typographical
error that was initially introduced.
2:45:19 PM
CHAIR FRENCH reviewed the descriptions and stated agreement.
CHAIR FRENCH directed attention to page 51, line 8, and said he
objects to striking the word "the" before the phrase "ordinary
course of business".
REPRESENTATIVE GRUENBERG said he agrees; the same change has
been made several times on the page. He related that when he
brought that up, he was told that the Uniform Act was drafted to
eliminate the word "the".
SENATOR WIELECHOWSKI directed attention to page 2, and noted
that the term "livestock" has been changed to "animals" and it's
quite a policy change to subject pets to lien. He asked if that
was a conscious change.
REPRESENTATIVE GRUENBERG responded it was his thought is that it
should apply to any animals. In urban areas in particular,
people have pets rather than livestock.
2:47:47 PM
CHAIR FRENCH asked if a lien on a dog really is on the dog or
the owner's checking account.
REPRESENTATIVE GRUENBERG responded that it would be a possessory
lien.
CHAIR FRENCH observed that in that case, the most the kennel
would get is possession of the dog.
REPRESENTATIVE GRUENBERG responded that the kennel could sell
the animal. Page 3, line 11, is existing statute and it states
that the owner of the property shall pay the value of the
property plus 50 percent. Later in the UCC it talks about
getting damages, which would be incidental and consequential.
That is cross referenced in Section 7; Article 7 of the UCC
makes it clear that these are cumulative. You're not limited to
one or the other as in the past, he said. "I didn't want there
to be any continuing question as to whether they both stood on
equal footing," he added.
CHAIR FRENCH closed public testimony and said he's satisfied
with the bill.
2:49:36 PM
SENATOR WIELECHOWSKI expressed concern with the change in
Section 4 regarding animals. It bothers me that someone could
take their dog to a kennel and then for whatever reason not
being able to pay their bill and the kennel would keep the
person's beloved dog, he said.
CHAIR FRENCH observed that the point is that the person could
take their dog home and later have a dispute in court over the
money issue.
SENATOR WIELECHOWSKI agreed. He related that his dogs are in a
kennel right now and he'd be furious if the kennel kept his dogs
if he couldn't pay what could be an exorbitant fee.
SENATOR WIELECHOWSKI moved a conceptual amendment to strike all
reference to "animal" in Section 4 and reinsert the references
to "livestock".
2:52:08 PM
CHAIR FRENCH asked the sponsor if he agrees that only Section 4
is affected.
REPRESENTATIVE GRUENBERG responded it appears to apply to
Section 4, lines 16 and 17, lines 27 and 28, lines 29 and 30. He
suggested that on lines 27 and 28 the reference could be limited
to "livestock" so the statute would no longer reference "horses,
cattle, hogs, sheep or other livestock." He added that he has no
objection to that.
2:53:31 PM
CHAIR FRENCH asked Senator Wielechowski to restate the
conceptual amendment.
SENATOR WIELECHOWSKI stated that the conceptual amendment is to
reference "livestock" as opposed to "animal care" [in Section
4]. On line 16, delete the phrase "animal care" and insert
"livestock; on line 27, delete the word "animals" and reinsert
the phrase "horses, cattle, hogs, sheep, or other livestock"; on
line 29, reinsert the word "upon" delete the word "animals" and
reinsert the word "livestock"; and on line 30, delete the word
"animals" and reinsert the word "livestock."
CHAIR FRENCH asked if there is objection.
REPRESENTATIVE GRUENBERG suggested on lines 28 and 29 to not
revert to the word "upon" and keep the word "on" since that is
more conventional use today. On lines 27 and 28, do not reinsert
the phrase, "horses, cattle, hogs, sheep or other" and use the
word "livestock" instead.
CHAIR FRENCH asked Senator Wielechowski if he agrees with the
suggestion.
SENATOR WIELECHOWSKI said he agrees and would restate the
amendment in the terms suggested by Representative Gruenberg.
CHAIR FRENCH found no objection and announced that Amendment 1
carries. Finding no further amendments or discussion, he
solicited a motion.
2:55:21 PM
SENATOR WIELECHOWSKI moved to report CS for HB 102, as amended,
from committee with individual recommendations and attached
fiscal note(s). There being no objection, SCS CSHB 102(JUD) was
reported from the Senate Judiciary Standing Committee.
2:55:42 PM
There being no further business to come before the committee,
Chair French adjourned the meeting at 2:55 pm.
| Document Name | Date/Time | Subjects |
|---|