CS FOR SENATE BILL NO. 315(L&C)                                                                                            
     "An Act relating to the disposition of unredeemed property;                                                                
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the first hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
ANNETTE SKIBINSKI,  Staff to Senator  John Cowdery,  Chair, Rules                                                               
Committee,  which   sponsored  the  bill,  explained   that  this                                                               
legislation  would  amend  current State  Statute,  AS  08.76.040                                                               
Disposition of  unredeemed property.  This Statute  addresses how                                                               
property  left  at  a  pawnshop  after  the  unredeemed  property                                                               
deadline could  be valued  and sold.  The provisions  in question                                                               
were  established in  1981, and  some of  them, specifically  the                                                               
pawn loan limit, were revised  overtime. Unfortunately, due to an                                                               
oversight,  when the  pawn loan  limit was  increased, the  ratio                                                               
mechanism for  determining the sale  price of  unclaimed property                                                               
was not  adjusted. Thus,  the purpose  of this  bill would  be to                                                               
restore the  original ratio between  the pawn loan limit  and the                                                               
value of the unredeemed property.  She stressed that the proposed                                                               
change is  specific to the sale  price of the property  and would                                                               
not alter pawn loan limit language.                                                                                             
                                                                                                                                
Co-Chair  Green asked  for an  example of  how the  ratio formula                                                               
would work.                                                                                                                     
                                                                                                                                
Ms. Skibinski  exampled a  wedding ring  valued at  $2,000. Under                                                               
current  law,  the  maximum  amount  a  pawnshop  could  loan  an                                                               
individual  for that  item would  be $500.  The individual  would                                                               
have 60 days  to repay the $500 loan, plus  interest, and reclaim                                                               
the ring. Otherwise,  after 60 days, the pawnshop  could sell it.                                                               
Current ratio provisions would require  the pawnshop to split any                                                               
profit  above  a   sale  price  of  $400   with  the  individual.                                                               
Therefore, in order to recoup the  $500 the pawnshop paid for the                                                               
ring, a  sale price of  $600 would  be required. This  bill would                                                               
restore the  price terms  to the  original two  to one  pawn loan                                                               
limit/unredeemed property  value ratio.  Thus, the  trigger point                                                               
at which the proceeds must be  split between the pawnshop and the                                                               
individual for a ring pawned for $500 would be $1,000.                                                                          
                                                                                                                                
9:57:53 AM                                                                                                                    
                                                                                                                                
Senator Bunde understood  that while the amount  a pawnshop could                                                               
loan had been  increased, the point at which  the money generated                                                               
from the  sale of an unredeemed  item must be split  had not been                                                               
addressed.  Thus,  this bill  would  restore  the original  ratio                                                               
limit.                                                                                                                          
                                                                                                                                
9:58:43 AM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked  whether there  was any  opposition to  the                                                               
bill.                                                                                                                           
                                                                                                                                
Ms. Skibinski replied in the  negative. The bill was drafted with                                                               
the  assistance of  the Commercial/Fair  Business Section  of the                                                               
Department of Law  and the Department of  Commerce, Community and                                                               
Economic Development  (DCED). DCED  suggested the bill  contain a                                                               
provision  that   would  require  a  pawnshop   to  disclose  the                                                               
information  about  unredeemed  property to  an  individual.  The                                                               
Senate  Labor  & Commerce  Committee  included  this language  in                                                               
their bill.                                                                                                                     
                                                                                                                                
Co-Chair Green acknowledged.                                                                                                    
                                                                                                                                
Co-Chair  Wilken moved  to report  the bill  from Committee  with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no objection,  CS  SB  315(L&C) was  REPORTED  from                                                               
Committee with previous zero fiscal  note #1 dated April 14, 2006                                                               
from  the   Department  of   Commerce,  Community   and  Economic                                                               
Development.                                                                                                                    
                                                                                                                                
9:59:55 AM