SB 195 - COMMON LAW LIENS CHAIRMAN LEMAN announced SB 195 to be up for consideration and that it was introduced by request through the Rules Committee. MR. TIM BENINTENDI, Staff to the Senate Rules Committee, explained that SB 195 addresses the emerging problem of filing of nuisance liens in this State with the intention of retribution. Such liens have been filed against property owned by public officials and others who have fallen in disfavor with certain groups or individuals who embrace an opposing philosophical or political view. The liens rarely have true commercial foundation, but are used as a harassment tactic. The practice has now surfaced in Alaska as several municipal officials can attest from the Municipality of Anchorage. SB 195 makes it a misdemeanor to record a non-consensual common law lien without court approval. It would ease the process of releasing a lien and would provide for filing a notice of invalid lien by attorneys of public officials. It would also set out penalties against those who file such nuisance liens. It has two $0 fiscal notes and has a wide variety of support in the public sector. CHAIRMAN LEMAN asked if the Department of Law would represent someone in the legislative branch of government. MR. BENINTENDI said that the Legislative Legal Department would represent them. He understands that municipal attorneys would represent their people. MR. WOOLIVER, Alaska Court System, testified that the court system asked for this bill to be introduced to address this growing problem of recording common law liens against real and personal property in Alaska which is an enormous problem in some other states. Although these liens are meaningless, they still cloud title that is typically discovered when someone goes to sell or borrow against their property. Typically these liens are for several hundred thousand, if not millions, of dollars. No action can be taken on a property until this lien is cleared up. In the past generally one has to file a lawsuit to get these resolved. Suing someone for a common law lien can be frustrating experience because they don't believe they are subject to the jurisdiction of the court and you end up in a paper war in addition to trying to get a lien removed, Mr. Wooliver said. Under current law there are several ways people can legitimately file liens and this bill doesn't seek to frustrate those. For example there are material liens, mechanics liens, fishermen liens, etc. and all of these liens are typically tied to a specific piece of property for work done on the property. There is an actual tie between the lien and what the person has done. Common law liens are not accompanied by any kind of valid court judgement and aren't tied to work done or goods or services provided. They are typically filed against public officials who have run afoul of someone who has recorded the lien. SB 195 seeks to address this problem in three ways. First there are expedited procedures to have a lien removed or declared invalid if one is filed against a person. There are two aspects to that. An attorney representing an official could record a notice of invalid lien and it would become invalid and not have to go to court. The second option is for someone who is not an official who can petition the court and attach an affidavit explaining the predicament. The the court can have a hearing within 20 days. If the person doesn't show up, the court enters a notice of invalid lien and records that. If a person does show up and the court finds this is an invalid lien, then court records a notice of invalid lien and the person who is the lien claimant would pay costs and actual and reasonable attorney fees. The second prong is that it provides for civil damages and third, it makes the filing of a bogus common law lien a class A misdemeanor. Number 525 MR. CLIFF JOHN GROH, Municipality of Anchorage, strongly supported this bill. He explained there have been 43 false liens filed against municipal officials in Anchorage. These filings are getting to be more common. He explained some of the financing problems one can run into with liens filed on their properties. MS. SHARON YOUNG, State Recorder, testified in addition to Mr. Groh's testimony that these types of liens are definitely becoming more frequent in Alaska as everywhere else in the United States. They are definitely becoming a tool with which people are using the public record to get at people they are discontent with. She definitely supports this bill from the standpoint of the recording system in general. TAPE 98-2, SIDE B MS. YOUNG said she did not want recorders placed in the role of having to review documents for substantive content or validity. That concern is resolved with this bill. CHAIRMAN LEMAN asked if her office sends a notice to an owner when a lien is filed. MS. YOUNG replied that there is no notice provision by her office. SENATOR MACKIE moved to pass SB 195 out of committee with individual recommendations. There were no objections and it was so ordered.