Judiciary Committee - Senate

Call as many of Senate Judiciary to order. First item on the agenda today I. Of. Vice chair flowers is got some pages here Q. like introduces Board. Thank you Mr chair. I have pages five of them from the doing this school district they're all ninth graders at the call your name please stand up Prachi. Hallie. Elisabet. Camden. Can they come around outside of the. And I'd say aye. Gloria. What does some fine looking kids. Thank you we hope you learned something the peer. One of his favorite subjects is six so you have a lot to learn. It may be. To our. Learn how to give us some advice on civics. Thank you for being here. Thank you thank you senator flowers are the first item on the agenda today is a Senate bill two sixty three Senator Hester you Mr chairman I'm gonna pass over that today I'm still working on on on Amendment Senator Clark so we'll probably hear here Monday okay. Senator Clark Lanier and the as the next two bills. Senator Hammer is not areas the next bill. Senator Irvin I'd like to be at the end of the committee because she's in public health. we're not running Senator get you run centre Gazaway. Your personal agenda Gazaway. Senator Tucker. Both of them. Forty seven okay. We don't have a representative Lundstrum here today. We don't have representative Maddox here today. That gap. The it gavel. Take a recess. I tell you what Senator Irvin she wanted me to textures soon as we got to our so I'm gonna go in texture we would talk about a ten minute break recess. Per. Senator Clark are you going are you prepared to run your to bills. Three. This is what the bill gross yes. I know it's going to impact. Another. It is sitting in the room today. Okay. Tucker slams. Bills okay do you they all energy so I what while we're waiting we have some of the pages in the room today I think Senator Tucker. You have a couple pages here today. Yes yes. Please. Just. One of those to actually get some okay. Yes seven. That we also we also have a Senator Leding is one here Harper Lee. All right you're recognized. Thank you Mr aparat they were here today and everybody that's that serves in the General Assembly will know their you know their mom Michelle Davenport who who dress. All the bills for state agencies committees and does a wonderful job she's got two twin boys who attend Little Rock Central High School and are very interested the Arkansas legislative process Blake anything we all step out and wave and say hello. The motion. They are. You're recognized. Well you mentioned that the. Senator Leding had a page properly at the copper stood up a second ago. Stand up again. Thanks for being here hopper don't know what grade you're in. What grade are you in. Seven. Six we're happy to have a sixth grader in here I hope you have a good time at the capitol today. Are are we also have Senator king as a. As ask Aston Miller. Thank you to a good to have you as. And senator board has saw your and Jude Hary. And then Senator Hill aye Byron weather's. All right. This is this is what we see is. This you Senator Clark is. When. Anybody wanna saying. Lord lord don't I heard you were good saying Robert lord. In the back. Are we have certain. Senate Judiciary be back in the order of Senate history of Senate bill. Two sixty three. You're recognized president. Thank you Mr chairman members of this is of a bill trying to correct concern from us an equipment dealer in my area basically we we all agree that if if if if a service or equipment dealer somebody does work on your Quitman and then you don't pay for the services for the parts that they awfully they they get a hold that equipment until there there's remedy if there's a sale or whatever that happens so are the law used to say that if you're gonna Celebes women you have to have a bond and that bond amount was established by a J. P. from the quorum court. And over time JP's just became less and less moral you know willing to set those bond amounts because a lot of times maybe they should have an understanding with those costs were so then we moved on to say that the the judge would set that amount and now we're finding out the judges don't like set that amount less is actually on their docket which means someone has to suit which makes of something become far more expensive and more cumbersome than the process should actually be and so what we're doing here is just clarifying that you know you can you can establish a fair market value and make the bond for twice that amount and and then send the proper notice of and we we used to have records of we're adding registered and are registered in stirs removing registered adding certified to that mail to make sure we're actually trying to get the signature on that rather than just to a last known address but this is cleaning up a process for our equipment dealers and service people across state of Arkansas I'm happy to answer any questions and this also includes following upon with the circuit Clerk it absolutely that that's that's kind of the whole just of that you got to follow up on because if you sell something and you shouldn't sell that we've got to be able to make the individual the owner of the the owner of that equipment right. This doesn't include any leased equipment this is just what you buy that's right okay just or any any questions from committee sent flowers. Okay. Thank you Mr. So I see. It changes registered to certified. And just want to ask or not certified. A return receipt requested to make sure. That the debtor has received notice. When you said certified that's just the green card coming back and then have to be signed for by anybody that that's one question and then the other question. I'm glad this is dealing just with personal property the trash okay. But the Put in here. A requirement that the lien holder shall file will shall determine the fair market value. Of the personal property to be sold so how is the lien holder supposed to. Assemblage. The fair market value. Well you know I think that that is a fair question you know I I think the people in in those industries understand what a fair market value of a piece of equipment is also do you will understand based on what they sold but we're also saying whatever the fair market value is the bond has to be twice that to make sure there's not a that if somebody's trying to be cheap for some reason but whatever the fair market value is has to be twice and then if there's in the unlikely event but we always have to have these laws for the unlikely event that they get sued that was found to be not right the judge can still award of of that well the thing up That goes along with that is that. At the sale. It could be sold. The minimum bid is what's owed. To the lien holder. So if that's a big gap between what's old. And what the fair market value is and also wanted to know is that fair market value. Something that is determined by that lien holder are an independent third party. Yeah Senator Tucker is been in the wages bill that I'm going to ask you if you'll help me answer. So so this is my concern to Senator flowers and When I first read the bill I was a little concerned that the lien holders the one determining the value and I'm not sure that the amendment that I suggested I want to thank Senator Hester for for working with me to make the amendment may not be perfect I definitely think it improves it obviously you can thank you own or termination about that but. But basically I think there needs to be some check on the lien holder determining the the value of the property so if you look at the amendment. it says that. Under subsection three That the the property owner can recover damages from the lien holder not to exceed two times and this is one of the changes in the amendment the fair market value as determined by a court and and not only that so that at that point a court is coming for market value not the lien holder the debtor the Sir Clark anyone else but the other check on that is if if the property owner feels aggrieved enough that they have to file suit to recover that money then under subsection four they can recover attorneys fees as well as a result so those are those are kind of the checks to put in place on the lien holder determining the fair market value that I suggested to Senator Hester enough and that he put for what to the extent that helps. Yes. Well that's all well and good if it's a. Put before the court. What I'm talking about at the time of sale. A minimum be it. Because. It says it on the first page of section one. Eliminate older shall determine the fair market of the property to be sold and that goes along with. posting. But not. So. What I'm talking about is at the sale. If the sale. Is for the the minimum bid of what is owed. Say somebody owes fifteen hundred on a tractor or something. Fair market of the tractor is more like fifteen thousand dollars. So that lien holder one with the money. He's going to be in the minimum bid fifteen hundred dollars will he gets a. A piece of equipment. That. Is worth more than. Well I don't know how many times to count how many times. What I mean what about that because I look at it like this. All sales. Generally. You talking about. Sales of real estate that I'm more from the familiar with. Can be a challenge. Because there was. Nothing close paid at the time at the sale. That. You know is it's close to what the property is is worth. I mean. You get a. Market value of fifteen thousand dollars. The Devereaux's fifteen hundred that's a big gap. And Just wanna know how you respond to that. Yes so Senator flowers that process is already established and and that that's not part of this bill we're just we're just talking about how you get to the sale but but the sale process is is already established in on and not that's not part of this this bill but I know I do I do agree and I I can't talk intelligently about the actual cell process but there's no doubt that something could sell cheaper than than its market value that's auctions go sometimes they sell for more than Arkansas you. But and again I I like I like you understand real property sales and the the excess proceeds have a opportunity to go back to the original lien holder. Well if nobody else is update the sale. the ending at I can imagine the lien holder beating more. For something that he's going to get for a lot cheaper then I can I can see that that's just not what this this bill is not dealing with the actual sale it's about how to get to the sale. Well. Mr it was something on one of these pages. Trying to find it about. The minimum be it. Senator flowers yes. We we really need to discuss the amendment first to get that file for you okay well I moved to adopt is amendment okay we have a motion to adopt the amendment the second any discussion. All those in favor say aye aye All opposed right the members been adopted. Now you may proceed with. The Bill. Okay so. It it may be. In the law already. And maybe that's not something that you're adding but you are. Adding. Of the fact that. A fair market value has to be determined. I certainly appreciate serve larger your concern always for the lien holder and and you had that position for and and I agree with that I think for the debtor for the debtor that try the debtor but the reality is I believe that these lien holders argument is if we have a simpler process it saves the debtor a lot of potential hot like that they're not having to follow suit which all that would be added on to it and if it takes a lot longer there's day storage rates they get that on making a simpler process keeps keeps the cost down for it for everyone involved So I would say it's it's there's always risk reward on both sides of of these processes. I just wish that. There was more tightening NO. Between what the property is actually worth. What the. Did he is on the property over to the lien holder. And how much that be at the this that's all I'm saying I think that's fair. Senator Tucker you're recognized I'm I'm curious. I'm sincerely curious if you have the same rate of this is I do Senator flowers because I'm I'm not an expert on it either. The way that I see the amendment. If you look at that subsection three and I don't know use your hypothetical. The lien holder shall be liable to the debtor for court costs and any sum of money a judge as damages to the debtor which exceed the amount of the bond so in your hypothetical let's say you have a tractor worth fifteen thousand dollars and the lien holder. Submits a bid for fifteen hundred and the debtor gets. Gets nothing and the debtor believes they've been harmed then at that point it would be incumbent on them to file a lawsuit against the lien holder. and at that point they get to prove the fair market value of the property to a court and say I was damaged by this announcmenet. And that not only to enable to recover that amount of damages from the lien holder I can also recover my court costs and attorney's fees. So that's the way that I see that playing out but I'm I'm sincerely curious if if used if there's something that I'm missing that year that you're saying yeah because preceding that. You're not getting in the circuit court. but for petition. Saying that the lien holder wrongfully enforce the late. So that that's a question about whether anything was owed in the first place to the lien holder by the debtor it's not about. Whether an inadequate amount that's not the issue before the court the court considers that after it finds that. The lien holder wrongfully and forced the lien provided for by this subchapter and I have to admit Senator Hester I haven't. Read all that but I do have some Some experience with some of these cases in a long time ago so I can't say that I know this whole chapter. But that's my concern and and do you Senator Tucker that's my read you have to have a reason that so allow it in the law to get before the court and it it says Yes Is that. That the lien holder wrongfully enforced. So I don't see anything suggesting. That there is a big gap between minimum be it and former fair market value if you haven't shown that there was uh maybe he could have issue with notice he didn't get notice of the sale with the certified mail our the something like that but otherwise it's about. The. With the debt was owed in the first place Senator Clark center crowd Committee Senate quarters in the queue right now so I'll come right back to the tent okay coming back to us normal of business people the Senator Hester this bill fonder standard is about expediting the process where we have a broken contract where someone says I want. A quick but whatever repair. And I'll pay for it. When it's done they don't and the person who does the work has it automatically try in the equipment unlike me who would put a lien on a home that you live in and then I don't have to worry about it because it's your home when you're living in it and if you ever sell it unless I take other legal action but they on the other hand have to store that equipment which takes up room they have to protect the equipment and so the law over time. Has been written so that there's a way for them to dispose of that. And my experience in all these cases is that the lien holder because we we protect the lien holder the the the person who made a loan on the equipment. Will make the minimum bid. Just to protect themselves although they are protected. Of and and let anybody else build any amount they want to be because that's what those options were we have got a broken contract we're trying to fix it we're trying to move on so that somebody's not storing this for five years or ten years. The and not moving and you're destroying this bills just trying to expedite that. With this bond so it's clear that if for some reason there's a dispute. And the person who didn't pay is harmed. They have or they have more remedy than they have now. They entities and it's easier for the person who didn't get paid to move along. That's right is that correct thank you. tenderize. Thank you Mr president Senator Clark the definition of what he's saying just adding to that this bill doesn't address the original agreement between the two parties they probably have posted like you see sometimes. Thanks left after thirty days subject to whatever so that's determined on the front end this is after say the repair in the chart so what I'm reading in the a language in the new language. Is what's the lien holder makes demand at and it says the last known residence or post office I think about a lot of times to being dropped off may give you cell phone number that's all you got you may have an old address in your system when you did this before but I mean that's all this bill requires you do to try to do it by. Mail is that correct that is correct it's all you did in fact we've had that discussion about the on the mail that when when they're taking something from somebody they better get a good address right at least an address provided by that individual in this this will probably see the day against a but. Regardless the initial time that was originally discussed once this notification notifications received you got to thirty days and then after that it talks about in the language ten days so within forty days they need to do something that liquor I got forty days to come work out and as you know I just can't imagine somebody to go to copies quick non of the. Your money may be scarce whatever but it gives a forty days from when they've been notified actually make it work and and I think it's rate thank you. So Senator Tucker your record breaking. Thank you Mr chairman I want to go back to what the point Senator flowers raising is I actually have the exact same concern about that wrongfully enforce language and again I want you to tell me if I'm missing something. But the amendment takes. That award of damages that wrongfully enforce languages in subsection B. two. And The Amendment takes the award of damages out of B. two and creates a separate. The three. So I. The way I read that that wrong fully enforce language is really a separate issue. And subsection three just starts clean and says after the amendment the lien holder shall be liable to the debtor for court costs and any sum of money judges damages to the debtor. Yes. Well this amendment. It deletes line three through eight it doesn't take the language. If the court circuit court finds that the lien holder wrongfully and forced the lien. Provided for by this subchapter. So the the amendment only deals with what the court can do. After the finding that the lien holder wrongfully enforce. So you're back to what I said. Notice can be challenged. With that has been previously satisfied. And that the lien holder is not entitled. That's before the court. There's nothing before the court. That can come before the court except for that. Is what I read this. It's in certain lands. I mean the way that I see it is that that subsection two relates to the sureties obligations. The security will pay the debt or damage is up to the amount of the bond. If the court finds that the lien holder was wrongfully enforce but then the new subsection three. The sureties not in that anymore and the wrongful enforce language is not in that anymore and that's just the relationship between the lien holder in the debtor. I don't see too as a pre requisite to three but I I could be wrong and so that's why I'm I'm glad we're having this discussion. I'm simply saying that. The language that he is has in this bill. Provides I think. For. The jurisdiction of the court to be involved and that is. Wrongfully enforcing the lease. So to me like I say at. Wrongfully in for sentence some out notice due process notice. You're talking about whether it's actually a debt that's owed. It's not about. The difference between what the property sold that. Market that you can petition the court for. And what it was worth in the big if there is a big gap. And I can see it being a big gap. You know you give somebody a piece of equipment. They are truck. Well they D. Wallace. They go out there. All the trucking in they do the repair work maybe a broken axle or something like that. With that truck is worth. Thousands of dollars. Many thousands of dollars. And if the work that was done. The labor even the parts. Don't add up but a couple of thousand dollars. You gotta allow somebody. To get. We're many thousand dollars. What is a thousand or two thousand dollars. That's not right servers I would argue that that's the that's the process as it sits today. Make me from personal property sold at a at a mini storage for you know the people that live around like there there's an auction and it may sell for less it may sell for more but I I guess my point is like that's not what. excess proceeds or the amount of the bid is just not what what I'm dealing with this in this bill. I just see it is. What. For somebody. To get a lot. For doing a little. Not saying that that would be the case in all cases but when we're talking about a some some types of equipment. Eighteen wheelers. Big farm equipment. You're talking about big Bucks. And so. Say it's a former. Former can make that note of that bill because. He hadn't got his. Money from the meal or something I don't know. In the landholder seizes of the way of getting over that's all I'm saying. I wish. That. The bill would provide for. A minimum bid. That would be. At least something closer to the fair market value are at least you know if if if you see that. The fair market value is way up here. And the debt that the lien holder holds sway down here. There should be some process Ford adjusting it may be that would be something that the court. I would consider and that could go into. That the. Section two which I think gives the court the jurisdiction. You see what I'm saying I do see what you're saying. Any other questions from committee members. Is there anyone in the audience who would like to speak for against the bill. Centers to close for your bill yeah I'll just be very brief like wait we have a problem that back in the day a local JP would set the value they stop doing it then we set up a judge would set the values judges are busy they're not want to set the value unless it's on their docket which means someone basically as follow lawsuit and we're just trying to make a an ability for these the service people to be able to sell the property and we feel like it's fair that if it's something someone is treated unfairly with setting up on what they believe is twice what fair market value is that that is more than adequate and I would to I appreciate a good vote I make a motion to pass. We're motion if passed. As amended we also have a second. Are in discussion. All those in favor say aye. All opposed no. March your bill passes interest. We're still waiting on center ridge. Okay Senator Irvin is on our way so. We'll just wait. Senator you're recognized president. Senate bill two eighty two. Thank you so much members I'm very sorry very busy meeting up stairs going on Marco. Yes okay again my apologies thank you for allowing me to run this bill today and member Senate bill two I'm Missy Irvin district twenty four and Senators as Senate bill two eighty two is this bill Mears the standard that is used in federal anti trafficking laws and this makes Arkansas consistent with those existing standards are enforced in federal court cases so there really is no substantive changes for businesses here that already are under the federal statute what this bill does is it allows litigants to choose to file suit under the Arkansas law without having to meet the criminal law standards and there's nothing that prevents prosecutors from if they are found liable that they can pursue those individuals criminally or those businesses and entities criminally there's nothing to to restrict our prosecutors from from being able to do that but more importantly and I think this is something that needs to be discussed this amendment protects those hotels motels from insurance policy coverage exclusions based on intentional conduct and that's what this is about is intentional conduct motel hotel owners already are insuring against risks under the general negligence standard of knew or should have known so this spring sex trafficking under that same standards and it clearly defines it and are low so that they can have that insurance protection coverage but that also if if an entity in a business entity a hotel or motel is knowingly and intentionally aiding in the act of human trafficking for an individual that they are held liable and I think that's very very clear that we need to make this clear in Arkansas state law Under this act I think it's important to note that a litigant must first prove that the person bringing the suit is a sex trafficking victim to recover and hallmark in a sex trafficking cases that the victim has been subjected to fraud force or corrosion and a person cannot volunteer to be affixed under our definition of sex trafficking that as a as a definition of the sex trafficking victim if a person is subject to to fraud force or coercion and is manipulated into the sex trafficking trade to hold them at fault allows those prospering from his or her victimization to shift the blame off them and on to the victim should not be allowed so for victims of crime are not responsible for being victimized by a criminal and that's this language makes that clear hotels and motels will still be able to compare fault with the trafficker so I think it's important that we're clearly defining who is at fault here he was the one profiting off of the sex trafficking of the spectrum and then being able to clearly hold those folks accountable for and then profiting off of a victim's portable experience has been traffic's. In the sex industry. I'll be happy to answer any questions our committee Werner lecture the Bill any questions from committee. We have a sure research. Jean from Sam the counselor speak for the bill. Good morning my name is Christine and I am one of the government affairs liaison to a family council thank you Mr chair and committee for the opportunity to speak to you I'll be really brief just want to state for the record that family council council fully supports this legislation we appreciate Senator Irvin consistently to ship when it comes to protecting the most vulnerable citizens of our of our state so we ask that you vote yes on this legislation and once again we thank you for this opportunity thanks or any any questions from committee. Saying none. We have a stream ones okay that that's all the people from the audience to wish to speak for against the bill centerman having to close for your bill I want to close by saying that there's a group of attorneys that worked really hard on this legislation with me and I'm very grateful for them date date did their due diligence in making sure that it was written very tightly so that is actually beneficial for the hotel motel hospitality industry M. X. specially in what within consideration of their negligence insurance policies so it's really important for us to have clear language as it relates to this incidents and again you know for all the folks that have been victimized human trafficking and sex trafficking is a money making industry and if we do not go after the people that are profiting off of the refit crimes that these individuals are going through that we're not doing our job and so with that I really appreciate a good vote close from a bill or. We have a motion to pass. And a second any discussion. All of favour say aye aye aye All opposed graduate center your bill passed thank you guys so much. Saying nothing else on the agenda. Where we are adjourned.