January 12-13, 2001
Savannah, Georgia

Chairman Barry Evenchick convened the meeting of the Committee on Scope and Program at the Westin Savannah Harbor Resort in Savannah, Georgia on Friday, January 12, 2001. Commissioners Rex Blackburn, William Henning, Michael Houghton, Carl Lisman, Harry Tindall and Martha Lee Walters, members of the Committee, were also present, as were, from time to time, John McClaughtery, President of the Conference; King Burnett, chair of the Executive Committee; Gene Lebrun, former President; Fred Miller, Executive Director; John McCabe, Legal Counsel; and Michael Kerr, interim Chief Administrative Officer and Deputy Legal Counsel.

The meeting was in session from 8:30 a.m. until 12:10 p.m. and from 1:30 p.m. to 4:40 p.m. on January 12, 2001 and from 8:30 a.m. to 11:05 a.m. on January 13, 2001.

Minutes

The minutes of the July 29-August 1, 2000 meeting were reviewed:

Commissioner Tindall reported on the progress of the Drafting Committee on Interstate Family Support Act.

Commissioner Henning reported that he had engaged in conversations with others regarding updating the Uniform Commercial Credit Code.

Fred Miller believes that issues relating to subprime lending practices will be addressed at the federal level.

He also reported that he had sent his letter to drafting committee chairs relating to the role of observers. He is continuing to encourage efforts to involve consumer participation.

Commissioner Tindall explained his concerns regarding the currency of Official Comments which are written before judicial interpretations add to the Acts. Fred Miller noted that the JEB's and the PEB can issue updates of Comments, but these Boards do not cover all Acts available for adoption. It may be appropriate to remind Commissioners generally that there is a procedure to revise and update the Official Comments.

A Study Committee has been appointed to consider revisions to the Uniform Conflicts of Laws - Limitations Act.

A Special Committee on International Legal Developments has been appointed.

Regarding the Internet practice of medicine, Commissioner Evenchick reported that it had been agreed in discussions between himself and AMA representatives that any useful legislation that would likely come from a study would be focused primarily on regulation of medical practices and thus not a subject for the ULC.

A Study Committee has been appointed regarding revisions to the Uniform Management of Institutional Funds Act.

Commissioner Evenchick reported that he had asked the Vice President to provide his report to members of this Committee.

The minutes were then approved.

Annual Meeting Agendas

President McClaughtery reported generally on the agenda for the 2001 and 2002 annual meetings. For the 2002 meeting, he anticipates the following acts will be considered:

Apportionment of Tort Responsibility
UCC 7
Conversion or Merger of Business Entities
Estate Tax Apportionment
Health Care
Testimony of Minors
UCC 3, 4 4A
UCC 1
Non-judicial Foreclosure

John McCabe shared his thoughts on the drafting cycles of the Conference that he has observed. Why not solicit thoughts on possible Acts on the ULC's website? Also discussed was whether such access should be as open as possible or filtered initially by ULC standards and limitations. Chairman Evenchick proposed that Commissioner Walters and Houghton make a written recommendation to this Committee regarding implementation of the a "suggestion box" idea.

Fred Miller reminded the Committee that there are many Study Committees which have not reported, and repeated his belief that the ULC should be looking to discrete topics, rather than larger "Code" projects. John McCabe believes that Study Committees, lacking resources and without much organizational guidance, are not very productive.

Study Committees should be required to review the current literature in the area of their subjects.

It was recommended that the Chairman write to all Commissioners soliciting recommendations for possible Acts to be discussed by the Committee at the 2001 annual meeting.

Consumer Debt Counseling

Provisions in the UCCC dealing with consumer debt counseling were dropped before the Act was completed. In light of efforts to "toughen up" the Bankruptcy Code and encourage Chapter 13 filings, rather than Chapter 7's, there is continuing discussion that consumer debt counseling should be encouraged. A recent article in the Business Lawyer points out that the counseling industry is unregulated and might need legislation on specific topics, such as deposits. There is no uniformity among State treatment today.

Is this a topic that would be supported by consumer groups?

The following resolution was adopted unanimously:

RESOLVED, the Committee on Scope and Program recommends to the Executive Committee that a Study Committee be appointed to consider an Act relating to consumer debt counseling including, among other topics, whether nonprofit counselors should be exempted from regulation, whether additional security for debtor's deposits is necessary, and whether and how there should be regulation of interstate operators.

The Committee should review current literature, determine interest in this subject by the American Bar Association and other groups; consider potential funding sources; and analyze the likelihood of enactments.

The Study Committee should be directed to report to the Committee on Scope and Program 30 days before the 2001 annual meeting.

Harmonized Wage Code Project

Philip M. Corn (IRS, Project Manager for the Harmonized Wage Code), Ronald Moore (IRS, Consultant) and Theresa Colushia (Vector Research) appeared before the Committee. STAWRS (the "Simplified Tax and Wage Reporting System") is a joint venture of federal agencies, including the Internal Revenue Service, Labor, Treasury, and OMB, which was borne from the desire to reduce employer burdens. The Harmonized Wage Code is one of four elements of the STAWRS project.

Messrs. Corn and Moore are knowledgeable in the area of federal employment tax laws (income tax, FICA and FUTA). Ms. Colushia is an advisor.

They are seeking a co-venture with the ULC to produce a uniform law dealing with definitions of wages for use in state employment taxes (income tax withholding and unemployment insurance). The project does not deal with State deposits, nor with the employee vs. independent contractor issue (which Congress has left to the States).

Success would mean combined and simplified federal and state forms, clarity and efficiency. At the same time, Congress will be asked to make minor changes in the federal laws to parallel the State legislation. In addition, there is the possibility that tax filing dates could be harmonized.

This would help employers, reducing the tax and wage reporting burdens for employers by eliminating direct costs by $15 billion annually. There are about 6.7 million employers in the United States.

Many States already piggyback on the federal income tax withholding definitions, so the focus would be on the unemployment taxes. Changing definitions will probably have revenue implications for the States; a study is being undertaken at this time and should be completed by the end of 2001.

A Study Committee would be the appropriate approach.

The following resolution was adopted unanimously:

RESOLVED, the Committee on Scope and Program recommends to the Executive Committee that a Study Committee be appointed to consider whether an Act should be adopted to harmonize State wage codes for employment tax laws and the feasibility for enactments by the States.

The Study Committee should be directed to report to the Committee on Scope and Program 30 days before the 2001 annual meeting.

Uniform Adoption Act

Commissioner Biklen has pointed out that the Act has been enacted in only one jurisdiction (Vermont). The Act is controversial because of the closing of records, agency vs. private adoptions and termination of parental rights.

The Committee decided to take no action at this time.

Uniform Transboundary Reciprocal Access Act

Henry King, the United Stated chairman of the Joint ABA/Canadian Bar Association and Barra Mexican Working Group on the Settlement of International Disputes, has recommended that the ULC reconsider this Act in light of NAFTA.

Chairman Evenchick will confer with the Joint Subcommittee for Cooperation Between the ULC and the Uniform Law Conference of Canada.

Has this Act ever been used in a suit?

Payday Lending Act

This subject was addressed by the UCCC. Fred Miller raised the thought that this discrete topic might be appropriate for legislation.

The law would be regulatory and deal with consumer issues, primarily usury. He believes that a number of States have enacted laws on this subject.

After discussion, the Committee decided that this subject deserves further investigation.

Privacy

The ULC has previously drafted laws in Healthcare Records, Information Practices Code, Criminal History Records; and these have resulted in few adoptions.

A Study Committee has been appointed on Internet Private Law.

The Committee decided that no action should be taken.

Hague Conference on Jurisdiction and Judgments Convention

The Executive Committee will address this matter.

Pre-need Funeral Arrangements

The National Funeral Directors Association has proposed model guidelines. The Committee decided that no action should be taken.

Environmental Covenants Enforcement Act

Commissioner Lisman reported that various federal agencies, including the Department of Defense, have expressed concerns regarding enforceability of private restrictions on contaminated lands sold by the federal government.

A proposal to fund a study has been made.

The following resolution was adopted unanimously:

RESOLVED, the Committee on Scope and Program recommends to the Executive Committee that the Joint Editorial Board - Real Property undertake the study requested by the Department of Defense regarding enforcement of environmental covenants and that the ULC accept funding for that purpose from the Department of Defense.

The JEB - Real Property should be directed to report to the Committee on Scope and Program 30 days before the 2001 annual meeting.

Conservation Easement Act

Commissioner Burnett has proposed that some changes should be made to the Uniform Conservation Easement Act, especially in the area of amendments and how to relate the law of charitable trusts to donated easements. Historic preservation is an important consideration.

The following resolution was adopted unanimously:

RESOLVED, the Committee on Scope and Program recommends to the Executive Committee that the JEB - Real Property undertake a study to consider whether the Uniform Conservation Easement Act should be amended.

The Study Committee should be directed to report to the Committee on Scope and Program 30 days before the 2001 annual meeting.

Statute of Limitations

Commissioner Peterson has proposed a Uniform Statute of Limitations Act. The Committee noted that a Study Committee has been appointed on Conflicts of Laws - Limitations and determined that no further action be taken.

Uniform Computer Information Transactions Act

Commissioner Ring has proposed amendments. This will be addressed by the Executive Committee.

Uniform Statute and Rule Construction Act

Commissioner Hartnett has proposed minor textual amendments to the Act and to limit its application to legislative acts. The Chairman will refer this to the Committee on Liaison with Legislative Drafting Agencies. Uniform Commercial Code - Articles 3, 4 and 4A In the middle-1980's, with deregulation of interest rates by depository institutions, banks extended the time within which funds would be available to customers. Congress passed the Expedited Funds Availability Act, which set limits on the time after which funds must be available to customers, which, in turn, put pressure on the check collection process. So Congress gave the Federal Reserve Board the power to adopt a regulation, which became Regulation CC.

Regulation CC, among other topics, changed the check collection process, preempting existing state law. The Fed recognized that this imposed dual rules on banks, and suggested that, if the ULC revised the IUCC, it would defer to state law.

Banks saw conflicts between Regulation CC and state law. Also, Regulation CC binds the banking system and a bank's customer, but not those who are not direct players in the banking system. UCC 4 solves that gap.

A Drafting Committee has been appointed, and it has been working. However, the primary proponent at the Fed for this task has left that agency and some banks have now decided that Regulation CC should not be embodied in State law.

Is it time to terminate this project?

• Yes: The proposed amendments are not part of a cohesive series of amendments and there is no constituency for them.

• No: There are consumer issues that should be addressed and others have raised issues for the first time. The Electronic Clearing House Organization (ECHO) believes that the time has come for electronic checks; this could be a substitute for the repatriation of the Regulation CC issue.

Fred Miller proposed that the drafting committee's charge should be the ECHO proposal and those listed in the memorandum, dated January 2, 2001, from Reporter Ronald Mann and Chairman Edwin Smith and in his memorandum, also dated January 2, 2001. He believes that the ULC should not been seen as unable to deal with difficult and controversial issues.

Will termination of the project affect the ULC's ability to further amend the UCC?

The following resolution was unanimously adopted:

RESOLVED, that the Committee on Scope and Program recommends to the Executive Committee that the Drafting Committee to Amend UCC Articles 3, 4 and 4A meet as a Study Committee with the observers, using the Memoranda to the Drafting Committee and the Committee on Scope and Program, each dated January 2, 2001, and consider whether to proceed; and, if so, to propose a final agenda of amendments.

The Committee must consider the likelihood of uniformity of enactment of its list of amendments.

The agenda, if agreed to, shall be presented to the Committee on Scope and Program 30 days prior to the 2001 annual meeting for consideration and action before the Committee may take further action.

Elections Act

Commissioner Richard Smith, among others, has suggested that, in light of the recent presidential election, the ULC draft an act relating to election voting. There is the possibility of both federal pre-emptive or supportive legislation.

President McClaughtery believes that specifying the type of voting machine or voting procedure will be seen as political, not drafting, decisions. Commissioner Henning expressed concern about the ULC's ability to produce an act in time for the 2002 election. Fred Miller indicated that the ULC needs a mandate before undertaking a project from, for example, the National Governors Conference or the National Council of State Legislatures.

Commissioner Burnett believes that an Act should address the following subjects, but not specify the type of voting machine: Times and procedures for protest, how and who certifies, and standards for review of ballots.

Commissioner Evenchick concurred that a mandate from the NGA and NCSL should be a condition precedent to any ULC activity in this area.

Commissioner Houghton indicated that the ULC should not seek a mandate; it should get involved only if it is solicited to draft. He expressed concern that the drafting process might be inappropriately politicized.

Fred Miller pointed out that an Act should be limited to national offices. Commissioner Richard Smith had suggested that the Act should cover national and state-wide offices.

President McClaugherty will be requested to make further inquiries and present his observations to the committee before it takes further action on this proposal.

Electoral College

Commissioner Davies has asked the Committee to reconsider its prior decisions not to propose an Act reforming the law regarding the electoral college. The majority of the Committee determined to take no action at this time. Uniform Law Foundation Commissioner Tindall proposed that support for the Uniform Law Foundation could be stimulated by establishing a "membership" or "fellowship" dependent on donations. The President will pass on this suggestion to the Board of the ULF.

Internet Sales and Use Taxation

The NCSL and others have created a task force on streamlined internet sales taxation. Some Congressional bills have proposed that the ULC be involved. Commissioner Lebrun proposed that no action be taken at this time.

Adjournment

There being no further business, the meeting was thereupon adjourned.

Respectfully submitted,

__________________
Barry Evenchick, Chair