Colorado Commission on Uniform State Laws (12/09/2014)

Final
STAFF SUMMARY OF MEETING

COLORADO COMMISSION ON UNIFORM STATE LAWS

Date:	12/09/2014	ATTENDANCE

Time:	10:03 AM to 11:38 AM	Gardner	E
		Grimshaw	X
Place:	SCR 356	Kent	X
		Levy	E
This Meeting was called to order by		Mielke	X
	McGihon	Morris	X
		Pike	E
This Report was prepared by		Shaffer	*
	Patti Dahlberg	(None), (None)
		McGihon	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Fiduciary Access to Digital Assets Act Recognition of Substitute Decision-making Documents Act Revisions to the Uniform Common Interest Ownership Act Section 3-116 Interstate Family Support Act Amendments (2008) Uniform Voidable Transactions Act (formerly the Uniform Fraudulent Transfer Act) Next CCUSL meeting		- - - - - - - - - -

10:04 AM -- Proposed 2015 legislative agenda; feedback from Colorado Bar Association

Commissioner McGihon briefly summarized the agenda and asked that those testifying try to limit their testimony time to allow for questions and discussion with Commissioners.

10:05 AM -- Uniform Voidable Transactions Act (formerly the Uniform Fraudulent Transfer Act)

Andy Toft, Colorado Bar Association - Real Estate (RE) Section, addressed two areas of concern. First, regarding Section 10 which puts the governing section of law to be the local law of debtor. There are concerns that suits filed in other states deciding cases regarding Colorado real estate may cause confusion with Colorado law. The RE Section's position is that litigation concerning Colorado real estate should be filed in Colorado and fall under Colorado jurisdiction. The RE Section supports this legislation as long as it is amended to state that Colorado law applies to any litigation involving real estate in Colorado and suggests that the language could be changed to be similar to other uniform laws that provide that the prevailing law is within the state where the interest lies. The second area of concern of the RE Section was with Section 11 regarding series organizations, which Colorado law is not currently in the position to support.

Commissioner Kent pointed out that Section 10 deals with an entity transferring interest and not property. Mr. Toft confirmed that the section's concern is regarding property or deeds and not interests. The Commission briefly discussed amending the language in Section 10. It was decided to proceed with moving with the uniform law to introduction. Meanwhile the Commission will take a closer look at the language, get more clarification from the Uniform Law Commission (ULC), and work on an amendment addressing the RE Section's concerns.

Lori Hulbert, Colorado Bar Association - Elder Law (EL) Section, indicated that a committee has been formed to study this act, but does not currently have a position.

10:23 AM -- Fiduciary Access to Digital Assets Act

Lori Hulbert, Colorado Bar Association - Elder Law (EL) Section, indicated that the section does support this act but also has some suggested changes. They agree that most financial information is now stored electronically and it is important for a fiduciary agent to have the ability to get to all the information needed to fulfill their duties as administrators for their clients. The EL Section has concerns regarding some of the definitions and indicated that they were prepared with written suggested changes and comments. Commissioner McGihon requested the comments be sent to the Commission.

Steve Brainerd, Colorado Bar Association - Trusts & Estates (TE) Section, indicated that this section, in general, also supports the legislation. In addition to some definitional concerns, this section has been discussing whether financial agents under a medical durable power of attorney should have the same access. Alternative wording is being worked on by the Colorado Bar Association.

John DeBruyn, Colorado Bar Association - Business Law (BL) Section, pointed out that both the Fiduciary Access and Substitute Decision-making Documents acts may affect the law of agency and choice of law issues, as well as possibly affecting contract law. Stated that "person" includes entities so it would embrace all agency and contractual rights which may then also impact commercial transactions. There may be concerns regarding the scope and reach of the acts. Commissioner McGihon pointed out that the applicability of the act should be considered with applying definitions.

10:38 AM -- Recognition of Substitute Decision-making Documents Act

Catherine Hance, Colorado Bar Association - Real Estate (RE) Section, voiced concerns over the term "jurisdiction" stating that it seems to be written very broadly and could be interpreted to cover documents from any country. In addition, the consequences of not accepting the offered translations at face value could cause extra costs for a second translation and for legal advice. Real Estate law has recently seen varying levels of increased fraud and inadequately verified translations of property descriptions may become a problem. The RE Section can see this law being easily used and also needing a certain amount of breadth for health or medical concerns but is concerned about someone having to accept documents that may be difficult to verify or costly to translate. The RE Section supports this act as long as real estate transactions are not part of it.

Commissioner Mielke pointed out that this act has gone through substantial review without these concerns being raised and asked if there was something different about Colorado law. Ms. Hance suggested that Colorado has its own power of attorney law and additional laws protecting real estate transactions, perhaps other states do not have similar laws in place. Commissioner Mielke suggested taking these concerns to the ULC and Commissioner Shaffer agreed. Commissioner Kent pointed out that this act is meant to be an overlay to the power of attorney laws and intended to buttress other law and it is not trying to change power of attorney laws.

John DeBruyn, Colorado Bar Association - Business Law (BL) Section, expressed concern with the meaning and effect regarding controlling law in this act. The BL Section is looking for clarification regarding to what extent foreign law is to be imported and where the line is drawn between commercial transaction and agency agreement/relationship. Seems that one portion may say Colorado law applies and another might say a different state or country has jurisdiction. Mr. Bruyn also voiced some concerns during the above Fiduciary Access discussion regarding the scope and reach of these acts.

Commissioners Kent and McGihon explained that the act states that if this document is valid in a foreign jurisdiction then it is also valid in Colorado and that it does not try to import foreign law. Mr. DeBryun would like either the law or the comments to make it clearer that foreign law is not being imported.

Steve Brainerd, Colorado Bar Association - Trusts & Estates (TE) Section, would like more time to consider the proposed act and to reach out to other sections of the bar and other health related professionals. They are in general agreement with law, but would like more time to consider impact.

Lori Hulbert, Colorado Bar Association - Elder Law (EL) Section, agreed with Mr. Brainerd regarding the need for more time to consider the act and reach out to others.

Commissioner McGihon agreed that it would be desirable to be able to give the Colorado Bar Association more time to consider and vet proposed acts, but there are times when the CCUSL may need to move things along to better meet upcoming drafting deadlines.

11:10 AM -- Revisions to the Uniform Common Interest Ownership Act Section 3-116

Catherine Hance, Colorado Bar Association - Real Estate (RE) Section, indicated that the Common Interest Ownership Act regarding the priority of rights of liens has been a subject of litigation in a number of states. The RE Section does not take a position on this act, but does want to raise awareness with the commission that it may be more controversial than previously considered -- especially with lending entities. There are concerns that this act may cause problems with consumer borrowing because of the super priority lien and the right of eviction for unpaid dues. The RE Section recommends that the commission not adopt the portion regarding the right of eviction during foreclosure and perhaps adopt an amendment clarifying the scope of the super priority right. Anticipates some lender opposition and homeowner concern.

Commissioner Mielke indicated that the Commission shares some of these concerns and that there has been a lot of changes in law in this area as well as changing levels of support of this act from lenders and associations.

11:17 AM -- Interstate Family Support Act Amendments (2008)

Commissioner Mielke explained that the priority in proceeding with this act is that federal law has been amended to specify that federal funding will be lost should it not be enacted during the 2015 legislative session. There was no other public comment on this agenda item.

Commissioner McGihon requested a motion to indicate that the commission is moving forward with the drafting of legislation and the recruitment of sponsors for the five ULC acts discussed today. She made it clear that this vote does not constitute final approval of any bill language but will allow these bills to be considered committee bills and, as such, not be counted against a legislator’s bill limit.

Commissioner Shaffer moved for the adoption or endorsement of the Uniform Voidable Transactions Act, the Fiduciary Access to Digital Assets Act, the Recognition of Substitute Decision-making Documents Act, Revisions to the Uniform Common Interest Ownership Act Section 3-116, and the Interstate Family Support Act Amendments (2008) with the understanding that any drafts are not yet final and for the purpose of making these drafts available to legislators for potential sponsorship, if final bill drafts are approved by the commission. Commissioner Kent seconded the motion and it passed unanimously.

11:21 AM -- Study & Drafting Committees

The commissioners briefly outlined some of the ULC committees that they are currently working on and also highlighted some newly formed committees that might be of interest to attendees. A document listing the 2014-2015 ULC drafting and study committees was made available. Commissioner McGihon encouraged those interested in the potential uniform state laws to contact one of the commissioners or CCUSL staff with comments or for drafts and to do so as early as possible in the process.

11:32 AM -- Next CCUSL meeting

Commissioner Morris told the commission Senate and House leadership will introduce a joint resolution within the first few days of session appointing commissioners for 2015-2016 term. After the resolution is adopted the commission would need to meet to elect a new chair. After discussion the next CCUSL meeting was scheduled for noon on Wednesday, January 28.