Legislature(2019 - 2020)GRUENBERG 120
05/03/2019 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB123 | |
| HJR18 | |
| HB110 | |
| HJR18 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 123 | TELECONFERENCED | |
| + | HB 110 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HJR 18 | TELECONFERENCED | |
| += | HB 115 | TELECONFERENCED | |
HB 110-VEHICLES/BOATS: TRANSFER ON DEATH TITLE
2:14:14 PM
CHAIR CLAMAN announced that the next order of business would be
HOUSE BILL NO. 110, "An Act relating to the transfer of a title
to a boat on the death of the owner; relating to the transfer of
a title to a vehicle, including certain manufactured homes and
trailers, on the death of the owner; allowing a person to act
for the surviving spouse of a decedent to enforce liability
against real property transferred at death; and providing for an
effective date." [Before the committee was CSHB 110(STA)
labeled 31-LS0422\U.]
2:15:10 PM
MEGAN HOLLAND, Staff, Representative Ivy Spohnholz, Alaska State
Legislature, introduced HB 110 on behalf of Representative
Spohnholz, the prime sponsor, and began the bill presentation.
She identified various people available to the committee for
questions.
2:16:14 PM
REPRESENTATIVE IVY SPOHNHOLZ, Alaska State Legislature, said HB
110 would build upon the Uniform Real Property Transfer on Death
Act (URPTODA) [House Bill 60, which passed in the Twenty-Eighth
Alaska State Legislature], which created the Transfer on Death
(TOD) deed. She said HB 110, which is similar to House Bill 273
introduced in the Twenty-Ninth Alaska State Legislature and
carried by the late Representative Max Gruenberg, would extend
the TOD concept to titles for vehicles and boats. She explained
that HB 110 would allow an Alaskan to submit a form at the
Division of Motor Vehicles (DMV) to designate up to two
beneficiaries for his/her vehicle or boat. Upon death of the
owner, the beneficiary or beneficiaries would provide proof of
death to the DMV, submit a form, and pay associated fees to
receive a new title in their name or names. She said HB 110
would assist estate planners and simplify the estate planning
process so that families can avoid probate and other
difficulties related to passing down assets to beneficiaries.
2:18:16 PM
The committee took an at-ease from 2:18 p.m. to 2:35 p.m.
2:35:15 PM
REPRESENTATIVE SPOHNHOLZ summarized her introduction from before
the at-ease. She explained that she is carrying the legislation
at the request of Representative Gruenberg's widow. She said
the American Association of Retired Persons (AARP), the Alaska
Automobile Dealers Association (AADA), and the Alaska Commission
on Aging (ACoA) all support HB 110. She noted that her office
has not received any formal opposition to the bill nor was there
opposition to House Bill 273.
2:37:16 PM
REPRESENTATIVE STUTES observed that HB 110 calls for a two-step
process. She explained that, if she is the owner of the
vehicle, she would submit a form declaring a beneficiary who
would then return to the DMV after her death to submit another
form and claim the new title.
REPRESENTATIVE SPOHNHOLZ said that is correct. She explained
that it would work like any other transfer of asset in which the
person bequeathing the asset indicates his/her beneficiary, who
then proves the death of the owner to claim the bequeathed
asset.
CHAIR CLAMAN asked if the process is different from the transfer
of a bank account upon death.
REPRESENTATIVE SPOHNHOLZ said it would require the presentation
of a death certificate as well as proof of identification. She
explained that the DMV wants there to be a form to document the
process.
2:38:48 PM
MS. HOLLAND began her PowerPoint presentation [hard copy
included in the committee packet] and addressed slide 2. She
spoke to the legislative history of HB 110 and similar bills in
other state legislatures. She noted that 18 other states have
TOD titles for vehicles and 7 authorize TOD titles for boats.
She characterized TOD titles as a national trend.
MS. HOLLAND addressed slide 3. She said HB 110 addresses the
problem of probate, which can take anywhere from six months to
several years and can cost thousands of dollars in legal fees.
She noted that Alaska has a few existing remedies for non-
probate transfers of property, including joint ownership, which
requires a degree of forfeiture of certain ownership rights; an
affidavit for collection of personal property, which only
applies when the value of all vehicles is $100,000 or less and
when the value of all other personal property owned by the
decedent is $50,000 or less; and a living trust, which involves
naming a trustee to manage one's property after death and is
more complicated than a traditional will, meaning it is likely
to be more expensive. She said HB 110 seeks to avoid the
limitations and expenses associated with those options.
2:41:36 PM
MS. HOLLAND addressed slide 4. She restated that HB 110 would
create TOD titles to reduce the need for probate, to provide
streamlined estate planning services to Alaskans at little cost
to the State of Alaska (SOA), and to expedite the transfer of
property to beneficiaries.
MS. HOLLAND addressed slide 5. She noted that the information
displayed about the application process corresponds to the
earlier answer to Representative Stutes's question.
2:42:31 PM
MS. HOLLAND began a sectional analysis of the bill. She
addressed slide 6, which focused on sections 1 and 2 of HB 110.
She said section 1 would allow for owners of boats for which the
Department of Administration (DOA) issues titles to obtain a TOD
title. She noted that certain boats are exempt from the titling
requirements in AS 05.25.044, including boats less than 24 feet
long, boats federally documented by the United States Coast
Guard (USCG), homemade nonmotorized umiaks, and foreign vessels
passing through Alaskan waters in less than 90 days. She added
that, under AS 05.25.056(f), owners of boats less than 24 feet
long are still able to apply for a title through the DMV, so a
TOD title would be available to them should HB 110 become law.
She explained that section 2 of the bill would add TOD title
transfers of boats and vehicles to the existing list of
properties that can be transferred outside of probate.
MS. HOLLAND addressed slide 7, which focused on section 3. She
explained that section 3 would create the mechanism of TOD
titles for boats and vehicles titled through the DMV. She
pointed to a photo of a motor home and said the DMV issues
titles for some manufactured homes that are transportable
without a permanent foundation and have plumbing, heating, and
air-conditioning. She said much of the language in section 3
was pulled from or is similar to the Uniform Law Commission's
language related to URPTODA, which created the TOD deed. She
discussed the processes through which TOD titles would be
obtained, changed, or revoked through the DMV and noted that the
legislation does not allow for the titles to be altered in any
other way. She clarified that the TOD title would automatically
be revoked if the vehicle or boat is sold. She said section 3
would also subject TOD titles to the decedent's creditors,
contracts, and liens, and lays out how liability would be
enforced upon TOD titles. She stated that it would work similar
to TOD deeds and that "the debt follows the asset," so the debts
and contracts associated with a bequeathed boat would be
transferred to the new owner. She said section 3 would also
establish that the owner retains full ownership rights until
death and that beneficiaries have the right to disclaim interest
in the boat or vehicle should they wish not to receive it after
the owner's death.
2:47:02 PM
MS. HOLLAND addressed slide 8, which focused on sections 4
through 6. She said section 4 would clarify that a person
acting on behalf of the surviving spouse of the decedent may
demand to enforce liability against the decedent's property.
She said section 5 would allow customers to authorize the DMV to
automatically change their mailing address to match the address
used by the United States Postal Service (USPS). She explained
that many people who move to a new house change their address
through USPS but fail to do so through the DMV, resulting in the
DMV receiving a high volume of returned mail. She spoke to the
cost of having to send multiple copies of a document to multiple
addresses. She said section 5 is "an efficiency" supported by
the [DMV]. She noted that section 5 was added to the bill by
the House State Affairs Standing Committee.
2:48:21 PM
REPRESENTATIVE KOPP identified a 1970s-era vehicle pictured on
slide 8. He asked if the vehicle represents how long
Representative Gruenberg had been pushing this legislation.
After some laughter from the committee, he asked how long
Representative Gruenberg had advocated for this legislation.
REPRESENTATIVE SPOHNHOLZ provided some historical context
including her understanding that Representative Gruenberg was
very active with the Uniform Law Commission as relates to
contracts. She provided additional information about URPTODA.
2:49:53 PM
MS. HOLLAND continued to section 6, which she explained would
clearly state that owners of vehicles for which the DMV issues
titles may obtain a TOD title.
MS. HOLLAND addressed slide 9, which covered sections 7, 8, and
9. She explained that section 7 would give DOA the authority to
develop necessary regulations to implement TOD titles. She said
section 8 would apply an immediate effective date to section 7,
while section 9 would apply an effective date of July 1, 2020,
for all sections other than 7 and 8.
2:51:00 PM
REPRESENTATIVE EASTMAN asked, assuming HB 110 becomes law, what
the differences would be between death transfers for boats
versus real estate.
REPRESENTATIVE SPOHNHOLZ answered that the passage of URPTODA
[House Bill 60] in 2014 created the TOD deed which allows for
the transfer of real property using a deed. She said this is a
similar mechanism to the TOD titles proposed in HB 110. She
said the idea behind HB 110 is to allow people with smaller
estates to avoid the time-consuming probate process when
transferring assets. She said a TOD deed would be "just about
instant." She established a hypothetical scenario about a
family fishing business wherein the elder dies and the younger
person would like to assume immediate ownership of the boat.
She said HB 110 would allow the younger person to efficiently
take ownership and immediately begin fishing with full
responsibility for the boat.
2:52:47 PM
CHAIR CLAMAN opened public testimony on HB 110. He recognized
that there was meant to be an invited testifier from AARP who
had previously been present but is currently unavailable. He
noted that he would allow her the opportunity to testify in the
future. After ascertaining that no one else wished to testify,
Chair Claman closed public testimony on HB 110.
2:54:11 PM
CHAIR CLAMAN noted that a hearing for HB 115 was scheduled for
today, but time constraints will prevent the bill from being
heard. He announced his intention to hear HB 115 on Monday, May
6.
2:54:32 PM
REPRESENTATIVE KOPP said he appreciates that HB 110 addresses
what can be a major hassle for people. He recognized that this
legislation would benefit Alaska's military service members and
their families. He spoke to his experience with the probate
process and observed that HB 110 introduces concepts that are
much needed in Alaska law.
2:55:27 PM
REPRESENTATIVE EASTMAN asked how the bill distinguishes between
those acting in good faith and those who are not.
REPRESENTATIVE SPOHNHOLZ answered that HB 110 would not affect
debt resolution issues. She noted that any responsibility
related to money owned on a vehicle would be transferred to the
beneficiary, so financial responsibilities could not be
circumvented through a TOD title. She added that proof of death
is required for an asset to transfer, so "fraud would still be
fraud."
REPRESENTATIVE EASTMAN asked a question based on a hypothetical
scenario in which a relative with heavy debts dies and bequeaths
his truck to a survivor via a TOD title.
REPRESENTATIVE SPOHNHOLZ answered that the purpose of HB 110 is
to create an opening for people who do not need to go through
the probate process. She said there would still be
responsibilities for liabilities if the decedent's estate has
liabilities. She suggested that the specifics of Representative
Eastman's scenario would be better addressed by a representative
from the Department of Law or the Alaska Bar Association's (ABA)
Estate Planning & Probate Law section.
2:58:26 PM
REPRESENTATIVE LEDOUX remarked that she would like to hear
testimony from ABA. She said it is her understanding that if an
item of property transfers automatically and does not have a
lien on it, then it is not part of the estate. She said it
would not matter if the estate owes $500,000 and a $500,000 boat
without liens is automatically bequeathed to a beneficiary, as
the beneficiary would not be liable for the debts of the estate.
REPRESENTATIVE SPOHNHOLZ said that is also her understanding.
She noted that if there is a debt associated with the boat, then
the beneficiary would be responsible for that.
2:59:47 PM
REPRESENTATIVE LEDOUX asked if there is any cap on the value of
what can be automatically transferred. She remarked that the
issue is a major policy question of whether an estate and its
beneficiaries should be able to avoid [liability]. She
established a scenario in which a person operates a fishing
enterprise and owns the fishing boat "free and clear," but has
many other debts. Upon death, the spouse inherits the boat and
does not have to pay those debts.
CHAIR CLAMAN said he believes this bill only applies to boats
registered with SOA and specifically exempts vessels registered
with USCG. He noted that the typical fishing boat would be
registered with USCG and that there are not likely any vessels
registered with SOA that are as valuable as the one in
Representative LeDoux's scenario.
REPRESENTATIVE LEDOUX said the boat in her hypothetical was just
one example. She said there could be items of considerable
value that get automatically transferred, leaving the creditors
of the estate with nothing to pay the debts owed to them.
MS. HOLLAND said there is no cap in HB 110 for value of vehicles
or boats that can be transferred upon death. She stated that
creditors can use a boat or vehicle as collateral to ensure
debts are payable. She established a scenario in which an
expensive car is automatically transferred to a beneficiary and
is thus removed from the probate process. In the scenario, she
continued, the individual who has died had considerable debts
and the value of the decedent's estate is not sufficient to
satisfy those allowed claims. She said the creditors would be
able to reclaim the value of the debt through the vehicle.
REPRESENTATIVE LEDOUX said she does not believe that is correct.
CHAIR CLAMAN concurred with Representative LeDoux.
3:03:35 PM
REPRESENTATIVE EASTMAN said there could be scenarios in which
vehicles of very high value are transferred. He asked whether
HB 110 would clash with federal law as pertains to money/asset
transfers. He said he does not want to create a scenario in
which an Alaskan who acts in compliance with Alaska law is
surprised to find the Internal Revenue Service (IRS) seeking
payment.
REPRESENTATIVE SPOHNHOLZ suggested that the question would be
better answered by a representative from the National
Association of Estate Planners & Councils (NAEPC) or the Alaska
Bar Association's (ABA) Estate Planning & Probate Law section.
She said there are valid "policy call" discussions to be had.
She repeated that the purpose of the bill is not to allow people
to avoid responsibility for debts owed, but to find a
streamlined way for people with modest assets to avoid the
probate process. She addressed the earlier discussion about how
fishing vessels tend to be licensed through USCG and said HB 110
deals more with personal use boats. She expressed that she is
not clear whether a high-end yacht would or would not be
registered with USCG. She suggested bringing in an expert to
answer that question. She opined that it would be perfectly
reasonable for the committee to decide to place a cap on the
value of an asset that is eligible for a TOD title. She said
she wants to see a practical way of addressing high-value assets
that still allows people who own trailers, small boats, and
vehicles to transfer their assets to beneficiaries without the
use of an attorney.
3:06:47 PM
CHAIR CLAMAN observed that part of the goal of estate planning
is to "plan ahead" and noted that estate planning attorneys
often advise people to transfer moderate and large assets during
their lifetime. He spoke about the process of securing loans.
He announced that the committee would hold HB 110 for further
review.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB123 ver M 5.3.19.PDF |
HJUD 5/3/2019 1:00:00 PM HJUD 5/10/2019 1:00:00 PM |
HB 123 |
| HB123 Sponsor Statement 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 123 |
| HB123 Sectional Analysis ver M 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 123 |
| HB123 Supporting Document-Letters 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 123 |
| HB123 PowerPoint Presentation 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 123 |
| HB123 Fiscal Note DOA-DMV 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 123 |
| HB123 Fiscal Note DPS-COM 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 123 |
| HB110 ver U 5.3.19.PDF |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Sponsor Statement 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Sectional Analysis ver U 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Explanation of Changes ver M to U 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Supporting Document-Affidavit for Collection of Personal Property, ACS 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Supporting Document-Senior Voice Article 4.24.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Supporting Document-DoA Boat Titles 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Supporting Document-Questions and Answers 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Supporting Document-Trusts, ACS 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Supporting Document-URPTODA Summary 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Supporting Document-Letters 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 PowerPoint Presentation (Updated) 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB110 Fiscal Note DOA-DMV 5.3.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 110 |
| HB115 ver A 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM HJUD 5/10/2019 1:00:00 PM HJUD 5/11/2019 9:30:00 AM |
HB 115 |
| HB115 Sponsor Statement 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Supporting Document-Alaska Absentee Ballot Application 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Supporting Document-Hawaii Permanent Absentee Application 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Supporting Document-Vote at Home Letter 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Additional Document-Alaska Permanent Absentee Voter Regulation 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Additional Document-Alaska Sample By-Mail Return Ballot Envelope 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Additional Document-Municipality of Anchorage Response to Security Questions 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Additional Document-Municipality of Anchorage Sample Ballot 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Additional Document-NCSL Absentee and Early Voting 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Supporting Document-Alaska Commission on Aging Letter 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Fiscal Note OOG-DOE 5.1.19.pdf |
HJUD 5/1/2019 1:00:00 PM HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM |
HB 115 |
| HB115 Amendments #1-6.pdf |
HJUD 5/3/2019 1:00:00 PM HJUD 5/6/2019 1:00:00 PM HJUD 5/10/2019 1:00:00 PM HJUD 5/11/2019 9:30:00 AM |
HB 115 |
| HJR018 ver S 5.1.19.PDF |
HJUD 5/3/2019 1:00:00 PM |
HJR 18 |
| HJR018 Sponsor Statement 5.1.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HJR 18 |
| HJR018 Sectional Analysis ver S 5.1.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HJR 18 |
| HJR018 Supporting Document-APFC Resolution 5.1.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HJR 18 |
| HJR018 Fiscal Note OOG-DOE 5.1.19.pdf |
HJUD 5/3/2019 1:00:00 PM |
HJR 18 |
| HJR018 Supporting Document-Public Comment 5.3.18.pdf |
HJUD 5/3/2019 1:00:00 PM |
HJR 18 |
| HB123 Supporting Document-Public Comment 5.3.18.pdf |
HJUD 5/3/2019 1:00:00 PM |
HB 123 |