05/11/2002 05:50 PM House JUD

SB 369 - POWERS OF APPOINTMENTS/TRUSTS/CREDITORS                                                                              
                                                                                                                                
[Contains mention of the companion bill, HB 316.]                                                                               
                                                                                                                                
Number 0026                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that  the committee  would hear  CS FOR                                                               
SENATE BILL NO.  369(RLS), "An Act relating  to trusts, including                                                               
trust  protectors,  trustee  advisors,  and  transfers  of  trust                                                               
interests, and  to creditors' claims against  property subject to                                                               
a power  of appointment;  and providing  for an  effective date."                                                               
He noted that  there is a proposed  amendment, hereafter referred                                                               
to as Amendment 1, which read [original punctuation provided]:                                                                  
                                                                                                                                
     Page 4, Line 4:                                                                                                            
          Delete: "or"                                                                                                          
          Insert: [or]                                                                                                          
     Page 4, Line 6:                                                                                                            
          Delete: [.]                                                                                                           
          Insert; ;                                                                                                           
     Page 4, Line 7:                                                                                                            
        Insert: (5) the creditor is seeking to satisfy a                                                                    
     claim for child support.                                                                                               
     Page 5, Line 25, after "except," through line 30:                                                                          
          Delete all material.                                                                                                  
          Insert:                                                                                                               
        (a) to the extent that a donee of an inter vivos                                                                        
     or testamentary power of appointment                                                                                       
           (1) is permitted by the donor of the power                                                                           
      to appoint the property to the donee's estate or to                                                                       
     the creditors of the donee's estate; and                                                                                   
             (2) effectively exercises the power of                                                                             
       appointment in favor of the donee's estate or the                                                                        
     creditors of the donee's estate; or                                                                                        
         (b) when the creditor is seeking to satisfy a                                                                          
     claim of child support.                                                                                                    
                                                                                                                                
Number 0057                                                                                                                     
                                                                                                                                
SUSAN  SULLIVAN,  Child   Support  Enforcement  Division  (CSED),                                                               
Department of Revenue, testified  via teleconference and said the                                                               
CSED's concern with SB  369 and its companion bill -  HB 316 - is                                                               
that there  will be an  unintended consequence.  She  warned that                                                               
certain provisions of  this legislation would make  it easier for                                                               
an unscrupulous parent  to avoid supporting his  or her children.                                                               
She  offered  that  Amendment  1  would  resolve  this  potential                                                               
problem.                                                                                                                        
                                                                                                                                
Number 0147                                                                                                                     
                                                                                                                                
HEATHER  M. NOBREGA,  Staff  to  Representative Norman  Rokeberg,                                                               
House Judiciary Standing Committee,  Alaska State Legislature, in                                                               
response to a question, indicated  that she had drafted Amendment                                                               
1.                                                                                                                              
                                                                                                                                
Number 0155                                                                                                                     
                                                                                                                                
DIANE  WENDLANDT,  Assistant  Attorney General,  Collections  and                                                               
Support Section,  Civil Division  (Anchorage), Department  of Law                                                               
(DOL), testified via teleconference,  stating simply that she has                                                               
reviewed Amendment 1.                                                                                                           
                                                                                                                                
MS.  NOBREGA, in  response to  a question,  pointed out  that the                                                               
portion of  Amendment 1 that will  alter page 5 of  SB 369 begins                                                               
after the word "except" on line 25.                                                                                             
                                                                                                                                
MS. SULLIVAN remarked  that Ms. Wendlandt has  suggested that the                                                               
last line of Amendment 1 be amended  to read:  "(b) to the extent                                                               
that  the  creditor  is  seeking  to satisfy  a  claim  of  child                                                               
support."                                                                                                                       
                                                                                                                                
MS. NOBREGA  noted that  such an  amendment would  merely involve                                                               
deleting "when" and inserting "to the extent that".                                                                             
                                                                                                                                
CHAIR ROKEBERG  indicated that  Amendment 1  would be  amended to                                                               
incorporate that suggestion.                                                                                                    
                                                                                                                                
Number 0360                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES made  a  motion to  adopt  Amendment 1  [as                                                               
amended].   There being  no objection,  Amendment 1,  as amended,                                                               
was adopted.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JAMES  pointed  out  that Section  1  contains  a                                                               
reference to another  statute - AS 47.07.020(f) -  and asked what                                                               
that statute is.                                                                                                                
                                                                                                                                
CHAIR ROKEBERG surmised  that the "trust boys"  probably made the                                                               
suggestion to add  that language to SB 369,  thereby creating one                                                               
of the differences between SB 369 and HB 316.                                                                                   
                                                                                                                                
MS. NOBREGA  noted that  AS 47.07.020(f),  which says,  "A person                                                               
may not be  denied eligibility for medical  assistance under this                                                               
chapter  on  the basis  of  a  diversion  of income,  whether  by                                                               
assignment  or after  receipt  of the  income,  into a  Medicaid-                                                               
qualifying  trust", can  be found  in the  chapter pertaining  to                                                               
medical assistance for needy persons.                                                                                           
                                                                                                                                
REPRESENTATIVE JAMES  indicated that the  reference in SB  369 to                                                               
that statute is appropriate.                                                                                                    
                                                                                                                                
CHAIR  ROKEBERG  agreed.    He  then  suggested  that  the  House                                                               
Judiciary Standing  Committee's [draft minutes] regarding  HB 316                                                               
be included as part of the record for SB 396.                                                                                   
                                                                                                                                
Number 0547                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  moved to report CSSB  369(RLS), as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying zero  fiscal note.   There  being no  objection, HCS                                                               
CSSB  369(JUD) was  reported from  the  House Judiciary  Standing                                                               
Committee.