Legislature(2007 - 2008)BELTZ 211

04/07/2008 02:15 PM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
-- Time Change --
Moved SCS CSHB 196(JUD) Out of Committee
Moved CSHB 354(JUD) Out of Committee
Moved CSHB 331(L&C) Out of Committee
Heard & Held
Bills Previously Heard/Scheduled
Moved SCS HB 25(JUD) Out of Committee
Moved SCS CSHB 305(JUD) Out of Committee
Moved CSHJR 28(FIN) Out of Committee
  CSHB 196(JUD) - HANDLING MATTERS AFTER A PERSON'S DEATH                                                                   
CHAIR  FRENCH announced  the consideration  of HB  196. [The                                                                    
committee was working from SCS CSHB 196(L&C).]                                                                                  
2:27:17 PM                                                                                                                    
REPRESENTATIVE  JAY RAMRAS,  Sponsor  of HB  196, said  this                                                                    
legislation updates the statutes  on wills and addresses the                                                                    
subject of anatomical gifts                                                                                                     
JANE  PIERSON,  Staff  to Representative  Ramras,  explained                                                                    
that the  estate portion of  HB 196  is in Sections  1-5 and                                                                    
Section 37.  It provides a  penalty clause for  contesting a                                                                    
will  or  instituting other  proceedings  even  if there  is                                                                    
probable  cause, which  is in  alignment with  provisions in                                                                    
revocable trusts. Also, it amends  AS 13.16.680(a) to change                                                                    
the statement  in an  affidavit to be  used by  a decedent's                                                                    
successor to collect personal property  in a small estate to                                                                    
say  that  The  statement  says that  the  estate  does  not                                                                    
consist  of vehicles  worth more  than $100,000  or personal                                                                    
property worth  more than $100,000.  The bill also  lays out                                                                    
protections  for  benefits  paid under  life  insurance  and                                                                    
retirement plans.                                                                                                               
2:29:22 PM                                                                                                                    
MS. PIERSON  highlighted an issue  that the  committee might                                                                    
wish to  consider. Section 2, page  2, line 10, says  that a                                                                    
small estate can  be passed to a successor  via an affidavit                                                                    
if the  personal property is  valued at less  than $100,000.                                                                    
Initially  the bill  increased the  amount from  the current                                                                    
$15,000 to  $25,000 and then  the Senate Labor  and Commerce                                                                    
Committee amended  it to $100,000. The  attorneys working on                                                                    
the  bill  believe  $50,000  would  be  more  in  line  with                                                                    
Alaska's  other  statute  on  small  estate  administration,                                                                    
which  allows a  short probate  if the  estate is  less than                                                                    
$55,000 and assuming there is a spouse or minor children.                                                                       
REPRESENTATIVE RAMRAS  noted that  the figure was  raised at                                                                    
the request of Senator Bunde.                                                                                                   
MS. PIERSON  relayed that the  trust attorneys  believe this                                                                    
may be  problematic. In the  circumstance of  two successors                                                                    
of interest,  one could  write an affidavit  that he  or she                                                                    
was the successor  of interest and remove  $100,000 from the                                                                    
estate. That's  a lot  of money  that couldn't  be recouped,                                                                    
she said.                                                                                                                       
REPRESENTATIVE RAMRAS  restated that all the  parties worked                                                                    
cooperatively and they suggest  that a fair accommodation is                                                                    
to roll the amount back to $50,000.                                                                                             
CHAIR FRENCH flagged that as  a point for further discussion                                                                    
and noted  the individuals  who would  be testifying  on the                                                                    
trust principles and the anatomical gifts.                                                                                      
MS. PIERSON said the rest  of the bill clarifies and updates                                                                    
statutes dealing with anatomical  gifts. That portion of the                                                                    
bill was  drafted cooperatively with the  Department of Law,                                                                    
the Department of Health and  Social Services, the Office of                                                                    
the State Medical Examiner, Life  Alaska Donor Services, and                                                                    
representatives    from   the    National   Conference    on                                                                    
Commissioners on Uniform State Laws  to ensure a sound piece                                                                    
of legislation.  The provisions are  drawn from  the Uniform                                                                    
Anatomical   Gift  Act   (UAGA)  that   aims  to   harmonize                                                                    
anatomical gift  laws in  all 50  states. Similarly,  HB 196                                                                    
aims   to  facilitate   organ   and   tissue  donation   and                                                                    
transplants. It  removes obstacles  in the  donation process                                                                    
and hopefully it will increase  participation in organ donor                                                                    
MS PIERSON said that there  have been significant changes in                                                                    
this field over the years and  HB 196 will bring Alaska into                                                                    
line  with these  changes. Close  to thirty  percent of  the                                                                    
state's population participate in  the Alaska donor registry                                                                    
program, but more  can be done. Currently in  this state 180                                                                    
patients are awaiting life-saving  transplants and many more                                                                    
are  awaiting tissue  transplants.  This  bill improves  the                                                                    
anatomical gift  laws in Alaska and  encourages badly needed                                                                    
organ donations  that will save and  improve lives statewide                                                                    
and throughout the country.                                                                                                     
2:33:42 PM                                                                                                                    
SENATOR THERRIAULT joined the meeting.                                                                                          
REPRESENTATIVE  RAMRAS added  that in  spite of  the strides                                                                    
that hospitals across the state  have made, Alaska currently                                                                    
does  not  have the  breadth  of  services available  to  do                                                                    
anything but harvest organs. Alaska  does have an intrastate                                                                    
compact with  other states to  accommodate organ  and tissue                                                                    
donations, but it's  important to update these  laws so that                                                                    
Alaska  conforms  with  other  states and  can  continue  to                                                                    
facilitate this life-giving service, he said.                                                                                   
2:36:16 PM                                                                                                                    
SENATOR   THERRIAULT  asked   if  the   wills  and   probate                                                                    
subcommittee of the Alaska Bar had reviewed the bill.                                                                           
MS. PIERSON replied it has been vetted through them.                                                                            
CHAIR FRENCH said  that Section 1 seems to  flip current law                                                                    
with  respect to  the ability  of  a person  to challenge  a                                                                    
will. Current law says:                                                                                                         
     A provision  in a  will purporting to  penalize an                                                                         
     interested  person  for  contesting  the  will  or                                                                         
     instituting  other  proceedings  relating  to  the                                                                         
     estate is  unenforceable if probable  cause exists                                                                         
     for instituting proceedings.                                                                                               
Under  that  law  a  person   would  not  be  penalized  for                                                                    
challenging a  will as long  as there is probable  cause. As                                                                    
currently drafted HB 196 says  that the penalty clause is in                                                                    
effect  and enforceable  even if  probable cause  exists for                                                                    
instituting proceedings. He  asked if that is  a huge change                                                                    
and if it's becoming the majority rule.                                                                                         
2:38:20 PM                                                                                                                    
ROBERT  MANLEY, Attorney  at Law,  said  he is  part of  the                                                                    
group  of  estate planning  attorneys  who  work on  keeping                                                                    
Alaska trust law current and  efficient so that Alaskans can                                                                    
have their wishes implemented with  a minimum of expense and                                                                    
tax  cost.  He  explained  that Section  1  brings  the  law                                                                    
governing wills  into conformity with current  law governing                                                                    
revocable trusts.  Those are the  two primary  vehicles used                                                                    
in estate planning  and there are various  reasons for using                                                                    
one versus  the other. Trust  law currently provides  that a                                                                    
no-contest clause is effective  regardless of probable cause                                                                    
for bringing a challenge to the trust.                                                                                          
CHAIR  FRENCH  asked if  it's  a  uniform provision  or  the                                                                    
majority  rule with  respect  to trusts,  that  you can  not                                                                    
institute challenge proceedings penalty  free if that clause                                                                    
is in the trust.                                                                                                                
MR. MANLEY replied  he believes that from  a statutory point                                                                    
of view  it's the minority  rule, and probably  the minority                                                                    
rule from a  general judicial point of view  where the issue                                                                    
isn't specifically addressed by the statute.                                                                                    
CHAIR FRENCH asked about the will side of the equation.                                                                         
MR. MANLEY  explained that the will  provision provides that                                                                    
if there is a no-contest  clause and there is probable cause                                                                    
to bring a  contest, then the penalty set  forth wouldn't be                                                                    
effective  or   enforceable.  A  no-contest   clause  simply                                                                    
indicates that  a beneficiary is provided  something under a                                                                    
will or  trust, but if  the beneficiary objects to  the gift                                                                    
or to  the other provisions he  or she is at  risk of losing                                                                    
that gift.  For example, if  a decedent wanted to  favor his                                                                    
children  and stepchildren  equally,  in the  absence of  an                                                                    
effective  no-contest clause,  the children  who might  gain                                                                    
greater benefit if the will  was ineffective could challenge                                                                    
the capacity of  the individual making the  will without any                                                                    
risk of loss.  There may be very good  reasons for excluding                                                                    
or favoring one  person or entity over  another, and without                                                                    
this  provision it  makes it  too  easy for  the person  who                                                                    
benefits less,  to leverage the  risk of litigation  and the                                                                    
potential challenge and extract  some sort of settlement. He                                                                    
noted that  this isn't applicable  with respect  to spouses;                                                                    
they are protected under  different provisions. This applies                                                                    
to children, shirttail relatives and  the like, but if there                                                                    
is  a true  case  of undue  influence,  then the  no-contest                                                                    
clause  is  ineffective  because the  entire  instrument  is                                                                    
ineffective. This is simply a  way for testators to preserve                                                                    
their plan, he said.                                                                                                            
2:42:50 PM                                                                                                                    
MR.  MANLEY said  that the  trust provision  makes Alaska  a                                                                    
more  favored jurisdiction  to  administer  trusts. The  no-                                                                    
contest  provision was  added to  bring  the laws  governing                                                                    
wills  into conformity  with the  laws governing  trusts and                                                                    
allow people to  do, with simpler les  expensive wills, what                                                                    
they could do with trusts, he said.                                                                                             
CHAIR  FRENCH  responded  that  that's  the  source  of  his                                                                    
concern.  He  thinks  of  trusts  as  belonging  to  a  more                                                                    
sophisticated  class of  testators while  wills fall  on the                                                                    
lower  end of  the  sophistication scale.  This statute  has                                                                    
been  on the  books for  a long  time and  he sees  probable                                                                    
cause  as  the  barrier  to  bad  challenges.  If  there  is                                                                    
probable  cause, he  questions  whether a  person should  be                                                                    
penalized  for  bringing  a challenge.  He  asked  how  many                                                                    
jurisdictions  have  a  clause  that's similar  to  the  one                                                                    
that's being proposed in Section 1.                                                                                             
MR.  MANLEY said  he  doesn't  know, but  he  could get  the                                                                    
information and forward it to the committee.                                                                                    
CHAIR  FRENCH  said  that's important  to  him.  Alaska  has                                                                    
adopted  an   aggressive  set  of  trust   laws  to  attract                                                                    
sophisticated   investors  nationwide,   but   he's  had   a                                                                    
lingering concern about this provision.                                                                                         
MR. MANLEY observed that if  Alaska laws on wills and trusts                                                                    
don't  conform, that  allows the  person wishing  to provide                                                                    
for a no-contest  clause to do so by spending  more money on                                                                    
lawyers. It doesn't seem reasonable  to deny that ability to                                                                    
less sophisticated people, he said.  Also, we usually have a                                                                    
good indication of what a  testator or decedent wanted to do                                                                    
because  that's   what's  in  the  trust   or  will.  Anyone                                                                    
challenging  that is  trying to  defeat their  intent rather                                                                    
than figuring it out.                                                                                                           
CHAIR FRENCH said those are  good points. Acknowledging that                                                                    
it's  somewhat   weak  to  make   a  decision   by  counting                                                                    
jurisdictions with  a similar provision, he  relayed that at                                                                    
some level  he needs to know  how prevalent this is  in will                                                                    
and trust law across the country.                                                                                               
MR. MANLEY agreed  to get the information,  hopefully by the                                                                    
end of day.                                                                                                                     
2:47:21 PM                                                                                                                    
SENATOR  McGUIRE   said  she  respects   the  right   of  an                                                                    
individual to put what they  want in their will, but there's                                                                    
a  healthy tension  in  current law  that  allows people  to                                                                    
challenge  wills  and  she'd  hate to  quash  or  chill  any                                                                    
healthy debate.                                                                                                                 
CHAIR  FRENCH turned  to Section  2 and  clarified that  the                                                                    
suggestion  that  was  made pertains  to  subparagraph  (B).                                                                    
Current statute allows a person  to use an affidavit to pass                                                                    
their personal property  if the entire estate  is worth less                                                                    
than $15,000.  The current draft proposes  that an affidavit                                                                    
can be  used if vehicles  in the  estate are not  worth more                                                                    
than  $100,000 and  the personal  property  does not  exceed                                                                    
$100,000.  The suggestion  was to  reduce the  value of  the                                                                    
personal property to not exceed $50,000.                                                                                        
MS. PIERSON agreed that was the suggestion.                                                                                     
CHAIR FRENCH asked for an  explanation for keeping the total                                                                    
value  of   vehicles  at  $100,000  and   dropping  personal                                                                    
property to $50,000.                                                                                                            
REPRESENTATIVE  RAMRAS  commented   that  this  accommodates                                                                    
motor homes and campers.                                                                                                        
MS.  PIERSON added  that vehicles  are titled  and won't  be                                                                    
CHAIR FRENCH moved Amendment 1.                                                                                                 
                        AMENDMENT 1                                                                                         
     Page 2, line 10 following "exceed"                                                                                         
          Delete "$100,000"                                                                                                     
          Insert "$50,000"                                                                                                      
SENATOR McGUIRE objected for  discussion purposes. She asked                                                                    
what year  the underlying statute  was crafted that  came to                                                                    
the $15,000 figure.                                                                                                             
MS. PIERSON replied  she isn't sure, but believes  it was in                                                                    
the '60s.                                                                                                                       
MR. MANLEY clarified that in  1962 the amount was $6,000 and                                                                    
in 1984 it was adjusted to $15,000.                                                                                             
SENATOR McGUIRE removed her objection  and said that this is                                                                    
a good provision; probate can be onerous.                                                                                       
CHAIR FRENCH  announced that  without objection  Amendment 1                                                                    
is adopted.                                                                                                                     
CHAIR FRENCH  turned to the  anatomical gift portion  of the                                                                    
bill  beginning with  Section 5  and asked  Mr. Geraghty  to                                                                    
explain those provisions.                                                                                                       
MICHAEL  C.  GERAGHTY,  Attorney   at  Law,  and  State  Law                                                                    
Commissioner to the National  Conference of Commissioners on                                                                    
Uniform State  Laws (NCCUSL),  explained that  NCCUSL drafts                                                                    
appropriate uniform legislation for  consideration by the 50                                                                    
states. One  area NCCUSL has  worked is organ  donation. The                                                                    
original Uniform Anatomical Gift  Act was promulgated by the                                                                    
NCCUSL in 1968 and quickly enacted  by all 50 states and the                                                                    
District of Columbia. Minor revisions  were made in 1957 and                                                                    
those  were  adopted in  26  states.  The current  revisions                                                                    
found in HB  196 bring the original act up  to date with the                                                                    
advances  in  medical  technology,  the  widespread  use  of                                                                    
electronic    records,    and    evolving    practices    in                                                                    
transplantation. HB  196 is  the revised  Uniform Anatomical                                                                    
Gift Act.  It was promulgated  in 2006 and has  already been                                                                    
adopted in  over 20 states.  Because it's very common  for a                                                                    
decedent,  the  donor,  and  the donor's  family  to  be  in                                                                    
different  states,  this  is an  area  where  uniformity  is                                                                    
2:54:27 PM                                                                                                                    
MR. GERAGHTY explained that the  revised act strengthens the                                                                    
first-person consent  to make a donation  of an individual's                                                                    
organs,  eyes and  tissue  to bar  others  from amending  or                                                                    
revoking a  gift made  by the  donor. Likewise,  the revised                                                                    
act strengthens  the provision  of a  person who  refuses to                                                                    
donate and  prevents others from interfering.  Absent first-                                                                    
person  consent,  gifts by  family  members  and agents  are                                                                    
facilitated if the deceased hasn't  acted to make or refused                                                                    
to make  an anatomical gift.  This is done by  expanding the                                                                    
roster  of people  who  can  make a  gift  on that  person's                                                                    
behalf  to  include a  health-care  agent,  a grandchild  or                                                                    
another family member who has  exhibited special care. Also,                                                                    
it  clarifies  the  manner  in which  the  consent  must  be                                                                    
obtained in those circumstances.                                                                                                
Gifts  on donor  registries and  state-issued identification                                                                    
cards are  specifically authorized under HB  196, registries                                                                    
are  encouraged,  and  standards   are  provided  for  their                                                                    
operation. Alaska  has a donor program  through the division                                                                    
of  motor  vehicles (DMV)  and  it's  been very  successful.                                                                    
Finally,  it provides  for coordination  between procurement                                                                    
organizations  and  medical   examiners,  particularly  with                                                                    
regard to procuring organs and  tissue from donors under the                                                                    
jurisdiction  of the  medical examiner.  Doctors Butler  and                                                                    
Fallico went over  the changes and at  their suggestion some                                                                    
minor tweaks were made, he said.  The goal, of course, is to                                                                    
expand the opportunity for gifts  of organs and tissue to be                                                                    
taken from donors.                                                                                                              
MR. GERAGHTY said  the revised act, which is  embodied in HB                                                                    
196,  is  endorsed  by the  American  Medical  Society,  the                                                                    
American   Bar   Association,   the  American   Academy   of                                                                    
Ophthalmology,  the American  Association  of Tissue  Banks,                                                                    
the  American Society  of Cataract  and Refractive  Surgery,                                                                    
the  Association  of  Organ Procurement  Organizations,  the                                                                    
federal  Health and  Human  Services  Advisory Committee  on                                                                    
Organ Transplantation, the Cornea  Society, and the Eye Bank                                                                    
Association of  America. He encouraged the  committee to act                                                                    
on HB  196 and join the  other states that have  adopted the                                                                    
revised Uniform Anatomical Gift Act.                                                                                            
2:57:31 PM                                                                                                                    
CHAIR FRENCH commented  that it gives him  some comfort that                                                                    
the doctors  and lawyers  are in agreement  on the  bill. He                                                                    
asked if the model provisions begin  in Section 18 and go on                                                                    
for several sections.                                                                                                           
MR. GERAGHTY said that's right.                                                                                                 
CHAIR  FRENCH asked  if the  small tweaks  that the  doctors                                                                    
suggested  are in  preceding sections  where references  are                                                                    
inserted in statute to those  model provisions. For example,                                                                    
Section 6 takes up a DMV statute.                                                                                               
MR.  GERAGHTY  replied  that's where  some  of  the  changes                                                                    
occur,  but  the  major  changes  occur  on  page  18,  Sec.                                                                    
13.52.255  -  Cooperation  between  coroner,  state  medical                                                                    
examiner,  and procurement  organization. Although  based on                                                                    
the model  act some accommodations were  made to acknowledge                                                                    
the  vast  jurisdiction  of the  medical  examiner  and  the                                                                    
limitations  on  his  services.  Those  minor  changes  were                                                                    
reviewed by  and agreed upon  by the National  Conference of                                                                    
Commissioners and the original drafters.                                                                                        
2:59:49 PM                                                                                                                    
SHERRY  BADILLO-MARINO  (ph),  Life Alaska  Volunteer,  said                                                                    
she's a donor mom; her  17-year-old daughter died in an auto                                                                    
accident in  2003 while  on her  way to  work. She  became a                                                                    
tissue, heart valve, skin, and  bone donor and has helped 48                                                                    
people across the country, including  a six-year-old boy and                                                                    
a 65-year-old woman. Her heart  valve will become lifesaving                                                                    
to either an  infant or young child, her skin  has been used                                                                    
in burn  and reconstructive  surgeries, her bone  and tissue                                                                    
could used be in joint and back surgeries.                                                                                      
She referenced  a poem  her daughter wrote  when she  was 12                                                                    
called,  "Cherish  the  Moments" that  speaks  about  living                                                                    
every moment  to its  fullest and not  taking anyone  in you                                                                    
life for granted.  You never know when someone  will be gone                                                                    
and you'll never be able to relive a moment that's passed.                                                                      
When Life  Alaska called  and asked  about tissue  and organ                                                                    
donation, she  didn't hesitate because she  knew that's what                                                                    
her daughter would want. "That  is part of why I continually                                                                    
offer to  help and  to encourage  others to  consider tissue                                                                    
and organ donation, because it  has helped me and her sister                                                                    
immensely to move forward," she said.                                                                                           
MS.  BADILLO-MARINO  said she  and  her  daughter had  never                                                                    
discussed becoming a donor, but  after her death she found a                                                                    
signed  tissue and  organ donation  card in  her room.  As a                                                                    
grieving  mother  that  solidified   the  decision  she  had                                                                    
already made for  her daughter to become a  tissue and organ                                                                    
donor. In her heart she knew  she'd done the right thing and                                                                    
that's  part of  what  she says  to  everyone she  contacts.                                                                    
"Share your wishes with your family."                                                                                           
She  relayed   that  her   father  was   so  proud   of  his                                                                    
granddaughter and the  fact that she became  a tissue donor,                                                                    
that he changed his stand and  become a donor as well. He is                                                                    
now helping others along with his granddaughter, she said.                                                                      
3:06:06 PM                                                                                                                    
CHAIR  FRENCH thanked  her for  her  very moving  testimony.                                                                    
Finding no  one else who wished  to testify on behalf  of HB                                                                    
196, he closed public testimony.                                                                                                
SENATOR McGUIRE  said we  spend time  in these  meetings and                                                                    
you wonder  if anything you  do makes a difference.  This is                                                                    
one of the  circumstances that makes her think  it does. She                                                                    
reminded the committee  that 2004 she sponsored  a bill that                                                                    
created the Alaska donor registry.  At that time she thought                                                                    
it  was something  that would  make a  difference, but  it's                                                                    
overwhelming to  see that over 330,000  Alaskans have joined                                                                    
and between  800 and  1,000 new  registrants are  added each                                                                    
week.  She described  HB 196  as  a step  to continue  those                                                                    
efforts, and then  declared a conflict and  asked to refrain                                                                    
from  voting on  the bill.  her  father is  the founder  and                                                                    
chair of  Life Alaska Donation  Services, one of  the groups                                                                    
supporting this bill.                                                                                                           
CHAIR  FRENCH noted  her conflict  and said  that while  the                                                                    
meeting is  in recess he'd find  out if that's in  order. He                                                                    
thanked  the sponsor  for accommodating  two bills  into one                                                                    
and set HB 196 aside.                                                                                                           
   CSHB 196(JUD)-HANDLING MATTERS AFTER A PERSON'S DEATH                                                                    
CHAIR FRENCH announced the consideration  of HB 196. [Before                                                                    
the  committee was  CSHB 196(JUD).]  He said  he understands                                                                    
that the sponsor  and the interested parties  are willing to                                                                    
drop Section 1.                                                                                                                 
JANE PIERSON,  Staff to  Representative Jay  Ramras, sponsor                                                                    
of HB 196, said that's correct.                                                                                                 
CHAIR FRENCH moved Amendment 2.                                                                                                 
                        AMENDMENT 2                                                                                         
     Page 1, lines 6-10                                                                                                         
          Delete all material                                                                                                   
     Renumber sections accordingly.                                                                                             
CHAIR  FRENCH, hearing  and seeing  no objection,  announced                                                                    
that Amendment 2 is adopted.                                                                                                    
4:58:08 PM                                                                                                                    
SENATOR THERRIAULT asked what Amendment 1 was.                                                                                  
CHAIR FRENCH  replied Amendment  1 changed  on page  2, line                                                                    
10, $100,000 to $50,000.                                                                                                        
SENATOR McGUIRE motioned to report  SCS CSHB 196, as amended                                                                    
today,  from committee  with individual  recommendations and                                                                    
attached fiscal note(s).                                                                                                        
CHAIR  FRENCH announced  that  without  objection, SCS  CSHB                                                                    
196(JUD) is moved from the Senate Judiciary Committee.                                                                          
SENATOR   McGUIRE   moved   the  Senate   concurrent   title                                                                    
resolution  to accompany  HB 196  from the  Senate Judiciary                                                                    
Committee. There being no objection, it was so ordered.                                                                         

Document Name Date/Time Subjects