Legislature(2015 - 2016)BELTZ 105 (TSBldg)

03/30/2015 01:30 PM JUDICIARY

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Audio Topic
02:46:32 PM Start
02:47:03 PM Confirmation Hearing Board of Governors of the Alaska Bar
03:02:41 PM SB47
03:18:47 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled:
-- Testimony <Invited and Public> --
+ Confirmation of Governor's Appointment TELECONFERENCED
William Gordon - Board of Governors of the
Alaska Bar
+= SB 47 LIFE INSURANCE/ANNUITY EXEMPTIONS TELECONFERENCED
Moved SB 47 Out of Committee
+= HCR 3 ENDORSING ANWR LEASING TELECONFERENCED
Scheduled but Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         March 30, 2015                                                                                         
                           2:46 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lesil McGuire, Chair                                                                                                    
Senator John Coghill, Vice Chair                                                                                                
Senator Mia Costello                                                                                                            
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Peter Micciche                                                                                                          
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARING                                                                                                            
                                                                                                                                
     Board of Governors of the Alaska Bar                                                                                     
          William Gordon                                                                                                        
                                                                                                                                
     - CONFIRMATION ADVANCED                                                                                                    
                                                                                                                                
SENATE BILL NO. 47                                                                                                              
"An Act relating to exemptions for cash surrender values,                                                                       
accrued dividends, and loan values of life insurance and annuity                                                                
contracts."                                                                                                                     
                                                                                                                                
     - MOVED  SB 47 OUT OF COMMITTEE                                                                                            
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 3(RLS)                                                                                   
Urging the governor and the  attorney general to pursue all legal                                                               
and legislative options  to open the coastal plain  of the Arctic                                                               
National Wildlife  Refuge and areas  of the Chukchi  and Beaufort                                                               
Seas to oil and gas exploration, development, and production.                                                                   
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB  47                                                                                                                  
SHORT TITLE: LIFE INSURANCE/ANNUITY EXEMPTIONS                                                                                  
SPONSOR(s): SENATOR(s) COGHILL                                                                                                  
                                                                                                                                
02/11/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/11/15       (S)       L&C, JUD                                                                                               
02/26/15       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/26/15       (S)       Heard & Held                                                                                           
02/26/15       (S)       MINUTE(L&C)                                                                                            
03/03/15       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/03/15       (S)       Moved  SB 47 Out of Committee                                                                          
03/03/15       (S)       MINUTE(L&C)                                                                                            
03/04/15       (S)       L&C RPT 3DP                                                                                            
03/04/15       (S)       DP: GIESSEL, MEYER, STEVENS                                                                            
03/16/15       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/16/15       (S)       Heard & Held                                                                                           
03/16/15       (S)       MINUTE(JUD)                                                                                            
03/25/15       (S)       JUD AT 1:30 PM BUTROVICH 205                                                                           
03/25/15       (S)       Bills Previously Heard/Scheduled:                                                                      
03/30/15       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
WILLIAM GORDON, Appointee                                                                                                       
Board of Governors of the Alaska Bar                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified as appointee to the Board of                                                                   
Governors of the Alaska Bar.                                                                                                    
                                                                                                                                
GERMAN BAQUERO, Intern                                                                                                          
Senator John Coghill                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information related to SB 47 on                                                                 
behalf of the sponsor.                                                                                                          
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
2:46:32 PM                                                                                                                    
CHAIR  LESIL   MCGUIRE  called  the  Senate   Judiciary  Standing                                                             
Committee meeting  to order at 2:46  p.m. Present at the  call to                                                               
order  were  Senators  Costello,   Coghill,  and  Chair  McGuire.                                                               
Senator Wielechowski arrived during the course of the meeting.                                                                  
                                                                                                                                
^Confirmation Hearing Board of Governors of the Alaska Bar                                                                      
                      Confirmation Hearing                                                                                  
              Board of Governors of the Alaska Bar                                                                          
                                                                                                                                
2:47:03 PM                                                                                                                    
CHAIR MCGUIRE  announced the first  order of business would  be a                                                               
confirmation hearing for William Gordon.  She asked Mr. Gordon to                                                               
tell the committee  about himself and his  interest in continuing                                                               
to serve on the Board of Governors of the Alaska Bar.                                                                           
                                                                                                                                
2:47:21 PM                                                                                                                    
WILLIAM GORDON, Appointee, Board of  Governors of the Alaska Bar,                                                               
said this  will be his second  term on the Board  of Governors of                                                               
the  Alaska Bar.  He  related  that he  tries  to bring  business                                                               
practices to  the budgetary  process and has  worked to  have the                                                               
offending party  pay the discipline  costs as opposed to  the bar                                                               
members paying. He also worked to  open the bar convention to the                                                               
public in  an effort  to present  a better image  of the  bar. He                                                               
expressed his belief that his resume speaks for itself.                                                                         
                                                                                                                                
CHAIR MCGUIRE expressed appreciation  for receiving an invitation                                                               
to the  bar convention.  She highlighted  the lingering  issue of                                                               
high bar dues and asked if the board had revisited that matter.                                                                 
                                                                                                                                
MR. GORDON  answered no,  but he  would bring it  up at  the next                                                               
meeting. He explained that Alaska  Bar dues are higher than other                                                               
states because the membership pays  the total cost of discipline,                                                               
which  is over  one-third of  the budget.  In other  states those                                                               
costs are borne by the public.                                                                                                  
                                                                                                                                
CHAIR  MCGUIRE  offered  suggestions  for  a  sliding  scale  and                                                               
expressed appreciation for considering the thought.                                                                             
                                                                                                                                
2:53:22 PM                                                                                                                    
SENATOR COSTELLO asked what challenges face the Alaska Bar.                                                                     
                                                                                                                                
MR. GORDON  replied the many  challenges include  Internet growth                                                               
and the falling number of lawyers in the state.                                                                                 
                                                                                                                                
SENATOR COSTELLO asked  to what he attributes  the reduced number                                                               
of lawyers.                                                                                                                     
                                                                                                                                
MR. GORDON responded that he  has found that many attorneys don't                                                               
enjoy  the  practice  of  law  and  that  compensation  is  often                                                               
relatively low.                                                                                                                 
                                                                                                                                
CHAIR MCGUIRE highlighted that less  than 20 percent of her class                                                               
is practicing law.                                                                                                              
                                                                                                                                
2:56:11 PM                                                                                                                    
SENATOR  COGHILL mentioned  the  judicial ethics  code and  asked                                                               
what  barriers   lawyers  face  when   they're  serving   in  the                                                               
legislature.                                                                                                                    
                                                                                                                                
MR. GORDON admitted he wasn't an expert in that area.                                                                           
                                                                                                                                
2:58:04 PM                                                                                                                    
SENATOR WIELECHOWSKI joined the committee.                                                                                      
                                                                                                                                
SENATOR  COGHILL  asked  him  to comment  on  his  membership  in                                                               
Justice Not Politics Alaska.                                                                                                    
                                                                                                                                
MR. GORDON explained  that he's a member because  he believes the                                                               
current  judicial selection  and retention  processes work  well.                                                               
It's  a mistake  to  try  to change  the  Alaska Constitution  to                                                               
correct a problem that doesn't exist.                                                                                           
                                                                                                                                
SENATOR COGHILL thanked Mr. Gordon for being willing to serve.                                                                  
                                                                                                                                
CHAIR MCGUIRE motioned to forward  the name William Gordon to the                                                               
full  body for  consideration. Hearing  and seeing  no objection,                                                               
she announced that the name would be forwarded.                                                                                 
                                                                                                                                
            SB  47-LIFE INSURANCE/ANNUITY EXEMPTIONS                                                                        
                                                                                                                                
3:02:41 PM                                                                                                                    
CHAIR  MCGUIRE announced  the  consideration  of SB  47. "An  Act                                                             
relating  to  exemptions  for   cash  surrender  values,  accrued                                                               
dividends,  and  loan  values   of  life  insurance  and  annuity                                                               
contracts."                                                                                                                     
                                                                                                                                
3:03:00 PM                                                                                                                    
SENATOR  COGHILL,   sponsor  of  SB  47,   noted  the  additional                                                               
information in the packets. Legislative  counsel Dan Wayne issued                                                               
a  memorandum   stating  that   retirement  benefits   of  public                                                               
employees  and members  of labor  unions generally  are protected                                                               
from  garnishment.  Lauri  Wing-Heier   with  the  Department  of                                                               
Commerce,  Community  and   Economic  Development  addressed  the                                                               
question about the  availability of life insurance  and the issue                                                               
on the cap.                                                                                                                     
                                                                                                                                
3:03:34 PM                                                                                                                    
GERMAN  BAQUERO, Intern,  Senator John  Coghill, stated  that the                                                               
intent of  SB 47 is to  repeal the $500,000 cap  on the exemption                                                               
of  life  insurance policies  and  make  them fully  exempt.  The                                                               
memorandum from Mr. Wayne thoroughly  explains the exemptions set                                                               
out in the  Alaska Exemptions Act, AS  09.38.017. The legislation                                                               
was passed  initially because life insurance  policies were being                                                               
used as a private investment  tool to secure retirement benefits.                                                               
It now  seems prudent  to treat  life insurance  the same  as the                                                               
other fully  exempt retirement  benefits in  Title 9.  Lori Wing-                                                               
Heier, the  Director of the  Division of Insurance,  advised that                                                               
the  bill will  not provide  an exemption  for criminal  acts but                                                               
will for civil acts.                                                                                                            
                                                                                                                                
SENATOR  COGHILL noted  that the  Legal Services  memorandum says                                                               
that AS  09.38.015(a)(6) exempts  from debt collection  in Alaska                                                               
"compensation  or  benefits  paid  or payable  and  exempt  under                                                               
federal law."  According to the  U.S. Supreme  Court, garnishment                                                               
of  retirement benefits  is generally  prohibited  by ERISA,  the                                                               
Social  Security  Act, the  Railroad  Retirement  Act, the  Civil                                                               
Service Retirement  Act, and  the Veterans'  Benefits Act.  SB 47                                                               
makes it more  equitable for the people who are  making their own                                                               
retirement through life insurance or an annuities.                                                                              
                                                                                                                                
CHAIR MCGUIRE asked Senator Wielechowski if he was satisfied.                                                                   
                                                                                                                                
SENATOR WIELECHOWSKI  questioned the wisdom of  a total exemption                                                               
and wondered whether  it was better policy to place  a $5 million                                                               
or $10 million cap on the exemption.                                                                                            
                                                                                                                                
SENATOR COGHILL  responded that small  business owners  don't get                                                               
the  same protection  that public  employees  receive. He  opined                                                               
that  in many  ways those  are the  people who  are carrying  the                                                               
weight in society.                                                                                                              
                                                                                                                                
3:12:01 PM                                                                                                                    
SENATOR WIELECHOWSKI  agreed that the limit  should be increased,                                                               
but argued against  making it possible for someone  to shield all                                                               
their assets from potential garnishment.                                                                                        
                                                                                                                                
SENATOR COGHILL talked about the business  he grew up in and said                                                               
that if it  hadn't been for insurance policies,  his father might                                                               
have lost  his retirement. He  offered other examples  and opined                                                               
that  small  businesses  should  have  the  same  protections  as                                                               
government employees.                                                                                                           
                                                                                                                                
SENATOR  WIELECHOWSKI restated  that  he agrees  that the  limits                                                               
should  be increased.  However, at  some point  it bumps  against                                                               
someone's constitutional  right to file  a lawsuit if  all assets                                                               
are  shielded from  garnishment. He  said he's  trying to  find a                                                               
balance.                                                                                                                        
                                                                                                                                
3:18:21 PM                                                                                                                    
SENATOR COGHILL moved to report SB 47 from committee with                                                                       
individual recommendations and attached zero fiscal note.                                                                       
                                                                                                                                
3:18:36 PM                                                                                                                    
CHAIR MCGUIRE announced that without objection SB 47 is reported                                                                
from the Senate Judiciary Standing Committee.                                                                                   
                                                                                                                                
3:18:47 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair McGuire adjourned the Senate Judiciary Standing Committee                                                                 
meeting at 3:18 p.m.                                                                                                            

Document Name Date/Time Subjects
10 SB47 Support Document Cook Schuhmann & Groseclose.pdf SJUD 3/30/2015 1:30:00 PM
SB 47
11 SB47 Supporting Document Hompesch & Evans.pdf SJUD 3/30/2015 1:30:00 PM
SB 47
5 SB47 Supporting Research Insurance Fraud.pdf SJUD 3/30/2015 1:30:00 PM
8 SJUD Follow Up SB47 Division of Insurance.pdf SJUD 3/30/2015 1:30:00 PM
SB 47
9 SB47 Legal Opinion on Retirements.pdf SJUD 3/30/2015 1:30:00 PM
1 HCR 3 Sponsor Statement.pdf SJUD 3/30/2015 1:30:00 PM
2 HCR 3 Version H.pdf SJUD 3/30/2015 1:30:00 PM
3 HCR 3 (RLS) Background Info.pdf SJUD 3/30/2015 1:30:00 PM
Resume William (Bill) Gordon.pdf SJUD 3/30/2015 1:30:00 PM
Board of Governors of the Alaska Bar Appointment
4 HCR 3 Amendment #1.pdf SJUD 3/30/2015 1:30:00 PM
HCR 3
6 SB47 FN # 1.pdf SJUD 3/30/2015 1:30:00 PM
SB 47
7 CS SB43 Summary of Changes(JUD).pdf SJUD 3/30/2015 1:30:00 PM
SB 43
7 SB47 Research on Claims Enforceable Agasint Property.pdf SJUD 3/30/2015 1:30:00 PM
SB 47