Legislature(1997 - 1998)
03/06/1998 01:07 PM House JUD
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
March 6, 1998
1:07 p.m.
MEMBERS PRESENT
Representative Joe Green, Chairman
Representative Brian Porter
Representative Norman Rokeberg
Representative Jeannette James
Representative Eric Croft
Representative Ethan Berkowitz
MEMBERS ABSENT
Representative Con Bunde, Vice Chairman
COMMITTEE CALENDAR
HOUSE BILL NO. 452
"An Act relating to registration, disclosures, and reports by
certain nonprofit corporations."
- HEARD AND HELD
HOUSE BILL NO. 395
"An Act relating to civil liability resulting from the use of a
defibrillator in providing emergency aid."
- MOVED CSHB 395(JUD) OUT OF COMMITTEE
* HOUSE BILL NO. 196
"An Act relating to wills, intestacy, nonprobate transfers, and
trusts; and amending Rule 24, Alaska Rules of Civil Procedure."
- HEARD AND HELD
HOUSE BILL NO. 406
"An Act relating to subsistence uses of fish and game."
- BILL HEARING CANCELLED
(* First public hearing)
PREVIOUS ACTION
BILL: HB 452
SHORT TITLE: NONPROFIT CORPORATIONS DISCLOSURES
SPONSOR(S): REPRESENTATIVES(S) GREEN
Jrn-Date Jrn-Page Action
02/18/98 2362 (H) READ THE FIRST TIME - REFERRAL(S)
02/18/98 2362 (H) JUDICIARY
03/04/98 (H) JUD AT 1:00 PM CAPITOL 120
03/04/98 (H) MINUTE(JUD)
03/06/98 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 395
SHORT TITLE: CIVIL LIABILITY FOR EMERGENCY AID
SPONSOR(S): REPRESENTATIVES(S) BUNDE, Hudson
Jrn-Date Jrn-Page Action
02/11/98 2283 (H) READ THE FIRST TIME - REFERRAL(S)
02/11/98 2283 (H) JUDICIARY
02/25/98 2438 (H) COSPONSOR(S): HUDSON
03/06/98 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 196
SHORT TITLE: WILLS, TRUSTS, & OTHER TRANSFERS
SPONSOR(S): REPRESENTATIVES(S) RYAN, Therriault
Jrn-Date Jrn-Page Action
03/14/97 667 (H) READ THE FIRST TIME - REFERRAL(S)
03/14/97 667 (H) JUDICIARY, FINANCE
04/23/97 (H) JUD AT 1:00 PM CAPITOL 120
04/23/97 (H) MINUTE(JUD)
03/06/98 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
JEFFREY LOGAN, Legislative Assistant
to Representative Joe Green
Alaska State Legislature
Capitol Building, Room 118
Juneau, Alaska 99801
Telephone: (907) 465-6841
POSITION STATEMENT: Presented HB 452 on behalf of sponsor.
MANO FREY, Co-Chair
Arctic Power
2501 Commercial Drive
Anchorage, Alaska 99501
Telephone: (907) 272-4571
POSITION STATEMENT: Testified on HB 452.
JOHN CONLEY
Ketchikan Chamber of Commerce
P.O. Box 8462
Ketchikan, Alaska 99901
Telephone: (907) 225-3519
POSITION STATEMENT: Testified in support of HB 452.
DICK COOSE, Executive Director
Concerned Alaskans for Resources and Environment
P.O. Box 9266
Ketchikan, Alaska 99901
Telephone: (907) 247-9266
POSITION STATEMENT: Testified in support of concept of HB 452.
STEVE BORELL, Executive Director
Alaska Miners Association, Incorporated
501 West Northern Lights Boulevard, Suite 203
Anchorage, Alaska 99503
Telephone: (907) 276-0347
POSITION STATEMENT: Testified in support of HB 452.
MICHAEL MONAGLE, Records and Licensing Supervisor
Corporations Section
Division of Banking, Securities and Corporations
Department of Commerce and Economic Development
P.O. Box 110807
Juneau, Alaska 99811
Telephone: (907) 465-2297
POSITION STATEMENT: Testified on HB 452.
PATRICIA SWENSON, Legislative Assistant
to Representative Con Bunde
Alaska State Legislature
Capitol Building, Room 106
Juneau, Alaska 99801
Telephone: (907) 465-6824
POSITION STATEMENT: Presented HB 395 and answered questions on
behalf of sponsor.
MARK JOHNSON, Chief
Community Health and Emergency Medical Services
Division of Public Health
Department of Health and Social Services
P.O. Box 110616
Juneau, Alaska 99811-0616
Telephone: (907) 465-3027
POSITION STATEMENT: Testified in support of HB 395.
ROSE MARIE CITTI, Director of Training
Respond Systems
P.O. Box 220348
Anchorage, Alaska 99522-0348
Telephone: (907) 344-0302
POSITION STATEMENT: Testified on HB 395.
CRAIG LEWIS, Director
Interior Region Emergency Medical Services Council
3522 Industrial Avenue
Fairbanks, Alaska 99709
Telephone: (907) 546-3978
POSITION STATEMENT: Testified in support of HB 395.
KEVIN JARDELL, Legislative Administrative Assistant
to Representative Joe Green
Alaska State Legislature
Capitol Building, Room 118
Juneau, Alaska 99801
Telephone: (907) 465-4990
POSITION STATEMENT: Answered questions regarding HB 395.
REPRESENTATIVE JOE RYAN
Alaska State Legislature
Capitol Building, Room 420
Juneau, Alaska 99801
Telephone: (907) 465-3875
POSITION STATEMENT: Sponsor of HB 196.
RICHARD THWAITES, Attorney
500 "L" Street, Suite 301
Anchorage, Alaska
Telephone: (907) 277-1595
POSITION STATEMENT: Answered questions regarding HB 196.
BOB MANLEY, Attorney
324 East Cook Avenue
Anchorage, Alaska
Telephone: (907) 263-8251
POSITION STATEMENT: Testified on HB 196.
JOHNNY GRAMES
525 West Third
Anchorage, Alaska 99501
Telephone: (907) 274-6348
POSITION STATEMENT: Testified on HB 196.
RICHARD HOMPESCH, Attorney
119 North Cushman, Suite 400
Fairbanks, Alaska 99701
Telephone: (907) 452-1700
POSITION STATEMENT: Testified in support of HB 196.
ACTION NARRATIVE
TAPE 98-31, SIDE A
Number 0001
CHAIRMAN JOE GREEN called the House Judiciary Standing Committee
meeting to order at 1:07 p.m. Members present at the call to order
were Representatives Green, Porter, James and Croft.
Representatives Rokeberg and Berkowitz arrived at 1:11 p.m. and
1:13 p.m., respectively.
HB 452 - NONPROFIT CORPORATIONS DISCLOSURES
Number 0040
CHAIRMAN GREEN announced the first item of business would be HB
452, "An Act relating to registration, disclosures, and reports by
certain nonprofit corporations," sponsored by Representative Green.
Number 0052
JEFFREY LOGAN, Legislative Assistant to Representative Joe Green,
Alaska State Legislature, came forward to explain HB 452. He told
members, "In the body of American law, there is somewhat of a
peculiarity known as the private nonprofit corporation. It finds
its roots in liberal laissez faire economics, a branch of economics
that posits that private associations can do things better than the
government, and evolves from activities in the late 19th century,
when private groups and associations began forming to meet public
needs. Interestingly enough, this is a trend noted by De
Tocqueville in his book, after his visit to the United States, when
he noted that in America average people just organize themselves
and take care of public needs, whereas in Europe we appoint kings
and other accomplished men to accomplish the same tasks. So it is
somewhat of an American thing."
MR. LOGAN said in the 1920s and 1930s, a series of Supreme Court
decisions defined "corporate giving" as a management prerogative.
This was significant because corporations were beginning to amass
great wealth, and the court decisions allowed for a wedding of
philanthropy and corporate wealth. The offspring of this marriage
has evolved into what we know today as the private nonprofit
philanthropic foundation.
Number 0192
MR. LOGAN stated, "Sometime later, a deal was struck, wherein the
body politic, us, afforded these foundations certain advantages,
namely, tax advantages, in exchange for certain behavior, namely,
that they would give us part of the money they earned. So private
nonprofits developed into a source of money for various groups,
causes and activities, and they gave money based on a few rules.
One rule, maybe the main rule, was that there was a prohibition on
political activities. This agreement worked pretty well up until
about ten years ago. For a number of reasons, on which I could
expound later if asked, there began a transformation. First, the
amount of money in private nonprofit foundations exploded. ... Some
economists believe that today 10 percent of the total U.S. economy
is the nonprofit economy. Secondly, the number of private
nonprofit organizations exploded."
MR. LOGAN said today there are about a million nonprofit
organizations in the country. There are about 600,000 are
501(c)(3) corporations, which is the Internal Revenue Service (IRS)
classification we commonly understand to be nonprofit, including
churches, universities, think tanks, local service clubs, homeless
shelters, and so forth. In addition, there are about 40,000
private nonprofit foundations, and that number is growing steadily.
Mr. Logan said the third element of the transformation is that
these foundations became political. The transformation resulted in
an altered relationship. Whereas in the past local groups would
apply to a foundation for money, today there is evidence that
foundations target the groups, causes and activities that they want
to support.
Number 0374
MR. LOGAN referred to bill packets, first pointing out an article
quoted from The Washington Post, with a headline of "Foundations,
Growth May Mean More Grants." He noted that along with the Alaska
permanent fund, private nonprofit foundations have enjoyed the boom
in the stock market. In the third paragraph of the article, it
says these increases drive the total endowments of the top
foundations to more than $126 billion dollars, or more than 12
times as much as the U.S. government spent last year on welfare aid
to the poor. "This is big business," Mr. Logan commented.
MR. LOGAN referred to the following in committee packets: A series
of articles from Boston Globe Online, titled "The Greening of a
Movement", with a subtitle of "Big Money is Bankrolling Select
Environmental Causes"; a piece titled, "Recent Foundation Grants
for Green Groups Active in Alaska"; and a list titled, "Alaska
Conservation Foundation," from a book by Jonathan Adler, which
shows some financial information about one group operating in
Alaska that receives foundation funding and is active in the
environmental movement.
Number 0494
MR. LOGAN pointed out that environmental groups are not the only
groups to receive money from foundations, and that foundations
which give money to environmental groups are not the only
foundations that donate to what could be considered political
activities. He said these examples appear in the packet because
they were the easiest to get a hold of in the time he had to put
the packet together. He expressed the hope that if the committee
addresses the bill again, he will be able to provide additional
information to show that there are foundation activities in all
phases of the political spectrum.
Number 0541
MR. LOGAN noted that packets contain a proposed committee
substitute, Version E [0-LS1324\E, Bannister, 3/4/98]. He said
the changes from the original bill are mostly superficial.
However, Version E changes the time within which donations may be
given from a from a fiscal year to a calendar year, deletes the
requirement for some information by the corporation, and on page 2
requires information about where the money ends up.
MR. LOGAN concluded, "Overall, the bill simply says that if you are
a private nonprofit corporation, and you give more than $5,000 in
a calendar year to an organization in Alaska, you have to tell the
public where the money goes. And if you don't, the commissioner
can revoke your certificate of authority to do business. It's a
right-to-know bill. The information we are requesting pales ... in
comparison to what the federal government asks for."
Number 0639
REPRESENTATIVE ERIC CROFT said he had just received the materials,
except for the original version of the bill. He asked whether it
was heard at another time.
CHAIRMAN GREEN said this is the original hearing. [It had been
brought up briefly on March 4, 1998.]
Number 0698
REPRESENTATIVE CROFT asked how much of a burden the biennial report
would be.
MR. LOGAN replied that he had not seen the form of the biennial
report, but someone from the Division of Banking, Securities and
Corporations was present.
Number 0745
CHAIRMAN GREEN asked for confirmation that this isn't nearly as
much information as is required by the federal government,
including delineation of contributors on the IRS form.
MR. LOGAN said that is true, adding that he could provide copies of
the IRS form and the rules for filling that out.
Number 0765
REPRESENTATIVE ETHAN BERKOWITZ asked whether a for-profit
corporation that is in aggregate and does more than $5,000 worth of
business in Alaska has filing requirements with the state. He said
it seems that certain equal protection considerations might arise.
MR. LOGAN said he doesn't know, but the drafter had brought that
issue and a potential commerce clause issue to his attention, "both
of which she agreed could be issues but that we meet the tests for
those."
Number 0874
REPRESENTATIVE JEANNETTE JAMES commented that certainly if a
foreign corporation comes into the state to do any business, it
must first file with the Division of Banking, Securities and
Corporations as a foreign corporation, and get a permit.
Number 0908
REPRESENTATIVE BERKOWITZ asked whether there is a reporting
requirement if a foreign corporation purchases $5,000 worth of
goods from an Alaska corporation, for example.
CHAIRMAN GREEN said he doesn't know.
Number 0927
REPRESENTATIVE CROFT suggested that goes to the definition of doing
business. He provided an example, "If Corrections Corporation of
America, a for-profit company who is not yet doing business in the
state of Alaska, wanted to give donations to various groups, as I
read it, ... it just covers nonprofits. So for-profit corporations
sending in money to influence or for whatever purpose - not doing
business but simply sending in the ... type of donations we're
talking about here - wouldn't be covered, would they?"
MR. LOGAN replied, "That's not the intent, and as I read it, it is
not covered in this language."
Number 0979
REPRESENTATIVE JAMES suggested putting the reporting requirement on
the current in-state nonprofits, and making them report where they
got all of their money. She noted that those could include health
providers, treatment centers or special interest groups.
Number 1029
REPRESENTATIVE CROFT said he doesn't understand why for-profits
giving money wouldn't have the same reporting requirements. He
asked whether the federal reporting mentioned by Mr. Logan is
public information.
Number 1077
MR. LOGAN replied that the form he had mentioned, the 990, is
available in some form but is stale by the time it is available to
the public. It takes several months after it is reported to get
from the IRS to the public. The Council on Foundations, the
voluntary trade organization of big nonprofit foundations, has a
membership service and a library in Washington, D.C., with a few
branches around the country; they acquire these 990 forms and have
them available on microfiche. However, Mr. Logan had asked that
very day, and the most recent forms they have are two years old.
For people in Alaska to get this information, even if they know
about it, would be difficult, and by the time the information was
available, the effect of the money could long have passed. Mr.
Logan said the intent here is to make the information available to
Alaskans, in Alaska.
Number 1164
REPRESENTATIVE NORMAN ROKEBERG commented that given the giving
power of the Alaska Conservation Foundation, according to the
exhibit in the file, they would presumably have had to file a 990
form. He asked whether Mr. Logan had requested information from
the IRS about them, to see how the system works.
MR. LOGAN said he had tried. He restated that this information is
in the packet because it was obtainable, adding that he had tried
for other groups as well, but unsuccessfully. He noted that some
of this information is published by foundations on the Internet.
Number 1256
MR. LOGAN advised members that the IRS requires a public inspection
period, but does not require the notice to be in a newspaper where
the file is to be inspected. Therefore, a Washington-based
foundation could put a notice in a newspaper in Macon, Georgia,
wait for the 180-day period to elapse, and then say they had met
all the legal requirements. He told Representative Rokeberg that
is one of the problems, noting that there is legislation now in
Congress relating to some of these loopholes.
CHAIRMAN GREEN added, "But the fact is the information is public.
It's just difficult to find, and this makes it easier to find."
Number 1317
REPRESENTATIVE BERKOWITZ asked how Mr. Logan had obtained the
information that is listed.
MR. LOGAN answered that some is available on the Internet, some is
available in part in other publications, and some was due to luck.
REPRESENTATIVE BERKOWITZ asked whether those were government
publications.
MR. LOGAN said no. He added that some of the information in Mr.
Adler's book is no longer current, as it is a few years old.
Number 1378
REPRESENTATIVE BERKOWITZ expressed concern about unintended
consequences, noting that the focus appears to be solely on
environmental groups. He asked whether there were any other groups
that might have contributed that Mr. Logan knows about.
MR. LOGAN said he believes there are, and has been told that, but
he cannot show that there are. For example, certain employment
organizations in the transportation industry have foundations, and
there is some evidence of this in the education field.
Furthermore, someone in Pennsylvania had told him there was a
problem there with the Robert Wood Johnson (ph) Foundation, which
had issued a grant to the health and social services department to
train people in the department in how to apply for grants from the
state government; he noted that a legislator there is trying to
close that loophole. Mr. Logan restated that it is not only in the
environmental area.
Number 1434
REPRESENTATIVE BERKOWITZ said it would seem that groups like the
NAACP [National Association for the Advancement of Colored People]
or the Anti-Defamation League would somehow get involved in this
reporting requirement.
AN UNIDENTIFIED SPEAKER mentioned the NRA.
Number 1443
REPRESENTATIVE JAMES referred to a book titled, "Trashing the
Economy." She noted that oil companies also have foundations. She
told members that several years before, when there had been
controversy over some geothermal energy where she was living,
including lobbying against that project, it turned out that oil
companies were behind it. She suggested that it is important that
whoever hears something knows from whom they are hearing it.
Number 1489
REPRESENTATIVE CROFT noted that major American oil companies
operate in Alaska, suggesting that if they didn't, however, and if
their sole operation was to influence that geothermal project
through donations, it wouldn't be covered here, as he sees it.
That would be a for-profit company trying to influence public
opinion, not generally doing business here but trying to influence
it by giving in the aggregate over $5,000.
CHAIRMAN GREEN noted that if it gave to a nonprofit, that would be
disclosed.
Number 1525
REPRESENTATIVE CROFT pointed out that it says a foreign nonprofit
corporation is considered to be transacting business if it gives
over $5,000 to a nonprofit. He said he still doesn't understand
that distinction on the giving end, although he may understand it
somewhat on the receiving end.
REPRESENTATIVE BRIAN PORTER said he believes the example was that
these companies have foundations.
REPRESENTATIVE CROFT replied, "That was that example: If they
wanted to directly influence it, they wouldn't have to report; if
they wanted to do it through a foundation, they would. I don't
understand that."
Number 1559
REPRESENTATIVE JAMES said that point is well-taken. She said it
seems the purpose of the reporting is to know who is funding the
nonprofit corporations in the state, in order to determine whether
the behavior follows the donations. She again suggested requiring
local nonprofit corporations to report where they get their money,
as opposed to making those that give money do the reporting.
Number 1601
MR. LOGAN agreed Representative Croft's point is well-taken. He
added that the point of the bill is to compel foundations, which
were originally organized to have certain tax advantages and which
are becoming more political, to disclose what they are doing in
Alaska. He noted that a representative from the Department of
Commerce and Economic Development had information about the
nonprofit corporations code and what is going on in that area.
CHAIRMAN GREEN asked whether there were questions before hearing
testimony. He announced that those waiting on teleconference could
testify first.
Number 1652
MANO FREY, Co-Chair, Arctic Power, testified via teleconference
from Anchorage, specifying that he is one of two co-chairs of
Arctic Power, a nonprofit group with the single goal of "seeing
the safe and efficient development, exploration and use of a small
little piece of land in Alaska, the coastal plain on the Arctic
coast." Noting that he is also involved in several other nonprofit
groups, he expressed great interest in hearing the answers to some
of the questions being brought up.
MR. FREY stated his understanding that this only applies to
501(c)(3)s, which have limited purposes, and for which it is pretty
well defined under law what they can or cannot do. He told members
his initial reaction to the bill is that he doesn't have a problem
with it, as he understands its purpose. However, he also
understands from the discussion that it may be a little more
focused in another draft; he expressed interest in seeing any
future changes.
Number 1753
JOHN CONLEY, Ketchikan Chamber of Commerce, testified via
teleconference from Ketchikan. He told members this bill kind of
excites him, because if he makes a large contribution to a
political candidate, he and the candidate are required to disclose
that to the Alaska Public Offices Commission (APOC) and it becomes
public information immediately, available on the Internet. He said
he likes this because in Ketchikan he has discovered that a lot of
East Coast foundations have sought to change the public image, or
to affect the public process, by giving to organizations within
Alaska. He stated, "You know, when we were fighting for the timber
industry here, we kept bumping into these so-called community-based
groups claiming to represent a section of their community. And
it's always been my belief that they were actually funded by an
East Coast corporation, through grants, and ... their sole purpose
was to affect public policy, basically, to abort the legislative
process and to act as a lobbying group." He said he didn't want to
name names, then cited specific examples.
Number 1894
REPRESENTATIVE BERKOWITZ agreed there needs to be a level playing
field, but said if he recalls correctly, there were also
organizations in the Lower 48, including land use groups, that were
supportive of the timber industry. He asked Mr. Conley if that
would affect his decision on this bill in any way.
MR. CONLEY replied, "No, sir, it wouldn't. In fact, I'm president
of a local grassroots organization called CARE. And we have
nothing to hide. I mean, our membership is made up of local
Ketchikan folks and folks from around the nation with similar
interests. I believe what this legislation would do is it would
show the amount of money being funneled into Alaska to affect
public policy in Alaska. I think there's a big difference there.
The people on my side have no fear. I mean, what more can we lose?
But we can only pick up a paper daily and see that public policy is
being established on the East Coast for Alaskans. It is my belief
that these East Coast foundations, through these limited
environmental groups, are specifically trying to affect public
policy."
Number 1979
DICK COOSE, Executive Director, Concerned Alaskans for Resources
and Environment (CARE), testified next via teleconference from
Ketchikan, expressing support for the concept of this bill and
agreeing the playing field needs to be leveled out. He suggested
the committee consider not only (c)(3) organizations but (c)(4) and
(c)(6) organizations as well. "And we are a (c)(4), and we do not
have anything to hide," he added. Mr. Coose spoke about people on
the East Coast telling Alaskans how to live their lives, manage
their companies and manage their lands.
MR. COOSE said the Alaska Rainforest Campaign, along with other
groups, spent $70,000 the previous month to put a full-page ad in
the New York Times saying how bad the Tongass is. He stated, "And
each and every one of you sitting in that room, I know, understand
the Tongass is a well-managed forest, and it's being caused to have
economic output that's [considerably] below its sustainable level.
And I'd just encourage you to go ahead and pass something similar
to what you have. We really need it, so that the public realizes
that these groups, be they environmental or others, are not really
funded locally, as they would have you perceive they are."
Number 2045
STEVE BORELL, Executive Director, Alaska Miners Association,
Incorporated (Anchorage), testified via teleconference from
Fairbanks on behalf of the association, stating support for the
bill, and saying he believes the concepts that are changes in the
proposed committee substitute are appropriate. Mr. Borell told
members that for years or possibly decades, outside money has been
coming into Alaska to influence public policy, development of
regulations, and who knows what else. He agreed with testimony
about the difficulty of getting information except through the
Internet. He said it was not until these web sites were developed
that they began to understand the incredible magnitude of the money
and the "widespread tentacles" of what is being done.
MR. BORELL said they feel that these donors translate into
opposition for projects not due to real environmental issues but
using the environment to block projects, lock up more land into
conservation system units, block access, and so forth. He stated,
"These outside dollars have been disastrous for the communities,
especially the Southeast, and not so much in the mining but in the
logging, and in the opposition of ANWR [Arctic National Wildlife
Refuge]." Mr. Borell concluded by encouraging passage of HB 452,
saying he believes it is a necessary step that will not hamper
foundations' contributing but will put state residents, and the
legislature, on notice as to what monies are being brought in to
affect public policy.
Number 2163
MICHAEL MONAGLE, Records and Licensing Supervisor, Corporations
Section, Division of Banking, Securities and Corporations,
Department of Commerce and Economic Development, came forward to
testify. He first commented on the bill itself, mentioning its
fiscal impact. Mr. Monagle advised members that right now there
are 23,000 active corporations, of which 4,600 are nonprofit.
Using Mr. Logan's statistics, with 600,000 501(c)(3) corporations
and 40,000 private nonprofit foundations, if they saw an increase
of 400 filings the next year, they could probably handle that.
However, 4,000 more would require additional staff, and 40,000
would require them to double their staff. "And if we saw 600,000,
Juneau would get its new state office building," he added.
Number 2204
MR. MONAGLE said the point is that nobody knows how much money is
coming in, the number of filings, or the impact on his agency, but
there would be an impact. Each filing would have to be handled and
processed. If the state captured this information that is not
available elsewhere easily, then newspapers, magazines and people
from all over the country would seek that information from his
office, where it would be easy to obtain as a public record.
Therefore, the numbers of requests for copies of reports would
rise. The bottom line is that it could potentially have a dramatic
impact on the agency.
MR. MONAGLE pointed out that right now the bill doesn't specify the
nature of the $5,000 being given to a nonprofit corporation. He
stated, "So, if I have a mission in a village in Alaska, and I have
a church outside the state that gives $5,000 to that mission, I
have to register, which I would not have had to have done before.
That prompts two questions. One, is that $5,000 gift from that
foundation worth the hassle to that foundation of having to
register? And would that take away that gift from taking place?
And that $5,000 gift to that mission might be very important to
that particular mission. So, what impact would it have ... on the
receivers of these funds and monies who are churches? If I have a
church, and I want to build a new church, and I have an extension
society, again, under the current statute I'm not registered. But
if I make a loan to that church so they can put up a building, am
I then required to register? So, there's a scope of how broad this
bill is."
Number 2283
MR. MONAGLE referred to enforceability and noted that if the
corporation fails to turn in this report, the corporation's
authority to do business in this state will be revoked. He asked
what prompts them to have to comply in the first place, or causes
them to be aware of the requirement.
MR. MONAGLE mentioned a point raised by Representative James. He
said in 1991, the Alaska Code Review Commission submitted a bill
for consideration, although it never went anywhere. There was a
revision of the Nonprofit Mofrl Corporation Act by the American Bar
Association. Quite a few states have adopted this revision,
although Mr. Monagle said he didn't have statistics on it. He said
Alaska's existing statute is virtually unchanged since statehood,
and all kinds of organizations are included such as sewing clubs,
booster groups for athletic events, churches and environmental
groups. The revised model Act would break out nonprofits into
essentially religious corporations; mutual benefit corporations,
which would be homeowner associations, booster clubs, and so forth;
and public benefit corporations.
MR. MONAGLE said it seems if they want disclosure on funding
sources, passage of a revision of the revised model Act, creating
a public benefit type of nonprofit corporation, could put a
requirement in the statute that says, "Tell us who your funding
sources are." Administratively, for the department, it would not
increase the number of corporations coming into the state. It
would simply separate out and identify the public benefit
nonprofits, and make some filing requirements necessary for them.
Number 2383
REPRESENTATIVE CROFT asked whether each donor would be charged a
filing fee under this bill.
MR. MONAGLE replied that right now under the regulations, each
registration would be charged $50; therefore, each corporation
would pay $50. He explained, "Once registered, they would also
fall under the other provisions as a foreign corporation doing
business here, which would mean any amendments that they have in
their domicile they'd have to file here, mergers would have to be
filed here, notification changes of their officers and directors
would have to file here. So it goes beyond just the initial
registration as well. Once you're registered, you're subject to
other requirements that you have to file changes with the state."
REPRESENTATIVE CROFT asked, "We would keep on file their board of
directors and their current articles?"
MR. MONAGLE affirmed that.
Number 2419
CHAIRMAN GREEN said the increase in workload appears to be offset
by the filing fee. He asked what is so onerous about filing this.
MR. MONAGLE explained that each corporation would have to submit an
application for registration, which needs to be reviewed to make
sure they have complied with what is in statute; typically, that is
handled by a person who would then issue some type of certificate
of registration. That paper would have to be retained, currently
either by converting those records to microfiche or microfilm,
although they have a small pilot project for imaging; those become
permanent archival records. Each application that comes in would
have to be processed, and would have a $50 check with it, so there
would be fiscal aspects of processing that. Once the information
is stored, whether on microfilm, microfiche or electronically,
people then request information that the department must provide.
TAPE 98-31, SIDE B
Number 0006
MR. MONAGLE continued, saying that if additional staffing is
required, there would be additional equipment needs, as well as
increased contractual costs for microfiche from the central
microfilm lab and increased postage and telephone costs. He said
it all is part of the filing process.
CHAIRMAN GREEN asked how the $50 was established.
MR. MONAGLE said it is set out in regulation as a filing fee, to
cover the cost of filing and processing.
Number 0029
REPRESENTATIVE JAMES said she didn't recall the bill Mr. Monagle
had mentioned that would rewrite the nonprofit corporation
designations. She asked, "So, you're saying that if that was done
and then we required this from the receiver - not the payer but
from the receiver - there would be no cost then, it would just be
absorbed in what you are already doing?"
MR. MONAGLE said that is correct.
REPRESENTATIVE CROFT asked for a brief explanation of the
differences between a (c)(3), a (c)(4) and a (c)(6) corporation.
MR. MONAGLE said he didn't know, as they don't get involved in the
tax issues. He explained, "They file with us, saying they are a
nonprofit; we make no determination on whether they are tax-exempt.
That is strictly an IRS requirement. Right now, in checking with
Department of Revenue, they receive 1,100 filings a year, 990 forms
from nonprofit corporations. Under their statute, that information
is confidential; so you couldn't get a copy if you wanted to. If
you filed these types of reports with the Department of Commerce,
they're public record; anybody would have access."
Number 0081
REPRESENTATIVE BERKOWITZ referred to questions he had asked Mr.
Logan about filing requirements of for-profit corporations. He
asked Mr. Monagle if he knows the answer to those questions.
MR. MONAGLE replied, "I don't recall your specific questions.
Generally, the nexus that we use for registration is fairly similar
to what Department of Revenue uses, in that you have to have some
type of presence in the state to be required to register. So, a
nonprofit formed in Florida, before they register with us,
generally open a chapter of their organization in Alaska, or they
have an office in Alaska, or they have some type of, quote,
'presence' here. If they don't have a presence, right now they
would not be required to register. The similar thing with for-
profit corporations -- there's a section under the bill that
revises, or it says excluding 10.24.60, Now, that's a section of
the nonprofit act that says these activities do not constitute
transacting business. And they're similar to the for-profit
corporations. Things like holding title to real and personal
property, by itself, does not mean you're transacting business in
Alaska. Making loans or acquiring indebtedness in the state is
exempt from the definition of doing business. So right now ...
those activities would be exempt from registration. But under this
bill, they would require registration anyway."
CHAIRMAN GREEN noted that it would be if they met the $5,000
threshold.
MR. MONAGLE concurred.
Number 0149
REPRESENTATIVE ROKEBERG referred to AS 10.20.645, relating to a
failure or refusal to file reports. He asked about the $5 fine.
MR. MONAGLE explained that for a domestic corporation that has
failed to file, currently the state has authority to involuntarily
dissolve the corporation's charter. For an out-of-state
corporation, the authority already resides with the commissioner to
revoke its certificate of authority. He said he is not familiar
with that $5 fine.
Number 0182
REPRESENTATIVE ROKEBERG asked whether there are other provisions
within that title, which the department enforces, and which provide
for penalties for failure to file.
MR. MONAGLE answered that the "stick" that the department has, in
almost all cases, is the authority to dissolve a corporation. If
the department dissolved a corporate charter because of failure to
file reports, for example, the department can reinstate that
corporation if it pays the fees assessable at the time the report
was due. In the case of for-profit corporations, there is a
provision in statute for a double-the-amount-due penalty to
reinstate. Therefore, there is an additional penalty to reactivate
a charter if the corporation fails to file in a timely manner.
Number 0223
REPRESENTATIVE ROKEBERG asked what the fee is for a profit-making
corporation to file. He further asked, "How could you dissolve a
foreign corporation?"
MR. MONAGLE replied that right now the initial fee is $350 for an
out-of-state corporation to register; that breaks down to a $150
filing fee, plus the first two-year, biennial tax of $200. He
pointed out that they cannot dissolve an out-of-state corporation
but can simply revoke its authority to do business in Alaska, which
means the certificate of authority no longer exists and the
corporation would be prohibited from certain activities under the
statute.
REPRESENTATIVE ROKEBERG asked whether the $200 biennial tax is
incurred against the corporation's taxable income or is another
form of tax.
MR. MONAGLE answered that it is a flat tax, called in some states
a franchise tax.
REPRESENTATIVE ROKEBERG asked whether a corporation also needs a
business license.
MR. MONAGLE said yes.
Number 0279
REPRESENTATIVE PORTER recalled discussion of the nonprofit
legislation, but asked whether Mr. Monagle remembered what happened
to it.
MR. MONAGLE said he believed it was in 1991 or thereabouts, and it
was introduced late in the session. He suggested a major code
revision like that would require a bill that runs 200 pages, and
the committee did not feel up to tackling it at that point. He
said unfortunately the Code Review Commission was disbanded in the
interim, as it was not funded, and the issue went away. "The
department certainly would support a revision of that code," he
added.
CHAIRMAN GREEN noted that everyone who had signed up had testified.
He asked the wish of the committee.
Number 0332
REPRESENTATIVE ROKEBERG expressed concern about the failure-to-file
provision, mentioning the $5 penalty and noting Mr. Monagle's
testimony that the "stick" is dissolving a corporation. He asked
whether that would be enough enforcement to preclude the continued
contributions of funds if corporations didn't file.
Number 0370
REPRESENTATIVE PORTER said he thinks the idea of "sunshining" this
information is laudatory, and he would like to do that. He
questioned the ability to do that with this vehicle, however. For
example, he said he doesn't believe that the Brainerd Foundation
referenced in packets does business in Alaska and would therefore
be required to file for anything. Consequently, there would be no
enforceability there.
CHAIRMAN GREEN replied that he may be right, but suggested it is a
step in the right direction to gather those that don't skirt the
law through loopholes.
Number 0427
REPRESENTATIVE PORTER asked whether there had been consideration of
the notion of reporting by those who receive the money.
CHAIRMAN GREEN said there really wasn't.
Number 0461
REPRESENTATIVE JAMES agreed that if they want to know where
nonprofits in Alaska get their money, they ought to ask those
nonprofits. She said she wished they had in front of them the
rewrite of the nonprofit law, as it is unnecessary to get the
information from missions and churches, for example. She also
agreed with Representative Porter that probably many corporations,
both for-profit and nonprofit, send money into Alaska without being
registered to do business in the state. She offered to work on the
bill.
Number 0537
REPRESENTATIVE ROKEBERG told members that the House Labor and
Commerce Committee, which he chairs, has been in communication with
the Department of Commerce and Economic Development on a larger
rewrite. He said if it was Chairman Green's desire, they would be
happy to look further into that. He mentioned the alleged 200
pages, noting that Chapter 20 is only 35 pages long.
CHAIRMAN GREEN asked if there were further comments, then thanked
participants. [HB 452 was held over.]
HB 395 - CIVIL LIABILITY FOR EMERGENCY AID
Number 0591
CHAIRMAN GREEN announced the next item of business would be HB 395,
"An Act relating to civil liability resulting from the use of a
defibrillator in providing emergency aid."
Number 0599
PATRICIA SWENSON, Legislative Assistant to Representative Con
Bunde, Alaska State Legislature, read the sponsor statement into
the record as follows:
"Every day nearly 1,000 people in the United States die
unnecessarily due to sudden cardiac arrest. Most people die before
they reach the hospital, usually within two hours. Research shows
that early defibrillation, delivering an electric current to the
heart within minutes after sudden cardiac arrest, can raise
survival rates to 30 percent of higher. That's 25 percent more
lives than the current national survival rate of 5 percent.
"The American Heart Association estimates that 20,000 or more
unnecessary deaths could be prevented each year if automatic
external defibrillators [AEDs] were more widely available.
Implementation of a plan that allows both traditional and
nontraditional targeted first responders to have access to and use
of an AED in medical emergencies is needed.
"House Bill 395 expands our state's Good Samaritan statute to
provide protection from liability for people who are properly
trained in the use of an AED. As a general rule, the American
legal system does not require someone to rescue a victim. However,
all states currently have Good Samaritan statutes that protect a
volunteer who is aiding another in good faith. These statutes
mainly apply to physicians and other health care providers who
assist somebody voluntarily and do not expect any reimbursement for
their services, but passersby who happen upon an accident and
provide emergency assistance are also protected from liability.
House Bill 395 clearly sets the standard for training and proper
use of an automatic external defibrillator. Increased availability
of automatic external defibrillators along with proper training
will save lives. House Bill 395 will help make Alaska a safer
place."
Number 0712
REPRESENTATIVE BERKOWITZ made a motion to adopt Version E [0-
LS1560\E, Ford, 3/5/98] as a work draft. There being no objection,
it was so ordered.
MS. SWENSON explained that Version E adds the use of manual
electric cardiac defibrillators to the so-called Good Samaritan
statute, AS 09.65.090.
REPRESENTATIVE BERKOWITZ asked what "manual electric" means,
suggesting it sounds almost contradictory.
MS. SWENSON answered that it is an automatic external
defibrillator.
Number 0755
REPRESENTATIVE CROFT asked, "Manual electric as opposed to what? "
MS. SWENSON told members she hadn't anticipated that question and
has been out of the field for a while.
REPRESENTATIVE ROKEBERG suggested they could say "old-fashioned"
instead of "manual." He said as he reads it, people using manual
defibrillators in emergency rooms, such as on television shows, are
not immune under subsection (b).
Number 0934
REPRESENTATIVE JAMES suggested Representative Rokeberg's concern
was because it says this immunity does not apply except to a person
authorized by law to do it. A passerby who didn't know how to do
it wouldn't be exempt, which she thinks is the intent.
MS. SWENSON said further on, it sets out standards for training.
"The training will say when people can use them and when they
can't," she added.
Number 0958
REPRESENTATIVE CROFT expressed his understanding that everybody is
immune if they meet the criteria. For the more complicated kind,
the criteria is that the person must be authorized by law; he
suggested that would mainly be nurses or doctors in a hospital.
For subsection (e), the criteria is that people must be trained.
Representative Croft pointed out that subsection (d) had been
retained, which says, "(d) This section does not preclude liability
for civil damages as a result of gross negligence or reckless or
intentional misconduct."
MS. SWENSON offered to show members documentation of support.
Number 1072
MARK JOHNSON, Chief, Community Health and Emergency Medical
Services, Division of Public Health, Department of Health and
Social Services, introduced paramedic Matt Anderson, who was with
him to answer questions. Mr. Johnson said they were here to speak
in favor of this legislation.
MR. JOHNSON told members there are approximately 350,000 sudden
cardiac arrests in the United States every year; in Alaska they
estimate that translates to roughly 600 to 700. Numerous studies
have been done over the last 15 or more years, many in Seattle,
Washington. Mr. Johnson pointed out that HB 395 is quite similar
to a bill working its way through the Washington State legislature
now; he indicated they had worked with the sponsor of that bill to
incorporate much of it here.
Number 1115
MR. JOHNSON stated, "According to the American Heart Association,
they've adopted what's called the emergency cardiac care systems
concept, and they call it the chain of survival. And it has four
elements. When someone collapses with cardiac arrest and it's
witnessed, the first thing to do is notify the EMS [emergency
medical services] system, usually by 911 or some other means.
Second, initiate CPR [cardiopulmonary resuscitation]. Third, get
early defibrillation, as quickly as possible. And fourth, get
advanced cardiac life support via paramedics, hospital emergency
department, whatever."
MR. JOHNSON said some studies have shown that when the EMS system
is notified within approximately one minute, CPR is initiated
within about two minutes, defibrillation is provided within about
four minutes, and advanced cardiac life support is provided within
about eight minutes, the survival rate can be approximately 30
percent. By contrast, if there is no CPR and defibrillation is
delayed for approximately ten minutes, the survival rate drops to
roughly zero to 2 percent. Clearly, the key is to get the CPR and
defibrillation as early as possible.
Number 1217
MR. JOHNSON reported that the American Heart Association and other
national groups have, over the last year or two, been advocating
"public access defibrillation." The new automated external
defibrillators (AEDs) are computerized; when the defibrillator is
hooked up to the patient, the computer detects whether there is a
life-threatening dysrhythmia of the heart and then determines
whether to shock the patient. These new machines, available on the
market today for $3,000, will only shock when there is a life-
threatening dysrhythmia. Mr. Johnson pointed out that manual
defibrillators can cost upwards of $10,000, adding that those are
the types of machines paramedics and hospital emergency departments
use, and those people currently are licensed under state law to
perform those kinds of functions.
Number 1273
MR. JOHNSON explained that this bill would affect people with
approved CPR training and AED training, which is significantly less
training than is currently required to become authorized to use
defibrillators. Those people could become legally authorized under
this statute, and they could include police officers, firefighters
who are not EMS providers and perhaps security guards. The
American Heart Association recommends placing these devices
wherever there are both a likelihood of significant numbers of
people and a likelihood of cardiac arrests. A recent study out of
Seattle found that the number one public place was in the airport.
"And, in fact, I just spoke with the Anchorage fire department
today, and they're working to put defibrillators at the Anchorage
airport," Mr. Johnson added.
MR. JOHNSON said they had worked with the sponsor, and they believe
the provisions to ensure that people have minimum training
requirements could potentially lead to hundreds more authorized
people in Alaska; there are about 1,200 in the state now, including
emergency medical technicians (EMTs), paramedics or first
responders currently certified by Mr. Johnson's department to
legally provide defibrillation. Over the next few years, that
increase could potentially translate into dozens of lives saved.
Mr. Johnson noted that the bill also addresses protections for
people who do the training and who own the devices. He offered to
answer questions, noting that Matt Anderson could answer specific
questions about the devices. He concluded by expressing strong
support for the bill.
Number 1380
REPRESENTATIVE ROKEBERG expressed concern about the requirement
that a person be trained and carry a card. He asked what would
happen if no one else was around, and a person either didn't have
a card or had left it at home.
MR. JOHNSON replied that as a Good Samaritan bill, the protection
here is from liability. The state won't be asking someone for a
card at the scene. The real issue is whether there is a protection
from liability for these individuals. Although not trained in law,
he said he would think that as long as someone had the appropriate
training required under the bill, that person would be protected.
Number 1474
ROSE MARIE CITTI, Director of Training, Respond Systems, testified
via teleconference from Anchorage. She first indicated she had
been sending material almost daily since February 1, and that Mr.
Johnson had addressed some items in her prepared comments. Ms.
Citti offered a quotation from Dr. Richard Cummins, professor of
medicine at the University of Washington, who is a leader in
treatment of sudden cardiac arrest. Dr. Cummins had said there is
now both national and international acceptance of the "principle of
early defibrillation," which contends that whoever arrives first at
the scene of a cardiac arrest should have a defibrillator. He had
gone on to say that anyone who can learn CPR can also learn to use
an AED and should be allowed to use one and be protected from
repercussions.
MS. CITTI reminded members that 30 years ago, CPR was considered an
advanced medical skill. "Now we teach school kids how to use it,"
she said, adding that there are numerous documented cases where
people have been saved due to CPR performed by bystanders, buying
the patients time until EMS personnel arrived.
MS. CITTI indicated she was testifying out of frustration because
although the technology exists that can save countless lives, laws
prohibit the use. Her interest comes from eight years of being a
CPR instructor; she teachers pre-EMS personnel from a wide variety
of occupational settings who are designated by their employers and
expected to respond to medical emergencies, or else they are
willing bystanders. Ms. Citti said public access use of AEDs
should target pre-EMS responders, who are trained individuals with
a willingness, designation or responsibility to treat the public
and to assist co-workers in medical emergencies. These people
should be free to perform this potentially life-sustaining action
without fear of violating the law. She said the Good Samaritan law
must be extended beyond paramedics, firefighters, police officers,
lifeguards and those with a duty to respond, to include those who
are doing it on a willing basis or because of their employer's
requirement.
Number 1615
MS. CITTI cited examples of companies with trained personnel which
should be able to use AEDs in an emergency without risk of breaking
existing laws. She cited additional examples of people who should
have use of this technology without repercussion, including trained
motor coach or bus drivers, Alaska Railroad conductors, utility
workers, pilots, charter boat operators, people who have remote
lodges and in-town hotel or motel staff.
MS. CITTI said Alaska has always been on the leading edge of making
important changes to established medical procedures because of
unique needs and remote locations. Alaska led the way with
defibrillator-trained technicians when the equipment was manually
operated, and AED technology has moved so fast that Alaska is no
longer keeping pace with regulations or statutes.
MS. CITTI concluded by saying she applauds the energy and
thoughtfulness that have gone into preparing HB 395. She said she
finds the approach taken in this bill addresses most of her main
personal concerns. She encouraged the committee to move this issue
forward.
Number 1692
CRAIG LEWIS, Director, Interior Region Emergency Medical Services
Council, testified via teleconference from Fairbanks in support of
the proposed committee substitute for HB 395. He noted that a
number of his prepared comments had already been addressed by Mr.
Johnson and Ms. Citti.
MR. LEWIS told members the development and proliferation of
automated external defibrillators across the nation and in Alaska
warrant the amendment to Alaska's Good Samaritan Act. The American
Heart Association, the American Red Cross and a number of corporate
American companies recognize the value of AEDs, and states either
have or are passing similar legislation. Major corporations across
the nation and in Alaska are already purchasing and positioning
AEDs in their places of business. Princess Tours has them on its
buses, and Alaska Airlines has them on its planes. "It only makes
sense that we adjust our legislative process to recognize the
technology," Mr. Lewis said.
MR. LEWIS advised members that the state of the art regarding
defibrillation has changed significantly and will continue to
change. The size, shape and capabilities of these machines will
improve, "most likely to where the next time you see one, it will
be a third the size of a briefcase and be next to the first-aid
station on the wall." Mr. Lewis said the sophistication of the
devices is incredibly fast-moving, and right now they do the
analyses that used to be done by hand.
MR. LEWIS explained that the difference between manual and
automated has to do with the capability on a manual defibrillator
to adjust the amount of electric flowage by hand, with a pre-
approved protocol and standard, to the patient. Automated
defibrillators adjust all of those things within the computer
system of the machine, with a number of fail-safe mechanisms that
have been tested over time. He urged passage of this legislation.
Number 1854
CHAIRMAN GREEN asked that both Ms. Citti and Mr. Lewis submit any
written testimony for the record.
Number 1875
REPRESENTATIVE CROFT offered an amendment to page 2, line 15, to
substitute "possess" for "carry". He explained, "I don't think we
meant that you carry it around the whole time."
REPRESENTATIVE BERKOWITZ suggested "maintain".
REPRESENTATIVE CROFT mentioned then getting rid of "evidence."
REPRESENTATIVE BERKOWITZ suggested "maintain current evidence".
CHAIRMAN GREEN asked what the amendment is.
REPRESENTATIVE stated, "My amendment is 'maintain'."
Number 1982
REPRESENTATIVE ROKEBERG suggested they could delete the last part
of the sentence, following the semicolon ["a user of a
defibrillator shall carry current evidence of demonstrated
proficiency in defibrillator use and cardiopulmonary
resuscitation;"], unless the implication is to have not current
training but recurrent training. He said all it means is the
person is carrying a card around.
CHAIRMAN GREEN said the problem may be people who don't have their
cards with them.
Number 2057
REPRESENTATIVE CROFT stated, "It couldn't be there to mean to be
current. You take the course, 'shall receive reasonable
instruction' - I did that ten years ago or whatever - 'and shall
stay current.'"
REPRESENTATIVE PORTER agreed.
REPRESENTATIVE ROKEBERG said if that is the implication, it should
be spelled out.
Number 2074
MS. LEWIS told members that people have to redo their training
every year or two.
Number 2098
REPRESENTATIVE JAMES said it could stop after "proficiency". She
explained, "I think you do need to have this bit about being
current with it, because the first part doesn't say that you are."
Number 2125
CHAIRMAN GREEN referred to the motion on the table and asked
whether there was any objection to substituting "maintain" for
"carry" on page 2, line 15. There being no objection, that
amendment was adopted.
REPRESENTATIVE ROKEBERG asked Ms. Swenson what is meant by
"current," suggesting the need to stipulate that in the bill.
Number 2150
MS. SWENSON answered that "current" means that the card must be
kept up and the training must be there, through an approved course.
People must redo their training every year or two and get an
updated card. She explained that there are basic life support and
advanced cardiac life support, which have changes over the years.
As the changes occur, people have to update their training. In
addition, a lot of nurses and other people use it for continuing
education, so that they keep their cards current.
Number 2204
REPRESENTATIVE ROKEBERG said he appreciates that and thinks it is
laudable, but when they put in the statute that a person must have
a current permit, they need to define what "current" is.
CHAIRMAN GREEN asked whether "active" would satisfy it.
REPRESENTATIVE ROKEBERG suggested that if there are different
training forums, there may be differing standards.
Number 2283
MS. SWENSON told members, "The cards all have an expiration date on
them, when you renew your training, and it varies by program what
that expiration date is and the length of time before they have to
retrain. So 'current' would be before the expiration date."
CHAIRMAN GREEN said it is like CPR, for which the card has an
expiration date, and he asked again whether "active" would be
appropriate.
MS. SWENSON stated her belief that "current" is the standard.
CHAIRMAN GREEN pointed out that the committee was having difficulty
with it.
Number 2298
REPRESENTATIVE PORTER suggested it isn't the evidence they want
current, but the proficiency. He asked whether perhaps they should
say, "shall maintain evidence of current demonstrated proficiency".
CHAIRMAN GREEN suggested perhaps just "proficiency".
Number 2366
REPRESENTATIVE CROFT said he would amend the amendment so the
sentence will read, starting at line 15, "a user of a defibrillator
shall maintain a current proficiency in defibrillator use and
cardiopulmonary resuscitation". He specified that he was taking
out "evidence of demonstrated" and making essentially the
substitution made before.
CHAIRMAN GREEN asked whether there was any objection to the
modified amendment. There being no objection, it was adopted.
Number 2395
REPRESENTATIVE CROFT advised members of one more legal problem,
which he and Kevin Jardell had been working on. He said he would
describe the problem and perhaps Mr. Jardell had a solution.
Section 1 says "authorized by law," and testifiers have said, if he
understands correctly, that this is limited to a certain class of
people; it was illegal for other people to do this. What they are
changing here is simply the Good Samaritan law, not the law that
said it is illegal for someone to do it. Representative Croft
stated, "So, we could have, 'you're not liable for it, as long as
you don't use gross negligence,' but you're actually still
technically violating the law ...."
TAPE 98-32, SIDE A
Number 0001
MR. JOHNSON said he is not sure exactly how it affects this bill,
but the way to address the problem described is with a one-word
insertion under AS 18.08.090(1). Previously in that statute, it
says a person has to be certified or licensed in order to do
advanced life support. Mr. Johnson read from subsection (1), which
says, "'advanced life support' means emergency care techniques
provided under the written or oral orders of a physician that
include, but are not limited to, electric cardiac defibrillation
...."
Number 0092
MR. JOHNSON suggested if they inserted "manual" there, it would
simply say a person has to be appropriately licensed or certified
to use a manual defibrillator. "But that would not require
automated defibrillators to come under this requirement," he
pointed out.
Number 0128
REPRESENTATIVE PORTER asked Ms. Swenson whether she would accept a
conceptual amendment to include that in the bill.
MS. SWENSON said that would be fine.
Number 0150
KEVIN JARDELL, Legislative Administrative Assistant to
Representative Joe Green, spoke as the committee aide, noting that
it may or may not require a title change.
CHAIRMAN GREEN said they are still talking about civil liability
for use of a defibrillator.
Number 0210
REPRESENTATIVE CROFT suggested a conceptual amendment to make the
same things they are talking about here partially immunized and not
illegal.
Number 0234
MR. JARDELL stated his understanding that the conceptual amendment
includes that this is not an illegal act, that the liability is
immunized and the actual activity is legal and allowable.
CHAIRMAN GREEN noted that is under the statute cited in Title 18.
Number 0279
REPRESENTATIVE PORTER said as he understood Mr. Johnson's reading
of that statute, the only required amendment is to add "manual" in
front of "electrical"," as they have here, but in the other statute
[AS 18.08.090].
CHAIRMAN GREEN asked whether everyone understood the conceptual
amendment and whether there was any objection. Hearing no
objection, he announced that it was adopted.
Number 0335
REPRESENTATIVE BERKOWITZ, noting that his grandmother is an English
teacher, suggested that on page 2, line 20, it would be better to
say "consistently" instead of "consistent."
CHAIRMAN GREEN agreed it is an adverb.
REPRESENTATIVE ROKEBERG said he believes adverbs are discouraged by
the drafting manual.
Number 0437
REPRESENTATIVE ROKEBERG made a motion to move HB 395, Version E [0-
LS1560\E, Ford, 3/5/98], as amended, from committee with individual
recommendations and with the attached zero fiscal note.
CHAIRMAN GREEN asked whether there was any objection. There being
none, CSHB 395(JUD) moved from the House Judiciary Standing
Committee.
HB 196 - WILLS, TRUSTS, & OTHER TRANSFERS
Number 460
CHAIRMAN GREEN announced the committee would hear HB 196, "An Act
relating to wills, intestacy, nonprobate transfers, and trusts; and
amending Rule 24, Alaska Rules of Civil Procedure," sponsored by
Representative Ryan.
Number 545
REPRESENTATIVE JOE RYAN came before the committee to explain the
legislation. He noted there is a proposed committee substitute,
Version B. He read the following statement into the record:
"The bill makes a number of important improvements to Alaska's
estate and trust laws. Sections 1 to 8, 18 and 19 of the bill
changes Alaska law to permit a person who is domiciled outside of
Alaska to select Alaska as their jurisdiction for the probate of
his or her estate. This provision should bring significant
business to the state. In other jurisdictions they give the
attorneys a percentage of the estate as fee. Alaska doesn't, you
only get the time you spend and it will keep people from
necessarily having to go to another state to probate the will. It
can be probated here in Alaska.
"Sections 9 and 10 of the bill allow a person to limit the
liability of a trustee in his or her trust when more than one
trustee is serving. The person could provide only the trustee who
exercises a power will be held liable for its actions and that the
other trustees who did not participate in the exercise of the power
would not be held liable for that (indisc.) other trustee. This
provision will encourage trustees in Alaska to work with other
trustees of the same trust.
"The Uniform Trust Act included in Section 11 which clarifies many
issues involving the administration of trusts in Alaska.
"Section 12 protects an Alaska trustee who in good faith defends an
Alaska trust from the claims of a creditor who seeks to set the
trust aside. If the trustee acts in good faith, then the trustee
gets a first lien on all trust assets for payment of its fees,
costs and attorneys' fees. Delaware has adopted a similar
provision to protect its trustees.
"Section 14 clarifies that a trust created in another state or
country can be moved to Alaska even though the trust was settled
before the Alaska Trust Act was passed last year.
"The Uniform Trustee's Powers Act is enacted in Section 16. Alaska
does not have a statutory provision that sets out the powers of a
trustee. These statutory powers would supplement the powers set
forth in a trust agreement.
"A number of miscellaneous provisions are included elsewhere in the
bill. Section 15 allows a person to include a penalty clause in
his or her trust. Section 17 clarifies the accounting of bond
premiums and discounts. Section 20 amends AS 34.40.110(d) to be
consistent with the Uniform Fraudulent Transfers Act. Section 21
precludes an action by creditors of the grantor of the trust
against those who assist in the creation of the trust.
"The bill will improve our estate and trust laws and will make
Alaska's laws more favorable to our residents. In addition, the
bill will make our laws more attractive to people outside of Alaska
who are considering Alaska for the administration of their estates
and trusts."
REPRESENTATIVE RYAN noted that Richard Thwaites, a practicing
attorney and the immediate past chairman of the state planning
section of the Alaska Bar, would explain the technical aspects of
the bill.
Number 716
RICHARD THWAITES, Attorney, came before the committee to answer
questions.
REPRESENTATIVE ROKEBERG said he would like to know what the bill
does.
MR. THWAITES said, "We are looking at Alaska, because of this new
trust act, as a destination jurisdiction for this. Basically, what
has happened in many of the national meetings everybody is now very
attentive to Alaska as being the location to go for estate
planning. This takes that one step further in that let's say that
one of your relatives died in Kansas or some other jurisdiction
because a defibrillator didn't work. There was no other relative
down there and no reason for you, as the person who is doing the
administration of the estate, to go down there. This bill provides
that you can actually do that administration here in Alaska in your
home or residence. And you just need to apply the Kansas law to
the Kansas real estate or whatever that might be. And so it
permits the jurisdiction of the court to extend to those types of
probates. And even in our probate code, it is discretionary on the
person to bring the action here. So in all of the other states
it's likewise discretionary and they don't have to have a probate
in that state if no assets are required. This also defers to that
other jurisdiction which means if there is somebody down there who
says, 'No, we want to have the probate there,' then you're going to
have to defer to that jurisdiction. So if the Kansas court did
come up and say they would have a priority, so this is only in a
situation where no one is objecting. Typically, that would be the
younger generation here wanting to do it there."
MR. THWAITES continued, "Further than that, it actually goes a
little further and it allows perhaps someone setting up in an
Alaska trust to also, as part of their state plan, suggest that
Alaska would be the designated jurisdiction for the administration
of their estate, say where there is a (indisc.) provision in their
will that whatever assets are still in their estate pours over to
their Alaska trust. (Indisc.) omit that administration."
MR. THWAITES explained that California requires many hearings and
a definitive process to go through the probate process. It also
sets up statutory fees on a percentage basis of the estate. He
said that as a result, many states have living trusts as the
primary form of estate planning for the purpose of avoiding probate
in those jurisdictions. He said Maine, Kentucky, Wisconsin, Alaska
and Idaho are five states which do not have percentage fees. For
that reason, it is often very convenient to go into the Alaska
court where we have a nonintervention system. This means that no
one ever has to attend a hearing or go to court, you merely hand
the petition to the court. The court then authorizes a personal
representative to act as long as the personal representative swears
they will abide by all the probate rules. Mr. Thwaites said after
distributions have occurred and after the minimum requirements have
been met with the Department of Revenue, et cetera, there is a
closing letter that they have to issue, when those things are done,
the personal representative files a sworn statement closing the
estate. That is called an informal administration of an estate
which is fairly common to the 14 jurisdictions that have the
uniform probate code. Mr. Thwaites said this, in essence, extends
this option to all of the citizens of the United States which means
that the lawyers, certified public accountants, trust officers, et
cetera, might get additional business as a result of that. The
state of Alaska would receive the additional fees for the filings,
et cetera, that is also required.
MR. THWAITES pointed out that as a result of the Alaska Trust Act,
one slight bonus has happened. In many of the state jurisdictions,
the professors and so forth in those states are now recommending to
their perspective lawyers that when considering the Alaska as
jurisdiction for either trusts or estates, if they really want to
make it solid they won't transfer some of their assets to Alaska,
they will transfer a majority of their assets to Alaska. From a
conservative standpoint, that means that you are solidly within
both the situs meaning you've designated Alaska as a jurisdiction
and the minority opinion which is substantial contact. There are
two opinions on how to determine whether Alaska is the appropriate
jurisdiction or not. By placing a majority of your assets that are
in trust with the Alaska administrators and so forth, you have met
both tests. Mr. Thwaites noted that the Oregon Bar, in a January
letter to their members, has given a description about how to set
these up. In their recommendation they suggest you ought to really
have substantial contacts with Alaska, as well as declaring a situs
of the jurisdiction. This is a further enhancement of that
permitting, in the probate code a portion of the statute,
designation of Alaska as the jurisdiction in the will as well as in
the trust. It doesn't override the other.
Number 1095
CHAIRMAN GREEN said if you are going to transfer the assets of real
property, that would be sold in the other state and be subject to
any taxations. He referred money or jewelry and asked if there
would be a taxation before they would be removed from that
jurisdiction to Alaska jurisdiction.
Number 1131
MR. THWAITES explained that under the current common law of the
United States, the tangible personal property passes in the state
of which the person is domiciled. If someone in Oregon had
tangible personal property, Oregon would impose a tax on that
tangible personal property. However, if they had placed that
property in an Alaska trust, the domicile of that property is then
Alaska. Then the portion of the estate tax return concerning the
tangible personal property, even though it's a Florida resident,
would be paid to the Alaska Department of Revenue under the trust.
REPRESENTATIVE BERKOWITZ asked who is opposed to the bill and why.
Number 1225
MR. THWAITES responded that it would be the other jurisdictions
that want to impose or protect their right to tax and levy against
those assets. There is a certain right of the citizens of the
United States, under the U.S. Constitution, to be able to freely
transfer these things back and forth. He explained that Delaware's
reaction to our last trust bill was that within 19 days after
Alaska had passed legislation, they introduced and passed a similar
statute. They even cited the Alaska statute as what they were
trying to copy. He said, "They kind of messed it up because there
were some other things that were placed in there that didn't make
it work for tax reasons and they're attempting to straighten those
out this years. But I think that Delaware and South Dakota are
likewise trying to capitalize on being a destination situs, if you
will, for those kinds of assets and it only affects the
personality, it doesn't affect the real estate."
REPRESENTATIVE BERKOWITZ asked if there is any Alaskan opposition.
MR. THWAITES responded that he isn't aware of any.
Number 1259
CHAIRMAN GREEN asked if HB 196 is an addendum to the legislation
passed last year. He asked if HB 196 covers intestation.
MR. THWAITES explained the legislation last year covered the trust
law. There are many parts to HB 196. The main part of the bill,
as far as probate goes, is the probate portion. Mr. Thwaites
referred to the section regarding the trustees that Representation
Ryan spoke about does affect the corporate fiduciaries or
individual fiduciaries that might be involved. He said, "For
example, if your bother-in-law and sister-in-law acted as a trustee
along with an Alaska bank or someone else, they wouldn't be liable
for the bank's actions and the bank wouldn't be liable for their
actions. So it makes it more acceptable for those corporate
fiduciaries to accept that work. Presently, in most jurisdictions
the corporate fiduciaries -- if they're going to have some
liability, they're concern about, 'If I have a little bit of the
liability, I'm going to have all the liability.' And they're less
than willing to go ahead and co-administer a fund and this will
limit that exposure and encourage co-administration so that you
have a family member involved, perhaps with the corporate fiduciary
and not having the liability pass back and forth one to the other."
Number 1330
REPRESENTATIVE CROFT said there are some portions of the bill that
are uniform laws or come from uniform reforms. There are some that
merely relate to transferability of trust properties. He said
those seem to him to be acceptable because he tends to trust the
uniform drafters. A transfer type of operation seems to him to be
substantively neutral. It just allows them to bring the trust
property to Alaska or it expedites the ways they can do that.
Representative Croft stated he is more interested in the
substantive changes. He said, "Aside from the ones that we've have
adopted out of uniform laws and aside from things that simply
relate to how someone would transfer their trust property up here,
what are the major substantive changes to our trust law? And in
particular, I'm concerned about the penalty clause in Section 15 --
an explanation of why that's good public policy."
MR. THWAITES said he would defer the question to Richard Hompesch
who has spent a considerable amount of time working on the statute.
Number 1427
REPRESENTATIVE PORTER referred to Section 19 and said he doesn't
understand the term "or otherwise." He read, "A cause of action or
claim for relief with respect to a fraudulent transfer under
(b)(1)," which describes a "fraudulent transfer" of this section
"or otherwise is extinguished unless the action is brought."
MR. THWAITES explained he thinks it is meant to broaden this
limitation to correspond to the statute that was adopted under our
trust act. He noted there is also a 4-year, 1-year statute. This
makes it consistent and it expands that definition to cover the
broader terminologies. Mr. Thwaites said he believes Mr. Hompesch
can speak to that. He said basically, it brings the existing
statute in compliance with trust statute. Mr. Thwaites referred to
the Uniform Trust Act that is referred to in the bill and said
there was a comment by the Attorney General's Office last year
about that because the uniform commissioners are talking about
modifying the Uniform Act. He said, "What we have here was the
existing Uniform Act that was in existence and is currently the law
for the state of Alaska, not the new revised version that they
haven't adopted. We also adopted the 1993 version of the Uniform
Probate Code, and so there are many versions of that and there are
lots of variations. And while ours is called the 'Uniform Probate
Code,' we did not adopt all the provisions out of it, and there are
provisions for variations there." Mr. Thwaites said that whenever
we have a uniform act, he believes the connotation is that we are
substantially similar and our concept is the same as the Uniform
Act, but every state has a little variation, one way or the other,
from those acts.
Number 1594
BOB MANLEY, Attorney, testified via teleconference from Anchorage.
He noted he is primarily involved in estate planning. He urged the
committee to adopt the proposed committee substitute language as
it is an improvement of the Alaska Trust Act. It basically
generates greater (indisc.) action for people disposing of their
property. The Alaska Trust Act that was passed last year has
received a lot of national commentary. Mr. Manley referred to the
Heckerly (ph) Institute in Florida and said one of the (indisc.)
involved "North to The Future, The Alaska Trust," which establishes
Alaska as a situs for money management. He said it is important to
keep current and modify with the current trends.
MR. MANLEY referred to Representative Porter having a question
about the Fraudulent Transfers Act and said, "What this provision
regarding the 4-year and 1-year statute of limitations does is
adopt exactly the language or almost exactly the language of the
Uniform Fraudulent Transfers Act which is that the cause of action
is extinguished after that 4-year or 1-year period run. And
previously, we simply provided that the cause of action I believe
expired or at least was no longer brought. So it was procedural
rather than substance and the change, (1) the patterns that's
closer to that - Uniform Fraudulent Transfer statute of limitation;
and second, it makes it more likely that a court outside of Alaska
will recognize the validity of our statute of limitations and
that's Section 19."
MR. MANLEY continued, "The other thing that I want to point out and
urge you to consider favorably is the new Section 20 which provides
that if a fraudulent conveyance action is brought and it's
acceptable -- in other words, if somebody was trying to cheat their
creditor and they knew who their creditors were and they hid the
money in the Alaska trust, the Alaska court and any other courts
are going to approve invasion of that. However, if because of the
expiration of the statute of limitations are otherwise the Alaska
courts do not view it as a fraudulent conveyance. If it's, as Mr.
Thwaites mentioned, one of those future - future (indisc.)
creditors in the future. What this does is it prevents the
creditor from going in the back door and instead of getting to the
trust assets, suing the trustee for conspiracy to commit a
fraudulent conveyance or the equivalent which might have a
different statute of limitations. So simply this makes it better
or safer for individuals and institutions (indisc.) trustees. I
think if you follow the local bank stocks you'll see that NBA
(National Bank of Alaska) has had a tremendous runoff in the last
year, North Rim has been shooting up. We've got a new Alaska trust
company. There are some new financial institutions also that
looking at Alaska seriously for establishing bases of operation and
this kind of improvement in the law makes it more likely that we
can continue this good clean new industry of money management for
Alaska. Thank you."
Number 1805
REPRESENTATIVE JAMES made a motion to adopt the proposed committee
substitute for HB 196, Version B, Bannister, 3/4/98. There being
no objection, the proposed committee substitute for HB 196 was
before the committee.
Number 1817
JOHNNY GRAMES testified via teleconference from Anchorage. He
said, "I am not here to talk about my own case. But as a parent,
I'm -- that you're setting up Alaskans (indisc.) to get policed by
predators operating under these laws that are set up by the
judiciary branch of government and lobbied by these lying lawyers.
And I don't know how else to warn the people what's happening. And
Mr. Thwaites is a crook and he sold out my sons who are beneficiary
to my mother's estate - our family estate which -- my father came
here in 1915 and built up and now the lawyers and bankers are going
to be able to steel the estate for the next 22 years. Now the
reason you don't hear about this is because the court system is
totally politicized and corrupted and I'm not able to appeal -- not
able to file a due process appeal so I (indisc.) block from access
to the court to petition the government for (indisc.) which is a
constitutional right so that nobody knows about this. And you will
not hear it with the Alaska Commission on Judicial Conduct with the
probate master and the judges...."
CHAIRMAN GREEN interjected and asked Mr. Grames to conclude his
testimony.
MR. GRAMES continued, "Also, Mr. Thwaites appointed a guardian ad
litem over my son and I am the father and the trustee and he lives
with me. And the court system went along with it. So a trustee
has power over my son and we have no privacy and we are unable to
protect him from the guardian and from court control and that's Mr.
Thwaites that you're depending on."
Number 1954
RICHARD HOMPESCH, Attorney, testified via teleconference from
Fairbanks. He said that Representative Croft asked about Section
15. Mr. Hompesch said, "The policy behind Section 15, which is the
penalty provision, goes as follows: If I want to set up a trust,
Section 15 clarifies that I can have a provision in the trust that
says if any of my children who are beneficiaries of the trust sue
the trustee, the trustee can deduct its attorneys fees from that
child's share. And many times we have - estate planners have
clients who have difficult children who are very prone to frivolous
litigation. And as you know rule 82, which is our attorneys fee
provision, rarely provides (indisc.) for a board of attorneys fees
when litigation is filed that's frivolous. So this type of penalty
provision would allow a person setting up a trust to charge their
beneficiary, who filed the frivolous litigation, for the costs.
Without such a provision, all the beneficiaries of the trust would
have to share the legal fees for defending the frivolous
litigation. And I figure it's good policy to allow such a clause
under Alaska law because what the Community Property Act and other
provisions of our new laws, this penalty provision is completely
optional. If a person chooses to (indisc.) or include a penalty
provision in their trust, they may. It's provided, it's allowed
under Alaska law. Most people may choose not to. So as a matter
of freedom of choice, I think it's a good policy for Alaska.
Unless there are other questions, I'd like to thank you and urge
you to pass House Bill 196.
REPRESENTATIVE CROFT said that he didn't see in Section 15 that the
lawsuit had to be frivolous. It said, "even if probably cause
existed instituting the proceedings." He said these can valid but
losing suits, not just frivolous suits.
MR. HOMPESCH stated, "Yes, the penalty provision merely says that
if you want to provide a penalty provision, it could say that even
if the beneficiary claim is meritorious that the penalty provision
could still apply. Now I'm not here to say that such a penalty
provision should be included. I think most of my clients would
probably say -- you know they would prefer a penalty provision that
would apply if the litigation was frivolous. But it's important to
remember that most of the trusts that I think Mr. Thwaites, Mr.
Manley, myself and other attorneys in Alaska are doing today have
trust protector clauses. A trust protector clause allows someone
- some trusted advisor in the family to remove the trustee without
cause. So It would seem to me that this penalty provision would
encourage the resolution of disputes through the trust protector
and not through our court system."
CHAIRMAN GREEN thanked Mr. Hompesch for his testimony. He
indicated the HB 196 would be held for further consideration.
ADJOURNMENT
Number 2126
CHAIRMAN GREEN adjourned the House Judiciary Standing Committee
meeting at 3:20 p.m.
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