03/11/2022 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB11 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 11 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 11, 2022
1:07 p.m.
MEMBERS PRESENT
Representative Matt Claman, Chair
Representative Liz Snyder, Vice Chair
Representative Harriet Drummond
Representative Jonathan Kreiss-Tomkins
Representative David Eastman
Representative Christopher Kurka
MEMBERS ABSENT
Representative Sarah Vance
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 11(JUD)
"An Act relating to community property and to community property
trusts; and providing for an effective date."
- MOVED CSSB 11(JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 11
SHORT TITLE: COMMUNITY PROPERTY TRUSTS
SPONSOR(s): SENATOR(s) BEGICH
01/22/21 (S) PREFILE RELEASED 1/8/21
01/22/21 (S) READ THE FIRST TIME - REFERRALS
01/22/21 (S) L&C, JUD
03/10/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/10/21 (S) -- MEETING CANCELED --
03/12/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/12/21 (S) Heard & Held
03/12/21 (S) MINUTE(L&C)
03/19/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/19/21 (S) Moved SB 11 Out of Committee
03/19/21 (S) MINUTE(L&C)
03/22/21 (S) L&C RPT 4DP
03/22/21 (S) DP: COSTELLO, GRAY-JACKSON, STEVENS,
HOLLAND
05/05/21 (S) JUD AT 1:30 PM BUTROVICH 205
05/05/21 (S) Heard & Held
05/05/21 (S) MINUTE(JUD)
05/10/21 (S) JUD AT 1:30 PM BUTROVICH 205
05/10/21 (S) Moved CSSB 11(JUD) Out of Committee
05/10/21 (S) MINUTE(JUD)
05/11/21 (S) JUD RPT CS 3DP 2NR SAME TITLE
05/11/21 (S) DP: HOLLAND, HUGHES, KIEHL
05/11/21 (S) NR: MYERS, SHOWER
05/17/21 (S) TRANSMITTED TO (H)
05/17/21 (S) VERSION: CSSB 11(JUD)
05/18/21 (H) READ THE FIRST TIME - REFERRALS
05/18/21 (H) L&C, JUD
02/02/22 (H) L&C AT 5:15 PM BARNES 124
02/02/22 (H) Heard & Held
02/02/22 (H) MINUTE(L&C)
02/14/22 (H) L&C AT 3:15 PM BARNES 124
02/14/22 (H) Moved CSSB 11(JUD) Out of Committee
02/14/22 (H) MINUTE(L&C)
02/16/22 (H) L&C RPT 5DP 2NR
02/16/22 (H) DP: SNYDER, MCCARTY, SCHRAGE,
SPOHNHOLZ, FIELDS
02/16/22 (H) NR: NELSON, KAUFMAN
02/25/22 (H) JUD AT 1:30 PM GRUENBERG 120
02/25/22 (H) Heard & Held
02/25/22 (H) MINUTE(JUD)
03/04/22 (H) JUD AT 1:00 PM GRUENBERG 120
03/04/22 (H) Heard & Held
03/04/22 (H) MINUTE(JUD)
03/11/22 (H) JUD AT 1:00 PM GRUENBERG 120
WITNESS REGISTER
SENATOR TOM BEGICH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, answered questions on
CSSB 11(JUD).
ABIGAIL O'CONNOR, Attorney
O'Connor Law Office, LLC
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on
CSSB 11(JUD).
ACTION NARRATIVE
1:07:08 PM
CHAIR MATT CLAMAN called the House Judiciary Standing Committee
meeting to order at 1:07 p.m. Representatives Eastman, Kriess-
Tomkins, Drummond, Snyder, and Claman were present at the call
to order. Representative Kurka arrived as the meeting was in
progress.
SB 11-COMMUNITY PROPERTY TRUSTS
1:07:38 PM
CHAIR CLAMAN announced that the only order of business would be
CS FOR SENATE BILL NO. 11(JUD), "An Act relating to community
property and to community property trusts; and providing for an
effective date."
REPRESENTATIVE EASTMAN asked for the status of any changes to
federal regulations associated with marital trusts.
1:08:54 PM
SENATOR TOM BEGICH, prime sponsor, Alaska State Legislature,
stated that he was unaware of any federal actions pertaining to
the proposed bill. He offered that the bill had been drafted in
response to a court case which had identified ambiguity in
existing statute pertaining to the appreciation of value.
REPRESENTATIVE EASTMAN asked whether community property trusts
are the same as grantor property trusts.
SENATOR BEGICH deferred to invited testifiers.
1:10:06 PM
ABIGAIL O'CONNOR, Attorney, O'Connor Law Office, LLC, answered
that a community property trust is a grantor trust, but a
grantor trust is not necessarily a community property trust.
She added that a grantor trust is one for which the grantor is
treated as the owner for income tax purposes. She stated that a
grantor trust may be either irrevocable or revocable. She added
that a community property trust, during the grantor's lifetime,
is revocable, or for a living trust, the income is taxed to the
grantors.
REPRESENTATIVE EASTMAN asked whether grantor trusts have
mandatory Internal Revenue Service (IRS) filings.
MS. O'CONNOR answered that any income to the grantor's trust
during the grantor's lifetime would be reported on the grantor's
income tax return. She added that, following the death of the
first grantor, part of the trust becomes irrevocable, then the
irrevocable trust is "siphoned off" and may result in a separate
filing requirement. She clarified that while both grantors are
still alive, there is no separate return required.
REPRESENTATIVE EASTMAN asked whether the initial formation of a
trust would address any potential ambiguities regarding
appreciation of assets.
MS. O'CONNOR answered that, in a perfect world, yes. She
speculated that practitioners [drafting trusts] assume that the
statute included this. She added that some trusts were created
without the inclusion of language regarding appreciation, with
the assumption appreciation was considered. She stated that,
should income and appreciation not be community property, then
there is no point in having community property law in Alaska.
SENATOR BEGICH stated that the comments offered by Ms. O'Conner
were the reason the the bill was drafted and before the
committee. He pointed out the intention of the original
legislation was that income and appreciation should be included
in community property. He stated that the proposed legislation
would remove any ambiguity from the statute.
1:14:09 PM
REPRESENTATIVE KREISS-TOMKINS asked for an explanation of the
retroactivity in Section 1 of the proposed legislation.
SENATOR BEGICH expressed the opinion that thousands of trust
agreements were drafted with the assumption the appreciation and
income would be a part of the trusts. He stated that when the
court case occurred, the matter was called into question. He
noted that a savings clause exists in the proposed legislation
so any cases filed before the effective date would not be
impacted, should it pass.
REPRESENTATIVE KREISS-TOMKINS asked whether May 23, 1998, was
the initial date of the original legislation.
SENATOR BEGICH answered that it was exactly the date this became
law.
REPRESENTATIVE EASTMAN observed that it is rare for the
legislative intent to be so clear, and this makes the process of
considering the proposed legislation easier.
REPRESENTATIVE KREISS-TOMKINS commented that he would be
extremely cautious regarding trust-related legislation because
of cases which have resulted in a "race to the bottom" for trust
laws. He added that there has been flawed legislation
previously introduced, which fortunately did not pass. He
expressed the opinion that flawed legislation and its resulting
"cottage industry" would be tantamount to making the rich
richer.
1:18:18 PM
REPRESENTATIVE SNYDER moved to report CSSB 11(JUD) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSSB 11(JUD) was
reported out of the House Judiciary Standing Committee.
1:18:39 PM
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 1:18 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 11 v. G 5.11.2021.PDF |
HJUD 2/25/2022 1:30:00 PM HJUD 3/4/2022 1:00:00 PM HJUD 3/11/2022 1:00:00 PM |
SB 11 |
| SB 11 Sponsor Statement v. G 2.17.2022.pdf |
HJUD 2/25/2022 1:30:00 PM HJUD 3/4/2022 1:00:00 PM HJUD 3/11/2022 1:00:00 PM |
SB 11 |
| SB 11 Sectional Analysis v. G 2.17.2022.pdf |
HJUD 2/25/2022 1:30:00 PM HJUD 3/4/2022 1:00:00 PM HJUD 3/11/2022 1:00:00 PM |
SB 11 |
| SB 11 Supporting Document - Supreme Court Phillips Decision 12.18.2020.pdf |
HJUD 2/25/2022 1:30:00 PM HJUD 3/4/2022 1:00:00 PM HJUD 3/11/2022 1:00:00 PM |
SB 11 |
| SB 11 Supporting Document - LISI Article 7.29.2019.pdf |
HJUD 2/25/2022 1:30:00 PM HJUD 3/4/2022 1:00:00 PM HJUD 3/11/2022 1:00:00 PM |
SB 11 |
| SB 11 Supporting Document - Community Property Trust Act.pdf |
HJUD 2/25/2022 1:30:00 PM HJUD 3/4/2022 1:00:00 PM HJUD 3/11/2022 1:00:00 PM |
SB 11 |
| SB 11 Fiscal Note JUD-ACS 2.2.2022.pdf |
HJUD 2/25/2022 1:30:00 PM HJUD 3/4/2022 1:00:00 PM HJUD 3/11/2022 1:00:00 PM |
SB 11 |