Legislature(2001 - 2002)

04/08/2002 01:45 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE JUDICIARY STANDING COMMITTEE                                                                             
                         April 8, 2002                                                                                          
                           1:45 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Norman Rokeberg, Chair                                                                                           
Representative Jeannette James                                                                                                  
Representative John Coghill                                                                                                     
Representative Kevin Meyer                                                                                                      
Representative Ethan Berkowitz                                                                                                  
Representative Albert Kookesh                                                                                                   
MEMBERS ABSENT                                                                                                                
Representative Scott Ogan, Vice Chair                                                                                           
OTHER LEGISLATORS PRESENT                                                                                                     
Representative Harry Crawford                                                                                                   
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 317                                                                                                              
"An Act relating to stalking and amending Rule 4, Alaska Rules                                                                  
of Civil Procedure, and Rule 9, Alaska Rules of Administration."                                                                
     - MOVED CSHB 317(JUD) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 295                                                                                                              
"An Act relating to prohibiting the use of cellular telephones                                                                  
when operating a motor vehicle; and providing for an effective                                                                  
     - HEARD AND HELD                                                                                                           
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 316                                                                                       
"An Act  relating to trusts,  including trust protectors,  trustee                                                              
advisors,  and transfers  of trust  interests,  and to  creditors'                                                              
claims against  property subject  to a  power of appointment;  and                                                              
providing for an effective date."                                                                                               
     - MOVED SSHB 316 OUT OF COMMITTEE                                                                                          
PREVIOUS ACTION                                                                                                               
BILL: HB 317                                                                                                                  
SHORT TITLE:STALKING & PROTECTIVE ORDERS                                                                                        
SPONSOR(S): REPRESENTATIVE(S)CRAWFORD                                                                                           
Jrn-Date   Jrn-Page                      Action                                                                                 
01/14/02     1958       (H)         PREFILE RELEASED 1/11/02                                                                    
01/14/02     1958       (H)         READ THE FIRST TIME -                                                                       
01/14/02     1958       (H)         JUD, FIN                                                                                    
01/28/02     2086       (H)         COSPONSOR(S): GUESS                                                                         
03/06/02                (H)         JUD AT 1:00 PM CAPITOL 120                                                                  
03/06/02                (H)         Heard & Held                                                                                
03/18/02     2593       (H)         COSPONSOR(S): DYSON                                                                         
04/08/02                (H)         JUD AT 1:00 PM CAPITOL 120                                                                  
BILL: HB 295                                                                                                                  
SHORT TITLE:PROHIBIT CELL PHONE USE WHEN DRIVING                                                                                
SPONSOR(S): REPRESENTATIVE(S)LANCASTER                                                                                          
Jrn-Date   Jrn-Page                      Action                                                                                 
01/14/02     1952       (H)         PREFILE RELEASED 1/4/02                                                                     
01/14/02     1952       (H)         READ THE FIRST TIME -                                                                       
01/14/02     1952       (H)         JUD                                                                                         
01/14/02     1952       (H)         REFERRED TO JUDICIARY                                                                       
03/18/02                (H)         JUD AT 1:00 PM CAPITOL 120                                                                  
03/18/02                (H)         Scheduled But Not Heard                                                                     
03/27/02                (H)         JUD AT 1:00 PM CAPITOL 120                                                                  
03/27/02                (H)         -- Meeting Canceled --                                                                      
04/08/02                (H)         JUD AT 1:00 PM CAPITOL 120                                                                  
BILL: HB 316                                                                                                                  
SHORT TITLE:POWERS OF APPOINTMENTS/TRUSTS/CREDITORS                                                                             
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE                                                                                            
Jrn-Date   Jrn-Page                      Action                                                                                 
01/14/02     1958       (H)         PREFILE RELEASED 1/11/02                                                                    
01/14/02     1958       (H)         READ THE FIRST TIME -                                                                       
01/14/02     1958       (H)         JUD                                                                                         
03/01/02     2438       (H)         SPONSOR SUBSTITUTE INTRODUCED                                                               
03/01/02     2438       (H)         READ THE FIRST TIME -                                                                       
03/01/02     2438       (H)         JUD                                                                                         
04/08/02                (H)         JUD AT 1:00 PM CAPITOL 120                                                                  
WITNESS REGISTER                                                                                                              
DAVID D'AMATO, Staff                                                                                                            
to Representative Harry Crawford                                                                                                
Alaska State Legislature                                                                                                        
Capitol Building, Room 426                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  On behalf of the sponsor, Representative                                                                   
Crawford, presented Version R of HB 317.                                                                                        
ANNE CARPENETI, Assistant Attorney General                                                                                      
Legal Services Section-Juneau                                                                                                   
Criminal Division                                                                                                               
Department of Law (DOL)                                                                                                         
PO Box 110300                                                                                                                   
Juneau, Alaska  99811-0300                                                                                                      
POSITION STATEMENT:  Noted that the administration supports HB                                                                  
REPRESENTATIVE KEN LANCASTER                                                                                                    
Alaska State Legislature                                                                                                        
Capitol Building, Room 421                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Sponsor of HB 295.                                                                                         
JUSTIN CARRO, Intern                                                                                                            
to Representative Ken Lancaster                                                                                                 
Alaska State Legislature                                                                                                        
Capitol Building, Room 421                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Assisted with the presentation of HB 295.                                                                  
MARY MARSHBURN, Director                                                                                                        
Division of Motor Vehicles (DMV)                                                                                                
Department of Administration (DOA)                                                                                              
3300B Fairbanks Street                                                                                                          
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:  Provided comments during discussion of HB                                                                  
DAVID HUDSON, Captain                                                                                                           
Administrative Services Unit                                                                                                    
Central Office                                                                                                                  
Division of Alaska State Troopers (AST)                                                                                         
Department of Public Safety (DPS)                                                                                               
5700 East Tudor Road                                                                                                            
Anchorage, Alaska  99507-1225                                                                                                   
POSITION STATEMENT:  Provided comments during discussion of HB                                                                  
MARK LOSCHKY, Regional Director                                                                                                 
External Affairs                                                                                                                
AT&T Wireless Services, Inc.                                                                                                    
617 Eastlake Avenue East                                                                                                        
Seattle, Washington  98109                                                                                                      
POSITION STATEMENT:  Testified in opposition to HB 295.                                                                         
ROGER BURNS                                                                                                                     
2559 Dale Road                                                                                                                  
Fairbanks, Alaska  99709                                                                                                        
POSITION STATEMENT:  Testified in opposition to HB 295.                                                                         
MARY ANN PEASE, Vice President                                                                                                  
Corporate Communications                                                                                                        
Alaska Communications Systems (ACS)                                                                                             
600 Telephone Avenue                                                                                                            
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:  Provided comments during discussion of HB                                                                  
JOAN PRIESTLEY, M.D.; Associate                                                                                                 
Assembly of Learning and Health (ph)                                                                                            
3705 Arctic Boulevard                                                                                                           
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:  Testified in opposition to HB 295.                                                                         
REPRESENTATIVE LESIL McGUIRE                                                                                                    
Alaska State Legislature                                                                                                        
Capitol Building, Room 418                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Sponsor of SSHB 316.                                                                                       
STEPHEN E. GREER, Attorney at Law                                                                                               
PO Box 24-2903                                                                                                                  
Anchorage, Alaska  99524-2903                                                                                                   
POSITION STATEMENT:  Assisted with the presentation of SSHB 316                                                                 
and responded to questions.                                                                                                     
DOUGLAS J. BLATTMACHR, President                                                                                                
Chief Executive Officer (CEO)                                                                                                   
Alaska Trust Company                                                                                                            
1029 West Third Avenue, Suite 601                                                                                               
Anchorage, Alaska  99501-1981                                                                                                   
POSITION  STATEMENT:    Testified  in  support  of  SSHB  316  and                                                              
responded to questions.                                                                                                         
DAVID G. SHAFTEL, Attorney                                                                                                      
550 West 7th Avenue, Suite 705                                                                                                  
Anchorage, Alaska  99501                                                                                                        
POSITION STATEMENT:   Urged  the committee's  support of  SSHB 316                                                              
and responded to questions.                                                                                                     
ACTION NARRATIVE                                                                                                              
TAPE 02-45, SIDE A                                                                                                              
Number 0001                                                                                                                     
CHAIR  NORMAN   ROKEBERG  called  the  House   Judiciary  Standing                                                              
Committee  meeting back  to order  at 1:45  p.m.   Representatives                                                              
Rokeberg,  James,  Coghill,  Meyer, Berkowitz,  and  Kookesh  were                                                              
present at  the call to  order.  [For  minutes on the  Division of                                                              
Insurance update, see the 1:15 p.m. minutes for this date.]                                                                     
HB 317 - STALKING & PROTECTIVE ORDERS                                                                                         
Number 0021                                                                                                                     
CHAIR ROKEBERG  announced that the  first order of  business would                                                              
be HOUSE BILL NO.  317, "An Act relating to stalking  and amending                                                              
Rule  4, Alaska  Rules  of Civil  Procedure,  and  Rule 9,  Alaska                                                              
Rules  of Administration."   [Adopted  as a work  draft on  3/6/02                                                              
was the  proposed committee  substitute (CS)  for HB 317,  version                                                              
22-LS1258\J, Luckhaupt,  3/5/02.]   Chair Rokeberg noted  that the                                                              
committee also  had for its  consideration the proposed  committee                                                              
substitute  (CS)  for  HB  317,  version  22-LS1258\R,  Luckhaupt,                                                              
Number 0029                                                                                                                     
REPRESENTATIVE  BERKOWITZ moved  to adopt  the proposed  committee                                                              
substitute  (CS)  for  HB  317,  version  22-LS1258\R,  Luckhaupt,                                                              
4/5/02, as  a work  draft.   There being  no objection,  Version R                                                              
was before the committee.                                                                                                       
Number 0072                                                                                                                     
DAVID  D'AMATO, Staff  to  Representative  Harry Crawford,  Alaska                                                              
State  Legislature, sponsor,  said,  on behalf  of  Representative                                                              
Crawford, that to  alleviate concerns expressed by  the committee,                                                              
Version  R  does  not  include  the  mandatory  arrest  provisions                                                              
regarding child protective injunctions.  He elaborated:                                                                         
     [Subsections  (a)(1)  and   (2)  of  Section  1]  simply                                                                   
     identify  how someone  goes about  committing the  crime                                                                   
     of violating  a protective  order.  [Subsection  (a)(1)]                                                                   
     indicates  that  that  section is  a  domestic  violence                                                                   
     protective  order,  and  [subsection  (a)(2)]  indicates                                                                   
     that  it is now  a new  ... [paragraph]  for a  stalking                                                                   
     protective order.   Section 2 of the bill  ... redefines                                                                   
     a domestic  violence protective  order on [page  2, line                                                                   
     6]; that's  redefined as  AS 11.56.740(a)(1), which,  as                                                                   
     I  stated earlier,  just  refers  only to  the  domestic                                                                   
     violence  protective  order, which  is  already in  law.                                                                   
     So,  there's   no  mandatory   arrest  for  a   stalking                                                                   
     protective order under ... [Version R].                                                                                    
     Section  3 gets  into the  particulars  of the  stalking                                                                   
     protective  orders,  and this  - again,  to  accommodate                                                                   
     the   committee   -  follows   the   domestic   violence                                                                   
     protective-order  language as  closely as  it can  while                                                                   
     still  maintaining  that  it's   acting  as  a  stalking                                                                   
     protective  order.    In  this   regard,  the  bill  was                                                                   
     modified  to   that  method   to  make  it   easier  for                                                                   
     practitioners   to  understand   what  the   legislative                                                                   
     intent  was.   ... Nothing  else has  really changed  in                                                                   
     terms  of the  definitions;  it's just  simply  followed                                                                   
     the domestic  violence protective-order bill,  which was                                                                   
     the majority of the committee's concern.                                                                                   
Number 0235                                                                                                                     
ANNE  CARPENETI,   Assistant  Attorney  General,   Legal  Services                                                              
Section-Juneau, Criminal  Division, Department of Law  (DOL), said                                                              
simply that the DOL supports HB 317.                                                                                            
Number 0333                                                                                                                     
REPRESENTATIVE  JAMES  moved  to  report  the  proposed  committee                                                              
substitute  (CS)  for  HB  317,  version  22-LS1258\R,  Luckhaupt,                                                              
4/5/02, out of  committee with individual recommendations  and the                                                              
[accompanying]  fiscal  notes.   There  being no  objection,  CSHB                                                              
317(JUD)  was  reported  out  of   the  House  Judiciary  Standing                                                              
CHAIR ROKEBERG called an at-ease from 1:50 p.m. to 1:52 p.m.                                                                    
HB 295 - PROHIBIT CELL PHONE USE WHEN DRIVING                                                                                 
Number 0360                                                                                                                     
CHAIR ROKEBERG  announced that  the next  order of business  would                                                              
be HOUSE  BILL NO. 295,  "An Act relating  to prohibiting  the use                                                              
of  cellular  telephones  when  operating  a  motor  vehicle;  and                                                              
providing for an effective date."                                                                                               
Number 0438                                                                                                                     
REPRESENTATIVE KEN  LANCASTER, Alaska State  Legislature, sponsor,                                                              
offered  that HB  295  will help  ensure  the  safety of  Alaska's                                                              
roadways  by  limiting  the  use  of  cellular  telephones  ("cell                                                              
phones")  in  motor  vehicles  to only  "hands-free"  units.    He                                                              
remarked that new  technologies are available for  hands-free cell                                                              
phones,  and indicated  that HB  295 encourages  the use of  those                                                              
type of units in  motor vehicles.  He remarked  that AT&T Wireless                                                              
Services, Inc., is  giving away a hands-free unit  with every cell                                                              
phone that it sells,  and that there are mechanisms  with which to                                                              
convert  a  car radio  into  a  speaker  for  a cell  phone,  thus                                                              
turning  a  regular  cell  phone  into  a  hands-free  unit.    He                                                              
suggested  that encouraging  "non-use"  of  [regular] cell  phones                                                              
will save  lives, adding that "everyone  must share the  road, and                                                              
we all share in the safety concerns of others."                                                                                 
REPRESENTATIVE JAMES  referred to subsection (c)  [of the proposed                                                              
committee substitute  (CS) for HB 295, version  22-LS1176\F, Ford,                                                              
2/11/02  ("Version F")],  which says,  "'cellular telephone'  does                                                              
not mean a citizens  band radio".  She noted that  a lot of people                                                              
-  for  example,  those  in the  trucking  industry  -  depend  on                                                              
citizens band  (CB) radios,  and asked why  using a cell  phone is                                                              
different from using a CB radio.                                                                                                
REPRESENTATIVE  LANCASTER said  that he  did not  know that  it is                                                              
any different;  however,  HB 295  is not attempting  to limit  the                                                              
use of  a technology -  such as that for  CB radio -  that already                                                              
has a  commercial use  established.  He  mentioned that  the types                                                              
of  CB radios  that he  was familiar  with had  the capability  of                                                              
being used  in a hands-free  manner, and  he is assuming  that the                                                              
same is true of modern versions.                                                                                                
REPRESENTATIVE  MEYER,  acknowledging  that  using  a  cell  phone                                                              
while  driving   can  be  distracting,  noted  that   handouts  in                                                              
members'   packets   list   several   other   types   of   driving                                                              
distractions:    things  outside  the  vehicle,  other  occupants,                                                              
adjusting  audio  equipment  and   climate  controls,  eating  and                                                              
drinking,  to  name  a  few.    He  pondered  whether,  while  the                                                              
legislature  is attempting  to limit  cell phone  use and  thereby                                                              
the distraction caused  by such use, some of those  other types of                                                              
distractions ought to be regulated as well.                                                                                     
Number 0611                                                                                                                     
REPRESENTATIVE  LANCASTER  alluded  to  the synopsis  of  a  study                                                              
conducted in England that indicates that there is:                                                                              
     Some  kind of  a factor  that enters  into your  thought                                                                   
     process  as you  get focused  on your phone  call.   You                                                                   
     actually  get more than  distracted versus reaching  for                                                                   
     the cup  of coffee or  [something else in the  vehicle].                                                                   
     It's a  different thought process  that goes  along with                                                                   
     trying  to concentrate  on  what somebody  is saying  on                                                                   
     the phone and  what your answer or response  may be; and                                                                   
     apparently   the  cell   phone   is   the  ...   largest                                                                   
     distracter  of all  of  them.   And  so, ...  apparently                                                                   
     this study  ... proves that  point, that the  cell phone                                                                   
     is more distracting than any of the others.                                                                                
REPRESENTATIVE  MEYER,  referring  to  a chart  produced  by  [the                                                              
National  Accident  Sampling System  (NASS)  Crashworthiness  Data                                                              
System  (CDS)], noted  that cell  phone use  is one  of the  least                                                              
distracting of all of the distractions listed.                                                                                  
REPRESENTATIVE JAMES  said she agrees  that cell phone use  can be                                                              
distracting,  and  noted  that  although  she  has  no  difficulty                                                              
talking and  ending a call on a  cell phone while driving,  if she                                                              
has to dial  a number while driving,  she simply pulls  off to the                                                              
side of the  road to place the  call.  She mentioned  that she has                                                              
noticed that  many drivers have  their car stereo  systems playing                                                              
so loudly  that she cannot see  how those drivers  can concentrate                                                              
on anything else.   She remarked that if she were  to choose which                                                              
type  of driving  distraction to  target  first, it  would be  the                                                              
distraction  of playing  a car  stereo system  too loudly,  rather                                                              
than using a cell phone.                                                                                                        
CHAIR  ROKEBERG   noted  that  a   few  years  ago   he  sponsored                                                              
legislation  prohibiting loud  vehicle sound  systems, but  it did                                                              
not pass.   He then  requested an  explanation of the  differences                                                              
between Version F and the original HB 295.                                                                                      
Number 0854                                                                                                                     
JUSTIN  CARRO,  Intern  to Representative  Ken  Lancaster,  Alaska                                                              
State Legislature,  sponsor, explained  that Version F  includes a                                                              
provision allowing  cell phone  use during  an emergency,  for the                                                              
reporting  of a  crime, or  during  the performance  of duties  by                                                              
emergency  services   personnel.     Also,  Version   F  specifies                                                              
"driving a motor  vehicle" instead of "operating  a motor vehicle"                                                              
- this change  allows drivers who  have pulled off to  the side of                                                              
the  road  to use  a  regular  cell  phone  - and  that  the  term                                                              
"highway"  has  been changed  to  "public  roadway" so  that  more                                                              
areas are included.   And, as Representative James  noted, Version                                                              
F contains language  specifying that a "'cellular  telephone' does                                                              
not  mean a  citizens  band radio".   Version  F  also contains  a                                                              
provision allowing  the fine to  be waived upon the  completion of                                                              
a driver  safety education course;  this provision  recognizes the                                                              
need  to  educate  society.    In   response  to  a  question,  he                                                              
confirmed that violation  of this proposed law would  result in an                                                              
Number 0919                                                                                                                     
REPRESENTATIVE  MEYER  moved  to   adopt  the  proposed  committee                                                              
substitute (CS)  for HB 295,  version 22-LS1176\F,  Ford, 2/11/02,                                                              
as a work draft.   There being no objection, Version  F was before                                                              
the committee.                                                                                                                  
REPRESENTATIVE KOOKESH,  noting that  it appears that  Congress is                                                              
looking  to  implement  similar   restrictions  nationally,  asked                                                              
whether it  would be beneficial to  "do it before they  require us                                                              
to do it."                                                                                                                      
MR. CARRO  said that  the last he'd  heard, that proposed  federal                                                              
legislation  "wasn't going  to  really go  anywhere."   He  opined                                                              
that if  similar federal  legislation is  proposed in  the future,                                                              
it would just be in addition to a state law, should HB 295 pass.                                                                
REPRESENTATIVE KOOKESH  said he is  interested in knowing  why the                                                              
proposed federal  legislation didn't pass, and what  the reasoning                                                              
is  behind having  the  state adopt  HB 295  -  whether there  are                                                              
statistics  that   show  what   "this  distraction"   is  actually                                                              
causing, in terms of accidents in Alaska.                                                                                       
REPRESENTATIVE  LANCASTER  said  that for  him  it is  strictly  a                                                              
safety  issue,  and remarked  that  while  driving around  in  his                                                              
community  - the Soldotna-Kenai  area -  he has  seen a  number of                                                              
"people off  in the  ditch," for  example, because of  inattention                                                              
while driving  and talking  on the  cell phone.   He also  relayed                                                              
that  insurance  companies  now   prohibit  their  employees  from                                                              
talking  on  their cell  phones  while  driving,  unless it  is  a                                                              
hands-free unit,  because of accidents  and costs  associated with                                                              
insurance claims from those accidents.                                                                                          
REPRESENTATIVE  KOOKESH   again  asked  whether  there   were  any                                                              
statistics that  led to the development  of HB 295.  "'The  sky is                                                              
falling' scenario  doesn't work very well  with me; I want  to see                                                              
a reason why we're doing this," he said.                                                                                        
Number 1045                                                                                                                     
MR. CARRO said:                                                                                                                 
     There  are no  specific  Alaskan statistics  because  we                                                                   
     don't  collect   them,  but  they  have   changed  their                                                                   
     reporting forms  to reflect it now, so  those statistics                                                                   
     will be available  in a few years.  But as  far [as] ...                                                                   
     national  statistics go, ...  using cell phones  usually                                                                   
     result in  one of  two things:   either failing  to stop                                                                   
     and striking  something, or  swerving out of  their lane                                                                   
     and causing  an accident to [indisc.] vehicle.   But the                                                                   
     liability for  negligence, if  it causes an  accident --                                                                   
     for  example, one  suit cost  a driver  $3 million  when                                                                   
     there was a death involved.                                                                                                
     And  there are  between 500  and  1,000 fatalities  each                                                                   
     year,  nationally,  related   to  driving  with  a  cell                                                                   
     phone.  And  for each of those accidents,  there are 660                                                                   
     more  accidents   happening  which  involve   damage  to                                                                   
     property,   ranging  anywhere   between  ...  $300   and                                                                   
     $65,000  per year  - total  -  with an  average cost  of                                                                   
     $37,000 in  damages per accident.   Eighty five  percent                                                                   
     of the  people surveyed in  a national survey  said they                                                                   
     use  a cell  phone while  driving, and  that results  in                                                                   
     roughly  75  million  people  a  day  talking  on  their                                                                   
     phones while  they're driving - nationally -  which adds                                                                   
     to a large number of distractions.                                                                                         
CHAIR ROKEBERG asked  what the increase has been  in the "national                                                              
GDP [gross domestic  product] labor productivity" due  to those 75                                                              
million  people using  their cell  phones.   He  said he  suspects                                                              
that "it'd be pretty significant."                                                                                              
REPRESENTATIVE  LANCASTER countered,  "I'd suggest  that one  life                                                              
isn't worth that."                                                                                                              
REPRESENTATIVE  KOOKESH  asked  whether a  person  violating  this                                                              
proposed statute would be charged with reckless driving.                                                                        
MR. CARRO  said:   "It would  be a  fine above  and beyond  normal                                                              
reckless driving"  and specifically  targets cell  phone use.   In                                                              
response to  another question, he said  that there would  not be a                                                              
point deduction for this particular violation.                                                                                  
REPRESENTATIVE JAMES  remarked that  dialing a phone  number while                                                              
driving,  not  simply  talking  on the  phone,  creates  the  main                                                              
distraction;  therefore,  since  even  with a  hands-free  unit  a                                                              
person still  has to dial  a phone number,  he/she would  still be                                                              
distracted.   She mentioned that  not everyone can be  expected to                                                              
get a voice-activated unit.                                                                                                     
CHAIR ROKEBERG  suggested  that Congress's  delay in passing  this                                                              
type  of  legislation  stems  from  a desire  to  wait  until  the                                                              
technology  for voice-activated  units improves  and becomes  more                                                              
Number 1339                                                                                                                     
MARY  MARSHBURN,  Director,  Division  of  Motor  Vehicles  (DMV),                                                              
Department    of     Administration    (DOA),     testified    via                                                              
teleconference.   She said  that use of  cell phones falls  into a                                                              
category that the  DMV calls distractive driving,  and the overall                                                              
field of distractive  driving is driver inattention,  during which                                                              
the  driver doesn't  sufficiently  address  the factors  for  safe                                                              
operation  of the vehicle  - primarily  because his/her  attention                                                              
state is  limited.  Some  of the things  that go into  distractive                                                              
driving  include what  is known  as  "looked but  didn't see,"  in                                                              
which  the driver  has some  sort of  flawed visual  surveillance;                                                              
inattention - preoccupation  with competing thoughts;  or internal                                                              
distractions such as  turning to referee the kids  fighting in the                                                              
back seat  or turning to look  toward the passenger.   Compounding                                                              
all  of these  are  the  technological  advances that  have  taken                                                              
place  in the  auto  industry -  compact  disk  (CD) players,  DVD                                                              
players, navigation  aids, and electronic  seat adjustments  - all                                                              
of which contribute to distractive driving.                                                                                     
MS. MARSHBURN  said the issue of  what effect cell phones  have on                                                              
driving has  received national  attention:  specifically,  whether                                                              
they increase  the risk of  crashes and,  if they do,  what should                                                              
be  done  about   them.    She  relayed  that   according  to  the                                                              
information  which she  has read,  there  are a  number of  states                                                              
that have  begun to  look at this  issue.   What has come  across,                                                              
however,  is   that  there   is  an   almost  universal   lack  of                                                              
statistics,  mostly because,  since the  use of  cell phones  is a                                                              
fairly recent  phenomena, accident  reports hadn't connected  cell                                                              
phone  use to an  accident  by saying  that a person  was using  a                                                              
cell phone  at the  time.   She explained  that currently,  Alaska                                                              
does not  have any such statistics;  however, the  accident report                                                              
has been  modified, and so those  statistics will be  available in                                                              
the future.                                                                                                                     
MS.  MARSHBURN  pointed out  that  the  national effort  has  been                                                              
geared  toward education  and  data  collection,  rather than  the                                                              
passage of  laws.   Anecdotally, National  Highway Traffic  Safety                                                              
Administration  (NHTSA) information  reports and reports  gathered                                                              
from other states  indicate that in terms of  distraction, using a                                                              
hands-free cell  phone is  no better than  using a hand-held  cell                                                              
phone.   The problem  with  using a cell  phone is  two fold,  she                                                              
said:   one, the driver is  physically removing his/her  hand from                                                              
the  steering wheel,  and second  - and  more important  - is  the                                                              
fact that  the driver, in  order to have  a conversation,  must be                                                              
actively engaged  - it is an  interactive process -  unlike simply                                                              
having   one's  thoughts   wander   off  the   task  of   driving.                                                              
Therefore,  when  it  comes  to  the  distraction  that  is  posed                                                              
cognitively,  that occurs regardless  of what  type of  cell phone                                                              
is used.                                                                                                                        
MS. MARSHBURN  concluded by  saying that the  fiscal impact  of HB                                                              
295  on  the DMV  would  be  minimal;  using  a cell  phone  while                                                              
driving would simply  be added to the list of  violations, and the                                                              
driver  safety  education  course  offered as  an  alternative  to                                                              
paying the fine is already available on-line.                                                                                   
Number 1587                                                                                                                     
DAVID  HUDSON,  Captain,  Administrative  Services  Unit,  Central                                                              
Office, Division  of Alaska  State Troopers  (AST), Department  of                                                              
Public  Safety  (DPS), testified  via  teleconference,  confirming                                                              
that with  the updated  motor vehicle  collision report  forms, it                                                              
is now  possible to collect  data regarding cellular  phone usage.                                                              
He explained  that there  are currently  three [laws]  which could                                                              
be utilized when  a person's driving behavior becomes  erratic, or                                                              
causes  an accident,  because  of  cellular phone  use.   He  said                                                              
those  three  [laws] are:    reckless  driving -  [AS  28.35.040];                                                              
negligent driving  - [AS 28.35.045];  and driver to  exercise care                                                              
- 13  ACC 02.545 -  which says, "Every  driver of a  vehicle shall                                                              
exercise care to  avoid colliding with a pedestrian,  an animal or                                                              
another vehicle", and  which is generally used in  cases of driver                                                              
distraction, as was recounted by Ms. Marshburn.                                                                                 
REPRESENTATIVE  JAMES noted  that  there is  a difference  between                                                              
those laws  and HB  295 in that  HB 295 could  be applied  even in                                                              
situations  in which  a  person is  not  driving erratically;  law                                                              
enforcement  officers  could issue  tickets  to persons  that  are                                                              
simply seen holding a cell phone to their ear while driving.                                                                    
REPRESENTATIVE  COGHILL  asked Captain  Hudson  whether  observing                                                              
someone  applying makeup  while driving  would give  him cause  to                                                              
stop that person under the aforementioned laws.                                                                                 
CAPTAIN HUDSON said  that if he saw someone applying  makeup while                                                              
driving,  but  the  person  was  driving  at a  safe  speed  in  a                                                              
straight  line  and  not creating  any  hazardous  conditions,  he                                                              
would not pull that driver over.                                                                                                
Number 1812                                                                                                                     
MARK LOSCHKY, Regional  Director, External Affairs,  AT&T Wireless                                                              
Services, Inc.,  testified via teleconference, and  said that AT&T                                                              
Wireless respectfully opposes HB 295.  He said:                                                                                 
     We  understand   that  driving   safely  is  the   first                                                                   
     priority when  operating a  motor vehicle, and  for that                                                                   
     reason  AT&T  Wireless  has   been  promoting  safe  and                                                                   
     responsible  driving   for  several  years.     We  have                                                                   
     developed  and continue  to provide  tools to  encourage                                                                   
     safety  and  responsibility   as  our  customer's  first                                                                   
     concern when operating a motor vehicle.                                                                                    
MR.  LOSCHKY  noted  that  his company  produces  a  handout  that                                                              
provides  safety tips  pertaining to  the use  of cellular  phones                                                              
while  driving,   adding  that  the  handout  did   not,  however,                                                              
specifically   reference  voice-activated   units.     He  briefly                                                              
mentioned  some   of  the  features  available  and   soon  to  be                                                              
available  with   cellular  phone  products.    He   offered  AT&T                                                              
Wireless's  belief that education  and the  strict enforcement  of                                                              
existing traffic  laws are  the best way  to encourage  drivers to                                                              
remain focused  on the road.   He said that  he is unaware  of any                                                              
statistics  indicating  that  simply  requiring  hands-free  units                                                              
will  increase safety.   He  mentioned  that none  of the  reports                                                              
referred to in  his company's handout recommend  mandating the use                                                              
of  hands-free  devices,  and that  states  which  have  conducted                                                              
studies on  this issue  have not  found statistical  justification                                                              
for adopting  a hands-free requirement.   He, too, noted  that the                                                              
[NASS  CDS] chart  indicates  that  of the  many  types of  driver                                                              
distractions that  contribute to  accidents, cell phone  use makes                                                              
up only a  small portion of the  total; thus he surmised  that the                                                              
hands-free requirement is not warranted.                                                                                        
Number 2065                                                                                                                     
ROGER  BURNS testified  via  teleconference  in opposition  to  HB                                                              
295.   After  noting  that he  is an  amateur  radio operator,  he                                                              
opined  that  there   will  always  be  drivers   who  are  easily                                                              
distracted from the  task of driving; that education  and improved                                                              
technology  - and increasing  familiarity  with that technology  -                                                              
are  key factors  to  eliminating problems  caused  by cell  phone                                                              
use; and  that having a  conversation on a  cell phone is  just as                                                              
distracting  as  having  a  conversation  with a  passenger.    He                                                              
suggested that the committee should not pass HB 295.                                                                            
Number 2121                                                                                                                     
MARY ANN PEASE,  Vice President, Corporate  Communications, Alaska                                                              
Communications  Systems (ACS), testified  via teleconference,  and                                                              
said that ACS is  a strong advocate of cellular  phones being used                                                              
responsibly.  She elaborated:                                                                                                   
     While we do  not oppose HB 295 - we realize  that safety                                                                   
     is a very key  issue - we do hope that you  take note of                                                                   
     some of  the instances where  this bill could  pose some                                                                   
     problems.     As   Representative   Meyer  stated   ...,                                                                   
     cellular phones  are just one of the  many distractions,                                                                   
     and   we've   been   hearing   about   some   of   those                                                                   
     distractions  from  many of  the people  that  testified                                                                   
     here  today.  Pulling  over to  place a  call is a  safe                                                                   
     practice,  and one  that our  customers,  we hope,  use.                                                                   
     It is  just one of  the many safety  tips we provide  to                                                                   
     our  customers,  and  there are  numerous  other  safety                                                                   
     tips  that are  out there and  are available.   But  you                                                                   
     know  there are  other sides  to cellular  phone use  as                                                                   
     well, and  many times cellular  phones have come  in and                                                                   
     been  true   savers  when   it  come  to  an   emergency                                                                   
     So  even  though there  are  some  negatives  associated                                                                   
     with  them  being  used  irresponsibly,  there  are  the                                                                   
     responsible  users  of cell  phones that  have  provided                                                                   
     safety  and health  and emergency  service, and  others,                                                                   
     that would  not have been  available without the  use of                                                                   
     cellular  phones.   Every  single  one of  the  cellular                                                                   
     phones  that ACS sells  today ...  come equipped  with a                                                                   
     hands-free-type  device -  more  like a  headset -  that                                                                   
     can  be  placed   on  the  phone  and  used,   and  it's                                                                   
     available  at  very nominal  prices;  sometimes  they're                                                                   
     even given away  with the phone as part  of an offering.                                                                   
     The  hands-free  kits  are   also  available;  they  are                                                                   
     slightly  more expensive.   It's when  you get into  the                                                                   
     issue  of  truly voice-activated  cellular  phones  that                                                                   
     you're  talking  about  phones that  are  slightly  more                                                                   
     expensive  -  they are  available  on the  higher  model                                                                   
     cars  - and are  also limited  in the  choices that  are                                                                   
     being offered by a "cell company."                                                                                         
REPRESENTATIVE BERKOWITZ  asked whether  there is a  difference in                                                              
the  accident rate  between  "hand-held  and [hands-free]  use  of                                                              
cell phones."                                                                                                                   
MS. PEASE indicated  that she is not aware of  any statistics that                                                              
show whether  there is such a  difference.  She noted  that hands-                                                              
free units are not  truly hands-free.  "You still  have to use the                                                              
pad on the phone to place your call; the only time it's hands-                                                                  
free is when  you're responding to  the call or you're  talking on                                                              
the phone," she added.                                                                                                          
CHAIR ROKEBERG  said that  that was  not necessarily true,  noting                                                              
that the unit in his car has voice recognition.                                                                                 
MS. PEASE  replied, however, that  that type of  voice recognition                                                              
system is  one if the  high-end vehicle  options.  She  noted that                                                              
the  hands-free,  voice-activated  unit available  from  Motorola,                                                              
Inc.,  is not  that state  of the  art  with regard  to its  voice                                                              
recognition and is sometimes difficult to use.                                                                                  
REPRESENTATIVE  BERKOWITZ  remarked   that  even  that  system  is                                                              
somewhat expensive.                                                                                                             
Number 2273                                                                                                                     
JOAN PRIESTLEY,  M.D.; Associate, Assembly of Learning  and Health                                                              
(ph),   testified   via  teleconference,   explaining   that   her                                                              
organization is  devoted to increasing the public's  education and                                                              
awareness of  certain issues.  She  said that she wanted  to speak                                                              
in  opposition  to HB  295  on  behalf  of  both herself  and  her                                                              
organization.   She, too,  spoke of the  [NASS CDS]  chart, saying                                                              
that  that chart  illustrates information  obtained  from a  study                                                              
that examined 5,000  accidents over a four-year period.   She said                                                              
that this  study concludes:   "Distracted drivers who  crash their                                                              
vehicles  are more  likely to have  been engrossed  in changing  a                                                              
CD, eating a hamburger, or quieting a toddler than by using                                                                     
their cellular phones."  She continued:                                                                                         
     They  found that  [29.5] percent  of distracted  drivers                                                                   
     said  that some  other distraction  - something  outside                                                                   
     the car, or  other problems - caused them  to crash, ...                                                                   
     and  only 1.5  percent blamed  their cell  phones.   And                                                                   
     [these  statistics] seemed  to  be age  related:   those                                                                   
     under 20 were  most likely to be adjusting  the radio or                                                                   
     CD  player, drivers  20 to  29  were most  likely to  be                                                                   
     distracted  by other  passengers,  senior citizens  were                                                                   
     most likely  to be distracted  by something  outside the                                                                   
     car.    Now,  there are  also  unintended  benefits  and                                                                   
     unintended   burdens,   I   think,   imposed   by   this                                                                   
     The  burdens, unfortunately,  are going  to be borne  by                                                                   
     the  public.    This  is an  infraction,  which  is  not                                                                   
     punishable by  jail time, but infractions can  turn into                                                                   
     misdemeanors, if  I'm correct, if people do  not show up                                                                   
     for their  court date,  and now you  have a warrant  out                                                                   
     for someone's  arrest for  using a  cell phone.   You're                                                                   
     going  to  punish this  by  a fine  of  up to  $300  per                                                                   
     incident,  and  I  believe there  is  other  legislation                                                                   
     raising the  limit to  $500.  We  have to be very  clear                                                                   
     that  what  this  legislation  does  is  criminalize  an                                                                   
     innocent act.                                                                                                              
     The trooper  [Captain Hudson] wisely said that  there is                                                                   
     ample  legislation  already  covering  the  minority  of                                                                   
     people  who  demonstrate  irresponsible  use of  a  cell                                                                   
     phone,  just  as they  could  demonstrate  irresponsible                                                                   
     use of  [an] eyelash curler  while they're driving  down                                                                   
     the  road.    But  if  this  legislation  goes  through,                                                                   
     people  don't  need  to  be   driving  irresponsibly  or                                                                   
     negligently  or recklessly;  all they  need to be  doing                                                                   
     is using  a cell  phone.   So I  hope you're clear  that                                                                   
     this legislation  adds a new [section  that criminalizes                                                                   
     an otherwise innocent action].                                                                                             
TAPE 02-45, SIDE B                                                                                                              
Number 2390                                                                                                                     
DR. PRIESTLEY continued:                                                                                                        
     I should  tell you  I spoke  to one of  the men who  run                                                                   
     one  of the driver's  safety courses  in Anchorage,  and                                                                   
     he said that  they are doubling [the] price  of a driver                                                                   
     safety  education  course partly,  not  completely,  but                                                                   
     partly  in anticipation  of  a  large influx  of  people                                                                   
     having  to take  this  course in  order  to avoid  their                                                                   
     fine because  of this  cell phone  legislation.   I also                                                                   
     have a  couple of other studies  for you out  of Europe.                                                                   
     A  study   from  London  demonstrated  that,   I  quote:                                                                   
     "Drivers  who listen  to fast  music in  their cars  are                                                                   
     twice as liable  to have an accident as  those listening                                                                   
     to  slower tracks."   And  this summary  also says  that                                                                   
     previous studies  have shown  a link between  loud music                                                                   
     and  dangerous  driving.   And  I  will send  you  these                                                                   
     other separate packets.                                                                                                    
     So,  my question  is  -- actually  my  second point  is:                                                                   
     Where does this  stop?  The next thing will  have to be,                                                                   
     eliminate  cell   phones  entirely,  eliminate   radios,                                                                   
     eliminate  passengers,  eliminate cigarette  smoking  in                                                                   
     cars  -  eliminate  virtually anything  which  causes  a                                                                   
     distraction.    And  I  should   tell  you,  even  as  a                                                                   
     physician, I  caused a car  to swerve from lane  to lane                                                                   
     a  while  back because  I  reached  over to  change  the                                                                   
     radio,  and I  acknowledge that.   So  radios, I  think,                                                                   
     are just as suspect as cell phones....                                                                                     
     One  more point  about these  ... other  studies:   some                                                                   
     other people  have said, "Who benefits from  this?"  And                                                                   
     what they found  was, when they followed the  money, ...                                                                   
     that  the insurance  industry  ... -  sometimes  through                                                                   
     several  layers of  organizations  which  trace back  to                                                                   
     insurance   industries  -   [has]   actually  been   the                                                                   
     "funders,"  sometimes  to a  large  extent,  of some  of                                                                   
     these  other  studies.   Why?    Because  the  insurance                                                                   
     industry  will   benefit  from   both  ends.     If  you                                                                   
     eliminate a  minor distraction, which will  decrease the                                                                   
     accident  rate  however  small  [a]  proportion,  that's                                                                   
     that  many  fewer  payouts  -  claims  -  the  insurance                                                                   
     company has to make.                                                                                                       
Number 2295                                                                                                                     
DR. PRIESTLEY said:                                                                                                             
     And I  do have  a question for  you because the  wording                                                                   
     is vague in  the bill itself:  It simply  will impose an                                                                   
     infraction,  but  when [we]  go  and read  the  statutes                                                                   
     related  to infractions,  there may  be points  involved                                                                   
     also.   So,  are you  going  to give  someone points  on                                                                   
     their license  for merely using a cell phone,  which can                                                                   
     jack  ... insurance  company  rates to  the point  where                                                                   
     the  people will forego  their insurance  and become  an                                                                   
     uninsured  driver?    And I  think  that's  a  potential                                                                   
     public   health   problem    that   is   an   unintended                                                                   
     ramification of this legislation.                                                                                          
     And my  final thought  is, ...  I personally think  that                                                                   
     this  is   an  intrusive  and  restrictive   [piece  of]                                                                   
     legislation;  it ...  represents  the government  acting                                                                   
     as  the "nanny  state" ...  in a place  where [we  have]                                                                   
     ample  legislation  to  already cover  people  who  will                                                                   
     misuse  the  privilege  of  using  a  cell  phone  while                                                                   
     they're  driving a car.   I don't  think that this  kind                                                                   
     of legislation  is appropriate for a state  that has had                                                                   
     such  a  strong  tradition  of  individual  freedom  and                                                                   
     privacy.     And   I   personally  believe   that   this                                                                   
     legislation really  demeans the level of  competency and                                                                   
     responsibility  that you  impute  to the  public....   I                                                                   
     would suggest  respectfully that this bill needs  to die                                                                   
     a dignified,  quiet death in this committee.   Thank you                                                                   
     for your time.                                                                                                             
REPRESENTATIVE MEYER asked Dr. Priestley whether she believes                                                                   
that cell phone use provides a benefit from a "safety/emergency                                                                 
DR. PRIESTLEY said:                                                                                                             
     Absolutely.     We   all   know  what   a   tremendously                                                                   
     unforgiving  climate we  live  in up  here; cell  phones                                                                   
     are a survival  tool.  You can never ban  cell phones in                                                                   
     this  state.    Just  for   safety  reasons,  it  cannot                                                                   
     happen.    If  you have  points  attached  to  someone's                                                                   
     license  for  the mere  instant  use  of a  cell  phone,                                                                   
     without  causing  damage  or  driving  recklessly,  it's                                                                   
     going  to up their  rates -  that always  happens.   And                                                                   
     I'm concerned  that we're going  to have more  uninsured                                                                   
     people  who  might later  be  involved in  an  accident,                                                                   
     where they would have no coverage.                                                                                         
Number 2161                                                                                                                     
REPRESENTATIVE  COGHILL noted  that he  gave his  daughter a  cell                                                              
phone because of  its safety benefits, relaying that  she was able                                                              
to use it  to get police assistance  during an instance  when some                                                              
men tried  to run her  off the road  while she  was on the  way to                                                              
work early one morning.                                                                                                         
CHAIR  ROKEBERG announced  that the  committee would  hold HB  295                                                              
[Version F] over.                                                                                                               
HB 316 - POWERS OF APPOINTMENTS/TRUSTS/CREDITORS                                                                              
Number 2129                                                                                                                     
CHAIR ROKEBERG  announced that  the last  order of business  would                                                              
be SPONSOR  SUBSTITUTE FOR  HOUSE BILL NO.  316, "An  Act relating                                                              
to  trusts,  including  trust protectors,  trustee  advisors,  and                                                              
transfers  of trust interests,  and to  creditors' claims  against                                                              
property subject to  a power of appointment; and  providing for an                                                              
effective date."                                                                                                                
Number 2092                                                                                                                     
REPRESENTATIVE LESIL  McGUIRE, Alaska State  Legislature, sponsor,                                                              
said  that  SSHB   316  attempts  to  make  Alaska's   trust  laws                                                              
competitive  with other  states  such as  Delaware.   She  relayed                                                              
that in  1997 the legislature passed  the Alaska Trust  Act, which                                                              
she  opined,  has  been a  tremendous  success  by  all  accounts.                                                              
Representative  McGuire noted that  last year  she brought  a bill                                                              
before  the  committee that  did  some  fine-tuning to  that  1997                                                              
legislation, and  that this area  of law is continually  changing;                                                              
thus [SSHB  316] is  before the  committee today.   Representative                                                              
McGuire   highlighted  that   SSHB  316   makes  changes   to  the                                                              
"spendthrift  trust"  area  of  the law,  and  adds  the  ability,                                                              
similar  to  Delaware, to  have  a  trust  protector and  a  trust                                                              
advisor.   She pointed  out that this  ability allows  the settlor                                                              
to have  as much  control as  possible when  the decision  to give                                                              
money is made.                                                                                                                  
Number 1977                                                                                                                     
STEPHEN E. GREER,  Attorney at Law, said that he  is interested in                                                              
ensuring  that Alaska  has the  best trust  laws.   He noted  that                                                              
although his  constituent base  is the  average Alaskan  who wants                                                              
to protect  his/her family,  passage of  SSHB 316 will  indirectly                                                              
benefit  the  Alaska  trust  industry   and  allow  it  to  remain                                                              
competitive with  trust industries  in other states,  particularly                                                              
Delaware.  Mr.  Greer explained that because Alaska  was the first                                                              
state to  pass trust laws,  other states  have since been  able to                                                              
draft improved legislation.   Therefore, SSHB 316,  while adding a                                                              
few  new provisions,  mainly clarifies  what those  in the  estate                                                              
planning community view the law to be.                                                                                          
MR. GREER  pointed  out that Sections  1 and  2 provide  statutory                                                              
authority  for  trust  provisions   that  are  commonly  found  in                                                              
trusts.   The legislation  also provides  clarity to the  existing                                                              
spendthrift  provisions,  which   are  presently  found  under  AS                                                              
34.40.110.   Furthermore, Section 3  adds two new  provisions that                                                              
pertain  to "charitable  remainder  trusts,  and grantor  repaying                                                              
unit  trusts, and  grant  retained annuity  [trusts]."   He  noted                                                              
that these provisions  are found in Delaware's law.   Moreover, he                                                              
added,  this legislation  restates the  [American Law  Institute's                                                              
Restatement   (Second)  of   Property   ("Second  Restatement   of                                                            
Property")]  regarding the  power of appointments  and the  extent                                                              
to which  property  subject to a  power of  appointment should  be                                                              
protected from creditor claims.                                                                                                 
REPRESENTATIVE  BERKOWITZ turned  to Section 1  and asked  if that                                                              
section  requires  the  hiring of  professional  trust  protectors                                                              
because it has to be a disinterested party.                                                                                     
MR.  GREER,   in  response,   posed  a   situation  in   which  he                                                              
establishes  a trust and  the Alaska  Trust Company, for  example,                                                              
is named  as the  trustee of  that trust.   However,  he wants  to                                                              
ensure  that the Alaska  Trust Company  isn't  going to view  [the                                                              
trust]  as  a   permanent  position  of  employment   for  itself.                                                              
Therefore, the settlor  could name a disinterested  party, a trust                                                              
protector,  that  could  be  given  the  authority  to  remove  or                                                              
replace   that  [trustee]   with   the  trustee   of  the   [trust                                                              
protector's] choice.   Therefore, the provision is  actually meant                                                              
to protect the settlor's intent in creating the trust.                                                                          
Number 1761                                                                                                                     
REPRESENTATIVE  BERKOWITZ  turned to  Section  5, which  clarified                                                              
that fraudulent conveyance  actions may only be  brought against a                                                              
settlor of a trust  and only [with regard to] a  specific transfer                                                              
of assets, and noted  that this would be a change  to current law.                                                              
He  asked who  else  would  be subject  to  fraudulent  conveyance                                                              
actions,  what other  assets might  be consumed,  and "how  are we                                                              
limiting the scope?"                                                                                                            
MR. GREER  clarified that this  is not  a change to  existing law.                                                              
He  explained  that the  novelty  of  this trust  legislation  [AS                                                              
34.40.110]  is  that it  has  really always  been  the  law.   For                                                              
example, a  settlor may decide to  give someone money,  but, being                                                              
uncertain as  to how the money will  be used, the settlor  names a                                                              
trustee.    Assuming  there  is   a  spendthrift  provision  -  as                                                              
recognized by the  1875 U.S. Supreme Court case,  Nichols v. Eaton                                                            
- attached  to the  trust, the beneficiary  would have  no ability                                                              
to assign  his/her interest in the  trust.  Moreover, none  of the                                                              
creditors  of  the  beneficiary   would  be  able  to  attach  the                                                              
interest, assuming  that there has  been no fraudulent  conveyance                                                              
in transferring  the assets into that  trust.  The novelty  of the                                                              
1997  law  is  that  it  allows  an  individual,  while  retaining                                                              
discretionary interest  in the trust,  to create a trust  and name                                                              
a trustee,  thus ensuring  that no creditor  of the  [settlor] can                                                              
attach  these assets.   Mr. Greer  noted that  three other  states                                                              
have passed laws that copy Alaska's trust laws.                                                                                 
MR.  GREER  explained  that Sections  5  and  6  have to  be  read                                                              
together.   He  pointed out  that Sections  5 and  6(g) only  deal                                                              
with the  self-settled trust, as  just described, that  allows the                                                              
[settlor] to  retain discretionary interest  in the trust.   Under                                                              
current  law, a  preexisting creditor  is allowed  one year  after                                                              
the trust could  have reasonably been discovered  by that creditor                                                              
[to  be fraudulent]  in  which to  bring  a fraudulent  conveyance                                                              
action against [the  settlor].  If that action  is successful, the                                                              
spendthrift provision  would be held null and void.   However, the                                                              
problem is that  the current statute doesn't contain  a definition                                                              
of a  preexisting creditor.   Therefore,  Section 6(g)(1)  and (2)                                                              
provide the definition of a preexisting creditor.                                                                               
Number 1587                                                                                                                     
MR.  GREER  offered  an  example  of a  contractor  who  builds  a                                                              
building that  he believes has  been built to the  specifications.                                                              
The  contractor  then  decides  to do  some  estate  planning  and                                                              
subsequently  transfers  some property  in  trust.   He  explained                                                              
that the problem  with making a transfer in trust  is that without                                                              
maintaining  a discretionary  interest, the  money is  gone.   Mr.                                                              
Greer  commented  that people  are  hesitant  to make  such  gifts                                                              
unless  they  are  extremely  wealthy.     In  this  example,  the                                                              
[settlor] maintains  a discretionary  interest and upon  death the                                                              
property  will  pass  on  to the  children.    Subsequent  to  the                                                              
[settlor's]  death,  however, a  lawsuit  is brought  against  the                                                              
settlor  regarding  the building  that  he  built.   The  question                                                              
becomes:   at  what point  in  time does  the  plaintiff have  the                                                              
ability  to bring  a  fraudulent  conveyance action  against  that                                                              
contractor to attack the transfer in the trust?                                                                                 
MR. GREER  related his belief that  with the adoption  of [Section                                                              
6(g)(1) and  (2)], the plaintiff  - [creditor] -  must demonstrate                                                              
either that  the claim was  asserted against the  contractor prior                                                              
to the  creation of  the trust or  that the fraudulent  conveyance                                                              
action is filed  within four years  of transfer to the  trust.  He                                                              
reiterated that these  provisions of SSHB 316 attempt  to define a                                                              
preexisting creditor.                                                                                                           
REPRESENTATIVE  BERKOWITZ  inquired   as  to  the  source  of  the                                                              
language for this legislation.                                                                                                  
MR. GREER  indicated  that there  is no specific  source for  this                                                              
Number 1430                                                                                                                     
DOUGLAS J. BLATTMACHR,  President, Chief Executive  Officer (CEO),                                                              
Alaska Trust Company,  testified via teleconference  in support of                                                              
SSHB  316, remarking  that it  improves Alaska  law, makes  Alaska                                                              
competitive with Delaware, and clarifies some issues.                                                                           
CHAIR  ROKEBERG asked  what  would  happen if  an  income tax  was                                                              
enacted on trust clients.                                                                                                       
MR. BLATTMACHR answered  that Alaska's trust clients  from outside                                                              
Alaska  would leave  within one  year  and go  to Delaware,  South                                                              
Dakota,  or  Nevada because  of  the  lack  of  an income  tax  on                                                              
foreign trusts.                                                                                                                 
REPRESENTATIVE  BERKOWITZ  noted  that he  has  cautioned  against                                                              
including trusts in with an income tax.                                                                                         
REPRESENTATIVE  COGHILL asked  if  there would  be any  "interface                                                              
problems" in applying SSHB 316 to existing trusts.                                                                              
MR.  BLATTMACHR  responded that  he  didn't foresee  any  problems                                                              
because  [the  legislation]  merely  recognizes  things  that  are                                                              
already included in most trusts.                                                                                                
MR.  GREER  clarified that  only  the  ability  for a  settlor  to                                                              
create a  charitable remainder  trust would  be prospective.   All                                                              
other provisions  are retroactive and  are commonly done  in trust                                                              
instruments; SSHB  316 merely provides the statutory  authority to                                                              
do so.                                                                                                                          
CHAIR  ROKEBERG  noted  that  the legislation  does  not  make  it                                                              
mandatory  to have  a trust  protector; if  the owner  of a  trust                                                              
desires  a trust  protector,  he/she  would have  to  specifically                                                              
implement such provisions in his/her trust.                                                                                     
MR. GREER  agreed, and  confirmed SSHB 316  would allow  a settlor                                                              
to modify  an existing  trust to  provide for  a trust  protector,                                                              
but  only on  the  condition  that the  trust  can  be amended  or                                                              
modified.   He  pointed out  that  there is  another provision  in                                                              
Alaska  law that  allows for  modifications or  amendments if  one                                                              
returns to court, for instance.                                                                                                 
REPRESENTATIVE  BERKOWITZ asked  if there  is anything in  statute                                                              
that would preclude the appointment of a trust protector.                                                                       
MR. GREER replied no.                                                                                                           
REPRESENTATIVE  BERKOWITZ inquired, then,  whether Section  1 does                                                              
anything other than codify existing practice.                                                                                   
MR. GREER said that it merely codifies existing practice.                                                                       
Number 1189                                                                                                                     
DAVID  G. SHAFTEL,  Attorney, testified  via  teleconference.   He                                                              
informed the committee  that as a member of the  informal group of                                                              
attorneys   that  has   worked   on  trusts   and  related   state                                                              
legislation,  and as  someone who  [deals] with  these trusts,  he                                                              
agrees  with  previous  testimony.   Mr.  Shaftel  echoed  earlier                                                              
testimony  that  SSHB 316  clarifies  various  provisions  already                                                              
used in  trusts now:   "This bill clarifies  that if a  court ever                                                              
needs to review  these trusts and evaluate these  provisions, that                                                              
we  have  the support  of  the  legislature  that they  have  been                                                              
statutorily authorized."   He informed the committee  that about a                                                              
half  dozen  or so  estate  planning  attorneys [in  Alaska]  have                                                              
reviewed  SSHB 316  and are  in support  of it, and  he urged  the                                                              
committee's support.                                                                                                            
REPRESENTATIVE  BERKOWITZ   directed  attention  to   language  in                                                              
Section  3,  page 3,  line  7,  which  says:   "the  transfer  was                                                            
intended  primarily [IN  WHOLE OR  IN PART] to  hinder, delay,  or                                                            
defraud creditors or  other persons under AS 34.40.010".   He said                                                              
he interpreted  this language as a  change to the burden  of proof                                                              
required by creditors, and asked Mr. Shaftel for his opinion.                                                                   
MR. SHAFTEL said  this language ensures that in  the determination                                                              
of whether one is  going to "set aside a transfer,"  the motive to                                                              
[hinder,   delay,  or   defraud]   must  be   a  significant   and                                                              
substantial one.  Therefore, the word "primarily" was inserted.                                                             
REPRESENTATIVE BERKOWITZ  remarked that in his  mind, "significant                                                              
and substantial"  is different than "primarily";  "significant and                                                          
substantial" could,  for example, amount  to 20-25 percent  of the                                                              
reason, while  "primarily" would  [necessitate] 51 percent  of the                                                          
MR. SHAFTEL replied,  "Your point is accurate; I  can't argue with                                                              
MR.  GREER  argued  that  the  [aforementioned  language]  doesn't                                                              
really change  the law, noting  that the  motive will always  be a                                                              
question  of fact  decided  by a  jury.   He  pointed  out that  a                                                              
transfer restriction  can always set  aside if one can  prove that                                                              
when  the  settlor  created  the trust,  there  was  a  fraudulent                                                              
intent behind it.   To prove the fraudulent intent,  the plaintiff                                                              
has to show that  the primary purpose of the trust  was to defraud                                                              
the creditor.   Therefore, he  reiterated, he didn't  believe this                                                              
[language  change]  adds anything,  noting  that  the main  reason                                                              
people create  trusts is for estate  planning purposes.   In order                                                              
to set aside the  trust, the intent to defraud  the creditor can't                                                              
be  merely 1  percent of  [the trust];  rather,  it has  to be  to                                                              
"primarily" defraud  the creditor.   He opined  that this  is what                                                          
the court would've had to find in the past.                                                                                     
Number 0896                                                                                                                     
REPRESENTATIVE  BERKOWITZ  related  his view  that  [the  language                                                              
change regarding  "primarily"] has  added a  second element  to be                                                          
proven.   The existing statute  requires proof of  fraud; however,                                                              
now the  requirement is  that [the fraud]  is the primary  intent.                                                              
He  said  that  it  seems  that  the  balance  has  been  changed.                                                              
Therefore, he said,  he disagrees with Mr. Greer's  assertion that                                                              
[the  language  is]  the  same,   since  [that  would  mean  that]                                                              
"primarily"  is equated with  "in whole  or in  part".   He opined                                                          
that the two terms are not the same.                                                                                            
CHAIR ROKEBERG asked  whether it was [the trust  attorneys] or the                                                              
drafter who suggested the use of "primarily".                                                                               
MR. GREER replied  that that language was suggested  by [the trust                                                              
REPRESENTATIVE  JAMES,  returning  to  the earlier  example  of  a                                                              
contractor  who builds a  building and  then establishes  a trust,                                                              
and assuming that  the time period pertaining to  the contractor's                                                              
liability hasn't  expired, asked  whether a fraudulent  conveyance                                                              
action  could be  made against  [the settlor]  simply because  the                                                              
trust existed.                                                                                                                  
MR.  GREER, in  response, posed  a  situation in  which a  builder                                                              
builds a  building, which  he thinks  is fine.   Then the  builder                                                              
decides  to transfer  money  to  his children,  but  a lawsuit  is                                                              
subsequently filed  against the builder.  Therefore,  the question                                                              
is whether  one can set  aside a transfer  for any reason  at all.                                                              
Mr.  Greer said  that [SSHB  316]  specifies that  a transfer  can                                                              
only be  set aside if  the [plaintiff]  can show that  the primary                                                              
intent in transferring  the assets to the children  was to defraud                                                              
Number 0725                                                                                                                     
MR.  SHAFTEL  remarked  that all  estate  planning  involves  some                                                              
intent to  protect assets.   He related  his belief that  it would                                                              
be a flimsy provision  if all transfers could be  set aside merely                                                              
by proving  that someone discussed  asset protection  with his/her                                                              
attorney.  He noted  that almost all of his clients  discuss asset                                                              
protection  to  some degree,  and  that it  is  normal  to do  so.                                                              
Therefore, this  provision says that  if the primary purpose  of a                                                              
transfer was to  defraud creditors, then [the  transfer] should be                                                              
set  aside.   He  opined that  current  law regarding  this  issue                                                              
needs clarification because the language is vague.                                                                              
REPRESENTATIVE  BERKOWITZ agreed  that the  "in part" language  is                                                              
problematic  because  it  implies  that  the  least  scintilla  of                                                              
evidence  is  sufficient,  adding  that this  is  not  appropriate                                                              
either.  He remarked  that it seems to him that  if a "significant                                                              
and substantial  reason for  the intent,  not the primary  reason,                                                              
but  a  significant  and  substantial  [reason]  played  into  the                                                              
transfer," then  the individual  shouldn't be allowed  to benefit.                                                              
He expressed  concern with  the requirement  for proof  of primary                                                              
intent; "that's going to be difficult to get to."                                                                               
REPRESENTATIVE    JAMES    commented   that    "significant    and                                                              
substantial"  versus  "primary"   relates  to  intent.    Although                                                              
[protection of  the trust]  could be a  substantial reason  [for a                                                              
transfer],  it  may not  be  the primary  reason.    She said  she                                                              
didn't [believe]  that "significant  and substantial" is  equal to                                                              
"primarily".   She opined  that the language  is trying  to convey                                                              
that  if most  of the  reason  for establishing  the  trust is  to                                                              
defraud creditors, then the trust should be set aside.                                                                          
REPRESENTATIVE  BERKOWITZ  agreed,  but foresaw  "in  part"  being                                                              
interpreted  as next to  nothing, whereas  "primarily" amounts  to                                                              
just  over  50  percent  of  the   reason,  and  "significant  and                                                              
substantial" could be somewhere in between.                                                                                     
MR.  GREER  remarked  that  the intent  is  to  anticipate  future                                                              
problems.   He  said  that he  was unaware  of  any lawsuit  being                                                              
filed  "under this  section."    He noted  that  if  there is  any                                                              
possibility  that a  transfer  might be  set  aside, the  attorney                                                              
won't do it.  He remarked that this statute has not been abused.                                                                
Number 0421                                                                                                                     
REPRESENTATIVE  COGHILL,  referring to  Section  5, observed  that                                                              
the  aforementioned  language is  critical  because  the cause  of                                                              
action hinges on it.                                                                                                            
MR.  GREER  said that  Representative  Coghill  was correct.    He                                                              
pointed   out  that   a   transfer  restriction,   a   spendthrift                                                              
provision,  will only be  set aside  under the four  circumstances                                                              
listed  in  [Section  3],  and  that  (b)(1)  specifies  that  the                                                              
transfer  is primarily  shown  to be  a  fraudulent transfer  with                                                              
respect to  that creditor.  The  other circumstances:   (b)(2) and                                                              
(4)  aren't being  changed, although  (b)(3) is  being altered  to                                                              
allow for  charitable remainder  trusts, grantor retained  annuity                                                              
trusts, and  unit trusts.  Mr.  Greer agreed that under  (b)(1) of                                                              
Section  3, in  order for  the creditor  to set  aside a  transfer                                                              
restriction,  he/she  has  to  establish  that  the  transfer  was                                                              
intended primarily to defraud the creditor.                                                                                     
MR. SHAFTEL  pointed out  that Section 6  requires that  an action                                                              
or claim  can only be brought  when a "preponderance  of evidence"                                                              
has  been  demonstrated.    Generally,  when  proving  fraud,  the                                                              
burden of  proof is  higher, with  clear and convincing  evidence.                                                              
By allowing  51 percent  [with the use  of "primarily"],  SSHB 316                                                              
protects a  plaintiff who  is attempting to  set aside  a transfer                                                              
to a  trust.   Use of the  term "primarily"  is consistent  with a                                                              
liberal  burden  of  proof.    He noted  that  the  group  he  was                                                              
involved  with viewed  [the use  of "primarily"]  as a  compromise                                                              
and  agreed   that  "preponderance   of  the  evidence"   was  the                                                              
appropriate approach.   Mr. Shaftel said  that he felt it  to be a                                                              
balanced  and fair  approach, both  for  the settlor  and for  the                                                              
Number 0111                                                                                                                     
REPRESENTATIVE  JAMES moved to  report SSHB  316 out of  committee                                                              
with individual  recommendations and the accompanying  zero fiscal                                                              
note.  There  being no objection,  SSHB 316 was reported  from the                                                              
House Judiciary Standing Committee.                                                                                             
Number 0093                                                                                                                     
There being no further business before the committee, the House                                                                 
Judiciary Standing Committee meeting was adjourned at 3:20 p.m.                                                                 

Document Name Date/Time Subjects