04/08/2002 01:45 PM House JUD
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+ 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
date."
- 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 -
REFERRALS
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
MINUTE(JUD)
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 -
REFERRALS
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 -
REFERRALS
01/14/02 1958 (H) JUD
03/01/02 2438 (H) SPONSOR SUBSTITUTE INTRODUCED
03/01/02 2438 (H) READ THE FIRST TIME -
REFERRALS
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
317.
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
295.
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
295.
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
295.
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,
4/5/02.
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
Committee.
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
infraction.
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
available.
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
situation.
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
legislation.
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
standpoint."
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
language.
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
reason.
MR. SHAFTEL replied, "Your point is accurate; I can't argue with
it."
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
attorneys].
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
creditors.
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
plaintiff.
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.
ADJOURNMENT
Number 0093
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:20 p.m.
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