Legislature(2007 - 2008)CAPITOL 17
05/10/2007 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB141 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 141 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
May 10, 2007
3:10 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Gabrielle LeDoux
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
Representative Mark Neuman, Vice Chair
Representative Carl Gatto
Representative Jay Ramras
COMMITTEE CALENDAR
SENATE BILL NO. 141
"An Act relating to limited liability companies."
- MOVED SB 141 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 141
SHORT TITLE: LIMITED LIABILITY COMPANIES
SPONSOR(S): SENATOR(S) MCGUIRE
03/28/07 (S) READ THE FIRST TIME - REFERRALS
03/28/07 (S) JUD
04/23/07 (S) JUD AT 1:30 PM BELTZ 211
04/23/07 (S) Scheduled But Not Heard
04/27/07 (S) JUD AT 1:30 PM BELTZ 211
04/27/07 (S) Moved SB 141 Out of Committee
04/27/07 (S) MINUTE(JUD)
04/30/07 (S) JUD RPT 2DP 2NR
04/30/07 (S) DP: THERRIAULT, MCGUIRE
04/30/07 (S) NR: FRENCH, WIELECHOWSKI
05/09/07 (S) TRANSMITTED TO (H)
05/09/07 (S) VERSION: SB 141
05/10/07 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS REGISTER
MARIT CARLSON-VAN DORT, Staff
to Senator Lesil McGuire
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 141 on behalf of the sponsor,
Senator McGuire.
DAVID G. SHAFTEL, Attorney at Law
Anchorage, Alaska
POSITION STATEMENT: Responded to questions during discussion of
SB 141.
ACTION NARRATIVE
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:10:37 PM. Representatives
Gardner, Buch, LeDoux, and Olson were present at the call to
order.
SB 141 - LIMITED LIABILITY COMPANIES
CHAIR OLSON announced that the only order of business would be
SENATE BILL NO. 141, "An Act relating to limited liability
companies."
3:10:59 PM
MARIT CARLSON-VAN DORT, Staff to Senator Lesil McGuire, Alaska
State Legislature, explained on behalf of the sponsor, Senator
McGuire, that SB 141 will clarify that an organization providing
professional services can organize its business using a limited
liability company (LLC); adoption of this bill will eliminate
speculation regarding an organization's authority to use an LLC
for professional services. She shared her understanding that
[some] businesses providing professional services have already
been organizing as LLCs. Senate Bill 141 will also delete AS
10.50.150(d) in order to allow a founder of an Alaskan LLC to be
a co-manager without having all of the company's assets included
in the founder's gross estate for purposes of calculating
federal tax.
REPRESENTATIVE LeDOUX asked where "co-manager" is addressed in
the bill.
3:12:43 PM
DAVID G. SHAFTEL, Attorney at Law, after relaying that he
specializes in tax, trust, and estate planning law, offered his
understanding that for federal estate-tax purposes, under 26
U.S.C. Sec. 2036(a)(2), if a person forms a trust or family
limited liability partnership (LLP) or a family LLC, and retains
powers to effect the enjoyment of interests that the person has
given away or sold, then all of those interests "will be pulled
back into that founder's estate and taxed at death." To avoid
this problem, an independent person must be appointed as special
manager, and this person would have authority over distributions
and would be able to decide whether the entity would ever be
liquidated. However, "in order to make this effective, " he
remarked, AS 10.50.150(d) must be deleted, adding that it
doesn't serve any significant purpose anyway.
MR. SHAFTEL, in response to a question, said that the bill is
not intended to establish or clarify a tax shelter. He
explained that LLCs and LLPs are a very common tool in
legitimate estate planning. However, in such situations, one
must be careful with regard to how much control is retained,
otherwise interests will be pulled back into one's estate and
taxed at death. Good estate planning will prevent this, he
noted. In response to comments, he said that family LLCs and
LLPs serve a number of purposes, one being asset protection.
MS. CARLSON-VAN DORT added that SB 141 is offered in the spirit
of keeping the state's trust and estate planning laws up to date
and competitive, thereby continuing to bring more business and
revenue into the state.
CHAIR OLSON, after ascertaining that no one else wished to
testify, closed public testimony on SB 141.
3:23:51 PM
REPRESENTATIVE LeDOUX moved to report SB 141 out of committee
with individual recommendations and the accompanying fiscal
note. There being no objection, SB 141 was reported from the
House Labor and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:24 p.m.
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