04/03/2013 01:30 PM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB83 | |
| HB69 | |
| HB9 | |
| SB65 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 65 | TELECONFERENCED | |
| + | HB 9 | TELECONFERENCED | |
| += | HB 69 | TELECONFERENCED | |
| += | HB 83 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
April 3, 2013
1:46 p.m.
MEMBERS PRESENT
Senator John Coghill, Chair
Senator Fred Dyson
Senator Bill Wielechowski
MEMBERS ABSENT
Senator Lesil McGuire, Vice Chair
Senator Donald Olson
COMMITTEE CALENDAR
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 83(JUD)
"An Act relating to certain federal statutes, regulations,
presidential executive orders and actions, and secretarial
orders and actions; relating to the duties of the attorney
general; and providing for an effective date."
- MOVED CSHB 83(JUD) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 69(JUD)
"An Act exempting certain firearms, firearm accessories, and
ammunition in this state from federal regulation; declaring
certain federal statutes, regulations, rules, and orders
unconstitutional under the Constitution of the United States and
unenforceable in this state; providing criminal penalties for
federal officials who enforce or attempt to enforce a federal
statute, regulation, rule, or order regulating certain firearms
and firearm accessories in this state; and providing for an
effective date."
- MOVED SCS CSHB 69(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 9
"An Act relating to secured transactions under the Uniform
Commercial Code and to the regulation of funds transfers,
including remittance transfers, under the Uniform Commercial
Code and federal law; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 65
"An Act relating to property exemptions for retirement plans,
individual retirement amending Rule 64, Alaska Rules of Civil
Procedure, and Rule 301(a), Alaska Rules of accounts, and Roth
IRAs; relating to transfers of individual retirement plans;
relating to Evidence." the rights of judgment creditors of
members of limited liability companies and partners of limited
liability partnerships; relating to the Uniform Probate Code,
including pleadings, orders, liability, and notices under the
Uniform Probate Code and the Alaska Principal and Income Act,
the appointment of trust property, the Alaska Uniform Prudent
Investor Act, co-trustees, trust protectors, and trust advisors;
relating to the Alaska Principal and Income Act; relating to the
Alaska Uniform Transfers to Minors Act; relating to the
disposition of human remains; relating to the tax on insurers
for life insurance policies; relating to insurable interests for
certain insurance policies; relating to restrictions on
transfers of trust interests; relating to discretionary
interests in irrevocable trusts; relating to the community
property of married persons; and
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 65
SHORT TITLE: RETIREMENT PLANS; ROTH IRAS; PROBATE
SPONSOR(s): SENATOR(s) COGHILL
02/27/13 (S) READ THE FIRST TIME - REFERRALS
02/27/13 (S) L&C, JUD
03/21/13 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/21/13 (S) Heard & Held
03/21/13 (S) MINUTE(L&C)
03/26/13 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/26/13 (S) Moved CSSB 65(L&C) Out of Committee
03/26/13 (S) MINUTE(L&C)
03/27/13 (S) L&C RPT CS 2DP 2NR SAME TITLE
03/27/13 (S) DP: DUNLEAVY, ELLIS
03/27/13 (S) NR: OLSON, MICCICHE
04/01/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
04/01/13 (S) Heard & Held
04/01/13 (S) MINUTE(JUD)
04/03/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 9
SHORT TITLE: SECURED TRANSACTIONS AND FUNDS TRANSFERS
SPONSOR(s): REPRESENTATIVE(s) GRUENBERG
01/16/13 (H) PREFILE RELEASED 1/7/13
01/16/13 (H) READ THE FIRST TIME - REFERRALS
01/16/13 (H) L&C, JUD
02/20/13 (H) L&C AT 3:15 PM BARNES 124
02/20/13 (H) Moved Out of Committee
02/20/13 (H) MINUTE(L&C)
02/22/13 (H) L&C RPT 3DP 3NR
02/22/13 (H) DP: REINBOLD, JOSEPHSON, OLSON
02/22/13 (H) NR: CHENAULT, SADDLER, MILLETT
03/13/13 (H) JUD AT 1:00 PM CAPITOL 120
03/13/13 (H) Moved Out of Committee
03/13/13 (H) MINUTE(JUD)
03/14/13 (H) JUD RPT 4DP 2NR
03/14/13 (H) DP: GRUENBERG, FOSTER, LEDOUX, LYNN
03/14/13 (H) NR: PRUITT, KELLER
03/25/13 (H) TRANSMITTED TO (S)
03/25/13 (H) VERSION: HB 9
03/27/13 (S) READ THE FIRST TIME - REFERRALS
03/27/13 (S) JUD
04/03/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 69
SHORT TITLE: EXEMPT FIREARMS FROM FEDERAL REGULATION
SPONSOR(s): REPRESENTATIVE(s) CHENAULT
01/16/13 (H) READ THE FIRST TIME - REFERRALS
01/16/13 (H) JUD
01/18/13 (H) BILL REPRINTED 1/17/13
02/08/13 (H) JUD AT 1:00 PM CAPITOL 120
02/08/13 (H) Heard & Held
02/08/13 (H) MINUTE(JUD)
02/18/13 (H) JUD AT 1:00 PM CAPITOL 120
02/18/13 (H) Moved CSHB 69(JUD) Out of Committee
02/18/13 (H) MINUTE(JUD)
02/20/13 (H) JUD RPT CS(JUD) NT 6DP 1NR
02/20/13 (H) DP: MILLETT, PRUITT, LYNN, FOSTER,
LEDOUX, KELLER
02/20/13 (H) NR: GRUENBERG
02/27/13 (H) TRANSMITTED TO (S)
02/27/13 (H) VERSION: CSHB 69(JUD)
02/28/13 (S) READ THE FIRST TIME - REFERRALS
02/28/13 (S) JUD
03/15/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/15/13 (S) Heard & Held
03/15/13 (S) MINUTE(JUD)
03/18/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/18/13 (S) Heard & Held
03/18/13 (S) MINUTE(JUD)
03/20/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/20/13 (S) -- MEETING CANCELED --
03/25/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/25/13 (S) Heard & Held
03/25/13 (S) MINUTE(JUD)
03/29/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/29/13 (S) Heard & Held
03/29/13 (S) MINUTE(JUD)
04/01/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
04/01/13 (S) Heard & Held
04/01/13 (S) MINUTE(JUD)
04/03/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 83
SHORT TITLE: FEDERAL LAWS & EXECUTIVE ORDERS
SPONSOR(s): REPRESENTATIVE(s) KELLER
01/22/13 (H) READ THE FIRST TIME - REFERRALS
01/22/13 (H) JUD
02/08/13 (H) JUD AT 1:00 PM CAPITOL 120
02/08/13 (H) Heard & Held
02/08/13 (H) MINUTE(JUD)
02/18/13 (H) JUD AT 1:00 PM CAPITOL 120
02/18/13 (H) Scheduled But Not Heard
02/25/13 (H) JUD AT 1:00 PM CAPITOL 120
02/25/13 (H) Scheduled But Not Heard
02/27/13 (H) JUD AT 1:00 PM CAPITOL 120
02/27/13 (H) Heard & Held
02/27/13 (H) MINUTE(JUD)
03/04/13 (H) JUD AT 1:00 PM CAPITOL 120
03/04/13 (H) Moved CSHB 83(JUD) Out of Committee
03/04/13 (H) MINUTE(JUD)
03/05/13 (H) JUD RPT CS(JUD) NT 5DP
03/05/13 (H) DP: MILLETT, GRUENBERG, PRUITT, FOSTER,
KELLER
03/13/13 (H) TRANSMITTED TO (S)
03/13/13 (H) VERSION: CSHB 83(JUD)
03/15/13 (S) READ THE FIRST TIME - REFERRALS
03/15/13 (S) JUD
03/29/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
03/29/13 (S) Heard & Held
03/29/13 (S) MINUTE(JUD)
04/01/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
04/01/13 (S) Heard & Held
04/01/13 (S) MINUTE(JUD)
04/03/13 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
JIM POUND, Staff
Representative Wes Keller
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Opposed the proposed amendment to HB 83.
DEBORAH BEHR, Chief Assistant Attorney General
Legislation and Regulation Section
Civil Division
Department of Law
Chair
Alaska Uniform Law Delegation
National Conference of Commissioners on Uniform State Laws
Juneau, Alaska
POSITION STATEMENT: Provided supporting information related to
HB 9.
STACY SCHUBERT, Director
Government Relations and Public Affairs
Alaska Housing Finance Corporation (AHFC
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 9.
ERIC HAVELOCK, Multifamily Underwriting Supervisor
Alaska Housing Finance Corporation
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 9.
LUKE FANNING, Vice President
First National Bank Alaska
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 9.
CHAD HUTCHINSON, Staff
Senator John Coghill
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information related to SB 65.
DAVID SHAFTEL, Attorney
Anchorage, Alaska
POSITION STATEMENT: Provided information and answered questions
related to SB 65.
ACTION NARRATIVE
1:46:52 PM
CHAIR JOHN COGHILL called the Senate Judiciary Standing
Committee meeting to order at 1:46 p.m. Present at the call to
order were Senators Dyson, Wielechowski, and Chair Coghill.
HB 83-FEDERAL LAWS & EXECUTIVE ORDERS
1:47:22 PM
CHAIR COGHILL announced the consideration of HB 83. "An Act
relating to certain federal statutes, regulations, presidential
executive orders and actions, and secretarial orders and
actions; relating to the duties of the attorney general; and
providing for an effective date."
He reminded the members that CSHB 83(JUD), version O, was before
the committee and a motion to adopt proposed Amendment 1,
labeled 28-LS0328\O.1 was awaiting action.
1:47:44 PM
JIM POUND, Staff, Representative Wes Keller, sponsor of HB 83,
drew attention to a report from the Department of Law that
discusses legal actions against the federal government since
2008. He relayed the bill sponsor's opinion of the amendment,
which is that it is unfriendly and unnecessary. Mr. Pound said
he personally believes it is an effort to delay the legislation.
1:48:39 PM
SENATOR WIELECHOWSKI called a point of order. He said the
statement is offensive, and if he wanted to delay the bill he'd
walk out of the meeting because he was making the quorum.
CHAIR COGHILL cautioned against reading in motives.
MR. POUND apologized.
MR. POUND reported that the Department of Law advised that the
amendment does not affect the fiscal note. He said he believes
that current statutory language in AS 44.23.020(b)(7)(A) makes
the amendment unnecessary. That language talks about an annual
report to the legislature from the attorney general about the
work and expenditures of the office. He further opined that the
issue of the amendment was of little concern to most legislators
and could be brought up during finance subcommittees under
missions and measures. He asked the committee to reject the
amendment.
1:49:58 PM
SENATOR WIELECHOWSKI countered that the amendment simply asks
the attorney general to provide a summary of the litigation
between the state and the federal government, a discussion of
the legal issues, the cost of the case, and the final
disposition. He said it is good government to have this
information and every legislator should be interested in having
it.
CHAIR COGHILL said he was sympathetic to the amendment, but
would vote against it based on the bill sponsor's
recommendation.
1:52:08 PM
A roll call vote was taken. Senator Wielechowski voted in favor
of Amendment 1 and Senators Dyson and Coghill voted against it.
Therefore, Amendment 1 failed by a 1:2 vote.
CHAIR COGHILL solicited a motion.
1:53:22 PM
SENATOR DYSON moved to report CSHB 83(JUD), version O, from
committee with individual recommendations and attached fiscal
note(s).
CHAIR COGHILL announced that without objection CSHB 83(JUD)
moved from the Senate Judiciary Standing Committee.
HB 69-EXEMPT FIREARMS FROM FEDERAL REGULATION
1:53:59 PM
CHAIR COGHILL announced the consideration of HB 69. "An Act
prohibiting state and municipal agencies from using assets to
implement or aid in the implementation of the requirements of
certain federal statutes, regulations, rules, and orders that
are applied to infringe on a person's right to bear arms or
right to due process or that implement or aid in the
implementation of the federal REAL ID Act of 2005; exempting
certain firearms, firearm accessories, and ammunition in this
state from federal regulation; declaring certain federal
statutes, regulations, rules, and orders unconstitutional under
the Constitution of the United States and unenforceable in this
state; requiring the attorney general to file any legal action
to prevent implementation of a federal statute, regulation,
rule, or order that violates the rights of a resident of the
state; and providing for an effective date."
He noted that the Senate committee substitute (CS), version I,
was before the committee.
1:54:36 PM
REPRESENTATIVE MIKE CHENAULT, sponsor of HB 69, stated that he
may not agree with everything in the current CS, but he
understands the concerns the committee and the attorney general
have with the legislation.
CHAIR COGHILL said the committee heard some vehement opposition
to the changes, but he continues to feel they are important. He
solicited a motion.
1:56:02 PM
SENATOR DYSON moved to report Senate CS for CS for HB 69(JUD),
version I, from committee with individual recommendations and
attached fiscal note(s).
CHAIR COGHILL announced that without objection, SCS CSHB 69(JUD)
moved from the Senate Judiciary Standing Committee.
1:56:34 PM
At ease
HB 9-SECURED TRANSACTIONS AND FUNDS TRANSFERS
2:00:07 PM
CHAIR COGHILL announced the consideration of HB 9. "An Act
relating to secured transactions under the Uniform Commercial
Code and to the regulation of funds transfers, including
remittance transfers, under the Uniform Commercial Code and
federal law; and providing for an effective date."
2:01:14 PM
REPRESENTATIVE MAX GRUENBERG, Alaska State Legislature, sponsor
of HB 9, stated that this legislation is important and time
sensitive, because July 1, 2013 is a nationwide effective date.
The bill updates two articles of the Uniform Commercial Code
(UCC). These are Article 9 on secure transactions and Article 4A
on funds transfer. He reported no opposition to the bill.
2:03:21 PM
DEBORAH BEHR, Chief Assistant Attorney General, Legislation and
Regulation Section, Civil Division, Department of Law, and
Chair, Alaska Uniform Law Delegations, National Conference of
Commissioners on Uniform State Laws (NCCUSL), Juneau, Alaska,
said the Alaska statutes assigned DOL the duty of promoting
uniform laws in Alaska where uniformity among the states is
important. The state has been a member of the Uniform Law
Commission for over 100 years. She described the Uniform Law
Commission as a states' rights organization, in which states
meet annually to propose uniform solutions to state legislatures
to address common problems where uniformity across state lines
is desirable. One area is commerce.
Because businesses buy and sell products and borrow money across
state lines, all the states have adopted the Uniform Commercial
Code (UCC) to ensure reliability and predictability of business
transactions. The purpose of the bill is to update two articles
of the UCC. These pertain to Article 9 on secure transactions
and Article 4A on funds transfer.
She highlighted four major changes and provided examples. The
first amendment to Article 9 deals with misspellings of names.
She explained that she and her husband are in the process of
buying a car. As part of the process, they got a loan and gave
the creditor a security interest in the car in the event of
default. The UCC commissioners have found that names are
sometimes misspelled in these documents and this makes it
difficult for the creditor to recover the asset - the car in
this example. To address this problem the UCC has recommended
that all states create a safe harbor for creditors if they look
at the person's current driver's license or state ID card. This
is a protection to the consumer as well.
MS. BEHR said the second update to Article 9 makes changes to
the definition of "registered organization." For example, if she
were to obtain a loan to start a small business in Anchorage
called Behr's Bikes to sell bikes in Alaska, Washington, and
Oregon there would be a question about where the security
agreement would be filed. This update says that the date and
location where the business was formed determines where those
documents will be filed. In this example it would be in Alaska.
The third update to Article 9 relates to "after acquired
property." Using the same example of Behr's Bikes in Anchorage,
she hypothesized that she moved the business to Arizona,
purchased additional merchandise, but kept the same loan. The
legal issue that arises in this circumstance is where the
creditor would look for that security agreement. This amendment
says that the creditor may rely on the filing in Alaska for four
months. She noted that 36 states have adopted these three
changes and they're pending in 13 more jurisdictions.
MS. BEHR said the final changes relate to remittance transfers
in UCC Article 4A. She noted a letter of support in the packets
from the Alaska Bankers Association and explained that it's
often unclear whether these electronic transfers are covered by
state or federal law. The Article 4A changes have been passed by
14 jurisdictions and are pending in 21 jurisdictions. She noted
that the packets included a sectional analysis of HB 9.
SENATOR WIELECHOWSKI asked if there would be a walk-through of
the bill.
CHAIR COGHILL stated his preference to take testimony first.
2:11:02 PM
STACY SCHUBERT, Director, Government Relations and Public
Affairs, Alaska Housing Finance Corporation (AHFC), explained
that AHFC uses Article 9 of the Uniform Commercial Code in
securing some collateral when financing multifamily projects.
The collateral for things like kitchen appliances and furniture
is perfected through the recording of a UCC financing statement.
She said that HB 9 will enhance AHFC's secured position in two
ways. It will provide greater guidance as to the name of the
debtor on the financing statement and it will provide greater
protection for an existing secured creditor when the debtor
moves to another state or merges with another entity. She noted
that Mr. Havelock could answer technical questions.
CHAIR COGHILL asked where that provision was in the bill.
MS. SCHUBERT said she didn't have a copy of the bill in front of
her.
CHAIR COGHILL asked Mr. Havelock if he could identify where that
provision was in the bill.
2:13:03 PM
ERIC HAVELOCK, Multifamily Underwriting Supervisor, Alaska
Housing Finance Corporation, said that Ms. Schubert was talking
about the sections that make changes to Article 9, and
Representative Gruenberg could identify the exact location in
the bill.
2:13:42 PM
LUKE FANNING, Vice President, First National Bank Alaska, said
he was representing the Alaska Bankers Association (ABA) in
support of HB 9. It provides necessary amendments to Articles 4A
and 9 of the Uniform Commercial Code. This legislation is
necessary to address amendments made in 2010 to Article 9 of the
UCC. HB 9 also clarifies the relationship between UCC Article 4A
and the federal Electronic Funds Transfer Act. If the bill is
not passed this session, Alaska will be inconsistent with the
financial practices in the rest of the country. Failure to pass
the bill could result in additional costs and uncertainty for
Alaska businesses and financial services customers.
CHAIR COGHILL noted that Paula Kelsey from the Department of
Natural Resources (DNR) was available to answer questions.
2:16:19 PM
CHAIR COGHILL asked Ms. Behr to explain the process to get a UCC
law in place and where there was potential for modification.
MS. BEHR explained that the Uniform Law delegates meet annually
to discuss potential changes in an open process. The banking
community and consumer groups help develop the bill and then it
is recommended to state legislatures, as she is doing today. She
said it is unusual for the commissioners to recommend a
particular date, but for secure transactions it is very
important in that things happen on the same date. Almost all the
states have adopted or have this legislation pending.
CHAIR COGHILL asked where the suggested changes fit in the
articles.
MS. BEHR said they apply to Article 9 and Article 4A.
CHAIR COGHILL asked Mr. Henning if he had anything to add.
MR. HENNING explained that the Uniform Law Commission and the
American Law Institute develop the UCC articles in a deliberate,
open process, and make recommendations to the states. They are
not law. He explained that a major revision of Article 9 of the
UCC became effective in all the states on July 1, 2001. The
provisions in HB 9 are technical clarifications of those
revisions. They seek to resolve the practical problems facing
lenders and borrowers in the marketplace. He highlighted that
the legislature has the full authority to modify the UCC
recommendations embodied in HB 9, but it would put Alaska out of
step with other states.
2:22:09 PM
MS. BEHR provided the following sectional analysis of HB 9:
Sections 1 and 2 address the amendments to Article 4A to
maintain coverage under state law for certain types of
remittance transfers in commercial transactions. The banking
community supports this language.
Sections 3 through 7 update definitions in Article 9 of the
Uniform Commercial Code relating to secured transactions. Some
changes update language on electronic commerce to comply with
the Uniform Electronic Transactions Act. Others reflect updates
on certificates of title and recognize that there are
alternatives in other states. Sections 5 and 6 recognize that
there are new business organizations in Alaska and other states
that are not formed under the corporation law, but are formed
under other process of Alaska law such as limited liability
companies. If there is confusion about the official name, the
names on record with the department of commerce will be
examined.
Section 8 sets out a general test to demonstrate who owns
electronic chattel paper.
Section 9 makes a technical change and recognizes in statute
that designating a state of location of an organization or
agency includes the location of the home office.
Section 10 makes technical changes to conform to the revised
definition of certificate of title.
Section 11 relates to when a debtor changes location from one
state to another. It provides a four-month grace period for
after-move acquired collateral that current law provides for
pre-move collateral.
Sections 12 and 13 make technical changes in language to conform
to other provisions of the Uniform Commercial code, Article 9.
Section 14 addresses the priority of security creditors. These
technical changes protect the new priority rule in the bill.
Sections 15 and 16 clarify that a secured party that takes an
assignment of a payment as collateral for an obligation may use
the remedies under Article 9.
Sections 17 through 19 provide clarity on the name of the debtor
to be used in a financing statement for different types of
debtors, such as registered organizations, trusts, decedent of
estate, or individual debtors.
Section 20 makes technical changes to conform to the new rules
governing individual debtor names on financing statements.
Section 21 makes a technical change to parallel other provisions
of the section. The change is needed for ease of administration
by filing offices.
Sections 22 through 24 change the term "correction statement" to
"information statement" to avoid giving the impression that a
filing of the statement has a legal effect of correcting a
problem. The changes also allow a secured party of record to
file an information statement regarding a filed record if the
secured party believes that the person that filed the record was
not entitled to do so under Article 9. Without this change, only
a debtor could file such a statement.
Section 25 says that in order for a secured party to record an
affidavit to facilitate foreclosure on a mortgage serving as
collateral for a promissory note, the secured party must state
in the affidavit that the mortgagor is in default.
Sections 26 sets out an applicability provision for the Act.
Sections 27 through 33 set out transition provisions for the
Act.
Section 34 instructs the Department of Natural Resources (DNR)
on implementation of the Act.
Section 35 provides a savings clause for an action, case, or
proceeding commenced before July 1, 2013.
Section 36 provides an immediate effective date of these
instructions.
Section 37 provides an effective date of July 1, 2013 for the
Act. This avoids implementation issues across the states.
2:29:23 PM
MR. HENNING said that many of the provisions resolve minor
ambiguities or address definitional changes.
CHAIR COGHILL stated that he would hold HB 9 for further
consideration.
2:30:58 PM
At ease
SB 65-RETIREMENT PLANS; ROTH IRAS; PROBATE
2:35:57 PM
CHAIR COGHILL reconvened the meeting and announced the
consideration of SB 65. "An Act relating to property exemptions
for retirement plans, individual retirement accounts, and Roth
IRAs; relating to transfers of individual retirement plans;
relating to the rights of judgment creditors of members of
limited liability companies and partners of limited liability
partnerships; relating to the Uniform Probate Code, including
pleadings, orders, liability, and notices under the Uniform
Probate Code and the Alaska Principal and Income Act, the
appointment of trust property, the Alaska Uniform Prudent
Investor Act, co-trustees, trust protectors, and trust advisors;
relating to the Alaska Principal and Income Act; relating to the
Alaska Uniform Transfers to Minors Act; relating to the
disposition of human remains; relating to insurable interests
for certain insurance policies; relating to restrictions on
transfers of trust interests; relating to discretionary
interests in irrevocable trusts; relating to the community
property of married persons; and amending Rule 64, Alaska Rules
of Civil Procedure, and Rule 301(a), Alaska Rules of Evidence."
CHAIR COGHILL moved to adopt the proposed committee substitute
(CS), labeled 28-LS0473\O. He explained that it removes what was
Section 37 in version C, and asked if there was objection.
SENATOR WIELECHOWSKI asked what Section 37 did.
2:37:41 PM
CHAD HUTCHINSON, Staff, Senator John Coghill, sponsor of SB 65,
explained that Section 37 amends AS 21.09.210(m). He read the
subsection (m) as follows:
(m) The tax imposed under this section for a
single[AN INDIVIDUAL] life insurance policy or for a
group or other type of policy that insures the life of
one or more individuals shall be computed at the rate
of
(1) 2.7 percent of policy year premium up
to $100,000; and
(2) one-tenth of one percent of policy
year premium exceeding $100,000.
MR. HUTCHINSON deferred to Beth Chapman or David Shaftel to
explain what that means and why it was eliminated.
CHAIR COGHILL said the policy call was to avoid the fiscal
impact this year.
MR. HUTCHINSON agreed, and added that it could be taken up in a
separate bill in the future.
2:38:51 PM
CHAIR COGHILL found no objection and stated that version O was
before the committee. He directed attention to the new fiscal
note, and stated his intention to take action on the bill
tomorrow.
2:39:46 PM
MR. HUTCHINSON addressed the question Senator Wielechowski
raised during the last hearing regarding the single subject
rule. He explained that he corresponded with Senator
Wielechowski's office and sent a legal opinion that was prepared
by Representative Thompson for House Bill 292. It was introduced
last year and was substantially similar to SB 65. Mr. Hutchinson
said he, too, reviewed the opinion and cross-referenced the
cases stated in the memorandum on the Westlaw database.
He highlighted that the single subject rule has a broad
interpretation, and an act generally qualifies under the rule as
long as there is a logical connection or popular understanding.
The Alaska Supreme Court has heard eight of these cases and
seven were deemed to have qualified because of the broad
interpretation. The case that did not qualify under the single
subject rule tried to include both oil taxes and a clean
election program. He opined that SB 65 would qualify because the
subjects all address trusts and family or estate financial
planning matters.
2:42:16 PM
SENATOR WIELECHOWSKI said the opinion that Legislative Legal
Services issued certainly raises the question about whether the
bill violates the single subject rule. He suggested the
committee could manage the risk by removing the offending parts.
He warned that some attorney would challenge it if there was a
lot of money involved.
2:43:49 PM
DAVID SHAFTEL, Attorney, Anchorage, Alaska, said the group of
estate planning attorneys and trust officers that has worked to
improve the laws in this area has received similar opinions from
Legislative Legal Services nearly every time a bill like this
has been introduced. One particular attorney feels an obligation
to bring the issue up because it is a possibility. Mr.
Hutchinson and other attorneys believe that it won't be a
problem, and the Supreme Court has taken a broad view on these
challenges. He acknowledged that there was a small risk that
some attorney would make an argument in the future, but it
wasn't a realistic concern. The bill has 17 subjects but they're
all related to family and estate planning.
2:48:02 PM
CHAIR COGHILL asked if he had been working in this venue for 16
years.
MR. SHAFTEL clarified that he began working with the legislature
in 1997, but he's been practicing in Alaska for about 40 years.
CHAIR COGHILL asked if the single subject rule had always been a
topic of conversation.
MR. SHAFTEL said yes.
CHAIR COGHILL asked if there had been a court challenge.
MR. SHAFTEL said not in the area of estate planning and estate
and trust administration.
SENATOR WIELECHOWSKI said it's a risk but he wouldn't push it
any further.
2:50:10 PM
CHAIR COGHILL said he intended to have a sectional analysis at
the next hearing.
He held SB 65 in committee.
2:53:15 PM
There being no further business to come before the committee,
Chair Coghill adjourned the Senate Judiciary Standing Committee
meeting at 2:53 p.m.