Legislature(1997 - 1998)

04/28/1998 01:35 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         SENATE LABOR AND COMMERCE COMMITTEE                                   
                    April 28, 1998                                             
                      1:35 p.m.                                                
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Senator Loren Leman, Chairman                                                  
Senator Jerry Mackie, Vice Chairman                                            
Senator Tim Kelly                                                              
Senator Lyman Hoffman                                                          
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
Senator Mike Miller                                                            
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
CONFIRMATION HEARINGS:                                                         
                                                                               
     State Board of Registration for Architects, Engineers & Land              
     Surveyors:  Patricia Peirsol, Fairbanks                                   
                                                                               
     Alaska Labor Relations Agency:  Karen Mahurin, Kenai                      
                                                                               
     Occupational Safety and Health Review Board:  Denis Davidson,             
     Anchorage; and Carla Meek, Juneau                                         
                                                                               
     Personnel Board:  Charlie Parr, Fairbanks                                 
                                                                               
     Board of Certified Real Estate Appraisers:  Judy Kemplen,                 
     Anchorage                                                                 
                                                                               
     Alaska Workers' Compensation Board:  John Abshire, Anchorage;             
     Valerie Baffone, Anchorage; and Shawn Pierre, Chugiak                     
                                                                               
SENATE BILL NO. 353                                                            
"An Act relating to property exemptions; and providing for an                  
effective date."                                                               
                                                                               
     - HEARD AND HELD                                                          
                                                                               
SENATE BILL NO. 354                                                            
"An Act relating to wills, intestacy, nonprobate transfers, and                
trusts; and amending Rule 24, Alaska Rules of Civil Procedure."                
                                                                               
     - MOVED SB 354 OUT OF COMMITTEE                                           
                                                                               
                                                                               
CS FOR HOUSE BILL NO. 411(FIN)                                                 
"An Act relating to issuance of a winery license in a local option             
area."                                                                         
                                                                               
     - MOVED CSHB 411(FIN) OUT OF COMMITTEE                                    
                                                                               
CS FOR HOUSE BILL NO. 451(JUD)                                                 
"An Act relating to assistive technology devices and mobility aids             
for physically disabled persons."                                              
                                                                               
     - MOVED CSHB 451(JUD) OUT OF COMMITTEE                                    
                                                                               
PREVIOUS SENATE COMMITTEE ACTION                                               
                                                                               
SB 353 - No previous action to record.                                         
                                                                               
SB 354 - No previous action to record.                                         
                                                                               
HB 411 - No previous action to record.                                         
                                                                               
HB 451 - No previous action to record.                                         
                                                                               
WITNESS REGISTER                                                               
                                                                               
Representative Alan Austerman                                                  
State Capitol                                                                  
Juneau, AK 99801-1182                                                          
  POSITION STATEMENT:  Prime Sponsor of HB 411                                 
                                                                               
Doug Griffin, Director                                                         
Alcohol Beverage Control Board                                                 
550 W. 7th Ave., Suite 350                                                     
Anchorage, AK 99501-3510                                                       
  POSITION STATEMENT:  ABC Board neutral on HB 411                             
                                                                               
Ms. Jennifer Adzima, Legislative Assistant Intern to                           
  Representative Joe Green                                                     
State Capitol                                                                  
Juneau, AK 99801-1182                                                          
  POSITION STATEMENT:  Presented overview on HB 451                            
                                                                               
Patrick Reinhart, Director                                                     
State Independent Living Council                                               
1016 W. 6th Ave., #205                                                         
Anchorage, AK 99501                                                            
  POSITION STATEMENT:  Testified in support of HB 451                          
                                                                               
                                                                               
Ken Dean                                                                       
1130 Slim Williams Way                                                         
Juneau, AK 99801                                                               
  POSITION STATEMENT:  Testified in support of HB 451                          
                                                                               
Ms. Mel Krogseng, Staff to Senator Robin Taylor                                
State Capitol                                                                  
Juneau, AK 99801-1182                                                          
  POSITION STATEMENT:  Presented overviews on SB 354 & SB 353                  
                                                                               
Stephen Noey                                                                   
P.O. Box 110018                                                                
Anchorage, AK 99511-0018                                                       
  POSITION STATEMENT:  Testified in support of SB 354                          
                                                                               
Douglas Blattmacher, President & CEO                                           
Alaska Trust Company                                                           
1029 W. 3rd                                                                    
Anchorage, AK 99501                                                            
  POSITION STATEMENT:  Testified in support of SB 354                          
                                                                               
Rich Hompesch                                                                  
199 N. Cushman, Suite 400                                                      
Fairbanks, AK 99701                                                            
  POSITION STATEMENT:  Testified in support of SB 354                          
                                                                               
Steve Greer                                                                    
4041 B St., #205                                                               
Anchorage, AK 99501                                                            
  POSITION STATEMENT:  Offered information on SB 353                           
                                                                               
Ms. Linda Hulbert                                                              
P.O. Box 81402                                                                 
Fairbanks, AK 99708                                                            
  POSITION STATEMENT:  Testified in support of SB 353                          
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 98-25, SIDE A                                                             
Number 001                                                                     
                                                                               
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee                  
meeting to order at 1:35 p.m. and noted the presence of Senators               
Kelly, Hoffman and Mackie.                                                     
                                                                               
The first item on the agenda was a confirmation hearing on the                 
appointment of Karen Mahurin of Kenai to the Alaska Labor Relations            
Agency.                                                                        
                                                                               
KAREN MAHURIN, testifying via teleconference from Kenai, stated she            
has served on the Alaska Labor Relations  Agency Board for the past            
five years, as well as serving as president of a Local of support              
employees on the Kenai Peninsula for approximately eight years.                
The Alaska Labor Relations Agency has also sent her to Boston to               
attend the National Labor Relations Academy.                                   
                                                                               
MS. MAHURIN believes that the board provides a very  orderly                   
process to clarify unit disagreements and settle unfair labor                  
practices.  She also believes that only by having a balanced panel             
of labor management in a public seat can there be fairness to all              
parties.  She expressed her desire to be reconfirmed to the Alaska             
Labor Relations Agency.                                                        
                                                                               
SENATOR MACKIE moved that the name of Karen Mahurin to the Alaska              
Labor Relations Agency be forwarded to a joint session on                      
confirmations, and that this was not an indication of the members'             
intent to vote for or against the nominee.  Hearing no objection,              
the motion carried.                                                            
                                                                               
Number 095                                                                     
                                                                               
CHAIRMAN LEMAN opened the confirmation hearing on the appointment              
of Carla Meek to the Occupational Safety and Health Review Board.              
                                                                               
CARLA MEEK, the owner of a construction business in Juneau, said               
she serves in the field as a construction person so she is                     
knowledgeable about the importance and the necessity for safety and            
health in the job environment.  She believes that her experience of            
being the owner of a construction business, as well working in the             
field, will be an asset to the board.                                          
                                                                               
SENATOR MACKIE moved that the name of Carla Meek to the                        
Occupational Safety and Health Review Board be forwarded to a joint            
session on confirmations, and that this was not an indication of               
the members' intent to vote for or against the nominee.  Hearing no            
objection, the motion carried.                                                 
                                                                               
Number 175                                                                     
                                                                               
CHAIRMAN LEMAN opened the confirmation hearing on the appointment              
of Charlie Parr to the Personnel Board.                                        
                                                                               
CHARLIE PARR of Fairbanks said he has been a resident of the state             
of Alaska since 1961.  He is a former faculty member of the                    
University of Alaska Fairbanks and served in the Alaska State                  
Legislature for eight years.  He and his wife have been the owners             
and operators of a gift shop in Fairbanks since 1976.  He has                  
served on the Parole Board for almost five years, and he was                   
appointed to the Personnel Board last September.  He said he views             
the Personnel Board, since it is the last recourse in the Executive            
Branch for public employees who aren't covered by a bargaining                 
agreement, as a  place that requires both careful consideration and            
absolute integrity.                                                            
                                                                               
CHAIRMAN LEMAN noted that concern was expressed last year about the            
potential for extreme partisanship by members of the board, and he             
asked Mr. Parr how he views his participation on this board.  MR.              
PARR responded that he can honestly say that in the board's                    
deliberations, he has never seen any indication of political                   
partisanship, and he would not let his membership in a party                   
influence his decisions.                                                       
                                                                               
SENATOR MACKIE moved that the name of Charlie Parr to the Personnel            
Board be forwarded to a joint session on confirmations, and that               
this was not an indication of the members' intent to vote for or               
against the nominee.  Hearing no objection, the motion carried.                
                                                                               
Number 235                                                                     
                                                                               
CHAIRMAN LEMAN opened the confirmation hearing on the appointment              
of Judy Kemplen to the Board of Certified Real Estate Appraisers.              
                                                                               
JUDY KEMPLEN, testifying from Anchorage, related that she is vice              
president and manager of residential lending at National Bank of               
Alaska, overseeing statewide production of new mortgage loans.  She            
said she has hands-on mortgage lending experience to bring to the              
board, and she has worked with appraisers statewide in her current             
position, as well as previous positions as loan officer, internal              
quality officer and underwriter.                                               
                                                                               
CHAIRMAN LEMAN asked Ms. Kemplen if she saw any conflict in her                
work on the board and her husband's serving in the House of                    
Representatives.  MS. KEMPLEN responded that she saw no conflict at            
all.                                                                           
                                                                               
SENATOR MACKIE moved that the name of Judy Kemplen to the Board of             
Certified Real Estate Appraisers be forwarded to a joint session on            
confirmations, and that this was not an indication of the members'             
intent to vote for or against the nominee.  Hearing no objection,              
the motion carried.                                                            
                                                                               
Number 265                                                                     
                                                                               
CHAIRMAN LEMAN opened the confirmation hearing on the appointment              
of  Shawn Pierre to the Alaska Workers' Compensation Board.                    
                                                                               
SHAWN PIERRE, a teacher in the Anchorage School District, said he              
has served on the executive board of the Alaska Teamsters since                
1996, and has found  it very interesting and a learning experience.            
                                                                               
CHAIRMAN LEMAN asked Mr. Pierre what types of issues have been                 
addressed since he has been on the board.  MR. PIERRE replied they             
have addressed many different issues including a wide spectrum of              
work related injuries.                                                         
                                                                               
SENATOR MACKIE moved that the name of Shawn Pierre to the Alaska               
Workers' Compensation Board be forwarded to a joint session on                 
confirmations, and that this was not an indication of the members'             
intent to vote for or against the nominee.  Hearing no objection,              
the motion carried.                                                            
                                                                               
CHAIRMAN LEMAN opened the confirmation hearing on the appointment              
of Patricia Peirsol to the State Board of Registration for                     
Architects, Engineers & Land Surveyors.                                        
                                                                               
PATRICIA PEIRSOL, the owner of an architectural firm in Fairbanks,             
said she realized several years ago that the Board of Registration             
was more than a place to send your money and receive your                      
registration certificate.  She realized that it was a very                     
important board and the issues were very important, not only to                
herself, but to the general public as well.  She believes that with            
her experience she can help with some of the decision-making                   
process and that is why she is interested in being on the board.               
                                                                               
CHAIRMAN LEMAN noted that SB 110, which passed the Senate and was              
currently in the House, received criticism because it shifts  costs            
to licensees from the new registrants, and he asked Ms. Peirsol if             
she had any comments on the bill.   MS. PEIRSOL replied that she               
was in only one meeting where that issue was discussed, and she is             
not certain that she understands the thought that monies would be              
transferred from one group to the other.                                       
                                                                               
SENATOR MACKIE commented that the legislation provides for the                 
licensing of landscape architects and being part of the board, and,            
as a result of that, all architects, engineers, land surveyors and             
landscape architects will pay the same amount of fees.                         
                                                                               
Number 380                                                                     
                                                                               
SENATOR MACKIE moved that the name of Patricia Peirsol to the State            
Board of Registration for Architects, Engineers & Land Surveyors,              
and that this was not an indication of the members' intent to vote             
for or against the nominee.  Hearing no objection, the motion                  
carried.                                                                       
                                                                               
Number 391                                                                     
                                                                               
         CSHB 411(FIN) - LOCAL OPTION FOR WINERY LICENSE                       
                                                                               
CHAIRMAN LEMAN closed the confirmation hearing portion of the                  
meeting and then brought HB 411 before the committee.                          
                                                                               
REPRESENTATIVE ALAN AUSTERMAN, prime sponsor of HB 411, explained              
the legislation is a minor change to the statute to allow the                  
possibility of a small winery business to be established,                      
particularly in one of the villages on Kodiak Island, although it              
could apply to the rest of the state.   Because of the way the ABC             
statutes are written, it was felt that the winery licensee portion             
had to be added to the exemption clauses which would then allow the            
local communities to have a vote to allow a winery to take place.              
                                                                               
SENATOR MACKIE asked if the statutes contain a definition of a                 
winery.                                                                        
                                                                               
DOUG GRIFFIN, Director, Alcoholic Beverage Control Board, stated               
the ABC Board's position as being neutral and not having any                   
objection to the legislation.  He confirmed  the change allows the             
ability to start a winery as part of one of the options that are               
available to local residents under the local option process.                   
                                                                               
In response to Senator Mackie's question, MR. GRIFFIN clarified                
that the state of Alaska relies on the definition for wine that's              
provided by the federal government.  The Bureau of Alcohol, Tobacco            
and Firearms is more involved in the manufacturing of a product.               
He said he didn't have the definition in front of him, but it                  
basically would be a product that's fermented from grapes or other             
types of fruit.  On Kodiak Island they are looking at a wildberry              
winery and it would be within a certain alcohol content.                       
                                                                               
SENATOR MACKIE asked if a winery would be regulated in the same                
manner by the ABC Board as any other industry would.  MR. GRIFFIN              
acknowledged that was correct.  He stressed that there would have              
to be a local option election held before a winery could be                    
established.                                                                   
                                                                               
CHAIRMAN LEMAN asked if the winery would be just exporting its                 
product.  MR. GRIFFIN replied that could be the case if that is the            
option it chooses, but a community could also allow for limited                
sale of the product as well.  He noted there are communities in                
other parts of the country involved in the  manufacturing of a                 
product but they remain dry communities.                                       
                                                                               
There being no further testimony on HB 411, CHAIRMAN LEMAN asked               
for the pleasure of the committee.                                             
                                                                               
SENATOR MACKIE moved that CSHB 411(FIN) be passed out of committee             
with individual recommendations.  Hearing no objection, it was so              
ordered.                                                                       
                                                                               
                                                                               
       CSHB 451(JUD) - ASSISTIVE TECHNOLOGY & MOBILITY AIDS                    
                                                                               
CHAIRMAN LEMAN brought CSHB 451(JUD) before the committee as the               
next order of business.                                                        
                                                                               
JENNIFER ADZIMA, a legislative  intern to Representative Joe Green             
who is the prime sponsor of HB 451, said the legislation                       
establishes an express warranty for technologies which assist                  
physically disabled persons.  Assistive technologies and mobility              
aids for physically disabled are not covered by the lemon laws and             
the consumer protection statutes in Title 45.  She noted 11 states             
have passed such laws, and two others, including Alaska, are                   
considering doing so.                                                          
                                                                               
Number 524                                                                     
                                                                               
PATRICK REINHART, Director of the State Independent Living Council             
(SILC), testifying from Anchorage in support of HB 451, said the               
council's  primary responsibility is the development of a state                
plan for independent living and the implementation of that plan.               
He related that SILC requested that the legislation be introduced.             
                                                                               
MR. REINHART said that even though the bill has a zero fiscal note,            
he believes it will end up saving the state money in the long run              
because it is often state agencies that are involved in helping                
people with disabilities with the purchase of some kinds of very               
expensive pieces of adaptive equipment.  When there is no recourse,            
they often end up with pieces of equipment that lie idle and                   
useless, so it will save the state money, as well as the                       
individuals with disabilities.                                                 
                                                                               
Number 542                                                                     
                                                                               
SENATOR MACKIE expressed his appreciation to Mr. Reinhart for all              
of his hard work with Challenge Alaska, as well as his work as                 
director of SILC.                                                              
                                                                               
KEN DEAN of Juneau said he works for Southeast Alaska Independent              
Living (SAIL) and he was appearing before the committee to shed                
some light on the value of the legislation.                                    
                                                                               
MR. DEAN said he purchased his wheelchair six years ago at a cost              
of $13,500.  However, before that, he had a wheelchair which was               
made by a different manufacturer, which he purchased at a cost of              
$9,500.  He had problems with the wheelchair, but was told by the              
manufacturer that Alaska had no lemon law so he was basically out              
of luck.  He said in working for an independent living agency, he              
runs across this type of problem continually because of                        
manufacturers not honoring their nationwide warranties, mainly                 
because the equipment is in Alaska.                                            
                                                                               
TAPE 98-25, SIDE B                                                             
Number 585                                                                     
                                                                               
There being no further testimony on HB 451, CHAIRMAN LEMAN asked               
for the pleasure of the committee.                                             
                                                                               
SENATOR HOFFMAN moved CSHB 451(JUD) be passed out of committee with            
individual recommendations.  Hearing no objection, it was so                   
ordered.                                                                       
                                                                               
            SB 354 - WILLS, TRUSTS, & OTHER TRANSFERS                          
                                                                               
CHAIRMAN LEMAN brought SB 354, sponsored by the Senate Judiciary               
Committee,  before the committee as the next order of business.                
                                                                               
MEL KROGSENG, staff to Senator Robin Taylor, explained the                     
legislation puts finishing touches on the Alaska Trust Act passed              
in 1997 by taking common law and codifying it into statute.  In                
writing the trust document, people who write trusts for Alaska,                
will be able to include references to the statutes as opposed to               
having to individually list all the provisions in the trust                    
document.                                                                      
                                                                               
SB 354 makes a number of important improvements to Alaska's estate             
and trust laws.  Section 1-8, 18, and 19 of the bill change Alaska             
law to permit a person who is domiciled outside of Alaska to select            
Alaska as the jurisdiction for the probate of their estate.  This              
provision should bring significant business to the state.                      
                                                                               
Sections 9 and 10 of the bill allow a person to limit the liability            
of a trustee in their trust when more than one trustee is serving.             
The person could provide that only the trustee who exercises a                 
power will be held liable for his  actions and that the other                  
trustee who did not participate in the exercise of the power would             
not be held liable.  This provision will encourage trustees in                 
Alaska to work with other trustees of the same trust.                          
                                                                               
Portions of the Uniform Trusts Act draft 1997) which clarify many              
issues involving the administration of trusts in Alaska are                    
included in Section 11 of the bill.                                            
                                                                               
Section 12 protects an Alaska trustee who in good faith defends an             
Alaska trust from the claims of a creditor who seeks to set the                
trust aside.  If the trustee acts in good faith, then the trustee              
gets a first lien on all trust assets for payment of its fees,                 
costs and attorneys' fees.  Delaware has adopted a similar                     
provision to protects its trustees.                                            
                                                                               
Section 13 allows a trustee who has the power to invade the corpus             
of a trust to appoint the assets of the trust to another trust for             
the beneficiaries to postpone estate and similar taxes.  This                  
provision would allow a trustee to move a trust to Alaska and to               
appoint the assets to an Alaska trust.                                         
                                                                               
Section 14 clarifies that a trust created in another state or                  
country can be moved to Alaska even though the trust was settled               
before the Alaska Trust Act was passed last year.                              
                                                                               
Alaska does not have a statutory provision that sets out the powers            
of a trustee.  Sections of the Uniform Trustee's Powers Act (draft             
1994-1997) are enacted in Section 16 of the bill.  These statutory             
powers would supplement the powers set forth in a trust agreement.             
                                                                               
A number of miscellaneous provisions are included elsewhere in the             
bill.  Section 15 allows a person to include a penalty clause in               
their trust.  Section 17 clarifies the accounting of bond premiums             
and discounts.  Section 20 amends AS 34.40.110(d) to be consistent             
with the Uniform Fraudulent Transfers Act.  Section 21 precludes an            
action by creditors of the grantor of the trust against those who              
assist in the creation of the trust.                                           
                                                                               
Concluding her overview on the legislation, MS. KROGSENG said this             
bill will improve estate and trust laws and will make Alaska's laws            
more favorable to its residents.  In addition, the bill will make              
Alaska's laws more attractive to people outside of Alaska who are              
considering Alaska for the administration of their estates and                 
trusts.                                                                        
                                                                               
Number 525                                                                     
                                                                               
SENATOR LEMAN asked Ms. Krogseng if she was aware of any opposition            
to the legislation.  MS. KROGSENG replied that she was not, and                
that correspondence in support of the legislation as been received             
from attorneys in Anchorage who work trusts.  The attorneys have               
said it will make it easier for them in working with trusts and                
setting them up.                                                               
                                                                               
STEVEN NOEY said one of the important things in the legislation is             
the ability to take a trust that has been created prior to Alaska              
Trust Act and have it moved to Alaska.  The U.S. Treasury estimates            
that there are about a trillion dollars offshore in trusts, and a              
lot of them have gone offshore due to the fact that Alaska didn't              
have a self-settling trust where it was an asset protection trust.             
SB 354 is a housekeeping measure to make sure that there is no                 
conflict if people do want to switch and move the trust to Alaska.             
                                                                               
                                                                               
DOUGLAS BLATTMACHER, President and CEO of the Alaska Trust Company             
(ATC), testifying via teleconference from Anchorage, stated ATC                
strongly supports SB 354. ATC thinks it will complement the Alaska             
Trust Act passed last year and will encourage more people to set up            
trusts, as well as generate additional job opportunities and                   
business opportunities.                                                        
                                                                               
RICH HOMPESCH, a Fairbanks attorney and a member of the Alaska                 
Probate Rules Committee, said he helped draft portions of SB 354,              
and he agrees with the previous testimony on the bill.  He thinks              
the bill will help Alaska remain competitive in the trust industry             
in the United States.                                                          
                                                                               
There being no further testimony or discussion on SB 354, CHAIRMAN             
LEMAN requested a motion to move the bill out of committee.                    
                                                                               
Number 487                                                                     
                                                                               
SENATOR MACKIE moved SB 354 be passed out of committee with                    
individual recommendations.  Hearing no objection, it was so                   
ordered.                                                                       
                                                                               
CHAIRMAN LEMAN opened the confirmation hearing on the appointment              
of Valerie Baffone to the Alaska Workers' Compensation Board.                  
                                                                               
VALERIE BAFFONE, testifying via teleconference from Anchorage,                 
stated she is currently the assistant business manager for Public              
Employees Local 71, and she is up for reconfirmation to the board              
as a labor representative.  She enjoys the work she's been doing on            
the board, and she thinks it is a good functioning board.  She                 
believes it is important to have a board that can work well with               
both the employer representatives and the employees in resolving               
the issues that come before it.                                                
                                                                               
CHAIRMAN LEMAN commented that workers' comp costs appear to have               
come come down in recent years, and he asked Ms. Baffone if she                
thinks it is a reflection of some of the changes in law that the               
Legislature has made in the last five years.  MS. BAFFONE replied              
that she thinks some of changes that have been made over the years             
have had an impact on reducing the costs for the workers' comp                 
claims.                                                                        
                                                                               
SENATOR MACKIE moved that the name of Valerie Baffone to the Alaska            
Workers' Compensation Board be forwarded to a joint session on                 
confirmation, and that this was not an indication of the members'              
intent to vote for or against the nominee.  Hearing no objection,              
the motion carried.                                                            
                                                                               
                   SB 353 - PROPERTY EXEMPTIONS                                
                                                                               
CHAIRMAN LEMAN brought SB 353, sponsored by the Senate Judiciary               
Committee, before the committee as the final order of business.                
                                                                               
MEL KROGSENG, staff to Senator Robin Taylor, said SB 353 seeks to              
update the exemptions which are presently allowed Alaska residents             
for a family home and insurance.  The legislation, although not                
granting an unlimited exemption for the family home, would at least            
put the family home on par with the new federal income tax capital             
gain exclusion.  Given the growing popularity of trusts as estate              
planning tools, a section is added to give individuals who have                
their assets placed in the name of a trust, the same protection                
that would exist had the assets been in the individuals' own names.            
This would apply only to those trusts where the trust income is                
still taxable to the grantor.                                                  
                                                                               
In addition, the bill adds three new exemptions: (1) for the                   
reserves set aside for condominium associations; (2) a limited                 
exemption for annuities; and (3) for the new Roth IRA.                         
                                                                               
The exemption provided for condominium reserves is meant to protect            
the many individuals who reside in condominiums in Alaska.  The                
bill assures them that the money which they have paid in the form              
of monthly dues will continue to be used for the purposes for which            
they were intended, i.e., ongoing maintenance and repairs.                     
                                                                               
MS. KROGSENG said the bill would protect insurance policies and                
their related cousin, annuities (up to $100,000) from unforeseen               
financial disasters.  She noted that the states of Alabama, New                
York, Florida, California, Missouri, New Mexico, North Carolina,               
Oregon, and Texas have seen fit to give its citizens an unlimited              
exemption for insurance policies.                                              
                                                                               
Number 385                                                                     
                                                                               
CHAIRMAN LEMAN inquired as to the current value of the homestead               
exemption.                                                                     
                                                                               
STEVE GREER, an Anchorage attorney who has worked on the                       
legislation, said with respect to the indexing of the homestead                
exemption, it is now $62,100.                                                  
                                                                               
CHAIRMAN LEMAN said he could understand the reason for increasing              
a homestead exemption, but he questioned why the big jump to                   
$250,000 for an individual and $500,000 for a couple.  MR. GREER               
pointed out that a lot of states allow unlimited homestead                     
exemptions.  This legislation was meant to try put to Alaska, not              
at the top of ladder, but at least higher than where it is right               
now, and it was felt that the previous amount in the law was                   
exceptionally low.  He noted that with respect to the homestead                
exemption, banks are still going to request in their deed of trust             
language that the individual who gets a loan waive that right to               
that homestead exemption, so the banks' interests are still going              
to be protected.  It was felt that this legislation would be of                
great benefit to the majority of Alaskans.                                     
                                                                               
CHAIRMAN LEMAN asked if other people besides the banks can ask that            
the homestead exemption be waived when they set up loan agreements.            
MR. GREER acknowledged that was correct.  He added that what this              
bill is really meant to protect against is the unforeseen financial            
disaster that might occur such as a huge medical bill, a lawsuit,              
etc.                                                                           
                                                                               
MR. GREER spoke to the importance of the exemption for the reserves            
set aside for condominium associations, as well as Section 11,                 
relating to the treatment of certain trusts, which is meant to                 
assure the fact that if an individual retitles his asset in the                
name of his revokable trust, that the same type of exemption                   
protection is going to be given to that individual as if he had                
just kept the asset in his own individual name.                                
                                                                               
CHAIRMAN LEMAN said recent studies have indicated that the CPI                 
overstates inflation, and he asked Mr. Greer if in using that it is            
creating limits that are higher than what we really want to create.            
MR. GREER replied that the present $54,000 puts Alaska in  the                 
lower half of the states that protect its citizens against claims,             
and Alaska is one of the more expensive states in the union, where,            
if anything, the protection should be higher and not lower.                    
                                                                               
CHAIRMAN LEMAN commented there are two sides to that because it may            
protect the citizens against claims, but raising those limits would            
not protect the person making the claim.                                       
                                                                               
Number 234                                                                     
                                                                               
LINDA HULBERT, a licensed insurance agent living in Fairbanks,                 
voiced her strong support for the provision in the bill that would             
protect insurance policies from unforeseen financial disasters.                
Many times life insurance is the only asset there to protect the               
spouses and children.  She said she represents a lot of life                   
insurers in the state and, with those agents, works with hundreds              
and hundreds of people every year who in good faith get a permanent            
policy to protect their families.                                              
                                                                               
Number 192                                                                     
                                                                               
CHAIRMAN LEMAN stated it was his intent to hold the legislation                
over, but he wanted to get a sense of the committee regarding the              
amounts proposed in the legislation.                                           
                                                                               
SENATOR HOFFMAN said he would like to see the amounts for the                  
homestead exemption and the insurance policy protection as close as            
possible  so that it is not protecting one group of people at a                
higher level, because many families might only have life insurance             
as their asset.                                                                
                                                                               
There being no further testimony on SB 353, CHAIRMAN LEMAN said the            
legislation would be worked on for the next couple of days to see              
if a consensus could be reached on the limits in the bill and to               
craft something that everyone could support.                                   
                                                                               
There being no further business to come before the committee, the              
meeting adjourned at 3:07 p.m.                                                 

Document Name Date/Time Subjects