Legislature(2007 - 2008)BELTZ 211

02/21/2008 01:30 PM LABOR & COMMERCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 196 HANDLING MATTERS AFTER A PERSON'S DEATH TELECONFERENCED
Heard & Held
+ HJR 16 OPPOSING MILK TAX TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
+= SB 153 PEACE OFFICERS/FIRE FIGHTER RETIREMENT TELECONFERENCED
Moved SB 153 Out of Committee
+= SB 209 EXTEND ALASKA COMMISSION ON AGING TELECONFERENCED
Moved SB 209 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                       February 21, 2008                                                                                        
                           1:30 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Johnny Ellis, Chair                                                                                                     
Senator Bettye Davis                                                                                                            
Senator Con Bunde                                                                                                               
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Gary Stevens, Vice Chair                                                                                                
Senator Lyman Hoffman                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 153                                                                                                             
"An Act relating to the use of credited military service by                                                                     
retired peace officers and fire fighters to meet certain                                                                        
requirements for major medical insurance coverage benefits."                                                                    
     MOVED SB 153 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 209                                                                                                             
"An Act extending the termination date of the Alaska Commission                                                                 
on Aging; and providing for an effective date."                                                                                 
     MOVED SB 209 OUT OF COMMITTEE                                                                                              
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 16                                                                                                   
Opposing imposition of a milk tax on Alaskans.                                                                                  
     HEARD AND HELD                                                                                                             
                                                                                                                                
CS FOR HOUSE BILL NO. 196(JUD)                                                                                                  
"An Act relating to the handling of matters after a person's                                                                    
death."                                                                                                                         
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 153                                                                                                                  
SHORT TITLE: PEACE OFFICERS/FIRE FIGHTER RETIREMENT                                                                             
SPONSOR(s): SENATOR(s) FRENCH                                                                                                   
                                                                                                                                
04/13/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/13/07       (S)       L&C, STA, FIN                                                                                          
01/31/08       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
01/31/08       (S)       Heard & Held                                                                                           
01/31/08       (S)       MINUTE(L&C)                                                                                            
02/07/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/07/08       (S)       -- MEETING CANCELED --                                                                                 
02/21/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 209                                                                                                                  
SHORT TITLE: EXTEND ALASKA COMMISSION ON AGING                                                                                  
SPONSOR(s): SENATOR(s) DAVIS                                                                                                    
                                                                                                                                
01/16/08       (S)       PREFILE RELEASED 1/4/08                                                                                
01/16/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/08       (S)       L&C, FIN                                                                                               
02/19/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/19/08       (S)       Heard & Held                                                                                           
02/19/08       (S)       MINUTE(L&C)                                                                                            
02/21/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
BILL: HJR 16                                                                                                                  
SHORT TITLE: OPPOSING MILK TAX                                                                                                  
SPONSOR(s): REPRESENTATIVE(s) LYNN                                                                                              
                                                                                                                                
03/30/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/30/07       (H)       L&C                                                                                                    
05/04/07       (H)       L&C AT 3:00 PM CAPITOL 17                                                                              
05/04/07       (H)       Moved Out of Committee                                                                                 
05/04/07       (H)       MINUTE(L&C)                                                                                            
05/05/07       (H)       L&C RPT 5DP                                                                                            
05/05/07       (H)       DP: GARDNER, GATTO, BUCH, LEDOUX, OLSON                                                                
05/09/07       (H)       TRANSMITTED TO (S)                                                                                     
05/09/07       (H)       VERSION: HJR 16                                                                                        
05/09/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/09/07       (S)       L&C                                                                                                    
02/21/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
BILL: HB 196                                                                                                                  
SHORT TITLE: HANDLING MATTERS AFTER A PERSON'S DEATH                                                                            
SPONSOR(s): JUDICIARY                                                                                                           
                                                                                                                                
03/14/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/14/07       (H)       JUD                                                                                                    
04/04/07       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/04/07       (H)       Heard & Held                                                                                           
04/04/07       (H)       MINUTE(JUD)                                                                                            
04/10/07       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/10/07       (H)       Moved CSHB 196(JUD) Out of Committee                                                                   
04/10/07       (H)       MINUTE(JUD)                                                                                            
04/11/07       (H)       JUD RPT CS(JUD) 5DP 1NR                                                                                
04/11/07       (H)       DP: GRUENBERG, LYNN, COGHILL, HOLMES,                                                                  
                         RAMRAS                                                                                                 
04/11/07       (H)       NR: SAMUELS                                                                                            
04/20/07       (H)       TRANSMITTED TO (S)                                                                                     
04/20/07       (H)       VERSION: CSHB 196(JUD)                                                                                 
04/23/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/23/07       (S)       L&C, STA, JUD                                                                                          
02/21/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ALLISON BIASTOCK                                                                                                                
Staff to Senator French                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on SB 153 for the sponsor.                                                                      
                                                                                                                                
REPRESENTATIVE BOB LYNN                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of HJR 16.                                                                                        
                                                                                                                                
DIRK MOFFAT                                                                                                                     
Staff to Representative Lynn                                                                                                    
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on HJR 16 for the sponsor.                                                                      
                                                                                                                                
ILONA RICHEY, Executive Director                                                                                                
Alaska Milk Coalition                                                                                                           
Palmer, AK                                                                                                                      
POSITION STATEMENT: Supported HJR 16.                                                                                         
                                                                                                                                
MARIO CASTILLO, Executive Director                                                                                              
Dairy Trade Coalition                                                                                                           
No address provided                                                                                                             
POSITION STATEMENT: Supported HJR 16.                                                                                         
                                                                                                                                
REPRESENTATIVE JAY RAMRAS                                                                                                       
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of HB 196.                                                                                        
                                                                                                                                
JANE PIERSON                                                                                                                    
Staff to Representative Ramras                                                                                                  
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on HB 196 for the sponsor.                                                                      
                                                                                                                                
ROBERT MANLEY, Estate Planning Attorney                                                                                         
Representing himself                                                                                                            
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported HB 196.                                                                                         
                                                                                                                                
RODNEY KLEEDEHN, representing himself                                                                                           
No address provided                                                                                                             
POSITION STATEMENT: Supported HB 196.                                                                                         
                                                                                                                                
DOUGLAS BLATTMACHER, President                                                                                                  
Alaska Trust Company                                                                                                            
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported HB 196.                                                                                         
                                                                                                                                
STEVE GREER, Estate Planning Attorney                                                                                           
Representing himself                                                                                                            
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported HB 196  and spoke to Sections 2 and                                                             
3.                                                                                                                              
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR JOHNNY ELLIS called the  Senate Labor and Commerce Standing                                                             
Committee meeting to order at 1:30:31  PM. Present at the call to                                                             
order were Senators Bunde, Davis and Ellis.                                                                                     
                                                                                                                                
         SB 153-PEACE OFFICERS/FIRE FIGHTER RETIREMENT                                                                      
                                                                                                                                
1:31:35 PM                                                                                                                    
CHAIR ELLIS announced SB 153 to be up for consideration.                                                                        
                                                                                                                                
ALLISON BIASTOCK,  staff to  Senator French,  sponsor of  SB 153,                                                               
said she was available to answer questions.                                                                                     
                                                                                                                                
SENATOR  BUNDE said  he  generally supported  the  bill, but  one                                                               
factor under discussion was that it  would be used to recruit new                                                               
employees, and he asked if that was the case.                                                                                   
                                                                                                                                
MS. BIASTOCK replied that it applies  to only Tier II and III and                                                               
it is going  to be used as  a retention tool to  keep people from                                                               
leaving before they vest, not for new-hires.                                                                                    
                                                                                                                                
SENATOR  BUNDE remarked  that  he wanted  it  clarified that  the                                                               
state is not  going to hire any people under  a retirement system                                                               
that no longer exists.                                                                                                          
                                                                                                                                
SENATOR  DAVIS  moved   to  pass  SB  153   from  committee  with                                                               
individual recommendations  and accompanying fiscal  notes. There                                                               
were no objections and it was so ordered.                                                                                       
                                                                                                                                
            SB 209-EXTEND ALASKA COMMISSION ON AGING                                                                        
                                                                                                                              
1:34:27 PM                                                                                                                    
CHAIR ELLIS announced SB 209 to be up for consideration.                                                                        
                                                                                                                                
SENATOR  BUNDE  moved   to  pass  SB  209   from  committee  with                                                               
individual recommendations and attached  fiscal notes. There were                                                               
no objections and it was so ordered.                                                                                            
                                                                                                                                
                    HJR 16-OPPOSING MILK TAX                                                                                
                                                                                                                                
1:34:56 PM                                                                                                                    
CHAIR ELLIS announced HJR 16 to be up for consideration.                                                                        
                                                                                                                                
REPRESENTATIVE  BOB  LYNN,  sponsor  of HJR  16,  said  the  milk                                                               
industry  in Alaska  is struggling  to stay  in business  and the                                                               
dairy  business   is  a  vital   element  to   Alaska's  economic                                                               
diversification.                                                                                                                
                                                                                                                                
1:36:24 PM                                                                                                                    
SENATOR BUNDE  asked after the  Matanuska Maid debacle,  if there                                                               
is still a dairy industry in Alaska.                                                                                            
                                                                                                                                
REPRESENTATIVE LYNN  replied barely,  but they  need to  keep the                                                               
remnants of what  is left and a milk tax  would have the opposite                                                               
effect.                                                                                                                         
                                                                                                                                
DIRK  MOFFAT, staff  to Representative  Lynn, explained  that the                                                               
milk  tax  refers to  the  mandatory  dairy assessment  that  was                                                               
imposed  by Congress  in  1983. The  purpose of  the  tax was  to                                                               
decrease the  surplus of  milk by increasing  the demand.  In the                                                               
past milk over-production  was a big problem in the  Lower 48 and                                                               
answer  to it  was a  massive  generic campaign  that asked  "Got                                                               
milk?"  Alaska,  Hawaii,  and  Puerto Rico  have  milk,  but  not                                                               
enough.  "We're a  milk  deficit state."  So,  he explained  that                                                               
Alaska was excluded  from this promotion, but  stated that Alaska                                                               
is  still a  milk  deficit  state and  should  not  be forced  to                                                               
promote outside surplus milk from the Lower 48.                                                                                 
                                                                                                                                
1:38:58 PM                                                                                                                    
ILONA  RICHEY, Executive  Director, Alaska  Milk Coalition,  said                                                               
she is also president of the  Alaska Chapter of Women Involved in                                                               
Farm Economics  (WIFE), supported  HJR 16.  They oppose  the milk                                                               
tax   because  of   its  impact   on  consumers.   Isolated  Bush                                                               
communities  with the  highest milk  prices will  be particularly                                                               
affected.                                                                                                                       
                                                                                                                                
1:41:37 PM                                                                                                                    
MARIO  CASTILLO,  Executive   Director,  Dairy  Trade  Coalition,                                                               
supported HJR 16  said the Alaska Chapter of WIFE  and the Alaska                                                               
Milk Coalition are members of  the association. He related that a                                                               
new dairy  was opening up in  the Matanuska Valley and  that four                                                               
or  five  dairies in  Alaska  will  have congressional  funds  to                                                               
develop niche  products. The Valley  Dairy will start  to produce                                                               
some  ice cream  flavors very  soon that  will be  niche products                                                               
unique  to  Alaska. For  example,  their  products are  going  to                                                               
feature   local  ingredients   such  as   wild  salmon   berries,                                                               
huckleberries and  birch syrup.  He said  the Alaska  Gold Nugget                                                               
Cheddar  plant is  already receiving  orders.  This operation  is                                                               
committed to using all the milk Alaska can produce.                                                                             
                                                                                                                                
MR. CASTILLO said  he wrote the language that  exempted Alaska in                                                               
1983.                                                                                                                           
                                                                                                                                
1:46:09 PM                                                                                                                    
SENATOR  BUNDE asked  at  $.15 per  100-weight,  what would  that                                                               
actually translate to for the consumer per half gallon of milk.                                                                 
                                                                                                                                
MR. CASTILLO  answered any time  a middle man has  an opportunity                                                               
to mark up a product, it won't be  at the lowest level; he all of                                                               
a  sudden  take  a  brand  new  look  at  some  outside  elements                                                               
including transportation  costs, storage  or whatever  to revisit                                                               
his  current pricing.  "There is  no way  to gauge  the level  of                                                               
human greed that could be let loose."                                                                                           
                                                                                                                                
CHAIR ELLIS asked what the other milk-deficit states have done.                                                                 
                                                                                                                                
MR. MOFFAT answered  that Congressman Young had sent  a letter to                                                               
U.S.  Secretary of  Agriculture.  Others from  Hawaii and  Puerto                                                               
Rico signed the same letter.                                                                                                    
                                                                                                                                
1:48:42 PM                                                                                                                    
CHAIR ELLIS noted  a letter from Department  of Natural Resources                                                               
(DNR) talking about  the "Got Milk" campaign and  others. It said                                                               
it  might be  prudent to  wait for  the outcome  of the  Beef Act                                                               
case. He  asked if he had  any comments on the  natural resources                                                               
briefing paper about this bill.                                                                                                 
                                                                                                                                
MR. MOFFAT had no comments.                                                                                                     
                                                                                                                                
CHAIR ELLIS said he would hold the bill for another hearing.                                                                    
                                                                                                                                
1:51:14 PM at ease 1:53:51 PM                                                                                               
                                                                                                                                
     CSHB 196(JUD)-HANDLING MATTERS AFTER A PERSON'S DEATH                                                                  
                                                                                                                                
CHAIR ELLIS announced CSHB 196(JUD) to be up for consideration.                                                                 
                                                                                                                                
1:53:51 PM                                                                                                                    
REPRESENTATIVE JAY RAMRAS,  sponsor of HB 196,  testified that it                                                               
discourages beneficiaries  in a will from  contesting elements of                                                               
the  document; it  also addresses  proceeds  from life  insurance                                                               
policies.                                                                                                                       
                                                                                                                                
1:56:08 PM                                                                                                                    
JANE PIERSON,  staff to Representative  Ramras, said  the purpose                                                               
of  HB  196 is  to  make  the  will  process as  streamlined  and                                                               
efficient as  possible. It works  hand in  hand with some  of the                                                               
provisions  in trusts  and that  was really  the impetus  of this                                                               
bill.                                                                                                                           
                                                                                                                                
CHAIR ELLIS asked if it originated from trust attorneys.                                                                        
                                                                                                                                
MS. PEARSON replied yes.                                                                                                        
                                                                                                                                
SENATOR BUNDE asked if the bill  wants to prevent someone who has                                                               
a legitimate claim from contesting a trust.                                                                                     
                                                                                                                                
MS. PIERSON  answered that provisions  in case law  address undue                                                               
influence in  a will. This bill  would apply if your  last wishes                                                               
were  being questioned.  Sometimes a  protest will  be used  as a                                                               
bargaining chip to get a monetary settlement in litigation.                                                                     
                                                                                                                                
1:58:55 PM                                                                                                                    
SENATOR BUNDE asked if this  would prevent an investor from being                                                               
named in a  life insurance contract to protect  his investment if                                                               
the entrepreneur was somehow removed from the scene.                                                                            
                                                                                                                                
REPRESENTATIVE RAMRAS  responded that  the concept  Senator Bunde                                                               
was referring  to is called  "key man" insurance coverage  and he                                                               
had those same reservations last  year. He deferred those answers                                                               
to  professionals  in  the  field  because as  a  lay  person  he                                                               
couldn't see the logic.                                                                                                         
                                                                                                                                
2:01:03 PM                                                                                                                    
MS.  PIERSON  clarified that  AS  13.33.101  lays out  that  life                                                               
insurance  contracts  and  retirement plans  are  protected  from                                                               
claims and creditors.                                                                                                           
                                                                                                                                
SENATOR BUNDE said  he thought an answer is that  if you have key                                                               
man insurance, those people are  named in the insurance. So, this                                                               
would not prevent them from having a claim.                                                                                     
                                                                                                                                
MS. PIERSON answered yes.                                                                                                       
                                                                                                                                
2:02:14 PM                                                                                                                    
ROBERT  MANLEY, Estate  Planning  Attorney representing  himself,                                                               
said he is  part of an informal group of  estate planning lawyers                                                               
who have  been working to keep  Alaska law on trusts  current and                                                               
working well so  Alaskans can have their wishes  carried out with                                                               
a minimum  of expense and  tax costs. While other  legislation in                                                               
recent years  has come before them  has been designed in  part to                                                               
attract trusts from  other jurisdictions, HB 196  is primarily of                                                               
local  interest.   It  has  been   circulated  through   the  bar                                                               
association and it has broad support. `                                                                                         
                                                                                                                                
MR.  MANLEY  said  Section  1  deals  with  no  contest  clauses;                                                               
Sections 2 and 3 deal  with probate waiver affidavits and section                                                               
4  deals  with  beneficiary   designations  for  life  insurance,                                                               
qualified plans, IRAs and the like.                                                                                             
                                                                                                                                
He said he wanted to speak  to section 1 and allow his colleagues                                                               
to  speak to  the other  sections;  he said  this section  simply                                                               
brings  Alaska  law governing  wills  into  conformity with  laws                                                               
governing revocable  trusts. Revocable  trusts and wills  are the                                                               
two primary vehicles  that people use for  estate planning. There                                                               
are various  reasons for selecting  one over the  other including                                                               
privacy,  avoidance  of  probate  in  multiple  jurisdictions  or                                                               
avoidance of the extra expense of funding a revocable trust.                                                                    
                                                                                                                                
MR. MANLEY  said that Alaska  trust law provides that  no contest                                                               
clauses are effective; the laws  governing wills say that contest                                                               
clauses are not  effective if the challenger  has probable cause.                                                               
The contest clause  is the provision used if  a beneficiary under                                                               
a  will or  trust challenges  the dispositions  someone wants  to                                                               
make. Some  people will challenge a  will not because there  is a                                                               
good reason for  doing it, but because they are  trying to extort                                                               
some kind of  settlement on the basis of the  cost of litigation;                                                               
often they are  successful. This puts wills on the  same plane as                                                               
trusts in preventing that kind of thing.                                                                                        
                                                                                                                                
MR.  MANLEY stated  there  is  a valid  challenge  if the  person                                                               
making the  instrument didn't have  testamentary capacity  or was                                                               
unduly  influenced,  and  then  a  court  could  invalidate  that                                                               
instrument  and the  no  contest  clause is  of  no effect.  More                                                               
importantly, he  said, if  you totally  disinherit somebody  a no                                                               
contest clause doesn't work at  all because the person is risking                                                               
nothing. So,  it only  applies in situations  where one  child is                                                               
being favored over the other.  This legislation will allow people                                                               
to  exercise their  own judgment  over disposition  of their  own                                                               
money rather than have ongoing litigation in the future.                                                                        
                                                                                                                                
2:07:26 PM                                                                                                                    
Section 4(f) on page 3, line  21, specifically does not limit the                                                               
right of  the owner of  a policy to  pledge or assign  a contract                                                               
for  collateral for  debts. So  it doesn't  interfere in  any way                                                               
with  the ability  for creditors  to  protect themselves  through                                                               
life insurance.  It clarifies in Alaska  law that you can  name a                                                               
trust as  well as  an individual and  have that  disposition free                                                               
from the claims of general predators of the deceased.                                                                           
                                                                                                                                
CHAIR ELLIS asked if he knew of any opposition to this bill.                                                                    
                                                                                                                                
MR. MANLEY replied he didn't know of any opposition.                                                                            
                                                                                                                                
2:08:44 PM                                                                                                                    
RODNEY KLEEDEHN, representing himself,  supported HB 196 and said                                                               
he would  comment on the  part of  Section 4 that  addresses life                                                               
insurance proceeds payable to a  beneficiary upon the death of an                                                               
insured  and  also  that addresses  retirement  account  proceeds                                                               
payable to a beneficiary upon the  death of the account owner. He                                                               
explained that  life insurance proceeds payable  to an individual                                                               
or to an irrevocable trust are  not subject to claims made by the                                                               
insureds'  creditors. This  is  true in  the  case of  retirement                                                               
account  proceeds  payable to  an  individual  or an  irrevocable                                                               
trust.  However,  proceeds  payable  to  a  revocable  trust  are                                                               
subject to  such claims. This  is the  form of trust  most widely                                                               
used by Alaskans.                                                                                                               
                                                                                                                                
The  problem is  that the  ability  of creditors  to reach  these                                                               
proceeds discourages use of revocable  trusts, which provide much                                                               
needed  management  for  immature beneficiaries  and  others  who                                                               
can't manage money for one reason  or another. His concern is for                                                               
the  18-year  old who  is  legally  an adult  getting  unfettered                                                               
control of life insurance proceeds  because a parent chose not to                                                               
run  the  creditor  risk  of  using a  revocable  trust.  If  the                                                               
proceeds  had gone  to the  trust, management  could be  provided                                                               
indefinitely or  to a suitable  age for the individual  to assume                                                               
responsibility  for  financial  affairs.   He  was  aware  of  no                                                               
opposition whatsoever; the consensus is it's a good idea.                                                                       
                                                                                                                                
2:11:19 PM                                                                                                                    
DOUGLAS BLATTMACHER,  President, Alaska Trust  Company, supported                                                               
HB 196.  He said it  would improve  Alaska's trust laws  and make                                                               
the administration of estates and trusts simpler.                                                                               
                                                                                                                                
CHAIR  ELLIS asked  him  to describe  what  Alaska Trust  Company                                                               
does.                                                                                                                           
                                                                                                                                
MR.  BLATTMACHER replied  it is  a stand-alone  trust institution                                                               
similar  to the  bank's  trust  department, but  all  they do  is                                                               
provide  trust,  fiduciary  and  investment  management  services                                                               
primarily to individuals,  but to some institutions,  as well. He                                                               
has nine  employees and  about 1,000  trust accounts  mostly from                                                               
outside of Alaska. It started in 1996.                                                                                          
                                                                                                                                
CHAIR  ELLIS asked  if  it was  fair  to say  the  growth of  his                                                               
company was  due in part to  changes the state has  made over the                                                               
years in trust law in Alaska.                                                                                                   
                                                                                                                                
MR. BLATTMACHER replied  yes; he added that  trust departments in                                                               
other  banks have  also received  additional business  along with                                                               
insurance writers, stock brokers and attorneys.                                                                                 
                                                                                                                                
2:13:21 PM                                                                                                                    
STEVE  GREER,  Estate  Planning Attorney,  representing  himself,                                                               
Anchorage supported  HB 196  and spoke  to Sections  2 and  3. He                                                               
explained that  they proposed bringing the  threshold limit where                                                               
probate  can be  avoided up  to a  more reasonable  amount. These                                                               
sections were meant to allow heirs  to avoid the legal expense of                                                               
a probate proceeding.                                                                                                           
                                                                                                                                
Current statutes say  that the decedent can only  avoid the legal                                                               
expense  of a  probate  proceeding if  the  decedent dies  owning                                                               
$15,000 or less  of personal property that has been  on the books                                                               
since the early 80s. This  bill raises that threshold to $25,000,                                                               
a number  that has tracked  the consumer price index  (CPI) since                                                               
the early  80s. Cars  are a problem  and are  treated separately.                                                               
Because no  one really knows  what a car  is worth when  a spouse                                                               
dies,  and when  title  does  not list  the  surviving spouse  as                                                               
"and/or" or "or",  the spouse would have to go  through a probate                                                               
proceedings to get the car transferred  to her if it exceeded the                                                               
value of  $15,000. This bill  raises the threshold for  the value                                                               
of  cars to  a more  reasonable amount  of $100,000  because most                                                               
families have more than one car.                                                                                                
                                                                                                                                
MR. GREER said it should be  noted that virtually all states have                                                               
a  similar statute  only differing  only in  the amount  in which                                                               
probate proceeding is not necessary.  For example, Washington has                                                               
a  statute which  states  the formal  probate  proceeding is  not                                                               
necessary if  a decedent's probatable  estate is worth  less than                                                               
$100,000; Oregon has  a statute that says  $200,000. He concluded                                                               
that this bill represents a  compromise between those individuals                                                               
who  want to  avoid probate  as  opposed to  those attorneys  who                                                               
typically use the  probate process to get assets  from a decedent                                                               
to the heirs. It really is  a consumer protection bill because it                                                               
makes it more  possible for a decedent dying with  a small estate                                                               
to avoid  the expense that would  be the case under  current law.                                                               
He  had heard  of  no objections  to this  bill;  rather that  it                                                               
provided good changes.                                                                                                          
                                                                                                                                
SENATOR  BUNDE  asked  why  increase the  value  of  vehicles  to                                                               
$100,000,  but leave  the  other  property or  cash  to a  modest                                                               
increase of $25,000.                                                                                                            
                                                                                                                                
2:18:48 PM                                                                                                                    
MR. GREER  answered it's the case  with any bill when  you set an                                                               
arbitrary amount whether  it be $25,000 or  $100,000, people have                                                               
different thoughts. One thought is  if someone died with $100,000                                                               
in a bank account, there's too  much room for fraud. He explained                                                               
that  the  affidavit procedure  wherein  probate  can be  avoided                                                               
simply states that a  successor can go to a bank  and the bank is                                                               
obligated to  pay that money to  him. However if someone  else is                                                               
entitled  to receive  that money  pursuant  to the  terms of  the                                                               
decedent's will,  that individual  can still go  to court  and go                                                               
through the probate process. A  property limit over $25,000 would                                                               
encourage abuse  of this section,  but that  is not the  case for                                                               
automobiles.                                                                                                                    
                                                                                                                                
SENATOR BUNDE asked  if it's possible that people  who do probate                                                               
work would  lose the  opportunity to  do some  work if  the limit                                                               
were raised to $100,000.                                                                                                        
                                                                                                                                
MR. GREER replied  yes, but an attorney's duty is  to his client,                                                               
not his pocketbook.                                                                                                             
                                                                                                                                
REPRESENTATIVE  RAMRAS wrapped  up that  no  one is  hurt by  the                                                               
changes  and  it is  helpful  to  the  process and  an  important                                                               
housekeeping measure for Alaska.                                                                                                
                                                                                                                                
2:22:19 PM                                                                                                                    
SENATOR BUNDE  said when  the bill  comes up  again he  wanted to                                                               
know  what it  would cost  to go  through probate  for $25,000  -                                                               
because he understands  it would cost them  a significant portion                                                               
of the  $25,000 to recover the  $25,000 - especially when  he has                                                               
heard other states  are at $100,000 or $200,000  and vehicles are                                                               
$100,000. He wanted  to raise the limit to  $100,000 or something                                                               
higher  so the  cost of  probate  would not  eat up  most of  the                                                               
inheritance.                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS said he shared those concerns.                                                                            
                                                                                                                                
CHAIR ELLIS said  the bill would be held for  further work. There                                                               
being  no  further business  to  come  before the  committee,  he                                                               
adjourned the meeting at 2:25:46 PM.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects