Legislature(2001 - 2002)
05/02/2001 03:40 PM Senate L&C
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ALASKA STATE LEGISLATURE
SENATE LABOR & COMMERCE COMMITTEE
May 2, 2001
3:40 pm
MEMBERS PRESENT
Senator Randy Phillips, Chair
Senator Alan Austerman
Senator Loren Leman
Senator John Torgerson
Senator Bettye Davis
MEMBERS ABSENT
All Members Present
COMMITTEE CALENDAR
SENATE BILL NO. 208
"An Act relating to the labeling of, the advertising of, and the
disclosure of certain information about halibut, salmon, halibut
products, and salmon products."
MOVED CSSB 208(L&C) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 152(RLS)
"An Act relating to brewpub licenses; and providing for an
effective date."
MOVED CSHB 152(RLS) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 181(JUD)
"An Act relating to the obligations of spouses, to insurance
policies of spouses, to the nonprobate transfer of property on
death to a community property trust, to the division of the
community property of spouses at death, and to the Alaska
Community Property Act; amending Rule 301, Alaska Rules of
Evidence; and providing for an effective date."
MOVED CSHB 181(JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 208 - No previous action to consider.
HB 152 - See Labor and Commerce minutes dated 5/1/01.
HB 181 - No previous action to consider.
WITNESS REGISTER
Ms. Loretta Brown, Staff
Senator Jerry Ward
State Capitol Bldg.
Juneau AK 99811
POSITION STATEMENT: Commented on SB 208.
Mr. Kevin Hand, Staff
Representative Andrew Halcro
State Capitol Bldg.
Juneau AK 99811
POSITION STATEMENT: Commented on HB 152.
Ms. Amy Erickson, Staff
Representative Lisa Murkowski
State Capitol Bldg.
Juneau AK 99811
POSITION STATEMENT: Supported HB 181.
Mr. Dave Shaftel
Estate Planning Attorney
No address provided
POSITION STATEMENT: Supported HB 181.
Representative Lisa Murkowski
State Capitol Bldg.
Juneau AK 99811
POSITION STATEMENT: Sponsor of HB 181.
ACTION NARRATIVE
TAPE 01-27, SIDE A
Number 001
SB 208-FARMED SALMON DISCLOSURES
CHAIRMAN RANDY PHILLIPS called the Senate Labor & Commerce
Committee meeting to order at 3:40 pm and announced SB 208 to be
up for consideration.
MS. LORETTA BROWN, Staff to Senator Ward, read the sponsor
statement as follows:
SB 208 adds a new section relating to the labeling and
advertisement of halibut and salmon products. This
section will allow a person to sell or advertise
halibut or salmon products as "wild," "antibiotic-
free," "hormone free," and dye-free" if the product is
harvested from a river or an ocean and has not been
raised in captivity.
We have all seen the beautiful displays of farmed
salmon at fish counters or restaurants without
realizing that the varying shades of pink are
artificially created. Almost 100% of all farmed salmon
is artificially colored with either canthaxanthin or
astaxanthin, a process sometimes called "color
finishing" to give farmed salmon the attractive red
color associated with wild salmon and salmon products
that consumers expect.
Federal regulations call for declaration of the use of
canthaxanthin or astaxanthin at the retail level, but
that information is rarely passed on to the consumer.
Additionally, it is common practice to add antibiotics
and other supplements to farmed finfish diets.
This legislation will allow a clear distinction to the
consumer informing them of the natural benefits of
"wild salmon" and "wild halibut."
CHAIRMAN PHILLIPS asked for a current fiscal note.
MS. BROWN responded that it wasn't ready yet.
SENATOR LEMAN noted on page 3, line 24 talks about how a person
can label and advertise halibut and salmon. It says, "…may
indicate that the product or the halibut or salmon in the product
is free from colors and additives, if the product is harvested
from a river or ocean and has not been raised in captivity or
under control for its entire life." and it should say, "if the
product is free from colors and additives". We don't want the
condition to be saying you can advertise that it's free from
colors and additives just because it was raised in the wild.
"What if someone takes pink or chum salmon, which is light and
wants to add artificial colors to it? We shouldn't allow them to
advertise that as being additive-free."
MS. BROWN agreed.
SENATOR LEMAN moved a conceptual amendment saying that it may
indicate the product or salmon in the product is free from colors
and additives, if it is free. There were no objections and it was
so ordered.
SENATOR LEMAN moved to pass CSSB 208(L&C) out of committee with
individual recommendations. There were no objections and it was
so ordered.
HB 152-BREWPUB LICENSES
CHAIRMAN PHILLIPS announced HB 152 to be up for consideration.
MR. KEVIN HAND, Staff to Representative Halcro, thanked them for
bringing this legislation up again today. He reviewed that HB 152
is a stopgap measure to ensure the unencumbered operation of new
highly successful industry in the State of Alaska.
It incorporates a band aid solution involving a one-
year sunset clause that will enable brewpubs to
continue their operation through a full year rather
than shutting down due to the somewhat draconian
production that are put in place currently in state
statute.
He said the sunset is June 30, 2002 and it raises the production
cap on brewpubs to 150,000 gallons total, of which no more than
75,000 gallons can be sold in-house and of which no more than
75,000 gallons can be sold wholesale.
MR. HAND said:
These businesses do employ hundreds of people in the
Anchorage area, alone. They represent millions of
dollars and, in fact, multi-millions of dollars in
capital investments, which in Anchorage has taken
previously abandoned decrepit buildings and revitalized
them into a very popular spot right in the middle of
Spenard and old Anchorage.
Brewpubs do represent a diversification of economies in
Alaska encouraging increased employment outside of our
historically limited industries, which have obviously
been heavily dependent upon resource extraction. The
sunset clause does allow an operational timetable for
the brewpub operators to sit down with the industry
associations to find a consensus, which can be a long-
term solution.
I do concur as does Representative Halcro that this, in
fact, is not a long-term fix. Hence the reason we are
before you with a one-year band aid that will provide
the time without putting encumbrances upon a successful
operation here within the state that has enjoyed great
success…
SENATOR TORGERSON said he was not going to support this
legislation, because he thought it was:
…a travesty that the House sat on it for five months
and couldn't get it worked out and I don't see really
that it'll be worked out over the summer. At any
degree, this is not the fix that should be before us.
They should go to the heart of the thing and try to fix
it instead of trying to put band aids on it and expect
us to do it in a couple of days. I won't block the
move, but I'll sign 'no recommendation.'
SENATOR DAVIS moved to pass SB 152 from committee with individual
recommendations. There were no objections and it was so ordered.
HB 181-COMMUNITY PROPERTY/OBLIGATIONS OF SPOUSES
CHAIRMAN PHILLIPS announced HB 181 to be up for consideration.
MS. AMY ERICKSON, Staff to Representative Murkowski, said:
In 1998, the legislature passed Alaska's Community
Property Act, which allows married couples to
characterize some or all of their assets as community
property. Since enactment, those dealing in estate
planning and trusts on a day-to-day basis have realized
that the statutes need minor adjustment and that
happens in four areas. The first provides that a
creditor of a debtor spouse may only reach the separate
property of that debtor spouse and the spouse's jointly
held property. It also allows property such as life
insurance and IRAs to be transferred to a community
property trust by designating the trust as a
beneficiary of the property. It also clarifies the
sources of funds used to purchase life insurance and
expands categories of family members to include
ancestors or descendents of either spouse. So, it not
only allows a surviving spouse to be a beneficiary, but
also a grandchild.
Since current statute does not address division of
property at death, HB 181 clarifies that on the death
of a spouse, certain property items can be allocated to
the spouse's heirs as long as each spouse's heirs
receive half the total value of a community property.
MS. ERICKSON said there was a question in Judiciary about whether
this impacts family law practice. She asked the Bar Association
and they located all their family law members and there was no
adverse reaction from them.
MR. DAVE SHAFTEL said he was one of a group of estate planning
attorneys who has worked on Alaska's estate planning legislation
over the past four years. The Community Property Act of 1998 is
popular with his clients and others. However, they have found
some gaps in the law that this legislation addresses. He said the
Act was originally taken from the Uniform Marital Property Act,
which was drafted in 1981 and was initially enacted in only one
state, Wisconsin. He said Alaska is the tenth community property
state.
This particular bill clarified four areas. It clarifies if you
have an obligation incurred by one spouse, then that spouse's
creditor can reach that spouse's separate property and that
spouses one-half of the families' community property. Existing
statute is ambiguous on this point. This clarifies that community
property will be treated the same as other jointly held property.
If you had jointly held property without community property held
by both spouses, a creditor could only reach the separate
property of the debtor spouse and that debtor spouse's half of
jointly held property.
The next clarification deals with transfers of certain assets to
a community property trust, like life insurance, IRAs, 401K plans
and assets that have beneficiary designations. They can be
transferred by designating the community property trust as the
beneficiary of such property. This is important when you get to
the fourth change.
The third change deals with life insurance. There can be
complications when a person uses funds from a community property
account, like a bank account to buy life insurance. There are
both ownership and tax complications. If it's unclear that the
spouse who is not making the contribution agreed to the
contribution, this legislation creates some presumptions of
agreement, as long as the policy is benefiting family members. It
also clarifies an area in the estate gift tax law if community
property funds are being used by one spouse to create a life
insurance trust for the surviving spouse. It makes it clear that
the presumption is the surviving spouse agreed that the funds
used would be first the community property, which would be
changed to separate property, so that the insured spouse is
contributing these funds to the trust. The end result of this is
to make sure the life insurance proceeds are not included in the
surviving spouse's estate and taxed at his or her death. The
presumptions are safety nets when dealing with funds that are
community property and are used to purchase life insurance.
The last clarification deals with the provision that talks about
what happens at death to the community property. It clarifies
that at death, one half of the community property belongs to the
surviving spouse and the other one half belongs to the decedent's
estate. It also adopts the "aggregate theory of division of
community property assets," which allows for "non-prorata funding
of trusts." Basically, this means that you don't have to divide
every item of community property exactly in half and give half to
the deceased spouse's estate and half to the surviving spouse.
Rather, you just have to make sure that the deceased spouse's
estate gets one half of the total aggregate value and the
surviving spouse gets only one half of the total aggregate value.
This is important, because they often find that the couple
together may have had retirement assets, all of which should go
to the surviving spouse. This is because there is a better income
tax result if all the other assets go to the deceased spouse's
estate, so they can fund a bypass trust. This kind of trust is
for the benefit of the surviving spouse, but then it goes on to
the children without any further transfer taxation.
MR. SHAFTEL said these changes would strengthen the act and make
it a lot more useable. It will also make it available in the
retirement plan the life insurance area for nonresidents of
Alaska who have chosen to use Alaska's optional community
property system. He hasn't run into any opposition to it.
Number 330
REPRESENTATIVE MURKOWSKI said that these changes seem to make
sense.
CHAIRMAN PHILLIPS asked what triggered this legislation.
REPRESENTATIVE MURKOWKSI replied that she is not a trust
attorney, which is a very select group of practitioners. Mr.
Shaftel is her constituent, as well as a trust attorney.
SENATOR DAVIS said she had someone called her last week with the
concerns that were addressed in this bill.
SENATOR LEMAN said he thought the change of not requiring each
item to be divided in half was good, but asked if he ran into
cases where an estate argued over pieces of property because
someone values it as being important to them. "In those cases,
does this help bring resolution or not or does it make any
change?…Are we neither harming or helping?"
MR. SHAFTEL replied that was right and he thought good drafting
could solve that problem, but good administration would do it if
good drafting didn't. This legislation does not affect that one
way or the other.
SENATOR LEMAN moved to pass CSHB 181(KUD) from committee with
individual recommendations and the $0 fiscal note. There were no
objections and it was so ordered.
CHAIRMAN PHILLIPS adjourned the meeting at 4:20 pm.
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