HB 110-VEHICLES/BOATS: TRANSFER ON DEATH TITLE  3:09:43 PM CO-CHAIR KREISS-TOMKINS announced that the first order of business would be HOUSE BILL NO. 110, "An Act relating to the transfer of a title to a boat on the death of the owner; relating to the transfer of a title to a vehicle, including certain manufactured homes and trailers, on the death of the owner; allowing a person to act for the surviving spouse of a decedent to enforce liability against real property transferred at death; and providing for an effective date." 3:09:57 PM MEGAN HOLLAND, Staff, Representative Ivy Spohnholz, Alaska State Legislature, made opening remarks on behalf of Representative Spohnholz, prime sponsor of HB 110. She mentioned a PowerPoint Presentation and indicated the bill sponsor's imminent arrival. 3:11:23 PM REPRESENTATIVE IVY SPOHNHOLZ, Alaska State Legislature, as prime sponsor, introduced HB 110. She paraphrased the sponsor statement, which read as follows [original punctuation provided, with some formatting changes]: Sponsor Statement  House Bill 110 Nonprobate Vehicle Transfer Upon Death "An Act relating to the transfer of the title to a vehicle, including certain manufactured homes and trailers, on the death of the owner; allowing a person to act for the surviving spouse of a decedent to make a demand of the personal representative of the decedent's estate related to enforcing a liability against real property or an interest in real property transferred at death by a transfer on death deed; and providing for an effective date." The process of probate in the state of Alaska can take anywhere from six months to several years , and can cost family members and beneficiaries thousands, potentially tens of thousands of dollars in legal and 2 filing fees. While the State Legislature has already taken great strides to reduce the costs of probate, there is still much room for improvement. House Bill 110 continues in spirit with the Uniform Real Property Transfer on Death Act (URPTDA), which unanimously passed both the House and Senate in 2014. URPTDA created the Transfer on Death (TOD) deed, which allows for nonprobate transfers of real property. TOD deeds allow Alaskans to select a beneficiary who will receive the property at their passing, and removes that property from the process of probate. In 2016, the late Representative Max Gruenberg introduced legislation similar to HB 110 that created a mechanism for nonprobate transfers of vehicles. HB 110 is nearly identical, although it expands the concept to apply both to vehicles and boats that are issued titles through the state. Currently, 11 other states have TOD titles for vehicles, and several have TOD titles for boats. HB 110 continues the ongoing effort to reduce the costs of probate for Alaskans and creates a streamlined service through the DMV through which they can designate beneficiaries for both cars and boats through a simple form. The TOD titles will be available for all boats and vehicles for which the DMV provides titles, which also includes some mobile manufactured homes under AS 45.29.102(66). The program will be self-sustaining through fees. At no cost to the state, HB 110 will allow countless Alaskans to pass down boats, vehicles, and some manufactured homes to beneficiaries with more ease, and will help simplify and streamline the potentially complicated, costly, and painful process of probate following the death of a loved one. 1. Alaska Court System Self-Help Services: Probate. http://www.courts.alaska.gov/shc/probate/probate- steps.htm 2. "How Much is that Probate in the Window?" The Senior Voice: https://www.seniorvoicealaska.com/story/2018/11/01/ finance-and-legal/how-much-is-that-probate-in-the- window/1839.html REPRESENTATIVE SPOHNHOLZ noted that AARP, the Alaska Automobile Dealers Association, and the Alaska Commission on Aging support HB 110. Further, she related that she had received no formal opposition to the proposed legislation, nor had there been any opposition to Representative Gruenberg's proposed legislation in 2016. 3:14:01 PM CO-CHAIR KREISS-TOMKINS asked if HB 110 would apply also to trailers. MS. HOLLAND answered that it would apply to vehicles titled through the [Division] of Motor Vehicles (DMV). CO-CHAIR KREISS-TOMKINS clarified that he meant that which is trailed behind a car, such as a boat trailer or "other kinds of wheeled trailers." MS. HOLLAND speculated that only that which is titled would be covered under HB 110. REPRESENTATIVE WOOL proffered that some trailers do have license plates and, thus, are [titled]. He deferred to Marla Thompson, the director of the DMV for confirmation. 3:15:14 PM MARLA THOMPSON, Director, Division of Motor Vehicles (DMV), Department of Administration (DOA), stated, "Anything that has a title would qualify under this bill, and that would include any type of trailer or a mobile home." 3:15:44 PM REPRESENTATIVE WOOL observed that HB 110 would add titled boats and trailers to the list of those things that can be transferred on death of the owner. MS. HOLLAND responded that currently there is no mechanism for transfer on death for cars. She said HB 110 would create "the transfer on death title for cars and boats." She said there are things that currently can be "transferred on death outside of probate in the state of Alaska," including deeds, bank accounts, and brokerage accounts. 3:17:07 PM REPRESENTATIVE STORY noted that the fiscal note lists $60,000 for a software system, and she asked Ms. Holland if she thinks that is all that would be required. MS. HOLLAND said she had spoken with Ms. Thompson about the fiscal note, because the original legislation of 2016 had a zero fiscal note. She explained that since 2016, the DMV has overhauled its software, and software engineers would be necessary to create the new forms - the two new types of titles that would be needed under HB 110. She explained that once the division creates the forms and necessary software, "it will be self-sustaining through fees." In response to a follow-up question, she offered her understanding that the Department of Administration cannot absorb the cost; therefore, it needs the $60,000. 3:19:05 PM CO-CHAIR KREISS-TOMKINS asked whether the proposed change to statute was recommended by the Uniform Law Commission. MS. HOLLAND answered no. She stated that the Uniform Real Property Transfer and Death Act of 2009 (URPTDA), endorsed by the commission, created a transfer on death deed, but did not include boats and vehicles. She noted that 11 states have implemented transfer on death titles for vehicles, while 7 states have done so for boats. She said the commission has not put "its stamp of approval on it," but [HB 110] is "following in that spirit of finding ... more assets - more forms of personal property - that we can transfer outside of the process of probate in order to ... pass along more of that value to our beneficiaries." CO-CHAIR KREISS-TOMKINS asked Ms. Holland whether it would be fair to summarize that Alaska has a lot of boats, thus the sponsor thinks it would be helpful to add them to the list of assets. MS. HOLLAND answered, "I believe so." CO-CHAIR KREISS-TOMKINS recalled prior legislation regarding the titling of boats. He referred to the aforementioned PowerPoint [not presented], and a slide that includes the sectional analysis, which notes that boats in Alaska are exempt from the title requirement under AS 05.25.055 if they are less than 24 feet. He asked the significance of that notation in the sectional analysis. MS. HOLLAND explained she had wanted to show committee members which boats are required to be issued titles through the DMV. She surmised that "your average Joe's" boat is going to be less than 24 feet in length, and the intent of HB 110 is to "allow people to transfer those boats along." That said, she noted that there is a provision under Title V, which allows individuals with boats under 24 feet in length to apply for a title, if they wish to do so, which would allow them to take advantage of a transfer on death title. 3:22:31 PM REPRESENTATIVE STORY asked how the public would know about the option to title boats under 24 feet in length. MS. HOLLAND responded that she does not know, and she suggested the question could be asked of Ms. Thompson. 3:23:06 PM MS. THOMPSON provided that the titling of the boat is a new process that the DMV initiated in January 2019, wherein boats of 25 feet or more are required [to register for] a title "if they're not documented somewhere else." She confirmed that "anybody can go ahead and title a boat." She said the division just refreshed its website information regarding titling, and it would add a separate section informing anyone visiting the website of the option to [title a boat 24 feet or less in length]. 3:23:57 PM REPRESENTATIVE WOOL asked if "a bunch of numbers on the bow of a boat" indicates that the boat is titled. MS. THOMPSON answered no. She speculated that Representative Wool may be referring to a U.S. Coast Guard documented number. She said boat titles look similar to vehicle titles, and they include a number, but that number is not on the boat. REPRESENTATIVE WOOL concluded that a boat would not have a license plate as would trailers or motorcycles. MS. THOMPSON confirmed that is correct. 3:25:08 PM CO-CHAIR KREISS-TOMKINS announced that the deadline for amendments for HB 110 to be submitted would be Monday, 4/22/19, at 5 p.m. 3:25:25 PM REPRESENTATIVE STORY returned to the issue of the $60,000 listed on the fiscal note. She referred to the second sentence [of the second paragraph of the fiscal analysis], which read: "This estimate is based on prior reconfiguration for similar changes and assumes 600 programming hours at a cost of $100 per hour." She asked, "And that is in-kind, since that's not listed here?" 3:26:10 PM MS. THOMPSON explained that the fiscal note reflects programming time for Information Technology (IT) staff or contractors needed to complete the necessary work. She said, "This is very similar to the amount of work that was required to create a title. This is a different type of title for vehicles and for boats, and so there is work to be done." She echoed Ms. Holland's statement that the DMV had recently converted from an older system. She said the fiscal note for HB 110 has no training hours included that are not related to IT work. CO-CHAIR KREISS-TOMKINS noted that within the PowerPoint is mention of a small fee for a transfer on death title, and he asked how much that would be. MS. HOLLAND said that fee would be determined by the DMV. CO-CHAIR KREISS-TOMKINS asked Ms. Thompson, "Given that there would be a fee, presumably determined by regulation, why does the fiscal note not reflect any revenue in future years?" MS. THOMPSON answered the DMV currently charges $15 for a title fee, and since there was no mention of a different fee, she did not "add anything different." The fee would be $15. In response to a request for clarification, she said the current title fee is $15, and that amount is the same for all types of vehicles, "A, B, or C." [HB 110 was held over.]