HB 121: "An Act relating to the issuance of qualified charitable gift annuities."
00 HOUSE BILL NO. 121 01 "An Act relating to the issuance of qualified charitable gift annuities." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 04 to read: 05 SHORT TITLE FOR AS 21.03.070. AS 21.03.070, added by sec. 3 of this Act, may 06 be cited as the Charitable Gift Annuities Exemption Act. 07 * Sec. 2. AS 21.03.021 is amended to read: 08 Sec. 21.03.021. Application of title. In addition to the exclusion contained 09 in AS 21.03.070, this [THIS] title does not apply to a life insurance or annuity 10 company organized and operated without profit to any private shareholder or 11 individual exclusively for the purpose of aiding and strengthening educational 12 institutions by issuing insurance and annuity contracts only to or for the benefit of the 13 institutions and individuals engaged in the service of these institutions; however, all 14 policies and contracts issued by such an organization must provide for acceptance of 15 service of process within this state.
01 * Sec. 3. AS 21.03 is amended by adding a new section to read: 02 Sec. 21.03.070. Exemption for qualified charitable gift annuities. (a) 03 Notwithstanding any other provision of this title, the issuance of a qualified charitable 04 gift annuity does not constitute engaging in the business of insurance in this state, and, 05 except as provided by this section, is exempt from regulation by the division under this 06 title. 07 (b) When entering into an agreement for a qualified charitable gift annuity, the 08 charitable organization shall disclose to the donor in writing in the agreement that a 09 qualified charitable gift annuity is not an insurance policy in this state, is not subject to 10 regulation by the division, and is not protected by the Alaska Life and Health 11 Insurance Guaranty Association established under AS 21.79.040. 12 (c) The notice required by (b) of this section must be contained in a separate 13 paragraph, and the print size of the notice may not be smaller than the print size 14 generally used in the annuity agreement. 15 (d) A charitable organization that issues its first qualified charitable gift 16 annuity on or after the effective date of this Act shall notify the division in writing 17 within 90 days after the issuance. The notice 18 (1) shall be signed by an officer or director of the charitable 19 organization; 20 (2) must provide the name and address of the charitable organization; 21 and 22 (3) must certify that 23 (A) the charitable organization is a charitable organization; and 24 (B) the charitable gift annuities issued by the charitable 25 organization are qualified charitable gift annuities. 26 (e) Except for the information required by (d) of this section, a charitable 27 organization is not required to submit information to the division unless the division 28 determines additional information is necessary to determine an appropriate fine under 29 (g) of this section. 30 (f) If a charitable organization fails to comply with the notice requirements 31 under (b), (c), or (d) of this section, the qualified charitable gift annuity issued by the
01 charitable organization still receives the exemption for a qualified charitable gift 02 annuity provided by (a) of this section. 03 (g) The division may enforce performance with the notice requirements under 04 (b), (c), or (d) of this section by sending a letter by certified mail, return receipt 05 requested, demanding that the charitable organization comply with the requirements. 06 The division may impose a civil penalty on the charitable organization in an amount 07 not to exceed $1,000 for each qualified charitable gift annuity issued by the charitable 08 organization until the charitable organization complies with the requirements. 09 (h) The division shall keep the information provided to the department under 10 (d) or (g) of this section confidential. 11 (i) In this section, 12 (1) "charitable gift annuity" means a transfer of money or other 13 property by a person to a charitable organization in return for the charitable 14 organization's providing an annuity to the person that is payable over one or two lives 15 and under which the 16 (A) actuarial value of the annuity is less than the value of the 17 money or other property transferred; and 18 (B) difference in value constitutes a charitable deduction for 19 federal income tax purposes; 20 (2) "charitable organization" means a person identified 21 (A) in the definition of "charitable contribution" in 26 U.S.C. 22 170(c) as a person to whom or for whose use a contribution or gift is made; or 23 (B) as an exempt organization under 26 U.S.C. 501(c)(3); 24 (3) "qualified charitable gift annuity" means an annuity described in 26 25 U.S.C. 501(m)(5) and 26 U.S.C. 514(c)(5), if the annuity is issued by a charitable 26 organization that on the date of the issuance has 27 (A) a minimum of $300,000 in unrestricted cash, in cash 28 equivalents, or in publicly traded securities, exclusive of the assets funding the 29 annuity; and 30 (B) been in continuous operation for at least three years or is a 31 successor or affiliate of a charitable organization that has been in continuous
01 operation for at least three years. 02 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 APPLICABILITY. (a) AS 21.03.070(a), added by sec. 3 of this Act, applies to a 05 qualified charitable gift annuity that is issued 06 (1) before the effective date of this Act and that is in effect on the effective 07 date of this Act, and, to that extent, this Act is retroactive under AS 01.10.090; 08 (2) on or after the effective date of this Act. 09 (b) In this section, "qualified charitable gift annuity" has the meaning given in 10 AS 21.03.070(i), added by sec. 3 of this Act. 11 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION. If a charitable organization has issued a qualified charitable gift 14 annuity before the effective date of this Act, and if the qualified charitable gift annuity is still 15 in effect on the effective date of this Act, the charitable organization that issued the qualified 16 charitable gift annuity shall notify the division in writing within 90 days after the effective 17 date of this Act that it has issued a qualified charitable gift annuity. The notice must comply 18 with AS 21.03.070(b) and (c), added by sec. 3 of this Act. In this section, "charitable 19 organization" and "qualified charitable gift annuity" have the meanings given in 20 AS 21.03.070(i), added by sec. 3 of this Act.