02/01/2024 01:30 PM House FINANCE

HOUSE BILL NO. 81                                                                                                             
                                                                                                                                
     "An  Act relating  to the  transfer of  a title  on the                                                                    
     death  of the  owner;  and providing  for an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
3:02:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GEORGE RAUSCHER, SPONSOR, introduced HB 81.                                                                      
He read the sponsor statement (copy on file):                                                                                   
                                                                                                                                
     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                                                                    
     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 81  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,  legislation similar to  HB 81  was introduced                                                                    
     but the  legislation failed to pass  that session. HB81                                                                    
     is nearly  identical, although  it expands  the concept                                                                    
     to apply  both to  vehicles and  boats that  are issued                                                                    
     titles through the state.                                                                                                  
                                                                                                                                
     HB81 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  81 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.                                                                                        
                                                                                                                                
RYAN  MCKEE,  REPRESENTATIVE  GEORGE RAUSCHER  STAFF,  noted                                                                    
there were testifiers online available to answer questions.                                                                     
                                                                                                                                
Representative Galvin  understood that  the bill  would come                                                                    
at no cost to the state.  She asked if the Division of Motor                                                                    
Vehicles  (DMV) could  provide  information  on whether  the                                                                    
bill would  require additional paperwork or  that staff work                                                                    
overtime  hours. She  liked the  bill but  wanted to  ensure                                                                    
that it was clear whether more support would be needed.                                                                         
                                                                                                                                
3:06:59 PM                                                                                                                    
                                                                                                                                
DAVID  DUNLAP, VEHICLE  PROGRAM MANAGER,  DIVISION OF  MOTOR                                                                    
VEHICLES,     DEPARTMENT      OF     ADMINISTRATION     (via                                                                    
teleconference),  responded  that  there was  a  small  cost                                                                    
associated  with  the  programing   changes  that  would  be                                                                    
required in order for the  DMV to facilitate the process. He                                                                    
emphasized   that  the   bill  would   not  be   excessively                                                                    
prohibitive for the public.                                                                                                     
                                                                                                                                
Representative  Hannan relayed  that she  was supportive  of                                                                    
the bill.  She asked  if there  was a  way to  add airplanes                                                                    
into the  transfer of  ownership upon  death in  addition to                                                                    
vehicles and boats.                                                                                                             
                                                                                                                                
Representative   Rauscher  responded   that   he  would   be                                                                    
amendable  to  the  addition  of  planes  if  Representative                                                                    
Hannan were to suggest adding it.                                                                                               
                                                                                                                                
Representative Hannan  noted that the remainder  of the bill                                                                    
addressed   transfer  of   ownership   through  an   already                                                                    
established process. She had been  asked by constituents how                                                                    
ownership  of  airplanes  was  tracked  or  whether  it  was                                                                    
federally regulated. She did not  want to derail the bill or                                                                    
overinflate the cost. She asked  Co-Chair Foster if he could                                                                    
comment because she was aware that he owned a plane.                                                                            
                                                                                                                                
Co-Chair Foster  replied that he  had to register  his plane                                                                    
with   the  Federal   Aviation  Administration   (FAA).  The                                                                    
question might  require some additional research  but he was                                                                    
certain that the FAA would be involved.                                                                                         
                                                                                                                                
Representative Hannan  reiterated that  she did not  want to                                                                    
derail the  bill and thought  it would cover  more Alaskans.                                                                    
She noted that  the only issue she had  heard about relating                                                                    
to  the  bill  was  the potentiality  for  airplanes  to  be                                                                    
included.                                                                                                                       
                                                                                                                                
Co-Chair  Foster OPENED  public testimony.  He detailed  the                                                                    
way in  which written  testimony could  be submitted  to the                                                                    
committee.                                                                                                                      
                                                                                                                                
3:11:21 PM                                                                                                                    
                                                                                                                                
GORDON WILLIAMS,  ATTORNEY, KETCHIKAN  (via teleconference),                                                                    
testified  that he  was an  attorney  and a  member of  ATEP                                                                    
[Alaska  Trust of  Estate  Professionals]  and his  practice                                                                    
focused on  probate, estate planning, wills  and trusts, and                                                                    
trusts  administration. Probate  received  a bad  reputation                                                                    
which  he  thought  was   unfortunate  because  the  probate                                                                    
process in Alaska was done  online. He thought the bad press                                                                    
on  probate  was  mostly unwarranted.  The  probate  on  the                                                                    
transfer of  death title  was a good  process which  with he                                                                    
was intimately  familiar. He was familiar  with Colorado law                                                                    
and  relayed that  Alaska law  had safeguards  that did  not                                                                    
exist in Colorado. In Alaska,  people were required to go to                                                                    
the DMV  and obtain  a new title  with the  beneficiaries on                                                                    
board. There  would also be a  fee charge for the  new title                                                                    
which  meant  that  there would  be  incoming  revenue.  The                                                                    
fiscal  note might  not have  taken  into consideration  the                                                                    
fees collected.  He noted  that the  transfer of  death deed                                                                    
took  into  account  issues that  occurred  in  probate.  He                                                                    
thought the bill would help expediate the transfer process.                                                                     
                                                                                                                                
Co-Chair Foster understood that Mr.  Willams was a member of                                                                    
"ATEP" and he asked what it was.                                                                                                
                                                                                                                                
Mr. Williams responded  that ATEP stood for  Alaska Trust of                                                                    
Estate  Professionals, which  was a  troop of  professionals                                                                    
responsible  for   reviewing  law.   He  thought   that  the                                                                    
legislature had consulted with ATEP in the past.                                                                                
                                                                                                                                
3:16:01 PM                                                                                                                    
                                                                                                                                
LINDA   HULBERT,  SELF,   FAIRBANKS  (via   teleconference),                                                                    
testified  that she  had been  an  agent for  New York  Life                                                                    
Insurance  Company for  35 years  and she  thought the  bill                                                                    
would  be  favorable for  a  vast  number of  Alaskans.  She                                                                    
explained  that everyone  needed  to make  a plan  regarding                                                                    
asset  ownership. When  a  vehicle  or boat  was  only in  a                                                                    
deceased individual's  name, it  was not possible  to ensure                                                                    
the  vehicle or  boat.  She  thought the  bill  would be  an                                                                    
important tool to  help Alaskans make a plan  and keep costs                                                                    
down. She urged support for the bill.                                                                                           
                                                                                                                                
3:18:46 PM                                                                                                                    
                                                                                                                                
MATTHEW    BLATTMACHR,    PEAK   TRUST,    ANCHORAGE    (via                                                                    
teleconference),  agreed  with  the  comments  made  by  Ms.                                                                    
Hulbert  and Mr.  Williams.  He added  that  the bill  would                                                                    
create  more efficiencies  within the  Alaska Court  System.                                                                    
The probate  process in Alaska  was deficient  in comparison                                                                    
to many other  states and the bill would  help modernize the                                                                    
process. The  bill would also  help allow more  vehicles and                                                                    
boats  to   pass  through  direct  assignment   rather  than                                                                    
involving the  courts. He thought  that the cost  savings to                                                                    
the  courts  would  be  more   substantial  than  any  costs                                                                    
associated with implementing the bill.                                                                                          
                                                                                                                                
Representative Hannan  asked Mr. Blattmachr to  describe the                                                                    
process of  transferring ownership  of an airplane  upon the                                                                    
death of the owner.                                                                                                             
                                                                                                                                
Mr.  Blattmachr   responded  that  the  transfer   would  be                                                                    
federally regulated and  not managed at the  state level. He                                                                    
did  not  think  the  bill  would  successfully  change  the                                                                    
process. He understood  that it would be  helpful to include                                                                    
airplanes  in  the  bill,  but  he  did  not  think  federal                                                                    
regulations would allow for any changes.                                                                                        
                                                                                                                                
Representative Hannan  asked if  trusts for  airplane owners                                                                    
were generally established as a separate entity.                                                                                
                                                                                                                                
Mr.  Blattmachr replied  that  airplanes  were an  important                                                                    
asset for  many Alaskans.  He explained that  airplanes were                                                                    
not typically held  in trusts for the majority  of trusts he                                                                    
administered.                                                                                                                   
                                                                                                                                
Co-Chair Foster thought  that it sounded like an  act of the                                                                    
U.S. Congress.                                                                                                                  
                                                                                                                                
Representative   Rauscher    noted   that    he   especially                                                                    
appreciated the testimony from Mr.  Williams because he made                                                                    
the point  that the majority  of title transfers  would help                                                                    
pay for the process due to fee collection.                                                                                      
                                                                                                                                
3:23:26 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
HB  81  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.