Legislature(2023 - 2024)BUTROVICH 205
03/21/2024 01:30 PM Senate TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| HB81 | |
| SB255 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 81 | TELECONFERENCED | |
| += | SB 255 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 81-VEHICLES/BOATS: TRANSFER ON DEATH TITLE
1:32:59 PM
CHAIR KAUFMAN announced the consideration of 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."
1:33:34 PM
REPRESENTATIVE GEORGE RAUSCHER, District 29, Alaska State
Legislature, Juneau, Alaska, sponsor of HB 81, paraphrased the
following sponsor statement:
[Original punctuation provided.]
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 non-probate 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.
1:35:18 PM
SENATOR RAUSCHER continued to paraphrase the sponsor statement.
In 2016, legislation similar to HB 81 was introduced
but the legislation failed to pass that session. HB 81
is nearly identical, although it expands the concept
to apply both to vehicles and boats that are issued
titles through the state.
HB 81 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.
1:36:08 PM
RYAN MCKEE, Staff, Representative George Rauscher, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for HB 81 on behalf of the sponsor.
[Original punctuation included.]
House Bill 81 Vehicles/Boats: Transfer on Death
Title
Sectional Analysis
Section 1:
Adds a new section under AS 05.25 that allows owners
of boats, for which the Department of Administration
(DoA) issues titles, to obtain a transfer on death
(TOD) title.
Section 2:
Amends AS 13.33.101(a) to add a transfer of a boat or
vehicle by a TOD title to the existing list of
acceptable nonprobate transferable property.
1:36:36 PM
MR. MCKEE continued the presentation of the sectional analysis.
Section 3:
Creates a provision under AS 13.33 for a transfer on
death (TOD) title for boats and vehicles. Creates and
defines the mechanism through the Division of Motor
Vehicles (DMV), by which individuals will obtain,
revoke, or change their transfer on death title and
defines the parameters of the transfer on death title.
(a)-(c) Obtaining a TOD Title
• Creates a provision under AS 13.33 for a transfer
on death title for vehicles and boats for which
DoA issues titles.
o This includes some manufactured homes for which
the DMV issues titles under AS 45.29.102(66).
These homes are without a permanent foundation
and transportable in one or more sections.
• Requires that the transfer of title to the
designated beneficiary occurs when the sole owner
or last surviving joint owner of the vehicle
dies.
• Requires that owners of the boats or vehicles
file a form through the DMV and pay associated
fees to apply for a TOD title.
• Limits the TOD titles to two beneficiaries.
1:37:46 PM
MR. MCKEE continued the presentation of the sectional analysis.
(d)TOD titles effective without notice or
consideration
• Provides that TOD titles will not require notice
or acceptance by the designated beneficiary.
• Provides that TOD titles will not be subject to
consideration, the process by which there is an
exchange or "quid pro quo" required from the
recipient of the assets.
o Language taken from TOD deed statute under AS
13.48.060.
(e) TOD titles are nontestamentary
• States that TOD titles are nontestamentary,
meaning that the associated vehicles do not need
to be provided for in the decedents will.
(f)-(g) Revocation or Change to TOD titles
• Provides that the owner may revoke or change the
designated beneficiary on the TOD at any time
without the beneficiary's consent.
• Explains the process by which owners may revoke
or change a TOD title.
o The owner can either assign and deliver the
certificate of title for the vehicle to another
person, thereby revoking the TOD title, or;
o file with the DMV to reissue the title without
a designated beneficiary or with a different
designated beneficiary.
(h) Designated beneficiaries right to disclaim
interest
• Allows designated beneficiaries to refuse the
boat or vehicle designated to them in a TOD
title.
o Language taken from TOD deed statute under AS
13.48.100.
(i) TOD titles subject to decedent's creditors,
contracts, etc.
• Subjects the TOD title to creditor's claims
against the owner's estate, as well as to other
interests, contracts, liens, encumbrances,
assignments, and other interests.
• These interests remain attached to the boat or
vehicle after it is transferred to the designated
beneficiary.
1:39:48 PM
MR. MCKEE continued the presentation of the sectional analysis.
(j-m) Enforcing liability upon TOD titles
• Imposes the same procedures for enforcing
liability upon TOD titles that is applied to TOD
deeds under AS 13.48.110 and AS 13.48.088.
o Provides that the estate may enforce liability
against boats or vehicles with TOD titles if
the owner's estate does not cover an allowed
claim.
o States that if there are multiple vehicles
and/or boats, and a liability exists in the
deceased's estate, the liability will be
apportioned to each asset in proportion to its
net value.
o Requires that a proceeding to enforce a
liability must begin within 12 months of the
owner's passing and can only begin once proper
notification to beneficiaries has occurred.
o Stipulates that TOD titles do not affect rights
of ownership before the owner's death, and do
not affect rights of the designated beneficiary
or creditors of the owner(s).
o TOD titles do not give legal or equitable
preference to the designated beneficiary.
o TOD titles do not affect designated
beneficiaries' eligibility for state public
assistance.
(n-p) Uniform standard of survivorship, requirements
to receive TOD title
• Requires that the designated beneficiary survive
the previous owner by 120 hours.
• Requires that the designated beneficiary submit
proof of the owner's death and an application and
associated fees to the DMV.
• If there are two beneficiaries listed on the TOD
title, they become joint owners.
(q)TOD titles may not be changed by other instruments
• Provides that TOD titles may only be changed by
the process outlined in section 3 and not by a
will or any other instrument.
(r) Gives the DoA authority to develop regulations to
implement the TOD titles, establish necessary forms
and fees, etc.
(s) Definitions
1:41:50 PM
MR. MCKEE continued the presentation of the sectional analysis.
Section 4:
Amends AS 13.48.110(c) to add a person acting on
behalf of the surviving spouse of the decedent to the
list of people who may demand to enforce liability
against the decedents' property.
Section 5:
Adds a new section to AS 28.10.275, relating to
vehicle titles, to clearly state that owners of
vehicles for which the DMV issues titles may obtain a
TOD title.
Section 6:
Gives the DoA authority to develop necessary
regulations.
Section 7:
Applies an immediate effective date to section 5 of
the bill to allow the department to develop
regulations.
Section 8:
Applies an effective date of July 1, 2024 to the
legislation except for sections 5 and 7.
1:42:51 PM
CHAIR KAUFMAN invited committee members to ask questions.
1:42:57 PM
SENATOR TOBIN noted that on page 5 of HB 81, the definition of
"person" includes a corporation, company, partnership, firm,
association, organization, trust, business trust, or society, as
well as a natural person. She sought clarification on whether
the definition includes charitable entities, organizations, and
nonprofits. She refined the question by posing a scenario,
asking if HB 81 would allow an individual wishing to bequeath a
boat to the Seward Community Foundation to do so.
1:44:13 PM
MR. MCKEE deferred the question to an attorney who was invited
to answer questions during the meeting.
1:44:24 PM
CHAIR KAUFMAN invited Ms. O'Connor to put herself on the record
and respond to the question.
1:44:39 PM
ABBY O'CONNOR, Attorney, O'Connor Law LLC, Anchorage, Alaska,
said she is a trust and estate attorney, and that while she did
not write the legislation, typically a charitable entity has
some organizational structure. Often it is a corporation or
nonprofit corporation, or some kind of an organization. She
suggested the spirit of the legislation is to allow a charitable
gift. She said that she could not promise that every charitable
organization would qualify as a person, but if it identifies as
one of the listed forms, she said it would likely qualify as an
heir.
1:46:03 PM
SENATOR TOBIN sought clarification as to whether that definition
interpretation includes a place of worship. She offered that her
church, for example, has no articles of incorporation.
MS. O'CONNOR replied that, in her interpretation, she would
include a place of worship as an organization, association, or
society, but she cannot promise a court would interpret it the
same way. She noted the language of HB 81 does not specifically
say religious organization, but it does say organization.
1:46:57 PM
SENATOR TOBIN said she would work with the bill sponsor to
ensure those entities are included within the definition.
1:47:06 PM
SENATOR MYERS referred to HB 81, page 3, lines 18-22, and asked
whether a loan held by the deceased would go away or would pass
to the beneficiary.
1:47:55 PM
REPRESENTATIVE RAUSCHER expressed his understanding that it
would but deferred the question to the drafters of the bill for
confirmation.
1:48:18 PM
CHAIR KAUFMAN directed the question to Ms. Hall.
1:48:35 PM
MARIAM HALL, Marketing and Communications Coordinator, Peak
Trust Company, Anchorage, Alaska, said that she would find out
and respond in writing.
1:49:05 PM
SENATOR MYERS asked how often this legislation might be used if
passed into law.
1:49:31 PM
REPRESENTATIVE RAUSCHER replied that he would get a
quantification.
1:49:52 PM
SENATOR KIEHL sought clarification on what happens if the
beneficiary fails to move the Transfer of Death (TOD) title to
their name. He described a hypothetical scenario in which a
beneficiary is in an accident, and an officer asks for vehicle
registration. He asked what happens if the beneficiary failed to
transfer the title cleanly into their name.
REPRESENTATIVE RAUSCHER said there are likely many situations in
which titles were not updated with a beneficiary's name. He
deferred the question.
1:51:17 PM
CHAIR KAUFMAN directed the question to Ms. O'Connor.
1:51:30 PM
MS. O'CONNOR replied the same question applies with or without
HB 81. She explained that HB 81 seeks to create an equitable
interest in a beneficiary. She said a disclaimer is an
affirmative rejection of an inheritance. AS 13.70 describes how
to disclaim. She said failing to go to the DMV [to update a
registration] does not constitute a disclaimer, and the
beneficiary would still have an equitable interest in the
property. She said HB 81 does present an interesting issue of
liability. She described a hypothetical situation in which Joe
has been named beneficiary [of a car], but Sally takes the car
and gets in an accident. In that case, it is in question whether
Joe is liable. She acknowledged that she is not an injury
lawyer, and does not know the answer, but she said it does
create a concern for the beneficiary. Whether it creates a
concern for the estate is in question. She explained that one of
the concerns with probate and vehicles [in Alaska], is that a
decedent's vehicle is a concerning liability for an estate,
because it's very difficult to insure and there is a question as
to whether the insurance applies. She said HB 81 would allow
that liability problem to be avoided by naming a beneficiary. To
answer the question, she restated, if a beneficiary has not gone
to the DMV to register the inherited car, the beneficiary still
has an equitable interest in the car; in terms of liability, she
said she does not know that it's clear. She also said she
doesn't know whether HB 81 could solve [the liability question];
however, she said it would not be worse than what Alaska
currently has, which says the estate presumably would be liable.
1:54:38 PM
SENATOR KIEHL thanked Ms. O'Connor and said he wasn't thinking
of personal injury, rather things like tickets. He suggested
that most beneficiaries would need the title in order to get
insurance. He suggested he may ask the DMV whether it would be
possible to do better than the status quo.
1:55:17 PM
CHAIR KAUFMAN opened public testimony on HB 81.
1:55:55 PM
ED MARTIN, JR., representing self, Kenai, Alaska, testified on
HB 81 with concerns. Mr. Martin explained that he, his wife and
his son own a construction company. His questions concern the
company and the heavy equipment that may be involved in probate.
He said he does not think HB 81 includes heavy construction
equipment, a large asset. He explained that he already has a
will, establishing a means to transfer the equipment to his son.
He said there could be barriers to the transfer, such as a UCC
Code, or a bank might place a hold on this equipment or try to
collect a debt on the equipment and he suggested HB 81 may not
be complete in that sense. He said only 26 states have passed a
beneficiary waiver act and he urged more research into
beneficiary waivers. He affirmed the spirit of HB 81 and
suggested the committee members do their homework to strengthen
the bill. He said it is very important to ease the financial
burden and support the wellbeing of beneficiaries experiencing
loss.
1:58:15 PM
CHAIR KAUFMAN closed public testimony on HB 81.
1:58:25 PM
CHAIR KAUFMAN offered Representative Rauscher an opportunity to
make closing remarks.
1:58:32 PM
REPRESENTATIVE RAUSCHER said that in past committees there were
attempts to include airplanes in HB 81. He said airplanes are
controlled by the Federal Aviation Administration (FAA) and
can't be included in the bill. Machinery has not come up at all,
previously, but airplanes have already been ruled out in
previous discussions.
1:59:39 PM
CHAIR KAUFMAN held HB 81 in committee.
#
1:59:41 PM
At ease.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 81 Sponsor Statement.pdf |
HFIN 5/4/2023 1:30:00 PM STRA 3/21/2024 1:30:00 PM |
HB 81 |
| HB 81 Sectional Analysis .pdf |
HFIN 5/4/2023 1:30:00 PM STRA 3/21/2024 1:30:00 PM |
HB 81 |
| HB 81 Fiscal Note DOA DMV 2.14.24.pdf |
STRA 3/21/2024 1:30:00 PM |
HB 81 |
| HB 81 Letters of Support.pdf |
STRA 3/21/2024 1:30:00 PM |
HB 81 |
| SB 255 Public Testimony recieved as of 3.20.24.pdf |
STRA 3/21/2024 1:30:00 PM |
SB 255 |