03/27/2013 01:00 PM House JUDICIARY

         HB 102 - RETIREMENT PLANS; ROTH IRAS; PROBATE                                                                      
                                                                                                                                
2:06:54 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER announced  that the next order of  business would be                                                               
HOUSE BILL NO.  102, "An Act relating to  property exemptions for                                                               
retirement plans, individual retirement  accounts, and Roth IRAs;                                                               
relating to  transfers of  individual retirement  plans; relating                                                               
to  the  rights  of  judgment creditors  of  members  of  limited                                                               
liability   companies   and   partners   of   limited   liability                                                               
partnerships;  relating to  the Uniform  Probate Code,  including                                                               
pleadings,  orders,  liability,  and notices  under  the  Uniform                                                               
Probate  Code  and  the  Alaska Principal  and  Income  Act,  the                                                               
appointment  of  trust  property,   the  Alaska  Uniform  Prudent                                                               
Investor Act, co-trustees, trust  protectors, and trust advisors;                                                               
relating to the Alaska Principal  and Income Act; relating to the                                                               
Alaska  Uniform   Transfers  to  Minors  Act;   relating  to  the                                                               
disposition of  human remains;  relating to  the tax  on insurers                                                               
for life insurance policies; relating  to insurable interests for                                                               
certain   insurance  policies;   relating   to  restrictions   on                                                               
transfers   of  trust   interests;   relating  to   discretionary                                                               
interests  in  irrevocable  trusts;  relating  to  the  community                                                               
property of married  persons; and amending Rule  64, Alaska Rules                                                               
of Civil Procedure, and Rule 301(a), Alaska Rules of Evidence."                                                                 
                                                                                                                                
[Before the committee was CSHB 102(L&C).]                                                                                       
                                                                                                                                
CHAIR  KELLER, as  the  sponsor  of HB  102,  indicated that  the                                                               
committee has considered  a past iteration of the  bill, and that                                                               
he   is   comfortable   with  the   changes   incorporated   into                                                               
CSHB 102(L&C).                                                                                                                  
                                                                                                                                
2:08:35 PM                                                                                                                    
                                                                                                                                
DAVID G. SHAFTEL,  Attorney at Law - presenting HB  102 on behalf                                                               
of the sponsor, Representative Keller -  noted that he is part of                                                               
a  group  of  attorneys  and  trust  officers  that  periodically                                                               
recommends improvements  to Alaska's  trust and  estate statutes,                                                               
and characterized HB 102 as  an excellent bill that would provide                                                               
updates to Alaska's trust and  estate laws, including some of the                                                               
uniform Acts adopted  by Alaska.  He explained that  HB 102 would                                                               
update  the  Alaska  Principal  and Income  Act  with  regard  to                                                               
allocating principal  and income, in order  to address regulatory                                                               
changes made by  the Internal Revenue Service  (IRS); would amend                                                               
the [Alaska  Uniform Transfers  to Minors Act]  to allow  for the                                                               
extension [of a  custodian's term] for the benefit  of the minor;                                                               
would provide  statutory changes  related to  retirement accounts                                                               
so  that  the interests  of  beneficiaries  are protected;  would                                                               
allow for  the transfer of individual  retirement accounts (IRAs)                                                               
to  trusts for  tax-planning  purposes; would  clarify that  life                                                               
insurance  [policies] can  be  held in  a  life insurance  trust,                                                               
which can  be used to protect  the proceeds and exempt  them from                                                               
federal  estate  taxes;   would  establish  statutory  provisions                                                               
pertaining  to the  disposition  of human  remains,  in order  to                                                               
address  situations   wherein  arguments  arise   regarding  such                                                               
disposition; would  update the  [Alaska Community  Property Act];                                                               
and -  following what New York  has already done -  would improve                                                               
the statutes  pertaining to  modifying a  trust so  that problems                                                               
with a  trust can  be cured.   He ventured  that it  was probably                                                               
merely a lack of time that  resulted in the past iteration of the                                                               
bill not being enacted during the previous legislature.                                                                         
                                                                                                                                
MR.  SHAFTEL, in  response to  questions, explained  that current                                                               
law already prohibits  a person from taking out  a life insurance                                                               
policy on someone whom he/she  doesn't have an insurable interest                                                               
in, and  that HB  102 would  not change  that.   He noted  that a                                                               
national  organization   representing  insurance   companies  has                                                               
already reviewed and approved the bill.                                                                                         
                                                                                                                                
2:18:26 PM                                                                                                                    
                                                                                                                                
DOUGLAS J.  BLATTMACHR, President and CEO,  Alaska Trust Company,                                                               
said his  company supports HB  102, and  thinks it would  be good                                                               
for  both Alaska  and Alaskans,  and  would bring  more jobs  and                                                               
revenue to  the state.   In conclusion,  he shared  his company's                                                               
hope that the committee would support the bill.                                                                                 
                                                                                                                                
2:18:59 PM                                                                                                                    
                                                                                                                                
BETHANN B. CHAPMAN, Attorney at  Law, Faulkner Banfield, PC, said                                                               
simply that she supports HB 102.                                                                                                
                                                                                                                                
CHAIR KELLER, in  response to questions, noted  that the previous                                                               
committee  of  referral  had  inserted  a  "sunset"  clause,  and                                                               
offered his  understanding that all  the interested  parties were                                                               
satisfied with the changes made by that previous committee.                                                                     
                                                                                                                                
2:21:43 PM                                                                                                                    
                                                                                                                                
ERNEST  PRAX,  Staff,  Representative Wes  Keller,  Alaska  State                                                               
Legislature, on behalf  of the sponsor of  HB 102, Representative                                                               
Keller, added that  that sunset clause of five  years pertains to                                                               
Section 37's proposed  change to  AS 21.09.210(m) -  which, under                                                               
CSHB  102(L&C), clarifies  the tax  treatment  of life  insurance                                                               
policies  [being issued  for delivery  to life  insurance trusts]                                                               
formed under or  governed by Alaska law -  and addresses concerns                                                               
that as  changed by  Section 37,  proposed AS  21.09.210(m) might                                                               
result in a reduction in state tax revenue.                                                                                     
                                                                                                                                
2:24:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN  moved  to   report  CSHB  102(L&C)  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There  being  no  objection, CSHB  102(L&C)  was                                                               
reported from the House Judiciary Standing Committee.