02/04/2016 08:00 AM House STATE AFFAIRS

            HB 273-VEHICLES: TRANSFER ON DEATH TITLE                                                                        
                                                                                                                                
8:53:10 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  announced that the final  order of business  was HOUSE                                                              
BILL NO. 273, "An  Act relating to the transfer of  the title to a                                                              
vehicle,  including certain  manufactured homes  and trailers,  on                                                              
the death of the owner; and providing for an effective date."                                                                   
                                                                                                                                
8:53:20 AM                                                                                                                    
                                                                                                                                
DENEEN  TUCK,   Staff,  Representative  Bob  Lynn,   Alaska  State                                                              
Legislature,  on  behalf  of  the  House  State  Affairs  Standing                                                              
Committee,  sponsor,  on  which   Representative  Lynn  serves  as                                                              
chair,  announced that  HB 273  was  proposed by  the House  State                                                              
Affairs  Standing Committee,  and she  deferred to  Representative                                                              
Gruenberg for presentation.                                                                                                     
                                                                                                                                
8:53:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  thanked the chair and  committee members                                                              
for their cooperation in haring the proposed legislation.                                                                       
                                                                                                                                
8:54:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  stated  that HB  273  is based  on  the                                                              
concept  of "transfer  on death"  (TOD) in which  people can  plan                                                              
their  estates  avoiding  the  problems,  delay,  and  expense  of                                                              
probate.   The proposed legislation  follows other  TOD provisions                                                              
in  statutes  in  Alaska  -  TOD   bank  accounts,  TOD  brokerage                                                              
accounts,  and   TOD  deeds  for  real  estate.     Representative                                                              
Gruenberg   expressed  that   the  TOD  concept   has  been   very                                                              
successful  and  HB  273  proposes   to  expand  that  concept  to                                                              
vehicles.    He  professed  that the  only  litigation  in  Alaska                                                              
concerning TOD  of which he  was aware was  a case brought  to his                                                              
attention  by  probate attorney  Beth  Chapman.    He said  he  is                                                              
working  on an amendment  to address  that issue  and Ms.  Chapman                                                              
will be available at the next meeting to testify.                                                                               
                                                                                                                                
REPRESENTATIVE  GRUENBERG continued  that 15  states have  similar                                                              
legislation  to HB  273  and four  states  have  expanded the  TOD                                                              
concept  to watercraft.    The  proposed legislation  was  drafted                                                              
with the  help of the Division  of Motor Vehicles (DMV)  using the                                                              
legislation  from the 15  states.   The proposed legislation  does                                                              
not  include  watercraft or  snow  machines,  as they  are  titled                                                              
differently, and aircraft are under federal jurisdiction.                                                                       
                                                                                                                                
9:00:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  went on  to describe the  process, which                                                              
he  maintained   is  very  simple.     The  vehicle   registration                                                              
application  would provide  a place  to  designate a  beneficiary.                                                              
Only  human  owners could  designate  beneficiaries;  corporations                                                              
could not, because  they do not die.  The  beneficiary designation                                                              
may  be an  individual,  two  people in  a  joint  tenancy, or  an                                                              
organization.  He  offered that the proposed legislation  could be                                                              
applied   to   charitable  giving.      Representative   Gruenberg                                                              
continued  by  stating that  under  HB  273, vehicle  liens  would                                                              
remain  with the vehicle.   The  beneficiary  could be changed  by                                                              
reregistering the car.   If the vehicle was sold,  the beneficiary                                                              
designation  would become  invalidated.   He said the  beneficiary                                                              
may decline to accept the property.                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG  referred to page 3, line  17, to discuss                                                              
one remaining  issue: namely, the  claims of unsecured  creditors.                                                              
He explained  that the draft  version of the proposed  legislation                                                              
was  initially  written so  that  a  claim against  the  vehicle's                                                              
owner would not  survive the transfer to the  beneficiary upon the                                                              
owner's  death.   Responding to  concerns  of Representative  Lynn                                                              
and his  staff, the  proposed legislation  [Version P]  now states                                                              
that upon  transfer to the  designated beneficiary, the  TOD title                                                              
of the  vehicle would be subject  to "claims of  creditors against                                                              
the  owner  or  the owner's  estate."    Representative  Gruenberg                                                              
further indicated  that subsequent legal advice,  illuminating the                                                              
potential  for complicated  and  time-consuming probate,  prompted                                                              
him  to  pursue  drafting  an  amendment  that  would  ensure  the                                                              
language  in  the  proposed  legislation   will  be  the  same  as                                                              
language  in the transfer  on death  deed (TODD)  bill -  that is,                                                              
giving  creditors a  year to  make  a claim.   He  added that  the                                                              
proposed amendment would be forthcoming.                                                                                        
                                                                                                                                
9:06:10 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER,  citing the expense and time  involved with                                                              
legislation, asked  Representative Gruenberg  to describe  what HB
 would  provide beyond what  is currently available  by listing                                                              
a second owner for a vehicle.                                                                                                   
                                                                                                                                
REPRESENTATIVE  GRUENBERG  alluded to  a statute  in  Title 28  to                                                              
discuss  "joint  tenancy  with  the  right  of  survivorship"  and                                                              
"tenancy  in common"  as  they apply  to  vehicle  ownership.   He                                                              
defined  joint tenancy  with the  right of survivorship  as  a co-                                                              
ownership  in  which ownership  may  pass  only to  the  surviving                                                              
joint owner  or owners  in case  of the death  of a joint  tenant.                                                              
Tenancy  in common  he  described  as shared  ownership;  however,                                                              
when a person dies,  his/her interest in the vehicle  is passed on                                                              
to  whomever he/she  has chosen.    Representative Gruenberg  made                                                              
the point  that in  either case,  the tenants  are current  owners                                                              
with  rights of  ownership.   He  emphasized that  TOD titles  are                                                              
quite different.   The owner  maintains full ownership  during his                                                              
or her  lifetime, and transfer of  the vehicle to  the beneficiary                                                              
is an automatic pass through upon death of the owner.                                                                           
                                                                                                                                
9:10:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER asked  for more  information to  understand                                                              
the need for this legislation in terms of public interest.                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG  declared that  it is impossible  to know                                                              
how many  will take advantage  of this,  but he has  been informed                                                              
that the  concept of the  TODD and the  TOD brokerage  accounts is                                                              
very  popular.    He  further  insisted   that  many  people  have                                                              
expressed an  interest, he  has heard no  opposition, and  it will                                                              
take time for  awareness.  In response to  Representative Keller's                                                              
concern  for   the  legislature's  limited   time,  Representative                                                              
Gruenberg mentioned  that the proposed  legislation would  only be                                                              
heard in the current committee and on the floor.                                                                                
                                                                                                                                
9:12:41 AM                                                                                                                    
                                                                                                                                
AVES  THOMPSON, Executive  Director,  Alaska Trucking  Association                                                              
(ATA), testified  in support of HB 273.   He stated that  ATA is a                                                              
statewide organization  representing the  interests of  nearly 200                                                              
member companies from  Barrow to Ketchikan.  He  affirmed that ATA                                                              
believes  that the proposed  legislation  would make the  transfer                                                              
of a  vehicle upon death  much easier.   He further  asserted that                                                              
the process  makes the  intentions clear and  would allow  for the                                                              
transfer  of the  vehicle  without probate.    Mr. Thompson  added                                                              
that  although many  of the  ATA members  are corporations,  there                                                              
are a  significant number of  individuals in the  organization who                                                              
could benefit  from HB  273.   He asked  for committee  support of                                                              
the proposed legislation.                                                                                                       
                                                                                                                                
9:13:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  VAZQUEZ requested clarification  for why  120 days                                                              
was chosen  for the  length of time  the beneficiary  must survive                                                              
the owner before the title to the vehicle would be transferred.                                                                 
                                                                                                                                
REPRESENTATIVE  GRUENBERG  responded   that  the  length  of  time                                                              
chosen  is  as designated  in  probate  code,  and that  the  time                                                              
interval applies to all of the TOD statutes in Alaska.                                                                          
                                                                                                                                
REPRESENTATIVE GRUENBERG  then made  a correction -  the specified                                                              
time in the proposed legislation is 120 hours, not days.                                                                        
                                                                                                                                
9:15:32 AM                                                                                                                    
                                                                                                                                
NICOLE THAM, Driver  Services Manager, Division of  Motor Vehicles                                                              
(DMV),  Department  of  Administration   (DOA),  stated  that  the                                                              
division had no objection to HB 273.                                                                                            
                                                                                                                                
REPRESENTATIVE KELLER  mentioned that the fiscal  note states that                                                              
the DMV  will absorb  the costs  of implementing the  requirements                                                              
of  the proposed  legislation.    He asked  Ms.  Tham to  describe                                                              
exactly what the DMV would be absorbing.                                                                                        
                                                                                                                                
9:16:49 AM                                                                                                                    
                                                                                                                                
MS. THAM responded  that the DMV would incur about  three weeks of                                                              
programming costs,  which would be absorbed through  the title fee                                                              
collected for the  issuance of a TOD title.  She  also stated that                                                              
the DMV  would need to update  the title form,  registration form,                                                              
and application  form, but  didn't know at  this time  the expense                                                              
related to these  modifications.  She asserted that  the DMV would                                                              
be able to absorb this cost as well.                                                                                            
                                                                                                                                
REPRESENTATIVE GRUENBERG  directed attention to page  4, lines 20-                                                              
22, to  explain that the  authority would be  given to the  DMV to                                                              
set any additional fees necessary to implement HB 273.                                                                          
                                                                                                                                
MS. THAM confirmed Representative Gruenberg's statement.                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG referred  to a  letter in the  committee                                                              
packet from  the Alaska Automotive  Dealers Association  (AADA) in                                                              
support of the proposed legislation.                                                                                            
                                                                                                                                
9:19:36 AM                                                                                                                    
                                                                                                                                
BOB  MAIER,   Executive  Director,  Alaska   Manufactured  Housing                                                              
Association  (AMHA),   testified  in  support  of  HB   273.    He                                                              
explained that  AMHA is a  statewide organization  of manufactured                                                              
home community owners and managers.                                                                                             
                                                                                                                                
CHAIR LYNN asked if manufactured homes includes trailers.                                                                       
                                                                                                                                
MR.  MAIER  stated  that trailers  are  included  as  manufactured                                                              
homes.  Mr.  Maier added that he  had one concern, which  was with                                                              
the  phrase  "certain  manufactured  homes", and  he  offered  his                                                              
understanding  that   there  was  an  amendment   forthcoming  for                                                              
clarification.                                                                                                                  
                                                                                                                                
9:21:28 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN announced that HB 273 was held over.