Legislature(2021 - 2022)BARNES 124
05/10/2022 09:00 AM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB301 | |
| HB405 | |
| HB406 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 405 | TELECONFERENCED | |
| += | HB 406 | TELECONFERENCED | |
| += | HB 408 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 301 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
May 10, 2022
9:06 a.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage
Representative Liz Snyder
MEMBERS ABSENT
Representative David Nelson
Representative James Kaufman
Representative Ken McCarty
COMMITTEE CALENDAR
HOUSE BILL NO. 301
"An Act relating to the establishment of a renewable portfolio
standard for regulated electric utilities; and providing for an
effective date."
- MOVED CSHB 301(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 405
"An Act relating to the establishment of trusts; requiring the
filing of certain trust information; and requiring compliance
with a federal law."
- HEARD & HELD
HOUSE BILL NO. 406
"An Act relating to the validity of trusts involving persons
sanctioned by the United States Department of the Treasury; and
relating to the recording of documents conveying land to persons
sanctioned by the United States Department of the Treasury."
- HEARD & HELD
HOUSE BILL NO. 408
"An Act relating to the business of money transmission; relating
to money transmission licenses, licensure requirements, and
registration through the Nationwide Multistate Licensing System;
relating to the use of virtual currency for money transmission;
relating to authorized delegates of a licensee; relating to
acquisition of control of a license; relating to record
retention and reporting requirements; authorizing the Department
of Commerce, Community, and Economic Development to cooperate
with other states in the regulation of money transmission;
relating to permissible investments; relating to violations and
enforcement of money transmission laws; relating to money
transmission license exemptions; relating to payroll processing
services; repealing currency exchange licenses; and providing
for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 301
SHORT TITLE: UTILITIES: RENEWABLE PORTFOLIO STANDARD
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/04/22 (H) READ THE FIRST TIME - REFERRALS
02/04/22 (H) ENE, L&C, FIN
03/08/22 (H) ENE AT 10:15 AM BARNES 124
03/08/22 (H) Heard & Held
03/08/22 (H) MINUTE(ENE)
03/10/22 (H) ENE AT 10:15 AM BARNES 124
03/10/22 (H) Heard & Held
03/10/22 (H) MINUTE(ENE)
03/15/22 (H) ENE AT 10:15 AM BARNES 124
03/15/22 (H) Heard & Held
03/15/22 (H) MINUTE(ENE)
03/17/22 (H) ENE AT 10:15 AM BARNES 124
03/17/22 (H) Heard & Held
03/17/22 (H) MINUTE(ENE)
03/22/22 (H) ENE AT 10:15 AM BARNES 124
03/22/22 (H) -- MEETING CANCELED --
03/24/22 (H) ENE AT 10:15 AM BARNES 124
03/24/22 (H) -- MEETING CANCELED --
04/26/22 (H) ENE AT 10:15 AM BARNES 124
04/26/22 (H) Heard & Held
04/26/22 (H) MINUTE(ENE)
04/28/22 (H) ENE AT 10:15 AM BARNES 124
04/28/22 (H) Moved CSHB 301(ENE) Out of Committee
04/28/22 (H) MINUTE(ENE)
04/29/22 (H) ENE RPT CS(ENE) NEW TITLE 3DP 1NR 2AM
04/29/22 (H) DP: TUCK, FIELDS, SCHRAGE
04/29/22 (H) NR: CLAMAN
04/29/22 (H) AM: KAUFMAN, RAUSCHER
05/02/22 (H) L&C AT 3:15 PM BARNES 124
05/02/22 (H) Heard & Held
05/02/22 (H) MINUTE(L&C)
05/06/22 (H) L&C AT 9:00 AM BARNES 124
05/06/22 (H) Heard & Held
05/06/22 (H) MINUTE(L&C)
05/09/22 (H) L&C AT 3:15 PM BARNES 124
05/09/22 (H) -- Delayed to 5/10/22 at 9:00 am --
05/10/22 (H) L&C AT 9:00 AM BARNES 124
BILL: HB 405
SHORT TITLE: ESTABLISHMENT OF TRUSTS
SPONSOR(s): LABOR & COMMERCE
04/04/22 (H) READ THE FIRST TIME - REFERRALS
04/04/22 (H) L&C
04/08/22 (H) L&C AT 9:00 AM BARNES 124
04/08/22 (H) -- MEETING CANCELED --
04/15/22 (H) L&C AT 9:00 AM BARNES 124
04/15/22 (H) Heard & Held
04/15/22 (H) MINUTE(L&C)
04/18/22 (H) L&C AT 3:15 PM BARNES 124
04/18/22 (H) Heard & Held
04/18/22 (H) MINUTE(L&C)
04/20/22 (H) JUD REFERRAL ADDED AFTER L&C
04/20/22 (H) BILL REPRINTED
04/22/22 (H) L&C AT 9:00 AM BARNES 124
04/22/22 (H) Heard & Held
04/22/22 (H) MINUTE(L&C)
04/25/22 (H) L&C AT 3:15 PM BARNES 124
04/25/22 (H) <Bill Hearing Postponed to 4/27/22>
04/27/22 (H) L&C AT 3:15 PM BARNES 124
04/27/22 (H) Heard & Held
04/27/22 (H) MINUTE(L&C)
05/09/22 (H) L&C AT 3:15 PM BARNES 124
05/09/22 (H) -- Delayed to 5/10/22 at 9:00 am --
05/10/22 (H) L&C AT 9:00 AM BARNES 124
BILL: HB 406
SHORT TITLE: MORATORIUM ON TRUSTS/PROPERTY ACQUISITION
SPONSOR(s): LABOR & COMMERCE
04/04/22 (H) READ THE FIRST TIME - REFERRALS
04/04/22 (H) L&C
04/08/22 (H) L&C AT 9:00 AM BARNES 124
04/08/22 (H) -- MEETING CANCELED --
04/15/22 (H) L&C AT 9:00 AM BARNES 124
04/15/22 (H) Heard & Held
04/15/22 (H) MINUTE(L&C)
04/20/22 (H) JUD REFERRAL ADDED AFTER L&C
04/20/22 (H) BILL REPRINTED
04/22/22 (H) L&C AT 9:00 AM BARNES 124
04/22/22 (H) Heard & Held
04/22/22 (H) MINUTE(L&C)
04/25/22 (H) L&C AT 3:15 PM BARNES 124
04/25/22 (H) <Bill Hearing Postponed to 4/27/22>
04/27/22 (H) L&C AT 3:15 PM BARNES 124
04/27/22 (H) Heard & Held
04/27/22 (H) MINUTE(L&C)
05/09/22 (H) L&C AT 3:15 PM BARNES 124
05/09/22 (H) -- Delayed to 5/10/22 at 9:00 am --
05/10/22 (H) L&C AT 9:00 AM BARNES 124
WITNESS REGISTER
EVAN ANDERSON, Staff
Representative Zack Fields
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing on HB 405, explained two
amendments on behalf of Representative Fields, sponsor of the
amendments.
EVAN ANDERSON, Staff
Representative Zack Fields
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing on HB 406, explained two
amendments on behalf of Representative Fields, sponsor of the
amendments.
CHRISSI THURMAN, State Recorder
Recorder's Office
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 406, answered a
question.
ACTION NARRATIVE
9:06:24 AM
CO-CHAIR IVY SPOHNHOLZ called the House Labor and Commerce
Standing Committee meeting to order at 9:06 a.m.
Representatives Schrage, Snyder, Fields, and Spohnholz were
present at the call to order.
HB 301-UTILITIES: RENEWABLE PORTFOLIO STANDARD
9:07:26 AM
CO-CHAIR SPOHNHOLZ announced that the first order of business
would be HOUSE BILL NO. 301, "An Act relating to the
establishment of a renewable portfolio standard for regulated
electric utilities; and providing for an effective date."
[Before the committee was CSHB 301(ENE), amended on 5/6/22.]
9:07:41 AM
CO-CHAIR FIELDS moved to report CSHB 301(ENE), as amended, out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
301(L&C) was reported out of the House Labor and Commerce
Standing Committee.
HB 405-ESTABLISHMENT OF TRUSTS
9:08:00 AM
CO-CHAIR SPOHNHOLZ announced that the next order of business
would be HOUSE BILL NO. 405, "An Act relating to the
establishment of trusts; requiring the filing of certain trust
information; and requiring compliance with a federal law."
9:09:28 AM
CO-CHAIR FIELDS, to give context on the [three] amendments about
to be proposed, recounted that the committee listened to input
from various stakeholders. He offered his appreciation to the
committee for taking up the amendments to provide a template
that future legislatures can work with, given it is too late
this session to move the bill. He encouraged stakeholders to
again weigh in after the amendments to relate the extent to
which the amendments resolve suggestions and concerned.
9:09:56 AM
CO-CHAIR FIELDS moved to adopt Amendment 1 to HB 405, labeled
32-LS1620\B.1, Bannister, 4/26/22, which read:
Page 1, line 1, following the first occurrence of
"of":
Insert "certain"
Page 2, line 2:
Following "to":
Insert "certain"
Following "trusts;":
Insert "relating to Alaska Native corporation
settlement trusts;"
Delete "requiring"
Insert "relating to"
Page 1, line 5, through page 2, line 6:
Delete all material and insert:
"* Section 1. AS 13.36.005 is amended by adding a
new subsection to read:
(c) If the establishment or relocation of a
trust is subject to AS 13.36.030, the trust must be
established or relocated under AS 13.36.030 before
registering under this section."
Page 4, following line 1:
Insert a new subsection to read:
"(g) This section does not apply to a trust that
constitutes a settlement trust as defined in 43 U.S.C.
1602 (Alaska Native Claims Settlement Act), or to a
settlor, trustee, or beneficiary of a trust that
constitutes a settlement trust as defined in 43 U.S.C.
1602 (Alaska Native Claims Settlement Act)."
Reletter the following subsections accordingly.
9:10:00 AM
CO-CHAIR SPOHNHOLZ objected for the purpose of explanation.
9:10:06 AM
EVAN ANDERSON, Staff, Representative Zack Fields, Alaska State
Legislature, on behalf of Co-Chair Fields, sponsor of the
amendment, explained that Amendment 1 was created after
conversations with several Alaska Native regional corporations.
They stated that Alaska Native Settlement Trusts (ANSTs) were
established through the 1971 Alaska Native Claims Settlement Act
(ANCSA), but that these trusts were largely not utilized until
the 2017 Tax Cuts and Jobs Act (TCJA). From these
conversations, they continued, it seemed clear that the
reporting requirements being sought for all trusts through HB
405 should not count for these settlement trusts. Therefore,
Mx. Anderson said, Amendment 1 would create a broad exemption
for those settlement trusts.
9:11:17 AM
CO-CHAIR FIELDS offered his understanding that Amendment 1 would
entirely resolve any concerns had by Alaska Native corporations.
He requested that the corporations let him know if any further
refinement is needed.
CO-CHAIR SPOHNHOLZ expressed her appreciation for the intent of
Co-Chair Fields in working on HB 405, as well as the
collaborative process in fine tuning the legislation to prevent
creating any unintentional harm. She noted that the committee
is seeking to improve the bill through these amendments and then
work with stakeholders on further refinements over the interim.
9:12:06 AM
CO-CHAIR SPOHNHOLZ removed her objection to Amendment 1. There
being no further objection, Amendment 1 was adopted.
9:12:16 AM
CO-CHAIR FIELDS moved to adopt Amendment 2 to HB 405, labeled
32-LS1620\B.2, Bannister, 4/28/22, which read:
Page 3, lines 16 - 17:
Delete "within 30 days after"
Insert "on or before January 30 of the calendar year
that follows the calendar year in which"
9:12:18 AM
CO-CHAIR SPOHNHOLZ objected for the purpose of explanation.
9:12:23 AM
MX. ANDERSON, on behalf of Co-Chair Fields, sponsor of the
amendment, noted that Amendment 2 came after feedback from
representatives of the trust industry. They said the bill had a
strong reporting requirement for any time changes are made to a
trust, such as a new beneficiary or new settlor. For example,
they related, the committee heard testimony that every time a
new grandchild is born a trust might be subject to fines. So,
Amendment 2 was built in direct response to that feedback, they
said. The disclosure requirement would instead be on an annual
basis any changes would be reported by January 30 of the
following year to the Department of Commerce, Community, and
Economic Development (DCCED). This would line it up with the
federal tax cycle, Mx. Anderson continued, making it reliable
and easy to plan for. They noted that people can also report
changes at the time those changes occur [rather than waiting
until January 30 of the following year].
MX. ANDERSON, in response to Co-Chair Spohnholz, confirmed that
this is just when there is a change to the trust, this is not a
requirement to report annually or file documents on an annual
basis if there haven't been any changes to the trust.
9:14:02 AM
CO-CHAIR SPOHNHOLZ removed her objection to Amendment 2. There
being no further objection, Amendment 2 was adopted.
9:14:11 AM
CO-CHAIR FIELDS moved to a adopt Amendment 3 to HB 405, labeled
32-LS1620\B.3, Bannister, 4/29/22, which read:
Page 1, line 1, following the first occurrence of
"of":
Insert "certain"
Page 1, line 2:
Following "to":
Insert "certain"
Following "trusts;":
Insert "relating to charitable trusts;"
Delete "requiring"
Insert "relating to"
Page 4, following line 1:
Insert a new subsection to read:
"(g) This section does not apply to a trust that
is described as a charitable trust under 26 U.S.C.
4947(a)(1) (Internal Revenue Code of 1954)."
Reletter the following subsections accordingly.
9:14:13 AM
CO-CHAIR SPOHNHOLZ objected for the purpose of explanation.
9:14:15 AM
CO-CHAIR FIELDS explained Amendment 3 would exempt charitable
trusts, which was a suggestion made by stakeholders.
9:14:36 AM
CO-CHAIR SPOHNHOLZ removed her objection to Amendment 3. There
being no further objection, Amendment 3 was adopted.
CO-CHAIR SPOHNHOLZ said the committee looks forward to any
feedback that stakeholders want to provide on the legislation,
as amended.
[HB 405 was held over.]
HB 406-MORATORIUM ON TRUSTS/PROPERTY ACQUISITION
9:15:21 AM
CO-CHAIR SPOHNHOLZ announced that the final order of business
would be HOUSE BILL NO. 406, "An Act relating to the validity of
trusts involving persons sanctioned by the United States
Department of the Treasury; and relating to the recording of
documents conveying land to persons sanctioned by the United
States Department of the Treasury."
9:15:40 AM
CO-CHAIR FIELDS moved to adopt Amendment 1 to HB 406, labeled
32-LS1631\B.3, Bannister, 4/25/22, which read:
Page 1, line 1:
Delete "the validity of trusts involving"
Page 1, line 2, following "Treasury":
Insert "serving as trustees or receiving a
distribution as a beneficiary"
Page 1, lines 5 - 10:
Delete all material and insert:
"* Section 1. AS 13.36.071 is amended by adding a
new subsection to read:
(e) A person that is listed on the most recent
Specially Designated Nationals and Blocked Persons
List published by the United States Department of the
Treasury, Office of Foreign Assets Control, may not
accept a trusteeship or serve as a trustee, act to
preserve trust property under (c) of this section, or
inspect or investigate trust property under (d) of
this section.
* Sec. 2. AS 13.36.073(a) is amended to read:
(a) Except as otherwise provided in the trust
instrument, a vacancy in a trusteeship occurs if
(1) a person designated as a trustee
rejects the trusteeship, [OR] is considered to have
rejected the trusteeship under AS 13.36.071, or is
prohibited under AS 13.36.071(e) from accepting the
trusteeship or serving as a trustee;
(2) a person designated as a trustee cannot
be identified or does not exist;
(3) a trustee resigns, including
resignation under AS 13.36.074(d);
(4) a trustee is disqualified or removed
under AS 13.36.076;
(5) a trustee dies;
(6) a guardian or conservator is appointed
for an individual serving as a trustee.
* Sec. 3. AS 13.36.074 is amended by adding a new
subsection to read:
(d) Notwithstanding (a) and (b) of this section,
a trustee shall resign if the trustee is listed on the
most recent Specially Designated Nationals and Blocked
Persons List published by the United States Department
of the Treasury, Office of Foreign Assets Control. If
the trustee does not resign, a beneficiary of the
trust may remove the trustee without obtaining
approval of the court.
* Sec. 4. AS 13.36.076(a) is amended to read:
(a) A trustee may be removed from office
(1) by the decision of a trust protector
under AS 13.36.370(b)(1);
(2) by the decision of another person
specified in the trust instrument;
(3) under a procedure specified in the
trust instrument;
(4) by a court on petition by the settlor,
a co-trustee, a qualified beneficiary, or the court on
its own initiative, if
(A) the court finds there is a basis for
removal under (b) of this section, there is not a
trust protector or another specified person who is
currently acting and who may be contacted by the
settlor, trustee, or qualified beneficiary in person,
by mail, electronically, or by another means, and
there is not a procedure for removal specified in the
trust instrument; or
(B) notwithstanding the appointment of a
trust protector under AS 13.36.370 or the existence of
a procedure for trustee removal specified in the trust
instrument, there has been a serious breach of trust
as specified under (b)(1) of this section;
(5) by a beneficiary under AS 13.36.074(d).
* Sec. 5. AS 13.36.153 is amended by adding a new
subsection to read:
(k) Notwithstanding any other provision of this
chapter, a trustee may not make a distribution to a
beneficiary if the beneficiary is listed on the most
recent Specially Designated Nationals and Blocked
Persons List published by the United States Department
of the Treasury, Office of Foreign Assets Control,
unless the failure to make the distribution would
jeopardize
(1) a deduction or exclusion originally
claimed with respect to a contribution to a trust that
qualified for the annual exclusion under 26 U.S.C.
2503(b), the marital deduction under 26 U.S.C. 2056(a)
or 26 U.S.C. 2523(a), or the charitable deduction
under 26 U.S.C. 170(a), 26 U.S.C. 642(c), 26 U.S.C.
2055(a), or 26 U.S.C. 2522(a) (Internal Revenue Code);
(2) the qualification of a transfer as a
direct skip under 26 U.S.C. 2642(c) (Internal Revenue
Code);
(3) an election to treat a corporation as a
subchapter S corporation under 26 U.S.C. 1362
(Internal Revenue Code); or
(4) another specific tax benefit for which
the contribution originally qualified for income,
gift, estate, or generation-skipping transfer tax
purposes under 26 U.S.C. (Internal Revenue Code)."
Renumber the following bill sections accordingly.
Page 2, line 5:
Delete "AS 13.36.380, enacted by sec. 1 of this
Act, does"
Insert "AS 13.36.071(e), enacted by sec. 1 of
this Act, AS 13.36.073(a), as amended by sec. 2 of
this Act, AS 13.36.074(d), enacted by sec. 3 of this
Act, AS 13.36.076(a), as amended by sec. 4 of this
Act, and AS 13.36.153(k), enacted by sec. 5 of this
Act, do"
Page 2, line 6, following "Act":
Insert "or to the trustees and distributions of a
trust formed before the effective date of this Act"
9:15:43 AM
CO-CHAIR SPOHNHOLZ objected for the purpose of explanation.
9:15:45 AM
CO-CHAIR FIELDS specified that Amendment 1 and Amendment 2 would
rewrite HB 406 with sweeping changes based on input from the
trust industry group. He said the amendments are designed to
ensure that people on a sanctions list aren't hiding wealth in a
trust. He stated that the tool originally written into the bill
around making a trust invalid was probably not the best
structured tool, which is what Amendment 1 attempts to fix.
9:16:26 AM
EVAN ANDERSON, Staff, Representative Zack Fields, Alaska State
Legislature, on behalf of Co-Chair Fields, reiterated that
Amendment 1 is a substantial rewrite of Section 1 of HB 406.
They explained that the amendment would prohibit certain
activities by individuals rather than describing a trust as
invalid when the trust has an Office of Foreign Assets Control
(OFAC) member. Specifically, they said, Amendment 1 would
prohibit people on the OFAC list from accepting positions within
a trust structure and the amendment would also prohibit
distributions from a trust to any individuals on the OFAC
sanctions list. The intent, Mx. Anderson continued, is to back
away from nullifying the actions of a trust and focus instead on
individuals who are bad actors and describe what the
consequences for them might be. This was written with a lot of
collaboration from the trust industry, they reiterated.
9:17:40 AM
CO-CHAIR SPOHNHOLZ removed her objection to Amendment 1. There
being no further objection, Amendment 1 was adopted.
9:17:47 AM
CO-CHAIR FIELDS moved to adopt Amendment 2 to HB 406, labeled
32-LS1631\B.4, Bannister, 4/27/22, which read:
Page 1, lines 2 - 3:
Delete "documents conveying land to persons
sanctioned by the United States Department of the
Treasury"
Insert "certain real property interest transfers
and beneficial ownership information on the transfers"
Page 1, line 11, through page 2, line 2:
Delete all material and insert:
"* Sec. 2. AS 34.15 is amended by adding a new
section to read:
Sec. 34.15.360. Recording of beneficial ownership
information. (a) If the transfer of a real property
interest is accomplished without a mortgage or similar
form of financing or is financed by a financial
institution that is not regulated by 31 U.S.C.
5318(h), or if the purchaser of the real property
interest is a corporation, trust, or other legal
entity organized in a foreign country, the transfer
and the beneficial ownership information for each
beneficial owner of the real property interest
transferred, including by gift, shall be offered for
recording under AS 40.17 within 30 days after the
transfer is finalized. Documents offered for recording
under this subsection must comply with the applicable
requirements for recording under AS 40.17.030 and
40.17.110.
(b) The beneficial ownership information under
(a) of this section shall be offered for recording by
(A) the title insurance company or its
agent that is used for the transfer;
(B) if there is no person that satisfies
(A) of this subsection, the escrow company or its
agent that handles the transfer;
(C) if there is no person that satisfies
(A) or (B) of this subsection, the transferee's
attorney;
(D) if there is no person that satisfies
(A) - (C) of this subsection, the transferor's
attorney;
(E) if there is no person that satisfies
(A) - (D) of this subsection, the transferee's real
estate broker or agent;
(F) if there is no person that satisfies
(A) - (E) of this subsection, the transferor's real
estate broker or agent;
(G) if there is no person that satisfies
(A) - (F) of this subsection, the transferee; or
(H) if there is no person that satisfies
(A) - (G) of this subsection, the transferor.
(c) A person that fails to comply with this
section is subject to a civil penalty of $150 for each
day the person fails to comply.
(d) In this section,
(1) "beneficial owner" means
(A) an individual or entity that owns all
or part of the real property interest as a result of
the transfer;
(B) with respect to an entity that owns all
or part of the real property interest as a result of
the transfer, an individual who, through a contract,
arrangement, understanding, relationship, or other
method, directly or indirectly exercises substantial
control over the entity, or owns or controls 25
percent or more of the ownership interests of the
entity;
(2) "beneficial ownership information"
means
(A) a beneficial owner's full legal name;
(B) a beneficial owner's date of birth, if
the beneficial owner is a natural person;
(C) a beneficial owner's date and location
of organization, if the beneficial owner is not a
natural person;
(D) a beneficial owner's residential
address, if the beneficial owner is a natural person,
and any business street address; and
(E) one of the following, if the beneficial
owner has one of the following:
(i) a beneficial owner's tax identification
number or employer identification number;
(ii) if the beneficial owner does not have
a tax identification number or an employer
identification number, the beneficial owner's data
universal numbering system number issued by Dun and
Bradstreet; or
(iii) a number assigned to the beneficial
owner by the United States Department of the Treasury
Financial Crimes Enforcement Network."
Page 2, line 5, following "APPLICABILITY.":
Insert "(a)"
Page 2, following line 6:
Insert a new subsection to read:
"(b) AS 34.15.360, enacted by sec. 2 of this Act,
applies to a real property interest that is
transferred on or after the effective date of this
Act."
9:17:48 AM
CO-CHAIR SPOHNHOLZ objected for the purpose of explanation.
9:17:53 AM
MX. ANDERSON, on behalf of Co-Chair Fields, said Amendment 2 was
a good opportunity to work with the Recorder's Office and with
national advocates, such as Global Financial Integrity (GFI).
During testimony before the committee [on 4/22/22], they
recounted, GFI provided geographical targeting orders and
statistics. It turns out, they continued, that Alaska is one of
the top three or top five real estate markets in the US that are
unregulated by the US Department of the Treasury. Rather than
waiting on those regulations to come sometime in the future,
they said, Amendment 2 would rewrite Section 2 of HB 405 to
follow that reporting structure. So, Mx. Anderson explained,
any real estate transactions that could be categorized as high
risk, such as those that are paid with all cash or those that
are financed by a non-US bank, would automatically trigger a
reporting requirement of beneficial ownership information
directly to the Recorder's Office by the real estate
professionals involved with that sale. It is hoped, they added,
that this doesn't require the same level of staffing by the
Recorder's Office, as it is specifically and narrowly targeted
and so it should be a low number of overall transactions in
Alaska. However, when those transactions are happening, it will
ensure that Alaska regulators know who is involved in those
sales.
9:19:37 AM
CO-CHAIR SPOHNHOLZ asked whether Amendment 2 would reduce the
oversight burden and fiscal note associated with HB 406.
9:20:26 AM
CHRISSI THURMAN, State Recorder, Recorder's Office, Department
of Natural Resources (DNR), replied that as the bill currently
stands it is unclear who would do the enforcement of the
tracking of the beneficial information. She said she is
concerned about that because it is not the authority that the
Recorder's Office holds right now. She stated that the fiscal
note is undetermined at this time but based on Amendment 2 she
does see that it could be reduced substantially.
9:21:11 AM
CO-CHAIR SPOHNHOLZ related that this legislation is complicated,
which is why the committee is only adopting amendments today and
not taking any final action. She said it must be ensured that
what is being done is understood in detail, but it sounds like
[Amendment 2] would reduce some of the burden and fiscal note
associated with compliance.
CO-CHAIR SPOHNHOLZ removed her objection to Amendment 2. There
being no further objection, Amendment 2 was adopted.
9:21:56 AM
CO-CHAIR FIELDS requested Mx. Anderson address the other issues
that were brought up during the bill's previous hearing.
MX. ANDERSON recounted that in testimony before the committee,
it was brought up repeatedly that no state in the US asks for
this kind of information. They explained that the reason no
other state asks for beneficial ownership information for trusts
or trust income is that 43 US states tax income, which means
distributions from trusts or any trust earning income are
subject to tax. The federal taxation requirements are high for
trusts, they stated, over $600 in income each year, just like
for an individual; or, if a trust ends up in an estate tax
situation or an inheritance tax situation, it must be over $12
million for an individual or $24 million for a married couple.
So, state taxes on these trusts are significant across the
country, Mx. Anderson continued, and when someone files their
taxes for their trust or their distributions from a trust, they
are sharing more than all the information that is being asked
for in HB 406 with state regulators. It would typically be a
department of revenue or department of taxation within a given
state, they noted, that is tracking this information, so Alaska
is one of the small number of states that is not tracking any of
this information.
9:23:57 AM
CO-CHAIR FIELDS reiterated that he would like to hear further
information from stakeholders after the adoption of these
amendments, given that there is a new paradigm with aggressive
foreign actors who have been documented to hide their wealth in
the US [by taking] advantage of trusts, and Alaska needs to
address that.
[HB 406 was held over.]
9:24:31 AM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
9:24 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 405 Completed Amendment Packet_5.10.22.pdf |
HL&C 5/10/2022 9:00:00 AM |
HB 405 |
| HB 406 Completed Amendment Packet_5.10.22.pdf |
HL&C 5/10/2022 9:00:00 AM |
HB 406 |