Legislature(2013 - 2014)BARNES 124
03/25/2013 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB168 | |
| HB102 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 168 | TELECONFERENCED | |
| += | HB 102 | TELECONFERENCED | |
HB 102-RETIREMENT PLANS; ROTH IRAS; PROBATE
3:38:34 PM
CHAIR OLSON announced that the final 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."
CHAIR OLSON recapped that the committee previously has a
presentation, adopted the proposed committee substitute (CS),
Version U, and took public testimony.
3:39:00 PM
ERNEST PRAX, Staff, Representative Wes Keller, Alaska State
Legislature, on behalf of Representative Wes Keller, sponsor,
referred to the committee substitute (CS) Version U, [labeled
28-LS0335\U, Bannister, 2/26/13]. He briefly explained the
differences from the original version to Version U, which
corrects a drafting error on page 3, line 3. The committee
substitute also deleted Section 38 of the original bill, since
some question arose as to the necessity of the language. Thus
the sponsor deleted the language. [Section 38 would expand the
allowable time an insurance contract may be procured on the life
of body of a person with whom there is a significant financial
interest in the continued life of that person being insured].
3:39:59 PM
REPRESENTATIVE SADDLER asked for clarification on whether these
remarks reflected the changes in Version U.
REPRESENTATIVE CHENAULT asked for clarification on Section 38.
CHAIR OLSON noted that a draft amendment in members' packets
labeled U.1 conceptual will not be offered.
3:41:37 PM
REPRESENTATIVE REINBOLD made a motion to adopt Amendment 1,
labeled [28-LS0335\U.3, Bannister, 3/20/13], which read, as
follows:
Page 35, line 22:
Delete "a single" [AN INDIVIDUAL]"
Insert "an individual"
Page 35, lines 23 - 24:
Delete "or for a group or other type of policy
that insures the life of one or more individuals"
Insert ", or for a life insurance policy issued
for delivery to a trust that was formed under the laws
of this state or contains a provision that laws of
this state govern the validity, construction, and
administration of the trust,"
Page 44, following line 1:
Insert a new subsection to read:
"(d) AS 21.09.210(m), as amended by sec. 37 of
this Act, applies to a life insurance policy issued
for delivery to a trust if the life insurance policy
is issued for delivery to a trust on or after the
effective date of AS 21.09.210(m), as amended by sec.
37 of this Act."
Reletter the following subsection accordingly.
CHAIR OLSON objected for the purpose of discussion.
3:41:58 PM
BRET KOLB, Director, Division of Insurance (DOI); Anchorage
Office, Department of Commerce, Community & Economic Development
(DCCED), stated that Amendment 1 would delete the language "or
for a group or other type of policy that insures the life of one
or more individuals" which the division thought was broad and
[adds language that] ties it to trusts. The intent of HB 102 is
to address trusts and the way the bill was originally drafted it
broadened out the premium tax handling for every type of
insurance instead of limiting it to insurance related to trusts.
He clarified that the language in Amendment 1, lines 8-10
defines it to limit the bill to a life insurance policy
delivered for a trust that would receive the favorable
treatment, which is 2.7 percent premium tax for the first
$100,000 in premium and one-tenth of one percent for the premium
above the first $100,000.
3:43:44 PM
REPRESENTATIVE JOSEPHSON asked where the state would stand vis-
à-vis other states in terms of rate charges over $100,000 and
whether Alaska would be the most generous rate.
MR. KOLB answered no; that other states, perhaps South Dakota,
offer eight-tenths of one percent for insurance above the first
$100,000 of premium as opposed to one-tenth of one percent,
although he admitted he was unsure of the rate for the first
$100,000.
3:44:36 PM
REPRESENTATIVE JOSEPHSON asked whether the insured person for
the trust needs to have some connection to Alaska, such as
property or other nexus.
MR. KOLB answered that that the question pertains to trust law
and not insurance so unfortunately he doesn't know the answer.
REPRESENTATIVE JOSEPHSON asked whether an amendment in members'
packets labeled U.2 would be offered.
CHAIR OLSON answered yes.
CHAIR OLSON removed his objection. There being no further
objection, Amendment 1 was adopted.
3:45:52 PM
REPRESENTATIVE REINBOLD made a motion to adopt Amendment 2,
labeled U.2 [labeled 28-LS0335\U.2, Bannister, 3/15/13], which
read as follows:
Page 1, line 12:
Delete "and"
Page 2, line 2:
Delete "Evidence"
Insert "Evidence; and providing for an effective
date"
Page 35, following line 27:
Insert a new bill section to read:
"* Sec. 38. AS 21.09.210(m), as amended by sec. 37
of this Act, is amended to read:
(m) The tax imposed under this section for an
individual [A SINGLE] life insurance policy [OR FOR A
GROUP OR OTHER TYPE OF POLICY THAT INSURES THE LIFE OF
ONE OR MORE INDIVIDUALS] shall be computed at the rate
of
(1) 2.7 percent of policy year premium up
to $100,000; and
(2) one-tenth of one percent of policy year
premium exceeding $100,000."
Renumber the following bill sections accordingly.
Page 43, line 9:
Delete "sec. 42"
Insert "sec. 43"
Page 43, line 13:
Delete "sec. 45"
Insert "sec. 46"
Page 43, line 15:
Delete "sec. 45"
Insert "sec. 46"
Page 44, line 2:
Delete "42"
Insert "43"
Page 44, following line 5:
Insert a new bill section to read:
"* Sec. 52. The uncodified law of the State of
Alaska is amended by adding a new section to read:
APPLICABILITY. AS 21.09.210(m), as amended by
sec. 38 of this Act, applies to a policy offered,
issued for delivery, or delivered on or after the
effective date of AS 21.09.210(m), as amended by sec.
38 of this Act. In this section, "policy" has the
meaning given in AS 21.97.900."
Renumber the following bill section accordingly.
Page 44, line 8:
Delete "sec. 42"
Insert "sec. 43"
Page 44, line 9:
Delete "sec. 49(a)"
Insert "sec. 50(a)"
Page 44, line 11:
Delete "sec. 45"
Insert "sec. 46"
Delete "sec. 49(b)"
Insert "sec. 50(b)"
Page 44, following line 13:
Insert a new bill section to read:
"* Sec. 54. AS 21.09.210(m), as amended by sec. 38
of this Act, and sec. 52 of this Act take effect five
years after the effective date of sec. 37 of this
Act."
3:46:06 PM
MR. KOLB explained that Amendment 2 would provide a sunset
provision after five years, so the statutes would revert to
exactly to how insurance is handled today. It would remove the
favorable trust treatment just to ensure that the process is
working adequately, he said.
3:46:56 PM
CHAIR OLSON commented that at this point it does not appear the
state has missed any premium sales. In fact, it appears the
state has been competitive on the few number of policies issued;
however, if it turns out that hundreds or thousands of policies
are over the limit of the premium, the state could lose a
significant amount of premium tax. He related his understanding
[Amendment 2] would not interfere with existing contracts, but
would apply to new contracts after the sunset date. The
proposed language change [in Amendment 2] would give the
director a means to determine whether an adjustment is required.
Additionally, this amendment would provide a means to measure
the effect of the change after a reasonable amount of time.
CHAIR OLSON removed his objection. There being no further
objection, Amendment 2 was adopted.
3:48:21 PM
REPRESENTATIVE REINBOLD moved to report the proposed committee
substitute (CS) for HB 102, Version U, [labeled 28-LS0335\U,
Bannister, 2/26/13] as amended, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 102 (L&C) was reported from the House Labor
and Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB168 ver C.pdf |
HL&C 3/25/2013 3:15:00 PM |
HB 168 |
| HB168 Draft Proposed CS version O.PDF |
HL&C 3/25/2013 3:15:00 PM |
HB 168 |
| HB168 Sponsor Statement.pdf |
HL&C 3/25/2013 3:15:00 PM |
HB 168 |
| HB168 Sectional Analysis.pdf |
HL&C 3/25/2013 3:15:00 PM |
HB 168 |
| HB168 Supporting Documents-Letter ASTA 3-21-2013.pdf |
HL&C 3/25/2013 3:15:00 PM |
HB 168 |
| HB168 Supporting Documents-USTIA-Travel Producer Overview.pdf |
HL&C 3/25/2013 3:15:00 PM |
HB 168 |
| HB102 Draft Proposed Amendment U.2.PDF |
HL&C 3/25/2013 3:15:00 PM |
HB 102 |
| HB102 Draft Proposed Amendment U.3.PDF |
HL&C 3/25/2013 3:15:00 PM |
HB 102 |
| HB168 Fiscal Note-DCCED-DOI-03-22-13.pdf |
HL&C 3/25/2013 3:15:00 PM |
HB 168 |