Legislature(2021 - 2022)BARNES 124

04/15/2022 09:00 AM House LABOR & COMMERCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
09:05:07 AM Start
09:06:42 AM Board of Veterinary Examiners
09:21:05 AM HB405
09:55:20 AM HB406
10:07:06 AM HB407
10:25:24 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ Consideration of Governor’s Appointees: Board TELECONFERENCED
of Examiners in Optometry - Kathleen Rice;
Board of Certified Real Estate Appraisers -
Valery Kudryn; Board of Certified Direct-Entry
Midwives - Hannah St. George; Real Estate
Commission - Chad Stigen and Devon Thomas;
Board of Social Work Examiners - Gabriel King;
Board of Veterinary Examiners - Ciara Vallaro
*+ HB 405 ESTABLISHMENT OF TRUSTS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
*+ HB 406 MORATORIUM ON TRUSTS/PROPERTY ACQUISITION TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
*+ HB 407 PROHIBIT COMMERCE WITH RUSSIA TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 174 ALLOW NATURAL HAIRSTYLES TELECONFERENCED
Scheduled but Not Heard
         HB 406-MORATORIUM ON TRUSTS/PROPERTY ACQUISITION                                                                   
                                                                                                                                
9:55:20 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ  announced  that  the  next  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."                                                                                             
                                                                                                                                
9:55:35 AM                                                                                                                    
                                                                                                                                
EVAN  ANDERSON,  Staff, Representative   Zack Fields,  Alaska  State                                                            
Legislature,  provided  a  PowerPoint  presentation   titled  "House                                                            
Bill  406"  on behalf  of  the House  Labor  and  Commerce  Standing                                                            
Committee,  sponsor.    He spoke  from  the  fourteenth  slide,  "HB
406: Moratorium  on Trusts  / Property Acquisition."   He  explained                                                            
that HB  406 would:   update  Alaska law  to ensure  trusts held  or                                                            
managed by  enemies of the  United States can  no longer operate  in                                                            
the  state of  Alaska;  prohibit these  individuals  from  acquiring                                                            
real estate,  which  is the biggest  difference  between HB 406  and                                                            
HB  405;  and protect  Alaskans'  access  to  services  provided  by                                                            
trusts,   such   as  estate   planning,   while   ensuring   foreign                                                            
adversaries cannot hide their wealth in Alaska.                                                                                 
                                                                                                                                
MR.  ANDERSON  moved to  the  fifteenth slide,  "Office  of  Foreign                                                            
Asset  Control,"  and  stated   that  the  U.S.  Department  of  the                                                            
Treasury  has used economic  power  to freeze assets  of enemies  of                                                            
the U.S.  since  1940 when  Nazi Germany  invaded Norway.   He  said                                                            
OFAC's  authorities were  expanded  with the  2016 Global  Magnitsky                                                            
Act  and stressed  that  sanctions  from  OFAC  target individuals,                                                             
not  countries,  deemed  enemies of  the  U.S.   He  specified  that                                                            
financial  transactions  with  individuals  on  the  sanctions  list                                                            
are  prohibited  for  U.S.  citizens,   which  makes  it  even  more                                                            
concerning  that  Alaska's  trust  laws  could  potentially  conceal                                                            
some  of these  transactions.   He  stated  that [in  October  2021]                                                            
the  Pandora Papers  revealed  that  U.S.  states like  Alaska  have                                                            
trust laws  so strong that  they may effectively  conceal assets  of                                                            
international criminals.                                                                                                        
                                                                                                                                
MR.  ANDERSON  displayed   a  photograph  on  the  sixteenth   slide                                                            
depicting  Monaco's Monte  Carlo Star,  a luxury  apartment  complex                                                            
located  between the casino  [and the  sea] and  which has in  front                                                            
of it  a marina  full  of yachts.   He said  the  complex was  worth                                                            
$3.1  million  when  it  was  cited  in  the  Pandora  Papers.    He                                                            
related  that according  to  a recent  report by  the International                                                             
Consortium   of  Investigative  Journalists   (ICIJ),  one   of  the                                                            
multi-million-dollar   flats  inside  this  building  was  purchased                                                            
through  a   Caribbean-based  shell   company  in  2003   for  Alina                                                            
Kabaeva,  whom some reports  have identified  as the rumored  mother                                                            
to a child of Russian President Putin.                                                                                          
                                                                                                                                
MR. ANDERSON  presented  the seventeenth  slide,  "Why do  criminals                                                            
like trusts?"   He paraphrased  a quote from  ["The Puppet  Masters"                                                            
report  by the World  Bank, October  2011], which  states:   "Trusts                                                            
prove  such  a  hurdle  to  investigation,  prosecution   (or  civil                                                            
judgment),  and asset  recovery  that  they are  seldom prioritized                                                             
in  corruption  investigations.     Investigators  and  prosecutors                                                             
tend  not   to  bring  charges  against   trusts,  because   of  the                                                            
difficulty in proving their role in the crime".                                                                                 
                                                                                                                                
MR. ANDERSON  showed the  nineteenth slide  and said the  photograph                                                            
includes  Alisher Usmanov,  a notorious Russian  oligarch who  until                                                            
recently  was  majority  owner  of  Arsenal  football  club  in  the                                                            
United  Kingdom  (UK)  and  who is  a  major  financier  of  Putin's                                                            
efforts  in Russia.    Mr. Anderson  moved  to the  twentieth  slide                                                            
and related  that Mr.  Usmanov made  news a few  weeks ago when  his                                                            
spokesperson  said  that Mr.  Usmanov's  assets, including  a  yacht                                                            
and  a London  apartment,  were out  of reach  of  sanctions in  the                                                            
UK,  even  though  located  in  the  UK,  [because   they  had  been                                                            
transferred  into irrevocable  trusts].   Mr.  Anderson stated  that                                                            
things  can  be  done about  these  legal  loopholes  in  Alaska  by                                                            
taking  steps to  integrate  the state's  trusts  into the  existing                                                            
federal enforcement mechanisms.                                                                                                 
                                                                                                                                
10:00:14 AM                                                                                                                   
                                                                                                                                
MR.  ANDERSON  reviewed  the  sectional  analysis  of  HB 406.    He                                                            
spoke  from the document  provided  in the committee  packet  titled                                                            
"Sectional  Analysis  House Bill  406    Version B,"  which read  as                                                            
follows [original punctuation provided]:                                                                                        
                                                                                                                                
         * Section 1. AS 13.36 is amended by adding a new                                                                     
      section that strips a trust of its legal status in the                                                                    
     State  of Alaska  if  any individual  associated  with  it                                                                 
     is  named on  the sanctions  list  by U.S.  Department  of                                                                 
     Treasury.                                                                                                                  
                                                                                                                                
     Trusts  are   a legal   recognition  of  relationships                                                                     
     definitions  for  these  relationships  already  exist  in                                                                 
     statute:                                                                                                                   
                                                                                                                                
     - a settlor places their assets into trust                                                                                 
     - a  trustee or trustor  holds the assets  in their  name,                                                                 
     but  the assets do not  belong to them,  and they can  not                                                                 
     [sic] financially benefit from them                                                                                        
     -  a  beneficiary  will  receive  distributions  from  the                                                                 
     assets held in trust                                                                                                       
                                                                                                                                
     *  Sec.  2.  AS 40.17.070  is  amended  by  adding  a  new                                                               
     subsection  to  make  it  impossible  for  individuals  on                                                                 
     the  U.S.  Department   of  Treasury  sanctions   list  to                                                                 
     acquire,  sell,  or gift  real property  in  the State  of                                                                 
     Alaska.                                                                                                                    
                                                                                                                                
     The   Recorders   Office   in   Department    of  Natural                                                                  
     Resources  is  responsible  for keeping  records  on  real                                                                 
     estate  transactions.  The Recorders  Office  can utilize                                                                  
     the  Office of Foreign  Assets Control  sanctions list  to                                                                 
     avoid   any  future   sale   of  Alaskan   properties   to                                                                 
     individuals on the sanctions list.                                                                                         
                                                                                                                                
     * Sec.  3. This section  provides for  an effective  date.                                                               
     This  bill will  not  impact trusts  established  or  real                                                                 
     estate  transactions  completed  prior  to  its effective                                                                  
     date.                                                                                                                      
                                                                                                                                
10:01:41 AM                                                                                                                   
                                                                                                                                
CO-CHAIR SPOHNHOLZ opened invited testimony on HB 406.                                                                          
                                                                                                                                
10:01:56 AM                                                                                                                   
                                                                                                                                
RYAN  GURULE,   Policy   Director,  Financial   Accountability   and                                                            
Corporate   Transparency   (FACT)   Coalition,    provided   invited                                                            
testimony  on HB  406.  He  urged that  in promulgating  HB 406  the                                                            
committee   consider  typical  real  estate   anti-money  laundering                                                            
typologies and  creative corporate structuring that  is available to                                                            
sanctioned individuals, such as the  ability to purchase real estate                                                            
through trusts  or other anonymous  legal entities  or arrangements,                                                            
or via nominees.  He said HB  406 needs to contemplate and look past                                                            
legal blinders to  identify problematic buyers.  In  other words, he                                                            
continued, HB  405 will help  to ensure  that HB 406  is effectively                                                            
implemented  in Alaska  as would  similar measures  with respect  to                                                            
other  typologies.    This   would  ensure  that  sanctions  against                                                            
oligarchs  cannot be  avoided  through secrecy  and  that Alaska  is                                                            
encouraging the  type of investment  that will ensure  the long-term                                                            
growth  of  the  Alaskan  economy  to the  benefit  of  the  Alaskan                                                            
citizenry.                                                                                                                      
                                                                                                                                
10:03:55 AM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 10:03 a.m. to 10:04 a.m.                                                                     
                                                                                                                                
10:04:31 AM                                                                                                                   
                                                                                                                                
CO-CHAIR  FIELDS   opined  that  international  criminals   who  use                                                            
trusts  to shield  their  assets  are like  vermin  and  it must  be                                                            
ensured  that  they  cannot  come  into  Alaska.    He  said  Alaska                                                            
cannot  control  what South  Dakota  or Nevada  do,  but Alaska  can                                                            
protect  itself  as  well as  set  a good  example  with  its  state                                                            
laws.   These goals  are important,  he continued,  because it  is a                                                            
reality  that  Putin   and  other  rogue  regimes  operate   through                                                            
informal  networks  of  hiding  and  generating  wealth,   including                                                            
through criminal  organizations.   Alaska must  do its part  to stop                                                            
someone  like  Putin  from  deriving  funding  for  a  criminal  and                                                            
aggressive regime, he added.                                                                                                    
                                                                                                                                
10:05:36 AM                                                                                                                   
                                                                                                                                
CO-CHAIR  SPOHNHOLZ offered  her belief that  the committee  process                                                            
will make  the bill  better.  She  stressed that  the intent  is not                                                            
to  undermine  individual  Alaskans  or good  acting  Americans  who                                                            
want to  establish trusts.   She said the  trust industry in  Alaska                                                            
is an important  part of  the state's commercial  spectrum  and most                                                            
trusts  are family  trusts  that are  designed  to make  it easy  to                                                            
convey  assets.   [The intent],  she continued,  is  to ensure  that                                                            
Alaska  is not  part  of propping  up  bad  actors that  might  take                                                            
advantage of Alaska's trust system.                                                                                             
                                                                                                                                
[HB 406 was held over.]                                                                                                         
                                                                                                                                

Document Name Date/Time Subjects
Chad Stigen Application_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
Devon Thomas Application_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
Ciara Vollaro Application_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
Devon Thomas Resume_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
Gabriel King Application_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
Hannah St. George Application_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
Kathleen Rice Application_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
Valery Kudryn Application_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
Valery Kudryn Resume_Redacted.pdf HL&C 4/15/2022 9:00:00 AM
HLAC Confirmations 2022
HB 405 - Sponsor Statement.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 405 - Sectional Analysis.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 405 and HB 406_testimony_ATEP 4.13.22.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 406
HB 405 Supporting Document - Euro Parliament Resolution - 9-2021-0438.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 405 Supporting Document - Tax Justice Network Andres Knobel 033122.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 405 Supporting Document - Trust-Jurisdiction-Objective-Comparison.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 405 Supporting Document - ICIJ Will Fitzgibbon ADN 100422.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 406 - Sectional Analysis.pdf HL&C 4/15/2022 9:00:00 AM
HB 406
HB 406 - Sponsor Statement.pdf HL&C 4/15/2022 9:00:00 AM
HB 406
HB 406 Supporting Document - OFAC U.S. Department of the Treasury FAQs.pdf HL&C 4/15/2022 9:00:00 AM
HB 406
HB 406 Supporting Document - Sen Rubio support Magnitsky reauthorization.pdf HL&C 4/15/2022 9:00:00 AM
HB 406
HB 407 - Sectional Analysis.pdf HL&C 4/15/2022 9:00:00 AM
HB 407
HB 407 Supporting Document - Stateside Associates.pdf HL&C 4/15/2022 9:00:00 AM
HB 407
HB 407 - Sponsor Statement.pdf HL&C 4/15/2022 9:00:00 AM
HB 407
SB 174 Amendment 1_4.14.22.pdf HL&C 4/15/2022 9:00:00 AM
HL&C 4/18/2022 3:15:00 PM
SB 174
SB 174 Amendment 2_4.14.22.pdf HL&C 4/15/2022 9:00:00 AM
HL&C 4/18/2022 3:15:00 PM
SB 174
HB 406 Fiscal Note DNR.pdf HL&C 4/15/2022 9:00:00 AM
HB 406
HB 405 Fiscal Note DCCED.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 405 406 407 presentation_041522.pdf HL&C 4/15/2022 9:00:00 AM
HB 405
HB 407_presentation_4.15.22.pdf HL&C 4/15/2022 9:00:00 AM
HB 407
HB 405 Testimony_FACT Coalition_4.15.2022.pdf HL&C 4/15/2022 9:00:00 AM
HB 405