Legislature(1997 - 1998)

03/06/1998 01:07 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         HOUSE JUDICIARY STANDING COMMITTEE                                    
                   March 6, 1998                                               
                     1:07 p.m.                                                 
                                                                               
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Representative Joe Green, Chairman                                             
Representative Brian Porter                                                    
Representative Norman Rokeberg                                                 
Representative Jeannette James                                                 
Representative Eric Croft                                                      
Representative Ethan Berkowitz                                                 
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
Representative Con Bunde, Vice Chairman                                        
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
HOUSE BILL NO. 452                                                             
"An Act relating to registration, disclosures, and reports by                  
certain nonprofit corporations."                                               
                                                                               
     - HEARD AND HELD                                                          
                                                                               
HOUSE BILL NO. 395                                                             
"An Act relating to civil liability resulting from the use of a                
defibrillator in providing emergency aid."                                     
                                                                               
     - MOVED CSHB 395(JUD) OUT OF COMMITTEE                                    
                                                                               
* HOUSE BILL NO. 196                                                           
"An Act relating to wills, intestacy, nonprobate transfers, and                
trusts; and amending Rule 24, Alaska Rules of Civil Procedure."                
                                                                               
     - HEARD AND HELD                                                          
                                                                               
HOUSE BILL NO. 406                                                             
"An Act relating to subsistence uses of fish and game."                        
                                                                               
     - BILL HEARING CANCELLED                                                  
                                                                               
(* First public hearing)                                                       
                                                                               
PREVIOUS ACTION                                                                
                                                                               
                                                                               
BILL:  HB 452                                                                  
SHORT TITLE: NONPROFIT CORPORATIONS DISCLOSURES                                
SPONSOR(S): REPRESENTATIVES(S) GREEN                                           
                                                                               
Jrn-Date    Jrn-Page           Action                                          
02/18/98      2362     (H)  READ THE FIRST TIME - REFERRAL(S)                  
02/18/98      2362     (H)  JUDICIARY                                          
03/04/98               (H)  JUD AT  1:00 PM CAPITOL 120                        
03/04/98               (H)  MINUTE(JUD)                                        
03/06/98               (H)  JUD AT  1:00 PM CAPITOL 120                        
                                                                               
BILL:  HB 395                                                                  
SHORT TITLE: CIVIL LIABILITY FOR EMERGENCY AID                                 
SPONSOR(S): REPRESENTATIVES(S) BUNDE, Hudson                                   
                                                                               
Jrn-Date    Jrn-Page           Action                                          
02/11/98      2283     (H)  READ THE FIRST TIME - REFERRAL(S)                  
02/11/98      2283     (H)  JUDICIARY                                          
02/25/98      2438     (H)  COSPONSOR(S): HUDSON                               
03/06/98               (H)  JUD AT  1:00 PM CAPITOL 120                        
                                                                               
BILL:  HB 196                                                                  
SHORT TITLE: WILLS, TRUSTS, & OTHER TRANSFERS                                  
SPONSOR(S): REPRESENTATIVES(S) RYAN, Therriault                                
                                                                               
Jrn-Date    Jrn-Page           Action                                          
03/14/97       667     (H)  READ THE FIRST TIME - REFERRAL(S)                  
03/14/97       667     (H)  JUDICIARY, FINANCE                                 
04/23/97               (H)  JUD AT  1:00 PM CAPITOL 120                        
04/23/97               (H)  MINUTE(JUD)                                        
03/06/98               (H)  JUD AT  1:00 PM CAPITOL 120                        
                                                                               
WITNESS REGISTER                                                               
                                                                               
JEFFREY LOGAN, Legislative Assistant                                           
   to Representative Joe Green                                                 
Alaska State Legislature                                                       
Capitol Building, Room 118                                                     
Juneau, Alaska  99801                                                          
Telephone:  (907) 465-6841                                                     
POSITION STATEMENT:  Presented HB 452 on behalf of sponsor.                    
                                                                               
MANO FREY, Co-Chair                                                            
Arctic Power                                                                   
2501 Commercial Drive                                                          
Anchorage, Alaska  99501                                                       
Telephone:  (907) 272-4571                                                     
POSITION STATEMENT:  Testified on HB 452.                                      
                                                                               
JOHN CONLEY                                                                    
Ketchikan Chamber of Commerce                                                  
P.O. Box 8462                                                                  
Ketchikan, Alaska  99901                                                       
Telephone:  (907) 225-3519                                                     
POSITION STATEMENT:  Testified in support of HB 452.                           
                                                                               
DICK COOSE, Executive Director                                                 
Concerned Alaskans for Resources and Environment                               
P.O. Box 9266                                                                  
Ketchikan, Alaska  99901                                                       
Telephone:  (907) 247-9266                                                     
POSITION STATEMENT:  Testified in support of concept of HB 452.                
                                                                               
STEVE BORELL, Executive Director                                               
Alaska Miners Association, Incorporated                                        
501 West Northern Lights Boulevard, Suite 203                                  
Anchorage, Alaska 99503                                                        
Telephone:  (907) 276-0347                                                     
POSITION STATEMENT:  Testified in support of HB 452.                           
                                                                               
MICHAEL MONAGLE, Records and Licensing Supervisor                              
Corporations Section                                                           
Division of Banking, Securities and Corporations                               
Department of Commerce and Economic Development                                
P.O. Box 110807                                                                
Juneau, Alaska  99811                                                          
Telephone:  (907) 465-2297                                                     
POSITION STATEMENT:  Testified on HB 452.                                      
                                                                               
PATRICIA SWENSON, Legislative Assistant                                        
   to Representative Con Bunde                                                 
Alaska State Legislature                                                       
Capitol Building, Room 106                                                     
Juneau, Alaska  99801                                                          
Telephone:  (907) 465-6824                                                     
POSITION STATEMENT:  Presented HB 395 and answered questions on                
                     behalf of sponsor.                                        
                                                                               
MARK JOHNSON, Chief                                                            
Community Health and Emergency Medical Services                                
Division of Public Health                                                      
Department of Health and Social Services                                       
P.O. Box 110616                                                                
Juneau, Alaska  99811-0616                                                     
Telephone:  (907) 465-3027                                                     
POSITION STATEMENT:  Testified in support of HB 395.                           
                                                                               
ROSE MARIE CITTI, Director of Training                                         
Respond Systems                                                                
P.O. Box 220348                                                                
Anchorage, Alaska  99522-0348                                                  
Telephone:  (907) 344-0302                                                     
POSITION STATEMENT:  Testified on HB 395.                                      
                                                                               
CRAIG LEWIS, Director                                                          
Interior Region Emergency Medical Services Council                             
3522 Industrial Avenue                                                         
Fairbanks, Alaska  99709                                                       
Telephone:  (907) 546-3978                                                     
POSITION STATEMENT:  Testified in support of HB 395.                           
                                                                               
KEVIN JARDELL, Legislative Administrative Assistant                            
  to Representative Joe Green                                                  
Alaska State Legislature                                                       
Capitol Building, Room 118                                                     
Juneau, Alaska 99801                                                           
Telephone:  (907) 465-4990                                                     
POSITION STATEMENT:  Answered questions regarding HB 395.                      
                                                                               
REPRESENTATIVE JOE RYAN                                                        
Alaska State Legislature                                                       
Capitol Building, Room 420                                                     
Juneau, Alaska  99801                                                          
Telephone:  (907) 465-3875                                                     
POSITION STATEMENT:  Sponsor of HB 196.                                        
                                                                               
RICHARD THWAITES, Attorney                                                     
500 "L" Street, Suite 301                                                      
Anchorage, Alaska                                                              
Telephone:  (907) 277-1595                                                     
POSITION STATEMENT:  Answered questions regarding HB 196.                      
                                                                               
BOB MANLEY, Attorney                                                           
324 East Cook Avenue                                                           
Anchorage, Alaska                                                              
Telephone:  (907) 263-8251                                                     
POSITION STATEMENT:  Testified on HB 196.                                      
                                                                               
JOHNNY GRAMES                                                                  
525 West Third                                                                 
Anchorage, Alaska 99501                                                        
Telephone:  (907) 274-6348                                                     
POSITION STATEMENT:  Testified on HB 196.                                      
                                                                               
RICHARD HOMPESCH, Attorney                                                     
119 North Cushman, Suite 400                                                   
Fairbanks, Alaska 99701                                                        
Telephone:  (907) 452-1700                                                     
POSITION STATEMENT:  Testified in support of HB 196.                           
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 98-31, SIDE A                                                             
Number 0001                                                                    
                                                                               
CHAIRMAN JOE GREEN called the House Judiciary Standing Committee               
meeting to order at 1:07 p.m.  Members present at the call to order            
were Representatives Green, Porter, James and Croft.                           
Representatives Rokeberg and Berkowitz arrived at 1:11 p.m. and                
1:13 p.m., respectively.                                                       
                                                                               
HB 452 - NONPROFIT CORPORATIONS DISCLOSURES                                    
                                                                               
Number 0040                                                                    
                                                                               
CHAIRMAN GREEN announced the first item of business would be HB
452, "An Act relating to registration, disclosures, and reports by             
certain nonprofit corporations," sponsored by Representative Green.            
                                                                               
Number 0052                                                                    
                                                                               
JEFFREY LOGAN, Legislative Assistant to Representative Joe Green,              
Alaska State Legislature, came forward to explain HB 452.  He told             
members, "In the body of American law, there is somewhat of a                  
peculiarity known as the private nonprofit corporation.  It finds              
its roots in liberal laissez faire economics, a branch of economics            
that posits that private associations can do things better than the            
government, and evolves from activities in the late 19th century,              
when private groups and associations began forming to meet public              
needs.  Interestingly enough, this is a trend noted by De                      
Tocqueville in his book, after his visit to the United States, when            
he noted that in America average people just organize themselves               
and take care of public needs, whereas in Europe we appoint kings              
and other accomplished men to accomplish the same tasks.  So it is             
somewhat of an American thing."                                                
                                                                               
MR. LOGAN said in the 1920s and 1930s, a series of Supreme Court               
decisions defined "corporate giving" as a management prerogative.              
This was significant because corporations were beginning to amass              
great wealth, and the court decisions allowed for a wedding of                 
philanthropy and corporate wealth.  The offspring of this marriage             
has evolved into what we know today as the private nonprofit                   
philanthropic foundation.                                                      
                                                                               
Number 0192                                                                    
                                                                               
MR. LOGAN stated, "Sometime later, a deal was struck, wherein the              
body politic, us, afforded these foundations certain advantages,               
namely, tax advantages, in exchange for certain behavior, namely,              
that they would give us part of the money they earned.  So private             
nonprofits developed into a source of money for various groups,                
causes and activities, and they gave money based on a few rules.               
One rule, maybe the main rule, was that there was a prohibition on             
political activities.  This agreement worked pretty well up until              
about ten years ago.  For a number of reasons, on which I could                
expound later if asked, there began a transformation.  First, the              
amount of money in private nonprofit foundations exploded. ... Some            
economists believe that today 10 percent of the total U.S. economy             
is the nonprofit economy.  Secondly, the number of private                     
nonprofit organizations exploded."                                             
                                                                               
MR. LOGAN said today there are about a million nonprofit                       
organizations in the country.  There are about 600,000 are                     
501(c)(3) corporations, which is the Internal Revenue Service (IRS)            
classification we commonly understand to be nonprofit, including               
churches, universities, think tanks, local service clubs, homeless             
shelters, and so forth.  In addition, there are about 40,000                   
private nonprofit foundations, and that number is growing steadily.            
Mr. Logan said the third element of the transformation is that                 
these foundations became political.  The transformation resulted in            
an altered relationship.  Whereas in the past local groups would               
apply to a foundation for money, today there is evidence that                  
foundations target the groups, causes and activities that they want            
to support.                                                                    
                                                                               
Number 0374                                                                    
                                                                               
MR. LOGAN referred to bill packets, first pointing out an article              
quoted from The Washington Post, with a headline of "Foundations,              
Growth May Mean More Grants."  He noted that along with the Alaska             
permanent fund, private nonprofit foundations have enjoyed the boom            
in the stock market.  In the third paragraph of the article, it                
says these increases drive the total endowments of the top                     
foundations to more than $126 billion dollars, or more than 12                 
times as much as the U.S. government spent last year on welfare aid            
to the poor.  "This is big business," Mr. Logan commented.                     
                                                                               
MR. LOGAN referred to the following in committee packets:  A series            
of articles from Boston Globe Online, titled "The Greening of a                
Movement", with a subtitle of "Big Money is Bankrolling Select                 
Environmental Causes"; a piece titled, "Recent Foundation Grants               
for Green Groups Active in Alaska"; and a list titled, "Alaska                 
Conservation Foundation," from a book by Jonathan Adler, which                 
shows some financial information about one group operating in                  
Alaska that receives foundation funding and is active in the                   
environmental movement.                                                        
                                                                               
Number 0494                                                                    
                                                                               
MR. LOGAN pointed out that environmental groups are not the only               
groups to receive money from foundations, and that foundations                 
which give money to environmental groups are not the only                      
foundations that donate to what could be considered political                  
activities.  He said these examples appear in the packet because               
they were the easiest to get a hold of in the time he had to put               
the packet together.  He expressed the hope that if the committee              
addresses the bill again, he will be able to provide additional                
information to show that there are foundation activities in all                
phases of the political spectrum.                                              
                                                                               
Number 0541                                                                    
                                                                               
MR. LOGAN noted that packets contain a proposed committee                      
substitute, Version E  [0-LS1324\E, Bannister, 3/4/98].  He said               
the changes from the original bill are mostly superficial.                     
However, Version E changes the time within which donations may be              
given from a from a fiscal year to a calendar year, deletes the                
requirement for some information by the corporation, and on page 2             
requires information about where the money ends up.                            
                                                                               
MR. LOGAN concluded, "Overall, the bill simply says that if you are            
a private nonprofit corporation, and you give more than $5,000 in              
a calendar year to an organization in Alaska, you have to tell the             
public where the money goes.  And if you don't, the commissioner               
can revoke your certificate of authority to do business.  It's a               
right-to-know bill.  The information we are requesting pales ... in            
comparison to what the federal government asks for."                           
                                                                               
Number 0639                                                                    
                                                                               
REPRESENTATIVE ERIC CROFT said he had just received the materials,             
except for the original version of the bill.  He asked whether it              
was heard at another time.                                                     
                                                                               
CHAIRMAN GREEN said this is the original hearing.  [It had been                
brought up briefly on March 4, 1998.]                                          
                                                                               
Number 0698                                                                    
                                                                               
REPRESENTATIVE CROFT asked how much of a burden the biennial report            
would be.                                                                      
                                                                               
MR. LOGAN replied that he had not seen the form of the biennial                
report, but someone from the Division of Banking, Securities and               
Corporations was present.                                                      
                                                                               
Number 0745                                                                    
                                                                               
CHAIRMAN GREEN asked for confirmation that this isn't nearly as                
much information as is required by the federal government,                     
including delineation of contributors on the IRS form.                         
                                                                               
MR. LOGAN said that is true, adding that he could provide copies of            
the IRS form and the rules for filling that out.                               
                                                                               
Number 0765                                                                    
                                                                               
REPRESENTATIVE ETHAN BERKOWITZ asked whether a for-profit                      
corporation that is in aggregate and does more than $5,000 worth of            
business in Alaska has filing requirements with the state.  He said            
it seems that certain equal protection considerations might arise.             
                                                                               
MR. LOGAN said he doesn't know, but the drafter had brought that               
issue and a potential commerce clause issue to his attention, "both            
of which she agreed could be issues but that we meet the tests for             
those."                                                                        
                                                                               
Number 0874                                                                    
                                                                               
REPRESENTATIVE JEANNETTE JAMES commented that certainly if a                   
foreign corporation comes into the state to do any business, it                
must first file with the Division of Banking, Securities and                   
Corporations as a foreign corporation, and get a permit.                       
                                                                               
Number 0908                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ asked whether there is a reporting                    
requirement if a foreign corporation purchases $5,000 worth of                 
goods from an Alaska corporation, for example.                                 
                                                                               
CHAIRMAN GREEN said he doesn't know.                                           
                                                                               
Number 0927                                                                    
                                                                               
REPRESENTATIVE CROFT suggested that goes to the definition of doing            
business.  He provided an example, "If Corrections Corporation of              
America, a for-profit company who is not yet doing business in the             
state of Alaska, wanted to give donations to various groups, as I              
read it, ... it just covers nonprofits.  So for-profit corporations            
sending in money to influence or for whatever purpose - not doing              
business but simply sending in the ... type of donations we're                 
talking about here - wouldn't be covered, would they?"                         
                                                                               
MR. LOGAN replied, "That's not the intent, and as I read it, it is             
not covered in this language."                                                 
                                                                               
Number 0979                                                                    
                                                                               
REPRESENTATIVE JAMES suggested putting the reporting requirement on            
the current in-state nonprofits, and making them report where they             
got all of their money.  She noted that those could include health             
providers, treatment centers or special interest groups.                       
                                                                               
Number 1029                                                                    
                                                                               
REPRESENTATIVE CROFT said he doesn't understand why for-profits                
giving money wouldn't have the same reporting requirements.  He                
asked whether the federal reporting mentioned by Mr. Logan is                  
public information.                                                            
                                                                               
Number 1077                                                                    
                                                                               
MR. LOGAN replied that the form he had mentioned, the 990, is                  
available in some form but is stale by the time it is available to             
the public.  It takes several months after it is reported to get               
from the IRS to the public.  The Council on Foundations, the                   
voluntary trade organization of big nonprofit foundations, has a               
membership service and a library in Washington, D.C., with a few               
branches around the country; they acquire these 990 forms and have             
them available on microfiche.  However, Mr. Logan had asked that               
very day, and the most recent forms they have are two years old.               
For people in Alaska to get this information, even if they know                
about it, would be difficult, and by the time the information was              
available, the effect of the money could long have passed.  Mr.                
Logan said the intent here is to make the information available to             
Alaskans, in Alaska.                                                           
                                                                               
Number 1164                                                                    
                                                                               
REPRESENTATIVE NORMAN ROKEBERG commented that given the giving                 
power of the Alaska Conservation Foundation, according to the                  
exhibit in the file, they would presumably have had to file a 990              
form.  He asked whether Mr. Logan had requested information from               
the IRS about them, to see how the system works.                               
                                                                               
MR. LOGAN said he had tried.  He restated that this information is             
in the packet because it was obtainable, adding that he had tried              
for other groups as well, but unsuccessfully.  He noted that some              
of this information is published by foundations on the Internet.               
                                                                               
Number 1256                                                                    
                                                                               
MR. LOGAN advised members that the IRS requires a public inspection            
period, but does not require the notice to be in a newspaper where             
the file is to be inspected.  Therefore, a Washington-based                    
foundation could put a notice in a newspaper in Macon, Georgia,                
wait for the 180-day period to elapse, and then say they had met               
all the legal requirements.  He told Representative Rokeberg that              
is one of the problems, noting that there is legislation now in                
Congress relating to some of these loopholes.                                  
                                                                               
CHAIRMAN GREEN added, "But the fact is the information is public.              
It's just difficult to find, and this makes it easier to find."                
                                                                               
Number 1317                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ asked how Mr. Logan had obtained the                  
information that is listed.                                                    
                                                                               
MR. LOGAN answered that some is available on the Internet, some is             
available in part in other publications, and some was due to luck.             
                                                                               
REPRESENTATIVE BERKOWITZ asked whether those were government                   
publications.                                                                  
                                                                               
MR. LOGAN said no.  He added that some of the information in Mr.               
Adler's book is no longer current, as it is a few years old.                   
                                                                               
Number 1378                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ expressed concern about unintended                    
consequences, noting that the focus appears to be solely on                    
environmental groups.  He asked whether there were any other groups            
that might have contributed that Mr. Logan knows about.                        
                                                                               
MR. LOGAN said he believes there are, and has been told that, but              
he cannot show that there are.  For example, certain employment                
organizations in the transportation industry have foundations, and             
there is some evidence of this in the education field.                         
Furthermore, someone in Pennsylvania had told him there was a                  
problem there with the Robert Wood Johnson (ph) Foundation, which              
had issued a grant to the health and social services department to             
train people in the department in how to apply for grants from the             
state government; he noted that a legislator there is trying to                
close that loophole.  Mr. Logan restated that it is not only in the            
environmental area.                                                            
                                                                               
Number 1434                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ said it would seem that groups like the               
NAACP [National Association for the Advancement of Colored People]             
or the Anti-Defamation League would somehow get involved in this               
reporting requirement.                                                         
                                                                               
AN UNIDENTIFIED SPEAKER mentioned the NRA.                                     
                                                                               
Number 1443                                                                    
                                                                               
REPRESENTATIVE JAMES referred to a book titled, "Trashing the                  
Economy."  She noted that oil companies also have foundations.  She            
told members that several years before, when there had been                    
controversy over some geothermal energy where she was living,                  
including lobbying against that project, it turned out that oil                
companies were behind it.  She suggested that it is important that             
whoever hears something knows from whom they are hearing it.                   
                                                                               
Number 1489                                                                    
                                                                               
REPRESENTATIVE CROFT noted that major American oil companies                   
operate in Alaska, suggesting that if they didn't, however, and if             
their sole operation was to influence that geothermal project                  
through donations, it wouldn't be covered here, as he sees it.                 
That would be a for-profit company trying to influence public                  
opinion, not generally doing business here but trying to influence             
it by giving in the aggregate over $5,000.                                     
                                                                               
CHAIRMAN GREEN noted that if it gave to a nonprofit, that would be             
disclosed.                                                                     
                                                                               
Number 1525                                                                    
                                                                               
REPRESENTATIVE CROFT pointed out that it says a foreign nonprofit              
corporation is considered to be transacting business if it gives               
over $5,000 to a nonprofit.  He said he still doesn't understand               
that distinction on the giving end, although he may understand it              
somewhat on the receiving end.                                                 
                                                                               
REPRESENTATIVE BRIAN PORTER said he believes the example was that              
these companies have foundations.                                              
                                                                               
REPRESENTATIVE CROFT replied, "That was that example:  If they                 
wanted to directly influence it, they wouldn't have to report; if              
they wanted to do it through a foundation, they would.  I don't                
understand that."                                                              
                                                                               
Number 1559                                                                    
                                                                               
REPRESENTATIVE JAMES said that point is well-taken.  She said it               
seems the purpose of the reporting is to know who is funding the               
nonprofit corporations in the state, in order to determine whether             
the behavior follows the donations.  She again suggested requiring             
local nonprofit corporations to report where they get their money,             
as opposed to making those that give money do the reporting.                   
                                                                               
Number 1601                                                                    
                                                                               
MR. LOGAN agreed Representative Croft's point is well-taken.  He               
added that the point of the bill is to compel foundations, which               
were originally organized to have certain tax advantages and which             
are becoming more political, to disclose what they are doing in                
Alaska.  He noted that a representative from the Department of                 
Commerce and Economic Development had information about the                    
nonprofit corporations code and what is going on in that area.                 
                                                                               
CHAIRMAN GREEN asked whether there were questions before hearing               
testimony.  He announced that those waiting on teleconference could            
testify first.                                                                 
                                                                               
Number 1652                                                                    
                                                                               
MANO FREY, Co-Chair, Arctic Power, testified via teleconference                
from Anchorage, specifying that he is one of two co-chairs of                  
Arctic Power, a nonprofit group with the single goal of "seeing                
the safe and efficient development, exploration and use of a small             
little piece of land in Alaska, the coastal plain on the Arctic                
coast."  Noting that he is also involved in several other nonprofit            
groups, he expressed great interest in hearing the answers to some             
of the questions being brought up.                                             
                                                                               
MR. FREY stated his understanding that this only applies to                    
501(c)(3)s, which have limited purposes, and for which it is pretty            
well defined under law what they can or cannot do.  He told members            
his initial reaction to the bill is that he doesn't have a problem             
with it, as he understands its purpose.  However, he also                      
understands from the discussion that it may be a little more                   
focused in another draft; he expressed interest in seeing any                  
future changes.                                                                
                                                                               
Number 1753                                                                    
                                                                               
JOHN CONLEY, Ketchikan Chamber of Commerce, testified via                      
teleconference from Ketchikan.  He told members this bill kind of              
excites him, because if he makes a large contribution to a                     
political candidate, he and the candidate are required to disclose             
that to the Alaska Public Offices Commission (APOC) and it becomes             
public information immediately, available on the Internet.  He said            
he likes this because in Ketchikan he has discovered that a lot of             
East Coast foundations have sought to change the public image, or              
to affect the public process, by giving to organizations within                
Alaska.  He stated, "You know, when we were fighting for the timber            
industry here, we kept bumping into these so-called community-based            
groups claiming to represent a section of their community.  And                
it's always been my belief that they were actually funded by an                
East Coast corporation, through grants, and ... their sole purpose             
was to affect public policy, basically, to abort the legislative               
process and to act as a lobbying group."  He said he didn't want to            
name names, then cited specific examples.                                      
                                                                               
Number 1894                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ agreed there needs to be a level playing              
field, but said if he recalls correctly, there were also                       
organizations in the Lower 48, including land use groups, that were            
supportive of the timber industry.  He asked Mr. Conley if that                
would affect his decision on this bill in any way.                             
                                                                               
MR. CONLEY replied, "No, sir, it wouldn't.  In fact, I'm president             
of a local grassroots organization called CARE.  And we have                   
nothing to hide.  I mean, our membership is made up of local                   
Ketchikan folks and folks from around the nation with similar                  
interests.  I believe what this legislation would do is it would               
show the amount of money being funneled into Alaska to affect                  
public policy in Alaska.  I think there's a big difference there.              
The people on my side have no fear.  I mean, what more can we lose?            
But we can only pick up a paper daily and see that public policy is            
being established on the East Coast for Alaskans.  It is my belief             
that these East Coast foundations, through these limited                       
environmental groups, are specifically trying to affect public                 
policy."                                                                       
                                                                               
Number 1979                                                                    
                                                                               
DICK COOSE, Executive Director, Concerned Alaskans for Resources               
and Environment (CARE), testified next via teleconference from                 
Ketchikan, expressing support for the concept of this bill and                 
agreeing the playing field needs to be leveled out.  He suggested              
the committee consider not only (c)(3) organizations but (c)(4) and            
(c)(6) organizations as well.  "And we are a (c)(4), and we do not             
have anything to hide," he added.  Mr. Coose spoke about people on             
the East Coast telling Alaskans how to live their lives, manage                
their companies and manage their lands.                                        
                                                                               
MR. COOSE said the Alaska Rainforest Campaign, along with other                
groups, spent $70,000 the previous month to put a full-page ad in              
the New York Times saying how bad the Tongass is.  He stated, "And             
each and every one of you sitting in that room, I know, understand             
the Tongass is a well-managed forest, and it's being caused to have            
economic output that's [considerably] below its sustainable level.             
And I'd just encourage you to go ahead and pass something similar              
to what you have.  We really need it, so that the public realizes              
that these groups, be they environmental or others, are not really             
funded locally, as they would have you perceive they are."                     
                                                                               
Number 2045                                                                    
                                                                               
STEVE BORELL, Executive Director, Alaska Miners Association,                   
Incorporated (Anchorage), testified via teleconference from                    
Fairbanks on behalf of the association, stating support for the                
bill, and saying he believes the concepts that are changes in the              
proposed committee substitute are appropriate.  Mr. Borell told                
members that for years or possibly decades, outside money has been             
coming into Alaska to influence public policy, development of                  
regulations, and who knows what else.  He agreed with testimony                
about the difficulty of getting information except through the                 
Internet.  He said it was not until these web sites were developed             
that they began to understand the incredible magnitude of the money            
and the "widespread tentacles" of what is being done.                          
                                                                               
MR. BORELL said they feel that these donors translate into                     
opposition for projects not due to real environmental issues but               
using the environment to block projects, lock up more land into                
conservation system units, block access, and so forth.  He stated,             
"These outside dollars have been disastrous for the communities,               
especially the Southeast, and not so much in the mining but in the             
logging, and in the opposition of ANWR [Arctic National Wildlife               
Refuge]."  Mr. Borell concluded by encouraging passage of HB 452,              
saying he believes it is a necessary step that will not hamper                 
foundations' contributing but will put state residents, and the                
legislature, on notice as to what monies are being brought in to               
affect public policy.                                                          
                                                                               
Number 2163                                                                    
                                                                               
MICHAEL MONAGLE, Records and Licensing Supervisor, Corporations                
Section, Division of Banking, Securities and Corporations,                     
Department of Commerce and Economic Development, came forward to               
testify.  He first commented on the bill itself, mentioning its                
fiscal impact.  Mr. Monagle advised members that right now there               
are 23,000 active corporations, of which 4,600 are nonprofit.                  
Using Mr. Logan's statistics, with 600,000 501(c)(3) corporations              
and 40,000 private nonprofit foundations, if they saw an increase              
of 400 filings the next year, they could probably handle that.                 
However, 4,000 more would require additional staff, and 40,000                 
would require them to double their staff.  "And if we saw 600,000,             
Juneau would get its new state office building," he added.                     
                                                                               
Number 2204                                                                    
                                                                               
MR. MONAGLE said the point is that nobody knows how much money is              
coming in, the number of filings, or the impact on his agency, but             
there would be an impact.  Each filing would have to be handled and            
processed.  If the state captured this information that is not                 
available elsewhere easily, then newspapers, magazines and people              
from all over the country would seek that information from his                 
office, where it would be easy to obtain as a public record.                   
Therefore, the numbers of requests for copies of reports would                 
rise.  The bottom line is that it could potentially have a dramatic            
impact on the agency.                                                          
                                                                               
MR. MONAGLE pointed out that right now the bill doesn't specify the            
nature of the $5,000 being given to a nonprofit corporation.  He               
stated, "So, if I have a mission in a village in Alaska, and I have            
a church outside the state that gives $5,000 to that mission, I                
have to register, which I would not have had to have done before.              
That prompts two questions.  One, is that $5,000 gift from that                
foundation worth the hassle to that foundation of having to                    
register?  And would that take away that gift from taking place?               
And that $5,000 gift to that mission might be very important to                
that particular mission.  So, what impact would it have ... on the             
receivers of these funds and monies who are churches?  If I have a             
church, and I want to build a new church, and I have an extension              
society, again, under the current statute I'm not registered.  But             
if I make a loan to that church so they can put up a building, am              
I then required to register?  So, there's a scope of how broad this            
bill is."                                                                      
                                                                               
Number 2283                                                                    
                                                                               
MR. MONAGLE referred to enforceability and noted that if the                   
corporation fails to turn in this report, the corporation's                    
authority to do business in this state will be revoked.  He asked              
what prompts them to have to comply in the first place, or causes              
them to be aware of the requirement.                                           
                                                                               
MR. MONAGLE mentioned a point raised by Representative James.  He              
said in 1991, the Alaska Code Review Commission submitted a bill               
for consideration, although it never went anywhere.  There was a               
revision of the Nonprofit Mofrl Corporation Act by the American Bar            
Association.  Quite a few states have adopted this revision,                   
although Mr. Monagle said he didn't have statistics on it.  He said            
Alaska's existing statute is virtually unchanged since statehood,              
and all kinds of organizations are included such as sewing clubs,              
booster groups for athletic events, churches and environmental                 
groups.  The revised model Act would break out nonprofits into                 
essentially religious corporations; mutual benefit corporations,               
which would be homeowner associations, booster clubs, and so forth;            
and public benefit corporations.                                               
                                                                               
MR. MONAGLE said it seems if they want disclosure on funding                   
sources, passage of a revision of the revised model Act, creating              
a public benefit type of nonprofit corporation, could put a                    
requirement in the statute that says, "Tell us who your funding                
sources are."  Administratively, for the department, it would not              
increase the number of corporations coming into the state.  It                 
would simply separate out and identify the public benefit                      
nonprofits, and make some filing requirements necessary for them.              
                                                                               
Number 2383                                                                    
                                                                               
REPRESENTATIVE CROFT asked whether each donor would be charged a               
filing fee under this bill.                                                    
                                                                               
MR. MONAGLE replied that right now under the regulations, each                 
registration would be charged $50; therefore, each corporation                 
would pay $50.  He explained, "Once registered, they would also                
fall under the other provisions as a foreign corporation doing                 
business here, which would mean any amendments that they have in               
their domicile they'd have to file here, mergers would have to be              
filed here, notification changes of their officers and directors               
would have to file here.  So it goes beyond just the initial                   
registration as well.  Once you're registered, you're subject to               
other requirements that you have to file changes with the state."              
                                                                               
REPRESENTATIVE CROFT asked, "We would keep on file their board of              
directors and their current articles?"                                         
                                                                               
MR. MONAGLE affirmed that.                                                     
                                                                               
Number 2419                                                                    
                                                                               
CHAIRMAN GREEN said the increase in workload appears to be offset              
by the filing fee.  He asked what is so onerous about filing this.             
                                                                               
MR. MONAGLE explained that each corporation would have to submit an            
application for registration, which needs to be reviewed to make               
sure they have complied with what is in statute; typically, that is            
handled by a person who would then issue some type of certificate              
of registration.  That paper would have to be retained, currently              
either by converting those records to microfiche or microfilm,                 
although they have a small pilot project for imaging; those become             
permanent archival records.  Each application that comes in would              
have to be processed, and would have a $50 check with it, so there             
would be fiscal aspects of processing that.  Once the information              
is stored, whether on microfilm, microfiche or electronically,                 
people then request information that the department must provide.              
                                                                               
TAPE 98-31, SIDE B                                                             
Number 0006                                                                    
                                                                               
MR. MONAGLE continued, saying that if additional staffing is                   
required, there would be additional equipment needs, as well as                
increased contractual costs for microfiche from the central                    
microfilm lab and increased postage and telephone costs.  He said              
it all is part of the filing process.                                          
                                                                               
CHAIRMAN GREEN asked how the $50 was established.                              
                                                                               
MR. MONAGLE said it is set out in regulation as a filing fee, to               
cover the cost of filing and processing.                                       
                                                                               
Number 0029                                                                    
                                                                               
REPRESENTATIVE JAMES said she didn't recall the bill Mr. Monagle               
had mentioned that would rewrite the nonprofit corporation                     
designations.  She asked, "So, you're saying that if that was done             
and then we required this from the receiver - not the payer but                
from the receiver - there would be no cost then, it would just be              
absorbed in what you are already doing?"                                       
                                                                               
MR. MONAGLE said that is correct.                                              
                                                                               
REPRESENTATIVE CROFT asked for a brief explanation of the                      
differences between a (c)(3), a (c)(4) and a (c)(6) corporation.               
                                                                               
MR. MONAGLE said he didn't know, as they don't get involved in the             
tax issues.  He explained, "They file with us, saying they are a               
nonprofit; we make no determination on whether they are tax-exempt.            
That is strictly an IRS requirement.  Right now, in checking with              
Department of Revenue, they receive 1,100 filings a year, 990 forms            
from nonprofit corporations.  Under their statute, that information            
is confidential; so you couldn't get a copy if you wanted to.  If              
you filed these types of reports with the Department of Commerce,              
they're public record; anybody would have access."                             
                                                                               
Number 0081                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ referred to questions he had asked Mr.                
Logan about filing requirements of for-profit corporations.  He                
asked Mr. Monagle if he knows the answer to those questions.                   
                                                                               
MR. MONAGLE replied, "I don't recall your specific questions.                  
Generally, the nexus that we use for registration is fairly similar            
to what Department of Revenue uses, in that you have to have some              
type of presence in the state to be required to register.  So, a               
nonprofit formed in Florida, before they register with us,                     
generally open a chapter of their organization in Alaska, or they              
have an office in Alaska, or they have some type of, quote,                    
'presence' here.  If they don't have a presence, right now they                
would not be required to register.  The similar thing with for-                
profit corporations -- there's a section under the bill that                   
revises, or it says excluding 10.24.60,  Now, that's a section of              
the nonprofit act that says these activities do not constitute                 
transacting business.  And they're similar to the for-profit                   
corporations.  Things like holding title to real and personal                  
property, by itself, does not mean you're transacting business in              
Alaska.  Making loans or acquiring indebtedness in the state is                
exempt from the definition of doing business.  So right now ...                
those activities would be exempt from registration.  But under this            
bill, they would require registration anyway."                                 
                                                                               
CHAIRMAN GREEN noted that it would be if they met the $5,000                   
threshold.                                                                     
                                                                               
MR. MONAGLE concurred.                                                         
                                                                               
Number 0149                                                                    
                                                                               
REPRESENTATIVE ROKEBERG referred to AS 10.20.645, relating to a                
failure or refusal to file reports.  He asked about the $5 fine.               
                                                                               
MR. MONAGLE explained that for a domestic corporation that has                 
failed to file, currently the state has authority to involuntarily             
dissolve the corporation's charter.  For an out-of-state                       
corporation, the authority already resides with the commissioner to            
revoke its certificate of authority.  He said he is not familiar               
with that $5 fine.                                                             
                                                                               
Number 0182                                                                    
                                                                               
REPRESENTATIVE ROKEBERG asked whether there are other provisions               
within that title, which the department enforces, and which provide            
for penalties for failure to file.                                             
                                                                               
MR. MONAGLE answered that the "stick" that the department has, in              
almost all cases, is the authority to dissolve a corporation.  If              
the department dissolved a corporate charter because of failure to             
file reports, for example, the department can reinstate that                   
corporation if it pays the fees assessable at the time the report              
was due.  In the case of for-profit corporations, there is a                   
provision in statute for a double-the-amount-due penalty to                    
reinstate.  Therefore, there is an additional penalty to reactivate            
a charter if the corporation fails to file in a timely manner.                 
                                                                               
Number 0223                                                                    
                                                                               
REPRESENTATIVE ROKEBERG asked what the fee is for a profit-making              
corporation to file.  He further asked, "How could you dissolve a              
foreign corporation?"                                                          
                                                                               
MR. MONAGLE replied that right now the initial fee is $350 for an              
out-of-state corporation to register; that breaks down to a $150               
filing fee, plus the first two-year, biennial tax of $200.  He                 
pointed out that they cannot dissolve an out-of-state corporation              
but can simply revoke its authority to do business in Alaska, which            
means the certificate of authority no longer exists and the                    
corporation would be prohibited from certain activities under the              
statute.                                                                       
                                                                               
REPRESENTATIVE ROKEBERG asked whether the $200 biennial tax is                 
incurred against the corporation's taxable income or is another                
form of tax.                                                                   
                                                                               
MR. MONAGLE answered that it is a flat tax, called in some states              
a franchise tax.                                                               
                                                                               
REPRESENTATIVE ROKEBERG asked whether a corporation also needs a               
business license.                                                              
                                                                               
MR. MONAGLE said yes.                                                          
                                                                               
Number 0279                                                                    
                                                                               
REPRESENTATIVE PORTER recalled discussion of the nonprofit                     
legislation, but asked whether Mr. Monagle remembered what happened            
to it.                                                                         
                                                                               
MR. MONAGLE said he believed it was in 1991 or thereabouts, and it             
was introduced late in the session.  He suggested a major code                 
revision like that would require a bill that runs 200 pages, and               
the committee did not feel up to tackling it at that point.  He                
said unfortunately the Code Review Commission was disbanded in the             
interim, as it was not funded, and the issue went away.  "The                  
department certainly would support a revision of that code," he                
added.                                                                         
                                                                               
CHAIRMAN GREEN noted that everyone who had signed up had testified.            
He asked the wish of the committee.                                            
                                                                               
Number 0332                                                                    
                                                                               
REPRESENTATIVE ROKEBERG expressed concern about the failure-to-file            
provision, mentioning the $5 penalty and noting Mr. Monagle's                  
testimony that the "stick" is dissolving a corporation.  He asked              
whether that would be enough enforcement to preclude the continued             
contributions of funds if corporations didn't file.                            
                                                                               
Number 0370                                                                    
                                                                               
REPRESENTATIVE PORTER said he thinks the idea of "sunshining" this             
information is laudatory, and he would like to do that.  He                    
questioned the ability to do that with this vehicle, however.  For             
example, he said he doesn't believe that the Brainerd Foundation               
referenced in packets does business in Alaska and would therefore              
be required to file for anything.  Consequently, there would be no             
enforceability there.                                                          
                                                                               
CHAIRMAN GREEN replied that he may be right, but suggested it is a             
step in the right direction to gather those that don't skirt the               
law through loopholes.                                                         
                                                                               
Number 0427                                                                    
                                                                               
REPRESENTATIVE PORTER asked whether there had been consideration of            
the notion of reporting by those who receive the money.                        
                                                                               
CHAIRMAN GREEN said there really wasn't.                                       
                                                                               
Number 0461                                                                    
                                                                               
REPRESENTATIVE JAMES agreed that if they want to know where                    
nonprofits in Alaska get their money, they ought to ask those                  
nonprofits.  She said she wished they had in front of them the                 
rewrite of the nonprofit law, as it is unnecessary to get the                  
information from missions and churches, for example.  She also                 
agreed with Representative Porter that probably many corporations,             
both for-profit and nonprofit, send money into Alaska without being            
registered to do business in the state.  She offered to work on the            
bill.                                                                          
                                                                               
Number 0537                                                                    
                                                                               
REPRESENTATIVE ROKEBERG told members that the House Labor and                  
Commerce Committee, which he chairs, has been in communication with            
the Department of Commerce and Economic Development on a larger                
rewrite.  He said if it was Chairman Green's desire, they would be             
happy to look further into that.  He mentioned the alleged 200                 
pages, noting that Chapter 20 is only 35 pages long.                           
                                                                               
CHAIRMAN GREEN asked if there were further comments, then thanked              
participants.  [HB 452 was held over.]                                         
                                                                               
HB 395 - CIVIL LIABILITY FOR EMERGENCY AID                                     
                                                                               
Number 0591                                                                    
                                                                               
CHAIRMAN GREEN announced the next item of business would be HB 395,            
"An Act relating to civil liability resulting from the use of a                
defibrillator in providing emergency aid."                                     
                                                                               
Number 0599                                                                    
                                                                               
PATRICIA SWENSON, Legislative Assistant to Representative Con                  
Bunde, Alaska State Legislature, read the sponsor statement into               
the record as follows:                                                         
                                                                               
"Every day nearly 1,000 people in the United States die                        
unnecessarily due to sudden cardiac arrest.  Most people die before            
they reach the hospital, usually within two hours.  Research shows             
that early defibrillation, delivering an electric current to the               
heart within minutes after sudden cardiac arrest, can raise                    
survival rates to 30 percent of higher.  That's 25 percent more                
lives than the current national survival rate of 5 percent.                    
                                                                               
"The American Heart Association estimates that 20,000 or more                  
unnecessary deaths could be prevented each year if automatic                   
external defibrillators [AEDs] were more widely available.                     
Implementation of a plan that allows both traditional and                      
nontraditional targeted first responders to have access to and use             
of an AED in medical emergencies is needed.                                    
                                                                               
"House Bill 395 expands our state's Good Samaritan statute to                  
provide protection from liability for people who are properly                  
trained in the use of an AED.  As a general rule, the American                 
legal system does not require someone to rescue a victim.  However,            
all states currently have Good Samaritan statutes that protect a               
volunteer who is aiding another in good faith.  These statutes                 
mainly apply to physicians and other health care providers who                 
assist somebody voluntarily and do not expect any reimbursement for            
their services, but passersby who happen upon an accident and                  
provide emergency assistance are also protected from liability.                
House Bill 395 clearly sets the standard for training and proper               
use of an automatic external defibrillator.  Increased availability            
of automatic external defibrillators along with proper training                
will save lives.  House Bill 395 will help make Alaska a safer                 
place."                                                                        
                                                                               
Number 0712                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ made a motion to adopt Version E [0-                  
LS1560\E, Ford, 3/5/98] as a work draft.  There being no objection,            
it was so ordered.                                                             
                                                                               
MS. SWENSON explained that Version E adds the use of manual                    
electric cardiac defibrillators to the so-called Good Samaritan                
statute, AS 09.65.090.                                                         
                                                                               
REPRESENTATIVE BERKOWITZ asked what "manual electric" means,                   
suggesting it sounds almost contradictory.                                     
                                                                               
MS. SWENSON answered that it is an automatic external                          
defibrillator.                                                                 
                                                                               
Number 0755                                                                    
                                                                               
REPRESENTATIVE CROFT asked, "Manual electric as opposed to what? "             
                                                                               
MS. SWENSON told members she hadn't anticipated that question and              
has been out of the field for a while.                                         
                                                                               
REPRESENTATIVE ROKEBERG suggested they could say "old-fashioned"               
instead of "manual."  He said as he reads it, people using manual              
defibrillators in emergency rooms, such as on television shows, are            
not immune under subsection (b).                                               
                                                                               
Number 0934                                                                    
                                                                               
REPRESENTATIVE JAMES suggested Representative Rokeberg's concern               
was because it says this immunity does not apply except to a person            
authorized by law to do it.  A passerby who didn't know how to do              
it wouldn't be exempt, which she thinks is the intent.                         
                                                                               
MS. SWENSON said further on, it sets out standards for training.               
"The training will say when people can use them and when they                  
can't," she added.                                                             
                                                                               
Number 0958                                                                    
                                                                               
REPRESENTATIVE CROFT expressed his understanding that everybody is             
immune if they meet the criteria.  For the more complicated kind,              
the criteria is that the person must be authorized by law; he                  
suggested that would mainly be nurses or doctors in a hospital.                
For subsection (e), the criteria is that people must be trained.               
Representative Croft pointed out that subsection (d) had been                  
retained, which says, "(d) This section does not preclude liability            
for civil damages as a result of gross negligence or reckless or               
intentional misconduct."                                                       
                                                                               
MS. SWENSON offered to show members documentation of support.                  
                                                                               
Number 1072                                                                    
                                                                               
MARK JOHNSON, Chief, Community Health and Emergency Medical                    
Services, Division of Public Health, Department of Health and                  
Social Services, introduced paramedic Matt Anderson, who was with              
him to answer questions.  Mr. Johnson said they were here to speak             
in favor of this legislation.                                                  
                                                                               
MR. JOHNSON told members there are approximately 350,000 sudden                
cardiac arrests in the United States every year; in Alaska they                
estimate that translates to roughly 600 to 700.  Numerous studies              
have been done over the last 15 or more years, many in Seattle,                
Washington.  Mr. Johnson pointed out that HB 395 is quite similar              
to a bill working its way through the Washington State legislature             
now; he indicated they had worked with the sponsor of that bill to             
incorporate much of it here.                                                   
                                                                               
Number 1115                                                                    
                                                                               
MR. JOHNSON stated, "According to the American Heart Association,              
they've adopted what's called the emergency cardiac care systems               
concept, and they call it the chain of survival.  And it has four              
elements.  When someone collapses with cardiac arrest and it's                 
witnessed, the first thing to do is notify the EMS [emergency                  
medical services] system, usually by 911 or some other means.                  
Second, initiate CPR [cardiopulmonary resuscitation].  Third, get              
early defibrillation, as quickly as possible.  And fourth, get                 
advanced cardiac life support via paramedics, hospital emergency               
department, whatever."                                                         
                                                                               
MR. JOHNSON said some studies have shown that when the EMS system              
is notified within approximately one minute, CPR is initiated                  
within about two minutes, defibrillation is provided within about              
four minutes, and advanced cardiac life support is provided within             
about eight minutes, the survival rate can be approximately 30                 
percent.  By contrast, if there is no CPR and defibrillation is                
delayed for approximately ten minutes, the survival rate drops to              
roughly zero to 2 percent.  Clearly, the key is to get the CPR and             
defibrillation as early as possible.                                           
                                                                               
Number 1217                                                                    
                                                                               
MR. JOHNSON reported that the American Heart Association and other             
national groups have, over the last year or two, been advocating               
"public access defibrillation."  The new automated external                    
defibrillators (AEDs) are computerized; when the defibrillator is              
hooked up to the patient, the computer detects whether there is a              
life-threatening dysrhythmia of the heart and then determines                  
whether to shock the patient.  These new machines, available on the            
market today for $3,000, will only shock when there is a life-                 
threatening dysrhythmia.  Mr. Johnson pointed out that manual                  
defibrillators can cost upwards of $10,000, adding that those are              
the types of machines paramedics and hospital emergency departments            
use, and those people currently are licensed under state law to                
perform those kinds of functions.                                              
                                                                               
Number 1273                                                                    
                                                                               
MR. JOHNSON explained that this bill would affect people with                  
approved CPR training and AED training, which is significantly less            
training than is currently required to become authorized to use                
defibrillators.  Those people could become legally authorized under            
this statute, and they could include police officers, firefighters             
who are not EMS providers and perhaps security guards.  The                    
American Heart Association recommends placing these devices                    
wherever there are both a likelihood of significant numbers of                 
people and a likelihood of cardiac arrests.  A recent study out of             
Seattle found that the number one public place was in the airport.             
"And, in fact, I just spoke with the Anchorage fire department                 
today, and they're working to put defibrillators at the Anchorage              
airport," Mr. Johnson added.                                                   
                                                                               
MR. JOHNSON said they had worked with the sponsor, and they believe            
the provisions to ensure that people have minimum training                     
requirements could potentially lead to hundreds more authorized                
people in Alaska; there are about 1,200 in the state now, including            
emergency medical technicians (EMTs), paramedics or first                      
responders currently certified by Mr. Johnson's  department to                 
legally provide defibrillation.  Over the next few years, that                 
increase could potentially translate into dozens of lives saved.               
Mr. Johnson noted that the bill also addresses protections for                 
people who do the training and who own the devices.  He offered to             
answer questions, noting that Matt Anderson could answer specific              
questions about the devices.  He concluded by expressing strong                
support for the bill.                                                          
                                                                               
Number 1380                                                                    
                                                                               
REPRESENTATIVE ROKEBERG expressed concern about the requirement                
that a person be trained and carry a card.  He asked what would                
happen if no one else was around, and a person either didn't have              
a card or had left it at home.                                                 
                                                                               
MR. JOHNSON replied that as a Good Samaritan bill, the protection              
here is from liability.  The state won't be asking someone for a               
card at the scene.  The real issue is whether there is a protection            
from liability for these individuals.  Although not trained in law,            
he said he would think that as long as someone had the appropriate             
training required under the bill, that person would be protected.              
                                                                               
Number 1474                                                                    
                                                                               
ROSE MARIE CITTI, Director of Training, Respond Systems, testified             
via teleconference from Anchorage.  She first indicated she had                
been sending material almost daily since February 1, and that Mr.              
Johnson had addressed some items in her prepared comments.  Ms.                
Citti offered a quotation from Dr. Richard Cummins, professor of               
medicine at the University of Washington, who is a leader in                   
treatment of sudden cardiac arrest.  Dr. Cummins had said there is             
now both national and international acceptance of the "principle of            
early defibrillation," which contends that whoever arrives first at            
the scene of a cardiac arrest should have a defibrillator.  He had             
gone on to say that anyone who can learn CPR can also learn to use             
an AED and should be allowed to use one and be protected from                  
repercussions.                                                                 
                                                                               
MS. CITTI reminded members that 30 years ago, CPR was considered an            
advanced medical skill.  "Now we teach school kids how to use it,"             
she said, adding that there are numerous documented cases where                
people have been saved due to CPR performed by bystanders, buying              
the patients time until EMS personnel arrived.                                 
                                                                               
MS. CITTI indicated she was testifying out of frustration because              
although the technology exists that can save countless lives, laws             
prohibit the use.  Her interest comes from eight years of being a              
CPR instructor; she teachers pre-EMS personnel from a wide variety             
of occupational settings who are designated by their employers and             
expected to respond to medical emergencies, or else they are                   
willing bystanders.  Ms. Citti said public access use of AEDs                  
should target pre-EMS responders, who are trained individuals with             
a willingness, designation or responsibility to treat the public               
and to assist co-workers in medical emergencies.  These people                 
should be free to perform this potentially life-sustaining action              
without fear of violating the law.  She said the Good Samaritan law            
must be extended beyond paramedics, firefighters, police officers,             
lifeguards and those with a duty to respond, to include those who              
are doing it on a willing basis or because of their employer's                 
requirement.                                                                   
                                                                               
Number 1615                                                                    
                                                                               
MS. CITTI cited examples of companies with trained personnel which             
should be able to use AEDs in an emergency without risk of breaking            
existing laws.  She cited additional examples of people who should             
have use of this technology without repercussion, including trained            
motor coach or bus drivers, Alaska Railroad conductors, utility                
workers, pilots, charter boat operators, people who have remote                
lodges and in-town hotel or motel staff.                                       
                                                                               
MS. CITTI said Alaska has always been on the leading edge of making            
important changes to established medical procedures because of                 
unique needs and remote locations.  Alaska led the way with                    
defibrillator-trained technicians when the equipment was manually              
operated, and AED technology has moved so fast that Alaska is no               
longer keeping pace with regulations or statutes.                              
                                                                               
MS. CITTI concluded by saying she applauds the energy and                      
thoughtfulness that have gone into preparing HB 395.  She said she             
finds the approach taken in this bill addresses most of her main               
personal concerns.  She encouraged the committee to move this issue            
forward.                                                                       
                                                                               
Number 1692                                                                    
                                                                               
CRAIG LEWIS, Director, Interior Region Emergency Medical Services              
Council, testified via teleconference from Fairbanks in support of             
the proposed committee substitute for HB 395.  He noted that a                 
number of his prepared comments had already been addressed by Mr.              
Johnson and Ms. Citti.                                                         
                                                                               
MR. LEWIS told members the development and proliferation of                    
automated external defibrillators across the nation and in Alaska              
warrant the amendment to Alaska's Good Samaritan Act.  The American            
Heart Association, the American Red Cross and a number of corporate            
American companies recognize the value of AEDs, and states either              
have or are passing similar legislation.  Major corporations across            
the nation and in Alaska are already purchasing and positioning                
AEDs in their places of business.  Princess Tours has them on its              
buses, and Alaska Airlines has them on its planes.  "It only makes             
sense that we adjust our legislative process to recognize the                  
technology," Mr. Lewis said.                                                   
                                                                               
MR. LEWIS advised members that the state of the art regarding                  
defibrillation has changed significantly and will continue to                  
change.  The size, shape and capabilities of these machines will               
improve, "most likely to where the next time you see one, it will              
be a third the size of a briefcase and be next to the first-aid                
station on the wall."  Mr. Lewis said the sophistication of the                
devices is incredibly fast-moving, and right now they do the                   
analyses that used to be done by hand.                                         
                                                                               
MR. LEWIS explained that the difference between manual and                     
automated has to do with the capability on a manual defibrillator              
to adjust the amount of electric flowage by hand, with a pre-                  
approved protocol and standard, to the patient.  Automated                     
defibrillators adjust all of those things within the computer                  
system of the machine, with a number of fail-safe mechanisms that              
have been tested over time.  He urged passage of this legislation.             
                                                                               
Number 1854                                                                    
                                                                               
CHAIRMAN GREEN asked that both Ms. Citti and Mr. Lewis submit any              
written testimony for the record.                                              
                                                                               
Number 1875                                                                    
                                                                               
REPRESENTATIVE CROFT offered an amendment to page 2, line 15, to               
substitute "possess" for "carry".  He explained, "I don't think we             
meant that you carry it around the whole time."                                
                                                                               
REPRESENTATIVE BERKOWITZ suggested "maintain".                                 
                                                                               
REPRESENTATIVE CROFT mentioned then getting rid of "evidence."                 
                                                                               
REPRESENTATIVE BERKOWITZ suggested "maintain current evidence".                
                                                                               
CHAIRMAN GREEN asked what the amendment is.                                    
                                                                               
REPRESENTATIVE stated, "My amendment is 'maintain'."                           
                                                                               
Number 1982                                                                    
                                                                               
REPRESENTATIVE ROKEBERG suggested they could delete the last part              
of the sentence, following the semicolon ["a user of a                         
defibrillator shall carry current evidence of demonstrated                     
proficiency in defibrillator use and cardiopulmonary                           
resuscitation;"], unless the implication is to have not current                
training but recurrent training.  He said all it means is the                  
person is carrying a card around.                                              
                                                                               
CHAIRMAN GREEN said the problem may be people who don't have their             
cards with them.                                                               
                                                                               
Number 2057                                                                    
                                                                               
REPRESENTATIVE CROFT stated, "It couldn't be there to mean to be               
current.  You take the course, 'shall receive reasonable                       
instruction' - I did that ten years ago or whatever - 'and shall               
stay current.'"                                                                
                                                                               
REPRESENTATIVE PORTER agreed.                                                  
                                                                               
REPRESENTATIVE ROKEBERG said if that is the implication, it should             
be spelled out.                                                                
                                                                               
Number 2074                                                                    
                                                                               
MS. LEWIS told members that people have to redo their training                 
every year or two.                                                             
                                                                               
Number 2098                                                                    
                                                                               
REPRESENTATIVE JAMES said it could stop after "proficiency".  She              
explained, "I think you do need to have this bit about being                   
current with it, because the first part doesn't say that you are."             
                                                                               
Number 2125                                                                    
                                                                               
CHAIRMAN GREEN referred to the motion on the table and asked                   
whether there was any objection to substituting "maintain" for                 
"carry" on page 2, line 15.  There being no objection, that                    
amendment was adopted.                                                         
                                                                               
REPRESENTATIVE ROKEBERG asked Ms. Swenson what is meant by                     
"current," suggesting the need to stipulate that in the bill.                  
                                                                               
Number 2150                                                                    
                                                                               
MS. SWENSON answered that "current" means that the card must be                
kept up and the training must be there, through an approved course.            
People must redo their training every year or two and get an                   
updated card.  She explained that there are basic life support and             
advanced cardiac life support, which have changes over the years.              
As the changes occur, people have to update their training.  In                
addition, a lot of nurses and other people use it for continuing               
education, so that they keep their cards current.                              
                                                                               
Number 2204                                                                    
                                                                               
REPRESENTATIVE ROKEBERG said he appreciates that and thinks it is              
laudable, but when they put in the statute that a person must have             
a current permit, they need to define what "current" is.                       
                                                                               
CHAIRMAN GREEN asked whether "active" would satisfy it.                        
                                                                               
REPRESENTATIVE ROKEBERG suggested that if there are different                  
training forums, there may be differing standards.                             
                                                                               
Number 2283                                                                    
                                                                               
MS. SWENSON told members, "The cards all have an expiration date on            
them, when you renew your training, and it varies by program what              
that expiration date is and the length of time before they have to             
retrain.  So 'current' would be before the expiration date."                   
                                                                               
CHAIRMAN GREEN said it is like CPR, for which the card has an                  
expiration date, and he asked again whether "active" would be                  
appropriate.                                                                   
                                                                               
MS. SWENSON stated her belief that "current" is the standard.                  
                                                                               
CHAIRMAN GREEN pointed out that the committee was having difficulty            
with it.                                                                       
                                                                               
Number 2298                                                                    
                                                                               
REPRESENTATIVE PORTER suggested it isn't the evidence they want                
current, but the proficiency.  He asked whether perhaps they should            
say, "shall maintain evidence of current demonstrated proficiency".            
                                                                               
CHAIRMAN GREEN suggested perhaps just "proficiency".                           
                                                                               
Number 2366                                                                    
                                                                               
REPRESENTATIVE CROFT said he would amend the amendment so the                  
sentence will read, starting at line 15, "a user of a defibrillator            
shall maintain a current proficiency in defibrillator use and                  
cardiopulmonary resuscitation".  He specified that he was taking               
out "evidence of demonstrated" and making essentially the                      
substitution made before.                                                      
                                                                               
CHAIRMAN GREEN asked whether there was any objection to the                    
modified amendment.  There being no objection, it was adopted.                 
                                                                               
Number 2395                                                                    
                                                                               
REPRESENTATIVE CROFT advised members of one more legal problem,                
which he and Kevin Jardell had been working on.  He said he would              
describe the problem and perhaps Mr. Jardell had a solution.                   
Section 1 says "authorized by law," and testifiers have said, if he            
understands correctly, that this is limited to a certain class of              
people; it was illegal for other people to do this.  What they are             
changing here is simply the Good Samaritan law, not the law that               
said it is illegal for someone to do it.  Representative Croft                 
stated, "So, we could have, 'you're not liable for it, as long as              
you don't use gross negligence,' but you're actually still                     
technically violating the law ...."                                            
                                                                               
TAPE 98-32, SIDE A                                                             
Number 0001                                                                    
                                                                               
MR. JOHNSON said he is not sure exactly how it affects this bill,              
but the way to address the problem described is with a one-word                
insertion under AS 18.08.090(1).  Previously in that statute, it               
says a person has to be certified or licensed in order to do                   
advanced life support.  Mr. Johnson read from subsection (1), which            
says, "'advanced life support' means emergency care techniques                 
provided under the written or oral orders of a physician that                  
include, but are not limited to, electric cardiac defibrillation               
...."                                                                          
                                                                               
Number 0092                                                                    
                                                                               
MR. JOHNSON suggested if they inserted "manual" there, it would                
simply say a person has to be appropriately licensed or certified              
to use a manual defibrillator.  "But that would not require                    
automated defibrillators to come under this requirement," he                   
pointed out.                                                                   
                                                                               
Number 0128                                                                    
                                                                               
REPRESENTATIVE PORTER asked Ms. Swenson whether she would accept a             
conceptual amendment to include that in the bill.                              
                                                                               
MS. SWENSON said that would be fine.                                           
                                                                               
Number 0150                                                                    
                                                                               
KEVIN JARDELL, Legislative Administrative Assistant to                         
Representative Joe Green, spoke as the committee aide, noting that             
it may or may not require a title change.                                      
                                                                               
CHAIRMAN GREEN said they are still talking about civil liability               
for use of a defibrillator.                                                    
                                                                               
Number 0210                                                                    
                                                                               
REPRESENTATIVE CROFT suggested a conceptual amendment to make the              
same things they are talking about here partially immunized and not            
illegal.                                                                       
                                                                               
Number 0234                                                                    
                                                                               
MR. JARDELL stated his understanding that the conceptual amendment             
includes that this is not an illegal act, that the liability is                
immunized and the actual activity is legal and allowable.                      
                                                                               
CHAIRMAN GREEN noted that is under the statute cited in Title 18.              
                                                                               
Number 0279                                                                    
                                                                               
REPRESENTATIVE PORTER said as he understood Mr. Johnson's reading              
of that statute, the only required amendment is to add "manual" in             
front of "electrical"," as they have here, but in the other statute            
[AS 18.08.090].                                                                
                                                                               
CHAIRMAN GREEN asked whether everyone understood the conceptual                
amendment and whether there was any objection.  Hearing no                     
objection, he announced that it was adopted.                                   
                                                                               
Number 0335                                                                    
                                                                               
REPRESENTATIVE BERKOWITZ, noting that his grandmother is an English            
teacher, suggested that on page 2, line 20, it would be better to              
say "consistently" instead of "consistent."                                    
                                                                               
CHAIRMAN GREEN agreed it is an adverb.                                         
                                                                               
REPRESENTATIVE ROKEBERG said he believes adverbs are discouraged by            
the drafting manual.                                                           
                                                                               
Number 0437                                                                    
                                                                               
REPRESENTATIVE ROKEBERG made a motion to move HB 395, Version E [0-            
LS1560\E, Ford, 3/5/98], as amended, from committee with individual            
recommendations and with the attached zero fiscal note.                        
                                                                               
CHAIRMAN GREEN asked whether there was any objection.  There being             
none, CSHB 395(JUD) moved from the House Judiciary Standing                    
Committee.                                                                     
                                                                               
HB 196 - WILLS, TRUSTS, & OTHER TRANSFERS                                      
                                                                               
Number 460                                                                     
                                                                               
CHAIRMAN GREEN announced the committee would hear HB 196, "An Act              
relating to wills, intestacy, nonprobate transfers, and trusts; and            
amending Rule 24, Alaska Rules of Civil Procedure," sponsored by               
Representative Ryan.                                                           
                                                                               
Number 545                                                                     
                                                                               
REPRESENTATIVE JOE RYAN came before the committee to explain the               
legislation.  He noted there is a proposed committee substitute,               
Version B.  He read the following statement into the record:                   
                                                                               
"The bill makes a number of important improvements to Alaska's                 
estate and trust laws.  Sections 1 to 8, 18 and 19 of the bill                 
changes Alaska law to permit a person who is domiciled outside of              
Alaska to select Alaska as their jurisdiction for the probate of               
his or her estate.  This provision should bring significant                    
business to the state.  In other jurisdictions they give the                   
attorneys a percentage of the estate as fee.  Alaska doesn't, you              
only get the time you spend and it will keep people from                       
necessarily having to go to another state to probate the will.  It             
can be probated here in Alaska.                                                
                                                                               
"Sections 9 and 10 of the bill allow a person to limit the                     
liability of a trustee in his or her trust when more than one                  
trustee is serving.  The person could provide only the trustee who             
exercises a power will be held liable for its actions and that the             
other trustees who did not participate in the exercise of the power            
would not be held liable for that (indisc.) other trustee.  This               
provision will encourage trustees in Alaska to work with other                 
trustees of the same trust.                                                    
                                                                               
"The Uniform Trust Act included in Section 11 which clarifies many             
issues involving the administration of trusts in Alaska.                       
                                                                               
"Section 12 protects an Alaska trustee who in good faith defends an            
Alaska trust from the claims of a creditor who seeks to set the                
trust aside.  If the trustee acts in good faith, then the trustee              
gets a first lien on all trust assets for payment of its fees,                 
costs and attorneys' fees.  Delaware has adopted a similar                     
provision to protect its trustees.                                             
                                                                               
"Section 14 clarifies that a trust created in another state or                 
country can be moved to Alaska even though the trust was settled               
before the Alaska Trust Act was passed last year.                              
                                                                               
"The Uniform Trustee's Powers Act is enacted in Section 16.  Alaska            
does not have a statutory provision that sets out the powers of a              
trustee.  These statutory powers would supplement the powers set               
forth in a trust agreement.                                                    
                                                                               
"A number of miscellaneous provisions are included elsewhere in the            
bill.  Section 15 allows a person to include a penalty clause in               
his or her trust.  Section 17 clarifies the accounting of bond                 
premiums and discounts.  Section 20 amends AS 34.40.110(d) to be               
consistent with the Uniform Fraudulent Transfers Act.  Section 21              
precludes an action by creditors of the grantor of the trust                   
against those who assist in the creation of the trust.                         
                                                                               
"The bill will improve our estate and trust laws and will make                 
Alaska's laws more favorable to our residents.  In addition, the               
bill will make our laws more attractive to people outside of Alaska            
who are considering Alaska for the administration of their estates             
and trusts."                                                                   
                                                                               
REPRESENTATIVE RYAN noted that Richard Thwaites, a practicing                  
attorney and the immediate past chairman of the state planning                 
section of the Alaska Bar, would explain the technical aspects of              
the bill.                                                                      
                                                                               
Number 716                                                                     
                                                                               
RICHARD THWAITES, Attorney, came before the committee to answer                
questions.                                                                     
                                                                               
REPRESENTATIVE ROKEBERG said he would like to know what the bill               
does.                                                                          
                                                                               
MR. THWAITES said, "We are looking at Alaska, because of this new              
trust act, as a destination jurisdiction for this.  Basically, what            
has happened in many of the national meetings everybody is now very            
attentive to Alaska as being the location to go for estate                     
planning.  This takes that one step further in that let's say that             
one of your relatives died in Kansas or some other jurisdiction                
because a defibrillator didn't work.  There was no other relative              
down there and no reason for you, as the person who is doing the               
administration of the estate, to go down there.  This bill provides            
that you can actually do that administration here in Alaska in your            
home or residence.  And you just need to apply the Kansas law to               
the Kansas real estate or whatever that might be.  And so it                   
permits the jurisdiction of the court to extend to those types of              
probates.  And even in our probate code, it is discretionary on the            
person to bring the action here.  So in all of the other states                
it's likewise discretionary and they don't have to have a probate              
in that state if no assets are required.  This also defers to that             
other jurisdiction which means if there is somebody down there who             
says, 'No, we want to have the probate there,' then you're going to            
have to defer to that jurisdiction.  So if the Kansas court did                
come up and say they would have a priority, so this is only in a               
situation where no one is objecting.  Typically, that would be the             
younger generation here wanting to do it there."                               
                                                                               
MR. THWAITES continued, "Further than that, it actually goes a                 
little further and it allows perhaps someone setting up in an                  
Alaska trust to also, as part of their state plan, suggest that                
Alaska would be the designated jurisdiction for the administration             
of their estate, say where there is a (indisc.) provision in their             
will that whatever assets are still in their estate pours over to              
their Alaska trust.  (Indisc.) omit that administration."                      
                                                                               
MR. THWAITES explained that California requires many hearings and              
a definitive process to go through the probate process.  It also               
sets up statutory fees on a percentage basis of the estate.  He                
said that as a result, many states have living trusts as the                   
primary form of estate planning for the purpose of avoiding probate            
in those jurisdictions.  He said Maine, Kentucky, Wisconsin, Alaska            
and Idaho are five states which do not have percentage fees.  For              
that reason, it is often very convenient to go into the Alaska                 
court where we have a nonintervention system.  This means that no              
one ever has to attend a hearing or go to court, you merely hand               
the petition to the court.  The court then authorizes a personal               
representative to act as long as the personal representative swears            
they will abide by all the probate rules.  Mr. Thwaites said after             
distributions have occurred and after the minimum requirements have            
been met with the Department of Revenue, et cetera, there is a                 
closing letter that they have to issue, when those things are done,            
the personal representative files a sworn statement closing the                
estate.  That is called an informal administration of an estate                
which is fairly common to the 14 jurisdictions that have the                   
uniform probate code.  Mr. Thwaites said this, in essence, extends             
this option to all of the citizens of the United States which means            
that the lawyers, certified public accountants, trust officers, et             
cetera, might get additional business as a result of that.  The                
state of Alaska would receive the additional fees for the filings,             
et cetera, that is also required.                                              
                                                                               
MR. THWAITES pointed out that as a result of the Alaska Trust Act,             
one slight bonus has happened.  In many of the state jurisdictions,            
the professors and so forth in those states are now recommending to            
their perspective lawyers that when considering the Alaska as                  
jurisdiction for either trusts or estates, if they really want to              
make it solid they won't transfer some of their assets to Alaska,              
they will transfer a majority of their assets to Alaska.  From a               
conservative standpoint, that means that you are solidly within                
both the situs meaning you've designated Alaska as a jurisdiction              
and the minority opinion which is substantial contact.  There are              
two opinions on how to determine whether Alaska is the appropriate             
jurisdiction or not.  By placing a majority of your assets that are            
in trust with the Alaska administrators and so forth, you have met             
both tests.  Mr. Thwaites noted that the Oregon Bar, in a January              
letter to their members, has given a description about how to set              
these up.  In their recommendation they suggest you ought to really            
have substantial contacts with Alaska, as well as declaring a situs            
of the jurisdiction.  This is a further enhancement of that                    
permitting, in the probate code a portion of the statute,                      
designation of Alaska as the jurisdiction in the will as well as in            
the trust.  It doesn't override the other.                                     
                                                                               
Number 1095                                                                    
                                                                               
CHAIRMAN GREEN said if you are going to transfer the assets of real            
property, that would be sold in the other state and be subject to              
any taxations.  He referred money or jewelry and asked if there                
would be a taxation before they would be removed from that                     
jurisdiction to Alaska jurisdiction.                                           
                                                                               
Number 1131                                                                    
                                                                               
MR. THWAITES explained that under the current common law of the                
United States, the tangible personal property passes in the state              
of which the person is domiciled.  If someone in Oregon had                    
tangible personal property, Oregon would impose a tax on that                  
tangible personal property.  However, if they had placed that                  
property in an Alaska trust, the domicile of that property is then             
Alaska.  Then the portion of the estate tax return concerning the              
tangible personal property, even though it's a Florida resident,               
would be paid to the Alaska Department of Revenue under the trust.             
                                                                               
REPRESENTATIVE BERKOWITZ asked who is opposed to the bill and why.             
                                                                               
Number 1225                                                                    
                                                                               
MR. THWAITES responded that it would be the other jurisdictions                
that want to impose or protect their right to tax and levy against             
those assets.  There is a certain right of the citizens of the                 
United States, under the U.S. Constitution, to be able to freely               
transfer these things back and forth.  He explained that Delaware's            
reaction to our last trust bill was that within 19 days after                  
Alaska had passed legislation, they introduced and passed a similar            
statute.  They even cited the Alaska statute as what they were                 
trying to copy.  He said, "They kind of messed it up because there             
were some other things that were placed in there that didn't make              
it work for tax reasons and they're attempting to straighten those             
out this years.  But I think that Delaware and South Dakota are                
likewise trying to capitalize on being a destination situs, if you             
will, for those kinds of assets and it only affects the                        
personality, it doesn't affect the real estate."                               
                                                                               
REPRESENTATIVE BERKOWITZ asked if there is any Alaskan opposition.             
                                                                               
MR. THWAITES responded that he isn't aware of any.                             
                                                                               
Number 1259                                                                    
                                                                               
CHAIRMAN GREEN asked if HB 196 is an addendum to the legislation               
passed last year.  He asked if HB 196 covers intestation.                      
                                                                               
MR. THWAITES explained the legislation last year covered the trust             
law.  There are many parts to HB 196.  The main part of the bill,              
as far as probate goes, is the probate portion.  Mr. Thwaites                  
referred to the section regarding the trustees that Representation             
Ryan spoke about does affect the corporate fiduciaries or                      
individual fiduciaries that might be involved.  He said, "For                  
example, if your bother-in-law and sister-in-law acted as a trustee            
along with an Alaska bank or someone else, they wouldn't be liable             
for the bank's actions and the bank wouldn't be liable for their               
actions.  So it makes it more acceptable for those corporate                   
fiduciaries to accept that work.  Presently, in most jurisdictions             
the corporate fiduciaries -- if they're going to have some                     
liability, they're concern about, 'If I have a little bit of the               
liability, I'm going to have all the liability.'  And they're less             
than willing to go ahead and co-administer a fund and this will                
limit that exposure and encourage co-administration so that you                
have a family member involved, perhaps with the corporate fiduciary            
and not having the liability pass back and forth one to the other."            
                                                                               
Number 1330                                                                    
                                                                               
REPRESENTATIVE CROFT said there are some portions of the bill that             
are uniform laws or come from uniform reforms.  There are some that            
merely relate to transferability of trust properties.  He said                 
those seem to him to be acceptable because he tends to trust the               
uniform drafters.  A transfer type of operation seems to him to be             
substantively neutral.  It just allows them to bring the trust                 
property to Alaska or it expedites the ways they can do that.                  
Representative Croft stated he is more interested in the                       
substantive changes.  He said, "Aside from the ones that we've have            
adopted out of uniform laws and aside from things that simply                  
relate to how someone would transfer their trust property up here,             
what are the major substantive changes to our trust law?  And in               
particular, I'm concerned about the penalty clause in Section 15 --            
an explanation of why that's good public policy."                              
                                                                               
MR. THWAITES said he would defer the question to Richard Hompesch              
who has spent a considerable amount of time working on the statute.            
                                                                               
Number 1427                                                                    
                                                                               
REPRESENTATIVE PORTER referred to Section 19 and said he doesn't               
understand the term "or otherwise."  He read, "A cause of action or            
claim for relief with respect to a fraudulent transfer under                   
(b)(1)," which describes a "fraudulent transfer" of this section               
"or otherwise is extinguished unless the action is brought."                   
                                                                               
MR. THWAITES explained he thinks it is meant to broaden this                   
limitation to correspond to the statute that was adopted under our             
trust act.  He noted there is also a 4-year, 1-year statute.  This             
makes it consistent and it expands that definition to cover the                
broader terminologies.  Mr. Thwaites said he believes Mr. Hompesch             
can speak to that.  He said basically, it brings the existing                  
statute in compliance with trust statute.  Mr. Thwaites referred to            
the Uniform Trust Act that is referred to in the bill and said                 
there was a comment by the Attorney General's Office last year                 
about that because the uniform commissioners are talking about                 
modifying the Uniform Act.  He said, "What we have here was the                
existing Uniform Act that was in existence and is currently the law            
for the state of Alaska, not the new revised version that they                 
haven't adopted.  We also adopted the 1993 version of the Uniform              
Probate Code, and so there are many versions of that and there are             
lots of variations.  And while ours is called the 'Uniform Probate             
Code,' we did not adopt all the provisions out of it, and there are            
provisions for variations there."  Mr. Thwaites said that whenever             
we have a uniform act, he believes the connotation is that we are              
substantially similar and our concept is the same as the Uniform               
Act, but every state has a little variation, one way or the other,             
from those acts.                                                               
                                                                               
Number 1594                                                                    
                                                                               
BOB MANLEY, Attorney, testified via teleconference from Anchorage.             
He noted he is primarily involved in estate planning.  He urged the            
committee to adopt the proposed committee substitute language as               
it is an improvement of the Alaska Trust Act.  It basically                    
generates greater (indisc.) action for people disposing of their               
property.  The Alaska Trust Act that was passed last year has                  
received a lot of national commentary.  Mr. Manley referred to the             
Heckerly (ph) Institute in Florida and said one of the (indisc.)               
involved "North to The Future, The Alaska Trust," which establishes            
Alaska as a situs for money management.  He said it is important to            
keep current and modify with the current trends.                               
                                                                               
MR. MANLEY referred to Representative Porter having a question                 
about the Fraudulent Transfers Act and said, "What this provision              
regarding the 4-year and 1-year statute of limitations does is                 
adopt exactly the language or almost exactly the language of the               
Uniform Fraudulent Transfers Act which is that the cause of action             
is extinguished after that 4-year or 1-year period run.  And                   
previously, we simply provided that the cause of action I believe              
expired or at least was no longer brought.  So it was procedural               
rather than substance and the change, (1) the patterns that's                  
closer to that - Uniform Fraudulent Transfer statute of limitation;            
and second, it makes it more likely that a court outside of Alaska             
will recognize the validity of our statute of limitations and                  
that's Section 19."                                                            
                                                                               
MR. MANLEY continued, "The other thing that I want to point out and            
urge you to consider favorably is the new Section 20 which provides            
that if a fraudulent conveyance action is brought and it's                     
acceptable -- in other words, if somebody was trying to cheat their            
creditor and they knew who their creditors were and they hid the               
money in the Alaska trust, the Alaska court and any other courts               
are going to approve invasion of that.  However, if because of the             
expiration of the statute of limitations  are otherwise the Alaska             
courts do not view it as a fraudulent conveyance.  If it's, as Mr.             
Thwaites mentioned, one of those future - future (indisc.)                     
creditors in the future.  What this does is it prevents the                    
creditor from going in the back door and instead of getting to the             
trust assets, suing the trustee for conspiracy to commit a                     
fraudulent conveyance or the equivalent which might have a                     
different statute of limitations.  So simply this makes it better              
or safer for individuals and institutions (indisc.) trustees.  I               
think if you follow the local bank stocks you'll see that NBA                  
(National Bank of Alaska) has had a tremendous runoff in the last              
year, North Rim has been shooting up.  We've got a new Alaska trust            
company.  There are some new financial institutions also that                  
looking at Alaska seriously for establishing bases of operation and            
this kind of improvement in the law makes it more likely that we               
can continue this good clean new industry of money management for              
Alaska.  Thank you."                                                           
                                                                               
Number 1805                                                                    
                                                                               
REPRESENTATIVE JAMES made a motion to adopt the proposed committee             
substitute for HB 196, Version B, Bannister, 3/4/98.  There being              
no objection, the proposed committee substitute for HB 196 was                 
before the committee.                                                          
                                                                               
Number 1817                                                                    
                                                                               
JOHNNY GRAMES testified via teleconference from Anchorage.  He                 
said, "I am not here to talk about my own case.  But as a parent,              
I'm -- that you're setting up Alaskans (indisc.) to get policed by             
predators operating under these laws that are set up by the                    
judiciary branch of government and lobbied by these lying lawyers.             
And I don't know how else to warn the people what's happening.  And            
Mr. Thwaites is a crook and he sold out my sons who are beneficiary            
to my mother's estate - our family estate which -- my father came              
here in 1915 and built up and now the lawyers and bankers are going            
to be able to steel the estate for the next 22 years.  Now the                 
reason you don't hear about this is because the court system is                
totally politicized and corrupted and I'm not able to appeal -- not            
able to file a due process appeal so I (indisc.) block from access             
to the court to petition the government for (indisc.) which is a               
constitutional right so that nobody knows about this.  And you will            
not hear it with the Alaska Commission on Judicial Conduct with the            
probate master and the judges...."                                             
                                                                               
CHAIRMAN GREEN interjected and asked Mr. Grames to conclude his                
testimony.                                                                     
                                                                               
MR. GRAMES continued, "Also, Mr. Thwaites appointed a guardian ad              
litem over my son and I am the father and the trustee and he lives             
with me.  And the court system went along with it.  So a trustee               
has power over my son and we have no privacy and we are unable to              
protect him from the guardian and from court control and that's Mr.            
Thwaites that you're depending on."                                            
                                                                               
Number 1954                                                                    
                                                                               
RICHARD HOMPESCH, Attorney, testified via teleconference from                  
Fairbanks.  He said that Representative Croft asked about Section              
15.  Mr. Hompesch said, "The policy behind Section 15, which is the            
penalty provision, goes as follows:  If I want to set up a trust,              
Section 15 clarifies that I can have a provision in the trust that             
says if any of my children who are beneficiaries of the trust sue              
the trustee, the trustee can deduct its attorneys fees from that               
child's share.  And many times we have - estate planners have                  
clients who have difficult children who are very prone to frivolous            
litigation.  And as you know rule 82, which is our attorneys fee               
provision, rarely provides (indisc.) for a board of attorneys fees             
when litigation is filed that's frivolous.  So this type of penalty            
provision would allow a person setting up a trust to charge their              
beneficiary, who filed the frivolous litigation, for the costs.                
Without such a provision, all the beneficiaries of the trust would             
have to share the legal fees for defending the frivolous                       
litigation.  And I figure it's good policy to allow such a clause              
under Alaska law because what the Community Property Act and other             
provisions of our new laws, this penalty provision is completely               
optional.  If a person chooses to (indisc.) or include a penalty               
provision in their trust, they may.  It's provided, it's allowed               
under Alaska law.  Most people may choose not to.  So as a matter              
of freedom of choice, I think it's a good policy for Alaska.                   
Unless there are other questions, I'd like to thank you and urge               
you to pass House Bill 196.                                                    
                                                                               
REPRESENTATIVE CROFT said that he didn't see in Section 15 that the            
lawsuit had to be frivolous.  It said, "even if probably cause                 
existed instituting the proceedings."  He said these can valid but             
losing suits, not just frivolous suits.                                        
                                                                               
MR. HOMPESCH stated, "Yes, the penalty provision merely says that              
if you want to provide a penalty provision, it could say that even             
if the beneficiary claim is meritorious that the penalty provision             
could still apply.  Now I'm not here to say that such a penalty                
provision should be included.  I think most of my clients would                
probably say -- you know they would prefer a penalty provision that            
would apply if the litigation was frivolous.  But it's important to            
remember that most of the trusts that I think Mr. Thwaites, Mr.                
Manley, myself and other attorneys in Alaska are doing today have              
trust protector clauses.  A trust protector clause allows someone              
- some trusted advisor in the family to remove the trustee without             
cause.  So It would seem to me that this penalty provision would               
encourage the resolution of disputes through the trust protector               
and not through our court system."                                             
                                                                               
CHAIRMAN GREEN thanked Mr. Hompesch for his testimony.  He                     
indicated the HB 196 would be held for further consideration.                  
                                                                               
ADJOURNMENT                                                                    
                                                                               
Number 2126                                                                    
                                                                               
CHAIRMAN GREEN adjourned the House Judiciary Standing Committee                
meeting at 3:20 p.m.                                                           

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