04/07/2006 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB54 | |
| SB298 | |
| HB413 | |
| HB347 | |
| HB276 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 54 | TELECONFERENCED | |
| + | SB 298 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 413 | TELECONFERENCED | |
| += | HB 347 | TELECONFERENCED | |
| += | HB 276 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
April 7, 2006
1:19 p.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Tom Anderson
Representative Pete Kott
Representative Peggy Wilson
Representative Les Gara
Representative Max Gruenberg
MEMBERS ABSENT
Representative John Coghill
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 54(FIN)
"An Act amending protective order statutes for crimes involving
stalking to include crimes involving sexual assault and sexual
abuse, to provide for other relief ordered by a court, to add
the protective orders to a centralized registry, to prevent
denial solely for a lapse of time, and to require notification
of the court of known civil or criminal actions involving the
petitioner or respondent; relating to notifications to victims
of sexual assault and to mandatory arrest for crimes involving
violation of protective orders and violation of conditions of
release; and amending Rule 65, Alaska Rules of Civil Procedure."
- MOVED CSSB 54(FIN) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 298(JUD)
"An Act relating to loans from trust property; relating to a
trustee's power to appoint the principal of a trust to another
trust; relating to challenges to, claims against, and
liabilities of trustees, beneficiaries, and creditors of trusts
and of trusts and estates; relating to individual retirement
accounts and plans; relating to certain trusts in divorce and
dissolutions of marriage situations; and providing for an
effective date."
- MOVED HCS CSSB 298(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 413
"An Act relating to the burning capability of cigarettes being
sold, offered for sale, or possessed for sale; and providing for
an effective date."
- HEARD AND HELD
HOUSE BILL NO. 347
"An Act relating to mandatory motor vehicle insurance, license
suspensions, and notices relating to motor vehicles and driver's
licenses."
- MOVED CSHB 347 (JUD) OUT OF COMMITTEE
HOUSE BILL NO. 276
"An Act relating to business license endorsements for tobacco
products, to holders of business license endorsements for
tobacco products, and to the employees and agents of holders of
business license endorsements for tobacco products."
- MOVED CSHB 276 (JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 54
SHORT TITLE: PROTECTIVE ORDERS FOR SEXUAL ASSAULT
SPONSOR(S): SENATOR(S) DYSON
01/14/05 (S) READ THE FIRST TIME - REFERRALS
01/14/05 (S) STA, JUD
02/17/05 (S) STA AT 3:30 PM BELTZ 211
02/17/05 (S) Heard & Held
02/17/05 (S) MINUTE(STA)
03/15/05 (S) STA AT 3:30 PM BELTZ 211
03/15/05 (S) Moved CSSB 54(STA) Out of Committee
03/15/05 (S) MINUTE(STA)
03/16/05 (S) STA RPT CS 1NR 4AM NEW TITLE
03/16/05 (S) NR: THERRIAULT
03/16/05 (S) AM: DAVIS, ELTON, WAGONER, HUGGINS
03/16/05 (S) FIN REFERRAL ADDED AFTER JUD
03/31/05 (S) JUD AT 8:30 AM BUTROVICH 205
03/31/05 (S) Moved CSSB 54(JUD) Out of Committee
03/31/05 (S) MINUTE(JUD)
03/31/05 (S) JUD RPT CS FORTHCOMING 5DP
03/31/05 (S) DP: SEEKINS, FRENCH, GUESS, THERRIAULT,
HUGGINS
04/01/05 (S) JUD CS RECEIVED NEW TITLE
05/07/05 (S) FIN AT 10:00 AM SENATE FINANCE 532
05/07/05 (S) Heard & Held
05/07/05 (S) MINUTE(FIN)
01/19/06 (S) FIN AT 9:00 AM SENATE FINANCE 532
01/19/06 (S) Heard & Held
01/19/06 (S) MINUTE(FIN)
01/24/06 (S) FIN AT 9:00 AM SENATE FINANCE 532
01/24/06 (S) Moved CSSB 54(FIN) Out of Committee
01/24/06 (S) MINUTE(FIN)
01/25/06 (S) FIN RPT CS 7DP NEW TITLE
01/25/06 (S) DP: WILKEN, GREEN, HOFFMAN, OLSON,
DYSON, STEDMAN, BUNDE
02/09/06 (S) TRANSMITTED TO (H)
02/09/06 (S) VERSION: CSSB 54(FIN)
02/10/06 (H) READ THE FIRST TIME - REFERRALS
02/10/06 (H) JUD, FIN
04/07/06 (H) JUD AT 1:00 PM CAPITOL 120
BILL: SB 298
SHORT TITLE: TRUSTS: CHALLENGES; CLAIMS; LIABILITIES
SPONSOR(S): SENATOR(S) SEEKINS
02/14/06 (S) READ THE FIRST TIME - REFERRALS
02/14/06 (S) L&C, JUD
02/23/06 (S) L&C AT 1:30 PM BELTZ 211
02/23/06 (S) Moved SB 298 Out of Committee
02/23/06 (S) MINUTE(L&C)
02/27/06 (S) L&C RPT 3DP
02/27/06 (S) DP: BUNDE, SEEKINS, STEVENS B
03/02/06 (S) JUD AT 8:30 AM BUTROVICH 205
03/02/06 (S) Moved CSSB 298(JUD) Out of Committee
03/02/06 (S) MINUTE(JUD)
03/03/06 (S) JUD RPT CS 4DP 1NR SAME TITLE
03/03/06 (S) DP: SEEKINS, FRENCH, THERRIAULT,
HUGGINS
03/03/06 (S) NR: GUESS
03/22/06 (S) TRANSMITTED TO (H)
03/22/06 (S) VERSION: CSSB 298(JUD)
03/24/06 (H) READ THE FIRST TIME - REFERRALS
03/24/06 (H) JUD, FIN
03/27/06 (H) L&C AT 3:15 PM CAPITOL 17
03/27/06 (H) Scheduled But Not Heard
03/28/06 (H) FIN REFERRAL REMOVED
03/28/06 (H) L&C REFERRAL ADDED BEFORE JUD
04/03/06 (H) L&C AT 3:15 PM CAPITOL 17
04/03/06 (H) Moved HCS CSSB 298(L&C) Out of
Committee
04/03/06 (H) MINUTE(L&C)
04/05/06 (H) L&C RPT HCS(L&C) 5DP 2NR
04/05/06 (H) DP: LYNN, KOTT, LEDOUX, ROKEBERG,
ANDERSON;
04/05/06 (H) NR: CRAWFORD, GUTTENBERG
04/07/06 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 413
SHORT TITLE: BURNING CAPABILITY OF CIGARETTES
SPONSOR(S): REPRESENTATIVE(S) JOULE
02/01/06 (H) READ THE FIRST TIME - REFERRALS
02/01/06 (H) STA, JUD, FIN
02/09/06 (H) STA AT 8:00 AM CAPITOL 106
02/09/06 (H) Moved CSHB 413(STA) Out of Committee
02/09/06 (H) MINUTE(STA)
02/13/06 (H) STA RPT CS(STA) 6DP
02/13/06 (H) DP: GARDNER, LYNN, ELKINS, RAMRAS,
GRUENBERG, GATTO
03/31/06 (H) JUD AT 1:00 PM CAPITOL 120
03/31/06 (H) Heard & Held
03/31/06 (H) MINUTE(JUD)
04/07/06 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 347
SHORT TITLE: MOTOR VEHICLE INSURANCE & NOTICE
SPONSOR(S): REPRESENTATIVE(S) GARA, LYNN
01/09/06 (H) PREFILE RELEASED 1/6/06
01/09/06 (H) READ THE FIRST TIME - REFERRALS
01/09/06 (H) STA, JUD
01/31/06 (H) STA AT 8:00 AM CAPITOL 106
01/31/06 (H) Heard & Held
01/31/06 (H) MINUTE(STA)
02/14/06 (H) STA AT 8:00 AM CAPITOL 106
02/14/06 (H) Heard & Held
02/14/06 (H) MINUTE(STA)
02/16/06 (H) STA AT 8:00 AM CAPITOL 106
02/16/06 (H) Moved CSHB 347(STA) Out of Committee
02/16/06 (H) MINUTE(STA)
02/17/06 (H) STA RPT CS(STA) NT 3DP 3NR
02/17/06 (H) DP: GARDNER, GATTO, SEATON;
02/17/06 (H) NR: GRUENBERG, ELKINS, RAMRAS
03/31/06 (H) JUD AT 1:00 PM CAPITOL 120
03/31/06 (H) Heard & Held
03/31/06 (H) MINUTE(JUD)
04/07/06 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 276
SHORT TITLE: BUSINESS LICENSE TOBACCO ENDORSEMENT
SPONSOR(S): REPRESENTATIVE(S) KOTT
04/19/05 (H) READ THE FIRST TIME - REFERRALS
04/19/05 (H) JUD, FIN
04/26/05 (H) JUD AT 1:00 PM CAPITOL 120
04/26/05 (H) Scheduled But Not Heard
04/27/05 (H) JUD AT 1:00 PM CAPITOL 120
04/27/05 (H) Heard & Held
04/27/05 (H) MINUTE(JUD)
02/15/06 (H) JUD AT 1:00 PM CAPITOL 120
02/15/06 (H) <Bill Hearing Canceled>
03/24/06 (H) JUD AT 1:00 PM CAPITOL 120
03/24/06 (H) Heard & Held
03/24/06 (H) MINUTE(JUD)
04/07/06 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
SENATOR FRED DYSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 54.
CHRISTINE McLEOD PATE, Mentoring Attorney
Alaska Network on Domestic Violence & Sexual Assault (ANDVSA)
Sitka, Alaska
POSITION STATEMENT: Testified in support of SB 54.
BRIAN HOVE, Staff
to Senator Ralph Seekins
Senate Judiciary Standing Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke on behalf of the sponsor of SB 298,
Senator Seekins.
STEPHEN E. GREER, Attorney at Law
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 298.
DAVID G. SHAFTEL, Attorney at Law
Law Offices of David G. Shaftel, PC
Anchorage, Alaska
POSITION STATEMENT: Testified on SB 298.
MITCHELL GANS, Professor
Hofstra University School of Law
Hempstead, New York
POSITION STATEMENT: Testified that SB 298 [Version X, addresses
his concerns].
BETHANN B. CHAPMAN, Attorney at Law
Faulkner Banfield, PC
Juneau, Alaska
POSITION STATEMENT: During hearing of SB 298, answered
questions.
JONATHAN BLATTMACHR, Attorney at Law
Milbank, Tweed, Hadley & McCloy, LLP
New York, New York
POSITION STATEMENT: During hearing of SB 298, opined that the
legislation will continue to cause most of his clients to choose
Alaska [to establish a trust].
RICHARD W. HOMPESCH, II, Attorney at Law
Hompesch & Evans, PC
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 298.
PATRICK LUBY, Advocacy Director
AARP Alaska
Anchorage, Alaska
POSITION STATEMENT: During discussion of SB 298, encouraged the
committee to continue to improve the bill and forward it from
committee; during discussion of HB 276, provided comments and
recommended that the current enforcement system be left as is.
DOUGLAS BLATTMACHR, President
Chief Executive Officer
Alaska Trust Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 298.
RICHARD S. THWAITES, JR, Attorney at Law
Thwaites, JR. LLC;
Chairman
Alaska Trust Company Board
Alaska Trust Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 298.
MIKAYLA SAITO, Intern
to Representative Reggie Joule
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided comments on behalf of the sponsor
of HB 413, Representative Joule.
DAVID HULL, Chief
North Tongass Volunteer Fire Department (NTVFD)
Ketchikan, Alaska
POSITION STATEMENT: During discussion of HB 413, testified on
behalf of the NTVFD and on behalf of Scott Davis, Chief of the
South Tongass Volunteer Fire Department (STVFD).
STEVEN "RUSTY" BELANGER, Assistant State Fire Marshal
Central Office
Division of Fire Prevention
Department of Public Safety (DPS)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 413.
JOHANNA BALES, Excise Audit Manager
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Provided a comment regarding recommended
changes during the discussion of HB 413, Version F.
DUANE BANNOCK, Director
Division of Motor Vehicles (DMV)
Department of Administration (DOA)
Anchorage, Alaska
POSITION STATEMENT: Provided comments during discussion of
HB 347.
ROGER HAMES, President
Hames Corporation
Sitka, Alaska
POSITION STATEMENT: During discussion of HB 276, provided a
comment.
MICHAEL ELERDING, President
Northern Sales Company of Alaska, Inc.
Ketchikan, Alaska
POSITION STATEMENT: Urged passage of HB 276.
CYNTHIA DRINKWATER, Assistant Attorney General
Commercial/Fair Business Section
Civil Division (Anchorage)
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Expressed concerns regarding HB 276,
Version S.
MICHAEL FORD
Alaska Native Health Board (ANHB)
Anchorage, Alaska
POSITION STATEMENT: Suggested a change to HB 276, Version S.
MICHELLE TOOHEY, Director
Public Relations & Advocacy
American Lung Association of Alaska
Anchorage, Alaska
POSITION STATEMENT: Relayed that the American Lung Association
of Alaska does not support HB 276, Version S.
RICHARD MANDSAGER, M.D., Director
Central Office
Division of Public Health
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 276, provided
comments and urged the committee to retain some length of
mandatory suspension for a first offense.
ACTION NARRATIVE
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting to order at 1:19:17 PM. Representatives
McGuire, Gara, Wilson, and Kott were present at the call to
order. Representatives Anderson and Gruenberg arrived as the
meeting was in progress.
SB 54 - PROTECTIVE ORDERS FOR SEXUAL ASSAULT
1:19:55 PM
CHAIR McGUIRE announced that the first order of business would
be CS FOR SENATE BILL NO. 54(FIN), "An Act amending protective
order statutes for crimes involving stalking to include crimes
involving sexual assault and sexual abuse, to provide for other
relief ordered by a court, to add the protective orders to a
centralized registry, to prevent denial solely for a lapse of
time, and to require notification of the court of known civil or
criminal actions involving the petitioner or respondent;
relating to notifications to victims of sexual assault and to
mandatory arrest for crimes involving violation of protective
orders and violation of conditions of release; and amending Rule
65, Alaska Rules of Civil Procedure."
REPRESENTATIVE GARA noted that he doesn't have any questions
regarding SB 54.
1:21:31 PM
SENATOR FRED DYSON, Alaska State Legislature, sponsor of SB 54,
relayed that some judges are not allowing rape and [sexual]
assault victims to obtain a restraining order because Alaska law
is not specific enough. Therefore, SB 54 primarily adds sexual
assault to the categories of stalking and domestic violence,
[which have access to protective orders]. The legislation also
requires the alleged victim to inform the judge if there are
other pending actions between the victim and the perpetrator.
Senator Dyson acknowledged that some restraining orders have
been requested based on spite or maneuver during divorce
hearings. However, he opined that the aforementioned almost
never occurs in sexual assault cases.
1:23:48 PM
CHRISTINE McLEOD PATE, Mentoring Attorney, Alaska Network on
Domestic Violence & Sexual Assault (ANDVSA), began by noting her
support of SB 54. She informed the committee that she has
worked in the field of domestic violence and sexual assault for
over 13 years. She then reminded the committee that the state
ranks number one for sexual assault and the state's forcible
rape rate is 2.5 times the national average. This legislation,
she explained, would create a much-needed remedy for sexual
assault victims who are not intimate partners with the person
who sexually assaulted them by allowing them to obtain a
protection order. She noted that Standing Together Against Rape
(STAR) has repeatedly brought forward this request. Ms. Pate
concluded by urging the committee pass SB 54 out of committee.
CHAIR McGUIRE shared her view that SB 54 is further clean up of
statute with regard to protective orders.
REPRESENTATIVE GARA offered his understanding that if someone is
arrested or sentenced for sexual assault, it's a standard
condition of bail or sentencing that there be no contact by the
alleged perpetrator with the victim. Therefore, he assumed that
there must be some circumstance in which there is no arrest and
the bail and sentencing conditions don't apply.
MS. PATE said that is correct, adding that there is under-
prosecution in this area and thus some of the cases don't result
in criminal prosecutions. Ms. Pate then highlighted that SB 54
provides more specific remedies than a criminal no-contact
order, and, in that sense, is probably more enforceable if
there's a violation.
CHAIR McGUIRE, upon determining no one else wished to testify,
closed public testimony on SB 54.
1:27:47 PM
REPRESENTATIVE KOTT moved to report CSSB 54(FIN) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSSB 54(FIN) was
reported from the House Judiciary Standing Committee.
SB 298 - TRUSTS: CHALLENGES; CLAIMS; LIABILITIES
1:28:10 PM
CHAIR McGUIRE announced that the next order of business would be
CS FOR SENATE BILL NO. 298(JUD), "An Act relating to loans from
trust property; relating to a trustee's power to appoint the
principal of a trust to another trust; relating to challenges
to, claims against, and liabilities of trustees, beneficiaries,
and creditors of trusts and of trusts and estates; relating to
individual retirement accounts and plans; relating to certain
trusts in divorce and dissolutions of marriage situations; and
providing for an effective date." [Before the committee was HCS
CSSB 298(L&C).]
1:28:26 PM
BRIAN HOVE, Staff to Senator Ralph Seekins, Senate Judiciary
Standing Committee, Alaska State Legislature, speaking on behalf
of the sponsor, Senator Seekins, relayed that SB 298 is another
in a sequence of bills intended to keep Alaska competitive in
the trust industry. This legislation, he opined, allows trust
business and assets "to flow this way" and provides "clean
industry" to the legal, accounting, and banking businesses [of
Alaska].
1:31:19 PM
STEPHEN E. GREER, Attorney at Law, said he is supportive of the
bill but would defer to its three drafters: David Shaftel, Beth
Chapman, and Jonathan Blattmachr. He relayed that he has not
heard objections from any quarter, and said, "Most of this is a
cleanup matter."
1:32:27 PM
DAVID G. SHAFTEL, Attorney at Law, Law Offices of David G.
Shaftel, PC, relayed that he has been a member of a group of
attorneys and trust officers who have participated in drafting
proposed legislation [for Alaska] since 1997, and explained that
SB 298 provides some procedural changes, some new provisions -
all of which he characterized as being "very sound." He said
the bill would be beneficial in the planning and administering
of trusts and estates for those clients with Alaska residency,
as well as make Alaska a more competitive market for
nonresidents desiring to do trust business in this state. He
highlighted that Alaska is foremost of eight states with similar
laws and that the legislature - via the adoption of specific
legislation - has enabled Alaska to remain in this lead
position.
REPRESENTATIVE GRUENBERG offered his belief that if one has a
spendthrift trust, it's not generally considered property that's
going to be divisible in a divorce, but noted that the last
sentence of Section 14 says:
Unless otherwise agreed to in writing by the parties
to the marriage, this subsection does not apply to a
settlor's interest in a self-settled trust with
respect to assets transferred to the trust after the
settlor's marriage.
REPRESENTATIVE GRUENBERG opined that "it would be imminently
fair" for the court to divide the trust assets in a divorce
situation; he suggested, therefore, that a phrase be added to
the end of Section 14 to read, "or immediately before the
marriage in contemplation of marriage."
CHAIR McGUIRE asked what effect [such a change] would have on
prenuptial agreements.
REPRESENTATIVE GRUENBERG suggested that a prenuptial agreement
means "otherwise agreed to in writing." He explained that the
reason for including the [exception for self-settled trusts in
Section 14] is so that a trust is not established during a
marriage for the purpose of ensuring that the trustee's property
is not divided upon a divorce of that marriage. He said that he
sees no difference between those trusts established during
marriage and those established when "in contemplation of
marriage."
1:38:42 PM
MR. SHAFTEL informed the committee that prior to a marriage, a
prospective spouse can transfer property into a "self-settled,
discretionary, spend-thrift trust" prior to marriage and that
trust would then not be subject to division in a subsequent
divorce. He explained that the aforementioned sentence is being
added to ensure that a person could not, after a marriage, put
[a spouse's] assets into a self-settled, discretionary, spend-
thrift trust so as to have those assets protected against a
property division in a subsequent divorce. He said he does not
interpret this additional language as anything to be concerned
about, and suggested that should a person's fiancé not be
agreeable to a prenuptial agreement, a possible remedy would be
to not proceed with the marriage.
REPRESENTATIVE ANDERSON surmised that this section prohibits a
married party from transferring assets into a trust after the
marriage occurred in order to protect his/her assets.
REPRESENTATIVE GRUENBERG disagreed, and pointed out that AS
25.24.160(a)(4) currently says in part:
(a) In a judgment in an action for divorce or
action declaring a marriage void or at any time after
judgment, the court may provide ...
(4) for the division between the parties of their
property, including retirement benefits, whether joint
or separate, acquired only during marriage, in a just
manner and without regard to which of the parties is
in fault; however, the court, in making the division,
may invade the property, including retirement
benefits, of either spouse acquired before marriage
when the balancing of the equities between the parties
requires it; ...
REPRESENTATIVE GRUENBERG specified that normally one can't
[invade the property] unless there are special circumstances
that require the court to do so. He then informed the committee
that property acquired during the marriage by inheritance or
gift is considered separate property as opposed to joint
property.
REPRESENTATIVE GRUENBERG surmised that Section 14 would ensure
that in the event of a divorce or dissolution, the beneficiary's
interest is not considered property subject to division under AS
25.24.160, and therefore the court couldn't invade [the
property] even under special circumstances that require a
balancing of the equity.
1:45:29 PM
MR. SHAFTEL said a primary concern is that if there is a
divorce, trust assets would be divided between both spouses and
their children rather than remaining protected in the trust.
The statutory laws of New York and California, he relayed,
expressly provide that assets in trust cannot be divided in a
subsequent divorce; however, there have been some recent cases
in Colorado and other states that have moved in a variety of
different directions and created some concern in this area, and
this has led the informal group of which he is a member to
propose the language of Section 14 so as to provide clarity on
this matter. This is an extremely important policy provision,
he opined.
REPRESENTATIVE GRUENBERG indicated that he is concerned that a
trust established just prior to a marriage could be improperly
used by one spouse to keep what would normally be considered
joint assets from being considered as such by the court in a
subsequent divorce proceeding.
CHAIR McGUIRE opined that Representative Gruenberg's suggested
additional language won't clarify that [issue] because the
language refers to "trust assets set aside in contemplation of a
marriage". She pointed out that there could be a situation in
which an individual sets up a trust and sets aside assets for
possible [future] children, marries, and then places those
assets in the trust. Without clarifying it in state law, a
judge could decide to invade the corpus of that trust thus
defeating the purpose for which the trust was established.
REPRESENTATIVE GRUENBERG conceded that the language he proposed
is too broad, and explained that he is attempting to address
situations in which an individual establish a trust immediately
before a marriage, in contemplation of it, with the individual
as the beneficiary. He offered his understanding that a self-
settled trust is a trust that one establishes for
himself/herself and specifies himself/herself as the
beneficiary.
MR. SHAFTEL concurred. He asked Representative Gruenberg
whether he could specify the period of time he would consider to
be "immediately before."
REPRESENTATIVE GRUENBERG suggested one month. He specified that
he is referring to a time period in which the individual is
absolutely getting married and is merely attempting to defeat
the spouse's interest under AS 25.24.160.
[Chair McGuire turned the gavel over to Representative
Anderson.]
REPRESENTATIVE ANDERSON asked whether a spouse in such a
situation could simply argue that the trust was established in
advance just for that purpose, and, if so, would there really be
a need to change the statute.
MR. SHAFTEL said it doesn't matter when the trust is
established, rather the key point is when the assets get
transferred to the trust. For example, if substantial assets
were transferred to a self-settled trust five years after the
marriage, those assets wouldn't be protected from being
considered and divided in a subsequent divorce action. The
aforementioned is why [Section 14] was included. With regard to
Representative Gruenberg's concern, Mr. Shaftel said that if
assets are transferred prior to a marriage, those assets belong
to the individual who is not yet married. Unless there has been
some representation made to the fiancé, an argument can be made
that a transfer prior to the marriage should be completely
protected. The committee could decide to maintain that policy
and leave the provision as it is.
1:58:58 PM
MR. SHAFTEL suggested, however, that if the committee desired to
amend the legislation, the committee could simply add a
provision that specifies that if a transfer is made to a trust
within the 30-day period prior to marriage, the transferring
party would need to notify the other party that such a transfer
is being made. The aforementioned would allow the fiancé to be
aware of what is happening; then, if it was of concern, the
fiancé would have the choice of not entering into the marriage.
MR. SHAFTEL, in response to a question, suggested that language
such as, "unless written notice of a transfer is given within 30
days prior to marriage" could be inserted. In response to
another question, he explained that any assets that were
transferred after the marriage and the growth of those assets
would not be protected and could be divided if there was a
subsequent divorce.
REPRESENTATIVE GRUENBERG characterized Mr. Shaftel's suggestion
as a good amendment. H remarked that if the funds put in the
self-settled trust were acquired from a relative as a gift or
bequest, then it would be considered separate property that
could only be invaded under the divorce law if the special
equity provision required it, though any "marital funds" [could
be invaded].
MR. SHAFTEL agreed.
REPRESENTATIVE GRUENBERG suggested that Mr. Shaftel's concept
could be the genesis of an acceptable amendment.
MR. SHAFTEL reiterated that the concept would be that if someone
transfers assets into a self-settled trust 30 days prior to a
marriage, that party must give the fiancé notice of that
transfer in order to obtain the protection provided by
[Section 14].
2:05:44 PM
REPRESENTATIVE GRUENBERG [made a motion] to adopt Conceptual
Amendment 1 such that if assets are transferred by one party to
the marriage to a self-settled trust within 30 days before the
marriage, the transferor must give written notice to the other
party of the transfer.
There being no objection, Conceptual Amendment 1 was adopted.
2:06:45 PM
MITCHELL GANS, Professor, Hofstra University School of Law,
noted that Alaska's statute of limitations on an informal
accounting is 24 months, and characterized this as problematic
from the perspective of both equity and efficiency because, for
a formal accounting, one can go to court and trigger a statute
of limitations period of 60 days or 90 days, and this would seem
to be unfair and inequitable.
MR. GANS said that with regard to efficiency, it would seem that
if the trustee wanted to qualify for the shorter period, the
trustee simply has to go through the formal procedure and
petition the court. However, to avoid the cost of a formal
accounting or petition, the [trustee] would have to wait two
years, and the consequence of that is that it imposes costs on
the trust, which would be borne by the beneficiary. In terms of
protecting the rights of the beneficiary, it would seem that if
the period were shortened and there were to be a focused
timeframe within which there must be a decision, it would be
more likely for the beneficiary to focus on and protect his/her
rights rather than to allow them to expire or lapse
inadvertently.
REPRESENTATIVE ANDERSON asked if Mr. Gans had spoken with the
sponsor of the legislation or its supporters.
MR. GANS replied no.
2:10:17 PM
BETHANN B. CHAPMAN, Attorney at Law, Faulkner Banfield, PC,
offered her belief that Mr. Gans's concerns have been addressed
such that the inconsistencies between an interim report and a
final report have been resolved.
MR. GANS agreed that the current version of the bill alleviates
his concerns.
2:11:43 PM
JONATHAN BLATTMACHR, Attorney at Law, Milbank, Tweed, Hadley &
McCloy, LLP, informed the committee that he has been involved
with Alaska trust legislation since its inception. He estimated
that probably nine out of ten of his clients choose Alaska [in
which to establish a trust]. The proposal before the committee,
he opined, will certainly result in most of his clients
continuing to choose Alaska.
2:12:52 PM
RICHARD W. HOMPESCH, II, Attorney at Law, Hompesch & Evans, PC,
relayed his support for SB 298.
2:13:22 PM
PATRICK LUBY, Advocacy Director, AARP Alaska, encouraged the
committee to continue to improve SB 298 and forward it from
committee.
2:13:55 PM
DOUGLAS BLATTMACHR, President, Chief Executive Officer, Alaska
Trust Company, relayed his support for SB 298, adding his belief
that it will continue to improve what Alaska has to offer, and
thus continue to attract business to the state.
2:14:11 PM
RICHARD S. THWAITES, JR, Attorney at Law, Thwaites, JR. LLC;
Chairman, Alaska Trust Company Board, Alaska Trust Company,
relayed his support for SB 298.
REPRESENTATIVE ANDERSON, upon determining that no one else
wished to testify, closed public testimony on SB 298.
REPRESENTATIVE GARA said that he is concerned that [the bill]
might limit the rights beneficiaries in relation to trustees;
for example, two changes proposed will reduce the period of time
in which a beneficiary can make a claim: Section 6 changes
notice of a court proceeding from 90 days to 60 days, and
changes the timeframe in which a beneficiary can file a claim
from 60 days to 45 days. He asked if the aforementioned is
really necessary, and offered his recollection of there being a
battle over this a few years ago that resulted in the changes
not being included in the legislation [that was adopted then].
MR. DOUGLAS BLATTMACHR offered his understanding that these
changes are meant to provide consistency with the probate code.
MS. CHAPMAN said the proposed change is intended to address an
inconsistency within the statute that currently specifies that
90 days' notice of the court proceeding is required, and that
the beneficiary then has 60 days after receiving the report [to
file a claim with the court]. Because currently the time that
the report is provided to the beneficiary and the time the
petition is filed can be two different times, the desire was to
tie everything to the same date, and this will make the trust
laws consistent with the probate code so that there isn't a lot
of distinction between whether one is a beneficiary of a trust
or of an estate. Furthermore, even at the reduced time frames
of 60 days and 45 days, it's substantially longer than what's
currently provided under the probate code.
MS. CHAPMAN explained if she were to be the personal
representative of an estate and she intended to issue her final
accounting and file it with the court for approval of the
accounting so as to terminate her authority, under the probate
code, she would only be required to provide 14 days notice of
the hearing. This means that the hearings occur within 14 days
and the beneficiaries aren't given any additional length of time
in which to respond. The probate code also includes a provision
that allows [the personal representative] to give notice of the
distribution of the estate to a beneficiary with only 30 days'
notice; if the beneficiary doesn't object within 30 days, the
beneficiary's rights are terminated. "While we are trying ...
to align trusts and estates similarly, we didn't feel it was
appropriate to go so far as the probate code [does] when we're
working with an estate," she explained. Therefore, what was
deemed to be a reasonable timeframe was proposed in the current
version of SB 298.
2:19:14 PM
REPRESENTATIVE GARA, in noting that Section 6 allows [45] days
to file a claim and Section 7, unless changed, allows two years
to do so, asked what the difference is between the claims
referred to in each section.
MS. CHAPMAN explained that for those claims wherein the court is
used to formally approve the accounting, then the 60-day notice
applies. Under the current law, she continued, when relying on
just the general statute of limitations and it's an interim
report, then a two-year statute of limitations applies. The
proposal is to reduce this to a six-month period so there won't
be a distinction between an interim report and a final report.
REPRESENTATIVE said he is uncomfortable reducing the amount of
time that a beneficiary has to file a claim against a trustee.
He opined that the two-year period addressed in Section 7 is
very consistent with most statute of limitations and thus
whittling the period down to six months is of concern, adding
that he doesn't want to diminish the rights of beneficiaries
solely to maintain a competitive edge with other states.
MS. CHAPMAN explained that in comparing trusts and estate claims
to personal injury claims, which have a two-year statute of
limitations, the former are "generally not subject to any of
those limitation periods because they are equitable in nature."
She said that it is important to look at the history of the
statute. Prior to the 2003 Act, there were two limitation
periods: a six-month period if a final account was provided to
the beneficiary, and a three-year period if there had been a
lack of full disclosure. In the legislation of 2003, the intent
was to eliminate the distinction between an interim report and a
final report. She explained that the reason it's referred to as
a "report" instead of an "accounting" is because the latter has
specific legal definitions of what an actual accounting is.
MS. CHAPMAN relayed that given that the beneficiary is provided
information about the trust, the intent was to ensure that there
was a limitation period that was the same regardless of whether
it was "while the trust was still going on or while it was a
final report terminating the relationship." The legislation
that was passed out in 2003, however, did include a distinction
between interim reports and final reports which, she opined,
causes significant confusion. In returning to a six-month
period, she said, "We are looking to protect beneficiaries ...
to ensure that when we transfer assets out of trusts, we do so
with some certainty to the beneficiaries." She relayed that the
return to a six-month period now includes additional
requirements for the trustee to follow, and provides "very clear
language to the beneficiary of what their rights are" as well as
notifying them of the length of the limitation period.
[Representative Anderson returned the gavel to Chair McGuire.]
MS. CHAPMAN noted that should a trustee fail to do either of
"these," then he/she would no longer have the benefit of the
shortened statute of limitations - it would revert to the three-
year period. She again expressed her belief that having two
separate statute of limitations for an interim report and a
final report causes confusion.
2:25:54 PM
REPRESENTATIVE GARA recalled past efforts to [shorten] the
statute of limitations and said that he is still "uncomfortable
reducing the amount of time somebody has to claim that a trustee
has charged too much money [and] mishandled the trust"
especially in what he characterized as delicate and trying
circumstances.
MS. CHAPMAN reiterated that having two different time periods
causes confusion to beneficiaries. She suggested, therefore,
that a six-month statute of limitations be required for any
report and that beneficiaries be notified of the length of this
time period.
REPRESENTATIVE GARA surmised that most beneficiaries have never
had a prior trust and that notice is given each time
beneficiaries receive an interim report as to what any filing
deadlines are.
MS. CHAPMAN again reiterated that having two statute of
limitations is confusing and could cause individuals to wonder
what the actual statute of limitations is, particularly when
receiving more than one report. One of the things that
[attorneys] try to do with estates and trusts is to provide
certainty to beneficiaries to ensure that further claims will
not be made on those assets once distributed. Furthermore, she
informed the committee, should a trustee be later accused of
mishandling the estate and the court determines that the trustee
is not at fault, that trustee is entitled reimbursement of legal
fees from that trust. In response to a question, she relayed
that no part of the bill is retroactive.
2:31:32 PM
REPRESENTATIVE GARA made a motion to adopt Amendment 2, labeled
24-LS1113\X.1, Bannister, 4/7/06, which read:
Page 4, lines 2 - 4:
Delete "within [24 MONTHS AFTER RECEIPT OF THE
REPORT IF IT IS AN INTERIM REPORT OR WITHIN] six
months after receipt of the report [IF IT IS A FINAL
REPORT],"
Insert ", if the claim is related to a monetary
benefit for the trustee, within 24 months after
receipt of the report if it is an interim report or
[WITHIN] six months after receipt of the report if it
is a final report, or, for other claims, within six
months after receipt of the report,"
Page 4, line 14, following "BEGUN":
Insert ", IF THE CLAIM IS RELATED TO A MONETARY
BENEFIT FOR THE TRUSTEE, WITHIN 24 MONTHS AFTER YOU
RECEIVE THIS REPORT IF THIS REPORT IS AN INTERIM
REPORT OR SIX MONTHS AFTER YOU RECEIVE THIS REPORT IF
THIS REPORT IS A FINAL REPORT, OR, FOR OTHER CLAIMS,"
Page 7, line 28:
Delete all material.
Renumber the following bill sections accordingly.
REPRESENTATIVE ANDERSON objected.
REPRESENTATIVE GARA explained that Amendment 2 would change the
statute of limitations to a two-year period - one, he opined,
that a beneficiary faced with challenges should have. He said
the two-year period should be retained "when it involves a claim
against the trustee for monetary benefits the trustee should or
shouldn't have received."
REPRESENTATIVE GRUENBERG opined that this discussion involves
three different issues: what the statute of limitations should
be, whether there should be two different statutes of
limitations, and the effects of possible claims made by trustees
for reimbursement by the beneficiaries. He said he interpreted
Ms. Chapman's main argument to be that it's very confusing to
have two different statutes of limitations. Representative
Gruenberg suggested that Representative Gara might consider one
single statute of limitation and that Ms. Chapman could provide
input as to what that limitation might be. As for the third
issue, Representative Gruenberg suggested that language be added
to the bill to prevent any possible harm to the beneficiary,
perhaps even requiring something like that a bond be maintained
for the period of the statute of limitations. This bond, he
said, would only be paid to the amount of the trustee's legal
fees and costs and "basically make it easier ... for the
beneficiaries to pay those costs in that unlikely event - either
that or retaining a portion of the trust for that [purpose]."
2:35:23 PM
MS. CHAPMAN, addressing Representative Gruenberg's suggestion of
maintaining a bond, informed the committee that many of the
[beneficiaries] in these situations either don't have the
wherewithal to post a bond or the commercial bonds are too
difficult and costly to obtain.
REPRESENTATIVE GRUENBERG mentioned that there is a court rule
that specifically says that a person can file with the court the
amount of his or her worth and then the court must approve a
bond for that amount.
MS. CHAPMAN expressed her belief that in the context of a trust
and a distribution, it makes sense to ask beneficiaries to post
bonds. She said she understands concerns about trustee fees;
however, when terminating a trust, and given the fiduciary
relationship between the trustee and the beneficiary, it is hard
to have a law requiring that a beneficiary post a bond in order
to receive his or her distribution.
CHAIR McGUIRE, referring to Representative Gruenberg's
suggestions on revising the statute of limitations, asked Ms.
Chapman if she would support a different period of time other
than the six-month period she recommended.
MS. CHAPMAN maintained her belief that the six-month period is
appropriate.
2:38:37 PM
A roll call vote was taken. Representatives Gara and Gruenberg
voted in favor of Amendment 2. Representatives Kott, Anderson,
McGuire, and Wilson voted against it. Therefore, Amendment 2
failed by a vote of 2-4.
REPRESENTATIVE GRUENBERG, referring to Section 6, lines 22 and
26, asked Ms. Chapman whether the changes to the number of days
"makes [the bill] conform to the probate code."
MS. CHAPMAN said that it actually allows more time than does the
probate code, which allows 14 days for any hearing.
2:39:52 PM
REPRESENTATIVE ANDERSON moved to report HCS CSSB 298(L&C), as
amended, out of committee with individual recommendations and
zero fiscal notes. There being no objection, HCS CSSB 298(JUD)
was reported from the House Judiciary Standing Committee.
HB 413 - BURNING CAPABILITY OF CIGARETTES
2:40:26 PM
CHAIR McGUIRE announced that the next order of business would be
HOUSE BILL NO. 413, "An Act relating to the burning capability
of cigarettes being sold, offered for sale, or possessed for
sale; and providing for an effective date." [Before the
committee was CSHB 413(STA); in members' packets was a proposed
committee substitute (CS) for HB 413, Version 24-LS1495\F,
Bannister, 4/5/06.]
2:40:37 PM
MIKAYLA SAITO, Intern to Representative Reggie Joule, Alaska
State Legislature, relayed on behalf of the sponsor,
Representative Joule, that HB 413 establishes a standard of
safety by [requiring a reduction in the ignition propensity of
cigarettes sold in Alaska], and that similar legislation has
been introduced in the states of New York and California.
2:41:48 PM
DAVID HULL, Chief, North Tongass Volunteer Fire Department
(NTVFD), after relaying that he is also speaking on behalf of
Scott Davis - Chief of the South Tongass Volunteer Fire
Department (STVFD) - pointed out that a cigarette has been
involved in every one of the several fire deaths he has had to
deal with in his over 30 years' of experience in firefighting
and emergency medical service (EMS). He opined that HB 413
raises a lifesaving issue, and thus the tobacco industry should
not be a primary participant in the discussion; rather the
people should be the primary participants.
MR. HULL referred to the findings and intent section of HB 413
and noted that one of the findings states that cigarettes are
the leading cause of fire-related deaths in the U.S. each year,
claiming a 1,000 lives and causing nearly 2,000 injuries and
nearly $400,000 in direct property damage; furthermore, he
remarked, Alaska leads in every one of those categories. The
simple technology to significantly reduce such deaths and
carnage is already available, other states have already enacted
legislation similar to HB 413, and Alaska should join those
other states. One really need look no further than Cable News
Network (CNN) reports regarding how this type of legislation
would benefit not only those who smoke [and their families] but
the EMS personnel who must respond to fires that result from
cigarettes.
MR. HULL pointed out that the severe fire aboard a Princess
cruise ship in the Caribbean was caused by a discarded,
unattended cigarette. Furthermore, on the cruise ship docks in
Ketchikan, people discard their lit cigarettes on the dock on
dry days and those cigarettes get in between the pieces of
lumber that make up the docks and smolder, and the fire
departments are called in a few hours later to fight a dock
fire, and although most such fires are small, at least once a
year a major fire erupts. If not for the quick and expert
response by the Ketchikan Fire Department, he relayed, these
fires would have easily spread underneath the buildings and
simply burnt away the foundations of millions of dollars in real
estate, not to mention the potential loss of jobs, taxes, and
human lives that were put in danger by a cigarette that didn't
self-extinguish. Furthermore there is also the danger that
firefighters face in responding to such fires.
MR. HULL, in conclusion, asked members to choose lives over the
needs of tobacco industry stockholders by supporting HB 413.
2:46:27 PM
STEVEN "RUSTY" BELANGER, Assistant State Fire Marshal, Central
Office, Division of Fire Prevention, Department of Public Safety
(DPS), relayed that the DPS supports the passage of HB 413.
Alaska has one of the highest per capita fire fatality rates in
the nation, he remarked, adding that over the last 10 years,
one-fourth of Alaska's fire fatalities have been caused by
cigarettes. Often, those dying are not the smokers themselves,
but rather their family members and friends. Via advances in
technology and the tobacco market, there now exists the means by
which to address a significant portion of this horrific fire
record; by requiring cigarettes [being sold in Alaska] to comply
with already existing burning standards in major U.S. markets
and in all of Canada, Alaska can begin to enjoy a reduction in
fire fatalities and property loss.
MR. BELANGER remarked that it will be easier to address the
ignition propensity of cigarettes than it would be to regulate
all the home furnishings that are often typically ignited by
unattended cigarettes. He remarked that this is not an anti-
smoking issue but is instead a life- and property-conservation
issue; all manufacturers can and do produce these types of
cigarettes already, and so [passage of HB 413] will not affect
revenues or retailers. "This bill makes good sense for Alaska,
and I ask you to help us as we do what we can to reduce our
fire-loss record," he concluded.
2:48:33 PM
JOHANNA BALES, Excise Audit Manager, Tax Division, Department of
Revenue (DOR), noted that although the DOR had recommended some
changes to the sponsor, not all of them were incorporated into
the CS.
REPRESENTATIVE GRUENBERG moved to adopt the proposed committee
substitute (CS) for HB 413, Version 24-LS1495\F, Bannister,
4/5/06, as the work draft. There being no objection, Version F
was before the committee.
MS. SAITO acknowledged that although the changes recommended by
the DOR were submitted to Legislative Legal and Research
Services, not all of them were included in Version F. She
suggested that perhaps some of the recommendations were simply
overlooked by the drafter.
CHAIR McGUIRE set HB 413, Version F, aside for the purpose of
allowing the sponsor time to work further with the DOR regarding
its recommendations.
[Later in the meeting Representative Gruenberg mentioned that
he'd be helping the sponsor and his staff work on HB 413.]
HB 347 - MOTOR VEHICLE INSURANCE & NOTICE
2:50:19 PM
CHAIR McGUIRE announced that the next order of business would be
HOUSE BILL NO. 347, "An Act relating to mandatory motor vehicle
insurance, license suspensions, and notices relating to motor
vehicles and driver's licenses." [Before the committee was CSHB
347(STA).]
REPRESENTATIVE GARA, speaking as the sponsor, noted that Tom
McGrath had expressed a valid concern at the bill's last
hearing, and so he is willing to add language to address that
concern. Currently there is no mandatory fine for the crime of
driving without insurance, and the fine for a class B
misdemeanor doesn't necessarily apply, and so it is actually
cheaper to drive without insurance because any fines levied will
be less than the cost of insurance.
REPRESENTATIVE GARA said he has a proposed amendment that would
make driving without insurance a class B misdemeanor and would
establish a mandatory minimum fine of $500; that proposed
amendment was labeled 24-LS1372\F.2, Luckhaupt, 4/6/06, and
read:
Page 1, following line 12:
Insert a new bill section to read:
"* Sec. 3. AS 28.22.019 is amended by adding a new
subsection to read:
(d) A person convicted under this section is
guilty of a class B misdemeanor and may be punished as
provided in AS 12.55, except that a fine of at least
$500 must be imposed."
Renumber the following bill sections accordingly.
CHAIR McGUIRE referred to that proposed amendment as
Amendment 1.
2:53:18 PM
DUANE BANNOCK, Director, Division of Motor Vehicles (DMV),
Department of Administration (DOA), after relaying that he would
not able to speak to Amendment 1 because it falls outside the
purview of the DMV, stated that the DMV is "in love with" [what
is currently Section 3 of CSHB 347(STA) - proposed AS
28.22.041(f)] - and is grateful to the sponsor [for including
that provision].
REPRESENTATIVE GARA made a motion to adopt Amendment 1. There
being no objection, Amendment 1 was adopted.
2:54:13 PM
REPRESENTATIVE GRUENBERG moved to report CSHB 347(STA), as
amended, out of committee with individual recommendations and
the accompanying zero fiscal notes. There being no objection,
CSHB 347(JUD) was reported from the House Judiciary Standing
Committee.
HB 276 - BUSINESS LICENSE TOBACCO ENDORSEMENT
2:54:33 PM
CHAIR McGUIRE announced that the final order of business would
be HOUSE BILL NO. 276, "An Act relating to business license
endorsements for tobacco products, to holders of business
license endorsements for tobacco products, and to the employees
and agents of holders of business license endorsements for
tobacco products." [Left pending from 3/24/06 was a motion to
adopt the proposed committee substitute (CS) for HB 276, Version
24-LS0855\L, Bannister, 3/23/06, as the work draft; in members'
packets was another proposed committee substitute (CS) for HB
276, Version 24-LS0855\S, Bannister, 3/31/06.]
REPRESENTATIVE KOTT, speaking as the sponsor, relayed that in
the proposed CS, Version S, Section 1 still increases the
penalty to $750 for a first offense but now allows an
endorsement holder to come before a hearing officer, and Section
3 now contains the language pertaining to that hearing.
2:56:11 PM
REPRESENTATIVE ANDERSON moved to adopt the proposed committee
substitute (CS) for HB 276, Version 24-LS0855\S, Bannister,
3/31/06, as the work draft. There being no objection, Version S
was before the committee.
2:57:20 PM
ROGER HAMES, President, Hames Corporation, said simply that he
supports Version S as being something he can live with though
doing so will be difficult.
2:57:59 PM
MICHAEL ELERDING, President, Northern Sales Company of Alaska,
Inc., simply urged passage of HB 276.
2:58:26 PM
CYNTHIA DRINKWATER, Assistant Attorney General, Commercial/Fair
Business Section, Civil Division (Anchorage), Department of Law
(DOL), relayed that she represents the Department of Commerce,
Community, & Economic Development (DCCED) in administrative
hearings held under AS 43.70.075, and that she would be speaking
to three issues. First, the language in Version S is
potentially confusing. For example, proposed AS 43.70.075(d)(1)
says in part, "after a hearing under (t) of this section", and
the following paragraphs (2) through (4) don't contain similar
language, but proposed AS 43.70.075(t) says in part, "this
subsection governs the imposition ... of the business license
endorsement suspension and civil penalty under (d) of this
section". Thus there is some confusion regarding when
subsection (t) will apply because it appears to pertain to all
of proposed AS 43.70.075(d).
REPRESENTATIVE KOTT, in response to questions, clarified that
the hearing referred to in AS 43.70.075(d)(1) should only apply
for a first offense.
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 1, to
change "(d)" on page 2, line 27, to "(d)(1)". There being no
objection, Amendment 1 was adopted.
MS. DRINKWATER then referred to the language in Section 3 that
says the notice must inform the person of, among other things,
the date and time of the hearing. She said this requirement
will prove difficult because the initial notice goes out from
the DCCED, but the hearing information falls under the purview
of the Office of Administrative Hearings.
3:05:08 PM
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 2, to
delete from page 3, line 1, the words ", and the date and time
of the hearing", and place a period after the word "imposed".
There being no objection, Amendment 2 was adopted.
REPRESENTATIVE WILSON suggested adding language specifying that
the hearing office shall set the date and time of the hearing.
CHAIR McGUIRE characterized that as a conforming amendment.
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 3, to
add to page 3, line 2, after the word "determine", the words
"the date and time of the hearing,".
CHAIR McGUIRE pointed out, however, that notice must still be
given with regard to the date and time of the hearing.
REPRESENTATIVE GRUENBERG restated Amendment 3 and called it
conceptual: "that the [Office of Administrative Hearings] ...
would set the date and time of the hearing and notify the
parties". There being no objection, Conceptual Amendment 3 was
adopted.
MS. DRINKWATER then remarked that it appears that the proposed
change in the statutory framework will mean that there will be
an increase in the number of hearings, because retailers will
have every incentive to request a hearing since there is
discretion regarding the amount of the civil penalty and whether
a suspension shall be imposed. This will result in an increase
in attorney and hearing officer time; furthermore, with the
lengthier hearing process and greater number of items that must
be considered by the hearing officer, proceedings will become
more like they were prior to 2002. Such hearings were lengthy,
multi-day hearings with numerous witnesses and documentary
evidence. She surmised, therefore, that costs will increase
because of these proposed changes.
3:08:55 PM
MICHAEL FORD, Alaska Native Health Board (ANHB), relayed that in
the ANHB's view, the current law is effective and does what it
is intended to do. The ANHB recommends that instead of allowing
for an optional suspension, have a mandatory suspension but
reduce the number of days for a first offense - for example,
provide for a mandatory 3-day suspension. In this way, the law
would still have teeth, it would still act as a deterrent, and
yet retailers would be given some relief. In conclusion, he
said he did share some of the concerns regarding Section 3, but
hopes that those have now been addressed via the aforementioned
amendments.
3:11:03 PM
MICHELLE TOOHEY, Director, Public Relations & Advocacy, American
Lung Association of Alaska, referring to Version S, said that
although education efforts do play a constructive role, their
value must not be overestimated. She elaborated:
We know that businesses with education programs have
been cited for making illegal sales. These illegal
sales are plain evidence that an education program is
not enough. The critical factor is active and
diligent management, and that means there needs to be
meaningful consequences in the case of a violation,
including the first violation. The compliance data
shows that once predictable, readily enforceable and
meaningful penalties were put in place under current
law, illegal sales dropped dramatically. The various
proposals that have been advanced [thus] far - as
HB 276 and subsequent drafts - would eliminate the
certainty of a meaningful penalty for illegal sales in
the case of a first violation.
Under the most current CS, Version S, it would be
possible for a violation to occur and there be no
penalty whatsoever. In conclusion, in order to
preserve the effectiveness of the enforcement program,
we feel strongly that some meaningful level of
suspension is essential to maintain in the case of a
first violation. Businesses that elect to engage in
the sale of tobacco products [have a very] serious
responsibility to ensure that they do not make illegal
sales to children. Therefore, the American Lung
Association of Alaska does not support ... Version S
as written because it does not include a guarantee of
at least a minimum suspension on first offense. Thank
you.
3:13:23 PM
PATRICK LUBY, Advocacy Director, AARP Alaska, said that AARP
members come from a generation that smoked freely, and they know
the terrible health and financial consequences of all those
cigarettes, adding, "We don't want to see anyone's grandchildren
start to smoke." The AARP feels the State is doing a good job
in its enforcement efforts, he relayed, noting that the State is
using 15- and 16-year-olds in its compliance checks; therefore,
if a retailer is selling cigarettes to 15- and 16-year-olds,
then he/she should face the consequences. The AARP recommends
that the current system be left as is in order to help Alaska
continue to reduce youth smoking.
3:14:09 PM
RICHARD MANDSAGER, M.D., Director, Central Office, Division of
Public Health, Department of Health and Social Services (DHSS),
relayed that David Kessler, former commissioner of the Food and
Drug Administration (FDA), has said, "Nicotine addiction begins
when most tobacco users are teenagers, so let's call this what
it really is - a pediatric disease." Dr. Mandsager said that
from the DHSS's point of view, he would echo comments made by
Ms. Toohey and Mr. Luby: current law is working and there needs
to be some minimum mandatory suspension for a first offense.
Enforcement actions only visit a small percentage of retailers
in any given year, and so chances are small that there will be a
second visit within 24 months; therefore, if there isn't a
mandatory suspension of some length for a first offense, it is
unlikely that a license holder will ever get a suspension. In
conclusion, he urged the committee to maintain some suspension
[period] for a first offense.
DR. MANDSAGER, in response to a question, said that a mandatory
suspension period should be at least three days.
CHAIR McGUIRE, after ascertaining that no one else wished to
testify, closed public testimony on HB 276.
3:16:19 PM
REPRESENTATIVE ANDERSON made a motion to adopt Conceptual
Amendment 4, to have the 20-day suspension apply on a second
offense.
The committee took an at-ease from 3:17 p.m. to 3:18 p.m.
REPRESENTATIVE ANDERSON, in response to questions, clarified
that Conceptual Amendment 4 would result in deleting the
language pertaining to a suspension for a first offense but
would keep the language pertaining to the hearing in order to
address the question of whether to impose a civil penalty for a
first offense. He also indicated that Conceptual Amendment 4
would have the 45-day suspension period apply on a third
offense, the 90-day suspension period apply on a fourth offense.
He said he doesn't believe that there should be any restriction
of sales on a first violation, and that he doesn't believe that
removing the mandatory suspension for a first offense will have
any impact on compliance statistics.
CHAIR McGUIRE objected to Conceptual Amendment 4.
REPRESENTATIVE GARA mentioned that the House Finance Committee
might do more work on the bill, and that members could still
attempt to change the bill on the House floor.
REPRESENTATIVE ANDERSON withdrew Conceptual Amendment 4.
3:20:37 PM
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 5,
which read [original punctuation provided]:
page 2 line 27 after "shall" insert
", upon request of either party,"
REPRESENTATIVE GRUENBERG noted that to save costs and time, it
may be that neither party would request a hearing, and Amendment
5 would provide for this. In other words, if neither party
requests a hearing, then a hearing need not be held.
REPRESENTATIVE KOTT agreed that there might be a situation in
which the owner of the business decides he/she doesn't want to
go through the hearing process.
REPRESENTATIVE GRUENBERG remarked, "They could submit it on
documentation and pleadings."
CHAIR McGUIRE asked whether there were any objections to
Amendment 5. There being none, Amendment 5 was adopted.
3:22:07 PM
REPRESENTATIVE GRUENBERG made a motion to adopt Conceptual
Amendment 6, to alter Section 1 such that there would be a
mandatory minimum 3-day suspension period [for a first offense].
REPRESENTATIVE ANDERSON objected.
REPRESENTATIVE GRUENBERG in response to a question, clarified
that Conceptual Amendment 6 would alter the language on page 1,
lines 10-12 so that it read in part, "may, after a hearing under
(t) of this section, suspend the endorsement for a period of 3
to 20 days".
The committee took an at-ease from 3:23 p.m. to 3:24 p.m.
REPRESENTATIVE ANDERSON maintained his objection to Conceptual
Amendment 6.
REPRESENTATIVE GRUENBERG remarked that a CS incorporating the
adopted amendments will be forthcoming.
REPRESENTATIVE KOTT objected to Conceptual Amendment 6. He
posited that by stating a minimum suspension period of 3 days, a
hearing officer will be inclined to always impose at least a 3-
day suspension period unless there are also aggravating factors
in a give case.
REPRESENTATIVE GARA expressed a preference for dealing with this
issue on the House floor, after the bill has been heard and
perhaps changed in the House Finance Committee.
REPRESENTATIVE GRUENBERG withdrew Amendment 6.
3:27:44 PM
REPRESENTATIVE GRUENBERG moved to report the proposed committee
substitute (CS) for HB 276, Version 24-LS0855\S, Bannister,
3/31/06, as amended, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 276(JUD) was reported from the House
Judiciary Standing Committee.
CHAIR McGUIRE concluded by saying, "I cannot stress enough that
the movement of this bill today in no way endorses anybody's
personal opinion on the bill."
ADJOURNMENT
3:28:00 PM
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:28 p.m.
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