02/16/1998 03:21 PM House L&C
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 16, 1998
3:21 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chairman
Representative John Cowdery, Vice Chairman
Representative Jerry Sanders
Representative Joe Ryan
MEMBERS ABSENT
Representative Bill Hudson
Representative Tom Brice
Representative Gene Kubina
COMMITTEE CALENDAR
* HOUSE BILL NO. 363
"An Act relating to social security numbers; providing for the
limitation of use of social security numbers; and making the
improper use of a social security number a prohibited unfair trade
practice."
- HEARD AND HELD
* HOUSE BILL NO. 321
"An Act relating to trusts, to the prudent investor rule, and to
standards of care applicable to personal representatives,
conservators, and trustees; and providing for an effective date."
- MOVED HB 321 OUT OF COMMITTEE
(* First public hearing)
PREVIOUS ACTION
BILL: HB 363
SHORT TITLE: DISCLOSURE OF SOCIAL SECURITY NO.
SPONSOR(S): REPRESENTATIVES(S) KEMPLEN, Kohring, Phillips
Jrn-Date Jrn-Page Action
01/28/98 2154 (H) READ THE FIRST TIME - REFERRAL(S)
01/28/98 2154 (H) L&C, JUDICIARY
02/04/98 2223 (H) COSPONSOR(S): PHILLIPS
02/16/98 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 321
SHORT TITLE: UNIFORM PRUDENT INVESTOR ACT
SPONSOR(S): REPRESENTATIVES(S) RYAN
Jrn-Date Jrn-Page Action
01/15/98 2054 (H) READ THE FIRST TIME - REFERRAL(S)
01/15/98 2054 (H) LABOR & COMMERCE, FINANCE
02/16/98 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE J. ALLEN KEMPLEN
Alaska State Legislature
Capitol Building, Room 112
Juneau, Alaska 99801
Telephone: (907) 465-2435
POSITION STATEMENT: Sponsor of HB 363.
ACTION NARRATIVE
TAPE 98-14, SIDE A
Number 0001
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce
Standing Committee meeting to order at 3:21 p.m. Members present
at the call to order were Representatives Rokeberg, Cowdery,
Sanders and Ryan.
HB 363 - DISCLOSURE OF SOCIAL SECURITY NO.
Number 0048
CHAIRMAN ROKEBERG stated the committee would take up HB 363, "An
Act relating to social security numbers; providing for the
limitation of use of social security numbers; and making the
improper use of a social security number a prohibited unfair trade
practice." He noted the sponsor would present the bill.
Number 0071
REPRESENTATIVE J. ALLEN KEMPLEN thanked the committee and noted he
has personal experience with this issue. He related during the
interim he went to an Anchorage business to rent a musical
instrument for his son. The business's form required a drivers'
license number, major credit card for deposit, and social security
number. He said he did not think it was necessary to provide his
social security number in order to rent an instrument, but he was
told that was how the business tracked its accounts, and if he did
not provide his social security number, he was not a welcome
customer. Representative Kemplen stated he thought that was an
invasion of privacy and did not rent an instrument.
Number 0233
REPRESENTATIVE KEMPLEN said made him think about the whole issue of
social security numbers, computers, the "information age." He had
thought Alaska was different because the right of individual
Alaskans to privacy was laid out in a clause of the state
constitution and "shall not be infringed." Representative Kemplen
noted he found, however, that there wasn't anything that really
prohibited this business person from requiring his social security
number. His research showed there had been a big concern about
privacy in the late 1960s, early 1970s. He stated the Fair Credit
Reporting Act was passed in 1970; it gave consumers a right to know
what was in their credit files and to demand corrections for
errors. The public response was that the government tells citizens
what records it keeps on them while insisting that information be
kept private unless it was required by law. In the private sector
each industry was pretty much allowed to create its own guidelines,
which worked until personal computers (PCs) came on board. He said
it was not such a big issue with large mainframe computers but the
rapid growth of PCs has changed things fairly remarkably.
Representative Kemplen stated that the growth of the Internet over
the last three to five years has also changed things dramatically.
He stated privacy is becoming a victim of this "information age."
Number 0430
REPRESENTATIVE KEMPLEN said it seems to him Alaska is unique, and
he noted the state constitution has the strongest privacy clause of
all of the state constitutions in America. He said if any state
stands up for individual privacy, it would be Alaska. He stated
that is the purpose of this legislation: to stand up for the
rights of individual Alaskans. It says that the individual demands
a right of privacy, and someone who wants information about that
individual, particularly as it relates to the social security
number, which is linked to so many databases, needs the
individual's written permission. He stated that information cannot
be mandated from an individual.
Number 0510
REPRESENTATIVE JOHN COWDERY stated he thought the social security
document was a federal document, not a state one, and he noted
their medical insurance plan identification numbers were their
social security numbers. He asked if Representative Kemplen
thought that would cause a disruption or inconvenience.
Representative Cowdery also noted a social security number was
requested when obtaining information by phone about an escrow
account, former bank, credit card, et cetera, and he asked about
that impact.
Number 0601
REPRESENTATIVE KEMPLEN stated the only impact on insurance would be
the necessity of obtaining an individual's written permission to
use a social security number to track that person's accounts. He
said it put the power back into the hands of the individual, rather
than in a big organization's.
Number 0638
REPRESENTATIVE COWDERY stated that if use of the social security
number was denied to insurance companies, then the number's use
could be denied in all documents including the Internal Revenue
Service (IRS) forms.
Number 0650
REPRESENTATIVE KEMPLEN replied that the legislation as written
states, "Except where required by federal or state law."
Number 0663
REPRESENTATIVE COWDERY noted he appreciated the privacy direction
Representative Kemplen was going in, but he wondered if that was
reality. Representative Cowdery commented on the many places
social security numbers occurred, including drivers' licenses; he
noted it is a "number world," as Representative Kemplen had said,
and mentioned the current sophistication of computers.
Number 0706
REPRESENTATIVE KEMPLEN brought up the concept of identity theft,
noting that stealing someone's identity is a concern when social
security numbers are increasingly required. He said with all the
information people, retail store clerks for example, have access
to, including a social security number, someone can fill out a
credit application with all of an individual's relevant data and
have a credit card in that individual's name sent to another
address. Representative Kemplen noted that person can then use
that individual's good credit to run up a comfortable lifestyle.
He stated the notion of stealing someone's identity is something
they need to be thinking about and acting to minimize.
Number 0793
REPRESENTATIVE COWDERY stated he understood the comfortable
lifestyle situation, but commented some people think getting caught
and going to jail would be a lifestyle improvement.
Number 0812
REPRESENTATIVE JOE RYAN stated he appreciated this bill and asked
if Representative Kemplen was aware that, in order to require a
person's social security number, a disclaimer was required by
federal law. He said he has notified several branches of the
state's government that they are not in compliance, noting he had
called the Division of Retirement and Benefits and the health
people, asking them who had given them the authority to use his
social security number as a medical number. He received the
response that they have always done it as a (indisc.), to which he
replied he had caught them and did not want them to continue the
practice. Representative Ryan noted he hasn't been successful so
far, but feels he will be able to convince them it is not a good
thing for them to do in his case. He stated he liked this kind of
legislation, and noted when he was a child a lot of people came
from Europe with numbers tattooed on their arms - they had been
reduced to a number - and he did not like being reduced to a
number.
Number 0885
CHAIRMAN ROKEBERG noted the absence of any supporting background
from state business-type organizations in the submitted bill
package, and asked Representative Kemplen if he had investigated
whether or not this legislation would have any kind of negative
impact on commerce in the state of Alaska.
Number 0915
REPRESENTATIVE KEMPLEN answered he had not.
Number 0928
CHAIRMAN ROKEBERG stated it was one of the committee's purviews and
charges to ensure that, when it does pass legislation, the
legislation meets muster, doesn't create undue burdens, or impact
job creation and the economic health of the state. Chairman
Rokeberg commented that the committee had received a call the
previous week from an organization in Washington, D.C., opposing
this type of legislation; unfortunately the committee has not been
able to reestablish contact with that organization. He said, in
terms of his own comfort, he would like to make sure that the issue
received a full hearing before the committee took final action.
Chairman Rokeberg suggested Representative Kemplen make inquiries
to organizations like the Alaska State Chamber of Commerce, the
Anchorage Chamber of Commerce, the National Federation of
Independent Business (NFIB), and other business-type organizations
that might have opinions. He commented Representative Kemplen
might find support from these organizations, and he noted there was
certainly a lot of merit in the thrust of the bill. Also, Chairman
Rokeberg asked if it might be necessary to check with the Division
of Insurance regarding insurance forms and things of that nature,
referring to Representative Cowdery's comment that even their own
group-administered health plan used social security numbers. He
also noted the state government was basically exempted as the bill
was drafted, and he asked if that was fair, questioning whether it
was one of those deals where Congress and the legislature can get
away with it but everybody else can't.
Number 1035
Representative Kemplen answered that if a business is required to
collect social security numbers, as a federal or state requirement,
that would not be affected by this legislation.
Number 1054
CHAIRMAN ROKEBERG asked if Representative Kemplen knew of instances
where that was the case.
Number 1061
REPRESENTATIVE KEMPLEN said his intuition told him there certainly
were instances where social security numbers are required by
federal or state statute, but none came immediately to mind.
Number 1086
CHAIRMAN ROKEBERG commented, "Besides IRS forms...."
Number 1087
REPRESENTATIVE RYAN stated they had passed SB 154, last year for
child support enforcement [SB 154, Child Support and Paternity,
misstated as HB 154 on tape], and it required any kind of license
received in the state of Alaska to have a social security number:
drivers', hunting, fishing, occupational, et cetera. He said a
social security number had to be given so (indisc.) be in
compliance with the federal statute. Representative Ryan noted he
had not voted for the bill, and disliked it, but said that was the
situation they were currently in. He also referred to one of
Chairman Rokeberg's previous comments about the exemption of state
government, "the king can do no wrong," and said he "couldn't buy"
that exemption, noting he did not think this government was that
wise.
Number 1130
REPRESENTATIVE COWDERY asked about things like union pension plans
which were required by federal law to use social security numbers.
Number 1144
CHAIRMAN ROKEBERG commented that most military personnel are on
military reservations and federal property, and are therefore
exempt from state statute, but said he would be concerned because
the military currently uses social security numbers instead of the
previously used serial numbers. Chairman Rokeberg stated this
change occurred after he had left the military, noting he had been
a US (ph), a draftee, not an RA, regular army, person, and those
distinctions have now been lost because of the military's switch to
social security numbers. Chairman Rokeberg asked if that use of
social security number would have any impact, giving the example of
a credit granting business. He asked if it would not be
appropriate for that business to ask for an active duty military
member's serial number as part of the individual's personal
information.
Number 1205
REPRESENTATIVE KEMPLEN agreed, but said all the bill does is allow
the business to get permission through the individual who is
requesting that credit. He noted it moves something from a
mandatory type of situation to a voluntary situation, and it gives
the individual the discretion to decide whether or not the
individual wants to give his or her social security number. If the
individual wants the credit card, all he or she has to do is sign
the written permission saying, "Here is my social security number."
Number 1251
CHAIRMAN ROKEBERG referred to page 2, subsection (c) which reads
"(c) A person may not offer or accept an offer for goods or
services, for sale or lease, on the condition that a consumer
provide consent to the use of the consumer's social security number
for identification." Chairman Rokeberg asked if that meant the
closing of a sale could not be made contingent on the granting or
giving of the social security number.
Number 1286
REPRESENTATIVE KEMPLEN answered in the affirmative.
Number 1288
CHAIRMAN ROKEBERG clarified, "So they can't withhold their sale
without a person coming forward with the number."
Number 1298
REPRESENTATIVE RYAN stated, if memory served him right, other than
the various things that were included under subsequent federal
statutes like the child support enforcement, an individual is not
required to give a social security number, or the number cannot be
used under the federal statutes, except for purposes of income
reporting to the IRS, and there are related federal statutes.
Representative Ryan stated, "Everybody ... kind of blows it off and
doesn't pay any attention, 'cause everybody and his brother found
that a common data base -- we get your social security number, we
link you into all kinds of things -- and it's easier to keep track
of you, and to build up files on you, and make sure you get a lot
of junk mail."
Number 1340
CHAIRMAN ROKEBERG commented, "If that were the case, then why is
there in the bill package from the sponsor, federal legislation on
this very topic? Or are you making a public assumption about
what's required?"
Number 1354
REPRESENTATIVE RYAN noted he had stated he was speaking from
memory.
Number 1356
CHAIRMAN ROKEBERG asked if Representative Kemplen could shed any
light on this matter.
Number 1360
REPRESENTATIVE KEMPLEN noted that the federal legislation was a
proposal introduced last year in Congress because of the concern
being raised, in a number of different places, about the increasing
use of a social security number as a unique identifier, and the
number being mandated by a number of different organizations and
entities because of convenience. Representative Kemplen said there
is also growing concern that technology is making it so easy to
cross-check on people that it is really becoming an invasion of
their privacy, and this concern has moved up to the congressional
level. He noted Alaska, because of the very strong privacy clause
in its state constitution, really has legitimate cause to be in the
forefront of action on this issue at the state level.
Number 1423
CHAIRMAN ROKEBERG said he would like to give Representative Kemplen
the opportunity to generate some support, particularly from the
business community, noting he did not think anyone in the committee
would not want to pass this bill out, but needed to be convinced
that this would not be a burden on business. Chairman Rokeberg
commented that, perhaps, if there were some witnesses who could
testify to that effect, and the committee was provided with some
documentation, the committee would be happy to move this bill
along. However, the Chairman said he thought they would not be
doing their job, given the brevity of testimony and support of this
bill, in passing the bill until they were convinced. Chairman
Rokeberg asked Representative Kemplen if he had any problems with
that.
Number 1458
REPRESENTATIVE KEMPLEN replied he did not, he thought that was a
very prudent course of action.
Number 1463
CHAIRMAN ROKEBERG indicated HB 363 would be held.
HB 321 - UNIFORM PRUDENT INVESTOR ACT
Number 1471
CHAIRMAN ROKEBERG announced the committee's next order of business
was HB 321, "An Act relating to trusts, to the prudent investor
rule, and to standards of care applicable to personal
representatives, conservators, and trustees; and providing for an
effective date." Chairman Rokeberg asked Representative Ryan, the
bill sponsor, how he wished to proceed.
Number 1481
REPRESENTATIVE RYAN noted there was information in the bill packet
that briefly outlined the bill function. He said it is uniform law
[promulgated by the National Conference of Commissioners on Uniform
State Laws], it is not something that would be new and unique to
Alaska; he thought there were 19 other states who have already
adopted this. He said the bill mainly deals with trustees of
trusts, the people who are running trusts, and he stated, "The
trustee must manage a trust in such a manner that they look to
manage the assets of the trust for the maximum benefit of the
beneficiaries, that's the primary duty of ... the trustee." He
said trustees have been constrained in some previous legislation
and court decisions that allow the trustees, or make it difficult
for them, depending on the type of asset in the trust, as to what
they can do with it. He stated, "This bill sets up the standards
for prudent investor, and I'll ... read you a slight paragraph here
[from a letter by L.S. "Jerry" Kurtz], 'Many fiduciaries find
themselves holding mines, family businesses, fishing boats, real
estate, zero coupon bonds and other property, which doesn't produce
interest and can feel ... compelled under common law to liquidate
such property, when common sense dictates otherwise. [The] Prudent
Investor Act makes it clear that a fiduciary must use good sense
rather than rigid guidelines in carrying out fiduciary duties, and
consider the current status of markets, tax consequences,
liquidation and other factors before taking such action.'"
Number 1576
REPRESENTATIVE RYAN stated HB 321 gives trustees latitude for
making investments; at the same time, it also gives them ethical
guidelines inasmuch as the trustee may be the trustee for numerous
trusts. He noted there are many provisions in the bill about
dealings between trusts, selling one asset of one trust to another,
and it states how the trustees must act if they have any kind of a
relationship with any of the beneficiaries. He said it tells them
what they do and they don't do, to make sure everybody gets a
square deal, and to cover their liability standards.
Representative Ryan stated this is to avoid unnecessary litigation
if some person feels that the trustee has taken an investment
action which wasn't as optimum as it could have been. He stated
the reason he was putting this bill forward, "We passed a trust
bill last year, and it was signed by the Governor on ... April 1.
Subsequently the state of Delaware, in two weeks, passed an
identical bill, because they saw that Alaska was going to get ahead
of 'em. So in only two weeks time, and it took two years to do
here, it was through and became law."
Number 1648
REPRESENTATIVE RYAN stated this bill was the Alaska trust Act. He
noted Delaware made one small error, it allowed the corpus of the
trust to be invaded for child or spousal support; he said there was
a "rule of thumb" in the estate planning community and the court
decisions that have been made, that if invasion of the corpus was
allowed for any reason, it could be allowed for all reasons. He
stated Delaware was going to amend their law this year to do away
with those provisions. Representative Ryan commented on the
provision in Alaska's law, that an individual could not settle any
assets into the corpus of a trust if the individual was 30 days or
more in arrears on child or spousal support. He stated, "What
you're basically doing when you establish a trust is you're making
a gift, you pay a gift tax, and Alaska law is unique, inasmuch as
once you've settled it, and the money is what we call, quote, clean
money, there are no obligations or pending obligations or so forth,
that money cannot -- it's a gifting, it's gone away, for tax
purposes it doesn't become part of your estate when you die, and
... it cannot be attacked by subsequent creditors, ... it stays
inviolate, and that's a unique feature of Alaska law, as long as it
wasn't a fraudulent transfer, and we have a (indisc.) portion in
there for that, but that's getting away from what this does."
Number 1713
REPRESENTATIVE RYAN said the major point of HB 321 is that the
standards of prudence apply to a trust as a whole instead of
individual investments. He said that when an individual makes an
individual investment the overall portfolio of the corpus of the
trust needs to be looked at, the various investments that are being
made, and the question asked, "Is this a prudent action on the part
of this individual as far as the whole trust assets are concerned,
versus that particular individual investment?" Representative Ryan
stated, "The overall investment strategy should be based upon risk
and reward objective suitable for the trust." Since the
distributions in most trusts usually come from the earnings of the
trust, which is a capital gain, rather than from the corpus, it is
a good point that an income necessary for the distributions must be
maintained, but at the same time, he stated, "You don't want to be
too conservative because you won't have any monies to do it."
Number 1763
REPRESENTATIVE RYAN stated that the duties to diversify must be
part of the investment strategy, unless the trustee reasonably
determines it is in the interests of the beneficiaries not to
diversify, taking into account the purposes, terms and provisions
of the governing document. He noted, when a governing document is
set up instructing how the trust will be managed and how
distributions will be made, indenture, et cetera, the person who
settles the trust outlines what he or she wants to do.
Representative Ryan commented that now some people allow
distributions out of the corpus too, depending upon how they want
to structure the trust. He stated Alaska has made an exception to
the statute on perpetuities, allowing the trust to go on in
perpetuity, and he described the financial considerations, "If you
were to settle a million dollars in a trust today, at the 8 1/2
percent that the markets returned over the last couple hundred
years, in 120 years you'd have over a billion dollars in that
trust, so money does grow money, depending upon the management of
the trust." Representative Ryan commented that no special status
was given to the original investments and the trustee must review
those investments from time to time. He stated, "(Indisc.)
corporate trusts (indisc.) paid professional advisor acting as
trustee is accountable under special investment skills standard,
and the delegation of investment authority is permitted but the
trustee retains liability for the investment performance of the
'delegee.'"
Number 1836
REPRESENTATIVE RYAN noted that not all trustees are good financial
managers, so they are allowed to hire professionals, but the
trustees still bear the responsibility if those investments go
wrong to the point where it adversely affects the trust; this
raises the level of responsibility and duties to the beneficiaries.
He stated the overall strategy is to be designed to enable the
trustee to make appropriate present and future distributions to the
beneficiaries. Representative Ryan noted 20 states have
anticipated this, and he said it looks like a lot more will in the
future because it is a standard that can be used, a uniform law,
all over the country. He stated, "You can be as assured as you
possibly can that you're getting responsible actions from the
trustee." He stated he was open to questions, noting he was the
author of the Alaska trust Act.
Number 1903
REPRESENTATIVE COWDERY noted the presence of a letter from Attorney
General Bruce M. Botelho supporting HB 321 in the bill packet.
Number 1910
REPRESENTATIVE RYAN commented that politics made strange
bedfellows.
Number 1919
CHAIRMAN ROKEBERG asked if Representative Ryan could provide a copy
of the uniform law issued by the uniform law conference to the
committee, and also give the committee the listing of the states
which have adopted it, or some modification. Chairman Rokeberg
noted Mr. Peterson indicates his letter listed the only changes
made to the uniform Act by HB 321. He asked Representative Ryan if
that was correct, noting it was hard to make that analysis without
having the uniform Act, as far as the committee was concerned.
Chairman Rokeberg also asked Representative Ryan if he had
requested a sectional analysis from Legislative Legal and Research
Services.
Number 1978
REPRESENTATIVE RYAN replied that legislative legal had been very
busy lately trying to draft bills for the deadline, and fighting
cases in the court at Legislative Council's request, noting he
thinks they have three current cases. He said his office will urge
them to see what they can do with it.
Number 1998
CHAIRMAN ROKEBERG asked if Representative Ryan had talked to many
investment houses in the state, and any other investment bankers,
banks or other investment mediums. Chairman Rokeberg noted, as he
took it, this would not affect those entities; the repeal of the
"prudent man rule" and its replacement with this prudent investor
Act was only in relationship to trusts.
Number 2018
REPRESENTATIVE RYAN indicated that was correct and noted it did not
apply to the permanent fund either. He said he had called them
early on and asked if they would like this law to be applicable to
them. He stated they took some time to consider it and decided to
pass. Representative Ryan commented his response was that he had
no desire to include them against their wishes. Representative
Ryan also said he had spoken with Jerry Weaver from NBA (National
Bank of Alaska) who was the spokesperson for, not only NBA, but
also a consortium of representatives of the banking community.
Representative Ryan stated Mr. Weaver said he had seen the bill and
didn't have any problem with it, but commented he would get back to
Representative Ryan if he came up with something. Representative
Ryan stated that trust business was an arcane sort of a business,
it was not very large in Alaska, but was building since the passage
of the [trust] law last year. He said, however, a few banks have
trust companies, noting he thought both KeyBank (KeyBank National
Association) and NBA do.
Number 2064
CHAIRMAN ROKEBERG added that both NBA and First National (First
National Bank of Anchorage) have trust departments, and he stated
it might even be helpful if Representative Ryan had some kind of
correspondence from those institutions indicating they had looked
the legislation over.
Number 2070
REPRESENTATIVE RYAN commented he had been assured by Mr. Weaver
that they had, but he would have somebody go back and check.
Number 2077
CHAIRMAN ROKEBERG explained he was suggesting they help build the
record here so HB 321 could proceed.
Number 2082
REPRESENTATIVE RYAN stated that there was quite a record, and he
would have Mr. Peterson provide the committee with more
information, if that was the wish of the committee, than they would
probably want to see.
Number 2095
CHAIRMAN ROKEBERG stated there were just a few things he would
recommend; he didn't think he was asking for any more than any of
his colleagues "down the stream" would be asking for, and noted he
was attempting to assist Representative Ryan.
Number 2103
REPRESENTATIVE RYAN commented he was sure everyone understood this
trust business very well and said he would have his staff get on
that.
Number 2114
CHAIRMAN ROKEBERG asked if investment bankers that act at the
behest of, or (indisc.) by their clients to make investments, would
be governed by this particular provision.
Number 2120
REPRESENTATIVE RYAN stated, from inquiries made last year when they
were working on the trust bill, that, to his knowledge there are no
investment bankers in Alaska.
Number 2130
CHAIRMAN ROKEBERG stated that Merrill Lynch (Merrill Lynch and
Company, Incorporated), Paine Webber (Paine Webber Incorporated)
and all (indisc.) are investment banking houses.
Number 2135
REPRESENTATIVE RYAN replied that those institutions do not claim to
be investment bankers according to what they had done last year,
but perhaps the institutions had reassessed themselves.
Number 2140
CHAIRMAN ROKEBERG stated that was just the companies' general
definition. He said he meant that is what they are, and stated,
"You can authorize -- you could sign a contract setting up a
managed account for investment purposes with those institutions
that gives the discretion to the investment manager to run those
accounts. Now will this bill affect any of that type of business?"
Number 2160
REPRESENTATIVE RYAN replied in the negative. He stated one does
not create a legal trust situation when one does that, referring to
the first paragraph, "A personal representative is a fiduciary who
should observe the standards of care applicable to trustees, under
AS 13.36.200."
Number 2184
CHAIRMAN ROKEBERG noted then, that to Representative Ryan's
knowledge, there was no other duty in state statute for investment
houses and things of that nature, unless there was a formal trust
established, asking if this only affected that.
Number 2191
REPRESENTATIVE RYAN stated that you have to be a trust company to
handle trusts in the state of Alaska, they had set that up last
year in the bill, as to what constitutes the Alaska trust Act and
how it was structured.
Number 2206
CHAIRMAN ROKEBERG stated, "But it's your opinion, Representative
Ryan, that the act of an individual under contract for an
investment banking house and managing money is not the creation of
a trust, is that correct?"
Number 2215
REPRESENTATIVE RYAN stated that a trust has particular rules
(indisc.) has to operate, and (indisc.) managed accounts under a
investment house was not the same as a trust.
Number 2225
CHAIRMAN ROKEBERG noted he was sorry Mr. Kirkpatrick (Willis
Kirkpatrick, Director, Division of Banking, Securities and
Corporations, Department of Commerce and Economic Development)
could not be here to elucidate on this for the record, in order to
make sure.
Number 2234
CHAIRMAN ROKEBERG called an at-ease at 4:00 p.m. The committee
reconvened at 4:03 p.m.
Number 2236
CHAIRMAN ROKEBERG stated he would entertain a motion.
Number 2249
REPRESENTATIVE COWDERY made a motion to move HB 321 to the next
committee of referral with individual recommendations and the
accompanying fiscal note.
Number 2251
CHAIRMAN ROKEBERG asked if there were any objections. Hearing
none, HB 321 was so moved.
ADJOURNMENT
Number 2258
CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing
Committee meeting at 4:06 p.m.
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