03/02/2006 08:30 AM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB249 | |
| SB284 | |
| HB92 | |
| SB298 | |
| HB318 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 298 | TELECONFERENCED | |
| + | HB 92 | TELECONFERENCED | |
| + | HB 318 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 284 | ||
| = | SB 249 | ||
ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
March 2, 2006
8:42 a.m.
MEMBERS PRESENT
Senator Ralph Seekins, Chair
Senator Charlie Huggins, Vice Chair
Senator Gene Therriault
Senator Hollis French
Senator Gretchen Guess
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 249
"An Act relating to criminal justice information."
MOVED CSSB 249(JUD) OUT OF COMMITTEE
SENATE BILL NO. 284
"An Act relating to sentencing for the commission of a felony
while under the influence of alcohol."
MOVED CSSB 284(JUD) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 92(JUD)
"An Act relating to the purchase of interests in nonprofit
corporations by the University of Alaska."
HEARD AND HELD
SENATE BILL NO. 298
"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 CSSB 298(JUD) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 318(FIN) am
"An Act limiting the exercise of eminent domain."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 249
SHORT TITLE: REPORTING BAIL AND RELEASE INFORMATION
SPONSOR(s): SENATOR(s) FRENCH
01/23/06 (S) READ THE FIRST TIME - REFERRALS
01/23/06 (S) JUD
02/15/06 (S) JUD AT 8:30 AM BUTROVICH 205
02/15/06 (S) Heard & Held
02/15/06 (S) MINUTE(JUD)
03/01/06 (S) JUD AT 8:30 AM BUTROVICH 205
03/01/06 (S) Scheduled But Not Heard
BILL: SB 284
SHORT TITLE: SENTENCING FOR ALCOHOL-RELATED CRIMES
SPONSOR(s): SENATOR(s) THERRIAULT
02/13/06 (S) READ THE FIRST TIME - REFERRALS
02/13/06 (S) JUD, FIN
02/28/06 (S) JUD AT 8:30 AM BUTROVICH 205
02/28/06 (S) Heard & Held
02/28/06 (S) MINUTE(JUD)
03/01/06 (S) JUD AT 8:30 AM BUTROVICH 205
03/01/06 (S) Heard & Held
03/01/06 (S) MINUTE(JUD)
BILL: HB 92
SHORT TITLE: UNIV. OF ALASKA & NONPROFIT CORP STOCK
SPONSOR(s): REPRESENTATIVE(s) KELLY
01/21/05 (H) READ THE FIRST TIME - REFERRALS
01/21/05 (H) EDU, HES
04/05/05 (H) EDU AT 11:00 AM CAPITOL 106
04/05/05 (H) Heard & Held
04/05/05 (H) MINUTE(EDU)
04/06/05 (H) HES REFERRAL WAIVED
04/06/05 (H) JUD REFERRAL ADDED AFTER EDU
04/07/05 (H) EDU AT 11:00 AM CAPITOL 106
04/07/05 (H) -- Meeting Canceled --
04/12/05 (H) EDU AT 11:00 AM CAPITOL 106
04/12/05 (H) Moved CSHB 92(EDU) Out of Committee
04/12/05 (H) MINUTE(EDU)
04/14/05 (H) EDU AT 11:00 AM CAPITOL 106
04/14/05 (H) -- Meeting Canceled --
04/18/05 (H) EDU RPT CS(EDU) NT 1DP 5NR
04/18/05 (H) DP: LYNN;
04/18/05 (H) NR: THOMAS, WILSON, GATTO, SALMON,
NEUMAN
04/18/05 (H) JUD AT 1:00 PM CAPITOL 120
04/18/05 (H) Scheduled But Not Heard
04/19/05 (H) JUD AT 1:00 PM CAPITOL 120
04/19/05 (H) Heard & Held
04/19/05 (H) MINUTE(JUD)
04/22/05 (H) JUD AT 1:00 PM CAPITOL 120
04/22/05 (H) Moved CSHB 92(JUD) Out of Committee
04/22/05 (H) MINUTE(JUD)
04/26/05 (H) JUD RPT CS(JUD) NT 1DP 6NR
04/26/05 (H) DP: MCGUIRE;
04/26/05 (H) NR: KOTT, GRUENBERG, ANDERSON,
DAHLSTROM, COGHILL, GARA
04/28/05 (H) TRANSMITTED TO (S)
04/28/05 (H) VERSION: CSHB 92(JUD)
05/01/05 (S) READ THE FIRST TIME - REFERRALS
05/01/05 (S) HES
02/09/06 (S) HES REFERRAL WAIVED
02/09/06 (S) JUD REFERRAL ADDED
03/02/06 (S) JUD AT 8:30 AM BUTROVICH 205
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
BILL: HB 318
SHORT TITLE: LIMITATION ON EMINENT DOMAIN
SPONSOR(s): REPRESENTATIVE(s) MCGUIRE, HOLM, HAWKER
01/09/06 (H) PREFILE RELEASED 12/30/05
01/09/06 (H) READ THE FIRST TIME - REFERRALS
01/09/06 (H) JUD, FIN
01/11/06 (H) JUD AT 1:00 PM CAPITOL 120
01/11/06 (H) Heard & Held
01/11/06 (H) MINUTE(JUD)
01/25/06 (H) JUD AT 1:00 PM CAPITOL 120
01/25/06 (H) Heard & Held
01/25/06 (H) MINUTE(JUD)
02/01/06 (H) JUD AT 1:00 PM CAPITOL 120
02/01/06 (H) -- Meeting Canceled --
02/03/06 (H) JUD AT 1:00 PM CAPITOL 120
02/03/06 (H) Moved CSHB 318(JUD) Out of Committee
02/03/06 (H) MINUTE(JUD)
02/06/06 (H) JUD RPT CS(JUD) NT 3DP 1NR 2AM
02/06/06 (H) DP: WILSON, ANDERSON, MCGUIRE;
02/06/06 (H) NR: GRUENBERG;
02/06/06 (H) AM: GARA, KOTT
02/09/06 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/09/06 (H) Moved CSHB 318(FIN) Out of Committee
02/09/06 (H) MINUTE(FIN)
02/10/06 (H) FIN RPT CS(FIN) NT 2DP 3NR 3AM
02/10/06 (H) DP: HAWKER, MEYER;
02/10/06 (H) NR: KERTTULA, JOULE, WEYHRAUCH;
02/10/06 (H) AM: STOLTZE, HOLM, FOSTER
02/21/06 (H) TRANSMITTED TO (S)
02/21/06 (H) VERSION: CSHB 318(FIN) AM
02/22/06 (S) READ THE FIRST TIME - REFERRALS
02/22/06 (S) JUD, FIN
03/02/06 (S) JUD AT 8:30 AM BUTROVICH 205
WITNESS REGISTER
Senator Hollis French
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 249
Senator Gene Therriault
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 284
Dave Stancliff, Legislative Aide
Staff to Senator Therriault
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions regarding SB 284
Representative Mike Kelly
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 92
Dr. Craig Dorman, Vice President of Academic Affairs
University of Alaska Statewide System
PO Box 755000
Fairbanks, AK 99775
POSITION STATEMENT: Testified in support of HB 92
Brian Rogers
Board of Regents
University of Alaska Fairbanks
POSITION STATEMENT: Testified in support of HB 92
Brian Hove, Legislative Aide
Staff to Senator Ralph Seekins
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 298
Beth Chapman, Attorney
Faulkner Banfield
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 298
Rich Hompesch, Attorney
Hompesch & Evans
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 298
Dick Thwait, Attorney
Chairman of the Board
Alaska Trust Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 298
Douglas Blattmachr, President and CEO
Alaska Trust Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 298
David Shaftel, Attorney
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 298
Steve Greer, Attorney
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 298
Jonathon Blattmachr
POSITION STATEMENT: Testified in support of SB 298
Craig Johnson, Legislative Aide
Staff to Representative Lesil McGuire
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced HB 318
Peter Putzier, Senior Assistant Attorney General
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Commented on HB 318
ACTION NARRATIVE
CHAIR RALPH SEEKINS called the Senate Judiciary Standing
Committee meeting to order at 8:42:58 AM. Present were Senators
Hollis French, Charlie Huggins, Gene Therriault, Gretchen Guess
and Chair Ralph Seekins.
SB 249-REPORTING BAIL AND RELEASE INFORMATION
8:43:20 AM
CHAIR RALPH SEEKINS announced SB 249 to be up for consideration.
SENATOR HOLLIS FRENCH moved CSSB 249 version G as the working
document before the committee.
CHAIR SEEKINS objected for the purpose of explanation.
SENATOR FRENCH explained the difference with the committee
substitute (CS) was on page 2. Line 9 added the conditions of
parole or probation supervision.
8:44:34 AM
CHAIR SEEKINS removed his objection and hearing no further
objections, version 24-LS1490\G was adopted.
SENATOR FRENCH reported that the Department of Law (DOL) was in
support of the bill.
CHAIR SEEKINS closed public testimony.
SENATOR GRETCHEN GUESS moved CSSB 249(JUD) out of committee with
individual recommendations and attached fiscal notes. Hearing no
objections, the motion carried.
CHAIR SEEKINS announced a brief recess at 8:45:59 AM.
SB 284-SENTENCING FOR ALCOHOL-RELATED CRIMES
8:47:01 AM
CHAIR RALPH SEEKINS announced SB 284 to be up for consideration.
DAVE STANCLIFF, Staff to Senator Gene Therriault, reported that
he and Senator Therriault worked with the drafter to create a
committee substitute (CS) to address the issues raised in
earlier hearings.
SENATOR GENE THERRIAULT moved CSSB 284 version Y as the working
document before the committee.
CHAIR SEEKINS objected for the purpose of explanation.
MR. STANCLIFF explained that the CS accommodates the three
concepts discussed previously. At the bottom of page 1
"alcoholic beverage" has been changed to "consumption of
alcohol." The second change modifies existing DUI statutes to
bring the language into conformity with SB 284. The change
includes the term "consuming alcohol" instead of "alcoholic
beverage" and the concept of "up to the lifetime of the
defendant" is added. The last concept is to allow judges a range
of up to a lifetime ban, an option to use as they see
appropriate.
8:49:04 AM
SENATOR THERRIAULT asked Mr. Stancliff to clarify everything
that was swept in under the DUI statutes.
MR. STANCLIFF explained that after a person is convicted of a
third DUI these conditions of sentencing would apply. The
sentencing would also apply for a person with one DUI conviction
if it involved a death or serious injury.
SENATOR THERRIAULT asked whether the conditions of sentencing
would apply for a first time DUI conviction involving a death or
serious injury.
MR. STANCLIFF said yes.
CHAIR SEEKINS closed public testimony.
8:51:16 AM
SENATOR THERRIAULT moved CSSB 284(JUD) out of committee with
individual recommendations and attached fiscal notes. Hearing no
objections, the motion carried.
CHAIR SEEKINS announced a brief recess at 8:51:56 AM.
HB 92-UNIV. OF ALASKA & NONPROFIT CORP STOCK
8:53:38 AM
CHAIR RALPH SEEKINS announced CSHB 92(JUD) to be up for
consideration.
REPRESENTATIVE MIKE KELLY, bill sponsor, advised the committee
of a new committee substitute (CS) for the bill. SCS CSHB 92
version X would permit the University of Alaska to invest in
corporations who would produce and market inventions coming from
the university. The bill that passed the House limited the
investment to non-profit organizations but the current CS would
allow for investment opportunities in profit corporations as
well. The university has seen tremendous growth in money coming
in for sponsored research and that has a tremendous multiplier,
creating thousands of jobs. That has been instrumental in
changing the university's funding from a majority of state
funding to tuition and other funds.
Part of a successful research university is the ability to "spin
off" intellectual properties into applied science and to
contribute to the economy. Presently the university is prevented
from investing in corporations due to fear of liability
associated with "piercing the corporate veil." HB 92 would make
it possible for the university to invest in corporations but
would not allow the university to be liable for the
corporation's debts.
When the House stripped away the for-profit corporation ability,
it took away a large portion of the potential benefit of the
bill. The current CS would add that ability back in.
8:57:47 AM
SENATOR GENE THERRIAULT moved 24-LS0344\X as the working
document before the committee. Hearing no objections, the motion
carried.
DR. CRAIG DORMAN, Vice President of Academic Affairs for the
University of Alaska Statewide System, explained that the basis
of the university's request was based on public law that permits
universities to take ownership of inventions that are made with
federal funding. To take advantage of the inventions, it
requires that things move into the commercial line of business
and would start by encouraging the individual who made the
invention to patent or license it.
9:00:28 AM
DR. DORMAN said when a scientist invents a piece of equipment
used to further his research it can be useful for other
researchers around the world. The form of ownership that it
would typically take could include the university putting up
it's own portion of the invention rights as outlined in a
collective bargaining agreement or have stock rights or partial
interest in a corporation.
DR. DORMAN gave an example of using a non-profit last year.
Currently the university is involved with the Alaska Ocean
Observing System. The university is in the process of
establishing rules and governance processes whereby it becomes
part of the national federation of regional agencies and thus it
could accrue significant federal funding, he noted. Although the
university wants to be involved in such ventures, there is
concern with regard to the university being seen as a "deep
pocket." Therefore, the intent of HB 92 is to avoid losing the
university's assets by allowing it to participate in start-up
ventures and charitable nonprofits.
9:02:16 AM
SENATOR GRETCHEN GUESS asked Dr. Dorman the amount of public
universities that have the same provision.
DR. DORMAN said from his experience it was common practice.
Universities have a variety of ways of allowing for this type of
thing.
REPRESENTATIVE KELLY explained to the committee that the
university legal counsel was unable to be present today but they
put the language for the original bill together. There are
several states that have similar language as HB 92.
9:03:28 AM
SENATOR GUESS asked Representative Kelly whether the normal
practice was for someone to form a corporation but leave the
university not liable for losses. She said she did not
understand why anyone would enter into an agreement such as
that.
REPRESENTATIVE KELLY responded they would be liable within the
corporation and so the investment would be at risk. It would not
be any different than the average person in that the corporation
couldn't reach into the university.
CHAIR SEEKINS said it was more of a corporate iron curtain than
a corporate veil.
SENATOR GUESS posed a hypothetical example. If the university
owns forty percent of a corporation and that corporation goes
bankrupt and incurs $100,000 worth of losses, she asked who
would pay the liable loss.
REPRESENTATIVE KELLY explained that it would be the same as any
investment in a corporation and that the university's investment
would be at risk but the corporation could not submit that bill
to the Board of Regents. It would be strictly within that profit
or non-profit corporation.
SENATOR GENE THERRIAULT commented it was no different than any
other corporation. The assets of the business are at risk but
the bank could not reach through to confiscate anyone's home.
9:07:47 AM
REPRESENTATIVE KELLY commented that the bill was timely because
currently there is approximately $150 million dollars a year
brought in from the outside into the university system. He said
he is very comfortable with the bill and reminded the committee
that it involves the Board of Regents and is very tightly
controlled.
SENATOR CHARLIE HUGGINS expressed support for the bill.
9:09:45 AM
SENATOR THERRIAULT asked Representative Kelly the reason the
House dropped out the for-profit corporations in the bill.
REPRESENTATIVE KELLY said it happened in the House Economic
Development and Tourism Committee out of a "fairness" concern
that there be no injury to the public.
SENATOR THERRIAULT said he did not understand why there would be
any difference.
REPRESENTATIVE KELLY commented the concern was about tort and
fraud but the bill would actually protect the university from
those sorts of things.
CHAIR SEEKINS speculated the reason the committee dropped non-
profit from the bill was due to a basic misunderstanding of
corporate law.
SENATOR HUGGINS asked Representative Kelly whether the House
Economic Development and Tourism Committee now understood their
mistake.
REPRESENTATIVE KELLY said he couldn't comment. There was another
side to the issue, which was that the bill now clarifies that
the corporate entity of the university does not enter into
liability with the corporation.
9:13:13 AM
SENATOR HOLLIS FRENCH said he had a question for the university
legal counsel and hoped to be able to question someone before
the bill left committee. He said he wanted to know the other
states that use the same model that the bill proposes.
BRIAN ROGERS, member, University of Alaska Fairbanks Board of
Regents, expressed support for the bill. Testimony last year
indicated that the legal protections the bill provides the
university are identical to those that are provided to state
agencies, such as Alaska Industrial Development and Export
Authority (AIDEA). The university has been trying to transfer
technology to the private sector for some time. They tried in
the early 1990s to set up a technology development corporation
but were not successful.
9:16:12 AM
MR. ROGERS gave an example of an invention that identifies pin
bones in a fish and removes them, making for a better product.
Without a corporate veil or legal protections the university
could become liable if someone were to choke on a pin bone that
did not get removed. The standard university stance is to not
take risks and so the bill provides a balance so that the only
risk to the university would be the investment. HB 92 balances
the protections yet allows them to create economic development
from the university and in the long run, provides revenues to
the university.
CHAIR SEEKINS announced a brief recess at 9:18:07 AM.
9:25:11 AM
CHAIR SEEKINS held the bill in committee.
SB 298-TRUSTS: CHALLENGES; CLAIMS; LIABILITIES
9:26:25 AM
CHAIR RALPH SEEKINS announced SB 298 to be up for consideration.
BRIAN HOVE, Staff to Senator Seekins, introduced SB 298. The
bill revises Titles 13 and 34 pertaining to the administration
of trust assets.
Updates incorporated into Title 13 include the addition of
clarifying language relating to the various powers conferred
upon the trustee; trustee reporting requirements; and claims
made against trust assets.
Updates integrated into Title 34 include language pertaining to
the exemption from transfer provisions for certain IRA trust
assets; technical corrections made to AS 34.40.110(b); and the
handling of trust assets in cases of divorce or dissolution.
Since 1997, the Alaska State Legislature has consistently worked
to update and improve laws regarding the use and administration
of trusts. As a result, Alaska is considered one of the premier
trust jurisdictions in the country. The updates proposed in SB
298 are in keeping with revisions made to Alaska's trust laws in
1997 and 2003. They are intended to preserve Alaska's leading
position within the universe of products and services offered
nationwide.
9:28:50 AM
The bill clarifies prior trust legislation, makes the
administration of trusts in Alaska more efficient and cost
effective, and will keep Alaska as the jurisdiction of choice
for trust administration. Mr. Hove offered to answer general
questions.
9:29:48 AM
BETH CHAPMAN described herself as a private practice attorney
working in estates and trusts. She represents individual
families, individuals who service trustees, and beneficiaries of
trust. She said she supports the bill because it brings trust
business and revenues to Alaska and helps protect families.
The first provision to discuss is in Sections 2 and 3 and is
designed to clarify a trustee's powers to appoint trust assets.
Simply put, it is designed to improve the administration of
trusts so that trustees have flexibility to respond to changing
circumstances in the family.
CHAIR SEEKINS interrupted Ms. Chapman to ask the committee to
adopt the current version of the bill.
9:30:58 AM
SENATOR CHARLIE HUGGINS moved to adopt 24-LS1113\ Y as the
working document before the committee. Hearing no objection, the
motion carried.
CHAIR SEEKINS explained the Y version replaces the word "from"
on page 2 line 1 with "or" after the word "income."
MS. CHAPMAN continued the bill allows the trustee to respond to
changes in circumstances. Many times families establish
irrevocable trusts and then circumstances arise with regard to
beneficiaries. The provision would allow the trustee to continue
the trust under terms that are beneficial to the beneficiary,
does not impact their interest in the trust, and yet does so
without the need to involve a court proceeding.
9:32:38 AM
MS. CHAPMAN continued the second provision concerns the statute
of limitations for claims against a trustee. Currently Alaska
law has three different statutes of limitations for claims
against a trustee brought by a beneficiary. This leads to
confusion and works to the disadvantage of trust beneficiaries.
The proposed changes would eliminate the different time periods
for interim reports and final reports. It would eliminate the
difference so that there would be one statute of limitations for
all types of claims relating to a report given by a trustee. It
would also impose additional obligations on the trustees to
ensure that the beneficiaries are aware of the time limitation.
The statute would require that the trustee use 14-point pitch to
clearly communicate the limitation period to the beneficiary.
9:33:51 AM
The other amendment to the statute of limitations corrects the
time periods for notices when a trustee decides to use the court
to approve a report. Currently there is an inconsistency
regarding when those notices must be provided. The probate and
trust codes are designed to protect beneficiaries by ensuring
that claims are handled in an expeditious manner so that assets
can be distributed to beneficiaries free of potential claims.
The amendment balances expeditious resolution of claims with the
rights of beneficiaries to adequate disclosure regarding trust
assets and the right to bring claims arising from a trust
report. The limitation periods proposed in SB 298 are longer
than the limitation periods currently in the probate code that
apply to estates but they are fair and provide a good balance
between the needs for administration of a trust in an
expeditious manner yet protect beneficiaries rights, she said.
9:35:11 AM
SENATOR HOLLIS FRENCH asked Ms. Chapman what the statute of
limitations would be if the bill were to pass.
MS. CHAPMAN responded the bill would reduce the process to two
statutes of limitations. The first would be an ultimate
limitation of three years. That would be from any report that a
trustee provides to a beneficiary. The second limitation period
would be six months. That applies to final reports and proposes
to eliminate a longer statute of limitations that applies to
interim reports, which is two years.
SENATOR FRENCH asked Ms. Chapman to describe under which
circumstances when, in the life of a trust, a final report is
issued.
MS. CHAPMAN said a final report is issued when the trust
relationship is going to be terminated either because the trust
is to be terminated and the assets distributed or a new trustee
will be taking over the duties of administration.
SENATOR FRENCH clarified in the notice of the final report there
would be delivery of notice to the beneficiary that they have
six months to act should there be any dispute.
MS. CHAPMAN agreed.
9:37:29 AM
RICH HOMPESCH, described himself as an attorney in private
practice who does estate planning, probate, and trust
administration. He testified in support of the bill and agreed
with the testimony of Ms. Chapman.
DICK THWAITS, Attorney and Chairman of the Board of Alaska Trust
Company, testified in support of the bill and agreed with the
testimony of Ms. Chapman. He said often times a trustee can
anticipate when a trust terminates and can start in motion the
six-month statute and make the distribution immediately.
9:39:40 AM
SENATOR FRENCH asked him to restate his point regarding the
distribution to beneficiaries and the issuance of report.
MR. THWAITS said:
Oftentimes as a trust comes to its termination, that
is, the children are reaching the age at which the
trust can be distributed to them, it is advantageous
to then issue a preliminary report as to what assets
are there, what has been done with the assets, and how
the assets are going to distribute. Each beneficiary
would then have a six-month period with which to
respond or reply.
9:41:09 AM
MR. BLATTMACHR, President and CEO of Alaska Trust Company,
expressed strong support for SB 298.
DAVID SHAFTEL identified himself as an attorney who works in the
estate and trust arena and a member of attorneys and trust
officers who have worked to improve estate statutes since 1997.
He testified in support of SB 298.
STEVE GREER identified himself as an attorney whose practice was
limited to estate and trust work. He testified in support of SB
298.
9:43:39 AM
JONATHON BLATTMACHR, Attorney, said although he is a member of
the Alaska Bar, he practices primarily in New York. He was
involved in the development of the Alaska trust legislation and
said it was a pro-consumer bill. He testified in support of SB
298.
CHAIR SEEKINS closed public testimony.
SENATOR GRETCHEN GUESS asked Ms. Chapman to walk the committee
through how Section 11 would work.
MS. CHAPMAN said Section 11 was designed to parallel the claims
procedure reviews for probates when there is an estate involved.
An irrevocable trust doesn't go through the court probate
process and there has been uncertainty regarding how creditors
can assert claims against the revocable trusts.
When the settlor dies, the trustee can publish notice similar to
the notice published for an estate. That notice has a four month
statute of limitations and it adopts the probate procedures that
are contained in AS 13.16.450-525. They also can file a petition
with the superior court for the determination of claims if there
are any issues regarding those claims.
She said:
So what happens is you file a public notice in the
newspaper. Claims come in from creditors. The trustee
can either allow them or deny them pursuant to the
probate code. If a claim is disallowed then we have to
give them additional notice and allow them the right
to petition the court for determination and validity
of the claim. If there are no claims or if we've
resolved all claims within four months, then no
further claims can be asserted against the assets of a
revocable trust just as that happens with an estate,
and then the assets can be distributed to the
beneficiaries knowing that all claims of the deceased
have been satisfied.
9:47:41 AM
SENATOR CHARLIE HUGGINS related an anecdote about a probate
judge in Georgia who used his position to accumulate a lot of
land. He asked her whether there was a liability in Alaska for
that scenario to happen.
MS. CHAPMAN said she did not believe Alaska runs that risk.
Other than Anchorage, the state does not have probate judges.
The courts do not oversee the administration of the estates;
they are there only as needed for resolving disputes.
9:49:47 AM
SENATOR HUGGINS moved CSSB 298(JUD) from committee with
individual recommendations and attached fiscal notes. Hearing no
objections, the motion carried.
9:50:10 AM
HB 318-LIMITATION ON EMINENT DOMAIN
9:54:28 AM
CHAIR RALPH SEEKINS announced CSHB 318(FIN) am to be up for
consideration.
CRAIG JOHNSON, Staff to Representative Lesil McGuire, introduced
the bill and said it resolved around a policy call of whether
the state should allow private property to be transferred to a
private individual for economic gain. Also, should eminent
domain be allowed to take someone's private home so that others
might recreate, he asked. He referred to Kelo versus City of New
London where the city captured forty homes and transferred them
to an economical development project and the property ended up
being a parking lot. This created outrage across the country and
to date more than forty pieces of legislation has entered the
federal system regarding eminent domain. The bill that has the
most support says that any state or municipality that uses
eminent domain to take private property for private gain will
lose their economic development money for a period of two years.
More than thirty states are in the process of addressing the
issue through legislation and the sponsor of the bill would like
to ensure the same thing could not happen in Alaska.
9:57:02 AM
MR. JOHNSON said he has discovered through research that some of
the properties taken through eminent domain were second-
generation homes that were in a viable neighborhood. The bill
creates a definition for the word "home." The sponsor of HB 318
intends to protect Alaskan's homes as much as possible. He
prepared the committee that the testimony they would hear would
not be totally supportive and he conceded that it was not a
"perfect bill."
9:59:34 AM
MR. JOHNSON stated that many attorneys have looked at the bill
as well as state departments, the Realtors Association, utility
companies, the railroads, and some oil companies. The current
version represents a balance from the suggestions and concerns
of many different entities.
10:02:26 AM
SENATOR CHARLIE HUGGINS asked Mr. Johnson the type of feedback
they are receiving regarding the trail system in Anchorage.
MR. JOHNSON said they have heard a lot of support regarding the
trail system, mainly from the city assembly who passed an
ordinance against the taking of personal property. The basic
premise of the bill is that a person's home is their castle and
that the least the government can do is protect it.
10:05:56 AM
SENATOR HUGGINS asked for clarification whether the bill would
impact traditional trails.
MR. JOHNSON said access to hunting and fishing trails is
specifically protected in the bill.
SENATOR HOLLIS FRENCH said most projects have many aspects and
as an example, someday there will be a large development on the
south side of Mount McKinley to allow people more access to
Denali National Park. That will have a huge economic impact on
the area. He asked Mr. Johnson how he proposes to separate the
recreational aspect of a new hotel and road from the economic
development aspects. He said property could be taken to build a
railroad because that would fall into economic development but
some projects are large-scale and are mixed.
MR. JOHNSON said that example wouldn't come under consideration
because that is federal land and the bill only addresses private
property.
SENATOR FRENCH countered there was a lot of private land on the
south side of Denali off of the Petersville Road that would fall
under the restriction if the bill were too tightly crafted.
MR. JOHNSON said the bill allows for access to trails and roads
and does not affect a developed road system. If a borough or
munipality wants to take private land and sell it to another
private individual it would be prohibited. If they want to keep
it for their own use, such as infrastructure, then it would not
be protected under the bill. If they want to sell private land
to a developer of a lodge, they would have trouble doing so
under the bill.
10:09:52 AM
SENATOR FRENCH said ultimately the judge would make the call of
whether the eminent domain taking of someone's private land was
for economic development or not. He felt that it would be a
difficult process and subject to interpretation.
MR. JOHNSON agreed that the judge would make the determination
because by definition, eminent domain is a court action. He
noted that only one percent of the land in Alaska is held in
private hands.
SENATOR GUESS asked Mr. Johnson to explain the instances where
local government could impose local control. She questioned the
reason he said that the bill would not affect the Municipality
of Anchorage.
10:12:22 AM
MR. JOHNSON responded ordinances that are more restrictive tend
to trump state laws.
SENATOR GUESS asked the reason for adding "fiber optic lines" on
page 3 line 8.
MR. JOHNSON said it was done at the request of a House Judiciary
Standing Committee member as an attempt to plan for the future.
If a cable company has a right-of-way and they need to use the
land for fiber optics infrastructure, they wanted to make sure
that scenario was covered.
SENATOR GUESS asked Mr. Johnson to explain the third exemption
on page 4.
MR. JOHNSON said that is directly out of the Alaska State
Constitution that guarantees the right to access of resources.
He asked to have a representative from the Department of Law
explain the reason.
PETER PUTZIER, Senior Assistant Attorney General, Department of
Law (DOL), said the language comes from Article 8, Section 18 of
the Alaska State Constitution. The reason for the exception is
to avoid any argument that the bill in some way conflicts with
the Constitution.
10:14:43 AM
SENATOR GUESS asked whether she reads it correctly that a
private home could be taken to access resources.
MR. PUTZIER explained the way the Constitution reads is
proceedings in eminent domain may be undertaken for private ways
of necessity to permit essential access for extraction or
utilization of resources. The bill uses the exact same language.
SENATOR THERRIAULT asked Mr. Putzier to speak about the fifth
exemption.
MR. JOHNSON said it was brought as a concern that in a case such
as an oil lease, the state could take back the lease if
absolutely necessary. That was put in as a request from the
Department of Natural Resources.
SENATOR GENE THERRIAULT asked whether the state, through eminent
domain would actually take back the lease or whether the state
would take the resource under the lease and pay fair market
value for it.
CHAIR SEEKINS said it would appear that the state would take
back the surface use of the land.
MR. PUTZIER said he understood the idea was to preserve the
right to take back the property. There would be interplay with
existing lease rights and, he said, it would be an interesting
exercise of eminent domain. It is theoretically possible that
the property could be taken back if the consensus was that the
property wasn't used productively.
10:18:47 AM
CHAIR SEEKINS asked whether the property would include a
subsurface estate.
MR. PUTZIER said that was his understanding.
SENATOR THERRIAULT asked whether the definition of "property"
was the acreage or the resource. He also asked whether anyone
could potentially take the resource without taking the acreage.
MR. PUTZIER said he did not think the state could take the
resource without paying for the value of the resource.
SENATOR GUESS referred to page 4 line 8 and asked the reason for
the phrase "common carrier."
10:20:31 AM
MR. PUTZIER said the language was in response to similar federal
legislation so that Alaska would be in conformity. The intent is
to cover something like public bus systems, for example.
SENATOR GUESS clarified that under the definition of economic
development, it means "for profit."
10:21:48 AM
SENATOR FRENCH observed there was nothing in the bill
prohibiting the state from offering large amounts of money to
entice landowners to sell.
MR. PUTZIER said that is absolutely correct.
MR. JOHNSON added there was also an escape clause in the case of
a "hold out" that would allow the Legislature to step in and
determine whether a situation was an appropriate use of eminent
domain.
SENATOR FRENCH referred to page 5 and the definition of
"recreational facility or project." He posed a hypothetical
situation of a small community where thousands of people use the
small boat harbor and the city determined the harbor must
expand. He asked how that situation would be handled if the
harbor expansion would be within 250 feet of a residence.
10:24:17 AM
MR. JOHNSON said the city would probably offer the resident
owner additional money for the property although if it were
identified to be a large economic project, a judge could justify
the taking of the property.
SENATOR FRENCH asked Mr. Johnson the reason for not identifying
"boat launch" in the bill. He speculated there would be more
incidences of that occurring than any issue with small boat
harbors.
MR. JOHNSON said there was no reason. The language came from the
Department of Natural Resources (DNR) and the Department of Fish
and Game (DFG).
10:28:46 AM
CHAIR SEEKINS asked Mr. Putzier the reason the bill uses the
words "personal property" instead of "private property."
MR. PUTZIER said "personal property" is generally considered an
automobile or something like a swing set. "Private property"
restricts the language to "real property" that could be taken
with eminent domain.
CHAIR SEEKINS asked the reason for using the word "personal
residence" versus "private residence."
MR. PUTZIER responded either phrase could be used. The
definition of residence is difficult and there is no model even
in other states.
CHAIR SEEKINS asked how the residence is considered in the case
of someone owning a home in a family trust.
MR. PUTZIER said it would depend on how it flows through the
definitions in Section 3 subparagraphs (A-C).
10:31:30 AM
CHAIR SEEKINS held the bill in committee.
There being no further business to come before the committee,
Chair Seekins adjourned the meeting at 10:34:19 AM.
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