Legislature(1997 - 1998)
04/28/1998 01:35 PM Senate L&C
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* first hearing in first committee of referral
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SENATE LABOR AND COMMERCE COMMITTEE
April 28, 1998
1:35 p.m.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Jerry Mackie, Vice Chairman
Senator Tim Kelly
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Mike Miller
COMMITTEE CALENDAR
CONFIRMATION HEARINGS:
State Board of Registration for Architects, Engineers & Land
Surveyors: Patricia Peirsol, Fairbanks
Alaska Labor Relations Agency: Karen Mahurin, Kenai
Occupational Safety and Health Review Board: Denis Davidson,
Anchorage; and Carla Meek, Juneau
Personnel Board: Charlie Parr, Fairbanks
Board of Certified Real Estate Appraisers: Judy Kemplen,
Anchorage
Alaska Workers' Compensation Board: John Abshire, Anchorage;
Valerie Baffone, Anchorage; and Shawn Pierre, Chugiak
SENATE BILL NO. 353
"An Act relating to property exemptions; and providing for an
effective date."
- HEARD AND HELD
SENATE BILL NO. 354
"An Act relating to wills, intestacy, nonprobate transfers, and
trusts; and amending Rule 24, Alaska Rules of Civil Procedure."
- MOVED SB 354 OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 411(FIN)
"An Act relating to issuance of a winery license in a local option
area."
- MOVED CSHB 411(FIN) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 451(JUD)
"An Act relating to assistive technology devices and mobility aids
for physically disabled persons."
- MOVED CSHB 451(JUD) OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
SB 353 - No previous action to record.
SB 354 - No previous action to record.
HB 411 - No previous action to record.
HB 451 - No previous action to record.
WITNESS REGISTER
Representative Alan Austerman
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of HB 411
Doug Griffin, Director
Alcohol Beverage Control Board
550 W. 7th Ave., Suite 350
Anchorage, AK 99501-3510
POSITION STATEMENT: ABC Board neutral on HB 411
Ms. Jennifer Adzima, Legislative Assistant Intern to
Representative Joe Green
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Presented overview on HB 451
Patrick Reinhart, Director
State Independent Living Council
1016 W. 6th Ave., #205
Anchorage, AK 99501
POSITION STATEMENT: Testified in support of HB 451
Ken Dean
1130 Slim Williams Way
Juneau, AK 99801
POSITION STATEMENT: Testified in support of HB 451
Ms. Mel Krogseng, Staff to Senator Robin Taylor
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Presented overviews on SB 354 & SB 353
Stephen Noey
P.O. Box 110018
Anchorage, AK 99511-0018
POSITION STATEMENT: Testified in support of SB 354
Douglas Blattmacher, President & CEO
Alaska Trust Company
1029 W. 3rd
Anchorage, AK 99501
POSITION STATEMENT: Testified in support of SB 354
Rich Hompesch
199 N. Cushman, Suite 400
Fairbanks, AK 99701
POSITION STATEMENT: Testified in support of SB 354
Steve Greer
4041 B St., #205
Anchorage, AK 99501
POSITION STATEMENT: Offered information on SB 353
Ms. Linda Hulbert
P.O. Box 81402
Fairbanks, AK 99708
POSITION STATEMENT: Testified in support of SB 353
ACTION NARRATIVE
TAPE 98-25, SIDE A
Number 001
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee
meeting to order at 1:35 p.m. and noted the presence of Senators
Kelly, Hoffman and Mackie.
The first item on the agenda was a confirmation hearing on the
appointment of Karen Mahurin of Kenai to the Alaska Labor Relations
Agency.
KAREN MAHURIN, testifying via teleconference from Kenai, stated she
has served on the Alaska Labor Relations Agency Board for the past
five years, as well as serving as president of a Local of support
employees on the Kenai Peninsula for approximately eight years.
The Alaska Labor Relations Agency has also sent her to Boston to
attend the National Labor Relations Academy.
MS. MAHURIN believes that the board provides a very orderly
process to clarify unit disagreements and settle unfair labor
practices. She also believes that only by having a balanced panel
of labor management in a public seat can there be fairness to all
parties. She expressed her desire to be reconfirmed to the Alaska
Labor Relations Agency.
SENATOR MACKIE moved that the name of Karen Mahurin to the Alaska
Labor Relations Agency be forwarded to a joint session on
confirmations, and that this was not an indication of the members'
intent to vote for or against the nominee. Hearing no objection,
the motion carried.
Number 095
CHAIRMAN LEMAN opened the confirmation hearing on the appointment
of Carla Meek to the Occupational Safety and Health Review Board.
CARLA MEEK, the owner of a construction business in Juneau, said
she serves in the field as a construction person so she is
knowledgeable about the importance and the necessity for safety and
health in the job environment. She believes that her experience of
being the owner of a construction business, as well working in the
field, will be an asset to the board.
SENATOR MACKIE moved that the name of Carla Meek to the
Occupational Safety and Health Review Board be forwarded to a joint
session on confirmations, and that this was not an indication of
the members' intent to vote for or against the nominee. Hearing no
objection, the motion carried.
Number 175
CHAIRMAN LEMAN opened the confirmation hearing on the appointment
of Charlie Parr to the Personnel Board.
CHARLIE PARR of Fairbanks said he has been a resident of the state
of Alaska since 1961. He is a former faculty member of the
University of Alaska Fairbanks and served in the Alaska State
Legislature for eight years. He and his wife have been the owners
and operators of a gift shop in Fairbanks since 1976. He has
served on the Parole Board for almost five years, and he was
appointed to the Personnel Board last September. He said he views
the Personnel Board, since it is the last recourse in the Executive
Branch for public employees who aren't covered by a bargaining
agreement, as a place that requires both careful consideration and
absolute integrity.
CHAIRMAN LEMAN noted that concern was expressed last year about the
potential for extreme partisanship by members of the board, and he
asked Mr. Parr how he views his participation on this board. MR.
PARR responded that he can honestly say that in the board's
deliberations, he has never seen any indication of political
partisanship, and he would not let his membership in a party
influence his decisions.
SENATOR MACKIE moved that the name of Charlie Parr to the Personnel
Board be forwarded to a joint session on confirmations, and that
this was not an indication of the members' intent to vote for or
against the nominee. Hearing no objection, the motion carried.
Number 235
CHAIRMAN LEMAN opened the confirmation hearing on the appointment
of Judy Kemplen to the Board of Certified Real Estate Appraisers.
JUDY KEMPLEN, testifying from Anchorage, related that she is vice
president and manager of residential lending at National Bank of
Alaska, overseeing statewide production of new mortgage loans. She
said she has hands-on mortgage lending experience to bring to the
board, and she has worked with appraisers statewide in her current
position, as well as previous positions as loan officer, internal
quality officer and underwriter.
CHAIRMAN LEMAN asked Ms. Kemplen if she saw any conflict in her
work on the board and her husband's serving in the House of
Representatives. MS. KEMPLEN responded that she saw no conflict at
all.
SENATOR MACKIE moved that the name of Judy Kemplen to the Board of
Certified Real Estate Appraisers be forwarded to a joint session on
confirmations, and that this was not an indication of the members'
intent to vote for or against the nominee. Hearing no objection,
the motion carried.
Number 265
CHAIRMAN LEMAN opened the confirmation hearing on the appointment
of Shawn Pierre to the Alaska Workers' Compensation Board.
SHAWN PIERRE, a teacher in the Anchorage School District, said he
has served on the executive board of the Alaska Teamsters since
1996, and has found it very interesting and a learning experience.
CHAIRMAN LEMAN asked Mr. Pierre what types of issues have been
addressed since he has been on the board. MR. PIERRE replied they
have addressed many different issues including a wide spectrum of
work related injuries.
SENATOR MACKIE moved that the name of Shawn Pierre to the Alaska
Workers' Compensation Board be forwarded to a joint session on
confirmations, and that this was not an indication of the members'
intent to vote for or against the nominee. Hearing no objection,
the motion carried.
CHAIRMAN LEMAN opened the confirmation hearing on the appointment
of Patricia Peirsol to the State Board of Registration for
Architects, Engineers & Land Surveyors.
PATRICIA PEIRSOL, the owner of an architectural firm in Fairbanks,
said she realized several years ago that the Board of Registration
was more than a place to send your money and receive your
registration certificate. She realized that it was a very
important board and the issues were very important, not only to
herself, but to the general public as well. She believes that with
her experience she can help with some of the decision-making
process and that is why she is interested in being on the board.
CHAIRMAN LEMAN noted that SB 110, which passed the Senate and was
currently in the House, received criticism because it shifts costs
to licensees from the new registrants, and he asked Ms. Peirsol if
she had any comments on the bill. MS. PEIRSOL replied that she
was in only one meeting where that issue was discussed, and she is
not certain that she understands the thought that monies would be
transferred from one group to the other.
SENATOR MACKIE commented that the legislation provides for the
licensing of landscape architects and being part of the board, and,
as a result of that, all architects, engineers, land surveyors and
landscape architects will pay the same amount of fees.
Number 380
SENATOR MACKIE moved that the name of Patricia Peirsol to the State
Board of Registration for Architects, Engineers & Land Surveyors,
and that this was not an indication of the members' intent to vote
for or against the nominee. Hearing no objection, the motion
carried.
Number 391
CSHB 411(FIN) - LOCAL OPTION FOR WINERY LICENSE
CHAIRMAN LEMAN closed the confirmation hearing portion of the
meeting and then brought HB 411 before the committee.
REPRESENTATIVE ALAN AUSTERMAN, prime sponsor of HB 411, explained
the legislation is a minor change to the statute to allow the
possibility of a small winery business to be established,
particularly in one of the villages on Kodiak Island, although it
could apply to the rest of the state. Because of the way the ABC
statutes are written, it was felt that the winery licensee portion
had to be added to the exemption clauses which would then allow the
local communities to have a vote to allow a winery to take place.
SENATOR MACKIE asked if the statutes contain a definition of a
winery.
DOUG GRIFFIN, Director, Alcoholic Beverage Control Board, stated
the ABC Board's position as being neutral and not having any
objection to the legislation. He confirmed the change allows the
ability to start a winery as part of one of the options that are
available to local residents under the local option process.
In response to Senator Mackie's question, MR. GRIFFIN clarified
that the state of Alaska relies on the definition for wine that's
provided by the federal government. The Bureau of Alcohol, Tobacco
and Firearms is more involved in the manufacturing of a product.
He said he didn't have the definition in front of him, but it
basically would be a product that's fermented from grapes or other
types of fruit. On Kodiak Island they are looking at a wildberry
winery and it would be within a certain alcohol content.
SENATOR MACKIE asked if a winery would be regulated in the same
manner by the ABC Board as any other industry would. MR. GRIFFIN
acknowledged that was correct. He stressed that there would have
to be a local option election held before a winery could be
established.
CHAIRMAN LEMAN asked if the winery would be just exporting its
product. MR. GRIFFIN replied that could be the case if that is the
option it chooses, but a community could also allow for limited
sale of the product as well. He noted there are communities in
other parts of the country involved in the manufacturing of a
product but they remain dry communities.
There being no further testimony on HB 411, CHAIRMAN LEMAN asked
for the pleasure of the committee.
SENATOR MACKIE moved that CSHB 411(FIN) be passed out of committee
with individual recommendations. Hearing no objection, it was so
ordered.
CSHB 451(JUD) - ASSISTIVE TECHNOLOGY & MOBILITY AIDS
CHAIRMAN LEMAN brought CSHB 451(JUD) before the committee as the
next order of business.
JENNIFER ADZIMA, a legislative intern to Representative Joe Green
who is the prime sponsor of HB 451, said the legislation
establishes an express warranty for technologies which assist
physically disabled persons. Assistive technologies and mobility
aids for physically disabled are not covered by the lemon laws and
the consumer protection statutes in Title 45. She noted 11 states
have passed such laws, and two others, including Alaska, are
considering doing so.
Number 524
PATRICK REINHART, Director of the State Independent Living Council
(SILC), testifying from Anchorage in support of HB 451, said the
council's primary responsibility is the development of a state
plan for independent living and the implementation of that plan.
He related that SILC requested that the legislation be introduced.
MR. REINHART said that even though the bill has a zero fiscal note,
he believes it will end up saving the state money in the long run
because it is often state agencies that are involved in helping
people with disabilities with the purchase of some kinds of very
expensive pieces of adaptive equipment. When there is no recourse,
they often end up with pieces of equipment that lie idle and
useless, so it will save the state money, as well as the
individuals with disabilities.
Number 542
SENATOR MACKIE expressed his appreciation to Mr. Reinhart for all
of his hard work with Challenge Alaska, as well as his work as
director of SILC.
KEN DEAN of Juneau said he works for Southeast Alaska Independent
Living (SAIL) and he was appearing before the committee to shed
some light on the value of the legislation.
MR. DEAN said he purchased his wheelchair six years ago at a cost
of $13,500. However, before that, he had a wheelchair which was
made by a different manufacturer, which he purchased at a cost of
$9,500. He had problems with the wheelchair, but was told by the
manufacturer that Alaska had no lemon law so he was basically out
of luck. He said in working for an independent living agency, he
runs across this type of problem continually because of
manufacturers not honoring their nationwide warranties, mainly
because the equipment is in Alaska.
TAPE 98-25, SIDE B
Number 585
There being no further testimony on HB 451, CHAIRMAN LEMAN asked
for the pleasure of the committee.
SENATOR HOFFMAN moved CSHB 451(JUD) be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
SB 354 - WILLS, TRUSTS, & OTHER TRANSFERS
CHAIRMAN LEMAN brought SB 354, sponsored by the Senate Judiciary
Committee, before the committee as the next order of business.
MEL KROGSENG, staff to Senator Robin Taylor, explained the
legislation puts finishing touches on the Alaska Trust Act passed
in 1997 by taking common law and codifying it into statute. In
writing the trust document, people who write trusts for Alaska,
will be able to include references to the statutes as opposed to
having to individually list all the provisions in the trust
document.
SB 354 makes a number of important improvements to Alaska's estate
and trust laws. Section 1-8, 18, and 19 of the bill change Alaska
law to permit a person who is domiciled outside of Alaska to select
Alaska as the jurisdiction for the probate of their estate. This
provision should bring significant business to the state.
Sections 9 and 10 of the bill allow a person to limit the liability
of a trustee in their trust when more than one trustee is serving.
The person could provide that only the trustee who exercises a
power will be held liable for his actions and that the other
trustee who did not participate in the exercise of the power would
not be held liable. This provision will encourage trustees in
Alaska to work with other trustees of the same trust.
Portions of the Uniform Trusts Act draft 1997) which clarify many
issues involving the administration of trusts in Alaska are
included in Section 11 of the bill.
Section 12 protects an Alaska trustee who in good faith defends an
Alaska trust from the claims of a creditor who seeks to set the
trust aside. If the trustee acts in good faith, then the trustee
gets a first lien on all trust assets for payment of its fees,
costs and attorneys' fees. Delaware has adopted a similar
provision to protects its trustees.
Section 13 allows a trustee who has the power to invade the corpus
of a trust to appoint the assets of the trust to another trust for
the beneficiaries to postpone estate and similar taxes. This
provision would allow a trustee to move a trust to Alaska and to
appoint the assets to an Alaska trust.
Section 14 clarifies that a trust created in another state or
country can be moved to Alaska even though the trust was settled
before the Alaska Trust Act was passed last year.
Alaska does not have a statutory provision that sets out the powers
of a trustee. Sections of the Uniform Trustee's Powers Act (draft
1994-1997) are enacted in Section 16 of the bill. These statutory
powers would supplement the powers set forth in a trust agreement.
A number of miscellaneous provisions are included elsewhere in the
bill. Section 15 allows a person to include a penalty clause in
their trust. Section 17 clarifies the accounting of bond premiums
and discounts. Section 20 amends AS 34.40.110(d) to be consistent
with the Uniform Fraudulent Transfers Act. Section 21 precludes an
action by creditors of the grantor of the trust against those who
assist in the creation of the trust.
Concluding her overview on the legislation, MS. KROGSENG said this
bill will improve estate and trust laws and will make Alaska's laws
more favorable to its residents. In addition, the bill will make
Alaska's laws more attractive to people outside of Alaska who are
considering Alaska for the administration of their estates and
trusts.
Number 525
SENATOR LEMAN asked Ms. Krogseng if she was aware of any opposition
to the legislation. MS. KROGSENG replied that she was not, and
that correspondence in support of the legislation as been received
from attorneys in Anchorage who work trusts. The attorneys have
said it will make it easier for them in working with trusts and
setting them up.
STEVEN NOEY said one of the important things in the legislation is
the ability to take a trust that has been created prior to Alaska
Trust Act and have it moved to Alaska. The U.S. Treasury estimates
that there are about a trillion dollars offshore in trusts, and a
lot of them have gone offshore due to the fact that Alaska didn't
have a self-settling trust where it was an asset protection trust.
SB 354 is a housekeeping measure to make sure that there is no
conflict if people do want to switch and move the trust to Alaska.
DOUGLAS BLATTMACHER, President and CEO of the Alaska Trust Company
(ATC), testifying via teleconference from Anchorage, stated ATC
strongly supports SB 354. ATC thinks it will complement the Alaska
Trust Act passed last year and will encourage more people to set up
trusts, as well as generate additional job opportunities and
business opportunities.
RICH HOMPESCH, a Fairbanks attorney and a member of the Alaska
Probate Rules Committee, said he helped draft portions of SB 354,
and he agrees with the previous testimony on the bill. He thinks
the bill will help Alaska remain competitive in the trust industry
in the United States.
There being no further testimony or discussion on SB 354, CHAIRMAN
LEMAN requested a motion to move the bill out of committee.
Number 487
SENATOR MACKIE moved SB 354 be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
CHAIRMAN LEMAN opened the confirmation hearing on the appointment
of Valerie Baffone to the Alaska Workers' Compensation Board.
VALERIE BAFFONE, testifying via teleconference from Anchorage,
stated she is currently the assistant business manager for Public
Employees Local 71, and she is up for reconfirmation to the board
as a labor representative. She enjoys the work she's been doing on
the board, and she thinks it is a good functioning board. She
believes it is important to have a board that can work well with
both the employer representatives and the employees in resolving
the issues that come before it.
CHAIRMAN LEMAN commented that workers' comp costs appear to have
come come down in recent years, and he asked Ms. Baffone if she
thinks it is a reflection of some of the changes in law that the
Legislature has made in the last five years. MS. BAFFONE replied
that she thinks some of changes that have been made over the years
have had an impact on reducing the costs for the workers' comp
claims.
SENATOR MACKIE moved that the name of Valerie Baffone to the Alaska
Workers' Compensation Board be forwarded to a joint session on
confirmation, and that this was not an indication of the members'
intent to vote for or against the nominee. Hearing no objection,
the motion carried.
SB 353 - PROPERTY EXEMPTIONS
CHAIRMAN LEMAN brought SB 353, sponsored by the Senate Judiciary
Committee, before the committee as the final order of business.
MEL KROGSENG, staff to Senator Robin Taylor, said SB 353 seeks to
update the exemptions which are presently allowed Alaska residents
for a family home and insurance. The legislation, although not
granting an unlimited exemption for the family home, would at least
put the family home on par with the new federal income tax capital
gain exclusion. Given the growing popularity of trusts as estate
planning tools, a section is added to give individuals who have
their assets placed in the name of a trust, the same protection
that would exist had the assets been in the individuals' own names.
This would apply only to those trusts where the trust income is
still taxable to the grantor.
In addition, the bill adds three new exemptions: (1) for the
reserves set aside for condominium associations; (2) a limited
exemption for annuities; and (3) for the new Roth IRA.
The exemption provided for condominium reserves is meant to protect
the many individuals who reside in condominiums in Alaska. The
bill assures them that the money which they have paid in the form
of monthly dues will continue to be used for the purposes for which
they were intended, i.e., ongoing maintenance and repairs.
MS. KROGSENG said the bill would protect insurance policies and
their related cousin, annuities (up to $100,000) from unforeseen
financial disasters. She noted that the states of Alabama, New
York, Florida, California, Missouri, New Mexico, North Carolina,
Oregon, and Texas have seen fit to give its citizens an unlimited
exemption for insurance policies.
Number 385
CHAIRMAN LEMAN inquired as to the current value of the homestead
exemption.
STEVE GREER, an Anchorage attorney who has worked on the
legislation, said with respect to the indexing of the homestead
exemption, it is now $62,100.
CHAIRMAN LEMAN said he could understand the reason for increasing
a homestead exemption, but he questioned why the big jump to
$250,000 for an individual and $500,000 for a couple. MR. GREER
pointed out that a lot of states allow unlimited homestead
exemptions. This legislation was meant to try put to Alaska, not
at the top of ladder, but at least higher than where it is right
now, and it was felt that the previous amount in the law was
exceptionally low. He noted that with respect to the homestead
exemption, banks are still going to request in their deed of trust
language that the individual who gets a loan waive that right to
that homestead exemption, so the banks' interests are still going
to be protected. It was felt that this legislation would be of
great benefit to the majority of Alaskans.
CHAIRMAN LEMAN asked if other people besides the banks can ask that
the homestead exemption be waived when they set up loan agreements.
MR. GREER acknowledged that was correct. He added that what this
bill is really meant to protect against is the unforeseen financial
disaster that might occur such as a huge medical bill, a lawsuit,
etc.
MR. GREER spoke to the importance of the exemption for the reserves
set aside for condominium associations, as well as Section 11,
relating to the treatment of certain trusts, which is meant to
assure the fact that if an individual retitles his asset in the
name of his revokable trust, that the same type of exemption
protection is going to be given to that individual as if he had
just kept the asset in his own individual name.
CHAIRMAN LEMAN said recent studies have indicated that the CPI
overstates inflation, and he asked Mr. Greer if in using that it is
creating limits that are higher than what we really want to create.
MR. GREER replied that the present $54,000 puts Alaska in the
lower half of the states that protect its citizens against claims,
and Alaska is one of the more expensive states in the union, where,
if anything, the protection should be higher and not lower.
CHAIRMAN LEMAN commented there are two sides to that because it may
protect the citizens against claims, but raising those limits would
not protect the person making the claim.
Number 234
LINDA HULBERT, a licensed insurance agent living in Fairbanks,
voiced her strong support for the provision in the bill that would
protect insurance policies from unforeseen financial disasters.
Many times life insurance is the only asset there to protect the
spouses and children. She said she represents a lot of life
insurers in the state and, with those agents, works with hundreds
and hundreds of people every year who in good faith get a permanent
policy to protect their families.
Number 192
CHAIRMAN LEMAN stated it was his intent to hold the legislation
over, but he wanted to get a sense of the committee regarding the
amounts proposed in the legislation.
SENATOR HOFFMAN said he would like to see the amounts for the
homestead exemption and the insurance policy protection as close as
possible so that it is not protecting one group of people at a
higher level, because many families might only have life insurance
as their asset.
There being no further testimony on SB 353, CHAIRMAN LEMAN said the
legislation would be worked on for the next couple of days to see
if a consensus could be reached on the limits in the bill and to
craft something that everyone could support.
There being no further business to come before the committee, the
meeting adjourned at 3:07 p.m.
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