04/06/2010 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB354 | |
| HB253 | |
| HB287 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 253 | TELECONFERENCED | |
| + | HB 287 | TELECONFERENCED | |
| + | HB 354 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 6, 2010
1:32 p.m.
MEMBERS PRESENT
Senator Joe Paskvan, Chair
Senator Joe Thomas, Vice Chair
Senator Kevin Meyer
Senator Con Bunde
MEMBERS ABSENT
Senator Bettye Davis
COMMITTEE CALENDAR
HOUSE BILL NO. 354
"An Act relating to eligibility for loans from the Alaska
capstone avionics revolving loan fund."
- MOVED HB 354 OUT OF COMMITTEE
HOUSE BILL NO. 253
"An Act relating to the time periods affecting certain liens
related to providing labor, material, service, or equipment to
real property, including buildings and other improvements."
- MOVED HB 253 OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 287(JUD)
"An Act relating to the adoption of the Uniform Disclaimer of
Property Interests Act, and to the disclaimer of property rights
under the Uniform Probate Code."
- MOVED CSHB 287(JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 354
SHORT TITLE: AK CAPSTONE AVIONICS REVOLVING LOAN FUND
SPONSOR(s): REPRESENTATIVE(s) KELLER
02/19/10 (H) READ THE FIRST TIME - REFERRALS
02/19/10 (H) L&C
02/23/10 (H) TRA REFERRAL ADDED AFTER L&C
03/08/10 (H) L&C AT 3:15 PM BARNES 124
03/08/10 (H) Moved Out of Committee
03/08/10 (H) MINUTE(L&C)
03/10/10 (H) L&C RPT 4DP
03/10/10 (H) DP: BUCH, NEUMAN, CHENAULT, OLSON
03/11/10 (H) TRA AT 1:00 PM CAPITOL 17
03/11/10 (H) Moved Out of Committee
03/11/10 (H) MINUTE(TRA)
03/12/10 (H) TRA RPT 7DP
03/12/10 (H) DP: JOHANSEN, MUNOZ, JOHNSON, T.WILSON,
GRUENBERG, PETERSEN, P.WILSON
03/25/10 (H) TRANSMITTED TO (S)
03/25/10 (H) VERSION: HB 354
03/26/10 (S) READ THE FIRST TIME - REFERRALS
03/26/10 (S) L&C
04/06/10 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 253
SHORT TITLE: MECHANIC/MATERIALMEN LIENS
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
01/08/10 (H) PREFILE RELEASED 1/8/10
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) L&C, JUD
03/01/10 (H) L&C AT 3:15 PM BARNES 124
03/01/10 (H) Moved Out of Committee
03/01/10 (H) MINUTE(L&C)
03/04/10 (H) L&C RPT 5DP
03/04/10 (H) DP: LYNN, BUCH, CHENAULT, T.WILSON,
OLSON
03/12/10 (H) JUD AT 1:00 PM CAPITOL 120
03/12/10 (H) Moved Out of Committee
03/12/10 (H) MINUTE(JUD)
03/15/10 (H) JUD RPT 6DP
03/15/10 (H) DP: LYNN, GRUENBERG, HERRON, DAHLSTROM,
GATTO, RAMRAS
03/26/10 (H) TRANSMITTED TO (S)
03/26/10 (H) VERSION: HB 253
03/29/10 (S) READ THE FIRST TIME - REFERRALS
03/29/10 (S) L&C, JUD
04/06/10 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 287
SHORT TITLE: UNIFORM ACT: PROPERTY INTEREST DISCLAIMER
SPONSOR(s): REPRESENTATIVE(s) RAMRAS, GRUENBERG
01/15/10 (H) PREFILE RELEASED 1/15/10
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) L&C, JUD
03/01/10 (H) L&C AT 3:15 PM BARNES 124
03/01/10 (H) Moved Out of Committee
03/01/10 (H) MINUTE(L&C)
03/04/10 (H) L&C RPT 1DP 4NR
03/04/10 (H) DP: LYNN
03/04/10 (H) NR: BUCH, CHENAULT, T.WILSON, OLSON
03/11/10 (H) JUD AT 1:00 PM CAPITOL 120
03/11/10 (H) <Bill Hearing Canceled>
03/17/10 (H) JUD AT 1:00 PM CAPITOL 120
03/17/10 (H) Moved CSHB 287(JUD) Out of Committee
03/17/10 (H) MINUTE(JUD)
03/19/10 (H) JUD RPT CS(JUD) 7DP
03/19/10 (H) DP: LYNN, GRUENBERG, HERRON, DAHLSTROM,
HOLMES, GATTO, RAMRAS
03/23/10 (H) TRANSMITTED TO (S)
03/23/10 (H) VERSION: CSHB 287(JUD)
03/24/10 (S) READ THE FIRST TIME - REFERRALS
03/24/10 (S) L&C, JUD
04/06/10 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
REPRESENTATIVE KELLER
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 354.
MATT JOHNSON
Staff to Representative Keller
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on HB 354 for the sponsor.
REPRESENTATIVE RAMRAS
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 253.
GRACE RUDY
Overhead Door Co.
Fairbanks, AK
POSITION STATEMENT: Supported HB 253.
SANDRA HEMBREE
Alaska Best Plumbing and Heating
Fairbanks, AK
POSITION STATEMENT: Supported HB 253.
REPRESENTATIVE GRUENBERG
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 287.
TERRY THURBON
Chief Administrative Law Judge &
Uniform Law Commissioner
State of Alaska
POSITION STATEMENT: Answered questions on HB 287.
DAVE SHAFTEL, estate and trust attorney
Anchorage, AK
POSITION STATEMENT: Supported HB 287.
ACTION NARRATIVE
1:32:18 PM
CHAIR JOE PASKVAN called the Senate Labor and Commerce Standing
Committee meeting to order at 1:32 p.m. Present at the call to
order were Senators Thomas, Meyer, Bunde, and Paskvan.
HB 354-AK CAPSTONE AVIONICS REVOLVING LOAN FUND
CHAIR PASKVAN announced HB 354 to be up for consideration.
1:34:19 PM
REPRESENTATIVE WES KELLER, sponsor of HB 354, said he has heard
no negatives about the Capstone Project. He said this FAA pilot
program in Southeast and Southwest Alaska claimed a 47 percent
reduction in accidents. Since then the challenge is to get all
the aircraft equipped with the proper equipment. All HB 354 does
is correct an oversight by making aircraft operators in the
state who lease their aircraft eligible for the loan that was
put in place for purchasing the equipment.
SENATOR BUNDE asked if this revolving loan fund supports itself.
REPRESENTATIVE KELLER answered yes and that HB 354 is supported
by the Division of Investments in the Department of Commerce,
Community and Economic Development (DCCED).
SENATOR BUNDE asked what the Capstone equipment costs.
1:36:18 PM
MATT JOHNSON, staff to Representative Keller, answered that the
upper end equipment costs around $15,000 and purchasers can
borrow up to 80 percent of that which would be about $12,000.
SENATOR BUNDE said that jibes with his memory; that amount is
not something that someone would get on a lark.
CHAIR PASKVAN closed public testimony.
SENATOR THOMAS moved to report HB 354 from committee with
individual recommendations and attached fiscal note(s).
SENATOR BUNDE objected to note a possible conflict because he is
an aircraft owner and could conceivably take advantage of this
particularly if the price comes down substantially; then he
removed his objection. There were no further objections and HB
354 moved from committee.
1:38:40 PM
CHAIR PASKVAN announced an at ease from 1:38 to 1:39 p.m.
1:39:46 PM
CHAIR PASKVAN called the meeting back to order at 1:39 p.m.
HB 253-MECHANIC/MATERIALMEN LIENS
CHAIR PASKVAN announced HB 253 to be up for consideration.
1:40:04 PM
REPRESENTATIVE JAY RAMRAS, sponsor of HB 253, said this bill is
from one of the chair's constituents, Rocky Paby, a Fairbanks
boiler technician and that he has taken lengthy testimony from
small contractors, an overhead door company, and a couple of
boiler technicians on it. He said that communities often
organize regular maintenance, but many times workmen are called
on after hours or for emergencies. Presently they are subject to
a 90-day lean period. Once the first 30 days goes by because
they don't have a regular accounts payable relationship, these
bills often get shuffled to the bottom of their paper pile. As
such, these tradesmen are losing their position and their
ability to lien jobs. So, HB 253 merely extends the time within
which to file a lien from 90 days to 120 days. This will give an
additional 30 days to work with property owners to secure
payment or to negotiate a reasonable payment plan.
SENATOR BUNDE said he assumed you have to be 30 days in arrears
before any concern comes to the vendor's attention, and then
they have two more months to place a lien. Why isn't that two
months adequate?
REPRESENTATIVE RAMRAS answered that reasonable people don't
anticipate that the bill is due when it is mailed to them,
because they see on the bottom of the billing statement that
it's due in 30 days. As a result the contractors in this class
of small business people find themselves in a position where
they don't send a bill until time has passed and then people
that they are billing don't often pay upon receipt of an invoice
until the next billing cycle. In a community like Fairbanks that
still uses diesel, often people get into situations like today
where the price of oil has reached $87/barrel and the price of
home heating oil is over $3/gallon. Families are seeing $1100 in
fuel bills for a monthly period; they call out to get their
boiler man to do a repair late at night when they have lost
their heat for their home and then that bill takes a seat behind
the regular cycle of paying for their fuel. As a result, they
see the business owner being punished passively simply because
the person for whom they did the work in a distressed time
doesn't have the money to pay. So, if the clock doesn't start
running until after 30 days and then they only have a 60-day
window with which to file a lien, a number of contractors have
said that simply isn't an adequate period of time.
He said he has heard a criticism that perhaps when the service
man shows up at the house they should present to the person that
they are doing work for a right to waive lien, but then you
would be accusing the person of having bad credit at the moment
you're there to service them and that isn't a good business
practice. This is an excellent compromise to help households and
not berate customers at the time of service.
1:45:42 PM
CHAIR PASKVAN clarified that it's not the date of the bill that
is important to the lien statute, but the date of the completion
of the service. So if the furnace man comes in and doesn't give
you the bill on the day that he does the job and gets the bill
to the customer two weeks later, it has already been maybe 30-50
from the time of the completion of the work. You have one more
cycle and then you are almost up against the 90 days from the
completion of the work. So the billing cycle is distinct from
the completion of the work trigger date.
SENATOR THOMAS asked if the small businesses he spoke to thought
the 120 days was a good number. He knew that invoicing is often
delayed because shops are small and people are busy.
REPRESENTATIVE RAMRAS replied that sometimes these small
business people are drawn into work because they have a passion
for it. Sadly some of his closest friends who have a passion for
repairing your stuff show less of an interest in billing you for
it promptly and even less of an interest in collecting it. They
are excellent trades people but not such great business people.
This would be an extra buffer, an opportunity for them to not
suffer so much from their own procrastination.
1:48:27 PM
GRACE RUDY, owner, Overhead Door Co., Fairbanks, AK, testified
that a lot of times when she tries to collect bills after the 30
days is passed - which is really when the bill is due - she gets
anything from the people just don't have the money and want to
make payments to maybe you can't get hold of them at all for 60
days and after you get a hold of them, they let you know that
they have been on vacation for a month and now they don't have
any more money. By the time the 90 days is up you're trying to
work with them, because you don't want to alienate your
customers, but 90 days often is not enough time. Another 30 days
would be very valuable for the customers and the business people
for many reasons.
1:50:13 PM
SANDRA HEMBREE, Alaska Best Plumbing and Heating, Fairbanks,
Co., added that one situation that comes up quite a bit,
especially in the winter time, is when they are dealing with
insurance claims for expensive damage. In most of those
situations they are dealing with tens of thousands of dollars
rather than hundreds of dollars, and it takes at least 90 days
before they even consider processing payments. She knows of
several instances where the home owner gets the check and the
business never sees the money because they decide to take off
with it. Businesses don't have any recourse because they have to
wait for the insurance adjusters to do their fractions, then
they submit that to the mortgage company; the mortgage company
wants to do their own inspections. It's a very time consuming
process.
MS. HEMBREE said they don't have problems with their customers,
but they do have cases where they set up a payment plan, and
then the people don't pay and then they have to track them down.
By the time they realize they are just not going to pay it's
past that 90 day mark.
CHAIR PASKVAN asked if the insurance company doesn't make the
check out as dual payee.
MS. HEMBREE answered they are supposed to but in a lot of cases
they don't. In most cases they make it out to the mortgage
company and the home owner, so then they have to send the checks
to the mortgage company and get an inspection. Then the mortgage
company will release the money to the homeowner. They are
outside that chain in most cases. The dual check is very rare.
SENATOR BUNDE said he wanted businesses to be paid for their
services and promptly and asked if there is any danger that the
word will go out that someone can drag their feet for another 30
days.
MS. HEMBREE answered no; she has found if you're going to pay
your bill you will.
MS. RUDY agreed 100 percent.
SENATOR BUNDE asked if they can begin the lien process sooner if
they felt these were scofflaws.
REPRESENTATIVE RAMRAS answered that you can file a lien right
away, but probably not on repeat customers.
CHAIR PASKVAN closed public testimony.
1:55:20 PM
SENATOR THOMAS moved to report HB 253 from committee with
individual recommendations and attached zero fiscal note(s).
There were no objections and it was so ordered.
HB 287-UNIFORM ACT: PROPERTY INTEREST DISCLAIMER
1:58:03 PM
CHAIR PASKVAN announced HB 287 to be up for consideration.[CSHB
287(JUD) was before the committee.]
1:57:01 PM
REPRESENTATIVE MAX GRUENBERG, sponsor of HB 287, introduced
Gretchen Staft, his chief of staff who is a member of the Alaska
Bar. He said this updates the existing Uniform Probate law
specifically, AS 13.12.801 that deals with "disclaimers." A
disclaimer is a device in probate law where if a person is given
a bequest, is a devisee under a will or is a beneficiary of a
trust, he can say he doesn't want to take a particular asset.
It can be done for a number of reasons: because for example the
person isn't able to manage it if it's a business or a house
that requires active management or for tax purposes. For
example, if he leaves money to his son and he is elderly or in
bad health and doesn't want to be taxed on that particular
bequest he can disclaim it and it goes directly to his heir, the
grandson. That saves a substantial amount of federal taxes.
He explained that originally this issue was covered in a single
section and since then the world of probate law has gotten more
complex and tax law has changed. As a result the commissioners
on uniform state laws have enacted the Uniform Disclaimer of
Property Interest Act, which repeals the original section and
updates it in a separate act. This just updates the existing
law.
REPRESENTATIVE GRUENBERG said they made very few changes, but
one they did make was to the question of whether any creditor
claims would survive. An amendment says you cannot escape child
support obligations by disclaiming, because some people would
rather see their money go away than see their ex-spouse get it
and take care of the kids and that is not good public policy.
2:02:14 PM
SENATOR MEYER noted that this started in 1999 and 16 states have
adopted it since then. Why haven't more states jumped on board?
REPRESENTATIVE GRUENBERG replied that he thinks that the
Commission on Uniform State Laws has a lot of bills on a variety
of subjects; some of them are very timely and important like the
Uniform Electronic Signatures Act that has to keep pace with
commerce. Others are less publicized, and only one or two
probate laws get passed a year. Probate laws aren't very sexy
and many lawyers don't deal with them. One of the bills they
brought last year was the UCC update, which they did. Sometimes
it has to politically find someone who wants to push it. That
doesn't mean it's controversial.
The only controversy he is aware of is a series of law review
articles between the reporter who drafted this and one other
practitioner from different parts of the country who have some
basic philosophical differences.
2:05:00 PM
TERRY THURBON, Chief Administrative Law Judge and Uniform Law
Commissioner, State of Alaska, said she wasn't aware of anything
in the Act that should be a problem for Alaska, and since 23 or
24 other states have enacted this already, that provides the
needed momentum.
REPRESENTATIVE GRUENBERG said this bill was introduced several
years ago by Representative LeDoux, and the there was some
controversy about the child support. That was cured and
Representative LeDoux is no longer here, so it took a little
while to pick it up again.
He stated that the folks in Alaska brought this bill forward;
it's a uniform act, but the commissioners traditionally only
bring two or three bills a year to the legislature.
2:07:30 PM
DAVE SHAFTEL, estate and trust attorney, Anchorage, Alaska, he
is a member of an information group of lawyers who work in this
area and have been working with the legislature since 1997 to
suggest what they think would be good additions to Alaska law.
This bill came to his attention a couple of years ago through
Representative LeDoux and they asked for time to study it. They
worked on it and consulted with a law professor at Florida State
University who had written a number of articles about it. He was
supportive but suggested changes that were very good. Some of
them that they thought fit Alaska were incorporated into the
legislation. They came back with the bill last year, which was a
very busy year and the bill didn't get through then. They think
it's a very good bill.
2:09:21 PM
SENATOR THOMAS asked for an example of the situation on page 7,
line 13, paragraph (e) that says "in the case of an interest
created by a beneficiary designation made before the time the
designation becomes irrevocable, disclaimer shall be delivered
to the person making the beneficiary designation."
MR. SHAFTEL explained that this whole section is procedural and
describes how the knowledge of this disclaimer gets transferred
according to the rules stated in this statute or according to
directions in the instrument that created that property right
and goes on to whomever is entitle to it. Lines 13-15 talk about
an interest created beneficiary designation made before the time
the designation becomes irrevocable. For example, you might have
a life insurance policy and you might make a beneficiary
designation in that policy of your son or daughter that is not
irrevocable. That beneficiary designation can be changed at any
time. But if your daughter does not want to receive that
property and would rather it go to her children, she can
disclaim that interest. The disclaimer's notice would be
delivered back to the person making the beneficiary designation.
He said these provisions attempt to answer questions of how to
make a disclaimer effective.
SENATOR THOMAS asked if someone passes away, does that create
the situation where the designation becomes irrevocable.
MR. SHAFTEL answered yes.
CHAIR PASKVAN asked what his thoughts were about the addition of
the child support obligation.
MR. SHAFTEL said it is just fine. It's one exception that
appears in other areas of trust law.
2:14:50 PM
CHAIR PASKVAN closed public testimony.
SENATOR THOMAS moved to report CSHB 287(JUD) from committee with
individual recommendations and attached zero fiscal note. There
were no objections and it was so ordered.
2:15:55 PM
CHAIR PASKVAN found no further business to bring before the
committee and adjourned the meeting at 2:15 p.m.
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