HOUSE BILL NO. 81 "An Act relating to the transfer of a title on the death of the owner; and providing for an effective date." 3:02:33 PM REPRESENTATIVE GEORGE RAUSCHER, SPONSOR, introduced HB 81. He read the sponsor statement (copy on file): The process of probate in the state of Alaska can take anywhere from six months to several years, and can cost family members and beneficiaries thousands, potentially tens of thousands of dollars in legal and filing fees. While the State Legislature has already taken great strides to reduce the costs of probate, there is still much room for improvement. House Bill 81 continues in spirit with the Uniform Real Property Transfer on Death Act (URPTDA), which unanimously passed both the House and Senate in 2014. URPTDA created the Transfer on Death (TOD) deed, which allows for nonprobate transfers of real property. TOD deeds allow Alaskans to select a beneficiary who will receive the property at their passing and removes that property from the process of probate. In 2016, legislation similar to HB 81 was introduced but the legislation failed to pass that session. HB81 is nearly identical, although it expands the concept to apply both to vehicles and boats that are issued titles through the state. HB81 continues the ongoing effort to reduce the costs of probate for Alaskans and creates a streamlined service through the DMV through which they can designate beneficiaries for both cars and boats through a simple form. The TOD titles will be available for all boats and vehicles for which the DMV provides titles, which also includes some mobile manufactured homes under AS 45.29.102(66). The program will be self-sustaining through fees. At no cost to the state, HB 81 will allow countless Alaskans to pass down boats, vehicles, and some manufactured homes to beneficiaries with more ease, and will help simplify and streamline the potentially complicated, costly, and painful process of probate following the death of a loved one. RYAN MCKEE, REPRESENTATIVE GEORGE RAUSCHER STAFF, noted there were testifiers online available to answer questions. Representative Galvin understood that the bill would come at no cost to the state. She asked if the Division of Motor Vehicles (DMV) could provide information on whether the bill would require additional paperwork or that staff work overtime hours. She liked the bill but wanted to ensure that it was clear whether more support would be needed. 3:06:59 PM DAVID DUNLAP, VEHICLE PROGRAM MANAGER, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF ADMINISTRATION (via teleconference), responded that there was a small cost associated with the programing changes that would be required in order for the DMV to facilitate the process. He emphasized that the bill would not be excessively prohibitive for the public. Representative Hannan relayed that she was supportive of the bill. She asked if there was a way to add airplanes into the transfer of ownership upon death in addition to vehicles and boats. Representative Rauscher responded that he would be amendable to the addition of planes if Representative Hannan were to suggest adding it. Representative Hannan noted that the remainder of the bill addressed transfer of ownership through an already established process. She had been asked by constituents how ownership of airplanes was tracked or whether it was federally regulated. She did not want to derail the bill or overinflate the cost. She asked Co-Chair Foster if he could comment because she was aware that he owned a plane. Co-Chair Foster replied that he had to register his plane with the Federal Aviation Administration (FAA). The question might require some additional research but he was certain that the FAA would be involved. Representative Hannan reiterated that she did not want to derail the bill and thought it would cover more Alaskans. She noted that the only issue she had heard about relating to the bill was the potentiality for airplanes to be included. Co-Chair Foster OPENED public testimony. He detailed the way in which written testimony could be submitted to the committee. 3:11:21 PM GORDON WILLIAMS, ATTORNEY, KETCHIKAN (via teleconference), testified that he was an attorney and a member of ATEP [Alaska Trust of Estate Professionals] and his practice focused on probate, estate planning, wills and trusts, and trusts administration. Probate received a bad reputation which he thought was unfortunate because the probate process in Alaska was done online. He thought the bad press on probate was mostly unwarranted. The probate on the transfer of death title was a good process which with he was intimately familiar. He was familiar with Colorado law and relayed that Alaska law had safeguards that did not exist in Colorado. In Alaska, people were required to go to the DMV and obtain a new title with the beneficiaries on board. There would also be a fee charge for the new title which meant that there would be incoming revenue. The fiscal note might not have taken into consideration the fees collected. He noted that the transfer of death deed took into account issues that occurred in probate. He thought the bill would help expediate the transfer process. Co-Chair Foster understood that Mr. Willams was a member of "ATEP" and he asked what it was. Mr. Williams responded that ATEP stood for Alaska Trust of Estate Professionals, which was a troop of professionals responsible for reviewing law. He thought that the legislature had consulted with ATEP in the past. 3:16:01 PM LINDA HULBERT, SELF, FAIRBANKS (via teleconference), testified that she had been an agent for New York Life Insurance Company for 35 years and she thought the bill would be favorable for a vast number of Alaskans. She explained that everyone needed to make a plan regarding asset ownership. When a vehicle or boat was only in a deceased individual's name, it was not possible to ensure the vehicle or boat. She thought the bill would be an important tool to help Alaskans make a plan and keep costs down. She urged support for the bill. 3:18:46 PM MATTHEW BLATTMACHR, PEAK TRUST, ANCHORAGE (via teleconference), agreed with the comments made by Ms. Hulbert and Mr. Williams. He added that the bill would create more efficiencies within the Alaska Court System. The probate process in Alaska was deficient in comparison to many other states and the bill would help modernize the process. The bill would also help allow more vehicles and boats to pass through direct assignment rather than involving the courts. He thought that the cost savings to the courts would be more substantial than any costs associated with implementing the bill. Representative Hannan asked Mr. Blattmachr to describe the process of transferring ownership of an airplane upon the death of the owner. Mr. Blattmachr responded that the transfer would be federally regulated and not managed at the state level. He did not think the bill would successfully change the process. He understood that it would be helpful to include airplanes in the bill, but he did not think federal regulations would allow for any changes. Representative Hannan asked if trusts for airplane owners were generally established as a separate entity. Mr. Blattmachr replied that airplanes were an important asset for many Alaskans. He explained that airplanes were not typically held in trusts for the majority of trusts he administered. Co-Chair Foster thought that it sounded like an act of the U.S. Congress. Representative Rauscher noted that he especially appreciated the testimony from Mr. Williams because he made the point that the majority of title transfers would help pay for the process due to fee collection. 3:23:26 PM Co-Chair Foster CLOSED public testimony. HB 81 was HEARD and HELD in committee for further consideration.