HB 405-ESTABLISHMENT OF TRUSTS  9:08:00 AM CO-CHAIR SPOHNHOLZ announced that the next order of business would be HOUSE BILL NO. 405, "An Act relating to the establishment of trusts; requiring the filing of certain trust information; and requiring compliance with a federal law." 9:09:28 AM CO-CHAIR FIELDS, to give context on the [three] amendments about to be proposed, recounted that the committee listened to input from various stakeholders. He offered his appreciation to the committee for taking up the amendments to provide a template that future legislatures can work with, given it is too late this session to move the bill. He encouraged stakeholders to again weigh in after the amendments to relate the extent to which the amendments resolve suggestions and concerned. 9:09:56 AM CO-CHAIR FIELDS moved to adopt Amendment 1 to HB 405, labeled 32-LS1620\B.1, Bannister, 4/26/22, which read: Page 1, line 1, following the first occurrence of "of": Insert "certain" Page 2, line 2: Following "to": Insert "certain" Following "trusts;": Insert "relating to Alaska Native corporation  settlement trusts;" Delete "requiring" Insert "relating to" Page 1, line 5, through page 2, line 6: Delete all material and insert:  "* Section 1. AS 13.36.005 is amended by adding a new subsection to read: (c) If the establishment or relocation of a trust is subject to AS 13.36.030, the trust must be established or relocated under AS 13.36.030 before registering under this section." Page 4, following line 1: Insert a new subsection to read: "(g) This section does not apply to a trust that constitutes a settlement trust as defined in 43 U.S.C. 1602 (Alaska Native Claims Settlement Act), or to a settlor, trustee, or beneficiary of a trust that constitutes a settlement trust as defined in 43 U.S.C. 1602 (Alaska Native Claims Settlement Act)." Reletter the following subsections accordingly. 9:10:00 AM CO-CHAIR SPOHNHOLZ objected for the purpose of explanation. 9:10:06 AM EVAN ANDERSON, Staff, Representative Zack Fields, Alaska State Legislature, on behalf of Co-Chair Fields, sponsor of the amendment, explained that Amendment 1 was created after conversations with several Alaska Native regional corporations. They stated that Alaska Native Settlement Trusts (ANSTs) were established through the 1971 Alaska Native Claims Settlement Act (ANCSA), but that these trusts were largely not utilized until the 2017 Tax Cuts and Jobs Act (TCJA). From these conversations, they continued, it seemed clear that the reporting requirements being sought for all trusts through HB 405 should not count for these settlement trusts. Therefore, Mx. Anderson said, Amendment 1 would create a broad exemption for those settlement trusts. 9:11:17 AM CO-CHAIR FIELDS offered his understanding that Amendment 1 would entirely resolve any concerns had by Alaska Native corporations. He requested that the corporations let him know if any further refinement is needed. CO-CHAIR SPOHNHOLZ expressed her appreciation for the intent of Co-Chair Fields in working on HB 405, as well as the collaborative process in fine tuning the legislation to prevent creating any unintentional harm. She noted that the committee is seeking to improve the bill through these amendments and then work with stakeholders on further refinements over the interim. 9:12:06 AM CO-CHAIR SPOHNHOLZ removed her objection to Amendment 1. There being no further objection, Amendment 1 was adopted. 9:12:16 AM CO-CHAIR FIELDS moved to adopt Amendment 2 to HB 405, labeled 32-LS1620\B.2, Bannister, 4/28/22, which read: Page 3, lines 16 - 17: Delete "within 30 days after" Insert "on or before January 30 of the calendar year that follows the calendar year in which" 9:12:18 AM CO-CHAIR SPOHNHOLZ objected for the purpose of explanation. 9:12:23 AM MX. ANDERSON, on behalf of Co-Chair Fields, sponsor of the amendment, noted that Amendment 2 came after feedback from representatives of the trust industry. They said the bill had a strong reporting requirement for any time changes are made to a trust, such as a new beneficiary or new settlor. For example, they related, the committee heard testimony that every time a new grandchild is born a trust might be subject to fines. So, Amendment 2 was built in direct response to that feedback, they said. The disclosure requirement would instead be on an annual basis any changes would be reported by January 30 of the following year to the Department of Commerce, Community, and Economic Development (DCCED). This would line it up with the federal tax cycle, Mx. Anderson continued, making it reliable and easy to plan for. They noted that people can also report changes at the time those changes occur [rather than waiting until January 30 of the following year]. MX. ANDERSON, in response to Co-Chair Spohnholz, confirmed that this is just when there is a change to the trust, this is not a requirement to report annually or file documents on an annual basis if there haven't been any changes to the trust. 9:14:02 AM CO-CHAIR SPOHNHOLZ removed her objection to Amendment 2. There being no further objection, Amendment 2 was adopted. 9:14:11 AM CO-CHAIR FIELDS moved to a adopt Amendment 3 to HB 405, labeled 32-LS1620\B.3, Bannister, 4/29/22, which read: Page 1, line 1, following the first occurrence of "of": Insert "certain" Page 1, line 2: Following "to": Insert "certain" Following "trusts;": Insert "relating to charitable trusts;" Delete "requiring" Insert "relating to" Page 4, following line 1: Insert a new subsection to read: "(g) This section does not apply to a trust that is described as a charitable trust under 26 U.S.C. 4947(a)(1) (Internal Revenue Code of 1954)." Reletter the following subsections accordingly. 9:14:13 AM CO-CHAIR SPOHNHOLZ objected for the purpose of explanation. 9:14:15 AM CO-CHAIR FIELDS explained Amendment 3 would exempt charitable trusts, which was a suggestion made by stakeholders. 9:14:36 AM CO-CHAIR SPOHNHOLZ removed her objection to Amendment 3. There being no further objection, Amendment 3 was adopted. CO-CHAIR SPOHNHOLZ said the committee looks forward to any feedback that stakeholders want to provide on the legislation, as amended. [HB 405 was held over.]