SB 65-RETIREMENT PLANS; ROTH IRAS; PROBATE  2:35:57 PM CHAIR COGHILL reconvened the meeting and announced the consideration of SB 65. "An Act relating to property exemptions for retirement plans, individual retirement accounts, and Roth IRAs; relating to transfers of individual retirement plans; relating to the rights of judgment creditors of members of limited liability companies and partners of limited liability partnerships; relating to the Uniform Probate Code, including pleadings, orders, liability, and notices under the Uniform Probate Code and the Alaska Principal and Income Act, the appointment of trust property, the Alaska Uniform Prudent Investor Act, co-trustees, trust protectors, and trust advisors; relating to the Alaska Principal and Income Act; relating to the Alaska Uniform Transfers to Minors Act; relating to the disposition of human remains; relating to insurable interests for certain insurance policies; relating to restrictions on transfers of trust interests; relating to discretionary interests in irrevocable trusts; relating to the community property of married persons; and amending Rule 64, Alaska Rules of Civil Procedure, and Rule 301(a), Alaska Rules of Evidence." CHAIR COGHILL moved to adopt the proposed committee substitute (CS), labeled 28-LS0473\O. He explained that it removes what was Section 37 in version C, and asked if there was objection. SENATOR WIELECHOWSKI asked what Section 37 did. 2:37:41 PM CHAD HUTCHINSON, Staff, Senator John Coghill, sponsor of SB 65, explained that Section 37 amends AS 21.09.210(m). He read the subsection (m) as follows: (m) The tax imposed under this section for a  single [AN INDIVIDUAL] life insurance policy or for a  group or other type of policy that insures the life of  one or more individuals shall be computed at the rate of (1) 2.7 percent of policy year premium up to $100,000; and (2) one-tenth of one percent of policy year premium exceeding $100,000. MR. HUTCHINSON deferred to Beth Chapman or David Shaftel to explain what that means and why it was eliminated. CHAIR COGHILL said the policy call was to avoid the fiscal impact this year. MR. HUTCHINSON agreed, and added that it could be taken up in a separate bill in the future. 2:38:51 PM CHAIR COGHILL found no objection and stated that version O was before the committee. He directed attention to the new fiscal note, and stated his intention to take action on the bill tomorrow. 2:39:46 PM MR. HUTCHINSON addressed the question Senator Wielechowski raised during the last hearing regarding the single subject rule. He explained that he corresponded with Senator Wielechowski's office and sent a legal opinion that was prepared by Representative Thompson for House Bill 292. It was introduced last year and was substantially similar to SB 65. Mr. Hutchinson said he, too, reviewed the opinion and cross-referenced the cases stated in the memorandum on the Westlaw database. He highlighted that the single subject rule has a broad interpretation, and an act generally qualifies under the rule as long as there is a logical connection or popular understanding. The Alaska Supreme Court has heard eight of these cases and seven were deemed to have qualified because of the broad interpretation. The case that did not qualify under the single subject rule tried to include both oil taxes and a clean election program. He opined that SB 65 would qualify because the subjects all address trusts and family or estate financial planning matters. 2:42:16 PM SENATOR WIELECHOWSKI said the opinion that Legislative Legal Services issued certainly raises the question about whether the bill violates the single subject rule. He suggested the committee could manage the risk by removing the offending parts. He warned that some attorney would challenge it if there was a lot of money involved. 2:43:49 PM DAVID SHAFTEL, Attorney, Anchorage, Alaska, said the group of estate planning attorneys and trust officers that has worked to improve the laws in this area has received similar opinions from Legislative Legal Services nearly every time a bill like this has been introduced. One particular attorney feels an obligation to bring the issue up because it is a possibility. Mr. Hutchinson and other attorneys believe that it won't be a problem, and the Supreme Court has taken a broad view on these challenges. He acknowledged that there was a small risk that some attorney would make an argument in the future, but it wasn't a realistic concern. The bill has 17 subjects but they're all related to family and estate planning. 2:48:02 PM CHAIR COGHILL asked if he had been working in this venue for 16 years. MR. SHAFTEL clarified that he began working with the legislature in 1997, but he's been practicing in Alaska for about 40 years. CHAIR COGHILL asked if the single subject rule had always been a topic of conversation. MR. SHAFTEL said yes. CHAIR COGHILL asked if there had been a court challenge. MR. SHAFTEL said not in the area of estate planning and estate and trust administration. SENATOR WIELECHOWSKI said it's a risk but he wouldn't push it any further. 2:50:10 PM CHAIR COGHILL said he intended to have a sectional analysis at the next hearing. He held SB 65 in committee.