ALASKA STATE LEGISLATURE  HOUSE JUDICIARY STANDING COMMITTEE  May 11, 2002 5:50 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chair Representative Jeannette James Representative John Coghill Representative Kevin Meyer MEMBERS ABSENT  Representative Scott Ogan, Vice Chair Representative Ethan Berkowitz Representative Albert Kookesh COMMITTEE CALENDAR CS FOR SENATE BILL NO. 369(RLS) "An Act relating to trusts, including trust protectors, trustee advisors, and transfers of trust interests, and to creditors' claims against property subject to a power of appointment; and providing for an effective date." - MOVED HCS CSSB 369(JUD) OUT OF COMMITTEE PREVIOUS ACTION BILL: SB 369 SHORT TITLE:POWERS OF APPOINTMENTS/TRUSTS/CREDITORS SPONSOR(S): JUDICIARY Jrn-Date Jrn-Page Action 04/29/02 3024 (S) READ THE FIRST TIME - REFERRALS 04/29/02 3024 (S) JUD 05/01/02 (S) JUD AT 3:30 PM BELTZ 211 05/01/02 (S) Moved Out of Committee -- Time Change -- 05/01/02 (S) MINUTE(JUD) 05/02/02 3101 (S) JUD RPT 2DP 1NR 05/02/02 3101 (S) DP: TAYLOR, COWDERY; NR: THERRIAULT 05/02/02 3101 (S) FN1: ZERO(LAW) 05/07/02 (S) RLS AT 9:30 AM FAHRENKAMP 203 MINUTE(RLS) 05/09/02 3260 (S) RULES TO CALENDAR W/CS 5/9 SAME TITLE 05/09/02 3260 (S) FN1: ZERO(LAW) 05/09/02 3267 (S) READ THE SECOND TIME 05/09/02 3268 (S) RLS CS ADOPTED UNAN CONSENT 05/09/02 3268 (S) ADVANCED TO 3RD READING FLD Y14 N6 05/09/02 3268 (S) ADVANCED TO THIRD READING 5/10 CALENDAR 05/10/02 3312 (S) READ THE THIRD TIME CSSB 369(RLS) 05/10/02 3312 (S) PASSED Y19 N- A1 05/10/02 3312 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 05/10/02 3321 (S) TRANSMITTED TO (H) 05/10/02 3321 (S) VERSION: CSSB 369(RLS) 05/11/02 3510 (H) READ THE FIRST TIME - REFERRALS 05/11/02 3510 (H) JUD 05/11/02 (H) JUD AT 5:45 PM CAPITOL 120 WITNESS REGISTER SUSAN SULLIVAN, Child Support Enforcement Division (CSED) Department of Revenue 550 West 7th Avenue, Suite 310 Anchorage, Alaska 99501 POSITION STATEMENT: During the discussion of SB 369, expressed a concern and suggested the adoption of proposed Amendment 1. HEATHER M. NOBREGA, Staff to Representative Norman Rokeberg House Judiciary Standing Committee Alaska State Legislature Capitol Building, Room 118 Juneau, Alaska 99801 POSITION STATEMENT: Responded to questions during discussion of SB 369. DIANE WENDLANDT, Assistant Attorney General Collections and Support Section Civil Division (Anchorage) Department of Law (DOL) 1031 West 4th Avenue, Suite 200 Anchorage, Alaska 99501-1994 POSITION STATEMENT: During discussion of SB 369, indicated that she had reviewed proposed Amendment 1. ACTION NARRATIVE TAPE 02-65, SIDE A Number 0001 CHAIR NORMAN ROKEBERG called the House Judiciary Standing Committee meeting to order at 5:50 p.m. Representatives Rokeberg, James, Coghill, and Meyer were present at the call to order. SB 369 - POWERS OF APPOINTMENTS/TRUSTS/CREDITORS [Contains mention of the companion bill, HB 316.] Number 0026 CHAIR ROKEBERG announced that the committee would hear CS FOR SENATE BILL NO. 369(RLS), "An Act relating to trusts, including trust protectors, trustee advisors, and transfers of trust interests, and to creditors' claims against property subject to a power of appointment; and providing for an effective date." He noted that there is a proposed amendment, hereafter referred to as Amendment 1, which read [original punctuation provided]: Page 4, Line 4: Delete: "or" Insert: [or] Page 4, Line 6: Delete: [.] Insert; ; Page 4, Line 7: Insert: (5) the creditor is seeking to satisfy a  claim for child support. Page 5, Line 25, after "except," through line 30: Delete all material. Insert: (a) to the extent that a donee of an inter vivos or testamentary power of appointment (1) is permitted by the donor of the power to appoint the property to the donee's estate or to the creditors of the donee's estate; and (2) effectively exercises the power of appointment in favor of the donee's estate or the creditors of the donee's estate; or (b) when the creditor is seeking to satisfy a claim of child support. Number 0057 SUSAN SULLIVAN, Child Support Enforcement Division (CSED), Department of Revenue, testified via teleconference and said the CSED's concern with SB 369 and its companion bill - HB 316 - is that there will be an unintended consequence. She warned that certain provisions of this legislation would make it easier for an unscrupulous parent to avoid supporting his or her children. She offered that Amendment 1 would resolve this potential problem. Number 0147 HEATHER M. NOBREGA, Staff to Representative Norman Rokeberg, House Judiciary Standing Committee, Alaska State Legislature, in response to a question, indicated that she had drafted Amendment 1. Number 0155 DIANE WENDLANDT, Assistant Attorney General, Collections and Support Section, Civil Division (Anchorage), Department of Law (DOL), testified via teleconference, stating simply that she has reviewed Amendment 1. MS. NOBREGA, in response to a question, pointed out that the portion of Amendment 1 that will alter page 5 of SB 369 begins after the word "except" on line 25. MS. SULLIVAN remarked that Ms. Wendlandt has suggested that the last line of Amendment 1 be amended to read: "(b) to the extent that the creditor is seeking to satisfy a claim of child support." MS. NOBREGA noted that such an amendment would merely involve deleting "when" and inserting "to the extent that". CHAIR ROKEBERG indicated that Amendment 1 would be amended to incorporate that suggestion. Number 0360 REPRESENTATIVE JAMES made a motion to adopt Amendment 1 [as amended]. There being no objection, Amendment 1, as amended, was adopted. REPRESENTATIVE JAMES pointed out that Section 1 contains a reference to another statute - AS 47.07.020(f) - and asked what that statute is. CHAIR ROKEBERG surmised that the "trust boys" probably made the suggestion to add that language to SB 369, thereby creating one of the differences between SB 369 and HB 316. MS. NOBREGA noted that AS 47.07.020(f), which says, "A person may not be denied eligibility for medical assistance under this chapter on the basis of a diversion of income, whether by assignment or after receipt of the income, into a Medicaid- qualifying trust", can be found in the chapter pertaining to medical assistance for needy persons. REPRESENTATIVE JAMES indicated that the reference in SB 369 to that statute is appropriate. CHAIR ROKEBERG agreed. He then suggested that the House Judiciary Standing Committee's [draft minutes] regarding HB 316 be included as part of the record for SB 396. Number 0547 REPRESENTATIVE JAMES moved to report CSSB 369(RLS), as amended, out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, HCS CSSB 369(JUD) was reported from the House Judiciary Standing Committee. ADJOURNMENT  Number 0575 CHAIR ROKEBERG announced at 6:00 p.m. that the House Judiciary Standing Committee would be recessed to a call of the chair. [This meeting was never reconvened.]