ALASKA STATE LEGISLATURE  SENATE STATE AFFAIRS STANDING COMMITTEE  May 1, 2025 3:33 p.m. MEMBERS PRESENT Senator Scott Kawasaki, Chair Senator Jesse Bjorkman, Vice Chair Senator Bill Wielechowski Senator Elvi Gray-Jackson MEMBERS ABSENT  Senator Robert Yundt COMMITTEE CALENDAR  SENATE BILL NO. 167 "An Act relating to a permanent fund dividend for an individual whose conviction has been vacated, reversed, or dismissed; and relating to the calculation of the value of the permanent fund dividend by including payment to individuals eligible for a permanent fund dividend because of a conviction that has been vacated, reversed, or dismissed." - MOVED CSSB 167(STA) OUT OF COMMITTEE SENATE BILL NO. 104 "An Act relating to the transfer of a title on the death of the owner; and providing for an effective date." - HEARD & HELD SENATE BILL NO. 160 "An Act relating to the membership of the legislative council; and relating to the membership of the Legislative Budget and Audit Committee." - HEARD & HELD SENATE BILL NO. 107 "An Act establishing a violation for hindering the Alaska Sunset Commission; establishing the Alaska Sunset Commission to review, audit, and make recommendations on discontinuation of or changes to state entities; and relating to the powers and duties of the Alaska Sunset Commission." - HEARD & HELD PREVIOUS COMMITTEE ACTION  BILL: SB 167 SHORT TITLE: CRIM. CONV. OVERTURNED: RECEIVE PAST PFD SPONSOR(s): SENATOR(s) KAWASAKI 04/10/25 (S) READ THE FIRST TIME - REFERRALS 04/10/25 (S) STA, JUD 04/24/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg) 04/24/25 (S) Heard & Held 04/24/25 (S) MINUTE(STA) 05/01/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg) BILL: SB 104 SHORT TITLE: VEHICLES/BOATS: TRANSFER ON DEATH TITLE SPONSOR(s): SENATOR(s) KAWASAKI 02/19/25 (S) READ THE FIRST TIME - REFERRALS 02/19/25 (S) TRA, STA 03/20/25 (S) TRA AT 1:30 PM BUTROVICH 205 03/20/25 (S) Heard & Held 03/20/25 (S) MINUTE(TRA) 04/10/25 (S) TRA AT 1:30 PM BUTROVICH 205 04/10/25 (S) 04/24/25 (S) TRA AT 1:30 PM BUTROVICH 205 04/24/25 (S) Moved SB 104 Out of Committee 04/24/25 (S) MINUTE(TRA) 04/25/25 (S) TRA RPT 3DP 04/25/25 (S) DP: TOBIN, STEDMAN, KIEHL 05/01/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg) BILL: SB 160 SHORT TITLE: MEMBERS LEG COUNCIL; LEG BUDGET & AUDIT SPONSOR(s): SENATOR(s) SHOWER 04/09/25 (S) READ THE FIRST TIME - REFERRALS 04/09/25 (S) STA, FIN 05/01/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg) BILL: SB 107 SHORT TITLE: ALASKA SUNSET COMMISSION SPONSOR(s): SENATOR(s) HUGHES 02/19/25 (S) READ THE FIRST TIME - REFERRALS 02/19/25 (S) STA, FIN 03/20/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg) 03/20/25 (S) Heard & Held 03/20/25 (S) MINUTE(STA) 05/01/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg) WITNESS REGISTER SALLY RAFSON, Staff Senator Scott Kawasaki Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Explained the summary of changes from version A to version N of SB 167. JENNA COLQUHOUN, Staff Senator Scott Kawasaki Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Introduced SB 104 on behalf of the sponsor. CHELSEA RIEKKOLA, Attorney Foley and Pearson Anchorage, Alaska POSITION STATEMENT: Testified by invitation on SB 104. CHRISTOPHER WALKER, representing self Faulkner Banfield Juneau, Alaska POSITION STATEMENT: Testified by invitation on SB 104. ABIGAIL O'CONNOR, Chief Fiduciary Officer Peak Trust Company Anchorage, Alaska POSITION STATEMENT: Testified by invitation on SB 104. LINDA HULBERT, Agent New York Life Insurance Fairbanks, Alaska POSITION STATEMENT: Testified by invitation on SB 104. SENATOR MIKE SHOWER, District O Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Sponsor of SB 160. SCOTT CRAWFORD, Staff Senator Mike Shower Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Provided the sectional analysis for SB 160. SENATOR SHELLY HUGHES District M Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Sponsor of SB 107. MIKE COONS, representing self Wasilla, Alaska POSITION STATEMENT: Testified in support of SB 107. ACTION NARRATIVE 3:33:35 PM CHAIR KAWASAKI called the Senate State Affairs Standing Committee meeting to order at 3:33 p.m. Present at the call to order were Senators Bjorkman, Wielechowski, Gray-Jackson, and Chair Kawasaki. SB 167-CRIM. CONV. OVERTURNED: RECEIVE PAST PFD  3:35:00 PM CHAIR KAWASAKI announced the consideration of SENATE BILL NO. 167 "An Act relating to a permanent fund dividend for an individual whose conviction has been vacated, reversed, or dismissed; and relating to the calculation of the value of the permanent fund dividend by including payment to individuals eligible for a permanent fund dividend because of a conviction that has been vacated, reversed, or dismissed." 3:35:13 PM CHAIR KAWASAKI solicited a motion. 3:35:20 PM SENATOR BJORKMAN moved to adopt the committee substitute (CS) for SB 167, work order 34-LS0491\N, as the working document. 3:35:33 PM CHAIR KAWASAKI objected for purposes of discussion. 3:35:46 PM SALLY RAFSON, Staff, Senator Scott Kawasaki, Alaska State Legislature, Juneau, Alaska, explained the summary of changes from version A to version N of SB 167 and read the following: [Original punctuation provided.] Page 1, lines 12-13 of Version N: Added the language "and the dismissal was not part of a plea agreement in another criminal case under Rule 11, Alaska Rules of Criminal Procedure;" This change makes it clear that individuals whose cases have been dismissed because they took a plea agreement would not qualify for this legislation. 3:36:40 PM CHAIR KAWASAKI removed his objection; he found no further objection and CSSB 167 was adopted as the working document. 3:37:00 PM CHAIR KAWASAKI solicited the will of the committee. 3:37:03 PM SENATOR BJORKMAN moved to report CSSB 167, work order 34- LS0491\N, from committee with individual recommendations and attached fiscal note(s). 3:37:22 PM CHAIR KAWASAKI found no objection and CSSB 167(STA) was reported from the Senate State Affairs Standing Committee. 3:37:37 PM At ease. SB 104-VEHICLES/BOATS: TRANSFER ON DEATH TITLE  3:38:57 PM CHAIR KAWASAKI reconvened the meeting and announced the consideration of SENATE BILL NO. 104 "An Act relating to the transfer of a title on the death of the owner; and providing for an effective date." 3:39:28 PM JENNA COLQUHOUN, Staff, Senator Scott Kawasaki, Alaska State Legislature, Juneau, Alaska, introduced SB 104 on behalf of the sponsor and read the following quote from slide 1: [Original punctuation provided.] "An Act relating to the transfer of a title on the death of the owner; and providing for an effective date." 3:39:53 PM MS. COLQUHOUN moved to slide 2 and discussed the following: [Original punctuation provided.] Transfer on Death Deeds • Was created in Alaskan Statute when the "Uniform Real Property Transfer on Death Act" was passed in 2014 by the 28th Legislature -AS 13.48.010 "An individual may transfer property to one or more beneficiaries effective at the transferor's death by a transfer on death deed." • AS 13.48.020 "A transfer on death deed is no testamentary -Not involving or creating a will -Assets subject to a Transfer on Death (TOD) deed skip the probate process • TOD deeds currently can only be used for Real Property -Land and anything permanently attached to it 3:41:14 PM MS. COLQUHOUN moved to slide 3 and discussed the following: [Original punctuation provided.] What SB 104 Does  • Extends Transfer on Death (TOD) deed to boats, vehicles, and certain manufactured homes titled through the DMV -No more than two beneficiaries -Owner can revoke TOD deed or change the beneficiary at anytime without notice to the beneficiary -Designated beneficiary can disclaim their interest • Beneficiary of a TOD deed would be subject to conveyances, encumbrances, assignments, contracts, liens, and other interests to which the boat or vehicle • Establishes the procedure to obtain a TOD deed -Owner will fill out an application and submit a fee to the Department of Administration -These fees will serve to fund the program 3:43:15 PM MS. COLQUHOUN moved to slide 4 and discussed the following: [Original punctuation provided.] Benefits of SB 104  • Lowers the cost of probate for Alaskans -On average, it costs $14,225 to settle an estate* • Allows Alaskans without ready access to law services estate planning tools -Rural Alaska • Expedites beneficiary access to boats and vehicles -Enabling timely maintenance and preservation of boats and vehicles -In the instance of a family fishing business, allows the business to continue uninterrupted • Reduces probate case load 3:45:55 PM CHAIR KAWASAKI announced invited testimony on SB 104. 3:47:25 PM CHELSEA RIEKKOLA, Attorney, Foley and Pearson, Anchorage, Alaska, testified by invitation on SB 104 and emphasized that the bill improves access to justice. She noted that probate for smaller assetslike vehicles and boatsoften doesn't justify using public or court resources, and SB 104 would address the issue. 3:49:07 PM CHRISTOPHER WALKER, representing self, Faulkner Banfield, Juneau, Alaska, testified by invitation on SB 104 and said this is a common-sense measure that fills a gap in current law. He explained that Alaska lacks effective mechanisms to transfer certain assets, especially boats and vehicleswithout probate. He said existing tools like TOD deeds are limited because they don't fully avoid probate for these items. 3:51:29 PM ABIGAIL O'CONNOR, Chief Fiduciary Officer, Peak Trust Company, Anchorage, Alaska, testified by invitation on SB 104 and stated this is a practical solution for families when someone dies on a boat in Alaska. SB 104 addresses timing and insurance issues, easing significant challenges families face after a loved one's death. 3:52:24 PM SENATOR WIELECHOWSKI said noted Alaska does not have estate tax. He asked if the transfer of a boat or vehicle would count towards federal estate tax. 3:52:49 PM MS. O'CONNOR replied that vehicles are included in the gross estate for federal estate tax purposes and SB 104 does not change that. If the vehicle passes to a U.S. citizen spouse, no estate tax applies, however, if it goes to someone else, estate tax may be owed. 3:53:28 PM SENATOR WIELECHOWSKI asked whether creditors can collect against a boat or vehicle asset if the estate has liabilities and that asset is transferred. 3:54:03 PM MS. O'CONNOR requested confirmation that the question was talking about a general estate liability, not a lien on the vehicle. SENATOR WIELECHOWSKI answered yes. MS. O'CONNOR replied that SB 104 does not provide an exemption for vehicles and boats. She referenced SB 104, Section 3, page 3, lines 24-27,[AS 13.33.401 (j)], "...the state may enforce liability against a boat or vehicle transferred at the owner's death... 3:55:17 PM SENATOR WIELECHOWSKI asked if the deceased co-owned a boat, would the share be transferred upon death and how would it work if the new owner wanted to sell or not keep their share. 3:56:01 PM MS. O'CONNOR replied that without SB 104, a non-married co-owner of a boat could still transfer only their share at death. The beneficiary designation would apply only to that person's interest, and the title would still list both owners. She noted that SB 104 doesn't change that outcome, and in such cases, the transfer-on-death designation might not be used. 3:57:43 PM MR. WALKER replied that under [AS 13.33.401] (a), a TOD vehicle title only takes effect upon the death of the sole owner or the last surviving joint owner. It does not apply to just one co- owner's fractional interest. 3:58:13 PM SENATOR WIELECHOWSKI asked if he owned a boat with Senator Kawasaki, and died, would his daughter acquire the share. 3:58:31 PM MR. WALKER replied that his daughter would not acquire his share because the other owner, Senator Kawasaki is still living. SENATOR WIELECHOWSKI asked if Senator Kawasaki died would his daughter get the boat. MR. WALKER replied that it depends on how the boat is titled. He said unlike real property, vehicle titles can be listed as "and" or "or" between owners. An "or" title is usually interpreted to grant survivorship rights, meaning the vehicle passes to the surviving owner. However, under the language of SB 104, a transfer-on-death designation would not apply to just one owner's share. 4:00:31 PM LINDA HULBERT, Agent, New York Life Insurance, Fairbanks, Alaska, testified by invitation on SB 104 and stated that the bill helps everyday people transfer assets like boats or vehicles without probate, avoiding delays and allowing continued use for family or business. She said TOD titles make the process smoother, reduce court involvement, and are easy to revoke if needed. She emphasized a TOD is flexible, practical tool that simplifies estate planning and encourages more people to use it. 4:03:08 PM SENATOR WIELECHOWSKI asked if there is a liability, such as a mortgage or loan, on the boat or car, does the debt transfer to the beneficiary. 4:03:22 PM MS. HULBERT answered yes. She said beneficiaries can disclaim a boat or vehicle if they don't want it, whether for financial or personal reasons. She suggested attorneys clarify the legal details. 4:04:19 PM SENATOR WIELECHOWSKI asked if a boat or vehicle is transferred and later the estate is found to lack sufficient funds, is the recipient still responsible for the debt if they already sold or gave away the asset. 4:04:53 PM MS. RIEKKOLA answered that SB 104 mirrors the transfer-on-death deed process for handling creditors. Creditors have one year from the date of death to make claims. If someone accepts a vehicle through a transfer-on-death title, they also accept any liabilities attached, and if they later sell the asset, they remain responsible for those obligations. 4:06:48 PM CHAIR KAWASAKI asked how SB 104 applies when someone owns both a vehicle with a TOD title and a home used as a licensed assisted living facility, since the real property falls under a different statute. 4:07:41 PM MS. O'CONNOR replied that if a vehicle is titled to an individual, it can transfer to beneficiaries under SB 104, regardless of its use. Similarly, a house under a revocable TOD deed would pass to the named beneficiary. He noted that regulatory requirements may involve notifying the state about ownership changes, which is outside their expertise. She added that assisted living homes and related vehicles are often titled under an entity like an LLC, in which case this statute would not apply. 4:09:43 PM MS. RIEKKOLA clarified that SB 104 is meant to address simpler, lower-income situations, like transferring a car to children or a family fishing vessel, rather than complex business scenarios. She stated that businesses with significant liabilities, such as assisted living facilities, should be structured as LLCs with legal counsel. Overall, SB 104 effectively streamlines straightforward cases. 4:10:48 PM SENATOR WIELECHOWSKI questioned the accuracy of the statute referenced in SB 104, page 5, lines 2930, which cites AS 28.10.201 for vehicle titles. He suggested this may be incorrect and that AS 28.10.011 or another section might be the proper citation, urging a review of the reference. 4:11:39 PM MS. COLQUHOUN stated that, to her understanding, the section discusses vehicles that can be titled through the DMV. She said it was reviewed multiple times to clarify distinctions, such as between manufactured homes with and without foundations, however she is willing to reread it to confirm accuracy. 4:12:37 PM CHAIR KAWASAKI opened public testimony on SB 104; finding none; public testimony was kept open. 4:14:14 PM CHAIR KAWASAKI held SB 104 in committee. SB 160-MEMBERS LEG COUNCIL; LEG BUDGET & AUDIT  4:14:19 PM CHAIR KAWASAKI announced the consideration of SENATE BILL NO. 160 "An Act relating to the membership of the legislative council; and relating to the membership of the Legislative Budget and Audit Committee." 4:14:55 PM SENATOR MIKE SHOWER, District O, Alaska State Legislature, Juneau, Alaska, sponsor of SB 160 read the sponsor statement: [Original punctuation provided.] As outlined in AS 24.20, the Legislative Council has the essential role of conducting internal business for the Alaska Legislature, while the Legislative Budget and Audit (LB&A) Committee plays a pivotal role in managing state finances and expenditures. Both committees are established in statute with authority to conduct business anytime throughout the year so that internal legislative business may be conducted in a timely manner. 4:16:01 PM SENATOR SHOWER continued with the sponsor statement for SB 160: Alaska State Statute establishes membership on Legislative Council and the LB&A Committee to include "at least one member from each of the two major political parties of each house." However, the Alaska Legislature has a long history of coalition caucuses and unaffiliated legislators. In addition, following passage of voter initiative Ballot Measure 2 in 2020, candidates are not required to name a political party affiliation, and therefore may be elected to office without one. Senate Bill 160 seeks to update the membership statutes for both the Legislative Council and the LB&A Committee to reflect these changes in law and practice to ensure fair caucus representation on these committees. Every committee established in the Alaska Legislature Uniform Rules ensures representation of organized minority caucuses. Under current law, there is no guarantee that these two joint interim committees will include representation of all organized caucuses. SB 160 also reflects the Uniform Rules definition of "minority" as constituting at least 25 percent of a chamber's membership. As all Alaskans have a right to vote for their legislators, who in turn have a right to form caucuses if they choose, those organized caucuses have a right to have their voices and visions represented on all committees. Senate Bill 160 seeks to ensure this fair representation is established in law 4:18:15 PM SCOTT CRAWFORD, Staff, Senator Mike Shower, Alaska State Legislature, Juneau, Alaska, provided the sectional analysis for SB 160: [Original punctuation provided.] Section 1. Amends AS 24.20.020 to include at least one member of the minority on the legislative council. Includes language from Uniform Rule 1(e) to entitle minority caucus membership on the council that is proportional to their total house membership. Section 2. Amends AS 24.20.161 to include at least one member of the minority on the Legislative Budget and Audit Committee, and changes "chairman" to "chair." Section 3. Adds a new section to AS. 24.20 to define "minority" as a group of members who have organized, elected a minority leader, and who constitute at least 25 percent of the total house membership 4:19:24 PM CHAIR KAWASAKI opened public testimony on SB 160; finding none; public testimony was kept open. 4:20:59 PM CHAIR KAWASAKI held SB 160 in committee. 4:21:20 PM At ease. SB 107-ALASKA SUNSET COMMISSION  4:24:31 PM CHAIR KAWASAKI reconvened the meeting and announced the consideration of SENATE BILL NO. 107 "An Act establishing a violation for hindering the Alaska Sunset Commission; establishing the Alaska Sunset Commission to review, audit, and make recommendations on discontinuation of or changes to state entities; and relating to the powers and duties of the Alaska Sunset Commission." 4:25:05 PM SENATOR SHELLY HUGHES, District M, Alaska State Legislature, Juneau, Alaska, sponsor of SB 107 presented a brief recap of the bill and noting that it promotes efficiency and effective operations in state agencies through an independent, objective panel. She stated that the panel presents recommendations in the form of a bill to the legislature for action, which reduces bias and increases public confidence. for legislative action, reducing bias and increasing public confidence. The process includes a year of public input and thorough review, offering a practical, impartial tool for budgeting and ensuring taxpayer resources are used effectively. 4:27:48 PM SENATOR GRAY-JACKSON asked whether the responsibility for conducting all the audits would fall to the legislative auditor. 4:27:58 PM SENATOR HUGHES answered no. She said the current setup maintains independence and neutrality, unlike expanding the legislative auditor's duties, which could introduce political bias. The panel operates on a rotating basis to ensure impartiality across administration and legislative cycles. 4:28:53 PM SENATOR GRAY-JACKSON asked who will be responsible for conducting the audits. 4:29:07 PM SENATOR HUGHES replied that SB 107 allows the panel to hire auditors, though funding is not currently available. She said implementation could start small, such as one agency or auditor. The goal is to ensure independence, avoiding conflicts with the governor's or legislative auditor's perspectives. 4:29:55 PM SENATOR WIELECHOWSKI asked whether commissioners, who serve at the pleasure of the governor, have any protection against termination. 4:30:12 PM SENATOR HUGHES suggested SB 107 could include a mechanism to prevent commissioners from being fully under the governor's control, such as allowing the legislature to override a removal, though she is unsure of the exact solution. 4:30:47 PM CHAIR KAWASAKI highlighted the stability and experience of the Legislative Audit Division. He said auditors often serve for decades while legislators come and go. He praised the system for its independence and effectiveness, and mentioned upcoming legislation related to this topic. He emphasized that audits and commissioners operate without political influence. He noted that the legislative auditor strictly follows the law and remains apolitical. 4:32:31 PM SENATOR HUGHES stated that the legislature could have the power to remove someone, noting that while the legislature currently has a good auditor, oversight is necessary. SB 107 places the independent entity under the executive branch without giving the governor control, like other independent state entities. 4:33:30 PM CHAIR KAWASAKI opened public testimony on SB 107. 4:33:42 PM MIKE COONS, representing self, Wasilla, Alaska, testified in support of SB 107 and stated that the bill aims to reduce spending by requiring divisions recommended for sunsetting by audits to end unless the legislature acts. He said past audits have identified $160 billion in savings, including long ended programs. SB 107 ensures audit recommendations are considered by both the legislature and governor, promoting data-driven decisions and preventing repeated overspending, potentially saving millions. 4:36:54 PM CHAIR KAWASAKI held SB 107 in committee. 4:37:50 PM There being no further business to come before the committee, Chair Kawasaki adjourned the Senate State Affairs Standing Committee meeting at 4:37 p.m.