State of Alaska
Fiscal Note
Bill Version: HB 208
2018 Legislative Session
Fiscal Note Number: 2
(S) Publish Date: 1/31/2018
Identifier: HB208-LAW-CIV-01-26-2018 Department: Department of Law
Title: TRUSTS; COMM PROP TRUSTS; POWERS OF Appropriation: Civil Division
APPT Allocation: Commercial and Fair Business
Sponsor: JOHNSON OMB Component Number: 2717
Requester: Senate Labor & Commerce
Expenditures/Revenues
Note: Amounts do not include inflation unless otherwise noted below. (Thousands of Dollars)
Included in
FY2019 Governor's
Appropriation FY2019 Out-Year Cost Estimates
Requested Request
OPERATING EXPENDITURES FY 2019 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Personal Services
Travel
Services
Commodities
Capital Outlay
Grants & Benefits
Miscellaneous
Total Operating 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Fund Source (Operating Only)
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Positions
Full-time
Part-time
Temporary
Change in Revenues
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Estimated SUPPLEMENTAL (FY2018) cost: 0.0 (separate supplemental appropriation required)
(discuss reasons and fund source(s) in analysis section)
Estimated CAPITAL (FY2019) cost: 0.0 (separate capital appropriation required)
(discuss reasons and fund source(s) in analysis section)
ASSOCIATED REGULATIONS
Does the bill direct, or will the bill result in, regulation changes adopted by your agency? No
If yes, by what date are the regulations to be adopted, amended or repealed?
Why this fiscal note differs from previous version/comments:
Updated to SLA2018 fiscal note template.
Prepared By: Valerie Rose, Budget Analyst Phone: (907)465-3674
Division: Administrative Services Division Date: 01/26/2018
Approved By: Jahna Lindemuth, Attorney General Date: 01/26/18
Agency: Department of Law
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 HB 208 - Fiscal Note 2
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. HB 208
2018 LEGISLATIVE SESSION
Analysis
HB 208 amends AS 13.12.704 (Power of appointment; meaning of specific reference requirements) under AS 13.12 (rules
of construction applicable to wills and other governing instruments), by adding provisions related to nonfiduciary power
of appointments. The provisions describe when a power of appointment is considered nonfiduciary, when the exercise of
nonfiduciary power cannot be limited, that a person holding a nonfiduciary power cannot be forced or prevented from
exercising it, and when property subject to the exercise of a nonfiduciary power is not subject to claims by creditors.
The bill amends certain sections under AS 13.36 (trustees). AS 13.36.109 (specific powers of trustees) is amended to allow
a trustee to insure against liability with respect to beneficiaries of the trust, and charge incurred costs against the trust.
HB 208 amends sections of AS 13.36.157 (exercise of power of appointment) to clarify that an unlimited authorized
trustee may appoint principal of the trust to benefit future beneficiaries, establishes a standard for distributions from the
trust, and defines who is a permissible appointee when an unlimited authorized trustee grants a discretionary power of
appointment. The bill also clarifies when a limited authorized trustee may appoint principal of a trust to a trustee of an
appointed trust, and sets limits on the exercise of the power of appointment. The bill also repeals AS 13.36.157(f) having
to do with the ability of a trustee to invade the principal of an appointed trust while the duration of the trust is extended.
The bill amends sections AS 13.36.158 (additional provisions relating to exercise of a power of appointment) dealing with
the duration of an appointed trust, and the authority of an unlimited authorized trustee when both a limited and
unlimited authorized trustee have the power to pay trust principal. The section is also amended to remove limits on power
of a trustee where there is substantial evidence of contrary intent by the settlor. The bill also allows the terms of the
governing instrument to expand or restrict the right of a trustee to appoint property of the trust, and deals with an
authorized trustees ability to reduce, limit, or modify a beneficiarys right to a mandatory distribution. The bill also
clarifies that the trust administration statutes apply when certain trustees select the state as the primary location for
administration of the trust, and the requirements for a written acknowledgement of that selection. The definition of
Internal Revenue Code is also clarified.
The bill amends sections of AS 13.36.159 (Implementation of power of appointment) dealing with the effective date to
exercise the power of appointment, clarifies the documents related to an invaded and appointed trust that have to be
delivered, and the authority of a trustee to exercise authority without notice to the beneficiaries or consent of the settlor.
The bill repeals sections of the current statute having to do with the authority of a trustee to exercise the power of
appointment without the consent of the settlor or court approval, and requiring that a copy of the trust instrument
exercising the power of appointment be kept with the records of the invaded trust.
The bill amends AS 13.36.215 (definitions) to clarify the definitions of appointed trust, authorized trustee, and invaded
trust and adds definitions of beneficiary, limited authorized trustee, and unlimited authorized trustee.
The bill adds new sections to AS 13.36 defining the term standard in a governing instrument, and allowing a trustee to
divide a trust created by one or more settlors for income tax purposes. A new section is added describing when a court
may authorize the trustee of an irrevocable trust to invade the trust.
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 HB 208 - Fiscal Note 2
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. HB 208
2018 LEGISLATIVE SESSION
Analysis
Further, the bill amends sections of AS 34.27 dealing with the rules against perpetuities. The bill repeals and replaces AS
34.27.051 (rule against perpetuities). The new section defines the term first power as a nongeneral power of
appointment exercised to create a second power, and defines second power as a nongeneral power of appointment
that is not presently exercisable, or a general appointment not presently exercisable. If a second power is created, it may
be exercised to postpone vesting of the property without regard to the creation of the first power. The second power is
not valid unless all property interests subject to the second power vest within 1,000 years of the creation of the first
power. HB 208 amends AS 34.27.053 (savings provision) to reference the revised sections of AS 34.27.051, and amends AS
34.27.070 (application) to clarify which trusts the amendments apply to.
HB 208 provides an effective date, and adds new sections to the uncodified law of the State of Alaska dealing with the
applicability of the bill to powers of appointment and trusts, and the retroactive effect of amendments to AS 34.27.
The bill affects trusts and the powers of appointment among private parties.
The Department of Law does not anticipate a fiscal impact to the department should this bill become law.
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Statutes affected:
HB0208A, AM HB 208, introduced 03/31/2017, passed House 05/05/2017: 13.12.704, 34.40.115, 13.36.109, 13.36.157, 13.36.158, 13.36.159, U.S.C, 13.06.120, 13.36.080, 13.06.110, C.F.R, 13.36.215, 34.27.051, 34.27.053, 34.27.070, 34.27.100, 13.36.173, 13.36.210, 13.36.380