04/08/2013 01:00 PM House JUDICIARY

                 HB  57-ENTITY TRANSACTIONS ACT                                                                             
                                                                                                                                
2:11:14 PM                                                                                                                    
                                                                                                                                
CHAIR KELLER announced  that the next order of  business would be                                                               
HOUSE  BILL   NO.  57,  "An   Act  adopting  the   Alaska  Entity                                                               
Transactions  Act; relating  to  changing the  form of  entities,                                                               
including    corporations,   partnerships,    limited   liability                                                               
companies,  business trusts,  and  other organizations;  amending                                                               
Rule 79,  Alaska Rules of  Civil Procedure, and  Rules 602(b)(2),                                                               
602(c),  and  605.5, Alaska  Rules  of  Appellate Procedure;  and                                                               
providing  for an  effective  date."   [Before  the committee  is                                                               
proposed   committee   substitute   (CS)   labeled   28-LS0255\O,                                                               
Kirsch/Bannister, 3/12/13, adopted 3/13/13.]                                                                                    
                                                                                                                                
2:11:54 PM                                                                                                                    
                                                                                                                                
JAMES  R. WALDO,  Staff,  Representative  Lindsey Holmes,  Alaska                                                               
State Legislature,  reminded the committee that  HB 57 implements                                                               
the Model Entity Transaction Act  (META) in Alaska statute, which                                                               
means  that  it provides  an  avenue  for the  various  corporate                                                               
entities within  the state to  interact with other entities  of a                                                               
different  variety.    This  ability   for  various  entities  to                                                               
communicate  on  a  level  and  uniform  playing  field  will  be                                                               
advantageous  for businesses  in  the state  and will  facilitate                                                               
commerce.   He then  directed attention  to an  amendment labeled                                                               
28-LS0255\O.1,  Bannister,   4/5/13,  which  would   remove  from                                                               
Section 30  of CSHB 57,  Version O,  the repeal of  AS 06.260.670                                                               
and  thus  AS 06.26.670  would  remain  in  existing law.    This                                                               
statute, AS 06.26.670,  deals with trust companies.   The impetus                                                               
for  the  amendment, he  related,  was  from Dan  Branch,  Senior                                                               
Assistant   Attorney  General,   Commercial  and   Fair  Business                                                               
Practices  Section, Civil  Division  (Juneau), DOL.   Mr.  Branch                                                               
found that if  CSSB 56(JUD) was to repeal AS  06.26.670, it would                                                               
limit dissenters'  rights within trust companies  that engaged in                                                               
a conversion.  Dissenters' rights are  the right of folks with an                                                               
interest in a company/entity to have  an easy way out if they are                                                               
unhappy with  a conversion, merger,  or form of  transaction with                                                               
which the  company/entity is  engaged.   Effectively, dissenters'                                                               
rights  means  that  folks  can  be quickly  bought  out  of  the                                                               
company/entity if  it engages  in a  transaction from  which they                                                               
want to  dissent.  He  related that  leaving AS 06.26.670  in law                                                               
will preserve  dissenters' rights  for trust companies  and won't                                                               
impair any other mechanism in the legislation.                                                                                  
                                                                                                                                
2:15:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG characterized  the aforementioned  as a                                                               
good amendment that  he would offer at the appropriate  time.  He                                                               
then  asked whether  the legislation  includes any  other statute                                                               
similar to AS 06.26.670.                                                                                                        
                                                                                                                                
MR. WALDO  directed attention  to the  proposed new  section, the                                                               
Alaska Entity  Transactions Act, AS  10.55, which would  apply to                                                               
almost every form of entity in  the state.  However, page 5, line                                                               
26 through page  6, line 7, specifies a number  entities that are                                                               
excluded from  participating in the  act.  That list  of entities                                                               
includes  financial institutions  as  defined in  Title 6,  which                                                               
includes trust companies.  Therefore,  trust companies are exempt                                                               
from participating in the new act.   Any entities not exempt from                                                               
participating  in the  new act  are afforded  dissenters' rights,                                                               
according to  AS 10.55.  With  regard to the entities  that can't                                                               
participate in  the act,  he related  his understanding  that the                                                               
only statute repealed  in Section 30 that applies  to an excluded                                                               
entity is AS 06.26.670; the others  are in AS 10.06.1050 or Title                                                               
32,   which   would   be  partnerships,   limited   partnerships,                                                               
corporations, and limited liability companies  (LLC).  All of the                                                               
aforementioned will  be able  to participate  under the  new act,                                                               
and  thus won't  be  excluded and  will  have dissenters'  rights                                                               
according to the new act.   In further response to Representative                                                               
Gruenberg,  Mr.   Waldo  confirmed  that  the   sponsor  is  very                                                               
satisfied with  the legislation and  believes the  amendment will                                                               
improve it significantly.                                                                                                       
                                                                                                                                
CHAIR KELLER,  after determining no  one else wished  to testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
2:19:48 PM                                                                                                                    
                                                                                                                                
GRANT CALLOW, Attorney, Law Offices  of Wm. Grant Callow; Member,                                                               
Alaska  Delegation  of  the   Uniform  Law  Commission,  National                                                               
Conference  of Commissioners  on Uniform  State Law  (NCCUSL), in                                                               
response   to  Representative   Gruenberg,  characterized     the                                                               
legislation as good and to  his understanding the amendments make                                                               
sense.    Therefore,  he  opined that  the  legislation  and  the                                                               
amendments will be of value to Alaska.                                                                                          
                                                                                                                                
2:21:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 1,                                                                    
labeled 28-LS0255\O.1, Bannister, 4/5/13, which read:                                                                           
                                                                                                                                
     Page 1, line 7, through page 2, line 1:                                                                                    
          Delete all material.                                                                                                  
                                                                                                                                
     Page 2, line 2:                                                                                                            
          Delete "Sec. 2"                                                                                                     
          Insert "Section 1"                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 49, line 16:                                                                                                          
          Delete "AS 06.26.670;"                                                                                                
                                                                                                                                
     Page 49, line 20:                                                                                                          
          Delete "sec. 11"                                                                                                      
          Insert "sec. 10"                                                                                                      
                                                                                                                                
     Page 49, line 24:                                                                                                          
          Delete "sec. 11"                                                                                                      
          Insert "sec. 10"                                                                                                      
                                                                                                                                
     Page 49, line 27:                                                                                                          
          Delete "sec. 11"                                                                                                      
          Insert "sec. 10"                                                                                                      
                                                                                                                                
     Page 49, line 31:                                                                                                          
          Delete "sec. 11"                                                                                                      
          Insert "sec. 10"                                                                                                      
                                                                                                                                
     Page 50, line 13:                                                                                                          
          Delete "Section 32"                                                                                                   
          Insert "Section 31"                                                                                                   
                                                                                                                                
     Page 50, line 14:                                                                                                          
          Delete "sec. 34"                                                                                                      
          Insert "sec. 33"                                                                                                      
                                                                                                                                
There being no objection, Amendment 1 was adopted.                                                                              
                                                                                                                                
2:21:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN moved to report CSHB 57, Version 28-                                                                        
LS0255\O.1, Bannister, 4/5/13, as amended, out of committee with                                                                
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There  being no  objection, CSHB  57(JUD) was  reported from  the                                                               
House Judiciary Standing Committee.