Legislature(2005 - 2006)

04/04/2005 02:55 PM House FIN


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 229                                                                                                            
                                                                                                                                
     An Act relating to the reinstatement of Native                                                                             
     corporations; and providing for an effective date.                                                                         
                                                                                                                                
PAUL  LA   BOLLE,  STAFF,   REPRESENTATIVE  RICHARD   FOSTER,                                                                   
explained  that the legislation  had been  introduced  at the                                                                   
request of  regional Native  corporations in their  district.                                                                   
Corporations  have   been  involuntarily  dissolved   by  the                                                                   
commissioner  under  AS 10.06.633  and  failed  to apply  for                                                                   
reinstatement   during  the  grace   period  established   in                                                                   
statute.  The  legislation provides a one-time  window during                                                                   
which  the   Native  village  corporations,  who   have  been                                                                   
dissolved, can apply for reinstatement.                                                                                         
                                                                                                                                
Mr. La Bolle continued,  the  legislation is  needed  because                                                                   
the  corporations were  established under  the Alaska  Native                                                                   
Land Claims  Settlement and  legally own village  corporation                                                                   
assets.  A new corporation could  be created but it would not                                                                   
have the  same legal  standing as  the original  corporations                                                                   
nor could they legally own the  assets.  The bill would allow                                                                   
the corporation's  board of directors  to legally  change the                                                                   
corporation's  name  if  another corporation  had  taken  the                                                                   
previous name.                                                                                                                  
Mr.  La  Bolle  pointed out  that  the  proposed  legislation                                                                   
applies  to  Caswell  Native   Association,  Savoonga  Native                                                                   
Corporation,   Arviq  Incorporated   and  Oscarville   Native                                                                   
Corporation.                                                                                                                    
Representative Kelly asked what  would the consequences be if                                                                   
the legislation  did not pass.   Mr. La Bolle  explained that                                                                   
the corporation  would be dissolved,  the assets would  go to                                                                   
paying  off debt  and  any remaining  assets  would be  split                                                                   
between the shareholders.                                                                                                       
                                                                                                                                
Representative  Kelly  asked  if  they  would  be  forced  to                                                                   
reapply.   Mr. La Bolle  explained that  it would not  be the                                                                   
same corporation.   They could  have the same name  but would                                                                   
not hold  the lands  or any  other assets  granted under  the                                                                   
Native  Lands Settlement  Act.   The lands  would be  divided                                                                   
between shareholders when the corporation was dissolved.                                                                        
                                                                                                                                
Representative Kelly  asked why they  would make a  choice to                                                                   
not reapply.   Mr. La Bolle  replied that the choice  was not                                                                   
made but had been overlooked.                                                                                                   
                                                                                                                                
Representative  Kelly asked  the number  of corporations  the                                                                   
legislation  would apply to.   Mr. La  Bolle replied  that it                                                                   
would   relate   to   all   Native    village   corporations,                                                                   
specifically the four previously mentioned.                                                                                     
                                                                                                                                
Co-Chair Chenault  inquired how many times the  bill had been                                                                   
heard.  Representative  Foster explained that  this was about                                                                   
the  fifth   time  it   had  been   introduced  for   various                                                                   
corporations  over the years.     The corporations  forget to                                                                   
file their returns.                                                                                                             
                                                                                                                                
3:00:46 PM                                                                                                                    
                                                                                                                                
Representative Kelly inquired  if there was opposition to the                                                                   
legislation.  Mr. La Bolle replied  that all the corporations                                                                   
support it.                                                                                                                     
                                                                                                                                
3:01:34 PM                                                                                                                    
                                                                                                                                
Representative   Weyhrauch  asked   to   make  a   conceptual                                                                   
amendment.   Co-Chair  Meyer requested  that  he "hold"  that                                                                   
idea until public testimony had been taken.                                                                                     
                                                                                                                                
Co-Chair  Chenault inquired  if  the requests  had been  made                                                                   
from large landholders.                                                                                                         
                                                                                                                                
ALYCE  HOUSTON,   CORPORATIONAL  SUPERVISOR,   DEPARTMENT  OF                                                                   
COMMERCE, COMMUNITY & ECONOMIC  DEVELOPMENT, said she did not                                                                   
know the  size of  the land holdings  as that information  is                                                                   
not reported  to her  section.   Co-Chair Chenault  commented                                                                   
that information must be available.                                                                                             
                                                                                                                                
Representative  Holm questioned  if there  was a penalty  for                                                                   
not filing in a  timely manner.  Ms. Houston  said there was.                                                                   
The corporations  have been  involuntarily dissolved  for not                                                                   
filing  the reports  and  paying their  fees.   Often  times,                                                                   
because  of the  biannual pay  period, the  address that  was                                                                   
provided do not always get to  the ones that need to file the                                                                   
reports.    She noted  that  they  are allowed  to  reinstate                                                                   
within a  two-year period  and the  two-year period  that has                                                                   
passed.                                                                                                                         
                                                                                                                                
Mr. La Bolle  pointed out that  there is a $37.50  dollar fee                                                                   
for each year that  the corporation has not filed.   With the                                                                   
proposed  extension,  it  would  be a  $70  dollar  late  fee                                                                   
penalty.    Ms. Houston  corrected  that  the fees  had  been                                                                   
doubled  and  that  the  corporation  would  be  paying  $275                                                                   
dollars to reinstate.                                                                                                           
                                                                                                                                
3:04:48 PM                                                                                                                    
                                                                                                                                
Representative  Holm was  troubled by  the notion that  there                                                                   
are requirements  for other  corporations in  the State.   He                                                                   
questioned if the  legislation would be good policy.   Mr. La                                                                   
Bolle replied that  it is good policy because  the results of                                                                   
not passing the legislation would be worse.                                                                                     
                                                                                                                                
Representative   Holm  inquired   why  there  are   different                                                                   
policies for different  corporate laws.  Ms.  Houston replied                                                                   
that the  Bureau of  Indian Affairs  (BIA) had contacted  her                                                                   
and there  seems to  be serious implications  if they  do not                                                                   
keep  their  original  lands from  the  Alaska  Native  Lands                                                                   
Settlement  Act.    Those corporations  need  to  keep  their                                                                   
original  date   of  incorporation   or  there  are   serious                                                                   
complications; whereas, any other  entity could reincorporate                                                                   
and  have  a  new  beginning date.    There  is  a  different                                                                   
implication for those land holdings.                                                                                            
                                                                                                                                
3:06:46 PM                                                                                                                    
                                                                                                                                
Representative   Holm   understood   the  severity   of   the                                                                   
situation, however, he thought  there should be a policy that                                                                   
the corporations fulfill their legal obligations.                                                                               
                                                                                                                                
Co-Chair Chenault  mentioned the lands issue  and was curious                                                                   
if the  corporations would  loose their lands  & assets.   He                                                                   
asked where the  lands would go.  Ms. Huston did  not know if                                                                   
that had ever happened.                                                                                                         
                                                                                                                                
3:08:26 PM                                                                                                                    
                                                                                                                                
Representative  Joule  responded that  there  are two  levels                                                                   
being  discussed.   The  village  corporations  have  surface                                                                   
ownership and  the regional  corporations that encompass  the                                                                   
village have sub-surface  rights.  He admitted  the issue was                                                                   
complicated.                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  agreed  that the  legislation  needs  to                                                                   
pass.   He noted that  he did not want  to find out  what the                                                                   
consequences would be if it did not pass.                                                                                       
                                                                                                                                
Representative  Weyhrauch recommended  that the  corporations                                                                   
be warned and then fined.                                                                                                       
                                                                                                                                
3:10:34 PM                                                                                                                    
                                                                                                                                
Representative Foster  responded that there are  at least 230                                                                   
villages  throughout  Alaska  and  that  some  are  basically                                                                   
uninhabited.    He  understood  how mail  delivery  could  be                                                                   
"balled up".   He  stressed that  these are not  professional                                                                   
office  people.    Representative  Foster did  not  know  the                                                                   
easiest way to address the concern.                                                                                             
                                                                                                                                
Representative  Hawker interjected that  he was a  co-sponsor                                                                   
of the bill.   He pointed out that by the time  the last bill                                                                   
got to the floor  a couple years ago, it  passed unanimously.                                                                   
He  surmised that  passage of  the legislation  is "just  the                                                                   
right thing to do".                                                                                                             
                                                                                                                                
Representative  Foster   MOVED  to  report  HB   229  out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
HB  229  was reported  out  of  Committee  with a  "do  pass"                                                                   
recommendation  and with zero  note #1  by the Department  of                                                                   
Commerce, Community & Economic Development.                                                                                     
                                                                                                                                

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