Legislature(1993 - 1994)

03/24/1993 03:00 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HB 217:  NATIVE CORPORATION DIVIDENDS TO MINORS                              
                                                                               
  Number 030                                                                   
                                                                               
  RENA BUKOVICH, LEGISLATIVE AIDE to REP. EILEEN MACLEAN,                      
  testified on HB 217 on behalf of Rep. MacLean, PRIME SPONSOR                 
  of the bill.  She read the sponsor statement, which is on                    
  file in the committee room.  In summary, the statement said                  
  the bill would require Native corporations to hold in an                     
  interest-bearing account dividends of minor shareholders who                 
  were in state custody.  The bill, requested by the                           
  Department of Health and Social Services, is an effort to                    
  ensure that dividends were spent only for the benefit of the                 
  child.                                                                       
                                                                               
  MS. BUKOVICH said a letter from the Cook Inlet Regional                      
  Corp. (CIRI) raised two issues that could be addressed by                    
  HB 217.  First, CIRI requested an amendment to the bill that                 
  would allow the state to extend the same benefits to those                   
  Native minors living outside Alaska.  She said issues of                     
  jurisdiction might be difficult to address.  The second                      
  would be an amendment relating to distribution of funds when                 
  state custody terminates while the child is still a minor                    
  and no new custodian has been appointed.  She asked that the                 
  two amendments be referred to the House Judiciary Committee,                 
  the next committee of referral.                                              
                                                                               
  Number 090                                                                   
                                                                               
  REP. BUNDE asked whether the zero fiscal note was                            
  appropriate, as there were likely to be some expenses in                     
  administrating the accounts.                                                 
                                                                               
  Number 100                                                                   
                                                                               
  MS. BUKOVICH answered no, there would be no cost, as the                     
  accounts would be set up and maintained by Native                            
  corporations.                                                                
                                                                               
  (Rep. Brice arrived at 3:12 p.m.)                                            
                                                                               
  Number 106                                                                   
                                                                               
  RANDALL HINES, LEGISLATIVE CONTACT for the DIVISION OF                       
  FAMILY AND YOUTH SERVICES (DFYS) in the DEPARTMENT OF HEALTH                 
  AND SOCIAL SERVICES (DHSS), testified in Juneau in favor of                  
  HB 217.  He said the department strongly supported the bill,                 
  which would protect dividends of after-born children                         
  entering or leaving state custody.  The bill supports the                    
  department's mission to act in the best interests of                         
  children while enabling self-determination by allowing the                   
  corporations to act as childrens' fiduciaries.                               
                                                                               
  Number 117                                                                   
                                                                               
  REP. BUNDE asked how many children would be affected by                      
  HB 217.                                                                      
                                                                               
  MR. HINES said he did not know how many children were                        
  eligible for dividends from Native corporations.                             
                                                                               
  Number 135                                                                   
                                                                               
  REP. VEZEY asked if any Native corporations had elected to                   
  issue new stock since 1971, the cutoff date for eligibility                  
  to receive stock in Native corporations under the Alaska                     
  Native Claims Settlement Act (ANCSA).                                        
                                                                               
  MR. HINES said some corporations had issued new stock, but                   
  Congress had extended the inalienability issue, such that                    
  the question was meaningless around that issue.                              
                                                                               
  Number 151                                                                   
                                                                               
  REP. VEZEY said it appeared that the only class of people                    
  covered by HB 217 would be those who were heir to Native                     
  corporation stock.  He asked if there was another class of                   
  people who would be eligible.                                                
                                                                               
  MR. HINES referred the question to Mr. Larry Carroll of the                  
  Department of Commerce and Economic Development.                             
                                                                               
  Number 159                                                                   
                                                                               
  REP. VEZEY said it appeared the statute would cover only a                   
  very few people.  He asked why the state would want to make                  
  special note of a minor's rights to Native corporation                       
  dividends and not any stock dividends.                                       
                                                                               
  MR. HINES said the state already does set up special trust                   
  accounts for the permanent funds of children in state                        
  custody, regardless of their race.  He said there were no                    
  trust accounts set up for other stock dividends.                             
                                                                               
  Number 176                                                                   
                                                                               
  REP. VEZEY asked the number of children for whom the state                   
  was acting as fiduciary or custodial officer.                                
                                                                               
  MR. HINES answered that it would be the number of children                   
  in custody under court order at the time of issue of                         
  permanent fund dividend.  He said the state set up trust                     
  accounts for such children to hold their dividends, and the                  
  trusts could not be accessed except through a third-party                    
  petition to the court.  He said he did not know the number,                  
  but could provide it to the committee.                                       
                                                                               
  Number 196                                                                   
                                                                               
  LARRY CARROLL, SENIOR SECURITIES EXAMINER, DIVISION OF                       
  BANKING, SECURITIES AND CORPORATIONS, DEPARTMENT OF COMMERCE                 
  AND ECONOMIC DEVELOPMENT, testified in Juneau on HB 217.  He                 
  said about four Native corporations had decided to issue                     
  corporation stock to children born after 1971 who had                        
  previously been ineligible to receive such stock.  He said                   
  that while each corporation could decide to do so, the total                 
  number of children affected was not likely to be large.  He                  
  said the department's involvement in the issue was limited                   
  and it dealt with regulations governing proxies and voting.                  
                                                                               
  Number 239                                                                   
                                                                               
  ELLA BENNETT, SHAREHOLDER RECORDS MANAGER, SEALASKA CORP.,                   
  testified in Juneau in support of HB 217.  She said some                     
  children have shares in Sealaska which they inherited or                     
  received as gifts.  She said Sealaska may hold a proxy                       
  election in a year or so to determine whether it will allow                  
  new shareholders.  She said there were from 20 to 30 minor                   
  shareholders in 1991 when the corporation had the AK-Ahtna                   
  (???) that would be affected by HB 217, but she did not know                 
  the current number.                                                          
                                                                               
  Number 261                                                                   
                                                                               
  REP. VEZEY spoke against the bill, saying it was concerned                   
  with such a small number of people that it risked violating                  
  the constitutional prohibition against special-interest                      
  legislation.  He said if the state was the custodian for                     
  minors, it should receive any income due those minors,                       
  including permanent fund dividends, to offset the cost of                    
  providing custodial care.                                                    
                                                                               
  REP. NICHOLIA voiced support for HB 217, saying it would                     
  benefit four Native regional corporations and any others                     
  that might adopt after-born provisions.  While only a few                    
  people might benefit, she said, the exact number was                         
  unknown, as four different Native corporations were                          
  involved.                                                                    
                                                                               
  Number 285                                                                   
                                                                               
  REP. B. DAVIS said the House Judiciary Committee might deal                  
  with questions raised about the number of children affected                  
  by the bill.  She said protecting the childrens' money was a                 
  good idea.                                                                   
                                                                               
  Number 295                                                                   
                                                                               
  REP. B. DAVIS moved for passage of HB 217 from the HESS                      
  Committee with individual recommendations.                                   
                                                                               
  REP. VEZEY objected.                                                         
                                                                               
  Number 300                                                                   
                                                                               
  CHAIR TOOHEY called for a roll call vote.  Those voting yes                  
  were Reps. G. Davis, Olberg, B. Davis, Nicholia, Brice,                      
  Toohey and Bunde.  Rep. Vezey voted no.  The motion passed                   
  7-1.  She brought HB 12 to the table.                                        

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