Legislature(1993 - 1994)
03/24/1993 03:00 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.