01/29/1996 01:05 PM House JUD

 HB 392 - NATIVE CORP DIRECTOR CLASSIFICATION                                
                                                                               
 Number 0165                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN, sponsor of HB 392, presented the bill.              
 He prefaced his remarks by saying he represented District 39,                 
 Southwestern Alaska.  He explained that HB 392 amended the Alaska             
 Corporations Code to allow Alaska Native Claims Settlement Act                
 (ANCSA) village corporations to amend their articles and bylaws to            
 authorize a classified or staggered term board of directors by a              
 majority vote of the shares represented at a meeting of                       
 shareholders.  Under current law, for those villages which did not            
 have classified boards in place by July 1, 1989, such an amendment            
 required a vote of two-thirds of all outstanding shares entitled to           
 vote.  This was often difficult for village corporations to                   
 achieve.  House Bill 392 rectified that situation.                            
                                                                               
 REPRESENTATIVE IVAN added that HB 392 was introduced at the request           
 of a village corporation based out of Napaskiak, located several              
 miles downriver from Bethel, as well as a village corporation north           
 of the Yukon River.  For years, these corporations had attempted to           
 classify their boards of directors.  However, the requirement for             
 a vote of two-thirds of all shares prevented the corporations from            
 achieving that goal.                                                          
                                                                               
 REPRESENTATIVE IVAN explained that most of these small communities            
 had five directors in place.  With five directors, current law                
 required each one to be up for reelection each year.  The villages            
 were seeking continuity in their boards of directors.  With more              
 than five directors, they could institute staggered terms.  The               
 purpose of HB 392 was to implement these changes.                             
                                                                               
 Number 0401                                                                   
                                                                               
 REPRESENTATIVE IVAN commented that Glen Price, attorney for the two           
 village corporations, was available to answer questions.                      
 Representative Ivan added that when the HB 392 had been introduced            
 in the House Community and Regional Affairs Committee, he had not             
 heard any opposition to the bill.  It was simple and straight-                
 forward, he said.                                                             
                                                                               
 Number 0463                                                                   
                                                                               
 REPRESENTATIVE JOE GREEN asked whether Representative Ivan knew               
 what the attitudes of the other villages were towards HB 392.                 
                                                                               
 REPRESENTATIVE IVAN replied that with more than 200 village                   
 corporations in Alaska, he could not respond to that.  However, he            
 felt certain that many small villages fell into this category.                
 Bigger communities such as Bethel, he added, had up to nine                   
 directors; the regional corporations had nine or more.  But as for            
 the smaller villages, he knew of nobody who had come forward                  
 opposing this concept or having concerns over it.                             
                                                                               
 Number 0527                                                                   
                                                                               
 REPRESENTATIVE CON BUNDE asked how many village corporations                  
 Representative Ivan had communicated with about the issue.                    
                                                                               
 REPRESENTATIVE IVAN reiterated that they had not received                     
 opposition to HB 392.                                                         
                                                                               
 Number 0570                                                                   
                                                                               
 CHAIRMAN PORTER declared that in reviewing the bill, he and Tom               
 Meyer, committee aide for the House Judiciary Committee, had                  
 noticed that while HB 392 appeared straight-forward, clear and easy           
 to understand, it was involved in a body of law that was anything             
 but clear and concise.                                                        
                                                                               
                                                                               
 CHAIRMAN PORTER observed that no one else was present to testify;             
 however, before taking action on the bill, he wanted to mention               
 that Mr. Meyer had discovered the law being amended by HB 392 was             
 not a codified law.  It was a session law grandfathering every                
 corporation that had been incorporated prior to 1989 into the laws            
 now being amended.  For some reason, he said, these laws had never            
 been codified.  The new, revised law affecting corporations                   
 incorporated on or after July 1, 1989, was the one on the books.              
 To anyone except a corporation lawyer, he said, that could be                 
 extremely confusing for someone reviewing the law books to                    
 determine which law affected which corporation, especially if it              
 were a corporation begun prior to 1989.  The question had just come           
 up, he said, and nobody had been able to give them an answer yet.             
 He stated his belief that the body of law in question needed to be            
 codified in order to minimize confusion.  He added that                       
 Representative Ivan's office was going to investigate the matter              
 before HB 392 went to the House Finance Committee.  Chairman Porter           
 asserted that matter would probably not be affected by HB 392 one             
 way or the other; it was a side issue, however, that needed                   
 addressing.                                                                   
                                                                               
 Number 0733                                                                   
                                                                               
 REPRESENTATIVE GREEN moved that HB 392, version C, move from the              
 House Judiciary Committee with individual recommendations and zero            
 fiscal notes.  There being no objection, it was so ordered.