Legislature(2001 - 2002)
03/04/2002 03:20 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 418-ELECTRONIC PROXY VOTING & NOTIFICATION CHAIR MURKOWSKI announced that the first order of business would be HOUSE BILL NO. 418, "An Act amending the Alaska Corporations Code as it relates to delivery of annual reports, notice of shareholders' meetings, proxy statements, and other information to shareholders, and providing for electronic proxy voting." Number 050 REPRESENTATIVE ROKEBERG moved to adopt CSHB 418, version 22- LS13335\F, Bannister, 3/4/02, as the working document. There being no objection, Version F was before the committee. REPRESENTATIVE ROKEBERG asked if the amendments included in the packet are included in Version F. CHAIR MURKOWSKI replied yes. Chair Murkowski related her understanding that the amendments were suggested by the Division Banking, Securities & Corporations (DBSC) of the Department of Community & Economic Development (DCED). Number 072 BUDD SIMPSON, Attorney, Simpson, Tillinghast, Sorensen & Longenbaugh, representing Sealaska Corporation, explained how the changes were made. Mr. Simpson said "we" are prepared to accept [Version F]. However, he noted the following typographical errors. In Section 1, page 1, line 7, there should contain a subparagraph (a). On page 4, line 24, he suggested that the list of items that shouldn't be sent should include "a dividend payment". CHAIR MURKOWSKI pointed out that the latter suggestion is addressed in later sections. She clarified that this isn't addressing the issue of no longer forwarding dividends in the mail. MR. SIMPSON agreed. He directed attention to [subparagraph] (2) at the bottom of page [4], which says that "during a period of at least 12 months, at least two payments of dividends or interest on securities". He explained, "It needs to refer back to that first section is all, in order to be correct." He directed the committee to page 5, line 28, which should read: "in person; or". The "or" was inadvertently left out, he noted. Number 135 REPRESENTATIVE HALCRO posed a situation in which two dividend checks are returned because the address is "undeliverable." He asked what would happen in such a situation. MR. SIMPSON informed the committee that Sealaska Corporation maintains an escrow account for funds that are undeliverable. If a shareholder has been missing for some time, the [corporation] goes to great lengths to locate the shareholder and has hired an investigator. However, such lengths aren't taken when the shareholder has been missing for only one year or so. He indicated a dividend that remains uncollected for many years can escheat at some point. REPRESENTATIVE HAYES inquired as to whether the amendments introduced today would change the fiscal note to zero for both years. CHAIR MURKOWSKI announced that was her understanding. However, she said the division could address that. Number 172 REPRESENTATIVE ROKEBERG turned to page 4, subsection (c), which is where Mr. Simpson recommended including "dividends". However, he pointed out that page 5, line 1, refers to "dividends or interest on securities, or at least two dividend reinvestment confirmations". Representative Rokeberg asked if all the specific types of corporate payouts have to be listed or if there is a term of art that encompasses all those. MR. SIMPSON said listing the entire list would be safe, but he was hoping to use a more shorthand form. CHAIR MURKOWSKI asked if payments to shareholders or shareholder payments would include dividends and interest on securities. MR. SIMPSON suggested inserting the following language on [page 4], line 24, after "send": "a payment to shareholders or notice thereof". The aforementioned language would cover the dividend reinvestment confirmation. Furthermore, the term "payment" is a broader term than "dividend". REPRESENTATIVE ROKEBERG related his understanding, then, that it would read as follows: "A corporation is not required to send a payment to shareholders or notice thereof". CHAIR MURKOWSKI noted that she was inserting Mr. Simpson's suggested language on [page 4], line 25, after "annual report". MR. SIMPSON said that would be acceptable. Number 218 REPRESENTATIVE ROKEBERG moved that the committee adopt conceptual Amendment 1, on [page 4] line 25, after "annual report," to insert "a payment to shareholders or notice thereof". There being no objection, conceptual Amendment 1 was adopted. Number 231 TERRY ELDER, Director, Division of Banking, Securities & Corporations, Department of Community & Economic Development, expressed his happiness in the fact that he and Mr. Simpson were able to come to agreement on a number of amendments that addressed [the division's] concerns. Therefore, the division has submitted a zero fiscal note for [Version F]. Although there will be a cost due to the adjustment of the regulations, the plan is to do it as part of the regular regulation review process. Mr. Elder explained that the main item that moved the division to the zero fiscal note and away from the investigator was the addition of the provision [in Version F] that allows for any legal proxy to be treated in the same manner if a corporation adopts rules that provide for the electronic voting proxies. [The division] feels that goes far in ensuring that there is a level playing field between corporation proxies and independent proxies. REPRESENTATIVE ROKEBERG remarked that Representative Halcro had made a good point earlier. Representative Rokeberg asked if the statute includes a provision regarding the requirement relating to nondelivered dividends or fiduciary instruments. MR. ELDER said he would have to review Title 10 in order to determine whether that matter is discussed elsewhere. He noted that his only concern is in regard to whether this section is the appropriate section to include that, because this section [AS 10.06.411] speaks to the delivery of information to shareholders. He added, "If you're comfortable doing that, fine, but there may be some other section that's more appropriate and [Legislative Legal Services], in fact, may recommend a different one." However, he said, he understood [Mr. Simpson's] point that if dividends and interest payments are sent out and are returned, there is no point in continuing to send those out. Mr. Elder said he was guessing that the corporations would be required to maintain those holdings for the benefit of the shareholder, although there may a specific time period in which the money would be considered to be "legally dead." REPRESENTATIVE ROKEBERG inquired as to the current provision under the property law regarding the banks' ability to distribute funds to the state if there is no claimant to the money. MR. ELDER answered that although he recalled the time period that the money had to be held to be quite a while, he wasn't sure of the specific time. REPRESENTATIVE ROKEBERG said he didn't mind having it as a de facto provision. However, a specific statutory dictate has been created in regard to the action of a corporation, but the corporation hasn't been told what to do if those items can't be delivered. Therefore, he indicated his liking of [Sealaska Corporation's policy] to hold the funds with interest until such time that the individual can be found. MR. ELDER commented that he would be surprised if that isn't already required, but said he'd have to review it. Number 309 REPRESENTATIVE HALCRO informed the committee that some cooperatives such as Chugach Electric that send out dividends which are returned place a list of the names relating to the returned dividends in the newspaper. He surmised that is done because it satisfies some public-notice provision for state law, and that a corporation in the same situation would operate under the same rules. MR. ELDER agreed and recalled that a number of newsletters from various Alaska Native Claims Settlement Act (ANCSA) corporations, which go out to all the shareholders, include a similar type of notice. CHAIR MURKOWSKI pointed out that the statutes pertaining to real property say that after seven years from the date of judgment, the [property] can escheat to the state. Chair Murkowski agreed to have staff check into this matter. Number 349 REPRESENTATIVE HALCRO moved to adopt conceptual Amendment 2, on page 5, line 28, after "person;", to insert "or". There being no objection, conceptual Amendment 2 was adopted. CHAIR MURKOWSKI announced that the lack of subsection (a) in Section 1 is a drafting issue that the drafters can address [without an amendment]. REPRESENTATIVE HAYES moved to report CSHB 418 [version 22- LS13335\F, Bannister, 3/4/02, as amended] out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, CSHB 418(L&C) was moved out of the House Labor and Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|