Legislature(2001 - 2002)

04/08/2002 02:05 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
           HB 418-CORPORATE NOTICES/PROCEDURES/VOTING                                                                       
                                                                                                                                
REPRESENTATIVE  LISA  MURKOWSKI,  Chair  of the  House  Labor  and                                                              
Commerce  Committee, sponsor  of HB  418, said  HB 418 would  help                                                              
Alaskan   corporations   with  their   management   and   business                                                              
operations by allowing  them to offer electronic  proxy voting and                                                              
deliver materials  to shareholders electronically.   She said this                                                              
change  would be  similar to  corporate  code changes  made by  25                                                              
other states.   She said it  would allow for efficiencies  such as                                                              
householding  of shareholder information.   She  said she  and her                                                              
sons   received  their   annual  notices   from  an   out-of-state                                                              
corporation  in which  they were  shareholders.   She was able  to                                                              
vote online  for the entire family  in about a minute and  a half.                                                              
She  was prompted  for a  personal identification  number and  her                                                              
vote.  She said  a lot of shareholders received  their ballots and                                                              
put them in the pile of things to  do and didn't get to them until                                                              
too late.                                                                                                                       
                                                                                                                                
SENATOR  THERRIAULT asked  who would benefit  monetarily  from the                                                              
streamlined process.                                                                                                            
                                                                                                                                
REPRESENTATIVE  MURKOWSKI  said   any  Alaskan  corporation  would                                                              
benefit,  including Alaska-based  banks  and Native  corporations.                                                              
She said  HB 418 originated from  Sealaska because they  wanted to                                                              
provide notices to their shareholders electronically.                                                                           
                                                                                                                                
CHAIRMAN  TAYLOR asked  if there  were any  further questions  for                                                              
Representative Murkowski.  There were none.                                                                                     
                                                                                                                                
MR. JOE NELSON,  legal counsel, Sealaska Corporation,  said HB 418                                                              
was not a  new idea and there  was nothing unique in  the language                                                              
of the bill.   He said it  was modeled after corporate  codes from                                                              
across  the   country  but  came   primarily  from   Delaware  and                                                              
California  codes   and  the  Federal  Communications   Commission                                                              
guidelines.                                                                                                                     
                                                                                                                                
CHAIRMAN  TAYLOR  said  HB 418  would  provide  shareholders  with                                                              
convenience  and   should  lead  to  increased   participation  by                                                              
shareholders.   He said  Alaska had the  highest rate  of computer                                                              
ownership and Internet access in the country.                                                                                   
                                                                                                                                
He said  HB 418  would provide  for many  opportunities to  reduce                                                              
costs.    For example  Sealaska  could  save  a  lot of  money  by                                                              
householding  information.   He  attended  a national  meeting  of                                                              
corporate   secretaries  that   had  a   discussion  panel   about                                                              
householding and electronic voting.   He learned that corporations                                                              
across the  country were saving millions  of dollars by  using the                                                              
methods outlined in HB 418.                                                                                                     
                                                                                                                                
SENATOR THERRIAULT  asked if Sealaska  paid anything to  the State                                                              
for oversight.                                                                                                                  
                                                                                                                                
MR. NELSON didn't know.                                                                                                         
                                                                                                                                
SENATOR THERRIAULT  thought statutes  allowed the State  to charge                                                              
Native  corporations  a fee  for  the  oversight provided  by  the                                                              
Division of  Banking, Securities  & Corporations  (DBSC).   He did                                                              
not believe the  State had been charging Native  corporations.  He                                                              
said  HB 418  would be  revenue neutral  for the  State but  would                                                              
provide  a savings to  corporations.   He said  perhaps with  this                                                              
savings  it would  be  time for  Native  corporations  to pay  for                                                              
oversight like the rest of the corporations in the state.                                                                       
                                                                                                                                
MR. NELSON  said DBSC  had previously been  concerned with  HB 418                                                              
but  those  concerns related  to  financial  impact to  the  State                                                              
rather than  fees paid to  the State.   He said Sealaska  and DBSC                                                              
worked out those  concerns.  He said DBSC had testified  on HB 418                                                              
and he didn't think they had any  problems with the reworked bill.                                                              
He said the current fiscal note reflected no cost to the State.                                                                 
                                                                                                                                
CHAIRMAN TAYLOR asked how long a proxy lasted.                                                                                  
                                                                                                                                
MR. NELSON  thought a proxy  lasted 11  months unless a  new proxy                                                              
was  submitted.   He said  HB 418  wouldn't impact  the length  of                                                              
proxies.                                                                                                                        
                                                                                                                                
CHAIRMAN TAYLOR thought HB 418 would  be beneficial to all parties                                                              
involved.   He said  there  had been a  lot of  discussion in  the                                                              
legislature  about minority  shareholders who  were frustrated  by                                                              
the actions  of management and wanted  to have their  views heard.                                                              
He thought HB 418  would make it easier for them  to express their                                                              
views because of increased ease of communications.                                                                              
                                                                                                                                
CHAIRMAN TAYLOR asked if there were  any further questions for Mr.                                                              
Nelson.  There were none.  He asked  if there was anybody else who                                                              
wished  to testify on  HB 418.   There  was nobody.   He asked  if                                                              
there were any amendments.                                                                                                      
                                                                                                                                
SENATOR COWDERY offered the following Amendment 1.                                                                              
                                                                                                                                
                        A M E N D M E N T                                                                                   
                                                                                                                                
                                                                                                                                
OFFERED IN THE SENATE                                                                                                           
     TO:  CSHB 418(L&C)                                                                                                         
                                                                                                                                
Page 5, lines 13 - 14:                                                                                                          
     Delete "executed by electronic transmission"                                                                           
                                                                                                                                
Page 5, line 18:                                                                                                                
     Delete "transmission; and"                                                                                             
     Insert "proxy;"                                                                                                        
                                                                                                                                
Page 5, line 20:                                                                                                                
     Delete "transmission"                                                                                                  
     Insert "proxy, authorized an attorney-in-fact for the                                                                  
shareholder, if applicable, authorized  an agent under (1) of this                                                          
subsection to receive the proxy,  if applicable, and authorized an                                                          
electronic transmission, if applicable; and                                                                                 
               (3)  if the corporation is using corporation money                                                           
     to send out the proxy form, include                                                                                    
                    (A)  on the form a line for the shareholder                                                             
          to name an eligible shareholder as the holder of the                                                              
          proxy; and                                                                                                        
                    (B)  with the form appropriate instructions                                                             
          on  using the line  required by  (A) of this  paragraph,                                                          
          including an  instruction that the shareholder  may name                                                          
          a  person to hold  the proxy  who is not  a part  of the                                                          
          current management of the corporation"                                                                            
                                                                                                                                
                                                                                                                                
SENATOR THERRIAULT asked if the amendment  had been discussed with                                                              
the sponsor of HB 418.                                                                                                          
                                                                                                                                
REPRESENTATIVE  MURKOWSKI  said she  had  not seen  the  amendment                                                              
before.                                                                                                                         
                                                                                                                                
CHAIRMAN TAYLOR didn't  think Amendment 1 would  change the intent                                                              
of HB 418.  He said Amendment 1 would  require the corporations to                                                              
provide a form with the appropriate  instructions so that a person                                                              
who wished  to could  write in a  proxy holder.   He thought  most                                                              
corporations already did so.                                                                                                    
                                                                                                                                
REPRESENTATIVE MURKOWSKI  agreed that was probably  what Amendment                                                              
1 would do.  She asked for the source of Amendment 1.                                                                           
                                                                                                                                
CHAIRMAN TAYLOR  understood that every Native  corporation already                                                              
provided a blank line to write in  proxies.  However, he had heard                                                              
that Cook Inlet Region, Inc. (CIRI)  didn't provide any such space                                                              
and threw  away  any proxies  that were  written in.   He said  he                                                              
didn't know  whether that  was true.   He said a CIRI  shareholder                                                              
had  asked that  shareholders  be given  the  opportunity to  name                                                              
their own proxy.                                                                                                                
                                                                                                                                
MR.  NELSON thought  Sealaska  had  always provided  for  write-in                                                              
proxies.  He thought it was already a requirement.                                                                              
                                                                                                                                
SENATOR THERRIAULT asked if that  was a requirement of Sealaska or                                                              
the State.                                                                                                                      
                                                                                                                                
MR. NELSON  said Sealaska  required it.   He  also thought  it was                                                              
provided for in State regulations.                                                                                              
                                                                                                                                
SENATOR  THERRIAULT wondered  if  Amendment 1  would codify  State                                                              
regulations that CIRI might have been ignoring.                                                                                 
                                                                                                                                
CHAIRMAN  TAYLOR said  that  was his  assumption  but he  couldn't                                                              
confirm  that.  He  announced that  the committee  would hear  the                                                              
bill again  on Wednesday to allow  time for these questions  to be                                                              
answered.                                                                                                                       
                                                                                                                                
HB 418 was held in committee with Amendment 1 pending.                                                                          

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