Legislature(2021 - 2022)BELTZ 105 (TSBldg)
02/17/2021 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB24 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 24 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 24-VIRTUAL MEETINGS FOR CORPORATIONS
1:33:43 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO.
24, "An Act authorizing virtual meetings of shareholders of a
corporation; and authorizing virtual meetings of members of a
nonprofit corporation."
Noting that public testimony was still open, Chair Costello
asked Ms. Paskvan to provide her testimony.
1:34:20 PM
BONNIE PASKVAN, Partner, Dorsey & Whitney LLP, Anchorage,
Alaska, stated that she and her partners have been working to
effect permanent change to the Alaska Corporations Code. The
requested changes are to allow corporations, nonprofits, and
Alaska Native corporations to hold annual and special meetings
in person, virtually, or a hybrid. She directed attention to the
letter from the Alaska Native Claims Settlement Act (ANCSA)
Regional Association stating unanimous support for SB 24 on
behalf of the 12 regional land-based Native corporations.
MS. PASKVAN highlighted that Alaska is one of just nine states
that require in-person annual shareholder meetings. She said
passing SB 24 will give corporations the right to hold
shareholder and special meetings in person, virtually, or a
hybrid. She noted that in some instances this will help
corporations to meet quorum requirements. This will also make
meetings more accessible to shareholders, particularly those who
cannot afford the time or expense to attend annual shareholder
meetings in person. She said most corporations are not expected
to stop holding in-person meetings, but this provides a tool in
the corporate toolkit that provides flexibility.
MS. PASKVAN concluded, "We consider SB 24 to be a small
modernization effort to allow Alaska corporations to operate in
this challenging new environment and to bring our state into the
current century."
1:38:47 PM
SENATOR STEVENS asked what safeguards would be implemented to
ensure safety and security and that someone has not illegally
accessed the voting system.
MS. PASKVAN pointed out that corporations in the Lower 48 have
been holding remote and hybrid meetings for decades. The
software companies that have made this possible will provide the
same support and security for Alaska corporations. She noted
that most Alaska Native corporations she is aware of already
allow electronic proxy voting. A special pin is given to each
shareholder so they can vote electronically. SB 24 will allow
Alaska to catch up with what is already being done safely in the
rest of the world, she said.
1:40:23 PM
ERROL CHAMPION, Realtor, Legislative Issues Committee, Alaska
Realtors, Juneau, Alaska, said the Alaska Realtors was working
hard on the virtual meetings legislation last year and their
support extends to SB 24. If the bill becomes law, corporations
and most nonprofits will benefit.
1:41:12 PM
CHAIR COSTELLO closed public testimony on SB 24. She solicited a
motion to adopt Amendment 1.
1:41:24 PM
SENATOR STEVENS moved Amendment 1, [work order 32-LS0213\A.3].
32-LS0213\A.3
Bannister
2/15/21
AMENDMENT 1
OFFERED IN THE SENATE
TO: SB 24
Page 1, lines 1 - 2:
Delete all material and insert:
""An Act relating to holding corporate meetings by remote
communication; allowing voting by remote communication at
corporate meetings; making shareholder lists available
electronically; relating to for-profit and nonprofit
corporations; relating to business and industrial development
corporations; relating to Native corporations; relating to the
Alaska Banking Code; and providing for an effective date.""
Page 1, line 4, through page 2, line 15:
Delete all material and insert:
"* Section 1. AS 10.06.223 is amended to read:
Sec. 10.06.223. Organizational meeting. After the
commencement of corporate existence by the issuance of a
certificate of incorporation, an organizational meeting of
either the incorporators or the board of directors named in
the articles of incorporation shall be held [, EITHER
INSIDE OR OUTSIDE THE STATE,] at the call of a majority of
the incorporators or directors named in the articles of
incorporation [,] for the purpose of adopting bylaws,
electing directors if none have been named in the articles,
electing officers, and transacting such other business as
may come before the meeting. The organizational meeting may
be held at a designated place, by remote communication, or
at a designated place and by remote communication. The
designated place may be inside or outside the state. Those
calling the meeting shall give at least 20 days' [DAYS]
notice of the meeting by mail to each incorporator or
director named. The notice shall state the time and place,
if the meeting is to be held at a designated place, of the
meeting, and whether the meeting will also be held by
remote communication.
* Sec. 2. AS 10.06.230(e) is amended to read:
(e) The bylaws may contain any provision, not in
conflict with law or the articles of incorporation, for the
management of the business of the corporation and for the
conduct of the affairs of the corporation, including [BUT
NOT LIMITED TO,]
(1) a provision referred to in AS 10.06.210(2),
(3), or (4);
(2) the time, for meetings held at a designated
place, the place, and the manner, including by remote
communication, of calling, conducting, and giving notice of
meetings of shareholders, directors, and committees;
(3) the manner of execution, revocation, and use
of proxies;
(4) the qualifications, duties, and compensation
of directors; the time of their annual election; and the
requirements of a quorum for directors' and committee
meetings;
(5) the appointment and authority of committees
of the board;
(6) the appointment, duties, compensation, and
tenure of officers;
(7) the mode of determination of holders of
record of the shares of the corporation;
(8) the making of annual reports and financial
statements to the shareholders.
* Sec. 3. AS 10.06.405(a) is amended to read:
(a) Meetings of shareholders shall be held at a place
inside or outside the [THIS] state, by remote
communication, or at a place inside or outside the state
and by remote communication, as provided in the bylaws. In
the absence of a provision in the bylaws, meetings shall be
held at the direction of the board or at the registered
office of the corporation.
* Sec. 4. AS 10.06.405(b) is amended to read:
(b) An annual meeting of the shareholders shall be
held at the time as provided in the bylaws or, if the
bylaws do not set a time, at a time determined by the
board. If the annual meeting is not held within any 13-
month period, the superior court may on the application of
a shareholder summarily order a meeting to be held.
* Sec. 5. AS 10.06.410(a) is amended to read:
(a) Written or printed notice stating the place, if
the meeting will be held at a designated place, the manner,
including holding the meeting by remote communication, the
day, and the hour of the meeting, and, in the case of a
special meeting, the purpose for which the meeting is
called, shall be delivered not less than 20 or more than 60
days before the date of the meeting, either personally, by
mail, or by electronic transmission under (b) of this
section, by or at the direction of the president, the
secretary, the officer, or persons calling the meeting, to
each shareholder of record entitled to vote at the meeting.
If mailed, the notice is considered delivered when
deposited with postage prepaid in the United States mail
addressed to the shareholder at the address of the
shareholder as it appears on the stock transfer books of
the corporation, or, if the shareholder has filed with the
secretary of the corporation a written request that notice
be mailed to a different address, addressed to the
shareholder at the new address. An affidavit of the
secretary or other person giving the notice or of a
transfer agent of the corporation that the notice required
by this section has been given is prima facie evidence of
the facts stated in the affidavit. If attendance of the
meeting by remote communication is permitted, the notice
must state the method of remote communication by which a
shareholder or a proxy holder is considered present in
person at the meeting and by which the shareholder or proxy
holder may vote.
* Sec. 6. AS 10.06.413(a) is amended to read:
(a) At least 20 days before each meeting of
shareholders, the officer or agent having charge of the
stock transfer books for shares of a corporation shall make
a list of the shareholders entitled to vote at the meeting
or an adjournment of the meeting arranged in alphabetical
order, with the address of and the number of shares held by
each shareholder. The list shall be kept on file at the
registered office of the corporation and is subject to
inspection by a shareholder or the agent or attorney of a
shareholder at any time during usual business hours for a
period of 20 days before the meeting. The list shall also
be produced and kept open at the time and place of the
meeting and [SHALL BE] subject to the inspection of a
shareholder during the meeting, or the list shall be kept
available for the meeting on a reasonably accessible
electronic network where the information required to gain
access to the list is provided with the notice of the
meeting. If the corporation makes the list available on an
electronic network, the corporation may take reasonable
steps to ensure that the information is available only to
shareholders of the corporation. The original stock
transfer books are prima facie evidence as to the
shareholders who are entitled to examine the list or
transfer books or to vote at a meeting of shareholders.
* Sec. 7. AS 10.06.415(a) is amended to read:
(a) Unless otherwise provided in the articles of
incorporation, a majority of the shares entitled to vote,
represented in person, by remote communication, or by
proxy, constitutes a quorum at a meeting of shareholders,
but in no event may a quorum consist of less than one-third
of the shares entitled to vote at the meeting. If a quorum
is present, the affirmative vote of the majority of shares
represented at the meeting and entitled to vote on the
subject matter is the act of the shareholders, unless the
vote of a greater number or voting by classes is required
by this chapter, the articles of incorporation, or the
bylaws.
* Sec. 8. AS 10.06.418(b) is amended to read:
(b) A proxy is not valid after the expiration of 11
months from the date of the proxy unless it qualifies as an
irrevocable proxy under (e) of this section. A proxy
continues in full force and effect until revoked by the
person executing it, except as provided in this section. A
person may revoke a proxy by a writing delivered to the
corporation stating that the proxy is revoked, by a
subsequent proxy executed by the person executing the prior
proxy and delivered to the corporation, or by attendance at
the meeting and voting in person, or by remote
communication, by the person executing the proxy. The dates
contained on the forms of proxy presumptively determine the
order of execution, regardless of the postmark dates on the
envelopes in which the proxies are mailed.
* Sec. 9. AS 10.06.420(c) is amended to read:
(c) A shareholder may vote in person, by remote
communication, by proxy executed in writing by the
shareholder or by the authorized attorney-in-fact of the
shareholder, or by proxy executed by electronic
transmission by the shareholder or by the authorized
attorney-in-fact of the shareholder. A proxy executed by
electronic transmission must
(1) be directed to the person who will be the
holder of the proxy or to a proxy solicitation firm, proxy
support service organization, or similar agent that is
authorized by the person who will be the holder of the
proxy to receive the transmission; and
(2) include information that demonstrates that
the shareholder authorized the transmission.
* Sec. 10. AS 10.06.420(d) is amended to read:
(d) Unless the articles of incorporation provide
otherwise, at an election for directors, each shareholder
entitled to vote at the election may vote, in person, by
remote communication, or by proxy, the number of shares
owned by the shareholder for as many persons as there are
directors to be elected and for whose election the
shareholder has a right to vote, or to cumulate votes by
giving one candidate votes equal to the number of directors
multiplied by the number of shares of the shareholder, or
by distributing votes on the same principle among any
number of candidates. The rights created by this subsection
may not be limited by amendment to the articles when the
votes cast against the amendment would be sufficient to
elect one director if voted cumulatively at an election of
the entire board.
* Sec. 11. AS 10.06.420(f) is amended to read:
(f) Shares held by an administrator, executor,
guardian, or conservator may be voted by that person,
[EITHER] in person, by remote communication, or by proxy,
without a transfer of the shares into the name of that
person. Shares standing in the name of a trustee may be
voted by the trustee, [EITHER] in person, by remote
communication, or by proxy, but a trustee is not entitled
to vote shares held by the trustee without a transfer of
the shares into the name of the trustee.
* Sec. 12. AS 10.06.420(j) is amended to read:
(j) If a corporation adopts rules to provide for
voting by proxy executed by electronic transmission or by a
ballot cast by electronic transmission, the rules must
provide that all legally qualified proxies and ballots cast
by electronic transmission may be voted in the same manner
as the corporation's proxy or ballot.
* Sec. 13. AS 10.06.420 is amended by adding a new subsection
to read:
(k) The board may permit shareholders and
shareholders' proxy holders to participate in meetings of
the shareholders by remote communication using one or more
methods of remote communication, whether the meetings are
held at a designated place, by remote communication, or at
a designated place and by remote communication. The board
may adopt guidelines and procedures that apply to
participation in shareholder meetings by remote
communication and that the board considers appropriate. The
board may limit participation to specified locations or
means of communication. A shareholder participating in a
meeting by remote communication permitted by the board is
considered to be present in person at the meeting.
* Sec. 14. AS 10.06.470(a) is amended to read:
(a) A regular or special meeting of the board or a
committee of the board may be called by the chair
[CHAIRMAN] of the board, the president, a vice-president,
the secretary, or a director and may be held at any place
designated under the bylaws inside or outside the [THIS]
state, by remote communication, or at a designated place
inside or outside the state and by remote communication. A
member of the board or of a committee of the board
participating in a meeting by remote communication is
considered to be present in person at the meeting for the
purposes of reaching a quorum under AS 10.06.473 and for
voting at the meeting.
* Sec. 15. AS 10.06.960(n) is amended to read:
(n) Notwithstanding AS 10.06.504(d), an amendment to
the articles of incorporation of a corporation organized
under 43 U.S.C. 1601 et seq. (Alaska Native Claims
Settlement Act) and incorporated under former AS 10.05.005
to add a provision eliminating or limiting the personal
liability of a director to the corporation or its
stockholders for monetary damages under AS 10.06.210(1)(M)
may be adopted by the affirmative vote of a majority of the
shares represented at the regular or special meeting at
which a quorum is present in person, [OR] by proxy, or by
remote communication.
* Sec. 16. AS 10.06.960(o) is amended to read:
(o) Notwithstanding AS 10.06.455(b) and 10.06.504(d),
an amendment to the articles of incorporation of a village
corporation organized under 43 U.S.C. 1601 et seq. (Alaska
Native Claims Settlement Act) and incorporated under former
AS 10.05.005 to add a provision authorizing the
classification of directors under AS 10.06.455 may be
adopted by the affirmative vote of a majority of the shares
represented at a regular or special meeting at which a
quorum is present in person, [OR] by proxy, or by remote
communication.
* Sec. 17. AS 10.06.960(p) is amended to read:
(p) Notwithstanding AS 10.06.504(d), a Native
corporation incorporated under former AS 10.05 before
July 1, 1989, may amend its articles under this subsection
to reduce the quorum necessary to hold a meeting of
shareholders to one-third of the outstanding shares
entitled to vote at a meeting, represented in person, by
remote communication, or by proxy. An amendment under this
subsection is approved if it receives an affirmative vote
of two-thirds of the shares represented in person, by
remote communication, or by proxy at an annual meeting. The
Native corporation may not use the reduced quorum
established under this subsection to adopt other amendments
of the articles or to adopt resolutions to which 43 U.S.C.
1629b applies. AS 10.06.504(d) continues to apply to the
adoption of other amendments of the articles.
* Sec. 18. AS 10.06.990 is amended by adding a new paragraph
to read:
(51) "remote communication" means communication
by means of electronic communication, conference telephone,
videoconference, the Internet, electronic transmission, or
other means by which persons not physically present in the
same location may communicate with each other on a
substantially simultaneous basis.
* Sec. 19. AS 10.10.100(b) is amended to read:
(b) Each stockholder shall have one vote, in person,
by remote communication, or by proxy, for each share of
capital stock held by that stockholder, and each member
shall have one vote, in person, by remote communication, or
by proxy, except that a member having a loan limit of more
than $1,000 shall have one additional vote, in person, by
remote communication, or by proxy, for each additional
$1,000 which the member is authorized to have outstanding
on loans to the corporation at any one time as determined
under AS 10.10.070(a)(3)(B).
* Sec. 20. AS 10.10.100 is amended by adding new subsections
to read:
(c) A proxy may be executed in writing by a
stockholder or by the authorized attorney-in-fact of the
stockholder, or executed by electronic transmission by the
stockholder or by the authorized attorney-in-fact of the
stockholder. A proxy executed by electronic transmission
must
(1) be directed to the person who will be the
holder of the proxy or to a proxy solicitation person,
including a proxy support service organization or similar
agent that is authorized by the person who will be the
holder of the proxy to receive the transmission; and
(2) include information that demonstrates that
the stockholder authorized the transmission.
(d) In this section, "electronic transmission" and
"remote communication" have the meanings given in
AS 10.06.990.
* Sec. 21. AS 10.20.066 is amended to read:
Sec. 10.20.066. Notice of meetings. Unless otherwise
provided in the articles of incorporation or bylaws,
written notice stating the manner, place, if the meeting is
to be held at a designated place, day, and hour of the
meeting, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be
delivered not less than 10 nor more than 50 days before the
date of the meeting, either personally or by mail, by or at
the direction of the president, or the secretary, or the
officers or persons calling the meeting, to each member
entitled to vote at the meeting. If mailed, the notice
shall be considered to be delivered when deposited in the
United States mail addressed to the member at the member's
address as it appears on the records of the corporation,
with postage prepaid.
* Sec. 22. AS 10.20.071(b) is amended to read:
(b) A member entitled to vote may vote in person or,
unless the articles of incorporation or the bylaws
otherwise provide, may vote by remote communication, proxy
executed in writing by the member or by the attorney-in-
fact for the member, or by proxy executed by electronic
transmission by the member or by the authorized attorney-
in-fact of the member. A proxy is not valid after 11 months
from the date of its execution, unless otherwise provided
in the proxy. If directors or officers are to be elected by
members, the bylaws may provide that the elections may be
conducted by mail.
* Sec. 23. AS 10.20.071(e) is amended to read:
(e) The articles of incorporation or the bylaws may
provide the number or percentage of members entitled to
vote represented in person, by remote communication, or by
proxy, or the number or percentage of votes represented in
person, by remote communication, or by proxy, which
constitute a quorum at a meeting of members. In the absence
of any such provision, members holding one-tenth of the
votes entitled to be cast on the matter to be voted on
[UPON] represented in person, by remote communication, or
by proxy constitute a quorum. A majority of the votes
entitled to be cast on a matter to be voted on [UPON] by
the members present or represented by proxy at a meeting at
which the quorum is present is necessary for adoption
unless a greater proportion is required by this chapter,
the articles of incorporation or the bylaws.
* Sec. 24. AS 10.20.071 is amended by adding new subsections
to read:
(f) A proxy executed by electronic transmission must
(1) be directed to the person who will be the
holder of the proxy or to a proxy solicitation person,
including a proxy support service organization or similar
agent that is authorized by the person who will be the
holder of the proxy to receive the transmission; and
(2) include information that demonstrates that
the stockholder authorized the transmission.
(g) In this section, "electronic transmission" has
the meaning given in AS 10.06.990.
* Sec. 25. AS 10.20.076 is amended to read:
Sec. 10.20.076. Quorum of members. Unless otherwise
provided in the articles of incorporation or the bylaws,
members holding one-tenth of the votes entitled to be cast,
represented in person, by remote communication, or by
proxy, constitute a quorum at a meeting of members.
However, in no event may a quorum consist of less than one-
tenth of the votes entitled to vote at a meeting. If a
quorum is present, the affirmative vote of a majority of
the votes represented at the meeting and entitled to vote
on the subject matter is the act of the members, unless the
vote of a greater number is required by this chapter or the
articles of incorporation or the bylaws.
* Sec. 26. AS 10.20.116(a) is amended to read:
(a) Regular or special meetings of the board of
directors may be held at a designated place, by remote
communication, or at a designated place and by remote
communication. The designated place may be [EITHER] inside
or outside the state.
* Sec. 27. AS 10.20.166(a) is amended to read:
(a) After the issuance of the certificate of
incorporation an organizational meeting of the board of
directors named in the articles of incorporation shall be
held at a designated place, by remote communication, or at
a designated place and by remote communication [, EITHER
INSIDE OR OUTSIDE THE STATE,] at the call of a majority of
the incorporators, for the purpose of adopting bylaws,
electing officers, and the transaction of other business as
may come before the meeting. The designated place may be
inside or outside the state. The incorporators calling the
meeting shall give at least three days' notice of the
meeting by mail to each director named, and the notice must
[WHICH SHALL] state the time and place of the meeting.
* Sec. 28. AS 10.20.920 is amended by adding a new paragraph
to read:
(10) "remote communication" has the meaning
given in AS 10.06.990.
* Sec. 29. The uncodified law of the State of Alaska is
amended by adding a new section to read:
SAVING CLAUSE. This Act does not affect
(1) a court action or court proceeding begun before
the effective date of this Act; or
(2) a right accrued before the effective date of this
Act.
* Sec. 30. The uncodified law of the State of Alaska is
amended by adding a new section to read:
RETROACTIVITY. This Act is retroactive to March 11, 2020.
* Sec. 31. This Act takes effect immediately under
AS 01.10.070(c)."
1:41:35 PM
CHAIR COSTELLO objected for discussion purposes.
1:41:42 PM
SENATOR DAVID WILSON Alaska State Legislature, Juneau, Alaska,
sponsor of SB 24, directed attention to the lengthy amendment
summary in the packets and advised that Ms. Martin would further
summarize the amendment.
1:42:10 PM
JASMIN MARTIN, Staff, Senator Wilson, Alaska State Legislature,
Juneau, Alaska, explained that Amendment 1, work order 32-
LS0213\A.3, defines "remote communication" and the aspects of
corporate governance that can be conducted by remote
communication. It also adds "remote communication" throughout
Title 10, includes businesses organized under the Business and
Industrial Development Corporations Act, adds an immediate
effective date, and adds a retroactivity date so the
organizations that amended their bylaws to allow remote meetings
during the emergency disaster do not need to reamend their
bylaws. She noted that SB 24 is optional; it only affects
organizations that adopt these changes in their bylaws.
1:43:51 PM
CHAIR COSTELLO said it is important for the record to reflect
that SB 24 is not a mandate. The bill is responding to the
current environment so a corporation may choose to change their
bylaws to conduct business online.
1:44:33 PM
SENATOR GRAY-JACKSON commented that this bill is much needed and
an advancement into the current century.
1:44:57 PM
CHAIR COSTELLO removed her objection and AM 1 was adopted.
1:45:13 PM
SENATOR WILSON thanked the people who testified and those who
reached out to his office encouraging this much-needed
innovation.
1:45:41 PM
At ease
1:46:07 PM
CHAIR COSTELLO reconvened the meeting and solicited a motion.
1:46:16 PM
SENATOR HOLLAND moved to report SB 24, as amended, from
committee with individual recommendations and attached fiscal
note(s).
CHAIR COSTELLO found no objection and CSSB 24(L&C) was reported
from the Senate Labor and Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 24 v. A Amendment No. 1.pdf |
SL&C 2/17/2021 1:30:00 PM |
SB 24 |
| SB 24 Amendment No. 1 Summary.pdf |
SL&C 2/17/2021 1:30:00 PM |
SB 24 |
| SB 24 Letter of Support Afognak Native Corp.pdf |
SL&C 2/17/2021 1:30:00 PM |
SB 24 |
| SB 24 Letter of Support Koniag Native Corp.pdf |
SL&C 2/17/2021 1:30:00 PM |
SB 24 |
| SB 24 Letter of Support ANCSA Regional Corp.pdf |
SL&C 2/17/2021 1:30:00 PM |
SB 24 |
| SB 24 Letter of Support Doyon Limited.pdf |
SL&C 2/17/2021 1:30:00 PM |
SB 24 |
| SB 24 Letter of Support ANVCA.pdf |
SL&C 2/17/2021 1:30:00 PM |
SB 24 |