Legislature(1995 - 1996)

03/27/1995 03:10 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
           HOUSE LABOR & COMMERCE STANDING COMMITTEE                           
                         March 27, 1995                                        
                           3:10 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Pete Kott, Chairman                                            
 Representative Norman Rokeberg, Vice Chairman                                 
 Representative Kim Elton                                                      
 Representative Gene Kubina                                                    
 Representative Brian Porter                                                   
 MEMBERS ABSENT                                                                
 Representative Beverly Masek                                                  
 Representative Jerry Sanders                                                  
 COMMITTEE CALENDAR                                                            
  HB 224:  "An Act relating to the state plumbing code."                       
           HEARD AND HELD                                                      
 *HB 251:  "An Act relating to Native corporations."                           
           HEARD AND HELD                                                      
 (* First public hearing)                                                      
 WITNESS REGISTER                                                              
 REPRESENTATIVE CARL E. MOSES                                                  
 Alaska State Legislature                                                      
 State Capitol, Room 204                                                       
 Juneau, AK 99801                                                              
 Telephone:  (907) 465-2214                                                    
 POSITION STATEMENT:  Sponsor of HB 251                                        
 ROY HUHNDORF                                                                  
 Chairman and Chief Executive Officer                                          
 Cook Inlet Region, Incorporated                                               
 P.O. Box 93330                                                                
 Anchorage, AK 99509                                                           
 POSITION STATEMENT:  Testified in support of HB 251                           
 MARK KROLOFF, General Counsel                                                 
 Cook Inlet Region, Incorporated                                               
 P.O. Box 93330                                                                
 Anchorage, AK 99509                                                           
 POSITION STATEMENT:  Answered questions on HB 251.                            
 TIM BENINTENDI, Legislative Assistant                                         
   to Representative Carl E. Moses                                             
 Alaska State Legislature                                                      
 State Capitol, Room 204                                                       
 Juneau, AK 99801                                                              
 Telephone:  (907) 465-2214                                                    
 POSITION STATEMENT:  Explained CSHB 251(L&C), Version G.                      
 CHARLES WHEATON, Shareholder                                                  
 Sealaska Native Corporation; and                                              
 Goldbelt Native Corporation                                                   
 P.O. Box 21662                                                                
 Juneau, AK 99801                                                              
 Telephone:  586-2794                                                          
 POSITION STATEMENT:  Testified against HB 251                                 
 DOROTHY ZURA, Representative                                                  
 Shareholders for Shareholders                                                 
 2140 Lawson Creek                                                             
 Douglas, AK 99824                                                             
 Telephone:  364-3898                                                          
 POSITION STATEMENT:  Testified against HB 251                                 
 DELICE ALEXANDER-CALCOTE, Shareholder                                         
 Cook Inlet Region, Incorporated                                               
 205 East Dimond, Number 326                                                   
 Anchorage, AK 99515                                                           
 Telephone:  (907) 349-1546                                                    
 POSITION STATEMENT:  Testified on HB 251.                                     
 JUDITH KALKINS, Shareholder                                                   
 Cook Inlet Region, Incorporated                                               
 3723 East 66th Avenue                                                         
 Anchorage, AK 99503                                                           
 Telephone:  (907) 349-7648                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 BOBBIE OSKOLOFF                                                               
 P.O. Box 266                                                                  
 Kenai, AK 99611                                                               
 Telephone:  (907) 283-7748                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 IKE CROPLEY, Shareholder                                                      
 Sealaska Native Corporation; and                                              
 Goldbelt Native Corporation                                                   
 4104 Birch Lane                                                               
 Juneau, AK 99801                                                              
 Telephone:  (907) 789-0858                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 KATHY POLK                                                                    
 P.O. Box 32677                                                                
 Juneau, AK 99803                                                              
 Telephone:  (907) 789-0438                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 SONYA SMITH                                                                   
 General Delivery                                                              
 Juneau, AK                                                                    
 Telephone:  (907) 586-3914                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 JANE IGTANLOC, Chairperson                                                    
 Shareholders for Goldbelt                                                     
 3258 Montpeleir Court                                                         
 Anchorage, AK 99503                                                           
 Telephone:  (907) 563-7917                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 HAROLD RUDOLPH, Shareholder                                                   
 Cook Inlet Region, Incorporated                                               
 635 "B" Bliss Street                                                          
 Anchorage, AK 99508                                                           
 Telephone:  (907) 338-2507                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 SHARON KAY, Shareholder                                                       
 Cook Inlet Region, Incorporated                                               
 17400 Spain Drive                                                             
 Anchorage, AK 99516                                                           
 Telephone:  (907) 345-7848                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 JOAN MANTEI, Shareholder                                                      
 Sealaska Corporation                                                          
 Box 34711                                                                     
 Juneau, AK 99803-4711                                                         
 Telephone:  (907) 463-7351                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 BERNICE TREGO, Shareholder                                                    
 Sealaska Corporation                                                          
 Yak-Tat Kwaan Tlingit Corporation                                             
 9464 Brady Place                                                              
 Juneau, AK 99801                                                              
 POSITION STATEMENT:  Testified against HB 251                                 
 EDWARD DALE CASEY                                                             
 4003 Minnesota Drive, Number 36                                               
 Anchorage, AK 99503                                                           
 Telephone:  (907) 561-6542                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 JIMMIE D. HARTLEY, Shareholder                                                
 Cook Inlet Region, Incorporated                                               
 4501 Parson, A                                                                
 Anchorage, AK 99508                                                           
 Telephone: (907) 272-3095                                                     
 POSITION STATEMENT:  Testified against HB 251                                 
 HELEN HARTLEY, Elder                                                          
 Cook Inlet Region, Incorporated                                               
 3710 B, Raudolph Street                                                       
 Anchorage, AK 99508                                                           
 Telephone:  (907) 596-0001                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 BERTHA HORTON, Shareholder                                                    
 Sealaska Native Corporation; and                                              
 Goldbelt Native Corporation                                                   
 Box 20505                                                                     
 Juneau, AK 99802                                                              
 Telephone:  Not available                                                     
 POSITION STATEMENT:  Testified against HB 251                                 
 PAT SIERRA, Shareholder                                                       
 Sealaska Native Corporation; and                                              
 Goldbelt Native Corporation                                                   
 P.O. Box 34711                                                                
 Juneau, AK 99803                                                              
 Telephone:  (907) 789-0815                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 ADA PATTERSON, Shareholder                                                    
 Sealaska Native Corporation                                                   
 P.O. Box 020508                                                               
 Juneau, AK 99802                                                              
 POSITION STATEMENT:  Testified against HB 251                                 
 GAIL ANAGICK SCHUBERT                                                         
 Shareholder, Unalakeet Native Corporation; and                                
 Shareholder, Member, Board of Directors                                       
   Bering Straits Native Corporation                                           
 Address and telephone number not available                                    
 POSITION STATEMENT:  Testified in support of HB 251                           
 GLORIA SARABIA, Shareholder                                                   
 Sealaska Native Corporation; and                                              
 Goldbelt Native Corporation                                                   
 P.O. Box 32751                                                                
 Juneau, AK 99801                                                              
 Telephone:  (907) 789-5597                                                    
 POSITION STATEMENT:  Testified against HB 251                                 
 CATHERINE PRICE, Shareholder                                                  
 Sealaska Native Corporation                                                   
 P.O. Box 33796                                                                
 Juneau, AK 99801                                                              
 Telephone:  (907) 790-2163                                                    
 POSITION STATEMENT:  Commented on HB 251                                      
 PREVIOUS ACTION                                                               
 BILL:  HB 251                                                                 
 SHORT TITLE: NATIVE CORPORATIONS                                              
 SPONSOR(S): REPRESENTATIVE(S) MOSES, MacLean, Williams                        
 JRN-DATE     JRN-PG                  ACTION                                   
 03/15/95       741    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/15/95       741    (H)   LABOR & COMMERCE                                  
 03/27/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 ACTION NARRATIVE                                                              
 TAPE 95-24, SIDE A                                                            
 Number 000                                                                    
 The House Labor and Commerce Standing Committee meeting was                   
 called to order by Representative Pete Kott at 3:10 p.m.  Members             
 present at the call to order were Representatives Kott, Elton and             
 Rokeberg.  Members absent were Representatives Porter, Kubina,                
 Masek, and Sanders.  CHAIRMAN PETE KOTT asked that the record                 
 reflect that Representatives Masek and Sanders were excused                   
 absences.  He also asked that the record reflect that a quorum                
 wasn't present so action couldn't be taken on legislation.  He                
 said testimony would be taken because many people in attendance               
 had come to Juneau from other locations of the state.                         
 HB 224 - STATE PLUMBING CODE                                                
 CHAIRMAN KOTT asked that the subcommittee chairman,                           
 Representative Rokeberg, give an overview of the single wall                  
 exchanger and the rewrite of the plumbing code relating to HB                 
 REPRESENTATIVE NORMAN ROKEBERG explained the subcommittee is in               
 the process of redrafting a committee substitute (CS) or an                   
 amendment to HB 224 to accommodate the adoption of the 1991                   
 plumbing code.  He noted it has not been amended since the early              
 70s.  The bill turned over responsibility of code adoption and                
 regulation to the Department of Labor (DOL).  As part of the CS,              
 the subcommittee will be asking that an exception be made for the             
 single wall heat exchangers.  He noted they are also going to                 
 adopt a two year sunset provision on Wednesday, if that is the                
 will of the committee.  The documentation and testimony should be             
 ready for the committee meeting on Wednesday.                                 
 REPRESENTATIVE KOTT said the measure will be discharged from the              
 subcommittee back to the committee for consideration of the CS.               
 He requested that a teleconference be set up as well.                         
 HB 251 - NATIVE CORPORATIONS                                                
 Number 070                                                                    
 The next order of business was HB 251, "An Act relating to Native             
 REPRESENTATIVE CARL E. MOSES, sponsor of HB 251, explained he                 
 introduced the bill to address problems dealing with special                  
 shareholder meetings and petition actions within Native                       
 corporations in Alaska.  The objective of HB 251 is to try to                 
 bring more balance between needs of the shareholders to                       
 responsibly petition for change, and management's need to pursue              
 the objectives of the corporation without undue attention to the              
 continual repetitive and unsuccessful actions of shareholder                  
 groups.  Recognizing the rights of petition for shareholders, we              
 must also realize the considerable drain on the financial                     
 resources of the corporations that many of these efforts                      
 REPRESENTATIVE MOSES explained there is information in the                    
 committee packets which shows that this bill provides for filing              
 procedures for shareholder petitions, penalties for the willful               
 distribution of false or misleading information, 90 days for                  
 securing signatures an increase from 10 percent to 25 percent of              
 the eligible shares needed to insure a successful petition, and               
 promoting for a two year wait for the revival of an unsuccessful              
 petition attempt.  Many conditions exist for Native corporations              
 in Alaska.  Concern for minority shareholder rights and actions               
 must be tempered with a regard for the financial health,                      
 stability and survival of the corporation.  He said he believes               
 HB 251 achieves such a balance.                                               
 REPRESENTATIVE MOSES said he would answer questions the committee             
 may have.  There were no questions.                                           
 CHAIRMAN KOTT said the bill is scheduled for a teleconference                 
 which will begin at 3:30 p.m.  He asked Mr. Roy Huhndorf to come              
 to the table.  He noted Representative Kubina joined the meeting              
 at 3:15 p.m.                                                                  
 ROY HUHNDORF, Chairman and Chief Executive Officer, Cook Inlet                
 Region, Incorporated (CIRI), read his statement into the record:              
 "As you know, CIRI is one of the 12 Alaska regional corporations              
 formed pursuant to the Alaska Native Claims Settlement Act                    
 (ANCSA).  The legislation you are considering today, House Bill               
 251, is the result of careful consideration over a long period of             
 time by the regional corporations and a number of ANCSA village               
 corporations, of problems posed for them by the Alaska                        
 Corporations Code.  This bill has broad support among the Native              
 corporations, and I am privileged to speak to you not only on                 
 behalf of CIRI, but on behalf of the many regional village                    
 corporations supporting this bill.                                            
 "Our general counsel, Mark Kroloff who is with us today, has                  
 already submitted detailed written testimony regarding the                    
 specific provisions of HB 251.  My purpose today will not be to               
 repeat that more detailed, technical testimony, but instead to                
 touch briefly on some of the policy considerations that support               
 passage of this bill.                                                         
 "As you may know, ANCSA called for all regional and village                   
 corporations to be chartered as corporations under Alaska law.                
 Regional corporations were required to be chartered as for-profit             
 corporations.  Village corporations could opt to be chartered as              
 for-profit or non-profit corporations; most chose for-profit                  
 status.  Therefore, all regional corporations and most village                
 corporations are governed by the general corporations law of                  
 Alaska found in part 10.06 of the Alaska Corporations Code.                   
 "What many people do not realize is that Native corporations are              
 preeminent among the businesses most affected by the Alaska                   
 Corporations Code.  Most of the state's largest businesses, such              
 as the oil companies, communications companies, timber companies,             
 oil field service companies, and others, are not incorporated                 
 under the laws of the state of Alaska, but are incorporated under             
 the laws of Delaware or other states that attract incorporation.              
 Thus, Alaska Native corporations are among the most economically              
 significant corporations governed by the Alaska Corporations                  
 "Yet, in 1989 when the Corporations Code was broadly rewritten by             
 a California law professor hired at that time to advise the                   
 state, the re-write largely ignored important issues of state                 
 corporate law that affect Native corporations.  As a result, the              
 legislature has amended the Corporations Code on more than one                
 occasion since 1989, to enact specific provisions dealing with                
 Native corporations.  Most of these amendments are contained in               
 section 10.06.960 of the code, which is a separate section                    
 dealing with Native corporations and which is the section that                
 would be further amended by HB 251.                                           
 "Most of the Native corporation amendments have been designed for             
 two purposes:  First, to address problems unique to the way                   
 Native corporations operate; and second, to more closely                      
 reconcile provisions of the Corporations Code with provisions of              
 ANCSA.  The legislation before you today seeks to do both.                    
 "We are all familiar with the series of petition drives and                   
 special meeting requests that are sweeping across the state, from             
 Goldbelt and Sealaska in Southeast to Arctic Slope Regional                   
 Corporation on the North Slope.  In these petition drives, small              
 groups of shareholders, in some cases encouraged by a group of                
 non-shareholder advisors who have moved from region to region,                
 are demanding that Native corporations hold special meetings of               
 shareholders to consider a variety of resolutions.  Most of these             
 resolutions, while addressing matters that shareholders may be                
 interested in, are of an advisory nature only.                                
 "On its face there is nothing wrong with the petition process.                
 If a significant number of shareholders would like their                      
 corporation to call a meeting, and if they have honestly and with             
 full disclosure presented to their fellow shareholders all of the             
 facts surrounding the matters to be addressed at the meeting, we              
 would have no objection to the process.                                       
 "But that is not what is happening under current law for two                  
 important reasons.  First, these petition groups have been using              
 false and misleading information on their petition drives in                  
 every region of the state.  The securities administrator has done             
 nothing to stop this false and misleading information, because it             
 is uncertain, in his view, whether a petition for the purpose of              
 calling a special meeting is the same as a proxy and, therefore,              
 subject to the truthfulness requirements of Alaska's proxy rules.             
 This legislation makes clear that it is, and requires the                     
 administrator to act to stop the spread of false and misleading               
 information in these petition drives.                                         
 "Second, this legislation would change the threshold for calling              
 a special meeting from 10 percent to 25 percent of the                        
 shareholders, to make it more consistent with the petition                    
 provisions of ANCSA.  This is an important protection mechanism               
 for the vast majority of shareholders who support conducting the              
 corporation's business at its regular annual meeting, and who see             
 the corporation's money wasted when it has to conduct repeated                
 special meetings at the behest of a small minority.                           
 "ANCSA has not dictated petition requirements for every corporate             
 issue affecting Native corporations.  But on perhaps the single               
 most important issue--the alienability restrictions governing                 
 ANCSA stock--Congress provided that 25 percent of the                         
 shareholders sign a petition before the corporation can be                    
 required to call a special meeting.                                           
 "What is the purpose of a higher, 25 percent threshold:  To                   
 ensure that a proposition has some significant level of support,              
 even if it is a minority, before the corporation can be required              
 to undergo the expense and disruption of a meeting.                           
 "If you pass this legislation, will shareholders be deprived of               
 their rights to bring resolutions before their corporations?  No.             
 First of all, shareholders can always bring resolutions before                
 the corporation at the company's annual meeting, which by statute             
 is required to be held every year.  HB 251 addresses special                  
 meetings only and does not affect that right.                                 
 "Secondly, any time there is significant support for a special                
 meeting, even if it is only supported by a minority, 25 percent               
 of the shareholders will be able to call for such a meeting.                  
 "What this legislation will do is protect the vast majority of                
 shareholders from the manipulation that can come when people use              
 false and misleading information in a petition drive.  It will                
 also ensure that a petition that has only a very limited amount               
 of support cannot be used to repeatedly subject the corporation               
 to the expense and disruption of a special meeting.  In addition,             
 the legislation contains a provision conforming Alaska law to the             
 majority of state corporations law, including Delaware, by                    
 providing that where a corporation has a classified or                        
 `staggered' board of directors, the recall provisions of the                  
 Corporations Code do not apply.                                               
 "In conclusion, I would like to point out that CIRI has taken a               
 leading role in improving the lives of our shareholders and                   
 helping empower our shareholders to control their own destiny.                
 Our efforts include one of the state's most aggressive native                 
 hire programs; numerous social and cultural programs such as the              
 Alaska Native Heritage Park, the Alaska Native Justice Center,                
 Koahnic Broadcasting Corporation, and other programs; and special             
 stock buy-back legislation for CIRI shareholders to vote on to                
 provide a middle-ground between restriction and un-restriction of             
 CIRI stock.  The many other Native corporations supporting this               
 bill also support some of these, and other important programs, in             
 their areas.  We see this bill as a means to further protect to               
 empower our shareholders, by requiring a petition process that is             
 truthful, accurate, and supported by at least a relatively                    
 significant minority of shareholders.                                         
 "In closing, I would like to thank you once again for the                     
 opportunity to speak to you today and I'd be happy to answer any              
 questions that you may have."                                                 
 Representative Porter joined the meeting at 3:20 p.m.                         
 Number 272                                                                    
 CHAIRMAN KOTT referred to there being 12 regional corporations in             
 the state and asked Mr. Huhndorf if he would give an idea how                 
 large they are and how much variation there are between                       
 membership and shareholders.                                                  
 MR. HUHNDORF explained CIRI ranks fifth among the 12 and has                  
 about 6,700 shareholders.  Sealaska is number 1 in terms of                   
 population and has approximately 20,000 shareholders.  Calista is             
 next in rank and has approximately 16,000 shareholders.  The                  
 smallest has about 3,500 shareholders.                                        
 Number 285                                                                    
 REPRESENTATIVE ROKEBERG referred to the village corporations that             
 are chartered under the state code and asked if they would also               
 be affected by the legislation.                                               
 MR. HUHNDORF said as he recalls, from his reading of the statute,             
 those with more than 500 shareholders would be affected.                      
 Number 310                                                                    
 MARK KROLOFF, GENERAL COUNSEL, CIRI, indicated that is correct.               
 MR. HUHNDORF stated a vast majority of the villages are under 500             
 and wouldn't be affected by these changes                                     
 REPRESENTATIVE ROKEBERG asked if that is 500 shareholders.                    
 MR. HUHNDORF said that is 500 shareholders.                                   
 CHAIRMAN KOTT said as he understands the measure, the Alaska                  
 Corporation Code would be amended with respect to calling special             
 meetings by shareholders.  He said it is also being done in a way             
 that we're dealing specifically with Natives.  He asked if anyone             
 has looked into the possibility that Natives may be treated                   
 differently.  He asked if that could be in violation of the equal             
 protection clause in the U.S. Constitution.                                   
 REPRESENTATIVE ROKEBERG said he believes the Code, as it would                
 apply to all corporations that are incorporated in Alaska, is                 
 being amended.  He asked MR. KROLOFF if that is not true.                     
 MR. KROLOFF explained there would be no particular reason that                
 the legislation couldn't apply to all corporations.  As it                    
 currently stands, the CS addresses only Native corporations and               
 is intended to be (indisc.) in the way Native corporations are                
 regulated by the Corporations Code.  The most prominent of what               
 is currently in there for Native corporations that differs from               
 other corporations is a more lenient ability, under the code, for             
 Native corporations to pay dividends in circumstances where other             
 corporations might not have the retained earnings that would                  
 otherwise be required.  Mr. Kroloff said the question is an                   
 interesting question.  He suspects that there would be sufficient             
 grounds for justifying unique treatment of Native corporations to             
 address the unique problems of those corporations should that be              
 the legislature's desire.  He noted that has been done on a                   
 number of occasions.  Dividends are the most prominent because he             
 believes the legislature recognized the importance of Native                  
 corporation dividends even in circumstances where other                       
 corporations might not be permitted by law to pay them.  This                 
 would be analyzed the same way.  Mr. Kroloff said he doesn't                  
 believe the legislature would be doing any injustice to any other             
 corporations should it be decided that the provision be broadly               
 applicable.  To his knowledge most of the other major                         
 corporations that would be incorporated in Alaska, such as Carrs              
 or the National Bank of Alaska (NBA), are regulated in a                      
 considerably different manner and really face these issues.                   
 Legislation that affected them technically wouldn't affect them               
 practically in one way or another.                                            
 Number 344                                                                    
 REPRESENTATIVE ROKEBERG asked if the 10 percent or the 25 percent             
 provision would apply to all corporations.                                    
 MR. KROLOFF said currently it would not.  It wouldn't affect NBA              
 or First National Bank one way or another.  If you wanted to take             
 that approach and make it broadly applicable, he doubts it would              
 have any practical affect on them because there are controlling               
 blocks of stock in those companies that allow those controlling               
 parties to call or not call meetings as they see fit.                         
 CHAIRMAN KOTT indicated there is a proposed committee substitute              
 in the committee member's packets and asked staff for                         
 Representative Moses wanted to address the proposed CS.                       
 Number 367                                                                    
 TIM BENINTENDI, Legislative Assistant to Representative Moses,                
 Alaska State Legislature, explained Representative Moses had a                
 CS drafted based on some people who came into his office late the             
 previous week.  The CS makes the bill more responsive to their                
 objectives.  Mr. Benintendi said the CS clarifies the title by                
 including the words "shareholder proposals and removal of                     
 directors" to indicate which subjects, within the area of Native              
 corporation matters, that are being addressed with the bill.  He              
 said on page 3, lines 4 and 5, of the proposed CS a clause was                
 added starting with "or if the corporation is allowed."  He said              
 that basically provided for Native corporations whose bylaws                  
 account for their classification of directors as opposed to the               
 Articles of Incorporation.  Since 1989, most corporations either              
 formed or who have done (indisc.) revised the bylaws have                     
 provided for their directorships to classified within the                     
 Articles of Incorporation.  Mr. Benintendi explained there are                
 Native corporations in Alaska that still have those provisions in             
 the bylaws.  The CS cleans up the original subsection (n) that                
 didn't make that distinction.  He noted those are the only two                
 changes in the CS.                                                            
 Number 390                                                                    
 REPRESENTATIVE BRIAN PORTER moved to adopt CS for HB 251, Version             
 G, dated 3/24/95, as the committee's working document.                        
 CHAIRMAN KOTT said there is a motion to adopt CS for HB 251,                  
 dated 3/24/95, Bannister, Version G.  He asked if there was an                
 objection.  Hearing none, CSHB 251(L&C) was adopted.  Chairman                
 Kott welcomed people listening via teleconference.  Chairman Kott             
 asked Charles Wheaten to give testimony.                                      
 Number 419                                                                    
 CHARLES WHEATON, Shareholder, Sealaska Native Corporation; and                
 Goldbelt Native Corporation, said he received a copy of HB 251                
 the previous Friday.  He said he really doesn't understand a lot              
 of it and really doesn't agree with it.  Mr. Wheaton explained he             
 has been through a few recalls and the most recent was with                   
 Goldbelt.  He said he feels there are a lot of things in the bill             
 that just aren't true.  He said  a lot of the corporations might              
 be having trouble from shareholders, but if the bill does pass,               
 it is going to affect all corporations from what he understands.              
 Mr. Wheaton said Goldbelt did a complete 120 percent turnaround               
 after it was faced with recalls.  He said he is now proud to be a             
 Goldbelt shareholder.  Mr. Wheaton noted he doesn't know how many             
 corporations want the bill to pass.  He said he doesn't feel it               
 should be passed and he is very much against it.  He noted most               
 recently people have been fighting over net operating losses                  
 (NOLs).  Mr. Wheaten referred to 1971 when the Alaska Native Land             
 Claims Settlement Act was passed, and said he was 17 years old.               
 He is now 39 and is raising a family.  He explained he really                 
 didn't understand what the 1971 act meant when he was 17, and he              
 still doesn't.  Mr. Wheaten said at one time he was looking                   
 forward to having and building on his own land, but the                       
 corporations are holding a lot of people back.  Many of the                   
 shareholders don't like fighting the corporations.  He said he                
 feels sad that the corporations have to come to the legislature               
 and ask for bills like HB 251 to make it more difficult for poor              
 people like him to come in and speak.  Mr. Wheaten said he feels              
 the corporations don't have any business getting into politics,               
 especially Sealaska.                                                          
 MR. WHEATEN said he didn't vote for Tony Knowles.  When a fund                
 raiser was held for Governor Knowels, he called Sealaska to hold              
 a fund raiser for Jim Campbell and they hung up the phone on him.             
 Mr. Wheaten said in an issue of the Juneau Empire, it was said                
 that Southeast Alaska Natives are voting for Tony Knowles.  That              
 wasn't true.  He said he is a Native of Southeast Alaska and he               
 belongs to Sealaska.  When the corporations tell him who he is                
 voting for, he feels that is wrong and its really unjust.  Mr.                
 Wheaten said he doesn't feel that corporations should be running              
 to the legislature and asking for help in introducing bill such               
 as HB 251.  Recalls are a last attempt at trying to get changes               
 within corporations.  He urged that the bill not be allowed to                
 Number 465                                                                    
 DOROTHY ZURA, Representative, Shareholders for Shareholders, said             
 he is very opposed to HB 251.  She said Representative Elton                  
 knows of how the shareholders are being treated.  Ms. Zura said               
 she is full Tlingit and her grandmother is still alive and sat in             
 front of people like the committee members to win the settlement.             
 HB 251 was introduced as she sees as 501, but 501 was tabled.                 
 She said it isn't the people who want HB 251, it is lawyers and               
 consultants that wrote the bill.  She referred to Mr. Wheaten and             
 said he read the bill and couldn't understand it.  She noted she              
 semi understood the bill as she has been into this type of                    
 political outfit before.  She referred to Roy Huhndorf and said               
 when they ask for balance and needs, there is no balance and                  
 needs in her corporation.  The people are poor.  The old balance              
 and needs is the board of directors, lawyers and consultants.                 
 When they talk about more fairness with 10 to 25 percent, it is               
 dictatorship.  They are making it so hard to fight.  She                      
 discussed going to the board of directors and asking them what                
 they are going to do in 1991, as they would be lifted from                    
 Congress.  She said they are now at the mercy of the state of                 
 Alaska.  How dare them.  Now they are at no mercy, because if HB              
 251 is passed, there is going to be an uprising.  Ms. Zura                    
 discussed how she has lived through two Goldbelt recalls and how              
 they threatened elderly people.  Ms. Zura continued to give                   
 testimony against HB 251 by saying this has become ownership.                 
 ANCSA was won on the Alaska Native Brotherhood and Sisterhood and             
 it is now in the hands of lawyers and consultants.  She discussed             
 the difficulty in doing petitions.  Ms. Zura continued to express             
 her opposition and urged the committee to vote against HB 251.                
 Number 572                                                                    
 CHAIRMAN KOTT pointed out that the meeting was noticed the                    
 previous Wednesday, in accordance with statutory and legal                    
 requirements.  The bill was noticed appropriately.  Chairman Kott             
 said he would take testimony via teleconference from Anchorage.               
 Number 590                                                                    
 DELICE ALEXANDER-CALCOTE, Shareholder, Cook Inlet Region,                     
 Incorporated, was next to testify on HB 251, via teleconference.              
 Ms. Alexander-Calcote said she is currently serving as the ad hoc             
 chairperson for Shareholders for CIRI's Future.  She referred to              
 two petitions relating to NOLs and the most recent on recalling               
 CIRI's entire board.  She said she has been told the petitions                
 are valid for a year and HB 251 has some ramifications.  She                  
 referred to petitions that are currently out there relating to                
 recalls or NOL money and asked if they would still be able                    
 operate under what they have been approved to operate under.                  
 They are still continuing to gather signatures and are very                   
 concerned about the bill.  Ms. Alexander-Calcote said                         
 corporations are pushing state and federal legislation that the               
 shareholders don't even hear about until after it has already                 
 been submitted.  The corporations are the shareholder's                       
 corporations and shareholders should be informed.  The board                  
 members and officers are the shareholders' employees.  The                    
 shareholders, as the owners, should be told of legislation that               
 exists to alienate the shareholders or (indisc.) stock.  She                  
 discussed the process of filing petitions and said everything has             
 to be filed in a timely manner.  They must work with the state of             
 Alaska.  They have an attorney and consultants.  Ms. Alexander-               
 Calcote explained they have been communicating with other                     
 corporations that have (indisc.) been successful and they are                 
 very appreciative of what the Goldbelt Board has done as they                 
 have completely turned around and are working with their                      
 shareholders.  She said they want positive changes in their lives             
 and if they have positive changes, the rest of the people in the              
 country are also going to be impacted in a positive manner.  She              
 said shareholders don't want to be on unemployment or AFDC.  They             
 want jobs and changes.  Ms. Alexander-Calcote explained they                  
 would rather vote by ballot rather than proxies.  She noted a lot             
 of shareholders have degrees and are very talented people.  They              
 want to have open elections for whoever wants to run for the                  
 board.  She thanked the committee for listening to her.                       
 Number 634                                                                    
 JUDY KALKINS, Shareholder, Cook Inlet Region, Incorporated,                   
 referred to CIRI's 1994 annual meeting and said CIRI's president              
 was asked if CIRI was going to distribute any NOL money to the                
 shareholders.  The president answered "no," and said shareholders             
 already received their share of NOLs through their dividends.                 
 CIRI's president told the shareholders the NOL funds were going               
 to be used for investments and to buy back stock for CIRI                     
 shareholders.  Ms. Kalkins stated she didn't like the president's             
 answer then and still doesn't because (indisc.) CIRI proxy                    
 statements that he would pay nearly $2.8 million from 1987                    
 through 1993 and (indisc.) was paid based on requiring CIRI NOL               
 money as revenue.                                                             
 TAPE 95-24, SIDE B                                                            
 MS. KALKINS continued... which he himself said 70 percent was                 
 (indisc.) quality level couldn't get a fair share.  Refusal to                
 give NOLs to the shareholders lead to the formation of                        
 Shareholders for CIRI's Future.  Ms. Kalkins explained the group              
 (indisc.) handed out flyers then it passed out petitions that                 
 called for CIRI to distribute 50 percent of its NOLs.  When there             
 were enough signatures to call a special meeting, they contacted              
 both CIRI and the state's attorney's office.  The shareholders                
 didn't want a special meeting nor did they want to do a proxy                 
 campaign.  All they wanted was to have the voice of the people                
 heard.  CIRI management spent a large amount of money to oppose               
 the shareholder's resolutions.  She noted shareholders donated                
 supplies such as envelopes, paper, money, etc.  After the                     
 signatures were turned in, CIRI's management called a meeting                 
 with 20 days notice.  They set up the deadline for (indisc.) on               
 Veteran's Day.  There was only nine days to mail proxies and get              
 them back from rural Alaska, the U.S.A. and foreign countries.                
 Over 525 shareholders were disenfranchised by CIRI's move.                    
 Neither CIRI's management nor the group received an (indisc.)                 
 vote on the resolutions that were presented at CIRI's meeting.                
 CIRI's management also changed the shareholder's resolution and               
 presented (indisc.).  Ms. Kalkins said she believes HB 251 is                 
 legislation that discriminates against Native stockholders and                
 asked the committee to kill the bill.                                         
 Number 065                                                                    
 CHAIRMAN KOTT referred to Ms. Alexander-Calcote indicating that               
 there are some ongoing recall petitions and said the effective                
 date of the bill would be 90 days after the Governor signs it.                
 He asked if it would be retroactive.                                          
 REPRESENTATIVE MOSES stated there is no intent to make the bill               
 CHAIRMAN KOTT asked if the bill wouldn't intervene with existing              
 REPRESENTATIVE MOSES said he isn't an attorney but he doesn't                 
 think it does intervene.                                                      
 REPRESENTATIVE PORTER said it has been his experience that                    
 without a retroactive clause in the bill, the bill would not                  
 affect anything in process.  It would only affect filings and                 
 actions that began after the effective date of the bill.                      
 The next person to testify was Bobbie Oskolkoff.                              
 Number 102                                                                    
 BOBBIE OSKOLKOFF, representing herself, testified via                         
 teleconference from Kenai.  She explained her village, Ninilchik,             
 other villagers and shareholders were not informed of HB 251,                 
 which affects about 70,000 Alaska Natives.  Ms. Oskolkoff stated              
 she has a problem with a bill being introduced before everyone is             
 completely and totally notified, and what the contents of the                 
 bill are.  She explained she is currently working on a petition               
 asking for NOL money.  She referred to petitions being done in a              
 timely manner and passed at annual meetings and said the bill is              
 assurance that if there is a technical error, a legal                         
 technicality, or anything that may happen, they could still                   
 reintroduce their bill, under HB 251, and would have to wait two              
 years.  The bill is discriminatory against Alaska Natives to have             
 25 percent of signatures, when state law for other corporations               
 is 10 percent.  Ms. Oskolkoff said they are asking for another                
 resolution that they be included in participation and litigation              
 (indisc.).  She said the shareholders don't feel they are being               
 allowed participation because they have a discretionary vote.  If             
 they fail, they shouldn't have to wait two years to reintroduce               
 anything.  Ms. Oskoloff said she feels that she doesn't want to               
 personally do anything called (indisc.) for her corporation, but              
 she does feel that any time the board of directors is completely              
 and totally out of line, then a recall might be necessary.  It                
 keeps the board in line.  To take this right away is really                   
 wrong.  She thanked the committee for listening to her.                       
 Number 168                                                                    
 CHAIRMAN KOTT referred to legislation and said any idea can be                
 drafted at any point in time without consulting members of the                
 public.  There is no requirement to bring in the public during                
 the drafting process and anyone can introduce it.  Once it is                 
 introduced, and there is the first hearing, the public then                   
 becomes involved.  He announced the next person to testify was                
 Ike Cropley from Juneau.                                                      
 Number 180                                                                    
 IKE CROPLEY, Shareholder, Sealaska Native Corporation and                     
 Goldbelt Native Corporation, explained that he was born and                   
 raised in Juneau.  He said he has been helping with a recall                  
 effort against Sealaska.  As a shareholder, he would like to say              
 Shareholders for Shareholders stand united against HB 251.  Their             
 rights as shareholders are being taken away by the bill.  He                  
 asked why shareholders in Juneau weren't notified about HB 251                
 and about the current hearing.  He referred to the Sealaska                   
 recall and said he would like to explain some of the reasons they             
 are having a recall.  First, the reason shareholders are                      
 protesting and calling for a recall of Sealaska directors, by                 
 petition signed by shareholders, is to end corrupt leadership who             
 has not accounted for $310 million of Native funds and $900                   
 million lost in timber revenue.  The source of those figures is               
 from the Forrest Service and the Sealaska Annual Reports.                     
 Shareholders protest leadership who vote themselves elaborate                 
 salaries, $3,000 per month, and who allow the minority to rule                
 over Native corporations with unfair election practices.  With                
 the help of the state of Alaska and the U.S. government, they                 
 spend millions of dollars of Native corporation monies to fight               
 off honest attempts by a majority who want to reclaim their                   
 Native company.  Shareholders for Shareholders stand united                   
 against HB 251.  He thanked the committee.                                    
 Number 223                                                                    
 CHAIRMAN KOTT announced that the next person to testify was Kathy             
 KATHY POLK was next to testify from Juneau.  She informed the                 
 committee that last year she was chairperson for Shareholders for             
 Goldbelt's Future.  She said they had a lot of concerns that                  
 affected shareholders and the reason that they had joined forces              
 together was because the directors weren't listening to them.                 
 Ms. Polk said they tried to get in touch with people in the U.S.              
 government to help them.  Native corporations are protected                   
 within themselves.  After 1991, the board of directors wouldn't               
 listen to the shareholders.  When there was the first recall,                 
 they were turning off the microphone and wouldn't listen to the               
 shareholders.  Theoretically, the shareholders won by majority on             
 the recall, but because of the way the law is written, you had to             
 have 50 percent, plus 1, in order to win.  Ms. Polk said it has               
 been a known fact that you don't have that many shareholders vote             
 within the elections for the board of directors.  One of the                  
 problems with the recall is they, the board, hired proxy workers              
 to work for them and paid them $75 a proxy.  There are 2,700                  
 shareholders and they were picking up their proxies.  She said                
 they didn't know if they won.  From the records she had, she knew             
 that they won, but the board said they didn't.  She indicated the             
 shareholders didn't want to have the recall.  You cannot recall               
 just one person, you have to recall the whole board in order to               
 be effective the way the law is written.                                      
 MS. POLK said they had a problem with the chairman of the board               
 of the corporation and a few people that were behind him.  They               
 wouldn't listen to the shareholder's concerns.  She said the                  
 president was fired and he was paid a large amount of money and               
 then hired another president.  What happened is they ended up                 
 paying double the amount for a president for one year.  The board             
 gave the shareholders 20 days for a special meeting from the time             
 the petition was submitted.  She said the proxy material couldn't             
 be printed up until the board had given the date.  The board had              
 their material printed and then they immediately mailed it as                 
 soon as they announced the date of the meeting.  She noted she                
 spent $5 thousand out of her own pocket on this effort.  Ms. Polk             
 informed the committee the shareholders put together a platform.              
 She stated that the system with elections is such that the board              
 can take discretionary votes and use them to manipulate the                   
 votes.  She indicated that shareholders have been threatened.                 
 Ms. Polk suggested the committee should be looking at changing                
 the election rules in the Division of Banking, Securities and                 
 Corporations statutes for corporations.                                       
 MS. POLK said when NOL monies become available, they want a board             
 that will give the shareholders the right to decide how their                 
 money will be handled and to vote for or against 100 percent                  
 distribution, and when it becomes available, to vote for or                   
 against a permanent fund.  Ms. Polk said they wanted a board of               
 directors that was in favor of election reform.  She asked that               
 the little which is left that the shareholders have to fight with             
 not be taken away.  The state or the government doesn't give the              
 Native shareholders much rope to fight.  Recall is just about the             
 only way to do it.  She asked the committee to give consideration             
 to the shareholders.                                                          
 Number 329                                                                    
 CHAIRMAN KOTT referred to Ms. Polk mentioning that the only way               
 to effectively cause change is to recall the entire board of                  
 directors.  He said it would seem that if they got rid of every               
 director, there would be a lot of disruption and disharmony                   
 within the corporation.                                                       
 MS. POLK said that came up during the recall.  She said she was               
 not in favor of recalling the whole board.  There were some                   
 people that shouldn't be there.  She said, in speaking with the               
 Division of Banking, Securities and Corporations, the way the                 
 situation is such that it makes more sense to recall the whole                
 board.  She said she doesn't really know what the answer is                   
 except that she knows shareholders have very little rights within             
 the Native corporations.  The corporations are run by legal                   
 counsel and whoever the majority is on the board of directors.                
 It is run by the majority.  She noted that Goldbelt has had two               
 recalls because they try to trick the shareholders the first                  
 time, and they didn't give enough time.  Ms. Polk urged that                  
 there be unity with the shareholders and within the corporation.              
 Number 390                                                                    
 SONYA SMITH was next to testify.  She noted that she is                       
 originally from Kake, Alaska.  She stated that she was informed               
 about HB 251 at the last minute and was surprised and angered.                
 Ms. Smith said she doesn't approve of the bill.  She stated she               
 comes from a very cultural family and the whole purpose for the               
 corporations is to have cultural representation.  Ms. Smith said              
 she supports previous testimony against the bill.  She is very                
 upset, and she doesn't think that it is fair, right or proper.                
 Ms. Smith said that when you are dealing with people with a past,             
 you can only poke those people long enough before you get a                   
 reaction.  Ms. Smith said she hasn't participated much in the                 
 voting process because of the result and outcome of what they are             
 dealing with here.  She said that this isn't the way her people               
 were taught to deal with problems.  She referred to not                       
 participating in the voting process and said it is mainly because             
 she doesn't agree with the process.  Sealaska has done a lot of               
 hard work but there is a gap there between the leadership and the             
 shareholders.  She questioned why the bill was written and said               
 she has many concerns and doesn't believe any of it can be dealt              
 with in the committee because of the last minute approach that                
 was taken.  The process of the petitions should actually be a                 
 warning to the Sealaska Board of Directors.  She said she doesn't             
 agree with HB 251 at all.  She indicated she will do her best to              
 see that a lot of the shareholders are informed about this whole              
 Number 458                                                                    
 JANE IGTANLOC, Chairperson, Shareholders for Goldbelt, was next               
 to testify from Anchorage.  (A lot of Ms. Igtanloc's testimony                
 was indiscernible due to taping difficulties)  She discussed                  
 language on page 1, line 8, starting with, "A director who votes              
 for or assents to a distribution to the corporation's                         
 shareholders contrary to the provisions..."  She discussed how                
 she is against having an increase in signatures on a petition                 
 from 10 percent to 25 percent.  Ms. Igtanloc said it seems to her             
 that HB 251 is written for management and not for the                         
 shareholders.  She referred to wording in the bill where it says,             
 "A corporation that is organized under this act is not required               
 to consider or to submit to a vote of the shareholders a                      
 shareholder proposal that deals substantially with the same                   
 subject matter as a proposal that was submitted to a vote of the              
 shareholders within the preceding two years."  Ms. Igtanloc                   
 indicated that the language takes away the shareholders                       
 constitutional right of freedom of speech.  She said they have                
 every right to petition and HB 251 takes away the right to                    
 petition.  Ms. Igtanloc continued to give testimony against HB                
 Number 512                                                                    
 HAROLD RUDOLPH, Shareholder, Cook Inlet Region, Incorporated,                 
 testified via teleconference from Anchorage.  He said as a CIRI               
 shareholder, he is totally opposed to HB 251.  If the bill passes             
 there would be great deprivation to all children of all                       
 corporations.  He said no white man's corporation would allow                 
 such a bill.  Mr. Rudolph said he wonders why the bill is before              
 the legislature and 70,000 Natives haven't heard about the bill.              
 The bill shouldn't even go to the floor.  He referred to a                    
 November 17th, CIRI meeting and said it was uncalled for.  The                
 shareholders don't know how much money the corporation spent                  
 against simple advisory resolutions.  The corporation promised to             
 tell them how much they spent but haven't done so yet.  It seems              
 to him the directors are supposed to be running the corporations,             
 not the officers.  He said he would be happy to answer questions.             
 CHAIRMAN KOTT noted that HB 251 was read across on the House                  
 floor nearly two weeks ago and had been noticed for a hearing in              
 the House Labor and Commerce Committee five days ago.                         
 Number 558                                                                    
 SHARON KAY, Shareholder, Cook Inlet Region, Incorporated,                     
 testified via teleconference from Anchorage.  She said she faxed              
 a letter to Representative Masek's office earlier in the day with             
 approximately 80 signatures.  She noted that it was one evening               
 of gathering signatures.  Ms. Kay said she was really sad that                
 some of her fellow Alaskan Native shareholders were hesitant to               
 sign the petition against HB 251, even after she explained the                
 consequences to shareholders.  If HB 251 passes, it will                      
 negatively affect thousands of Alaska Native shareholders who                 
 don't know anything about the bill.  Ms. Kay said she spoke to a              
 CIRI board member about HB 251.  That board member was really                 
 concerned and didn't have any knowledge of the bill.  HB 251                  
 deals with Chapter AS 45.55, Chapter 55 of the Alaska Securities              
 (indisc.)  Ms. Kay asked why Native corporations are exempted                 
 from the Securities Exchange Act, and therefore, she inquired how             
 are they to abide by laws from which they are exempted.  She said             
 the bill is another political ploy to further shut the                        
 shareholders out of their own corporations.  It is                            
 discriminatory.  Ms. Kay urged the committee to vote against HB               
 REPRESENTATIVE GENE KUBINA said the current debate is an                      
 interesting debate, as he has never listened in on how Native                 
 Corporations are run.  He said he has a lot of questions and he               
 would like to know more about how the corporations are run.                   
 Representative Kubina said he would like someone from the                     
 department to give an overview of what things are currently like              
 and what the bill would do.                                                   
 CHAIRMAN KOTT said he also has some questions.  He noted that Mr.             
 Kirkpatrick from the Division of Banking, Securities and                      
 Corporations, Department of Commerce and Economic Development,                
 was in attendance.  He also said the committee might want to get              
 an opinion from Legislative Legal.                                            
 Number 610                                                                    
 JOAN MANTEI, Shareholder, Sealaska Corporation, was next to                   
 testify in Juneau.  She said her grandmother was a full blooded               
 Athabascan-Tsimshian Indian Sealaska shareholder.  She referred               
 to the bill being introduced without people knowing about it and              
 said they had three days to inform people.  Ms. Mantei referred               
 to people in outlying villages and said she wonders how much                  
 notice was really given to them.  She referred to Section 6(a)                
 and said it mentions stockholders having to take on the burden of             
 proof that they didn't know a regulation existed on misleading                
 information.  She said she is concerned because a lot of the                  
 shareholders are very old.  They don't understand the issue and               
 are not technical people.  She said they do wonder, including her             
 grandmother, where their Indian land is, as they never received               
 any through the Claims Act; yet, they believed they were going to             
 receive land.  Ms. Mantei said she has a feeling they're not                  
 going to be allowed to challenge why they didn't get any Indian               
 land from Sealaska Corporation or the corporations that haven't               
 given any yet.  She referred to a bill introduced last year, HB               
 510, and said it was 9 pages long.  She said there were some                  
 errors in it.  She spoke to Klukwan's attorney and the Division               
 of Banking, Securities and Corporations, and saw what was                     
 mistaken and what was not.  Ms. Mantei explained that Sealaska                
 didn't give them an opportunity to understand the bill.  There                
 weren't educational classes; nor were any Indians contacted.                  
 TAPE 95-25, SIDE A                                                            
 MS. MANTEI said HB 251 affects every Native in Alaska, there is a             
 moral responsibility to allow each and every one of them insight              
 as to how the legislation will affect them.  It is their right as             
 stock owners and Native people.  She said she feels that when the             
 board feels that the shareholders are stating something that                  
 imposes on them, they can throw scary circumstances out such as               
 $25,000 fines, indictments, felonies, etc.  Ms. Mantei explained              
 many Indians got only Sealaska as a corporation.  They have no                
 land or economic base to continue the Indian way of life.  She                
 said bills such as HB 251 further prove to her that they cannot               
 get through the corporate Berlin wall that Sealaska has been                  
 steadfastly encroaching to incapacitate the shareholders.                     
 MS. MANTEI explained that there is a 90 day regulations period                
 being proposed in Section 2(m), page 2, for petitions to be                   
 turned in.  The cost for stockholders to turn in these petitions              
 would be about $25,000 to $30,000 under the increase in petition              
 signatures that the legislation calls for.  What the legislation              
 is stating is that you must have about 3,000 signatures and                   
 $30,000, and you have 90 days from the date you began the                     
 petition to accomplish it all.  She said Indian people are poor               
 and you'll never see it.  An Indian will never be heard again.                
 Ms. Mantei asked the committee to kill the bill.  She asked that              
 the committee remain sensitive to the needs of the old Indian                 
 Number 091                                                                    
 BERNICE TREGO, Shareholder, Sealaska Corporation; and Yak-Tat                 
 Kwaan Tlingit Corporation, said she is opposed the HB 251.  She               
 explained that she sat back believing her corporation was there               
 to help all these years.  There wouldn't be the petitions for the             
 distribution of the NOLs or the recall for the board of directors             
 if they were doing what they were elected into office for.  She               
 said she wouldn't have elected the directors into office if she               
 knew they were going to introduce HB 251.  She asked what                     
 corporations fine their shareholders serious fines.  She asked if             
 she should be fined for something that she doesn't fully                      
 understand.  She asked about their freedom of speech.  Ms. Trego              
 asked the committee members not to pass HB 251.                               
 EDWARD DALE CASEY was next to testify via teleconference from                 
 Anchorage.  He said he opposes HB 251 as he believes the bill                 
 will further (indisc.) between our corporation and our                        
 shareholders.  Mr. Casey again said he is against the passage of              
 HB 251.                                                                       
 Number 134                                                                    
 JIMMIE D. HARTLEY, Shareholder, Cook Inlet Region, Incorporated,              
 testified via teleconference from Anchorage.  He said he would                
 like to remind everybody that we still live under a democracy.                
 HB 251 is one in a series of special interest legislation                     
 sponsored by CIRI.  This signals the desperation and intention of             
 CIRI's leadership which doesn't have the support of the majority              
 (indisc.)  It attacks the shareholder and director's basic                    
 freedoms of speech.  Already (indisc.) by legislation, politician             
 have been lobbied at considerable expense and is causing severe               
 public ridicule for their efforts and will probably lose their                
 political tenure and voting support.  He asked that the                       
 legislators not allow themselves as to be used as innocent pawns              
 to (indisc.) any dictatorship.  Mr. Hartley said currently 10                 
 percent of the CIRI shareholders have petitioned for change and               
 have followed all of the legal guidelines for this change.  He                
 said if committee members support and vote for HB 251, it is                  
 another form of the KGB and the (indisc.) and the constitution of             
 the U.S. might as well be thrown out.  He said HB 251 is the                  
 grossest form of special interest legislation CIRI has sponsored              
 to date.  The issues will not go away but will only intensify.                
 Mr. Hartley thanked the committee for listening to his testimony.             
 Number 164                                                                    
 HELEN HARTLEY, Elder, Cook Inlet Region, Incorporated, testified              
 via teleconference from Anchorage.  She said she is 75 years old,             
 is an elder of CIRI, and is against HB 251.                                   
 Number 187                                                                    
 BERTHA HORTON, Shareholder, Sealaska Native Corporation; and                  
 Goldbelt Native Corporation, testified in Juneau.  She said when              
 the ANCSA came about in 1971, she was ten years old.  She said                
 her mother believed that they would be rich some day and the                  
 corporations were for the Natives.  Ms. Horton said HB 251 tells              
 her that the shareholders don't have a voice if they have                     
 concerns about the management of corporations.  She stated she                
 doesn't agree with HB 251.                                                    
 Number 208                                                                    
 PAT SIERRA, Shareholder, Sealaska Native Corporation Goldbelt                 
 Native Corporation, testified in Juneau.  She said if HB 251 is               
 passed without the knowledge of its existence to the entire                   
 population of nearly 75,000 Native stockholders enrolled in the               
 ANCSA corporations that it affects, it can be compared to the                 
 blankets filled with smallpox germs that were handed out to wipe              
 out unknowing and unsuspecting groups of Indians.  HB 251 will                
 wipe out rights of a minority group of stockholders that are                  
 slowly becoming a majority.  She suggested that instead of                    
 passing laws against the stockholders who are supposed to be the              
 owners of the corporation, stiffer laws should be passed against              
 the directors who do not conform to corporate laws already in                 
 existence.  She explained that at no one time in Sealaska's                   
 corporate history have the shareholders been asked about assets               
 affecting the corporation like buying and selling major assets,               
 and as she understands under corporate law, this is a major issue             
 that must come before the stockholders before it can be dealt                 
 with.  Ms. Sierra said they are breaking the law and asked why                
 they are getting away with it.  She said not one recall attempt               
 has ever succeeded due to the voting laws under state statutes.               
 HB 251 will not benefit everyone but will benefit present                     
 management and directors.  It would secure what they currently                
 have to ensure their future as they are the only ones benefiting              
 from the corporation.  ANCSA was the shareholder's grandparents               
 dream and has now become a nightmare.                                         
 MS. SIERRA said instead of passing HB 251, the legislature should             
 take a look at what is going on in corporations today.  She said,             
 "Find out why there are so many recall attempts with almost all               
 the corporations."  She said, "Compare it to what was supposed to             
 happen when ANCSA was passed."  Not only is HB 251 unnecessary,               
 it discriminates against the Native people.  She asked where are              
 the equal rights as guaranteed in the U.S. Constitution.  Black               
 people were freed from slavery a long time ago, but the Indians               
 are still wards of the government.  Ms. Sierra said it is time                
 that they are granted some freedoms like the freedom to have a                
 say in their corporations.  If HB 251 is passed without full                  
 knowledge disclosed to everyone it affects, it will be time to                
 ask for a congressional hearing.  She stated that the legislature             
 was elected to serve the people and to listen to them.                        
 Therefore, as a Native and taxpayer, Ms. Sierra said she is                   
 asking the committee to table the bill until hearings in every                
 city, town and village can be held to make every Native                       
 stockholder aware of the bill and listen to what they have to                 
 say.  Then the committee members will be able to say, "I've done              
 my job well, I've listened to the people."  She thanked the                   
 Number 282                                                                    
 ADA PATTERSON, Shareholder, Sealaska Native Corporation,                      
 testified in Juneau.  She explained that during one recall, she               
 passed out fliers against Sealaska.  Ms. Patterson explained the              
 main question in the flier was where was the interest earned on               
 the permanent fund.  This really disrupted the management, and                
 within a month, they had $12 million put into the permanent fund              
 because of that one question.  That shows there is a lot of                   
 "crap" going on.  She said there is previous management such as               
 Byron Mallott who retired at $160,000 per year for life.                      
 Shareholders get a few bucks here and there.  If the legislature              
 takes away their rights, it will be extremely hard to process                 
 petitions and come up with a slate.  It is hard to raise money to             
 get new independent candidates into the corporation.                          
 Shareholders should have a right in the corporations and should               
 have the right to have the freedom to do what needs to be done in             
 order to keep the corporation up to par to their needs.  She                  
 continued to give testimony urging the committee not to pass HB               
 Number 334                                                                    
 GAIL ANAGICK SCHUBERT, Shareholder, Unalakeet Native Corporation;             
 and Shareholder, Member, Board of Directors, Bering Straits                   
 Native Corporation, testified in Juneau.  She said she would like             
 to speak out in support of HB 251.  There have been a number of               
 recall and other petitions that have occurred over the past                   
 several years by minority or dissident shareholders.  One of the              
 complaints that she has heard is that shareholders who have an                
 opinion that differs from the directors, don't have a chance to               
 be heard.  Her argument has always been that when you have an                 
 election, even if you have a board slate, shareholders are                    
 entitled to vote whoever they want to on or off the board slate.              
 She said she ran as an independent and noted there was a board                
 slate.  Ms. Schubert said she was elected because there were                  
 enough shareholders who voted for her.  Shareholders can have a               
 voice in how the corporations are managed and what happens.  The              
 amount of time and money that goes into recalls or other                      
 activities could be better spent elsewhere.  When the regional                
 Native corporations were set up, they went forward very quickly               
 into the twentieth century.  Ms. Schubert said some of the                    
 original leaders that are currently being attacked have done a                
 lot of good for Natives.  She said HB 251 makes sense and should              
 be passed.                                                                    
 Number 372                                                                    
 REPRESENTATIVE MOSES asked Ms. Schubert if it is her observation              
 that the more successful Native corporations are the ones that                
 are having the most problems.                                                 
 MS. SCHUBERT said that is correct.  If you look at Sealaska and               
 CIRI, those are the two corporations that she has heard have the              
 most problems.  If you look at the annual reports, you'll see                 
 they have been the most successful.  She said that is why she                 
 doesn't really understand why this is going on.  It is the people             
 who have done very well and have been successful who are being                
 attacked.  Ms. Schubert said she doesn't understand it.                       
 Number 385                                                                    
 REPRESENTATIVE KUBINA said what he is feeling from this, there is             
 a lot of "some who have and some who have not."  He said he sees              
 it in the room and when we see people representing the                        
 corporations, they really seem to be the Natives that can dress               
 better, can have more material things.  He asked if the Native                
 corporations are not working to help spread the wealth to all                 
 Native groups.                                                                
 MS. SCHUBERT said she disagrees with Representative Kubina's                  
 REPRESENTATIVE KUBINA said to take it as a whole, the dissidents              
 really do seem to be the poorer group.                                        
 MS. SCHUBERT said she doesn't know the answer to that.  She said              
 she doesn't know enough about the population base of the regional             
 corporations that are experiencing these problems.  Ms. Schubert              
 informed Representative Kubina that she was born and raised in                
 Unalakeet and was one of nine children.  She said she comes from              
 a fairly well educated family.  She indicated they were very poor             
 as they had no running water or electricity.  When her father was             
 hospitalized for six months with tuberculosis, her mother didn't              
 want to go and ask for support to feed her children.  On                      
 Thanksgiving, her mother sent her children to the church with a               
 bowl to get some reindeer stew.  Ms. Schubert said she and                    
 several of her sisters got an education.  Because of that                     
 education, she has options available to her.  She noted those                 
 options are available to everyone.  Anyone else in the committee              
 room could have the same options available to them.                           
 REPRESENTATIVE KUBINA said he is looking for a reason why there               
 are so many problems, and why those who aren't involved with                  
 Native corporation see so much and feel so much emotion.  He said             
 it seemed very split.  He said he is trying to figure out if                  
 something has gone wrong and if there is a way the legislature                
 can help make it better so that the corporations can succeed in               
 their goals to somehow bring everybody together.                              
 MS. SCHUBERT said if you look at who is being attacked, it is the             
 corporations that have been really successful.  It is her                     
 understanding that HB 251 comports state law to federal law.  She             
 noted she isn't a securities expert, so she isn't absolutely                  
 sure.  Ms. Schubert said she doesn't think it is up to any                    
 legislative body to dictate to any management team how they                   
 should or should not run their corporations.  These people in                 
 charge know what it is that they have to do to make the                       
 corporation grow.  She said it would be great for her personally              
 to receive a huge $5,000 or $10,000 dividend out of a                         
 corporation, but her concern is in ensuring that the corporation              
 is healthy, stays healthy, continues to grow, and is there to                 
 protect her interest, her children's interest and her                         
 grandchildren's interest into the future.  Ms. Schubert explained             
 she doesn't favor seeing huge pay outs that might damage the                  
 corporate structures.  There is a desire to share the wealth, but             
 by the same token it is necessary to ensure that the corporation              
 remains viable.                                                               
 Number 450                                                                    
 GLORIA SARABIA, Shareholder, Sealaska Native Corporation; and                 
 Goldbelt Native Corporation, testified in Juneau.  Referring to               
 Ms. Schubert she said if she is really for the shareholders, she              
 shouldn't wear her $500 suit.  She said her clothes were on                   
 special at K Mart.  She said everything comes from clearance                  
 racks from K Mart, Costco, etc.  She said she can't afford nice               
 clothing.  Ms. Sarabia said she has 30 years of service with the              
 state of Alaska.  She said Ms. Schubert almost insulted her                   
 intelligence when she asked if the board were to be recalled,                 
 wouldn't it be disruptive.  We have an awful lot of intelligent               
 people.  The board of directors hold the shareholders in bondage.             
 She urged the committee to table the bill or at least vote                    
 against it.  Ms. Sarabia said she has worked as hard as anybody               
 with a degree.  She may not have gone to college.  She is the                 
 oldest of eight kids and not one has been to college except her               
 brother and he is the only state Indian coordinator in the U.S,               
 in the state of Connecticut.  Ms. Sarabia said her entire family              
 is against HB 251.                                                            
 Number 478                                                                    
 CHAIRMAN KOTT said if he has insulted anyone's intelligence, that             
 wasn't his intent.  He said he is trying to seek answers and                  
 understand the issues.  Chairman Kott noted he is not a member of             
 a Native corporation and never has been.  He said he is trying to             
 understand the whole concept.                                                 
 MS. SARABIA said Sealaska started 25 years ago with people who                
 knew nothing.  People know a lot today.                                       
 Number 491                                                                    
 CATHERINE PRICE, Shareholder, Sealaska Native Corporation, said               
 she learned about HB 251 earlier in the day.  She referred to the             
 legality of the legislation, and asked that the committee                     
 thoroughly do the research and find out if it truly is legal to               
 make these kinds of changes.  Ms. Price asked the committee to                
 please do the research before any decisions are made.                         
 Number 504                                                                    
 MS. SCHUBERT said she meant no insult to anyone sitting in the                
 committee room.  She referred to her clothing and said she                    
 doesn't owe any of it to her Native corporations.  She said she               
 owes her coat to the fact that she went to school for 21 years.               
 She is an attorney, is proud of it, and worked very hard.  She                
 said she isn't going to make excuses for how she dresses and she              
 certainly owe it to the Native corporations.                                  
 CHAIRMAN KOTT stated is isn't his intent to move HB 251 out of                
 the committee today.  There are a lot of questions that need to               
 be answered.  He said he believes the committee has a number of               
 questions that relate to the legal aspects of the bill.  Chairman             
 Kott asked Mr. Huhndorf to come back before the committee                     
 Number 513                                                                    
 REPRESENTATIVE ROKEBERG asked Mr. Huhndorf if he has any                      
 questions or statements he would like to make.                                
 MR. HUHNDORF said there has been a lot of testimony that has been             
 sharply conflicting in terms of people being very pro or very con             
 of what is being proposed in HB 251.  He said he would submit                 
 that this is about dividend and distribution policy.  Some of the             
 corporations have become quite successful and have increased                  
 their net worth, cash flows and their net income substantially.               
 He said CIRI has a policy of distributing about 50 percent of                 
 their net profits in dividends to the shareholders.  He said they             
 have been coming under a lot of pressure from a minority of                   
 shareholders to distribute more.  The board is caught on one side             
 of the question with their duty to the corporation to be prudent              
 in terms of the distributions they make and the liquidity that                
 they maintain in the company.  On the other hand, they know that              
 the people asking for more money need money.  In many cases they              
 are desperately poor and they want more money.  Mr. Huhndorf said             
 it is really hard to explain why you have to keep the corporation             
 alive and put some net profits back into the growth of the                    
 company in order for the company to be around and alive for                   
 generations to come.  He said there are no good or bad guys.  The             
 irony is that as the corporations grow and become more liquid,                
 there is an increase demand by people who are not very well off               
 to want more of that money, and all of a sudden, there are                    
 accusations flying back and forth.  Mr. Huhndorf said it is                   
 really a question of money, and that is why there is the                      
 disruption in the Native community in recent months.  He said                 
 CIRI has grown, for example, from $34 million in 1971, to a                   
 corporation with a net worth of about $435 million.  There was                
 nearly a 20 percent a year growth.                                            
 MR. HUHNDORF explained dividends have increased each year.  In                
 one year CIRI distributed 62 percent of their net income.  He                 
 said the corporations obviously can not conduct business if                   
 they're perpetually holding special meetings.  He said to hold a              
 special meeting, you can get 10 percent of the signatures on a                
 petition in just a few days.  He said the tragedy is that the                 
 special meetings are advisory in nature mostly because state law              
 prohibit shareholders from voting themselves dividends or for                 
 making major policy changes in the fiscal management of the                   
 company.  State law simply does not allow it and it only becomes              
 advisory to a board who then becomes or feels threatened.  They               
 then go into a siege mentality about what they should or                      
 shouldn't do.  They are threatened by being told they are going               
 to lose their board seats, and of course, nobody likes to be                  
 MR. HUHNDORF said the board thought they were doing a lot of                  
 right things, but it ended up, he believes, that the shareholders             
 weren't asked to participate in the planning and recommend some               
 of the policies that resulted in some of the things that were                 
 Number 583                                                                    
 REPRESENTATIVE ROKEBERG said from his personal knowledge, it                  
 seems to him that Mr. Huhndorf was probably the most underpaid                
 executive in North America during the 70s and 80s.  He also asked             
 if it isn't true that the solid decision making by the board of               
 directors of CIRI in the land selections and the ability to                   
 acquire assets, which are probably one of the most important                  
 sources of income for appropriations under the 7I provisions.                 
 MR. HUHNDORF said that is true statement in that to an extent                 
 they were able to select lands that had oil and gas bearing                   
 potential.  CIRI was able to do that and generate revenues under              
 Section 7 of ANCSA, which requires a sharing with other regions               
 in that a producing region must share 70 percent with other                   
 regions.  Mr. Huhndorf said as he recalls, since CIRI came into               
 existence, they have shared in excess of $200 million with other              
 MR. HUHNDORF explained that one of the things corporations try to             
 do that has a sense and continuity of management is to try to pay             
 market levels of salaries.  So when a person looks at his/her                 
 salary, it is either above or below the middle of the market.                 
 That is what they strive to do in CIRI.  It is important that                 
 managers don't have reasons to quit or look for new jobs.  If                 
 they are paid under the market consistently, even though they                 
 like their job, they will eventually feel used and put upon and               
 will look for a new job which pays more.  He said they try to pay             
 at the middle of the market.  That may be high because the                    
 corporation is large and it is compared to other corporations in              
 America that do similar things.  He explained they try to follow              
 paying the middle of the market and that causes some problems.                
 REPRESENTATIVE ROKEBERG asked if it wasn't true that CIRI didn't              
 have a retirement program for the first 12 years of their                     
 MR. HUHNDORF explained they currently don't have a retirement                 
 program.  They have a full "1K" and a small profit sharing                    
 program that builds some annuity.  He noted some companies have               
 retirement plans and stock options.                                           
 TAPE 95-25, SIDE B                                                            
 CHAIRMAN KOTT asked Mr. Kroloff to come back before the                       
 committee.  He referred to the sponsor statement saying the 10                
 percent requirement would be adjusted to the 25 percent, which                
 would bring Alaska's law into conformity with federal statute.                
 He asked Mr. Kroloff if he could specifically sight what federal              
 statute is addressed.                                                         
 MR. KROLOFF explained as ANCSA was originally passed in 1971, it              
 provided that the stock that the Native shareholders would                    
 receive would be subject to very strict alienability limitations              
 where the stock could not be sold, pledged or seized in                       
 foreclosure.  Those restrictions were to end 20 years from the                
 passage of ANCSA or in 1991.  In 1988, ANCSA was amended by                   
 congress in a way that dealt with alienability restrictions.  The             
 rule was essentially changed so rather than the restrictions                  
 expiring automatically in 1991, they stayed in place                          
 automatically unless 50 percent plus 1 of the shares voted to                 
 lift them.  So rather than having the restrictions expire,                    
 congress, in essence, gave authority to the shareholders to make              
 that decision for themselves.  It also provided a mechanism for               
 shareholders to bring that decision before the corporation.                   
 There are two ways that can come about.  The board of directors               
 can bring before the shareholders its own motion, in essence, or              
 resolution to lift the restrictions or shareholders may petition              
 the company for a vote to lift the restrictions.  It is that                  
 provision of ANCSA that set the petition level at 25 percent.                 
 The argument that has been made to the committee by people                    
 testifying earlier in the meeting can be summarized.  Mr. Kroloff             
 said congress did not mandate that every petition be 25 percent.              
 The state would not be required to make everything a 25 percent               
 threshold.  The argument being made is that when congress                     
 considered what is probably the most important subject that                   
 shareholders could bring before their corporation for a vote,                 
 which is to retain or to remove the restrictions on alienability              
 of Native corporation stock.  Congress set 25 percent as the                  
 threshold and the reason it did that is so there would have to be             
 a relatively significant level of support for the petition.  Even             
 if it was not majority support at the time it was brought, it had             
 to at least be a significant minority.  Mr. Kroloff explained the             
 argument being made today is if that every important question                 
 requires such a threshold.  The proponents of the bill feel that              
 these kinds of questions that are not of the same significance,               
 largely because they are of an advisory nature only, shall                    
 require a similar threshold.  Corporations should not be                      
 subjected to repeated calls for meetings on matters that are of               
 lessor significance and are advisory only, with a lessor minority             
 of shareholder supporting.                                                    
 Number 094                                                                    
 CHAIRMAN KOTT said he assumes Mr. Kroloff worked on the                       
 legislation with the bill sponsor.  He referred to the 90 day                 
 period to gain the required number of signatures on petitions,                
 and noted shareholders are mobil and scattered.  He asked if it               
 was reasonable to place the 90 day restriction in order to gain               
 the required number of signatures.                                            
 MR. KROLOFF said he thinks it is reasonable.  He stated that                  
 state law currently provides for a proxy campaign for an annual               
 meeting to elect directors.  The requirement is as low as 20 and              
 no longer than 60 days and that those who support or disagree                 
 with management have to contact all the shareholders to submit                
 their proxies and to cast them at the meeting.  These meetings                
 have happened for 20 years.  Mr. Kroloff referred to previous                 
 testimony where there were complaints that shareholders thought               
 20 days was too short.  The whole point of the bill is to treat               
 the petitions like proxies, which in essence is what they're                  
 like.  It provides a longer period than you would have to solicit             
 votes for a director which is considerably more significant act.              
 MR. KROLOFF said there were some calls for modeling Native                    
 corporations governance on SCC Rules.  He said he believes the                
 SCC has the same or a more stringent requirement.                             
 Number 138                                                                    
 CHAIRMAN KOTT said HB 251 would make it a criminal offense to                 
 solicit support for a request for a special meeting without first             
 notifying the corporation.  He asked Mr. Kroloff if he could                  
 comment on the reasonable "miss that" aspect of it.  He asked if              
 it perhaps infringes on the shareholders rights of free                       
 MR. KROLOFF asked if there should be criminal penalties.  He said             
 he doesn't think CIRI has a particular view in favor of criminal              
 penalties.  He said he believes that is in the bill because he                
 thinks the bill just incorporates the proxy votes,  already in                
 law, for willful violations of the proxy rules.  Mr. Kroloff said             
 if the committee didn't feel comfortable with that, he doesn't                
 think CIRI would care.  He referred to the question relating to               
 violating people's free speech rights and said he doesn't think               
 so as a legal matter.  This is because free speech rights are                 
 between a citizen and a government and not between a shareholder              
 and a corporation.  He noted even between a citizen and the                   
 government, the government can impose reasonable time, place and              
 manner restrictions on them.                                                  
 Number 160                                                                    
 REPRESENTATIVE ROKEBERG referred to earlier testimony that                    
 indicated there currently is a year or an unlimited period for                
 petitioning.  He asked if there currently was a time frame.                   
 MR. KROLOFF said he isn't familiar enough with that to know.                  
 An unidentified speaker indicated there isn't a limit.                        
 Number 174                                                                    
 CHAIRMAN KOTT said the penalty would be a felony of not less than             
 one year and not more than five.                                              
 Number 181                                                                    
 REPRESENTATIVE KIM ELTON said he wasn't sure what the chairman's              
 plan is for the bill.  He said as a dissident Democrat in the                 
 legislative body dominated by a majority of Republicans, there                
 are questions that have come up that need answers.  He said he                
 would doubt that the questions can be answered in the next 20                 
 minutes.  He noted Mr. Kirkpatrick is in attendance, but                      
 indicated he thinks it would be good for the committee to have                
 Mr. Kirkpatrick come back at a point in time where there is                   
 enough time for questions for him from other members of the body.             
 He said a lot of people have shown up to testify and he believes              
 it would be fair to have those people leave their names and                   
 telephone numbers to they can be contacted when HB 251 does come              
 up again.  Representative Elton said he will need his energy for              
 later in the evening when the House goes back into session.  He               
 said he would move for recess or adjournment.                                 
 CHAIRMAN KOTT objected for the purpose of inviting Mr.                        
 Kirkpatrick to the table for a very brief dialogue.  He asked Mr.             
 Kirkpatrick to provide a very brief synopsis of the bill as he                
 sees it.  He explained the bill would be held over until the                  
 following Wednesday and he would invite Mr. Kirkpatrick back to               
 cover some of the more intricate matters.                                     
 REPRESENTATIVE PORTER said if the bill is going to be back before             
 the committee, he would prefer that Mr. Kirkpatrick give his                  
 testimony at one time.  It is unfortunate that the timing is off.             
 He said he would like to also have someone from the Department of             
 Law that deals with securities and corporation matters as well.               
 CHAIRMAN KOTT agreed with Representative Porter.                              
 CHAIRMAN KOTT adjourned the House Labor and Commerce meeting.                 

Document Name Date/Time Subjects