Legislature(1995 - 1996)
03/29/1995 03:10 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE LABOR & COMMERCE STANDING COMMITTEE March 29, 1995 3:10 p.m. MEMBERS PRESENT Representative Pete Kott, Chairman Representative Norman Rokeberg, Vice Chairman Representative Gene Kubina Representative Kim Elton Representative Brian Porter MEMBERS ABSENT Representative Jerry Sanders Representative Beverly Masek OTHER MEMBERS PRESENT Representative Bill Williams COMMITTEE CALENDAR HB 168: "An Act relating to temporary permits for certain optometrists." PASSED OUT OF COMMITTEE HB 224: "An Act relating to the state plumbing code." PASSED OUT OF COMMITTEE HB 251: "An Act relating to Native corporations." HEARD AND HELD *HB 263: "An Act relating to certification of workers who handle hazardous waste; and providing for an effective date." SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HB 168 SHORT TITLE: PERMITS FOR NONRESIDENT OPTOMETRISTS SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES JRN-DATE JRN-PG ACTION 02/08/95 273 (H) READ THE FIRST TIME - REFERRAL(S) 02/08/95 273 (H) HES, L&C 03/07/95 (H) HES AT 03:00 PM CAPITOL 106 03/07/95 (H) MINUTE(HES) 03/16/95 (H) HES AT 02:00 PM CAPITOL 106 03/16/95 (H) MINUTE(HES) 03/17/95 772 (H) HES RPT CS(HES) 5DP 03/17/95 772 (H) DP: ROKEBERG, G.DAVIS, BUNDE, TOOHEY 03/17/95 772 (H) DP: ROBINSON 03/17/95 772 (H) ZERO FISCAL NOTE (DCED) 03/29/95 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 224 SHORT TITLE: STATE PLUMBING CODE SPONSOR(S): REPRESENTATIVE(S) KOHRING, Green JRN-DATE JRN-PG ACTION 03/03/95 564 (H) READ THE FIRST TIME - REFERRAL(S) 03/03/95 564 (H) LABOR & COMMERCE 03/22/95 (H) L&C AT 03:00 PM CAPITOL 17 03/22/95 (H) MINUTE(L&C) 03/27/95 (H) L&C AT 05:15 PM CAPITOL 17 03/27/95 (H) MINUTE(L&C) 03/29/95 (H) L&C AT 03:00 PM CAPITOL 17 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 03/27/95 (H) MINUTE(L&C) 03/29/95 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 263 SHORT TITLE: CERTIF. OF HAZARDOUS WASTE WORKERS SPONSOR(S): LABOR & COMMERCE JRN-DATE JRN-PG ACTION 03/17/95 778 (H) READ THE FIRST TIME - REFERRAL(S) 03/17/95 778 (H) LABOR & COMMERCE, FINANCE 03/29/95 (H) L&C AT 03:00 PM CAPITOL 17 WITNESS REGISTER REPRESENTATIVE CYNTHIA TOOHEY Alaska State Legislature State Capitol Building, Room 104 Juneau, AK 99801-1182 Telephone: (907) 465-4919 POSITION STATEMENT: Prime sponsor HB 168 MARY LOU VILANDRE Franks Plumbing, Heating and Sheet Metal 803 Halibut Point Road Sitka, AK 99835 Telephone: (907) 747-8086 POSITION STATEMENT: Testified on HB 224 ED FLANAGAN, Assistant Commissioner Department of Labor P.O. Box 21149 Juneau, AK 99801-1182 Telephone: (907) 4654-2700 POSITION STATEMENT: Testified on HB 224 STEVE SHUTTLEWORTH, Building Official City of Fairbanks 2588 Riverview Drive Fairbanks, AK 99701 Telephone: (907) 479-4279 POSITION STATEMENT: Testified on HB 224 LARRY LONG, Building Inspector City of Fairbanks 326 Baranof Fairbanks, AK 99701 Telephone: (907) 459-6724 POSITION STATEMENT: Testified against HB 224 REPRESENTATIVE JEANNETTE JAMES Alaska State Legislature State Capitol Building, Room 102 Juneau, AK 99801-1182 Telephone: (907) 465-3743 POSITION STATEMENT: Commented on HB 224 PAT KNOWLES, Mechanical Administrator Owner, Mountain Mechanical 8427 Mentra Street Anchorage, AK 99518 Telephone: (907) 344-0700 POSITION STATEMENT: Testified in favor of HB 224 MIKE TIBBLES, House Researcher to Representative Vic Kohring Alaska State Legislature State Capitol Building, Room 428 Juneau, AK 99811-1182 Telephone: (907) 465-2186 POSITION STATEMENT: Testified on HB 224 WILLIS KIRKPATRICK, Director Division of Banking, Securities and Corporations Department of Commerce and Economic Development P.O. Box 110807 Juneau, AK 99811-0807 Telephone: (907) 465-2521 POSITION STATEMENT: Testified on HB 251 SAMMY KALLANDER, Shareholder Cook Inlet Region, Incorporated 226 South Hoyt Street Anchorage, AK 99508 Telephone: (907) 333-6794 POSITION STATEMENT: Testified against HB 251 PATRICIA PRINCE, Kodiak Shareholder P.O. Box 241201 Anchorage, AK 99524 Telephone: (907) 258-0905 POSITION STATEMENT: Testified against HB 251 MERLIN PRINCE, Shareholder Bristol Bay Native Corporation P.O. Box 241201 Anchorage, AK 99524 Telephone: (907) 259-0905 POSITION STATEMENT: Testified against HB 251 ELIZABETH OSKOLOFF, Shareholder Cook Inlet Region, Incorporated P.O. Box 266 Kenai, AK 99611 Telephone: (907) 283-7748 POSITION STATEMENT: Testified against HB 251 BOBBIE OSKOLOFF, Shareholder in Ninilchik, and Cook Inlet Region, Incorporated P.O. Box 266 Kenai, AK 99611 Telephone: (907) 283-7748 POSITION STATEMENT: Testified against HB 251 STEPHANIE THOMPSON, President Alexander Creek, Incorporated 8128 Cranberry Anchorage, AK 99502 Telephone: (907) 243-5428 POSITION STATEMENT: Testified against HB 251 HAROLD RUDOLPH, Shareholder Cook Inlet Region, Incorporated 4200 East Fourth Avenue, Room 107 Anchorage, AK 99508 Telephone: (907) 338-2507 POSITION STATEMENT: Testified against HB 251 BOB HENDRICKS, Shareholder Chugach Alaska Corporation; and President, Native Village Eyak Tribal Council P.O. Box 299 Cordova, AK 99574 Telephone: (907) 424-3604 POSITION STATEMENT: Testified against HB 251 DOROTHY ZURA, Representative Shareholders for Shareholders 2140 Lawson Creek Juneau, AK 99824 Telephone: (907) 364-3898 POSITION STATEMENT: Testified against HB 251 ALMA MCCORMICK, Shareholder Cook Inlet Region, Incorporated 7220 Huntsman, `E' Anchorage, AK 99508 Telephone: (907) 344-9998 POSITION STATEMENT: Testified against HB 251 LYNETTE WATSON 8220 Spure Street Anchorage, AK 99507 Telephone: (907) 344-8828 POSITION STATEMENT: Testified against HB 251 JOHNNIE HARRIS, Shareholder Sealaska Native Corporation; and Goldbelt Native Corporation 5901 East Sixth, Number 337 Anchorage, AK 99504 Telephone: (907) 349-1546 POSITION STATEMENT: Testified against HB 251 JO DENE KERR P.O. Box 770297 Eagle River, AK 99577 Telephone: (907) 694-9058 POSITION STATEMENT: Testified against HB 251 GLENN KERR, Shareholder Cook Inlet Region, Incorporated P.O. Box 770297 Eagle River, AK 99577 Telephone: (907) 694-9058 POSITION STATEMENT: Testified against HB 251 JACQUELINE GUZLIAK, Shareholder Sealaska Native Corporation 4830 Omega Anchorage, AK 99511 Telephone: (907) 345-4741 POSITION STATEMENT: Testified against HB 251 ARCHIE NIELSEN, Shareholder Sealaska Native Corporation; and Shee Atika Native Corporation 5901 East Sixth, Number 337 Anchorage, AK 99504 Telephone: (907) 337-1909 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, Shareholder Sealaska Native Corporation; and Goldbelt Native Corporation P.O. Box 32677 Juneau, AK 99803 Telephone: (907) 789-0438 POSITION STATEMENT: Testified against HB 251 LORETTA WALLIN 6023 Chatham Drive Juneau, AK 99 Telephone: (907) 586-4012 POSITIONS STATEMENT: Testified against HB 251 ACTION NARRATIVE TAPE 95-26, SIDE A Number 000 The House Labor and Commerce Standing Committee was called to order by Representative Pete Kott at 3:10 p.m. Members present at the call to order were Representatives Kott, Rokeberg, Elton, Porter and James. Members absent were Representatives Sanders, Masek and Kubina. CHAIRMAN PETE KOTT stated a that quorum was present. The order of business would be HB 168, HB 224 and HB 251. He announced that the meeting was being teleconferenced to Kenai/Soldotna, Fairbanks, Sitka, Cordova, Kodiak, and Anchorage. HB 168 - PERMITS FOR NONRESIDENT OPTOMETRISTS Number 024 REPRESENTATIVE CYNTHIA TOOHEY, PRIME SPONSOR OF HB 168, noted that HB 168 had made it to Senate Rules in the Eighteenth Legislative Session; however, like a lot of good legislation, it didn't get a chance to be heard. REPRESENTATIVE TOOHEY gave the following sponsor statement: "The Alaska Optometric Association (APA) requested the proposal of this bill. With the passage of this bill, a locum tenens permit may be issued to a non-resident optometrist for the purpose of assisting or substituting for an optometrist licensed under AS 08.72. "Alaska has a lot of solo practitioners in remote and semi-remote areas of the state. If the practitioner becomes injured, seriously ill, or must leave temporarily, he presently must close down his clinic. This can bring a hardship to his patients, especially if the time away extends to several months. "Also, outside specialists in subnormal vision, visual therapy, etc., can be scheduled to assist local doctors where specialty care does not now exist." REPRESENTATIVE TOOHEY commented that Catherine Reardon, with the Division of Occupational Licensing, Department of Commerce and Economic Development, was in attendance to answer specific questions. She said one change had been made in the House Health, Education and Social Services (HESS) Committee requesting that the ability to dispense specific medications also travel with the locum tenens permit. Number 068 CHAIRMAN KOTT asked the committee members if they were familiar with HB 168. Number 070 REPRESENTATIVE NORMAN ROKEBERG stated he had read it thoroughly, and had also heard HB 168 in HESS. He recommended that the committee adopt the committee substitute (CS) for HB 168(HES). Number 074 REPRESENTATIVE BRIAN PORTER said he was familiar with the bill having heard it last year. He made a motion to move the CSHB 168(HES) Version K, with individual recommendations and accompanying fiscal notes out of the House Labor and Commerce Committee. CHAIRMAN KOTT asked if there was an objection. Hearing none, CSHB 168(HES), Version K, passed out of the House Labor and Commerce Committee. REPRESENTATIVE TOOHEY thanked the committee for their prompt and efficient service. REPRESENTATIVE GENE KUBINA joined the meeting at 3:12 p.m. Number 098 HB 224 - STATE PLUMBING CODE CHAIRMAN KOTT stated that they would hear a report from the subcommittee chairman on the status of HB 224, "An Act relating to the state plumbing code." Number 105 REPRESENTATIVE ROKEBERG directed the committee's attention to the working draft CS 9-LSO740/O. The subcommittee reviewed the CS the previous day. They have taken the original sponsor's bill and transferred the administration of the Uniform Plumbing Code (UPC) to the Department of Labor (DOL). In doing so, they also adopted an amendment requested by the City of Fairbanks and the City of Kodiak. He explained that they felt as an interim measure, they should provide the relief requested from those particular jurisdictions having fuel oil heated boilers, as opposed to gas fired boilers. REPRESENTATIVE ROKEBERG said the only new addition to the bill was the multiple dual sunset provisions placed in the statute. Sections 8 and 9 of the working draft CS provides for a two year sunset of the heat exchanger section as well as for the plumbing code adoption. The intent of the sunset provision was that the committee, as a long range project, would be reviewing the entire building code along with the different circumstances within the state of Alaska. After reviewing these, it would bring recommendations for revisions in the administration of the code, with the intent of weaning the administration of the code away from the legislature, if that is found to be the desirable thing to do. He said it is imperative to develop a public process so that local amendments can be put to use on a statewide basis with adequate public review and input. Number 166 CHAIRMAN KOTT asked if there were any questions. Hearing none, he said he would entertain a motion. Number 171 REPRESENTATIVE PORTER made a motion to adopt the proposed working draft for HB 224, Version O, dated 3-28-95. Number 173 CHAIRMAN KOTT asked if there wan an objection. Hearing none, CSHB 224(L&C), Version O, was adopted. Chairman Kott said he would take testimony via teleconference from Sitka. Number 183 MARY LOU VILANDRE, FRANKS PLUMBING, HEATING AND SHEET METAL, testified via teleconference from Sitka. She inquired if the UPC makes a change, would the legislature automatically adopt the change without any input. CHAIRMAN KOTT responded that they would revisit the entire code during the interim, at which point they would solicit public input regarding the applicable codes. REPRESENTATIVE ROKEBERG added that the bill requires the DOL to draft regulations and take public testimony during the interim period. MS. VILANDRE asked if that would be through the teleconference network. CHAIRMAN KOTT asked ED FLANAGAN to join the committee at the table. Number 206 ED FLANAGAN, ASSISTANT COMMISSIONER, DEPARTMENT OF LABOR, stated that he was not the best witness on this issue. Generally, when the department adopts regulations, public hearings are held in Fairbanks, Anchorage, and Juneau. The department also accepts written testimony. However, he was unclear regarding the teleconferencing of those meetings. The issue of whether they would take testimony by phone would be determined pursuant to the Administrative Procedures Act. Number 220 MS. VILANDRE stated that Franks Plumbing and Heating does business between Ketchikan and Barrow. Their business requires them to find a heat transfer medium suitable for 50 degrees to -50. She doesn't feel the National Code could "hack it for Alaska without some input from the people." Number 223 REPRESENTATIVE ROKEBERG responded that this was why they incorporated the two year sunset date. They would have put just one year in, but they wanted sufficient time to review the entire building code system, to allow for greater public input and the creation of local amendments as necessary. Number 237 STEVE SHUTTLEWORTH, BUILDING OFFICIAL, CITY OF FAIRBANKS, testified via teleconference from Fairbanks. He said that Fairbanks had just come on line and he had only received the work draft CS in the past few minutes. He asked the purpose of the sunset clause. Number 257 REPRESENTATIVE ROKEBERG explained that the sunset provisions were provided to remind all of them that they would be taking on an interim project to complete the examination of all building codes in the state, including the regulatory scheme and methods by which local amendments could be adopted. The committee wants to avoid what they were doing here today, which is to adopt a local amendment at Mr. Shuttleworth's request in the legislative forum, when it should be handled by another forum. MR. SHUTTLEWORTH appreciated the intent. However, as he reads the section, it is a sunset for Subsection C, which is a single wall coil provision. He reads it as (indiscernible) type of amendment and it seems that it is only attached to the single wall coil. Number 287 REPRESENTATIVE PORTER explained that his belief in suggesting the sunset provision, was that it's not appropriate that the legislature deal with and revisit the plumbing codes every year, or every time the UPC changes. He said this would be better for a board or group having more expertise in the area to accomplish that task. There was a compromise in terms of putting the heat exchanger language into the statute. They put it in statute because they are addressing a specific problem existing now, and they had it sunset, so that by the time it sunsets, regulations will be in place. Number 302 MR. SHUTTLEWORTH said that the reason the City of Fairbanks opposes the amendment is that over the years, the city has not had the best working relationship with DOL. He pointed out the tremendous amount of correspondence taking place between the City of Fairbanks and the committee. He would agree that adopting regulations, and working through the regulatory process, would probably be appropriate in most cases. However, because things have not worked out with DOL, they are willing to take their chances with the legislature. MR. SHUTTLEWORTH asked what assurances they would have, after the two year sunset, that the DOL will "nix" the single wall coil and revamp it completely. His goal was to solve a problem that is real in Fairbanks, not to create a political dilemma or crisis. He is meeting with the Architects Association on March 30th, and he has verbal assurances they are in support of the single wall coil amendment. He told the committee that he had polled the Interior Builders Association, and he said the Mechanical Contractors have voiced their support. The message is clear that compromise is appropriate, but they are adamantly opposed to the sunset clause. REPRESENTATIVE KOTT voiced that the committee understands the concerns not only of Fairbanks but of other areas as well. He said that they will be taking a look at the building code, and if they can't get cooperation, they'll be back two years from now, addressing the same topic. He commented that the legislature was under new management and that there seemed to be a good working relationship. The department has agreed to look hard at the matter. Number 355 REPRESENTATIVE ROKEBERG wanted to point out the seriousness in which the committee takes the state building code issue. This particular bill exposed a significant weakness in the regulatory and statutory structure, and if further disclosed weaknesses concerning the way they are administered in the state. He said this would be a major interim project for the committee and himself personally. He pointed out that he has received input from various state building officials, specifically in other large urban areas, indicating disagreement with the amendment. The committee is taking a position to support the people in Fairbanks, particularly given the input from Representative Jeannette James. He asked that any adamant rejection of the sunset clause not cloud the ability of the committee to move the bill through the legislature. Number 371 CHAIRMAN KOTT asked Representative Jeannette James to join them at the table. Number 380 LARRY LONG, CITY PLUMBING INSPECTOR, CITY OF FAIRBANKS, testified from Fairbanks via teleconference. He said he deals every day with the plumbing code. Public input is great, but if you don't act on it, it's worthless. In Fairbanks, they have approximately 25 amendments to the UPC, which have come from public testimony. He does not believe the state has ever amended the UPC. Local conditions should dictate when it comes to codes, especially codes written in Southern California. He can't see the state of Alaska taking on such a project, thinking they can take public input and make a perfect code for the entire state. He said he's worked with Adell Bacon in committees, and they all understand that there are local conditions that have to be addressed. If they spend every two years analyzing these, they'll never accomplish anything. MR. LONG said that 90 percent of the water heated in Fairbanks is heated with single wall coils, including the city's main water system at the treatment plant. Cooperation and regulations with the DOL will not work. In his opinion HB 224 "should be flushed." Number 418 CHAIRMAN KOTT asked if anyone else wished to testify via teleconference or in Juneau. There being no further testimony, he closed public testimony. Number 420 REPRESENTATIVE JEANNETTE JAMES noted that she didn't want to be insulting to anyone on the committee, but asked, "If single wall coils are good today, what makes anyone think that in two years they won't be?" She reiterated that agencies should not be given "carte blanche" authority to write regulations in areas. Past experience has never been totally successful. However, she agrees that there are cooperative people in the department today; but, there is no guarantee those same people will be here tomorrow. She noted the same goes for the legislators at the table. Someone else may be elected that has no sympathy for the same issues that they do, and these issues ought to be addressed by regulation. REPRESENTATIVE JAMES commented that she is presently trying to get more public input into the regulation process. The comments they have heard indicates that public input makes no difference. Historically, it hasn't always made any difference. She said that the public process in writing regulations in many cases has been a sham because regulations were already written before they ever got to the public process. Having the whole bill expires in two years might make sense. However, she doesn't understand the purpose of picking out the single wall issue and have it expire in two years. She realizes that people in Anchorage don't think this is a good idea, but it depends on how you look at things. The people in Fairbanks must look at this differently, as 90 percent of their water is heated with single wall coils. She urged the committee to delete the sunset clause. She appreciates that fact that the committee will be looking at the building codes, but she disagreed with Representative Porter, who believes that these are issues that should be dealt with in regulation. She asked who else is responsible in this state to make laws in this state, but the legislature. If we don't want to assume our responsibility for this and want to pass it on to someone else who doesn't have the same obligation to public input that they do, then we are being derelict in their duties." She requested the deletion of the clause. She added that whether they delete it or not, it has nothing to do with whether or not you can rewrite the code in the next two years. Number 475 REPRESENTATIVE PORTER stated that he sympathizes with the City of Fairbanks and pointed out that it was not the intent of the sunset to say that in two years, it would drop off and that they expect the code to stay the same. It takes the Plumbing Code and places it in the same category as all the other building codes that don't have to go through the statutory process for revision. They do not have the time or expertise to deal with the intricacies of electrical, plumbing, and various other building codes that exist. REPRESENTATIVE PORTER noted that the City of Anchorage uses the Board of Examiners and Appeals that doesn't impact even the Municipal Assembly. They recognize that they are not equipped to deal with the levels of professional problems existing in these codes, especially in a state that needs local options. If they could write a statute, that would allow regionalization for the input of local options that cities could utilize. CHAIRMAN KOTT stated that PAT KNOWLES had joined the teleconference line from a remote site. Number 503 PAT KNOWLES, MECHANICAL ADMINISTRATOR, AND OWNER OF MOUNTAIN MECHANICAL, PLUMBING AND HEATING, testified in favor of HB 224. He explained that double wall heat exchangers were adopted in the UPC because they cannot control the fluid substance that is used to heat the water on the other side of that pipe. For example, in Anchorage there are four types of anti-freeze available for use in boilers as heat exchanger fluid. They are; Polypropylene glycol with corrosion inhibitors; polypropylene glycol without corrosion inhibitors; RV anti-freeze; and, ethylene glycol anti-freeze. He said the difference between polypropylene glycol with corrosion inhibitors and ethylene glycol is about $6 dollars per gallon. MR. KNOWLES said the beauty of the double wall heat exchanger is the fact that it's vented; so if the coil breaks it squirts the fluid out the bottom. You know you have a problem before it makes it into your drinking water. He said this is not an economic issue, it is a health issue. He read the following from the UPC, "Frost or Snow Closure. Where frost or snow closure are likely to occur in locations having minimum design temperatures below zero, then terminal shall be a minimum of two inches in diameter, but in no event smaller than the required pipe. The change in diameter shall be made inside the building at least one foot below the roof and terminate not less that ten inches above the roof, or as required by the administrative authority." They make allowances for specific locations to adjust the code to their needs. He reiterated that this is a health issue, not an economic issue. The single wall heat exchanges were failing in Anchorage because the pipes are sensitive to the velocity of water traveling through them. If the pump is too big, it moves the water too fast. Plumbers size their pipes to what the need will be at the other end. Number 563 CHAIRMAN KOTT asked if there were questions. Hearing none, he closed public testimony. Number 568 MIKE TIBBLES, HOUSE RESEARCHER TO REPRESENTATIVE VIC KOHRING, ALASKA STATE LEGISLATURE, PRIME SPONSOR OF HB 224, testified that Mr. Knowles was one of many individuals who had contacted their office with concerns on this specific issue. They are not convinced that the single wall exemption would be guaranteed safe in every instance. He said that you could require propylene glycol in the heat exchanger; however, there is no enforcement mechanism to guarantee that this is what will be used. His office has had nothing but technical support for the double wall heat exchanger, and the only opposition they have heard is financial in nature. Therefore, the sponsor does not feel that there is sufficient evidence to warrant the single wall exchanger at this time. Number 583 REPRESENTATIVE ROKEBERG restated the position of the subcommittee on the appropriateness of this body to look at local amendments to building codes. The purpose of taking on this major project, is to introduce legislation by next session to correct this problem issue and reform the law. Number 596 CHAIRMAN KOTT observed that they had heard a lot of conflicting testimony, and that there could be strong justification for local options. Number 610 REPRESENTATIVE JAMES stated that it was a matter of money. Everything they do is a matter of money. There is a long list of schools that need help because of code violations. Code violations are the biggest "make work" and "make work activity" that they have going. This country has a multi-trillion dollar debt. This state has a $500 million dollar budget deficit where the legislature must look and see what is financially feasible. She said that it is not just a safety issue; it's financial, and without any money, there won't be any safety at all. Number 624 REPRESENTATIVE PORTER commented the CS has yet to be adopted. It recognizes the financial impact and recognizes that they have had conflicting information with balancing safety versus financial considerations. The compromise is that they will allow single walls to stay in effect for at least two years, and have the option of revisiting the issue then. Number 631 CHAIRMAN KOTT recognized that there was no one on the committee from the Fairbanks area, but that they all appreciate what Fairbanks has and is currently going through. He said that it is a real problem that will require a real solution. Number 635 REPRESENTATIVE ROKEBERG acknowledged that Representative James brought up a good point of looking at the entire scope of things. One of the alternatives they should look at is whether they want to do away with all state building codes. He said that if they adopt these codes, but there is no local amendments, they may be better off without them. REPRESENTATIVE JAMES noted that Fairbanks should be happy that the single wall coil was incorporated into the bill. Currently, they are out of compliance. She said that it puts them in compliance for the next two years, and she understands their frustration with the irresponsiveness of state government. TAPE 95-26, SIDE B Number 000 REPRESENTATIVE ROKEBERG made a motion to adopt the proposed CSHB 224, working draft, 9-LSO740/0, Banister. Number 005 CHAIRMAN KOTT stated there was a motion to move the CSHB 224 Version O. The committee took a brief at ease. The CS working draft Version O had been previously adopted. Chairman Kott stated there was a motion to move CSHB 224, Version O, dated 3-28-95, Banister, from committee with individual recommendations and accompanying fiscal notes. He asked for objections. Hearing none, CSHB 224(L&C) moved out of committee. CHAIRMAN KOTT appointed Representative Rokeberg Chairman of the subcommittee that would be looking at the revision of the building codes during the interim. REPRESENTATIVE ROKEBERG said he would take the assignment seriously and willingly. REPRESENTATIVE KUBINA asked which of the remaining bills were going to be heard. Number 026 CHAIRMAN KOTT answered that they would hold HB 263 until Friday. However, they would hear HB 251. Number 040 REPRESENTATIVE KUBINA stated he would not be at the meeting on Friday. HB 251 - NATIVE CORPORATIONS Number 057 CHAIRMAN KOTT stated that on Monday, March 27th, they had left off with Willis Kirkpatrick, Director, Division of Banking, Securities and Corporations, Department of Commerce and Economic Development. Number 057 WILLIS KIRKPATRICK, DIRECTOR, DIVISION OF BANKING, SECURITIES AND CORPORATIONS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, stated that he would try to explain why the division was involved with Native proxy matters. When the Alaska Native Claims Act (ANCSA) was passed, Congress decided that the Securities and Exchange Commission (SEC) would not have the expertise and should not have the authority to deal in the internal affairs of the state of Alaska. The ANCSA corporations were, therefore, exempt from SEC provisions and regulations. Brown versus Wood was between a Native shareholder and a local land owner in Anchorage who had made a proposition containing misleading information to the corporation. From that case came a requirement by the Division of Banking, Securities, and Corporations to make a determination as to what was false and misleading, in proxy contests. The result of this regulation was oversight in proxy contests and in other matters, before a vote of the corporation. It took a substantial amount of time to promulgate those regulations, the effort of which is that, in a proxy solicitations, certain criteria must be met. MR. KIRKPATRICK related a story from a woman who had been employed by a corporation. She came to him after her employment and said "always remember that your authority in the Native proxy situation was limited to truthfulness." In other words, the issue is whether statements are true. The department sees its responsibility in administering proxy regulations, as that of representing all shareholders. One of the things he has learned is that the idea of a Native Settlement Claim under the Corporations' point of view, is a test. MR. KIRKPATRICK told of when he was employed as a Pharmaceutical Manufacturer's Representative. He traveled in six week cycles, and he happened to be in Klammath Falls, Oregon, when there was a settlement there. The first week he was there, the Indian community was poor. During the next cycle he saw the distribution of $45,000 to each Indian in that particular settlement. Congress tried to make provisions for that settlement through a trustee. However, the recipient had rights to his money. He stated that it was a travesty to come back six weeks after that, and see that the funds were still there, but that there had been a 99 percent distribution to other people. When he came to Alaska in 1969, there wasn't anything available for Natives except for what the Alaska Federation of Natives (AFN) was trying to accomplish. With the Alaska Native Claims Settlement Act, some 40 million acres were titled, and $900 million was available. Twenty years later, those assets are still here. The test is a good test. MR. KIRKPATRICK said that some shareholders told him they would like a total distribution of their corporations. Over the last few years, there has been some distribution of assets, but it has not been in the form of dividends. The corporations are reducing size by partially liquidating. He said that when you get involved with this type of action, there should be a two-thirds vote of the shareholders before you start dissolving corporations. The majority of the shareholders don't want this. There are good, honest shareholders that have testified that they have been waiting 20 years and haven't seen their distribution, unlike other corporations. He stressed that these corporations are still in existence, and the funds are still available and are being distributed to shareholders. Number 325 MR. KIRKPATRICK stated that the corporations, themselves, are major players in Alaska's economy. He believes that they should continue to play a major part for their shareholders and others supportive of them. He feels that all shareholders need to be heard. Total corporate management is not good. During the meeting on March 27th, there were conflicting statements. He stressed that dissidents need to be heard. With the present posture of HB 251, it could turn off the voice of dissident shareholders entirely. Every dissident party with any strength at all should have at least one member on the board to speak for them. MR. KIRKPATRICK said that he has researched corporate law, in general. Mr. Huhndorf stated that he couldn't incorporate in Delaware because of Congress; he's stuck in Alaska. In Delaware, there aren't any provisions for shareholders to petition for special meetings. Most articles of incorporation contain that provision. Not all corporations want to shut out their shareholders. In states that require a certain percentage for shareholders to call special meetings, the lowest percentage is 10 percent, the highest 33.5 percent. Some states only allow this if the articles of incorporation also allow it. In determining how the concerned or dissident shareholders can be heard, he tried to determine the range of considerations. Some of the testimony has indicated that the Alaska Business Corporation Code was designed by Professor Dan Fessler, from Stanford. Professor Fessler counseled the Alaska Code Revision Commission in the adoption of the Alaska Corporation Code. One of the things they have seen is that management is under a barrage of shareholder activity, which probably has a negative effect on the corporation and the majority of the shareholders. They have taken a look at HB 251 to come up with specific recommendations so they could strike a balance, allowing the dissidents to be heard, and preventing the rules of the majority from being diluted by the disruptions of their corporations. He suggested that under Section 2, page 2, lines 17 and 18, the requirement of 25 percent be limited to those corporations having 500 or fewer shareholders. For corporations that have over 500 shareholders, 15 percent would be appropriate. The other concerns line 28, page 2, of Section 2, which is the 90 day provision. This provision blocks any basic action concerning larger corporations. He suggested that this be extended to 120 days. Number 370 CHAIRMAN KOTT restated that they were going to lengthen the window from 90 days to 120 days. He asked what the current window was. MR. KIRKPATRICK replied that there isn't one. Number 375 REPRESENTATIVE ROKEBERG commented that he wasn't clear if the Alaska Business Corporations Code had provisions for Native and non-Native Corporations. MR. KIRKPATRICK replied that in Section 900, 45.55 of ACC, there is a body of law that addresses special provisions for ANCSA corporations. Number 386 REPRESENTATIVE ROKEBERG asked if there was a difference between Native and non-Native under the code. Number 388 MR. KIRKPATRICK said the he was addressing only those provisions specific to ANCSA corporations. He did not want to open up Title 10, as far as the Corporations Code was concerned. Number 393 REPRESENTATIVE ROKEBERG asked if there were any time lines with petitions for special hearings in the non-ANCSA corporations. MR. KIRKPATRICK replied that there is not a time line for people soliciting for special meetings. REPRESENTATIVE ROKEBERG asked if, under ANCSA, there were none. MR. KIRKPATRICK said that was correct. Number 403 REPRESENTATIVE ROKEBERG asked if there were any difference in percentages between the two bodies of law. Number 405 MR. KIRKPATRICK said that the current code for all corporations, including ANCSA, was 10 percent of the existing shareholders. HB 251 would change that to 25 percent for ANCSA corporations. The division was suggesting they leave it at 25 percent for corporations under 500 shareholders, and change it to 15 percent for ANCSA corporations over 500 shareholders. MR. KIRKPATRICK noted that on page 2, line 23, for "prefiling with the corporation," he would suggest that this be made to read, "with the department." He explained that there is presently a requirement to prefile solicitations with the department. When the department receives a pre-filing in relationship to any corporation, they notify that corporation. Number 427 REPRESENTATIVE ROKEBERG asked if the Non-Native Alaska Business Corporate Code provided for petitioning if it was only for special meetings. Number 430 MR. KIRKPATRICK stated that the word "petition" doesn't exist in most corporate laws. However, if 10 percent of the shareholders are required to call a meeting, the only way to legally do this is by petition. The department has taken that position, because the petition usually results in a vote, that it is a pre-proxy statement in itself and cannot be false or misleading. If they find a false or misleading petition, the only remedy is to void proxies. If they discover false and misleading statements, they make the person who filed the statement issue a correction. Number 466 REPRESENTATIVE PORTER said if a group of shareholders wishes to petition, could they do so with the proxy of members, to constitute their 10 percent. Number 474 MR. KIRKPATRICK responded that theoretically they could start a proxy campaign. However, a proxy means that you're giving someone the right to vote for you. REPRESENTATIVE PORTER interjected, "vote for a petition," and then asked, "would you interpret that as a vote?" MR. KIRKPATRICK answered yes, any document that would solicit another person for a vote would fall under proxy regulations. Physically, it is easier to solicit a petition, whereby eligible shareholders could be recognized by their signatures. REPRESENTATIVE BILL WILLIAMS joined the meeting at 4:30 p.m. MR. KIRKPATRICK addressed the amendments relating to the Alaska Securities Act. The department would be a "policeman" over the concerns of the dissident shareholders. When Mr. Huhndorf testified, he had his lawyer by his side. When the Native community gets together to discuss the problems with their corporations, they may use the word thief or crook, and even question his heritage and birth right, and these are serious charges. Mr. Kirkpatrick said he has concerns with the department having the right to threaten Natives with civil and criminal penalties. The Natives do not have the resources to seek legal counsel. He said incorporating criminal and civil actions into HB 251 would be extremely disruptive for both the corporations and the dissidents. He asked that those provisions be omitted. Number 547 CHAIRMAN KOTT asked if there was a standardized petition process. For instance, when they talk about penalizing someone through fines and imprisonment, is there some identifying signature as the sponsor of the petition, and are they regulated. Number 555 MR. KIRKPATRICK explained that at the top of the petition, there is a statement of what the petition is addressing. The rest of the page is a lined page with spaces for signatures, names, and addresses, of the shareholders. When the required percentage of signatures is reached, they present the petition to the secretary of the corporation, who would then verify those signatures. The department becomes involved in regards to the statement at the top of the page. Number 572 CHAIRMAN KOTT asked if the individual that collected the signatures and turned them in to the corporation was responsible for any non-factual information contained on the petition and, therefore, subject to the penalties as stated in HB 251. Number 577 MR. KIRKPATRICK replied, not directly. There is public communication including charges and counter charges on both sides during any petition drive. The problem is that the regulations say that if you gather 30 to 35 people together and tell them certain things, in itself is a solicitation. It is these types of meetings and campaigns that make it difficult to determine what is truthful. The petition is usually straight forward. Number 592 REPRESENTATIVE PORTER asked if the person affected by the civil and criminal penalties included anyone who had given misleading or false information to a group of shareholders trying to solicit their votes for petition. Number 595 MR. KIRKPATRICK replied that in certain situations, there could be a solicitation of itself in trying to get the petition or proxy signed. Number 599 REPRESENTATIVE PORTER observed that while attempting to get a petition signed and filed, there could be one or several individuals subject to the possibility of fines or criminal charges if they are doing this in a way that violates the statute. MR. KIRKPATRICK replied absolutely, and stated he couldn't find this in any other state. REPRESENTATIVE PORTER asked if the section was aimed at more white collar FCC kinds of activity, as opposed to Native corporations. MR. KIRKPATRICK responded yes. Under the Alaska Securities Act, they have imposed major fines. Last year, the department fined Prudential Base $500,000. They often find people selling unregistered securities, and impose fines on them. In regards to shareholders, they recently had a situation with a Cook Inlet, Incorporated (CIRI) shareholder who solicited proxies with untruths. They called for a restraining order prior to the filing. The individual acknowledged he had started out in the wrong direction. Number 620 REPRESENTATIVE PORTER asked if in that case, was there a requirement that he file that with the department before it hit the street. MR. KIRKPATRICK responded yes. However, the individual did not. REPRESENTATIVE ROKEBERG asked for an example in a proxy or petition fight, historically, what type of resources would (indisc.) MR. KIRKPATRICK said he would never forget the day he appeared before the Senate Finance Committee with a fiscal note of $50,000. When the department was given the remedial responsibility to void proxies, Senator Ferguson said he didn't think it would cost that much money. They spend a great deal of time with both the corporations and the dissidents so that... (end of tape) TAPE 95-27, SIDE A, Number 000 MR. KIRKPATRICK continued... activity around any elections. The department has tried to figure out the amount of time involved and how to recover that time. He said they had recovered nothing from Native activities as far as proxy regulations are concerned nor had they asked. He said that they just haven't found an equitable way to do it. REPRESENTATIVE PORTER asked if there was a provision regarding the restriction of recall petitions if the directors are hired in certain ways. MR. KIRKPATRICK stated that on page 2, line 31, Subsection N, the provision of AS 10.06, Section 460 relates that directors can be removed without cause. HB 251, without this provision. provides that the directors can only be removed with just cause. REPRESENTATIVE PORTER asked if that provision was still in the CS. CHAIRMAN KOTT replied that it was. Number 052 REPRESENTATIVE PORTER asked if a corporation had staggered term directorships. MR. KIRKPATRICK finished, that a recall of the total board would have to be for total cause. REPRESENTATIVE PORTER asked if you could recall an individual. MR. KIRKPATRICK said not without cause. Number 052 REPRESENTATIVE PORTER concluded that any recall petition would have to be for cause, that includes for one, a number of directors, or all of them. MR. KIRKPATRICK replied yes. Number 084 CHAIRMAN KOTT asked if there were further questions for Mr. Kirkpatrick. There being none, he stated that they would hold the teleconference lines open for another 30 minutes. After today's meeting they would close public testimony, and hold a work session on April 5th. The panel would consist of two board members, one from Sealaska the other from CIRI; two shareholders from any corporation; Mr. Kirkpatrick from the Department of Commerce and Economic Development; and a representative from the Department of Law. He said they would not take public testimony at this work session but would sit down and "hammer out the issues." CHAIRMAN KOTT asked those people who had previously testified on March 27, to yield their testimony to those people who had not yet had the opportunity. Number 134 SAMMY KALLANDER, SHAREHOLDER, CIRI, testified via teleconference from Anchorage, that he was opposed to HB 251. He said that shareholders of CIRI had seen their rights taken away. They would no longer be able to meet (indisc.) with the 25 percent cap. He urged the committee not to pass HB 251. Number 160 PATRICIA PRINCE, KODIAK SHAREHOLDER, testified from Anchorage via teleconference that she was representing 14 relatives holding 1,400 shares, not to mention cousins, etc. She believes that a great majority of Alaska Natives do not fully understand corporate business, including herself. She opposes HB 251, and would like to see her people more educated in regard to corporation business. With too much power given to the corporations, a great percentage of shareholders do not know what is transpiring. HB 251 would hinder shareholders interest in keeping the power theirs. She asked that the board members and shareholders having conflicts get back to basics and take care of the shareholders. If the shareholders don't believe in them, find out what they want and do what they want. She said if this was true of Roy Huhndorf and white corporate America, she believes that Roy Huhndorf would have been impeached long ago. MERLIN PRINCE, SHAREHOLDER, BRISTOL BAY NATIVE CORPORATION, testified from Anchorage via teleconference that he is opposed to HB 251. ELIZABETH OSKOLOFF, SHAREHOLDER, CIRI, testified from Kenai/Soldotna via teleconference. She told the committee that it was not fair that a corporate leader introduce legislation that would take away the rights of shareholders. Mr. Huhndorf and Representative Moses didn't inform them they would be introducing this bill. HB 251 discriminates against Alaska Natives. They do not feel they need interference from Mr. Huhndorf and the state. She said some corporations are hypocritical in involving themselves with another corporation's business. If she were a corporate leader, maybe this would be a good bill. However, there are more shareholders than corporate leaders. Number 216 BOBBIE OSKOLOFF, SHAREHOLDER IN NINILCHIK AND CIRI, testified from Kenai/Soldotna via teleconference. She pointed out that previously CIRI has asked them to come up with resolutions. They had hoped everyone would be able to vote on them. However, CIRI has the option of not printing them. They did not tell the shareholders they weren't going to abstain from voting on them. Therefore, the people don't realize this and could not get a majority vote. She said that they will never be able to propose resolutions if something important should come up. Number 226 STEPHANIE THOMPSON, PRESIDENT OF ALEXANDER CREEK INCORPORATED, testified from Anchorage via teleconference. She said that she was a good example of how informed Natives are, having just heard of HB 251 from reading the newspaper. She read the following statement: "The reason that corporations were established was so the Natives could learn how to manage for themselves; to foster participation. At 10 percent, it gives the memberships the opportunity to come forward, to be able to discuss these matters. To get 25 percent of membership involved is very difficult to gather, something that high would mean that the issue is a universal problem. If you raise it to 25 percent, you will cut off participation effectively. What you will get will change the (indisc.) participation, eliminating participation. So now you need to decide what the purpose of this legislation is. If the purpose of it is to perpetuate management in a proxy, then admit it up front. If the purpose of the corporation or the legislation is to foster the open discussion consideration, if they want participation by members and if they want it fully, 10 percent is a significant percentage. I think the nature of this is to bring the matters forward to be able to discuss these matters and issues. To say that at any time you have 10 percent everyone has to pay a cost of that process, it is the reasonable cost. Corporations are owned by members equally. Most can spend their money and their own costs that way. Let us say it is worth it for we want our petition to be acknowledged by the corporation and considered. So, 10 percent is a good sound philosophy." Number 270 HAROLD RUDOLPH, SHAREHOLDER, CIRI, testified via teleconference from Kenai/Soldotna, that he had sent new information on a statement made by the CIRI attorney at the meeting of March 27th. The letter is in reference to the statements made, with documents to support that letter. He felt the documents should be forwarded to the Law Department. Number 280 BOB HENDRICKS, SHAREHOLDER IN CHUGACH ALASKA CORPORATION, said he is also on the Board of Directors and is President of Native Village Eyak Tribal Council. He testified from Cordova, via teleconference. He said he is 100 percent opposed to HB 251. Management at Chugach Alaska had not seen fit to notify the Board of Directors that the bill even existed. "If you hold Native shareholders to higher standards than non-Native corporations, it is called racial discrimination. If anything, the law should be made easier to recall members of the Board of Directors, because there were so many in the past that should have been recalled as well as gone to prison." Number 292 CHAIRMAN KOTT asked Mr. Kirkpatrick if there were any ANCSA provisions which impose special burdens as opposed to benefits. Number 302 MR. KIRKPATRICK responded that one of the reasons that the special section was put in the Corporation Code for ANCSA Corporations, was that in the setting up of corporations, there was a huge amount of assets. The corporation code addresses dividends. Under the Alaska Corporation Code the corporations could not pay anything to shareholders that wasn't out of earnings. The special section provides for the distribution of certain non-earning types of accumulation of funds, for example, timber and other resources. Number 318 CHAIRMAN KOTT commented that he thought racial groups could be singled out for benign treatment, but not for special burdens. DOROTHY ZURA, Representative, Shareholders for Shareholders, stood and requested that Mr. Kirkpatrick listen to her comments. She said to him, "We file everything we put on the street to Banking and Securities, and I want to hand this one to him now before he leaves." She said, "It had been out and about in Seattle." She also requested to testify on new issues. Number 338 ALMA MCCORMICK, SHAREHOLDER, CIRI, testified from Anchorage via teleconference. She said that it is not fair for their corporate leaders to work against its shareholders when it is the shareholders who own the corporations. She is opposed to HB 251. Number 343 LYNETTE WATSON, MARRIED TO CIRI SHAREHOLDER, testified from Anchorage via teleconference. She is opposed to HB 251. She attended the CIRI Shareholders meeting last November, at the Hilton Hotel. She was amazed that the then President Huhndorf "tried to have the microphones turned off and told people to `shut-up.' She was told by Native shareholders that they had no right to speak. This bill will silence them further. They have rights just as the citizens of this state and country have rights to talk, disagree and protest when they choose. They've been treated unfairly for some 20 years." She asked that people take a trip to Anchorage and see the Rescue Mission on Tudor Road, or the Brother Francis Shelter on Third Avenue, where natives have no homes and only exist from day to day, in jails or on the streets of Fourth Avenue. Some are classified as homeless, over 70 percent are at the poverty level. She doesn't see any of the corporations helping them to get jobs or educating them. They get dividends, but they don't add up to the paychecks that the board of directors receive. She wondered how much they bring home along with their yearly bonuses, maybe they need a pay cut. The Native people have to fight long and hard to receive NOL money. The corporations can afford to give money to the shareholders even though they are successful in real estate, timber, etc. She concluded by saying that "our forefathers in the 1770s gave us laws, one was the first amendment, the freedom of speech. Don't take this amendment or any of their other rights away because of one man and his ideas." Number 377 CHAIRMAN KOTT stated that he was aware of the facilities in Anchorage, and was previously employed by General Motors, making one-twentieth of what the board of directors made. Number 394 JOHNNIE HARRIS, SHAREHOLDER, SEALASKA NATIVE CORPORATION; AND GOLDBELT NATIVE CORPORATION, testified from Anchorage via teleconference, that he had also represented the Anchorage area in dealing with Goldbelt. He said that he did not like the word "dissident" in referring to the majority of shareholders. He said management is not representative of the shareholders. It is getting further away from the shareholders owning and running their corporation. He said "follow the situation with Goldbelt, they were going to win and get the corporation back to the shareholders." He said "if you keep taking from them, the only thing left will be management and no shareholders. Listen to what's right and do something right for a change." Number 420 JO DENE KERR, MARRIED TO CIRI SHAREHOLDER, testified from Anchorage via teleconference. She pointed out that between 1987 and 1993, Mr. Huhndorf received approximately $2.8 million in compensation and bonuses. There are 15 board members. Figuring that those board members receive even half as much compensation as Mr. Huhndorf, would mean that management fees are running 31 percent of what was being distributed to shareholders. As a group, they are trying to bring the management compensation and bonuses into acceptable industry standards. They have not been able to find any government agency to help them accomplish this. They're not a tribal agency, so the Bureau of Indian Affairs (BIA) cannot help them. If this legislation were to pass, the shareholders wouldn't be in a financial position to fight this outrageous form of management abuse. Shareholders have no recourse except for the special meetings. If HB 251 passes they will have no voice in their corporations. Only 50 to 60 percent of the shareholders now vote, if this bill would require 25 percent of the total shares, in reality you'd be asking for 50 percent of the voting body. She implored the committee to vote against HB 251. Number 447 GLENN KERR, SHAREHOLDER, CIRI, testified from Anchorage via teleconference in opposition to HB 251. He said that the board is there to help run the corporation, the shareholders are there to keep it in a check and balance. Passage of this bill would take that away from them. Number 459 JACQUELINE GUZLIAK, SHAREHOLDER, SEALASKA NATIVE CORPORATION, testifying via teleconference from Anchorage stated that there are two file drawers full of complaints from Sealaska shareholders. She felt that these hearings were not advertised widely enough for the Natives to voice their concerns. They were never asked what they wanted in 1970 or 1971 either. She said "Under Due Process 1. Right Privilege Doctrine. The essence of justice is largely procedural. It is procedure that spells much of the difference between rule by law and rule by whim or caprice. This seems to me by a whim these people are trying to put this through. Steadfast adherence to strict procedure safeguard is our main assurance that there will be equal justice under law. Procedural fairness and regularity are the indispensable essence of liberty. The history of liberty, the constitutional right, has largely been the history of procedural safeguards. Who's interests are affected? Almost 17,000 Sealaska shareholders plus children. We've complained to Banking and Securities, in which they say they don't have enough funds to pursue anything. We now have our complaints before the State Troopers on the last Sealaska election. I've also challenged the 1992 election because they brought a vote (indisc.) 5:00 deadline. Our complaints go unheard, the board tells us we are just advisors. It's our money and we have no control due to the power of our boards haven't hardly a chance. Therefore, we protest tearing people's lives apart because when we do this, we are censured and not able to obtain jobs, although qualified and are known as dissidents, even in our own subsidiaries. By the way, there are more dissidents than there are board members. We can't use legal services. Banking and Securities is under funded because the Bush Representative like the sponsor of HB 251 stopped it years ago. Where are our rights? Where is our better life? Our parents and families waited over 23 years for result and everyone treats the so called leaders, elected under their own by-laws, the absolute leaders. Now, some of the corporations are under investigation for several reasons. Wait until the truth is revealed before raping us one more time. Please stay out of this and don't pass this bill which affects 87,000 plus Natives. MS. GUZLIAK said in closing, according to George Washington in his 1790 speech to the Senate, "Where then is the security of your lands. No state, no person can purchase your lands unless by some public treaty. (indisc.) under the authority of the United States. The general government will never consent to your being defrauded. But it will protect you in all your just rights." Don't give our boards the authority to continue to do what they have done to us in the past. We have too much going on right now. We are worse off than we used to be. We have a large suicide rate. We have the most drug, although we are making a change with the sobriety movement. We feel that these people don't listen to us. Let us be. This happened before with the (indisc) select committee. The so called leaders, I call them the "Native Mafia" state "You didn't have to be there." How can we state what's wrong unless we're there. (indisc.) Sealaska shareholders unofficial news. I am quoting the laws from special relationship of Alaska Natives from the federal government. You better take a look at the due process. I know you people are fair and will want to do what's right. Please stay out of it. Thank you very much. ARCHIE NIELSEN, SHAREHOLDER, SEALASKA NATIVE CORPORATION; AND SHEE ATIKA NATIVE CORPORATION, testified via teleconference. He stated that there has been mention of discrimination. "You're (indisc.) on special elections or within this bill, then you better put the same cap on the south 48 corporations. We are not exempt from the south 48 corporations. We are just as equal as they are. When we talk about monopolizing, this bill would give management total hold power. We don't like that. We as individuals own corporations, not management, not special interest groups. The liability of directors and agents of a corporation under the law is very clear and explicit. One thing I've heard. What happens when, with Johnnie Harris, who someone turned in a proxy that wasn't his? In the law books it's called (indisc). If you don't research this, you as well as the people voting or in charge of the elections; as well as the state outfit are liable and can be fined or sent to prison. We don't like this bill for one simple reason, we as shareholders have rights. You're trying to infringe them. You're trying take them way. As for time, give us a chance to respond, maybe we can work something out. As it stands this bill is no good. Thank you very much." Number 560 DOROTHY ZURA, Representative, Shareholders for Shareholder, testified that she was a full Tlingit with 125 shares in both Sealaska and Goldbelt Corporations. "As it was stated yesterday by lawyers, they said to treat the petitions as proxies. I'm going to challenge them in their statement that they put an amendment in there that the corporation is going to be liable to mail out 16,500 petitions to each shareholder, as they do proxies." She said the committee was not versed on ANCSA law. Regarding the 25 percent, the lawyers stated that this provision came from federal statute. She said this was one of the many games played with them. They treat shareholders on the federal level which is highly restrictive, and give the board of directors lenient rights as to state law. "If we're going to play this game, let's go to tribal law, and eliminate and kill the bill right here. We will see them in tribal courts." She said this was not a money issue on the shareholders side, rather it was a money issue on the corporations side regarding NOL'S, and their salaries, wages and job security. On the federal level, in order to do petitions it only takes one person to request a special meeting, then there would be no money wasted. The money isn't wasted on shareholders, it's wasted from the board of directors. "When we did Goldbelt, the shareholders dug out of their own pockets to fight a fight and we won that fight." Ms. Zura said she would like to see a roll call vote on the bill. She reiterated that this was not a money issue from the shareholders side. They are only asking for what was theirs over 25 years ago. Number 598 IKE CROPLEY, SEALASKA NATIVE CORPORATION; AND GOLDBELT NATIVE CORPORATION, testified that they were all opposed to HB 251. When the election in Klawock took place, there was forgery and tampering with proxies. Mr. Kirkpatrick said the department had no authority to invalidate any election. Mr. Cropley asked what his office was suppose to do. There main objective as shareholders is NOLs. Mr. Cropley gave the following information regarding Sealaska's NOLs: $157 million was written; $13,000 million in interest since 1985; $60 million in permanent fund before NOLs were approved. He added that 100 percent vote was required by shareholders, and 100 percent was not voted. That put the amount of money at $230 million, or $14,500 per 100 shares for 15,780 shareholders. These figures had been taken from Sealaska reports, financial statements, and studies made by a University of Alaska Professor Steven Cope (sp.?), specializing in Native corporations. He said that he had submitted this information to the Juneau Empire at which time Sealaska attorneys wrote him a letter requesting that he cease and desist, to reply and to retract his statements. He responded to Sealaska by asking that the correct figures be given to him so he could correct this with the Juneau Empire. To this date, he has not received a response. "What has happened to the $34 million not accounted for?" TAPE 95-27, SIDE B Number 000 KATHY POLK, SEALASKA AND GOLDBELT SHAREHOLDER, indicated that Mr. Kirkpatrick had worked with certain individuals in the audience. She was concerned as to how that would sway the committee decision. To have these rights of recall taken away wasn't fair to the shareholders. The issue of proxies are important. Rather than having bills such as this, it would seem that we should be for the benefit and protection of management and the shareholders. As it currently stands, the corporations are completely protected. They have "our" money to fight "our" people. She would recommend that a concerned legislator submit a bill to look at the election rules, to make it fair. The way the votes are obtained is not fair. There was no way to prove how many proxies were picked up and not turned in. The main problem they have with the corporations is in communicating. At the annual meeting, they have an agenda. That agenda is usually only to elect the board of directors. They establish how things are taken care of. She added that she is interested in sitting on the panel as one of the shareholders. "Look in your hearts at this bill and put yourself in our place, and respond accordingly." Number 105 LORETTA WALLIN testified before the committee that she was a United States Citizen as well as an Alaskan Citizen. She has two children not belonging to a corporation other than through her affiliation. She wonders how her children will be able to vote for these corporations. In regards to the ANCSA laws, one individual who studied the law for years said that every shareholder had given up between $200,000 to $600,000 to (indisc.) these corporations that exist today. She is wondering what the legislature's jurisdiction was in the matter. ANCSA was created because of the uniqueness of the Native people. "Now they're trying to bring in the state policies, it's kind of scary. They are trying to get our people to believe that your policies and your laws overdo ours. Which is not true, not when you look into ANCSA." This was made clear by Mr. Kirkpatrick. He has no jurisdiction other than with proxies. She was concerned with lines 17 and 18, requiring 25 percent of the shareholders for corporations under 500, and 15 percent of the shareholders for corporations over 500. It's at 10 percent and should remain that way. The 90 days filing deadline should be deleted and left at no limit. Ms. Wallin referred to page 2, line 31, provision M, regarding cause in eliminating the board of directors and asked who is going to justify that cause. "The shareholders? You? Banking and Securities? Many of the corporations say this has to do with money. I worry about the children, if not that, the elders that are alive today. Their dream was to see us being able to get something out of the corporations, and what have they gotten today? Probably nothing, not compared to what they've given up. Even an education for myself, most of my funds have come from the State of Alaska loans, not my corporations." Number 214 CHAIRMAN KOTT commented that ANCSA specifically allows for state jurisdictions, with some exceptions. We are not completely removed from ANCSA provisions. MS. WALLIN thought the only jurisdiction the state had was with banking and securities. CHAIRMAN KOTT said the corporations are also included in that exception. The meeting on Wednesday will consist of questions, directed toward the panel, to determine the underlying problem. The committee could pursue some direction as far as the solution goes. He told the public that any questions they would like asked of the panel could be directed through one of the committee members. There would be no public testimony. ADJOURNMENT Number 260 There being no further business to come before the House Labor and Commerce Committee, Chairman Kott adjourned at 5:45 p.m.