Legislature(1995 - 1996)

04/12/1995 03:12 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                          
                         April 12, 1995                                        
                           3:12 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Pete Kott, Chairman                                            
 Representative Norman Rokeberg, Vice Chairman                                 
 Representative Jerry Sanders                                                  
 Representative Beverly Masek                                                  
 Representative Kim Elton                                                      
 Representative Brian Porter                                                   
 MEMBERS ABSENT                                                                
 Representative Gene Kubina                                                    
 OTHER MEMBERS PRESENT                                                         
 COMMITTEE CALENDAR                                                            
 HB 251:  "An Act relating to Native corporations."                            
   HEARD AND HELD                                                              
 HB 238:  "An Act excluding certain direct sellers of consumer                 
          products from coverage under the state unemployment                  
          compensation laws."                                                  
          SCHEDULED BUT NOT HEARD                                              
 HB 243:  "An Act relating to licensure of landscape architects."              
          SCHEDULED BUT NOT HEARD                                              
 HB 260:  "An Act relating to marine pilots and the Board of Marine            
          Pilots; extending the termination date of the Board of               
          Marine Pilots; and providing for an effective date."                 
          SCHEDULED BUT NOT HEARD                                              
 HB 266:  "An Act relating to preferred provider agreements offered            
          by hospital or medical service corporations."                        
          BILL POSTPONED                                                       
 WITNESS REGISTER                                                              
 TERRY BANNISTER, Attorney                                                     
 Legislative Legal Services Division                                           
 Legislative Affairs Agency                                                    
 130 Seward Street, Suite 409                                                  
 Juneau, AK 99801-2105                                                         
 Telephone:  (907) 465-2450                                                    
 POSITION STATEMENT:  Testified on HB 251                                      
 JOAN MANTEI, Shareholder                                                      
 Sealaska Native Corporation; and                                              
   Goldbelt Native Corporation                                                 
 Juneau, AK 99801                                                              
 Telephone:  (907)                                                             
 POSITION STATEMENT:  Testified on HB 251                                      
 JOE WILSON, Shareholder                                                       
 Sealaska Native Corporation; and                                              
   Goldbelt Native Corporation                                                 
 Juneau, AK 99801                                                              
 Telephone:  (907)                                                             
 POSITION STATEMENT:  Testified on HB 251                                      
 DOROTHY ZURA, Shareholder                                                     
 Sealaska Native Corporation; and                                              
   Goldbelt Native Corporation                                                 
 Juneau, AK 99801                                                              
 Telephone:  (907)                                                             
 POSITION STATEMENT:  Testified on HB 251                                      
 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                                      
 MARK KROLOFF, Vice President and General Counsel                              
 Cook Inlet Region, Incorporated                                               
 2525 "C" Street                                                               
 Anchorage, AK 99503                                                           
 Telephone:  (907) 262-5403                                                    
 POSITION STATEMENT:  Testified on HB 251                                      
 BOBBIE OSKOLKOFF, Shareholder                                                 
 Cook Inlet Region, Incorporated                                               
 P.O. Box 266                                                                  
 Kenai, AK 99611                                                               
 Telephone:  (907) 283-7748                                                    
 POSITION STATEMENT:  Testified on HB 251                                      
 TIM BENINTENDI, Legislative Assistant                                         
   to Representative Carl Moses                                                
 Alaska State Legislature                                                      
 State Capitol Building, Room 204                                              
 Juneau, AK 99801                                                              
 Telephone:  (907) 465-3764                                                    
 POSITION STATEMENT:  Answered questions regarding 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                        
 03/27/95              (H)   MINUTE(L&C)                                       
 03/29/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 03/29/95              (H)   MINUTE(L&C)                                       
 04/05/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/10/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/12/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 BILL:  HB 238                                                               
 SPONSOR(S): LABOR & COMMERCE BY REQUEST                                       
 JRN-DATE     JRN-PG                  ACTION                                   
 03/08/95       641    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/08/95       641    (H)   STATE AFFAIRS, LABOR & COMMERCE                   
 03/23/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/23/95              (H)   MINUTE(STA)                                       
 03/28/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/28/95              (H)   MINUTE(STA)                                       
 04/06/95      1049    (H)   STA RPT  CS(STA) 2DP 1NR 2AM                      
 04/06/95      1049    (H)   DP: JAMES, OGAN                                   
 04/06/95      1049    (H)   NR: GREEN                                         
 04/06/95      1049    (H)   AM: WILLIS, ROBINSON                              
 04/06/95      1049    (H)   ZERO FISCAL NOTE (LABOR)                          
 04/12/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 BILL:  HB 243                                                               
 SPONSOR(S): LABOR & COMMERCE                                                  
 JRN-DATE     JRN-PG                  ACTION                                   
 03/08/95       644    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/08/95       644    (H)   STATE AFFAIRS, LABOR & COMMERCE                   
 03/23/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/23/95              (H)   MINUTE(STA)                                       
 03/24/95       893    (H)   STA RPT 1DP 5NR                                   
 03/24/95       893    (H)   DP: ROBINSON                                      
 03/24/95       893    (H)   NR: JAMES, WILLIS, IVAN, GREEN,                   
 03/24/95       894    (H)   FISCAL NOTE (DCED)                                
 04/12/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 BILL:  HB 260                                                               
 SHORT TITLE: MARINE PILOTS                                                    
 SPONSOR(S): TRANSPORTATION                                                    
 JRN-DATE     JRN-PG                  ACTION                                   
 03/15/95       745    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/15/95       745    (H)   TRANSPORTATION, LABOR & COMMERCE                  
 03/22/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 03/22/95              (H)   MINUTE(TRA)                                       
 03/24/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 04/05/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 04/05/95              (H)   MINUTE(TRA)                                       
 04/07/95      1170    (H)   TRA RPT  CS(TRA) 2DP 2NR 2AM                      
 04/07/95      1171    (H)   DP: BRICE, WILLIAMS                               
 04/07/95      1171    (H)   NR: MACLEAN, SANDERS                              
 04/07/95      1171    (H)   AM: JAMES, G.DAVIS                                
 04/07/95      1171    (H)   FISCAL NOTE (DCED)                                
 04/12/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 BILL:  HB 266                                                               
 SPONSOR(S): LABOR & COMMERCE BY REQUEST                                       
 JRN-DATE     JRN-PG               ACTION                                      
 03/17/95       778    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/17/95       779    (H)   LABOR & COMMERCE, HES, JUDICIARY                  
 04/12/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 ACTION NARRATIVE                                                              
 TAPE 95-39, SIDE A                                                            
 Number 000                                                                    
 The House Labor and Commerce Committee meeting was called to order            
 by Chairman Pete Kott at 3:12 p.m.  Members present at the call to            
 order were Representatives Kott, Sanders, Masek, and Porter.                  
 Members absent were Representatives Rokeberg, Elton and Kubina.               
 CHAIRMAN PETE KOTT stated there was a quorum present.                         
 HB 251 - NATIVE CORPORATIONS                                                
 CHAIRMAN told the committee they would continue with the sectional            
 analysis of HB 251, beginning with Section 3.  Representative Kim             
 Elton joined the meeting directly after the call to order.                    
 LEGISLATIVE AFFAIRS AGENCY, stated Section 3 authorizes the                   
 Administrator, which is basically the Department of Commerce and              
 Economic Development, to issue an order imposing a civil penalty              
 against a person who violates the new filing provisions under the             
 required for Alaska Native Claims Settlement Act (ANCSA)                      
 corporations under the corporations code.  Because of the new                 
 definition of "proxy," it also pulls ANCSA corporations into being            
 subject to an order under violations of 44.55.139 and 44.55.160.              
 The definition is at the end of the bill, but effects several other           
 CHAIRMAN KOTT noted they were using the work draft Version G.                 
 Number 052                                                                    
 MS. BANNISTER said Section 4 addresses the notice and hearing                 
 requirements for orders issued under 45.55.920.  It makes the                 
 changes in Section 5, subject to the notice in hearing requirements           
 as they're required by AS 45.55.920(d).  She said it is a                     
 conforming amendment to bring the Section 5 requirements into these           
 provisions about orders as to what notice and hearing opportunities           
 are to be allowed.                                                            
 REPRESENTATIVE NORMAN ROKEBERG joined the meeting at 3:15 p.m.                
 CHAIRMAN KOTT asked if any members on the panel had questions on              
 Sections 3 or 4.                                                              
 Number 077                                                                    
 NATIVE CORPORATION, said this was a break off of Section 2(l).  The           
 whole bill seems to rotate around Section 2(l).  Ms. Mantei said              
 she has a bad feeling about jail time.  Chapter 10 should not be              
 opened up and given to corporations at all.  She said this was very           
 harsh and wondered why they felt the need to do this to the Indian            
 people.  In referring to a document she said Representative Elton             
 had handed out regarding dialogue between shareholders and                    
 corporations and said she agreed with parts of it, but felt the               
 jail terms are wrong.                                                         
 Number 109                                                                    
 NATIVE CORPORATION, said the provisions regarding penalties in                
 Section 3, and any following Sections should be omitted.  He                  
 referred to people who may be in the process of filing a petition             
 or a proxy with the Division of Banking, Securities and                       
 Corporations, and said they are monitored in a manner to allow                
 change.  These provisions are not included for non-Native                     
 corporations under state law.                                                 
 Number 143                                                                    
 GOLDBELT NATIVE CORPORATION, said she would also like to make a               
 statement against this portion of the bill.  She asked who decides            
 what was misleading and not misleading.  She said their own board             
 of directors has sent out misleading information; however, they               
 can't take them to court because of the monetary aspect.                      
 Shareholders don't have the money to defend themselves.  She asked            
 where the hearings would take place and who would be on the panel.            
 Ms. Zura said this isolates Alaskan Natives.                                  
 Number 177                                                                    
 REPRESENTATIVE KIM ELTON asked Mr. Kirkpatrick if under the changes           
 in this legislation, it appeared they were applying a rule for a              
 law that is applied to other corporations, and if so, what would be           
 the difference between a proxy and a petition.                                
 Number 191                                                                    
 under the way the Alaska Securities Act is currently administered,            
 the only corporations the division has any involvement with, as far           
 as proxy and proxy solicitations, are those ANSCA corporations                
 having over 500 shareholders or $1 million in assets.  Under the              
 FCC rules those would be called "reporting corporations."  He said            
 a large majority of corporations would not fall under either FCC or           
 state purview.  It would be on the bases of private right of                  
 action.  In a small corporation, if you had a problem with                    
 management, directors or if anything was false or misleading, it              
 would fall upon the private right of action to address that.                  
 MR. KIRKPATRICK said Section 3 forward pulls into the Alaska                  
 Securities Act (ASA) the provisions that are generally reserved in            
 the administration of the ASA for white collar crime where somebody           
 is soliciting funds from another, on a disguise of an investment or           
 security definition, it would be false or misleading.  Mr.                    
 Kirkpatrick said the ASA is for the protection of investors.  He              
 informed the committee that he was opposed to Section 3 because it            
 makes the ASA somehow a regulator or an administrator of corporate            
 actions outside the intent to protect investors.  The department              
 attempted to come up with a fiscal note, because Section 3 requires           
 an administrative action.  Most administrative actions are done               
 with consent decrees and through the negotiation of fines and                 
 penalties.  He feels this would require an administrative law judge           
 to decide how this plays in relationship to corporate matters under           
 Title 10.                                                                     
 Number 250                                                                    
 REPRESENTATIVE ELTON asked if HB 251 passed, would those sections             
 also apply to corporations with under 500 shareholders and having             
 assets less than $1 million.                                                  
 Number 251                                                                    
 MR. KIRKPATRICK said his interpretation was that all ANSCA                    
 corporations falling under Section 960 of Title 10, would be                  
 brought into the ASA as far as that section is concerned.                     
 CHAIRMAN KOTT acknowledged that Bobbie Oskolkoff and Mark Kroloff             
 were on teleconference.                                                       
 Number 267                                                                    
 REPRESENTATIVE BRIAN PORTER asked who Section 3 applies to as it              
 currently appears in statute.                                                 
 Number 272                                                                    
 MR. KIRKPATRICK responded broker dealers, registration of                     
 securities, security salesman.  Those fall under the investment               
 provisions.  It also relates to any materiality in relationship to            
 a reporting company, which would be an ANSCA corporation having               
 over 500 shareholder or over $1 million in assets.                            
 Number 282                                                                    
 REPRESENTATIVE PORTER said that by adding 10.07.960(m), in effect             
 would add ANSCA corporations under 500 shareholders.                          
 MR. KIRKPATRICK said this was his interpretation.                             
 Number 287                                                                    
 REPRESENTATIVE BEVERLY MASEK said that under Section 3 (2), it                
 allows the commissioner of the Department of Commerce and Economic            
 Development to issue orders for violations of the proposed special            
 meeting requirements.  She asked if this was true.                            
 Number 300                                                                    
 MR. KIRKPATRICK said this would bring AS 10.07.960(m) within the              
 REPRESENTATIVE MASEK asked if the administrator would be the                  
 commissioner of the Department of Commerce.                                   
 MR. KIRKPATRICK replied that Commissioner William Hensley would be            
 the administrator.                                                            
 Number 303                                                                    
 MS. BANNISTER continued with Section 5.  She said this was a new              
 provision.  This makes it mandatory for the administrator to take             
 actions if the administrator is informed that a person has engage             
 in or is about to engage in a violation.  The violation would be              
 with the new filing provisions under the corporations code in                 
 Sections 139 and 160.                                                         
 Number 316                                                                    
 REPRESENTATIVE MASEK referred to Sections 4 and 5 regarding the               
 enforcement provisions and asked if the notice and hearings would             
 be done by the administrator's order.  She asked if that would be             
 Commissioner Hensley.                                                         
 Number 321                                                                    
 MS. BANNISTER explained that when they say "the administrator," it            
 is basically the Department of Commerce and Economic Development.             
 Number 334                                                                    
 REPRESENTATIVE ELTON asked Ms. Bannister about the language on line           
 25 which says, "a person has engaged or is about to engage in."  He           
 asked if we would have prior restraint problems?                              
 Number 334                                                                    
 MS. BANNISTER replied that as far as she could tell, there wouldn't           
 prior restraint problems regarding the issuance of orders against             
 misleading documents or advertising.  There could be problems with            
 prior restraint when you get into the issuance of injunctions on              
 future violations on all of the filing reforms.                               
 Number 345                                                                    
 REPRESENTATIVE MASEK asked if Section 5 represents a change to the            
 state securities law.                                                         
 Number 349                                                                    
 MS. BANNISTER responded yes.  It's mandatory, the other provisions            
 are discretionary with the department.  She said the provision is             
 tied only to regular or special meetings of ANSCA corporations.               
 Number 353                                                                    
 REPRESENTATIVE JERRY SANDERS asked who informs the administrator              
 that someone is "engaged or is about to engage in a practice that             
 is a violation."                                                              
 MS. BANNISTER replied that it is not clear.  It could be anyone.              
 It hasn't been limited in the wording of this section.                        
 REPRESENTATIVE SANDERS said there could be court cases from this.             
 He asked who informs the department if someone was lying.                     
 MS. BANNISTER said it could be someone on staff, a third person, or           
 someone having good or bad information.                                       
 REPRESENTATIVE SANDERS asked why their word would be better than              
 the other persons.                                                            
 Number 372                                                                    
 MR. KIRKPATRICK interjected that under white collar crime, you                
 usually have to have an informant.  A concerned individual has to             
 come forward and say that there is a possibility that someone has             
 or will be taken.  The department then acts on this information.              
 He said in relationship to ANCSA corporations, as he mentioned the            
 day before, the petitions must be prefiled with the corporation.              
 The corporation then would have information available to them                 
 rather than addressing that information with the person who filed             
 it.  They could inform the administrator that if this was                     
 disseminated, it would be false and misleading.  Under this                   
 provision, the administrator shall take action, issue an order and            
 void any proxies.  The informant would be the public or anyone                
 having information about a possible wrong doing.                              
 Number 393                                                                    
 REPRESENTATIVE SANDERS asked if these actions would be taken                  
 without any investigation.                                                    
 MR. KIRKPATRICK said that was the way he reads it.                            
 Number 395                                                                    
 REPRESENTATIVE ELTON commented that you couldn't look at Section 5            
 without looking at Section 2(m), which requires the filing of the             
 intent to petition as well as all materials used in connection with           
 the solicitation.  Under that provision, most contacts with                   
 administrator might be from the corporation.  Representative Elton            
 said it says "shall" rather than "may," so their is no discretion             
 for the administrator to make an independent judgement of whether             
 or not the materials are accurate.                                            
 Number 408                                                                    
 REPRESENTATIVE NORMAN ROKEBERG asked if there are normal procedures           
 before issuing any orders.                                                    
 Number 412                                                                    
 MR. KIRKPATRICK replied that in all proxy battles there is the                
 charge and counter charge of false and misleading information,                
 which is a subjective area.  They have to focus on materiality, "Is           
 the statement material?"  The court case, which happened to be a              
 Cook Inlet Region, Incorporated (CIRI) court case, Brown V. Ward              
 set up the standards followed for materiality.  It is loosely                 
 defined as those statements made or not made would have an effect             
 on voter's ballots.  Immediate action from the department isn't               
 taken; the department refers the complaint to the person who made             
 the statement and they ask for a response.  He said that it would             
 appear that whoever drafted this was disenchanted by the                      
 department's lack of action when they file complaints and want                
 immediate action.  The immediate action would result in                       
 administrative action rather than a negotiated action which would             
 get into administrative law.  Mr. Kirkpatrick said this occurs on             
 both sides of the proxy battle.  He said the ultimate is that if              
 violations under the ASA are not corrected, they void proxies.                
 Number 457                                                                    
 REPRESENTATIVE PORTER said he has interpreted this to say if the              
 administrator is informed that a person is or has engaged in a                
 violation of one of these three sections, he has to make a                    
 judgement that the person has or hasn't engaged in a violation of             
 those sections.  Then and only then do these other activities come            
 into play.                                                                    
 Number 471                                                                    
 REPRESENTATIVE ELTON noted that he interpreted this to say that if            
 the administrator is informed and if that information is that                 
 someone has or is about to engage in something that violates                  
 REPRESENTATIVE PORTER interjected that it doesn't say he is                   
 informed that "he may have violated," it says "he has violated."              
 REPRESENTATIVE ELTON said the way he reads it is if he went to the            
 administrator and said that, "Shareholder `Y' is violating or is              
 about to engage in a violation of this, then the `shall' kicks in."           
 Number 482                                                                    
 REGION, INCORPORATED, testifying via teleconference from Anchorage.           
 Mr. Kroloff said he read the language as Representative Porter had.           
 He said that probably the "shall" should be changed to "may."  He             
 said he never thought the statute was intended to, or could require           
 the administrator to adopt the view of a complaining party.  This             
 language was designed to encourage the division, having made the              
 determination there was a problem, to act.  The corporation's view            
 is the decision the division would take would be in the best                  
 interest of the thousands who would receive the information.                  
 Number 510                                                                    
 MS. BANNISTER added that if this was in fact the intent, it should            
 be clearly stated.                                                            
 Number 515                                                                    
 REPRESENTATIVE ELTON asked if the 90 day time limit would be                  
 suspended while the division makes their determination.                       
 Number 523                                                                    
 MR. KIRKPATRICK said in his opinion, those are two separate items.            
 He assumed the 90 days would follow through as stated in Title 10.            
 In Title 45, Chapter 55, they would take what ever investigations             
 are required.                                                                 
 REPRESENTATIVE ELTON said, "So the clock would keep going."                   
 MR. KIRKPATRICK said his opinion is that it would keep going.                 
 Number 531                                                                    
 MS. ZURA said the one thing the shareholders have in ANCSA                    
 corporations is the board.  The other thing they have are timber              
 sales.  She said she has no concept of this portion other than its            
 already in Alaska statute.  She explained that one of the                     
 shareholders wrote a statement on some figures because they have to           
 file everything with the division.  She said they were just                   
 guessing on the figures because going to the corporation and asking           
 for information was worse than going through legislation.  When               
 they made a misleading statement on numbers, the shareholder wrote            
 back and asked for corrections, they never responded.  She said               
 they have been following rules and regulations for 25 years and               
 this provision makes no sense.                                                
 Number 555                                                                    
 MS. MANTEI noted the 1968 Indian Civil Rights Act said the Indians            
 were to be treated equally, fair, and with due process.  This                 
 legislation would take it out of due process.  She said she's                 
 worried about the bill, and it seems they are all worlds apart on             
 Number 561                                                                    
 MR. WILSON stated the current provisions for the monitoring of                
 false and misleading statements are working satisfactory.  The                
 purpose of calling special meetings might be for business purposes.           
 However, the corporations never receive the requests objectively.             
 They continually have their attorneys working to find the petitions           
 false and misleading.  If this prohibits an action of the                     
 shareholders for a business purpose and the business fails because            
 the administrator made a decision in favor of the corporation, then           
 who will be liable.  He said he thinks there are some liability               
 issues if the administrator is going to make a decision over a                
 business purpose.                                                             
 Number 578                                                                    
 MS. MANTEI said she had received a document containing                        
 inaccuracies.  The Division of Banking, Securities and Corporations           
 contacted the lady who had distributed the documents and told her             
 to stop.  The lady told them she hadn't written it.  "Larry Carrol            
 told her, `I don't care you're the one that's handing it out.'"               
 She said they do get involved.                                                
 Number 585                                                                    
 MR. WILSON said the provision dealing with the administrator                  
 bringing an action in superior court was too harsh.                           
 Number 592                                                                    
 testifying via teleconference, said the laws are not clear enough.            
 The current laws need to be rewritten as to avoid false and                   
 misleading statements because they would understand what they dare            
 not do.  The Division of Banking, Securities and Corporations can't           
 help because they're not the attorneys for the shareholders.                  
 Number 601                                                                    
 MS. BANNISTER said Section 6 was the criminal penalty provision               
 which adds the provision of willfully violating AS 10.07.960(m).              
 Number 609                                                                    
 REPRESENTATIVE SANDERS commented that if this section applied to              
 the Anchorage Daily News, they'd all be in prison for life.                   
 Number 611                                                                    
 REPRESENTATIVE PORTER asked if it was the chair's intention to go             
 through the bill before they take any action on sections.                     
 CHAIRMAN KOTT said yes.                                                       
 MS. BANNISTER continued that Section 7 provides for new civil                 
 action specific to the regular or special meetings of ANCSA                   
 corporations.  It allows an ANSCA corporation, shareholders or                
 both, to bring an action in court against someone who violates                
 those provisions, if they are related to a special or regular ANCSA           
 corporation meeting.  It would cover damages, void a proxy, etc.              
 Number 619                                                                    
 REPRESENTATIVE ELTON asked if a person means a person or does a               
 person also mean a corporation.                                               
 Number 627                                                                    
 MS. BANNISTER responded, a "person" has a broad meaning, and could            
 mean just about anyone or any entity.                                         
 Number 623                                                                    
 MR. WILSON asked if the person or corporation was prohibited from             
 taking civil action if the provision wasn't added.                            
 MS. BANNISTER replied there isn't a provision giving them the right           
 at this time.                                                                 
 MR. WILSON said they currently have these protections under the               
 law.  The corporation attorneys constantly threaten shareholders...           
 (END OF TAPE)                                                                 
 TAPE 95-39, SIDE B,                                                           
 Number 000                                                                    
 MS. BANNISTER continued, "...holding special meetings because of              
 the definition of proxies.  It has gone beyond what's usually in              
 45.55.  Under 45.55 the department, depending on it's                         
 interpretation of what proxy is, it sounds like it is an expensive            
 one, could bring an action against a person who violates 139 or               
 160."  She said she would have to review other legal remedies in              
 the corporations code to see if they would cover this particular              
 Number 028                                                                    
 CHAIRMAN KOTT asked if a person is innocently distributing a                  
 petition, and did not know about a violation, could he/she be found           
 guilty of a crime.                                                            
 Number 030                                                                    
 MS. BANNISTER replied, in Section 6 it states, "A willful                     
 violation."  She would have to check the definition of "willful" in           
 the criminal section of the code.                                             
 Number 037                                                                    
 MS. MANTEI asked the committee to remember that the Natives are not           
 known for being able to "grab legal counsel" like a corporation               
 does.  Their errors are unintentional and there was a lack of                 
 education.  For instance, how could they expect elders in rural               
 areas to stop a law from taking place when they don't even                    
 understand it.  She asked who is representing those people.                   
 Number 055                                                                    
 MS. ZURA asked what was going to happen with shareholders living              
 out of state who violate this statute.  "Are you going to bring               
 them to Alaska to convict them when they make misleading and                  
 (indisc.) statements?"  HB 251 is making laws regarding ANCSA                 
 shareholders living out of state.  She asked if the state would               
 accept the burden of bringing charges against the out of state                
 Number 075                                                                    
 MS. BANNISTER replied that the state would always have to have                
 jurisdiction over the criminal act and there are limitations.  Just           
 because it says anyone who willfully violates doesn't mean the                
 state has the ability to go after everyone.                                   
 Number 081                                                                    
 MS. ZURA interjected, "This says Alaska Native shareholders."                 
 MS. BANNISTER replied the state still has to have appropriate                 
 criminal jurisdiction.                                                        
 MS. ZURA said she could move to Seattle and "blow them up about               
 their lies."  She asked if they can get away with it down there.              
 MS.  BANNISTER said she wasn't an expert on criminal jurisdiction,            
 but she would think if shareholders limited their activities only             
 to the Seattle area, she isn't sure just how much jurisdiction they           
 would have.  However, if they started contacting people in the                
 state, that might be a different matter.                                      
 Number 092                                                                    
 REPRESENTATIVE ROKEBERG asked Ms. Bannister to explain the last               
 sentence in the section.                                                      
 Number 096                                                                    
 MS. BANNISTER  said derivative action is a different type of action           
 to clarify whether or not they could use the derivative action                
 approach.  Derivative action is when a shareholder feels there is             
 some damage being done to the corporation and the directors aren't            
 taking action on it, and they want to protect the corporation so              
 they go to court and say, "We're suing on behalf of the corporation           
 because it is going to be damaged by someone's actions.  This is              
 instead of suing just for their own interests.                                
 Number 109                                                                    
 REPRESENTATIVE ROKEBERG asked what the citation was.                          
 MS. BANNISTER responded that the citation would govern derivative             
 Number 112                                                                    
 MS. BANNISTER referred to Section 8 and explained that frequently             
 with legislation, there is a lot in definitions.  They don't put              
 real substance into the definitions such as who can do what.                  
 However, by defining what's in covered, you can greatly expand or             
 contract the application of a statute.  On page 5, line 1, (15),              
 the definition of proxy is defined to include a petition related to           
 a special meeting of shareholder under AS 10.06.960(m).  She said             
 45.55 has limitations as to which corporations will be covered.  By           
 adding the definition of proxy, more ANCSA corporations are                   
 Number 143                                                                    
 MS. ZURA asked if this provision was currently in state statute.              
 Number 149                                                                    
 MR. KIRKPATRICK said he wasn't able to answer that question.                  
 REPRESENTATIVE ROKEBERG said the question was, "Are petitions                 
 considered proxies under Alaska statute."                                     
 MS. BANNISTER said there was a real question on whether they are.             
 She thought she'd heard Mr. Kirkpatrick say that the way he                   
 interpreted it they were.                                                     
 Number 156                                                                    
 MR. KIRKPATRICK responded that the division interprets petitions to           
 be a proxy as far as a proxy statement precursors (indisc.).                  
 MS. ZURA said "only the statement."                                           
 MR. KIRKPATRICK said the question was, "Does proxy and petitions              
 occur in Title 10 now."  He didn't know.                                      
 MS. ZURA said she didn't think so.                                            
 MS. BANNISTER said there were regulations about proxies but didn't            
 think there was the definition of proxy included.                             
 REPRESENTATIVE ROKEBERG asked if they were making a distinction               
 with proxy statement.                                                         
 MR. KIRKPATRICK said a "proxy statement" was a general term used by           
 the Security and Exchange Commission that puts forth the reasons              
 why a person would vote for the contents of a proxy.                          
 REPRESENTATIVE ROKEBERG commented that the materiality was in the             
 statement not in the proxy.                                                   
 CHAIRMAN KOTT asked Mr. Kirkpatrick if he had suggestions for the             
 work draft version G.                                                         
 Number 177                                                                    
 REPRESENTATIVE PORTER said Section 3 has a high standard before any           
 fines could be levied.  The concerns about not being able to get              
 the right information and putting something out that is later                 
 determined to be misleading, he believes wouldn't be covered under            
 this sanction.  The individual distributing that information would            
 have to know this was misleading or false.  He said he has concerns           
 about Section 6 that within this context, felony crimes were not              
 appropriate although it is a standard of willfully.                           
 REPRESENTATIVE PORTER suggested that Amendment 1 be the deletion of           
 Section 6 from the bill, page 4, line 7 through 19.                           
 Number 200                                                                    
 CHAIRMAN KOTT asked if there was and objection.  Hearing none,                
 Amendment 1 was adopted.  Chairman Kott said the remaining section            
 should be renumbered.                                                         
 Number 207                                                                    
 REPRESENTATIVE ELTON agreed with Representative Porter on Section             
 3, concerning the civil sanctions.  However, he wasn't comfortable            
 with the Division of Banking, Securities and Corporation's comments           
 which adds a new subset to the corporations code.  That being                 
 Native corporations of 500 or less or with assets less than $1                
 million.  His second concern with Section 3 was that it makes the             
 Securities Act apply to people outside of investors.                          
 Number 227                                                                    
 MS. BANNISTER wished to clarify her definition of proxy.  She said            
 except with the provision of (e) in Section 5, it expands the                 
 definition of proxy for the corporation that are covered by 139 and           
 Number 237                                                                    
 MR. KIRKPATRICK referred to Section 2 and said there were three               
 things that may be viewed by some as inappropriate actions by                 
 shareholders.  It requires that any petition have one quarter of              
 all shares within a 90 day time period.  It continues to say that             
 in any event, the action created by that shall not remove directors           
 unless the removal is for cause.  In the final part of subsection             
 (o) it states the shareholders can't repeat this for two years.               
 MR. KIRKPATRICK recommended that in Section 2, subsection (l) be              
 amended for those corporations having over 500 shareholders.  They            
 should be required to have 15 percent of shareholders which would             
 increase it from the present 10 percent.  For those corporations              
 under 500 shareholders, because of the geographical locations and             
 closeness of family, would remain at 25 percent.  Under subsection            
 (n), the filing requirement for those shareholders who do not                 
 presently file with the Department of Commerce, or those under 500            
 shareholders, notify the corporation that a petition exists.                  
 Rather than saddle them with 90 days, he would change this from 120           
 to 160 days.                                                                  
 Number 303                                                                    
 REPRESENTATIVE PORTER asked if he was suggesting it be something              
 between 120 and 160 or should it be specifically written that way.            
 Number 306                                                                    
 MR. KIRKPATRICK answered, "Specifically written 120."                         
 Number 307                                                                    
 REPRESENTATIVE ELTON asked what are the public notice requirements            
 for a special shareholder's meeting.                                          
 MR. KIRKPATRICK said they would file with the corporation that a              
 petition effort has started.  He said his proposal is that they               
 would have 120 days to complete that process.  After this process,            
 if it is successful, the corporation is required to post a special            
 meeting which cannot be less than 20 days or more than 60 days.               
 Number 320                                                                    
 REPRESENTATIVE ELTON said if the petition drive didn't begin until            
 six months prior to a required annual meeting, it wouldn't make               
 sense to even allow a petition.                                               
 Number 324                                                                    
 MR. KIRKPATRICK responded it wasn't uncommon to have a special                
 meeting in conjunction with an annual meeting.                                
 REPRESENTATIVE ELTON observed that it would add an issue to the               
 MR. KIRKPATRICK continued with subsection (n) on page 3.  The                 
 removal of the board of directors should be for cause.  He                    
 suggested that cause for the removal of the board would have to be            
 stated.  There are annual elections for board of directors.  Mr.              
 Kirkpatrick referred to subsection (o) and said he would suggest              
 wording to say annually or preceding 2 years.  This would allow               
 agendas or resolutions to be set at the annual meeting.  He                   
 suggested that Sections 3, 4, 5, 6, etc., be deleted.                         
 Number 374                                                                    
 REPRESENTATIVE ROKEBERG asked if he suggested a change in Section             
 2, subsection (n).                                                            
 MR. KIRKPATRICK said no.                                                      
 REPRESENTATIVE ROKEBERG commented they were leaving it alone                  
 because they would have to have cause.  He asked if subsection (o)            
 was being changed to one year.                                                
 MR. KIRKPATRICK said once a year.                                             
 Number 374                                                                    
 CHAIRMAN KOTT asked if he suggested deletion of Section 3 through             
 MR. KIRKPATRICK replied all remaining sections, 3 through 8.                  
 Number 386                                                                    
 CHAIRMAN KOTT noted they had already deleted Section 6 and                    
 renumbered Section 7 to Section 6; and Section 8 to Section 7.                
 Number 386                                                                    
 REPRESENTATIVE PORTER asked if he was suggesting deleting the                 
 definition section also.                                                      
 Number 388                                                                    
 MR. KIRKPATRICK said he would have no problem with leaving the                
 definition section in.  It may assist the department as far as                
 judicial actions.                                                             
 Number 395                                                                    
 CHAIRMAN KOTT restated Mr. Kirkpatrick's recommendation to delete             
 Sections 3, 4, 5 and 6 as amended.  The old section 6 is gone, the            
 old section 7 is now 6, the old Section 8 is now 7.                           
 MR. KIRKPATRICK amended his recommendation to leave the new Section           
 7 in.                                                                         
 Number 402                                                                    
 CHAIRMAN KOTT said Sections 3 and 4 on page 3, line 10 through 31.            
 Page 4, line 1 through 28.                                                    
 Number 401                                                                    
 REPRESENTATIVE ELTON referring to (n) in Section 2, asked if there            
 was a definition of "cause" elsewhere; or would they be better off            
 defining it in this bill.                                                     
 Number 411                                                                    
 MR. KIRKPATRICK commented there was a large body of law, as far as            
 corporate law is concerned, that would assist in determining that.            
 Number 414                                                                    
 MS. MANTEI said subsection (m) on line 30 should be amended to read           
 "12 months" due to hardships the present group is going through.              
 She said 120 or 160 days was not sufficient.  Trying to get someone           
 elected was next to impossible.  She said her cousin was paid to go           
 out and get discretionary votes.  She passed the committee an                 
 article from the Juneau Empire regarding the recall of Goldbelt.              
 She said removal of the board, with cause, should not be changed as           
 it may not match your corporate causes.  Land and money for Indians           
 was promised them from the ANCSA.  She said there is hardly any               
 Natives in Southeast Alaska that have land from the Alaska Native             
 Claims Act Settlement.  There are bills being introduced for Native           
 rights for subsistence.  She said she believes part of the ANCSA              
 lands were to go to the Native way of life and subsistence.  How do           
 you write that into corporate law?  She referred to the two year              
 provision and asked what if they are selling our land.  She said              
 that corporation every right to sell the land without the                     
 shareholder's permission and the shareholders file a petition that            
 they find it arbitrary or capricious.  They have to wait two years            
 in which time the land will be gone.                                          
 Number 451                                                                    
 REPRESENTATIVE ROKEBERG referred to page 2, subsection (m), and               
 said in terms of the time, Mr. Kirkpatrick was talking about the              
 120 days.  He said he drew a distinction between the over 500 and             
 the under 500.  He asked if a distinction should be made.                     
 MR. KIRKPATRICK said not in the 120 days.  He referred to                     
 subsection (m) and said as far as any reporting requirement on line           
 25 it says, "shall be filed with the corporation."  He said he                
 feels it might be appropriate for those collecting petitions to               
 notify the corporation that the process has been (indisc.)  He said           
 he doesn't know if it would be appropriate for them to try and file           
 all the materials involved with that.  Mr. Kirkpatrick said he                
 previously commented that corporations over 500 shareholders                  
 already file that with the department.  He said he is recommending            
 that the filing be noticed with the corporation in that a petition            
 effort has been started.                                                      
 REPRESENTATIVE ROKEBERG it should also be filed with the Division             
 of Banking, Securities and Corporations.                                      
 MR. KIRKPATRICK said if the corporation has 500 shareholders or               
 more, they currently file the documentation with the Division of              
 Banking, Securities and Corporations.  It would be a double filing.           
 He referred to those corporations with over 500 shareholders and              
 suggested a petition would have to be noticed with the corporation            
 but only filed with the department if there are over 500                      
 Number 482                                                                    
 REPRESENTATIVE ROKEBERG said you'd strike "file" and put "notice"             
 there if they are over 500 shareholders.                                      
 REPRESENTATIVE ELTON said we are getting beyond concept and into              
 issues.  Because of that, it may be easier for the committee to               
 make the final decisions on these issues if there is a committee              
 substitute (CS) that incorporates the concepts discussed by Mr.               
 Kirkpatrick.  The committee should make sure a copy of that                   
 committee substitute goes to other people who may be interested.              
 The committee could then work directly from something.  He said he            
 believes it would be easier for the committee to react from                   
 something on paper and consider changes to that.                              
 CHAIRMAN KOTT agreed and said that is what he believes                        
 Representative Rokeberg was trying to get at.                                 
 Number 494                                                                    
 MS. ZURA said she would like to clarify something.  She said, "You            
 guys are asking the Banking and Securities for high                           
 recommendations, and here is three of the shareholders here that              
 have the same right as recommendations.  And if you're going to               
 take his word solely, then what was the whole point of us sitting             
 here -- Because our recommendations are really tough too."                    
 REPRESENTATIVE ELTON said that is why he was sure to mention that             
 a copy of the committee substitute go to the bill sponsor and to              
 the people who participated.                                                  
 MS. ZURA said, "But I'm still saying you made recommendations here            
 and yet you wouldn't let us have a say so into these                          
 recommendations too."                                                         
 CHAIRMAN KOTT said, "That's not really correct.  All we're doing is           
 hearing recommendations by the department.  We've also written down           
 your comments as well."                                                       
 MS. ZURA said, "Right, is that policies that follow line of any of            
 the Alaska bills, is that you bring Banking and Securities here               
 every time when there is a change, and have them do the                       
 recommendations for you?"                                                     
 CHAIRMAN KOTT said, "We definitely bring in the department and ask            
 their recommendations.  This is totally unusual to have members               
 from the public make recommendations.  I will tell you that.                  
 Generally, the public is sitting over there.  There is no comment.            
 But we are considering all the recommendations - every comment that           
 has been brought forward.  We will incorporate those based on a               
 final analysis of which direction we should take."                            
 Number 519                                                                    
 REPRESENTATIVE PORTER said he thinks there has been an abundance of           
 recommendations made throughout the bill.  He said he would be a              
 little hesitant to incorporate all of the recommendations into a CS           
 at this point because some are reasonable and some are not.                   
 Representative Porter said he would like to hear from people                  
 representing management on the recommendations and would also like            
 to hear from the shareholders.  Then if the committee thinks there            
 is enough substance to any of the recommendations to proceed, they            
 may want to deal with them section by section.  He said he would              
 resist a total CS at this stage.                                              
 MS. ZURA said, "The reason why I say that, Mr. Chairman I'm sorry,            
 was because here again the Banking and Securities divided our                 
 people up again over the 500 above and 500 below as far as                    
 recommendations.  There we go again, there is another division of             
 how we're getting treated."                                                   
 REPRESENTATIVE ROKEBERG commented, "As Mr. Kott said here, you've             
 been invited here and it is a very unusual thing.  We're trying to            
 work through this stuff.  If you'd try to follow procedure a little           
 more, I think we'd all appreciate it because you're really talking            
 out of order.  And it's kind of disruptive but we want to hear you,           
 don't misunderstand.  What we're trying to do is go through this              
 process in a timely fashion.  Please don't take offense of                    
 (indisc.), but we're trying to get -- move along here and reach               
 REPRESENTATIVE ROKEBERG said he agrees with Representative Porter.            
 He said he doesn't think the committee is ready for a CS as they              
 haven't heard enough input from everybody else to start a with                
 another draft.                                                                
 Number 534                                                                    
 REPRESENTATIVE ELTON said he understands the positions of both                
 previous speakers, but if the committee is going to come to a                 
 closure on this process, we need to get beyond the concept stage so           
 that corporate management and shareholders can review and make                
 recommendations.  If this is kept off of paper, it will make the              
 dialogue go back and forth between what is good and bad.                      
 REPRESENTATIVE PORTER said the suggestion was to eliminate half of            
 the bill and they won't have something to look at if half of the              
 bill is gone.                                                                 
 REPRESENTATIVE ROKEBERG suggested Mr. Kirkpatrick present written             
 Number 548                                                                    
 CHAIRMAN KOTT referred to Section 1 of the bill and said as he                
 recalls there were no major problems.  He asked if there were any             
 problems with Section 1.                                                      
 Number 550                                                                    
 MS. MANTEI said, "My only problem is that it incorporates that                
 section (l) into it.  Section 1 (1) that the presence of that                 
 section (l) that seems to be at an impasse.  That's my problem with           
 the presence of that in there.  It's not totally clean, it's not              
 totally just sighting it word for word - the Alaska Statute."                 
 REPRESENTATIVE ROKEBERG said the reason it is there is it is the              
 only change from law.                                                         
 CHAIRMAN KOTT referred to Section 2 and said the major changes seem           
 to deal with corporations above and below 500 shareholders.                   
 Corporations over 500 require 15 percent of the shareholders to               
 sign a petition.  For corporations under 500, it would be 25                  
 percent.  He said he believes that was based on those shareholders            
 being confined to a small areas or village, it would be a lot                 
 easier to acquire those signatures.                                           
 REPRESENTATIVE MASEK referred to the title, "An Act relating to the           
 meetings, shareholder proposals, and removal of directors of Native           
 corporations," and said there are two different types of Native               
 corporations.  There is regional and village.  She said she                   
 believes the amendment is going overboard as it deals with the                
 regional corporations.  Representative Masek said nowhere in the              
 bill does it talk about village corporations.  She noted there are            
 12 regional corporations and there are the village corporations               
 that go under the regional corporations.  The bill seems to relate            
 to the regional corporations.  She said doesn't believe the                   
 amendment falls into the intent of the bill.  Representative Masek            
 said she objects.                                                             
 REPRESENTATIVE ROKEBERG asked Representative Masek if she is                  
 referring to the conceptual amendment.  REPRESENTATIVE MASEK                  
 indicated she was.  REPRESENTATIVE ROKEBERG said he would support             
 the amendment if the committee could qualify it by saying, "The               
 number of people that voted in the last election as a base line."             
 REPRESENTATIVE MASEK said she thinks it is getting way out of                 
 order.  We are talking about regional corporations.  She asked if             
 that could be clarified.                                                      
 REPRESENTATIVE ELTON said his understanding from the beginning was            
 that it covered all of them.  It covered Goldbelt, for example,               
 which is a sub regional corporation as well as Sealaska.  He said             
 he thinks that was the intent of the sponsor.  Representative Elton           
 said his understanding was that the clarification was based on what           
 the department now does.                                                      
 REPRESENTATIVE MASEK asked if the sponsor was in attendance.                  
 Number 598                                                                    
 TIM BENINTENDI, Legislative Assistant to Representative Carl Moses,           
 indicated he was in attendance on behalf of Representative Moses.             
 He asked Representative Masek to repeat the question.                         
 REPRESENTATIVE MASEK referred to the title of the bill and asked              
 for a clarification.  She said nowhere in the bill does it discuss            
 regional corporations or village corporations.  Based on the                  
 proposed amendments by Mr. Kirkpatrick, he is summarizing it to the           
 village and regional levels.  She said she has a real problem with            
 it as it isn't stated in the bill.                                            
 MR. BENINTENDI said the provisions of the bill were meant to apply            
 to all corporations regardless of locality.                                   
 REPRESENTATIVE MASEK said a problem she has is with the regional              
 corporations is it is very hard to go out and gather the required             
 number of votes.  She said she doesn't believe that increasing the            
 numbers will do any good for anybody.                                         
 CHAIRMAN KOTT referred to regional corporations and asked if there            
 are more than 500 members.                                                    
 REPRESENTATIVE MASEK said there are more.  The regional                       
 corporations serve all the villages below them.                               
 CHAIRMAN KOTT said as he understands under the current provisions             
 of the bill, the regional corporations would be required to have 10           
 percent.  The suggestion is to increase the number to 15 percent.             
 He asked Representative Masek if her recommendation is to retain it           
 at 10 percent.  REPRESENTATIVE MASEK said yes, only because                   
 geographically it is really hard for the people to do anything.               
 They don't have the background or financing to put forth their                
 opinions on what they would like to see done.  She said she has               
 experienced it and understands it very well.                                  
 REPRESENTATIVE ROKEBERG said he is suggesting an amendment to the             
 amendment to use a baseline of the number of voters in the prior              
 annual election.  Therefore, it would lower the operative                     
 percentage slightly to the favor of the shareholders.  He said he             
 thinks the recommendation of Mr. Kirkpatrick is a compromise that             
 goes a long ways towards the position of the shareholders.                    
 Number 628                                                                    
 CHAIRMAN KOTT asked if he was suggesting that the figure be 15                
 percent of the shareholders that participated in the previous                 
 annual election.  REPRESENTATIVE ROKEBERG said yes.                           
 TAPE 95-40, SIDE A                                                            
 Number 000                                                                    
 MR. WILSON said he thinks that would be a fair compromise.  He                
 referred to whatever percentage was used such as 10 percent or 15             
 percent and asked if it would be applied to the shareholders that             
 voted in that previous election.  He said before you have a valid             
 meeting, a quorum has to be established.  If you don't have a                 
 quorum, there would be no meeting unless a quorum were present.               
 Every meeting that is called to order has to have 50 percent plus             
 1 of all the outstanding shares.  In most instances, the percentage           
 could run anywhere from 52 percent to what it currently runs which            
 is about 70 percent.  You'd apply the 25 percent to those that                
 voted in the last election.                                                   
 CHAIRMAN KOTT said this would include the people voting by proxy.             
 Number 033                                                                    
 REPRESENTATIVE ELTON said the committee needs more data.  He said             
 if there is a corporation of 10,000 shareholder and we say, "O.K.,            
 were going to compromise at 15 percent."  Under that scenario,                
 you'd need 1,500 signatures for the petition to be valid.  He said,           
 "Lets say that this corporation's last annual meeting had 60                  
 percent turnout or 6,000 people.  So now we incorporate                       
 Representative Rokeberg's amendment and it is 15 percent of 6,000.            
 All of a sudden you need 900 signatures which is less than you                
 needed under the old 10 percent deal."  He said things are                    
 complicated.  It would be different from year to year and from                
 corporation to corporation.                                                   
 CHAIRMAN KOTT said this is complicating.  It is going to vary from            
 corporation to corporation and it may be hard to determine the                
 Number 059                                                                    
 REPRESENTATIVE ROKEBERG suggested using the 25 percent figure for             
 both under and over 500 because of the prior election.  It would,             
 as a practical matter, balance itself.  He said what he is hearing            
 is there is a feeling that there may be some difficulty in                    
 verifying the exact number.  He asked Mr. Kirkpatrick if his agency           
 has knowledge of the (indisc.--coughing) votes.                               
 MR. KIRKPATRICK said as a practice, they don't maintain records of            
 the votes, but as a practical proceeding, the election judge                  
 informs the agency as to what is going on in an election for those            
 corporations of over 500 shareholders.                                        
 CHAIRMAN KOTT said for the corporations of less than 500, we don't            
 know the numbers.  Those numbers would be a moving target.                    
 Number 081                                                                    
 REPRESENTATIVE MASEK informed the committee that the Doyon                    
 Corporation, which she belongs to, is holding their annual                    
 election.  They offer door prizes to people as an incentive to                
 attend the meeting.  She referred to proxies and said it is really            
 a complex issue if you can't read and understand them and the                 
 measures of how to go about voting.  Representative Masek said she            
 doesn't know what the turn out will be at the meeting.  For about             
 ten years, the majority of the members that serve on the board have           
 been on the board.  They have never been voted out.  She said at              
 one time she was a candidate and wasn't chosen under the management           
 slate to go on the executive board's nominee list.  It is really a            
 difficult process and if we're going to continue with                         
 recommendations, there is a need to gather more data to understand            
 the process better.  She suggested reviewing previous elections.              
 Number 115                                                                    
 MS. MANTEI informed the committee Sealaska had 9,500 people who               
 voted at the last meeting out of 15,700.                                      
 Number 121                                                                    
 REPRESENTATIVE ROKEBERG moved to adopt the conceptual amendment,              
 Amendment 1, as proposed by Chairman Kott.                                    
 CHAIRMAN KOTT noted Amendment 1 has already been adopted.  He                 
 offered Amendment 2.  He said he doesn't particularly care for the            
 percentage.  He said he would entertain the notion of the                     
 corporations which have 500 shareholders and above to have 10                 
 percent of the signatures, and corporations that have 499                     
 shareholder and below to be at 25 percent.                                    
 Number 130                                                                    
 REPRESENTATIVE ROKEBERG said he will vote against the amendment.              
 He said he thinks the number should be 15 percent.                            
 CHAIRMAN KOTT moved Amendment 2.                                              
 REPRESENTATIVE MASEK objected.                                                
 Number 183                                                                    
 CHAIRMAN KOTT asked Mr. Kroloff if he heard the proposed amendment            
 and continued to explain it to him.                                           
 Number 178                                                                    
 MR. KROLOFF said he would oppose that amendment because it doesn't            
 address (indisc.) legislation was design to solve (indisc.)  Most             
 of the corporation (indisc.) amendment are corporations in support            
 of the legislation and are corporations with more than 500                    
 shareholders.  He said the right number should be 25 percent or at            
 least the 10 percent number should be increased.                              
 CHAIRMAN KOTT said later in the meeting he will also address the              
 time frame that will be used to collect those signatures.                     
 Number 209                                                                    
 MR. BENINTENDI said initially the bill called for 25 percent for              
 the corporations with 500 shareholders or more.  Representative               
 Moses is prepared to modify the percentage to 20 percent for                  
 corporations of 500 or more shareholders.  Mr. Benintendi said                
 Representative Moses agrees with the 25 percent (indisc.) for 499             
 shareholders or less.                                                         
 REPRESENTATIVE MASEK said she still objects to the motion.  She               
 said she will support the 10 percent figure.                                  
 CHAIRMAN KOTT said the motion he made was to retain 10 percent for            
 corporations with 500 shareholders and above.  For corporations               
 with 499 shareholders and below, it would increase to 25 percent.             
 He said that is Amendment 2.                                                  
 CHAIRMAN KOTT said there is objection by Representative Masek and             
 asked the committee secretary to call the roll.                               
 REPRESENTATIVE MASEK asked Chairman Kott to review the amendment              
 one more time for the record.                                                 
 CHAIRMAN KOTT said, "For the record, Amendment Number 2 requires              
 corporations 500 and above, to the number of shareholders, it would           
 be required to have 10 percent for their petition.  Corporations              
 400 or -- less than 500 - 499 or below or less would require 25               
 percent of the shareholders to sign the petition."                            
 REPRESENTATIVE SANDERS said his understanding of the reason for               
 this is that in the larger corporations, the 10 percent is fine.              
 In some of the smaller corporations, they're a lot closer to home,            
 they're usually in a village and it is a lot easier to get the 25             
 percent.  He said he supports the amendment.                                  
 Number 250                                                                    
 A roll call vote was taken.  Voting in favor of Amendment 2 were              
 Representatives Sanders, Masek and Kott.  Voting against Amendment            
 2 was Representative Porter.  Amendment 2 was adopted.                        
 REPRESENTATIVE KOTT referred to page 2, line 30, which discusses              
 the number of days and said in the existing CS it is 90 days.  He             
 asked if there was discussion.                                                
 Number 276                                                                    
 REPRESENTATIVE MASEK asked what the deadline was before the bill              
 was introduced.                                                               
 MR. KIRKPATRICK indicated that there wasn't a deadline.                       
 Number 289                                                                    
 CHAIRMAN KOTT referred to page 3, line 9, subsection (o), which               
 says, "A corporation that is organized under the 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."  He asked if there              
 was discussion.                                                               
 CHAIRMAN KOTT referred to the testimony by Mr. Kirkpatrick and said           
 he would move that the "two years" be changed to "one year."                  
 REPRESENTATIVE PORTER asked Mr. Kirkpatrick if there was an issue             
 that had been taken through the petition process but was obviously            
 not adopted, would the language in the bill preclude that from                
 coming up at the next annual meeting in addition to two years by              
 special petition.  He asked if it precludes another special                   
 petition within two years.                                                    
 MR. KIRKPATRICK said he believes that management could bring up any           
 subject that they wanted to at any annual meeting, which may                  
 address something that was being petitioned.  He noted as he reads            
 the bill, it would prohibit a shareholder proposal that was                   
 submitted only be submitted every other year.                                 
 Number 342                                                                    
 CHAIRMAN KOTT said the amendment was the recommendation of the                
 department.  He said it would be Amendment 3 and it reduces the               
 time span from two years to one year within the previous year.  He            
 again noted it was on page 3, line 9.  He asked if there was an               
 objection to Amendment 3.  Hearing none, the amendment was adopted.           
 Number 345                                                                    
 REPRESENTATIVE MASEK asked to discuss Section 2(m).  She said it is           
 her understanding that the section establishes special requirements           
 for shareholders to request special shareholder meetings.                     
 Currently, there is no counterpart for these requirements in the              
 for profit corporation code under AS 10.06.  She said she would               
 like to make a motion to delete Section 2(m), on page 2, line 22.             
 CHAIRMAN KOTT said there is a motion, which is a conceptual                   
 amendment, to delete page 2, line 22 through page 3, line 1.  He              
 said he would object.  Chairman Kott asked Mr. Kirkpatrick what the           
 impact would be if the section is eliminated.                                 
 MR. KIRKPATRICK said as he reads (m), it is a new section and                 
 without it would be status quo, as it is today, in collecting                 
 petitions with the exception of (l) which has been adopted.                   
 MS. BANNISTER confirmed Mr. Kirkpatrick's comment.  she said it               
 would be status quo for the procedures.                                       
 Number 385                                                                    
 REPRESENTATIVE MASEK said she would like to put forth an amendment            
 that the 90 day filing should be decreased to 35 days after the               
 filing.  It is on page 2, line 30, under Section 2(n).  CHAIRMAN              
 KOTT said he doesn't really think Representative Masek would want             
 to do that.                                                                   
 REPRESENTATIVE MASEK said she was worried about the wording,                  
 "...this section shall be filed with the corporation before a                 
 person solicits support for the petition or request."  She inquired           
 if the person currently has to file with the corporation.                     
 REPRESENTATIVE SANDERS asked if the was a motion to eliminate (m).            
 There was a response from an unidentified speaker that there was a            
 motion to eliminate (m).  Representative Sanders said if the                  
 committee deals with that motion, then the committee wouldn't have            
 to deal with the 90 days.                                                     
 Number 398                                                                    
 CHAIRMAN KOTT said there is a motion to delete subsection (m) and             
 he said he would object.                                                      
 A roll call vote was taken.  Representatives Sanders and Masek                
 voted in favor of Amendment 4.  Representative Kott and Porter                
 voted against the amendment.  Amendment 4 failed.                             
 Number 414                                                                    
 REPRESENTATIVE MASEK said she would like to put forth another                 
 amendment which would increase the 90 days to 130 days on page 2,             
 line 30.                                                                      
 CHAIRMAN KOTT asked if there was an objection to Amendment 5.  He             
 then objected.  He said he thinks that since the percentage has               
 been retained at a reasonable number in Section 2, to counter and             
 to offer some balance, the 90 day period is probably sufficient               
 base time.                                                                    
 REPRESENTATIVE MASEK said prior to the bill being introduced, there           
 wasn't a deadline.  She said she believes it would be in the best             
 interest to put it at 130 and maybe even increase it to 150.                  
 CHAIRMAN KOTT said there has been testimony that if the people are            
 earnest and willing to get out and collect petitions, they can do             
 it in a very short period of time.                                            
 REPRESENTATIVE SANDERS said in some of the corporations, the                  
 villages are widely scattered.  It is hard to get to these people             
 and some of them don't read English.  Some of them don't understand           
 the legalese in some of the petitions.  They have to contact people           
 to interpret it for them.  He said he wouldn't have a problem with            
 giving a little more time.                                                    
 REPRESENTATIVE MASEK noted that a lot of people may be out fishing,           
 hunting, etc.  Raising the amount of time would give the                      
 shareholders adequate time to talk about the issue.                           
 Number 450                                                                    
 REPRESENTATIVE PORTER said "I believe not raising the level for               
 major corporations is a significant hinderance to the intent of the           
 bill in the first place, and I would agree that the 90 day period             
 is three months and we don't have any seasons that go that long.              
 So I think somebody is going to be available during that period of            
 time.  The period is from the date of the filing and if there is an           
 organized petition drive desired within a major corporation, I                
 think that you can be pretty well geared up and have your petitions           
 ready to go and file and mail to all the villages that you need to            
 mail to and have the person lined up to receive and offer it.  So             
 I would agree that in the spirit of balance, if we're going to                
 leave it at 10 percent, the 90 days is appropriate."                          
 Number 460                                                                    
 A roll call vote was taken.  Representative Sanders and Masek voted           
 in favor of the amendment  Representatives Porter and Kott voted              
 against the amendment.  So Amendment 5 failed.                                
 CHAIRMAN KOTT asked if there were additional amendments.                      
 REPRESENTATIVE MASEK asked for an at ease.  CHAIRMAN KOTT called an           
 at ease.                                                                      
 CHAIRMAN KOTT called the committee meeting back to order for the              
 purpose of adjournment.                                                       
 CHAIRMAN KOTT adjourned the meeting at 5:40 p.m.                              

Document Name Date/Time Subjects