Legislature(1995 - 1996)
03/29/1995 03:10 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= 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.
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