HB 57-ENTITY TRANSACTIONS ACT  2:11:14 PM CHAIR KELLER announced that the next order of business would be HOUSE BILL NO. 57, "An Act adopting the Alaska Entity Transactions Act; relating to changing the form of entities, including corporations, partnerships, limited liability companies, business trusts, and other organizations; amending Rule 79, Alaska Rules of Civil Procedure, and Rules 602(b)(2), 602(c), and 605.5, Alaska Rules of Appellate Procedure; and providing for an effective date." [Before the committee is proposed committee substitute (CS) labeled 28-LS0255\O, Kirsch/Bannister, 3/12/13, adopted 3/13/13.] 2:11:54 PM JAMES R. WALDO, Staff, Representative Lindsey Holmes, Alaska State Legislature, reminded the committee that HB 57 implements the Model Entity Transaction Act (META) in Alaska statute, which means that it provides an avenue for the various corporate entities within the state to interact with other entities of a different variety. This ability for various entities to communicate on a level and uniform playing field will be advantageous for businesses in the state and will facilitate commerce. He then directed attention to an amendment labeled 28-LS0255\O.1, Bannister, 4/5/13, which would remove from Section 30 of CSHB 57, Version O, the repeal of AS 06.260.670 and thus AS 06.26.670 would remain in existing law. This statute, AS 06.26.670, deals with trust companies. The impetus for the amendment, he related, was from Dan Branch, Senior Assistant Attorney General, Commercial and Fair Business Practices Section, Civil Division (Juneau), DOL. Mr. Branch found that if CSSB 56(JUD) was to repeal AS 06.26.670, it would limit dissenters' rights within trust companies that engaged in a conversion. Dissenters' rights are the right of folks with an interest in a company/entity to have an easy way out if they are unhappy with a conversion, merger, or form of transaction with which the company/entity is engaged. Effectively, dissenters' rights means that folks can be quickly bought out of the company/entity if it engages in a transaction from which they want to dissent. He related that leaving AS 06.26.670 in law will preserve dissenters' rights for trust companies and won't impair any other mechanism in the legislation. 2:15:45 PM REPRESENTATIVE GRUENBERG characterized the aforementioned as a good amendment that he would offer at the appropriate time. He then asked whether the legislation includes any other statute similar to AS 06.26.670. MR. WALDO directed attention to the proposed new section, the Alaska Entity Transactions Act, AS 10.55, which would apply to almost every form of entity in the state. However, page 5, line 26 through page 6, line 7, specifies a number entities that are excluded from participating in the act. That list of entities includes financial institutions as defined in Title 6, which includes trust companies. Therefore, trust companies are exempt from participating in the new act. Any entities not exempt from participating in the new act are afforded dissenters' rights, according to AS 10.55. With regard to the entities that can't participate in the act, he related his understanding that the only statute repealed in Section 30 that applies to an excluded entity is AS 06.26.670; the others are in AS 10.06.1050 or Title 32, which would be partnerships, limited partnerships, corporations, and limited liability companies (LLC). All of the aforementioned will be able to participate under the new act, and thus won't be excluded and will have dissenters' rights according to the new act. In further response to Representative Gruenberg, Mr. Waldo confirmed that the sponsor is very satisfied with the legislation and believes the amendment will improve it significantly. CHAIR KELLER, after determining no one else wished to testify, closed public testimony. 2:19:48 PM GRANT CALLOW, Attorney, Law Offices of Wm. Grant Callow; Member, Alaska Delegation of the Uniform Law Commission, National Conference of Commissioners on Uniform State Law (NCCUSL), in response to Representative Gruenberg, characterized the legislation as good and to his understanding the amendments make sense. Therefore, he opined that the legislation and the amendments will be of value to Alaska. 2:21:03 PM REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 1, labeled 28-LS0255\O.1, Bannister, 4/5/13, which read: Page 1, line 7, through page 2, line 1: Delete all material. Page 2, line 2: Delete "Sec. 2" Insert "Section 1" Renumber the following bill sections accordingly. Page 49, line 16: Delete "AS 06.26.670;" Page 49, line 20: Delete "sec. 11" Insert "sec. 10" Page 49, line 24: Delete "sec. 11" Insert "sec. 10" Page 49, line 27: Delete "sec. 11" Insert "sec. 10" Page 49, line 31: Delete "sec. 11" Insert "sec. 10" Page 50, line 13: Delete "Section 32" Insert "Section 31" Page 50, line 14: Delete "sec. 34" Insert "sec. 33" There being no objection, Amendment 1 was adopted. 2:21:54 PM REPRESENTATIVE LYNN moved to report CSHB 57, Version 28- LS0255\O.1, Bannister, 4/5/13, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 57(JUD) was reported from the House Judiciary Standing Committee.