HB 57-ENTITY TRANSACTIONS ACT  10:02:11 AM CHAIR COGHILL announced the consideration of HB 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." [CSHB 57(JUD) was before the committee.] 10:02:39 AM REPRESENTATIVE LINDSAY HOLMES, sponsor of HB 57, introduced the bill speaking to the following sponsor statement: House Bill 57 conforms to the Uniform Law Commissioners' Model Entity Transaction Act (META). If implemented in the State of Alaska, this legislation will help facilitate transactions between more than one form of entity, improve the existing business climate in Alaska, and help reduce unnecessary administrative and legal burdens currently imposed on Alaska companies. During the past twenty years many new types of business entities - including limited liability companies, limited liability partnerships, and limited liability limited partnerships - have been recognized under state law. As a result of the proliferation of new entity forms, many businesses now utilize various types of entities in their organizational structures. The relaxation of federal tax rules governing entity classification has led to an increase in the volume of restructuring and acquisition transactions by and among the various types of entity forms. Because of the lack of clear statutory authority allowing transactions between more than one form of entity, these transactions have often required the use of multiple indirect steps, as opposed to a single transaction. House Bill 57 will offer new statutory authority to permit cross-entity transactions in order to remain responsive to the needs of Alaskan companies and should be enacted in order to allow Alaska businesses the opportunity to engage in cross-entity transactions. Adopting HB 57 will be an important step towards bringing Alaska more into the mainstream of statutory business law REPRESENTATIVE HOLMES noted that a letter in the packets from Doyon Corporation speaks to how this will help Native corporations. The bill basically makes it easier for different business entities to communicate, do business, and merge. It is based on model law. 10:06:54 AM HARRY HAYNSWORTH, Commissioner, National Conference of Commissioners on Uniform State Laws, stated that he was chair of the drafting committee for the Model Entity Transactions Act. He said the sponsor provided an excellent summary and why this is particularly important for states like Alaska that have an incomplete statutory framework. He offered to respond to questions on amendments that might be proposed. 10:08:25 AM JAMES WALDO, Staff, Representative Lindsay Holmes, sponsor of HB 57, clarified that Mr. Haynsworth was referring to some technical amendments that were proposed in the House Judiciary Committee at the behest of Department of Commerce, Community and Economic Development (DCCED). 10:08:56 AM At ease 10:13:16 AM CHAIR COGHILL reconvened the meeting and explained that the off- the-record discussion related to when the bill would reach the floor. He recognized that there were some concerns with the bill but that he was satisfied. He solicited a motion. 10:13:46 AM SENATOR MCGUIRE moved to report CS for HB 57, version Y, from committee with individual recommendations and attached zero fiscal note(s). 10:14:10 AM SENATOR WIELECHOWSKI objected. CHAIR COGHILL asked him to speak to his objection. SENATOR WIELECHOWSKI said it's probably a good bill, but he couldn't in good conscience vote to move a 50-page bill after a 15 minute hearing when he didn't understand what it does. This is the only committee of referral in the Senate and the committee didn't even receive a sectional walk through. He noted that this wasn't a special request for this bill; he made the same request on the large ROTH IRA bill and the chair agreed to hold an additional hearing. He restated his objection. CHAIR COGHILL said he understood the objection but he was satisfied that the bill was virtually identical to the one the committee heard last year. 10:15:50 AM A roll call vote was taken. Senators McGuire, Dyson, and Coghill voted in favor of moving HB 57 from committee; Senator Wielechowski voted against it. Therefore, CSHB 57(JUD) was reported out of the Senate Judiciary Standing Committee by a vote of 3-1. 10:16:26 AM CHAIR COGHILL stated that CSHB 57(JUD) moved from the Senate Judiciary Standing Committee with individual recommendations and attached fiscal note.