Legislature(1999 - 2000)
04/27/1999 01:40 PM Senate L&C
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 101-CORPORATE PUBLIC UTILITY REINSTATEMENT
CHAIRMAN MACKIE announced HB 101 to be up for consideration.
REPRESENTATIVE MORGAN, sponsor, said this legislation is a vehicle
to allow the Alaska Department of Commerce and Economic Development
the discretion to reinstate, as a corporation, a local exchange
(telecommunications) company that serves several communities in
western Alaska. This legislation also clearly outlines
departmental procedure for corporate notification that should
prevent further involuntary dissolutions.
Bush-Tell is a small, rural local exchange telephone company
located in Aniak, Alaska. It provides local exchange telephone
service to ten small villages in Western Alaska. Bush-Tell was
incorporated on November 10, 1969 and has been providing
telecommunications service since 1970. The President and sole
shareholder of Bush-Tell recently contacted the Alaska Division of
Banking, Securities & Corporations to find out about registering a
"dba" and was informed that Bush-Tell was no longer registered as
a corporation with the Division. Bush-Tell had been involuntarily
dissolved in 1993 for failing to file its biennial report and/or
failing to pay its biennial corporate tax for the period ending
December 31, 1992.
Upon investigation, it was discovered that Bush-Tell's registered
agent had failed to follow the proper statutory procedures for
resigning as a registered agent and that his omissions resulted in
the involuntary dissolution of Bush-Tell.
Bush-Tell's designated agent was a sole practitioner in Anchorage
who also served as Bush-Tell's general counsel. In the early
1980's, Bush-Tell hired another law firm to do its legal work, but
continued to retain the sole practitioner as its registered agent.
The forms for Bush-Tell's biennial reports were sent to the
registered agent and were filed by the registered agent up to and
including the period ending December 31, 1990.
In 1991, the registered agent left the private practice of law,
closed his office and left a forwarding address for his mail with
the U.S. Postal Service. The registered agent did not inform the
Alaska Division of Banking, Securities & Corporations that his
address was changing or that he was resigning as Bush-Tells'
registered agent. Alaska Statute requires that, if a registered
agent resigns, they first file a written notice with the
commissioner setting out the latest address of the principal office
of the corporation and the names, addresses and titles of the most
recent officers of the corporation. The commission must then
immediately mail a copy of the notice to the corporation at its
principal office.
On July 12, 1993, the Alaska Division of Banking, Securities &
Corporations sent a notice by certified mail to Bush-Tell, in care
of the registered agent, informing Bush-Tell it had not filed its
biennial report and/or tax for the period ending December 31, 1992
and, if the biennial report and/or tax are not mailed by September
19, 1993, the Certificate of Involuntary Dissolution will be issued
and the corporation will cease to exist as of September 20, 1993.
This notice was returned to the Alaska Division of Banking,
Securities & Corporations because the registered agent's forwarding
notice had expired. On September 20, 1993, Bush-Tell was
involuntarily dissolved.
Since the time of dissolution, and even after discovering the
involuntary dissolution, Bush-Tell has observed all of the
corporate procedures required by its Bylaws and Alaska law
including holding regular board of directors meetings and paying
corporate income tax.
This legislation corrects an involuntary dissolution and
statutorily establishes corporate notification procedures used by
the Department of Commerce and Economic Development to prevent
similar situations from happening in the future.
Procedures would require mail be sent certified to a corporation's
registered office. If returned, it would be sent first class to
the president of the corporation or to another officer. The
requirements would apply to for-profit, electric and telephone
cooperatives, religious corporations, limited liability
corporations, cooperatives, nonprofit cemetery corporations, and
professional corporations. These requirements would not apply to
business and industrial development corporations (BIDCO), as they
do not have provisions for dissolution. These requirements do
apply to revocation of certificates of authority for out-of-state
organized entities.
MR. ASHLEY REED testified on HB 61, but due to a taping
malfunction, his testimony did not record.
SENATOR HOFFMAN asked how this legislation would work.
REPRESENTATIVE MORGAN answered that this is putting policy into
statute.
SENATOR DONLEY asked where Section 10 of the bill went into
statute, because it didn't say where it goes. He asked if it goes
in the temporary section of the statute.
MS. DAWN WILLIAMS, Department of Commerce, explained a temporary
section in the bill has happened with native corporations in the
past. They have a certain time limit in which to reinstate, and
after that time, the language is deleted.
CHAIRMAN MACKIE said they would check with the drafters to make
sure nothing was left out and asked if the Department supported the
bill.
MS. WILLIAMS said yes.
CHAIRMAN MACKIE asked her to explain how this was able to happen
and if they have a new policy in the meantime for notifications.
MS. WILLIAMS responded that she didn't know what happened in this
case as she wasn't here in 1993. She thought the certified notice
was sent to the registered agent and returned. She didn't know if
they then sent it then to a principle officer or not. Sections 3
and 8 will require them to do the policy and more.
SENATOR KELLY moved to pass CSHB 101(L&C) with individual
recommendations. There were no objections and it was so ordered.
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