Legislature(2015 - 2016)GRUENBERG 120
04/05/2016 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB339 | |
| HB194 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 339 | TELECONFERENCED | |
| += | HB 205 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 194 | TELECONFERENCED | |
HB 194-AK SECURITIES ACT; PENALTIES; CRT. RULES
1:15:08 PM
CHAIR LEDOUX announced that the next order of business would be
HOUSE BILL NO. 194, "An Act repealing and reenacting the Alaska
Securities Act, including provisions relating to exempt
securities and transactions; relating to registration of
securities, firms, and agents that offer or sell securities and
investment advice; relating to administrative, civil, and
criminal enforcement provisions, including restitution and civil
penalties for violations; allowing certain civil penalties to be
used for an investor training fund; establishing increased civil
penalties for harming older Alaskans; retaining provisions
concerning corporations organized under the Alaska Native Claims
Settlement Act; amending Rules 4, 5, 54, 65, and 90, Alaska
Rules of Civil Procedure; and providing for an effective date."
1:16:05 PM
REPRESENTATIVE KREISS-TOMKINS moved to adopt Amendment 1,
Version 29-GH1060\N.1, Bannister, 4/5/16, which read:
Page 1, line 7, following "older persons":
Insert "and vulnerable adults"
Page 79, line 29, following "older person":
Insert "or a vulnerable adult"
Page 79, line 31, following "older person":
Insert "or a vulnerable adult"
Page 80, line 5, following "older person":
Insert "or a vulnerable adult"
Page 80, line 6, following "older person":
Insert "or a vulnerable adult"
Page 81, line 27, following "older person":
Insert "or a vulnerable adult"
Page 81, line 29, following "older person":
Insert "or a vulnerable adult"
Page 82, line 1, following "older person":
Insert "or a vulnerable adult"
Page 82, line 3, following "person":
Insert "or a vulnerable adult"
Page 100, line 29, following "States":
Insert ";
(36) "vulnerable adult" means a person 19
years of age or older who, because of incapacity,
mental illness, mental deficiency, physical illness,
physical disability, advanced age, chronic use of
drugs, chronic intoxication, fraud, confinement, or
disappearance, is unable to meet the person's own
needs or to seek help without assistance"
CHAIR LEDOUX objected.
1:16:17 PM
REPRESENTATIVE KREISS-TOMKINS explained that Amendment 1
broadens the bill's class of vulnerable persons and creates a
definition of vulnerable adult. Therefore, he advised,
vulnerable people, if taken advantage of, incur the ability that
treble damages to be awarded.
REPRESENTATIVE KELLER asked whether the definition was taken
from a statute because it looks familiar.
REPRESENTATIVE KREISS-TOMKINS responded that it came from the
National Association of Security or other industry regulatory
materials. He then deferred to Kevin Anselm.
1:17:55 PM
KEVIN ANSELM, Director, Division of Banking and Securities,
Department of Commerce, Community & Economic Development,
responded that the definition provided within Amendment 1 is
contained within Alaska Statutes, AS 47.24.900(21).
CHAIR LEDOUX said she agrees until line 9, "or disappearance,"
in that she does not understand the disappearance wording
because if they've disappeared, they can't be sold securities.
MS. ANSELM related that she had not vetted this particular
definition.
CHAIR LEDOUX asked her to restate the citation.
MS. ANSELM replied AS 47.24.900(21).
1:19:46 PM
MS. ANSELM offered her interpretation that when it comes up in a
case, it would extend the opportunity for treble damages to not
only persons 60 years or older, but also to vulnerable adults.
A vulnerable adult can be someone who has disappeared, according
to this definition, but she said she does not know the
underlying information about the disappearance. She said it
could be that someone who has disappeared fits into this
definition and then the estate would be able to go after the
treble damages, but perhaps the sponsor of the amendment has
other thoughts on that.
1:20:46 PM
REPRESENTATIVE KREISS-TOMKINS said he does not have thoughts on
that.
CHAIR LEDOUX asked whether Kristy Naylor or Renee Wardlaw have
thoughts regarding the reason the term "disappearance" is
included.
MS. ANSELM offered that the term "disappearance" is taken
directly from Alaska Statute.
CHAIR LEDOUX stated that she understands that, but if there has
been a mistake the first time around it will be repeated in all
of the other statutes from here on out. She reiterated that she
wants to understand why the term "disappearance" is included.
REPRESENTATIVE CLAMAN suggested a brief at ease to research the
statute.
1:21:57 PM
The committee took an at-ease from 1:21 p.m. to 1:28 p.m.
1:28:22 PM
CHAIR LEDOUX announced she is setting Amendment 1 aside until
Representative Kreiss-Tomkins returns.
1:28:29 PM
REPRESENTATIVE CLAMAN moved to adopt Amendment 2, Version 29-
GH1060\N.2, Bannister, 4/5/16, which read:
Page 27, line 12:
Delete "$5,000"
Insert "$10,000"
REPRESENTATIVE KELLER objected.
1:28:39 PM
REPRESENTATIVE CLAMAN explained that Amendment 2 relates to
crowdfunding and the limit on a single investor or purchaser on
what is technically called "Small Intra-state Securities
Offerings," or crowdfunding. Amendment 2 raises the limit for a
single investor from $5,000 to $10,000, he said. He opined that
the $10,000 amount is more entrepreneur friendly and makes it
easier for someone with a start-up business to work within the
limits of the $1 million that can be raised through
crowdfunding. He related that the $5,000 limit is paternalistic
in suggesting that people should only be able to invest in these
on an individual basis at a $5,000 level. Otherwise, he
explained, the entrepreneur must go to a different structure to
create their investment framework. He opined that Amendment 2
does not put the investor at any greater risk than they would be
at the $5,000 level.
1:31:08 PM
REPRESENTATIVE KELLER inquired where Representative Claman
looked to choose the number $10,000. He noted that he is not
familiar with this process and asked why not just delete
paragraph (4).
REPRESENTATIVE CLAMAN deferred to Kevin Anselm to answer the
question regarding deleting paragraph (4). He related that
people from Fairbanks had seen other states with limits such as,
$2,000, $7,500 and $10,000. He offered that he concluded
$10,000 made more sense, both in terms of being more supportive
of the entrepreneur attempting to obtain the crowdfunding, and
also the typical person being approached with the means to
invest $10,000 is an area the person would be capable of
performing their own due diligence. He opined that the $5,000
limit would create more limits than necessary.
MS. ANSELM said the division has no objection to the $10,000
level.
1:32:46 PM
REPRESENTATIVE KELLER asked why include paragraph (4), what is
the background and concern, what is the state protecting itself
from that the highest number in the nation is $10,000, and what
are the ramifications of it.
MS. ANSELM responded that the crowdfunding piece is designed to
fall under a federal exemption, it is an instate crowdfunding
wherein investors can invest small amounts of money into a
project that is no larger than $1 million. She explained that
there are lesser requirements for disclosures, not a requirement
for audited financial statements, and the disclosure documents
do not have to be as extensive as other investments that would
allow a higher investment. It must coordinate with the federal
law which is a limit of $1 million and anything above $1
million, and anything that reaches outside of the state's
borders, is covered under federal acts. She noted there is a
federal crowdfunding now that is available as of May but it
requires that an entrepreneur can't just offer the securities
themselves in any sort of public solicitation, it must be done
through a portal or a stock brokerage. She related that the
design of the crowdfunding has evolved through the states due to
provisions in the Dodd-Frank Act, and the Securities and
Exchange Commission had not come up with the rules yet to allow
intrastate crowdfunding. Therefore, the fact that it is
supposed to be small investment amounts to reduce the risk fits
under that federal ceiling.
1:35:05 PM
REPRESENTATIVE KELLER removed his objection.
REPRESENTATIVE KREISS-TOMKINS asked Representative Claman how
$10,000 compares to limits that may exist in other states.
1:35:36 PM
REPRESENTATIVE CLAMAN offered that what was explained by Ms.
Anselm with the administration, that when they looked at the
crowdfunding limits on a per investor basis the most protective
states of investors were at the $2,000 level, and the maximum in
other states was $10,000. He reiterated that Alaska's
crowdfunding investors are typically sophisticated investors and
the investor looking at these projects would be good on their
own due diligence. He opined that limiting an entrepreneur to
$5,000 may hinder their ability to raise funds.
CHAIR LEDOUX asked whether the division has a position on this
issue.
MS. ANSELM answered that the division does not object.
1:36:41 PM
CHAIR LEDOUX removed her objection to Amendment 2. There being
no objection, Amendment 2 was adopted.
1:36:59 PM
CHAIR LEDOUX returned the committee to Amendment 1.
CHAIR LEDOUX reminded the committee that it was attempting to
determine the origin of the term "disappearance." She related
that she likes the amendment and does not see a need to hold the
bill while trying to determine the above in the event no one
objects to the inclusion of Amendment 1 in the bill and moving
forward. Chair LeDoux directed Representative Kreiss-Tomkins to
follow through and research why the word "disappearance" was
included, whether it makes sense to be included, and if it
doesn't make sense to see whether in its latter stages it can be
removed.
1:37:44 PM
REPRESENTATIVE KREISS-TOMKINS responded absolutely, and
apologized for personifying the meaning of that word. He
suggested amending out the term "disappearance" and then adding
it in later in a different committee if necessary.
CHAIR LEDOUX pointed out that the term has been used in statute
and she feels comfortable leaving it in with Representative
Kreiss-Tompkins determining why it was there in the first place.
REPRESENTATIVE KREISS-TOMKINS agreed and said he will eagerly
report back to the committee with the results.
1:38:31 PM
CHAIR LEDOUX removed her objection to Amendment 1. There being
no objection, Amendment 1 was adopted.
1:38:50 PM
REPRESENTATIVE CLAMAN moved to report CSHB 194(L&C), Version 29-
GH1060\N, as amended, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 194(JUD) passed from the House Judiciary
Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 339 - Fiscal Note - LAW-CRIM-03-25-16.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 339 |
| HB 339 - Version W.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 339 |
| HB 339 - Letter of Support - Alaska Fire Chiefs Association.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 339 |
| HB 339 - Letter of Support - Alaska Association of Fire & Arson Investigators.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 339 |
| HB 339 - Fiscal Note - DOA-PDA-03-30-16.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 339 |
| HB 339 - Sponsor Statement.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 339 |
| HB 194 - Supporting Documents - NASAA Model Act Overview.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 194 |
| HB 194 - Supporting Documents - NASAA Model Seniors Act.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 194 |
| HB 194 - Amendment #1.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 194 |
| HB 194 - Amendment #2.pdf |
HJUD 4/5/2016 1:00:00 PM |
HB 194 |