Legislature(2001 - 2002)
04/08/2002 02:05 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 418-CORPORATE NOTICES/PROCEDURES/VOTING
REPRESENTATIVE LISA MURKOWSKI, Chair of the House Labor and
Commerce Committee, sponsor of HB 418, said HB 418 would help
Alaskan corporations with their management and business
operations by allowing them to offer electronic proxy voting and
deliver materials to shareholders electronically. She said this
change would be similar to corporate code changes made by 25
other states. She said it would allow for efficiencies such as
householding of shareholder information. She said she and her
sons received their annual notices from an out-of-state
corporation in which they were shareholders. She was able to
vote online for the entire family in about a minute and a half.
She was prompted for a personal identification number and her
vote. She said a lot of shareholders received their ballots and
put them in the pile of things to do and didn't get to them until
too late.
SENATOR THERRIAULT asked who would benefit monetarily from the
streamlined process.
REPRESENTATIVE MURKOWSKI said any Alaskan corporation would
benefit, including Alaska-based banks and Native corporations.
She said HB 418 originated from Sealaska because they wanted to
provide notices to their shareholders electronically.
CHAIRMAN TAYLOR asked if there were any further questions for
Representative Murkowski. There were none.
MR. JOE NELSON, legal counsel, Sealaska Corporation, said HB 418
was not a new idea and there was nothing unique in the language
of the bill. He said it was modeled after corporate codes from
across the country but came primarily from Delaware and
California codes and the Federal Communications Commission
guidelines.
CHAIRMAN TAYLOR said HB 418 would provide shareholders with
convenience and should lead to increased participation by
shareholders. He said Alaska had the highest rate of computer
ownership and Internet access in the country.
He said HB 418 would provide for many opportunities to reduce
costs. For example Sealaska could save a lot of money by
householding information. He attended a national meeting of
corporate secretaries that had a discussion panel about
householding and electronic voting. He learned that corporations
across the country were saving millions of dollars by using the
methods outlined in HB 418.
SENATOR THERRIAULT asked if Sealaska paid anything to the State
for oversight.
MR. NELSON didn't know.
SENATOR THERRIAULT thought statutes allowed the State to charge
Native corporations a fee for the oversight provided by the
Division of Banking, Securities & Corporations (DBSC). He did
not believe the State had been charging Native corporations. He
said HB 418 would be revenue neutral for the State but would
provide a savings to corporations. He said perhaps with this
savings it would be time for Native corporations to pay for
oversight like the rest of the corporations in the state.
MR. NELSON said DBSC had previously been concerned with HB 418
but those concerns related to financial impact to the State
rather than fees paid to the State. He said Sealaska and DBSC
worked out those concerns. He said DBSC had testified on HB 418
and he didn't think they had any problems with the reworked bill.
He said the current fiscal note reflected no cost to the State.
CHAIRMAN TAYLOR asked how long a proxy lasted.
MR. NELSON thought a proxy lasted 11 months unless a new proxy
was submitted. He said HB 418 wouldn't impact the length of
proxies.
CHAIRMAN TAYLOR thought HB 418 would be beneficial to all parties
involved. He said there had been a lot of discussion in the
legislature about minority shareholders who were frustrated by
the actions of management and wanted to have their views heard.
He thought HB 418 would make it easier for them to express their
views because of increased ease of communications.
CHAIRMAN TAYLOR asked if there were any further questions for Mr.
Nelson. There were none. He asked if there was anybody else who
wished to testify on HB 418. There was nobody. He asked if
there were any amendments.
SENATOR COWDERY offered the following Amendment 1.
A M E N D M E N T
OFFERED IN THE SENATE
TO: CSHB 418(L&C)
Page 5, lines 13 - 14:
Delete "executed by electronic transmission"
Page 5, line 18:
Delete "transmission; and"
Insert "proxy;"
Page 5, line 20:
Delete "transmission"
Insert "proxy, authorized an attorney-in-fact for the
shareholder, if applicable, authorized an agent under (1) of this
subsection to receive the proxy, if applicable, and authorized an
electronic transmission, if applicable; and
(3) if the corporation is using corporation money
to send out the proxy form, include
(A) on the form a line for the shareholder
to name an eligible shareholder as the holder of the
proxy; and
(B) with the form appropriate instructions
on using the line required by (A) of this paragraph,
including an instruction that the shareholder may name
a person to hold the proxy who is not a part of the
current management of the corporation"
SENATOR THERRIAULT asked if the amendment had been discussed with
the sponsor of HB 418.
REPRESENTATIVE MURKOWSKI said she had not seen the amendment
before.
CHAIRMAN TAYLOR didn't think Amendment 1 would change the intent
of HB 418. He said Amendment 1 would require the corporations to
provide a form with the appropriate instructions so that a person
who wished to could write in a proxy holder. He thought most
corporations already did so.
REPRESENTATIVE MURKOWSKI agreed that was probably what Amendment
1 would do. She asked for the source of Amendment 1.
CHAIRMAN TAYLOR understood that every Native corporation already
provided a blank line to write in proxies. However, he had heard
that Cook Inlet Region, Inc. (CIRI) didn't provide any such space
and threw away any proxies that were written in. He said he
didn't know whether that was true. He said a CIRI shareholder
had asked that shareholders be given the opportunity to name
their own proxy.
MR. NELSON thought Sealaska had always provided for write-in
proxies. He thought it was already a requirement.
SENATOR THERRIAULT asked if that was a requirement of Sealaska or
the State.
MR. NELSON said Sealaska required it. He also thought it was
provided for in State regulations.
SENATOR THERRIAULT wondered if Amendment 1 would codify State
regulations that CIRI might have been ignoring.
CHAIRMAN TAYLOR said that was his assumption but he couldn't
confirm that. He announced that the committee would hear the
bill again on Wednesday to allow time for these questions to be
answered.
HB 418 was held in committee with Amendment 1 pending.
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