Legislature(2021 - 2022)BARNES 124
03/10/2021 05:45 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Workplace Safety in the Seafood Industry | |
| SB24 | |
| Worker's Compensation Appeals Commission | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | SB 24 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 24-VIRTUAL MEETINGS FOR CORPORATIONS
7:14:26 PM
CO-CHAIR SPOHNHOLZ announced that the next order of business
would be CS FOR SENATE BILL NO. 24(L&C), "An Act relating to
holding corporate meetings by remote communication; allowing
voting by remote communication at corporate meetings; making
shareholder lists available electronically; relating to for-
profit and nonprofit corporations; relating to business and
industrial development corporations; relating to Native
corporations; relating to the Alaska Banking Code; and providing
for an effective date."
7:14:44 PM
SENATOR DAVID WILSON, Alaska State Legislature, as prime
sponsor, introduced SB 24. He paraphrased from the sponsor
statement [included in committee packets], which read as follows
[original punctuation provided]:
The events of this past year have caused many
hardships but have also inspired innovation. It is
imperative that we use these innovations to improve
our operations and laws in the future. Senate Bill 24
capitalizes on one such of these innovations.
Senate Bill 24 allows corporations' shareholder
meetings and nonprofit member meetings to be held
virtually. Section 12 of SB 241 of the 31st
Legislature and subsequent emergency orders have
allowed for these virtual meetings, but that
authorization has expired. The ability to meet
virtually, as would be permanently allowed by the
passage of this bill, has proved invaluable to these
organizations. Senate Bill 24 enables corporations and
nonprofit organizations to operate more efficiently
and with greater flexibility than in the past.
7:16:21 PM
JASMIN MARTIN, Staff, Senator David Wilson, Alaska State
Legislature, presented the sectional analysis for SB 24 on
behalf of Senator Wilson, prime sponsor. She explained that SB
24 would affect three different parts of law: the Alaska
Corporation Code, the Business and Industrial Development Code,
and the Alaska Nonprofit Corporation Act. She read through the
sectional analysis, which read as follows [original punctuation
provided]:
Section 1: Modifies AS 10.06.223
? Relates to organizational meetings of Alaska
Corporations. Allows these to be held via remote
communication or via a hybrid of remote communications
and in person and modifies the notice requirements to
reflect this change.
Section 2: Modifies AS 10.06.230(e)
? Relates to the bylaws of a corporation. Allows
corporations to write bylaws pertaining to remote
communications.
Section 3: Modifies AS 10.06.405(a)
? Relates to meetings of shareholders. Allows meetings
of shareholders to be held via remote communication.
Section 4: Modifies AS 10.06.405(b)
? Relates to meetings of shareholders. Allows the
board of a corporation to set a time for meetings if
the time is not set in the bylaws.
Section 5: Modifies AS 10.06.410(a)
? Relate to notice of shareholder meetings. Directs
corporations to include the manner and definition of
"present" in meeting notices.
Section 6: Modifies AS 10.06.413(a)
? Relates to the list of shareholders entitled to vote
at a meeting or on adjournment. Allows this list to be
available electronically to shareholders.
Section 7: Modifies AS 10.06.415(a)
Interim:
? Relates to quorums in meetings. Allows shareholders
present through remote communication to be a counted
towards a quorum.
Section 8: Modifies AS 10.06.418(b)
? Relates to voting by proxy. Allows proxies to be
revoked by attending meetings remotely in addition to
in person.
Section 9: Modifies AS 10.06.420(c)
? Relates to voting shares. Allows a shareholder to
vote virtually.
Section 10: Modifies AS 10.06.420(d)
? Relates to voting shares. Allows a virtual attendee
to vote at an election for directors.
Section 11: Modifies AS 10.06.420(f)
? Relates to voting shares. Allows shares held by an
administrator, executor, guardian, or conservator to
be voted by remote communication. Allows shares
standing in the name of a trustee to be voted by
remote communication.
Section 12: Modifies AS 10.06.420(j)
? Relates to voting shares. Adds conforming language
pertaining to voting by proxy via remote
communication.
Section 13: Adds a new section (k) to AS 10.06.420
? Relates to voting shares. Allows shareholders and
shareholder proxies to participate in meetings via
remote communication.
Section 14: Modifies AS 10.06.470(a)
? Relating to meetings of executive and other board
committees. Allows these meetings to be held via
remote communication.
Section 15: Modifies AS 10.06.960(n)
? Relates to corporations organized under Alaska
Native Claims Settlement Act. Allows amendments to the
articles of incorporation for corporations organized
under ANCSA and incorporated under former AS 10.05.005
to add a provision relating to the personal liability
for monetary damages to the corporation or
stockholders to be voted on via remote communication.
Section 16: Modifies AS 10.06.960(o)
? Relates to corporations organized under Alaska
Native Claims Settlement Act. Allows amendments to the
articles of incorporation of a village corporation
organized under ANCSA and incorporated under former AS
10.05.005 to add a provision authorizing the
classification of directors under AS 10.06.455 to be
voted on via remote communication.
Section 17: Modifies AS 10.06.960(p)
? Relates to corporations organized under Alaska
Native Claims Settlement Act. Allows Native
corporations incorporate under former AS 10.05 prior
to July 1, 1989 to vote to modify quorum requirements
via remote communication.
Section: 18 Adds a new definition to AS 10.06.990
? Defines "remote communication".
Section 19: Modifies AS 10.10.100(b)
? Relates to entities organized under the Business and
Industrial Development Corporations Act. Allows
stockholders to vote by remote communication.
Section 20: Adds a new section (c) to AS 10.10.100
? Relates to executing a proxy by electronic
transmission. Outlines how a proxy is to be executed
by electronic transmission.
Section 21: Modifies AS 10.20.066
? Relates to nonprofit meetings notices. Establishes
that meeting notices should include the manner by
which the meeting will be held.
Section 22: Modifies AS 10.20.071(b)
? Relates to voting by proxy. Allows a member to vote
by remote communication or by proxy executed by
electronic transmission.
Section 23: Modifies AS 10.20.071(e)
? Relates to establishing a quorum. Allows members
present through remote communication to be a counted
towards a quorum.
Section 24: Adds a new section (f) to AS 10.20.071
? Relates to establishing a proxy. Defines how a proxy
could be established by remote communication.
Section 25: Modifies AS 10.20.076
? Relates to establishing a proxy. Conforming to allow
members present via remote communication to count
towards a quorum.
Section 26: Modifies AS 10.20.116(a)
? Relates to regular and special meetings of boards of
directors. Allows meetings to be held in person, by
remote communications, or a hybrid of both.
Section 27: Modifies AS 10.20.166(a)
? Relates to organizational meetings. Allows
organizational meetings to be held via remote
communication.
Section 28: Adds a new definition to AS 10.20.920
? Defines "remote communication".
Section 29: Adds a section to uncodified law.
? Adds a saving clause for retroactivity in section
30.
Section 30: Adds a section to uncodified law.
? Makes this act retroactive to March 11, 2020.
Section 31: Adds an immediate effective date.
7:21:13 PM
MS. MARTIN, in response to Co-Chair Spohnholz, gave the
definition of "remote communication" found in Section 18, on
page 7, lines 25-30, of CSSB 24(L&C), which read as follows:
*Sec. 18. AS 10.06.990 is amended by adding a new
paragraph to read:
(51) "remote communication" means communication
by means of electronic communication, conference
telephone, videoconference, the Internet, electronic
transmission, or other means by which persons not
physically present in the same location may
communicate with each other on a substantially
simultaneous basis.
7:21:51 PM
REPRESENTATIVE SCHRAGE shared his understanding that, prior to
the COVID-19 emergency declaration, electronic meetings were a
possibility, and under the lapse of the declaration, "there was
some error to where it was no longer allowed." He asked for
clarification on whether that was true.
MS. MARTIN responded that it was permissible for nonprofit
corporations but not permissible for corporations that work for
profit.
7:23:02 PM
REPRESENTATIVE KAUFMAN asked whether there was any concern about
verification regarding signatures for voting remotely.
SENATOR WILSON responded that he has not received any of those
types of complaint. He shared that he has actually received a
lot of support from a variety of shareholders, corporations, and
nonprofits. He said that the signature authentication process
is up to an entity's bylaws and that [under CSSB 24(L&C)], that
decision would remain that of an individual entity.
7:24:25 PM
CO-CHAIR SPOHNHOLZ offered clarification that bylaws are similar
to a constitution for a corporation, and each corporation has
its own bylaws to which to adhere. She said that the proposed
legislation would allow that to continue. She noted that the
committee would be hearing some testimony from the Foraker Group
as to why CSSB 24(L&C) was necessary to clear up any ambiguity.
7:25:34 PM
LAURIE WOLF, President and CEO, Foraker Group, explained that
the Foraker Group has been advising nonprofits on how to hold
meetings, based on Alaska law, for the past twenty years. She
noted that each nonprofit is required to have both articles of
incorporation and bylaws, which are legally binding documents
that can't supersede state or federal law. She explained that
bylaws govern nonprofits and are vetted by the revenue service
when granting nonprofit exempt status. Important rules for
establishing meetings are included in bylaws, she said, and
state law needs to be "simple, broad, and flexible" enough for
every corporation to follow it. She continued that Alaska law
has been broad enough to allow for remote meetings for three
decades; however, during 2020 the legislature passed a measure
authorizing remote meetings for corporate boards as part of the
disaster declaration in the thought that the state law was
prohibiting remote meetings. She said Foraker viewed this as "a
solution in search of a problem."
MS. WOLF recommended that two aspects be present in any
forthcoming proposals: a quorum of board members as defined by
bylaws must be gathered to make lawful decisions, and all
persons participating can hear and speak to each other at the
same time in real time. She said that only when these two
characteristics are present can there be certainty that an
entity is operating as "one voice." She noted that CSSB 24(L&C)
would need to allow every group to be consistent with its
bylaws. She urged the committee to act broadly, to deter to the
bylaws of each organization as much as possible, and to create a
flexible framework for all of Alaska's corporations, which she
stated has been the case for many decades. She said that the
easy, simple, and complete solution would be to add a definition
of "in person" to AS 10.20.290, which would mean a physical
presence or where a person may participate by means of
conference, telephone, or similar communication equipment, by
means of which all persons participating in the meeting can hear
each other at the same time.
7:31:15 PM
CO-CHAIR SPOHNHOLZ asked Ms. Wolf to send in the proposed
addition to the bill to ensure that the language included in the
bill meets the Ms. Wolf's criteria.
MS. WOLF responded that her understanding was the phrase
"substantially simultaneous" was currently in CSSB 24(L&C), and
she emphasized that is not what the Foraker Group is
recommending. In response to Co-Chair Spohnholz, she explained
there could be confusion. She said, for example, that the
Foraker Group has had many questions about whether this would
include voting by e-mail. She said that "the previous law" was
clear that e-mail voting was not simultaneous communication and
was not a place where a quorum could be established. An
advisory vote with unanimous consent could be taken through
email, she continued, but it would still need to be ratified in
a meeting where there was simultaneous communication and the
opportunity to vet, defend, and update a decision.
CO-CHAIR SPOHNHOLZ clarified that an e-mail communication is not
simultaneous, because not everyone is hearing the same thing at
the same time, thus it can lead to miscommunications and may
exclude individuals who are not able to communicate in a timely
manner.
MS. WOLF added that a quorum cannot be established over e-mail
and a meeting cannot be called to order via e-mail.
7:35:13 PM
FRANCES MAHONEY, Foraker Group, noted that he has been
practicing law in Alaska for forty years and that most of his
practice for the last twenty of those years has related to
nonprofits. He said that he applauds Senator Wilson and his
staff for the drafting of CSSB 24(L&C), because it's important
for nonprofits. He noted that if there is a change in
legislation, there is a presumption that the prior law did not
allow what was amended in the new law. He continued that it is
important to have an allowance for conducting meetings that are
not physically present to qualify as a quorum or as physically
present to vote. He said that he would prefer a more simplified
process and that "the least change is usually the best change."
He agreed that Ms. Wolf's suggestion to add a definition of "in
person" to AS 10.20.290 seems appropriate and would achieve the
same goal as Sections 21-23 of CSSB 24(L&C). He emphasized the
importance of ensuring discussion during a meeting, and he said
the proposals made would allow that to occur and would help
avoid possible confusion.
7:38:17 PM
CO-CHAIR SPOHNHOLZ announced that SB 24 was held over.