03/15/1995 03:06 PM House L&C

 HL&C - 03/15/95                                                               
 HB 17 - OFFICERS OF UTILITY COOPERATIVES                                    
                                                                               
 CHAIRMAN KOTT explained that HB 17 was back before the committee              
 because the drafting attorney had some concerns with the                      
 committee substitute (CS) version G.  He said that they now had a             
 new CS version K, dated March 6, 1995 before them.                            
                                                                               
 Number 058                                                                    
                                                                               
 CHAIRMAN KOTT stated, for the record, Representative Masek joined             
 the meeting at 3:10 p.m.                                                      
                                                                               
 Number 067                                                                    
                                                                               
 GEORGE DOZIER, LEGISLATIVE AIDE TO REPRESENTATIVE PETE KOTT, gave             
 the following explanation of the new CS for HB 17 version K.  He              
 explained that the CS version G did not amend the title to                    
 reflect the biannual report.  The other concerns deal with                    
 amendment two, which was proposed by the Division of Banking,                 
 Securities and Corporations, Department of Commerce and Economic              
 Development.  The draft, as passed out by committee, required                 
 that biannual reports be due before July 2, of the reporting                  
 year; however, the information contained in the reports was due               
 by June 30.  The  division felt this was not enough time for the              
 information to be gathered and the reports to be sent in.  In the             
 new CS version K, this date was amended to July 15.  Mr. Dozier               
 continued that the third concern addresses dissolution, this on               
 page 8, states, "the provisions of Alaska Statute 10.06 (Alaska               
 Corporations Code) relating to involuntary dissolution of                     
 business corporations applied to telephone and electric                       
 cooperatives."  He said that the drafting attorney was concerned              
 that too much generality had been included since a number of                  
 provision governing both voluntary and involuntary dissolution's              
 of corporations were affected.  He explained that this focuses                
 upon when a biannual report is delinquent.  This provision allows             
 the commissioner to involuntarily dissolve a corporation if it                
 hasn't filed its biannual reports.  The language in the new CS,               
 version K, makes this clearer.  The fourth concern was with                   
 subsection (b), biannual reports, addresses when reports are do               
 but is not clear that it applies to cooperatives that already                 
 exist.  He stated that no changes were made to this language.                 
 Therefore, it is his understanding that it will apply to existing             
 cooperatives, as well as new ones.  Mr. Dozier stated that                    
 finally, the drafting attorney's last concern was that the draft              
 provided and adopted by the committee (CS version G),                         
 (indisc.--interrupted)                                                        
                                                                               
 Number 202                                                                    
                                                                               
 REPRESENTATIVE GENE KUBINA asked if a motion to delete sections               
 17 and 18 would be a good way to deal with this.  He stated that              
 the reason the Department of Commerce and Economic Development                
 wasn't receiving these reports was because they were already                  
 going to the Alaska Public Utilities Commission (APUC).  He                   
 pointed out this would just be adding more bureaucracy.                       
                                                                               
 CHAIRMAN KOTT said he would entertain that motion, once they had              
 adopted the new CS.                                                           
                                                                               
 REPRESENTATIVE KUBINA asked Chairman Kott exactly where they were             
 at this point.                                                                
                                                                               
 CHAIRMAN KOTT stated that they had passed out version G, but they             
 had not yet adopted version K.                                                
                                                                               
 Number 231                                                                    
                                                                               
 REPRESENTATIVE JERRY SANDERS made a motion to adopt version K of              
 the CS for HB 17.                                                             
                                                                               
 CHAIRMAN KOTT asked if there were objections.  Hearing none, the              
 CS was adopted.                                                               
 REPRESENTATIVE KUBINA made a motion to delete sections 17 and 18,             
 and possibly make a title change.  He said, "line 4 starting                  
 with, `relating' through line 7 ending with `cooperatives'".                  
                                                                               
 CHAIRMAN KOTT stated, "The title would be lines 1, 2 and 3, and               
 then providing for an effective date."                                        
                                                                               
 REPRESENTATIVE KUBINA interjected, "The first half of line 4,                 
 `according to officers' and then `providing for an effective                  
 date'."                                                                       
                                                                               
 REPRESENTATIVE ELTON stated that they may need to start on line               
 5, because Section 4 of the bill amends the articles of                       
 incorporation.  That may need to be noted in the title `relating              
 to the articles of incorporation' beginning after cooperatives;               
 deleting down `to effective date'."                                           
                                                                               
 REPRESENTATIVE KUBINA indicated the last two words on line five               
 is where it would start.                                                      
                                                                               
 CHAIRMAN KOTT repeated `relating to' line 5 through `electric                 
 cooperatives' on line 7.                                                      
                                                                               
 Number 279                                                                    
                                                                               
 CHAIRMAN KOTT stated that the conceptual amendment is to delete               
 sections 17 and 18, and with that there will be a noted title                 
 change.  He asked Representative Green if he had a problem with               
 this amendment.                                                               
                                                                               
 Number 288                                                                    
                                                                               
 REPRESENTATIVE JOE GREEN stated that he did not have a problem                
 with this.                                                                    
                                                                               
 Number 291                                                                    
                                                                               
 CHAIRMAN KOTT stated that they did have Amendment 1, the                      
 conceptual amendment, deleting sections 17 and 18 with a title                
 change.  He asked for any objections.  Hearing none, Amendment 1              
 was adopted.  He stated that the committee now had the CSHB
(L&C) before them for debate.                                               
                                                                               
 Number 305                                                                    
                                                                               
 WILLIS KIRKPATRICK, DIRECTOR, BANKING, SECURITIES AND                         
 CORPORATIONS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT,                
 stated that every organization filing under Title 6, files a                  
 biannual report.  This provides the public with information as to             
 who the registered agents, officers and directors  of                         
 corporations are.  He stated that only these 37 organizations,                
 under this chapter of Title 10, do not file biannual reports.  He             
 stated, as far as bureaucracy is concerned, they are only asking              
 for the current names of the officers and directors of the                    
 corporations and a biannual filing fee of $100.  He pointed out               
 that when he was advised that this may be redundant filing with               
 the Department of Commerce, he called APUC for a current list of              
 officers and directors of Cook Inlet Rural Telephone Cooperative,             
 Incorporated; Glacier Valley Electric; and Unalaska Electric                  
 Association, Incorporated.  The APUC had no record of any of the              
 three.  He explained that this was important.  If they were to                
 have filed every other year as to their status of their                       
 corporation, with the names and addresses of the officers and                 
 directors, and if something had changed in that interim year, as              
 was the case with Unalaska, they would have written back and said             
 that they had been sold to the community.  They would have told               
 the Department of Commerce to cross them off their list, and they             
 would have been out of their file.  He reiterated that the                    
 department only wants them to file every other year, whether they             
 are profit or non-profit, like every other corporation and                    
 association under Title 10.  Mr. Kirkpatrick said that the APUC               
 further stated that they did not know if they could supply him                
 with lists of officers and directors of corporations.                         
                                                                               
 Number 416                                                                    
                                                                               
 REPRESENTATIVE ELTON asked why Glacier Valley was registered with             
 his department, and were they required to be.                                 
                                                                               
 MR. KIRKPATRICK stated that as an organization, they wanted to be             
 protected from liability as individuals.  They then incorporated              
 under electrical cooperatives, which gives them liability from                
 personal acts, and puts responsibility on the corporate                       
 structure.                                                                    
                                                                               
 DAVE HUTCHENS, EXECUTIVE DIRECTOR, ALASKA RURAL ELECTRIC                      
 COOPERATIVE ASSOCIATION, stated that he had testified previously              
 on this legislation and his association does not have any strong              
 objection to filing these biannual reports.  However, they do                 
 feel that it would be far better if it were set aside and dealt               
 with that separately the next time there is legislation  dealing              
 with the powers of the division.  He stated that all of the                   
 operating entities organized as electric and telephone                        
 cooperatives do make annual reports to the APUC.  He said the                 
 division should have a note in their file that says, "Requests                
 for information should be forwarded to the APUC."                             
                                                                               
 Number 454                                                                    
                                                                               
 REPRESENTATIVE ELTON pointed out that in the previous meeting Mr.             
 Hutchens had no objection to the legislation, the committee felt              
 that this might be a good idea.  He stated that he would be                   
 interested in hearing Mr. Hutchens reactions to the provision                 
 relating to involuntary dissolution of a cooperative.                         
 MR. HUTCHENS stated that this would be a very strong penalty for              
 failing to file a biannual report.  He commented that perhaps                 
 there could be an intermediate step, and if someone refused to                
 file, dissolution could be the ultimate sanction.  He stated the              
 reason for that would be to have some systematic way of weeding               
 out the entities no longer in business.                                       
                                                                               
 Number 471                                                                    
                                                                               
 CHAIRMAN KOTT stated the committee members had the CSHB 17 before             
 them.                                                                         
                                                                               
 REPRESENTATIVE BRIAN PORTER asked if they had adopted the CS.                 
                                                                               
 CHAIRMAN KOTT stated yes.                                                     
                                                                               
 REPRESENTATIVE PORTER made a motion to move CSHB 17, as amended,              
 out of committee with individual recommendations.                             
                                                                               
 REPRESENTATIVE ELTON commented that they wouldn't need the fiscal             
 note as amended.                                                              
                                                                               
 CHAIRMAN KOTT concurred that there would be a zero fiscal note.               
 He stated that there was a motion to move CSHB 17(L&C) from                   
 committee with individual recommendations.  He asked if there was             
 an objection.  Hearing none, the CSHB 17(L&C) was passed from                 
 committee.                                                                    
                                                                               
 Number 483                                                                    
                                                                               
 REPRESENTATIVE KUBINA asked if the bill goes to Rules next.                   
                                                                               
 CHAIRMAN KOTT stated that was correct.