Legislature(2007 - 2008)SENATE FINANCE 532
03/27/2008 01:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB233 | |
| SB221 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 221 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 233 | ||
SENATE CS FOR CS FOR HOUSE BILL NO. 233(L&C)
"An Act relating to giving notice of unclaimed net
margin distributions made by electric and telephone
cooperatives."
DEREK MILLER, STAFF, REPRESENTATIVE KELLY, read from Sponsor
Statement:
The purpose of HB 233 addresses the sometimes
burdensome and ineffective noticing requirements of
unclaimed property law regarding capital credits of
electric and telephone cooperatives. Electric and
telephone cooperative from time to time receive excess
revenue from members that exceed the expenses of
operations. The cooperative keeps these excess revenues
in a member-owned capital account called capital
credits, on behalf of the member.
Cooperatives may refund a portion of accumulated
capital credits, but in some cases the cooperative
seeking to refund the capital credits no loner has a
valid address for the member. As a result, many go
unclaimed. Current Alaska unclaimed property law allows
the credits to revert back to the cooperative as long
as the cooperative, at least six months prior to the
reversion 1) mailed a notice to last known address of
the member; 20 publishes a notice of proposed reversion
in the same manner required for publishing a service of
commons by publication; and 3) publishes a notice of
the unclaimed capital credits four times, during four
consecutive calendar weeks in a newspaper of local
circulation.
While mailing to last known address of members
sometimes result in finding members, newspaper
publication does not result in a significant increase
in the number of members who cash their capital credit
checks, particularly for rural cooperatives. As a
result, cost of compliance with this notice requirement
is significant and the effectiveness is questionable.
HB 233 allows cooperatives the option of using the
internet, instead of newspaper publication, to notify
its members of unclaimed capital credits. Alaska is the
most "wired" state in the country and this bill allows
for cooperative to notify its members using a method
most likely to reach them.
1:40:42 PM
Co-Chair Stedman inquired how many areas in Alaska do not
have internet access and if it is a problem.
Mr. Miller referred to Marilyn Leland Executive Director
Alaska Power Association to better answer that question.
Co-Chair Stedman referenced page 2, line 3, and asked why
the posting on the website was for 180 days.
1:41:42 PM
Mr. Miller explained that the bill was originally introduced
with a thirty day posting then the House Labor & Commerce
Committee amended that to 180 days. There has been no
objection from cooperatives regarding the change.
1:42:21 PM
Senator Dyson asked if consideration was given to the use of
the Permanent Fund Division's address list to notify those
owed a credit. Mr. Miller responded that it had not been
considered but he would look into the possibility.
1:43:04 PM
Senator Dyson felt the use of the Permanent Fund Division's
address listing was a more effective way to find members and
offered to propose an amendment to that effect.
1:43:56 PM
Co-Chair Stedman reminded the Committee that this was the
first hearing HB 233 and there would be time for questions
and concerns to be addressed.
Mr. Miller informed the Committee that Chugiak Consumers
Consortium reviewed the bill and felt confident the
consumers were being adequately notified.
1:44:45 PM
Senator Thomas expressed confusion over the term "member"
noting that those needing to be contacted would no longer be
members. Mr. Miller agreed.
1:45:18 PM
Senator Elton asked the notification process used by utility
companies that are not cooperatives. Mr. Miller answered
that the bill only covers telephone and electric
cooperatives and he would need to check into how other
private utilities handle notices of unclaimed capital
credits.
Senator Elton wanted to assure that the state was treating
both cooperative and non cooperative utilities equally. He
further noted that there may be legal limitations regarding
the use Permanent Fund Division information and it may
require a change in the law.
1:46:40 PM
Co-Chair Stedman suggested that the bill's sponsor check
with the Permanent Fund Division regarding legal limitations
to release address information.
1:47:09 PM
ROBERT WILKENSON, CHIEF EXECUTIVE OFFICER, COPPER VALLEY
ELECTRIC ASSOCIATION and VICE PRESIDENT, ALASKA POWER
ASSOCIATION testified via teleconference in support of HB
233. He explained that the Alaska electric industry includes
municipal utilities and a few investor-owned utilities but
was mostly made up of nonprofit electric cooperatives. The
distinguishable aspect of cooperatives is that they operate
on a nonprofit basis; by law the monies received in excess
of the cost of operations are a "contribution of capital" by
the member. The utility policy states that the credits are
allocated to customers, pending refund. He elaborated that
in some cases the refunds may not be made for a generation
or even longer, which presents the problem of unclaimed
refunds. He indicated that the 180 day notice was arrived at
from an existing statute whereby a year after a refund is
declared, if unclaimed refunds have been noticed for a year,
six months prior to the 180 days those funds may revert to
the utilities.
He noted staff on both the House and Senate side worked with
the utilities to make changes to HB 233. The goal of the
utilities is to complete the contract with members and
return any capital credits due. Mr. Wilkenson responsed to
Senator Thomas' earlier comment regarding "members" said a
differentiation could be made by using "members" and
"inactive members" terminology.
1:52:38 PM
MARILYN LELAND, EXECUTIVE DIRECTOR, ALASKA POWER ASSOCIATION
testified via teleconference and commented on the previously
asked question regarding the number of companies without
internet. She believed most companies had the internet and
this bill could be an incentive to use the internet for
those who do not already. She further noted that some
companies are already noticing members through the internet.
She described that the funds, once returned to the utility,
are generally given back into the communities. She provided
an example of communities using funds for school
scholarships.
1:54:55 PM
HB 233 was HEARD and HELD in Committee for further
consideration.
RECESS: 1:55:37 PM
RECONVENED: 5:12:58 PM
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