Legislature(1993 - 1994)
04/18/1994 01:00 PM House CRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
April 18, 1994
1:00 p.m.
MEMBERS PRESENT
Representative Harley Olberg, Chairman
Representative Jerry Sanders, Vice-Chair
Representative Con Bunde
Representative Ed Willis
Representative Bill Williams
Representative Cynthia Toohey
Representative John Davies
MEMBERS ABSENT
None
COMMITTEE CALENDAR
SB 255: "An Act establishing a comprehensive policy
relating to human resource development in the
state."
PASSED CSSB 255 OUT OF COMMITTEE
*HB 501: "An Act relating to Native corporations; and
providing for an effective date."
PASSED HB 501 OUT OF COMMITTEE
(* First public hearing)
WITNESS REGISTER
SENATOR RANDY PHILLIPS
Alaska State Legislature
Capitol Building, Room 103
Juneau, AK 99801-3100
Phone: 465-4949
POSITION STATEMENT: Chairman of Senate C&RA, sponsor of
CSSB 255
DEBRA CALL, Chairman
Alaska Job Training Council
12342 West Prince of Peace
Eagle River, AK
Phone: 696-5786
POSITION STATEMENT: Supported CSSB 255
VINCE BARRY, Director
Education Program Support
Department of Education
801 W. 10th St.
Juneau, AK 99801
Phone: 465-8689
POSITION STATEMENT: Offered amendments to CSSB 255
MARY SHIELDS, General Manager
Northwest Technical Services
4041 B Street, Suite 102
Anchorage, AK 99503
Phone: 562-1633
POSITION STATEMENT: Testified in support of CSSB 255
MAXINE RICHERT
Sealaska Corporate Secretary
One Sealaska Plaza, Suite 400
Juneau, AK 99801
Phone:586-1512
POSITION STATEMENT: Supported HB 501
JOE WILSON
Goldbelt and Sealaska shareholder
P.O. Box 21534
Juneau, AK 99801
Phone: 586-1512
POSITION STATEMENT: Opposed HB 501
CARL C. NELSON
Goldbelt and Sealaska shareholder
P.O. Box 34203
Juneau, AK 99802
Phone: 789-9897
POSITION STATEMENT: Opposed HB 501
LESLIE LONGENBAUGH, Attorney
Alaska Federation of Natives and Sealaska
Birch, Horton, Bittner and Cherot
One Sealaska Plaza, Suite 301
Juneau, AK 99801
Phone: 586-2890
POSITION STATEMENT: Supported HB 501
KATHERINE S. MIYASATO
Douglas Island Indian Association
Goldbelt and Sealaska shareholder
525 No. Franklin St.
Juneau, AK 99801
Phone: 586-3942
POSITION STATEMENT: Opposed HB 501
PREVIOUS ACTION
BILL: SB 255
SHORT TITLE: STATE POLICY ON HUMAN RESOURCE DEVELOPMT
SPONSOR(S): COMMUNITY & REGIONAL AFFAIRS BY REQUEST
JRN-DATE JRN-PG ACTION
01/18/94 2530 (S) READ THE FIRST TIME/REFERRAL(S)
01/18/94 2530 (S) CRA, L&C, HES, STA
02/11/94 2784 (S) CRA RPT CS 1DP 3NR SAME TITLE
02/11/94 2784 (S) ZERO FISCAL NOTES PUBLISHED
02/11/94 2784 (S) (DCRA,LABOR,UA,DOE,ADM,DHSS,
02/11/94 2784 (S) DMVA, S.CRA/CORR, DCED, F&G)
03/02/94 3037 (S) L&C REFERRAL WAIVED
03/18/94 3264 (S) HES RPT CS 2DP 5NR SAME TITLE
03/18/94 3264 (S) PREVIOUS ZERO FNS APPLY TO CS
03/18/94 3264 (S) (DCRA, LABOR, UA, DOE, DHSS,
03/18/94 3264 (S) ADM,DMVA,S.CRA/CORR,F&G,DCED)
03/29/94 3389 (S) STA RPT CS 4NR SAME TITLE
03/29/94 3389 (S) PREVIOUS ZERO FNS APPLY TO CS
03/29/94 3389 (S) (DCRA,LABOR,UA,DOE,DHSS,ADM,
03/29/94 3389 (S) DMVA, S.CRA/CORR, F&G, DCED)
04/08/94 3525 (S) RULES TO CALENDAR 4/8/94
04/08/94 3526 (S) READ THE SECOND TIME
04/08/94 3526 (S) STA CS ADOPTED UNAN CONSENT
04/08/94 3526 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/08/94 3526 (S) READ THE THIRD TIME
CSSB 255(STA)
04/08/94 3527 (S) PASSED Y18 N- E2
04/08/94 3531 (S) TRANSMITTED TO (H)
04/08/94 3212 (H) READ THE FIRST TIME/REFERRAL(S)
04/08/94 3212 (H) COMMUNITY & REGIONAL AFFAIRS
BILL: HB 501
SHORT TITLE: CORPORATION CODE & ANCSA CORPORATIONS
SPONSOR(S): REPRESENTATIVE(S) WILLIAMS BY REQUEST
JRN-DATE JRN-PG ACTION
02/14/94 2382 (H) READ THE FIRST TIME/REFERRAL(S)
02/14/94 2382 (H) CRA, JUDICIARY
04/18/94 (H) CRA AT 01:00 PM CAPITOL 124
ACTION NARRATIVE
TAPE 94-18, SIDE A
Number 000
CHAIRMAN HARLEY OLBERG called the meeting to order at 1:08
p.m. He noted for the record Representatives Willis, Bunde,
Williams, Davies and Sanders were present and that a quorum
was present.
SB 255 - STATE POLICY ON HUMAN RESOURCE DEVELOPMT
Number 032
SENATOR RANDY PHILLIPS testified on CSSB 255 saying,
"Representative Jerry Sanders and I belong to the Alaska Job
Training Council and basically, what this bill does is
coordinates human resource development for the state
government agencies and requires public officials' response
for education training to coordinate their programs with the
private sector... There's 22 members of this council. Mr.
Sanders is the member from the House of Representatives and
I'm the Senate member of that council and basically, we look
at coordinating job opportunities and education for the
people of Alaska."
Representative Cynthia Toohey joined the committee at 1:10
p.m.
REPRESENTATIVE JERRY SANDERS added, "I feel that
coordination is very much needed because there's so many
different programs going out there and there's no overall
thing tying them all together so that they serve the
public."
SENATOR PHILLIPS said, "This bill does do it and there is an
audit done every four years, a follow up on where we are,
where we were and where we're going. (This is) Just
basically a policy statement put in statutes asking the
agencies and the private sector to work together for the
betterment of everybody in the state."
Number 081
REPRESENTATIVE CON BUNDE asked about the notations on the
members' copies of CSSB 255. (A copy of this bill is one
file.)
SENATOR PHILLIPS said, "What it was, as you know, somebody
always asks what's the difference between the different
versions. What you see here is where the amendments were
made and by whom, but not necessarily why."
Number 120
DEBRA CALL, CHAIR, ALASKA JOB TRAINING COUNCIL, testified
via teleconference saying, "I would like to testify in
support of this Senate Bill 255. It's a piece of
legislation that has been in development for at least three
to five years and it concerns the development of a human
resource policy for the state of Alaska. What we're trying
to do is to coordinate a lot of the development in the state
of Alaska's human resources and make them aware they are
efficient and effective in meeting the needs of the private
sector and the people of the state of Alaska. The policy
development that is talked about in this piece of
legislation is currently ongoing within national legislation
and the fact that makes a lot of the programs work together,
as opposed to meeting separate federal program guidelines.
We're looking for more coordination and consistency in
language and performance evaluations. So this is a policy
statement that suits the needs of Alaska, as opposed to the
needs of the federal government. And we're looking to
customize the programs to meet the needs of Alaska and for
economic development in the state. I also have testimony to
read from Dave Reese, who is the manager of technical
training, Alyeska Pipeline Services Company. And he is also
a member of the Alaska Job Training Council...he lives in
Eagle River...
Number 157
MS. CALL read, "In regards to SB 255 which has already
passed the Senate. It's a bill which provides the basis of
coordinating human resource development policy for Alaska.
The bill responds to private sector employers, labor groups
and community-based organizations who see a need for
increasing the coordination and cooperation of agencies
dealing with education and employment in this state. As
revenues decline and employment opportunities shift, the
people of this state need to have a sound, systematic,
support system for training unemployment. There's a need
for more connections between agencies and educational
institutions (to) be sure that the people can get training
for new jobs, upgrades and current jobs, and enter or
reenter the job market as it changes. With a vast number of
programs offered across the various state agencies and
schools without oversight and policy direction, there are
many opportunities for redundancies, disconnects and
misdirection. These functions can be costly and provide
unnecessary barriers to people looking for help. Jobs are
changing rapidly in Alaska, just as in the rest of the
world. Few people in jobs today will be doing the same
thing five to ten years from now. Even if they are in the
same kind of work, technologies and equipment, regulations,
and competitive markets will make it necessary to learn new
skills, change employers and target new markets. If Alaska
is going to remain in the hunt for a strong economy, we must
have efficient, effective (indiscernible) for developing and
retraining our workforce. As a private sector employee
representative on the Alaska Job Training Council, this bill
will help focus the Administration and legislature, on a
need to have a coordinated human resource development
opportunity. The accountability laid out in this bill makes
it clear that agencies will collaborate and that the
Governor will have a periodic report and guidance mechanism
to ensure that coordination and human resource development
is a key policy to economic development..."
Number 208
VINCE BARRY, DIRECTOR, EDUCATION PROGRAM SUPPORT, DEPARTMENT
OF EDUCATION said, "The Department of Education feels
strongly that there has to be planning and coordination
between all of the various departments and divisions
including the university. What the department is
suggesting, however, is that lines 23 to 25 (page 2) be
struck. They read, `To plan, monitor, and coordinate the
programs, systems, and activities identified in this
section, the governor shall use the Alaska Job Training
Council as the recognized state job training coordinating
council.' There are several reasons for that, if you see
the sentences that follow it seems to be saying pretty much
the same thing, addressing the issue in the same way. If
lacking the possibility of striking that sentence, we would
like you to consider changing the word `shall' to `may' on
line 24... The bill gives a tremendous authority with very
little responsibility attached to it to the Alaska Job
Training Council. The tasks could cost a tremendous amount
of money in order to respond one way or another to whatever
the recommendations are. The issue to me is that it's a
policy issue so as soon as you...arrive at assigning,
planning and monitoring and coordinating policies, then you
have a program. This is a programmatic activity. And the
programmatic activity, these ten departments and the
university and business, labor, industry and government,
professions, so on and so forth, should come together in a
more organized way and that could possibly be carried out if
the word is made by individuals from each of those
institutions. Right at the moment, for instance, all of the
institutions named are not represented on that council. To
give you an example that these things do occur as we
speak...just in my own division there's probably over 100
different activities that we undertake that we are involved
with other departments and the university." He then
provided examples of current programs implemented by the
Department of Education (DOE) and other departments and
concluded, "Again, the department favors this coordination.
We'd like to have this type of coordination formalized and I
think that if the Governor is given the option to say `may
use,' it would go a long way to helping the concerns that
the Department of Education has."
REPRESENTATIVE CYNTHIA TOOHEY said, "I appreciate Goal #1,
Objective #4, (found within backup information distributed
by Senator Phillips.) I think that is an area that we very
often forget and I think that it's very important that we
focus on requiring women to be given the option of having
nontraditional roles...the training is necessary."
SENATOR PHILLIPS said, "Quite frankly...this is the first
time I've heard of this complaint (from DOE) and the bill
was assigned to four committees in the Senate and I know in
my committee, C&RA...we had three hearings on it, this is
the first time I've heard of this. I don't know what's
going on. In this late date in the session, unless the
members on the teleconference feel that this is an important
amendment. I'd like to hear what they have to say about it,
but this is something new to me."
Number 310
MS. CALL said, "I have mentioned to a variety of people
that, if we could keep the legislation as it is, we can work
out the details before it goes for the Governor's signature,
in the sense that, the gist of the bill is to develop a
human resource policy for the state of Alaska and develop a
report, to report to the Governor on areas where we could
improve. That is my overriding focus, we need a policy for
the state of Alaska. One of the things that I know that is
a real issue with the Department of Education is the fact
that they don't have representation on the council... We've
gone so far as to say without authorization that you're ex-
officio members of our council. The council is funded by
Job Training Partnership money and they pretty much dictate
what the percentage of representation will be on the
council. So I am very supportive of the Department of
Education. I continue to solicit their input and it will
continue to be that way as long as I am chair. So I would
prefer leaving the legislation as it is and have an open
door policy with the Department of Education."
Number 339
CHAIRMAN OLBERG said, "Speaking as chair, I would be
reluctant to start amending this legislation at this point
in the process because we are running up against some
deadlines."
MARY SHIELDS, GENERAL MANAGER, NORTHWEST TECHNICAL SERVICES,
testified via teleconference in support of CSSB 255. She
said, "We're trying to accomplish with this bill something
that has been very important for quite a period of time and
that's to develop a policy that will primarily enable. We
want to enable the people that are receiving the services,
we want to enable the people delivering the services and we
want to specifically enable the people, like my firm,
...that are hiring those who have received and trained out
of these services. ...to obtain the best results for all of
us and for everyone involved is to have this kind of
cooperative attitude, more or less an alliance...formed..."
Number 379
REPRESENTATIVE SANDERS moved to pass CSSB 255 out of
committee with individual recommendations.
There were no objections.
HB 501 - CORPORATION CODE & ANCSA CORPORATIONS
Number 388
CHAIRMAN OLBERG brought forth HB 501.
REPRESENTATIVE BILL WILLIAMS, PRIME SPONSOR, HB 501, read
the following sponsor statement for the record: "Alaska has
hundreds of Native corporations, each with shareholders
numbering from less than 100 to nearly 16,000. As the law
now stands, when shareholders wish to remove directors
neither they nor the corporations have a clear map of the
process. Each attempt can be brought by a single
shareholder and can go on indefinitely, sapping the
resources of these for-profit corporations, many of which
are primary employers in their regions. The situation is
most comparable to that in municipal government, where
elected officials can face recall elections. The
Legislature (should) recognize that limitless recall efforts
could cripple the legitimate work of government and make it
difficult to attract and keep qualified restrictions on
these drives. This bill generally applies the municipal
recall election procedures to Native corporations. The
Corporations Code now gives each shareholder the power to
force all other shareholders to vote on removal, no matter
how slim the odds of success or how frivolous the reason.
Any one of what are sometimes thousands of shareholders
could hold up a corporation's annual meeting in this way.
By contrast, when voters want to remove municipal officials
from office, they apply to the municipal clerk for a recall
petition is prepared, it must be signed by a number of
voters equal to at least 25 percent of the number who voted
at the last regular election before the municipal clerk may
call an election. In addition to adapting the municipal
recall procedure for corporations, the bill defines a
removal petition as the start of proxy solicitation,
triggering all filing and truthfulness requirements under
state law. This change, which codifies the relevant case
law, is the definition already employed by the State
Division of Banking, Securities and Corporations. The
Corporations Code does not answer most of the questions it
raises about the process for removing corporate directors,
and lacks an adequate definition of when proxy solicitation
begins. HB 501 proposes simple and clear steps for removal
and defines solicitation in the event of a removal election.
The objective of HB 501 is to provide a road map for a fair
elections process."
Number 450
REPRESENTATIVE TOOHEY asked, "You say that this bill will
bring into conformity the corporation into all corporation
proceedings?"
REPRESENTATIVE WILLIAMS said, "I believe so. I know that
the corporation that I belong to did not do this..."
REPRESENTATIVE JOHN DAVIES said, "Did I take that to mean
that there are many different procedures that different
corporations use?"
REPRESENTATIVE WILLIAMS said, "I'm not sure. I know that
the corporation that I belong to had gone through several
recall petitions and each time it had changed, the
procedures had changed. So I would have to say that there
is no clear road map... This bill would deal with only
Native corporations because of the fact that we can't sell
our shares..."
Number 490
REPRESENTATIVE SANDERS said, "Is this brought up because of
some specific situation that has happened or is this general
with all the Native corporations across Alaska?"
REPRESENTATIVE WILLIAMS said, "As you can see, I introduced
it by request. I was approached by the Alaska Federation of
Natives to do this."
Number 503
MAXINE RICHERT, CORPORATE SECRETARY, SEALASKA CORPORATION,
testified saying, "Sealaska is a member of the Alaska
Federation of Natives (AFN) who have been instrumental in
developing the language for HB 501." She then read aloud
AFN's position: "The legislation results in part from
Native corporations' experiences with shareholder matters
not adequately addressed by the present Corporations Code.
Before 1988 and 1989, when Alaska's new Corporations Code
was enacted, Native interests worked with the legislature to
revamp the Code. Since that time, we have discovered
shortcomings in the new Code and have worked to revise it.
HB 501 is the result of that effort. The bill was not
drafted to favor or obstruct the interest of either
management or shareholders. Rather, it tries to provide
both shareholders and management with a clear procedural
road map where virtually none has existed before. When
shareholders currently wish to remove an elected director
from office, they and their corporation must feel their way
through the law, relying on the common law from other states
and on the Division of Banking, Securities and Corporations,
or even the courts, for guidance when they encounter large
gaps in the Corporations Code. As a consequence, removal
efforts drag on almost endlessly, and all parties incur
enormous legal costs in simply making their way through the
process... The legislation first gives shareholders a forum
to go to, the Department of Commerce and Economic
Development, Division of Banking, Securities and
Corporations, if the corporate secretary rejects their
petition for removal. The division already has jurisdiction
over proxy disputes in Native corporations. By making the
direct removal process clearer, this legislation ought to
decrease, rather than increase, the division's workload...
Finally, the bill changes the size of Native corporations
that must file reports with the Division of Banking,
Securities and Corporations. As the law now stands, a
Native corporation with fewer than 300 shareholders in
Alaska is exempt from filing its annual report and proxy
materials with the division, no matter now big the
corporation's assets and income. This bill proposes to
require such filings of any Native corporation with at least
150 Alaska resident shareholders, if that corporation has at
least $5 million in assets. Small, but economically
powerful corporations would no longer be exempt from the
filing standards with which all regional corporations must
comply. The Alaska Federation of Natives believes that the
best interest of Native shareholders throughout Alaska
requires statutory clarification of these procedures. We
encourage thorough public examination of them through
hearings that will allow regional and village corporations
an opportunity to respond."
Number 566
REPRESENTATIVE TOOHEY asked, "I noticed this was introduced
on February 14. Is there any reason we're hearing it now?
Why didn't we hear it in February? Another question, the
AFN, did they vote on this?"
MS. RICHERT replied, "Their board of directors voted on it."
REPRESENTATIVE WILLIAMS assisted, "My being the sponsor of
this bill, I've been asking AFN when they would help us get
the information and apparently they've been busy on other
issues."
REPRESENTATIVE DAVIES asked if the Division of "Security and
Finance" is a state agency or federal agency.
MS. RICHERT replied it was `state'.
REPRESENTATIVE DAVIES pursued saying, "I'm wondering what
this state legislature's authority is to set requirements
for Native corporations, given that they were created by
federal law."
REPRESENTATIVE WILLIAMS said, "We are instructed to follow
the state laws for corporate law."
MS. RICHERT added, "Unless the federal law conflicts with
state. Then the federal takes precedence."
Number 595
REPRESENTATIVE WILLIAMS reiterated that Native corporation
shareholders cannot sell their shares like an IBM
shareholder can do.
JOE WILSON, SHAREHOLDER, GOLDBELT AND SEALASKA, said, "I'm
here representing my own concerns and views today...
Basically, I'm opposed to it (HB 501). I don't think even
though the AFN has stated they feel it's fair to both sides,
they don't want to take a position, they just want to create
something that's more fair, I don't agree with that. I
think this legislation is being proposed by the regional
corporations. Regional corporations paid money to fund the
AFN organization and that's where they get their money to
operate so they have to represent their interests, the
powers that in place in these regional corporation
institutions. So I don't feel that it is fair. There has
been no recall effort that has ever succeeded. Presently,
the rules in (the Division of) Banking and Securities are
pretty much written in favor of the institutions in place...
Whenever there is a challenge from the shareholders, the
regional corporation, in addition to having the code (Alaska
Administrative Code) in their favor, they also have
unlimited resources to defend their position that is under
question at any time and if the shareholder, the only way
they could bring their concerns forward...is to have a
petition to be circulated and to gain ten percent of the
total outstanding shares. Like, in our experience, in
Goldbelt. Goldbelt has 2,700 shareholders, and we are one
of the four urban corporations organized under Alaska Native
Claims Settlement Act... So for us to have more restrictive
procedures to follow in getting a petition signed and
getting first of all the regional corporation approval...
I'm sure at that point in time, a lot of efforts to resolve
it that have failed because the powers that be do not want
to listen. So, the only recourse the shareholders have is
to get a petition signed by 10 percent of the shareholders
and once that is accomplished, it is delivered to the
corporation and, under the Administrative Code, they have to
verify the signatures on the petition are. And that is a
process that is not difficult and they make it more
difficult for this procedure here. And they make it more
difficult for shareholders to sign a petition... Under HB
501, before we even get a petition, we have to go to the
entity that we are being critical of to approve our
signature. We have to go to the corporate secretary of the
corporation. I don't see where there's a need for us to do
that. But further, we have to comply with another provision
where...all signatures were made in the presence of a
sponsor... We have shareholders in Saudi Arabia and
Germany... The inspector of an election can look at a
filled signature. Furthermore, shareholders are identified
by a social security number and also an enrollment
number..."
TAPE 94-18, SIDE B
Number 000
MR. WILSON continued, "I don't believe that making it more
restrictive on the process of obtaining a petition is fair.
I think that this legislation gives more power to the entity
that you're wanting to question..."
REPRESENTATIVE TOOHEY said, " You said that the signature
had to be verified by someone within the corporation. It
says here as long as you have two witnesses, so it can be
any two witnesses. If you're in Europe and sitting in a
French cafe, it can be two people watching you sign that."
MR. WILSON said, "There's a provision for a person that
signs a petition with an `X', that's no problem there. But
where it spells out on page 2, (line 30)... For instance if
I were a sponsor on a petition, I would have to be present
at every signature and I don't think that's fair."
Number 078
REPRESENTATIVE JERRY SANDERS offered, "Joe, if there was
something put in there about having a notarized signature,
would that help you any?"
MR. WILSON said, "No, I don't think that is really necessary
because the signatures are on file at every corporation.
Signatures are on file at every corporation. Corporations
issue the dividend checks to shareholders and those
individuals that sign for cashing those checks are a good
source for verifying any signature that anyone signs."
Number 105
REPRESENTATIVE TOOHEY said, "I think what the gentleman's
referring to is on page 2, line 31. It says `sworn
signature and date of signing that the sponsor personally
circulated the petition'. That's impossible if you have
people living in New York City... I think that's the glitch
there."
REPRESENTATIVE WILLIAMS said, "I know from experience...that
trying to get ten percent of the petition signed, generally
you'll get most of those petition signers right here in
Juneau... I don't think, Joe, that it would hang up
Goldbelt to get the petitions signed."
MR. WILSON said, "The other thing, I think, is that you're
requiring a higher standard than ten percent also is being
proposed in this bill and I don't agree with that..."
REPRESENTATIVE TOOHEY asked if this bill affects all
corporations or just Native corporations and how many Native
corporations are members of AFN. She asked, "Does this
include any corporations that have not been consulted by
this?"
REPRESENTATIVE WILLIAMS responded saying, "It's signed by
Julie Kitka who is the president of AFN... Granted, it
probably has not been brought up at the AFN convention, but
the board of directors of AFN, which is made up of 12
regional corporations...and 12 regional nonprofit
organizations..."
REPRESENTATIVE DAVIES asked, "You have the Alaska
Administrative Code (AAC) there. Is the figure 10 percent
in that Administrative Code right now?"
MR. WILSON said, "The figure ten percent is in the bylaws of
most of the village or regional or urban corporations."
REPRESENTATIVE DAVIES asked, "So is it the case that right
now the percentage that's required to approve a recall
election is up to each individual corporation?"
MR. WILSON replied, "First of all, they must meet the
sufficient requirement which in most cases is ten percent of
the shareholders who bring a petition."
REPRESENTATIVE DAVIES asked, "That's what I'm trying to get
at. Who sets that ten percent requirement?"
MR. WILSON said, "It's in corporate law that each
corporation should specify and most of them have adopted the
ten percent requirement which is allowed in the Alaska
statute for corporations... The higher standard for recall
is also spelled out in Alaska statute which is 50 percent
plus one which is a very high standard for removal of
directors. So I see what you're doing here is just making
it more difficult for the shareholder that doesn't have the
finances of these corporations behind them..."
Number 234
REPRESENTATIVE WILLIAMS said, "When this bill came before
me, it was asked of me to introduce it, I was very much
against it for some of the reasons that Joe has mentioned.
Then, being away from that portion of my life for a couple
of years gave me a little bit of time to rethink on some of
the issues... I think that AFN has come up with this
language because of the fact that there have been a lot of
recalls and granted, sometimes it doesn't cost a company...
but when I was working for Cape Fox, I can say that we
treated every petition very seriously and we stopped
everything within the company to deal with just a petition
and nothing moved... We had to stop everything... It does
cost us money every time we do have a petition."
REPRESENTATIVE TOOHEY pointed out that on the letter
submitted to the committee from AFN (Alaska Federation of
Natives) it says, "We encourage a thorough public
examination of them through hearing that would allow
regional and village corporations an opportunity to respond"
and asked, "Has that been done?"
CHAIRMAN OLBERG said, "That's us."
REPRESENTATIVE TOOHEY asked if this committee meeting is
being teleconferenced.
CHAIRMAN OLBERG indicated no.
REPRESENTATIVE TOOHEY asked if was the intention of the
chair to move this bill out of committee today.
CHAIRMAN OLBERG said, "I didn't have any strong feelings one
way or the other."
Number 323
REPRESENTATIVE TOOHEY asked, "What is a frivolous petition?"
REPRESENTATIVE WILLIAMS said, "In my experience, we have
never denied a petition... The only reason that some of our
petitions never went through is that some of the sponsors
were meeting and discussed it and they backed off. Living
in a small community...you knew when you had to have a
meeting."
CARL NELSON, SHAREHOLDER, GOLDBELT INCORPORATED AND SEALASKA
CORPORATION, testified in opposition to HB 501. He said,
"In regards to what I feel that is very important in
something like this, is checks and balances... We're
looking at what we have as far as the Native corporation is
concerned and coming in with some kind of guidelines and
laws that are going to more or less guide them in a
direction that they're going to follow... It seems to me
the checks and balances are kind of being swayed to the
corporation's side rather than being swayed to the
individual shareholder's side. If we're going to be dealing
with anything such as HB 501, then I think what we ought to
do is really dwell into it. I mean dwell into it to the
extent... I would recommend that it be up for debate in the
AFN on the issue of this matter, so that all of the other
issues that are pertinent to it will come out of the
woodwork and be part of the bill... I certainly don't want
to see a corporation being manipulated all the time..."
Number 420
REPRESENTATIVE DAVIES said, "You said that there's no
standard processes?"
MR. NELSON said, "I don't believe that every corporation is
the same in their election process..." and described a
recent recall effort at Goldbelt that failed. He said, "If
we could change the 20 days to 60 days, the 40 days to 80
days. Then I think there's fairness there in regards to
recall or anything else dealing with any corporation.
You're not shutting the door. You're giving fairness to a
shareholder who does not have the funds..."
REPRESENTATIVE SANDERS said, "Since I've been down here,
this is the bill that I feel the most unqualified to vote on
or comment on because I don't understand the situation and I
don't think there's been enough input into it... I'm
married to a Native lady and over thirty years I've always
been told that Native people want to handle their own
affairs and I don't understand why we're being asked to tell
you what to do... I feel uniquely unqualified to make any
kind of a judgment."
Number 460
REPRESENTATIVE WILLIAMS said, "As far as doing it for
ourselves, I think a lot of the corporations have done it
for themselves. The way that they'd like to see a special
meeting called... This portion of law doesn't let us take
care of it (for ourselves)... I don't think we have staff
members on the Community and Regional Affairs to take care
of this. It probably should be heard in Judiciary where we
do have attorneys to look at this bill more closely, so that
everything within this bill is done according to the laws
that we do have... I can say now that ten percent is too
little..."
REPRESENTATIVE TOOHEY said, "This is a corporation
problem... But I'm going to feel very uncomfortable making a
decision legally in the legislature without having had
(this) at least brought up in front of the (AFN) meeting in
Anchorage or Juneau or Fairbanks, wherever it's going to be
this year... I'm very uncomfortable with it."
Number 556
REPRESENTATIVE DAVIES expressed similar discomfort also and
asked if a majority of all shareholders, not just those who
voted, are needed for a recall petition. He commented that
this would make a pretty tough standard.
REPRESENTATIVE BUNDE indicated he felt capable to make
decisions regarding Native corporations. He said, "On this
Goldbelt, it costs $150,000 of corporation money to deal
with the recall effort and the ink wasn't dry on the vote
before they starting another one..."
Number 587
REPRESENTATIVE ED WILLIS said, "I, too, am having problems
coming to grips with this and (not) knowing how many of the
corporations out there really feel that this is the way to
go..."
CHAIRMAN OLBERG indicated that he may have "inherited the
headquarters of Ahtna Corporation" due to redistricting and
indicated some discomfort with this bill. He said, "That
doesn't mean it can't go to Judiciary, either. They do have
attorneys that we don't have access to. The idea of it
coming up again at AFN has merit."
Number 615
LESLIE LONGENBAUGH, ATTORNEY, BIRCH, HORTON, AND SHEROUGH,
said, "Sealaska Corporation, with which I'm most familiar,
has probably more shareholders in Seattle than it does in
Juneau. That's just a guess... It frequently calls on the
hundreds of shareholders in Seattle area. I'm sure they
would get involved through local sponsors (there)."
REPRESENTATIVE TOOHEY asked, "On page 2, line 30, number 8,
`a statement, with spaces for the sponsor's sworn signature
and date of signing, that the sponsor personally circulated
the petition, that all signatures were made in the presence
of the sponsor': I get hundreds of petitions to sign and I
circulate them, give them out, it doesn't matter who signs
them as long as they're...verifiable. I think this is a
very restrictive section in here."
CHAIRMAN OLBERG said, "On page 2, line 6: that every person
voting in the election can theoretically be a sponsor and
have their very own petition mailed to them if they so
desire, is the way I read that, `to each sponsor who appears
in person in the secretary's office or whose mailing address
is provided to the secretary..."
Number 649
MS. LONGENBAUGH said, "You could be in Kake or Seattle...
Where it's written in the law that you have to have ten
percent now to get a recall. Actually, the statute says and
it's 10.06.460, one shareholder can put removal on the
ballot. Any one shareholder. You need ten percent of
shares to call for any special meeting which is normally
what the vehicle is for these removals; although sometimes
it will happen at the annual meeting. So, as it stands now,
of Sealaska's 16,000 shareholders, one could call for
removal of any given director."
REPRESENTATIVE DAVIES asked, "One person could cause an
election to happen?"
MS. LONGENBAUGH replied, "No, it takes ten percent to get a
special meeting. One person can put it on the ballot at an
election that's already happening... If you wanted to have
a special meeting which is more often the vehicle and
that's, I think, where the ten percent comes from in most
people's minds, you have to have a ten percent petition of
shareholder... 10.06.460, 10.06.405."
Number 664
REPRESENTATIVE TOOHEY asked, "What is the criteria for
denying a petition?"
MS. LONGENBAUGH said, "Well it looks as though in section 1
which is just talking about shareholder votes on any
petition or demand, not just recall, you have to just meet
the requirements of `b' which is at the base of page 1,
which requires the name and address of the sponsors, the
source of funding that exceeds $500 in the aggregate and the
name and address of a contact person and an alternate
contact person. And then it says `if the secretary
determines that an application for a petition form meets the
requirements of "b" of this section, the secretary shall
issue a petition form.' So in that regard the secretary has
very little discretion. This is copied from the recall
statute for municipalities... It's in the section by
section analysis and sponsor statement..."
CHAIRMAN OLBERG asked, "Are there any major differences
between this and municipal provisions, that you are aware
of?"
MS. LONGENBAUGH said, "None that I'm aware of or can think
of at the moment, except at the bottom of page 5 and this is
just because it's peculiar to corporations, section `p'
defines a petition as a proxy solicitation under the law,
which is a corporations thing. The Division of Banking,
Securities and Corporations already defines a petition as a
proxy solicitation which triggers some reporting
requirements. In section 2, that has to do with the recall
specifically...does say that it has to be for a lawful
purpose for holding a meeting and certainly recalling
directors is set out in the statutes as a very lawful
purpose. In fact, lawful purpose in the corporate context
is defined broadly by the case law. A corporation would be
really remiss to turn down anything that was other than
direct personal gain..."
TAPE 94-19, SIDE A
Number 000
MS. LONGENBAUGH indicated that all regional, urban and
village Native corporations are members of AFN, except
possibly one.
REPRESENTATIVE TOOHEY asked how many of these are on the
board of directors.
MS. LONGENBAUGH indicated twenty something board members.
REPRESENTATIVE DAVIES asked, "Did you hear my comment about
the 50 percent requirement? That's clearly not the same as
municipalities."
MS. LONGENBAUGH said, "What is actually the requirement has
to do with accumulative voting... It ends up being
extremely difficult. It's true, it's a very high standard
for, if they had to have 50 plus one at the Goldbelt
election given the numbers cited to you, they would have
recalled the entire board. But if you're trying to recall
an entire board, if they were cumulatively voted in, you
have to have more than as many votes as it took to elect
them in the first place. Extremely difficult standard
that's in the statutes now and the Alaska Corporate Code."
REPRESENTATIVE DAVIES asked, "The corporate code doesn't say
a majority of the stockholders, it has some other standard?"
MS. LONGENBAUGH said, "It has a different standard, it's
more complicated."
REPRESENTATIVE SANDERS asked, "Has anybody ever been
recalled?"
MS. LONGENBAUGH replied, "Larry Carroll at the Division of
Banking, Securities and Corporations has told me that no one
has ever been recalled. But what happens...is that
everything grinds to a halt for the supposedly for-profit
corporations, and the cost is extremely high."
Number 085
REPRESENTATIVE DAVIES asked, "Is there any restriction in
the number of times a recall can be brought?"
MS. LONGENBAUGH said, "In this bill, if you bring this (a
petition) before the body and it's not successful then you
have to wait like a year before you can bring it back again
which is similar or might be identical to the municipal
recall."
REPRESENTATIVE WILLIAMS said, "I didn't realize that...you
had to wait a year... Getting back to ten percent which I
think is important, is that increasing it then?... You do
have ten percent of the people upset with what we all do
here... But I do support this, I think that this bill needs
probably more work..."
Number 130
REPRESENTATIVE SANDERS said, "In the interest of cutting
down on frivolous suits and also in the interest of getting
more accomplished by the suits, I don't know that I don't
agree with the 25 percent because, like you say, all of them
are ten percent. It sounds to me like they just get their
ten percent and quit talking to people and if they got 25,
they'd stand a lot better chance of getting something
through and you'd have a lot less petitions to go through.
That might help."
MS. LONGENBAUGH added, "The 25 percent standard is the
municipal recall standard for I guess that reason."
REPRESENTATIVE DAVIES pointed out, "That's 25 percent of the
people that voted in the last election. This would be 25
percent of the corporation?"
MS. LONGENBAUGH said, "It says `representing at least 25
percent of the number of votes cast at the last regular
election.'"
REPRESENTATIVE SANDERS asked, "What's the (current) ten
percent of?"
MS. LONGENBAUGH said, "Ten percent is of all shareholders so
the 25 might be more like a 15, I don't know."
REPRESENTATIVE WILLIAMS said, "I didn't realize that. I'd
like to see it at 25 percent of the outstanding shares..."
and then moved that the bill be passed out of committee with
individual recommendations.
CHAIRMAN OLBERG asked to hold that motion until all
testimony was taken and called an at ease from 2:46 p.m. to
2:47 p.m.
Number 200
KATHERINE MIYASATO, SHAREHOLDER, GOLDBELT AND SEALASKA,
testified against HB 501. She said, "I understand there are
a few legislators here that have not really delved into it
and how much input is there from shareholders who are the
ones that are having the difficulty with some of the
corporate board members. It wouldn't cost us the money it's
costing us if things were the way they should be, because
it's a business corporation. It's not a fraternal
organization. The only difference is that these business
corporations, for-profit corporations, have Indian people
who do not generally think like a white person and... it's
important that you have this input from the shareholders.
From my understanding... the AFN, apparently it was the
board members, did they have input from all the people of
the AFN? Were these things circulated? I'm also chairing
the Douglas Indian Association... How much publicity has
there been? Since it deals with shareholders of these
corporations, how many of these shareholders have heard
about this?"
CHAIRMAN OLBERG asked if the Douglas Indian Association is a
member of AFN?
MS. MIYASATO said, "No, we have just recently been
recognized by the Department of the Interior."
CHAIRMAN OLBERG said, "All of the legal requirements as to
notification have been met as regards this bill, but
obviously it has not been disseminated statewide in any
systematic fashion to shareholders... That is exactly why
this meeting is taking place and why future meetings will
take place, is to allow people a chance and us to educate
ourselves..."
MS. MIYASATO asked if this meeting was publicized in the
legal notices.
CHAIRMAN OLBERG said no.
Number 285
REPRESENTATIVE WILLIS asked, "Could we not make a
recommendation to the next committee of referral that when
they do consider this bill that they hold a statewide
teleconferencing on it?
CHAIRMAN OLBERG said, "Absolutely..."
REPRESENTATIVE DAVIES said, "I would share Representative
Willis's concern if we were to add that as a recommendation
in a letter of transmittal, then I would be comfortable."
CHAIRMAN OLBERG said, "...I think that's appropriate," and
asked Representative Williams to restate his motion.
REPRESENTATIVE WILLIAMS moved to pass HB 501 out of
committee with individual recommendations with the described
letter of intent attached for the Judiciary Committee.
There were no objections.
CHAIRMAN OLBERG adjourned the meeting at 2:55 p.m.
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