04/12/2005 05:39 PM House EDU
| Audio | Topic |
|---|---|
| Start | |
| HB92 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON EDUCATION
April 12, 2005
5:39 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Chair
Representative Carl Gatto
Representative Bob Lynn
Representative Bill Thomas
Representative Peggy Wilson
Representative Woodie Salmon
MEMBERS ABSENT
Representative Les Gara
COMMITTEE CALENDAR
HOUSE BILL NO. 92
"An Act relating to the purchase of interests in corporations,
including limited liability companies, by the University of
Alaska."
- MOVED CSHB 92(EDU) OUT OF COMMITTEE
HOUSE BILL NO. 140
"An Act establishing a tuition waiver and voucher program for
eligible students who were placed in foster care by the state;
and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 92
SHORT TITLE: UNIVERSITY OF ALASKA AND CORPORATIONS
SPONSOR(S): REPRESENTATIVE(S) KELLY
01/21/05 (H) READ THE FIRST TIME - REFERRALS
01/21/05 (H) EDU, HES
04/05/05 (H) EDU AT 11:00 AM CAPITOL 106
04/05/05 (H) Heard & Held
04/05/05 (H) MINUTE(EDU)
04/06/05 (H) HES REFERRAL WAIVED
04/06/05 (H) JUD REFERRAL ADDED AFTER EDU
04/07/05 (H) EDU AT 11:00 AM CAPITOL 106
04/07/05 (H) -- Meeting Canceled --
04/12/05 (H) EDU AT 11:00 AM CAPITOL 106
WITNESS REGISTER
HEALTH HILYARD, Staff
to Representative Mike Kelly
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Offered information on CSHB 92, Version Y.
REPRESENTATIVE MIKE KELLY
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 92.
ACTION NARRATIVE
CHAIR MARK NEUMAN called the House Special Committee on
Education meeting to order at 5:39:33 PM. Representatives
Wilson, Gatto, Lynn, and Thomas were present at the call to
order. Representative Salmon arrived as the meeting was in
progress.
HB 92-UNIVERSITY OF ALASKA AND CORPORATIONS
CHAIR NEUMAN announced that the first order of business would be
HOUSE BILL NO. 92 "An Act relating to the purchase of interests
in corporations, including limited liability companies, by the
University of Alaska."
5:40:25 PM
REPRESENTATIVE WILSON moved to adopt CSHB 92, Version 24-
LS0344\Y, Bannister, 4/7/05, as the working document. [Although
not formally noted, Version Y was treated as adopted and before
the committee.]
5:41:03 PM
HEATH HILYARD, Staff to Representative Mike Kelly, Alaska State
Legislature, explained that the substantial change to CSHB 92
was the removal of all language referring to "for profit
corporations" and hence this legislation applies only to
"nonprofit corporations." Additionally, AS 37.10.085,
subsection (a), was amended to reference the Executive Ethics
Act, which he characterized as a conforming amendment.
5:42:23 PM
REPRESENTATIVE WILSON inquired as to the reasoning behind the
University of Alaska being exempt from liability of purchasing
even a nonprofit.
5:43:00 PM
REPRESENTATIVE MIKE KELLY, Alaska State Legislature, sponsor,
replied that this legislation would permit the university to
invest in its research and export that research into the private
sector. He added that other universities have had success with
similar programs. The university doesn't want to risk its
assets and this legislation permits, only by approval of the
Board of Regents, investments [in small nonprofits]. He related
that most of the investment will be on a small scale for stand-
alone organizations. The university's partial ownership does
not signify that the organization becomes part of the
university, he noted.
REPRESENTATIVE WILSON asked if the university will be able to
[generate revenue] to use as income.
REPRESENTATIVE KELLY responded that some income is associated.
However, most often this legislation would attempt to export a
small venture into the private sector, he added. In further
response to Representative Wilson, Representative Kelly said
this legislation is the [exact] "blueprint" from similar
successful university programs that turn research into an
"application."
5:46:54 PM
REPRESENTATIVE THOMAS opined that this legislation should move
to the House Judiciary Standing Committee in order to further
deal with the legalities of this issue.
CHAIR NEUMAN related that one of the committee's previous
concerns with HB 92 has been addressed by changing the language
to "nonprofit" corporations.
5:47:46 PM
REPRESENTATIVE GATTO offered the scenario in which the
university invests in what was thought to be a great idea, but
it ultimately "busts." Furthermore, if the idea busts because
of illegal activity, will the private investor be held
accountable while the university is [held harmless], he asked.
5:48:58 PM
REPRESENTATIVE KELLY said he will not attempt to give a legal
opinion, but he related that the corporation is separate from
the university. Beforehand, the Board of Regents would clarify
to investors that the university is a stand-alone limited
liability and as such, if the corporation fails, both parties
could lose the value of the stock but investors would not be
able to sue the university.
REPRESENTATIVE GATTO related his understanding that the
university has no culpability.
REPRESENTATIVE KELLY answered, "Correct." However, he reminded
the committee that [these investments/corporations] have to pass
through all the appropriate channels first to ensure it's not a
risky operation. This legislation comes from the desire to not
enter into "too much risk" and not miss opportunities for
Alaska.
REPRESENTATIVE GATTO surmised then that since the university
isn't liable, the [private investor] would likely be sued.
REPRESENTATIVE KELLY said, "Correct," and reiterated that the
university, prior to investment, would clarify that its
relationship is held harmless from "any deep pocket" activity.
5:52:18 PM
CHAIR NEUMAN offered that every corporation has its own body and
immunity.
REPRESENTATIVE WILSON alluded to he notion that nonprofits
aren't different from limited liability [companies].
5:53:35 PM
CHAIR NEUMAN closed public testimony.
REPRESENTATIVE WILSON moved to report CSHB 92, Version 24-
LS0344\Y, Bannister, 4/7/05, out of committee with individual
recommendations and the accompanying zero fiscal note. There
being no objection, CSHB 92(EDU) was reported from the House
Special Committee on Education.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Education meeting was adjourned at
approximately 6:00 p.m.
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