Legislature(2023 - 2024)BELTZ 105 (TSBldg)
04/27/2023 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB69 | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 69 | TELECONFERENCED | |
| *+ | HB 123 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
April 27, 2023
1:33 p.m.
MEMBERS PRESENT
Senator Forrest Dunbar, Chair
Senator Jesse Bjorkman
Senator Cathy Giessel
MEMBERS ABSENT
Senator Donald Olson, Vice Chair
Senator Elvi Gray-Jackson
COMMITTEE CALENDAR
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 69(CRA)
"An Act relating to the reclassification of first class cities
as second class cities; and providing for an effective date."
- MOVED SCS CSHB 69(CRA) OUT OF COMMITTEE
HOUSE BILL NO. 123
"An Act relating to an amendment to the articles of
incorporation of a corporation organized under the Alaska Native
Claims Settlement Act; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 69
SHORT TITLE: RECLASSIFICATION OF FIRST CLASS CITIES
SPONSOR(s): REPRESENTATIVE(s) CRONK
02/10/23 (H) READ THE FIRST TIME - REFERRALS
02/10/23 (H) EDC, CRA
03/01/23 (H) EDC AT 8:00 AM DAVIS 106
03/01/23 (H) Heard & Held
03/01/23 (H) MINUTE(EDC)
03/13/23 (H) EDC AT 8:00 AM DAVIS 106
03/13/23 (H) Heard & Held
03/13/23 (H) MINUTE(EDC)
03/20/23 (H) EDC AT 8:00 AM DAVIS 106
03/20/23 (H) Moved HB 69 Out of Committee
03/20/23 (H) MINUTE(EDC)
03/22/23 (H) EDC RPT 5DP 2NR
03/22/23 (H) DP: STORY, MCKAY, MCCORMICK, ALLARD,
RUFFRIDGE
03/22/23 (H) NR: HIMSCHOOT, PRAX
04/04/23 (H) CRA AT 8:00 AM BARNES 124
04/04/23 (H) Heard & Held
04/04/23 (H) MINUTE(CRA)
04/06/23 (H) CRA AT 8:00 AM BARNES 124
04/06/23 (H) Moved CSHB 69(CRA) Out of Committee
04/06/23 (H) MINUTE(CRA)
04/10/23 (H) CRA RPT CS(CRA) 6DP
04/10/23 (H) DP: MEARS, MCKAY, HIMSCHOOT, RUFFRIDGE,
MCCABE, MCCORMICK
04/14/23 (H) TRANSMITTED TO (S)
04/14/23 (H) VERSION: CSHB 69(CRA)
04/17/23 (S) READ THE FIRST TIME - REFERRALS
04/17/23 (S) CRA
04/25/23 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
04/25/23 (S) Heard & Held
04/25/23 (S) MINUTE(CRA)
04/27/23 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 123
SHORT TITLE: ARTICLES OF INCORPORATION FOR ANCSA CORPS
SPONSOR(s): REPRESENTATIVE(s) C.JOHNSON
03/17/23 (H) READ THE FIRST TIME - REFERRALS
03/17/23 (H) CRA
04/04/23 (H) CRA AT 8:00 AM BARNES 124
04/04/23 (H) Heard & Held
04/04/23 (H) MINUTE(CRA)
04/06/23 (H) CRA AT 8:00 AM BARNES 124
04/06/23 (H) Moved HB 123 Out of Committee
04/06/23 (H) MINUTE(CRA)
04/10/23 (H) CRA RPT 6DP
04/10/23 (H) DP: MEARS, MCKAY, HIMSCHOOT, RUFFRIDGE,
MCCABE, MCCORMICK
04/14/23 (H) TRANSMITTED TO (S)
04/14/23 (H) VERSION: HB 123
04/17/23 (S) READ THE FIRST TIME - REFERRALS
04/17/23 (S) CRA
04/27/23 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
DAVE STANCLIFF, Staff
Representative Mike Cronk
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke to Amendment 1 for CSHB 69(CRA).
TOM WRIGHT, Staff
Representative Craig Johnson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 123 on behalf of the sponsor.
KIM REITMEIER, President
Alaska Native Settlement Claims Act Regional Association
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in support of HB 123.
ROBERT MISULICH, General Counsel
Aleut Corporation
Anchorage, Alaska
POSITION STATEMENT: Responded to questions on HB 123.
SYLVAN ROBB, Director
Division of Corporations, Business and Professional Licensing
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Responded to questions on HB 123.
CHERYL BOWIE, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 123.
ACTION NARRATIVE
1:33:23 PM
CHAIR FORREST DUNBAR called the Senate Community and Regional
Affairs Standing Committee meeting to order at 1:33 p.m. Present
at the call to order were Senators Giessel, Bjorkman, and Chair
Dunbar.
HB 69-RECLASSIFICATION OF FIRST CLASS CITIES
1:34:35 PM
CHAIR DUNBAR announced the consideration of CS FOR HOUSE BILL
NO. 69(CRA) "An Act relating to the reclassification of first
class cities as second class cities; and providing for an
effective date."
CHAIR DUNBAR noted that this is the second hearing of CSHB
69(CRA), and the intention is to consider an amendment to this
bill today. The differences between this bill and its companion,
SB 79, were discussed in a previous meeting.
1:35:18 PM
SENATOR BJORKMAN moved to adopt Amendment 1, work order 33-
LS0407\B.2.
33-LS0407\B.2
Dunmire
4/26/23
AMENDMENT 1
OFFERED IN THE SENATE SENATOR BJORKMAN
TO: CSHB 69(CRA)
Page 1, lines 4 - 5:
Delete "The uncodified law of the State of
Alaska"
Insert "AS 29.04"
Page 1, lines 6 - 7:
Delete "RECLASSIFICATION OF FIRST CLASS CITIES
WITH FEWER THAN 400 PERMANENT RESIDENTS."
Insert "Sec. 29.04.045. Reclassification of first
class cities with fewer than 400 permanent residents."
Page 2, line 7:
Delete all material.
Renumber the following bill section accordingly.
1:35:30 PM
SENATOR GIESSEL objected for purposes of discussion.
1:35:33 PM
SENATOR BJORKMAN said Amendment 1 deletes the repealer language
in Section 2 of the bill. The state has multiple first-class
cities that could find themselves with fewer than 400 permanent
residents, like the City of Tanana, to whom this legislation
applies. It makes sense to give communities that might
experience similar population issues in the future access to the
same reclassification opportunity. Amendment 1 provides equal
protection and process for communities statewide.
1:36:40 PM
SENATOR GIESSEL removed her objection to Amendment 1.
1:36:43 PM
CHAIR DUNBAR invited Mr. Stancliff to speak to Amendment 1.
1:36:51 PM
DAVE STANCLIFF, Staff, Representative Mike Cronk, Alaska State
Legislature, Juneau, Alaska, stated the sponsor has no
difficulty with Amendment 1 and leaves its adoption to the
Senate's discretion.
1:37:19 PM
CHAIR DUNBAR found no further objection and Amendment 1 was
adopted. He sought the will of the committee.
1:37:28 PM
SENATOR GIESSEL moved to report CSHB 69(CRA), work order 33-
LS0407\B, as amended, from committee with individual
recommendations and attached fiscal note(s).
1:37:46 PM
CHAIR DUNBAR found no objection and SCS CSHB 69(CRA) was
reported from the Senate Community and Regional Affairs Standing
Committee.
1:37:55 PM
At ease.
HB 123-ARTICLES OF INCORPORATION FOR ANCSA CORPS
1:39:26 PM
CHAIR DUNBAR reconvened the meeting and announced the
consideration of HOUSE BILL NO. 123 "An Act relating to an
amendment to the articles of incorporation of a corporation
organized under the Alaska Native Claims Settlement Act; and
providing for an effective date."
CHAIR DUNBAR stated the intention is to hear an introduction of
the bill, a sectional analysis presentation, invited testimony,
and public testimony.
1:40:10 PM
TOM WRIGHT, Staff, Representative Craig Johnson, Alaska State
Legislature, Juneau, Alaska, presented HB 123 on behalf of the
sponsor. He said this bill pertains to the votes required to
amend articles of incorporation under the Alaska Native Claims
Settlement Act (ANCSA). The bill's primary purpose is to lower
the vote threshold from two-thirds to a majority vote. He said
that all ANCSA corporations believe the law governing this issue
is antiquated and needs updating to a more realistic voting
standard. He summarized the following sponsor statement:
[Original punctuation provided.]
SPONSOR STATEMENT
HOUSE BILL 123
The Alaska Corporations Code, adopted in 1989,
requires corporations existing before July 1, 1989,
(which includes all ANCSA corporations) to obtain an
affirmative vote of at least two-thirds of the shares
entitled to vote for the adoption of an amendment to
the articles of incorporation.
Per current AS 10.06.504(d): The requirement of an
affirmative vote of at least two-thirds of the shares
entitled to vote for the adoption of an amendment to
the articles of incorporation as provided in former AS
10.05.276 shall remain in force for corporations
existing before July 1, 1989.
By contrast, corporations formed after July 1, 1989,
including any newly formed corporation in the State of
Alaska, generally require only a simple majority vote
of all outstanding shares for articles amendments.
The existing language of AS 10.06.504(d) effectively
handicaps ANCSA corporations from making amendments to
their Articles of Incorporation, unless an exception
applies. Most ANCSA corporations typically received
shareholder meeting quorums in the upper 50% or lower
60% of the total outstanding shares eligible to vote.
But as the years go on and shares become distributed
across larger numbers of individual descendants of
original shareholders, quorum counts are expected to
continue to decrease.
ANCSA and Alaska law already recognize this phenomenon
by providing reduced voting thresholds for ANCSA
corporations for certain specified matters. Reduced
voting thresholds apply to creation of a Settlement
Trust or amending the Articles of Incorporation to
issue new shares of Settlement Common Stock to
descendants of original shareholders, along with
amendments to the Articles of Incorporation to provide
for classification of seats on the Board of Directors.
There is no general catch-all allowing Alaska Native
Corporations to amend the Articles of Incorporation
for matters outside these narrow exceptions.
Thus, AS 10.06.504 sets up a discriminatory, two-tier
regime, in which Alaska Native Corporations are
subjected to an effectively impossible heightened two-
thirds voting standard and are effectively prevented
from general amendments to their Articles of
Incorporation. Other, newly formed corporations are
provided a more realistic 50% voting standard.
Research reflects that the 50% standard is the modern
norm across most states.
Based on research of various states' corporation
codes, and the history and significance of ANCSA,
ANCSA corporations believe the current law is
antiquated, and leaves Native corporations established
under ANCSA at a competitive disadvantage compared
with newer corporations.
1:41:48 PM
CHAIR DUNBAR invited Ms. Reitmeier to put herself on the record
and speak to HB 123.
1:42:00 PM
KIM REITMEIER, President, Alaska Native Settlement Claims Act
Regional Association, Anchorage, Alaska, gave invited testimony
in support of HB 123. She summarized the following prepared
testimony:
On behalf of the ANCSA Regional Association (ARA), I
would like to express our support for the passage of
House Bill 123, introduced by Representative Craig
Johnson.
As you know, ARA represents the twelve Alaska Native
regional corporations created by Congress under the
Alaska Native Claims Settlement Act (ANCSA) in 1971.
Together, these organizations are tasked with
providing for their more than 160,000 Alaska Native
shareholders socially, culturally, and economically.
Under current Alaska law, Alaska Native corporations
(ANCs) must reach a two-thirds majority of all
outstanding shares to enact an amendment to their
articles of incorporation, unless certain exceptions
apply. However, Alaska corporations formed after July
1, 1989 only require a fifty percent plus one majority
of the outstanding shares to approve an articles
amendment. The two-thirds majority requirement is an
outdated rule that disadvantages ANCs and their
shareholders.
The two-thirds majority requirement is a constant
hurdle ANCs face when considering these amendments due
to gradually declining quorum counts. Quorum counts
rarely meet this high threshold, and because of this,
ANCs are deprived of opportunities to evolve and
advance compared to newer Alaska corporations.
HB 123 would end this unfair, antiquated system and
instead place ANCs on a level playing field with
Alaska corporations formed after July 1, 1989. Under
HB 123, ANCs could amend their articles according to
the fifty percent plus one majority standard
applicable to Alaska corporations formed after July 1,
1989, under AS 10.06.504(a).
After celebrating 50 years of ANCSA, several ANCs are
currently revisiting or considering modernizing their
articles of incorporation. Passage of HB 123 is
critical and timely.
Thank you for your work on behalf of Alaska and
consideration of this legislation. Together we can
continue to advocate for a better and more prosperous
future for our Alaska Native shareholders and all
Alaskans.
1:44:32 PM
CHAIR DUNBAR asked what practical concerns motivated the desire
for change in the law.
MS REITMEIER replied that the two-thirds voting requirement is
an ongoing hurdle for Alaska Native corporations to achieve
because of declining quorum counts. Corporations rarely meet
this high threshold. It is a monumental undertaking to evolve
and advance when the quorum requirement is so high compared to
new Alaska corporations.
CHAIR DUNBAR sought confirmation that the vote threshold is two-
thirds of the total, not two-thirds of the voting shares
present.
MS. REITMEIER replied that is correct and directed the question
to experts in attendance.
1:46:08 PM
CHAIR DUNBAR invited Mr. Misulich to speak to the question.
1:46:15 PM
ROBERT MISULICH, General Counsel, Aleut Corporation, Anchorage,
Alaska, replied that the current threshold requires ANCs to
achieve a two-thirds majority vote of all outstanding shares to
amend the incorporation articles. He said corporations are lucky
to achieve a quorum of 58 to 62 percent of shares in a meeting.
Most ANCs face an impossible scenario where annual meetings have
insufficient shareholder turnout to reach the vote threshold for
articles and amendments, even assuming all vote "yes."
1:47:19 PM
CHAIR DUNBAR asked Ms. Robb whether the Department of Commerce,
Community and Economic Development has a position on this
legislation.
1:47:55 PM
SYLVAN ROBB, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community and
Economic Development, Juneau, Alaska, stated the division has no
concerns with HB 123.
1:48:14 PM
CHAIR DUNBAR opened public testimony on HB 123.
1:48:42 PM
CHERYL BOWIE, representing self, Anchorage, Alaska, testified in
support of HB 123. She is a shareholder of NANA Corporation and
Kikiktagruk Inupiat Corporation. She said HB 123 would move
ANCSA corporations forward toward better voting outcomes. She
spoke about other topics, including the shareholder registration
process, aligning the voting system with municipal and state
elections, adopting civil rights between corporations, and equal
opportunities for shareholders. She said corporations need to
clarify and modernize because who is responsible for governance,
oversight, and industry can be confusing. She expressed her
belief that the passage of HB 123 will increase outcomes for
civil rights, reduce fraud, clarify the rules, and increase
shareholder participation.
1:51:22 PM
CHAIR DUNBAR closed public testimony on HB 123. He noted that
the committee received many letters of support from regional and
village corporations describing the challenge of achieving
votes, even in cases where the votes are unanimous. He invited
the public to submit written public testimony to
[email protected].
CHAIR DUNBAR held HB 123 in committee.
1:52:32 PM
There being no further business to come before the committee,
Chair Dunbar adjourned the Senate Community and Regional Affairs
Standing Committee meeting at 1:52 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 1.HB 123 Sponsor Statement.pdf |
SCRA 4/27/2023 1:30:00 PM |
HB 123 |
| 2. HB 123 vers. A.PDF |
SCRA 4/27/2023 1:30:00 PM |
HB 123 |
| 3. HB 123 - LOS through 4.21.23.pdf |
SCRA 4/27/2023 1:30:00 PM |
HB 123 |
| 4. HB 123 Fiscal Note.pdf |
SCRA 4/27/2023 1:30:00 PM |
HB 123 |
| HB 69, Amendment #1.pdf |
SCRA 4/27/2023 1:30:00 PM |
HB 69 |
| LBC letter regarding HB69 SB79.pdf |
SCRA 4/27/2023 1:30:00 PM |
HB 69 SB 79 |
| MLT Acreage Map April 2023.pdf |
SCRA 4/27/2023 1:30:00 PM |