HB 126-REINSTATEMENT OF NATIVE CORPS  8:06:47 AM CO-CHAIR HIMSCHOOT announced that the first order of business would be HOUSE BILL NO. 126, "An Act relating to the reinstatement of Native corporations; and providing for an effective date." [Before the committee was CSHB 126(TRB).] 8:07:03 AM PAUL LABOLLE, Staff, Representative Neal Foster, Alaska State Legislature, presented CSHB 126(TRB) on behalf of Representative Foster, prime sponsor. He paraphrased the sponsor statement [included in the committee packet], which read as follows [original punctuation provided]: This legislation allows an involuntarily dissolved Native Corporation to reinstate as the same corporation; thereby retaining its assets. This bill comes up periodically when a local Native corporation fails to submit its paperwork with the Division of Commerce. When any corporation does not fulfill its reporting requirements, the corporation is involuntarily dissolved. In normal instances, the remedy is a new corporation with the same name is formed. However, the new corporation is not the same as the old corporation and does not retain its assets. In normal instances, these assets are easily dispersed to the original shareholders. For Native corporations, this not the case. The assets are comprised of lands granted under the Alaska Native Claims Settlement Act (ANCSA). Dividing that land amongst the shareholders would not be consistent with (ANCSA), which makes land ownership collectively owned by all the shareholders. MR. LABOLLE referred to page 1, line 11, and highlighted the words "any time" as the substantive part of the bill. 8:10:00 AM REPRESENTATIVE RUFFRIDGE referred to line 6 of CSHB 126(TRB) and asked what would happen after the two-year time limit [from the date of the certificate of involuntary dissolution]. MR. LABOLLE referred to the deleted language on page 1, lines 9- 11, which was a drafting decision by Legislative Legal Services. He explained that not withstanding the 2-year cutoff, the involuntarily dissolved Native corporation could be reinstated at any time. 8:11:58 AM REPRESENTATIVE HALL questioned the circumstances in which a Native village corporation would have its status lapsed. MR. LABOLLE said it happens for a myriad of different reasons; most commonly, someone moves, or someone passes away. 8:12:52 AM REPRESENTATIVE PRAX asked what would happen with the corporation's assets after dissolution. MR. LABOLLE explained that normally, the assets would be redistributed to the shareholders who can reincorporate as a new corporation if they so choose. However, with Native village corporations, land assets granted under Alaska Native Claims Settlement Act (ANCSA) are owned collectively, not by individual shareholders. Furthermore, the federal government hasn't always conveyed all of the land that the corporations own. So, it gets legally complex. 8:16:00 AM REPRESENTATIVE HOLLAND characterized this as a paperwork problem and expressed concern about the workflow process that creates the noncompliance, which needs to be part of the solution. He asked how many entities are being dissolved and reincorporated in a two-year timeframe. CO-CHAIR HIMSCHOOT asked whether Representative Holland is speaking to ANCSA village corporations or global corporations. REPRESENTATIVE HOLLAND said he's trying to understand the scope of the problem and how many entities this affects. 8:20:49 AM MR. LABOLLE anecdotally reported that there were 19 Native village corporations that had been involuntary dissolved between 2010 and 2018. CO-CHAIR HIMSCHOOT asked for the total number of village corporations in Alaska. MR. LABOLLE estimated 250. REPRESENTATIVE HOLLAND asked of the 19, how many lapsed beyond the two-year period. MR. LABOLLE did not know the answer. 8:22:30 AM SYLVAN ROBB, Operations Manager, Division of Business, Corporations & Professional Licensing, Department of Commerce, Community & Economic Development (DCCED), answered that in FY 24, there were 6,441 corporations of all types that were administratively dissolved and 604 that were reinstated; however, they were still within the two-year window for reinstatement. REPRESENTATIVE HOLLAND asked whether there is a means for tracking entities dissolved outside the two-year window. MS. ROBB responded no, there is no specific information on village corporations. REPRESENTATIVE HOLLAND asked for the number of all entities that lapsed and reincorporated outside the two-year window. MS. ROBB did not know the answer because it would be hard to differentiate them from a newly formed corporation. 8:25:40 AM CO-CHAIR HIMSCHOOT questioned the distinction between the needs of ANCSA corporations and other types of corporations. She shared her understanding that it's based on the type of asset that the corporation distributes upon dissolution. MS. ROBB answered yes, there is a distinction, which is why the bill was brought forward. CO-CHAIR HIMSCHOOT asked what happens with the dissolved corporations' assets under current law. MR. LABOLLE did not know the answer and said he does not want to find out. 8:27:39 AM REPRESENTATIVE PRAX asserted that the dissolution of 6,441 corporations in one year seems impossible. MS. ROBB pointed out that there is in excess of 92,000 registered corporations in Alaska. CO-CHAIR HIMSCHOOT asked whether the limited liability company (LLC) for her rental property would be considered one of the [92,000] LLCs in Alaska. MS. ROBB said yes, the figure is inclusive of all corporate types. 8:29:00 AM REPRESENTATIVE PRAX asked whether the problem exists for nonprofit organizations (NPOs) as well. MS. ROBB said that it would be a policy call. She added that NPOs seem to do a reasonable job with paperwork, as fewer than 400 were involuntarily dissolved in FY 24. 8:31:12 AM REPRESENTATIVE HOLLAND asked for insight on why this is happening and what the legislature might do to solve the problem. MS. ROBB said part of the issue with corporate filings is the need to review the filing. She said it's hard to decipher how many were dissolved because they had no desire to see their business continue versus businesses that got behind on their paperwork or were confused about the process. 8:35:34 AM RICHARD BENDER, President & CEO, Alaska Native Claims Settlement Act Village Corporation, gave invited testimony during the hearing on HB 126. He shared his experience and said in the beginning, some believed that ANCSA corporations were destined to fail as Native leaders were expected to run these corporations when some lacked the ability to read, for example. He said his peoples are still adapting and developing their institutions, education, and culture. He opined that these ANCSA corporations are important to the economic wellbeing of individuals and the community. 8:39:18 AM REPRESENTATIVE HOLLAND asked whether the bill would be retroactive for currently involuntarily dissolved corporations. MR. LABOLLE answered yes. 8:39:49 AM CO-CHAIR HIMSCHOOT opened public testimony on CSHB 126(TRB). After ascertaining that no one wished to testify, she closed public testimony and announced that the bill would be held over.