HOUSE BILL NO. 308 "An Act relating to the exemptions under the Alaska Securities Act and to securities issued by Native corporations; and providing for an effective date." 2:31:01 PM REPRESENTATIVE LINDSEY HOLMES, explained the legislation. She stated that HB 308 removed the reporting requirements and fees for three types of exempt security transactions: sales by an issuer to not more than 10 persons in the state; sales by an issuer to not more than 25 persons in the state; an offer to existing security holders of the issuer. Under current law, if the security issuance qualifies as exempt from registration under AS 45.55.900(b), issuers are currently still required to file a form and pay a fee to the Department of Commerce, Community and Economic Development (DCCED). She stated that DCCED collected the information and reviewed it, however it did not appear to add any protections to the state or the investors. Often small business owners hire lawyers to navigate the form which caused expense and can slow down the process. While removing the reporting requirements, the bill still required the business issuing the securities to provide required information to investors in compliance with the Securities Act so that they could make an informed investing decision. The bill kept the act's consumer protection language intact and did not inhibit the Division of Banking and Securities from investigating violations or the investor seeking damages through the court system. The bill also changed the amount of time DCCED had to review rescission offers from only two days to ten days and had several conforming language changes. The bill further sought to clarify that stock issued by the Alaska Native Claims Settlement Act (ANCSA) corporations to Alaska Natives born after December 18, 1971 or issued after the original stock offering in compliance with federal law were exempt from registering under AS 45.55.070. This clean up responded to a report done by the United States Government Accountability Office that was concerned that Alaska statutes were not treating newly issued ANCSA corporation stocks the same as the initial offering. ALLAN JOHNSTON, VOLUNTEER, TEAM NETWORK, ANCHORAGE (via teleconference), testified in support of the legislation. He stated that he had volunteered in various organizations in Anchorage and across Alaska. He had worked to create "Angel Funds" from the federal government, which would be matched by the private sector. He stated that the Banking and Securities Division had done a remarkable job in assisting in education, because many people were unfamiliar with securities laws. He stated that Alaska was 50th in the country for its capital, and third in median family income. He stressed that the gap would be closed by encouraging the residents to invest locally and create local businesses. 2:36:52 PM KEVIN ANSELM, DIRECTOR, DIVISION OF BANKING, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, ANCHORAGE (via teleconference), introduced herself. She offered to outline the legislation, but felt that Representative Holmes had summarized the bill accurately. Co-Chair Meyer asked if DCCED had any comments on the legislation. Ms. Anselm replied that there was a PowerPoint presentation in the packet, which was an overview of the securities requirement. She stated that the legislation eliminated the paperwork and filing fees with the Banking and Securities Division for the small offerings and for offerings to existing securities holders. She added that there were two clean-up items were related to rescission offers allowing the division more time to ensure that it met its consumer protection requirements. Co-Chair Meyer CLOSED public testimony. HB 308 was HEARD and HELD in committee for further consideration.