HOUSE BILL NO. 229 An Act relating to the reinstatement of Native corporations; and providing for an effective date. PAUL LA BOLLE, STAFF, REPRESENTATIVE RICHARD FOSTER, explained that the legislation had been introduced at the request of regional Native corporations in their district. Corporations have been involuntarily dissolved by the commissioner under AS 10.06.633 and failed to apply for reinstatement during the grace period established in statute. The legislation provides a one-time window during which the Native village corporations, who have been dissolved, can apply for reinstatement. Mr. La Bolle continued, the legislation is needed because the corporations were established under the Alaska Native Land Claims Settlement and legally own village corporation assets. A new corporation could be created but it would not have the same legal standing as the original corporations nor could they legally own the assets. The bill would allow the corporation's board of directors to legally change the corporation's name if another corporation had taken the previous name. Mr. La Bolle pointed out that the proposed legislation applies to Caswell Native Association, Savoonga Native Corporation, Arviq Incorporated and Oscarville Native Corporation. Representative Kelly asked what would the consequences be if the legislation did not pass. Mr. La Bolle explained that the corporation would be dissolved, the assets would go to paying off debt and any remaining assets would be split between the shareholders. Representative Kelly asked if they would be forced to reapply. Mr. La Bolle explained that it would not be the same corporation. They could have the same name but would not hold the lands or any other assets granted under the Native Lands Settlement Act. The lands would be divided between shareholders when the corporation was dissolved. Representative Kelly asked why they would make a choice to not reapply. Mr. La Bolle replied that the choice was not made but had been overlooked. Representative Kelly asked the number of corporations the legislation would apply to. Mr. La Bolle replied that it would relate to all Native village corporations, specifically the four previously mentioned. Co-Chair Chenault inquired how many times the bill had been heard. Representative Foster explained that this was about the fifth time it had been introduced for various corporations over the years. The corporations forget to file their returns. 3:00:46 PM Representative Kelly inquired if there was opposition to the legislation. Mr. La Bolle replied that all the corporations support it. 3:01:34 PM Representative Weyhrauch asked to make a conceptual amendment. Co-Chair Meyer requested that he "hold" that idea until public testimony had been taken. Co-Chair Chenault inquired if the requests had been made from large landholders. ALYCE HOUSTON, CORPORATIONAL SUPERVISOR, DEPARTMENT OF COMMERCE, COMMUNITY & ECONOMIC DEVELOPMENT, said she did not know the size of the land holdings as that information is not reported to her section. Co-Chair Chenault commented that information must be available. Representative Holm questioned if there was a penalty for not filing in a timely manner. Ms. Houston said there was. The corporations have been involuntarily dissolved for not filing the reports and paying their fees. Often times, because of the biannual pay period, the address that was provided do not always get to the ones that need to file the reports. She noted that they are allowed to reinstate within a two-year period and the two-year period that has passed. Mr. La Bolle pointed out that there is a $37.50 dollar fee for each year that the corporation has not filed. With the proposed extension, it would be a $70 dollar late fee penalty. Ms. Houston corrected that the fees had been doubled and that the corporation would be paying $275 dollars to reinstate. 3:04:48 PM Representative Holm was troubled by the notion that there are requirements for other corporations in the State. He questioned if the legislation would be good policy. Mr. La Bolle replied that it is good policy because the results of not passing the legislation would be worse. Representative Holm inquired why there are different policies for different corporate laws. Ms. Houston replied that the Bureau of Indian Affairs (BIA) had contacted her and there seems to be serious implications if they do not keep their original lands from the Alaska Native Lands Settlement Act. Those corporations need to keep their original date of incorporation or there are serious complications; whereas, any other entity could reincorporate and have a new beginning date. There is a different implication for those land holdings. 3:06:46 PM Representative Holm understood the severity of the situation, however, he thought there should be a policy that the corporations fulfill their legal obligations. Co-Chair Chenault mentioned the lands issue and was curious if the corporations would loose their lands & assets. He asked where the lands would go. Ms. Huston did not know if that had ever happened. 3:08:26 PM Representative Joule responded that there are two levels being discussed. The village corporations have surface ownership and the regional corporations that encompass the village have sub-surface rights. He admitted the issue was complicated. Vice-Chair Stoltze agreed that the legislation needs to pass. He noted that he did not want to find out what the consequences would be if it did not pass. Representative Weyhrauch recommended that the corporations be warned and then fined. 3:10:34 PM Representative Foster responded that there are at least 230 villages throughout Alaska and that some are basically uninhabited. He understood how mail delivery could be "balled up". He stressed that these are not professional office people. Representative Foster did not know the easiest way to address the concern. Representative Hawker interjected that he was a co-sponsor of the bill. He pointed out that by the time the last bill got to the floor a couple years ago, it passed unanimously. He surmised that passage of the legislation is "just the right thing to do". Representative Foster MOVED to report HB 229 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HB 229 was reported out of Committee with a "do pass" recommendation and with zero note #1 by the Department of Commerce, Community & Economic Development.