HL&C - 03/15/95 HB 17 - OFFICERS OF UTILITY COOPERATIVES CHAIRMAN KOTT explained that HB 17 was back before the committee because the drafting attorney had some concerns with the committee substitute (CS) version G. He said that they now had a new CS version K, dated March 6, 1995 before them. Number 058 CHAIRMAN KOTT stated, for the record, Representative Masek joined the meeting at 3:10 p.m. Number 067 GEORGE DOZIER, LEGISLATIVE AIDE TO REPRESENTATIVE PETE KOTT, gave the following explanation of the new CS for HB 17 version K. He explained that the CS version G did not amend the title to reflect the biannual report. The other concerns deal with amendment two, which was proposed by the Division of Banking, Securities and Corporations, Department of Commerce and Economic Development. The draft, as passed out by committee, required that biannual reports be due before July 2, of the reporting year; however, the information contained in the reports was due by June 30. The division felt this was not enough time for the information to be gathered and the reports to be sent in. In the new CS version K, this date was amended to July 15. Mr. Dozier continued that the third concern addresses dissolution, this on page 8, states, "the provisions of Alaska Statute 10.06 (Alaska Corporations Code) relating to involuntary dissolution of business corporations applied to telephone and electric cooperatives." He said that the drafting attorney was concerned that too much generality had been included since a number of provision governing both voluntary and involuntary dissolution's of corporations were affected. He explained that this focuses upon when a biannual report is delinquent. This provision allows the commissioner to involuntarily dissolve a corporation if it hasn't filed its biannual reports. The language in the new CS, version K, makes this clearer. The fourth concern was with subsection (b), biannual reports, addresses when reports are do but is not clear that it applies to cooperatives that already exist. He stated that no changes were made to this language. Therefore, it is his understanding that it will apply to existing cooperatives, as well as new ones. Mr. Dozier stated that finally, the drafting attorney's last concern was that the draft provided and adopted by the committee (CS version G), (indisc.--interrupted) Number 202 REPRESENTATIVE GENE KUBINA asked if a motion to delete sections 17 and 18 would be a good way to deal with this. He stated that the reason the Department of Commerce and Economic Development wasn't receiving these reports was because they were already going to the Alaska Public Utilities Commission (APUC). He pointed out this would just be adding more bureaucracy. CHAIRMAN KOTT said he would entertain that motion, once they had adopted the new CS. REPRESENTATIVE KUBINA asked Chairman Kott exactly where they were at this point. CHAIRMAN KOTT stated that they had passed out version G, but they had not yet adopted version K. Number 231 REPRESENTATIVE JERRY SANDERS made a motion to adopt version K of the CS for HB 17. CHAIRMAN KOTT asked if there were objections. Hearing none, the CS was adopted. REPRESENTATIVE KUBINA made a motion to delete sections 17 and 18, and possibly make a title change. He said, "line 4 starting with, `relating' through line 7 ending with `cooperatives'". CHAIRMAN KOTT stated, "The title would be lines 1, 2 and 3, and then providing for an effective date." REPRESENTATIVE KUBINA interjected, "The first half of line 4, `according to officers' and then `providing for an effective date'." REPRESENTATIVE ELTON stated that they may need to start on line 5, because Section 4 of the bill amends the articles of incorporation. That may need to be noted in the title `relating to the articles of incorporation' beginning after cooperatives; deleting down `to effective date'." REPRESENTATIVE KUBINA indicated the last two words on line five is where it would start. CHAIRMAN KOTT repeated `relating to' line 5 through `electric cooperatives' on line 7. Number 279 CHAIRMAN KOTT stated that the conceptual amendment is to delete sections 17 and 18, and with that there will be a noted title change. He asked Representative Green if he had a problem with this amendment. Number 288 REPRESENTATIVE JOE GREEN stated that he did not have a problem with this. Number 291 CHAIRMAN KOTT stated that they did have Amendment 1, the conceptual amendment, deleting sections 17 and 18 with a title change. He asked for any objections. Hearing none, Amendment 1 was adopted. He stated that the committee now had the CSHB 17(L&C) before them for debate. Number 305 WILLIS KIRKPATRICK, DIRECTOR, BANKING, SECURITIES AND CORPORATIONS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, stated that every organization filing under Title 6, files a biannual report. This provides the public with information as to who the registered agents, officers and directors of corporations are. He stated that only these 37 organizations, under this chapter of Title 10, do not file biannual reports. He stated, as far as bureaucracy is concerned, they are only asking for the current names of the officers and directors of the corporations and a biannual filing fee of $100. He pointed out that when he was advised that this may be redundant filing with the Department of Commerce, he called APUC for a current list of officers and directors of Cook Inlet Rural Telephone Cooperative, Incorporated; Glacier Valley Electric; and Unalaska Electric Association, Incorporated. The APUC had no record of any of the three. He explained that this was important. If they were to have filed every other year as to their status of their corporation, with the names and addresses of the officers and directors, and if something had changed in that interim year, as was the case with Unalaska, they would have written back and said that they had been sold to the community. They would have told the Department of Commerce to cross them off their list, and they would have been out of their file. He reiterated that the department only wants them to file every other year, whether they are profit or non-profit, like every other corporation and association under Title 10. Mr. Kirkpatrick said that the APUC further stated that they did not know if they could supply him with lists of officers and directors of corporations. Number 416 REPRESENTATIVE ELTON asked why Glacier Valley was registered with his department, and were they required to be. MR. KIRKPATRICK stated that as an organization, they wanted to be protected from liability as individuals. They then incorporated under electrical cooperatives, which gives them liability from personal acts, and puts responsibility on the corporate structure. DAVE HUTCHENS, EXECUTIVE DIRECTOR, ALASKA RURAL ELECTRIC COOPERATIVE ASSOCIATION, stated that he had testified previously on this legislation and his association does not have any strong objection to filing these biannual reports. However, they do feel that it would be far better if it were set aside and dealt with that separately the next time there is legislation dealing with the powers of the division. He stated that all of the operating entities organized as electric and telephone cooperatives do make annual reports to the APUC. He said the division should have a note in their file that says, "Requests for information should be forwarded to the APUC." Number 454 REPRESENTATIVE ELTON pointed out that in the previous meeting Mr. Hutchens had no objection to the legislation, the committee felt that this might be a good idea. He stated that he would be interested in hearing Mr. Hutchens reactions to the provision relating to involuntary dissolution of a cooperative. MR. HUTCHENS stated that this would be a very strong penalty for failing to file a biannual report. He commented that perhaps there could be an intermediate step, and if someone refused to file, dissolution could be the ultimate sanction. He stated the reason for that would be to have some systematic way of weeding out the entities no longer in business. Number 471 CHAIRMAN KOTT stated the committee members had the CSHB 17 before them. REPRESENTATIVE BRIAN PORTER asked if they had adopted the CS. CHAIRMAN KOTT stated yes. REPRESENTATIVE PORTER made a motion to move CSHB 17, as amended, out of committee with individual recommendations. REPRESENTATIVE ELTON commented that they wouldn't need the fiscal note as amended. CHAIRMAN KOTT concurred that there would be a zero fiscal note. He stated that there was a motion to move CSHB 17(L&C) from committee with individual recommendations. He asked if there was an objection. Hearing none, the CSHB 17(L&C) was passed from committee. Number 483 REPRESENTATIVE KUBINA asked if the bill goes to Rules next. CHAIRMAN KOTT stated that was correct.