HB 101-CORPORATE PUBLIC UTILITY REINSTATEMENT CHAIRMAN MACKIE announced HB 101 to be up for consideration. REPRESENTATIVE MORGAN, sponsor, said this legislation is a vehicle to allow the Alaska Department of Commerce and Economic Development the discretion to reinstate, as a corporation, a local exchange (telecommunications) company that serves several communities in western Alaska. This legislation also clearly outlines departmental procedure for corporate notification that should prevent further involuntary dissolutions. Bush-Tell is a small, rural local exchange telephone company located in Aniak, Alaska. It provides local exchange telephone service to ten small villages in Western Alaska. Bush-Tell was incorporated on November 10, 1969 and has been providing telecommunications service since 1970. The President and sole shareholder of Bush-Tell recently contacted the Alaska Division of Banking, Securities & Corporations to find out about registering a "dba" and was informed that Bush-Tell was no longer registered as a corporation with the Division. Bush-Tell had been involuntarily dissolved in 1993 for failing to file its biennial report and/or failing to pay its biennial corporate tax for the period ending December 31, 1992. Upon investigation, it was discovered that Bush-Tell's registered agent had failed to follow the proper statutory procedures for resigning as a registered agent and that his omissions resulted in the involuntary dissolution of Bush-Tell. Bush-Tell's designated agent was a sole practitioner in Anchorage who also served as Bush-Tell's general counsel. In the early 1980's, Bush-Tell hired another law firm to do its legal work, but continued to retain the sole practitioner as its registered agent. The forms for Bush-Tell's biennial reports were sent to the registered agent and were filed by the registered agent up to and including the period ending December 31, 1990. In 1991, the registered agent left the private practice of law, closed his office and left a forwarding address for his mail with the U.S. Postal Service. The registered agent did not inform the Alaska Division of Banking, Securities & Corporations that his address was changing or that he was resigning as Bush-Tells' registered agent. Alaska Statute requires that, if a registered agent resigns, they first file a written notice with the commissioner setting out the latest address of the principal office of the corporation and the names, addresses and titles of the most recent officers of the corporation. The commission must then immediately mail a copy of the notice to the corporation at its principal office. On July 12, 1993, the Alaska Division of Banking, Securities & Corporations sent a notice by certified mail to Bush-Tell, in care of the registered agent, informing Bush-Tell it had not filed its biennial report and/or tax for the period ending December 31, 1992 and, if the biennial report and/or tax are not mailed by September 19, 1993, the Certificate of Involuntary Dissolution will be issued and the corporation will cease to exist as of September 20, 1993. This notice was returned to the Alaska Division of Banking, Securities & Corporations because the registered agent's forwarding notice had expired. On September 20, 1993, Bush-Tell was involuntarily dissolved. Since the time of dissolution, and even after discovering the involuntary dissolution, Bush-Tell has observed all of the corporate procedures required by its Bylaws and Alaska law including holding regular board of directors meetings and paying corporate income tax. This legislation corrects an involuntary dissolution and statutorily establishes corporate notification procedures used by the Department of Commerce and Economic Development to prevent similar situations from happening in the future. Procedures would require mail be sent certified to a corporation's registered office. If returned, it would be sent first class to the president of the corporation or to another officer. The requirements would apply to for-profit, electric and telephone cooperatives, religious corporations, limited liability corporations, cooperatives, nonprofit cemetery corporations, and professional corporations. These requirements would not apply to business and industrial development corporations (BIDCO), as they do not have provisions for dissolution. These requirements do apply to revocation of certificates of authority for out-of-state organized entities. MR. ASHLEY REED testified on HB 61, but due to a taping malfunction, his testimony did not record. SENATOR HOFFMAN asked how this legislation would work. REPRESENTATIVE MORGAN answered that this is putting policy into statute. SENATOR DONLEY asked where Section 10 of the bill went into statute, because it didn't say where it goes. He asked if it goes in the temporary section of the statute. MS. DAWN WILLIAMS, Department of Commerce, explained a temporary section in the bill has happened with native corporations in the past. They have a certain time limit in which to reinstate, and after that time, the language is deleted. CHAIRMAN MACKIE said they would check with the drafters to make sure nothing was left out and asked if the Department supported the bill. MS. WILLIAMS said yes. CHAIRMAN MACKIE asked her to explain how this was able to happen and if they have a new policy in the meantime for notifications. MS. WILLIAMS responded that she didn't know what happened in this case as she wasn't here in 1993. She thought the certified notice was sent to the registered agent and returned. She didn't know if they then sent it then to a principle officer or not. Sections 3 and 8 will require them to do the policy and more. SENATOR KELLY moved to pass CSHB 101(L&C) with individual recommendations. There were no objections and it was so ordered.