Legislature(2015 - 2016)BARNES 124

03/23/2016 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 194(L&C) Out of Committee
Moved HB 289 Out of Committee
Moved CSHB 337(L&C) Out of Committee
**Streamed live on AKL.tv**
        HB 194-AK SECURITIES ACT; PENALTIES; CRT. RULES                                                                     
3:23:29 PM                                                                                                                    
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE BILL NO.  194, "An Act repealing and  reenacting the Alaska                                                               
Securities   Act,  including   provisions   relating  to   exempt                                                               
securities   and  transactions;   relating  to   registration  of                                                               
securities, firms, and  agents that offer or  sell securities and                                                               
investment  advice;   relating  to  administrative,   civil,  and                                                               
criminal enforcement provisions,  including restitution and civil                                                               
penalties for violations; allowing  certain civil penalties to be                                                               
used for an investor training  fund; establishing increased civil                                                               
penalties  for  harming   older  Alaskans;  retaining  provisions                                                               
concerning corporations organized under  the Alaska Native Claims                                                               
Settlement  Act; amending  Rules 4,  5,  54, 65,  and 90,  Alaska                                                               
Rules of Civil Procedure; and providing for an effective date."                                                                 
[The committee substitute  for HB 194, Version E,  was before the                                                               
3:23:57 PM                                                                                                                    
KEVIN  ANSELM,  Director,  Division of  Banking  and  Securities,                                                               
Department  of   Commerce,  Community  &   Economic  Development,                                                               
briefly reviewed  HB 194,  noting that  the bill  would recognize                                                               
and incorporate current securities  industry terms and standards,                                                               
update the law, and delete  outdated references.  Furthermore, HB
194  would  synthesize  the  Alaska  Securities  Act  with  other                                                               
states'   laws,  open   equity   crowdfunding  opportunities   to                                                               
Alaskans,   deter  investment   scams,  enhance   penalties,  and                                                               
separate the  securities statutes  from the Alaska  Native Claims                                                               
Settlement Act statutes.                                                                                                        
3:26:03 PM                                                                                                                    
REPRESENTATIVE LEDOUX moved to adopt Amendment 1, which read:                                                                   
     Page 34, lines 8 - 9:                                                                                                      
          Delete "by governmental authorities"                                                                                  
CHAIR OLSON objected for discussion purposes.                                                                                   
REPRESENTATIVE LEDOUX  explained that  Amendment 1  requires that                                                               
any  action known  to be  contemplated has  to be  disclosed, not                                                               
only those contemplated by governmental authorities.                                                                            
MS. ANSELM opined  Amendment 1 would change the  model language a                                                               
little; however,  the original language  was not very  clear that                                                               
all  potential  or  pending litigation  that  hasn't  been  filed                                                               
should  be noticed.   She  acknowledged that  the model  language                                                               
includes an  official comment that said,  "Pending litigation can                                                               
include  litigation that  has not  yet been  filed."   Ms. Anselm                                                               
said she  understood the  intent of  the amendment,  and accepted                                                               
the amendment.                                                                                                                  
REPRESENTATIVE  KITO  surmised  that deleting  "by  [governmental                                                               
authorities]," raises concern about  who or what is contemplating                                                               
the action.                                                                                                                     
MS. ANSELM answered that the  language in the bill addresses what                                                               
needs  to be  disclosed to  potential investors,  particularly in                                                               
the  prospectus  of  the  offering  document.    An  issuer  must                                                               
disclose any  pending litigation, action, or  proceeding to which                                                               
the issuer is  a party, and that materially  affects the issuer's                                                               
business or  assets, and is  known to be contemplated  by anyone.                                                               
Thus,  the  intent  is  to   have  any  awareness  of  a  lawsuit                                                               
disclosed, whether by the government or anyone else.                                                                            
3:30:40 PM                                                                                                                    
REPRESENTATIVE  KITO questioned  how  an  individual would  know;                                                               
actions by  a governmental authority  require public  notice, but                                                               
for a private party, it may not be known.                                                                                       
MS. ANSELM  agreed; however, sometimes  parties do know,  but the                                                               
paperwork hasn't been  filed, and in those cases  there should be                                                               
disclosure.   In  further response  to  Representative Kito,  she                                                               
said the language can be made clear in regulation.                                                                              
3:32:12 PM                                                                                                                    
CHAIR OLSON  removed his objection  to Amendment 1.   There being                                                               
no further objection, Amendment 1 was adopted.                                                                                  
3:32:20 PM                                                                                                                    
CHAIR  OLSON  opened  public  testimony   on  HB  194.      After                                                               
ascertaining  no  one wished  to  testify,  public testimony  was                                                               
3:32:43 PM                                                                                                                    
REPRESENTATIVE HUGHES  moved to  report the  committee substitute                                                               
for HB 194, Version 29-GH1060\E,  Bannister, 3/11/16, as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying  fiscal  notes.   There  being  no  objection,  CSHB
194(L&C) was reported from the  House Labor and Commerce Standing                                                               

Document Name Date/Time Subjects