CHEYENNE - Supporters of a bill to combat business fraud expect a tougher national lobbying effort against the proposal when it comes up Thursday noon in a House committee.
Senate File 26 had been set for discussion Wednesday in the House Committee on Corporations, Elections and Political Subdivisions. But one of the opposing lobbyists objected that the schedule did not allow sufficient advance notice.
The bill passed the Senate Monday.
Secretary of State Max Maxfield said he is disappointed at the delay because he is concerned about the tight timeline to get the bill through before the budget session ends next week.
"I don't quite understand the fact that 10 minutes seems to have made the difference with the lobbyists," Maxfield said Tuesday in an interview.
He said he suspects the bill was delayed to give opponents time to bring in national groups to the committee on Thursday.
Both Maxfield and Gov. Dave Freudenthal cautioned before the session that they expected a national lobbying effort against the bill.
Local attorneys who are registered corporate agents argue that the bill places too much responsibility on them to provide information about the corporations they represent.
Maxfield said he is concerned about an amendment tacked onto the bill by Sen. Drew Perkins, R-Casper.
"It pretty much in my opinion guts the bill," Maxfield said. "Our focus over the last year was the premise that if you're a registered agent, you're selling corporations as a registered agent, and you're billing corporations as a registered agent."
"If you're a registered agent, you ought to know who your client is," he added.
That way, in case of an investigation, law enforcement can locate the corporation people in question, he said.
"The registered agents are pushing back on that. They don't want to keep those records, and they are saying we ought to keep them in the secretary of state's office," Maxfield said.
Perkins' amendment said the records "may be" filed with the secretary of state or with the registered agent. "But nowhere does it say they shall be. So it's just permissive," Maxfield said.
Perkins said Tuesday the delay on the bill shouldn't bother anybody.
'It's an open process," he said. "Whether you're in state or out of state, you have a right to come and visit."
He said his experience is that legislators don't respond well when out-of-towners come in and try to apply pressure for or against bills.
Just before the session, Perkins said, there were a lot of form e-mails that came in from all over the country on the business fraud bill and the role of registered agents.
They were not well-received, he said.
Perkins said he disagrees with Maxfield that his amendment guts the bill.
His position, Perkins said in an interview, is that the state gets the best security against fraud by making corporate governance transparent.
At the state level, that can be accomplished by requiring the custodians of the records to have contact information available in the public record for anybody who wants to see it.
His amendment, he said, specifies that the function of a registered agent would be fulfilled if a corporation volunteers to file with the secretary of state's office contact information that otherwise would be confidential with the registered agent .
The only reason for the registered agent to have that information is so it is available if needed for an investigation or a lawsuit, he said.
"You're making the registered agent a policeman, and registered agents don't have a tremendous amount of power to be a policeman," Perkins said.
Perkins, an attorney, is a registered agent. The Senate leadership and the Legislative Service Office concluded he does not have a conflict of interest with Senate File 26 because the bill affects a broad class of people, he said.
Perkins also said he is sure that every attorney in the Legislature is a registered agent for some company. The other lawyers in the Senate are Tony Ross, R-Cheyenne, and Phil Nicholas, R-Laramie.
Perkins said his service as a registered agent is to a local ranch or the owner of an oil and gas business.
"Those people are in the phone book," he said.
The companies causing the problem are out-of-state corporations that register here and set up drop boxes with no physical presence in the state.
One solution, he said, is for the state to revisit the "business friendly" laws on limited liability corporations adopted in the late 1980s to attract business to the state.
Posted in Legislature on Tuesday, February 26, 2008 12:00 am
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