Legislature(2019 - 2020)BUTROVICH 205
04/22/2019 12:00 PM House FREE CONFERENCE COMMITTEE ON SB89
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| Audio | Topic |
|---|---|
| Start | |
| SB89 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 89 | TELECONFERENCED | |
SB 89-LEGISLATURE: ETHICS, CONFLICTS
1:16:54 PM
CO-CHAIR COGHILL announced the business before the committee is
consideration of the FREE CONFERENCE CS FOR SENATE BILL NO. 89,
"An Act relating to the Legislative Ethics Act; and providing
for an effective date."
CO-CHAIR COGHILL stated that the Free Conference Committee on SB
89 will operate under Uniform Rule 42(a). The Uniform Rules were
waived and the conference committee was granted the powers of
free conference thus giving it the ability to consider all
issues germane to the title.
1:17:47 PM
CO-CHAIR CLAMAN stated that Senator Coghill will chair the
meeting since the bill originated as a Senate bill.
CO-CHAIR COGHILL asked Mr. Hutchinson to provide a section-by-
section comparison between the House and Senate versions of the
bill [and to discuss the resolutions that appear in the
conference committee substitute].
1:18:17 PM
CHAD HUTCHINSON, Staff, Senate Majority Office, Alaska State
Legislature, Juneau, directed attention to the document titled
"Senate Bill 89 Comparison Sheet - Legislative Ethics Act
Revision - FCC" and explained he would talk about the bill that
passed the Senate, referred to as Version K, the bill that
passed the House, referred to as Version E, and the proposed
resolution referred to as Version G.
[Note: Version G and Version O have identical text in the body
of the bills. The difference is that Version G is identified as
the CS FOR SENATE BILL NO. 89( ) and Version O is identified as
the FREE CONFERENCE CS FOR SENATE BILL NO. 89. The conference
committee ultimately adopted Version O and reported that version
from committee.]
MR. HUTCHISON directed attention to page 1 of the comparison
sheet. He explained that the provision relating to legislative
intent language was added to the House bill. It says, "a fair
and open government requires that constituents have unencumbered
access to legislators about issues important to the state
pursuant to art. I, secs. 5 and 6, Constitution of the State of
Alaska,". He noted that Version G retains the language the House
added.
MR. HUTCHISON said the next area of difference relates to the
prohibition on official/legislative action. The Senate bill
returned the law to what it was prior to House Bill 44. The
House bill is similar to the Senate bill, but it adds language
that says, "or the legislator's spouse is employed or is
negotiating for employment." He said the emphasis is on
including the legislator's spouse. Version G resolves the
differences with a number of changes and clarification.
First, it replaces the term "official action" (which is
undefined) with the term "legislative action" which is defined
in AS 24.60.990(10). It reads:
(10) "legislative action" means conduct relating to
the development, drafting, consideration, sponsorship,
enactment or defeat, support or opposition to or of a
law, amendment, resolution, report, nomination, or
other matter affected by legislative action or
inaction;
1:22:13 PM
At ease for technical difficulties.
1:23:27 PM
CO-CHAIR COGHILL reconvened the meeting.
MR. HUTCHISON continued to explain that using the term
"legislative action" provides clarity for the Select Committee
on Legislative Ethics and advisors like Jerry Anderson as to
what can and cannot occur.
MR. HUTCHISON said the second change regarding prohibitions on
official/legislative action that appears in Version G is that
the term "could" is replaced by the phrase "is likely to." For
the purposes of the ethics committee, the term likely is
intended to mean more likely than not or a greater than 50
percent chance.
1:24:44 PM
SENATOR BEGICH asked if that is legislatively defined or just in
the notes. He added that he values the notes highly.
MR. HUTCHISON replied the preponderance of the evidence
threshold is used, just as it is in civil proceedings. He said
we took "likely" to mean more likely than not or a greater than
50 percent chance.
CO-CHAIR COGHILL clarified that this relates to the prohibitions
in Section 2 of the bill and Section 3 deals with how to declare
a conflict. In House Bill 44 the definitions were connected to
both sections and the initial draft of SB 89 wasn't drafted that
way. "Hence the Free Conference Committee; we had to tie those
definitions together."
MR. HUTCHISON said the third change regarding prohibitions on
official/legislative action that appears in Version G is that
legislative action is only barred if the legislation is likely
to "substantially benefit or harm" the financial interest. The
definition of "financial interest" is clarified in Version G. He
said the intent was to sync everything and give definitive
parameters to the meaning of "substantially benefit or harm" and
"financial interest."
1:26:32 PM
MR. HUTCHISON said the fourth change in Section 2 regarding
prohibitions on official/legislative action is that the term
"another" is clarified to mean "the legislator or the
legislator's spouse." He noted that the definition in House Bill
44 included immediate family and that was considered to be too
broad.
MR. HUTCHISON said Section 3 relates to declarations of
conflict. The Senate bill said conflicts should be declared in
the committee process and on the floor if there is an "equity or
ownership interest" instead of a "financial interest." Also,
conflicts are compared with a "substantial class of persons"
rather than the "general public" because the general public was
prohibitively broad. The House bill kept those changes and added
the "legislator's spouse." Version G resolved the differences
with the decision that "conflicts shall be declared in the
committee process and on the floor if the effect of the vote is
likely to substantially benefit or harm the financial interest
of the legislator or the legislator's spouse." He said the
intent is to sync all language and definitions. An important
addition was that "employment" and "negotiating for employment"
were included with negotiating for employment.
1:28:35 PM
MR. HUTCHISON explained that the Senate bill repealed the
definition of "substantially benefit or harm" under AS
24.60.030(j)(2) and the definition of "financial interest" under
AS 24.60.990(a)(6) and returned to the law prior to House Bill
44. The House bill also repealed those definitions and returned
to the law prior to House Bill 44. He explained that the
resolution in Version G is found in Section 4 of the bill that
amends AS 24.60.030(j)(2) to read:
(2) "substantially benefit or harm" means the effect
on the person's financial interest is greater than the
effect on the financial interest of a substantial
class of persons to which the person belongs as a
member of a profession, occupation, industry, or
region.
MR. HUTCHISON explained that the intent is to eliminate personal
enrichment or benefit to a specific company to the detriment of
the rest of the industry. He highlighted that Version G also
repeals AS 24.60.990(a)(6) in Section 6 of the bill.
CO-CHAIR COGHILL clarified that the conference committee
substitute was prepared by legislators working with Dan Wayne
with Legislative Legal Services.
MR. HUTCHISON agreed. He explained that Section 5 of Version G
adds the revised definition of "financial interest" in AS
24.60.030(j)(3). It did not exist in either the Senate or House
bills. The new paragraph reads:
(3) "financial interest" means a substantial equity or
ownership interest in a business, investment, real
property, lease, or other enterprise.
He said the intent is to sync the language to clarify the
interpretation for the ethics committee.
He reiterated that AS 24.60.990(a)(6) is repealed in Section 6
of Version G.
Section 7 of Version G is the effective date, which is
immediate. Both the Senate and House bills also have an
immediate effective date.
CO-CHAIR COGHILL stated that free conference powers were granted
because of the new language in Version G that was not in either
the Senate or House bills. The intent was to clarify that "when
you have a real conflict of interest, there are some
prohibitions and some requirements for you to declare them." The
definitions are better than before and it provides continuity
between the prohibition language and the declaration
requirements.
1:32:43 PM
REPRESENTATIVE TUCK stated that the intent is to fix the
unintended consequences that resulted from House Bill 44. Two of
the largest problems were not having definitions for "official
action" and "official influence." He related his understanding
of the bill as it went through the House State Affairs Committee
was to require a legislator to declare a conflict and if the
conflict does exist, to prevent them from voting in committee
and on the floor. However, the resolution that went along for
that to happen on the floor did not pass. Because there isn't a
definition for "official action," legislators have to lean on
"legislative action" which is drafting a bill, talking with
constituents, talking with the public, meeting one-on-one with
other legislators, caucus meetings, etc. He said that really put
some restrictions on everybody's ability to maneuver without
fear of having a conflict.
He pointed out that [AS 24.60.10] states the following:
The Legislature finds that
(1) high moral and ethical standards among public
servants in the legislative branch of government are
essential to assure the trust, respect, and confidence
of the people of this state.
(2) a fair and open government requires that
legislators and legislative employees conduct the
public's business in a manner that preserves the
integrity of the legislative process and avoids
conflicts of interest or even appearances of conflicts
of interest.
REPRESENTATIVE TUCK said the statute goes on to acknowledge that
a code of conduct cannot solve every problem. He offered his
belief that, "the best that we can do is the best that we can
do." With that in mind, he said it helps that in Section 2 of
Version G the term "official influence" was removed. He said his
next question is whether Version G addresses the issue of a
legislator who has a conflict being able to draft or present a
bill [that is related to the declared conflict].
MR. HUTCHISON directed attention to question 4 in the "Bullet
Points" document in the packets and summarized the following
question and answer:
4. When is a legislator prohibited from taking
legislative action?
ANSWER: In circumstances where legislative action is
likely to substantially benefit or harm the financial
interest of the legislator, the legislator's spouse,
or a person with whom the legislator [or] the
legislator's spouse is employed or is negotiating for
employment.
MR. HUTCHISON said there is a three-step analysis looking at 1)
likely, 2) substantially benefit or harm, and 3) financial
interest and when those line up the legislator is prohibited
from taking legislative action.
1) The term "likely" means more likely than not or a greater
than 50 percent chance;
2) Substantially benefit or harm means "The effect on a person's
financial interest is greater than the effect on the financial
interest of a substantial class of persons to which the person
belongs as a member of a profession, occupation, industry, or
region." He read the following example:
Legislator A works for Company A in a statewide
industry. Other companies are also in that industry,
including companies B, C, D, E, F, and G. A
substantial benefit occurs when Company A greatly
benefits, but thee is no benefit to companies B, C, D,
E, F, and G.
There is no "substantial benefit" if all companies (A,
B, C, D, E, F, and G) benefit because of an equal
policy that benefits the entire industry (even if, in
reality, the benefit from company to company
varies)...Al long as the policy does not target
Company A, for the purpose of benefiting Company A, to
the detriment of the rest of the industry, then it is
allowable.
1:38:17 PM
CO-CHAIR COGHILL cautioned that 20 minutes answers raise more
questions.
1:38:31 PM
SENATOR BEGICH related a personal example. Under the current
ethics law he has a conflict because his wife works for an
organization that engages with a number of school districts. He
said it's unclear whether or not she would have benefited by his
supporting early funding of education in a constitutional
amendment. Under the language that's proposed there would not be
a conflict because early funding would affect all school
districts, not just those few. His wife would not be materially
impacted and therefore he would be able co-sponsor that
legislation.
MR. HUTCHISON said that's correct.
1:39:20 PM
CO-CHAIR COGHILL advised that his aide just notified him that
Version G is the draft CS and the Free Conference CS is Version
O. He said the language in the two versions is identical but he
would suggest everyone take a moment to check and become
comfortable with Version O.
1:39:44 PM
At ease
1:41:01 PM
CO-CHAIR COGHILL reconvened the meeting and explained that the
work draft Version G did not have the free conference title
because it was drafted before the House appointed members. The
only difference is that Version O identifies the document as the
Free Conference CS for SB 89.
1:41:33 PM
REPRESENTATIVE PRUITT noted that the Speaker stated on the floor
that legislators do not need to declare a conflict on
appropriation bills. He asked if Version O clarifies that point
or if there is a possibility that this issue may come up going
forward.
CO-CHAIR COGHILL explained that language in House Bill 44
exempted conflict declarations on the budget.
CO-CHAIR CLAMAN directed attention page 3, lines 3-6, of Version
O and explained that the Speaker was referring to that language
that the bill deletes. It reads:
[...HOWEVER, NOTWITHSTANDING (e)(3) OF THIS SECTION
AND THE LIMITATIONS OF THIS SUBSECTION, A LEGISLATOR
MAY VOTE ON AN APPROPRIATION BILL THAT MEETS THE
REUIREMENTS OF AS 37.07.020.(a) OR 37.07.100].
He said for lack of a better description, "we'd be back in kind
of the old style on the floor."
REPRESENTATIVE PRUITT responded that he believes that that
answers the question.
1:44:11 PM
REPRESENTATIVE TUCK said he's never seen anyone who had to
refrain from voting on the appropriations when they declared a
conflict. He said his concern is that it does a disservice to
the legislative body as a whole when a blanket statement is made
that anyone who declares a conflict will be required to vote.
What's happening, he said, is that people aren't declaring their
conflicts. He stressed that people who have a conflict should
put that on the record or the deleted section should be
reinserted.
CO-CHAIR COGHILL responded that he believes that the [three-step
analysis Mr. Hutchison described] answers that. He added that he
didn't believe that people would stop standing up to declare a
conflict and asking to be excused from voting. When they do, the
body makes the determination.
CO-CHAIR CLAMAN opined that removing the language completely
helps to clarify that legislators need to declare their
conflicts. "I think that's a more appropriate way to go
forward," he said.
1:48:01 PM
SENATOR BEGICH said he agrees that it makes more sense and is
more beneficial to the public to disclose as opposed to not
disclose. Having to disclose on the budget might take a little
extra time but the public deserves to know if there's a
conflict. If somebody doesn't disclose and it's discovered that
the person did have a substantive conflict, the public deserves
to know that as well, he said. "So I think it's a good idea that
it's left out."
REPRESENTATIVE PRUITT said it can be a little tedious when
conflicts are declared but it's an important point that if there
are 15 people with conflicts on an appropriation bill then 15
people should stand up and declare their conflict. He said this
is a good time to state legislative intent. His belief is that
every person that feels they have a conflict can and should
declare it. There should not be a blanket statement. "I think
that transparency in this particular case would be what we were
seeking," he said.
1:50:17 PM
REPRESENTATIVE TUCK said his main concern is that Rules chairs
in the past have made statements that led people to not declare
their conflicts. He liked that former Representative Gruenberg
noticed this and made sure that conflicts were declared. "I want
to make sure that does not happen," he said. He suggested the
process might be that when someone declares a conflict, the
Speaker or presiding officer can ask for a show of hands for
those who have the same conflict. That could keep things moving,
he said, because the frustration with numerous declarations is
understandable.
1:51:36 PM
CO-CHAIR COGHILL said this can be instructive for this committee
and the presiding officers that are watching. He added, "It
should be properly stated as a motion and the reason why the
conflict exists and ask to be excused from the vote." The bill
brings clarity and it's still wise to err on the side of caution
and declare a perceived conflict, he said.
1:52:28 PM
REPRESENTATIVE TUCK asked for clarification that if somebody has
a conflict, they can't take any of the legislative actions "that
are written by definition."
SENATOR BEGICH responded that the answer is yes. The definition
has been clarified, but actions that were prohibited before are
no longer prohibited. For example, he could sponsor a piece of
legislation as long as it was not likely to materially benefit
his spouse or himself or the employer of his spouse or himself.
The previous blanket prohibitions under the undefined, loose
definition doesn't exist any longer. "So yes you can do it now,
but ... the legislative action can't be taken if, specifically,
it's more likely to benefit you." He asked Mr. Hutchison if he
agrees.
1:53:57 PM
MR. HUTCHISON agreed as long as the person goes through the
three-step analysis. He said it's noteworthy that conflicts
declared in the committee process was added into the latest
version of the bill.
REPRESENTATIVE TUCK said he did not see a new definition of
"legislative action" but the existing definition [from AS
24.60.990(a)(10)] reads as follows:
(10) "legislative action" means conduct relating to
the development, drafting, consideration, sponsorship,
enactment or defeat, support or opposition to or of a
law, amendment, resolution, report, nomination, or
other matter affected by legislative action or
inaction;
He said part of the problem with House Bill 44 related to
inaction. For example, it can be an ethics violation if the
chair of a committee holds a bill because they have a conflict.
He said the difficulty with including "legislative action" in
the bill as defined is "you're kind of putting people in a
sticky situation, again, unintentionally." A chair who has a
conflict is in trouble if they act and they're in trouble if
they don't act. "I just want to make sure we're fixing this in
this version," he said.
1:55:31 PM
MR. HUTCHISON responded that the Senate resolved that problem
this year when a chair had a conflict and the bill was
discharged from the committee she chaired.
REPRESENTATIVE TUCK offered his understanding that there are two
fixes. First, make it so that it is no longer a conflict.
Second, if there is a conflict, things are rearranged just as
they have been under House Bill 44.
CO-CHAIR COGHILL added that part of the solution was to replace
the term ["official action"] with the term "legislative action."
REPRESENTATIVE TUCK said that wasn't his recollection when the
ethics committee repeatedly went over the advisory opinions. The
problem associated with the term "official action" was easy to
solve because there is a definition for the term "legislative
action." "So we relied on the definition of 'legislative
action,' which I don't see changing in this." He said he doesn't
object to getting rid of the term "official influence" but
substituting it with "legislative action" doesn't solve the
problem. He said he drafted a version earlier that removed both
terms and then defined when a legislator could take action. He
added, "I guess we can always work around whatever we have in
statute but if we're going to fix something, I think now's the
time to try to fix it."
1:58:15 PM
CO-CHAIR CLAMAN posed two hypothetical scenarios of legislative
action. In scenario one, a legislator's spouse works for one of
the 12 for-profit regional Native corporations and the
legislature is considering a bill that affects all 12 of those
corporations equally. Scenario two is similar to the current
situation with SB 54 that involves the transfer of railroad
lands to a private enterprise. The assumptions are that this is
a single transaction involving the transfer of land to a private
enterprise that is held by a small number of people, one of
which is a legislator's spouse. He asked how these scenarios
differ in terms of what that legislator could or could not do,
particularly with regard to drafting and supporting legislation.
MR. HUTCHISON replied the first scenario is not prohibitive
because the bill affects all the corporations equally. The
second scenario is prohibitive because it qualifies in each step
of the three-step analysis. The legislative action is more
likely than not to benefit the financial interest of the spouse
as a principal of the private company. The assumption is that
this is the only company that benefits from the transaction.
CO-CHAIR CLAMAN said he assumes that in the land transaction
scenario, the legislator could only vote to move the bill from
committee and vote for it on the floor. Any other activity,
including lobbying for the bill, would be prohibitive because of
that financial interest.
MR. HUTCHISON said correct and the legislator would need to
declare the conflict both in committee and on the floor.
CO-CHAIR COGHILL said these clarifications may result in changes
as to whether or not the body requires the conflicted legislator
to vote. He mentioned the guidelines in the Uniform Rules and
Mason's Manual of Legislative Procedure.
2:02:08 PM
REPRESENTATIVE TUCK provided the following commentary:
We really addressed the first part. That is making it
so people don't have a conflict. ... We've lightened
it up quite a bit from what we have right not. If you
make more than $10,000 in the previous 12 months, you
have a conflict. And that's in what we have written
now. And so now we're making it so your conflicts are
going to be reduced. But when you do have a conflict,
we're basically tying that person's hands all the way
for any type of legislative action.
I just want to make sure that everybody understands
that. That that's what we're deciding to do. But the
way I see this being written.
2:03:00 PM
SENATOR BEGICH agreed that was what the committee was doing and
added that he was quite comfortable tying a legislator's hands
at that point. He said that right now his hands are completely
tied for most education issues because his wife works for "an
entity that may or may not fall under a vague and ambiguous
law." He said that under the proposed bill he is appropriately
prohibited from taking any action on legislation that would
materially benefit her employer. "For me, that's what it does
and I favor that steeper restriction," he said.
2:03:46 PM
CO-CHAIR COGHILL clarified for the listening public that the
committee was dealing with two sections of AS 24.60 that relate
to how to declare a conflict and when legislative action would
be prohibited. He said the proposed bill addresses the testiest
points in House Bill 44, but it certainly won't solve all the
ethical questions that will come before the legislature.
REPRESENTATIVE TUCK asked for an example or scenario of when
somebody may have a conflict.
2:04:25 PM
SENATOR BEGICH related that prior to his wife being employed by
the Coalition for Education Equity, that organization received a
substantive amount of money in the State of Alaska v. Moore
settlement. If that happened today, he would be prohibited from
voting on that legislation because his wife would materially
benefit.
He also posed a hypothetical example of a [legislator's spouse]
who owns a company that does environmental cleanup. The
legislator should not vote on or sponsor any legislation related
to environmental cleanup because it's likely to materially
benefit the spouse's company.
2:05:53 PM
REPRESENTATIVE TUCK said the House State Affairs Committee
looked at "official action" as not being able to participate in
debate, not being able to vote, and not being able to sign the
bill report. He said, "That's where we got in that pickle of
'official action' and then we got ourselves in more trouble by
relying on 'legislative action'." He continued to say that if
everyone is okay that action also includes inaction, he's okay
with it, too. However, not addressing the issue places people
back in the same spot if they have a conflict. He said that part
could also be fixed but he was willing to accept this resolution
because legislators can't function under the current statutes.
He expressed willingness to continue to work to "clean it up."
CO-CHAIR COGHILL restated that this bill does not resolve all
questions. "This just tries to get us out of the situation where
private meetings and broad conflict questions have come up that
have really stifled good debate and hard work in the legislature
to this day," he said.
Finding no further discussion he solicited a motion.
2:07:25 PM
CO-CHAIR CLAMAN moved that the Free Conference Committee on SB
89 adopt the proposed FCCS SB 89, work order 31-LS0209\O, as the
working document.
CO-CHAIR COGHILL found no objection [and FCCS SB 89, 31-
LS0209\O, was adopted].
Finding no further discussion, he solicited a motion.
2:08:36 PM
CO-CHAIR CLAMAN moved that the Free Conference Committee for SB
89 recommend that the House and Senate adopt the Free Conference
Committee Substitute (FCCS) for SB 89, work order 31-LS0209\O
with the accompanying zero fiscal note.
CHAIR COGHILL asked for a roll call vote on the motion to send
the conference committee report to the respective bodies,
recommending its approval.
2:09:03 PM
A roll call vote was taken. Representatives Tuck, Pruitt, and
Claman, and Senators Begich and Coghill voted in favor of the
motion. Senator Stevens was absent. Therefore, FCCS SB 89 was
adopted by a 3:0 vote by House members and a 2:0 vote by Senate
members.
2:09:50 PM
CO-CHAIR COGHILL stated that the motion passes and FCCS SB 89
will be sent to the respective bodies.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 89 - Supplemental Document - Reference Bullet Points 4 21 19.pdf |
JSB89 4/22/2019 12:00:00 PM |
SB 89 |
| SB 89 Version G 4 21 19.pdf |
JSB89 4/22/2019 12:00:00 PM |
SB 89 |
| SB 89 - Version E - Version that Passed the House 4 21 19.PDF |
JSB89 4/22/2019 12:00:00 PM |
SB 89 |
| Free Conference Committee Schedule for SB 89 4.22.19.pdf |
JSB89 4/22/2019 12:00:00 PM |
SB 89 |
| SB 89 - Version K - Version that Passed the Senate 4 21 19.PDF |
JSB89 4/22/2019 12:00:00 PM |
SB 89 |
| SB 89 - Comparison Document 4 22 19.xlsx |
JSB89 4/22/2019 12:00:00 PM |
SB 89 |
| SB 89 - Fiscal Note - Published - SB0089-1-1-032219-LEG-N 4 21 19.PDF |
JSB89 4/22/2019 12:00:00 PM |
SB 89 |