Legislature(1993 - 1994)
04/19/1994 08:30 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 333
An Act relating to disclosure of close economic
associations by certain state employees and to the
prohibition against nepotism in the executive branch of
state government; and providing for an effective date.
Co-chair Pearce directed that SB 333 be brought on for
discussion and referenced file material relating to the
bill.
RANDY WELKER, Legislative Auditor, came before committee.
He explained that the bill was introduced by the Legislative
Budget and Audit Committee in response to an audit of the
Dept. of Public Safety, Fish and Wildlife Protection
Division. While the legislature had earlier passed law that
made it illegal for fish and wildlife protection officers to
be licensed as guides, the audit highlighted potential for
an additional problem: close economic association. Those
involved in the legislative branch of government are
required to disclose such associations. There is no such
requirement in the executive branch ethics act. During the
audit, evidence was found of fish and wildlife protection
officers who either own commercial fishing permits or
commercial fishing vessels, or have spouses who own permits
or vessels. There were also indications of significant
property transactions between fish and wildlife protection
officers and those they regulate. Nothing currently
requires disclosure of these associations. This situation
is not unique to the Dept. of Public Safety. Law does not
presently prohibit an ABC investigator from being co-owner
of a liquor license. Further, an oil and gas auditor
within the Dept. of Revenue is not required to disclose that
he or she owns significant stock in an oil company. The
proposed bill requires that those who exercise substantial
discretion in regulatory or audit matters be required to
disclose economic associations to their supervisors. The
legislation also provides for action by the supervisor in
either reassigning duties or ordering divestiture of the
interest.
Section 2 of the bill extends provisions of the current
nepotism statute. The present prohibition only extends to
blood relations to the executive head of the department.
The law should include all employer/subordinate
relationships in state government. Section 2 expands the
current prohibition. The fiscal note from the Dept. of
Administration relates to changes in the nepotism statute.
Discussion followed regarding the definition of
"supervisor." Mr. Welker explained that it is described as
"a position as immediate supervisor or as a supervisor
within the organizational structure." Co-chair Pearce asked
if the child of the Governor's chief of staff could work in
one of the departments. Mr. Welker said a legal
interpretation of that situation would have to be made.
In response to a question from Senator Kelly concerning the
definition of "public officer," Mr. Welker voiced his
understanding that it refers to "any state employee."
Senator Kelly stated his discomfort with broad application
of expanded nepotism provisions.
Senator Sharp voiced his understanding that private sector
nepotism restrictions generally allow for situations where a
family member was an employee prior to hire of the related
supervisor. Co-chair Pearce suggested that the employee
would not necessarily have to be discharged, in the noted
situation, but merely transferred to a different section.
Mr. Welker concurred.
Senator Kerttula attested to substantial abuse in areas
covered by the proposed bill.
Mr. Welker directed attention to page 1, line 14, and noted
language requiring that the "personnel board" adopt
associated regulations. The administration pointed out that
all executive branch ethics regulations are developed and
defined by the Attorney General. The administration has
thus asked that "personnel board" be deleted and "Attorney
General" inserted in lieu thereof. Mr. Welker recommended
the change.
KEVIN RICHIE, Director, Division of Personnel/EEO, Dept. of
Administration, and MIKE McMULLEN, Personnel Manager, System
Services, Division of Personnel/EEO, Dept. of
Administration, came before committee. Mr. Richie
referenced the $24.3 fiscal note and reiterated that it
relates to expanded nepotism provisions. He noted that
current statutes provide no waiver for nepotism. Proposed
new law extends to a "regular member of the household" as
well. That includes "other people living in the household
that weren't related by blood." It includes a larger number
of people than previously covered, and it is assumed that
grievances will be filed over this issue.
Senator Rieger directed attention to page 2, lines 4 and 5,
and requested an explanation of "official action in a matter
that directly involves a person . . . ." He then asked how
the language would be interpreted by the Attorney General.
Mr. McMullen explained that the executive branch ethics act
contains an assumption that relationships exist. Minor
interactions are not conflicts of interest.
Co-chair Pearce asked representatives from the department if
they were supportive of the language change recommended by
Mr. Welker. Both Mr. Richie and Mr. McMullen responded
affirmatively. Mr. McMullen indicated that the change would
reduce the fiscal note by $1.5.
Discussion followed regarding expansion of nepotism
prohibitions to cover regular members of a household. Mr.
Richie acknowledged that inclusion represents a policy call.
He noted that today's households contain equivalents of
family members that are not related by blood or marriage.
Senator Kerttula MOVED for adoption of the language change
from "personnel board" to "Attorney General" at page 1, line
14. No objection having been raised, Amendment No. 1 was
ADOPTED.
Senator Sharp MOVED that CSSB 333 (Fin) pass from committee
with individual recommendations and accompanying fiscal
notes. Senator Kelly OBJECTED. He attested to the small
size of the state population and the number of households
with members working for state government. He voiced his
belief that certain nepotism prohibitions within the bill
were too broad.
End: SFC-94, #64, Side 1
Begin: SFC-94, #64, Side 2
Co-chair Pearce called for a show of hands on the motion.
CSSB 333 (Fin) was REPORTED OUT of committee on a vote of 4
to 1. It was accompanied by zero fiscal notes from the
Office of the Governor and the Dept. of Labor and a $24.3
note from the Dept. of Administration. Co-chairs Pearce and
Frank and Senators Kerttula, Rieger, and Sharp signed the
committee report with a "do pass" recommendation. Senator
Kelly signed "no recommendation."
Senator Kerttula asked for a brief recess.
RECESS - 9:15 A.M.
RECONVENE - 9:30 A.M.
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