Legislature(1995 - 1996)
05/03/1996 03:30 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 141 "An Act relating to legislative ethics; and providing for an effective date." JOHN GAGUINE, ASSISTANT ATTORNEY GENERAL commented on sections which require individuals to file conflict of interest statements under AS 39.50. He noted that there are currently approximately 600 - 800 high level employees and boards and commission members that have to file conflict of interest statements. The legislation would expand this number to another 450 - 500 state employees, including a large number of employees not in policy making positions. He noted that psychiatrists at the Alaska Psychiatric Institute (API), public defenders, and assistant attorney generals would be among those required to file. He questioned if the legislation would be constitutional. He noted that an employee has privacy rights in regards to their finances. He explained that to require a disclosure there must be some nexus between the public interest in disclosing and the person's privacy interest. He suggested that the Court might find that some of the positions affected cannot be required to disclose under the Constitution. He added that the Court may find equal protection violations. He pointed out that the bill applies to ranges 19 and above in the executive branch and legislature but not in the judiciary branch. He noted that classified employees do not have to disclose. Representative Martin asked if the problem could be solved with a severability clause. Mr. Gaguine replied that a severability clause would not hurt. He did not think that a severability clause was necessary. He explained that a ruling that some individuals cannot be covered would not affect the remaining sections of the bill. Representative Martin asked if employees of the Alaska Housing Finance Corporation (AHFC) and Alaska Railroad should be covered. Mr. Gaguine observed that Alaska Railroad senior officials are in policy making positions. He thought they could be included in the disclosure requirements without fear of a constitutional challenge. Mr. Gaguine commented on section 72 on page 42 which was added by the Senate. He noted that while the legislature is in session the governor and lieutenant governor may not fund raise. He maintained that the provisions on page 9, section 13 would not preclude a senator running for governor from fund raising during the legislative session. He observed that the intent was to allow fund raising for statewide office during the legislative session. If the parallel language was drawn then the governor could not raise money for legislative races. Funds raised during the session could not be accepted by any incumbent in a legislative race. BROOK MILES, JUNEAU BRANCH ADMINISTRATOR, ALASKA PUBLIC OFFICES COMMISSION (APOC) noted that several sections of SB 141 affect APOC. She noted that the Commission has serious reservations concerning sections 27 and 28, Legal Defense and Election Challenge Funds. She acknowledged that Senate Intent Language would limit the scope of the Fund. She expressed concern with possibilities for abuse of the Fund. She recommended guidelines concerning contribution levels, when contributions can be made and received and how much could be spent. She noted that there are no reporting requirements. She observed that APOC would be required to issue regulations. The Legislative Ethics Committee would administer and adjudicate cases. She noted that they are in different branches of government. She observed that the Commission has issued a fiscal note. Representative Parnell questioned why the Fund is limited to defense of a civil criminal administrative action. Ms. Miles noted that the Commission was not consulted in regards to the legislation. Representative Brown referred to section 49, page 27. She noted that language relating to gifts and loans was deleted. Ms. Miles noted that the deletion is the recommendation of the Legislative Ethics Committee. Gifts will be reported to the Committee. Copies of disclosure of gifts would be forwarded to the APOC and contained in each legislator's file. In response to a question by Representative Parnell, Ms. Miles clarified that any person required to submit a financial disclosure report under AS 39.50 or AS 24.60 could raise their own funds. A legislative employee has the same right. REPRESENTATIVE DAVID FINKELSTEIN stated that under current law a legislator cannot raise funds for a legal defense fund because money that is not earned or given as a political contribution or a legal gift cannot be accepted. He emphasized that there is no mechanism for a legal defense fund. Money would have to be accepted as a campaign contribution. The legislation would create a new area for legal defense funds. Representative Brown asked for a clarification of effective dates in sections 27 and 28. Ms. Miles explained that section 28 would take effect if the initiative dealing with campaign finance reform is enacted by a vote of the people. She noted that section 27 would be effective if legislation is enacted into law and is found to be substantially similar to the initiative. Representative Brown provided members with Amendment 1 (copy on file). She noted that the amendment incorporates changes recommended by APOC. MIKE MCMULLEN, PERSONAL MANAGER, DIVISION OF PERSONNEL, DEPARTMENT OF ADMINISTRATION discussed sections 68 - 70. He noted that a substantial amount of work would be moved to the Personnel Board in the Division of Personnel. He observed that the Personnel Board is a lay board. There are three members on the Board. The three members of the Personnel Board are also members of the Public Employee Retirement System Board. They meet several times a year. He estimated that the legislation will require an additional monthly meeting. He expressed concern with the additional responsibilities of the Personnel Board. He noted that the Board has not been informed of the proposed changes. Mr. McMullen discussed the shift of responsibilities from the Legislative Ethics Committee to the Executive Branch. He spoke against the addition of language stating that an appearance of a conflict of interest is a violation. He observed that the Executive Branch Ethics Act already applies to public employees. The bill would add a subcategory called a "state official". He maintained that additional requirements that are less demanding than the existing Act will cause confusion. He questioned if both provisions will apply to state officials. He noted that section 69 is already covered under existing statute. STEVEN (NEIL) SLOTNIK, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW explained that existing law under AS 39.52.120 is more stringent then the proposed requirements. He compared subsection (a)(1) on page 37, to current law. He observed that "personal interest" is deleted from current statue. He asserted that the current law maintains a higher ethical standard. He referred to section 71. He noted that existing law prohibits a public official from accepting a gift in circumstances from which it could be inferred that the gift is intended to influence the public officer's official duties. The legislation would allow gifts of under $250 dollars. There is no requirement to determine if the gift was intended to influence the official's duties. He observed that subsection (e) prohibits a state official from soliciting, accepting, or receiving, during a legislative session, a gift with any monetary value from a lobbyist or a person acting on behalf of a lobbyist. He stressed that the language implies that a gift could be accepted outside of session. He questioned the need for the additional language. Mr. Slotnik acknowledged his confusion in regards to section 71. He stated that it is unclear how the original statute would be affected. He noted that currently gifts under $50 dollars are presumed not to be meant to influence official duties. He stressed that he is unclear how to interface the language of the old act with SB 141. Mr. Slotnik noted that there is a new definition of "family member" in section 102, page 52. The new definition requires that the child or parent live with the individual and be financially dependent. The current law covers blood relation regardless of whether they are living with and financially dependent on the state official. Mr. Slotnik observed that the legislation creates two tiers of public employees. He referred to section 69. He observed that section 69 is in addition to the prohibitions under AS 39.52.120. He stated that the implication is that AS 39.52.120 does not reach to the additional provisions of AS 39.52.125 as contained in SB 141. He suggested that the prohibitions in section 69 would only apply to the top tier of state employees, but not to the remainder of employees in the classified service. Before the legislation, current statute was interpreted to prohibit the use of state funds, equipment or services in campaigning. He stressed that since the provisions are not contained in the current statute they would no longer be implied to pertain. He maintained that there should not be two tiers in the executive branch. He emphasized that it would be easier to maintain compliance to a single high ethical standard and educate employees if there is one executive branch ethical act. Mr. Slotnik noted that disclosure requirements are not in the Executive Branch Ethics Act. He acknowledged that there are currently two tiers in reporting requirements. Representative Brown questioned the point of having two tiers in the Executive Branch Ethics Act. Mr. Slotnik noted that he was not consulted in regards to drafting the legislation. (Tape Change, HFC 96-158, Side 2) In response to a question by Representative Brown, Mr. Slotnik stressed that he is comfortable with the rule in the existing Executive Branch Ethics Act, which prohibits an executive branch employee from taking a gift if it is in circumstances that could be inferred that it was intended to influence their performance of official duties. Mr. Slotnik reiterated that the new statutes would be applied in addition to the current statute. He added that the transfer of responsibility for advisory opinions and investigation of ethic complaints from the Office of the Attorney General to the Personnel Board is problematic. He observed that the Personnel Board is a lay board that does not meet regularly. He pointed out that the Attorney General's office is equipped to advise agencies. There are people on staff who are knowledgeable in regards to the Ethics Act and the operation of the agencies. Representative Parnell questioned if the Personnel Board would be more independent. Mr. Slotnik questioned if independence is of concern. He noted that opinions are available for review. He did not think the quality of advise would improve by the transfer. Mr. McMullen reviewed new requirements of the Personnel Board in sections 70, 71, and 90 - 100. Representative Mulder stressed that the issue is the perception of independence and impartiality. He thought that public confidence would be raised by the transfer to the Personnel Board. Mr. Slotnik noted that there are two issues, advice and investigation of complaints. Under current law, complaints are investigated by the Attorney General. If probable cause is determined then an accusation is filed with the Personnel Board. The Personnel Board hears the case and makes a decision as to whether a violation did occur. If a complaint is filed against a attorney general, governor or lieutenant governor then the Personnel Board appoints independent counsel. Representative Mulder stressed that the perception is that complaints are not going to receive an impartial hearing under current law. Mr. McMullen noted that the legislation would direct the Personnel Board to give the complaint to the Attorney General to serve notice and prosecute the case before the Board. In response to a question by Representative Brown, Mr. McMullen explained that the Attorney General's staff counsels the Board. Representative Brown asked if the current system is broken or if there is a specific problem. Mr. McMullen and Mr. Slotnik did not know of a specific problem. Representative Brown questioned the affect of not adopting the Department of Administration's fiscal note. Mr. McMullen stressed that there would be standstill in ethics investigations. He emphasized that there is not enough staff for the existing workload. LAURA WILLIAMS, STAFF, SENATOR PEARCE observed that the closest thing in the executive branch to an ethics committee is the Personnel Board. She observed that Senator Pearce felt that the Board would be more removed. Representative Brown questioned why the section prohibiting gifts during session was inserted into the Executive Branch Ethics Act for year around employees. Ms. Williams explained that the second tier was created to more closely reflect the Legislative Ethics Act. She noted that the intent is to make it clear that state officials should have the same prohibitions as legislators. It was not the Senator's intent to weaken the Executive Branch Ethics Act. She maintained that the current law would apply to the state offices. Representative Brown pointed out that the standards in the legislation would not pertain to these employees. Mr. McMullen provided members with Amendment 2 (copy on file). He explained that the amendment would delete "compensated" and insert "appointed" on page 35, line 16; and add "in the exempt services" on line 17. The amendment would also make this change on page 53, lines 6 and 7. He noted that the amendment would cover exempt service. Representative Brown discussed Amendment 1. She noted that the amendment was offered by the Administration. Mr. Slotnik explained that the amendment deletes almost all of the changes to the Executive Branch Ethics Act. If the amendment is adopted there would no longer be two tiers. All state employees would be subject to the Executive Branch Ethics Act. The disclosure changes would remain. Representative Brown MOVED to adopt Amendment 1. She noted that the amendment would delete the transfer to the Personnel Board and the two tier structure for state officials and other public officers. It would leave in the bill the changes in disclosure reporting for employees at range 21 and above. She noted that it is not the intent to weaken the Executive Branch Ethics Act. Representative Parnell spoke in opposition to the amendment. He suggested that both new and old prohibitions would be enforced. He spoke in support of the investigation function being transferred to the Personnel Board. Representative Brown WITHDREW Amendment 1. Mr. Slotnik clarified that current law pertains to commissioners, directors, board members and other high level policy makers. He observed that the two branches have similar ethic regulations. Mr. McMullen discussed Amendment 2. He explained that the same 800 individuals would be affected. He noted that the amendment clarifies that the requirements would pertain to persons that occupy a position at range 21 or higher as opposed to receiving pay equal to range 21. He noted that a lower range with a higher step could have pay equal to a range 21A. He explained that every hire is technically an appointment to the position. All range 21 and above employees would be covered, not just political appointees. Mr. Slotnik observed that the compensation level was added to cover exempt employees that are not scheduled by range. He questioned the status of University of Alaska employees. Representative Brown MOVED to adopt Amendment 2. Representative Kelly OBJECTED. Representative Brown noted that the amendment would make the disclosure cut-off at range 21. (Tape Change, HFC 96-159, Side 1) Mr. McMullen further explained that the range level would be the cut-off point rather than the compensation amount. Representative Kelly WITHDREW his objection to Amendment 2. There being NO OBJECTION, it was so ordered. Representative Brown amended Amendment 3 to add "limited" on page 4, line 29 after "C" (copy on file). She MOVED to adopt Amendment 3. Representative Mulder OBJECTED. Representative Mulder disclosed that his wife is a lobbyist. Representative Brown disclosed that her husband has filed as a lobbyist. She noted that all legislators are affected by the legislation. Representative Brown explained that Amendment 3 restores current law. She noted that the intent is that an occasional or incidental letter or call not related to their office which is handled by a legislator in their state office is permitted. She argued that without the amendment there would be unlimited use of telephones and fax machines for non-governmental purposes. Representative Finkelstein clarified that "limited" would prevent the running of a campaign or mailing house from the office. Representative Parnell questioned the affect on the legislator's staff. Representative Kelly asked if "limited" is defined. Representative Mulder stressed that there is no definition of "limited". He argued that there are protections built in to the current system. Representative Martin spoke in opposition to the amendment. Representative Finkelstein noted that the supervisor interprets the use of "limited". Representative Kelly expressed concern with the lack of definition. Representative Finkelstein stressed that the amendment requires that employees comply with the policy of the supervisor. A roll call vote was taken on the MOTION to adopt Amendment 3. IN FAVOR: Therriault, Brown, Kelly OPPOSED: Martin, Mulder, Kohring, Foster Co-Chair Hanley and Representatives Navarre, Parnell and Grussendorf were absent from the vote. The MOTION FAILED (3-4). Representative Brown MOVED to adopt Amendment 4 (copy on file). Amendment 4 would delete on page 3, lines 23 -30. She reiterated that her husband has filed as a lobbyist. She explained that the amendment would delete section 3, which bans legislative spouses from being employed as a lobbyist. Representative Martin OBJECTED. Representative Brown maintained that spouses should be required to disclose their lobbying activities. She stressed that legislators are not prevented from contracting with or receiving gifts from lobbyists. She noted that spouses may be employed in the other body. She emphasized that the ban would be inconsistent. She stressed that Alaska is a small state and there are limited things that spouses can do in Juneau. Representative Mulder reiterated that his wife is a lobbyist. Representative Martin spoke against the amendment. He stressed the poor public perception of allowing legislative spouses to lobby the legislature. Representative Kelly maintained that legislators vote their conscience. He added that they will have to answer to their constituents. A roll call vote was taken on the MOTION to adopt Amendment 4. IN FAVOR: Mulder, Therriault, Brown, Kelly, Kohring, Foster OPPOSED: Martin Co-Chair Hanley and Representatives Navarre, Parnell and Grussendorf were absent from the vote. The MOTION PASSED (6-1). Representative Brown MOVED to adopt Amendment 5 (copy on file). She explained that the amendment would clarify that legislator's offices are considered public areas and are not appropriate areas for display of campaign materials. Representative Mulder OBJECTED. He asked if a campaign button on a legislator's jacket in their office would be a violation. SUSIE BARNETT, SELECT COMMITTEE ON LEGISLATIVE ETHICS noted that legislative employees cannot wear campaign buttons while performing legislative duties. Representative Martin indicated that a legislator's office becomes their home away from home. Ms. Barnett indicated that a division could be made between a legislator's inner and outer office. Representative Therriault maintained that no campaign material should be distributed or posted in legislator's offices. He added that a brochure or pin inadvertently worn or carried into the office should not be considered as distributing or posting. Representative Brown noted that campaign buttons could be excluded. Representative Mulder spoke in support of maintaining the privacy of legislator's inner offices. He maintained that legislators are not campaigning from their inner offices. Representative Parnell suggested that "distributing and posting" be further defined. He agreed that the inadvertent position of campaign brochures or pins should not be considered as distributing or posting. He expressed concern with the proposal to exempt the inner office from the prohibitions. Representative Brown summarized that "distribute or post" means to deliberately put something out, proactively distributing or posting for view. A roll call vote was taken on the MOTION to adopt Amendment 5. IN FAVOR: Parnell, Therriault, Brown, Kelly, Kohring OPPOSED: Martin, Mulder, Foster Co-Chair Hanley and Representatives Navarre and Grussendorf were absent from the vote. The MOTION PASSED (5-3). Representative Brown MOVED to adopt Amendment 6 (copy on file). She explained that the amendment prohibits legislators from receiving more than $100 dollars in any form. The legislation would raise this amount to $250 dollars. Representative Finkelstein explained that the intent is to raise the threshold to $250 for gifts outside of the legislature, from friends or families. Legislative gifts would still be held at $100 dollars. He noted that the federal level is $50 dollars. Representative Martin spoke in support of reducing the gift level to $50. Representative Brown noted that there are exemptions for gifts that are not connected to a legislator's status. Representative Therriault noted that food consumed at a social event or meal is not included. There being NO OBJECTION, Amendment 6 was adopted. Representative Brown MOVED to adopt Amendment 7 (copy on file). Amendment 7 would delete discounts when on state business. Representative Kelly spoke against the amendment. (Tape Change, HFC 96-159, Side 2) Representative Finkelstein emphasized that discounts can be a way to circumvent the gift prohibitions. Representative Martin pointed out that many legislators receive discounts on housing. Representative Kelly maintained that the danger of the ethics law is not that a legislator will make an ethical violation, but that there will be a perception of a violation in the media. He spoke against the amendment. Representative Finkelstein stressed that pricing based on rental length or season is not a discount. Representative Martin questioned if he could take advantage of a 15 percent discount on carpet cleaning. Ms. Barnett noted that the discount would be under $100 dollars. She added that the discount is also being offered to a broader group. A roll call vote was taken on the MOTION to adopt Amendment 7. IN FAVOR: Brown OPPOSED: Kelly, Kohring, Martin, Mulder, Parnell, Therriault, Foster Co-Chair Hanley and Representatives Navarre and Grussendorf were absent for the vote. The MOTION FAILED (1-7). Representative Brown MOVED to adopt Amendment 8 (copy on file). Representative Finkelstein explained that the amendment would provide for contribution and time limits on legal defense funds. It also clears up the division between the Legislative Ethic Committee and the Alaska Public Offices Commission. Ms. Miles summarized that the amendment would provide more statutory guidance concerning the accounting behavior of legal defense funds. It would also require that the Commission by regulation determine when reports would be filed disclosing who contributed to the Fund. It provide that the Alaska Public Offices Commission the enforcement body and provide for civil penalty assessments of late filings of required reports. In response to a question by Representative Parnell, Ms. Miles noted that there would not be provision for a loosing candidate who is not a seated legislator, subject to AS 24.60. However, they would be disclosure on their financial disclosure reports. Representative Finkelstein noted that the State of Alaska acts on behalf of the winning candidate. Representative Parnell expressed concern with the contribution and time limits. He felt uncomfortable with placing limits on someone who can be sued just because they are legislators, when a person who does not hold office can raise all the money that they want to participate in a lawsuit. Representative Parnell MOVED to AMEND Amendment 8 by deleting the reference to page 16, line 2 and page 16, line 27. There being NO OBJECTION, it was so ordered. There being NO OBJECTION, Amendment 8 was adopted. Representative Brown provided members with Amendment 9 (copy on file). Amendment 9 would delete "political" "or public policy" on page 15 and 16. She questioned the need for this language. Ms. Barnett noted that the language was added by Senator Donely in the Senate. She stated that the language was added to clarify that the defense fund could not be used to fund divorce proceedings or other personal matters. Ms. Miles observed that the without the amendment any civil, criminal or administrative action could be covered. ANN RINGSTADT, STAFF, SENATE STATE AFFAIRS COMMITTEE clarified that Senator Donley's intent that the Fund should only refer to the political position or election. Divorce or small claims cases would not be covered. She noted that monies could be used to defend against a frivolous case having to do with a campaign. Ms. Miles noted that expenditures for election challenges are proposed for inclusion in other legislation. Representative Mulder summarized that the legislation will codify provisions regarding legal defense relating to campaigns. In response to a question by Representative Brown, Ms. Ringstadt noted that the intent is to cover the cost of actions arising against a legislator that was not under their control. Representative Brown HELD Amendment 9. Representative MOVED to adopt Amendment 10 (copy on file). She explained that the amendment would allow the subject of a complaint to attend amy meeting concerning the complaint. She noted that the Committee can consider the request and if it decides to deny the request notify the subject of the complaint their reasons. Representative Kelly spoke against the amendment. Representative Finkelstein noted that committee final deliberations are not open to the public or the subject of the complaint. He stressed that the amendment clarifies the internal inconsistency. Representative Therriault argued that the Legislative Ethics Committee should not be elevated to jury status. Representative Martin spoke against the amendment. A roll call vote was taken on the MOTION to adopt Amendment 10. IN FAVOR: Brown OPPOSED: Kelly, Kohring, Martin, Mulder, Parnell, Therriault, Foster Co-Chair Hanley and Representatives Navarre and Grussendorf were absent for the vote. The MOTION FAILED (1-7). Representative Finkelstein noted that page 22, line 17 is inconsistent. He noted that the legislation would prohibit the subject of the complaint from being present at committee deliberations and vote on the dismissal order and decision. Representative Kelly MOVED to adopt oral Amendment 11, delete "or the subject of the complaint" on page 22, lines 11 and 12. A roll call vote was taken on the MOTION. IN FAVOR: Kelly, Kohring, Martin, Mulder, Parnell, Therriault, Foster OPPOSED: Brown Co-Chair Hanley and Representatives Navarre and Grussendorf were absent for the vote. The MOTION PASSED (7-1). Representative Brown MOVED to adopt oral Amendment 12 to delete on page 23, lines 24 - 28. Ms. Barnett noted that the amendment would retain the status quo. The language would impose restrictions on the release of information by the subject of the complaint unless the complainant has agree to be bound by similar restrictions and has not made public the information contained in the complaint, information about the complaint, or the fact of filing the complaint. She noted that the language would tie the Committee to conditions as set by a person that the Committee has no jurisdiction over. She noted that the language pertains to be information irrelevant to the case. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to adopt oral Amendment 13, on page 8, line 29 insert "incidental" before "political activities". She maintained that the language is too broad. There being NO OBJECTION, it was so ordered. Representative Mulder questioned if a ethics complaint can be initiated within 60 days of an election. He alleged that ethic complaints are being used as campaign tools. Mr. Gaguine noted that AS 11.56 makes the crime of false accusation with the Legislative Ethics Committee, a class A misdemeanor. Representative Parnell pointed out that the penalty requires proof beyond a reasonable doubt. In response to a question by Representative Martin, Ms. Barnett noted that the statues do not speak to a gift given to a family member and imputed to the legislator. She noted that family members are limited to those people listed on page 13, lines 17 - 23. (Tape Change, HFC 96-160, Side 1). Representative Brown spoke to the need for changes within the proposed legislation. She pointed out that following communication with Senator Pearce's office, some changes would be permissible. Representative Brown suggested that the current bill could cause unfortunate repercussions. She stressed that the legislative ethics as proposed would be "forced" into the Executive ethics, explaining that the two concepts are quite different. SB 141 was HELD in Committee for further discussion.