Legislature(2017 - 2018)GRUENBERG 120

01/27/2017 01:00 PM JUDICIARY

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01:00:35 PM Start
01:01:47 PM HB44|| HCR1
02:52:46 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Meeting Rescheduled from 1/25/17 --
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
          HB 44-LEGISLATIVE ETHICS: VOTING & CONFLICTS                                                                      
         HCR 1-AMEND UNIFORM RULES: ABSTAIN FROM VOTING                                                                     
1:01:47 PM                                                                                                                    
CHAIR CLAMAN  announced that the  only order of business  would be                                                              
HOUSE  BILL NO.  44, "An  Act requiring  a  legislator to  abstain                                                              
from taking  or withholding official  action or exerting  official                                                              
influence that  could benefit  or harm an  employer or  to request                                                              
to be  excused from  voting in  an instance  where the  legislator                                                              
may have  a financial conflict of  interest; and providing  for an                                                              
effective  date,"   and,  HOUSE   CONCURRENT  RESOLUTION   NO.  1,                                                              
Proposing an  amendment to the Uniform  Rules of the  Alaska State                                                              
Legislature relating to voting and abstention from voting.                                                                      
[HB 44 and HCR 1 were before the committee jointly.]                                                                            
1:02:45 PM                                                                                                                    
REPRESENTATIVE  JASON GRENN, Alaska  State Legislature,  explained                                                              
that the  intent of  the legislation  is to increase  transparency                                                              
within the  state legislature,  and allow the  public to  see that                                                              
conflicts of interest  are taken seriously.  In  asking the public                                                              
to  trust  the  legislature  with their  votes,  these  pieces  of                                                              
legislation  are important  steps in  increasing the  transparency                                                              
constituents  expect.   Currently, he  explained, the  legislature                                                              
uses  a system  of abstention  allowing  for  no record  of why  a                                                              
person was  not allowed  to abstain.   A  single objection  can be                                                              
raised, and  the legislator requesting  to abstain is  required to                                                              
vote.    Alaska is  the  only  state  in the  country  to  require                                                              
unanimous consent  in allowing an  abstention from voting.   These                                                              
two pieces  of legislation  do not  allow for  a legislator  to be                                                              
excused from  voting on  an appropriation bill,  they do  not take                                                              
away  a  legislator's   ability  to  vote  on  the   budget.    As                                                              
legislators   guide   Alaska   through   these   troubled   times,                                                              
increasing  the public's  trust is  more important  than ever  and                                                              
creating transparency  is critical.   House Bill 44  establishes a                                                              
clear and  concise standard for  legislators to use when  they are                                                              
determining  whether they  have  a conflict  of  interest in  line                                                              
with existing statutes.   House Concurrent Resolution  1 does that                                                              
with a vote on the public record.                                                                                               
1:04:44 PM                                                                                                                    
RYAN  JOHNSTON, Staff,  Representative Jason  Grenn, Alaska  State                                                              
Legislature,  turned  to the  sectional  analysis  for  HB 44  and                                                              
paraphrased as follows: [original punctuation provided]                                                                         
     Section 1:  Defines the  conflict of interest  standards                                                                   
     under  which  a  Legislator  may vote  on  a  particular                                                                   
     issue.  Conflict is  defined as  substantial benefit  or                                                                   
     harm  to  the financial  interest  of  the  legislator's                                                                   
     immediate  family  member,  the  legislator's  employer,                                                                   
     and immediate  family member's  employer, a person  with                                                                   
     whom the  legislator is negotiating employment,  or from                                                                   
     whom  the  legislator  or immediate  family  member  has                                                                   
     received  more than  $10,000 in income  within the  last                                                                   
     12 months.                                                                                                                 
     Exceptions  to this  include those  outlined in  Section                                                                   
     2,  or  while  participating  in  public  discussion  or                                                                   
     Section 2:  A legislator may  not vote on a  question in                                                                   
     a committee  and must request to abstain from  voting on                                                                   
     the  floor if  the  legislator  or an  immediate  family                                                                   
     member   has  a   substantial   financial  interest.   A                                                                   
     legislator  may  vote  on an  appropriations  bill  that                                                                   
     meets the  requirements of AS 37.07.020(a)  or 37.07.100                                                                   
     (Executive Budget Act).                                                                                                    
     Section 3:  Defines "substantially  benefit or  harm" as                                                                   
     the  effect on  the  person's financial  interest  being                                                                   
     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.                                                                                                       
     Section  4: Defines  "financial  interest" as  ownership                                                                   
     of an  interest or involvement  in a business,  property                                                                   
     ownership,  or relationship that  is a source  of income                                                                   
     or financial benefit.                                                                                                      
     Section  5: Provides  that  this Act  only takes  effect                                                                   
     upon  passage  of  a resolution  amending  Uniform  Rule                                                                   
     Section  6: Provides  for an effective  date later  than                                                                   
     that of  the resolution to  Uniform Rule 34(b)  referred                                                                   
     to in Section 5.                                                                                                           
1:07:01 PM                                                                                                                    
MR. JOHNSTON paraphrased the sectional analysis for HCR 1, as                                                                   
follows: [original punctuation provided]                                                                                        
     Section 1:  Amends the rule  to state that  a legislator                                                                   
     may  abstain  from  a  vote  with  a  majority  consent.                                                                   
     Currently, Uniform  Rule 34(b) states that  a legislator                                                                   
     may  abstain from  a vote by  a unanimous  consent.   It                                                                   
     also amends  the Uniform Rule  to include two  instances                                                                   
     when a  member may not vote:  a legislator may  not vote                                                                   
     on their own  abstention from a vote; and,  a legislator                                                                   
     may not vote on an issue if the body casts a majority                                                                      
     vote for the legislator to abstain.                                                                                        
MR.  JOHNSTON stated  that the  flowchart  "Current Procedure"  is                                                              
included  within  the  committee  packet, and  explained  that  it                                                              
reflects the  current procedure for  a legislator to  abstain, and                                                              
what the  procedure would  look like under  HB 44  and HCR 1.   He                                                              
then explained the two procedures depicted on the chart.                                                                        
1:09:48 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked  why  the person  who objected  isn't                                                              
recorded in the journal.                                                                                                        
MR. JOHNSTON  opined  that it is  an unwritten  rule that  someone                                                              
always stands up  and, currently, the statute reads  that there is                                                              
no record of it.                                                                                                                
1:10:29 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  questioned   whether  the  statute  itself                                                              
reads that there is no record of it.                                                                                            
MR. JOHNSTON  advised there is no  language in that regard  in the                                                              
REPRESENTATIVE  LEDOUX surmised  there is no  language one  way or                                                              
the other in the statute.                                                                                                       
MR. JOHNSTON answered in the affirmative.                                                                                       
1:10:53 PM                                                                                                                    
REPRESENTATIVE  KOPP   suggested  that  Representative   Grenn  is                                                              
referring   to  the   uniform  rule   rather   than  the   statute                                                              
Representative LeDoux  was discussing.  He agreed  there should be                                                              
good  transparency   and  public  process,  and   asked  that  the                                                              
committee  consider the  unintended  consequences.   He asked  the                                                              
committee  to imagine  a situation  where the  majority decides  a                                                              
bill is important  to them and that someone in the  minority has a                                                              
conflict,  and "we're  all going  to vote that  that person  does,                                                              
and kind  of vote on  party lines versus  how they really  feel if                                                              
that person has  an interest that is greater than  someone else in                                                              
their class  of people that are  similarly situated."   He offered                                                              
that he had been  attempting to imagine situations  where it was a                                                              
majority/minority split based upon how the bill was written.                                                                    
1:12:13 PM                                                                                                                    
REPRESENTATIVE GRENN  answered that his office researched  how the                                                              
other 49 states  dealt with conflicts of interest,  and found that                                                              
the vast  majority of states  that allow  for an abstention  to be                                                              
voted on  use a majority  vote of  the body.   He said  that after                                                              
reviewing  Alaska's   statutes  he   was  advised  the   Anchorage                                                              
Assembly has  a majority vote  allowing a  member to abstain  on a                                                              
conflict  of   interest  issue.     He   stated  that   the  state                                                              
legislature should  meet what the  state is asking  municipalities                                                              
to  do,  as  well.    He  extended  that  Representative  Kopp  is                                                              
correct,  this does  not take  politics  out of  what can  happen.                                                              
The  hope is  that legislators  recognize that  someone's vote  is                                                              
the most  important action they can  take as a legislator,  and to                                                              
take  that  vote  away  from  someone  for  political  reasons  or                                                              
vindictive reasons,  cannot be dealt with through  legislation, he                                                              
said.   The intent of  this bill is to  create a public  record of                                                              
the vote,  and in the event  a legislator rises to  their conflict                                                              
of interest and  one side or the other wants to  play politics and                                                              
vote party  lines,  that vote now  is public  record.   Therefore,                                                              
the public  can  see that one  side or  the other  is engaging  in                                                              
politics  as opposed  to good  policy, which  is the  transparency                                                              
layer where  the public knows  what is  happening on the  floor of                                                              
the House of Representatives.                                                                                                   
1:14:41 PM                                                                                                                    
REPRESENTATIVE KOPP  noted that Alaska has a  citizen legislature,                                                              
legislators  have other  jobs of  which APOC  discloses, and  they                                                              
are elected because  they bring the perspective and  view point of                                                              
their  constituents  into  the  public  arena  of  discussions  on                                                              
public policy  ideas.  Currently,  he surmised, when  a legislator                                                              
declares a  conflict it is on  the record, the only  difference is                                                              
absolutely calling  for a vote each  time.  There could  be a fish                                                              
tax bill  with legislators  involved in  the fishing industry,  or                                                              
perhaps the bill  is related to the legal field and  it affects an                                                              
attorney  legislator's   clientele  whose  fees   exceed  $10,000.                                                              
Possibly, he offered,  it would come back to how  the majority and                                                              
minority feel about  the bill, although, who their  clients are or                                                              
who  the  legislator   is  in  their  profession,   is  important.                                                              
Legislators  are   elected  by  their  districts   because  people                                                              
believe  in  them and  want  their  perspective represented.    He                                                              
posited  that sometimes  an action  is  taken that  is thought  to                                                              
decrease finger pointing  and increase the flow of  process.  Yet,                                                              
he said,  it may  be an  unintended stumbling  block based  on the                                                              
fact  this  is  a citizen  legislature  and  people  come  out  of                                                              
various backgrounds  and interests.   He asked for  Representative                                                              
Grenn comments.                                                                                                                 
1:17:11 PM                                                                                                                    
REPRESENTATIVE GRENN  agreed with Representative  Kopp's comments,                                                              
and noted  that they reviewed  other citizen legislatures  and how                                                              
they dealt  with conflict of interest  issues.  He  explained that                                                              
a  New  Mexico  state  legislator  receives  no  salary  but  does                                                              
receive per diem,  and they have other incomes and  jobs for their                                                              
livelihood.    He  described  it  as  the  epitome  of  a  citizen                                                              
legislature.    New  Mexico's  conflict  of  interest  statute  is                                                              
similar  to this  bill  and in  some  ways it  is  stricter as  to                                                              
stocks,  the percentage  of a  business ownership,  and so  forth.                                                              
He said,  "And I think if  we go back  to the bill where  it says,                                                              
you know,  we're talking lawyers  or other cases, these  are bills                                                              
that  would substantially  benefit  you as  a  legislator more  so                                                              
than the rest of  the class maybe you are representing  or more so                                                              
than the  rest of  the class  that --  that this legislation  goes                                                              
towards."   He deferred to  Doug Gardner, Director  of Legislative                                                              
Legal  and  Research  Services  to  respond  to  the  hypothetical                                                              
1:19:14 PM                                                                                                                    
REPRESENTATIVE KOPP  said he would  like to hear  from Legislative                                                              
Legal and  Research Services  regarding a  situation where  he was                                                              
representing  a class of  clients and  received more than  $10,000                                                              
in income ....                                                                                                                  
1:19:51 PM                                                                                                                    
CHAIR  CLAMAN interjected  that  he  would present  the  following                                                              
three  hypotheticals.    Chair   Claman  said,  within  the  first                                                              
hypothetical  he worked  for  ARCO Petroleum  which  is no  longer                                                              
involved in  the North  Slope, his salary  was more  than $10,000,                                                              
and there  was an  oil and  gas tax  credit bill  in front  of the                                                              
legislature affecting  any oil company  doing business  in Alaska.                                                              
He asked whether  he would have  a basis to rise and  declare that                                                              
he has a conflict.                                                                                                              
REPRESENTATIVE  GRENN  responded   that  under  this  bill,  Chair                                                              
Claman would not  have a conflict of interest.   He explained that                                                              
the main pivot on this is found ...                                                                                             
1:21:11 PM                                                                                                                    
MR. JOHNSTON  interjected there  would not  be a conflict  because                                                              
ARCO  was not  substantially  benefited or  harmed  more than  the                                                              
rest of  the industry,  and the  oil taxes  were equal  across the                                                              
board, with no  caveat in the legislation that  ARCO would receive                                                              
"X" amount more than any other company.                                                                                         
1:21:49 PM                                                                                                                    
CHAIR CLAMAN  said the  second hypothetical  involves him  working                                                              
for Laborer's  Union "X" and he  earned more than $10,000  a year.                                                              
A bill was  in front of the  legislature that read  that Laborer's                                                              
Union "X" would  be treated a certain way in this  legislation, he                                                              
asked how he would be impacted under this bill.                                                                                 
REPRESENTATIVE  GRENN  opined  that  if the  bill  was  discussing                                                              
Laborer's Union "X"  and excluding all other unions,  Chair Claman                                                              
would  need to  rise  and disclose  to the  body  his conflict  of                                                              
CHAIR CLAMAN  surmised that  the legislature  would then  vote yea                                                              
or nay whether to accept that conflict.                                                                                         
REPRESENTATIVE  GRENN answered the  vote would  be based  on Chair                                                              
Claman's explanation of the conflict of interest.                                                                               
1:22:52 PM                                                                                                                    
CHAIR  CLAMAN noted  that  he is  an attorney,  and  in the  third                                                              
hypothetical ARCO  is a client  and pays  his firm, and  him, more                                                              
than  $10,000 in  a given  year.   ARCO  has  a bill  that is  tax                                                              
credit specific  to ARCO and  not the oil  and gas  industry, ARCO                                                              
doesn't  employ him  but  ARCO pays  his  firm.     He asked  what                                                              
happens in that hypothetical.                                                                                                   
REPRESENTATIVE GRENN  deferred to Doug Gardner,  Legislative Legal                                                              
and Research Services.                                                                                                          
1:23:44 PM                                                                                                                    
DOUGLAS GARDNER,  Director, Legal Services, Legislative  Legal and                                                              
Research  Services,  Legislative  Affairs  Agency  (LAA),  related                                                              
that he  is an attorney,  a member of  the Alaska Bar  Association                                                              
(ABA), and  if he had to answer  that question as a  legislator he                                                              
would rise  and declare that conflict  because the vote  he places                                                              
may directly  benefit a  client who  ultimately pays Mr.  Gardner.                                                              
Although,  he explained,  it would  not be  necessary to  disclose                                                              
any confidentiality  in that he could rise and  declare a conflict                                                              
because his  employment, as  an attorney, involved  representation                                                              
in the oil and  gas tax area and this bill may  create a conflict.                                                              
He explained  that it can  be done topically  in such a way  as to                                                              
avoid the  disclosure of different  individual clients,  and under                                                              
that hypothetical  he does not have  to declare ARCO as  his named                                                              
client.  There is  a way to address that without  getting into the                                                              
attorney client  privilege in representation confidentiality.   He                                                              
said that  while listening to this  hearing he had been  trying to                                                              
construct  a  hypothetical  where  he would  have  to  disclose  a                                                              
client, and he hasn't  come up with one just yet  but believes one                                                              
is out there.                                                                                                                   
1:25:13 PM                                                                                                                    
REPRESENTATIVE EASTMAN  referred HB 44, and noted  that "effect on                                                              
a  substantial  class  of  persons"  is not  defined.    He  asked                                                              
Representative  Grenn his  intent, what  he was  trying to  get at                                                              
under  "substantial  class  of  persons,"  and  how  specific  the                                                              
phrase is currently defined in statute.                                                                                         
MR. JOHNSTON  pointed to [Sec. 2.  AS 24.60.030(g), page  2, lines                                                              
25-27, which read:                                                                                                              
        (g) ... interest of the action to be voted on is                                                                        
       greater than the effect on a substantial class of                                                                        
     persons to which the legislator or                                                                                     
        Belongs as a member of a profession, occupation,                                                                        
     industry, or region.                                                                                                       
MR. JOHNSTON explained  that [line 27 represents  the "substantial                                                              
class  of persons"].    The  language  was derived  from  existing                                                              
statute and  it is  the substantial number  within an  industry or                                                              
"X" amount of businesses, he said.                                                                                              
1:26:50 PM                                                                                                                    
REPRESENTATIVE  EASTMAN asked  his  understanding of  how much  is                                                              
MR.   JOHNSTON  replied   that   the  bill   leaves   it  as   the                                                              
discretionary  choice of  the  legislator  because each  business,                                                              
industry, and  region is  different.   For example, he  explained,                                                              
"substantial"  would have  to be  a  good portion  of an  industry                                                              
such that  if the legislator  was part  of three businesses  being                                                              
affected  and  80   businesses  were  left  out,   that  would  be                                                              
1:27:37 PM                                                                                                                    
REPRESENTATIVE  EASTMAN related that,  currently, it  is difficult                                                              
to abstain from  a vote in that  there is not a lot  of precedence                                                              
for abstentions, and  [the bill] would make it  somewhat easier to                                                              
abstain from  a vote.  On the  other hand, he said,  he is unaware                                                              
of  an  instance  where  a  legislator  has  been  forbidden  from                                                              
casting  a vote.   The  bill language  puts  forth two  situations                                                              
where  a legislator  would  actually, by  law,  be forbidden  from                                                              
casting a vote,  and he asked whether that is  cross-purposes from                                                              
the  idea of  permitting  a legislator  to  abstain.   He  further                                                              
asked how  many other examples  inspired the requirement  that, by                                                              
law, a legislator would be prohibited from voting.                                                                              
REPRESENTATIVE  GRENN  responded that  the  bill  does not  forbid                                                              
anyone  from  voting, rather  it  constructs  a standard  for  the                                                              
legislator  to   discuss  their   conflict  and  ask   to  abstain                                                              
themselves,   then  putting  that   vote  to   the  body   of  the                                                              
membership.    He  clarified  that   the  bill  is  not  saying  a                                                              
legislator  is  forbidden  based   on  this,  but  rather  that  a                                                              
legislator  may have  a  conflict  of interest  that  needs to  be                                                              
1:29:39 PM                                                                                                                    
REPRESENTATIVE   EASTMAN   asked    whether   previous   testimony                                                              
indicated there  would be two  different types of  situations, for                                                              
example, where a  legislator voting on their own  abstention would                                                              
be legally prohibited from casting a vote for their district.                                                                   
MR. JOHNSTON  explained that  the two situations  have to  do with                                                              
the legislator  in question  voting on their  own abstention.   In                                                              
reviewing other  state statutes,  it makes  no practical  sense to                                                              
allow  the legislator  to vote  on  their own  abstention, and  in                                                              
that situation  they shouldn't be  allowed to vote.   He explained                                                              
this is  a uniform rules  change to allow  for this  abstention to                                                              
take effect.   In the second  situation the legislator  is granted                                                              
an abstention from  voting, not forbidden to vote,  but after they                                                              
are granted an  abstention they must abide by  that abstention and                                                              
not vote, he said.                                                                                                              
1:30:55 PM                                                                                                                    
REPRESENTATIVE LEDOUX  related that she  is pleased this  issue is                                                              
being addressed  because she  has believed for  a long  time there                                                              
was  a  problem  here.    She  asked   whether  other  states  and                                                              
municipalities  have far  broader  rationales  for letting  people                                                              
abstain.   She noted that within  some of the  hypotheticals Chair                                                              
Claman posited, she  would have expected a person to  be viewed as                                                              
having a  conflict of interest.   For example, she  recalled there                                                              
was  someone  in  the  municipality   that  was  involved  in  the                                                              
cannabis  industry  and there  were  ordinances relating  to  that                                                              
industry.   She opined  that he  was not allowed  to vote  on that                                                              
issue  even  though  the  ordinance in  question  did  not  relate                                                              
specifically  to  his  business.    She said  she  was  trying  to                                                              
remember  votes in  the  House of  Representatives  that may  have                                                              
been  viewed as  a  conflict of  interest  that  someone may  have                                                              
wanted  to  abstain  from,  and   she  said  she  could  think  of                                                              
virtually  zero  instances  in which  a  [bill]  was  specifically                                                              
related  to  just   one  business  or  one  union,   for  example.                                                              
Although,  she  said  she was  sure  there  would  be some.    She                                                              
offered a  scenario of a person  working for a union,  with right-                                                              
to-work  legislation before  the  legislature, she  said it  would                                                              
seem  to her that  there would  be a  conflict in  voting on  that                                                              
legislation.  Yet,  she continued, it appears  from Representative                                                              
Grenn's answers  that it would  be perfectly appropriate  for that                                                              
person to vote on that legislation under this bill                                                                              
1:33:39 PM                                                                                                                    
REPRESENTATIVE  GRENN agreed, and  he said  there are  states that                                                              
have municipalities  with stricter  parameters of what  a conflict                                                              
of  interest entails.   He  offered that  the intent  was to  make                                                              
this  a starting  place, add  some transparency,  have votes  take                                                              
place, and  what constitutes a conflict  of interest.   He pointed                                                              
out that contained  within the committee packets is  a list of the                                                              
threshold  of a  number of  other states,  such that  if a  person                                                              
owns 5 percent  of a company and  that company is involved  with a                                                              
bill,  the  person  would  have   to  declare  their  conflict  of                                                              
interest.   He  explained  that  this bill  takes  small steps  in                                                              
adding  to the  transparency of  how  Alaskan legislators  declare                                                              
conflict of interest and the public record.                                                                                     
MR.  JOHNSTON opined  that  the  issue Representative  LeDoux  was                                                              
pointing to is the  rank and file type of issue.   For instance, a                                                              
legislator was an  everyday electrician in a union  and as part of                                                              
that  union he  did not  believe  in right-to-work  and wanted  to                                                              
vote against it.   That scenario poses the question  of whether it                                                              
is a substantial  benefit or harm to that legislator,  he related.                                                              
In   the  event   the  legislator   believes  right-to-work   will                                                              
substantially   harm  him   as   an  everyday   electrician,   the                                                              
legislator  would  have  the  option  to  rise  and  declare  that                                                              
conflict of interest.                                                                                                           
1:36:25 PM                                                                                                                    
REPRESENTATIVE  LEDOUX posited a  scenario wherein the  legislator                                                              
is  the president  of  a union  and  the legislation  impacts  all                                                              
unions,  possibly   the  legislator  would  rise   and  declare  a                                                              
conflict.     Although,  she  pointed   out,  in  the   event  Mr.                                                              
Johnston's analysis  of this  bill is correct,  there would  be no                                                              
reason for  anyone to  [rise and declare]  a conflict  because the                                                              
legislator  was not impacted  more substantially  than any  of the                                                              
other unions in the state.                                                                                                      
REPRESENTATIVE  GRENN  answered   that  Representative  LeDoux  is                                                              
REPRESENTATIVE  LEDOUX queried that  if someone  were to  offer an                                                              
amendment  tightening that  threshold,  would it  be considered  a                                                              
friendly or unfriendly amendment.                                                                                               
REPRESENTATIVE  GRENN answered that  question would  be up  to the                                                              
body to decide, or at least this committee.                                                                                     
1:38:03 PM                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS   asked  Mr.  Gardner  whether  the                                                              
legislature had  interpreted the conflict  of interest rule  to be                                                              
more  stringent  than  the  actual   letter  of  the  conflict  of                                                              
interest rules.   Legislators  often rise  to disclose  a conflict                                                              
of interest  even if  they do not  have a  conflict rising  to the                                                              
level greater than  the effect on a substantial  class of persons.                                                              
He  asked  whether   it  was  Mr.  Gardner's   impression,  having                                                              
observing members  rising and disclosing conflicts,  whether there                                                              
have been  a majority  of instances where  the legislator  was not                                                              
actually  obligated  to disclose  by  the  letter of  the  uniform                                                              
MR. GARDNER  related that he will  make a general comment  and not                                                              
focus  on any particular  time period  or legislator.   He  opined                                                              
that  in the  recent  past  the  Select Committee  on  Legislative                                                              
Ethics issued a  couple of opinions where it  found violations for                                                              
failure to  disclose.  Particularly,  he noted, in the  area where                                                              
legislators  have a contract  for a  state service and  ultimately                                                              
they  are voting  on a  budget or  an appropriation  vehicle.   He                                                              
offered,  those  ethics opinions  may  have  driven a  concern  of                                                              
political stigma  in not declaring  a conflict and being  found in                                                              
violation of the  ethics laws.  More than the  political stigma, a                                                              
legislator  can  be  fined and  theoretically  expelled  from  the                                                              
legislature  which,   he  commented,   is  extreme   and  probably                                                              
unlikely in those  cases.  He noted there has been  a trend toward                                                              
considerable  disclosure, such  as the circumstances  in  the last                                                              
several  years wherein  leadership stood  up on  the floor  of the                                                              
House  of Representatives  and made  comments about  the scope  of                                                              
disclosure  and,  subsequently, there  have  been  a large  number                                                              
disclosures  in  the  last  two  years.    Having  said  that,  he                                                              
related, a  legislator is  probably wise  to disclose  because the                                                              
net result,  as has  been observed,  is that  there is  usually an                                                              
objection  to  an abstention  from  voting,  and  in the  end  the                                                              
legislator votes  "because the ethics  statute is  ultimately made                                                              
subordinate to the  uniform rules -- uniform rule  decision and an                                                              
abstention   objection   exonerates   the  legislator   from   any                                                              
conflict."   Perhaps that  process, in  the end,  does what  it is                                                              
intended to do  such that it allows constituents,  the public, and                                                              
other legislators  to know where  that legislator is  coming from.                                                              
They  declare that  they  provide  this service,  or  they are  an                                                              
attorney for  a particular group  of clients.   In the end,  it is                                                              
out there but the  person is required to vote and  represent their                                                              
constituents.   He described it  as the ongoing balance,  and that                                                              
balance  has shifted  a bit  more in  terms of  disclosure in  the                                                              
last several years.                                                                                                             
1:42:59 PM                                                                                                                    
REPRESENTATIVE  KREISS-TOMKINS  described  the current  letter  of                                                              
the uniform  rule as  minimalistic, independent  of the bill.   He                                                              
commented  that  the  possible   amendment  Representative  LeDoux                                                              
discussed may  have merit  independent of the  bill, and  that the                                                              
substantial class clause  throws a curve ball and  waters down the                                                              
conflict of interest disclosure rules.                                                                                          
REPRESENTATIVE  FANSLER referred  to  unintended consequences  and                                                              
asked  whether there  is a  worry this  may actually  result in  a                                                              
suppression  of people  declaring a  conflict of  interest due  to                                                              
the substantial class clause.                                                                                                   
REPRESENTATIVE  GRENN  responded   that  the  clause  puts  a  bar                                                              
requiring someone to  rise for a conflict of  interest, it doesn't                                                              
take away  from someone  rising and declaring  a conflict  just to                                                              
be safe.  He  said, the clause sets a standard  he believes can be                                                              
followed better, and the public would know the level of the bar.                                                                
1:45:30 PM                                                                                                                    
REPRESENTATIVE   FANSLER    related   that   he    is   personally                                                              
experiencing  a   difficult  time  envisioning  bills   that  will                                                              
selectively  single  out one  or  two entities  in  a  class.   He                                                              
referred  to Representative  Grenn's  comment that  Alaska is  the                                                              
only state  without these laws on  its books, which played  a part                                                              
in his  idea for this  bill and  he applauds Representative  Grenn                                                              
because  he like  uniformity.    He asked  whether  Representative                                                              
Grenn  had  statistics  on  the   number  of  times  conflicts  of                                                              
interest have been  declared [in other states],  whether [a state]                                                              
has  the substantial  group  clause, and  also  statistics on  the                                                              
number of times,  after that conflict has been  declared, that the                                                              
majority has then voted to allow the legislator to abstain.                                                                     
MR.  JOHNSTON advised  that the  sponsor's office  reached out  to                                                              
states  and are  awaiting their  responses, he  will then  provide                                                              
their responses.                                                                                                                
1:47:16 PM                                                                                                                    
REPRESENTATIVE  REINBOLD  thanked the  sponsor  for  the bill  and                                                              
offered that  the intent is one  worth vetting.  She asked  him to                                                              
explain  any  subjectivity   concerns  he  may  have   related  to                                                              
legislators  who have  a more  or less  sensitive conscience  when                                                              
deciding to rise.                                                                                                               
REPRESENTATIVE  GRENN  explained there  is  a current  process  in                                                              
place through  the Select  Committee on  Legislative Ethics  for a                                                              
person  who wishes  to lodge  a  complaint due  to an  undisclosed                                                              
conflict.    He offered  that  it  has  happened, and  the  Select                                                              
Committee  on Legislative  Ethics  has  provided  statistics.   He                                                              
reminded  the committee  there are  well  known stories  regarding                                                              
some of those complaints in Alaska's history.                                                                                   
1:49:27 PM                                                                                                                    
REPRESENTATIVE  REINBOLD  noted  that  financial  disclosures  are                                                              
transparent  and a  matter  of public  record.    She offered  her                                                              
concern that  some legislators  are far  more sensitive  in rising                                                              
to  declare a  conflict  of interest,  and  noted  that the  ethic                                                              
process  is a  quiet  and time  consuming  process.   She  advised                                                              
Representative  Grenn there  is an  elephant in  the room  because                                                              
"some know  that your  caucus is very  interested in  changing oil                                                              
and gas  tax policy."   Historically,  she said,  the oil  and gas                                                              
industry  has contributed  approximately 90  percent to the  state                                                              
budget.    She asked  whether  there  was  any motivation  in  any                                                              
manner to  alienate or target anyone  associated with the  oil and                                                              
gas  industry by  any legislators,  including  the 11  co-sponsors                                                              
and himself, or any caucus members,                                                                                             
REPRESENTATIVE  GRENN responded that  in watching government  from                                                              
the outside,  he had  always hoped  the elected legislators  would                                                              
act  in a  manner  that was  mindful  of being  integrity  filled,                                                              
honest, and  open with  everything they do.   His emphasized  that                                                              
his  motivation in  putting  this legislation  forward  is from  a                                                              
personal  and policy  perspective  to add  transparency and  build                                                              
the public's trust.   Personally, he advised, the day  he filed to                                                              
run for office  was the day he  had to resign from  his employment                                                              
due  to  a  perceived  conflict  of interest.    He  offered  that                                                              
legislators can  always put themselves  to a higher  standard when                                                              
it comes  to building  trust with  the public.   When he  filed HB
44, he  had not discussed  its purpose  with anyone in  his caucus                                                              
or anyone other  than his staff  members.  He said that  in direct                                                              
response to  Representative Reinbold's question,  this legislation                                                              
is not  directed toward anyone in  the building, any  industry, or                                                              
region  in  Alaska, it  is  about  setting guidelines  for  future                                                              
legislators.   Thereby, giving them  a path and knowledge  of what                                                              
a  conflict  of  interest  might  be,  to  vote  on  the  possible                                                              
abstention  on  the  public  record,  and  add  another  layer  of                                                              
transparency to what the legislature is doing while in session.                                                                 
1:53:33 PM                                                                                                                    
REPRESENTATIVE REINBOLD  reiterated her question and  posited that                                                              
he  has  had  no discussion  amongst  his  caucus,  no  discussion                                                              
amongst  any  of  the 11  co-sponsors,  this  legislation  is  not                                                              
targeted  toward  any  member  associated  with the  oil  and  gas                                                              
industry, and the  bill has no intention of  moving Representative                                                              
Grenn's caucus agenda forward.                                                                                                  
REPRESENTATIVE  GRENN again  emphasized and  restated that  he did                                                              
not  discuss  the pre-filing  of  this  bill  with anyone  in  his                                                              
caucus, and  there was no  target within this legislation  outside                                                              
of the desire  to build public  trust and add transparency  to the                                                              
actions of the legislature.                                                                                                     
1:54:23 PM                                                                                                                    
REPRESENTATIVE    KOPP     referred    to    [Section     1,    AS                                                              
24.60.030(e)(3)(d)], page 2, lines 15-17, which read as follows:                                                                
                    (D) from whom the legislator or a                                                                       
     member  of the  legislator's  immediate  family has,  in                                                               
     the  immediately  preceding  12-month  period,  received                                                               
     more than $10,000 of income.                                                                                           
REPRESENTATIVE  KOPP offered concern  regarding the  two standards                                                              
as  to voting  in  committee and  on  the floor  of  the House  of                                                              
[Sec.  2, AS 24.60.030(g)],  page  2, lines 19-23,  which  read as                                                              
          (g) ... a legislator may not vote on a question                                                                       
     before  a  committee  of  the   legislature,  and  shall                                                               
     request to be  excused from voting on a  question before                                                               
     a house of the legislature, ...                                                                                        
REPRESENTATIVE  KOPP explained  that  the provision  related to  a                                                              
legislator  having   a  conflict.     He  surmised  that   if  the                                                              
legislator, while  on the floor  of the House of  Representatives,                                                              
can rise  and at least  have their  colleagues vote,  although, if                                                              
the legislator  is in  a committee  they lose  their vote.   Along                                                              
the friendly  amendment lines,  he said, one  vote in  a committee                                                              
can  be significant,  particularly  in the  other  body with  less                                                              
MR.  JOHNSTON noted  that  the sponsor  has  been discussing  that                                                              
issue and is open to a friendly amendment.                                                                                      
1:55:55 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked Mr.  Gardner whether the  substantial                                                              
interest  test  in this  bill  mirrors  what  is required  by  the                                                              
ethics  rules.    She  further  asked  whether  the  ethics  rules                                                              
require  a legislator  to  report "just  about  everything?"   She                                                              
then turned  to the  example of  someone working  for a  union and                                                              
right-to-work  legislation  before   the  legislature,  and  asked                                                              
whether  the ethics  rules requires  a legislator  to reveal  that                                                              
MR. GARDNER answered,  probably not.  He opined  that in expanding                                                              
the hypothetical  a bit, say a member  was part of a  larger state                                                              
union, or even  a smaller boutique union, according  to the ethics                                                              
opinions  he read  and the  thinking  of the  Select Committee  on                                                              
Legislative Ethics,  if a legislator is in a  substantial class of                                                              
persons  similarly  situated  and  the  legislator's  interest  is                                                              
neither here  nor there  with respect to  the issue,  a legislator                                                              
would not have to  disclose in that circumstance.   He returned to                                                              
an  earlier   question  and  commented   that  he   suspects  many                                                              
legislators would chose  to do so out of an  abundance of caution,                                                              
but technically they  would probably not need to  disclose in that                                                              
1:57:45 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  followed   up  and  noted  that  when  the                                                              
legislature  was voting  on  a tax  bill,  approximately ten  year                                                              
earlier, someone  ended up with ethics problems  for not declaring                                                              
a conflict  before they  voted when  they had allegedly  discussed                                                              
employment with a company involved in oil field services.                                                                       
MR.  GARDNER  offered that  in  preparing  for his  testimony,  he                                                              
reviewed  a couple  of  advisory opinions,  and  then referred  to                                                              
Advisory Opinion,  Number 2013/01.   He  explained that  the issue                                                              
was whether a  legislator, who also worked for  a natural resource                                                              
company  that  made  money extracting  natural  resources,  had  a                                                              
conflict  in terms  of voting  on bills  affecting that  industry.                                                              
He  explained the  process  was  a fact  intensive  inquiry.   The                                                              
committee reviewed  the duties  of the  individual in  relation to                                                              
the  company, weighed  whether or  not  the legislator  had a  key                                                              
financial   interest    or   just   strategic    decision   making                                                              
responsibilities  and  their  annual salary  was  compensated  the                                                              
same  as other  members,  and whether  or not  the  person was  on                                                              
unpaid  leave  from   the  employer  during  the   session.    The                                                              
committee concluded  there was no conflict in that  situation.  He                                                              
explained  that the Select  Committee on  Legislative Ethics  will                                                              
conduct a  factual inquiry, more of  a drill down to  exactly what                                                              
interest a  person may have  in an organization,  and in  the case                                                              
of the 2013 Advisory Opinion, the answer was no, no conflict.                                                                   
2:00:31 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked whether  there is currently  anything                                                              
in the  uniform rules  precluding the  clerk from identifying  the                                                              
person  who made the  objection  when a legislator  has asked  for                                                              
MR. GARDNER  responded that Uniform  Rules 9 and 34  instructs the                                                              
clerk on  what to include  in the Journal,  and opined  that those                                                              
rules are  basically silent  on this issue.   The question  may be                                                              
past practice  and precedent with  respect to the Chief  Clerk and                                                              
the  Senate  Secretary  including  abstention  requests  or  other                                                              
aspects of  that process in  the Journal.   The answer is  no, but                                                              
he said he will follow up if he learns something else later.                                                                    
2:01:45 PM                                                                                                                    
REPRESENTATIVE   EASTMAN   asked,  under   this   bill,  after   a                                                              
legislator  declares a conflict  of interest,  whether there  is a                                                              
point  a legislator  can pause or  withdrawn  their request  to be                                                              
excused   from  the   vote  on   the   floor  of   the  House   of                                                              
Representatives.   He noted  that Alaska  is different  from other                                                              
states wherein  Alaska may have  only five members on  a committee                                                              
and  in certain  situations  possibly  not  all five  members  are                                                              
present and  a single vote directly  impacts a district,  which is                                                              
unlike New  Hampshire with 12 times  as many members in  its state                                                              
house.   He opined that  a reason Alaska's  process is the  way it                                                              
is today,  is so that it  does not come  into a situation  where a                                                              
district is  being deprived of their  vote unless there  is a very                                                              
good  reason  for  doing  so.   He  queried  whether  there  is  a                                                              
[process],  under  this  bill,  for  a  legislator  who  wants  to                                                              
declare  a  conflict  but  doesn't   want  to  disadvantage  their                                                              
district.    Currently,  he  asked,  can  a  legislator  rise  and                                                              
declare their  conflict and not  be under the impression  there is                                                              
a  high likelihood  their  district  would  be deprived  of  their                                                              
vote.  Or, he  asked, once the legislator starts  down the road of                                                              
declaring a  conflict whether there is  a point in which  they can                                                              
say they  want to  take it back.   He  remarked that a  legislator                                                              
does not  have the  ability to vote  against their own  abstention                                                              
under this legislation.                                                                                                         
2:05:47 PM                                                                                                                    
REPRESENTATIVE  GRENN reiterated  that  it is  the  choice of  the                                                              
legislator  themselves  to  rise  and declare  their  conflict  of                                                              
interest and  in the event there  is a conflict of  interest based                                                              
on  this  legislation,  the  hope  is that  they  would  rise  and                                                              
declare the  conflict.   With regard to  whether a legislator  can                                                              
take  back their  declaration  mid-objection,  he  opined that  is                                                              
something  he would  look into  to  determine what  it might  look                                                              
like, and  how the uniform rules  may be affected.   He reiterated                                                              
that in making  a public declaration of an actual  honest conflict                                                              
of interest based  on this legislation, the legislator  would have                                                              
to question themselves whether they should be voting.                                                                           
2:06:53 PM                                                                                                                    
CHAIR CLAMAN opened public testimony on HB 44 and HCR 1.                                                                        
2:08:02 PM                                                                                                                    
MARGO  WARING, League  of Women  Voters, said  she is speaking  on                                                              
behalf of  Pat Redmond, President  of the  Board of the  League of                                                              
Women Voters, and read Ms. Redmond's letter as follows:                                                                         
     Dear  Representative  Claman,   Chairman  of  the  House                                                                   
     Judiciary Committee.                                                                                                       
     The  League  of Women  Voters  of  Alaska urges  you  to                                                                   
     support  House  Bill  44 and  send  it  on to  its  next                                                                   
     committee  of referral.   Transparency in government  is                                                                   
     important  to the League  at all  levels, local,  state,                                                                   
     and national.   When an elected official has  a conflict                                                                   
     of interest,  that official should not be  voting on the                                                                   
     legislation  under consideration.    One of  democracy's                                                                   
     greatest  challenges  comes   when  citizens  no  longer                                                                   
     think government  represents, or cares, about  them, and                                                                   
     in response fail to participate.                                                                                           
     We can see  this erosion of confidence in  the declining                                                                   
     numbers of  citizens who  participate in our  elections.                                                                   
     Part  of what  restores confidence  is  making it  clear                                                                   
     that  legislators   do  not   use  their  position   for                                                                   
     personal gain.                                                                                                             
     We applaud  the bill's sponsor  for seeing that  one way                                                                   
     to restore  confidence is  to change  the rule that  has                                                                   
     allowed legislators  with a conflict to be  excused from                                                                   
     voting -- from  not voting.  In this way,  voters can be                                                                   
     sure  that  the  vote  cast is  not  done  for  personal                                                                   
     benefit.    We  often hear  supporters  of  the  current                                                                   
     practice say that  to not vote is to deprive  a district                                                                   
     of its  voice.  The answer  to that is that a  vote cast                                                                   
     under a cloud  also deprives voters of knowing  that the                                                                   
     vote was cast  for the benefit of the district,  and the                                                                   
     Again, thank  you for giving the League  the opportunity                                                                   
     to  speak in  support  of a  bill that  strengthens  our                                                                   
     democracy.  Sincerely, Pat Redmond, President                                                                              
2:10:14 PM                                                                                                                    
REPRESENTATIVE LEDOUX asked whether she believes this bill goes                                                                 
far enough.                                                                                                                     
MS. WARING, answering as a private citizen and not representing                                                                 
the League of Women Voters, said her personal opinion is that                                                                   
the bill does not go far enough.                                                                                                
2:11:07 PM                                                                                                                    
FRED TRIEM,  Attorney, said  his opposition to  HB 44 is  based on                                                              
the Separation  of  Powers Doctrine  in that  it teaches that  one                                                              
branch  of government  cannot  regulate  the internal  affairs  of                                                              
another  branch,  and the  court  system  has its  own  regulation                                                              
about recusal of  judges for conflict of interest.   His objection                                                              
to  HB  44  is  based upon  the  notion  that  it  would  transfer                                                              
authority  from  the  legislature   to  the  judicial  branch  the                                                              
authority  to regulate  internal affairs  within the  legislature,                                                              
and the legislature's  internal affairs can be  properly addressed                                                              
within the  legislature's uniform  rules.  The legislature  should                                                              
not  convey through  the  judicial branch  the  authority to  make                                                              
decisions  about  the  legislature's  internal  process,  and  the                                                              
uniform rules  should address the issues  presented in HB  44.  As                                                              
a  footnote,  he  added  that in  the  event  the  committee  goes                                                              
further with  HCR 1, he suggested  that the committee  address the                                                              
two  categories of  objections or  concerns Representative  LeDoux                                                              
raised when considering amending the uniform rules.                                                                             
2:14:05 PM                                                                                                                    
MR.  TRIEM  noted   that  the  fiscal  note  is   not  a  complete                                                              
description of  the potential effect  of this legislation  because                                                              
it  overlooks  the litigation  that  would  be generated  and  the                                                              
effect on  the judicial  branch by  the duty  of having  to decide                                                              
cases  sent to  the judicial  branch  as a  result of  legislation                                                              
enacted here.   For example, he  referred to the chart  and stated                                                              
that in  the event  HB 44  is enacted,  it depicts where  disputes                                                              
will  arise and  what a  person would  do if  they were  adversely                                                              
involved  in  a   dispute  created  by  this  legislation.     The                                                              
judiciary  branch  should  not  be  involved  in  deciding  issues                                                              
within the  province of the  legislature, which is  the Separation                                                              
of  Powers  Doctrine, and  that  is  the  ultimate source  of  his                                                              
objection, he said.                                                                                                             
2:16:44 PM                                                                                                                    
REPRESENTATIVE EASTMAN  referred to  his statement that  he shares                                                              
the  two  categories   of  objection  Representative   LeDoux  had                                                              
referenced earlier, and asked him to summarize those objections.                                                                
MR. TRIEM  said that  Representative LeDoux  identified a  problem                                                              
found in  the upper  right hand  corner of the  chart.   The first                                                              
issue  is that the  objection made  under the  current rules,  the                                                              
objector  is not  identified  in the  record  which is  a form  of                                                              
anonymous legislation,  and he opined  that it offends  the notion                                                              
of  a public  legislature  with accountability.    He deferred  to                                                              
Representative LeDoux regarding the second objection.                                                                           
2:17:44 PM                                                                                                                    
REPRESENTATIVE  EASTMAN said  he simply  wanted it  in the  record                                                              
2:17:55 PM                                                                                                                    
REPRESENTATIVE LEDOUX  said she was discussing the  soft threshold                                                              
and opined  that this bill  is a good start.   In thinking  of the                                                              
number of  things someone  would have to  declare the  conflict on                                                              
and perhaps  not vote,  she said  she could  only think  of things                                                              
that might  have been in the capitol  budget in the old  days when                                                              
there was still  a capital budget.  Under this  bill, a legislator                                                              
would still  vote on a  capital budget,  so any little  grant that                                                              
might go  to an organization  a legislator  may have  interest in,                                                              
the legislator  would still  be required to  vote because it  is a                                                              
budget  item.    For  example,   say  motor  fuel  is  before  the                                                              
legislature and a  legislator is president of an  airlines and the                                                              
legislation  impacts all  airline  companies, it  would  not be  a                                                              
conflict.  Even  though, she commented, it appears  to her that it                                                              
is a conflict, which  is why people in an excess  of caution would                                                              
declare them as  conflicts.  After nine years  in the legislature,                                                              
she said she has  never seen an instance where  someone declares a                                                              
conflict and  someone does not object,  so no matter  the conflict                                                              
the  person  is voting  on  it.   That  is,  of course,  a  policy                                                              
question  and  it sounds  like  virtually  every other  state  and                                                              
municipality has resolved that conflict question differently.                                                                   
2:20:56 PM                                                                                                                    
MR. TRIEM advised  that the judicial system resolves  the conflict                                                              
of  interest issue  by  a common  law rule  that  relies upon  the                                                              
individual  judgment  and conscience  of  judicial  officers.   He                                                              
opined  that the  legislature  can follow  that  example and  rely                                                              
upon   individual  judgments   without  this   formal  rule,   and                                                              
suggested pursuing HCR 1, but not enact HB 44.                                                                                  
2:21:50 PM                                                                                                                    
REPRESENTATIVE FANSLER  surmised that  Mr. Triem supports  this as                                                              
an  adjustment  to  the  uniform  rules,  and  that  is  where  he                                                              
believes a change similar to this should be made.                                                                               
MR. TRIEM agreed emphatically.                                                                                                  
2:22:15 PM                                                                                                                    
REPRESENTATIVE   FANSLER  asked  whether   there  was   still  the                                                              
potential,  even if  it is  in the  uniform rules,  that it  would                                                              
eventually find  its way into the  judicial system if there  was a                                                              
2:22:28 PM                                                                                                                    
MR.  TRIEM   responded  that  it   is  less  likely   because  the                                                              
Separation of Powers  Doctrine and courts are  extremely reluctant                                                              
to mess in the  internal affairs of other branches  of government,                                                              
particularly  in  the  legislative  branch.   He  related  that  a                                                              
person would  have an  extraordinary burden to  try to  convince a                                                              
superior   court  judge   to  decide   an   issue  involving   the                                                              
interpretation   of  the  uniform   rules  of  the   Alaska  State                                                              
2:23:18 PM                                                                                                                    
DOUGLAS  MERTZ advised  that for  many years  he was an  assistant                                                              
attorney  general  and  his  duties  included  being  the  "ethics                                                              
guru,"  the   person  in  charge   of  administering   the  Alaska                                                              
Executive  Branch Ethics  Act  (Chapter 39.52).    He pointed  out                                                              
that  as an attorney  of 40  years he  is also  familiar with  the                                                              
Alaska  Rules of  Judicial  Conduct and  how  it affects  judicial                                                              
conflicts of interest.   Gleaned from his experience,  he related,                                                              
is that  two-thirds of the branches  of government in  Alaska have                                                              
the rule that if  a person has a conflict of  interest, the person                                                              
does not  take official action.   It is only the  legislature that                                                              
has arrogated  to itself  an exemption  from  that rule, one  that                                                              
for many  years has resulted  in no one  being disallowed  to vote                                                              
on particular  measures.  This is  not only the sole  exception to                                                              
the way ethics are  administered in Alaska, as has  been noted, it                                                              
is also the exception among the states.                                                                                         
MR.  MERTZ  pointed   out  that  the  common  law   of  ethics  is                                                              
consistent with the  rule in the two other branches  of government                                                              
wherein  if a  person has  a conflict  they do  not take  official                                                              
action.   Currently,  the sponsor  substitute  to HB  44 is  still                                                              
defective  in that it  would allow  a majority  to say  the person                                                              
has to vote  anyway.  He stressed  that this is a  major exception                                                              
to the common law  rule and to the rule in the  other two branches                                                              
of  government.   This  leads  him  to  question whether  the  way                                                              
elected officials are  held in regard by the  public has something                                                              
to do with the  fact that the legislature considers  itself exempt                                                              
from  the usual  ethics rules.   He  urged the  committee to  move                                                              
forward with HB  44 and HCR 1 and to essentially  enact the common                                                              
law rule  that if a  legislator has a  conflict of  interest, that                                                              
legislator  may  not  take  official  action.   It  is  fair  that                                                              
legislators  can tweak  the definition  of what  is a conflict  of                                                              
interest but, he  reiterated, once a legislator has  a conflict of                                                              
interest they should not take official action.                                                                                  
2:26:10 PM                                                                                                                    
REPRESENTATIVE LEDOUX  offered that a legislator is  working for a                                                              
company  which  is  impacted by  legislation,  so  the  legislator                                                              
declares  a conflict,  and under  this bill  the legislator  would                                                              
still  vote.   She asked  how that  would  work in  the other  two                                                              
branches of government.                                                                                                         
2:27:02 PM                                                                                                                    
MR.  MERTZ explained  that in  those cases,  the legislator  would                                                              
still  have  to look  at  the  definition  of what  a  substantial                                                              
conflict of  interest is,  what the threshold  is, and  whether it                                                              
is minor  and something  that affects everyone.   For  example, he                                                              
opined no  judge would recuse herself  when a question  was before                                                              
her regarding the  permanent fund dividend (PFD)  because everyone                                                              
receives a  PFD.   On the other  hand, if it  had something  to do                                                              
with the employer  of the judge's spouse, or  the executive branch                                                              
official's  spouse,  directly  affecting  them and  no  one  else,                                                              
that's on the  other side of the  ledger.  He extended  that it is                                                              
difficult to determine  where to draw the line, and  he was unsure                                                              
whether it  made sense  to do it  legislatively other  than saying                                                              
"substantial  conflict of  interest"  and defining  it in  general                                                              
terms, as the bill  does.  He warned that it  can't be defined too                                                              
closely because  by defining it  too closely, situations  are left                                                              
out  and  later  it  could  be   decided  they  should  have  been                                                              
2:28:16 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  pointed out  that  as the  bill  currently                                                              
reads, it  clearly allows the  president of  a company to  vote on                                                              
legislation  that  is  not  targeted   at  his  specific  company,                                                              
although the industry is impacted by the legislation.                                                                           
MR. MERTZ  stipulated that  Representative  LeDoux was correct  if                                                              
the legislation  impacted a substantial  number of  companies, and                                                              
not just the one.                                                                                                               
REPRESENTATIVE  LEDOUX said  that  that is  what this  legislation                                                              
MR. MERTZ agreed.                                                                                                               
2:29:19 PM                                                                                                                    
REPRESENTATIVE LEDOUX  offered a  scenario that a  judge's husband                                                              
is  the  president of  a  company  that  would  be impacted  by  a                                                              
judicial decision,  and asked how that would work  in the judicial                                                              
branch.  For example,  a couple of years ago there  was litigation                                                              
about  the constitutionality  of  retroactive legislation  related                                                              
to  the  real estate  industry.    She  explained that  many  real                                                              
estate people believed  that if a particular piece  of legislation                                                              
was declared  unconstitutional  that it would  have a  significant                                                              
deleterious effect  on everyone in  the profession.  In  the event                                                              
the  judge's  husband owned  a  real  estate company,  would  that                                                              
judge be allowed to rule on that case, she queried.                                                                             
MR. MERTZ  opined that  in the  judicial branch,  the judge  would                                                              
have  to recuse  herself if  for no other  reason  than out  of an                                                              
abundance of caution  and to avoid the appearance  of impropriety.                                                              
On  the other  hand,  if the  legal  question had  to  do with  an                                                              
application  of a tax  to all corporations,  it probably  wouldn't                                                              
have that result.                                                                                                               
2:31:41 PM                                                                                                                    
CHAIR  CLAMAN referred  to Mr.  Triem's  analysis suggestion  that                                                              
amending the  statutes creates  a separation  of powers  issue and                                                              
he asked whether Mr. Mertz concurred.                                                                                           
MR. MERTZ replied  that he appreciates Mr. Triem's  sensitivity to                                                              
constitutional issues, and opined that he is probably wrong.                                                                    
CHAIR CLAMAN  surmised that  his view was  that the  statute could                                                              
be  amended without  creating  a  conflict in  the  constitutional                                                              
area of separation of powers.                                                                                                   
MR. MERTZ agreed.                                                                                                               
2:32:37 PM                                                                                                                    
RAY  METCALFE  said  that  he  works  with  Emphasis  for  Ethical                                                              
Government,  and advised  that  he was  working  with the  federal                                                              
government before  it "busted VECO and jailed  six legislators for                                                              
taking bribes."   He said he was  in the legislature in  the 1970s                                                              
and 1980s,  and it was  obvious to him  that bribery  was rampant.                                                              
He  watched a  chairman in  the  Senate Finance  Committee, buy  a                                                              
pipeline camp  for $300,000, and then  try to sell it  back to the                                                              
state  for  $3 million  for  a  prison.   This  chairman  was  the                                                              
legislator  who put the  money into  the Senate Finance  Committee                                                              
bill,  he stated.    He  said he  saw  another legislator  move  a                                                              
Certificate  of Need  to  her family,  another  legislator took  a                                                              
$10,000  payment to  assist a  private  organization in  receiving                                                              
MR.  METCALFE advised  that in  1801, Thomas  Jefferson wrote  the                                                              
rules for  the U.S.  Senate, and Mr.  Metcalf paraphrased  "and if                                                              
you were  a member of  the U.S. Senate,  and you had  any interest                                                              
whatsoever  in the  issue  before you,  you  not only  had to  not                                                              
vote,  you had  to  withdraw, you  had  to leave  the  room."   In                                                              
recent  years,  the  U.S.  Supreme  Court  gave  America  Citizens                                                            
United v.  Federal Election Commission,  558 U.S. ___  (2010), and                                                            
also a  way to fix  it, yet a  lot of people  are not  paying much                                                              
attention.  He turned  to a State of Nevada ethics  case that went                                                              
before  the  U.S.  Supreme  Court,  and  explained  that  after  a                                                              
campaign  manager got  his  person elected,  he  brought his  best                                                              
friend  in, the  campaign  manager  advised the  elected  official                                                              
that  his best  friend needed  a  gaming permit,  and the  elected                                                              
official  helped the  best  friend  obtain a  gaming  permit.   He                                                              
described  the Nevada  conflict  of interest  statute as  "totally                                                              
broad," and said  he would loosely paraphrase the  Nevada conflict                                                              
of interest  statute, as follows:   "If  you have a  conflict, you                                                              
may not vote.   It's not quite that simple but  that's effectively                                                              
what it  says."  The  jury in this  case decided that  the elected                                                              
official did  the campaign  manager a favor  to repay him  for the                                                              
work  he  did   on  his  campaign.    The  elected   official  was                                                              
convicted,   and  the   Nevada   Supreme   Court  overturned   the                                                              
conviction  because it decided  the conviction  violated  his free                                                              
speech, and  his obligation  to represent  his constituency.   The                                                              
State of Nevada  took the case to  the U.S. Supreme Court  and the                                                              
U.S.  Supreme  Court  "slammed the  Nevada  court"  in  a 9  to  0                                                              
decision.    The U.S.  Supreme  Court  said  that speech  did  not                                                              
belong to  him -  it belonged  to his  constituents, and  that the                                                              
statute   in  the   State  of   Nevada  said   that  under   these                                                              
circumstances  the elected  official cannot  vote; therefore,  the                                                              
elected official  cannot not  vote.   He then  turned to  the VECO                                                              
Corporation deal.                                                                                                               
CHAIR CLAMAN  interjected that  Mr. Metcalf  had about  15 seconds                                                              
on his five minutes.                                                                                                            
MR.  METCALF   said  he  has  heard   "a  bunch  of   reasons  for                                                              
objection",  he has  been working  on this issue  for many  years,                                                              
and   would  answer   any  questions   regarding   this  type   of                                                              
2:38:23 PM                                                                                                                    
JOHN PUGH  said he was testifying  as a citizen living  in Juneau,                                                              
and  would  like to  comment  on  two important  issues  regarding                                                              
transparency,  not  specifically  on  the  bill.    Currently,  he                                                              
opined,  legislators are  erroring  on the  side  of [caution]  as                                                              
most members  will rise and say they  are a member of  a union, or                                                              
work for  an oil company,  and so  forth.  He  said he  would hope                                                              
that  that continues  and this  bill  does not  suppress the  fact                                                              
that  people  do  error  on the  side  of  disclosing  a  possible                                                              
perceived conflict,  if not in  their district, across  the state.                                                              
It  is important,  he  stressed,  to not  have  this bill  somehow                                                              
suppress legislators  from rising when  they believe there  may be                                                              
a perceived conflict.                                                                                                           
MR. PUGH  referred to the  idea of putting  it on the  record, and                                                              
described that  as transparency, and  why it is not  currently put                                                              
on the  record is  a mystery  to him because  that information  is                                                              
important  as well.   In  that regard,  citizens can  look at  the                                                              
record  and  ascertain who  declared  they  may have  a  perceived                                                              
conflict  of interest.    In moving  forward,  he  asked that  the                                                              
committee put  those two issues  into context, and make  sure this                                                              
bill   doesn't   actually   suppress    perceived   conflicts   by                                                              
legislators   because  that   would  be   less  transparency,   he                                                              
2:40:29 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked  whether it  is appropriate  that the                                                              
person objecting also be put on the record.                                                                                     
2:40:38 PM                                                                                                                    
MR. PUGH  expressed  yes, and further  expressed  that it  is very                                                              
important because  it is part of  the legislative process  and the                                                              
record should be the record.                                                                                                    
2:41:06 PM                                                                                                                    
CHAIR  CLAMAN,  after  ascertaining   no  one  further  wished  to                                                              
testify, closed public testimony in HB 44 and HCR 1.                                                                            
CHAIR  CLAMAN  commented  that   it  appears  there  may  be  some                                                              
interest in amending the bill.                                                                                                  
2:41:16 PM                                                                                                                    
The committee took an at-ease from 2:41 p.m. to 2:47 p.m.                                                                       
2:47:20 PM                                                                                                                    
MR. GARDNER said he was available for questions.                                                                                
2:47:43 PM                                                                                                                    
REPRESENTATIVE  EASTMAN  asked  whether  there  are  other  Alaska                                                              
constitutional   prohibitions  against  the   types  of   bills  a                                                              
legislature   may  pass.     He   explained  that   many  of   the                                                              
circumstances discussed  today dealt with  issues that may  not be                                                              
necessarily  expected to  come before the  legislature, and  asked                                                              
whether there  are any larger  prohibitions at the  constitutional                                                              
level  limiting these  types of  conflict  of interest  situations                                                              
from ever taking place in the form of a bill.                                                                                   
MR. GARDNER  replied that in the  event the legislature  passes an                                                              
unconstitutional  bill, such as  eliminating the  right to  a jury                                                              
trials in criminal  cases.  Clearly, the constitutional  limits on                                                              
what the legislature  can do is the function of the  court to make                                                              
the call  on whether a  statute is unconstitutional.   He  said he                                                              
was unsure exactly  what Representative Eastman was  asking in the                                                              
context of this bill.                                                                                                           
2:49:27 PM                                                                                                                    
REPRESENTATIVE EASTMAN  responded that he  is not thinking  in the                                                              
context of  that broad  of a situation,  but rather  more specific                                                              
types of legislation  in ex post  facto law.  For example,  a bill                                                              
of  attainder, corruption  of  blood,  or any  of  those types  of                                                              
prohibitions  imposed upon the  state legislature  as a  branch of                                                              
government by the state constitution.                                                                                           
MR. GARDNER asked  whether Representative Eastman  was looking for                                                              
an  example  of  a situation  where  there  was  a  constitutional                                                              
restriction on the legislatures, on legislators.                                                                                
2:50:15 PM                                                                                                                    
REPRESENTATIVE EASTMAN  said Mr. Gardner  was correct, and  he was                                                              
wondering what those might be, if any.                                                                                          
MR. GARDNER answered  it could be the restriction  the legislature                                                              
has under  Article II,  Section 19, Local  or Special  Acts, which                                                              
     The legislature  shall pass no  local or special  act if                                                                   
     a  general  act  can  be  made   applicable.  Whether  a                                                                   
     general act  can be made applicable shall  be subject to                                                                   
     judicial   determination.   Local   acts   necessitating                                                                   
     appropriations  by  a  political   subdivision  may  not                                                                   
     become effective  unless approved  by a majority  of the                                                                   
     qualified  voters  voting  thereon  in  the  subdivision                                                                   
MR. GARDNER explained  that a legislature cannot pass  a bill that                                                              
benefits  a  particular  community  because bills  must  all  have                                                              
statewide  application.   Therefore, he  related, the  legislature                                                              
does  have   a  restriction   on  what  it   can  do   in  certain                                                              
CHAIR  CLAMAN advised  Representative Eastman  that his  questions                                                              
appear to be far afield of the topic of the bill.                                                                               
2:51:28 PM                                                                                                                    
MR. JOHNSTON  related that  Representative Grenn  had to  leave to                                                              
attend another  meeting, Representative Grenn extended  his thanks                                                              
for allowing him  to present today, and that  Representative Grenn                                                              
looks forward to working with the committee on the bill.                                                                        
[HB 44 was held over.]                                                                                                          
[HCR 1 was held over.]                                                                                                          

Document Name Date/Time Subjects
HB044 ver D 1.20.17.PDF HJUD 1/27/2017 1:00:00 PM
HB044 ver O 1.23.17.PDF HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HJUD 2/3/2017 1:15:00 PM
HB 44
HCR001 ver J 1.20.17.PDF HJUD 1/27/2017 1:00:00 PM
HB044 Sponsor Statement 1.23.2017.pdf HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HJUD 2/3/2017 1:15:00 PM
HB 44
HB044 Explanation of Changes 1.23.17.pdf HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HJUD 2/3/2017 1:15:00 PM
HB 44
HB044 Sectional Analysis 1.23.17.pdf HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HJUD 2/3/2017 1:15:00 PM
HB 44
HCR001 Sectional Analysis 1.23.17.pdf HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HJUD 2/3/2017 1:15:00 PM
HCR001 Conflict of Interest flow Chart 1.27.17.pdf HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HJUD 2/3/2017 1:15:00 PM
HB044 Supporting Document-Letter AKPIRG 1.23.17.pdf HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HJUD 2/3/2017 1:15:00 PM
HB 44
HB044 Leg Research Report 15-422m 1.20.17.pdf HJUD 1/27/2017 1:00:00 PM
HB 44
HCR001 Leg Research Report 15-423m 1.20.17.pdf HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HJUD 2/3/2017 1:15:00 PM
HB044 Fiscal Note LEG-SESS 1.25.17.pdf HJUD 1/27/2017 1:00:00 PM
HJUD 1/30/2017 1:30:00 PM
HB 44