Legislature(2017 - 2018)GRUENBERG 120

02/18/2017 11:00 AM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 20(STA) Out of Committee
-- Public Testimony --
Moved CSHCR 5(STA) Out of Committee
-- Public Testimony --
          HB 44-LEGISLATIVE ETHICS: VOTING & CONFLICTS                                                                      
11:23:58 AM                                                                                                                   
CHAIR KREISS-TOMKINS  announced that  the next order  of business                                                               
would  be SPONSOR  SUBSTITUTE  FOR  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 immediate  family member or certain employers;                                                               
requiring a  legislator 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."   [Before the                                                               
committee was CSSSHB 44(JUD).]                                                                                                  
11:24:48 AM                                                                                                                   
REPRESENTATIVE JASON  GRENN, Alaska State  Legislature, presented                                                               
SSHB 44, as prime sponsor.  He  stated that the intent of SSHB 44                                                               
is to increase transparency within  the legislature and allow the                                                               
public to  see with utmost  certainty that conflicts  of interest                                                               
are taken  seriously in Alaska.   He asserted that the  intent of                                                               
SSHB 44 is  not to prevent a legislator from  voting on an issue,                                                               
as legislators are  elected to represent their  constituents.  He                                                               
attested that  SSHB 44 would  neither directly stop  a legislator                                                               
from  voting nor  outright disqualify  him/her from  voting.   He                                                               
said that SSHB 44 lays out  a standard procedure for a legislator                                                               
to  decide  for  himself/herself  if  he/she  has  a  substantial                                                               
conflict of  interest.  He opined  that there is always  room for                                                               
improvement, and legislators can exemplify a higher standard.                                                                   
REPRESENTATIVE  GRENN  paraphrased  from the  sponsor  statement,                                                               
which read as follows [original punctuation provided]:                                                                          
     SSHB  44 contains  provisions to  ensure conflicts  are                                                                    
     "substantial" before a legislator  would be required to                                                                    
     abstain  from voting.  Any benefit  a  legislator or  a                                                                    
     member  of  the  legislator's  immediate  family  might                                                                    
     receive   from  supporting   a   particular  piece   of                                                                    
     legislation would  have to be greater  than the benefit                                                                    
     a large  group of  Alaskans would  receive in  order to                                                                    
     require abstention.  The bill and  resolution recognize                                                                    
     the responsibility  of legislators  to vote,  except in                                                                    
     clear cases where the outcome  of the vote would result                                                                    
     in substantial  personal financial gain.  This includes                                                                    
     cases   where  an   immediate   family   member  or   a                                                                    
     legislator's employer would receive  a large and direct                                                                    
     financial benefit.                                                                                                         
11:26:2 8 AM                                                                                                                  
RYAN JOHNSTON,  Staff, Representative  Jason Grenn,  Alaska State                                                               
Legislature, on behalf of Representative  Grenn, prime sponsor of                                                               
SSHB 44, paraphrased  from the sectional analysis,  which read 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, an                                                                    
     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.                                                                                                           
MR. JOHNSTON pointed  out the change made by  the House Judiciary                                                               
Standing  Committee,  shown  on  page  2,  line  [20,  of  CSSSHB
40(JUD)]:  a legislator is  required simply to declare a conflict                                                               
in committee before voting on a  bill, rather than not being able                                                               
to vote in committee.                                                                                                           
11:29:03 AM                                                                                                                   
MR.  JOHNSTON cited  an example  of  what would  be considered  a                                                               
substantial conflict of interest for  a legislator.  He described                                                               
a situation in  which a legislator, voting on major  roads in the                                                               
Interior, is  himself part  of the  substantial class  of persons                                                               
who  lives in  the Interior.   He  said that  if that  legislator                                                               
votes on proposed  legislation that affects a  road that accesses                                                               
only a  parcel of land  of which he/she  is the sole  owner, then                                                               
the  legislator  has  a  substantial  interest  in  the  proposed                                                               
legislation.    He attested  that  the  legislator's interest  is                                                               
different from or greater than that  of anyone else living in the                                                               
Interior, who  also could benefit  from a road to  his/her house.                                                               
He  said  that  in  this  example,  under  the  amendment  to  AS                                                               
24.60.030,   subsection  (g),   proposed  under   SSHB  44,   the                                                               
legislator would be required to  request an abstention.  He noted                                                               
that the example he cited is  on page 6 of advisory opinion 2004-                                                               
02  in the  research  brief from  Legislative Research  Services,                                                               
titled LRS Report 15.422, included in the committee packet.                                                                     
11:30:43 AM                                                                                                                   
REPRESENTATIVE  BIRCH asked  for the  sponsor's perspective  on a                                                               
voter's  role  in  evaluating  the  qualifications,  merits,  and                                                               
"business" of  the respective candidates  and House members.   He                                                               
noted that  candidates for House  run for office every  two years                                                               
and candidates  for Senate  every four years.   He  expressed his                                                               
concern that  SSHB 44 would  be "setting  aside the voters."   He                                                               
asserted  that through  the election  process, every  candidate's                                                               
opponents  aptly  and  capably  elucidate  the  affiliations  and                                                               
financial interests of that candidate.                                                                                          
11:32:04 AM                                                                                                                   
REPRESENTATIVE  GRENN asked  if Representative  Birch was  asking                                                               
how voters weigh in during a campaign process.                                                                                  
REPRESENTATIVE  BIRCH responded  yes.   He explained  that voters                                                               
understand  a candidate's  employment, such  as a  union business                                                               
agent, a doctor, an engineer, a  retail person, or a worker for a                                                               
large  multinational  corporation.    He  pointed  out  that  all                                                               
candidates  complete  a   public  official  financial  disclosure                                                               
(POFD)  statement  exposing  their  financial  interests  to  the                                                               
public.  He asserted that there  is an election process every two                                                               
years, and  if the  public is  validly and  reasonably concerned,                                                               
the issues  are revealed  through that process  and by  virtue of                                                               
having  an opponent.    He  expressed his  concern  that SSHB  44                                                               
disenfranchises  the   17,000  people  that  each   House  member                                                               
represents in his/her district.                                                                                                 
REPRESENTATIVE  GRENN   maintained  that   SSHB  44   focuses  on                                                               
unanticipated legislation.   He referred to the  example given by                                                               
Mr. Johnston  about a  candidate owning property.   He  said that                                                               
owning  that property  would  not  have been  made  known to  the                                                               
voters, nor  would it  be something  that a  candidate's opponent                                                               
would have  talked about.   He offered  that no one  would "bring                                                               
that to  light" during  a campaign.   He gave  an example  of the                                                               
state  constructing  a  road through  that  property  making  the                                                               
candidate a millionaire.  He  said, "Is that something that might                                                               
be reflected  in a future  campaign?   Perhaps.  Is  it something                                                               
you should declare as a conflict of interest?  Perhaps."                                                                        
11:33:58 AM                                                                                                                   
REPRESENTATIVE GRENN  stated that  SSHB 44 would  give guidelines                                                               
on what  a substantial financial interest  means regarding voting                                                               
on proposed legislation  and would allow a  different process for                                                               
those  occasions.     He  opined   SSHB  44  would   create  more                                                               
transparency and a  way for voters to be made  aware of financial                                                               
conflicts.  He said he is  not suggesting that there was anything                                                               
hidden from  the public before  this legislation  was introduced,                                                               
but that  the public  be informed of  any potential  conflicts of                                                               
interest as the legislature processes new legislation.                                                                          
REPRESENTATIVE  BIRCH opined  that if  a legislator  were on  the                                                               
receiving end  of a  $1 million  benefit because  of legislation,                                                               
then he  is cautiously optimistic  that the media and  the public                                                               
would scrutinize it.  He said  one of the most substantial issues                                                               
for  the state  currently is  the $3  billion budget  deficit. He                                                               
offered  that  each  legislator has  a  substantial  interest  in                                                               
resolving  that   problem,  and   it  will  affect   each  person                                                               
differently.  He  stated that a legislator's  duty and obligation                                                               
is to his/her individual voters  and expressed his concern that a                                                               
law will  be passed that is  "a little muddled around  the edges"                                                               
with varying ideas  for what is "substantial."  He  opined that a                                                               
legislator's constituency  would be abandoned  through challenges                                                               
to a legislator's  eligibility to vote on issues  because of real                                                               
or  perceived conflicts.   He  offered  that members  do have  an                                                               
opportunity to announce a conflict on  the floor [of the House or                                                               
Senate].   He said  he had a  concern about  disenfranchising the                                                               
voters that legislators are elected to represent.                                                                               
REPRESENTATIVE  GRENN maintained  that  SSHB 44  would allow  the                                                               
opportunity for a legislator who  declares a conflict to speak to                                                               
that conflict  before the legislative  body, as opposed  to "what                                                               
happens  now with  just  a  lone objection  that  is  not on  the                                                               
record."   He  stated that  SSHB 44  would allow  the legislative                                                               
body  to  "hear  out"  the  conflict  and  vote  on  whether  the                                                               
legislator  who  has  declared a  conflict  should  abstain  from                                                               
voting.   He  said  that  in some  states,  a  legislator with  a                                                               
conflict  is not  allowed  to vote.   He  asserted  that SSHB  44                                                               
allows for a public process and  for the legislative body to vote                                                               
on the potential conflicts.                                                                                                     
11:36:50 AM                                                                                                                   
REPRESENTATIVE BIRCH  asked if  there had  been a  situation that                                                               
prompted introduction of SSHB 44.                                                                                               
REPRESENTATIVE  GRENN  responded not  at  all.   He  stated  that                                                               
before he  ran for  office he  was asked to  resign from  his job                                                               
because of  a potential conflict  of interest.   He said  that he                                                               
did so  because he didn't want  his campaign to have  any sort of                                                               
conflict of interest attached to it.   He mentioned that 49 other                                                               
states handle  conflicts of interest differently  and allow their                                                               
legislators  to  be  seen  as  transparently  as  possible.    He                                                               
asserted that  the legislature can  always build more  trust with                                                               
the voters.  He said he believes SSHB 44 would help to do that.                                                                 
REPRESENTATIVE  BIRCH  commented  that it  was  unfortunate  that                                                               
Representative Grenn  resigned from his  job, since Alaska  has a                                                               
citizen legislature.   He added  that hopefully  every legislator                                                               
has "another  life" outside of  the purported three  months spent                                                               
in legislative session.                                                                                                         
11:37:59 AM                                                                                                                   
REPRESENTATIVE KNOPP  expressed his concern that  the legislators                                                               
would "muddy everything up in  chambers and everybody is going to                                                               
stand up and  declare a conflict erring on the  side of caution."                                                               
He  offered  the following  hypothetical  scenario:   a  proposed                                                               
legislation  to fund  a number  of Interior  roads is  before the                                                               
legislature in the  capital budget, and the voting  member of the                                                               
legislature is a construction contractor.   He said that although                                                               
the project  is going out  for bid in  a public process,  and the                                                               
floor sessions  are public,  the contractor, who  may or  may not                                                               
bid on  the project, has a  conflict of interest.   He asked, "Is                                                               
that the  road we're going  to go down  ... every single  time we                                                               
have something coming up here."                                                                                                 
MR. JOHNSTON responded that every  legislator is required to vote                                                               
on  the final  budget under  AS 37.07.020(a).   He  said that  in                                                               
Representative  Knopp's  hypothetical situation,  the  legislator                                                               
could declare his/her  conflict of interest again,  but the chair                                                               
would rule  him/her out  of order, and  the conflict  of interest                                                               
would not  go to  a legislative  body vote.   He added  that this                                                               
situation was unlike  the earlier example, which  did not involve                                                               
a budgetary vote.                                                                                                               
11:39:44 AM                                                                                                                   
REPRESENTATIVE  KNOPP asked  what in  the current  process avoids                                                               
declaring  conflicts   of  interest,   and  what   triggered  the                                                               
introduction of SSHB 44.                                                                                                        
REPRESENTATIVE GRENN said he does  not have any personal anecdote                                                               
to relay, and  that the proposed legislation  was drafted without                                                               
input  from  anyone  within  or  without  the  legislature.    He                                                               
asserted  that his  staff worked  on SSHB  44 independently.   He                                                               
added that they  solely focused on creating  transparency so that                                                               
the public can  trust what the legislators are  doing, when there                                                               
is a  perceived conflict  of interest.   He  added that  there is                                                               
nothing that  happened recently in the  legislature prompting him                                                               
to introduce the  proposed legislation.  He said,  however, as he                                                               
went  door to  door, his  constituents mentioned  that they  felt                                                               
legislators were  doing their  voters a  disservice by  not being                                                               
more open and transparent.  He  said some referred to the lack of                                                               
transparency  as  "tarmac disease"  -  when  legislators hit  the                                                               
tarmac,  the  constituents  "didn't   know  everything  that  was                                                               
happening."   He contended that  people were looking for  ways to                                                               
know exactly  "what was  happening in  Juneau."   He said  he has                                                               
responded that  there are cameras  everywhere, social  media, and                                                               
documentation.   He  attested that  the legislature  does a  very                                                               
good job of  trying to share everything done  in the legislature.                                                               
He maintained that  anything that can be done to  put more on the                                                               
public record should be done.  He opined that SSHB 44 does that.                                                                
11:42:21 AM                                                                                                                   
REPRESENTATIVE JOSEPHSON opined that  currently "this building is                                                               
a remarkably  partisan building" and  offered his belief  that if                                                               
the  public were  aware  of how  partisan it  is,  they would  be                                                               
shocked.  He mentioned that in  the State of Hawaii, there are 25                                                               
senators.  He said that currently  all 25 senators are members of                                                               
the Democratic Party.   He went on to say that  two years ago, 24                                                               
of the  senators were  Democrats and  one was  a Republican.   He                                                               
offered the following hypothetical  scenario:  The one Republican                                                               
senator in Hawaii is a pineapple  grower with a pineapple farm on                                                               
the  north  shore of  the  island  of Oahu.    A  Democrat has  a                                                               
"pineapple bill"  and wants  a unanimous vote.   He  is concerned                                                               
that the  Republican has  a conflict of  interest and  would vote                                                               
against his  pineapple bill.  Representative  Josephson suggested                                                               
that  when  the   conflict  of  interest  was   declared  by  the                                                               
Republican,  the   24  Democrats   would  gang  up   against  the                                                               
Republican and  find that the declared  conflict was substantial;                                                               
therefore,  the  Republican must  be  recused  from voting.    He                                                               
expressed his  concern that  a member of  the minority  would not                                                               
get the same  objective hearing on a conflict  of interest debate                                                               
[as a  member of the  majority].  He  asked, "How do  you resolve                                                               
MR. JOHNSTON  replied that there are  many steps leading up  to a                                                               
legislator  needing  to  recuse himself/herself  during  a  floor                                                               
session.   He added that SSHB  44 leaves it up  to the legislator                                                               
to "stand  on the floor"  and make  his/her own declaration  of a                                                               
conflict and request  to abstain.  No one can  stand on the floor                                                               
[of the  House or Senate] and  "call someone out."   He said that                                                               
in that  scenario, the  single minority  member could  request an                                                               
advisory opinion from the Select  Committee on Legislative Ethics                                                               
prior to  his/her declaration in  the floor session.   He offered                                                               
that  if  the  committee  issued an  advisory  opinion  that  the                                                               
legislator  does not  have a  conflict, then  the legislator  can                                                               
avoid declaring  a conflict  during the  floor session  and would                                                               
have  that opinion  as backup  if the  majority members  filed an                                                               
ethics complaint.   He concluded  that there would be  checks and                                                               
balances and no super-majority control.                                                                                         
11:46:12 AM                                                                                                                   
REPRESENTATIVE JOHNSON posed  a scenario as follows:   There is a                                                               
district with all pineapple farmers.   The people of the district                                                               
have  elected   a  pineapple  farmer   because  that   person  is                                                               
representative  of the  district.    She asked  if  every time  a                                                               
pineapple  bill  comes  before the  legislature,  the  legislator                                                               
would have  to declare a conflict  and would not be  able to vote                                                               
on  the bill.   She  said  that the  people of  the district,  in                                                               
essence, have  lost their representation  on the issue  that most                                                               
concerns them.                                                                                                                  
MR. JOHNSTON  said that under  SSHB 44, simply being  a pineapple                                                               
farmer facing a pineapple bill  does not constitute a conflict of                                                               
interest.   He  asserted that  it is  "what's in  the bill"  that                                                               
counts.   He  offered that  if there  is a  tax on  all pineapple                                                               
farmers that  is the same  across the board, then  the legislator                                                               
would have  the right to vote  on that bill, because  the bill is                                                               
affecting the  entire class of  persons, industry, or  region the                                                               
same.  He said if that  pineapple bill only gives a tax incentive                                                               
for pineapple  farms over 1,000  acres, and that  legislator owns                                                               
the  only  pineapple  farm  over 1,000  acres,  then  that  would                                                               
constitute a substantial conflict, which  should be declared.  He                                                               
said that simply being a part  of an industry does not constitute                                                               
an outright  conflict of  interest.  There  must be  something in                                                               
the  proposed legislation  that sets  that legislator  apart from                                                               
the rest of the class to  constitute a conflict of interest, such                                                               
as only he/she would benefit or be harmed by the legislation.                                                                   
REPRESENTATIVE JOHNSON expressed two concerns:   in an attempt to                                                               
err on the  side of caution, most  legislators will over-declare;                                                               
and in  an effort to  avoid voting on  controversial legislation,                                                               
legislators will want to be "conflicted out."                                                                                   
REPRESENTATIVE TUCK stated that  declaring a conflict of interest                                                               
allows a legislator to avoid  voting on proposed legislation from                                                               
which he/she may  personally benefit.  He  offered that currently                                                               
it  only takes  an objection  from  one member  to override  that                                                               
declaration in the legislature.   Consequently, the legislator is                                                               
required to vote on the proposed  legislation.  He opined that it                                                               
is  appropriate  that  the  full legislative  body  decide  if  a                                                               
legislator  should  vote,  rather  than  just  one  person.    He                                                               
asserted that  SSHB 44 offers  protection for all members  of the                                                               
legislature, since  there are  times when a  vote may  hurt one's                                                               
political career  and times  when a vote  may hurt  one's private                                                               
career.   He suggested the  following scenario:  A  legislator is                                                               
part  owner of  a nail  salon.   A proposed  legislation benefits                                                               
that nail  salon, because it  is the  only salon that  can handle                                                               
the  training  [mentioned  in the  proposed  legislation].    The                                                               
legislator may be voting on behalf  of the industry, but there is                                                               
only   one   nail   salon  that   can   provide   the   services.                                                               
Representative Tuck asked whether  that legislator should be able                                                               
to vote on that proposed legislation.   He opined that SSHB 44 is                                                               
an innocent bill,  which would allow the  full [legislative] body                                                               
to decide  if a legislator  should vote on  proposed legislation,                                                               
rather than allow one person to decide.                                                                                         
CHAIR KREISS-TOMKINS announced that SSHB 44 would be held over.                                                                 

Document Name Date/Time Subjects
HB020 Alaska Family Action Letter of Opposition 2.17.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 20
HB013 Hearing Request 1.26.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 13
HB13 Sponsor Statement 1.26.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 13
HB0013 ver A 1.26.17.PDF HSTA 2/18/2017 11:00:00 AM
HB 13
HB0013 Draft Proposed CS ver J 1.26.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 13
HB13 Explanation of Changes 1.30.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 13
HB044 Sponsor Statement 1.23.2017.pdf HSTA 2/18/2017 11:00:00 AM
HB 44
HB044 Sectional Anaylsis 2.17.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 44
HB0044 CS for Sponsor Substitute Ver U 2.17.17.PDF HSTA 2/18/2017 11:00:00 AM
HB 44
HB044 Sponsor Substitute ver O 1.23.17.PDF HSTA 2/18/2017 11:00:00 AM
HB 44
HB44 Fiscal Note AL 1.25.2017.pdf HSTA 2/18/2017 11:00:00 AM
HB 44
HB044 supporting document-AKPIRG Support Letter 1.23.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 44
HB044 Supporting Document-LWV 1.27.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 44
HB044 Supporting Document- Nees ltr to Jason Green re HB44 2.1.2017.pdf HSTA 2/18/2017 11:00:00 AM
HB 44
HB020 Proposed Amendment A.1 2.17.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 20
HCR005 Proposed Amendment A.1 2.16.17.pdf HSTA 2/18/2017 11:00:00 AM
HB013 Fiscal Note 2.11.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 13
HB 020 Letter of Support Joy Lutheran Church 2.17.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 20
HCR005 Fiscal Note 2.17.17.pdf HSTA 2/18/2017 11:00:00 AM
HB13 Supporting Document - Timeline for Korematsu's Resolution 2.17.17.pdf HJUD 4/15/2017 10:00:00 AM
HSTA 2/18/2017 11:00:00 AM
HB 13
HB013 Supporting Document - Korematsu v US 2.17.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 13
HB013 Supporting Document Constituent Letters 2.20.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 13
HB13 Supporting Document - Research Document 3.7.17.pdf HSTA 2/18/2017 11:00:00 AM
HB 13