Legislature(2007 - 2008)SENATE FINANCE 532
02/07/2007 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB19 | |
| SB20 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 19 | TELECONFERENCED | |
| + | SB 20 | TELECONFERENCED | |
9:47:24 AM CS FOR SENATE BILL NO. 20(STA) "An Act relating to disclosures by legislators, legislative employees, public members of the Select Committee on Legislative Ethics, and legislative directors subject to the Legislative Ethics Act; relating to the applicability of the Legislative Ethics Act; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. 9:47:51 AM Senator French, sponsor of the bill, testified that it relates to disclosure that legislators and legislative employees provide to the public of "what we're doing to earn a living outside the capitol, who we're working for, how much they're paying us and what amounts of effort we're having to put out to gain that employment." 9:48:38 AM Senator French characterized the inserted language "of this chapter" to AS 24.60.020(a), in Section 1 as "clean up" suggested by the Department of Law. 9:48:48 AM Senator French stated that Section 2 proposes a new statute section to Article 2: AS 24.60.115. Disclosure required of a legislator, legislative employee or public member of the committee after the final day of service. This provision was intended to address past confusion of when a departed legislator must file the final disclosure. Currently, a question existed as to whether a final report must be filed after a legislator left service. 9:50:26 AM Senator French informed that Section 3 would amend AS 24.60.200. Financial disclosure by legislators, public members of the committee, and legislative directors., in part to extend the reportable income to include dividend income in excess of $1,000 received from a limited liability company as compensation for personal services. Additionally disclosure must include the nature of services performed "with sufficient description to make clear to a person of ordinary understanding the specific services performed"; "the approximate total number of hours that have been spent or will be spent performing the services" and "the amount of income received from the source." 9:51:32 AM Senator French explained that this would provide information about the "amount of effort" the legislator or legislative employee invested to earn the contract. A contract in the amount of $20,000 in which only ten hours were worked would "raise questions"; however, 40 hour weeks at a compensation rate consistent with the profession of the service provided in the contract would be "understandable." 9:52:31 AM Senator French continued that this section would provide for the amount of income permitted from one source. Previous rules pertaining to income from sources "known to have legislative business" would be "put by the wayside". A legislator or legislative employee would not be required to report whether the person or company which gave them money was a lobbyist or had business before the legislature. Instead, the amount of money received would be reported. 9:53:11 AM Senator French concluded with Section 4, which defines to whom this legislation would apply. The provisions of Section 2 would apply to a person serving as a legislator who left service on or after the effective date of the act and to a person who served as a legislator between April 2006 and the effective date of the act. 9:53:51 AM Co-Chair Stedman directed attention to the reporting requirement by a legislator who had dividend income in excess of $1,000 from a limited liability corporation. He remarked that the public should be aware of any "wealth creation" in excess of $1,000, whether from a dividend, or stock options, deferred compensation or other "mechanism that they may imbed in that limited liability company". 9:54:59 AM Senator French agreed that the intent was disclosure so long as Alaska has a "citizen legislature". He deferred to Co-Chair Stedman's greater financial experience to specify the methods of achieving the wealth. This legislation was intended to address matters that had occurred in the past. 9:55:52 AM Co-Chair Stedman would review the matter to avoid providing an "opportunity" for financial gain without disclosure. 9:56:22 AM Senator Elton understood that most businesses operating in Alaska are limited liabilities. He asked if other types of business formations exist in the state. 9:56:56 AM Senator French deferred to legal experts. He defined income in excess of $1,000 to include "almost everything". However, it was learned that income from a limited liability company was not specified. 9:57:32 AM Senator Huggins recalled that the original version of this bill included a provision addressing professional licenses. 9:57:51 AM Senator French affirmed, noting that the exemption provision was removed in the Senate Judiciary Committee substitute. 9:58:02 AM Senator Huggins supported the deletion. He predicted however, that the deletion could be onerous. 9:58:15 AM Senator French stated that the issue could be "delicate" with respect to some professions. The amended language would require legislators to "expose" all of their clients, including those legislators who earn income as a doctor, a lawyer or an investment advisor. Concern had been expressed about whether an attorney, for example, should be exposing some clients and the amount of money received from each client. Some clients seek professional services that they may not want known publicly. Senator French had decided that if a person chose to become a legislator, that person may be restricted in the types of cases or clients accepted. He shared that he would likely not undertake extensive patent cases, as the client and amount of money collected would be made public. Senator French qualified that an exemption could be considered for physicians under the provisions of Hippocratic Oath statutes. 10:00:58 AM Senator Huggins reiterated that he supported the removal of the professional license exemption. Licenses are issued for 38 professions, one of which relates to "performing arts" and "promoters of events". Holders of such licenses should not assume that income garnered from that profession should be exempt from disclosure. 10:01:41 AM Senator Dyson asked if consideration had been given to expanding the list of service providers for which confidentiality of client information would be allowed. Senator French requested an example of a type of service. 10:02:09 AM Senator Dyson shared that his wife was a mental health counselor who refused to divulge information about her clients. Also a previous legislator was an insurance provider who chose to stop issuing large policies to avoid disclosure requirements. 10:03:00 AM Senator French stressed that physicians are governed by "explicit protections" in federal law regarding disclosure of clients and client information. Information about a lawyer's clients is made public in the form of court filings. He understood that some seeking legal consultation could want that to remain private. A legislator practicing law could inform potential clients of the disclosure requirements, and could subsequently "loose some business". However, more disclosure is better. 10:04:36 AM Senator Dyson posed a scenario of a legislator involved in a mountain guiding business with his son. He asked if disclosure would be required if the business were paid $1,000 by a client. Senator French answered in the affirmative. Senator Dyson then asked if the business guided clients into the Chugiak State Park and if an issue relating to the park were before the legislature whether the legislator would be required to declare an interest in the matter. 10:05:39 AM Senator French responded that such requirement is provided for in existing law. 10:06:15 AM Senator French stressed the importance that legislators disclose their income sources. He informed that he owns rental property and would be required to disclose all tenants, the rental income received from each tenant and the amount of time spent in administering and maintaining each unit. 10:07:05 AM Co-Chair Stedman ordered the bill HELD in Committee. AT EASE 10:07:38 AM
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