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