Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/20/2019 01:30 PM JUDICIARY

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Audio Topic
01:32:02 PM Start
01:32:37 PM SB89
02:33:09 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 89 LEGISLATURE: ETHICS, CONFLICTS TELECONFERENCED
Moved CSSB 89(JUD) Out of Committee
-- Testimony <Invitation Only> --
+= SB 34 PROBATION; PAROLE; SENTENCES; CREDITS TELECONFERENCED
<Bill Hearing Canceled>
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
              SB 89-LEGISLATURE: ETHICS, CONFLICTS                                                                          
                                                                                                                                
1:32:37 PM                                                                                                                    
CHAIR HUGHES announced  that the only order of  business would be                                                               
SENATE BILL  NO. 89, "An  Act relating to the  Legislative Ethics                                                               
Act; and providing for an effective date."                                                                                      
                                                                                                                                
1:33:10 PM                                                                                                                    
SENATOR  KIEHL  moved  to  adopt Amendment  1,  work  order,  31-                                                               
LS0209\U.2, Wayne, 3/19/19.                                                                                                     
                                                                                                                                
                            AMENDMENT 1                                                                                     
                                                                                                                                
                                                                                                                                
      OFFERED IN THE SENATE                  BY SENATOR KIEHL                                                                   
         TO:  SB 89                                                                                                             
                                                                                                                                
                                                                                                                                
     Page 2, lines 16 - 19:                                                                                                     
          Delete "may not vote [SHALL DECLARE A CONFLICT OF                                                                 
     INTEREST  BEFORE  VOTING]  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,]"                                                                                                         
          Insert "shall declare a conflict of interest                                                                          
     before voting 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,"                                                                                                              
                                                                                                                                
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
SENATOR  KIEHL   explained  that   Amendment  1   would  maintain                                                               
disclosures of conflicts  of interest in committee.  It would not                                                               
change the effect  of the bill with respect to  how a conflict of                                                               
interest is  handled on the floor.  This would add back  the need                                                               
to disclose any conflict of  interest before voting on a question                                                               
in committee.                                                                                                                   
                                                                                                                                
1:33:53 PM                                                                                                                    
SENATOR  SHOWER   asked  whether  the  sponsor   could  speak  to                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
1:34:38 PM                                                                                                                    
SENATOR JOHN COGHILL, Alaska  State Legislature, Juneau, speaking                                                               
as sponsor  of SB 89,  said that this  issue arose at  an earlier                                                               
meeting,  when the  bill  was  introduced. At  the  time, he  was                                                               
[neutral]  to the  concept.  The  language in  Amendment  1 is  a                                                               
reasonable approach, he said. However,  if Amendment 1 were to be                                                               
amended by the two additional  pending amendments, the bill would                                                               
be  rendered unreasonable.  He said  that Amendment  1 would  not                                                               
harm  SB 89  since  it  would add  one  additional  layer to  the                                                               
conflict   declarations.  The   declarations  [of   conflicts  of                                                               
interest]  in SB  89 are  fairly narrow  and clear.  He suggested                                                               
that  adding  additional language  that  would  broaden it  would                                                               
become a problem.                                                                                                               
                                                                                                                                
1:35:28 PM                                                                                                                    
SENATOR SHOWER  related his understanding that  Amendment 1 would                                                               
not   change  the   intent  of   SB  89   or  create   unintended                                                               
consequences.                                                                                                                   
                                                                                                                                
SENATOR  COGHILL  answered  yes,  that Amendment  1  would  still                                                               
require  members to  declare  any conflict  of  interest, but  it                                                               
would be  subject to  the Uniform Rules.  This means  a committee                                                               
member could  object, but  the objection  could be  overruled. It                                                               
would put the committee in  the position of determining whether a                                                               
real conflict exists, which is appropriate.                                                                                     
                                                                                                                                
1:36:31 PM                                                                                                                    
CHAD  HUTCHISON,  Staff,  Senator   Jack  Coghill,  Alaska  State                                                               
Legislature, Juneau,  stated said that  one of the  questions the                                                               
sponsor  has posed  is whether  it would  have any  effect as  it                                                               
would  broaden  the  scope  of  the  overall  legislative  ethics                                                               
statutes.                                                                                                                       
                                                                                                                                
1:36:52 PM                                                                                                                    
CHAIR HUGHES  asked whether  [Amendment 1]  would bleed  over and                                                               
result    in    unintended     consequences    and    restrictive                                                               
interpretation.                                                                                                                 
                                                                                                                                
1:37:12 PM                                                                                                                    
DAN   WAYNE,  Legislative   Legal   Counsel,  Legislative   Legal                                                               
Services, Legislative  Affairs Agency, Juneau, asked  for further                                                               
clarification that  she is referring  to Amendment 1,  work order                                                               
[31-LS0209\U.2], referred to as U.2.                                                                                            
                                                                                                                                
CHAIR HUGHES agreed that is correct.                                                                                            
                                                                                                                                
MR. WAYNE said that Amendment 1  does not have any effect outside                                                               
of  the  specific  section  being   amended.  It  would  add  the                                                               
requirement that  members declare  a conflict of  interest before                                                               
voting on a question before a committee.                                                                                        
                                                                                                                                
CHAIR  HUGHES said  she  was  glad the  record  will reflect  his                                                               
opinion.  It  is  very  helpful   and  reassuring  to  know.  She                                                               
acknowledged  that many  members have  gotten into  the habit  of                                                               
[declaring a conflict of interest.]                                                                                             
                                                                                                                                
1:38:20 PM                                                                                                                    
SENATOR  MICCICHE  said this  raises  an  issue with  legislative                                                               
ethics.  He  said  that  he  has been  involved  in  several  key                                                               
industries  in the  state.  He has  always  declared a  perceived                                                               
conflict  of  interest  [on  the  floor]  because  he  wants  his                                                               
constituents  to know  he is  a fisherman  and that  he has  been                                                               
involved  in  the  oil  and gas  industry.  He  acknowledged  the                                                               
perception  he could  have  a conflict  exists.  However, he  has                                                               
obtained a ruling from the  joint Select Committee on Legislative                                                               
Ethics  on whether  it is  one. He  has never  had a  conflict of                                                               
interest.                                                                                                                       
                                                                                                                                
He pointed out  that Amendment 1 relates to  declaring a conflict                                                               
of interest  if a legislator  has an "actual" conflict,  which is                                                               
in accordance  with SB 89.  A legislator must declare  a conflict                                                               
of interest  if legislation will affect  a legislator differently                                                               
than  a substantial  class  of persons  to  which the  legislator                                                               
belongs.  He  said  that  legislators  also  need  to  think  for                                                               
themselves, as  many have  already done,  by listing  a perceived                                                               
conflict, which this does not  require. However, this would be on                                                               
a  limited  case, just  as  it  is on  the  floor.  He said  that                                                               
legislators often get challenged  because they or their relatives                                                               
have  jobs. However,  nothing  in Amendment  1  will clarify  the                                                               
issue, nor  did House Bill 44.  It is the responsibility  of each                                                               
legislator to  identify any perceived  conflicts when  talking to                                                               
his/her constituents. He said he would be doing this anyway.                                                                    
                                                                                                                                
MR. WAYNE advised  members that outside noises  are obscuring the                                                               
audio and he cannot hear the committee discussion.                                                                              
                                                                                                                                
CHAIR HUGHES thanked him.                                                                                                       
                                                                                                                                
1:40:22 PM                                                                                                                    
SENATOR MICCICHE continued. He said  he does not oppose Amendment                                                               
1  since this  is what  he  would do  anyway, so  he thought  the                                                               
amendment was fine.  He said further discussion  needs to address                                                               
[identifying real conflict of interests].                                                                                       
                                                                                                                                
1:40:55 PM                                                                                                                    
SENATOR   COGHILL  voiced   agreement   with   Amendment  1.   He                                                               
acknowledged that  Senator Micciche has identified  the practical                                                               
problem of  how to describe a  "real" conflict of interest  and a                                                               
political  problem on  the political  conflicts. Those  sometimes                                                               
cross over, he said. He said  that when someone obtains a benefit                                                               
that  is unusual  to anyone  else, legislators  should allow  the                                                               
legislator to  declare a conflict  of interest [and  abstain from                                                               
voting]. He  pointed out that  senators have  32,000 constituents                                                               
who  rely on  their  senators  to represent  them,  so a  tension                                                               
exists.  The conflict  must  be a  "real"  conflict of  interest,                                                               
which has not  occurred to date, but political  issues have often                                                               
arisen [related to conflicts of interest issue].                                                                                
                                                                                                                                
1:41:50 PM                                                                                                                    
SENATOR KIEHL said he appreciated the comments.                                                                                 
                                                                                                                                
1:42:05 PM                                                                                                                    
CHAIR  HUGHES  removed  her objection.  There  being  no  further                                                               
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
1:42:15 PM                                                                                                                    
SENATOR KIEHL moved [Conceptual] Amendment 2.                                                                                   
                                                                                                                                
                     CONCEPTUAL AMENDMENT 2                                                                                   
                                                                                                                              
                                                                                                                                
     Sec. 2.                                                                                                                    
                                                                                                                                
     Page 2,  Line 19: Insert  after "if the  legislator"  ,                                                                
     the  legislator's  spouse   or  domestic  partner,  the                                                                
     legislator's  dependent children,  or the  legislator's                                                                
     nondependent   children  who   are   living  with   the                                                                
     legislator                                                                                                             
                                                                                                                                
     Page 2, Line 24: Insert  after "the legislator": ", the                                                                
     legislator's   spouse   or    domestic   partner,   the                                                                
     legislator's  dependent children,  or the  legislator's                                                                
     nondependent   children  who   are   living  with   the                                                                
     legislator                                                                                                             
                                                                                                                                
                                                                                                                                
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
SENATOR KIEHL  explained that Conceptual  Amendment 2  relates to                                                               
when a  legislator must disclose  any conflict of  interest. This                                                               
would  essentially  split  the   difference  between  SB  89,  as                                                               
introduced, and  the current law. [Conceptual]  Amendment 2 would                                                               
require  members  to disclose  any  income  that would  affect  a                                                               
legislator differently  than "a  substantial class of  persons to                                                               
which the  legislator belongs." In  fact, it extends  beyond what                                                               
would  benefit  the legislator,  to  the  legislator's spouse  or                                                               
domestic  partner, dependent  children, or  nondependent children                                                               
living with  the legislator. This  language is modeled  after the                                                               
language  used  for  public official  financial  disclosures,  he                                                               
said. It  is not as  broad as [current  law] under House  Bill 44                                                               
since it would only relate  to one's immediate family. This would                                                               
pertain  to those  public  officials on  the  March 15  financial                                                               
disclosure. If they received an  unusual benefit, greater than "a                                                               
substantial class  of persons to  which the  legislator belongs",                                                               
it would need to be disclosed.                                                                                                  
                                                                                                                                
1:43:56 PM                                                                                                                    
SENATOR COGHILL responded that  he opposes [Conceptual] Amendment                                                               
2. He said  it is a worthy discussion. However,  he clarified the                                                               
difference between a financial disclosure  for public comment and                                                               
an ethics declaration.  He said that [the financial  aspects of a                                                               
person] are  disclosed by  the person but  under the  ethics law,                                                               
violations  are made  by accusation  and legislators  must defend                                                               
themselves. He  said that  one of  the reasons  to revert  to the                                                               
original language  for the ethics  law is because [House  Bill 44                                                               
law]  created ambiguity  and uncertainty  [since  it extended  to                                                               
family members].  This would tighten  it, but still  would create                                                               
ambiguity. He said he preferred  a cleaner approach and revert to                                                               
[the pre-House Bill 44 law] that has worked well.                                                                               
                                                                                                                                
1:45:18 PM                                                                                                                    
MR. HUTCHINSON  agreed that  [Conceptual] Amendment  2 is  not as                                                               
broad  as  House  Bill  44  law,  but it  is  still  broad  by  a                                                               
constitutional  analysis and  the  constitutional  duties of  the                                                               
legislative branch to fully implement  the will of the people. He                                                               
said it is  not truly the least  restrictive alternative, because                                                               
that language exists in pre-House  Bill 44 law. He concluded that                                                               
[Conceptual] Amendment 2 is still too broad.                                                                                    
                                                                                                                                
1:46:02 PM                                                                                                                    
SENATOR  SHOWER asked  for further  clarification  on the  "least                                                               
restrictive alternative."                                                                                                       
                                                                                                                                
MR.  HUTCHINSON said  that  the  "least restrictive  alternative"                                                               
refers to  the fundamental rights  that the sponsor  talked about                                                               
at  the   last  meeting  during   the  presentation   before  the                                                               
committee.  He  referred to  the  Constitution  of the  State  of                                                               
Alaska,  Article  II,  which   outlines  representation  and  the                                                               
legislative duties.  Further, the fundamental  rights established                                                               
under  the  first  amendment [Section  5]  include  free  speech,                                                               
[Section  6],  the  right  to   assemble,  and  to  petition  the                                                               
government. If the  government is going to  restrict those rights                                                               
it  must be  necessary  to  a compelling  state  interest and  be                                                               
narrowly tailored  to be the "least  restrictive alternative," he                                                               
said.                                                                                                                           
                                                                                                                                
He explained that  SB 89 relates to representation  in Article II                                                               
and  the scope  of conflict  is being  expanded. For  example, he                                                               
said he has a domestic partner,  as do others, who might not know                                                               
the financial aspects of their  domestic partners. He agreed that                                                               
[Conceptual] Amendment  2 is less  broad than House Bill  44 law,                                                               
but  it  is still  broad  enough  that  it cannot  be  reasonably                                                               
considered the "least restrictive alternative."                                                                                 
                                                                                                                                
1:47:33 PM                                                                                                                    
CHAIR HUGHES said  she has an adult [male] child  not living with                                                               
her. She  said that if  he did live with  her, she would  be very                                                               
concerned about running afoul of  this language. She acknowledged                                                               
she could get  information for the March  15 financial disclosure                                                               
requirement. However,  she would  not be  aware of  his financial                                                               
dealings throughout  the year, which  could result in  an unknown                                                               
conflict of  interest for her.  She said some spouses  share bank                                                               
accounts and some  do not. Further, legislators are  the ones who                                                               
are elected  to office, not  their family members.  She expressed                                                               
concern  about   spreading  the  conflict  of   interest  to  the                                                               
remainder of her family.                                                                                                        
                                                                                                                                
1:48:48 PM                                                                                                                    
SENATOR  SHOWER offered  his belief  that the  net being  cast by                                                               
[Conceptual] Amendment 2  was very large. He  echoed the previous                                                               
comment that  legislators are  the ones who  run for  office, not                                                               
their spouses and children. He  said his occupations have been in                                                               
the military and commercial airlines,  so he is neutral. However,                                                               
he expressed  concern that the  ethics law is being  broadened so                                                               
much  that it  makes it  difficult  for legislators  to do  their                                                               
jobs. For example, a crime bill  was referred to the Senate State                                                               
Affairs  Standing  Committee,  which  he  chairs,  because  Chair                                                               
Hughes had a  perceived conflict of interest due  to her spouse's                                                               
occupation.  This  increased  his committee  workload,  he  said.                                                               
Therefore,  since  the  "net"  is still  too  broad,  he  opposes                                                               
[Conceptual]  Amendment  2.  He  said it  needs  to  be  narrowly                                                               
tailored.  The record  should reflect  that  the legislators  the                                                               
people  elected are  not able  to do  their jobs  because of  the                                                               
current ethics law.                                                                                                             
                                                                                                                                
1:50:25 PM                                                                                                                    
SENATOR MICCICHE said he does  not support [Conceptual] Amendment                                                               
2. He acknowledged  that he and his wife have  the same financial                                                               
interests and investments. If his  wife were to start a business,                                                               
he would  take that into account  when he declares a  conflict of                                                               
interest. He  offered his belief  that conflicts of  interest are                                                               
adequately  covered in  the  original bill.  He  pointed out  the                                                               
reason  for   the  annual  financial  disclosure   is  to  report                                                               
everything  related to  your spouse  and  dependent children  and                                                               
non-dependent  children living  in the  household. This  provides                                                               
transparency  in case  any  potential  conflict arises.  However,                                                               
when  legislators are  performing their  jobs on  legislation, it                                                               
should   directly  affect   the   legislator   greater  than   "a                                                               
substantial class  of persons to  which the  legislator belongs".                                                               
He said  he thinks [Conceptual]  Amendment 2 is redundant,  so he                                                               
does not support it.                                                                                                            
                                                                                                                                
1:52:35 PM                                                                                                                    
SENATOR KIEHL  said this  conversation is  awkward because  he is                                                               
discussing  the matter  with  five people  that  he believes  are                                                               
honest   and  ethical   people.  However,   the  committee   must                                                               
contemplate that  one of their  colleagues could  potentially not                                                               
be  ethical.  In   fact,  ethics  laws  provide   an  avenue  for                                                               
complaints to  protect the  public from  the rare  individual who                                                               
does not share  the committee members' values.  He explained that                                                               
[Conceptual]  Amendment 2  is about  disclosure in  committee and                                                               
voting  on the  floor. He  said the  financial disclosure  covers                                                               
information provided  to the  public, but  the ethics  law covers                                                               
legislators'  behavior.  He  said that  these  disclosures  serve                                                               
different   purposes.   While   the  information   on   financial                                                               
disclosure exists, it  is only updated annually, and  it does not                                                               
cover   legislators'    behavior.   [Conceptual]    Amendment   2                                                               
contemplates  the unfortunate  possibility of  someone who  would                                                               
act  in a  manner to  benefit his/her  household more  than other                                                               
Alaskans. He  clarified that if  he were  to take an  action that                                                               
would benefit  his wife, it  would benefit his household  even if                                                               
their accounts were kept separate.  He maintained his belief that                                                               
it is important to consider  the immediate household as described                                                               
in [Conceptual] Amendment 2.                                                                                                    
                                                                                                                                
CHAIR HUGHES maintained her objection.                                                                                          
                                                                                                                                
1:55:23 PM                                                                                                                    
SENATOR MICCICHE  said that  if the effect  on him  constituted a                                                               
substantial  [gain], above  a class  of  persons, it  would be  a                                                               
conflict.  If  a family  member's  interest  was substantial,  he                                                               
would  declare  a  conflict  of   interest.  He  maintained  that                                                               
[Conceptual] Amendment 2 was redundant.                                                                                         
                                                                                                                                
1:56:29 PM                                                                                                                    
SENATOR KIEHL  offered his belief  that [Conceptual]  Amendment 2                                                               
provides  an  added step  and  not  a  redundancy. He  related  a                                                               
scenario to illustrate his point.                                                                                               
                                                                                                                                
1:57:38 PM                                                                                                                    
CHAIR HUGHES maintained her objection.                                                                                          
                                                                                                                                
1:57:43 PM                                                                                                                    
A  roll call  vote was  taken. Senator  Kiehl voted  in favor  of                                                               
[Conceptual]  Amendment   2  and  Senators   Micciche,  Reinbold,                                                               
Shower,  and Hughes  voted  against  it. Therefore,  [Conceptual]                                                               
Amendment 2 failed by a 1:4 vote.                                                                                               
                                                                                                                                
1:58:08 PM                                                                                                                    
SENATOR KIEHL moved to adopt [Conceptual] Amendment 3:                                                                          
                                                                                                                                
                    [CONCEPTUAL] AMENDMENT 3                                                                                  
                                                                                                                                
     Page 2, line 19, delete: "if the legislator"                                                                               
               Insert "if action on the question                                                                              
                                                                                                                                
     Replace the "equity or ownership interest" language on                                                                     
     page 2, lines 20-25 with:                                                                                                  
                                                                                                                                
      could  affect the  legislator by  a financial  loss or                                                                
     gain  that  is  $1000  or more  and  greater  than  the                                                                
     resulting  financial  loss  or gain  by  a  substantial                                                                
     class of persons  to which the legislator  belongs as a                                                                
     member  of  a   profession,  occupation,  industry,  or                                                                
     region.                                                                                                                
                                                                                                                                
                                                                                                                                
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
SENATOR  KIEHL  explained  that [Conceptual]  Amendment  3  would                                                               
cover a broader  scope of income than the bill  as introduced. He                                                               
said that  it keeps the  "substantial class of  persons" language                                                               
rather than House  Bill 44's general public  language. This would                                                               
provide more than  the equity or ownership  interest and includes                                                               
financial loss or  gain of $1,000 or more. It  also would include                                                               
salary  or participation  in a  program in  which the  legislator                                                               
does  not  have an  ownership  stake,  so  it would  address  any                                                               
instance that  provides money  to the legislator.  He said  he is                                                               
open  to   changing  the  $1,000  threshold,   since  the  ethics                                                               
committee  traditionally  uses the  gift  limit  of $250  when  a                                                               
specific limit is  not listed. He said that he  wanted it broader                                                               
than the gift limit, which seemed low.                                                                                          
                                                                                                                                
2:00:15 PM                                                                                                                    
SENATOR  COGHILL  spoke  against  [Conceptual]  Amendment  3.  He                                                               
suggested that  the sponsor of  [Conceptual] Amendment  3 appears                                                               
to attempt  to identify  a substantial  loss or  gain, and  he is                                                               
right that currently a $250  limit on gifts exists. However, this                                                               
bill relates  to financial  interests, so  $1,000 limit  would be                                                               
extremely   limiting  and   would  result   in  declarations   of                                                               
[perceived] conflicts  of interest in every  matter coming before                                                               
the legislature over $1,000.                                                                                                    
                                                                                                                                
He  was unsure  of  how it  would be  interpreted.  It would  add                                                               
additional complexity on how it  might affect the eight different                                                               
areas  of  ethics  law  related  to  conflicts  of  interest.  He                                                               
acknowledged  that  he  met  with  the  sponsor  of  [Conceptual]                                                               
Amendment  3   and  expressed  his  opposition   to  [Conceptual]                                                               
Amendment 3. He said the  language seemed more restrictive than a                                                               
substantial interest in a business  or investment. He offered his                                                               
belief that placing a $1,000 limit would be [detrimental].                                                                      
                                                                                                                                
2:01:58 PM                                                                                                                    
MR.   HUTCHINSON   highlighted   that   from   a   constitutional                                                               
perspective,  [Conceptual]  Amendment  3  still  has  Article  II                                                               
problems,  and  that it  would  broaden  the scope  of  potential                                                               
conflicts.   Further,   the   "least   restrictive   alternative"                                                               
provision and  inflation would  erode the  $1,000 figure.  At the                                                               
time House  Bill 44 was  adopted, research indicated that  only a                                                               
few states have  monetary amounts. He recalled  that Michigan and                                                               
Texas  both  have  $25,000, whereas  the  limit  in  [Conceptual]                                                               
Amendment 3 is $1,000.                                                                                                          
                                                                                                                                
SENATOR MICCICHE said he does  not support [Conceptual] Amendment                                                               
3 because  it actually justifies  some gain and there  should not                                                               
be  any gain.  He would  ask  to be  excused from  voting if  his                                                               
interest  was  different than  a  substantial  class of  persons,                                                               
whether it was a loss or a  gain, and the amount does not matter.                                                               
[Conceptual] Amendment  3 almost justifies a  difference from the                                                               
substantial class of persons standard  in the bill. He emphasized                                                               
that "a conflict is a conflict."                                                                                                
                                                                                                                                
2:04:26 PM                                                                                                                    
SENATOR REINBOLD  referred to  the language,  "$1000 or  more and                                                               
greater  than  the   resulting  financial  loss  or   gain  by  a                                                               
substantial class  of persons to  which the  legislator belongs."                                                               
However,  under House  Bill 44,  members must  still vote  on the                                                               
budget. It  prevented members from  declaring a conflict  and not                                                               
voting on the  budget, [yet a conflict of  interest could exist].                                                               
For  example, a  legislator  could  be a  teacher  and gain  from                                                               
geographical  difference  pay,  as  well  as  a  cost  of  living                                                               
adjustment (COLA),  merit increase,  or step  increase in  his or                                                               
her  union contracts.  She was  even unsure  how it  would affect                                                               
spousal  travel to  conferences. She  pointed out  that sometimes                                                               
Native  corporations also  benefit.  She  said that  [Conceptual]                                                               
Amendment 3 would result in  micromanagement. Further, she had no                                                               
idea what her  children invest in. She  emphasized the importance                                                               
of ethics laws, but she opposes [Conceptual] Amendment 3.                                                                       
                                                                                                                                
2:06:38 PM                                                                                                                    
SENATOR SHOWER  said he is neutral.  He said the rules  are black                                                               
or white,  it is  either right  or wrong,  and people  are either                                                               
ethical or  not. He agreed  that people should  behave ethically,                                                               
but  sometimes  people  behave   poorly.  He  asked  for  further                                                               
clarification on the impact of removing the $1,000.                                                                             
                                                                                                                                
2:07:40 PM                                                                                                                    
SENATOR COGHILL referred to the  actual language [of [Conceptual]                                                               
Amendment 3].                                                                                                                   
                                                                                                                                
               Insert "if action on the question                                                                              
                                                                                                                                
     Replace the "equity or ownership interest" language on                                                                     
     page 2, lines 20-25 with:                                                                                                  
                                                                                                                                
      could  affect the  legislator by  a financial  loss or                                                                
     gain  that  is  $1000  or more  and  greater  than  the                                                                
     resulting  financial  loss  or gain  by  a  substantial                                                                
     class of persons  to which the legislator  belongs as a                                                                
     member  of  a   profession,  occupation,  industry,  or                                                                
     region.                                                                                                                
                                                                                                                                
                                                                                                                                
He reviewed the language in  [Conceptual] Amendment 3. He offered                                                               
his belief  that actions by  a "bad actor"  would need to  be run                                                               
throughout the new formulation. He  pointed out that the language                                                               
[in  SB  89]  requires  legislators  to  declare  a  conflict  of                                                               
interest  for  any gain  or  loss.  He  offered his  belief  that                                                               
changing  one thing  in the  ethics law  will ripple  through it.                                                               
Further,   ambiguity  already   exists  on   the  definition   of                                                               
"substantial  benefit"  and  he  was  unsure  of  the  impact  of                                                               
[Conceptual] Amendment 3. The legislature's  goal is to penetrate                                                               
the cloud created  by ambiguous language [in House  Bill 44 law].                                                               
He said that he appreciates  this conversation. He said he serves                                                               
on the Select Committee on  Legislative Ethics and that committee                                                               
examines  every  word.  He  emphasized   that  SB  89  will  hold                                                               
legislators to  an appropriate standard.  However, he  was unsure                                                               
if  [Conceptual]   Amendment  3  would  add   elements  that  may                                                               
adversely impact the overall bill.                                                                                              
                                                                                                                                
2:09:54 PM                                                                                                                    
SENATOR  SHOWER said  he  is not  often  comfortable with  intent                                                               
language.  He said  that [Conceptual]  Amendment  3 would  create                                                               
uncertainty and the potential  for unintended consequences, which                                                               
is what happened under House Bill 44 law.                                                                                       
                                                                                                                                
2:10:28 PM                                                                                                                    
CHAIR HUGHES commented that high  school jobs, including earnings                                                               
from babysitting,  could potentially fall under  that low number.                                                               
She expressed  concern about  the language  "loss and  gain." She                                                               
currently has declared  a conflict of interest  since her husband                                                               
is  in  the health  care  industry.  Although  she could  have  a                                                               
conflict of interest by voting for  a bill that could result in a                                                               
financial loss  for her husband,  she would also want  to support                                                               
measures that reduce  health care cost. She  believes health care                                                               
costs  are too  high in  Alaska, she  said. She  highlighted that                                                               
legislators  are  "hit  from both  sides"  with  these  competing                                                               
conflicts. It gives her an aversion  to "loss and gain" since she                                                               
has seen how "harm and benefit"  has played out [in House Bill 44                                                               
law]. Therefore, she will not support [Conceptual] Amendment 3.                                                                 
                                                                                                                                
2:12:11 PM                                                                                                                    
SENATOR KIEHL  said that he  is amendable to removing  the $1,000                                                               
from [Conceptual]  Amendment 3  since his goal  is not  to create                                                               
uncertainty. However,  the language  in SB 89  does not  apply to                                                               
salary unless the  legislator owns the business, since  it is not                                                               
an equity or  ownership stake. Therefore, a  legislator who might                                                               
stand  to  benefit  or  incur  a loss  is  not  covered  by  this                                                               
language.  He  pointed  out that  public  benefit  programs  have                                                               
variable value  and legislators would  not be covered  since they                                                               
do not  have an equity  or ownership interest in  those programs.                                                               
He  agreed that  gaps  exist,  but the  goal  is  to ensure  that                                                               
conflicts of  interest are captured  related to  any legislation.                                                               
Further,  the   "substantial  class   of  persons"   language  is                                                               
important. He acknowledged that  Senator Reinbold is correct that                                                               
[Conceptual] Amendment 3  would not apply to someone  voting on a                                                               
budget bill.  Thus far, he has  not been able to  find a solution                                                               
to address budget bills. He signaled  he would be amendable to an                                                               
amendment  to remove  the  $1,000. However,  it  is important  to                                                               
ensure  that the  legislature address  potential conflicts,  in a                                                               
real sense, keeping the "bad actor" in mind.                                                                                    
                                                                                                                                
2:15:14 PM                                                                                                                    
CHAIR  HUGHES said  this is  a  good conversation.  She said  the                                                               
sponsor indicated that every word  matters, which is her concern.                                                               
She further  expressed concern that  this was being done  "on the                                                               
fly"  and salaries  could be  something the  Select Committee  on                                                               
Legislative Ethics may wish to consider.                                                                                        
                                                                                                                                
CHAIR HUGHES maintained her objection.                                                                                          
                                                                                                                                
2:16:11 PM                                                                                                                    
SENATOR MICCICHE asked to correct  a misstatement for the record.                                                               
He referred  to [page 2, lines  19-20] of SB 89.  The comma after                                                               
"lease,  or  other enterprise  if  the  interest is  substantial"                                                               
separates "an equity  or ownership interest," in  his view. These                                                               
are two  different minor sections  and legislators'  salaries are                                                               
affected and always have been.  This is why the language "benefit                                                               
or loss" is  important, he said. He emphasized  that if unethical                                                               
legislators would let  their decisions be influenced  by the fact                                                               
that they  might get a demotion  from the industry in  which they                                                               
work, they could change the  way they would vote. The legislature                                                               
has always interpreted that if  a vote could potentially affect a                                                               
legislator's salary, that  if the legislator was the  only one in                                                               
the pool or if it  affected the individual legislator differently                                                               
than  other members  in  the  pool, it  would  be  a conflict  of                                                               
interest.                                                                                                                       
                                                                                                                                
He referred to  page 2, line [19],  and read "  has  an equity or                                                               
ownership [A FINANCIAL] interest  in a business, investment, real                                                               
property,  lease,   or  other  enterprise  if   the  interest  is                                                               
substantial    ."  He   emphasized  that   the  legislature   has                                                               
interpreted  this  language  to  include  employment,  otherwise,                                                               
legislators  would not  declare potential  or real  conflicts. He                                                               
said that language specifically limits  it to a contract that the                                                               
legislator was  being offered. He concluded  that the legislature                                                               
has  plenty of  precedent  and [conflict  of interest]  certainly                                                               
should include a legislator's job.                                                                                              
                                                                                                                                
2:18:33 PM                                                                                                                    
CHAIR  HUGHES  asked if  the  language  "other enterprise"  would                                                               
capture everything else.                                                                                                        
                                                                                                                                
SENATOR MICCICHE responded that was his view.                                                                                   
                                                                                                                                
2:19:24 PM                                                                                                                    
MR. WAYNE said he was not  aware of an ethics opinion that treats                                                               
"other  enterprise"  to  include  salary. Although  it  could  be                                                               
interpreted that way, it  might be  a little bit of a stretch. He                                                               
said [the language] is not very clear.                                                                                          
                                                                                                                                
2:20:08 PM                                                                                                                    
CHAIR HUGHES said  that adding that there has  been precedent set                                                               
over  the years  with  legislators standing  up  and declaring  a                                                               
potential  conflict  of interest  with  regard  to salaries.  She                                                               
asked whether precedent would affect it.                                                                                        
                                                                                                                                
MR. WAYNE said if she is  speaking of declarations of conflict of                                                               
interest on  the floor, that  he cannot speak  to what is  in the                                                               
minds of people  making those declarations. There  has never been                                                               
an instance  in which  someone has been  allowed to  abstain from                                                               
voting after declaring a conflict  of interest under the old rule                                                               
[pre-House Bill 44 law], he said.                                                                                               
                                                                                                                                
SENATOR MICCICHE offered his belief  that whether legislators are                                                               
allowed to  abstain is irrelevant.  Instead, what is  relevant is                                                               
that legislators who held jobs  or invested in industries outside                                                               
of the legislature  stood up every time to declare  a conflict of                                                               
interest  due to  the salary  aspect. He  maintained that  action                                                               
created  precedent.   He  interpreted   the  phrase,   "or  other                                                               
enterprise"  to mean  that if  any legislator  has an  enterprise                                                               
which is  affected outside  a substantial  class of  persons, the                                                               
legislator has a conflict of  interest and it should be declared.                                                               
The legislator should ask to be  excused from voting, he said. He                                                               
acknowledged that  in his six  years serving in  the legislature,                                                               
he  has not  seen  someone  be allowed  to  abstain from  voting.                                                               
However, he also has not seen  any instance in which a person had                                                               
a contract that affected them  differently than others. If he was                                                               
aware  of  any instance  in  which  a  member received  a  direct                                                               
benefit that  members of  a substantial  class or  other Alaskans                                                               
were not receiving, he would  stand up and identify the conflict.                                                               
Although  he does  not  have a  contract test  case  to cite,  he                                                               
imagined  that  the  person  would be  allowed  to  abstain  from                                                               
voting.                                                                                                                         
                                                                                                                                
2:22:32 PM                                                                                                                    
SENATOR REINBOLD said she will  vote no on [Conceptual] Amendment                                                               
3.  She related  a scenario,  such that  if the  [state built]  a                                                               
trail around her  house that increased the value of  her home, it                                                               
would  impact  her.  She  illustrated   a  number  of  scenarios,                                                               
including   parks  and   recreational   or   grant  funding   for                                                               
nonprofits. She  questioned whether she  would need to  declare a                                                               
conflict or vote  against this funding since it  might affect her                                                               
or her spouse.                                                                                                                  
                                                                                                                                
2:23:56 PM                                                                                                                    
CHAIR HUGHES turned  to grammar to better  understand the effect.                                                               
She referred  to line  21 of  SB 89, which  read, "interest  in a                                                               
business, investment,  real property  lease, or  other enterprise                                                               
if the interest  is substantial  " She said it  repeats the word,                                                               
"interest" so  it is separate. It  is not an equity  ownership in                                                               
another  enterprise,  she  said.  She maintained  that  the  bill                                                               
covers some of  the things the sponsor  of [Conceptual] Amendment                                                               
3 intended.                                                                                                                     
                                                                                                                                
SENATOR  KIEHL   acknowledged  that  grammar  is   important.  He                                                               
referred to the  language, that the second "interest"  is part of                                                               
a subjunctive clause  "if the interest" which  is descriptive. It                                                               
is not a separate "interest." If  one reviews what SB 89 would do                                                               
without  [Conceptual] Amendment  3,  the sentence  would have  to                                                               
read  without the  preliminary clause  "of  equity and  ownership                                                               
interest." It would  need to read, "a legislator may  not vote on                                                               
a  question  if the  legislature  has  other enterprise,  if  the                                                               
interest is  substantial." He said  that does not make  sense and                                                               
would be  an ungrammatical  interpretation. He  acknowledged that                                                               
the bill  has [other committee  referrals] and the  committee has                                                               
held  the substantive  discussion. He  believes pretty  strongly,                                                               
supported by  an answer  from legislative  legal counsel  that as                                                               
written  it does  not cover  salary. He  offered his  belief that                                                               
[Conceptual] Amendment  3 will address  this, even if it  has the                                                               
same  threshold as  disclosures. It  would  still be  based on  a                                                               
substantial  class. He  maintained his  support for  [Conceptual]                                                               
Amendment 3.                                                                                                                    
                                                                                                                                
2:27:02 PM                                                                                                                    
CHAIR  HUGHES clarified  that  grammatically  the language  would                                                               
read, "if  the legislature has  an enterprise if the  interest is                                                               
substantial." She maintained her objection.                                                                                     
                                                                                                                                
2:27:25 PM                                                                                                                    
A  roll call  vote was  taken. Senator  Kiehl voted  in favor  of                                                               
[Conceptual]  Amendment   3  and  Senators   Micciche,  Reinbold,                                                               
Shower,  and Hughes  voted  against  it. Therefore,  [Conceptual]                                                               
Amendment 3 failed by a 1:4 vote.                                                                                               
                                                                                                                                
2:27:51 PM                                                                                                                    
SENATOR  MICCICHE offered  his belief  that he  did not  hear any                                                               
resolve  from  legislative legal  counsel  on  whether salary  is                                                               
included.  He said  he heard  that "it  would be  a stretch."  He                                                               
reminded people  that ethics laws  affect the  ethical, generally                                                               
ethical, and  nearly ethical,  but do  not affect  the unethical.                                                               
Any legislator that  had ethical issues looked  ethical on paper.                                                               
It was  outside of  the reporting and  ethics laws  where illegal                                                               
and unethical  activities occurred.  This committee is  trying to                                                               
change the ethics law, so that  it is functional. This bill would                                                               
allow legislators  to remain  ethical yet allow  them to  work as                                                               
legislators  and represent  their  constituents. He  said he  has                                                               
worked  in  the  oil  and  gas and  fishing  industries,  but  he                                                               
represents a district  of people in the oil and  gas industry and                                                               
the fishing industry.  That is how it works  in state government,                                                               
he said. He said that the  United States is a representative form                                                               
of  government, so  miners from  western states  represent mining                                                               
districts.  Alaska is  comprised  of legislators  who  work in  a                                                               
multitude of  industries, as fishermen,  as teachers, in  the oil                                                               
and gas  industry, along with  many others. He  hoped legislators                                                               
understand the  various industries  in Alaska [because  they have                                                               
expertise  in them],  but that  they  do not  benefit from  their                                                               
actions.  He characterized  it as  a good  balance. He  said that                                                               
locks  on  doors  are  for  those who  are  honest  and  not  for                                                               
criminals, since criminals  can find a way in anyway.  He said he                                                               
thought that was a way to consider this.                                                                                        
                                                                                                                                
2:30:10 PM                                                                                                                    
SENATOR KIEHL stated the committee  spent all its time on Section                                                               
2 of SB 89. He said that  Section 1 would fix the official action                                                               
of House  Bill 44 law. He  agrees with the sponsor  that that law                                                               
went too  far and made it  difficult for legislators to  do their                                                               
jobs. He  offered his belief  that Section  2 dials back  too far                                                               
some of the  reforms in House Bill  44 law. He also  agreed it is                                                               
difficult to catch  the unethical. He said he will  not object to                                                               
moving the  bill, but he  was unsure he could  ultimately support                                                               
it.                                                                                                                             
                                                                                                                                
SENATOR REINBOLD moved  to report SB 89,  work order 31-LS0209\U,                                                               
as amended,  from committee  with individual  recommendations and                                                               
attached zero fiscal note.                                                                                                      
                                                                                                                                
There being no objection, the  CSSB 89(JUD) was reported from the                                                               
Senate Judiciary Standing Committee.                                                                                            
                                                                                                                                
2:32:53 PM                                                                                                                    
CHAIR HUGHES  stated that the  committee gives  Legislative Legal                                                               
Services,  Legislative Affairs  Agency, the  ability to  make any                                                               
conforming    changes.    She   reviewed    upcoming    committee                                                               
announcements.                                                                                                                  

Document Name Date/Time Subjects
SB 89 - Bill - 3 13 19.PDF SJUD 3/18/2019 1:30:00 PM
SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Sponsor Statement - 3 13 19.pdf SJUD 3/18/2019 1:30:00 PM
SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Sectional Analysis - 3 13 19.pdf SJUD 3/18/2019 1:30:00 PM
SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - PowerPoint Presentation - 3 13 19.pptx SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Supporting Document - AO 19 01 - 3 13 19.pdf SJUD 3/18/2019 1:30:00 PM
SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Explanation of Changes 3 22 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Most Recent Version of Bill 31-LS0209 Version K 3 22 19.PDF SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Fiscal Note - Legislative Affairs Agency 3 22 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Request to Calendar 3 22 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Sectional Analysis 3 22 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Sponsor Statement 3 22 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Supporting Document - AO 19 01 - 3 22 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Supporting Document - AO 18-05 - 3 22 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Supporting Document - PowerPoint Presentation - 3 22 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Sectional Analysis - 3 13 19.pdf SJUD 3/20/2019 1:30:00 PM
SB 89