Legislature(2017 - 2018)BUTROVICH 205
02/20/2018 03:30 PM STATE AFFAIRS
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HB 44-LEGISLATIVE ETHICS: VOTING & CONFLICTS 4:41:13 PM CHAIR MEYER called the committee back to order and announced the consideration of House Bill 44 (HB 44). 4:41:57 PM REPRESENTATIVE JASON GRENN, Alaska State Legislature, Juneau, Alaska, provided the following sponsor statement for HB 44: I believe that we all here understand the importance of a citizen legislature. We recognize the importance of having representatives and senators from all walks of life for the betterment of our state; because of that fact, the standards of ethical conduct for state public officials needs to distinguish between those minor conflicts that are unavoidable in a free society and those conflicts which are substantial and material. The intent of HB 44 is to increase transparency within the Legislature and allow the public to see with the utmost certainty that conflicts of interest in our capitol building are taken seriously. The intent of this bill is not to stop a legislator from voting on an issue as we all are elected officials sent here to represent our constituents. The language in this bill does not directly stop a legislator from voting or ever outright disqualify them, the bill just simply lays out a standard form for which a legislator can decide for themselves if they have a substantial conflict. HB 44 contains provisions to ensure conflicts are "substantial" before a legislator would be required to abstain from voting. Any benefit a legislator or a member of the legislator's immediate family might receive from supporting or opposing a particular piece of legislation would have to be greater than the benefit of the general public of Alaska that would receive due to legislation in order to require abstention. The bill recognized the responsibility of legislators to vote, except in clear cases where the outcome of the vote would result in substantial personal financial gain; this includes cases where an immediate family member or a legislator's employer would receive a large and direct financial benefit. Twenty-nine other states have language such as what we are proposing that references the potential conflict of interest from an employer. HB 44 creates transparency by creating a clear and concise standard for legislators to use to determine if they have a conflict of interest. I believe that building trust between the Legislature and public should be one of our primary concerns and HB 44 is an example of the Legislature building that trust for increased transparency. 4:45:00 PM SENATOR GIESSEL referenced page 2, line 15, of the bill: Immediately preceding 12-month period receive more than $10,000 of income. She asked if the sentence refers to actual dollars or if it would also include in-kind remuneration. 4:45:31 PM RYAN JOHNSTON, Staff, Representative Grenn, Alaska State Legislature, Juneau, Alaska, referenced the definition in AS 24.60.990 that the income is aggregate, it is not in-kind but real dollars. SENATOR GIESSEL remarked that the income could be from stocks or some kind of "other" income as well. MR. JOHNSTON replied that AS 24.60.030, section 2, line 22 addresses Senator Giessel's question regarding interest in a business, investment, real property, lease or other enterprises. He added that legislative voting on the Permanent Fund dividend (PFD) would affect all Alaskans the same way and is not a conflict. 4:47:22 PM SENATOR GIESSEL asked what problem HB 44 is trying to fix. REPRESENTATIVE GRENN replied that the bill addresses trust from the general public's standpoint by declaring conflicts in more public arenas. He noted that 29 other states have legislation that affects an employer. He summarized that HB 44 raises the conflict definition to a better standard. 4:49:56 PM SENATOR GIESSEL commented as follows: This is really a foundational question. Periodically each one of us stands before our constituents. We live in what is a form of democracy. The word "democracy" comes from a couple of Greek words that mean, "Rule by the voting district," that's what the word "democracy" means and we stand for our voting district periodically, different periods of time based on the body that we serve in, and those districts know us or the voters certainly do, the people that turn out to vote. So, I can think of particular people that this bill might target so to speak, and those particular legislators are well known by their voting district who rule by selecting that person to represent them because that person has that knowledge that they want of their views carried forward to the Legislature. So, I just put that out there, I think this is a very restrictive criterion for a state like ours which has a very small population, we represent relatively small areas, it's one thing if we were in New Jersey and we had 300,000 people in a Senate district, that's not the case here. We are well known to our voters who rule in our district. So, I just put that out there as a philosophical question; again, I don't see that there is a "why" for this. 4:51:51 PM REPRESENTATIVE GRENN explained his intent as follows: My belief as a newly elected official, finding ways that we can add trust and transparency to what we do in Juneau is important to me. You mentioned how we rule in Alaska in a small-population state and a small state with a low number of representatives and senators. Other citizen legislatures around the country, New Mexico for example, has a citizen legislature that they receive zero pay for their work as elected officials and they have a standard for conflict of interest much higher than ours in terms of when they rise to conflict, when they rise to abstain from voting. So obviously different states handle it in different ways of what they see fit and do with their citizenry and how they represent. Again for us, my belief was just elected officials I think always can improve in terms of our interaction with the public in how they know us and setting a higher standard is something I strive to do and I think that this bill helps achieve that; it also, in our language regarding family and employers, the immediate family is a definition by statute so if your spouse owned a marijuana business your voters might not know that, but if this was enacted and a conflict arose and a huge tax increase on that industry was happening, you can declare a conflict and have your conscious free that your voters know that you are enacting on their behalf and not anyone who is directly impacted by your actions. I greatly take to heart your perspective and I agree with very much of it and I think it is something that we always need to be talking about. 4:53:59 PM CHAIR MEYER agreed with Representative Grenn's comments; however, he referenced legislatures in the 1970s where the body voted on declared conflicts where the process ended up being political. He opined that the current process for conflicts has been found to be the best and fairest. He agreed with Senator Giessel that making conflicts so restrictive will result in no one running for office. He pointed out that all legislators do financial disclosures in a careful manner. He asked how the $10,000 threshold for a financial conflict was arrived at. MR. JOHNSTON replied that the $10,000 threshold was derived from AS 24.60.990 and the intent was to stay consistent with Alaska's existing statute. 4:56:41 PM SENATOR GIESSEL addressed a legislative brief written on June 23, 2015 by Jerry Anderson, administrator for the Select Committee on Legislative Ethics. She pointed out that Mr. Anderson related a close economic association with AS 24.60.070 where the committee determined that $250 or more qualifies as "substantial." She continued as follows: Here we have $250 and then someplace else we have $10,000. It seems like there is a lot of bars being set and which one do we follow? Perhaps Senator Coghill has comments on this because I know he serves on Legislative Ethics. CHAIR MEYER pointed out that the next committee of referral is the Senate Judiciary Committee, a committee that Senator Coghill chairs and can address at that time. SENATOR WILSON asked if Mr. Anderson was available to address the committee. 4:58:15 PM JERRY ANDERSON, Committee Administrator, Select Committee on Legislative Ethics, Alaska State Legislature, Juneau, Alaska, addressed the question regarding the $250 threshold for close economic association. That is not a statutory $250 amount that was part of legislation, but rather the Select Committee on Legislative Ethics interpreting and administering the act where the $250 was determined by the committee and that in particular was with regard to a shared-calling plan where it was determined that the benefit was more than $250 for each of the people that were legislators and legislative employees who shared a calling-plan; that has since been clarified where previously it was not clarified what a substantial interest was by statute. SENATOR GIESSEL referenced the same legislative brief on page 2 regarding a list of states with numerical or proportional thresholds and noted that Alaska's current statute states the following: Has or seeks contracts in excess of $10,000 annually for goods and services with the Legislature or with an agency of the state. She asked if the intent is to change the statute to $10,000 worth of income. 5:00:06 PM MR. JOHNSTON explained as follows: AS 24.60.990 is the definition for AS 24.60.030, but if you look at AS 24.60.030, which is the section that the bill references, there's actually no monetary value placed in that section for a legislator to determine a conflict of interest, so that's why we found that amount and we are trying to create that more concise list for legislators to look at to see if they did have a conflict of interest and the $10,000 amount fit with not trying to penalize like contractors, anyone that does that kind of contract work with individual clients; if they make $4,000 or $5,000 per contract building a home or doing a remodel, we did not want to penalize them for needing to do a conflict of interest or maybe ethics opinion for all of their clients if they were working for many different individuals, we just didn't want to penalize them in that way. So, the $10,000 threshold fit with that kind of idea as well. SENATOR GIESSEL remarked that she was not sure Mr. Johnston clarified her question and commented as follows: I see completely two different things. What we have in AS 24.60.990(b) talks about seeking contracts, so if you are a legislator and you are serving in the Legislature and you know that one of the agencies is going out for a contract to let's say lay carpeting in one of their buildings and the contract would be for $10,000 or more annually, that would represent a threshold for a conflict of interest; but, what is happening in this bill is you are actually broadening that out significantly to be $10,000 worth of income that is of any kind in a year. So, that's kind of what I am seeing as the contrast here and that is what I was trying to get down to. 5:02:34 PM CHAIR MEYER held HB 44 in committee and noted that public testimony remains open for the bill.