Legislature(2017 - 2018)BUTROVICH 205

02/20/2018 03:30 PM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SCR 1 UNIFORM RULES: ABSTAIN FROM VOTING TELECONFERENCED
Heard & Held
+= HB 87 CONFLICT OF INTEREST: BD FISHERIES/GAME TELECONFERENCED
Heard & Held
+ HB 44 LEGISLATIVE ETHICS: VOTING & CONFLICTS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
-- Public Testimony --
          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.                                                                                            
                                                                                                                                

Document Name Date/Time Subjects
SCR1 Version A.PDF SSTA 2/20/2018 3:30:00 PM
SCR 1
SCR1 Sponsor Statement.pdf SSTA 2/20/2018 3:30:00 PM
SCR 1
SCR1 Supporting Document-Voting Recusal Provisions in 50 states.pdf SSTA 2/20/2018 3:30:00 PM
SCR 1
SCR 1 Fiscal Note SCR1-LEG-SESS-02-16-18.pdf SSTA 2/20/2018 3:30:00 PM
SCR 1
HB 87 Version A.PDF SSTA 2/20/2018 3:30:00 PM
HB 87
HB 87 Version R.PDF SSTA 2/20/2018 3:30:00 PM
HB 87
HB87 Summary of Changes A to R 2.17.17.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB87 Sponsor Statement ver R 2.3.18.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB87 Additional Document BOF BOG Information.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB87 Additional Document Historic Bills.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB87 Additional Document Board Recusal Rates.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB87 Legal Memo.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB87 Letter in Opposition RHAK 2.13.17.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB87 Letters of Support (Combined).pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB 87 Letter of Support UFA 1.24.2018.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB 87 Fiscal Note 2018.pdf SSTA 2/20/2018 3:30:00 PM
HB 87
HB 44 Version R.PDF SSTA 2/20/2018 3:30:00 PM
HB 44
HB 44 Ver R Explanation of Changes.pdf SSTA 2/20/2018 3:30:00 PM
HB 44
HB 44 Sponsor Statement.pdf SSTA 2/20/2018 3:30:00 PM
HB 44
HB 44 Supporting document-AKPIRG Support Letter.pdf SSTA 2/20/2018 3:30:00 PM
HB 44
HB 44 Supporting Document-Leg Research Report 15-423m.pdf SSTA 2/20/2018 3:30:00 PM
HB 44
HB 44 Supporting Document-LWV 1.27.17.pdf SSTA 2/20/2018 3:30:00 PM
HB 44
HB 44 Fiscal Note HB44-LEG-SESS-02-16-18.pdf SSTA 2/20/2018 3:30:00 PM
HB 44