03/22/2007 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB109 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 109 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 22, 2007
1:09 p.m.
MEMBERS PRESENT
Representative Jay Ramras, Chair
Representative Nancy Dahlstrom, Vice Chair
Representative John Coghill
Representative Bob Lynn
Representative Ralph Samuels
Representative Max Gruenberg
Representative Lindsey Holmes
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Berta Gardner
COMMITTEE CALENDAR
HOUSE BILL NO. 109
"An Act relating to the requirement for candidates, groups,
legislators, public officials, and other persons to submit
reports electronically to the Alaska Public Offices Commission;
relating to disclosures by legislators, public members of the
Select Committee on Legislative Ethics, legislative directors,
public officials, and certain candidates for public office
concerning services performed for compensation and concerning
certain income, gifts, and other financial matters; requiring
legislators, public members of the Select Committee on
Legislative Ethics, legislative directors, public officials, and
municipal officers to make certain financial disclosures when
they leave office; relating to insignificant ownership interest
in a business and to gifts from lobbyists for purposes of the
Alaska Executive Branch Ethics Act; relating to certain
restrictions on employment after leaving state service for
purposes of the Alaska Executive Branch Ethics Act; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 109
SHORT TITLE: DISCLOSURES & ETHICS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/25/07 (H) READ THE FIRST TIME - REFERRALS
01/25/07 (H) STA, JUD
01/30/07 (H) STA AT 8:00 AM CAPITOL 106
01/30/07 (H) Heard & Held
01/30/07 (H) MINUTE(STA)
02/03/07 (H) STA AT 10:00 AM SPEAKER'S CHAMBER
02/13/07 (H) STA AT 8:00 AM CAPITOL 106
02/13/07 (H) <Postponed Pending Subcommittee Report>
02/15/07 (H) STA AT 8:00 AM CAPITOL 106
02/15/07 (H) <Postponed Pending Subcommittee Report>
02/20/07 (H) STA AT 8:00 AM CAPITOL 106
02/20/07 (H) <Postponed Pending Subcommittee Report>
02/22/07 (H) STA AT 8:00 AM CAPITOL 106
02/22/07 (H) Heard & Held
02/22/07 (H) MINUTE(STA)
02/27/07 (H) STA AT 8:00 AM CAPITOL 106
02/27/07 (H) Heard & Held
02/27/07 (H) MINUTE(STA)
03/01/07 (H) STA AT 8:00 AM CAPITOL 106
03/01/07 (H) Heard & Held
03/01/07 (H) MINUTE(STA)
03/03/07 (H) STA AT 10:00 AM CAPITOL 106
03/03/07 (H) Moved CSHB 109(STA) Out of Committee
03/03/07 (H) MINUTE(STA)
03/07/07 (H) STA RPT CS(STA) NT 3DP 1NR 3AM
03/07/07 (H) DP: ROSES, DOLL, LYNN
03/07/07 (H) NR: JOHANSEN
03/07/07 (H) AM: JOHNSON, COGHILL, GRUENBERG
03/19/07 (H) JUD AT 1:00 PM CAPITOL 120
03/19/07 (H) Heard & Held
03/19/07 (H) MINUTE(JUD)
03/20/07 (H) JUD AT 1:00 PM CAPITOL 120
03/20/07 (H) Heard & Held
03/20/07 (H) MINUTE(JUD)
03/21/07 (H) JUD AT 1:00 PM CAPITOL 120
03/21/07 (H) Heard & Held
03/21/07 (H) MINUTE(JUD)
03/22/07 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
MEGAN KRUZICK
Ninilchik, Alaska
POSITION STATEMENT: Provided comments regarding proposed
Amendment 24 to HB 109.
EARTHA FIERRO
Wasilla, Alaska
POSITION STATEMENT: Provided comments regarding proposed
Amendment 24 to HB 109.
DANIEL CHAPPELL
Glennallen, Alaska
POSITION STATEMENT: Provided comments regarding proposed
Amendment 24 to HB 109.
HEIDI DRYGAS, General Counsel
Public Employees Local 71
Alaska District Council of Labors
Anchorage, Alaska
POSITION STATEMENT: Testified in support of proposed
Amendment 24 to HB 109.
JOHN FARLEIGH
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 109, provided
comments.
PAUL D. KENDALL
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 109, provided
comments.
REPRESENTATIVE PAUL SEATON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided comments and responded to
questions during discussion of HB 109.
DAVID G. SHAFTEL, Attorney at Law
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 109, provided
comments regarding blind trusts and responded to questions.
DAN WAYNE, Attorney
Legislative Legal Counsel
Legislative Legal and Research Services
Legislative Affairs Agency (LAA)
Juneau, Alaska
POSITION STATEMENT: As the drafter, provided comments and
responded to questions during discussion of HB 109.
BROOKE MILES, Director
Alaska Public Offices Commission (APOC)
Department of Administration (DOA)
Anchorage, Alaska
POSITION STATEMENT: Provided comments and responded to
questions during discussion of HB 109.
REPRESENTATIVE MARK NEUMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided comments and responded to
questions during discussion of HB 109.
TAMARA COOK, Director
Legislative Legal and Research Services
Legislative Affairs Agency (LAA)
Juneau, Alaska
POSITION STATEMENT: Responded to questions during discussion of
HB 109.
ACTION NARRATIVE
CHAIR JAY RAMRAS called the House Judiciary Standing Committee
meeting to order at 1:09:13 PM. Representatives Holmes,
Gruenberg, Dahlstrom, Coghill, Lynn, and Ramras were present at
the call to order. Representative Samuels arrived as the
meeting was in progress. Representative Gardner was also in
attendance.
HB 109 - DISCLOSURES & ETHICS
1:09:35 PM
CHAIR RAMRAS announced that the only order of business would be
HOUSE BILL NO. 109, "An Act relating to the requirement for
candidates, groups, legislators, public officials, and other
persons to submit reports electronically to the Alaska Public
Offices Commission; relating to disclosures by legislators,
public members of the Select Committee on Legislative Ethics,
legislative directors, public officials, and certain candidates
for public office concerning services performed for compensation
and concerning certain income, gifts, and other financial
matters; requiring legislators, public members of the Select
Committee on Legislative Ethics, legislative directors, public
officials, and municipal officers to make certain financial
disclosures when they leave office; relating to insignificant
ownership interest in a business and to gifts from lobbyists for
purposes of the Alaska Executive Branch Ethics Act; relating to
certain restrictions on employment after leaving state service
for purposes of the Alaska Executive Branch Ethics Act; and
providing for an effective date." [Before the committee was
CSHB 109(STA), as amended.]
CHAIR RAMRAS, referring to Amendment 24, said that he doesn't
feel that HB 109 is the proper vehicle with which to address the
issue of nepotism; Amendment 24, labeled 25-GH1059\O.24, Wayne,
3/20/07, read:
Page 27, following line 26:
Insert a new bill section to read:
"* Sec. 41. AS 39.52.910 is amended by adding a new
subsection to read:
(d) Nothing in this chapter
(1) supersedes AS 39.90.020; or
(2) precludes a person from being in an
employment relationship with a member of the person's
immediate family if the person
(A) does not supervise the immediate family
member; or
(B) supervises the immediate family member
but exercise of the supervision is only routine; under
this subparagraph, supervision is routine only if, as
to a decision that requires the person's exercise of
independent judgment, the person may not act or
recommend the family member's
(i) appointment to employment, including
hiring, transferring, laying off, and rehiring;
(ii) discipline, including suspension,
discharge, demotion, and issuance of written warnings;
or
(iii) grievance adjudication, including
responding to a first level grievance under a
collective bargaining agreement."
Renumber the following bill sections accordingly.
Page 28, line 11:
Delete "secs. 42 and 43"
Insert "secs. 43 and 44"
REPRESENTATIVE DAHLSTROM expressed a willingness to assist in
creating a specific bill pertaining to the issue of nepotism,
should the amendment be withdrawn.
REPRESENTATIVE LYNN opined that [HB 109] should address
nepotism, and that many constituents are awaiting a resolution
on this issue. Due to the pending passage of the bill, and the
timeliness of the issue, he said he is declining to withdraw his
amendment pending further discussion. He stated, "I think it's
a good amendment."
CHAIR RAMRAS offered that it could affect the bargaining
abilities of unions, and suggested that it may not be in the
best interest of those organizations to have it addressed as an
amendment to this bill.
1:14:40 PM
MEGAN KRUZICK relayed that she worked for two seasons as a
"fighter," out of the Soldotna Department of Transportation &
Public Facilities (DOT&PF) office. However, when called back to
work for the 2005 season, upon her arrival at the office she was
told that she was ineligible for activation due to nepotism.
She reported that after pursuing the chain of command within the
department, she filed a grievance with her union. A year of
arbitration ensued, resulting in a ruling against her claim; her
employment was considered nepotism. Having expected to continue
with the union and maintain her seasonal job with the state,
this disruption of service caused unexpected repercussions in
her life, which she recounted. The ruling was made because her
father also works for the state; however, she assured the
committee that her employment was not due to favoritism since
she went through the same process as any other applicant. As a
dues-paying member of the union, she said she feels that she
shouldn't be punished simply for having a relative who also
works for the state. She said that she would appreciate being
able to work for the state again.
CHAIR RAMRAS asked if she is currently eligible for rehire with
the state.
MS. KRUZICK said that although she has been called back, she has
also been told again that she may not work because of nepotism,
and so she remains unclear about her eligibility.
1:17:53 PM
EARTHA FIERRO described her history of working for three seasons
with the state, passing the test to become a permanent employee,
and, in 2005, being told that she would not be able to be hired
as a permanent employee due to nepotism - she has an aunt who
works for the state. She said she was informed that she could
decline her promotion and continue working as a non-permanent
employee, though she was also told that she would not be able to
work for the season based on a freeze that was imposed.
Recently, however, she has been offered a [non-permanent]
position in Fairbanks, but as a Wasilla resident, she is unable
to accept the position.
1:19:24 PM
DANIEL CHAPPELL said that he has worked for 17 years for the
DOT&PF, out of Tazlina, and that he'd recently requested a
transfer to the maintenance and operations section (M&O), but
was denied because his long-term "girlfriend" works in the M&O
administration office. The denial was cited as nepotism, and it
was suggested that his girlfriend could possibly alter
timesheets or manipulate schedules for his benefit. He
characterized this as a rude affront to his girlfriend's ethical
behavior. Neither would it be possible, he reported, as it is
the foreman who has the authority of overseeing the timesheets
and managing the work schedules. The result is that he is
continuing to work in the position which he has held for so many
years. He read the letter from his supervisor, which indicated
that although he exceeds qualifications and holds seniority, he
cannot be offered the operator position due to the relationship
between him and his girlfriend; they may not both work in the
M&O section. He pointed out that this would have been a lateral
position change, with no financial gain. After so many years of
ethical, committed work, he said that he feels that he has been
shortchanged.
REPRESENTATIVE LYNN asked for information regarding the area
served by the DOT&PF office in Tazlina, the population of that
area, and the specific job titles that he and his girlfriend
hold.
MR. CHAPPELL responded that the service area encompasses Tok,
Glennallen, Valdez, Paxson, and Nelchina. Including the Copper
River Basin, the population is approximately 3,500 people. He
reiterated that his girlfriend is an M&O administrative clerk,
and he works for Statewide Equipment Fleet (SEF); although they
would be working in the same building, they would work for
different bargaining unions; he is with Public Employees Local
71, and she is with the Alaska State Employees Association
(ASEA).
1:26:24 PM
HEIDI DRYGAS, General Counsel, Public Employees Local 71, Alaska
District Council of Labors, stated support for Amendment 24,
stressing that as previously testified to, the current Alaska
Executive Branch Ethics Act is preventing state employees from
having appropriate job opportunities, though it in no way
affects or restricts the unions' bargaining abilities. She
acknowledged that there may be some confusion regarding what
Amendment 24 will address. The state workers represented by
Local 71 are employees under the executive branch, working for
the administration in the various departments; thus the Alaska
Executive Branch Ethics Act governs each of these positions.
She stated:
This amendment will restore the long-standing policy
that would prevent family members from supervising
other family members, but would allow working
relationships between family members as long as
neither one is a supervisor of the other. It
addresses lower-level, non-supervisory employees, and
not mid- or upper-level management. ... We have no
problem with preventing family members from working
together when one is a supervisor over the other.
[Currently, however,] ... two flaggers [for example]
aren't able to work together on the same crew, because
they're family members, even though they're the same
wage grade, [and] neither one of them has authority
over the other. ... This amendment would fix that
problem.
MS. DRYGAS opined that it is not the intent of the Alaska
Executive Branch Ethics Act to prohibit this type of benign
situation between "everyday working folks," wherein many tasks
are routine in nature and are governed by the collective
bargaining agreement or approved by a supervisor.
MS. DRYGAS referred to the attorney general's March 2005
memorandum, and pointed out that it analyzed
supervisory/subordinate relationships. The policy change, which
this memorandum caused, has had a significant impact on small
communities. She stressed the need to review the language of
the Alaska Executive Branch Ethics Act in order to gain a clear
understanding of the intent. She opined that what is being
carried out by current policy is not in response to actual
"substantial and material conflicts" as set forth in the
original Act, but is instead causing a problem for these
employees, and Amendment 24 will rectify the situation.
1:31:34 PM
JOHN FARLEIGH relayed that a section of a previous version of HB
109 appears to be missing in CSHB 109(STA). He described the
section and stressed the importance of having it included in the
bill.
CHAIR RAMRAS affirmed that the issue has been previously dealt
with via an amendment, and thanked Mr. Farley for his comments.
1:33:37 PM
PAUL D. KENDALL directed the committee's attention to his letter
of January 4, 2007, included in members' packets. He opined
that the issue [of ethics] has become very complex and perhaps
beyond the average person's ability to comprehend. Referring to
his letter, he said:
It has become common knowledge to us, the general
citizenry, that many of those to whom we have conveyed
the "highest honor in the land" are failing us in
their representations of our public's business affairs
and matters, thereby jeopardizing our general welfare,
safety, well-being, and the pursuit of happiness. The
time has come for us citizens to impose a higher
standard of expectations and performances from our
public servants' behaviors. And in order to achieve a
greater degree of responsible, honest, fair, and
truthful conduct, we must declare, design, and impose
a higher magnitude of penalty.
We must give our jury system the latitude - discretion
- to make the final determination of a description of
a public servant's deeds as either "Honorable Conduct"
or "Less than Honorable Conduct," along with the
severest penalties, fines, and actions so as to stop
the continuing malaise of corrupted conduct by our
public servants. If we do not protect and establish
integrity and value for the fundamental laws that
govern our society, and hold accountable those who
[we] elect to represent those values and us with
"Honorable Conduct," then we have in essence
undermined our entire ... legal system and the very
fabric of our society.
We must in all fairness set a bar and a standard that
gives a clear and obvious forewarning and notification
that any public servant who betrays the full faith and
trust of the general citizenry will pay a heavy and
just price with short and long term impacts and
consequences in an expedient manner of trial and
sentencing. How can we hold to accountability the
common criminal for an impact born out of an act of
desperation while we let those who represent the
highest law and honor of the land go nearly scot-free
for an act of unmitigated greed and self indulgence
with impacts far beyond what the individual criminal
might do?
In closing, I believe that time is of the essence or
at least at hand for us today to end this historical,
continuing and ongoing, betrayal of the public's
conveyances of their full faith and trust in our
public leadership. I realize that I have focused
primarily on our need to and means of judgment and
penalties here in this writing, because we have to
begin our work on those foundational aspects to begin
correcting our political representations,
infrastructure, and process. Those fundamental
aspects being the establishment of clear and
meaningful reward and punishment for one's actions.
... This goes to reference the Act relating to
campaign financing. ...
1:38:24 PM
CHAIR RAMRAS closed public comment for the day on HB 109.
CHAIR RAMRAS reiterated his belief that the change proposed by
Amendment 24 should not be in HB 109. He said that in speaking
with John Bitney, legislative liaison for Governor Palin, he has
received assurance that the administration will circulate a new
opinion on how frontline management should interpret the
nepotism rule, thereby addressing the problems referred to by
Ms. Drygas. He assured the committee that he will follow-up
with the executive branch to ensure that such action has taken
place during the next two weeks, and encouraged interested
parties to call his office for updates.
REPRESENTATIVE LYNN opined that given the need for people to
earn a living with appropriate ethical statutes imposed,
Amendment 24 and HB 109 is the means by which this should be
addressed.
1:41:56 PM
REPRESENTATIVE PAUL SEATON, Alaska State Legislature, offered
that the current statute pertaining to blind trusts is
problematic due to its generality. With this in mind, he has
been making an effort to "clean up" the blind trust statute and
make it available to administration officials. He provided an
example wherein an official, such as the commissioner of
revenue, may hold assets and receive income from stocks and
bonds; the commissioner may then be required to take action on
issues regarding the investment field, and this could pose a
conflict. He explained that a blind trust could allow greater
participation by people serving in high-ranking positions with
the State because their marketable assets could be placed in a
blind trust. He opined that [Section 32] clearly defines what
constitutes marketable assets, and said it is expected that the
trust would be managed by a trustee who would be required to
prepare the taxes and either file them or report the gross total
to the owner of the trust for filing. A sealed report of the
trust would be provided to Alaska Public Offices Commission
(APOC), and if a relevant accusation was subsequently raised,
the APOC would break the seal and release the pertinent
information.
REPRESENTATIVE COGHILL, in response to a question, relayed that
his intention is to delete that language [Section 32] should the
House Judiciary Standing Committee not find sufficient reason to
retain it.
REPRESENTATIVE DAHLSTROM asked how a trust owner would know
whether a blind trust would need to be unsealed by the APOC.
REPRESENTATIVE SEATON said that the APOC would receive trust
information from the trustee, and, then, should accusations
arise involving the blind trust, the owner would need to have
that information in order to defend himself/herself. If the
accusation requires the unsealing of the blind trust, then it is
no longer blind. He said that typically the person would be
charged with actually having knowledge about the blind trust and
taking actions or making decisions that would benefit the trust.
1:51:22 PM
DAVID G. SHAFTEL, Attorney at Law, after indicating that he
specializes in the field of trust law, reported that he and his
colleagues have reviewed [Section 32], current statute, and "the
federal blind trust form," and relayed his understanding of the
purpose of blind trusts and how they might be used under HB 109.
He suggested that the federal form could be of assistance in
developing a thorough blind trust statute because although
[Section 32] was modeled after New Jersey law, the federal form
requires that certain issues be addressed. Issues such as
protection for and flexibility of the trustee - he/she would be
held to a standard of good faith and ordinary diligence but
otherwise could not be sued for the way he/she manages the
trust; income tax reporting - the trustee should only be
providing the trustor with basic information, and the trustor
should be responsible for actually reporting his/her income and
capital gains/losses; quarterly reporting by the trustee to the
trustor; cash distributions from the trust; and annual
certificates of compliance from the trustee.
MR. SHAFTEL, in response to comments, relayed that the lack of
protection for the trustee is a glaring omission [in Section
32], and that the requirement to have the trustee file the
trustor's personal income tax return may not even be legal.
REPRESENTATIVE SEATON pointed out that the New Jersey law has
been serving that state without repercussions from the Internal
Revenue Service (IRS), and that the DOL has reviewed that law
with regard to applicability in Alaska. He suggested that the
word "or" on page 24, line 19, makes [Section 32] compliant with
the federal form.
REPRESENTATIVE COGHILL clarified that Alaska statute does
include language regarding trusts, regardless that it is general
and broad. The question to be answered, he opined, is:
When a person is in a conflict situation, because of
investments they've made, do they recuse [themselves]
from the decision and send the decision to somebody
else, or do they create this blind trust ... [thereby
creating] a whole other range of questions.
REPRESENTATIVE COGHILL maintained that if a person creates a
blind trust, such action may automatically raise an ethical
question. A "straight-up recusal" would be in keeping with the
committee's emphasis on "bright lines." He inquired about the
intent, and necessity, of the language in paragraph (6) of
Section 32 that stipulates that a trust shall be irrevocable.
REPRESENTATIVE SEATON posited that the irrevocability clause
prevents someone from setting up a blind trust merely for the
sake of convenience. A blind trust is intended to be
established by someone who is able to isolate a group of assets
that can be set aside while he/she serves in public office.
REPRESENTATIVE COGHILL asked under what circumstance would the
APOC have the authority to revoke a trust.
2:05:47 PM
REPRESENTATIVE SEATON described how an accusation could be
lodged, reviewed, and acted appropriately upon by the APOC.
REPRESENTATIVE COGHILL asked if the APOC should be put in the
position of enforcement. Currently, the APOC has been reported
to for disclosure purposes, and this would bring in a new level
of authority.
CHAIR RAMRAS observed that the committee could do one of three
things: accept the current language of Section 32; have the
drafter produce a new version [of Section 32] that incorporates
Mr. Shaftel's recommendations; or simply remove Section 32.
REPRESENTATIVE GRUENBERG requested that Mr. Wayne be provided
the latitude to confer directly with Mr. Shaftel, or whomever he
might wish to consult, in order to draft a new version of
Section 32. He expressed confidence that acceptable language
could be crafted for inclusion in the bill.
REPRESENTATIVE DAHLSTROM asked what the financial threshold is
for establishing a blind trust.
MR. SHAFTEL said that a dollar amount is not specified, and
reiterated a description and use of a blind trust. He pointed
out that establishing a blind trust would remain a voluntary
action with the amount included in the trust being left to the
discretion of the trustor.
REPRESENTATIVE GRUENBERG asked whether Section 32 should be
expanded and made available to employees below the level of
deputy commissioner, and whether the federal Act includes
provisions for the trustor to give the trustee general
directions regarding the type of investments to make. He said
he would expect such directions to be made public.
MR. SHAFTEL, in response to the latter question, stated that it
does not, though the point is well taken, as every fiduciary
will ask that type of direction of an investor.
2:17:42 PM
CHAIR RAMRAS turned the committee's attention to Amendment 26,
labeled 25-GH1059\O.42, Wayne, 3/22/07, which read:
Page 19, lines 18 - 26:
Delete all material and insert:
"(2) as to income in excess of $1,000
received as compensation for personal services if the
source of the income is known or reasonably should be
known to have a substantial interest in legislative,
administrative, or political action and the recipient
of the income is a legislator or legislative director,
the name and address of the source of the income,
[AND] a statement describing in detail the nature of
the services performed, the amount of the income, and
the approximate number of hours of services performed
to earn the income; additional information regarding
how the income was earned may [; IF THE SOURCE OF
INCOME IS KNOWN OR REASONABLY SHOULD BE KNOWN TO HAVE
A SUBSTANTIAL INTEREST IN LEGISLATIVE, ADMINISTRATIVE,
OR POLITICAL ACTION AND THE RECIPIENT OF THE INCOME IS
A LEGISLATOR OR LEGISLATIVE DIRECTOR, THE AMOUNT OF
INCOME RECEIVED FROM THE SOURCE SHALL] be disclosed;"
REPRESENTATIVE DAHLSTROM made a motion to adopt Amendment 26.
REPRESENTATIVE SAMUELS objected for the purpose of discussion.
2:19:06 PM
DAN WAYNE, Attorney, Legislative Legal Counsel, Legislative
Legal and Research Services, Legislative Affairs Agency (LAA),
referred to paragraph (2) of Section 26, and said that the
semicolon on page 19, line 20, creates two scenarios. Prior to
the semicolon, the language refers to anyone receiving income in
excess of $1,000 for personal services, and, following the
semicolon, the language deals with someone having the same
income but addresses the source of the personal services.
Amendment 26 removes the semicolon and creates one scenario
dealing with instances involving substantial interest in
legislative, administrative, or political action. Without
Amendment 26, someone who might be remodeling a legislator's
house, doing work in excess of $1,000, would need to have
his/her name and address reported, with a description of the
services performed, despite their disinterest in political
action.
CHAIR RAMRAS surmised that this takes a non-retail event and
treats it as a retail event.
REPRESENTATIVE HOLMES expressed a concern that existing
requirements are being loosened rather than tightened. She
opined that Amendment 26 would serve to strip the existing
language of accountability. The legislator would be the only
person determining the relevancy of someone's services in
connection with the legislator, and she opined, "I really think
that flies in the face of what the public's been asking us to do
down here, ... to increase transparency rather than reduce
transparency."
CHAIR RAMRAS offered a scenario involving a car dealer, selling
large ticket items such as a $30,000 vehicle. As a retail
seller, a client's name or address would not be required to be
disclosed. Neither the car dealer, nor someone like himself,
with restaurant clientele, would be brought to the attention of
the APOC.
2:24:40 PM
BROOKE MILES, Director, Alaska Public Offices Commission (APOC),
Department of Administration (DOA), concurred that under current
law, information about individual clients would not need to be
disclosed by Chair Ramras. Under Amendment 26, a fundamental
change will occur, requiring the reporting of the names and
addresses of only those individuals who render compensation in
excess of $1,000 and are deemed to have an interest in a
legislative, administrative, or political action. As a point of
history, she relayed that beginning in 1997, legislators were
required to name all income sources over $100; this threshold
was changed in 1997 to $1,000, and a caveat was also added
regarding income sources who had an interest in legislative,
administrative, or political activities in Alaska. The year
2003 saw this amount increased to $5,000, and in August 2006,
the reporting threshold was decreased to $2,000. Throughout
these fluctuations, the names and addresses of income sources
have always been required to be reported.
2:26:28 PM
REPRESENTATIVE MARK NEUMAN, Alaska State Legislature, noting
that he's spoken to other legislators about the concerns he has
with the current language of the bill regarding reporting income
sources, relayed that Amendment 26 has been offered as a
possible vehicle with which to address his concern.
MS. MILES suggested as an alternative to Amendment 26 that the
APOC change the exemption regulations to be more inclusive so as
to encompass the needs of the business community and thereby
address Representative Neuman's concern.
REPRESENTATIVE NEUMAN acknowledged that that may be a good
alternative.
REPRESENTATIVE HOLMES said she is sympathetic to the fact that
[existing statutory language] might create a hardship for
individual legislators and/or their clients, but she has a
problem with the approach being taken via Amendment 26.
CHAIR RAMRAS offered his understanding that Amendment 26 poses
certain problems, and that the APOC could craft regulation that
would address the concern raised.
MS. MILES concurred, and suggested that the regulations needed
to be revisited anyway to ensure that they address the needs of
the business community.
REPRESENTATIVE DAHLSTROM withdrew Amendment 26.
2:32:36 PM
CHAIR RAMRAS referred to Amendment 24 [text provided
previously].
REPRESENTATIVE DAHLSTROM made a motion to take Amendment 24 from
the table. There being no objection, it was so ordered.
REPRESENTATIVE SAMUELS objected [to the motion to adopt
Amendment 24, originally made on 3/21/07].
REPRESENTATIVE LYNN suggested that Amendment 24 is intended to
protect the public.
REPRESENTATIVE SAMUELS opined that it would be better to address
an issue involving bargaining units via a separate piece of
legislation, and that Amendment 24 is not addressing an ethics
issue but rather a procedural issue regarding hiring.
CHAIR RAMRAS reiterated that he does not believe that HB 109 is
the appropriate vehicle for the change proposed by Amendment 24,
and that he has spoken to representatives from the executive
branch regarding the problems with the current nepotism statute
and has been assured that they will address this issue via
existing administrative authority; a new opinion dealing with
how frontline management should interpret the nepotism rules
ought to eliminate the problems that were brought before the
committee. He again assured members that he would follow up
with the administration and will report back to the committee
within a reasonable period of time.
2:36:51 PM
REPRESENTATIVE HOLMES said that although she has great
confidence in the administration's ability to fix the problem,
without a statutory change it is possible that somewhere down
the line the problem could reoccur. She offered her belief that
Amendment 24 would ensure that action is taken to address the
problem.
REPRESENTATIVE DAHLSTROM said she is not convinced that HB 109
is the appropriate vehicle with which to address the problem
raised, and again expressed a willingness to assist in
developing other legislation that would be a more appropriate
vehicle. If Amendment 24 as adopted, she remarked, "We are
opening ourselves up to a myriad of other issues ... that should
be dealt with separately ...."
REPRESENTATIVE GRUENBERG argued that the title of the bill
indicates that it is an Act related to ethics and to employment
and so the topic being discussed is well within the subject
matter. Furthermore, Amendment 24 proposes to alter a provision
of AS 39.52, the Alaska Executive Branch Ethics Act, and
nepotism is at the heart of executive ethics and is central to
the bill. Although the administration has made a commitment to
try to fix the problem outlined by the folks testifying today,
there is no assurance that the administration will actually do
so. Referring to how much of the session has already passed, he
surmised that if this issue is not addressed right now, the
legislature won't have time to deal with it either via a late
amendment to HB 109 or via another bill, and thus the problem
that the testifiers have been experiencing will still exist
during the upcoming construction season.
REPRESENTATIVE GRUENBERG suggested, therefore, that Amendment 24
be adopted, and, then, if the administration is actually able to
address the situation, this provision could be removed before
final passage of the bill.
A roll call vote was taken. Representatives Gruenberg, Lynn,
and Holmes voted in favor of Amendment 24. Representatives
Dahlstrom, Coghill, Samuels, and Ramras voted against it.
Therefore, Amendment 24 failed by a vote of 3-4.
2:42:37 PM
CHAIR RAMRAS referred to Amendment 27, which read [original
punctuation provided]:
Page 1, lines 4 -5:
Delete "restricting representation of others by
legislators and legislative employees;"
Page 13, lines 12 - 25:
Delete all material and insert:
Sec. 24.60.100. Representation. A
legislator or legislative employee who takes action
for compensation, other than compensation by the State
of Alaska, on behalf of another, including but not
limited to telephone calls and meetings and
appearances at proceedings or meetings, before an
agency, board, or commission of the municipal or
executive branch shall disclose to the committee the
name of the person on whose behalf the action is
taken, the subject matter of the action taken, and the
body before which the action is taken. The disclosure
shall be made within 48 hours of the commencement of
the action taken. A legislator or legislative
employee may not take action for compensation, other
than compensation by the State of Alaska, on behalf of
another, including but not limited to telephone calls
and meetings and appearances at proceedings or
meetings, before an agency, committee, or other entity
of the legislative branch.
REPRESENTATIVE DAHLSTROM made a motion to adopt Amendment 27.
REPRESENTATIVE COGHILL objected.
REPRESENTATIVE HOLMES relayed that Amendment 27 proposes to
replace Section 16, which currently says that a legislator or
legislative employee may not represent another person for
compensation before a municipal, legislative, or executive
branch agency, board, or commission. She offered her
understanding that the word, "represent" means an action taken
on behalf of another, whether for compensation or not, including
but not limited to telephone calls and meetings and appearances
at proceedings or meetings, and that the definition of the word,
"compensation" includes salaries, honoraria, and other types of
compensation. She opined that because of the broad definitions,
under Section 16, taking action on behalf of another could
include simply making routine telephone calls to gather
information, but such activity would be prohibited.
REPRESENTATIVE HOLMES suggested that as currently written,
Section 16 could keep legislators and legislative employees from
being able to do their jobs in the legislature during session
and from doing just about anything during the interim. She
referred to a memorandum by the drafter, Dan Wayne, dated
3/21/07, and said that under the replacement language proposed
by Amendment 27, Section 16 would simply require strict
disclosure within 48 hours of the action in question and would
exempt the work that is done by a legislator or legislative
employee on behalf of a constituent. She added:
It's a hard line to draw, what we do, and this is my
stab at shining as much light as early as possible on
anything that's going on. I've heard a lot of people
say in these halls, "You can't legislate ethics." At
the end of the day, I don't care what the rules are,
you're going to have people who are going to break
them or you're going to have people who are going to
bend them and you're going to have people who are
going find ways to make unethical choices, and I think
if you can get these things disclosed, any action that
anybody's making - I don't care what profession you're
in - any action that [you have] with the state,
[you've] got to disclose it within 48 hours. Any
interaction you're having, [that's] in any way
compensated, with a municipal agency, [you've] got to
disclose it right away. So there's a lot of attention
paid right away to what's going on.
REPRESENTATIVE DAHLSTROM asked whether, under Amendment 27, if
she went to the municipality and applied for a permit on behalf
of her husband so that he could do work as part of his business,
she would have to fill out a disclosure form within 48 hours.
REPRESENTATIVE HOLMES indicated that if Representative Dahlstrom
and her husband were being compensated for that work, then, yes,
Representative Dahlstrom would be required to disclose that
information. However, under the bill's existing language,
Representative Holmes pointed out, Representative Dahlstrom
wouldn't be able to apply for that permit at all.
REPRESENTATIVE DAHLSTROM acknowledged those points.
2:51:21 PM
TAMARA COOK, Director, Legislative Legal and Research Services,
Legislative Affairs Agency (LAA), concurred that there is a
definition of compensation, and surmised that the question being
discussed is whether a part owner of a business is in fact
receiving compensation. She said: "I suppose it is at least
possible that the part owner would be considered to ... be
receiving compensation in the form of whatever increase in value
the business has as a result of carrying on its business
enterprises."
CHAIR RAMRAS asked what the phrase, "another person" means. For
example, as a business owner, he has to call the Alcoholic
Beverage Control Board ("ABC Board"), and so would his company
be considered to be "another person?"
MS. COOK said that "a person" is defined to include essentially
all legal entities. So when used in statute, the word, "person"
is broader than "individual". In response to questions, she
offered her belief that under the current language of Section
16, Chair Ramras could not call the ABC Board on behalf of the
limited liability company (LLC) of which he is a managing
member, because the LLC would be considered to be "another
person".
CHAIR RAMRAS surmised that under Amendment 27, he would simply
have to report within 48 hours that he called the ABC Board.
MS. COOK concurred.
REPRESENTATIVE SAMUELS said he wants to avoid having someone
hire a legislator simply because the person is a legislator and
will thus be treated differently by the government entities with
whom he/she might deal.
CHAIR RAMRAS said that when he calls the ABC Board, he explains
who he is calling as - a legislator or a licensee.
MS. COOK, in response to comments and a question, explained that
the existing statutory language applies to legislators and
legislative employees, as does the language currently in Section
16, regardless of whether they are attorneys.
REPRESENTATIVE GRUENBERG, referring to Representative Samuels's
comment, opined that by following that line of reasoning, a
legislator should also be precluded from taking any action
before a government entity even on behalf of himself/herself
because the legislator will be treated differently then too. He
suggested that precluding a legislator from taking action on
behalf of another simply because the legislator might be treated
differently is an unreasonable approach to take.
3:02:24 PM
CHAIR RAMRAS opined that Section 16 won't work as currently
written.
[CSHB 109(STA), as amended, was held over with the motion of
whether to adopt Amendment 27 left pending.]
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:03 p.m.
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