Legislature(1997 - 1998)

02/17/1998 08:12 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
       HOUSE STATE AFFAIRS STANDING COMMITTEE                                  
                 February 17, 1998                                             
                     8:12 a.m.                                                 
                                                                               
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Representative Jeannette James, Chair                                          
Representative Ivan Ivan, Vice Chairman                                        
Representative Ethan Berkowitz                                                 
Representative Kim Elton                                                       
Representative Mark Hodgins                                                    
Representative Al Vezey                                                        
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
Representative Fred Dyson                                                      
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
HOUSE BILL 312                                                                 
"An Act relating to the Public Facilities Financing Corporation;               
authorizing an advisory vote on whether the legislature should                 
appropriate $1,500,000,000 from the constitutional budget reserve              
fund to capitalize the build Alaska fund; and providing for an                 
effective date."                                                               
                                                                               
     - MOVED CSHB 312(STA) OUT OF COMMITTEE                                    
                                                                               
CS FOR SENATE BILL 105(FIN) AM                                                 
"An Act relating to legislative and executive branch ethics;                   
relating to campaign finances for candidates for state office;                 
relating to the conduct and regulation of lobbyists with respect to            
public officials; relating to the filing of disclosures by certain             
state employees and officials; making a conforming amendment to the            
definition of 'public official' for employment security statutes;              
and providing for an effective date."                                          
                                                                               
     - HEARD AND HELD                                                          
                                                                               
* HOUSE BILL 313                                                               
"An Act relating to preventive maintenance programs required for               
certain state grants; and providing for an effective date."                    
                                                                               
     - SCHEDULED BUT NOT HEARD                                                 
                                                                               
* HOUSE BILL 315                                                               
"An Act relating to operating appropriations for annual maintenance            
and repair and periodic renewal and replacement of public buildings            
and facilities; and providing for an effective date."                          
                                                                               
     - SCHEDULED BUT NOT HEARD                                                 
                                                                               
(* First public hearing)                                                       
                                                                               
PREVIOUS ACTION                                                                
                                                                               
BILL: HB 312                                                                   
SHORT TITLE: PUBLIC FACILITIES FINANCING CORP                                  
SPONSOR(S): RULES BY REQUEST OF DMT                                            
                                                                               
Jrn-Date    Jrn-Page           Action                                          
01/12/98      2026     (H)  READ THE FIRST TIME - REFERRAL(S)                  

01/12/98 2026 (H) STATE AFFAIRS, FINANCE 02/05/98 (H) STA AT 8:00 AM CAPITOL 102 02/05/98 (H) MINUTE(STA) 02/07/98 (H) STA AT 10:00 AM CAPITOL 102 02/07/98 (H) MINUTE(STA) 02/17/98 (H) STA AT 8:00 AM CAPITOL 102 BILL: SB 105 SHORT TITLE: ETHICS/LOBBYING/CAMPAIGN FINANCE SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE ETHICS COMMITTEE Jrn-Date Jrn-Page Action 02/25/97 494 (S) READ THE FIRST TIME - REFERRAL(S) 02/25/97 494 (S) STATE AFFAIRS, FINANCE 03/11/97 (S) STA AT 3:30 PM BELTZ ROOM 211 03/11/97 (S) MINUTE(STA) 03/13/97 (S) STA AT 3:30 PM BELTZ ROOM 211 03/13/97 (S) MINUTE(STA) 03/18/97 (S) MINUTE(STA) 03/25/97 (S) STA AT 3:30 PM BELTZ ROOM 211 03/25/97 (S) MINUTE(STA) 03/26/97 873 (S) STA RPT CS 3DP NEW TITLE 03/26/97 873 (S) DP: GREEN, MILLER, WARD 03/26/97 873 (S) FISCAL NOTE TO SB (ADM) 03/26/97 873 (S) ZERO FISCAL NOTE TO SB (LAA) 03/26/97 873 (S) FISCAL NOTE TO CS (ADM) 04/10/97 (S) FIN AT 5:00 PM SENATE FINANCE 532 04/10/97 (S) MINUTE(FIN) 04/10/97 (S) MINUTE(FIN) 04/15/97 (S) FIN AT 8:00 AM SENATE FINANCE 532 04/15/97 (S) MINUTE(FIN) 04/16/97 (S) FIN AT 8:00 AM SENATE FINANCE 532 04/16/97 (S) MINUTE(FIN) 04/16/97 (S) MINUTE(FIN) 04/16/97 1163 (S) FIN RPT CS 2DP 5NR NEW TITLE 04/16/97 1163 (S) DP: PEARCE; DP IF AM: PHILLIPS 04/16/97 1163 (S) NR: SHARP, PARNELL, ADAMS, TORGERSON, 04/16/97 1163 (S) DONLEY 04/16/97 1163 (S) PREVIOUS ZERO FN APPLIES (LAA) 04/16/97 1163 (S) ZERO FNS TO CS (LABOR, LAW) 04/16/97 1163 (S) PREVIOUS ZERO FN APPLIES (LAA) 04/18/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203 04/18/97 (S) MINUTE(RLS) 04/18/97 1276 (S) RULES TO CALENDAR & 1NR 4/18/97 04/18/97 1279 (S) READ THE SECOND TIME 04/18/97 1279 (S) FIN CS ADOPTED UNAN CONSENT 04/18/97 1280 (S) AM NO 1 OFFERED AND WITHDRAWN 04/18/97 1281 (S) AM NO 2 FAILED Y4 N13 E3 04/18/97 1282 (S) AM NO 3 FAILED Y4 N13 E3 04/18/97 1283 (S) AMENDMENTS 4, 5 NOT OFFERED 04/18/97 1283 (S) AM NO 6 ADOPTED Y12 N5 E3 04/18/97 1285 (S) AM NO 7 FAILED Y7 N10 E3 04/18/97 1286 (S) AM NO 8 FAILED Y5 N12 E3 04/18/97 1287 (S) AM NO 9 ADOPTED Y17 N- E3 04/18/97 1291 (S) ADVANCED TO THIRD READING UNAN CONSENT 04/18/97 1291 (S) READ THE THIRD TIME CSSB 105(FIN) AM 04/18/97 1292 (S) PASSED Y15 N2 E3 04/18/97 1292 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 04/18/97 1292 (S) LINCOLN NOTICE OF RECONSIDERATION 04/21/97 1334 (S) RECON TAKEN UP - IN THIRD READING 04/21/97 1335 (S) RETURN TO SECOND FOR AM 10 UNAN CONSENT 04/21/97 1335 (S) AM NO 10 ADOPTED Y14 N5 E1 04/21/97 1336 (S) AUTOMATICALLY IN THIRD READING 04/21/97 1337 (S) PASSED ON RECONSIDERATION Y17 N2 E1 04/21/97 1337 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 04/21/97 1370 (S) TRANSMITTED TO (H) 04/22/97 1232 (H) READ THE FIRST TIME - REFERRAL(S) 04/22/97 1233 (H) STATE AFFAIRS, FINANCE 02/05/98 (H) STA AT 8:00 AM CAPITOL 102 02/05/98 (H) MINUTE(STA) 02/12/98 (H) STA AT 8:00 AM CAPITOL 102 02/17/98 (H) STA AT 8:00 AM CAPITOL 102 WITNESS REGISTER DENNIS DEWITT, Legislative Assistant to Representative Eldon Mulder Alaska State Legislature Capitol Building, Room 501 Juneau, Alaska 99801 Telephone: (907) 465-2647 POSITION STATEMENT: Testified on behalf of Representative Multer, sponsor of HB 312. MICHAEL MORGAN, Manager Facilities Section Department of Education 801 West 10 Street, Suite 200 Juneau, Alaska 99801 Telephone: (907) 465-2647 POSITION STATEMENT: Testified on behalf of the Department of Education on HB 312. JOE DONAHUE, Member of the Legislative Ethics Committee Office P.O. Box 1736 Kenai, Alaska 99611 Telephone: (907) 283-8051 POSITION STATEMENT: Available to answer questions on SB 105. SUZIE BARNETT, Professional Assistant Legislative Ethics Committee P.O. Box 101468 Anchorage, Alaska 99510 Telephone: (907) 258-8172 POSITION STATEMENT: Available to answer questions on SB 105. BEN BROWN, Legislative Administrative Assistant to Senator Tim Kelly Alaska State Legislature Capitol Building, Room 101 Juneau, Alaska 99801 Telephone: (907) 465-4823 POSITION STATEMENT: Testified on behalf of Senator Kelly, sponsor of SB 105. ACTION NARRATIVE TAPE 98-18, SIDE A Number 0020 CHAIR JEANNETTE JAMES called the House State Affairs Standing Committee meeting to order at 8:12 a.m. Members present at the call to order were Representatives James, Elton, Hodgins and Vezey. Representative Ivan and Berkowitz arrived at 8:11 a.m. and 8:15 a.m. respectively. HB 312 - PUBLIC FACILITIES FINANCING CORP Number 0050 CHAIR JAMES announced the first order of business is HB 312, "An Act relating to the Public Facilities Financing Corporation; authorizing an advisory vote on whether the legislature should appropriate $1,500,000,000 from the constitutional budget reserve fund to capitalize the build Alaska fund; and providing for an effective date," sponsored by the Deferred Maintenance Task Force. DENNIS DEWITT, Legislative Assistant to Representative Eldon Mulder, Alaska State Legislature came forward to testify. He said the changes in proposed committee substitute LS1243\L, Cook, 2/13/98 (page 4, lines 8, 9, and 15), allow the supreme court to (indisc. - paper shuffling) there is a maintenance management plan in place for the court and board of regents to certify that the university has a maintenance plan in place. Line 15 allows again the court and the board of regents to certify for their facilities that the projects will e designed to the energy performance standards. (2) the commissioner of administration, or the supreme court for a court facility, or the Board of Regents for a University of Alaska facility, has certified that a computerized maintenance management plan, cardex system, or formal systematic means of tracking the timing and costs associated with planned and completed maintenance activities, including scheduled preventive maintenance, is in place for the facility; and (3) the commissioner of transportation and public facilities, or the supreme court for a court facility, or the Board of Regents for a University of Alaska facility, has determined that a project or element of a project will be designed in accordance with the energy performance standards adopted under AS 44.42.020(a). MR. DEWITT explained line 10 expands the maintenance plans that will be acceptable to a cardex system or a formal systematic means of tracking the timing and costs associated with planned and completed maintenance activities, this was at the request of the Department of Education and the Department of Transportation and Public Facilities (DOT/PF). The computerized program was one option, but the other two would also accomplish the goal, that there is an organized maintenance plan. He said what the task force wanted to get away from being notes on a board, and most of it in the head of one or two people who sometimes get things done or don't get things done. MR. DEWITT said line 16 deals with energy standards, DOT/PF suggested using "project or element of a project will be designed in accordance with the energy performance standards adopted under AS 44.42.020(a)." He indicated it gets to the point and is clearly understood. MR. DEWITT referred to the next change, page 10, line 29, which responds to Representative Vezey's concern regarding the timeliness of the annual report. He believes most of the agencies report on December 15, his suggestion was they go ahead with October 1 and as HB 312 moves through the committees it could be made consistent with the other reports that come in in December. Sec. 35.45.130. Annual report. Before October 1 of each year, the corporation shall submit to the governor a comprehensive report describing operations, income, and expenditures for the preceding 12-month period. The corporation shall notify the legislature that the report is available. MR. DEWITT said, finally on page 11, line 17, we expanded the definition of "public facility" to specifically include "airports," this again was at the request of DOT/PF. (3) "public facility" means a building or other structure that serves a public purpose and is constructed or maintained in whole or in part with state money, and includes a highway, an airport, and a facility or vessel of the Alaska marine highway system. Number 0399 CHAIR JAMES said if we don't say what the fiscal year is, then it's the same as the state's, and October 1 is assuming that the fiscal year will then be July 1 to June 30. MR. DEWITT replied right, it defaults to July 1 unless something else is specified. REPRESENTATIVE AL VEZEY noted that they have not adopted the proposed committee substitute. He objected to the changes made on page 4, lines 8 and 9, because he didn't see why they would want to have three entities doing our deferred maintenance planning. He indicated he didn't understand why the legislature ever gave the supreme court the authority to be a facilities manager. He said, "What we're doing here is creating a situation where three government agencies are going to come to the legislature and lobby them for deferred maintenance funding. I think that we are much wiser to limit to one, it doesn't matter which one, ... but it should be one agency coming to the legislature with a plan and not three agencies coming to the legislature completing for plans. Because I guarantee you each one of these agencies will come before the legislature with a plan and take up all of the available money." Number 0527 CHAIR JAMES said her understanding is that the plan doesn't involve money, the plan involves a process, and that the decision by the Deferred Maintenance Task Force in allocating money, that we would be planning to spend over a six-year period, is that before we're willing to allocate any of that money to anyone, we need to understand that they have a process of ongoing maintenance - that we don't fix up something and then a few years from now it's broken down again. The other issue is to have a special line item in the budget and it will be a planning process for the legislature and the Department of Administration to determine how that money is spread out. MR. DEWITT explained the two sections relate only to actions that have to be taken prior to the corporation allocating dollars for the projects. What this requires these entities to do is to certify to the corporation that they have a maintenance program in place and that they have designed their projects to energy efficient standards prior to the release of dollars. MR. DEWITT said the program for identifying projects is a separate issue and it is held by the legislature. This does not affect that. He pointed out, constitutionally, as he understands it, the court is a separate branch of government, owns it's own facilities, and that is the reason they separated the court out. He also believes there is somewhat of a constitutional issue about the ownership of the university properties. He concluded these two entities plan separately from DOT/PF in how we plan our buildings and how they build their buildings. To have DOT/PF, or the Department of Administration, sign off on those simply enters another level of bureaucracy into the planning and execution process of building. It was not that they deal differently with the legislature. It was who would certify to the Public Facilities Financing Corporation that these items had occurred. REPRESENTATIVE VEZEY indicated Mr. DeWitt confirmed what he said earlier which is we are going to create three planning entities. He said, "I can assure you that the supreme court does not have at this time a confident professional facilities planning of department, or resources. If we put this burden on them, they will come up with that (indisc.) maybe through an RSA (reimbursable services agreement) or something, but they will still come up with it. The Department of Administration is going to have to have one and we're saying that the university, or perhaps for constitutional reason is or is not going to have one and we can question why we have a Department of Public Facilities (DOT/PF) and a university department of planning and projects." He still believes it would behoove the legislature to set up one professional level of reporting and making recommendations. CHAIR JAMES stressed it isn't that we are going to be having that we the legislature whose going to be making these decisions, are going to be depending upon their plan as much as it is that we want them to be sure that they have. She noted we're asking all the school districts, and anyone in the state that gets any money for deferred maintenance to prove to the legislature that they have a plan of ongoing maintenance so they'll never get behind again. They have to do that out of their regular budget, we don't give them extra money for doing their on-going maintenance, we are only giving them extra money for catching up. What they need to show to us, before they even get the catching up money, is to show us that they are going to on-go, keep their maintenance on-going with the existing funds that they have, that's the challenge. Number 0847 REPRESENTATIVE VEZEY said if they are going to have some continuity in this planning, some standard, that it does need to come back to a central authority. CHAIR JAMES stated she tends to agree with him. She said, "The problem we run into, with the school districts and everything, is 'government from on high' again. ... We've discussed that somewhat about having a statewide system of ongoing maintenance but that wasn't an option because we had too many people out there making independent decisions and not wanting the government to be putting something on down on (indisc.) high." REPRESENTATIVE VEZEY, being familiar with the planning process, he indicated the first thing that is going to happen is that the legislature is going to be inundated with a bunch of different formats of how they justify their budget for maintenance and were going to have to weed through it all. It would be foolish if they didn't do it with some sort of uniform standard because we'll get in a situation like we have now where people cut back in their maintenance and claim they don't need it now because they know that in five years when the roof starts leaking that we'll fund the money to fix it. Number 0944 REPRESENTATIVE VEZEY noted the administration is going to rely on feedback from all of the facilities' managers across the state, but the legislature is going to be inundated with different assessments of how to address maintenance needs. He said not that we have to be uniform across the state but the ability of people to give bad information to the legislature is going to be greatly increased. CHAIR JAMES said it would be nice to have an overall plan, but she didn't believe that was possible. Number 0991 MR. DEWITT pointed out both the university and the court system do have their facility management units. Without these proposed changes they would then have to report to DOT/PF and the Department of Administration prior to the Public Facilities Commission releasing dollars for their projects. They already have the ability and capacity to do this, the question is do they go through administration to have administration then sign off that they've done it, because they're separate units of government. He indicated the concern with having DOT/PF, at least from Representative Mulder's perspective, is when you go DOT/PF to have them do anything it just runs the dollars up outrageously, that was one of the Task Force's concerns is trying to make sure that it's not overly expensive and that we're getting the certification that they have a maintenance program in place and that the projects they design are consistent with energy efficient standards. REPRESENTATIVE VEZEY said if your statement is true that DOT/PF is so inefficient, maybe we should dissolve them and turn it over to the court system. These agencies all point their fingers and talk about who is efficient and who's not, and they all have different problems, but the point is that what you have done is lopped off the top of the pyramid and stuck the legislature on there. He said I guarantee you, we're the least competent of all of them. CHAIR JAMES asked if there were other changes. MR. DEWITT replied no. Number 1129 REPRESENTATIVE KIM ELTON referenced line 3, page 4. and renovation of public facilities or school facilities that are projects approved under AS 14.11.015(a). REPRESENTATIVE ELTON suggested an amendment may be necessary saying "or school facilities that are projects eligible for approval." He indicated there was discussion and expected the proposed committee substitute would reflect that change. MR. DEWITT replied the current language accomplishes what Representative Elton articulated. The suggestion that was made at the last meeting was that we allow them to fund projects for schools whether or not they were eligible. He indicated, "And the committee did not seem receptive to that particular change." What Representative Elton is articulating is what was in the bill. We didn't need to change the draft to accomplish that. REPRESENTATIVE ELTON reiterated there is no difference between "approved under" or "eligible for approval." Number 1196 MICHAEL MORGAN, Manager, Facilities Section, Department of Education came before the committee. He said there is a small difference in the bill and the only difference is in timing. If the committee wanted to make that change, it would allow for a timing change on when the projects would be eligible for funding. REPRESENTATIVE BERKOWITZ asked what is a computerized maintenance management plan and what is a cardex system. MR. DEWITT responded there are programs that work off of a computer and you input your entire inventory and the maintenance regiment and it gives you reports back on the timing of when particular things need to be done. The cardex system, as he understands it, works very similarly to that except it's a manual system. The DOT/PF, in terms of brushing and cleaning culverts have a process where the folks at the district level, substation level, will put together their proposal of what needs to be done. It's a formal system that works up through the chain so that they can keep track of what needs to be done. Number 1280 REPRESENTATIVE BERKOWITZ asked if it's fair to say they are formal systematic means of tracking the timing and costs associated with planned and completed maintenance activities. MR. DEWITT replied it would be his understanding. REPRESENTATIVE BERKOWITZ said this is stylistic, he tends to believe they should avoid using jargon inside statute. And if they have a description that adequately covers the functions of the computerized maintenance management plan and the cardex system they should use that general description rather than possibly limit or confuse with the jargon. CHAIR JAMES responded she understands his concern because neither is defined. She said she believes the operative word is "for": "for" formal systematic means of tracking the timing and costs associated with planned and completed maintenance activities CHAIR JAMES continued, this is actually the goal. She said, "I'd personally like to have the computerized maintenance management (indisc.) plan because it's a thought invoker. Number one, to understand we're going in the technology age now that most everyone, who is in business, understands that computers have lots of advantage, I think it's suggestive. And then the cardex system is a reaction to that ... 'I can do the same thing on a cardex system.' I think it's suggestive and because the 'or' is in there and defines actually what the goal of it is, I feel comfortable having those in there." REPRESENTATIVE BERKOWITZ said a computerized maintenance management plan, or in the disjunctive, computerized maintenance management plan need not be formal systematic means of tracking time and in costs. It doesn't have to be that way, it could be just a computer plan, something on a computer. If you wanted to describe what a computerized maintenance management plan is, he would suggest they define it. Otherwise he would go with the general term. CHAIR JAMES asked for a motion to adopt the proposed committee substitute. REPRESENTATIVE MARK HODGINS made the motion to adopt CSHB 312(STA), Version 1243\L, 2/13/98. Hearing no objection, CSHB 312(STA) was before the committee. REPRESENTATIVE HODGINS referred to page 10, line 18: (c) Money in the build Alaska fund may be used only in accordance with an appropriation. Money may be appropriated from the fund REPRESENTATIVE HODGINS next referred to line 22: (2) for acquisition, construction, repair, major maintenance, or renovation of public facilities or school facilities that are projects approved under AS 14.11.015(a). REPRESENTATIVE HODGINS asked if this money could be spent for buying facilities rather than deferred maintenance fixing the facilities and why would that be in there if that's not the case. He indicated it sounds like they can actually purchase buildings instead of deferred maintenance. MR. DEWITT responded that language is on the advice of the bond council that the legislature needs to be able to, through the legislative process, use the build Alaska fund at its discretion. And it has to do with complying with tax codes in order to make sure that the bonds remain tax-free. To answer Representative Hodgins question, he said there is that latitude within that section. Number 1474 REPRESENTATIVE BERKOWITZ indicated he had an amendment prepared on that point because that language also occurs on page 4, line 2: funds for acquisition, construction, repair, major maintenance, and renovation of public REPRESENTATIVE BERKOWITZ said the amendment deletes "acquisition, construction." And inserts "replacement". (This language is also found on page 10, line 25). REPRESENTATIVE HODGINS objected to proposed Amendment 1. He referred to Mr. DeWitt's comment that it might be possible that they might have a long-term lease or something and it might be more preferable for use to purchase as to not. He didn't see a problem with it as long as the legislature would be the ones that would make that decision. He mentioned he just wanted to get clarification on why acquisitions was in there, Representative Hodgins said he didn't believe it was necessary to remove it. Number 1568 CHAIR JAMES made it perfectly clear that she is not interested in purchasing more buildings, she wishes they would sell some of the ones that they have. Chair James pointed out the problem she has with this amendment is it refers to replacement as opposed to acquisition or construction and does not include "new schools." CHAIR JAMES said it appears the goal of the build Alaska fund is to have it be a perpetual fund. Once it is set up for the purpose of doing the deferred maintenance, and also because we were going to take six years to do the deferred maintenance, we have to admit that there will be some new construction or replacement construction that will be coming - maybe having just as much need as the deferred maintenance during this period of time. Therefore, we needed to expand the Deferred Maintenance Task Force finance planning to also slot in any new construction, including new schools. She mentioned there might be a need for a new school particularly in the Mat-Su (Matanuska-Susitna Borough), Anchorage or Fairbanks areas where we have a growing population and growing needs. Number 1627 CHAIR JAMES said she does not want to take out the word "construction," she does not have a problem with inserting the word "replacement." She indicated she has a problem with taking the word "acquisition" out because of the need for the tax-exempt status on all the other things that we have -- to need to have this be broad. She concluded saying anything that is done with this money cannot be done without legislative approval. REPRESENTATIVE HODGINS mentioned he flies in the Bush area often. For example, there are some Native villages that have airports located on rivers, a flood could wipe it out, and they might have to replace it at a higher elevation. He said he also agreed with Chair James analogy on the schools. CHAIR JAMES announced she is turning the meeting over to Vice Chairman Ivan. Number 1704 REPRESENTATIVE BERKOWITZ said he didn't initially intend to have "replacement" as part of his amendment. Representative Berkowitz stressed he wants to delete "acquisition, construction," and would take a friendly amendment to remove "replacement." REPRESENTATIVE BERKOWITZ said he believed what they are doing, by deleting acquisition, construction, is preventing us from acquiring and constructing a pork barrel. Because if they are putting together the build Alaska fund, in order to maintain facilities, and we're expanding its scope so they also can acquire and construct facilities, then we're going outside the intent of this fund. He stated, "And as soon as we do that, if we're not putting the proper parameters to it, it's a pork barrel." REPRESENTATIVE ELTON said he is not in favor of the friendly amendment because he thinks it is legitimate to replace an airport or a school, if a school burns down. He indicated he does not have a problem with inserting replacement. Number 1749 REPRESENTATIVE ELTON noted, "I do think that if we're going to take a discrete fix - I think everybody at the beginning of this process and everybody at the end of this process acknowledged that one of the problems that we have is we're not focusing on, not just deferred maintenance, we're not focusing on ongoing maintenance that keeps us from having deferred maintenance. And I agree with the maker of this amendment that what we're encouraging, by using the words 'acquisition, construction,' is we're encouraging people to look at the $1.5 billion fund as an opportunity to build new buildings rather than an opportunity to use this money for what its original purpose was. I'm absolutely in favor of the amendment and to go one step further, I'm in favor of the amendment as written and not deleting the word replacement because I think replacement is a legitimate function in a deferred maintenance scheme." REPRESENTATIVE VEZEY asked someone to get him a copy of the IRS (Internal Revenue Service) regulation that would exclude this type of a development corporation from being able to take advantage of IRS regulations if construction and acquisition were not an option. He pointed out that they are talking about a legitimate public purpose, and repair and maintenance of public facilities is certainly a legitimate public purpose. MR. DEWITT said he wanted to clarify what he meant to say. REPRESENTATIVE VEZEY said he wasn't accusing Mr. DeWitt of trying to be an expert on IRS regulations. He asked Mr. DeWitt to go back to his sources and get a copy of the IRS rules, regulations or case law that says we'd be in jeopardy of not qualifying under IRS regulations for a community development corporation if it didn't include construction acquisition. He stated he doesn't have any objection to putting it in there. He indicated he just gets tired of having smoke blown in his face. Number 1861 MR. DEWITT responded he apologized for having done that. The question he tried to answer was where did the language come from and why was it there. He indicated he was trying to answer the general flexibility, and noted he did state, "Yes, it would allow acquisition." Mr. DeWitt said he was not under the impression that deletion of construction or acquisition, in those terms, would jeopardize the tax status of the corporation with the broad flexibility. Certainly you could put parameters on how flexible you want to be. The bond council indicated the more flexible the better. It's not his understanding that the exclusion of those two terms would cause particular problems. He said he would run that by bond council, but his expectation (in the conversations he's had with them), is that those would not be problems, however, he does have some strong feelings about the importance of those words and how it does help the mission of this corporation and the deferred maintenance program. REPRESENTATIVE VEZEY acknowledged they recognize, in many cases, it is cheaper to tear-down and rebuild than it is to bring up to standard, or just make repairs. Representative Berkowitz comments that we're opening this up to a pork barrel, which goes without saying. This is an opportunity to hand out pork. He indicated if we don't have the option of reconstruction, as opposed to fixing- up, we'll end up spending more money fixing-up antiquated facilities than we would replacing them with new. Number 1944 REPRESENTATIVE BERKOWITZ conveyed what he is concerned about is that the build Alaska fund is somehow going to be used in lieu of presenting capital budgets to some degree. He stated he is not as familiar with the process, since he hasn't been around as long as anyone else at the table with the exception of Representative Hodgins. Representative Berkowitz stressed he didn't want the build Alaska fund taking the place of the capital budget. He said, "If that's the intent of the build Alaska fund, in any degree, it seems to me we ought to give it a much more formal review than we're doing right now." REPRESENTATIVE HODGINS offered a friendly amendment to the amendment presented by Representative Berkowitz. Representative Hodgins' amendment would correct line 4 of his amendment, he has page 10, line 25, that should be page 10, line 22. REPRESENTATIVE BERKOWITZ replied that's a different version. VICE CHAIRMAN IVAN asked Representative Hodgins' if he was offering that amendment. REPRESENTATIVE HODGINS responded yes, just to change the apparent typo [typographical error] from line 25 to line 22. UNIDENTIFIED SPEAKER objected. Number 1997 VICE CHAIRMAN IVAN stated he respects the intent and understands some of the concerns, but believes these will be forwarded to the corporation for their consideration and the final decision to allocate funds rests with the legislature. MR. DEWITT reiterated the purpose of the Public Facilities Financing Corporation is to make bonding available in a relatively efficient process so that essentially debt financing can be used by the state. He said we've selected to propose to use it for those projects that have been identified by the Deferred Maintenance Task Force which have been forwarded to the legislature. The legislature will make consideration of whether or not those projects are appropriate and the governor will approve it or he will not. MR. DEWITT continued, when you remove things like acquisition -- there are a number of rural schools that we visited some of which will need to be replaced, renovated, remodeled on separate pieces of ground. If you remove the term acquisition then this corporation cannot be a party to acquiring the property to move that school. He stated there has been a great deal of consideration about whether or not the high school in Juneau ought to be remodeled or replaced. If ultimately the structural integrity of that facility indicated that it ought to be replaced, it would be likely a new piece of ground would be needed. One of the problems at the high school is that the property is too small for the facility. He said, "If you remove the term acquisition, I think you're putting yourself in a box whether you believe this is a good program where there ought to be a real tight program just for deferred maintenance and ongoing maintenance, or whether you believe that the legislature is simply interested in pork. ... Some think that projects are important." MR. DEWITT stressed, "The issue of acquisition is not an issue of whether or not we buy the Bank of America Building, it's an issue of whether or not we have the ability or we have limited ourselves to whether or not - for example the Griffin Building in Kodiak, which under the deferred maintenance Task Force report, the option was taken to replace that as opposed to spending almost 80 percent of what it would cost to replace it - to renovate it and then not have a very good building." MR. DEWITT concluded, "I don't know at this juncture whether or not they decided on a new location or not. But if you remove acquisition from this particular bill, then certainly the decision is made that it will have to be torn down, replaced on that particular sight, because you don't have the option for acquisition." Number 2197 REPRESENTATIVE BERKOWITZ stated the example of the Bank of America Building is very instructive. He asked if it would be possible to acquire the Bank of America Building, or a similar structure, with the language in this bill, it would be possible... MR. DEWITT interjected, as we've seen without the language that's in here. REPRESENTATIVE BERKOWITZ replied that's right. He confirmed, "But we could use the funds that are contained here to do something like purchase that building. My concern is, if we're going to make a purchase like that, it should be done -- we talked about structural integrity, I think there's sort of a legislative integrity at stake here too. I've seen pockets of money shifted around a shell game and AHFC [Alaska Housing Finance Corporation] pays for things, AIDEA [Alaska Industrial Development and Export Authority] pays for things, so we don't want to pay for it out of general funds because that's not just politically opportune." REPRESENTATIVE BERKOWITZ asked if we're going to be acquiring buildings, we should acquire it out of capital projects or other sources. He identified this as a maintenance fund, it's designed to maintain, and fenceposts aren't drawn around acquisition or construction, then he could see a day where we do buy buildings because it advantages the state. But we buy buildings with a maintenance fund and at the same time, for sake our responsibilities in a less political area. He gave the example of buying a building in downtown Anchorage and not doing the proper maintenance on a school in Kivalina. Without fenceposts around this language he is concerned that that's what's going to happen. Number 2240 MR. DEWITT said he understood what Representative Berkowitz was saying and described the legislative process. He reiterated the notion of the Public Facilities Financing Corporation was to give the legislature as much flexibility in using it as it chose over time. It's really a policy call, do you want an opportunity in place that is useful, and the sideboards being placed by the legislative process. He indicated the future legislature can change this as well. He said, "But what you've done is limited the opportunity to do constructively, at least what I understand the task force and deferred maintenance indicated ought to be done." VICE CHAIRMAN IVAN announced said he wanted to hear from Representative Elton before he put the question of the proposed amendment before the committee. REPRESENTATIVE ELTON asked about the word "replacement," would preclude spending that money for design, engineering or land acquisition. MR. DEWITT replied, "If acquisition is appropriate, why is acquisition not appropriate." He indicated he didn't understand what Representative Elton asking. Number 2308 REPRESENTATIVE ELTON explained he would like to know what in the word "replacement" that is going to substitute for acquisition, construction. What in the word "replacement" would preclude the build Alaska fund for being used to buy the land and necessary (indisc. - noise) place. He pointed out what he is trying to do is he's trying to design the fence, that the maker of the amendment is, that would preclude a purchase of the Bank of America Building but would allow land acquisition. He stated he believes land acquisition is allowed under the word replacement in the same way that engineering would be allowed, or the cost of design elements would be allowed. REPRESENTATIVE HODGINS indicated he could see where replacement would not be construed as acquisition. He referred the example of Juneau [Juneau-Douglas] High School, replacement of the high school, he believes, without acquisition would be on that same site. You would replace the building. You wouldn't replace the land. He said, "I think an acquisition has to stay in there, and the questions that we've brought up I think are all valid..." REPRESENTATIVE ELTON said he believes replacement does allow the purchase of the property necessary to build a replacement building. He indicated he needed someone more familiar with this than members of the committee to tell them that it doesn't. He thinks this is an important point and noted this gets right to the heart of whether they are funding deferred maintenance or whether they're funding a new acquisition of a new building while they're letting others rot in the ground. Number 2375 REPRESENTATIVE HODGINS said, "I would think that replacement would be exactly that, you would replace an item. You would take whatever was there, you would remove it, and you would replace it exactly. I think we need to vote on this amendment and move one." Number 2390 VICE CHAIRMAN IVAN asked for a motion to move the amendment. He emphasized they are trying to arrive at a point to give the corporation as much flexibility to look at the situation as it is. If acquisition is necessary, they'll make that determination. If replacement needs to be done, he's sure they'll look at that situation and make that determination. He said, "We do the final funding as was..." TAPE 98-18, SIDE B Number 0001 VICE CHAIRMAN IVAN asked for a roll call vote (request not on tape). REPRESENTATIVE HODGINS asked, prior to a vote will it take a quorum of the sitting people, or is it a quorum of the entire membership. VICE CHAIRMAN IVAN replied the sitting members. Number 0030 A roll call vote was taken. Representatives Berkowitz and Elton voted for the amendment. Representatives Hodgins, Ivan and Vezey voted against it. Therefore, the Amendment 1 failed by a vote of 2 to 3. REPRESENTATIVE BERKOWITZ stated he has other amendments to offer. VICE CHAIRMAN IVAN asked for an at ease. Number 0050 CHAIR JAMES asked Representative Berkowitz what amendment did he want to address first. Number 0069 REPRESENTATIVE BERKOWITZ offered proposed Amendment H.1 [Amendment 2] which reads: Page 1, line 7, following "for": Delete "deferred" Page 1, line 10, following "financing": Delete "deferred" REPRESENTATIVE BERKOWITZ explained he is removing the term "deferred" in the findings section. He said we don't need to fund deferred maintenance. We have not funded maintenance. That's why there's a need - that's why deferred maintenance has occurred. We're trying to fund maintenance. He clearly said this is going to be a proactive program and not something that just sits still. CHAIR JAMES said she understands his point because she's used that same argument herself. She indicated the word "deferred maintenance" is a misnomer, what it means is we didn't do any. However, there is a term of deferred maintenance and that means that you put it off, you've deferred it, but the need is still there. Number 0116 CHAIR JAMES commented that process of the Deferred Maintenance Task Force, she said we tried to separate out the maintenance that was ongoing and maintenance that was deferred. The legislator's chore is to do the catch up. So, there is a catch up and a keep-up and the focus of this committee was to do the catch up because the maintenance was deferred. That's why she would support leaving deferred in the bill. REPRESENTATIVE VEZEY said Representative Berkowitz is correct. CHAIR JAMES said she agrees, however, she is disagreeing with his amendment. Chair James asked if there were objections to Amendment 1 [deleting the word "deferred"]. REPRESENTATIVE HODGINS objected. Number 0144 CHAIR JAMES asked for a roll call vote. Representatives Berkowitz, Elton and Vezey voted for the amendment. Representatives Hodgins, Ivan and James voted against it. Therefore, Amendment 1 failed by a vote of 3 to 3. Number 0174 REPRESENTATIVE BERKOWITZ offered proposed Amendment H.2 [Amendment 3]. He clarified what he is trying to do, is put some public members on the board of directors, as most of the other quasi- public... He believes the public deserves to be part of the process, if we just leave it with folks who are part of the administration or, part of the problem in a way, then we're lacking the insight necessary from public participation and this opens the process up. The amendment reads as follows: Page 2, line 7, following "of" through page 2, line 10: Delete all material Insert: "directors consisting of the commissioner of revenue the commissioner of transportation and public facilities the commissioner of education the executive director of the Alaska Housing Finance Corporation the executive director of the Alaska Industrial Development and Export Authority two public members appointed by the governor, as follows: (1) one member who has expertise in energy efficient building and weatherization; and (2) one member who is a rural resident of the state and has experience in building or maintaining public facilities. REPRESENTATIVE HODGINS objected. Number 0212 REPRESENTATIVE ELTON asked why there would be an objection to including the public as part of the process. CHAIR JAMES replied, "Because it is a legislative body that is being created here, and the legislators are going to be making the decision. You're talking about the directors of this, and this is to be utilizing our existing directors, and not wanting to have a fiscal note, there literally seems to me no purpose of having public members on this board." REPRESENTATIVE VEZEY said he is going to oppose Amendment 3 because we're taking a five-member board and expanding it to seven, all of them are appointed by the governor. He asked what's the point of making a bigger committee. REPRESENTATIVE ELTON spoke in favor of the amendment because anytime you're using $1.5 billion worth of public funds, it's always good to have members of the public involved. And if there is another way of doing this to overcome Representative Vezey's objection about having them all appointed by the governor, If I was the governor, I would be open to (indisc.). REPRESENTATIVE HODGINS said he objected to this, not that he doesn't want to see the public on here, but the process is the legislature will hold meetings that the public can participate in, and the public will have that opportunity. REPRESENTATIVE BERKOWITZ stated the public is already party to the board of directors in some of the other organizations listed here: AHFC and AIDA, they have public participation. He asked why are we drawing a line around the build Alaska fund. He believes this gives the appearance of creating some sort of sacred cow that's outside of public touch. Number 0280 CHAIR JAMES asked for a roll call vote on proposed Amendment 3. Representatives Berkowitz and Elton voted in favor of the amendment. Representatives Hodgins, Ivan, Vezey and James voted against it. Therefore, Amendment 3 failed by a vote of 2 to 4. Number 0311 REPRESENTATIVE BERKOWITZ offered Amendment H.3 as proposed Amendment 4 which reads: Page 2, line 20 through page 2, line 21: Delete all material REPRESENTATIVE BERKOWITZ said, "Forrest Brown testified before us that he did not feel the board of directors needed an executive director and I don't think we do either. I think it saves the public money if we don't employ one." REPRESENTATIVE VEZEY indicated his concern would be that if we don't address it, it would be unsaid and they could hire any number of employees they wanted because they would be a corporation under the laws of the State of Alaska. And hiring people, having employees, is an authorized function of corporations. REPRESENTATIVE BERKOWITZ replied we could solve that problem by saying the corporation may not employ anybody. REPRESENTATIVE VEZEY added that is a different amendment. Number 0372 CHAIR JAMES asked for a roll call vote on proposed Amendment 4. Representatives Berkowitz voted in favor of the amendment. Representatives Elton, Hodgins, Ivan, Vezey and James voted against it. Therefore, Amendment 4 failed by a vote of 1 to 5. Number 0384 REPRESENTATIVE ELTON offered proposed Amendment 5. He referred to page 2, lines 20 and 21, change paragraph (b) to read: The corporation may not employ staff. Delete the second sentence: The executive director is in the exempt service under AS 39.25.110. CHAIR JAMES objected. In summary she said if you created a corporation and you didn't allow the corporation to hire any staff it would be difficult to manage. We have listed under this the people who are the board members - who are already being paid for some other job. You can't have a corporation doing something if there's nobody to do it, a corporation is the same as a person but it doesn't have people except in its board of directors. Chair James stressed it's unrealistic to not have at least one hired person just in the organization. REPRESENTATIVE BERKOWITZ reiterated that an expert in the field, who testified before us, said that they didn't need anybody that they could handle it with the board of directors. He believes that this would unnecessarily add cost to the program. Number 0481 REPRESENTATIVE VEZEY pointed out that the committee rejected his suggestion that this organizational structure comes to a pyramid peak, we don't have one person preparing this information and presenting it to the legislature, we already have people in DOT/PF, the court system, and the university. This is the defacto staff of the corporation, they're going to be the ones coming before us. REPRESENTATIVE VEZEY said if we want the corporation to have an executive director, it would make sense that that person is on top of the pyramid and that person being the one coming to us. Number 0533 CHAIR JAMES asked for a roll call vote on Amendment 5. Representatives Berkowitz, Elton, Hodgins, and Vezey voted for it. Representatives James and Ivan voted against it. Therefore, Amendment 5 passed by a vote of 4 to 2. Number 0552 REPRESENTATIVE HODGINS made a motion to move CSHB 312(STA) with individual recommendations and attached fiscal notes. There being no objection, CSHB 312(STA) moved from the House State Affairs Standing Committee. SB 105 - ETHICS/LOBBYING/CAMPAIGN FINANCE Number 0588 CHAIR JAMES announced the next order of business is CSSB 105(FIN) AM, "An Act relating to legislative and executive branch ethics; relating to campaign finances for candidates for state office; relating to the conduct and regulation of lobbyists with respect to public officials; relating to the filing of disclosures by certain state employees and officials; making a conforming amendment to the definition of 'public official' for employment security statutes; and providing for an effective date." Number 0621 REPRESENTATIVE HODGINS said at the last meeting there was a motion to remove Section 8, page 8. JOE DONAHUE, Member of the Legislative Ethics Committee Office, said he is available to answer questions or clarify the committee's position via teleconference. SUZIE BARNETT, Professional Assistant to the Legislative Ethics Committee, said she is also available to answer questions or clarify the committee's position via teleconference. Number 0680 REPRESENTATIVE HODGINS said he made the motion to delete Section 8, at the last State Affairs Committee meeting after lengthy discussion. Sec. 8. AS 24.45 is amended by adding a new section to read: Sec. 24.45.165. Spouses and cohabitant of legislators. (a) A spouse of or a person cohabiting with a legislator may not engage in lobbying the executive branch of state government or the legislature during the legislator's term of office. (b) In this section, (1) engage in lobbying" means to act as a lobbyist; (2) person cohabiting with" means a person who is cohabiting with another person in a conjugal relationship that is not a legal marriage. REPRESENTATIVE ELTON said sometime the perception of conflict is as disastrous as the conflict itself and that Section 8 is more of a perceptual section than a reality section. He asked Representative Hodgins to expand on why Section 8 may not be appropriate. He believed that allowing spouses, or close associations of legislators to lobby does raise a public perception problem. REPRESENTATIVE HODGINS replied the disclosures that we do, we do have a close relationship disclosure that we would make. As long as that is disclosed to the public, he didn't have a problem with removal of Section 8. He said if we didn't have the forms that we filled out, and they were due yesterday, on close relationship the he would say, "Yes, Section 8 definitely needs to be in there." But he thinks the public is safeguarded. REPRESENTATIVE ELTON stated he agrees with Representative Hodgins with Subparagraph 1, but he was not sure that the disclosure forms covers somebody in number 2, which is a person cohabiting with. Number 0791 REPRESENTATIVE VEZEY said his objection to the proposed amendment [meant to say Section 8] is that we have a great disparity in the definition of "lobbyist." He indicated everyone in the legislature knows that most lobbying done on the legislature is by public officials, who are by definition exempt from lobbying restrictions. He said, "If we pass this, this is just another creation of another chasm between the private sector and the public sector. We're saying it's okay for a legislator to be married to a public official who has a very strong vested interest in public policy, but they can't be married to a private sector person who has a vested interest in public policy. And I have great difficulty with that." CHAIR JAMES asked Representative Vezey what side he was arguing on. REPRESENTATIVE VEZEY replied the he is opposed to Section 8, and is in favor of the proposed amendment. CHAIR JAMES stated what she is frustrated with SB 105 and the issue of ethics is that, in order to impose what the public or whoever else determines is ethical or unethical, you have to clamp down so far that you eliminate any possible perception of ethic violations. You make it almost unworkable for people to be doing this job. For example, she said, "Some of the responsibilities that we have, there are a lot of really good people out there that would be good legislators and they absolutely refuse to put themselves on the line for it." Number 0867 CHAIR JAMES said she believed they are going too far. She said it's the same thing she says about the "open meetings," which she is supportive of. But the problem she has with designing the rules of open meetings is that in order to keep two people from talking about something they shouldn't be taking about, you make a rule that says they can't be together without somebody else watching - to put it really extensively. Chair James believes that's what they are doing in this particular case. CHAIR JAMES said she has mixed feelings on this issue because there is a perception that if you are living with a person, that person shouldn't be a lobbyist. There is reality to that, but there is what is called disclosure. She stressed she didn't like this bill, and quite frankly probably won't vote for it. She explained it delineates what you can do to eliminate the perception that you're not doing something right. She believes what they're trying to do is to make people do impossible things. Chair James noted she agrees with Representative Vezey's analysis and concluded by saying, "We shouldn't tell people who they can be married to either." For that reason, she is in support of the deletion of Section 8. She mentioned it doesn't fix the bill, but it might help it a little bit. REPRESENTATIVE ELTON said, in response to some of Chair James' comments, there is a significant difference between a public official on salary testifying on behalf of a public agency. He believes there is a big difference between that person, if that person is described as a lobbyist, than there is between a lobbyist who has a private client with a negotiated lobbying contract that could amount to a significant amount of dollars and is not a public agency. There is a distinction between the two. CHAIR JAMES said she didn't have a problem, if that representative or that senator, stands up and discloses the conflict they might have because their lobbyist spouse, or spousal equivalent, is lobbying for a particular group and make it so the public is aware. She said the test is, if they don't like it they'll remove him or her. She it seems to her that the public ought to be in charge. REPRESENTATIVE VEZEY asked Representative Elton to explain the difference between a person trying to represent the private sector before the legislature and a person trying to represent the public sector. Number 1048 REPRESENTATIVE ELTON pointed out, one is working for a public agency on behalf of theoretically all Alaskans. The other would be working on behalf of some narrower interest groups. He said if we accept the premise that working in government, you're working on behalf of all Alaskans that would be the difference. REPRESENTATIVE BERKOWITZ said, "The size of this net is pretty peculiar, and if we're trying to limit the impact of lobbying on legislators why are we limiting it to spouses or spousal equivalents. It seems to me that if legislators are susceptible to persuasion it's likely to come from friends or other members of the family. And the size of this net, I don't think catches everybody. And I'm not sure you can design a net that catches all kinds of lobbying." Representative Berkowitz said the size of the net should be addressed at some point. CHAIR JAMES responded the net doesn't work. Number 1125 BEN BROWN, Legislative Administrative Assistant to Senator Tim Kelly, Alaska State Legislature, came before the committee. He said Section 8 is a policy call and informed the committee that the Ethics Committee didn't feel comfortable banning spousal lobbying, they felt more comfortable in putting a disclosure requirement in. BEN BROWN responded to Representative Hodgin's assertion that disclosure requirements in existing law are adequate. He said, "I don't think they are, the one that we put in for legislative staff, in Section 23 of the bill requires disclosure of new lobbying associations within 48 hours." Sec. 23. AS 24.60.070 is amended by adding a new subsection to read: (d) When making a disclosure under (a) of this section concerning a relationship with a lobbyist to whom the legislative employee is married or who is the legislative employee's spousal equivalent, the legislative employee shall also disclose the name and address of each employer of the lobbyist and the total monetary value received from the lobbyist's employer. The legislative employee shall report changes in the employer of the spouse or spousal equivalent within 48 hours after the change. In this subsection, "employer of the lobbyist" means the person from whom the lobbyist received amounts or things of value for engaging in lobbying on behalf of the person. MR. BROWN continued, "During the course of a session, the current disclosure form that has to be filled out by the 15 of February, well now that it's in, if your spouse or spousal equivalent went and picked up 15 new lobbying contracts between now and the end of session no one would know about that until next February. So that's why I don't think the current -- it's very good and well to take out the ban but I think you need to put in a disclosure requirement similar to what's in 23 [Section 23] to (indisc.) Similar public policy. It's a policy call." Number 1173 REPRESENTATIVE HODGINS asked if that disclosure policy was in this bill. MR. BROWN replied, "For legislative employee spouses and spousal equivalents, in Section 23, we made the change when the Senate took away the right for legislators spouses and spousal equivalents to lobby. So if you want to take this out, it would probably be prudent to put in a heightened disclose requirement for the legislator's spouses and spousal equivalents. In fact, Amendment K.17, which I distributed to you with a memorandum ... , puts in a contingency provision for doing that as we discussed last week. So if this ban were found unconstitutional that would happen. So if you want to go ahead and cut that one off at knees you can take out Section 8 and put in a disclosure requirement that is similar." Mr. Brown believes it will give the information to the public in a more timely fashion that the current system would. Number 1228 CHAIR JAMES stressed they cannot deal with the disclosure and the proposed amendment at the same time. She indicated she agrees with Mr. Brown that disclosure is the way to go. The proposed amendment deletes lines 5 through 12, on page 8, (which is the entire section). Chair James asked for a roll call vote. Representatives Hodgins, Ivan, Vezey, James and Berkowitz voted for the amendment. Representative Elton voted against it. Therefore, the amendment passed by a vote of 5 to 1. CHAIR JAMES mentioned they have a number of amendments and asked Mr. Brown to address them. Number 1357 MR. BROWN referred to the first batch of amendments, they were accompanied by a memorandum dated February 5. He said the batch has five amendments. The first being KA.36. CHAIR JAMES asked for an at ease in order to locate that amendment. TAPE 98-19, SIDE A Number 0012 CHAIR JAMES indicated she did not have the February 5 packet. She asked Mr. Brown to start with KA.11. MR. BROWN said amendment KA.11 is an attempt to address a problem and the specificity of the Legislative Ethics Code governing the use of public resources by legislators for partisan purposes. He mentioned there was a somewhat well publicized case of a legislator using his office, staff and state stationary to send out a mailing that was sent to only members of one political party. He said, "It was done expose-facto to a political activity so it thanked the persons that received the letters from participating in the activity so it wasn't a call to action (in advertising terminology), but it was in the eyes of the Ethic's Committee a partisan purpose that he sent the letter out for." Number 0120 REPRESENTATIVE HODGINS said he wished Mr. Brown would say, when he discussed that case, that he had received the office allowance. That he was taking the office allowance to Legislative Audit which is a lot different from if he'd received that lump sum - then he could do what he was doing. MR. BROWN said to clarify, that the legislators receive a six thousand dollar annual allowance that they can either take as personal income, and therefore have no restrictions on the use or expenditure of. Or they can have it accounted for, through reimbursable receipts a submission process through the Legislative Affairs Accounting Office. He explained, if they choose the reimbursable receipts process then there are restrictions on what the money can be spent on. It has to be related to legislative purposes. MR. BROWN said, "At the same time, if he had taken the money as personal income, he still would not have been able to use the state laser printer or staff time in the eyes of the committee, if what he did was wrong, and I'm not trying to make a judgement on that I'm just saying it was a gray area, the committee came down on the side of saying, 'This is too partisan for our liking.' And so, Amendment KA.11 attempts to put in language that governs the use of public resources for things that are arguably partisan." He read: A legislator or legislative employee may only use public funds, facilities, equipment, services or other assets or resources in a matter that involves partisan politics if the public purpose of the activity outweighs the partisan political purpose. Number 0241 REPRESENTATIVE BERKOWITZ asked what does that mean. MR. BROWN replied he thinks legislative activity, from time to time will unavoidably carry a bit of partisan air about it. He explained that it's simply trying to establish a balancing test whereby if you look at a specific action, or use of state resources, and you want to say, "Well, it seems to be a little partisan because it is trumpeting the party line but at the same time it trumpets the party line in such a way as to affect a public policy goal, which is why the person ran for office in the first place." He reiterated it's an attempt to establish a means of balancing partisan versus a public purpose. It specifically refers to the example of mailings to members of only one political party giving that an assumed political partisan purpose that can be outweighed. Number 0320 REPRESENTATIVE BERKOWITZ said he understands what Mr. Brown is trying to do, but there's just no way that you can write letters to one party and have that not be a partisan activity. He stressed it's just not feasible, it is clearly part of electioneering, it's clearly, in his mind, outside the bounds of what's allowed. REPRESENTATIVE BERKOWITZ said, "When you talked about that instance as being a gray area, there was nothing gray about it in my mind, it was black and white and that was in the black, it was wrong. To sit here after the fact and try to excuse that kind of behavior, and then trying to make an exception for it with this amendment, I think it sends the wrong signal to everyone out there. The signal your sending is that, if a legislator sends letters to members of his own party alone, that somehow that can be acceptable with state funds, that's just not possible in my mind. That's clearly partisan, it's clearly outside the bounds of what we should be ethically allowed to do." Number 0411 MR. BROWN said this amendment is to clarify what was apparently not as clear as it should have been. He indicated he drafted this in conjunction with the drafter whose worked on most of the legislative ethics bill, and in conjunction with the legislative ethics committee staff. Mr. Brown indicated they did not react to it with as much destain, or perhaps contempt. He suggested, if there was more clearer or effective language to propose as a substitute, by all means please. REPRESENTATIVE BERKOWITZ asked what is the inspiration for this amendment. MR. BROWN replied he believes it is to prevent future misunderstandings of the code when it comes to using public resources of partisan purposes. REPRESENTATIVE BERKOWITZ asked who concocted the idea behind this amendment. Number 0551 MR. BROWN said, "I don't know that there was the concoction of an idea in the process of its being drafted, I was aware from having watched the legislative ethics process over the course of the last few years of the problem, and the committee was aware of several desires on the part of other legislators to address the problem. And frankly, I did come up with this idea which was put into this language by the drafter and if it's entirely inadequate, that's not a problem. But, at the same time I think it's hard to say that there's no language that could go into the statute that would make things clearer. If you think that anything that goes to members of one political party is unrelentingly partisan, they by merely removing that last sentence of this amendment, we affect the policy (indisc.) that you seem to espouse, I believe. Perhaps amending the amendment would solve your problem." CHAIR JAMES indicated she agrees with Representative Berkowitz. Number 0624 REPRESENTATIVE HODGINS stated this would cover mailings, telephones, faxes, any facilities the state has. He asked, "So if I call somebody, and it turns out to be a Republican, then I need to get on the phone and call a democratic or else I'm in violation." MR. BROWN replied the only specific siting is a group mailing. The ban on the use of resources applies to all state resources, however, a phone - if you called 15 Republicans in the course of one day and didn't call any Democrats, and you called each of the 15 Republicans (and it was a long-distance call), and you called them all to ask them to go to a meeting, I think that would be the sort activity this amendment sought to ban. CHAIR JAMES asked for order. She then asked Mr. Brown if it would be simpler to say, "That legislators cannot do a mass mailing or group mailing that is political in nature because it is designed to go to one political party with using state resources." Chair James indicated it was questionable in her mind what they can and can't do with their campaign funds because they might not have any, because they can't keep it. They have tightened the rope so tightly, that it's going to make it almost impossible for people to do their jobs without worrying every step they take or that they are doing something wrong. She concluded prompt disclosure of these issues be the issue and let the public decide whether or not that's right or wrong. Number 0810 CHAIR JAMES asked if it would be better to deny a partisan mailing. MR. BROWN responded that it is possible to use unused campaign assets for legislative mailings in the course of ones holding office. He said they are called "legislative office accounts" and explained they are going to change the name as not to confuse them with the Legislative Affairs Agency's administered office account (which is in another proposed amendment they have). MR. BROWN reiterated it is possible to do that, and that is disclosed through Alaska Public Offices Commission (APOC), the public office expense term accounts (which he is seeking to have them called), those are subject to annual disclosure to APOC. Mr. Brown explained, "So if you spent that money on a mailing to members of one party it would be all right. The problem comes in - are you going to do that yourself at home, with campaign volunteers, or are you going to have your staff do it on your state laser printer." Number 0865 CHAIR JAMES said of course you're not going to have your staff do it. The fact that you're not going to mail it from the legislature, you're going to mail it from home using a campaign account that you would be using, not your personal account. She stated they need to make it specifically clear what you can and can't do, she also thinks it is too wordy. Number 0923 SUZIE BARNETT, Legislative Ethics Committee, said if they were to separate out production and mailing for partisan purposes, she could see many members of the committee feeling very comfortable with prohibiting partisan production and mailings. She indicated there could easily be a public purpose involved with a partisan activity, for example she is often asked, "Is it okay if I go speak to the Young Republicans or Young Democrats, I've been asked to speak on my new health care plan." Any number of topics that are totally related to a partisan activity, and there are many times when public purpose outweighs the partisan portion of the activity. Ms. Barnett concluded, "So, I'm not giving you a committee perspective on the up or down on mailings, but there are times when there is a public purpose, I think you're on the right track." CHAIR JAMES agreed. Number 1010 REPRESENTATIVE ELTON believes they are making a fairly simple issue very complicated. He thinks most of them realize, as a result of past circumstances, what is or isn't allowed. Or at least realize when they need to ask a question of the Ethics Committee. Representative Elton said he believes this amendment creates a lot of fog because it says you can't do it unless you can show substantial evidence that a public purpose for the mailing exists. That complicates things, he doesn't believe this amendment is necessary. REPRESENTATIVE ELTON asked Mr. Brown who do you present the substantial evidence to and do you do it previously to the mailing or after the mailing. MR. BROWN replied, "You, I think would have the option since it doesn't specify. I think the actual presentation of substantial evidence to defend you from a charge that you violated the Ethics Code, would come in the course of a formal investigation. Hopefully it wouldn't get that far. You would probably be wise to go ahead and start presenting your substantial evidence when you call Suzie [Barnett] up on the phone and say, 'Can I do this, or if I were thinking about doing this, could I do this.' If it's really substantial and you really believe it's going to get you off this hook. I certainly don't see any problem in deleting the last sentence of the amendment if that is collectively wisdom of the House State Affairs Committee is that it makes the ban on partisan activity more affective." Mr. Brown asked Ms. Barnett how the new subsection (i) would read without the last sentence. CHAIR JAMES indicated she didn't have a real problem with the decision that the whether or not is a public purpose or a partisan purpose. If there is any question the people could call the Ethics Committee and ask for advice. But this specific one, she thinks it needs to be written that the production and mailing of partisan material are prohibited. Number 1163 MS. BARNETT stated she doesn't have the amendment in front of her but believes they are on the right track. She suggested they check in on Mr. Donahue for a committee perspective. CHAIR JAMES read the following amendment: A legislator or legislative employee may only use public funds, facilities, equipment, services, or other assets or resources in a matter that involves partisan politics if the public purpose of the activity outweighs the partisan political purpose. A group mailing, addressed to members of only one political party is presumed to have a partisan political purpose. The legislator or legislative employee may overcome that presumption with substantial evidence that the public purpose of the mailing outweighs the partisan political purpose. MS. BARNETT asked it was her goal to delete that entire subsection. CHAIR JAMES replied yes. Her suggestion is, to make it perfectly clear, the producing and mailing of political party are prohibited. MS. BARNETT said she believes that was what Ethics Committee was intending in their past decision and it was the House decision that later came back and said, "Well it looks a little different to us." Number 1252 MR. DONAHUE explained he was not speaking for the entire Ethics Committee. He noted the committee originally had no problem, but now they would because of the House's decision to reverse it. Mr. Donahue believes there may well be a need for an amendment so that the [ethics] committee has a clearer idea of the legislature's intent in regard to the use of state resources for partisan political purposes. MR. DONAHUE indicated it still doesn't define what are or aren't partisan political purposes. He said the second half of that was intended apparently to say that mailing was one of those kinds of partisan political purposes for which the amendment was there. He said there may be other kinds, and there could still be mailings that somehow weren't bad. The committee would have to take a careful look because of the decisions they made and the House's reversal. He concluded there is a need for some clarity and this is going toward it, but he is not sure it's there. Number 1324 CHAIR JAMES asked Mr. Brown what he thought about coming back with better language. MR. BROWN said he would be glad to. CHAIR JAMES asked for a motion to either table it or turn it down. She asked what was the will of the committee. Number 1369 REPRESENTATIVE BERKOWITZ pointed out that the amendment hasn't been moved, they can just turn the page. CHAIR JAMES thanked Representative Berkowitz for pointing that out. She indicated there was ten more minutes. MR. BROWN stated Amendment KA.17 is now redundant. Having passed Representative Hodgins' amendment to delete Section 8 of the bill, putting in contingency language for the ban on spousal lobbying no longer makes sense. He let them know he will be preparing an amendment that puts a disclosure requirement in for legislative spouses. Number 1412 MR. BROWN stated the proposed Amendment KA.18 is an attempt to standardize terminology. The bill as currently written, puts in a requirement that legislative employees compensated at range 19 or higher, submit legislative financial disclosure forms on an annual basis (similar to those currently submitted by legislators and legislative directors, etcetera). As that expands the disclosure requirement to include staff, he explained Amendment KA.18 replaces all those references with "upper level employee" and that is defined for the purposes of the entire code in AS 24.60: As a person compensated at range 19 or higher who is required to file one of these disclosure forms. Number 1485 REPRESENTATIVE IVAN made a motion to move Amendment KA.18. CHAIR JAMES asked if there were any comments. REPRESENTATIVE ELTON asked someone to explain the value of advise from somebody who is lower than a range 19. He stated he doesn't understand the distinction. He said for example he looks at the people in his office and he doesn't determine whether or not he listens to them based on what their salary range is. Representative Elton said he thinks that's true of most legislators. CHAIR JAMES said that is a good question. MR. BROWN replied that disclosure requirement is an example of having to draw a line somewhere. He mentioned the Senate made that level of compensation last year, if it was higher than range 21 it would exempt all legislative staff. Number 1569 MR. BROWN indicated it's not so much a matter of their advice to them as a legislator, but their capacity to independently affect policy and therefore the public's need to know that their independently affecting policy. There's always going to be a certain arbitrariness to saying that range 19s and higher are affecting public policy more than the lower ranges. He said if it was the wisdom of this committee to increase that to 20 or to lower it to 15, it will have a fiscal impact and certainly on the employees of this branch. CHAIR JAMES mentioned this was another thing that bothers her. For example if you had a range 19 and range 17 or 16, you could change their ranges so they don't have to do the reporting. She also indicated there is no restriction of how long staff works, like term limits. Chair James concluded Amendment KA.18 is simple, and they are not dealing with whether or not this ought to be in the bill or not. On that reason, she said she does not have a problem with the amendment, however, she does have a problem with the area that is being amended. Number 1660 MR. BROWN said once we've standardized the language on what range level it is, it will be that much easier to do because it will be in one place in the bill as opposed to throughout the bill. He recommended KA.18 be adopted. CHAIR JAMES stated based on the fact that it is language simplification, but it doesn't fix the problems she has with the bill. REPRESENTATIVE BERKOWITZ said the whole purpose of SB 105 is to increase public confidence in the process. He asked do you agree. MR. BROWN replied to increase public process and the confidence and ensure the highest level of (indisc.) government in Alaska, he believes is the language in the cabinet findings. REPRESENTATIVE BERKOWITZ said those are fine lofty sentiments. He asked why is good government conditioned of being a range 19 or above. MR. BROWN responded it's for you to decide at what level you want disclosure to kick in. Number 1724 REPRESENTATIVE IVAN asked what is the current range that require disclosure for staff. MR. BROWN replied they include the director of the Legislative Affairs Agency, the legislative auditor, the legislative fiscal analyst, and the director of Leg. Legal [Legal and Research Services]. He mentioned the bill expands the number of legislative staffs who are disclosing this information. MS. BARNETT said to clarify this, under this type of comprehensive disclosure, all legislative employees must disclose under the close economic association, etcetera. MR. BROWN pointed out the only employees who don't have to disclose are Print Shop employees and some mail room employees. Everyone else has to file the item by item disclosures. REPRESENTATIVE IVAN said he was eager to make the process easier but he was beginning to doubt his own amendment. He considered withdrawing it. He asked if they were just starting another layer of disclosure. MR. BROWN replied it already puts the layer in there. This amendment does not add a layer of disclosure, it standardizes the terminology in the layer of disclosure that is already in the bill. Number 1824 REPRESENTATIVE BERKOWITZ stressed one of the concerns he has is that staffers deserve some protection for their privacy. If you already have to make disclosures about close economic association, and association with lobbyists, or such, how does this enhance any public awareness and how do you balance that public awareness against the personal privacy concerns of the staff. CHAIR JAMES said that wasn't a question for this amendment because all this amendment specifically does is make it simpler to say that. MR. BROWN said he didn't know if they thought it was appropriate that the executive director of the Legislative Affairs Agency has to share that information with the public, maybe that's a violation of her right to privacy under the Alaska Constitution. If that's the case, maybe make it only legislators who disclose, that's a policy call. CHAIR JAMES asked, "Do we have any information anywhere that says how many public looks at these things and who this public is." MR. BROWN replied he is not aware of statistics of that nature. He deferred that question to Ms. Barnett. CHAIR JAMES asked if there was any objection to Amendment KA.18, hearing none, the amendment passed. [[CSSB 105(FIN)AM WAS HELD IN COMMITTEE] ADJOURNMENT Number 1929 CHAIR JAMES adjourned the House State Affairs Standing Committee at 10:02 a.m.

Document Name Date/Time Subjects