Legislature(2019 - 2020)BUTROVICH 205

04/22/2019 12:00 PM FREE CONFERENCE COMMITTEE ON SB 89

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Audio Topic
01:16:34 PM Start
01:16:54 PM SB89
02:09:58 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Location Change --
SB 89 LEGISLATURE: ETHICS, CONFLICTS
Moved FCCS SB 89 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
               FREE CONFERENCE COMMITTEE ON SB 89                                                                             
                         April 22, 2019                                                                                         
                           1:16 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator John Coghill, Co-Chair                                                                                                  
Representative Matt Claman, Co-Chair                                                                                            
Senator Tom Begich                                                                                                              
Representative Lance Pruitt                                                                                                     
Representative Chris Tuck                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Gary Stevens                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 89(JUD)                                                                                                  
"An Act relating to the Legislative Ethics Act; and providing                                                                   
for an effective date."                                                                                                         
                                                                                                                                
HOUSE CS FOR CS FOR SENATE BILL NO. 89(JUD)                                                                                     
"An Act relating to the Legislative Ethics Act; and providing                                                                   
for an effective date."                                                                                                         
                                                                                                                                
FREE CONFERENCE CS FOR SENATE BILL NO. 89                                                                                       
"An Act relating to the Legislative Ethics Act; and providing                                                                   
for an effective date."                                                                                                         
                                                                                                                                
     - MOVED FCCS SB 89 OUT OF COMMITTEE                                                                                        
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB  89                                                                                                                  
SHORT TITLE: LEGISLATURE: ETHICS, CONFLICTS                                                                                     
SPONSOR(s): RULES                                                                                                               
                                                                                                                                
03/13/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/13/19       (S)       JUD                                                                                                    
03/18/19       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/18/19       (S)       Heard & Held                                                                                           
03/18/19       (S)       MINUTE(JUD)                                                                                            
03/20/19       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/20/19       (S)       Moved CSSB 89(JUD) Out of Committee                                                                    
03/20/19       (S)       MINUTE(JUD)                                                                                            
03/22/19       (S)       JUD RPT CS  1DP 3NR 1AM SAME TITLE                                                                     
03/22/19       (S)       DP: HUGHES                                                                                             
03/22/19       (S)       NR: REINBOLD, MICCICHE, SHOWER                                                                         
03/22/19       (S)       AM: KIEHL                                                                                              
03/27/19       (S)       TRANSMITTED TO (H)                                                                                     
03/27/19       (S)       VERSION: CSSB 89(JUD)                                                                                  
03/29/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/29/19       (H)       JUD                                                                                                    
04/01/19       (H)       JUD AT 1:00 PM GRUENBERG 120                                                                           
04/01/19       (H)       Heard & Held                                                                                           
04/01/19       (H)       MINUTE(JUD)                                                                                            
04/05/19       (H)       JUD AT 1:00 PM GRUENBERG 120                                                                           
04/05/19       (H)       Moved HCS CSSB 89(JUD) Out of Committee                                                                
04/05/19       (H)       MINUTE(JUD)                                                                                            
04/08/19       (H)       JUD RPT HCS(JUD) 3DP 1DNP 1AM                                                                          
04/08/19       (H)       DP: STUTES, KOPP, CLAMAN                                                                               
04/08/19       (H)       DNP: EASTMAN                                                                                           
04/08/19       (H)       AM: WOOL                                                                                               
04/08/19       (H)       VERSION: HCS CSSB 89(JUD)                                                                              
04/10/19       (S)       CONCUR VOTE HELD TO 4/12/19 UNANIMOUS                                                                  
                         CONSENT                                                                                                
04/12/19       (S)       NOT TAKEN UP 4/12                                                                                      
04/17/19       (S)       CONCUR TAKEN UP UC                                                                                     
04/17/19       (S)       WAIVE UNIFORM RULE 42 (A)                                                                              
04/17/19       (S)       FREE CONFERENCE COMMITTEE APPOINTED                                                                    
04/17/19       (S)       COGHILL (CHAIR), STEVENS, BEGICH                                                                       
04/22/19       (H)       SB89 AT 12:00 AM BUTROVICH 205                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CHAD HUTCHINSON, Staff                                                                                                          
Senate Majority Office                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Discussed the  differences between the Senate                                                             
and House versions  of SB 89, the resolution  of the differences,                                                               
and the added language that necessitated free conference powers.                                                                
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:16:34 PM                                                                                                                    
CO-CHAIR JOHN COGHILL called the Free Conference Committee on SB                                                              
89 meeting to order at 1:16 p.m.  Present at the call to order                                                                  
were  Senators  Begich  and Coghill;  and  Representatives  Tuck,                                                               
Pruitt, and Claman.                                                                                                             
                                                                                                                                
             SB  89-LEGISLATURE: ETHICS, CONFLICTS                                                                          
                                                                                                                                
1:16:54 PM                                                                                                                    
CO-CHAIR COGHILL  announced the business before  the committee is                                                               
consideration of the  FREE CONFERENCE CS FOR SENATE  BILL NO. 89,                                                               
"An Act  relating to  the Legislative  Ethics Act;  and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
CO-CHAIR COGHILL stated that the  Free Conference Committee on SB                                                               
89 will operate under Uniform  Rule 42(a). The Uniform Rules were                                                               
waived and  the conference  committee was  granted the  powers of                                                               
free  conference  thus giving  it  the  ability to  consider  all                                                               
issues germane to the title.                                                                                                    
                                                                                                                                
1:17:47 PM                                                                                                                    
CO-CHAIR  CLAMAN  stated  that  Senator Coghill  will  chair  the                                                               
meeting since the bill originated as a Senate bill.                                                                             
                                                                                                                                
CO-CHAIR COGHILL  asked Mr. Hutchinson  to provide  a section-by-                                                               
section comparison between  the House and Senate  versions of the                                                               
bill  [and  to  discuss  the   resolutions  that  appear  in  the                                                               
conference committee substitute].                                                                                               
                                                                                                                                
1:18:17 PM                                                                                                                    
CHAD  HUTCHINSON, Staff,  Senate  Majority  Office, Alaska  State                                                               
Legislature, Juneau,  directed attention  to the  document titled                                                               
"Senate  Bill  89  Comparison  Sheet  -  Legislative  Ethics  Act                                                               
Revision - FCC"  and explained he would talk about  the bill that                                                               
passed  the Senate,  referred  to  as Version  K,  the bill  that                                                               
passed  the House,  referred to  as Version  E, and  the proposed                                                               
resolution referred to as Version G.                                                                                            
                                                                                                                                
[Note: Version  G and Version O  have identical text in  the body                                                               
of the bills.  The difference is that Version G  is identified as                                                               
the CS FOR SENATE  BILL NO. 89( ) and Version  O is identified as                                                               
the FREE  CONFERENCE CS  FOR SENATE BILL  NO. 89.  The conference                                                               
committee ultimately adopted Version  O and reported that version                                                               
from committee.]                                                                                                                
                                                                                                                                
MR.  HUTCHISON directed  attention to  page 1  of the  comparison                                                               
sheet. He  explained that the  provision relating  to legislative                                                               
intent language  was added to  the House  bill. It says,  "a fair                                                               
and open government requires  that constituents have unencumbered                                                               
access  to  legislators  about  issues  important  to  the  state                                                               
pursuant to art.  I, secs. 5 and 6, Constitution  of the State of                                                               
Alaska,". He noted that Version  G retains the language the House                                                               
added.                                                                                                                          
                                                                                                                                
MR. HUTCHISON  said the  next area of  difference relates  to the                                                               
prohibition  on  official/legislative  action.  The  Senate  bill                                                               
returned  the law  to what  it was  prior to  House Bill  44. The                                                               
House bill  is similar to the  Senate bill, but it  adds language                                                               
that  says,  "or  the  legislator's  spouse  is  employed  or  is                                                               
negotiating  for   employment."  He  said  the   emphasis  is  on                                                               
including  the  legislator's  spouse.   Version  G  resolves  the                                                               
differences with a number of changes and clarification.                                                                         
                                                                                                                                
First,  it   replaces  the  term  "official   action"  (which  is                                                               
undefined) with  the term "legislative  action" which  is defined                                                               
in AS 24.60.990(10). It reads:                                                                                                  
                                                                                                                                
     (10)  "legislative action"  means  conduct relating  to                                                                    
     the development,  drafting, consideration, sponsorship,                                                                    
     enactment or defeat,  support or opposition to  or of a                                                                    
     law,  amendment,  resolution,  report,  nomination,  or                                                                    
     other   matter  affected   by  legislative   action  or                                                                    
     inaction;                                                                                                                  
                                                                                                                                
1:22:13 PM                                                                                                                    
At ease for technical difficulties.                                                                                             
                                                                                                                                
1:23:27 PM                                                                                                                    
CO-CHAIR COGHILL reconvened the meeting.                                                                                        
                                                                                                                                
MR.  HUTCHISON   continued  to  explain   that  using   the  term                                                               
"legislative action"  provides clarity  for the  Select Committee                                                               
on  Legislative Ethics  and advisors  like Jerry  Anderson as  to                                                               
what can and cannot occur.                                                                                                      
                                                                                                                                
MR. HUTCHISON  said the second  change regarding  prohibitions on                                                               
official/legislative  action that  appears in  Version G  is that                                                               
the term  "could" is replaced by  the phrase "is likely  to." For                                                               
the  purposes  of  the  ethics  committee,  the  term  likely  is                                                               
intended  to mean  more  likely than  not or  a  greater than  50                                                               
percent chance.                                                                                                                 
                                                                                                                                
1:24:44 PM                                                                                                                    
SENATOR BEGICH asked if that  is legislatively defined or just in                                                               
the notes. He added that he values the notes highly.                                                                            
                                                                                                                                
MR.  HUTCHISON   replied  the   preponderance  of   the  evidence                                                               
threshold is  used, just as it  is in civil proceedings.  He said                                                               
we took "likely"  to mean more likely than not  or a greater than                                                               
50 percent chance.                                                                                                              
                                                                                                                                
CO-CHAIR COGHILL clarified that  this relates to the prohibitions                                                               
in Section 2 of the bill and  Section 3 deals with how to declare                                                               
a conflict.  In House Bill  44 the definitions were  connected to                                                               
both sections and the initial draft  of SB 89 wasn't drafted that                                                               
way. "Hence  the Free Conference  Committee; we had to  tie those                                                               
definitions together."                                                                                                          
                                                                                                                                
MR.  HUTCHISON said  the third  change regarding  prohibitions on                                                               
official/legislative  action that  appears in  Version G  is that                                                               
legislative action  is only barred  if the legislation  is likely                                                               
to "substantially  benefit or harm"  the financial  interest. The                                                               
definition of "financial interest" is  clarified in Version G. He                                                               
said  the  intent was  to  sync  everything and  give  definitive                                                               
parameters to the meaning of  "substantially benefit or harm" and                                                               
"financial interest."                                                                                                           
                                                                                                                                
1:26:32 PM                                                                                                                    
MR.  HUTCHISON said  the  fourth change  in  Section 2  regarding                                                               
prohibitions  on official/legislative  action  is  that the  term                                                               
"another"   is  clarified   to  mean   "the  legislator   or  the                                                               
legislator's spouse." He noted that  the definition in House Bill                                                               
44 included  immediate family and  that was considered to  be too                                                               
broad.                                                                                                                          
                                                                                                                                
MR.  HUTCHISON   said  Section  3  relates   to  declarations  of                                                               
conflict. The  Senate bill said  conflicts should be  declared in                                                               
the committee process and on the  floor if there is an "equity or                                                               
ownership  interest" instead  of  a  "financial interest."  Also,                                                               
conflicts  are compared  with a  "substantial  class of  persons"                                                               
rather than the  "general public" because the  general public was                                                               
prohibitively broad. The House bill  kept those changes and added                                                               
the  "legislator's spouse."  Version G  resolved the  differences                                                               
with  the  decision that  "conflicts  shall  be declared  in  the                                                               
committee process and  on the floor if the effect  of the vote is                                                               
likely to  substantially benefit  or harm the  financial interest                                                               
of  the  legislator or  the  legislator's  spouse." He  said  the                                                               
intent  is to  sync all  language and  definitions. An  important                                                               
addition was  that "employment" and "negotiating  for employment"                                                               
were included with negotiating for employment.                                                                                  
                                                                                                                                
1:28:35 PM                                                                                                                    
MR.  HUTCHISON  explained  that  the  Senate  bill  repealed  the                                                               
definition   of  "substantially   benefit  or   harm"  under   AS                                                               
24.60.030(j)(2) and the definition  of "financial interest" under                                                               
AS 24.60.990(a)(6)  and returned to  the law prior to  House Bill                                                               
44. The House  bill also repealed those  definitions and returned                                                               
to  the  law prior  to  House  Bill  44.  He explained  that  the                                                               
resolution in  Version G is found  in Section 4 of  the bill that                                                               
amends AS 24.60.030(j)(2) to read:                                                                                              
                                                                                                                                
     (2) "substantially  benefit or  harm" means  the effect                                                                    
     on the person's financial  interest is greater than the                                                                    
     effect  on  the  financial interest  of  a  substantial                                                                    
     class  of persons  to  which the  person  belongs as  a                                                                    
     member  of  a   profession,  occupation,  industry,  or                                                                    
     region.                                                                                                                    
                                                                                                                                
MR. HUTCHISON explained that the  intent is to eliminate personal                                                               
enrichment or benefit  to a specific company to  the detriment of                                                               
the  rest of  the industry.  He highlighted  that Version  G also                                                               
repeals AS 24.60.990(a)(6) in Section 6 of the bill.                                                                            
                                                                                                                                
CO-CHAIR   COGHILL  clarified   that  the   conference  committee                                                               
substitute  was prepared  by legislators  working with  Dan Wayne                                                               
with Legislative Legal Services.                                                                                                
                                                                                                                                
MR. HUTCHISON  agreed. He explained  that Section 5 of  Version G                                                               
adds  the  revised  definition  of  "financial  interest"  in  AS                                                               
24.60.030(j)(3). It did  not exist in either the  Senate or House                                                               
bills. The new paragraph reads:                                                                                                 
                                                                                                                                
     (3) "financial interest" means  a substantial equity or                                                                    
     ownership  interest  in  a business,  investment,  real                                                                    
     property, lease, or other enterprise.                                                                                      
                                                                                                                                
He  said the  intent  is  to sync  the  language  to clarify  the                                                               
interpretation for the ethics committee.                                                                                        
                                                                                                                                
He reiterated  that AS 24.60.990(a)(6)  is repealed in  Section 6                                                               
of Version G.                                                                                                                   
                                                                                                                                
Section  7  of  Version  G   is  the  effective  date,  which  is                                                               
immediate.  Both  the  Senate  and   House  bills  also  have  an                                                               
immediate effective date.                                                                                                       
                                                                                                                                
CO-CHAIR COGHILL stated that free  conference powers were granted                                                               
because of the  new language in Version G that  was not in either                                                               
the Senate or  House bills. The intent was to  clarify that "when                                                               
you  have   a  real   conflict  of   interest,  there   are  some                                                               
prohibitions and some requirements for  you to declare them." The                                                               
definitions  are better  than before  and it  provides continuity                                                               
between   the   prohibition    language   and   the   declaration                                                               
requirements.                                                                                                                   
                                                                                                                                
1:32:43 PM                                                                                                                    
REPRESENTATIVE  TUCK  stated  that  the  intent  is  to  fix  the                                                               
unintended consequences that resulted from  House Bill 44. Two of                                                               
the largest  problems were not  having definitions  for "official                                                               
action" and  "official influence."  He related  his understanding                                                               
of the bill as it went  through the House State Affairs Committee                                                               
was to  require a  legislator to  declare a  conflict and  if the                                                               
conflict does  exist, to  prevent them  from voting  in committee                                                               
and on  the floor.  However, the resolution  that went  along for                                                               
that to happen  on the floor did not pass.  Because there isn't a                                                               
definition  for "official  action," legislators  have to  lean on                                                               
"legislative  action"  which is  drafting  a  bill, talking  with                                                               
constituents, talking  with the  public, meeting  one-on-one with                                                               
other legislators, caucus meetings, etc.  He said that really put                                                               
some  restrictions on  everybody's  ability  to maneuver  without                                                               
fear of having a conflict.                                                                                                      
                                                                                                                                
He pointed out that [AS 24.60.10] states the following:                                                                         
                                                                                                                                
     The Legislature finds that                                                                                                 
                                                                                                                                
     (1)  high  moral  and ethical  standards  among  public                                                                    
     servants in  the legislative  branch of  government are                                                                    
     essential to assure the  trust, respect, and confidence                                                                    
     of the people of this state.                                                                                               
                                                                                                                                
     (2)   a  fair   and  open   government  requires   that                                                                    
     legislators  and  legislative   employees  conduct  the                                                                    
     public's  business  in  a  manner  that  preserves  the                                                                    
     integrity  of   the  legislative  process   and  avoids                                                                    
     conflicts of interest or  even appearances of conflicts                                                                    
     of interest.                                                                                                               
                                                                                                                                
REPRESENTATIVE TUCK said the statute  goes on to acknowledge that                                                               
a  code of  conduct cannot  solve every  problem. He  offered his                                                               
belief that,  "the best that  we can do is  the best that  we can                                                               
do." With  that in mind,  he said it helps  that in Section  2 of                                                               
Version G the term "official  influence" was removed. He said his                                                               
next  question is  whether Version  G  addresses the  issue of  a                                                               
legislator who  has a conflict being  able to draft or  present a                                                               
bill [that is related to the declared conflict].                                                                                
                                                                                                                                
MR. HUTCHISON  directed attention  to question  4 in  the "Bullet                                                               
Points"  document in  the packets  and  summarized the  following                                                               
question and answer:                                                                                                            
                                                                                                                                
     4.  When   is  a  legislator  prohibited   from  taking                                                                    
     legislative action?                                                                                                        
                                                                                                                                
     ANSWER:  In circumstances  where legislative  action is                                                                
     likely to  substantially benefit or harm  the financial                                                              
     interest  of the  legislator, the  legislator's spouse,                                                                  
     or  a   person  with  whom  the   legislator  [or]  the                                                                    
     legislator's spouse  is employed or is  negotiating for                                                                    
     employment.                                                                                                                
                                                                                                                                
MR. HUTCHISON said  there is a three-step analysis  looking at 1)                                                               
likely,  2)  substantially  benefit  or harm,  and  3)  financial                                                               
interest  and when  those line  up the  legislator is  prohibited                                                               
from taking legislative action.                                                                                                 
                                                                                                                                
1) The  term "likely"  means more  likely than  not or  a greater                                                               
than 50 percent chance;                                                                                                         
                                                                                                                                
2) Substantially benefit or harm  means "The effect on a person's                                                               
financial interest  is greater than  the effect on  the financial                                                               
interest of  a substantial class  of persons to which  the person                                                               
belongs as  a member  of a  profession, occupation,  industry, or                                                               
region." He read the following example:                                                                                         
                                                                                                                                
     Legislator  A  works  for  Company  A  in  a  statewide                                                                    
     industry. Other  companies are  also in  that industry,                                                                    
     including  companies  B,    C,   D,  E,  F,  and  G.  A                                                                    
     substantial  benefit  occurs  when  Company  A  greatly                                                                    
     benefits, but thee is no  benefit to companies B, C, D,                                                                    
     E, F, and G.                                                                                                               
                                                                                                                                
     There is no "substantial  benefit" if all companies (A,                                                                    
     B,  C, D,  E, F,  and G)  benefit because  of an  equal                                                                    
     policy that  benefits the entire industry  (even if, in                                                                  
     reality,   the   benefit   from  company   to   company                                                                    
     varies)...Al  long  as  the   policy  does  not  target                                                                    
     Company A, for the purpose  of benefiting Company A, to                                                                    
     the detriment of  the rest of the industry,  then it is                                                                    
     allowable.                                                                                                                 
                                                                                                                                
1:38:17 PM                                                                                                                    
CO-CHAIR  COGHILL cautioned  that 20  minutes answers  raise more                                                               
questions.                                                                                                                      
                                                                                                                                
1:38:31 PM                                                                                                                    
SENATOR  BEGICH related  a personal  example.  Under the  current                                                               
ethics  law he  has  a conflict  because his  wife  works for  an                                                               
organization that engages  with a number of  school districts. He                                                               
said it's unclear whether or not  she would have benefited by his                                                               
supporting  early  funding  of   education  in  a  constitutional                                                               
amendment. Under the language that's  proposed there would not be                                                               
a  conflict  because  early  funding   would  affect  all  school                                                               
districts, not just  those few. His wife would  not be materially                                                               
impacted  and   therefore  he  would  be   able  co-sponsor  that                                                               
legislation.                                                                                                                    
                                                                                                                                
MR. HUTCHISON said that's correct.                                                                                              
                                                                                                                                
1:39:20 PM                                                                                                                    
CO-CHAIR COGHILL  advised that  his aide  just notified  him that                                                               
Version G is  the draft CS and the Free  Conference CS is Version                                                               
O. He said  the language in the two versions  is identical but he                                                               
would  suggest  everyone  take  a  moment  to  check  and  become                                                               
comfortable with Version O.                                                                                                     
                                                                                                                                
1:39:44 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
1:41:01 PM                                                                                                                    
CO-CHAIR COGHILL  reconvened the  meeting and explained  that the                                                               
work  draft Version  G did  not  have the  free conference  title                                                               
because it  was drafted before  the House appointed  members. The                                                               
only difference is that Version  O identifies the document as the                                                               
Free Conference CS for SB 89.                                                                                                   
                                                                                                                                
1:41:33 PM                                                                                                                    
REPRESENTATIVE PRUITT noted that the  Speaker stated on the floor                                                               
that  legislators   do  not  need   to  declare  a   conflict  on                                                               
appropriation bills. He  asked if Version O  clarifies that point                                                               
or if  there is a possibility  that this issue may  come up going                                                               
forward.                                                                                                                        
                                                                                                                                
CO-CHAIR  COGHILL  explained  that  language  in  House  Bill  44                                                               
exempted conflict declarations on the budget.                                                                                   
                                                                                                                                
CO-CHAIR CLAMAN directed attention page  3, lines 3-6, of Version                                                               
O and explained  that the Speaker was referring  to that language                                                               
that the bill deletes. It reads:                                                                                                
                                                                                                                                
     [...HOWEVER,  NOTWITHSTANDING  (e)(3) OF  THIS  SECTION                                                                    
     AND THE  LIMITATIONS OF  THIS SUBSECTION,  A LEGISLATOR                                                                    
     MAY  VOTE  ON  AN  APPROPRIATION BILL  THAT  MEETS  THE                                                                    
     REUIREMENTS OF AS 37.07.020.(a) OR 37.07.100].                                                                             
                                                                                                                                
He said for  lack of a better description, "we'd  be back in kind                                                               
of the old style on the floor."                                                                                                 
                                                                                                                                
REPRESENTATIVE  PRUITT  responded  that  he  believes  that  that                                                               
answers the question.                                                                                                           
                                                                                                                                
1:44:11 PM                                                                                                                    
REPRESENTATIVE  TUCK  said he's  never  seen  anyone who  had  to                                                               
refrain from  voting on the  appropriations when they  declared a                                                               
conflict. He  said his concern  is that  it does a  disservice to                                                               
the legislative body as a whole  when a blanket statement is made                                                               
that anyone  who declares  a conflict will  be required  to vote.                                                               
What's happening, he said, is  that people aren't declaring their                                                               
conflicts. He  stressed that  people who  have a  conflict should                                                               
put  that  on  the  record  or  the  deleted  section  should  be                                                               
reinserted.                                                                                                                     
                                                                                                                                
CO-CHAIR COGHILL responded that  he believes that the [three-step                                                               
analysis Mr. Hutchison described] answers  that. He added that he                                                               
didn't believe  that people would  stop standing up to  declare a                                                               
conflict and asking to be excused  from voting. When they do, the                                                               
body makes the determination.                                                                                                   
                                                                                                                                
CO-CHAIR  CLAMAN opined  that  removing  the language  completely                                                               
helps  to   clarify  that  legislators  need   to  declare  their                                                               
conflicts.  "I  think  that's  a   more  appropriate  way  to  go                                                               
forward," he said.                                                                                                              
                                                                                                                                
1:48:01 PM                                                                                                                    
SENATOR BEGICH  said he agrees  that it  makes more sense  and is                                                               
more  beneficial to  the public  to  disclose as  opposed to  not                                                               
disclose. Having  to disclose on  the budget might take  a little                                                               
extra  time  but  the  public  deserves  to  know  if  there's  a                                                               
conflict. If  somebody doesn't disclose and  it's discovered that                                                               
the person did  have a substantive conflict,  the public deserves                                                               
to know that as well, he said. "So  I think it's a good idea that                                                               
it's left out."                                                                                                                 
                                                                                                                                
REPRESENTATIVE  PRUITT  said it  can  be  a little  tedious  when                                                               
conflicts are declared but it's  an important point that if there                                                               
are 15  people with  conflicts on an  appropriation bill  then 15                                                               
people should stand  up and declare their conflict.  He said this                                                               
is a  good time to state  legislative intent. His belief  is that                                                               
every  person that  feels they  have  a conflict  can and  should                                                               
declare it.  There should  not be a  blanket statement.  "I think                                                               
that transparency in  this particular case would be  what we were                                                               
seeking," he said.                                                                                                              
                                                                                                                                
1:50:17 PM                                                                                                                    
REPRESENTATIVE TUCK  said his main  concern is that  Rules chairs                                                               
in the past  have made statements that led people  to not declare                                                               
their conflicts.  He liked  that former  Representative Gruenberg                                                               
noticed this and made sure  that conflicts were declared. "I want                                                               
to make  sure that does  not happen,"  he said. He  suggested the                                                               
process  might be  that  when someone  declares  a conflict,  the                                                               
Speaker or  presiding officer  can ask  for a  show of  hands for                                                               
those who have the same  conflict. That could keep things moving,                                                               
he said,  because the frustration  with numerous  declarations is                                                               
understandable.                                                                                                                 
                                                                                                                                
1:51:36 PM                                                                                                                    
CO-CHAIR COGHILL said this can  be instructive for this committee                                                               
and  the presiding  officers  that are  watching.  He added,  "It                                                               
should be  properly stated  as a  motion and  the reason  why the                                                               
conflict exists  and ask to be  excused from the vote."  The bill                                                               
brings clarity and it's still wise  to err on the side of caution                                                               
and declare a perceived conflict, he said.                                                                                      
                                                                                                                                
1:52:28 PM                                                                                                                    
REPRESENTATIVE TUCK asked for clarification  that if somebody has                                                               
a conflict, they can't take  any of the legislative actions "that                                                               
are written by definition."                                                                                                     
                                                                                                                                
SENATOR BEGICH responded  that the answer is  yes. The definition                                                               
has been clarified,  but actions that were  prohibited before are                                                               
no longer  prohibited. For example,  he could sponsor a  piece of                                                               
legislation as  long as it  was not likely to  materially benefit                                                               
his spouse or  himself or the employer of his  spouse or himself.                                                               
The  previous blanket  prohibitions  under  the undefined,  loose                                                               
definition doesn't exist  any longer. "So yes you can  do it now,                                                               
but ... the  legislative action can't be  taken if, specifically,                                                               
it's more  likely to benefit you."  He asked Mr. Hutchison  if he                                                               
agrees.                                                                                                                         
                                                                                                                                
1:53:57 PM                                                                                                                    
MR.  HUTCHISON agreed  as long  as  the person  goes through  the                                                               
three-step  analysis.  He  said it's  noteworthy  that  conflicts                                                               
declared  in the  committee  process was  added  into the  latest                                                               
version of the bill.                                                                                                            
                                                                                                                                
REPRESENTATIVE  TUCK said  he did  not  see a  new definition  of                                                               
"legislative  action"  but  the   existing  definition  [from  AS                                                               
24.60.990(a)(10)] reads as follows:                                                                                             
                                                                                                                                
     (10)  "legislative action"  means  conduct relating  to                                                                    
     the development,  drafting, consideration, sponsorship,                                                                    
     enactment or defeat,  support or opposition to  or of a                                                                    
     law,  amendment,  resolution,  report,  nomination,  or                                                                    
     other   matter  affected   by  legislative   action  or                                                                    
     inaction;                                                                                                                  
                                                                                                                                
He  said part  of  the  problem with  House  Bill  44 related  to                                                               
inaction.  For example,  it can  be  an ethics  violation if  the                                                               
chair of a  committee holds a bill because they  have a conflict.                                                               
He  said the  difficulty with  including "legislative  action" in                                                               
the  bill as  defined  is "you're  kind of  putting  people in  a                                                               
sticky  situation, again,  unintentionally."  A chair  who has  a                                                               
conflict is  in trouble  if they  act and  they're in  trouble if                                                               
they don't  act. "I just want  to make sure we're  fixing this in                                                               
this version," he said.                                                                                                         
                                                                                                                                
1:55:31 PM                                                                                                                    
MR.  HUTCHISON responded  that the  Senate resolved  that problem                                                               
this  year  when  a  chair  had  a  conflict  and  the  bill  was                                                               
discharged from the committee she chaired.                                                                                      
                                                                                                                                
REPRESENTATIVE TUCK offered his  understanding that there are two                                                               
fixes.  First, make  it  so  that it  is  no  longer a  conflict.                                                               
Second, if  there is  a conflict, things  are rearranged  just as                                                               
they have been under House Bill 44.                                                                                             
                                                                                                                                
CO-CHAIR COGHILL added  that part of the solution  was to replace                                                               
the term ["official action"] with the term "legislative action."                                                                
                                                                                                                                
REPRESENTATIVE TUCK  said that wasn't  his recollection  when the                                                               
ethics committee repeatedly went  over the advisory opinions. The                                                               
problem associated  with the term  "official action" was  easy to                                                               
solve because  there is  a definition  for the  term "legislative                                                               
action."  "So  we  relied  on   the  definition  of  'legislative                                                               
action,' which I don't see changing  in this." He said he doesn't                                                               
object  to  getting rid  of  the  term "official  influence"  but                                                               
substituting  it  with  "legislative action"  doesn't  solve  the                                                               
problem. He said  he drafted a version earlier  that removed both                                                               
terms and  then defined when  a legislator could take  action. He                                                               
added, "I  guess we can  always work  around whatever we  have in                                                               
statute but  if we're going to  fix something, I think  now's the                                                               
time to try to fix it."                                                                                                         
                                                                                                                                
1:58:15 PM                                                                                                                    
CO-CHAIR CLAMAN  posed two hypothetical scenarios  of legislative                                                               
action. In scenario  one, a legislator's spouse works  for one of                                                               
the   12  for-profit   regional  Native   corporations  and   the                                                               
legislature is  considering a bill  that affects all 12  of those                                                               
corporations  equally. Scenario  two  is similar  to the  current                                                               
situation  with SB  54  that involves  the  transfer of  railroad                                                               
lands to a  private enterprise. The assumptions are  that this is                                                               
a single transaction involving the  transfer of land to a private                                                               
enterprise  that is  held by  a small  number of  people, one  of                                                               
which  is a  legislator's spouse.  He asked  how these  scenarios                                                               
differ in  terms of what that  legislator could or could  not do,                                                               
particularly with regard to drafting and supporting legislation.                                                                
                                                                                                                                
MR.  HUTCHISON  replied the  first  scenario  is not  prohibitive                                                               
because  the  bill  affects all  the  corporations  equally.  The                                                               
second scenario is prohibitive because  it qualifies in each step                                                               
of  the  three-step  analysis. The  legislative  action  is  more                                                               
likely than not  to benefit the financial interest  of the spouse                                                               
as a  principal of  the private company.  The assumption  is that                                                               
this is the only company that benefits from the transaction.                                                                    
                                                                                                                                
CO-CHAIR  CLAMAN said  he assumes  that in  the land  transaction                                                               
scenario, the  legislator could only  vote to move the  bill from                                                               
committee  and vote  for it  on  the floor.  Any other  activity,                                                               
including lobbying for the bill,  would be prohibitive because of                                                               
that financial interest.                                                                                                        
                                                                                                                                
MR.  HUTCHISON said  correct  and the  legislator  would need  to                                                               
declare the conflict both in committee and on the floor.                                                                        
                                                                                                                                
CO-CHAIR COGHILL said these clarifications  may result in changes                                                               
as to whether or not  the body requires the conflicted legislator                                                               
to vote.  He mentioned  the guidelines in  the Uniform  Rules and                                                               
Mason's Manual of Legislative Procedure.                                                                                        
                                                                                                                                
2:02:08 PM                                                                                                                    
REPRESENTATIVE TUCK provided the following commentary:                                                                          
                                                                                                                                
     We really addressed  the first part. That  is making it                                                                    
     so people  don't have a  conflict. ...  We've lightened                                                                    
     it up quite  a bit from what we have  right not. If you                                                                    
     make more than  $10,000 in the previous  12 months, you                                                                    
     have a  conflict. And  that's in  what we  have written                                                                    
     now. And so  now we're making it so  your conflicts are                                                                    
     going to be  reduced. But when you do  have a conflict,                                                                    
     we're basically  tying that person's hands  all the way                                                                    
     for any type of legislative action.                                                                                        
                                                                                                                                
      I just want to make sure that everybody understands                                                                       
      that. That that's what we're deciding to do. But the                                                                      
     way I see this being written.                                                                                              
                                                                                                                                
2:03:00 PM                                                                                                                    
SENATOR BEGICH agreed  that was what the committee  was doing and                                                               
added that  he was quite  comfortable tying a  legislator's hands                                                               
at that  point. He said that  right now his hands  are completely                                                               
tied for  most education  issues because his  wife works  for "an                                                               
entity  that may  or may  not fall  under a  vague and  ambiguous                                                               
law." He  said that under  the proposed bill he  is appropriately                                                               
prohibited  from  taking any  action  on  legislation that  would                                                               
materially benefit  her employer.  "For me,  that's what  it does                                                               
and I favor that steeper restriction," he said.                                                                                 
                                                                                                                                
2:03:46 PM                                                                                                                    
CO-CHAIR  COGHILL clarified  for  the listening  public that  the                                                               
committee was dealing  with two sections of AS  24.60 that relate                                                               
to how  to declare a  conflict and when legislative  action would                                                               
be prohibited. He  said the proposed bill  addresses the testiest                                                               
points in  House Bill 44,  but it  certainly won't solve  all the                                                               
ethical questions that will come before the legislature.                                                                        
                                                                                                                                
REPRESENTATIVE  TUCK asked  for an  example or  scenario of  when                                                               
somebody may have a conflict.                                                                                                   
                                                                                                                                
2:04:25 PM                                                                                                                    
SENATOR BEGICH related  that prior to his wife  being employed by                                                               
the Coalition for Education Equity,  that organization received a                                                               
substantive  amount of  money in  the  State of  Alaska v.  Moore                                                               
settlement. If that  happened today, he would  be prohibited from                                                               
voting  on that  legislation  because his  wife would  materially                                                               
benefit.                                                                                                                        
                                                                                                                                
He also posed  a hypothetical example of  a [legislator's spouse]                                                               
who  owns   a  company  that  does   environmental  cleanup.  The                                                               
legislator should not vote on  or sponsor any legislation related                                                               
to  environmental  cleanup  because  it's  likely  to  materially                                                               
benefit the spouse's company.                                                                                                   
                                                                                                                                
2:05:53 PM                                                                                                                    
REPRESENTATIVE  TUCK  said  the  House  State  Affairs  Committee                                                               
looked at "official  action" as not being able  to participate in                                                               
debate, not  being able to vote,  and not being able  to sign the                                                               
bill report.  He said,  "That's where  we got  in that  pickle of                                                               
'official action'  and then we  got ourselves in more  trouble by                                                               
relying on  'legislative action'."  He continued  to say  that if                                                               
everyone is  okay that action  also includes inaction,  he's okay                                                               
with it,  too. However,  not addressing  the issue  places people                                                               
back in the same spot if they  have a conflict. He said that part                                                               
could also be fixed but he  was willing to accept this resolution                                                               
because legislators  can't function  under the  current statutes.                                                               
He expressed willingness to continue to work to "clean it up."                                                                  
                                                                                                                                
CO-CHAIR COGHILL  restated that  this bill  does not  resolve all                                                               
questions. "This just tries to get  us out of the situation where                                                               
private meetings and  broad conflict questions have  come up that                                                               
have really stifled good debate  and hard work in the legislature                                                               
to this day," he said.                                                                                                          
                                                                                                                                
Finding no further discussion he solicited a motion.                                                                            
                                                                                                                                
2:07:25 PM                                                                                                                    
CO-CHAIR CLAMAN  moved that the  Free Conference Committee  on SB                                                               
89 adopt the proposed FCCS SB  89, work order 31-LS0209\O, as the                                                               
working document.                                                                                                               
                                                                                                                                
CO-CHAIR  COGHILL  found  no  objection  [and  FCCS  SB  89,  31-                                                               
LS0209\O, was adopted].                                                                                                         
                                                                                                                                
Finding no further discussion, he solicited a motion.                                                                           
                                                                                                                                
2:08:36 PM                                                                                                                    
CO-CHAIR CLAMAN moved  that the Free Conference  Committee for SB                                                               
89 recommend that the House  and Senate adopt the Free Conference                                                               
Committee  Substitute (FCCS)  for SB  89, work  order 31-LS0209\O                                                               
with the accompanying zero fiscal note.                                                                                         
                                                                                                                                
CHAIR COGHILL  asked for a roll  call vote on the  motion to send                                                               
the  conference  committee  report   to  the  respective  bodies,                                                               
recommending its approval.                                                                                                      
                                                                                                                                
2:09:03 PM                                                                                                                    
A roll  call vote  was taken.  Representatives Tuck,  Pruitt, and                                                               
Claman, and  Senators Begich  and Coghill voted  in favor  of the                                                               
motion. Senator  Stevens was  absent. Therefore,  FCCS SB  89 was                                                               
adopted by a 3:0  vote by House members and a  2:0 vote by Senate                                                               
members.                                                                                                                        
                                                                                                                                
2:09:50 PM                                                                                                                    
CO-CHAIR COGHILL stated that the motion passes and FCCS SB 89                                                                   
will be sent to the respective bodies.                                                                                          
                                                                                                                                
2:09:58 PM                                                                                                                    
There being no further business to come before the Free                                                                         
Conference Committee on SB 89, Co-Chair Coghill adjourned the                                                                   
meeting at 2:09 pm.                                                                                                             

Document Name Date/Time Subjects
SB 89 - Supplemental Document - Reference Bullet Points 4 21 19.pdf JSB89 4/22/2019 12:00:00 PM
SB 89
SB 89 Version G 4 21 19.pdf JSB89 4/22/2019 12:00:00 PM
SB 89
SB 89 - Version E - Version that Passed the House 4 21 19.PDF JSB89 4/22/2019 12:00:00 PM
SB 89
Free Conference Committee Schedule for SB 89 4.22.19.pdf JSB89 4/22/2019 12:00:00 PM
SB 89
SB 89 - Version K - Version that Passed the Senate 4 21 19.PDF JSB89 4/22/2019 12:00:00 PM
SB 89
SB 89 - Comparison Document 4 22 19.xlsx JSB89 4/22/2019 12:00:00 PM
SB 89
SB 89 - Fiscal Note - Published - SB0089-1-1-032219-LEG-N 4 21 19.PDF JSB89 4/22/2019 12:00:00 PM
SB 89