Legislature(1995 - 1996)
03/28/1996 03:40 PM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE
March 28, 1996
3:40 p.m.
MEMBERS PRESENT
Senator Bert Sharp, Chairman
Senator Randy Phillips, Vice-Chairman
Senator Loren Leman
Senator Jim Duncan
Senator Dave Donley
COMMITTEE CALENDAR
SENATE BILL NO. 314
"An Act relating to issuance of a restaurant or eating place liquor
license."
SENATE BILL NO. 141
"An Act relating to legislative ethics; and providing for an
effective date."
SENATE BILL NO. 275
"An Act relating to state procurement practices and procedures; and
providing for an effective date."
HB 211 (VOTER REGISTRATION & ELECTIONS) was scheduled, but not
taken up on this date.
SB 182 (ELECTIONS ADMINISTRATION & VOTER REG'N) was scheduled, but
not taken up on this date.
SB 203 (TASK FORCE ON RECYCLING INDUSTRIES) was scheduled, but not
taken up on this date.
PREVIOUS SENATE COMMITTEE ACTION
SB 314 - No previous senate committee action.
SB 141 - See State Affairs minutes dated 4/20/95, 4/27/95, 1/30/96,
2/6/96, 2/27/96, and 3/26/96.
SB 275 - See State Affairs minutes dated 3/12/96.
WITNESS REGISTER
Senator Rick Halford, Co-chairman
Finance Committee
State Capitol, Juneau, AK 99801-1182¶(907)465-4958
POSITION STATEMENT: prime sponsor of SB 314
George Malekos
North Slope Restaurant
Eagle River, AK
POSITION STATEMENT: supports SB 314
Ann Ringstad, Aide
Senate State Affairs Committee
State Capitol, Juneau, AK 99801-1182¶(907)465-4522
POSITION STATEMENT: testified on SB 141
Terry Cramer, Attorney
Legislative Legal and Research Services
130 Seward St., Ste. 409, Juneau, AK 99801-2105¶(907)465-2450
POSITION STATEMENT: testified on SB 141
Susie Barnett, Professional Assistant
Legislative Ethics Committee
P.O. Box 101468, Anchorage, AK 99510-1468¶(907)258-8172
POSITION STATEMENT: testified on SB 141
Brooke Miles, Regulation of Lobbying
Alaska Public Offices Commission
P.O. Box 110222, Juneau, AK 99811-0222¶(907)465-4864
POSITION STATEMENT: testified on SB 141
Jerry Burnett, Aide
Senator Randy Phillips
State Capitol, Juneau, AK 99801-1182¶(907)465-4949
POSITION STATEMENT: testified on SB 275
Dugan Petty, Director
Division of General Services
Department of Administration
P.O. Box 110210, Juneau, AK 99811-0210¶(907)465-2250
POSITION STATEMENT: representing governor-prime sponsor SB 275
Loren Rasmussen, Acting Director
Division of Engineering & Operations
Department of Transportation & Public Facilities
3132 Channel Dr., Juneau, AK 99801-7898¶(907)465-2960
POSITION STATEMENT: testified on SB 275
ACTION NARRATIVE
SB 314 RESTAURANT LIQUOR LICENSE OWNERSHIP
TAPE 96-25, SIDE A
Number 001
CHAIRMAN SHARP called the Senate State Affairs Committee to order
at 3:40 p.m. and brought up SB 314 as the first order of business
before the committee. He stated that the committee wouldn't take
teleconference testimony at this time, but they would take
testimony from one person who travelled to Juneau to attend the
hearing. The chairman called Senator Halford to testify.
Number 020
SENATOR RICK HALFORD, Co-chairman - Finance Committee, prime
sponsor of SB 314, stated he introduced the bill at the request of
one of his constituents. The system had always been that a seller
couldn't be in both the wholesale and the retail business of
alcohol at the same time. We went through a fairly extensive
process to create the brew-pub licenses and put limitations on
them. We required them to have a bar license. But inadvertently,
we created a mega-license that goes around the rest of the
precedents in this very regulated industry. If you combine a
brewery license with a restaurant license, and then you add the
exemption for entertainment, which can be called a mini-tavern
license, and you have basically a mega license that can deal in
wholesale, retail, and virtually everything, down to selling a
product in a bucket or a barrel or a bag, and all the retail sales.
That is not what was intended, but that's what happened. There are
several of these licenses out there. SB 314 would reestablish what
most people thought was the case: that you couldn't have a
dispensing license and a wholesale license at the same time. It is
not retroactive; there are several of these licenses already
issued, and SB 314 would not affect those licenses.
CHAIRMAN SHARP asked if currently people can get a small mini-
brewing license.
SENATOR HALFORD replied it is a brewery license in combination with
a restaurant license, which allows them to make the product and to
sell the product at the retail level. But since they're a brewery,
they can also sell the product at the wholesale level. So they're
integrated into the entire chain where no other licensee can be.
The brew-pub license was supposed to satisfy the question of
alcohol content in the product. You then go through the process,
all the inspections, and probably $200,000.00 worth of equipment at
a minimum. The brewery license takes away all those restrictions.
When you combine that with a retail beer and wine license, then you
have a complete integrated sales and production system.
CHAIRMAN SHARP called Mr. Malekos to testify.
Number 120
GEORGE MALEKOS stated he owns the first brew-pub in Alaska. Mr.
Malekos submitted written testimony in support of SB 314. He gave
a brief explanation on the difference between a brew-pub and a
micro-brewery. He reiterated information on licensing previously
stated by Senator Halford. He stated he has no way of marketing
his beer under the type of license he has, but the new license
allows for a semi-tavern. These licenses are able to compete on a
completely different level from dispensary licenses, that sell for
a much greater amount of money. Mr. Malekos stated he has read
some of the letters of opposition submitted to the committee, which
state SB 314 is to eliminate competition. He stated his industry
is founded on competition. They would just like an equal playing
field in the competition. There is simply no way to compete with
the brewery-restaurants. In speaking to the Anchorage Assembly,
they were under the mistaken impression that these brewery-
restaurants would have the same brew-pub licenses as Mr. Malekos
has. He stated all he is asking for is an equal playing field.
CHAIRMAN SHARP asked if there are any questions on SB 314.
SENATOR RANDY PHILLIPS asked the chairman if there were any more
people to testify.
CHAIRMAN SHARP responded he stated earlier that the committee would
take testimony from anyone who travelled to Juneau to testify on
the bill. There will be another hearing on SB 314 for public
testimony via teleconference, whenever the bill is rescheduled.
That meeting will be noticed. The primary purpose of this meeting
has been stated. The chairman stated the committee would go on to
the next item on the agenda.
SB 141 LEGISLATIVE ETHICS
Number 240
CHAIRMAN SHARP brought up SB 141 as the next order of business
before the Senate State Affairs Committee. He asked committee
members if they've come up with more possible amendments since the
last committee meeting. We do have a side-by-side analysis of the
Executive Branch Ethics Act and the Legislative Ethics Act in
members' bill packets. He advised members who would like to amend
the Executive Branch Ethics Act to do so in the Rules Committee.
SENATOR DONLEY stated he has several amendments to offer.
CHAIRMAN SHARP stated members should have in their bill packets
comments from Susie Barnett of the Legislative Ethics Committee
relating to the five amendments adopted at the last meeting.
SENATOR DONLEY stated he has information from the legislative
drafter on how the legal defense fund provision would relate to the
initiative. Senator Donley's amendment, amendment R.4 relates to
that. The amendment clarifies that the APOC would set up the
regulations and guidelines. It also clarifies that it would be
outside the impact of the initiative process. This addresses
Senator Pearce's concern.
CHAIRMAN SHARP asked if there would be any restrictions on how the
defense fund could be used. Is it just for Ethics violations?
SENATOR DONLEY replied that's the first time that question has ever
been raised to him. He thought it was clear that since it will be
under the domain of APOC, it was for some function that was related
to your duties as a legislator.
CHAIRMAN SHARP agreed; that's what he would think also.
SENATOR DUNCAN noted that under subsection (d), the APOC will write
regulations on how the money may be expended, that is covered.
CHAIRMAN SHARP thinks the APOC could set whatever they want in
regulation.
Number 335
SENATOR DONLEY made a motion to adopt amendment R.4.
CHAIRMAN SHARP asked Senator Donley if he believed, from line 11-19
on page 1 of amendment R.4, that this would not run afoul of the
limitations in either the initiative or the bill, since this allows
unlimited transfer of campaign money into a defense fund. He
thinks the initiative forbids that.
SENATOR DONLEY thinks the way to get around that is the contingent
effective date. That was the issue the president raised yesterday.
If you put that provision into effect before the initiative, the
initiative would modify it; if you put it into effect after passage
of an initiative, then--
CHAIRMAN SHARP asked if there was objection to amendment R.4.
Hearing no objection, the chairman stated the amendment was
adopted. He asked if there were other amendments committee members
wished to offer at this time.
SENATOR DONLEY asked if there wasn't another amendment that Senator
Pearce suggested.
CHAIRMAN SHARP stated there are some other amendments that Senator
Pearce suggested.
SENATOR DONLEY stated there was also another amendment he had asked
to be drafted that dealt with the newsletter issue. He does not
know if it was completed though. That's pretty simple though; it
would be easily conceptualized.
CHAIRMAN SHARP asked if that was the one with the June 1 deadline.
SENATOR DONLEY stated Senator Pearce asked for a June 1 deadline,
but Senator Donley thinks July 1 would be a reasonable deadline;
that's what he was going to propose to the committee.
CHAIRMAN SHARP agreed that there's not enough time to put out a
newsletter between the date you get home and June 1. He asked
Senator Donley to conceptualize that in writing. He asked for a
motion to move the amendments in the committee's possession.
Number 380
SENATOR RANDY PHILLIPS made a motion to adopt amendment R.5.
SENATOR DONLEY stated amendment R.5 referred to a legislator
specifically having a conflict of interest in a committee meeting,
and the legislator would then orally disclose the conflict of
interest. He does not have a problem with the amendment.
CHAIRMAN SHARP, hearing no objection, stated amendment R.5 was
adopted.
CHAIRMAN SHARP asked if anyone cared to offer amendment R.6.
SENATOR RANDY PHILLIPS asked for a brief explanation of the
amendment.
Number 400
ANN RINGSTAD, Committee Aide to the Senate State Affairs Committee,
stated that Senator Pearce was concerned that personal gifts should
not be publicly disclosed, but should be disclosed in
confidentiality to the Ethics Committee. Only gifts that
legislators receive through legislative contacts will be publicly
disclosed.
SENATOR DONLEY asked what the dollar amount that triggers reporting
of gifts will be under SB 141.
MS. RINGSTAD stated it will be $250.00 or more.
SENATOR LEMAN asked for clarification that this amendment would
still require reporting of personal gifts to the Ethics Committee,
but the Ethics Committee would not disclose those gifts in the
journal.
MS. RINGSTAD responded that is correct: that information would be
confidential. That is the intent of this amendment.
SENATOR DONLEY thinks that C-6 are the ones that are open: public
disclosures.
MS. RINGSTAD stated it's referring to Section 18, page 10 of the
"R" work draft.
Number 420
SENATOR RANDY PHILLIPS made a motion to adopt amendment R.6.
SENATOR DONLEY stated he seemed to remember that the problem was
that you're supposed to report, but it wasn't clear whether you
report to the Ethics Committee or to the clerk. This just sets out
that you report to the Ethics Committee, and the Ethics Committee
forwards the appropriate ones to the clerk, and the clerk then
publishes those.
MS. RINGSTAD stated that is how she understands it.
CHAIRMAN SHARP asked if there was objection to amendment R.6.
Hearing none, he stated the amendment was adopted.
CHAIRMAN SHARP noted the next amendment was R.7.
SENATOR RANDY PHILLIPS stated this is the amendment regarding the
deadline. It's hard to comply with the deadline, because limited
partnership reports aren't received until after the first of March.
CHAIRMAN SHARP agreed it is impossible to comply.
SENATOR DONLEY stated he hasn't yet heard a motion.
SENATOR DUNCAN stated he's not moving it.
CHAIRMAN SHARP stated you won't hear it from him.
SENATOR RANDY PHILLIPS stated he has an amendment dealing with
legislative spouses lobbying for compensation. It was brought to
his intention that the amendment on this subject which was
previously adopted might be interpreted to mean spouses of
legislators would not have the ability to testify before a
committee. This would keep the prohibition, but would allow
spouses to testify before committees. He asked the legislative
drafter if he correctly explained the amendment.
Number 455
TERRY CRAMER, Attorney, Legislative Legal and Research Services,
stated the explanation was fine. She is not sure the original
amendment would have been interpreted with that result, but it was
confusingly drafted.
CHAIRMAN SHARP stated he was thinking about revisiting that
amendment for rescinding action.
SENATOR DUNCAN asked if this would replace the language previously
adopted.
SENATOR RANDY PHILLIPS stated yes.
MS. CRAMER stated the original language had two new sections. The
first of the two new sections is deleted by this amendment, so
you're only putting in one new section. The language you're
deleting raised the possibility that you would be denying spouses
free speech.
SENATOR DUNCAN asked if he is looking at the correct amendment: R.1
SENATOR RANDY PHILLIPS replied, no, Senator Duncan should be
looking at amendment R.8.
SENATOR DUNCAN stated he does not have the amendment.
MS. CRAMER responded that R.8 is the new one. If you start with
R.1, and delete what's labeled as Section 2, you get there.
SENATOR DUNCAN stated that R.1 doesn't say delete anything.
CHAIRMAN SHARP doesn't think he has it.
MS. CRAMER stated the amendment is not drafted as an amendment to
the amendment. It's drafted as an amendment to the bill.
SENATOR DUNCAN stated that they've already adopted an amendment to
the bill, so--
SENATOR RANDY PHILLIPS asked if it could be redrafted to make the
amendment an amendment to the amendment.
MS. CRAMER responded yes.
CHAIRMAN SHARP thinks that's a little hard to do, since the
amendment's been adopted.
SENATOR DUNCAN stated we can rescind our action on the other one
and adopt this one.
SENATOR DONLEY replied, no, we've got a cs before us; it can just
be conceptual.
MS. CRAMER replied she can do whatever the committee wishes.
CHAIRMAN SHARP asked if rescinding our previous action and then
reenacting this do it?
MS. CRAMER responded if you rescinded your previous action in
adopting M.1, and adopted R.8, then you would get there. But I
should also point out that R.1 was rolling in M.1 and a couple of
others that you had adopted at that meeting.
SENATOR DUNCAN asked if R.1 was adopted in it's entirety.
SENATOR RANDY PHILLIPS replied, right.
SENATOR DUNCAN stated they did not.
MS. RINGSTAD responded those were the three amendments the
committee adopted on Tuesday, and rather than rolling it into
another bill, she just had Ms. Cramer roll it in to this one
amendment, so you can see what was going to be put in.
SENATOR DUNCAN stated the amendments were adopted separately,
though.
MS. RINGSTAD replied that's correct.
MS. CRAMER stated as long as the committee is not actually adopting
R.1, you can go back and rescind--
SENATOR DUNCAN stated they've already adopted everything in R.1.
MS. CRAMER responded they've adopted the contents of R.1, but not
the form of R.1. So you could rescind M.1 and adopt R.8.
CHAIRMAN SHARP asked Senator Phillips how he wanted to get there.
MS. CRAMER stated she can also do a "quick and dirty" amendment to
R.1.
SENATOR RANDY PHILLIPS stated that's what he was thinking of doing,
because that would be easier than going through two motions, and
trying to explain all this. Basically what he wants to do is
refine the amendment that was made.
SENATOR DONLEY asked Senator Phillips to explain again the
amendment.
SENATOR RANDY PHILLIPS stated the amendment adopted a few days ago,
makes total prohibition, if you're being paid as a lobbyist, to be
married to a lobbyist, as a legislator.
SENATOR DONLEY noted, you mean to be married to a legislator?
CHAIRMAN SHARP responded, yes, a lobbyist married to a legislator.
SENATOR DUNCAN added, and cohabitating.
SENATOR RANDY PHILLIPS stated if you are married to someone who's
not paid as a lobbyist, but wanted to testify before a committee,
then that would also be prohibited. That was not the intent of the
amendment.
SENATOR LEMAN asked where that appears in this amendment? He is
not seeing it.
MS. RINGSTAD showed Senator Leman where that is in the amendment.
MS. CRAMER explained she is not sure that it would be interpreted
to deny spouses the opportunity to approach legislators and
legislative committees, but it might be.
SENATOR RANDY PHILLIPS stated they have a fax from the Ethics
Committee stating they have a different view of the world on this
one.
Number 515
SENATOR DONLEY asked if the proposed amendment would allow a spouse
who wasn't a lobbyist to do whatever they want.
SENATOR RANDY PHILLIPS replied, yes.
SENATOR DONLEY asked if it would allow a spouse who was a
registered lobbyist to participate in the legislative process for
things other than the clients they represent? He asked Senator
Phillips if he understood the question. Senator Donley thinks they
should have freedom of speech.
SENATOR DUNCAN thinks this is getting confusing, the way it's
drafted. He thinks this could be corrected in the Rules Committee.
SENATOR RANDY PHILLIPS stated that's fine. He doesn't care,
frankly. He withdrew the amendment.
SENATOR DONLEY doesn't think it's that hard. We just need to
decide how much freedom of speech to give them.
SENATOR RANDY PHILLIPS agreed, but he doesn't want to risk losing
the whole amendment, so he would just as soon keep the ban for
everyone.
SENATOR DONLEY asked Senator Phillips if he is withdrawing the
amendment.
SENATOR RANDY PHILLIPS stated if Senator Donley is interested, he
will move it again, as written by Ms. Cramer.
CHAIRMAN SHARP asked Senator Donley if he had an amendment.
Number 535
SENATOR DONLEY stated he had an amendment dealing with a deadline
for sending out newsletters. He asked if Senator Phillips
amendment was adopted.
CHAIRMAN SHARP stated Ms. Cramer is currently redrafting the
amendment.
SENATOR DONLEY asked the chairman if he would like to move on to
that amendment.
CHAIRMAN SHARP responded yes.
SENATOR DONLEY stated there is a provision suggested by the Ethics
Committee that we not allow newsletters within 90 days of an
election.
CHAIRMAN SHARP stated they suggested June 1, the filing deadline.
SENATOR DONLEY thinks they're trying to address something that
isn't really a problem. The compromise, since they seem to be
intimidated into doing some of these ridiculous things, would be to
change it to July 1. He doesn't think he's ever gotten a
newsletter out by June 1. Between the end of session, being on the
road, and your equipment being shipped back for two weeks, there is
no way to get it done by June 1.
SENATOR RANDY PHILLIPS agreed.
SENATOR DONLEY thinks the whole thing ought to be deleted.
SUSIE BARNETT, Professional Assistant, Legislative Ethics
Committee, clarified that on page 3, lines 22 and 23, the funds
referred to are leadership funds or committee funds, those kinds of
things. It wouldn't affect your office account funds.
SENATOR DONLEY thanks Ms. Barnett for that correction. He did not
understand what the committee was proposing. He suggested a July
1 cutoff for mailings. A committee will not be able to generate
something before July 1.
SENATOR DUNCAN is not sure a committee should do something. Why
would we want to authorize a committee to do a mailing at all
during election season? A committee doesn't need to do a
newsletter.
SENATOR RANDY PHILLIPS agreed. He doesn't think Senator Donley
wants the amendment he is proposing.
SENATOR DUNCAN does not think Senator Donley would want that
amendment either.
SENATOR DONLEY doesn't care. He thinks maybe since he hasn't been
a chairman in so long, he wouldn't know what to do with it.
CHAIRMAN SHARP asked if the committee wanted to try to define
"campaign period", delete "campaign period", delete all of Section
3? He doesn't care.
SENATOR DUNCAN suggested leaving it alone. He thinks with Ms.
Barnett's explanation that Section 3 is okay. It's only referring
to a committee mailing.
SENATOR LEMAN asked, what committee funds?
TAPE 96-25, SIDE B
CHAIRMAN SHARP asked if they have an amendment that addresses the
page of the bill where the amendment ended up?
Number 580
MS. CRAMER stated committee members have in front of them a
handwritten amendment to amendment R.1. Page 1, line 5 through
page 2, line 8 refers to amendment R.1, not to the bill.
CHAIRMAN SHARP asked if they can do that.
SENATOR RANDY PHILLIPS stated they could.
MS. CRAMER stated page 2, lines 9-16 is what is left.
SENATOR DUNCAN asked if everything would be taken out, but leave
Section 3 in?
MS. CRAMER responded, yes.
Number 558
SENATOR RANDY PHILLIPS made a motion to adopt the amendment to
amendment R.1. He asked Ms. Cramer to explain the amendment once
again.
MS. CRAMER replied the amendment to amendment R.1 would delete most
of the material on page 1 and the first 8 lines on page 2. It
leaves in place proposed new bill Section 3 and all the rest of the
material in amendment R.1.
SENATOR DONLEY asked what the amendment would do.
MS. CRAMER responded it would take out language that appeared to
suggest that spouses and spousal equivalents of legislators would
not be able to testify before committees or interact with
legislators on issues that they were concerned about, if they are
not paid lobbyists.
CHAIRMAN SHARP asked if that includes employees that are sent to
lobby, if they are legislative spouses.
MS. CRAMER replied that it would, if they were required to register
as a lobbyist.
CHAIRMAN SHARP asked if that meant that a governmental lobbyist, if
they were a legislative spouse, would still be able to lobby the
legislature?
MS. CRAMER responded they could, because governmental folks are not
covered by the lobbying law.
CHAIRMAN SHARP thinks lobbying is lobbying. If you're asking for
money or lobbying for a cause.... He has just seen a new federal
law that forbids any lobbying by the beneficiaries of federal funds
that are passed on through state grants.
SENATOR DONLEY asked if they didn't have the prohibition where you
can't use the money from a grant to come back and lobby with it?
CHAIRMAN SHARP stated now, no beneficiaries of that money cannot
lobby.
SENATOR DUNCAN stated that would empty the hallways.
Number 530
CHAIRMAN SHARP asked if there was any objection to the amendment to
amendment R.1. Hearing none, he stated it was adopted.
SENATOR LEMAN stated he has two other issues. The first relates to
a letter of intent. He would prefer to change the statute. He
asked Ms. Cramer to explain why she recommended a letter of intent.
MS. CRAMER stated she could not find anything in the bill that
would prohibit being employed by a political subdivision, so she
couldn't find anything to amend to say it didn't apply to that.
SENATOR LEMAN stated that is exactly his point: it never was the
intent, but it is now the interpretation under which we have to
operate.
SENATOR RANDY PHILLIPS asked if that is APOC or the Ethics
Committee?
SENATOR LEMAN stated it is APOC. He asked if the regulations have
been adopted yet.
BROOKE MILES, Regulation of Lobbying, Alaska Public Offices
Commission, stated the regulations have been adopted.
SENATOR LEMAN thinks the APOC has gone well beyond legislative
intent.
Number 510
MS. CRAMER asked what the source of the prohibition was against
municipal employment or political subdivision employment.
SENATOR LEMAN asked Ms. Barnett if she would respond to that.
MS. BARNETT responded no. She is not sure which section they are
talking about. Are they talking about contracts and leases?
SENATOR LEMAN asked for an explanation of what the Ethics Committee
advisory opinion or ruling was on employment by a municipality, if
that municipality was funding that project from an appropriation by
the state.
MS. BARNETT replied the advisory opinion to which she thinks
Senator Leman is referring was an early 1993 opinion. That opinion
referred to source of funds. It is the burden of the legislator or
legislative employee to research what the source of funds are for
contracts, leases, or grants. Is that what he is referring to? So
it could affect contract employment. But there isn't anything
regarding employment with a political subdivision under the new
law. However, there was a memo put out years ago which addressed
political subdivisions and employment by legislators. Does that
ring a bell to Ms. Cramer?
MS. CRAMER replied the only bell it rings with her is that you can
be employed by a political subdivision and not violate dual office
holding under the constitution. She doesn't think she's ever
thought about political subdivision with the Ethics Code.
SENATOR DONLEY stated he remembers a big floor fight and a vote in
the house.
MS. CRAMER stated there may have been a proposal that she was not
involved in drafting.
SENATOR DONLEY stated the house took it out of the bill. He thinks
that was the year it passed the house, but didn't pass the senate.
But there hasn't been an objection to it.
CHAIRMAN SHARP stated he has no objection. He didn't know a
legislator couldn't work professionally on a professional contract,
or digging a ditch as far as that's concerned, for any
municipality, no matter where the money comes from, when he or she
wasn't in session. It's up to the municipality to bid it out. He
can't imagine prohibiting that kind of work. What the hell's a guy
supposed to do to make a living in this state?
SENATOR DONLEY asked if anyone objects.
Number 480
CHAIRMAN SHARP doesn't have an objection, but thinks a letter of
intent is a weak way to go about it. He would load it right in the
damn statute.
MS. CRAMER stated she can create a place in statute, but if she
doesn't know toward what harm she's directing the medicine, it may
not be as useful as if she did.
SENATOR LEMAN moved the adoption of the letter of intent.
Number 465
CHAIRMAN SHARP asked if there was objection to the letter of
intent. Hearing none, he stated the letter of intent was adopted.
He also suggested that Senator Leman might wish to load that
language somewhere in the bill.
SENATOR LEMAN stated he has one other point on Section 45, page 24,
lines 17-21. It has to deal with the word "substantial". The APOC
has come up with what he thinks is an obtuse interpretation of
"substantial". For example, if a legislator pays over $5,000.00 in
raw fish taxes, then you have a substantial interest in state
government. So the legislator then has to report the source and
the amount of income. He thinks that interpretation is at odds
with the original intent of the legislation.
SENATOR DONLEY asked what Senator Leman would propose.
SENATOR LEMAN stated he would propose defining "substantial". He
asked Ms. Cramer if there is a definition for "substantial".
MS. CRAMER does not recall that there is a definition for
"substantial". There certainly isn't in AS 24.60. [After looking,
Ms. Cramer does find a definition for substantial.] It is a long
paragraph. "A person has a substantial interest in legislative,
administrative, or political action if they will be directly and
substantially affected financially by the action...."
SENATOR DONLEY commented he loves it when the definition includes
the word being defined.
MS. CRAMER continued, stating there are some exceptions. If they
seek contracts in excess of $10,000.00 or if they are lobbyists.
It's not exactly helpful.
SENATOR LEMAN stated that the APOC, by regulation, has now further
interpreted that to mean anyone who pays more than $5,000.00 in
taxes, because they might be affected by an action of state
government.
SENATOR DONLEY asked Senator Leman to just tell him what he wanted.
MS. CRAMER stated she is not clear on the direction Senator Leman
wants her to go.
Number 406
SENATOR DONLEY asked how about raising the dollar amount from
$1,000.00.
SENATOR RANDY PHILLIPS asked what they do if they get a dividend
over $1,000.00. Do they then have a substantial interest in that?
SENATOR LEMAN thinks the problem hasn't been so much the limit, as
the interpretation of "substantial".
SENATOR RANDY PHILLIPS asked Senator Leman to consider coming up
with an amendment for the Rules Committee.
Number 375
SENATOR DONLEY stated legislators have had definitions before about
conflicts of interest that have run into the idea of, if it's a
benefit available to a large group, you know what I mean? That
might work. There are thousands of people selling that fish, so
Senator Leman is one of a large group.
SENATOR LEMAN added that all the fish buyers are doing is
collecting the tax and passing it on.
CHAIRMAN SHARP asked if there are any further specific amendments.
Hearing none, he asked what the pleasure of the committee was.
Number 362
SENATOR RANDY PHILLIPS made a motion to discharge SB 141 from the
Senate State Affairs Committee with individual recommendations.
CHAIRMAN SHARP, hearing no objection, stated SB 141 was discharged
from the Senate State Affairs Committee.
SENATOR DONLEY thanked the committee and committee staff for all
their time and effort on SB 141.
CHAIRMAN SHARP replied that most of the thanks should go to the
committee staff person.
SB 275 STATE PROCUREMENT PRACTICES & PROCEDURES
CHAIRMAN SHARP brought up SB 275 as the next order of business
before the Senate State Affairs Committee.
Number 345
JERRY BURNETT, Aide to Senator Randy Phillips, reviewed the changes
to SB 275 as set out in a memo dated March 26, 1996 from Senator
Phillips. Outlined below are the changes:
Sections 1-6 are new. These sections require the Ombudsman, the
Alaska Railroad, the Aerospace Development Corporation, Alaska
Housing Finance Corporation, the Alaska State Pensions Investment
Board, the Alaska Seafood Marketing Institute, the Legislature, and
the Court System to comply with AS 36.30.170(b), the Alaska
Bidders' Preference.
Section 10 is the same as former Section 4, except that the 5,000
square foot exception has been changed to 3,000 square feet.
Section 11 is the same as former Section 5, except that the
University is not allowed to extend leases under this provision.
Sections 6 and 7 of the original bill have been deleted.
Section 14 is the same as former Section 10, except that the
language on line 25 has been changed from "that regularly provides
in the normal course of business" to " that deals in".
Section 16 is the sam as former Section 12, with the exception that
the terms "bidder" and "offeror" are clearly defined as having the
same meaning for the purpose of AS 36.30.115(a-e).
Section 20 is the same as former Section 16, with a new subsection
(e) that prohibits the delegation by the chief procurement officer
or the Commissioner of DOT/PF of the determination to make a single
source procurement.
Section 21 is the same as former Section 17, with the exception of
changes in drafting style.
Section 23 is the same as former Section 19, except that the title
was changed to "Innovative Competitive Procurements".
Section 24 is the same as former Sections 20 and 21.
Section 25 replaces former Section 22, which makes any state
official who makes a false statement in a determination under the
procurement code guilty of a class A misdemeanor.
Section 26 is the same as former Section 23, except that 5,000
square feet has been changed to 3,000 square feet.
Section 30 is the same as former Section 27, with the addition of
new language in subsection (b) that requires the Department of
Transportation to maintain and submit to the Commissioner of the
Department of Administration records of single source procurements.
Section 32 is the same as former Section 29, with the addition of
applying the procedures to "the proposed award of a contract".
Section 33 replaces former Section 30, with all new language on the
timing of a protest.
Section 39 is the same as former Section 36, except for the change
from 30 days to 90 days for the time limit for filing a claim on a
contract.
Section 43 is the same as former Section 40, except that paragraph
(34) now exempts only Governor's Office contracts with the media
for advertising, instead of an exemption for lobbying, public
relations, and advertising.
Section 44 is the same as former Section 41, except that it
specifies "41 U.S.C." instead of "federal law".
Section 51 is a new section that makes the first lease extension
report due on August 31, 1997, formerly covered in Section 5.
Section 53 is the same as former Section 48, with the addition of
the sections applying the Alaska Bidders' Preference to agencies
exempted from the procurement code.
CHAIRMAN SHARP handed out Executive Branch Conflict of Interest
reports. He advised members to look at the forms. We want to look
at this in the Rules Committee.
SENATOR DONLEY thinks that when ethics is considered, they should
be considering a comprehensive ethics in government act.
MR. BURNETT believes that someone from the Department of
Administration would like to speak to some of the changes in the
committee substitute.
SENATOR DONLEY made a motion to adopt the committee substitute for
SB 275.
Number 205
CHAIRMAN SHARP, hearing no objection, stated the committee
substitute was adopted. He asked for comments from the Department
of Administration.
Number 195
DUGAN PETTY, Director, Division of General Services, Department of
Administration, stated there are four comments he would like to
make on the committee substitute. It is his understanding that
Section 14 still needs some work. That is the section that
addresses the issue of brokering bidder preferences. He thinks
there is still some improvement that could be made there. Under
Section 20, the section on single-source procurements, the
administration requests that there be an amendment introduced to
allow for some level of delegation on single-source procurements.
Under current statute, the sole-source requirement may not be
delegated by the chief procurement officer, with the exception of
small procurements. We'd like to maintain that level, recognizing
that there's some level of sole-source that can be delegated to an
agency head to make a determination. Other wise, the chief
procurement officer will spend a lot of their time dealing with
relatively small determinations for single sources. The current
statutory limitation is $25,000.00. He thinks the preferable
approach would be to identify it as a small procurement. If the
committee thinks a $50,000.00 statutory procurement limitation is
too high, he suggested lowering that figure to $25,000.00. It
would be difficult to handle those without some level of
delegation. Mr. Petty suggested language to make that change.
MR. PETTY made the same suggestion under Section 21. The
administration would like to see the current allowance for
delegation of small procurements to continue. On Section 21, line
20, there is a comma after $100,000.00; the administration thinks
the deletion of that comma could cause confusion. Those are the
comments.
Number 125
SENATOR LEMAN stated that if deleting the comma causes confusion,
why not just re-order the sentence to say, "a construction contract
under $100,000.00 or a contract for supplies, services, or
professional services may be awarded without competitive sealed
bidding." He moved that amendment.
CHAIRMAN SHARP, hearing no objection, stated the amendment was
adopted.
MR. PETTY stated the administration can live with the committee
substitute as it now reads. But Section 14 should be addressed.
CHAIRMAN SHARP thinks they should forbid brokering of bids that
take advantage of the preference.
Number 085
MR. PETTY informed the committee that the administration has
proposed an amendment on this issue. The amendment proposes to
leave subsection (b) alone, but require that bidders have a history
of selling the supplies of the general nature solicited by the
state to other governments or to the general public.
Number 050
SENATOR DONLEY does not remember having a problem with Section 14
the way it was.
MR. PETTY responded the amendment would not impact the Alaska
bidders' preference, but would simply address the disabled bidders'
preference, the employment program preference, and the business
employing disabled preference.
SENATOR DONLEY asked what was wrong with Section 14 the way it was.
MR. PETTY responded that the concern with Section 14 in the
committee substitute is there is a question of whether that would
solve the problem.
SENATOR DONLEY asked what's wrong with Section 14 in the committee
substitute.
MR. PETTY replied, as he understands it, it's not specific enough
to believe it would prevent the brokering issue, and also, it
required someone to have sold a product or dealt in a product or
supply within the past six months, because it's tied to the six
months of the Alaska bidders' preference. So if an individual had
sold a product 18 or 20 months ago, but not within the last 6
months, they would have been prevented from getting the preference,
when they more appropriately should get it.
TAPE 96-26, SIDE A
Number 010
CHAIRMAN SHARP moved amendment #2 to SB 275.
SENATOR LEMAN objected for the purpose of a clarification. He
asked Mr. Petty if he meant "solicit to other governmental
agencies," because that's not what the bill says.
MR. PETTY stated he misspoke. He prefers the language as it is
written.
SENATOR LEMAN stated this is a little bit different from what he
normally sees in statute. Maybe the drafting attorneys can--
SENATOR RANDY PHILLIPS interjected that SB 275 goes to the
Judiciary Committee.
SENATOR LEMAN thinks it may be interpreted as "solicit to other
governments". What does that mean? Municipal governments?
MR. PETTY responded, municipal governments or other state agencies.
We just want them to have some track record of having been in
business.
SENATOR RANDY PHILLIPS suggested, "other political jurisdictions".
CHAIRMAN SHARP asked Senator Leman what he wanted to do.
SENATOR LEMAN thinks it should say, "solicit to other agencies or
governments," or something like that.
MR. PETTY agreed. If the language was to say, "solicited to other
state agencies, other governments, or to the general public," that
would cover Senator Leman's concern and the intent of the
legislation.
SENATOR LEMAN made a motion to amend amendment #2 and incorporate
those words.
CHAIRMAN SHARP asked if there was objection. Hearing none, he
stated the amendment to amendment #2 was adopted.
Number 070
CHAIRMAN SHARP asked if there was objection to amendment #2.
Hearing none, he stated the amendment was adopted.
CHAIRMAN SHARP asked if there is any prohibition on "shopping"
bids.
MR. PETTY stated that under the invitation to bid procedures, that
is not only inappropriate and unfair, but is not allowed under
current law. However, he doesn't want to mislead the committee,
because the innovative competitive procurement section states that
under certain circumstances there are cases where it's not
practical to use the invitation to bid process, which would prevent
that, or the competitive sealed proposal process, because it's like
trying to put a square peg in a round hole.
CHAIRMAN SHARP asked if that would still prevent bid shopping.
MR. PETTY responded that if the bid process was the appropriate
vehicle, we wouldn't get to the innovative procurement; we would
use the invitation to bid process. Our obligation is to award the
bid to the low responsive responsible bidder. We can't have people
change their bid. We couldn't do that under current law.
Number 135
CHAIRMAN SHARP stated the committee has written testimony in
support of SB 275 from Johanna Munson of Emcon Alaska, Inc.
Number 150
CHAIRMAN SHARP wants the intent for buying off the GSA supply
schedules to be used only for suppliers listed in the State of
Alaska, and not to be used as a catalog for GSA suppliers outside
the state.
SENATOR DONLEY made a motion to move amendment C.6 (amendment #3),
which addresses the chairman's concern.
CHAIRMAN SHARP asked if there is objection. Hearing none, he
stated the amendment is adopted. The chairman asked if there are
other amendments.
SENATOR RANDY PHILLIPS stated there is an amendment on Section 20.
MR. PETTY stated that Section 20 is the single-source section. We
want the authority to delegate small purchases. We currently have
the ability to delegate the determination of a sole-source for a
small procurement. That current threshold is $25,000.00. We would
want to preserve the ability to delegate those small procurement
determinations for single-source.
SENATOR LEMAN moved amendment #4.
MR. PETTY stated that the amendment would amend page 10, line 16 to
read, "except for procurements of supplies, services, professional
services, or construction that do not exceed the amount for small
procurements under AS 36.30.320(a), as applicable. The authority
to make a determination required by this section may not be
delegated, even if the authority to contract is delegated under AS
36.30.015(a-b)."
SENATOR RANDY PHILLIPS stated it is a "trust me" amendment.
SENATOR DONLEY asked Senator Phillips if he knows what the
amendment is.
SENATOR RANDY PHILLIPS replied, no, but his aide is saying it's
okay.
SENATOR LEMAN asked if there is documentation of that determination
made. We don't want this abused.
MR. PETTY replied this is delegated to specific individuals, and it
is made clear to them that they have the same threshold
requirements of statute as the chief procurement officer. Under
this, we would anticipate that we would have to do some training,
because those thresholds have changed with SB 275.
ELMER RASMUSSEN, Acting Director, Division of Engineering &
Operations, Department of Transportation & Public Facilities,
stated DOT requires that the same forms, process, and documentation
level be used for small procurements, with the only difference
being the person who signs it is the delegated individual, instead
of the commissioner.
SENATOR RANDY PHILLIPS made a motion to adopt amendment #4.
Number 225
CHAIRMAN SHARP, hearing no objection, stated amendment #4 is
adopted.
SENATOR RANDY PHILLIPS made a motion to discharge SB 275 from the
Senate State Affairs Committee with individual recommendations.
CHAIRMAN SHARP, hearing no objection, stated SB 275 was discharged
from the Senate State Affairs Committee.
CHAIRMAN SHARP adjourned the Senate State Affairs Committee meeting
at 5:23 p.m.
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