HB 35-CONFLICT OF INTEREST: BD FISHERIES/GAME  10:40:11 AM CHAIR STUTES announced that the final order of business would be HOUSE BILL NO. 35, "An Act relating to participation in matters before the Board of Fisheries and the Board of Game by the members of the respective boards; and providing for an effective date." 10:40:37 AM REPRESENTATIVE EDGMON moved to adopt the proposed committee substitute (CS), Version 31-LS0297\M, Bullard, 3/4/19, as the working document. CHAIR STUTES objected for purposes of discussion. MATT GRUENING, Staff, Representative Louise Stutes, Alaska State Legislature, on behalf of Representative Stutes, prime sponsor, explained the changes to HB 35 under Version M. He said the language in the original bill on page 3, lines 7-15, is deleted under Version M and no new language was added. Previously the bill had redefined "immediate family member" for the purposes of these two boards. This definition was in the bill the last two years and there was no opposition to that, and most people seemed to be in support of the change. However, what the sponsor is really trying to do with this bill is make it so that members can deliberate but not vote and the sponsor didn't want to make an exception for just these two boards. The sponsor therefore chose to delete that language. 10:42:33 AM REPRESENTATIVE KOPP asked whether Version M would allow members of these boards with a conflict of interest to vote on issues before the boards. MR. GRUENING replied they would not be allowed to vote but would be allowed to deliberate with the board. He explained that under current practice when a conflict is declared, a member is not allowed to deliberate and is required to step down from the podium and sit in the audience until the issue is resolved. The member is not allowed to offer input on the matter on the public record and that is the issue. Version M would change it so that a member [with a conflict] can deliberate but cannot vote. 10:43:18 AM CHAIR STUTES requested the context of the bill be presented. MR. GRUENING explained that HB 35 would change the way the Board of Fisheries and the Board of Game function by allowing board members to deliberate on subjects for which the members have declared a conflict of personal or financial interest according to AS 39.52, the Executive Branch Ethics Act. Members of these boards are selected based on their knowledge and abilities in the field of action of the board, with a view to providing diversity in interests and points of view in membership. Title 39 prohibits a member from taking or withholding official action in order to affect a matter in which the member has a conflict of personal or financial interest. Official action is defined as "Advice, participation or assistance", which could include a recommendation, decision, approval or disapproval, vote, or other similar action, including inaction, by the public officer. Currently, when a conflict is determined, the board member must step down and cannot participate. Under HB 35 [Version M] the board member would be allowed to deliberate but not vote. 10:44:35 AM CHAIR STUTES removed her objection to the motion to adopt the proposed CS. There being no further objection, Version M was before the committee. 10:44:58 AM MR. GRUENING explained the bill would allow the conflicted member to offer his/her input. The conflicted member would not be allowed to be part of the vote of the board regarding whether the member has a conflict of interest. Currently the decision on a possible conflict of interest is up to the chair of the board to decide. If board members disagree with the chair's ruling, a majority of voting members including the chair decide whether a conflict exists. The member whose possible conflict is being voted upon, is not allowed to participate in the vote. This process is consistent with current practice. This bill would enable each of the boards to benefit from the knowledge and points of view of all a board's members. MR GRUENING pointed out that Board of Fisheries and Board of Game issues tend to be complex and require knowledge-based solutions. Board members often have family or direct financial or personal interests which are tied to the complex knowledge the member would need in order to understand the sometimes- nuanced discussions of the board. Members are selected based on their knowledge of the field. Their knowledge would benefit the board discussions and be on the record even if they have a personal conflict of interest, but they should not be allowed to vote on an issue if a conflict exists. 10:46:39 AM MR. GRUENING said a concern regarding how the process is working with these boards is that off-the-record discussions are occurring between board members. The off-the-record discussions are not part of the public record; the proposed legislation would enable those discussions to occur on the record. He said, "As a life-long commercial fisherman, I can't tell you how many times I have heard or seen really extremely qualified candidates say they don't want to put their name in for consideration because they know they would be conflicted out of a lot of the proposals of which they have knowledge on." The proposed legislation would allow the member with the conflict of interest to impart his/her knowledge before recusing him/herself for the vote. This should lead to more informed decisions, stronger resource management statewide, and align the process with intent regarding boards benefitting from the members knowledge and diversity of viewpoints. Mr. Gruening stated that Version M would allow for board members of the Board of Game and the Board of Fisheries to deliberate if they have a conflict of interest, but they could not vote on the subject. MR. GRUENING walked through the changes in Version M. He drew attention to the language on page 1, line 12, which states, "except as provided in AS 39.52.220(c)". He stated that this is said again on page 2, lines 25-26, and that section is created on Section 3 of the bill, which basically says that for the Board of Fisheries and the Board of Game only, board members are allowed to deliberate but not vote. The only real change to statute is in Section 3 and the other two changes are just references to the section that is created. 10:49:37 AM REPRESENTATIVE VANCE asked what course of action is [currently] available if the member does not recuse him/herself or cite a conflict of interest but others feel that there is a conflict. MR. GRUENING replied that under AS. 39.52 there is a process for complaints to be filed with the Attorney General. He deferred to [Assistant Attorney General] Bradley Meyen for a more in- depth explanation. 10:50:42 AM BRADLEY MEYEN, Senior Assistant Attorney General, Natural Resources Section, Civil Division (Anchorage), Department of Law (DOL), responded to Representative Vance's question. He stated that two provisions could apply: AS 39.52.230 for reporting violations and AS 39.52.310 for complaints. He confirmed it does go through an Attorney General process. While he does Board of Fisheries issues, there is a separate section that deals with appeals of ethics. He said a process is outlined, and it is rather detailed. 10:51:27 AM REPRESENTATIVE VANCE referred to Section 3 of HB 35, regarding "financial interest relating to the involvement of the member". She noted that a similar bill, HB 44, cites a minimum dollar amount. She asked whether that issue had been considered under HB 35 as a threshold for a conflict to be declared. MR. GRUENING answered that the Executive Branch Ethics Act states less than $5,000 is considered insignificant, while anything $5,000 or above would be considered significant. He offered his understanding that AS 39.52.120(1)(d) provides that a stock or ownership interest in a business is presumed insignificant if the value or stock of other ownership interest, including an option to purchase an ownership interest, is less the $5,000. REPRESENTATIVE VANCE said she brings this issue up because different bills have different thresholds for financial conflicts of interest. She asked whether Mr. Gruening knows why the inconsistency exists. MR. GRUENING replied he was not sure of the legislative intent regarding the financial differences. 10:53:34 AM REPRESENTATIVE KOPP drew attention to the language in Version M [beginning on page 2, line 31, through page 3, line 4], which states: (c) If a member of the Board of Fisheries or the Board of Game discloses a personal or financial interest relating to the involvement of the member, or an immediate family member of that member, in a business or organization relating to fish or game resources, the member is not disqualified from deliberating or participating in the matter. REPRESENTATIVE KOPP said that makes sense because people with industry, fishery, or game knowledge are serving on the boards. He then referred to the continuing language [on page 3, lines 4- 6], of Version M, which read: If the supervisor or a majority of the members of the respective board determine that the member's further involvement will result in a violation of AS 39.52.110 - 39.52.190, the board member may not vote on the matter. REPRESENTATIVE KOPP opined that that is good, because those [statutes] address violations, including improper influence, misuse of official public position outside of employment, and improper representation. He continued: What I'm having a hard time understanding is it sounds like if it doesn't fall under that, we're still saying they can't vote if they have a personal or financial interest. Because you can have a personal or financial interest but not be in violation ... per se of how the statute says that that arrives to a misuse. REPRESENTATIVE KOPP said the legislature tries to ensure the board is balanced so that the voices are balanced on the board and to ensure balanced outcomes. He questioned whether taking away the ability to vote would throw the balance of the board. 10:57:26 AM MR. GRUENING responded that, currently, board members with a conflict of interest cannot vote. The language regarding "further involvement will result in a violation" simply describes the process that currently takes place. The proposed change would allow a conflicted board member to deliberate. The voting balance of the board was considered, but there was concern regarding the possibility of a member abusing the system for financial gain. The sponsor and community felt like allowing a conflicted member to vote was a step too far. 10:58:57 AM REPRESENTATIVE PRUITT asked, hy would we do this with these two boards and not others? MR. GRUENING answered that he was only aware of this problem with the two boards. User groups have brought this specific issue forward since changes/revisions to the Ethics Act in 1988. There was concern that in the attempt to fix the Board of Fisheries and Board of Game, similar changes to other boards may result in unforeseen repercussions. CHAIR STUTES noted that all the boards and commissions are different. The Board of Fisheries and Board of Game are some of the few allocative boards. MR. GRUENING added there are professional boards that have more members to cover the knowledge gaps if one of the members had a conflict of interest. The Board of Fisheries and the Board of Game only a single member may have knowledge of the subject being discussed. 11:01:37 AM REPRESENTATIVE PRUITT discussed his concern that if HB 35 were to pass, other boards and commissions could come forward asking for similar regulation. MR. GRUENING said he doesn't foresee the mentioned changes occurring but agreed it would be possible. REPRESENTATIVE PRUITT said it makes reasonable sense to allow a [conflicted] board member to participate in discussion share expertise. He said his real concern is that it appears that currently the conversations are occurring "behind the scenes" and board members may not only bring their expertise to the conversations but might be advocating for something that personally benefits them. He suggested adding language to the bill that would not allow a board member to advocate publicly or privately for something that would benefit him/her. MR. GRUENING stated he thought the Representative Pruitt has a fair point and he would look to the will of the chair and the committee regarding whether that is a change they wish to consider. 11:04:19 AM REPRESENTATIVE VANCE voiced her concerns about the duty to create consistency within the boards. She suggested that the committee investigate what could be done to preemptively do what is right for the public before problems arise. She explained that was her reason for bringing up the dollar amount differences for conflict of interests as a legislator versus a board. She said her concern is that the public would not want to have to look up all the differences between the government entities regarding the various standards for conflicts of interest. She expressed her desire to keep in mind the other boards and commissions and their future concerns. 11:06:32 AM CHAIR STUTES shared with the committee that HB 35 is the result of requests by user groups. She explained that it is a difficult situation when someone is on the board who is unable to share his or her expertise. Through the years this legislation has been worked on, there have not been any other reports from boards or commission that had similar problems. MR. GRUENING noted he has two additional letters for the legislators packets: One from the Resident Hunters of Alaska, in opposition, and the other from the United Southeast Gillnetters Association in support. 11:07:51 AM CHAIR STUTES stated the bill is one she has been working on with the United Fishermen of Alaska for many years. She said she believes the bill will lead to more informed decisions, a higher quality of applicant, and improved public process and transparency for both boards. [HB 35 was held over.]