SB 89-LOBBYING/LEGISLATIVE ETHICS CHAIR ROKEBERG announced that the first order of business would be CS FOR SENATE BILL NO. 89(JUD) am, "An Act amending the Regulation of Lobbying Act and the definition of 'lobbyist' as it applies in the act setting standards of conduct for legislators and legislative employees; and amending the Regulation of Lobbying Act and the legislative standards of conduct to allow a lobbyist to give and a person covered by legislative standards of conduct to accept tickets to a charity event during a legislative session." Number 024 REPRESENTATIVE COGHILL moved to adopt HCS CSSB 89, Version 23- LS0396\Q, Craver, 5/8/03, as the working document. REPRESENTATIVE BERKOWITZ objected for discussion purposes. Number 035 SENATOR RALPH SEEKINS, Alaska State Legislature, spoke as the sponsor of SB 89. He pointed out that Version Q adds new language on page 2, lines 25-26, which says, "except for tickets to a charity event described in AS 24.60.080(c)(10)". That language would allow anyone, including a lobbyist, to sponsor the participation of a legislator when the money goes to a charity. CHAIR ROKEBERG interjected, except for those areas for which approval from legislative council must be obtained. SENATOR SEEKINS agreed. CHAIR ROKEBERG highlighted the success of the charity events developed under the leadership of the legislature and the citizens of Juneau. SENATOR SEEKINS continued to review the changes encompassed in Version Q. He directed attention to the language on page 3, lines 4-16, which specify what an administrative action does not include. Therefore, the language lists some activities that the Alaska Public Offices Commission (APOC) now believes constitutes lobbying under the current statute [and specifies that those activites aren't considered an administrative action]. He emphasized that the activities [listed] have to do with the normal course of business with public officials. The language added in Section 3 was part of the original legislation, he noted. REPRESENTATIVE BERKOWITZ removed his objection. CHAIR ROKEBERG announced that with no further objection, Version Q was before the committee. Number 100 SENATOR SEEKINS remarked that when he attended new member orientation, he discovered that he had probably been breaking the lobbying laws by being an active member of his local Chamber of Commerce, the Alaska Automobile Dealers Association, as well as many other associations. He emphasized that he was in violation of the lobbying laws and didn't even know it. He said that as a new member of the legislature he wasn't aware of the four-hour limit because he didn't know all the regulations. Furthermore, he said he didn't believe he was aware of all the regulations under the current definition of lobbying. He directed attention to a February 11, 2003, letter from APOC to Brett Huber, Executive Director, Kenai River Sports Fishing Association, which is included in the committee packet. The letter says that an individual receiving a salary [from an organization] while talking with public officials is receiving payment to lobby. Senator Seekins characterized the aforementioned as a "wide net" that indicates merely providing public officials with information is one way of attempting to influence a legislative or administrative action. Furthermore, one doesn't have to be successful in an attempt to a influence legislative or administrative action, the attempt merely has to be made. Senator Seekins related his belief that the definition of lobbying shouldn't make unknowing criminals and thus he felt there was the need to be more clear. He pointed out that in AS 24.45.011, the legislative declaration of purpose specifies the following: The legislature finds and declares that the operation of responsible representative democracy requires that the fullest opportunity be afforded to the people to petition their government for the redress of grievances and to express freely to individual members of the legislature, to its committees, and to officials of the executive branch, their opinions on pending legislation or administrative actions; and that the people are entitled to know the identity, income, expenditures, and activities of those persons who pay, are paid or reimbursed for expenses, or who make expenditures or other payments in an effort to influence legislative or administrative action. SENATOR SEEKINS explained that this legislation tries to define a true lobbyist versus a citizen trying to express his/her opinion on legislation. Therefore, this legislation provides more clear definitions of the activities of lobbyists and what it entails. Rather than redefining "regular" and "substantial", this legislation specifies that if one spends a little less than 25 percent of a 40-hour work week month talking to public officials he/she would have to register as a lobbyist. Therefore, the legislature through statute would set the bar rather than APOC. Senator Seekins said he would appreciate the committee's support in getting this legislation to the House floor. Number 161 REPRESENTATIVE BERKOWITZ commented that he didn't believe Senator Seekins' actions when he was a new member were criminal. Furthermore, he didn't believe APOC believes so either. Representative Berkowitz said that he has a letter from Tammy Kempton, Regulation of Lobbying, APOC, Department of Administration, who indicates that participating in a legislative "fly-in" doesn't constitute a violation of current APOC rules. [The letter] further indicates that volunteer lobbyists and sole proprietors aren't breaking APOC rules. Participating in public proceedings or answering questions from a legislator directed to a nonlegislator aren't considered lobbying. SENATOR SEEKINS informed the committee that the letter he has was signed by [Tammy Kempton] as well. REPRESENTATIVE KERTTULA interjected that [legislators] do have a Fifth Amendment right. SENATOR SEEKINS agreed that participating in a [legislative] "fly-in" doesn't [constitute a violation], but what the individual does after arriving does [constitute a violation]. He explained that if an individual enters the capitol building and talks to legislators in an attempt to influence legislative or administrative action as a result of a "fly-in", then the "clock is ticking." Therefore, this legislation attempts to clarify the definition of a lobbyist in statute rather than [continue] with the moving regulations of APOC. Number 197 REPRESENTATIVE BERKOWITZ said that the 40-hour rule in this legislation seems excessive. He asked if there had been any research performed regarding how many of those currently registered as lobbyists would continue to be required as lobbyists under the 40-hour rule. SENATOR SEEKINS responded that he didn't know if anyone could answer Representative Berkowitz's question. He opined that many of those currently listed on the nonprofessional lobbyist list would probably continue to register. In fact, he related his belief that more individuals would be required to register as a lobbyist. He pointed out that the current law specifies that an individual who communicates personally or through an agent for four hours, that individual has to be registered as a lobbyist. Therefore, an individual who hires a lobbyist and communicates through that lobbyist for four hours would be required to register as a lobbyist. Senator Seekins said that this legislation isn't attempting to allow anyone who truly tries to influence public policy as part of his/her job to avoid [registering as a lobbyist]. However, the legislation attempts not to incidentally catch people who are trying to express their opinions freely to the legislature and/or public officials. Therefore, he didn't believe there would be a large reduction in the number [of registered lobbyists]. Number 227 REPRESENTATIVE BERKOWITZ informed the committee that 112 people have registered as part-time employee lobbyists and only two of those are from small businesses in the state. He said that he hasn't detected a real problem. Representative Berkowitz said he would like to hear from professional lobbyists regarding whether they actually engage in 40 hours a month of face-to-face legislative contact to the legislator or his/her staff. He characterized 40 hours of face-to-face time as a lot. SENATOR SEEKINS agreed and said those people engaging in 40 hours of face-to-face legislative contact should be registered. Senator Seekins remarked that if the real desire is to serve the public interest, then the legislators would report with whom they have spoken. "Having someone on a list that no one can find hardly does a good job in protecting the public interest in who we're talking too," he said. He highlighted that [lobbyists] don't have to report what legislation or public policy he/she is discussing. [Lobbyists] have to pay $100, appear on a list, and then not be able to participate fully in the political process in the rest of the state. Therefore, the barrier should be reasonably high enough to capture the professional lobbyist not the individual with the occasional interest that would amount to more than four hours in a 30-day period. Number 255 REPRESENTATIVE KERTTULA turned to the definition of "administrative action" on page 3 of Version Q. She asked if an individual doing things that don't fit into the new definition, even if the individual accumulated over 40 hours a week would have to register as a lobbyist. SENATOR SEEKINS related his understanding that an administrative action wouldn't include those things specified on page 3 of Version Q. He emphasized that the aforementioned only relates to administrative actions not proposed legislation or existing legislation. REPRESENTATIVE KERTTULA inquired as to why the list related to administrative actions is so broad. She questioned what would remain to be considered an administrative action. SENATOR SEEKINS directed attention to Section 2(B) of Version Q. He related that a number of years ago he wanted to put a channel in with a backwater slough and a pond at his home. This required dealing with several state agencies in order to obtain the permits necessary to do so. Under the current interpretation of the regulations when an individual attempts to influence an administrative action for more than four hours that individual has to [register] as a lobbyist. However, Version Q allows an individual to speak to someone regarding the issuance, amendment, or revocation of a permit, license, or entitlement for use and not require registering as a lobbyist. Therefore, an individual who goes to APOC and requests a change in the regulations regarding the definition of lobbyist wouldn't be exempt. REPRESENTATIVE KERTTULA said that she has never heard the above interpretation. She agreed if the above interpretation occurs it would be problematic. However, people have the right to personally represent themselves in regard to permits. "The broadness of this suggests that you could have a lawyer that you hire to do these things ... in a broad way," she pointed out. She expressed concern with that. CHAIR ROKEBERG pointed out that this particular [Section 2(B)] was included in Version Q at the request of APOC. REPRESENTATIVE BERKOWITZ commented, "I understand the constraints that APOC is operating under these days." Representative Berkowitz said although Senator Seekins' interpretation seems to be strained, it is problematic. Therefore, he suggested that it could be remedied if, on page 3, line 8, before "use", the word "personal" could be inserted. SENATOR SEEKINS explained that when he represents some of the corporations he does and tries to get permits or licenses issued, amended, or revoked that isn't personal use. As a business owner, regardless of the structure of his business, Senator Seekins said he believes that other forms of businesses in the state shouldn't be restrained from operating under this exception. Number 322 REPRESENTATIVE BERKOWITZ requested that Senator Seekins provide some specific examples in which businesses have gotten into trouble due to the absence of the proposed provision. SENATOR SEEKINS answered that he couldn't provide specific examples. "I didn't think, Mr. Chairman, that it was important ... that we be able to point to examples where the law ensnared someone if the law or the regulations was improper on its face," he remarked. Merely because something may not be enforced, isn't a reason to have the regulation or law in place, he said. REPRESENTATIVE BERKOWITZ said that the normal legislative response is that when things are changed that aren't broken, unintended consequences are created. SENATOR SEEKINS agreed, but related his desire not to have a law on the books that could allow selective enforcement. Number 337 CHAIR ROKEBERG related his understanding that one of the problems is APOC's regulations not the statute. Chair Rokeberg turned attention to a memo dated May 7, 2003, from Brooke Miles, Executive Director, APOC. This memo specifies that accompanying the governor on a trade mission; playing golf with a public official; and participating in a legislative "fly-in" are excluded. However, he understood that not to be the case, in terms of APOC's past activities. SENATOR SEEKINS agreed. He said he was aware of at least one instance in which an individual playing golf with a legislator was told that his time "had expired" and thus he should register as a lobbyist. CHAIR ROKEBERG said that was of concern to him. Chair Rokeberg remarked that the current law makes it virtually impossible for a legislator to have any friends. Number 356 REPRESENTATIVE BERKOWITZ interpreted Senator Seekins to think that there shouldn't be any lobbying requirements at all. If that's not the case, he inquired as to where Senator Seekins would draw the line. SENATOR SEEKINS said, "There's lots of places I would draw the line. And that isn't what I said." He specified that what he said was that the net is too large today because it inadvertently draws people into it who are merely trying to exercise their free opportunity to communicate with the legislature and the administration. Although Senator Seekins said he wasn't sure where the line is, the current barrier is too low, he specified. [The proposal in Version Q] is a reasonable bar that keeps people from inadvertently stepping over the line while providing legislators guidance as well. Senator Seekins said that he sees people in the Capitol who he believes may be breaking the regulations now, although these individuals are merely trying to relate their feelings about legislation. He stated that it's part of his job to defend their right to freely communicate with legislators. This legislation provides the balance to do so, without letting the professionals and those employed to lobby to escape [from the rules]. CHAIR ROKEBERG pointed out that the committee has received written testimony from Ms. Kempton, APOC. Ms. Kempton's written testimony specifies that APOC supports the definition of "administrative action" and "communicate directly" in SB 89. Furthermore, APOC supports how SB 89 changes the definition of lobbyist to more clearly define a professional lobbyist as well as changing the definition of part-time or employee lobbyist to eliminate the phrase "substantial or regular". However, Ms. Kempton's written testimony specifies that APOC opposes changing the amount of time an employee can lobby to 40 hours in a 30-day period and proposes changing that to 16 hours. Per Ms. Kempton's written testimony, "At 16 hours, employee lobbyists would be allowed 62 15-minute meetings per month; that's a total of 64 hours per legislative session; 248 15-minute meetings per session." Chair Rokeberg asked if the aforementioned testimony means that anyone coming in through the doors would have to be issued a time card in order to track the time spent with legislators and staff. He suggested that this almost makes the case that the [current regulations] are constrained. SENATOR SEEKINS commented that Chair Rokeberg made a good point. He highlighted that Ms. Kempton's example is based on evenly spacing every meeting in each 30-day period, which is a rolling 30-day period. He said that he didn't know anyone who can plan his/her time in such a way. CHAIR ROKEBERG surmised that when [a legislator] has a conversation with someone who is clearly lobbying on legislation, would that individual have to keep track of the time spent on the specific issue versus personal matters. If so, it becomes a matter of how one calculates the time, he supposed. SENATOR SEEKINS agreed and clarified that the [time limit] was made a bit more liberal so that one really has to be a lobbyist to reach the bar established. REPRESENTATIVE BERKOWITZ noted that he didn't have a copy of the earlier referenced February letter from Ms. Kempton. SENATOR SEEKINS provided the chair with an extra copy of the February letter from Ms. Kempton. Number 431 REPRESENTATIVE KERTTULA directed attention to page 4, Section 6, and although she said clarifying the law is good, she was concerned that the charity tickets may entitle the bearer "to other gifts or services involved in the charity event." This is of concern because sometimes the gifts are large. She asked if gifts from a charity event that are over a certain amount would have to be reported to the Select Committee on Legislative Ethics (Ethics). SENATOR SEEKINS said he would report such a gift in order not to run afoul of the Ethics rules. CHAIR ROKEBERG agreed that a gift [from a charity event] should be reported. However, he understood the question to be with regard to whether the reporting of [a gift from a charity event] should be mandatory. REPRESENTATIVE KERTTULA related her belief that legislators can't take a gift [from a charity event] if the gift's value amounts to over $250. SENATOR SEEKINS pointed out that without the language "Notwithstanding other law" at the beginning of this paragraph, one would have to comply with the existing Ethics law. CHAIR ROKEBERG opined that under the current language, a legislator would be able to accept the gift. REPRESENTATIVE BERKOWITZ pointed out the language "may entitle", which he interpreted to mean that the other [Ethics] requirements supercede these. REPRESENTATIVE COGHILL highlighted that the ticket to the charity event may only cost $1 while the prize could amount to a $400 flight. Therefore, the question becomes whether the $400 flight is a gift or a prize and whether [the legislator] could take it or not. Under the Ethics rules, the prize would have to be reported at least. However, he wasn't sure that it was a direct gift. Number 479 PAM LaBOLLE, President, Alaska State Chamber of Commerce (ASCC), informed the committee that ASCC has worked very hard to get SB 89 going because the lack of a clear set of rules defining a lobbyist has been problematic for members of ASCC. She said that most of the members of ASCC don't want to be a lobbyist and have never intended to be such. However, ASCC members, as frontline business people, know that they are the ones who should provide the information upon which legislators and administrators make decisions. Ms. LaBolle related that ASCC didn't have any problems with the existing law rather the problem was with APOC's interpretation of the law, specifically saying that 2.3 percent of one's job is a substantial portion of an individual's job. Furthermore, ASCC doesn't concur APOC's proposal of with 16 hours, 9 percent of a person's job, being considered a substantial portion of an individual's job. MS. LaBOLLE commented on the differences in what APOC says. For instance, ASCC's position paper dated January 15, 2003, quotes a letter from APOC to one of ASCC's members regarding a golf tournament. She related that APOC said: Note that the regulations do not require that the activities influence legislative or administrative action .... It may have been a social event, but it was certainly directed towards influencing legislative action. By spending time with legislators and their staffers, lobbyists hope to establish a rapport with them that will help the lobbyists when they later meet with legislators and/or staffers to influence action on legislation of interest to the lobbyists' clients. REPRESENTATIVE BERKOWITZ requested that Ms. LaBolle distribute the letter if she is going to continue to quote from it. Representative Berkowitz said he read the letter in another committee and he came to a vastly different conclusion than what Ms. LaBolle is inferring. MS. LaBOLLE turned to the February 11, 2003, letter from APOC to the executive director of the Kenai River Sport Fishing Association. She pointed out that the letter says, "To be considered a volunteer lobbyist and exempt from the registration requirement, you would need to be on leave from your job and pay all your own expenses." The letter also says, "In other words, lobbying is not confined to working towards the passage or defeat of any specific piece of legislation or regulation. Lobbying can be educating public officials so that when they consider a particular issue or legislative item, they include in that consideration the information you have provided." She also highlighted the sentence in the letter that says, "If, as part of your job, you encourage other people to contact legislators or other public officials, that is also lobbying." In regard to this latter statement, Ms. LaBolle asked if that would mean that teachers who have students contact legislators would be considered lobbyists. Perhaps that isn't what APOC meant. Therefore, Ms. LaBolle said the specifics should be put in law so that no one is guessing. Number 528 REPRESENTATIVE BERKOWITZ returned to Ms. LaBolle's testimony [regarding a golf tournament] and said that he heard testimony on that matter in the [House State Affairs Standing Committee]. He recalled that the letter referred to a trip to Las Vegas that was paid for by an individual. This had to do with VECO Corporation and Mr. Rick Smith being required to register as a lobbyist. Representative Berkowitz related his understanding that APOC said [in the letter] that lobbying has to be viewed not only on the event, but on the duration and the extent of the contact. Given the circumstances surrounding the trip and Mr. Smith's other contact with legislators, he would be required to register. Therefore, Representative Berkowitz said unless Ms. LaBolle is referring to a different incident, he didn't believe Ms. LaBolle is fully disclosing all the facts of the case. MS. LaBOLLE said that she recalled testifying in the House State Affairs Standing Committee, but she didn't recall speaking to this matter in that committee. REPRESENTATIVE BERKOWITZ inquired as to how many of ASCC's members have been in trouble with APOC. He also inquired as to who those individuals are. MS. LaBOLLE answered that although she didn't know how many people have gotten into trouble with APOC, she didn't believe there have been many because APOC works on complaints. REPRESENTATIVE BERKOWITZ related his understanding, from APOC's testimony in the House State Affairs Standing Committee, that APOC has only taken actions against Frank Prewitt and Bill Allen. CHAIR ROKEBERG announced that if there is already a public record on this testimony, then it isn't necessary to rehash the topic. Number 560 REPRESENTATIVE BERKOWITZ highlighted that this is the only House committee of referral for SB 89. Representative Berkowitz turned to ASCC's position paper, included in the committee packet, and ascertained that ASCC doesn't feel that 2.3 percent is a substantial portion of an individual's job. MS. LaBOLLE agreed. In further response to Representative Berkowitz, Ms. LaBolle said that she didn't feel that 2.3 percent is a substantial portion of an individual's income. REPRESENTATIVE BERKOWITZ surmised then that a 2.3 percent income tax would be acceptable to Ms. LaBolle. MS. LaBOLLE replied, "Personally, it would be." CHAIR ROKEBERG, upon determining no one else wished to testify, closed public testimony. REPRESENTATIVE BERKOWITZ informed the committee that during a House State Affairs Standing Committee hearing the 16-hour rule was of concern for some, including members of the Majority Caucus. Representative Berkowitz announced that he objects to this legislation. He related that he comes from a profession in which one avoids the appearance of impropriety. Although he appreciated the First Amendment arguments that people are wrapping themselves in, that isn't the issue. The issue is public trust and the need to preserve that public trust. When the rules are "cracked open" as they are [in SB 89], the perception of impropriety is violated. Therefore, this would be a disservice to the legislature's public role. Representative Berkowitz said, "I think this is a retreat from the high ethical standards of this house and from the legislature. And I think if there are particular problems related to the agency question, we should address those narrowly, but, in essence, gutting the lobbying requirements, which is the consequence of going to 40 hours, is a step in the wrong direction." CHAIR ROKEBERG pointed out that the committee packet includes a letter from Andree McLeod. REPRESENTATIVE COGHILL contrasted Representative Berkowitz's remarks by highlighting the danger of gutting the rights of people to freely talk with legislators. TAPE 03-4, SIDE B  REPRESENTATIVE COGHILL explained that [the rules should be such that] when a person is a paid lobbyist, there is the opportunity to make sure that is clearly what is being done. Obviously, there have been some gray areas and thus Representative Coghill applauded this effort. Representative Coghill related his belief that this is merely drawing a brighter line. Number 590 REPRESENTATIVE COGHILL moved to report HCS CSSB 89, Version 23- LS0396\Q, Craver, 5/8/03, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE BERKOWITZ objected. REPRESENTATIVE KERTTULA related her belief that four hours [of contact with a legislator] is a minimal amount. She said that [this current law] doesn't stop anyone from coming in and speaking with legislators on their own behalf when that individual isn't paid to do so. By going to 40 hours, things will be greatly confused and [the requirement] will eliminate the need for 111 people to register as a lobbyist. Therefore, Representative Kerttula said she feels this legislation is a step in the wrong direction. CHAIR ROKEBERG remarked that the current four-hour regulation is an imposition on the freedom of speech of all people in the state. The paramount issue to keep in mind is to allow people to be able to communicate with their representatives without feeling the constraint of any possible action against them, he related. Number 569 REPRESENTATIVE McGUIRE highlighted that under current law a public employee isn't required to register. However, a public employee in this state has unfettered access to the legislature and the administration and isn't required to report that activity under any circumstance. Representative McGuire opined that what's critical about this legislation is that one is being required to report to a government agency regarding who the individual is talking to and with regard to the subject. The aforementioned is where the First Amendment issue enters. Without ASCC members testifying on issues, she wondered how the legislation would actually end up. She mentioned that everyone has seen legislation in committee and hasn't thought about how the legislation would impact real people. Representative McGuire emphasized, "It's about your government keeping tabs on your speech. ... and at the same time stacking the deck against you, allowing their [departmental staff] agents to speak as often as they want ... about whatever topic they want." REPRESENTATIVE BERKOWITZ clarified that public individuals can only address public issues/interests; it isn't an open slate. Private interests are separate. With regard to the First Amendment argument, Representative Berkowitz pointed out that it's subject to reasonable, time, place, and manner restrictions. The aforementioned is the heart of this debate, he said. Letting people know who is addressing government - who has financial stakes in government - is a critical point. With the state's current fiscal gap there will be the need for people to contribute to the cost of government. In this transitional period it's particularly important for the public to know who is talking to the legislators. The only way [for the public] to know who is talking to legislators is if those individuals are required to register as lobbyists. Most who are required to register as lobbyists are people who are willing to stand up for their causes and subject themselves to some public scrutiny. Representative Berkowitz emphasized that he didn't see requiring lobbyists to register as such as an onerous burden. "I think it's in the best interest of the public as part of transparent government, and I think that's what all of this is about. How transparent do we want our government to be," he said. REPRESENTATIVE McGUIRE said she didn't disagree with the points made by Representative Berkowitz. However, she informed the committee that she has spent time in her office with public employees during which other items have been discussed, not just those related to the public interest. On that point, Representative McGuire disagreed with Representative Berkowitz. Representative McGuire opined that the real goal is to be able to use this as a weapon against people. She said if she had any confidence that this regulation was being acted on in a fair, responsible, efficient manner and was working, then perhaps there wouldn't be a need for this legislation. However, the four-hour regulation isn't working and is being enforced arbitrarily. She related that the executive director of APOC agrees that the four-hour regulation doesn't work. Number 507 REPRESENTATIVE COGHILL restated his motion to report HCS CSSB 89, Version 23-LS0396\Q, Craver, 5/8/03, out of committee with individual recommendations and the accompanying zero fiscal note. A roll call vote was taken. Representatives Kott, Coghill, McGuire, Morgan, and Rokeberg voted in favor of reporting HCS CSSB 89, Version Q, from committee. Representatives Kerttula and Berkowitz voted against it. Therefore, HCS CSSB 89(RLS) was reported out of the House Rules Standing Committee by a vote of 5-2.