HOUSE FINANCE COMMITTEE MAY 3, 1996 8:20 A.M. TAPE HFC 96 - 157, Side 1, #000 - end. TAPE HFC 96 - 157, Side 2, #000 - #102. CALL TO ORDER Co-Chair Mark Hanley called the House Finance Committee meeting to order at 8:20 A.M. PRESENT Co-Chair Hanley Representative Martin Co-Chair Foster Representative Mulder Representative Brown Representative Navarre Representative Grussendorf Representative Parnell Representative Kelly Representative Kohring Representative Therriault was not present for the meeting. ALSO PRESENT Representative David Finkelstein; Wendy Redman, Vice President, University Relations, University of Alaska; Marjie MacNeille, (Testified via teleconference), Ethics Committee, Anchorage; Susie Barnett, (Testified via teleconference), Staff to the Ethics Committee, Anchorage. SUMMARY SB 98 An Act making changes related to the aid to families with dependent children program, the Medicaid program, the general relief assistance program, and the adult public assistance program; directing the Department of Health and Social Services to apply to the federal government for waivers to implement the changes where necessary; relating to eligibility for permanent fund dividends of certain individuals who receive state assistance, to notice requirements applicable to the dividend program; and providing for an effective date. SB 98 was rescheduled for hearing at a latter date. SB 134 An Act establishing an endowment for the Robert B. Atwood journalism chair at the University of Alaska Anchorage; and providing for an effective 1 date. SB 134 am was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Senate Finance Committee dated 2/23/96. SB 141 An Act relating to legislative ethics; and providing for an effective date. SB 141 was HELD in Committee for further consideration. SCR 23 Relating to long range financial planning. SCR 43 was rescheduled for hearing at a latter date. SENATE BILL 134 "An Act establishing an endowment for the Robert B. Atwood journalism chair at the University of Alaska Anchorage; and providing for an effective date." WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS, UNIVERSITY OF ALASKA, noted that Bob Atwood's contribution to the State of Alaska and the community of Alaskans is immense. SB 134 honors him by establishing an endowment for the Robert B. Atwood Journalism Chair at the University of Alaska-Anchorage. That action would establish for both public and private entities to match contributions from Mr. Atwood to permanently fund the chair. Co-Chair Hanley asked if there were any federal funds available for the service. He questioned if State support would limit that ability. Ms. Redman was not aware of any available federal monies. Representative Brown questioned why the Legislature should be involved in mandating this type of legislation, suggesting that the Board of Regents should have that responsibility. Ms. Redman replied that the bill had been accompanied from the University with a $1 million general fund dollar fiscal note to be matched with private funds. Traditionally, that is how endowments have been established. The fiscal note was dropped along the way. Representative Brown understood that Mr. Atwood's contribution was contingent on a State match being appropriated. Ms. Redman agreed that had been the original intent, although, the community council has requested that the legislation be pursued without the fiscal note in order to set it up in statute, thus giving it more prestige. She 2 suggested that could help to raise the needed private funds. Representative Brown inquired how the initial terms of the bill would be carried out without any money in the fund. Ms. Redman replied that to date $1.3 million dollars has been donated; at this time, there is zero money in that fund. The University is hopeful, that without the matching money, Mr. Atwood will be compelled to contribute the money he had committed. In response to Representative Brown's concern, Ms. Redman pointed out that the University of Alaska does support the bill. Representative Brown asked if it was "normal" protocol to mandate endowments. Ms. Redman stated that it was not normal and that the Board of Regent's do not need the authorization of the Legislature to set up an endowed chair. Representative Martin MOVED to report SB 134 am out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. SB 134 am was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Senate Finance Committee dated 2/23/96. SENATE BILL 141 "An Act relating to legislative ethics; and providing for an effective date." MARJIE MACNEILLE, MEMBER, ETHICS COMMITTEE, ANCHORAGE, provided a sectional analysis of the proposed legislation. [Copy on file]. She noted that some of the sections would make "compliance" with the ethics law easier for the legislators. Section #9, dealing with conflict of interest, would be one of those sections. Sections #13, #19, #21, make the ethics concern more easily applied. Ms. MacNeille thought that some proposed changes could damage the public trust in the legislators if they were enacted. She pointed out the first concern in Section 5, Page 4, Subsection (2), which addresses the uses of the State's resources for personal benefit. She added that Section 2(C) addresses telephone and facsimile use; a section in which there is no ethical constraint indicated. Ms. MacNeille referenced Section 5(A), Page 5, which allows 3 the use of state property for personal purposes or political fund raising and campaigning. A key portion of the ethics effort is that campaigning be kept separate. Section 10, Page 8, Line 29, suggests that extensive political work could be allowed as part of a legislator staffers day. She stressed that impression should not be allowed. Ms. MacNeille continued, speaking to Section 20, Page 12, Line 11. The language would permit legislators to take discounts which are available while traveling on State business. She disagreed with discounts taken during State business travel. Co-Chair Hanley asked the consequences while on per diem, taking a discounted room rate. Ms. MacNeille stated that the amount should be reported. Representative Kelly and Ms. MacNeille discussed discounts and whether they should be allowed. Representative Brown agreed with Ms. MacNeille in deleting Line 11, Page 12, which references "state business". She saw it as a "loop hole" which would significantly expand the opportunity for people to receive benefits because of their legislative status. Representative Brown advised that there was a section in the legislation which defines what legislators could accept for purposes of legislative concern. SUSIE BARNETT, (TESTIFIED VIA TELECONFERENCE), STAFF, LEGISLATIVE ETHICS COMMITTEE, ANCHORAGE, pointed out that language was cited on Page 12, Line 14. REPRESENTATIVE DAVID FINKELSTEIN added that there were "gift limits" and the referenced language would clarify that an "in-kind" gift would not be a way to get around that concern. Discounts could be taken up to the gift level, although, a legislator could not go beyond that amount. Representative Martin expressed concerns with the discounts provided through use of the Frequent Mileage Program. Representative Finkelstein replied that concern would not be affected by the ethics law. Ms. MacNeille continued overviewing the remainder of the bill. She pointed out that Section 43 was the area of greatest concern to the Ethics Committee. That section relates to complaints, while they are confidential, until the committee determines that there is probable cause to believe that a violation has occurred. Representative Kelly commented that the "public perception" seemed to dominate the theme of the Ethic Committee's work. He asked if that was the intent within committee's purpose. Ms. MacNeille replied that it is important how the public 4 sees the Legislature operating in order that the voters will have confidence in the integrity of the system. It is part of the Ethics Committee's role. (Tape Change, HFC 96-157, Side 2). In response to Representative Kelly, Representative Brown pointed out that in statute, in the findings and purpose section, that concern is addressed. She added that information is significant. Representative Brown referenced Page 23, Lines 20-28, and asked how it would be addressed. Would the Ethics Committee be able to impose reasonable restrictions on the release of information that impose restrictions. Ms. MacNeille thought that the restrictions should apply to everyone. She suggested deletion of everything following Line 24 through Line 28, addressing that concern. Co-Chair Hanley asked if Ms. MacNeille thought that the person subject to the complaint should be able to file information. Ms. MacNeille responded, that person could waive confidentiality. Co-Chair Hanley thought those restrictions could be imposed on the release of any information. Ms. MacNeille stated that could occur to protect the privacy of the person. Representative Kelly added that "shepparding the public interest" was different than public disclosure and conflict of interest. He suggested that the intent of the documentation was to make legislators "look better" rather than addressing conflict of interest. SB 141 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 9:10 A.M. 5