03/20/1996 05:05 PM House FSH

 HB 542 - BOARD OF FISH VOTING ETHICS                                        
                                                                               
 Number 0044                                                                   
                                                                               
 CHAIRMAN AUSTERMAN explained that he had introduced HB 542 through            
 the House Community and Regional Affairs Committee.  Basically, the           
 bill changed the handling of conflicts of interest by the Board of            
 Fisheries.  Currently, when a board member had a conflict of                  
 interest, the conflict was stated by the member and the board ruled           
 on it.  "Part of the problem that we're having with that system               
 right now is that, also, the Attorney General's Office has the                
 ability to offer a letter of opinion on whether there is really a             
 conflict and whether that member ... should or should not vote on             
 an issue in front of the board," he said.  As a result of those               
 opinions, members with a conflict could neither participate in                
 discussions nor vote on issues relating to that conflict.  For                
 example, a salmon fisherman who had one permit out of 800 had been            
 ruled to have a conflict and thus was unable to testify on salmon             
 issues.                                                                       
                                                                               
 CHAIRMAN AUSTERMAN said, "The essence of what I've done with this             
 bill is to make it mandatory for a member of the board to                     
 participate in all activities of the board, that he has to declare            
 a conflict of interest but he does have to vote, very similar to              
 what we, as legislators, have to do.  It also removes the ability             
 of the Attorney General to say, one way or the other, whether a               
 person can vote or cannot vote."                                              
                                                                               
 Number 0247                                                                   
                                                                               
 REPRESENTATIVE KIM ELTON stated his understanding that the bill               
 allowed a person to declare a conflict and then have the board vote           
 on whether or not that person was allowed to opt out.                         
                                                                               
 CHAIRMAN AUSTERMAN replied, "No, if my bill is enacted in law, it             
 will not allow them to opt out at all."                                       
                                                                               
 REPRESENTATIVE ELTON pointed out that in the legislature, the body            
 decided whether or not to allow a person to opt out of voting.  He            
 wondered if there might be, at times, conflicts serious enough to             
 allow the Board of Fisheries to decide whether a person should be             
 allowed to opt out of voting.  That would at least protect                    
 perceptions, and, in some cases, would provide a cloak of                     
 protection to a member who would then have to decide whether to do            
 what they thought was right, or to vote in a manner that would                
 minimize accusations of self-interest.  Representative Elton asked            
 if there had been any consideration of that middle ground.                    
                                                                               
 Number 0362                                                                   
                                                                               
 CHAIRMAN AUSTERMAN replied, "At this point in time, no."  He                  
 explained that the Board of Fisheries, as well as the Board of                
 Game, was a lay board for which people were expected and required             
 to have expertise in certain areas.  "We ask them to have that                
 expertise, but then, when we get them there ... we don't let them             
 vote," he said.  Chairman Austerman believed that when someone was            
 asked to sit on the board as a salmon fisherman, for example, there           
 should be an understanding that there was an inherent conflict in             
 salmon issues or fishing issues.                                              
                                                                               
 Number 0428                                                                   
                                                                               
 REPRESENTATIVE ELTON outlined a scenario where the board would be             
 asked to endorse the fish initiative.  If a board member had helped           
 to draft that initiative, there would be a conflict.                          
 Representative Elton suggested, under such a scenario, it may be to           
 a member's advantage and may protect the integrity of the board if            
 the board was allowed the option of saying, "we accept your                   
 declaration [of conflict] and we accept your request not to vote on           
 the issue."                                                                   
                                                                               
 Number 0508                                                                   
                                                                               
 CHAIRMAN AUSTERMAN responded that he considered it part of the job            
 of being a board member.  "As long as it's declared and everything            
 is up-front, and everybody knows what your conflict of interest is            
 when you vote, I see nothing wrong with it," he said, indicating it           
 would give the board the power to discuss and react to the                    
 different issues before it.  With the present forum, both                     
 discussion and input were often disallowed from the member who had            
 the expertise.                                                                
                                                                               
 Number 0568                                                                   
                                                                               
 REPRESENTATIVE GARY DAVIS stated his understanding that there were            
 seven board members.  He asked if a majority of members present was           
 required to take action.  He suggested that with all their issues             
 related to fish, and all members belonging to fisheries entities of           
 one kind or another, there would always be someone abstaining.  He            
 asked how often abstention was requested.                                     
                                                                               
 Number 0629                                                                   
                                                                               
 CHAIRMAN AUSTERMAN replied he had no answer.                                  
                                                                               
 CHAIRMAN AUSTERMAN emphasized his opinion that the Board of                   
 Fisheries was a lay board and that members placed themselves in               
 that position when they volunteered to serve on the Board of                  
 Fisheries.  That was the reason he had drafted the legislation, he            
 said.                                                                         
                                                                               
 Number 0676                                                                   
                                                                               
 REPRESENTATIVE ELTON expressed that he thought Chairman Austerman             
 was making an important point.  "My understanding of the situation            
 is, the way the Department of Law is now interpreting the interest            
 ethics provisions, is that it is ... removing from people the                 
 ability to vote, whether the board wants that removal to occur or             
 not," he said.  He questioned whether the answer was a blanket                
 provision requiring a member to vote.  He suggested that, instead,            
 a person could declare a conflict, ask to be excused from voting,             
 and allow the board to decide.  Then, in those few, extraordinary             
 circumstances, the board could prohibit voting where necessary.               
 "That way, it's a voluntary decision made by the board, rather than           
 a mandatory decision, as it's now applied," he said.                          
                                                                               
 CHAIRMAN AUSTERMAN noted that Nick Szabo, a past Board of Fisheries           
 chairman, was on teleconference to testify and answer questions.              
                                                                               
 Number 0797                                                                   
                                                                               
 NICK SZABO testified via teleconference from Kodiak in support of             
 HB 542.  A member of the Board of Fisheries from 1975 to 1982, he             
 had recently attended a meeting of past and present board chairmen,           
 called by Chairman Austerman, where all present had fully agreed              
 that the change proposed in HB 542 was most needed.                           
                                                                               
 MR. SZABO said, "Fisheries management and allocation decisions are            
 very important to Alaska's economy.  We need the full participation           
 of members who are highly knowledgeable and widely experienced in             
 a variety of different fishery uses.  The issues are too complex              
 and too important to risk their outcome on a board that doesn't               
 fully understand all the implications of their decisions."                    
                                                                               
 MR. SZABO continued:  "People with a lot of knowledge and                     
 experience are likely to have both a financial and a personal                 
 interest in an issue.  However, the executive branch Ethics Act               
 prohibits participation by a member with a financial or personal              
 interest in the matter.  With only a seven-member board that                  
 requires four votes, regardless of how many are in attendance, to             
 pass an action, the Ethics Act frustrates the intent to have a                
 board that is composed of members with knowledge and experience."             
                                                                               
 Number 0904                                                                   
                                                                               
 MR. SZABO said, "At one time, the board had four members who held             
 Bristol Bay salmon permits.  Under the present legal opinions, that           
 board couldn't function on any action that dealt with Bristol Bay.            
 There have been other situations where only four or five members              
 have been ruled eligible to participate in the board meeting.  An             
 action to change the status quo had failed by a 3-2 vote, yet a               
 motion to approve findings to document the board's reasons for not            
 changing the status quo also failed because only a small number               
 were allowed to vote."                                                        
                                                                               
 MR. SZABO concluded:  "To those who say this is an outrageous                 
 proposal and violates the public trust, I believe there are other             
 ways to protect the public's interest while still allowing                    
 participation by members who are involved with the issues.  The               
 board could be required to document the reasons for an action by              
 findings of fact.  These findings would give the public a written             
 basis for a controversial board decision.  Possibly, each board               
 member could additionally be required to produce personal findings            
 explaining to the public their reasons for a particular vote.                 
 These additional obligations would require increased staff support,           
 but if the board is to retain some autonomy from the Administration           
 and the legislature, then they are very much needed and long                  
 overdue."                                                                     
                                                                               
 Number 1142                                                                   
                                                                               
 REPRESENTATIVE ELTON asked Mr. Szabo whether, instead of a blanket            
 mandate that lay members must participate, a system could be                  
 instituted in which a member declared a conflict, with the board              
 then deciding whether the conflict was serious enough to excuse the           
 member from the vote.  This was similar to the legislature's                  
 system, he said, adding that he could not recall a situation where            
 a legislator had actually been asked not to vote.                             
                                                                               
 Number 1086                                                                   
                                                                               
 MR. SZABO agreed there may be some extreme circumstances where a              
 board member may have an exclusive interest from which only he or             
 she may benefit.  "I guess that it wouldn't hurt to put some                  
 exceptional provision in there, but I can't think of too many times           
 when it would actually need to be exercised," he said.                        
                                                                               
 Number 1154                                                                   
                                                                               
 BRUCE SCHACTLER testified via teleconference from Kodiak in support           
 of HB 542.  He expressed agreement with Mr. Szabo's testimony,                
 which he thought had pretty well covered the issue.  "It's the                
 biggest problem that we had with the board," he said, "the loss of            
 the expertise that we've made such a big deal about putting on                
 there."  He emphasized that currently, members with conflicts could           
 not be involved in conversations or the learning process a board              
 went through about an issue.  "Something has to be done about this            
 conflict of interest, because we're just not getting the job done             
 with the right people, even though the right people are available             
 for the job," he concluded.                                                   
                                                                               
 Number 1240                                                                   
                                                                               
 JEFF STEPHANS, United Fishermen's Marketing Association, testified            
 via teleconference from Kodiak in support of HB 542.  He believed             
 that the board had been ham-strung by the current Ethics Act and              
 wanted to see the board operate where individual members were all             
 allowed to vote after stating their conflicts.  "The issue really             
 is in the exercise of the conflict, not whether someone has a                 
 conflict," he said.  "We believe that you want people on there who            
 have the experience and investment in whatever facet of the                   
 industry - the fishing business - that they're in, whether it be              
 recreational or sport or subsistence."  He stated, "We'd like to              
 see the legislature, somewhere along the line, require that the               
 findings be required any time the board adopts a regulation and               
 that they prove that a reasonable and rational consideration was              
 given to the alternatives, and that any time they change the status           
 quo or adopt a regulation, that there be a little bit more                    
 justification for their action."                                              
                                                                               
 Number 1381                                                                   
                                                                               
 NEAL SLOTNICK, Assistant Attorney General, Civil Division (Juneau),           
 Department of Law, pointed out what he saw as a potential technical           
 problem in Section 3, which currently read:  "Notwithstanding the             
 prohibition against taking or withholding official action in (b)(4)           
 of this section, a public officer who is a member of the Board of             
 Fisheries must participate in matters before the board even if the            
 member has a personal or financial interest in the matter."  Mr.              
 Slotnick explained, "My problem is with the language                          
 `notwithstanding the prohibition against taking or withholding                
 official action in (b)(4) of this section'."  He referred to                  
 AS39.52.120(a) and said it also included a prohibition against                
 using or attempting to use an official position for personal gain.            
 He said, "Now, the Department of Law has always interpreted the               
 listing of specific prohibitions contained in (b) of .120 as being            
 subsets of part (a), which is much broader, using or attempting to            
 use your official position for personal gain.  This language here             
 seems to distinguish between the two.  It might imply that (b)(4)             
 is not a subset of .120(a).  And I see potential interpretation or            
 implementation problems here if we're trying to distinguish between           
 using or attempting to use your official position for personal gain           
 from taking or withholding official action in a matter in which you           
 have a personal or financial interest."  He suggested that the                
 current committee, or a subsequent committee, consider language               
 exempting the board member from the reach of .120(a), as well as              
 .120(b)(4).                                                                   
                                                                               
 Number 1493                                                                   
                                                                               
 CHAIRMAN AUSTERMAN asked for clarification.                                   
                                                                               
 MR. SLOTNICK expressed concern over what .120(a) might apply to               
 that was different from .120(b)(4).  "For me, as the attorney who             
 must implement the executive branch Ethics Act, it creates a                  
 dilemma of sorts," he said, explaining that .120(b) had several               
 different listings of things that were prohibited.  The Department            
 of Law had always read that as a subset of the broad prohibition in           
 .120(a), which was against using an official position for personal            
 gain.  "By making this distinction, it implies to me that maybe our           
 interpretation might not be right," he said.  "It certainly raises            
 that potential argument if you're singling out only (b)(4) as ...             
 the exemption here."  He emphasized that it was a technical problem           
 with the drafting.                                                            
                                                                               
 Number 1558                                                                   
                                                                               
 REPRESENTATIVE DAVIS agreed, saying that the wording in AS                    
 52.120(a) was still in there.  "And that says a public officer may            
 not use or attempt to use an official position for personal gain              
 and may not intentionally secure or grant unwarranted benefits or             
 treatment for any person," he said.  "If we're making a person vote           
 on something that he's going to have a financial interest in, it's            
 contrary to that."                                                            
                                                                               
 MR. SLOTNICK responded, "I could see a potential conflict in                  
 implementing this."                                                           
                                                                               
 CHAIRMAN AUSTERMAN asked Mr. Slotnick for his recommendation.                 
                                                                               
 Number 1624                                                                   
                                                                               
 MR. SLOTNICK suggested that wording such as "notwithstanding any              
 other prohibition contained in this act" might be used.  He                   
 clarified that he was not taking a position on HB 542 but was                 
 trying to help the committee implement its objective.  He noted               
 that Amy Daugherty, Legislative Aide to Representative Austerman,             
 might have had language drafted to that effect; Ms. Daugherty                 
 subsequently handed out a new draft version of the bill, work                 
 draftG, dated 3/20/96.                                                        
                                                                               
 CHAIRMAN AUSTERMAN explained to Representative Ogan, who had                  
 recently joined the meeting, that the committee was looking at                
 Section 3, page 2 and considering a possible amendment.  Before the           
 committee was the redraft of that section.                                    
                                                                               
 REPRESENTATIVE DAVIS asked if a committee substitute had been                 
 adopted.                                                                      
                                                                               
 CHAIRMAN AUSTERMAN replied no.  He then noted that on page 2,                 
 Section 3, where it said, "Notwithstanding the prohibition against            
 taking or withholding official action in (b)(4) of this section",             
 the new language would read:  "Notwithstanding any other provision            
 of this chapter".  Chairman Austerman asked if there was discussion           
 or any problem with that language.  He then substituted version G             
 of the bill for version F, which had been before the committee but            
 had not been formally accepted as a work draft.                               
                                                                               
 Number 1820                                                                   
                                                                               
 REPRESENTATIVE DAVIS moved that the committee accept work draft G,            
 dated 3/20/96, as a committee substitute for HB 542.                          
                                                                               
 CHAIRMAN AUSTERMAN, hearing no objection to the motion, noted that            
 the committee was officially using work draft G.                              
                                                                               
 REPRESENTATIVE ELTON said although he saw a need for the bill, he             
 was bothered by what he sensed was a different application of the             
 rules among boards.                                                           
                                                                               
 MR. SLOTNICK emphasized that he was not speaking for the                      
 Administration or the Department of Law.  However, he had heard the           
 view that if a variant of the legislative ethics model was going to           
 be adopted, they should consider adopting it for all quasi-                   
 legislative bodies.  He did not believe there had been deliberate             
 differential application of the Ethics Act among the various boards           
 and commissions.  "The question is whether an individual member               
 actually has a significant financial interest in the specific                 
 matter," he said.  "And, if so, that's when that specific member              
 must recuse him[self] or herself."  He suggested there had been               
 many situations, on many boards, where people had been required to            
 recuse themselves.                                                            
                                                                               
 Number 1961                                                                   
                                                                               
 CHAIRMAN AUSTERMAN agreed there had been suggestions that this                
 approach should, perhaps, be applied to all boards in the same                
 manner.  "In our experience, and the information we've been able to           
 find out, there's only one of them that's not working right now,              
 and not working very well, and that is the Board of Fish[eries," he           
 said.  The Board of Game, for example, did not have the same kind             
 of problems.  "I've never been in favor of just going and changing            
 things or trying to fix a wheel that's not broke," he said,                   
 indicating that although other boards did not have the problem, the           
 Board of Fisheries needed this change in order to function                    
 properly.                                                                     
                                                                               
 Number 2011                                                                   
                                                                               
 REPRESENTATIVE SCOTT OGAN pointed out that the Board of Game did              
 not have members who were commercial users, with the possible                 
 exception of a guide.  He wanted to know whether the Board of                 
 Fisheries was required to have specified types of members in order            
 to create balance.  He suggested it might behoove the legislature             
 to consider redefining the numbers of commercial fishermen, sports            
 fishermen, public members, and so forth.  "Because that's how the             
 Big Game Commercial Services Board was set up," Representative Ogan           
 said, "because there [were] conflicting interests.  Then, there               
 wasn't a problem with a conflict of interest because there was a              
 balance in the structure of the board."                                       
                                                                               
 Number 2080                                                                   
                                                                               
 CHAIRMAN AUSTERMAN stated he would be happy to look at some other             
 structuring of how the Board of Fisheries members were appointed.             
 However, he did not envision that happening currently.  In lieu of            
 that, he thought this was the correct step under the current                  
 system.  "It's either that or we go to a professional board," he              
 said.  He indicated that there may not be support to put                      
 professional board legislation through this year.  He expressed               
 concern over having the Board of Fisheries be ineffective over the            
 next year.                                                                    
                                                                               
 REPRESENTATIVE DAVIS asked about the current make-up of the board.            
                                                                               
 REPRESENTATIVE ELTON replied there were no designated seats.                  
                                                                               
 CHAIRMAN AUSTERMAN explained the Governor attempted to balance the            
 board as well as he could when making appointments.  To Chairman              
 Austerman's understanding, there was nothing in statute that                  
 specified who those appointees would be.                                      
                                                                               
 REPRESENTATIVE ELTON said that each governor had a different view             
 of what that balance actually was.                                            
                                                                               
 CHAIRMAN AUSTERMAN reiterated that if a lay board was going to make           
 determinations on the resource, members should not be excluded from           
 a determination just because they happened to be involved in the              
 industry.  Industry people were wanted on the board in the first              
 place, to make the proper and knowledgeable decisions, he said.               
                                                                               
 Number 2175                                                                   
                                                                               
 REPRESENTATIVE ELTON made a motion that CSHB 542 move from                    
 committee with individual recommendations.  There being no                    
 objection, it was so ordered.