Legislature(1995 - 1996)
03/22/1996 08:16 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 542 - BOARD OF FISH VOTING ETHICS Number 638 CO-CHAIRMAN BILL WILLIAMS said the committee would address CSHB 542(FSH), "An Act relating to participation in matters before the Board of Fisheries by members of the board." He noted it is his intent to move the bill from committee. Number 660 REPRESENTATIVE ALAN AUSTERMAN informed the committee that HB 542 was introduced after a meeting held in Anchorage on February 15 and 16, 1996, between the Board of Fisheries' chairmen. He noted the minutes from the meeting are in the committee member's files. Representative Austerman said past chairmen of the Board of Fisheries were contacted and six were able to attend. One of the main things that came out of that meeting was the problem with the conflict of interest that the board members were having when it came to dealing with issues before the Board of Fish. He gave an example where a board member held a salmon permit in Bristol Bay, 1 of 800, and was deemed to have a conflict of interest and could not speak or vote on an issue dealing with the salmon permits in the Bristol Bay area. Representative Austerman said the problem with that is the fact that we have what we call a "lay board." The lay board is supposed to be made up of people who are involved in the industry so that you have the knowledge and expertise to make decisions based upon the layman's perspective of what's going on in that industry. REPRESENTATIVE AUSTERMAN explained that part of the problem with the way the current law is set up is that the option of an advisory opinion from the attorney general is allowed in state law. If somebody has a conflict of interest or has stated a conflict of interest, the chairman of the board then has the option of going and getting an opinion from the attorney general as to whether there is a true conflict or not. That comes back to the issue of an attorney general's opinion in reference to the permit holder in Bristol Bay. REPRESENTATIVE AUSTERMAN said the bill would change the law so that it states that the Board of Fish members are required, whether they have a conflict of interest or not, to sit on the board and make decisions. They cannot opt of not making a decision and they cannot be told that they can't make a decision. As a lay board, we're trying to set it up so that those lay people that have opted to permit themselves to be placed in that position that they do have to vote. REPRESENTATIVE AUSTERMAN referred to when the House Fisheries Committee had hearings on HB 547, the Department of Law was in attendance. They reviewed the bill and a small amendment was made to Section 3 of the bill which satisfied the Department of Law. He said he hasn't received a position from the Administration or the Department of Fish and Game. He stated the bill has a zero fiscal note. Number 843 REPRESENTATIVE DAVIES questioned what the disclosure requirements are. REPRESENTATIVE AUSTERMAN said if he understands it correctly, and there are some Board of Fish chairmen connected via teleconference that can speak to this, they have to file a financial conflict of interest statement with the Alaska Public Offices Commission (APOC). He said the way the bill is drafted, it says they have to declare at every meeting if they have a conflict of interest on any subject before them. Number 855 REPRESENTATIVE SCOTT OGAN said he had articulated some concerns in the previous committee. He said, "If we're going to allow members of the Fish Committee, Fish Board - excuse me, to vote despite a conflict of interest, would it not be prudent to designate so many positions on the board say to commercial fishermen, so many to sport fishermen, to many to public members - possibly a more of a professional member or some kind of a structure similar to what the Big Game Commercial Services Board had when there was a -- they would allow so many guides, outfitters, transporters, public members and they had one representative from the Board of Game. This precluded them from disclosing and allows them to vote on any issue, even though they had a vested interest in it because there was a structured balance on the board. And I was wondering if you would be willing to possibly -- I'm not prepared with amendments today. Unfortunately, this came up a little bit faster than I anticipated. It seems like just -- if you would entertain working on that concept or like maybe put that concept on the table for discussion." REPRESENTATIVE AUSTERMAN agreed that discussion took place at the House Fisheries Committee meeting. He said he doesn't think he is ready to try to come up with a whole new way of structuring the Board of Fish as it would be very contentious and a political "hot potato" that the whole state of Alaska would jump into. They way it currently is set up, as far as the appointments to the board are concerned, it is the Governor's option in how he appoints. The intent of the way the board is supposed to be appointed is that it is done on some kind of a balancing because of the different users of the resource. The Governor currently has the control and the option of how it's done. Representative Austerman said to come up with a different way of doing it would take a lot of public input and if that happened within HB 542, it would put the bill off for a year. He urged the committee to read the minutes from the meeting held in Anchorage and noted there were three chairmen from the commercial fishing industry and three from the sport industry. He said unanimously between the six chairmen, this was the main issue that threatens the integrity and the operations of the Board of Fish. Representative Austerman said if we are going to continue to have a lay board, it is just about mandatory that we come up with a system that allows them to take action and be involved in the decision making of the whole industry. He said he would be more than willing to hold Fish Committee hearings during the interim to look at how the board's structure is currently done and take input from the rest of the state to try and come up with another plan. Obviously, the system currently has fault and he believes it will always have faults because of the vastness of the industry and what it really means to the state of Alaska. He noted there are currently bills that have been introduced that do suggest regionalizing the state, etc. Number 1119 REPRESENTATIVE OGAN said, "I read the minutes from the meeting and I recognize it is a problem. We also read the statute that - to provided in the packet that talks about misuse of official position and how you - if you have a conflict of interest you have to disclose them. I believe right now the board members aren't allowed to vote on an issue. That's the issue now that they're not allowed to vote on the issue because if they have a conflict of interest..." REPRESENTATIVE AUSTERMAN said, "Not necessarily, the problem is that if there is a conflict of interest that's been stated, the option of going to the attorney general and having the attorney general say that `you do have a conflict and you can't vote,' is probably the biggest part of this is that any of the boards that you sit on in the state of Alaska you have to declare a conflict of interest. We're just trying to get a working board in and there's a lot of boards that serve in the state of Alaska and the Game Board is another one, but I've -- everybody that I've talked to that have dealt with any of the other boards will tell you that the problems facing the Fish Board are surmount compared to what any other problems of any other board in the state of Alaska have and that's what we're trying to fix." Number 1187 REPRESENTATIVE OGAN said, "Ya, I would say that's probably because - you know, like on the Game Board we don't have the commercial exploitation of game, obviously that we have with fisheries and so...." REPRESENTATIVE AUSTERMAN said, "I would say the commercial exploitation should be commercial use because when you're -- you're talking about a number of different users. You're correct though, there is a commercial use versus the game which is not necessarily so much of a commercial use as the fisheries are, but again, fisheries are the number one tax base in the state of Alaska. Commercial fishing is compared to oil and has been the number one tax base for the state of Alaska before oil ever to her - before they started exploiting it. So, you know, there is a lot more going on in the industry than there are in any of the other industries that have boards attached to it." Number 1247 REPRESENTATIVE DAVIES said he agrees with Representative Austerman in that he thinks that the issue that Representative Ogan raised is an important issue that needs to be resolved, but it is far more complicated to deal with it in an amendment to this particular bill. He said he would note that at least the last two governors have spent a lot of time in consideration of the various balances, both regional and gear types, etc., so it's not an issue that is ignored. The whole extreme range needs to be considered and perhaps it should even go to a professional board. It is much more of a complicated issue and he believes the committee should move on to passing the bill out of committee. Number 1308 CHERYL SUTTON, Legislative Assistant to Representative Bill Williams, Alaska State Legislature, came before the committee to giver her testimony. She said she is testifying from a different perspective as she was one of the privileged to serve on a Board of Fisheries Review Committee appointed by Governor Cowper. She said this issue has been discussed for some time. Ms. Sutton said the Board of Fisheries Review Committee issued an official report to the Governor, which was distributed to the legislature and others. She read from the report so that the committee might have some background on the discussion of this issue. She noted there are at least two former chairmen, who are both sports fishermen, on teleconference who she knows will support what she is going to read. She quoted from the report: "Other major concerns voiced in regard to conduct of the board relate to conflict interest, special interest biased and influence by special interest advocates. While it is recognized by the committee that conflict of interest and special interest bias can be and has, at times, been a problem with board members. The unanimous view of the committee and the majority of view received from the public supports appointments to the board of persons with hands on knowledge of and experience with fisheries resources and sport, commercial, subsistence and personal use fisheries. The feeling of the committee is that even with a full-time board divested of financial interest in the industry, persons of sufficient knowledge and experience to qualify for appointment will bring with them, by definition, certain views commensurate with their experience and background. Conflict of interest and special interest bias is not necessarily limited to commercial or financial interests, but also extends to sport fishing, subsistence and personal use. Any broad interpretation of conflict of interest or special interest would, therefore, tend to severely limit the number of qualified and knowledgeable person available for appointment to the board. This does not mean, however, that both the Governor and the legislature should not use reasonable care in avoiding the appointment of persons perceived as advocates of special interest groups. Divestiture of fisheries interest by persons appointed to the board was carefully considered and ultimately rejected by the majority of the committee." MS. SUTTON continued reading from another excerpt of the report. "The committee unanimously reaffirmed that assessee for full and clear disclosure by appoint is of any all financial interest in fisheries or fishery related business is as well in membership in organizations. The committee also considered a proposal which would require board members to abstain from discussing or voting on issues in which the member has any economic interest, including subsistence or personal use. It was decided that such a requirement would seriously hinder the board's ability to function." MS. SUTTON explained the legislative process is not unlike the Board of Fish process in that the members create law. The Board of Fisheries has rule making authority and there are conflicts that all the members of the legislative body carry with them, you work at other jobs and have other interests. Yet when the legislators are on the floor to vote on an issue, those issues are disclosed and the member asks to be excused from voting on an issue and yet is compelled by the body to vote. That is for a specific purpose in which there is experience and expertise that is brought forward by each of those members and you have an obligation to vote on matters that are before you. Ms. Sutton said the Board of Fisheries is no different in that regard. Number 1560 REPRESENTATIVE AUSTERMAN said to follow up on Ms. Sutton's statement, it gets back to how you balance a decision that has been made on a fishing issue. You have to have a balance, you have to have the balance of the sport industry, the commercial industry and subsistence. If you don't, then you end up with a lopsided decision. Representative Austerman stressed that balance is needed for decision making. REPRESENTATIVE AUSTERMAN pointed out a current problem is there are a number of attorneys that attend the board meetings and they fight tooth and nail to get somebody disqualified on a conflict of interest because it then weighs the side of the other aspects of this industry. Again, it is such a big important industry to this state that we have to have some kind of balance to it. Number 1671 BUD HODSON, Past Chairman, Board of Fisheries, testified via teleconference from Anchorage. He informed the committee he served on the Board of Fisheries for five years. He also participated with other past chairmen in the two day meeting discussing issues that pertain to the Board of Fisheries. Mr. Hodson said the single most important thing that the chairmen thought needed to be addressed was conflict of interest. Mr. Hodson said, "The current chairman, Larry Engle, was also in attendance and we had a lengthy discussion on not so much changing the Board of Fisheries, but keeping it the way it was prior to some of the AG opinions and the way the subsistence law is being interpreted and applied. And, again, Mr. Austerman said correctly, if we're going to have a lay board - people who participate in the industry, we have to allow people to be able to participate in Board of Fisheries meetings even though they may have somewhat of a conflict of interest or, in some cases, maybe even a direct conflict of interest. If we don't, what will happen through a period of time is that we will not have anybody who actively participates in the industry. You're gunna end up with people who do not commercial fish, do not participate in the sport fish industry. In effect, you're not gunna have a lay board. They may not be a professional board as we would consider it, but you'll end up going to a professional board because people who do not participate in the industry, frankly, it's hard for them to have the time or the will power to serve on a board like the Board of Fisheries, and you'll evolve into a professional board. So if it's the goal of the state to keep a lay board for the Board of Fisheries this action, in my opinion, is necessary." MR. HODSON continued, "There is one other comment at the end there where it says, `A Board of Fisheries person must participate.' I apologize for not seeing this earlier, but when I was on the Board of Fisheries the way that it worked is we would disclose our conflict of interest and it was up to the board and Robert's Rules of Order, the board would determine whether or not, you know, the individual should participate or not. And I personally left a board meeting once because there was only four people that participated in a fishery and I was one of em and I did not want to participate. I didn't feel it was fair. On this where it says `must,' I guess in that situation I would've just abstained. I would be staying within the new law here that I did participate just by abstaining. That's pretty much all I have other than just that I support it. If we're gunna keep it the way it was, at least when I was chairman, this is necessary. Thank you." CO-CHAIRMAN WILLIAMS indicated there are four more people to testify on the measure. He noted he would like to move the legislation. Number 1898 TOM ELIAS, Past Chairman, Board of Fisheries, testified via teleconference from Anchorage. He informed the committee members he served on the board from 1991 to 1994. Mr. Elias stated he echoes Mr. Hodson's and Ms. Sutton's comments. He referred to abstaining from a vote and said we have done this as far back as he can remember. He said people who serve on the board are various people from various sections of the state and in different industries such as sport, commercial, personal use or subsistence. We need that expertise because some of the board members may not be up to speed in a certain area. To disallow that person by conflicting them out, they cannot even participate other than the two or three minutes they give each testifier to testify. That is a great disservice of the board and a great disservice to the state. Mr. Elias said whether it be sport or commercial, he found a certain higher level of ethics between the board members than what is being perceived by the legislature, governor's office, the general public and the attorneys. He said to keep the lay board, this bill is extremely necessary. This is the only way to do it. Number 2073 NICK SZABO testified via teleconference from Kodiak. He noted he was a member of the Board of Fisheries from 1975 until 1982. Mr. Szabo said he has been involved with the fishing industry in Alaska for the last 30 years and is in support of HB 542. Mr. Szabo informed the committee members he also attended the meeting with the past chairmen and those who attended spanned a 20 year period of board service and all were in full agreement that this change was most needed. 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 decisions by a board that doesn't fully understand all the implications of their decisions. 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 personal or financial interest and, thus, frustrates the intent of having a board composed of members with knowledge and experience. The seven member Fisheries Board requires four votes to pass an action, regardless of how many members are actually participating. At one time the board had four members who held Bristol Bay salmon permits. Under the present legal opinion, that board couldn't function on any action that dealt with Bristol Bay. Mr. Szabo pointed out that there have been other situations where only four or five members have been ruled eligible to participate. In one particular situation, an action to change the status quo failed on a vote of three to two, yet a motion to approve findings in support of that vote also failed because only a portion of the membership was allowed to vote. The board's actions to maintain the status quo was nullified by its inability to approve findings. [END OF TAPE] TAPE 96-40, SIDE A Number 001 MR. SZABO said by requiring the board to document their reasons for an action by findings of fact, the public can be assured that board members are voting based on their expertise rather than their conflict. These findings will give the public a written basis for controversial board decisions. Possibly each board member could additionally be required to produce personal findings explaining to the public their individual reasons for a particular vote. These additional obligations would require increased staff support, but if the board is to regain the confidence of the public then they are very much needed and long overdue. Number 116 JEFF STEPHAN, United Fishermen's Marketing Association (UFMA), testified via teleconference from Kodiak. He explained UFMA represents commercial fishermen who are affected by the Board of Fisheries process. The UFMA supports HB 542 and applauds the committee's efforts and Representative Austerman's efforts for taking the time to address this issue. He said they hope that the Governor and the legislature are very careful in the appointment and confirmation process of board members. They also hope that the board is made up of persons who are capable of conducting the public business in a manner that doesn't exercise any personal or financial conflict of interest that they may have. Mr. Stephan said, "We know, however, that it has been quite frightening in the past on occasion when it is quite obvious that a board members has an obvious predetermined biased with regard to a particular regulatory matter. We note, however, that these predetermined attitudes and bias may or may not be based on financial conflicts of interest. The board process can and has been hamstrung because of the current status of the ethics rulings by the attorney general. Additionally, we have concern that the current process leaves the option open for any administration to direct or control the policies regulatory economy of the board through the offices of the attorney general by virtue of the authority that the AG holds to disqualify board members from voting. The AG can hold an exercise (indisc.) of control over the board regulatory process through this power that the own. While you can take actions to modify the board's process by changing the ethics requirements or otherwise making drastic changes to the structure of the board, you are not getting to the root of the problem entirely. The underlying process of the board should be addressed. The board should be required to produce findings on significant regulatory issues, and specifically with regard to any regulatory action where the board's allocation policy is required to be considered. Written findings should be required. They should be required to address issues of cost and benefit and significant and substantive matters. They should be required to consider alternative regulatory options and before the board adopts, amends or repeals a regulation, the board should be required to produce findings that prove that the board substantively and reasonably considered at the basis of regulatory action, the economic impact, the cost of benefits, the environmental impact and the conservation impact of their action. In conclusion, we support HB 542 as a first step in improving the board process and we note that it is the structure that is not in so much of need of fixing as the process itself. Thank you very much." Number 301 CO-CHAIRMAN WILLIAMS informed the committee that Mr. Dean Paddock supports HB 542. He then said he would like to entertain a motion to move the bill from committee. AN UNIDENTIFIED COMMITTEE MEMBER said, "So moved." CO-CHAIRMAN WILLIAMS asked if there was an objection. Hearing none, CSHB 542(FSH) was moved out of the House Resources Committee.