Legislature(1995 - 1996)

03/22/1996 08:16 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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            
 Number 843                                                                    
 REPRESENTATIVE DAVIES questioned what the disclosure requirements             
 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               
 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               
 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               
 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                     
 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                   
 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 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.           

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