02/21/2017 03:00 PM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB91 | |
| HB44|| HCR1 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 91 | TELECONFERENCED | |
| += | HB 44 | TELECONFERENCED | |
| + | HCR 1 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 21, 2017
3:05 p.m.
MEMBERS PRESENT
Representative Jonathan Kreiss-Tomkins, Chair
Representative Gabrielle LeDoux, Vice Chair
Representative Chris Tuck
Representative Adam Wool
Representative Chris Birch
Representative DeLena Johnson
Representative Gary Knopp
MEMBERS ABSENT
Representative Andy Josephson (alternate)
Representative Chuck Kopp (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 91
"An Act relating to fees for certain persons filing disclosure
statements or other reports with the Alaska Public Offices
Commission; relating to a tax on legislative lobbyists; and
providing for an effective date."
- HEARD & HELD
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 44
"An Act requiring a legislator to abstain from taking or
withholding official action or exerting official influence that
could benefit or harm an immediate family member or certain
employers; requiring a legislator to request to be excused from
voting in an instance where the legislator may have a financial
conflict of interest; and providing for an effective date."
- HEARD & HELD
HOUSE CONCURRENT RESOLUTION NO. 1
Proposing an amendment to the Uniform Rules of the Alaska State
Legislature relating to voting and abstention from voting.
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 91
SHORT TITLE: APOC REGISTRATION FEES; LOBBYIST TAX
SPONSOR(s): REPRESENTATIVE(s) KITO
01/30/17 (H) READ THE FIRST TIME - REFERRALS
01/30/17 (H) STA, FIN
02/09/17 (H) STA AT 3:00 PM GRUENBERG 120
02/09/17 (H) Heard & Held
02/09/17 (H) MINUTE(STA)
02/14/17 (H) STA AT 3:00 PM GRUENBERG 120
02/14/17 (H) Heard & Held
02/14/17 (H) MINUTE(STA)
02/21/17 (H) STA AT 3:00 PM GRUENBERG 120
BILL: HB 44
SHORT TITLE: LEGISLATIVE ETHICS: VOTING & CONFLICTS
SPONSOR(s): REPRESENTATIVE(s) GRENN
01/18/17 (H) PREFILE RELEASED 1/13/17
01/18/17 (H) READ THE FIRST TIME - REFERRALS
01/18/17 (H) JUD, FIN
01/23/17 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
01/23/17 (H) READ THE FIRST TIME - REFERRALS
01/23/17 (H) JUD, FIN
01/25/17 (H) STA REPLACES FIN REFERRAL
01/25/17 (H) BILL REPRINTED 1/25/17
01/25/17 (H) JUD WAIVED PUBLIC HEARING NOTICE, RULE
23 FOR SSHB 44
01/25/17 (H) JUD AT 1:00 PM GRUENBERG 120
01/25/17 (H) -- Meeting Postponed to 1/27/17 --
01/27/17 (H) JUD AT 1:00 PM GRUENBERG 120
01/27/17 (H) -- Meeting Rescheduled from 1/25/17 --
01/30/17 (H) JUD AT 1:30 PM GRUENBERG 120
01/30/17 (H) Heard & Held
01/30/17 (H) MINUTE(JUD)
02/03/17 (H) JUD AT 1:30 PM GRUENBERG 120
02/03/17 (H) Moved CSSSHB 44(JUD) Out of Committee
02/03/17 (H) MINUTE(JUD)
02/08/17 (H) JUD RPT CS(JUD) 1DP 3DNP 3AM
02/08/17 (H) DP: LEDOUX
02/08/17 (H) DNP: KOPP, EASTMAN, REINBOLD
02/08/17 (H) AM: KREISS-TOMKINS, FANSLER, CLAMAN
02/18/17 (H) STA AT 11:00 AM GRUENBERG 120
02/18/17 (H) Heard & Held
02/18/17 (H) MINUTE(STA)
02/21/17 (H) STA AT 3:00 PM GRUENBERG 120
BILL: HCR 1
SHORT TITLE: AMEND UNIFORM RULES: ABSTAIN FROM VOTING
SPONSOR(s): REPRESENTATIVE(s) GRENN
01/20/17 (H) READ THE FIRST TIME - REFERRALS
01/20/17 (H) STA, JUD
01/20/17 (H) JUD REFERRAL REMOVED
01/20/17 (H) JUD REFERRAL ADDED BEFORE STA
01/25/17 (H) JUD AT 1:00 PM GRUENBERG 120
01/25/17 (H) -- Meeting Postponed to 1/27/17 --
01/27/17 (H) JUD AT 1:00 PM GRUENBERG 120
01/27/17 (H) -- Meeting Rescheduled from 1/25/17 --
01/30/17 (H) JUD AT 1:30 PM GRUENBERG 120
01/30/17 (H) Heard & Held
01/30/17 (H) MINUTE(JUD)
02/03/17 (H) JUD AT 1:30 PM GRUENBERG 120
02/03/17 (H) Moved HCR 1 Out of Committee
02/03/17 (H) MINUTE(JUD)
02/08/17 (H) JUD AT 1:30 PM GRUENBERG 120
02/08/17 (H) Moved HCR 1 Out of Committee
02/08/17 (H) MINUTE(JUD)
02/10/17 (H) JUD RPT 1DP 3DNP 2AM
02/10/17 (H) DP: CLAMAN
02/10/17 (H) DNP: EASTMAN, KOPP, REINBOLD
02/10/17 (H) AM: KREISS-TOMKINS, FANSLER
02/21/17 (H) STA AT 3:00 PM GRUENBERG 120
WITNESS REGISTER
REPRESENTATIVE SAM KITO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 91, as prime
sponsor.
CRYSTAL KOENEMAN, Staff
Representative Sam Kito
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 91 on behalf of
Representative Kito, prime sponsor.
HEATHER HEBDON, Executive Director
Alaska Public Offices Commission (APOC)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
91.
RYAN JOHNSTON, Staff
Representative Jason Grenn
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a sectional analysis of HCR 1 and
explained CSSSHB 44(JUD) and HCR 1 with the use of a PowerPoint
presentation, on behalf of Representative Grenn, prime sponsor
of CSSSHB 44(JUD) and HCR 1.
REPRESENTATIVE JASON GRENN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
CSSSHB 44(JUD) and HCR 1, as prime sponsor.
JERRY ANDERSON, Administrator
Select Committee on Legislative Ethics
Legislative Agencies and Offices
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on
HCR 1 and CSSSHB 44(JUD).
ACTION NARRATIVE
3:05:52 PM
CHAIR JONATHAN KREISS-TOMKINS called the House State Affairs
Standing Committee meeting to order at 3:05 p.m.
Representatives LeDoux, Tuck, Wool, Birch, Johnson, Knopp, and
Kreiss-Tomkins were present at the call to order.
HB 91-APOC REGISTRATION FEES; LOBBYIST TAX
3:07:00 PM
CHAIR KREISS-TOMKINS announced that the first order of business
would be HOUSE BILL NO. 91, "An Act relating to fees for certain
persons filing disclosure statements or other reports with the
Alaska Public Offices Commission; relating to a tax on
legislative lobbyists; and providing for an effective date."
3:08:01 PM
REPRESENTATIVE SAM KITO, Alaska State Legislature, as prime
sponsor of HB 91, stated that staff is exploring alternate
methods for collecting program receipts for the Alaska Public
Offices Commission (APOC). He suggested that replacing the
"income tax" in HB 91 with a "fee" would provide a more direct
path to generating program receipts. He emphasized that the
goal is to generate money for APOC to support its operations, to
satisfy the program receipt authority, and to provide savings
for the State of Alaska.
3:09:33 PM
CRYSTAL KOENEMAN, Staff, Representative Sam Kito, Alaska State
Legislature, on behalf of Representative Kito, prime sponsor of
HG 91, relayed that staff is considering a "stair-step" approach
for generating revenue for APOC: the lower the contract amount,
the fewer the filings with APOC and the less work; as the
contract amount increases, more work is associated with APOC
filings. She stated that the new proposal under HB 91 would
consist of: a $350 fee for contracts under $30,000; a $650 fee
for contracts between $30,000 and [$60,000]; and an $850 fee for
contracts [$60,000] and over. She asserted that the resulting
revenue under this proposal is estimated to be $259,150, based
on 2015 and 2016 data provided by APOC. She went on to say that
after adding in the estimated $106,600 in revenue generated
through the proposed registration fees for candidate, groups,
and non-group entities and the proposed financial disclosure
fees for legislators and public officials, the total estimated
revenue is $365,750. She maintained that this amount is much
closer to the estimated amount [of $329,750] in the sponsor
statement. She asserted that collection of these fees into the
designated general fund (DGF) would reduce the 2018 operating
budget request by approximately $120,000.
3:11:54 PM
REPRESENTATIVE LEDOUX asked why a smaller contract would be
necessarily less complicated than a larger contract, and what
would be required of APOC pertaining to a contract of less than
$30,000 compared with a contract of greater than $60,000.
REPRESENTATIVE KITO responded that one difference is the work
that the lobbyist is providing the client. He conceded that
sometimes contracts overstate or understate the amount of work.
He explained, however, that under a $10,000 contract, the
likelihood of extensive billings for lobbyist activities needing
reconciliation by APOC, such as taking clients out to dinner, is
less than for a $60,000 contract.
REPRESENTATIVE LEDOUX stated that what she has observed is that
the client, not the lobbyist, is paying for the dinners. She
added that some lobbyists entertain clients in their homes. She
pointed out that in neither of these cases do the expenses show
up in APOC reports. Representative LeDoux asked what APOC would
be looking for with a higher priced client.
3:16:23 PM
HEATHER HEBDON, Executive Director, Alaska Public Offices
Commission (APOC), responded that her understanding is that the
stair-step approach for fees, which is being considered for HB
91, is based on the volume of reports that come into APOC, and
that volume relates to the amount of a contract. She stated
that the assumption is that larger contracts require more
reporting. She explained that fees are not based necessarily on
a single registration fee for a single lobbyist, since a single
lobbyist may have a dozen different clients. She offered that
the lobbyists making more money would have more clients and,
therefore, would require more reporting.
REPRESENTATIVE LEDOUX asked if a lobbyist with one client paying
$61,000 is likely to have less reports than a lobbyist with one
client paying $10,000.
MS. HEBDON replied no, that is not her understanding. She said
that the amounts referenced by the three contract ranges, are
not based on the individual lobbyist, but rather on the amount
that the lobbyist is making from lobbying activities. She
conceded that a single lobbyist could have one client paying
$60,000, but the expectation is that the single lobbyist makes
$60,000 with ten clients, and there are separate reports for
each of the ten clients.
REPRESENTATIVE LEDOUX suggested that Representative Kito's
intention is that under HB 91 every lobbyist would pay a
registration fee, and if the contract amount for any given
client is more than $60,000, the registration fee would be $850.
She added that if the contract were $10,000 or less, the
registration fee would be $350. She expressed her belief that
the fee was not intended to be based on "the entire book of
clients" for a lobbyist.
3:20:22 PM
REPRESENTATIVE KITO responded that the fees for lobbyists are
currently assessed at $250 per client. He explained that if a
lobbyist has multiple clients, then he/she pays that fee on each
client. He added that if a client contracts with multiple
lobbyists, each lobbyist is paying a fee on that client. He
stated that the goal for restructuring APOC fees is to generate
enough revenue for APOC to be able to fulfill its duties.
REPRESENTATIVE LEDOUX conceded that a client paying $60,000 for
lobbying services can more afford the $850 fee than a client
paying $10,000 for lobbying services. She stated that she is
not sure that the $60,000 client necessarily engenders more for
any lobbyist than does the $10,000 client.
CHAIR KREISS-TOMKINS suggested that assigning fees in this way
is comparable to the Alaska Court System assessing court fees
based on the size of a tort claim, even though a smaller claim
may require more in court services than a larger claim. He
offered that the size of a claim or contract is used as a blunt
metric for assessing a fee.
3:22:37 PM
REPRESENTATIVE BIRCH referred to the sponsor statement, which
estimates revenue of $60,000 through the $50 financial
disclosure filing fees. He asked if besides the 60 legislators,
there were 1,100 other people submitting annual financial
disclosure forms.
MS. HEBDON said that AS 24.60.200 requires a significant number
of people to file financial disclosure statements. She
mentioned that the five-year average of public official
financial disclosures (POFDs) received by APOC was approximately
1,300 per year. She said that number includes those in the
executive branch and governor's office, members of boards and
commissions, and legislators. She added that municipal filers
in communities with populations greater than 15,000, who are
subject to APOC's electronic reporting requirements, are also
included in the five-year annual average. She expressed her
desire for more clarification in Section 4, on page 3 of HB 91,
to better define the group of filers from whom APOC would be
collecting fees.
REPRESENTATIVE BIRCH asked how much effort is required for APOC
to manage the financial disclosure filings.
MS. HEBDON replied that the majority of APOC's budget is for
personnel. She said the online filing system alone requires a
fulltime analyst programmer. She mentioned that direct services
to the public consume most of APOC personnel's time - answering
phone calls, answering emails, assisting filers with the online
filing system, and auditing reports. She added that currently
APOC is statutorily required to audit every report coming into
the office, but it doesn't have the staff to do so.
3:26:09 PM
REPRESENTATIVE WOOL asked for confirmation that instead of the
income tax specified in the original bill or the flat fee of
$250 currently in statute, the new version of HB 91 will include
a fee on a sliding scale that is progressive - the higher the
value of the contract, the higher the fee.
MS. KOENEMAN confirmed that the fee would be on a sliding scale
based on [lobbyist] income [from] the client.
REPRESENTATIVE WOOL offered that the [new proposed] fee was per
contract, whereas the previous 2.5 percent tax would have been
on the lobbyist's gross amount derived from all the contracts.
REPRESENTATIVE KITO responded that the mechanism for applying
the tax versus the fee would be the same. He stated that the
2.5 percent tax for each lobbyist would have applied to each
lobbyist contract. He went on to say that this would be a
change from a tax to a fee. He said that the fee is set at a
sliding scale, not a percentage; for all of those below $30,000
is one fee, between $30,000 and $60,000 is another fee, and
above $60,000 is another fee.
3:27:44 PM
REPRESENTATIVE KNOPP noted APOC's reduction in revenue, from
$1,300,000 in 2015 to $866,000 in 2016, and reduction in
fulltime staff, from 12 positions authorized in fiscal year 2017
(FY 17) to 8 positions shown in the current organization chart.
He asked if APOC is currently operating with eight full-time
employees.
MS. HEBDON responded that APOC currently has eight position
control numbers (PCNs), and the analyst programmer position and
one other position are currently vacant.
REPRESENTATIVE KNOPP asked if those two positions have been
vacant for some time.
MS. HEBDON replied yes. She said that when the former executive
director left, she became the executive director and has not yet
recruited for her former position.
REPRESENTATIVE KITO confirmed in response to Representative
Knopp that the legislature authorized receipt authority up to
$240,000, but by statute the only fee that could be collected
was $250 per client per lobbyist, which raised about $106,000.
3:30:20 PM
REPRESENTATIVE KNOPP referred to the document, titled "Multi-
year Allocation Totals with Funding - Operating Budget - FY 2017
Conf Committee Structure," included in the committee packet, and
asked if the amounts shown in the budget were amounts authorized
but not necessarily received by APOC for operations.
MS. KOENEMAN referred to the column, titled "FY 16 Actual," to
point out that the legislature had appropriated $758,500 in
unrestricted general funds (UGF), but APOC was only able to
utilize $107,500, because that was the limit of its receipt
authority. She then referred to the amounts listed under the
column, titled "FY 16 Final," and pointed out that $240,000 was
appropriated by the legislature, but it turned out to be
"hollow" authority because APOC did not have the statutory
authority to collect fees up to that amount. She added that the
legislature thought it was giving APOC additional funds;
however, the revenue generated by APOC fees was substantially
lower than the amount authorized.
REPRESENTATIVE KNOPP asked if the legislature was giving APOC
authority to spend an amount that it was not able to collect.
MS. KOENEMAN replied, "Basically, yes."
REPRESENTATIVE KNOPP referred to the $242,600 listed under the
column, titled "FY 17 Auth," and asked if APOC would be able to
collect this amount only if HB 91 passed.
MS. KOENEMAN confirmed that APOC would not be able to generate
$242,600 in funds, but only the approximately $107,000,
depending on the number of filers. She reiterated that the
intent of HB 91 is to raise the statutory fee authority allowing
APOC to collect more revenue.
3:33:15 PM
REPRESENTATIVE KNOPP commented that with the possibility of
filing fees, he believes that people appointed to boards and
commissions should be exempt from APOC filing. He relayed that
there are about 360 people who fall into these categories, and
they are not necessarily compensated. He asserted that the
exemption would alleviate APOC of some of its workload.
CHAIR KREISS-TOMKINS offered that the Department of
Administration Finance Subcommittee was considering reducing the
number of public officials who are required to file POFDs.
[HB 91 was held over.]
3:35:06 PM
The committee took an at-ease from 3:35 p.m. to 3:38 p.m.
HB 44-LEGISLATIVE ETHICS: VOTING & CONFLICTS
HCR 1-AMEND UNIFORM RULES: ABSTAIN FROM VOTING
3:37:31 PM
CHAIR KREISS-TOMKINS announced that the final order of business
would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 44, "An Act
requiring a legislator to abstain from taking or withholding
official action or exerting official influence that could
benefit or harm an immediate family member or certain employers;
requiring a legislator to request to be excused from voting in
an instance where the legislator may have a financial conflict
of interest; and providing for an effective date." and HOUSE
CONCURRENT RESOLUTION NO. 1, Proposing an amendment to the
Uniform Rules of the Alaska State Legislature relating to voting
and abstention from voting. [Before the committee was CSSSHB
44(JUD) and HCR 1.]
3:38:14 PM
RYAN JOHNSTON, Staff, Representative Jason Grenn, Alaska State
Legislature, on behalf of Representative Grenn, prime sponsor of
CSSSHB 44(JUD) and HCR 1, provided a sectional analysis of HCR 1
and explained CSSSHB 44(JUD) and HCR 1 with the use of a
PowerPoint presentation. He relayed that Section 1 of HCR 1
would amend Uniform Rule 34(b) to state that a legislator may
abstain from a vote with a majority consent. He explained that
currently Uniform Rule 34(b) states that a legislator may
abstain from a vote by unanimous consent. He stated that HCR 1
would amend Uniform Rule 34(b) to include two instances when a
member of the legislature may not vote: a legislator may not
vote on his/her own abstention, and a legislator may not vote on
an issue if the body of the legislature casts a majority vote
ruling that the legislator must abstain.
3:39:30 PM
REPRESENTATIVE WOOL asked for clarification of the phrase "a
legislator may not vote on his/her own abstention."
MR. JOHNSTON replied that the phrase was included because staff
thought it improper for a legislator to vote on his/her own
abstention, after making a motion to abstain.
3:42:00 PM
MR. JOHNSTON referred to slide 2 of the PowerPoint presentation
on CSSSHB 44(JUD) and HCR 1, titled "Current Uniform Rule
34(b)," which highlights that a legislator currently needs
unanimous consent to abstain from voting. He referred to slide
3, titled "HCR 1 Proposed Changes to Uniform Rule 34(b)," which
states that the change in the rule would be the change from a
unanimous consent to a majority consent by the legislative body
to allow a legislator to abstain from a vote.
MR. JOHNSTON referred to slide 4, titled "Source of Language for
Majority Vote:" and relayed that the source of the language for
a majority vote comes from AS 29.20.010(a), in which the state
dictated that municipalities must have a conflict of interest
ordinance. He cited AS 29.20.010(a)(3), which states that the
ruling of the presiding officer can be overridden by a majority
vote of the legislative body. He added that since a majority
vote is used on the municipal level to overturn an abstention,
staff considered it a preexisting benchmark for allowing an
abstention in the legislature. He concluded that HCR 1 seeks to
bring about consistency between what the state requires of a
municipality and what is required of the legislature.
MR. JOHNSTON referred to slide 5, titled "Legislative Breakdown
for Voting Recusal," to discuss the voting recusal rules for
legislative bodies across the country. He explained that the
breakdown is done by individual state houses, not the state
itself. He added that every state has a House and Senate except
for Nebraska, which has a unicameral legislature. He relayed
that in some states, the two legislative bodies share rules,
while in other states, one rule is used for one body and another
rule used for the other body. He related that 30 bodies use a
method of voting that allows a legislator to abstain: 24 of
those use a majority consent; 4 use a two-thirds consent; and
Alaska is the lone state requiring unanimous consent. He stated
that 58 bodies use a method whereby a legislator declares a
conflict and is required to abstain without a vote; 5 bodies use
the method of declaring a conflict and the legislator is
required to vote or may choose to abstain; and 6 bodies use the
method of allowing for a presiding officer to use his/her
discretion. He added that in this last method, the presiding
officer determines if the conflict is substantial or not. If
the conflict is substantial, then the presiding officer grants
the legislator the abstention. If the conflict is not
substantial, then the legislator is required by the presiding
officer to vote.
3:43:33 PM
REPRESENTATIVE JOHNSON referred to slide 4 and asked when AS
29.20.010 was enacted.
MR. JOHNSTON responded that the original statute was enacted
June 30, 1986.
REPRESENTATIVE JOHNSON asked when the conflict of interest
statutes for the legislature were enacted.
MR. JOHNSTON answered that he did not have an exact date but
would provide her with that information.
3:45:24 PM
REPRESENTATIVE LEDOUX asked for confirmation that state laws
require municipalities to abide by a conflict of interest
statute, whereas the legislature does not require it of itself.
3:46:07 PM
REPRESENTATIVE JASON GRENN, Alaska State Legislature, as prime
sponsor of CSSSHB 44(JUD) and HCR 1, responded, "That is
correct."
REPRESENTATIVE JOHNSON commented that there is an open meetings
act on the municipal level, which the legislature does not have,
and maybe the legislature will want to "take that one on next."
3:46:49 PM
MR. JOHNSTON continued with his presentation to discuss CSSSHB
44(JUD). He referred to slide 7, titled "Employer Conflicts of
Interest in Current Statutes," and said that CSSSHB 44(JUD)
focuses on changes to subsections (e) and (g) in AS 24.60.030.
He stated that currently AS 24.60.030(e) addresses the potential
conflict of interest for a legislator who takes official action
that could substantially benefit or harm a person with whom the
legislator is negotiating for employment.
MR. JOHNSTON referred to slide 8, titled "HB 44 Proposed Changes
to AS 24.60.030(e)," and said that CSSSHB 44(JUD) would retain
the language "negotiating for employment" but broaden the scope
of AS 24.60.030(e)(3) to include a member of the legislator's
immediate family, the employer of a legislator or his/her
immediate family member, and a previous employer that a
legislator worked for in the preceding 12-month period.
MR. JOHNSTON referred to slide 9, titled "Other States with
Employer Conflict Language," and relayed that there are
currently 29 states that have statutes dealing directly with
possible conflicts of interest that could arise from a
legislator being employed outside of the legislature.
3:48:01 PM
MR. JOHNSTON referred to slide 10, titled "Current Monetary
Threshold in Statute Regarding Members of the Public," and said
that the $10,000 threshold is found in AS 24.60.990(b), which
sets the standard for a substantial interest in a legislative
action by a member of the public who seeks contracts more than
$10,000 annually for goods or services with the legislature or
agency of the state. He maintained that incorporating this
threshold into the statute would bring the legislature up to the
same standard to which the state holds a person of the public,
when determining a substantial interest, thus creating
consistency between what is required of the legislature and what
is required of the public. He mentioned that the State of
Virginia also uses the $10,000 threshold for income, which is in
VS 30-101.
MR. JOHNSTON then referred to slide 11, titled "'Substantial
Class' in Current Statutes," to point out the mention of
"substantial class" found in AS 24.60.030(g), and slide 12,
titled "'Substantial Class' in Current Statutes (cont.)," to
cite the mention of "substantial class" found in AS 24.60.990
(b). He maintained that the "substantial class" language in
these two subsections of statute are consistent with previous
and other states' statutes. He referred to slide 13, titled
"Substantial Class in Other State's Statute," to recite the
breakdown by states: 19 states have the substantial class
language; 8 states use similar language but refer to it in terms
of the effect on the interests of the general public of the
state, instead of on the substantial class; and 2 states use
both forms of statutory language in their conflict of interest
determinations.
3:50:14 PM
MR. JOHNSTON confirmed in response to Representative Tuck that
current statutory language is shown in blue on the slides and is
the language that is being compared with other state statutory
language.
REPRESENTATIVE WOOL referred to slide 11 and asked if the
language in AS 24.60.030(g) could apply to a chicken farm owner
voting on laws about importing chickens.
MR. JOHNSTON answered that if proposed legislation was
introduced that gave a tax incentive only for 500-acre chicken
farms, and the legislator had a 500-acre chicken farm, there
would be a conflict of interest. He added that if legislation
was introduced that gave tax incentives to every chicken farmer
in Alaska, then there would be no substantial benefit or harm,
because the industry is being affected as a whole.
REPRESENTATIVE WOOL mentioned the difficulty in delineating
between a class and subclass of an industry and offered that
such technical issues may not be easily discernable at the
moment of a House floor vote. He added that taking the question
to the Select Committee on Legislative Ethics may delay the
decision months. He offered that if he was an employee of an
industry, then he would not be affected because he is not an
owner. He asked if an employee of an oil company voting on oil
taxes would be considered differently from the owner of an oil
company voting on oil taxes.
MR. JOHNSTON responded that under current statute, that would be
the correct interpretation.
REPRESENTATIVE WOOL asked if an owner of an oil company voting
on oil taxes affecting all oil companies would be allowed to
vote.
MR. JOHNSON responded that is correct.
CHAIR KREISS-TOMKINS commented that many disclosures occurring
on the House floor currently are not required by the "letter of
the law," and the law defines conflicts much more narrowly.
3:54:39 PM
JERRY ANDERSON, Administrator, Select Committee on Legislative
Ethics, Legislative Agencies and Offices, stated that
Representative Wool's question has been the subject of a number
of advisory opinions, and it is a complex question that cannot
be answered without a specific set of facts.
3:55:28 PM
REPRESENTATIVE TUCK requested Mr. Anderson to provide the
committee with the last three cases in which there was a
conflict of interest on the floor. He maintained that "this is
really a gray area," and it is always safer to declare a
conflict than not to declare one. He offered that reviewing the
facts of cases with the names blanked out would help the
committee understand what constitutes conflicts of interest.
MR. ANDERSON confirmed that he could provide examples to the
committee. He clarified that his agency has both complaint
decisions and advisory opinions and could provide both.
REPRESENTATIVE TUCK expressed that he is more interested in
reviewing the complaints, but the advisory opinions would also
be good to review.
REPRESENTATIVE KNOPP offered a scenario: passage of the omnibus
reform bill would result in a benefit to collective bargaining
units. He asked if a legislator would have a conflict of
interest voting on that particular proposed legislation if
he/she were a member of a collective bargaining unit.
MR. ANDERSON replied that Representative Knopp is describing a
very large class of people and, under the current statute, one
individual of that class would not benefit substantially greater
than the class as a whole.
REPRESENTATIVE WOOL offered a hypothetical situation: There is
a vote on the floor, and a legislator declares a conflict of
interest. Then there is a vote on the conflict of interest,
which is disputed by the legislator with the potential conflict.
The case goes to the Select Committee on Legislative Ethics. He
asked if the question would be resolved in a timely manner or if
it would involve a long investigation. He asked what the
procedure would be at that point.
MR. ANDERSON said he is only able to provide information on the
current statutes but could offer an opinion on the proposed
legislation. He said under the current rules if a conflict of
interest is declared and there is an objection, the legislator
making the declaration is required to vote.
3:59:30 PM
REPRESENTATIVE LEDOUX speculated that even if the Uniform Rules
were amended requiring a legislator to vote, there are probably
very few cases in which that legislator would have to vote under
the current version of the statute. She opined that the
conflict of interest statute "has a hole big enough you could
drive a tank through."
CHAIR KREISS-TOMKINS asked Mr. Anderson to describe a
hypothetical situation that would constitute a conflict of
interest under current law.
MR. ANDERSON answered that a case in which a legislator had a
financial stake in the outcome of the vote could potentially
constitute a conflict of interest. He gave as an example:
regarding the collective bargaining vote mentioned earlier, the
legislator's compensation was tied to the outcome of that vote
and involved bonuses or other incentives that had a greater
impact on the legislator than the large class of collective
bargaining people.
REPRESENTATIVE LEDOUX responded that she did not understand Mr.
Anderson's example because collective bargaining involves a
large class of people. She said that under statute, a conflict
would have to involve a legislator who was different from a
large class of people.
MR. ANDERSON responded that in the scenario he described, the
financial impact was greater for the legislator voting on the
proposed legislation than for the collective class to which
he/she belonged - the collective bargaining unit.
REPRESENTATIVE LEDOUX asked if that could happen, since the vote
would affect everyone in the collective bargaining unit.
4:02:35 PM
CHAIR KREISS-TOMKINS asked for clarification that the legislator
in the hypothetical scenario has a unique status in the
collective bargaining unit, such as a negotiator, therefore
would be subject to a bonus or incentive.
MR. ANDERSON said yes. The legislator may be part of the
collective bargaining unit, but because of his/her status as a
negotiator, he/she would have a greater financial benefit
because of the legislation.
REPRESENTATIVE LEDOUX asked if a negotiator might get a bonus
for negotiating a good contract. She opined that the scenario
seems relatively far-fetched.
MR. ANDERSON replied, "That is the situation that I'm
describing." He conceded that the scenario may be far-fetched
but expressed that the legislator being different from the large
class of people is what would be required for the benefit to
him/her to be greater than the benefit to the large class of
people.
CHAIR KREISS-TOMKINS referred to the hypothetical situation
involving a legislator who is a chicken farmer with 500 acres.
He asked for confirmation that proposed legislation about
chicken farms would not constitute a conflict of interest for
the legislator, but chicken farm legislation relating to chicken
farms of 500 acres or greater would constitute a conflict of
interest.
MR. ANDERSON replied that if the legislator was the only chicken
farmer with 500 acres or more, he/she would obviously benefit
more than the class of chicken farmers, if there are provisions
in the legislation requiring the chicken farm to be 500 acres or
more to get the benefits of the legislation.
4:05:29 PM
REPRESENTATIVE WOOL asked about a scenario in which there is a
class of 1,000 chicken farmers and a subclass of 50 chicken
farmers with 500 acres or more. He asked at what point a group
constitutes a class and at what point is a group too small to be
a class, such as 5 chicken farmers. He suggested that some oil
companies produce 30,000 barrels of oil per day and some produce
100,000 barrels per day.
MR. ANDERSON attested that the questions Representative Wool
raised are the type of grappling questions that the Select
Committee on Legislative Ethics struggles with when asked for an
advisory opinion.
4:07:04 PM
REPRESENTATIVE KNOPP offered that in all the scenarios
presented, Mr. Anderson's response falls back to the financial
benefit. He asserted that there are many conflicts of interest
that legislators would uphold on the floor that do not have a
financial basis. He asked if all determinations regarding
conflicts of interest would be made based on the financial
implications of the legislation.
MR. ANDERSON answered that the current law addresses conflicts
of interest in terms of substantial benefit or harm, and
typically they are in financial terms. He conceded that there
could be non-quantifiable benefits and harms that could still be
basis for conflict of interest.
4:08:33 PM
REPRESENTATIVE LEDOUX presented a scenario as follows: a
legislator has a family member who is a lobbyist and is voting
on proposed legislation significant to that family member. She
asked if that would constitute a conflict of interest.
MR. ANDERSON replied that more facts would be needed just as the
Select Committee on Legislative Ethics would need more facts to
make a determination. He said that the question would be, "What
is the class of lobbyist ... being affected by that potential
legislation, and is that harm any greater with that family
member?"
REPRESENTATIVE LEDOUX opined that most people would agree that
if there is such a thing as a conflict of interest, the scenario
she just suggested would constitute a conflict of interest. She
offered that if the proposed legislation does not definitely
consider that hypothetical situation as a conflict of interest,
then "it's got some big problems."
4:10:20 PM
REPRESENTATIVE TUCK suggested that the committee's discussion
has been on "when to declare" and the proposed legislation
addresses "after you declare." He said that currently a
conflict of interest does not have to be declared in committee
but must be declared on the floor at the time of a final vote.
He maintained that the proposed legislation would require
declaring a conflict of interest in committee, as well as on the
floor, and it is on the floor that the body of legislators would
decide whether the legislator declaring the conflict shall or
shall not vote. He asserted that the "real" examples he
requested may provide clarification. He mentioned that under
the proposed legislation there are language changes for
substantial benefit or harm; there would be exceptions regarding
the operating budget; and "financial interest" is defined and
replaces "equity ownership." He reiterated that most of the
proposed legislation involves the process of what happens after
declaration of a conflict of interest.
MR. JOHNSTON referred to slide 14, titled "HB 44 Proposed
Changes to AS 24.60.030(g)," and stated that CSSSHB 44(JUD)
would add to AS 24.60.030(g) the following statement: "a
legislator shall declare a conflict of interest before voting on
a question before a committee of the legislature." Moving on to
slide 15, titled "HB 44 Proposed Changes to AS 24.60.030(g)," he
said that CSSSHB 44(JUD) would add "an immediate family member"
as a beneficiary of a potential conflict of interest, and
immediate family is defined in AS 24.60.990(a)(6).
MR. JOHNSTON referred to slide 16, titled "Other States with
Reference to Family," and said there are 28 states with
statutory language covering the possible conflicts involving
family members, such as the inclusion of a family member's
employer to the list of recipients of a potential benefit or
harm from the passage of legislation.
MR. JOHNSTON referred to slide 17, titled "HB 44 Proposed
Changes to AS 24.60.030(g)," and relayed that CSSSHB 44(JUD)
would add language ensuring that every legislator would be able
to vote on the final operating budget as required by AS
37.07.020(a) and AS 37.07.100 of the Executive Budget Act [AS
37.07].
4:13:44 PM
REPRESENTATIVE BIRCH referred to the visibility and exposure
already in place: every legislator completes a detailed
financial disclosure statement, which is available online to the
public; proposed legislation is available online; and the
legislative process is public. He opined that the legislation
would result in a "huge tangle" of trying to determine what is
substantial and whose judgement to follow, rather than "just
putting all the information out on the table." He asked Mr.
Anderson to identify for the committee a "real" conflict of
interest that occurred in the past several years for which this
legislation would have provided a constructive remedy.
REPRESENTATIVE GRENN offered that currently one person can
object and force a member of the legislature to vote without the
objection being on the public record. The details of the
conflict of interest and of the request to abstain remain
unknown. He maintained that the proposed legislation would
allow the legislator to speak to his/her conflict of interest to
the benefit of the rest of the body; the body would vote on the
conflict of interest; and the vote would become public record.
He asserted that if a member of the public was concerned about a
legislator's conflict of interest, it would be in the public
record that he/she spoke to the conflict and the legislative
body rejected the conflict. He maintained that CSSSHB 44(JUD)
would add transparency; would allow the legislature to be
consistent with its own requirement for municipalities; and
would conform to the practices of 49 other states.
REPRESENTATIVE BIRCH stated that given the amount of disclosure
already required of legislators and the obligation of completing
legislative work in a timely fashion, he does not see that the
proposed legislation will speed up that process or improve
public perception of legislative work.
REPRESENTATIVE GRENN referred to slides 18 and 19, titled
"Citizen Legislatures," and pointed out that in the Wyoming
legislature, whose legislators have low salaries and outside
employment, there were only 10 instances where a declared
conflict of interest needed a resolution in the past three
years. He added that more bills are introduced in Wyoming's
legislature than are introduced in Alaska's legislature. He
reiterated that the goal of CSSSHB 44(JUD) is transparency,
building trust, and adding legislators' interests to the public
record, which would be good for governance.
4:19:18 PM
REPRESENTATIVE JOHNSON stated that she has had a great deal of
experience with this issue in her involvement with municipal
government. She referred to slide 15 and asked if the
definition for domestic partner is included in statute.
MR. JOHNSTON answered that the definition for domestic partner
is currently in AS 24.60.990(a)(5).
REPRESENTATIVE JOHNSON asked how the $10,000 per year limit was
chosen and noted that it is very low - less than $1,000 per
month.
MR. JOHNSTON stated that the $10,000 per year limit is high
relative to other states. He cited other state limits as low as
$500 per year. He explained that the limit was derived from
Alaska Statutes pertaining to the limit required of a member of
the public in defining substantial interest. He added that the
proposed legislation specifies that amount as an amount received
in the preceding 12-month period. He maintained that with these
parameters, staff tried to set a benchmark that would ensure
identification of an employer with which a conflict could arise.
REPRESENTATIVE JOHNSON offered her concern that minority
members' votes would be blocked, and she asked if Mr. Johnston
had done research on that aspect.
MR. JOHNSON replied that in talking with representatives from
other states using majority consent from the body to address
declared conflicts of interest, he did not hear of any cases of
that occurring. He offered that because this involves public
record, "it's a double-edged sword for a majority" to use this
politically. He noted that the Wyoming legislature uses
majority consent of the Rules [& Procedures] Committee to
require abstention, but he said that staff considered that to be
more partisan than a floor vote. He reiterated that [the idea
of] majority vote comes from Alaska's statutes, and most states
that use a vote to abstain or not abstain uses majority vote.
4:23:20 PM
REPRESENTATIVE TUCK pointed out that CSSSHB 44(JUD) would
prevent people from having to make a declaration of conflict of
interest when voting on the operating budget, when declarations
of conflict of interest are most common. He offered that this
would streamline the process because there would be fewer
declarations of a conflict of interest. He opined that it is a
disservice to the public when before a legislator even finishes
declaring a conflict, someone objects.
REPRESENTATIVE KNOPP stated that in municipal government when a
conflict is declared, the chair decides on the conflict, and the
body has the right to object to the decision and overrule the
chair. He opined that is a method that works well in local
government, and he would support that method applied to the
legislature. He suggested that the declarations of conflicts
are numerous; legislators don't necessarily function well on the
floor; and he hates to make the process more cumbersome. He
expressed that there is a tendency to "over-declare" to "cover
our bases." He expressed that he supports the changes to the
statutes but struggles with the concepts of "immediate family
members" and "potential conflicts."
REPRESENTATIVE GRENN pointed the examples from other states
described on slides 18 and 19 of the PowerPoint presentation.
He concluded that the proposed legislation would offer another
way to build trust with the public and avoid any perception that
there are hidden conflicts.
[CSSSHB 44(JUD) and HCR 1 were held over.]
4:26:29 PM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 4:26
p.m.
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