Legislature(2007 - 2008)SENATE FINANCE 532
02/12/2007 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB20 | |
| SB19 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 19 | TELECONFERENCED | |
| += | SB 20 | TELECONFERENCED | |
MINUTES
SENATE FINANCE COMMITTEE
February 12, 2007
9:01 a.m.
CALL TO ORDER
Co-Chair Bert Stedman convened the meeting at approximately
9:01:47 AM.
PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice Chair
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
Also Attending: SENATOR HOLLIS FRENCH; MILES BAKER, Staff to
Co-Chair Stedman; DAVE JONES, Senior Assistant Attorney General,
Opinions, Appeals and Ethics Section, Civil Division, Department
of Law;
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
SB 19-EXEC. BRANCH ETHICS:INTERESTS & ACTIONS
The Committee heard from the sponsor and the Department of Law.
A committee substitute was adopted and the bill was reported
from Committee.
SB 20-LEGISLATIVE DISCLOSURES
The Committee heard from the sponsor. The bill was reported from
Committee.
9:02:35 AM
CS FOR SENATE BILL NO. 20(STA)
"An Act relating to disclosures by legislators, legislative
employees, public members of the Select Committee on
Legislative Ethics, and legislative directors subject to
the Legislative Ethics Act; relating to the applicability
of the Legislative Ethics Act; and providing for an
effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Stedman reminded of questions raised at the previous
hearing regarding definition of income.
9:03:42 AM
Co-Chair Stedman referenced subparagraph (2) of AS 24.60.200.
Financial disclosure by legislators, public members of the
committee, and legislative directors., amended by Section 3. He
had expressed concern that the provision requiring reporting of
income derived from performing a service for a limited liability
corporation would not "capture" all forms of income. Upon
consultation with Senator French and the Alaska Public Office
Commission (APOC), he was assured that the amended language
would "close existing loopholes" in the disclosure requirements
for income from a limited liability company.
9:04:39 AM
Co-Chair Stedman furthered that APOC had informed him that the
reporting of "all other forms of compensation" such as stock
options, equity, deferred compensation, and "other creative
methods of compensation" was sufficiently addressed elsewhere in
statute.
9:05:23 AM
Co-Chair Hoffman offered a motion to report the bill from
Committee with individual recommendations and accompanying
fiscal note.
There was no objection and CS SB 20 (STA) was REPORTED from
committee with zero fiscal note #2 from the Department of
Administration.
AT EASE 9:06:03 AM / 9:09:02 AM
9:09:16 AM
CS FOR SENATE BILL NO. 19(STA)
"An Act relating to a public officer's taking official
action regarding, or influencing, a matter in which the
public officer has a personal or financial interest;
prohibiting certain persons from engaging in activity as
lobbyists; and defining 'official action' under the Alaska
Executive Branch Ethics Act and related law."
This was the second hearing for this bill in the Senate Finance
Committee.
9:09:36 AM
Co-Chair Stedman reminded that discussion was held at the
previous hearing on this bill regarding the need for clarity in
the language for the benefit of those directly affected as well
as for public purview. Since that meeting, he has collaborated
with the bill's sponsor to draft a committee substitute.
9:10:17 AM
Co-Chair Hoffman moved for adoption of CS SB 19, 25-LS0160/O, as
a working document.
Without objection the committee substitute, Version "O" was
ADOPTED as a working document.
9:10:52 AM
Senator Olson announced the presence of students from the Kobuk
area within the Northwest Arctic Borough attending the meeting.
9:11:38 AM
MILES BAKER, Staff to Co-Chair Stedman, explained the changes
contained in the committee substitute.
9:11:51 AM
Mr. Baker recounted that the provisions of Section 1 of the
previous version of the bill amended AS 39.52.180 to address
lobbying activities by former public officers. However, Title 24
of Alaska Statute governs lobbying activities. The committee
substitute would amend AS 24.45.121 by adding a new subsection
(d) to provide that "a former public official in the executive
branch may not engage in activities as a lobbyist to the extent
prohibited under AS 39.52.180(d)". This language would "cross
reference" to the changes made to Title 39.
9:12:26 AM
Mr. Baker stated that the provisions of Section 2 were unchanged
from the Senate State Affairs Committee substitute.
9:12:31 AM
Mr. Baker continued that Section 3 had initially only included
subsection (d) of AS 39.52.180. The committee substitute would
amend subsection (a), to specify that "proposal or consideration
of legislative bills, resolutions and constitutional amendments,
or other legislative measures" and "administrative regulations"
would be included in the definition of "matter" in the
prohibition on lobbying activities in which a former public
officer could participate. Existing statute provided an
exemption for these.
Mr. Baker remarked that the existing language effectively
"created a loophole within its own section" allowing a former
public employee to work for compensation in an area in which the
company had "substantial involvement" if that work involved
legislation, a constitutional amendment, administrative
regulations, etc.
9:14:18 AM
Mr. Baker pointed out that Section 4 was grammatically amended
in the committee substitute to change the listing of those to
whom the provisions apply from a paragraph format to a listing
of the pertinent positions. Additionally the positions of
Legislative Liaison and policy making positions of the Office of
the Lieutenant Governor were added.
9:15:15 AM
Mr. Baker reminded that discussions of whether "policy making
position" should be defined had occurred. The Division of Legal
and Research Services advised that such language would not be
necessary.
9:15:36 AM
Mr. Baker furthered that the positions of chair of a governing
board and executive officer of a state public corporation were
included as positions in which the legislation would apply.
Public corporations in Alaska include the Alaska Industrial
Development Authority (AIDA) and the Alaska Seafood Marketing
Institute (ASMI).
9:16:08 AM
Mr. Baker reported that no changes were made to the language of
Section 5.
9:16:15 AM
Mr. Baker informed that Section 6 would repeal AS 39.52.180(c),
which reads, "The head of an agency may waive application of (a)
of this section after determining that representation of a
former public officer is not adverse to the public interest. The
waiver must be in writing and a copy of the waiver must be
provided to the attorney general for approval or disapproval."
Subsection (a) prohibits lobbying for two years after leaving
State service.
Mr. Baker shared that discussions with the sponsor revealed a
loophole that would allow for the lobbying activities if the
State employee obtained written permission from his or her
supervisor. The Attorney General's office had assured that this
would not prevent a former employee from obtaining a
determination of whether other employment could be accepted.
Elsewhere in statute, the attorney general was specified as the
party who would provide clarification as to whether future
employment would be restricted by the provisions of subsection
(a).
Mr. Baker remarked that elimination of this waiver "tightens up
people's ability to kind of creatively interpret the statute."
9:18:13 AM
SENATOR HOLLIS FRENCH, sponsor of the bill, testified that three
significant improvements were made to the bill. Each change
"closed a loophole" or broadened the number of positions subject
to the provisions of the bill.
Senator French averred, "The bill is a better product than what
came into Committee."
9:19:13 AM
Senator Olson, noting the language of Sections 3 and 4, asked if
"widespread abuse" had prompted the need for these changes.
9:19:30 AM
Senator French replied that he would not characterize the
situation as widespread, although frequently individuals have
left service in the Executive Branch and immediately accepted
"lucrative" positions in the private sector that appear to
capitalize directly on State experience.
9:20:17 AM
Senator Olson surmised that "more information by more
knowledgeable people [would] give you a better sense of the
legislative process."
9:20:27 AM
Senator French acknowledged this as a valid argument. The
challenge was to achieve a balance between allowing
knowledgeable former State employees to secure employment in the
private sector while preventing them from "trading in" on their
experience gained in the Executive Branch. Individuals who work
in the Office of the Governor have "wide access" to the capitol
and are present during every stage of the legislative process.
Senator French contended, "I think the public just feels like
that's something you earn using their dollars and their building
and their space if you will. It strikes some people as being a
little too quick to hop from one side to the other without some
intervening time."
9:21:21 AM
Senator Huggins posed a different potential conflict with
lobbyists being hired or elected into State service. He
encouraged review of this issue in addition to former State
employees becoming lobbyists.
9:22:00 AM
Senator French indicated that other pending legislation
pertained to the types of "outside" work allowed by sitting
legislators.
9:22:32 AM
Senator Huggins stated that such legislators or Executive Branch
employees could have the opportunity to make decisions on items
they recently lobbied on behalf of.
9:22:48 AM
Senator Olson asked if Senator Huggins intended to prohibit a
person to serve as a legislator if that person has been
advocating for a specific issue.
9:23:04 AM
Senator Huggins corrected that he was speaking to both
individuals who might serve as legislators or in the Executive
Branch.
9:23:10 AM
Co-Chair Stedman indicated he would direct the Senate Judiciary
Committee to address the issue in consideration of the other
legislation. He commented on the need to review "both sides"
because of the "two edges of the sword".
9:23:36 AM
DAVE JONES, Senior Assistant Attorney General, Opinions, Appeals
and Ethics Section, Civil Division, Department of Law, testified
to the question posed by Co-Chair Hoffman at the previous
hearing on this bill as to whether Governor Palin supported the
additional positions to which this legislation would apply. Mr.
Jones reported that the Governor was in support of the
expansion. He also relayed the Governor's support of the
increased lobbying restrictions proposed in the committee
substitute.
9:24:31 AM
Mr. Jones directed attention to the addition of the position of
administrative assistant within the Office of the Governor to AS
39.52.180(d)(5). The language was unclear as to whether the
prohibition would apply to all administrative assistants
employed in the Office of the Governor or only apply to those
administrative assistants involved in policy making. The
Committee's and the bill drafter's intent was unclear.
9:25:24 AM
Mr. Jones then noted that the lobbying prohibition of AS
39.52.180(d) would only apply to the chair or executive director
of a State board or commission. Some boards and commissions have
a practice of "rotating" the chair position between members. The
language of the committee substitute would prohibit an
individual from lobbying for one year after service as the
chair. He was unsure whether the intent was to bar lobbying
activities for one year after an individual left the board or
commission if that individual had ever served as the chair.
Mr. Jones suggested that all members be included in the
prohibition. Although the chair "runs" the meetings, that
individual casts only one vote. All members "play a policy
roll".
9:26:58 AM
Mr. Jones stated that the repeal of AS 39.52.180(c) by Section 6
would not cause "great harm" because the situation rarely
occurs.
9:28:00 AM
Senator French summarized that two areas should be addressed. He
understood the intent was that administrative assistants in the
Office of the Governor who were in a policy making position
would be subject to the lobbying restrictions.
9:28:58 AM
Co-Chair Stedman shared this intent and understanding.
9:29:13 AM
Mr. Jones cited AS 39.50.200(a)(1) as including a definition of
assistants to the governor and lieutenant governor that are
required to file financial disclosure forms with APOC. This
definition lists several positions and "others employed
similarly in policy making positions." He suggested utilizing
similar language in this legislation to clarify intent.
9:30:10 AM
Senator French reiterated the Assistant Attorney General's
recommendation to expand the provision of AS 39.52.180(d)(6) to
include all members and the executive director of a State board
or commission.
9:30:31 AM
Senator Elton asked if subparagraph (7) pertaining to the chair
and executive officer of a State public corporation should also
be amended to include all members.
9:31:09 AM
Senator French was unsure if the chair position "rotates" for
the public corporations.
9:31:23 AM
Senator Elton deemed the ability of all members to participate
in policy making to be of greater importance than the matter of
whether the chair position rotates. As Mr. Jones stated, each
member has the same vote as the chair.
9:32:00 AM
Senator French did not object to the rationale. He was uncertain
who would be "harmed" by the inclusion of these positions in the
lobbying prohibition provision. The application of the
restrictions should be "a little wider than a little narrower".
He concluded that former members would "just have to find some
other sort of work to sustain themselves after they've left
public service."
9:32:38 AM
Amendment #1: This conceptual amendment deletes "chair" and
inserts "member" in AS 39.52.180(d)(6) and (7) amended in
Section 4 on page 3, lines 25 through 28. The amended language
reads as follows.
(6) member of a state board or commission that
has the authority to adopt regulations, other than a board
or commission named in AS 08.01.010;
(7) member of the governing board and executive
officer of a state public corporation.
Co-Chair Hoffman moved for adoption.
The amendment was ADOPTED without objection.
AT EASE 9:33:36 AM / 9:36:05 AM
Co-Chair Stedman announced that the matter of administrative
assistants would not be addressed by this Committee; however, an
amendment could be offered later in the legislative process.
9:36:49 AM
Senator Thomas asked the definition of "insignificant or
conjectural effect on the matter" as included in AS
39.52.110(b)(1) amended by Section 2. This subparagraph would
exempt, from a violation of public trust, certain actions or
influences of a public officer. He questioned whether this
language could "leave an opening" for a public officer to avoid
the restrictions.
9:37:24 AM
Senator French was unsure that the language could be "tightened"
further. He agreed that arguments could be made in defense of
actions of a public officer utilizing this provision. This
language had been included in statute for some time.
9:38:06 AM
Co-Chair Hoffman offered a motion to report CS SB 19, 25-
LS0160\V, as amended from Committee with individual
recommendations and accompanying fiscal notes.
Without objections CS SB 19 (FIN) was REPORTED from committee
with zero fiscal notes #1 from the Department of Law and #2 from
the Department of Administration.
AT EASE 9:39:32 AM \ 9:39:44 AM
ADJOURNMENT
Co-Chair Bert Stedman adjourned the meeting at 9:40:18 AM
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