Legislature(1995 - 1996)

03/28/1996 03:40 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SENATE STATE AFFAIRS COMMITTEE                                
                         March 28, 1996                                        
                           3:40 p.m.                                           
  MEMBERS PRESENT                                                              
 Senator Bert Sharp, Chairman                                                  
 Senator Randy Phillips, Vice-Chairman                                         
 Senator Loren Leman                                                           
 Senator Jim Duncan                                                            
 Senator Dave Donley                                                           
    COMMITTEE CALENDAR                                                         
 SENATE BILL NO. 314                                                           
 "An Act relating to issuance of a restaurant or eating place liquor           
 SENATE BILL NO. 141                                                           
 "An Act relating to legislative ethics; and providing for an                  
 effective date."                                                              
 SENATE BILL NO. 275                                                           
 "An Act relating to state procurement practices and procedures; and           
 providing for an effective date."                                             
 HB 211 (VOTER REGISTRATION & ELECTIONS) was scheduled, but not                
 taken up on this date.                                                        
 SB 182 (ELECTIONS ADMINISTRATION & VOTER REG'N) was scheduled, but            
 not taken up on this date.                                                    
 SB 203 (TASK FORCE ON RECYCLING INDUSTRIES) was scheduled, but not            
 taken up on this date.                                                        
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 314 - No previous senate committee action.                                 
 SB 141 - See State Affairs minutes dated 4/20/95, 4/27/95, 1/30/96,           
      2/6/96, 2/27/96, and 3/26/96.                                            
 SB 275 - See State Affairs minutes dated 3/12/96.                             
  WITNESS REGISTER                                                             
 Senator Rick Halford, Co-chairman                                             
 Finance Committee                                                             
 State Capitol, Juneau, AK 99801-1182¶(907)465-4958                            
   POSITION STATEMENT: prime sponsor of SB 314                                 
 George Malekos                                                                
 North Slope Restaurant                                                        
 Eagle River, AK                                                               
   POSITION STATEMENT: supports SB 314                                         
 Ann Ringstad, Aide                                                            
 Senate State Affairs Committee                                                
 State Capitol, Juneau, AK 99801-1182¶(907)465-4522                            
   POSITION STATEMENT: testified on SB 141                                     
 Terry Cramer, Attorney                                                        
 Legislative Legal and Research Services                                       
 130 Seward St., Ste. 409, Juneau, AK 99801-2105¶(907)465-2450                 
   POSITION STATEMENT: testified on SB 141                                     
 Susie Barnett, Professional Assistant                                         
 Legislative Ethics Committee                                                  
 P.O. Box 101468, Anchorage, AK 99510-1468¶(907)258-8172                       
   POSITION STATEMENT: testified on SB 141                                     
 Brooke Miles, Regulation of Lobbying                                          
 Alaska Public Offices Commission                                              
 P.O. Box 110222, Juneau, AK 99811-0222¶(907)465-4864                          
   POSITION STATEMENT: testified on SB 141                                     
 Jerry Burnett, Aide                                                           
 Senator Randy Phillips                                                        
 State Capitol, Juneau, AK 99801-1182¶(907)465-4949                            
   POSITION STATEMENT: testified on SB 275                                     
 Dugan Petty, Director                                                         
 Division of General Services                                                  
 Department of Administration                                                  
 P.O. Box 110210, Juneau, AK 99811-0210¶(907)465-2250                          
   POSITION STATEMENT: representing governor-prime sponsor SB 275              
 Loren Rasmussen, Acting Director                                              
 Division of Engineering & Operations                                          
 Department of Transportation & Public Facilities                              
 3132 Channel Dr., Juneau, AK 99801-7898¶(907)465-2960                         
   POSITION STATEMENT: testified on SB 275                                     
  ACTION NARRATIVE                                                             
          SB 314 RESTAURANT LIQUOR LICENSE OWNERSHIP                         
 TAPE 96-25, SIDE A                                                            
 Number 001                                                                    
 CHAIRMAN SHARP called the Senate State Affairs Committee to order             
 at 3:40 p.m. and brought up SB 314 as the first order of business             
 before the committee.  He stated that the committee wouldn't take             
 teleconference testimony at this time, but they would take                    
 testimony from one person who travelled to Juneau to attend the               
 hearing.  The chairman called Senator Halford to testify.                     
 Number 020                                                                    
 SENATOR RICK HALFORD, Co-chairman - Finance Committee, prime                  
 sponsor of SB 314, stated he introduced the bill at the request of            
 one of his constituents.  The system had always been that a seller            
 couldn't be in both the wholesale and the retail business of                  
 alcohol at the same time.  We went through a fairly extensive                 
 process to create the brew-pub licenses and put limitations on                
 them.  We required them to have a bar license.  But inadvertently,            
 we created a mega-license that goes around the rest of the                    
 precedents in this very regulated industry.  If you combine a                 
 brewery license with a restaurant license, and then you add the               
 exemption for entertainment, which can be called a mini-tavern                
 license, and you have basically a mega license that can deal in               
 wholesale, retail, and virtually everything, down to selling a                
 product in a bucket or a barrel or a bag, and all the retail sales.           
 That is not what was intended, but that's what happened.  There are           
 several of these licenses out there.  SB 314 would reestablish what           
 most people thought was the case: that you couldn't have a                    
 dispensing license and a wholesale license at the same time.  It is           
 not retroactive; there are several of these licenses already                  
 issued, and SB 314 would not affect those licenses.                           
 CHAIRMAN SHARP asked if currently people can get a small mini-                
 brewing license.                                                              
 SENATOR HALFORD replied it is a brewery license in combination with           
 a restaurant license, which allows them to make the product and to            
 sell the product at the retail level.  But since they're a brewery,           
 they can also sell the product at the wholesale level.  So they're            
 integrated into the entire chain where no other licensee can be.              
 The brew-pub license was supposed to satisfy the question of                  
 alcohol content in the product.  You then go through the process,             
 all the inspections, and probably $200,000.00 worth of equipment at           
 a minimum.  The brewery license takes away all those restrictions.            
 When you combine that with a retail beer and wine license, then you           
 have a complete integrated sales and production system.                       
 CHAIRMAN SHARP called Mr. Malekos to testify.                                 
 Number 120                                                                    
 GEORGE MALEKOS stated he owns the first brew-pub in Alaska.  Mr.              
 Malekos submitted written testimony in support of SB 314.  He gave            
 a brief explanation on the difference between a brew-pub and a                
 micro-brewery.  He reiterated information on licensing previously             
 stated by Senator Halford.  He stated he has no way of marketing              
 his beer under the type of license he has, but the new license                
 allows for a semi-tavern.  These licenses are able to compete on a            
 completely different level from dispensary licenses, that sell for            
 a much greater amount of money.  Mr. Malekos stated he has read               
 some of the letters of opposition submitted to the committee, which           
 state SB 314 is to eliminate competition.  He stated his industry             
 is founded on competition.  They would just like an equal playing             
 field in the competition.  There is simply no way to compete with             
 the brewery-restaurants.  In speaking to the Anchorage Assembly,              
 they were under the mistaken impression that these brewery-                   
 restaurants would have the same brew-pub licenses as Mr. Malekos              
 has.  He stated all he is asking for is an equal playing field.               
 CHAIRMAN SHARP asked if there are any questions on SB 314.                    
 SENATOR RANDY PHILLIPS asked the chairman if there were any more              
 people to testify.                                                            
 CHAIRMAN SHARP responded he stated earlier that the committee would           
 take testimony from anyone who travelled to Juneau to testify on              
 the bill.  There will be another hearing on SB 314 for public                 
 testimony via teleconference, whenever the bill is rescheduled.               
 That meeting will be noticed.  The primary purpose of this meeting            
 has been stated.  The chairman stated the committee would go on to            
 the next item on the agenda.                                                  
                  SB 141 LEGISLATIVE ETHICS                                  
 Number 240                                                                    
 CHAIRMAN SHARP brought up SB 141 as the next order of business                
 before the Senate State Affairs Committee.  He asked committee                
 members if they've come up with more possible amendments since the            
 last committee meeting.  We do have a side-by-side analysis of the            
 Executive Branch Ethics Act and the Legislative Ethics Act in                 
 members' bill packets.  He advised members who would like to amend            
 the Executive Branch Ethics Act to do so in the Rules Committee.              
 SENATOR DONLEY stated he has several amendments to offer.                     
 CHAIRMAN SHARP stated members should have in their bill packets               
 comments from Susie Barnett of the Legislative Ethics Committee               
 relating to the five amendments adopted at the last meeting.                  
 SENATOR DONLEY stated he has information from the legislative                 
 drafter on how the legal defense fund provision would relate to the           
 initiative.  Senator Donley's amendment, amendment R.4 relates to             
 that.  The amendment clarifies that the APOC would set up the                 
 regulations and guidelines.  It also clarifies that it would be               
 outside the impact of the initiative process.  This addresses                 
 Senator Pearce's concern.                                                     
 CHAIRMAN SHARP asked if there would be any restrictions on how the            
 defense fund could be used.  Is it just for Ethics violations?                
 SENATOR DONLEY replied that's the first time that question has ever           
 been raised to him.  He thought it was clear that since it will be            
 under the domain of APOC, it was for some function that was related           
 to your duties as a legislator.                                               
 CHAIRMAN SHARP agreed; that's what he would think also.                       
 SENATOR DUNCAN noted that under subsection (d), the APOC will write           
 regulations on how the money may be expended, that is covered.                
 CHAIRMAN SHARP thinks the APOC could set whatever they want in                
 Number 335                                                                    
 SENATOR DONLEY made a motion to adopt amendment R.4.                          
 CHAIRMAN SHARP asked Senator Donley if he believed, from line 11-19           
 on page 1 of amendment R.4, that this would not run afoul of the              
 limitations in either the initiative or the bill, since this allows           
 unlimited transfer of campaign money into a defense fund.  He                 
 thinks the initiative forbids that.                                           
 SENATOR DONLEY thinks the way to get around that is the contingent            
 effective date.  That was the issue the president raised yesterday.           
 If you put that provision into effect before the initiative, the              
 initiative would modify it; if you put it into effect after passage           
 of an initiative, then--                                                      
 CHAIRMAN SHARP asked if there was objection to amendment R.4.                 
 Hearing no objection, the chairman stated the amendment was                   
 adopted.  He asked if there were other amendments committee members           
 wished to offer at this time.                                                 
 SENATOR DONLEY asked if there wasn't another amendment that Senator           
 Pearce suggested.                                                             
 CHAIRMAN SHARP stated there are some other amendments that Senator            
 Pearce suggested.                                                             
 SENATOR DONLEY stated there was also another amendment he had asked           
 to be drafted that dealt with the newsletter issue.  He does not              
 know if it was completed though.  That's pretty simple though; it             
 would be easily conceptualized.                                               
 CHAIRMAN SHARP asked if that was the one with the June 1 deadline.            
 SENATOR DONLEY stated Senator Pearce asked for a June 1 deadline,             
 but Senator Donley thinks July 1 would be a reasonable deadline;              
 that's what he was going to propose to the committee.                         
 CHAIRMAN SHARP agreed that there's not enough time to put out a               
 newsletter between the date you get home and June 1.  He asked                
 Senator Donley to conceptualize that in writing.  He asked for a              
 motion to move the amendments in the committee's possession.                  
 Number 380                                                                    
 SENATOR RANDY PHILLIPS made a motion to adopt amendment R.5.                  
 SENATOR DONLEY stated amendment R.5 referred to a legislator                  
 specifically having a conflict of interest in a committee meeting,            
 and the legislator would then orally disclose the conflict of                 
 interest.  He does not have a problem with the amendment.                     
 CHAIRMAN SHARP, hearing no objection, stated amendment R.5 was                
 CHAIRMAN SHARP asked if anyone cared to offer amendment R.6.                  
 SENATOR RANDY PHILLIPS asked for a brief explanation of the                   
 Number 400                                                                    
 ANN RINGSTAD, Committee Aide to the Senate State Affairs Committee,           
 stated that Senator Pearce was concerned that personal gifts should           
 not be publicly disclosed, but should be disclosed in                         
 confidentiality to the Ethics Committee.  Only gifts that                     
 legislators receive through legislative contacts will be publicly             
 SENATOR DONLEY asked what the dollar amount that triggers reporting           
 of gifts will be under SB 141.                                                
 MS. RINGSTAD stated it will be $250.00 or more.                               
 SENATOR LEMAN asked for clarification that this amendment would               
 still require reporting of personal gifts to the Ethics Committee,            
 but the Ethics Committee would not disclose those gifts in the                
 MS. RINGSTAD responded that is correct: that information would be             
 confidential.  That is the intent of this amendment.                          
 SENATOR DONLEY thinks that C-6 are the ones that are open: public             
 MS. RINGSTAD stated it's referring to Section 18, page 10 of the              
 "R" work draft.                                                               
 Number 420                                                                    
 SENATOR RANDY PHILLIPS made a motion to adopt amendment R.6.                  
 SENATOR DONLEY stated he seemed to remember that the problem was              
 that you're supposed to report, but it wasn't clear whether you               
 report to the Ethics Committee or to the clerk.  This just sets out           
 that you report to the Ethics Committee, and the Ethics Committee             
 forwards the appropriate ones to the clerk, and the clerk then                
 publishes those.                                                              
 MS. RINGSTAD stated that is how she understands it.                           
 CHAIRMAN SHARP asked if there was objection to amendment R.6.                 
 Hearing none, he stated the amendment was adopted.                            
 CHAIRMAN SHARP noted the next amendment was R.7.                              
 SENATOR RANDY PHILLIPS stated this is the amendment regarding the             
 deadline.  It's hard to comply with the deadline, because limited             
 partnership reports aren't received until after the first of March.           
 CHAIRMAN SHARP agreed it is impossible to comply.                             
 SENATOR DONLEY stated he hasn't yet heard a motion.                           
 SENATOR DUNCAN stated he's not moving it.                                     
 CHAIRMAN SHARP stated you won't hear it from him.                             
 SENATOR RANDY PHILLIPS stated he has an amendment dealing with                
 legislative spouses lobbying for compensation.  It was brought to             
 his intention that the amendment on this subject which was                    
 previously adopted might be interpreted to mean spouses of                    
 legislators would not have the ability to testify before a                    
 committee.  This would keep the prohibition, but would allow                  
 spouses to testify before committees.  He asked the legislative               
 drafter if he correctly explained the amendment.                              
 Number 455                                                                    
 TERRY CRAMER, Attorney, Legislative Legal and Research Services,              
 stated the explanation was fine.  She is not sure the original                
 amendment would have been interpreted with that result, but it was            
 confusingly drafted.                                                          
 CHAIRMAN SHARP stated he was thinking about revisiting that                   
 amendment for rescinding action.                                              
 SENATOR DUNCAN asked if this would replace the language previously            
 SENATOR RANDY PHILLIPS stated yes.                                            
 MS. CRAMER stated the original language had two new sections.  The            
 first of the two new sections is deleted by this amendment, so                
 you're only putting in one new section.  The language you're                  
 deleting raised the possibility that you would be denying spouses             
 free speech.                                                                  
 SENATOR DUNCAN asked if he is looking at the correct amendment: R.1           
 SENATOR RANDY PHILLIPS replied, no, Senator Duncan should be                  
 looking at amendment R.8.                                                     
 SENATOR DUNCAN stated he does not have the amendment.                         
 MS. CRAMER responded that R.8 is the new one.  If you start with              
 R.1, and delete what's labeled as Section 2, you get there.                   
 SENATOR DUNCAN stated that R.1 doesn't say delete anything.                   
 CHAIRMAN SHARP doesn't think he has it.                                       
 MS. CRAMER stated the amendment is not drafted as an amendment to             
 the amendment.  It's drafted as an amendment to the bill.                     
 SENATOR DUNCAN stated that they've already adopted an amendment to            
 the bill, so--                                                                
 SENATOR RANDY PHILLIPS asked if it could be redrafted to make the             
 amendment an amendment to the amendment.                                      
 MS. CRAMER responded yes.                                                     
 CHAIRMAN SHARP thinks that's a little hard to do, since the                   
 amendment's been adopted.                                                     
 SENATOR DUNCAN stated we can rescind our action on the other one              
 and adopt this one.                                                           
 SENATOR DONLEY replied, no, we've got a cs before us; it can just             
 be conceptual.                                                                
 MS. CRAMER replied she can do whatever the committee wishes.                  
 CHAIRMAN SHARP asked if rescinding our previous action and then               
 reenacting this do it?                                                        
 MS. CRAMER responded if you rescinded your previous action in                 
 adopting M.1, and adopted R.8, then you would get there.  But I               
 should also point out that R.1 was rolling in M.1 and a couple of             
 others that you had adopted at that meeting.                                  
 SENATOR DUNCAN asked if R.1 was adopted in it's entirety.                     
 SENATOR RANDY PHILLIPS replied, right.                                        
 SENATOR DUNCAN stated they did not.                                           
 MS. RINGSTAD responded those were the three amendments the                    
 committee adopted on Tuesday, and rather than rolling it into                 
 another bill, she just had Ms. Cramer roll it in to this one                  
 amendment, so you can see what was going to be put in.                        
 SENATOR DUNCAN stated the amendments were adopted separately,               
 MS. RINGSTAD replied that's correct.                                          
 MS. CRAMER stated as long as the committee is not actually adopting           
 R.1, you can go back and rescind--                                            
 SENATOR DUNCAN stated they've already adopted everything in R.1.              
 MS. CRAMER responded they've adopted the contents of R.1, but not             
 the form of R.1.  So you could rescind M.1 and adopt R.8.                     
 CHAIRMAN SHARP asked Senator Phillips how he wanted to get there.             
 MS. CRAMER stated she can also do a "quick and dirty" amendment to            
 SENATOR RANDY PHILLIPS stated that's what he was thinking of doing,           
 because that would be easier than going through two motions, and              
 trying to explain all this.  Basically what he wants to do is                 
 refine the amendment that was made.                                           
 SENATOR DONLEY asked Senator Phillips to explain again the                    
 SENATOR RANDY PHILLIPS stated the amendment adopted a few days ago,           
 makes total prohibition, if you're being paid as a lobbyist, to be            
 married to a lobbyist, as a legislator.                                       
 SENATOR DONLEY noted, you mean to be married to a legislator?                 
 CHAIRMAN SHARP responded, yes, a lobbyist married to a legislator.            
 SENATOR DUNCAN added, and cohabitating.                                       
 SENATOR RANDY PHILLIPS stated if you are married to someone who's             
 not paid as a lobbyist, but wanted to testify before a committee,             
 then that would also be prohibited.  That was not the intent of the           
 SENATOR LEMAN asked where that appears in this amendment?  He is              
 not seeing it.                                                                
 MS. RINGSTAD showed Senator Leman where that is in the amendment.             
 MS. CRAMER explained she is not sure that it would be interpreted             
 to deny spouses the opportunity to approach legislators and                   
 legislative committees, but it might be.                                    
 SENATOR RANDY PHILLIPS stated they have a fax from the Ethics                 
 Committee stating they have a different view of the world on this             
 Number 515                                                                    
 SENATOR DONLEY asked if the proposed amendment would allow a spouse           
 who wasn't a lobbyist to do whatever they want.                               
 SENATOR RANDY PHILLIPS replied, yes.                                          
 SENATOR DONLEY asked if it would allow a spouse who was a                     
 registered lobbyist to participate in the legislative process for             
 things other than the clients they represent?  He asked Senator             
 Phillips if he understood the question.  Senator Donley thinks they           
 should have freedom of speech.                                                
 SENATOR DUNCAN thinks this is getting confusing, the way it's                 
 drafted.  He thinks this could be corrected in the Rules Committee.           
 SENATOR RANDY PHILLIPS stated that's fine.  He doesn't care,                  
 frankly.  He withdrew the amendment.                                          
 SENATOR DONLEY doesn't think it's that hard.  We just need to                 
 decide how much freedom of speech to give them.                               
 SENATOR RANDY PHILLIPS agreed, but he doesn't want to risk losing             
 the whole amendment, so he would just as soon keep the ban for                
 SENATOR DONLEY asked Senator Phillips if he is withdrawing the                
 SENATOR RANDY PHILLIPS stated if Senator Donley is interested, he             
 will move it again, as written by Ms. Cramer.                                 
 CHAIRMAN SHARP asked Senator Donley if he had an amendment.                   
 Number 535                                                                    
 SENATOR DONLEY stated he had an amendment dealing with a deadline             
 for sending out newsletters.  He asked if Senator Phillips                    
 amendment was adopted.                                                        
 CHAIRMAN SHARP stated Ms. Cramer is currently redrafting the                  
 SENATOR DONLEY asked the chairman if he would like to move on to              
 that amendment.                                                               
 CHAIRMAN SHARP responded yes.                                                 
 SENATOR DONLEY stated there is a provision suggested by the Ethics            
 Committee that we not allow newsletters within 90 days of an                  
 CHAIRMAN SHARP stated they suggested June 1, the filing deadline.             
 SENATOR DONLEY thinks they're trying to address something that                
 isn't really a problem.  The compromise, since they seem to be                
 intimidated into doing some of these ridiculous things, would be to           
 change it to July 1.  He doesn't think he's ever gotten a                     
 newsletter out by June 1.  Between the end of session, being on the           
 road, and your equipment being shipped back for two weeks, there is           
 no way to get it done by June 1.                                              
 SENATOR RANDY PHILLIPS agreed.                                                
 SENATOR DONLEY thinks the whole thing ought to be deleted.                    
 SUSIE BARNETT, Professional Assistant, Legislative Ethics                     
 Committee, clarified that on page 3, lines 22 and 23, the funds               
 referred to are leadership funds or committee funds, those kinds of           
 things.  It wouldn't affect your office account funds.                        
 SENATOR DONLEY thanks Ms. Barnett for that correction.  He did not            
 understand what the committee was proposing.  He suggested a July             
 1 cutoff for mailings.  A committee will not be able to generate              
 something before July 1.                                                      
 SENATOR DUNCAN is not sure a committee should do something.  Why              
 would we want to authorize a committee to do a mailing at all                 
 during election season?  A committee doesn't need to do a                     
 SENATOR RANDY PHILLIPS agreed.  He doesn't think Senator Donley               
 wants the amendment he is proposing.                                          
 SENATOR DUNCAN does not think Senator Donley would want that                  
 amendment either.                                                             
 SENATOR DONLEY doesn't care.  He thinks maybe since he hasn't been            
 a chairman in so long, he wouldn't know what to do with it.                   
 CHAIRMAN SHARP asked if the committee wanted to try to define                 
 "campaign period", delete "campaign period", delete all of Section            
 3?  He doesn't care.                                                          
 SENATOR DUNCAN suggested leaving it alone.  He thinks with Ms.                
 Barnett's explanation that Section 3 is okay.  It's only referring            
 to a committee mailing.                                                       
 SENATOR LEMAN asked, what committee funds?                                    
 TAPE 96-25, SIDE B                                                            
 CHAIRMAN SHARP asked if they have an amendment that addresses the             
 page of the bill where the amendment ended up?                                
 Number 580                                                                    
 MS. CRAMER stated committee members have in front of them a                   
 handwritten amendment to amendment R.1.  Page 1, line 5 through               
 page 2, line 8 refers to amendment R.1, not to the bill.                      
 CHAIRMAN SHARP asked if they can do that.                                     
 SENATOR RANDY PHILLIPS stated they could.                                     
 MS. CRAMER stated page 2, lines 9-16 is what is left.                         
 SENATOR DUNCAN asked if everything would be taken out, but leave              
 Section 3 in?                                                                 
 MS. CRAMER responded, yes.                                                    
 Number 558                                                                    
 SENATOR RANDY PHILLIPS made a motion to adopt the amendment to                
 amendment R.1.  He asked Ms. Cramer to explain the amendment once             
 MS. CRAMER replied the amendment to amendment R.1 would delete most           
 of the material on page 1 and the first 8 lines on page 2.  It                
 leaves in place proposed new bill Section 3 and all the rest of the           
 material in amendment R.1.                                                    
 SENATOR DONLEY asked what the amendment would do.                             
 MS. CRAMER responded it would take out language that appeared to              
 suggest that spouses and spousal equivalents of legislators would             
 not be able to testify before committees or interact with                     
 legislators on issues that they were concerned about, if they are             
 not paid lobbyists.                                                           
 CHAIRMAN SHARP asked if that includes employees that are sent to              
 lobby, if they are legislative spouses.                                       
 MS. CRAMER replied that it would, if they were required to register           
 as a lobbyist.                                                                
 CHAIRMAN SHARP asked if that meant that a governmental lobbyist, if           
 they were a legislative spouse, would still be able to lobby the              
 MS. CRAMER responded they could, because governmental folks are not           
 covered by the lobbying law.                                                  
 CHAIRMAN SHARP thinks lobbying is lobbying.  If you're asking for             
 money or lobbying for a cause....  He has just seen a new federal             
 law that forbids any lobbying by the beneficiaries of federal funds           
 that are passed on through state grants.                                      
 SENATOR DONLEY asked if they didn't have the prohibition where you            
 can't use the money from a grant to come back and lobby with it?              
 CHAIRMAN SHARP stated now, no beneficiaries of that money cannot              
 SENATOR DUNCAN stated that would empty the hallways.                          
 Number 530                                                                    
 CHAIRMAN SHARP asked if there was any objection to the amendment to           
 amendment R.1.  Hearing none, he stated it was adopted.                       
 SENATOR LEMAN stated he has two other issues.  The first relates to           
 a letter of intent.  He would prefer to change the statute.  He               
 asked Ms. Cramer to explain why she recommended a letter of intent.           
 MS. CRAMER stated she could not find anything in the bill that                
 would prohibit being employed by a political subdivision, so she              
 couldn't find anything to amend to say it didn't apply to that.               
 SENATOR LEMAN stated that is exactly his point: it never was the              
 intent, but it is now the interpretation under which we have to               
 SENATOR RANDY PHILLIPS asked if that is APOC or the Ethics                    
 SENATOR LEMAN stated it is APOC.  He asked if the regulations have            
 been adopted yet.                                                             
 BROOKE MILES, Regulation of Lobbying, Alaska Public Offices                   
 Commission, stated the regulations have been adopted.                         
 SENATOR LEMAN thinks the APOC has gone well beyond legislative                
 Number 510                                                                    
 MS. CRAMER asked what the source of the prohibition was against               
 municipal employment or political subdivision employment.                     
 SENATOR LEMAN asked Ms. Barnett if she would respond to that.                 
 MS. BARNETT responded no.  She is not sure which section they are             
 talking about.  Are they talking about contracts and leases?                  
 SENATOR LEMAN asked for an explanation of what the Ethics Committee           
 advisory opinion or ruling was on employment by a municipality, if            
 that municipality was funding that project from an appropriation by           
 the state.                                                                    
 MS. BARNETT replied the advisory opinion to which she thinks                  
 Senator Leman is referring was an early 1993 opinion.  That opinion           
 referred to source of funds.  It is the burden of the legislator or           
 legislative employee to research what the source of funds are for             
 contracts, leases, or grants.  Is that what he is referring to?  So           
 it could affect contract employment.  But there isn't anything                
 regarding employment with a political subdivision under the new               
 law.  However, there was a memo put out years ago which addressed             
 political subdivisions and employment by legislators.  Does that              
 ring a bell to Ms. Cramer?                                                    
 MS. CRAMER replied the only bell it rings with her is that you can            
 be employed by a political subdivision and not violate dual office            
 holding under the constitution.  She doesn't think she's ever                 
 thought about political subdivision with the Ethics Code.                     
 SENATOR DONLEY stated he remembers a big floor fight and a vote in            
 the house.                                                                    
 MS. CRAMER stated there may have been a proposal that she was not             
 involved in drafting.                                                         
 SENATOR DONLEY stated the house took it out of the bill.  He thinks           
 that was the year it passed the house, but didn't pass the senate.            
 But there hasn't been an objection to it.                                     
 CHAIRMAN SHARP stated he has no objection.  He didn't know a                  
 legislator couldn't work professionally on a professional contract,           
 or digging a ditch as far as that's concerned, for any                        
 municipality, no matter where the money comes from, when he or she          
 wasn't in session.  It's up to the municipality to bid it out.  He            
 can't imagine prohibiting that kind of work.  What the hell's a guy           
 supposed to do to make a living in this state?                                
 SENATOR DONLEY asked if anyone objects.                                       
 Number 480                                                                    
 CHAIRMAN SHARP doesn't have an objection, but thinks a letter of              
 intent is a weak way to go about it.  He would load it right in the           
 damn statute.                                                                 
 MS. CRAMER stated she can create a place in statute, but if she               
 doesn't know toward what harm she's directing the medicine, it may            
 not be as useful as if she did.                                               
 SENATOR LEMAN moved the adoption of the letter of intent.                     
 Number 465                                                                    
 CHAIRMAN SHARP asked if there was objection to the letter of                  
 intent.  Hearing none, he stated the letter of intent was adopted.            
 He also suggested that Senator Leman might wish to load that                  
 language somewhere in the bill.                                               
 SENATOR LEMAN stated he has one other point on Section 45, page 24,           
 lines 17-21.  It has to deal with the word "substantial".  The APOC           
 has come up with what he thinks is an obtuse interpretation of                
 "substantial".  For example, if a legislator pays over $5,000.00 in           
 raw fish taxes, then you have a substantial interest in state                 
 government.  So the legislator then has to report the source and              
 the amount of income.  He thinks that interpretation is at odds               
 with the original intent of the legislation.                                  
 SENATOR DONLEY asked what Senator Leman would propose.                        
 SENATOR LEMAN stated he would propose defining "substantial".  He             
 asked Ms. Cramer if there is a definition for "substantial".                  
 MS. CRAMER does not recall that there is a definition for                     
 "substantial".  There certainly isn't in AS 24.60.  [After looking,           
 Ms. Cramer does find a definition for substantial.]  It is a long             
 paragraph.  "A person has a substantial interest in legislative,              
 administrative, or political action if they will be directly and              
 substantially affected financially by the action...."                         
 SENATOR DONLEY commented he loves it when the definition includes             
 the word being defined.                                                       
 MS. CRAMER continued, stating there are some exceptions.  If they             
 seek contracts in excess of $10,000.00 or if they are lobbyists.              
 It's not exactly helpful.                                                     
 SENATOR LEMAN stated that the APOC, by regulation, has now further            
 interpreted that to mean anyone who pays more than $5,000.00 in               
 taxes, because they might be affected by an action of state                   
 SENATOR DONLEY asked Senator Leman to just tell him what he wanted.           
 MS. CRAMER stated she is not clear on the direction Senator Leman             
 wants her to go.                                                              
 Number 406                                                                    
 SENATOR DONLEY asked how about raising the dollar amount from                 
 SENATOR RANDY PHILLIPS asked what they do if they get a dividend              
 over $1,000.00.  Do they then have a substantial interest in that?            
 SENATOR LEMAN thinks the problem hasn't been so much the limit, as            
 the interpretation of "substantial".                                          
 SENATOR RANDY PHILLIPS asked Senator Leman to consider coming up              
 with an amendment for the Rules Committee.                                    
 Number 375                                                                    
 SENATOR DONLEY stated legislators have had definitions before about           
 conflicts of interest that have run into the idea of, if it's a               
 benefit available to a large group, you know what I mean?  That               
 might work.  There are thousands of people selling that fish, so              
 Senator Leman is one of a large group.                                        
 SENATOR LEMAN added that all the fish buyers are doing is                     
 collecting the tax and passing it on.                                         
 CHAIRMAN SHARP asked if there are any further specific amendments.            
 Hearing none, he asked what the pleasure of the committee was.                
 Number 362                                                                    
 SENATOR RANDY PHILLIPS made a motion to discharge SB 141 from the             
 Senate State Affairs Committee with individual recommendations.               
 CHAIRMAN SHARP, hearing no objection, stated SB 141 was discharged            
 from the Senate State Affairs Committee.                                      
 SENATOR DONLEY thanked the committee and committee staff for all              
 their time and effort on SB 141.                                              
 CHAIRMAN SHARP replied that most of the thanks should go to the               
 committee staff person.                                                       
       SB 275 STATE PROCUREMENT PRACTICES & PROCEDURES                       
 CHAIRMAN SHARP brought up SB 275 as the next order of business                
 before the Senate State Affairs Committee.                                    
 Number 345                                                                    
 JERRY BURNETT, Aide to Senator Randy Phillips, reviewed the changes           
 to SB 275 as set out in a memo dated March 26, 1996 from Senator              
 Phillips.  Outlined below are the changes:                                    
 Sections 1-6 are new.  These sections require the Ombudsman, the              
 Alaska Railroad, the Aerospace Development Corporation, Alaska                
 Housing Finance Corporation, the Alaska State Pensions Investment             
 Board, the Alaska Seafood Marketing Institute, the Legislature, and           
 the Court System to comply with AS 36.30.170(b), the Alaska                   
 Bidders' Preference.                                                          
 Section 10 is the same as former Section 4, except that the 5,000             
 square foot exception has been changed to 3,000 square feet.                  
 Section 11 is the same as former Section 5, except that the                   
 University is not allowed to extend leases under this provision.              
 Sections 6 and 7 of the original bill have been deleted.                      
 Section 14 is the same as former Section 10, except that the                  
 language on line 25 has been changed from "that regularly provides            
 in the normal course of business" to " that deals in".                        
 Section 16 is the sam as former Section 12, with the exception that           
 the terms "bidder" and "offeror" are clearly defined as having the            
 same meaning for the purpose of AS 36.30.115(a-e).                            
 Section 20 is the same as former Section 16, with a new subsection            
 (e) that prohibits the delegation by the chief procurement officer            
 or the Commissioner of DOT/PF of the determination to make a single           
 source procurement.                                                           
 Section 21 is the same as former Section 17, with the exception of            
 changes in drafting style.                                                    
 Section 23 is the same as former Section 19, except that the title            
 was changed to "Innovative Competitive Procurements".                         
 Section 24 is the same as former Sections 20 and 21.                          
 Section 25 replaces former Section 22, which makes any state                  
 official who makes a false statement  in a determination under the            
 procurement code guilty of a class A misdemeanor.                             
 Section 26 is the same as former Section 23, except that 5,000                
 square feet has been changed to 3,000 square feet.                            
 Section 30 is the same as former Section 27, with the addition of             
 new language in subsection (b) that requires the Department of                
 Transportation to maintain and submit to the Commissioner of the              
 Department of Administration records of single source procurements.           
 Section 32 is the same as former Section 29, with the addition of             
 applying the procedures to "the proposed award of a contract".                
 Section 33 replaces former Section 30, with all new language on the           
 timing of a protest.                                                          
 Section 39 is the same as former Section 36, except for the change            
 from 30 days to 90 days for the time limit for filing a claim on a            
 Section 43 is the same as former Section 40, except that paragraph            
 (34) now exempts only Governor's Office contracts with the media              
 for advertising, instead of an exemption for lobbying, public                 
 relations, and advertising.                                                   
 Section 44 is the same as former Section 41, except that it                   
 specifies "41 U.S.C." instead of "federal law".                               
 Section 51 is a new section that makes the first lease extension              
 report due on August 31, 1997, formerly covered in Section 5.                 
 Section 53 is the same as former Section 48, with the addition of             
 the sections applying the Alaska Bidders' Preference to agencies              
 exempted from the procurement code.                                           
 CHAIRMAN SHARP handed out Executive Branch Conflict of Interest               
 reports.  He advised members to look at the forms.  We want to look           
 at this in the Rules Committee.                                               
 SENATOR DONLEY thinks that when ethics is considered, they should             
 be considering a comprehensive ethics in government act.                      
 MR. BURNETT believes that someone from the Department of                      
 Administration would like to speak to some of the changes in the              
 committee substitute.                                                         
 SENATOR DONLEY made a motion to adopt the committee substitute for            
 SB 275.                                                                       
 Number 205                                                                    
 CHAIRMAN SHARP, hearing no objection, stated the committee                    
 substitute was adopted.  He asked for comments from the Department            
 of Administration.                                                            
 Number 195                                                                    
 DUGAN PETTY, Director, Division of General Services, Department of            
 Administration, stated there are four comments he would like to               
 make on the committee substitute.  It is his understanding that               
 Section 14 still needs some work.  That is the section that                   
 addresses the issue of brokering bidder preferences.  He thinks               
 there is still some improvement that could be made there.  Under              
 Section 20, the section on single-source procurements, the                    
 administration requests that there be an amendment introduced to              
 allow for some level of delegation on single-source procurements.             
 Under current statute, the sole-source requirement may not be                 
 delegated by the chief procurement officer, with the exception of             
 small procurements.  We'd like to maintain that level, recognizing            
 that there's some level of sole-source that can be delegated to an            
 agency head to make a determination.  Other wise, the chief                   
 procurement officer will spend a lot of their time dealing with               
 relatively small determinations for single sources.  The current              
 statutory limitation is $25,000.00.  He thinks the preferable                 
 approach would be to identify it as a small procurement.  If the              
 committee thinks a $50,000.00 statutory procurement limitation is             
 too high, he suggested lowering that figure to $25,000.00.  It                
 would be difficult to handle those without some level of                      
 delegation.  Mr. Petty suggested language to make that change.                
 MR. PETTY made the same suggestion under Section 21.  The                     
 administration would like to see the current allowance for                    
 delegation of small procurements to continue.  On Section 21, line            
 20, there is a comma after $100,000.00; the administration thinks             
 the deletion of that comma could cause confusion.  Those are the              
 Number 125                                                                    
 SENATOR LEMAN stated that if deleting the comma causes confusion,             
 why not just re-order the sentence to say, "a construction contract           
 under $100,000.00 or a contract for supplies, services, or                    
 professional services may be awarded without competitive sealed               
 bidding."  He moved that amendment.                                           
 CHAIRMAN SHARP, hearing no objection, stated the amendment was                
 MR. PETTY stated the administration can live with the committee               
 substitute as it now reads.  But Section 14 should be addressed.              
 CHAIRMAN SHARP thinks they should forbid brokering of bids that               
 take advantage of the preference.                                             
 Number 085                                                                    
 MR. PETTY informed the committee that the administration has                  
 proposed an amendment on this issue.  The amendment proposes to               
 leave subsection (b) alone, but require that bidders have a history           
 of selling the supplies of the general nature solicited by the                
 state to other governments or to the general public.                          
 Number 050                                                                    
 SENATOR DONLEY does not remember having a problem with Section 14             
 the way it was.                                                               
 MR. PETTY responded the amendment would not impact the Alaska                 
 bidders' preference, but would simply address the disabled bidders'           
 preference, the employment program preference, and the business               
 employing disabled preference.                                                
 SENATOR DONLEY asked what was wrong with Section 14 the way it was.           
 MR. PETTY responded that the concern with Section 14 in the                   
 committee substitute is there is a question of whether that would             
 solve the problem.                                                            
 SENATOR DONLEY asked what's wrong with Section 14 in the committee            
 MR. PETTY replied, as he understands it, it's not specific enough             
 to believe it would prevent the brokering issue, and also, it                 
 required someone to have sold a product or dealt in a product or              
 supply within the past six months, because it's tied to the six               
 months of the Alaska bidders' preference.  So if an individual had            
 sold a product 18 or 20 months ago, but not within the last 6                 
 months, they would have been prevented from getting the preference,           
 when they more appropriately should get it.                                   
 TAPE 96-26, SIDE A                                                            
 Number 010                                                                    
 CHAIRMAN SHARP moved amendment #2 to SB 275.                                  
 SENATOR LEMAN objected for the purpose of a clarification.  He                
 asked Mr. Petty if he meant "solicit to other governmental                    
 agencies," because that's not what the bill says.                             
 MR. PETTY stated he misspoke.  He prefers the language as it is               
 SENATOR LEMAN stated this is a little bit different from what he              
 normally sees in statute.  Maybe the drafting attorneys can--                 
 SENATOR RANDY PHILLIPS interjected that SB 275 goes to the                    
 Judiciary Committee.                                                          
 SENATOR LEMAN thinks it may be interpreted as "solicit to other               
 governments".  What does that mean?  Municipal governments?                   
 MR. PETTY responded, municipal governments or other state agencies.           
 We just want them to have some track record of having been in                 
 SENATOR RANDY PHILLIPS suggested, "other political jurisdictions".            
 CHAIRMAN SHARP asked Senator Leman what he wanted to do.                      
 SENATOR LEMAN thinks it should say, "solicit to other agencies or             
 governments," or something like that.                                         
 MR. PETTY agreed.  If the language was to say, "solicited to other            
 state agencies, other governments, or to the general public," that            
 would cover Senator Leman's concern and the intent of the                     
 SENATOR LEMAN made a motion to amend amendment #2 and incorporate             
 those words.                                                                  
 CHAIRMAN SHARP asked if there was objection.  Hearing none, he                
 stated the amendment to amendment #2 was adopted.                             
 Number 070                                                                    
 CHAIRMAN SHARP asked if there was objection to amendment #2.                  
 Hearing none, he stated the amendment was adopted.                            
 CHAIRMAN SHARP asked if there is any prohibition on "shopping"                
 MR. PETTY stated that under the invitation to bid procedures, that            
 is not only inappropriate and unfair, but is not allowed under                
 current law.  However, he doesn't want to mislead the committee,              
 because the innovative competitive procurement section states that            
 under certain circumstances there are cases where it's not                    
 practical to use the invitation to bid process, which would prevent           
 that, or the competitive sealed proposal process, because it's like           
 trying to put a square peg in a round hole.                                   
 CHAIRMAN SHARP asked if that would still prevent bid shopping.                
 MR. PETTY responded that if the bid process was the appropriate               
 vehicle, we wouldn't get to the innovative procurement; we would              
 use the invitation to bid process.  Our obligation is to award the            
 bid to the low responsive responsible bidder.  We can't have people           
 change their bid.  We couldn't do that under current law.                     
 Number 135                                                                    
 CHAIRMAN SHARP stated the committee has written testimony in                  
 support of SB 275 from Johanna Munson of Emcon Alaska, Inc.                   
 Number 150                                                                    
 CHAIRMAN SHARP wants the intent for buying off the GSA supply                 
 schedules to be used only for suppliers listed in the State of                
 Alaska, and not to be used as a catalog for GSA suppliers outside             
 the state.                                                                    
 SENATOR DONLEY made a motion to move amendment C.6 (amendment #3),            
 which addresses the chairman's concern.                                       
 CHAIRMAN SHARP asked if there is objection.  Hearing none, he                 
 stated the amendment is adopted.  The chairman asked if there are             
 other amendments.                                                             
 SENATOR RANDY PHILLIPS stated there is an amendment on Section 20.            
 MR. PETTY stated that Section 20 is the single-source section.  We            
 want the authority to delegate small purchases.  We currently have            
 the ability to delegate the determination of a sole-source for a              
 small procurement.  That current threshold is $25,000.00.  We would           
 want to preserve the ability to delegate those small procurement              
 determinations for single-source.                                             
 SENATOR LEMAN moved amendment #4.                                             
 MR. PETTY stated that the amendment would amend page 10, line 16 to           
 read, "except for procurements of supplies, services, professional            
 services, or construction that do not exceed the amount for small             
 procurements under AS 36.30.320(a), as applicable.  The authority             
 to make a determination required by this section may not be                   
 delegated, even if the authority to contract is delegated under AS            
 SENATOR RANDY PHILLIPS stated it is a "trust me" amendment.                   
 SENATOR DONLEY asked Senator Phillips if he knows what the                    
 amendment is.                                                                 
 SENATOR RANDY PHILLIPS replied, no, but his aide is saying it's               
 SENATOR LEMAN asked if there is documentation of that determination           
 made.  We don't want this abused.                                             
 MR. PETTY replied this is delegated to specific individuals, and it           
 is made clear to them that they have the same threshold                       
 requirements of statute as the chief procurement officer.  Under              
 this, we would anticipate that we would have to do some training,             
 because those thresholds have changed with SB 275.                            
 ELMER RASMUSSEN, Acting Director, Division of Engineering &                   
 Operations, Department of Transportation & Public Facilities,                 
 stated DOT requires that the same forms, process, and documentation           
 level be used for small procurements, with the only difference                
 being the person who signs it is the delegated individual, instead            
 of the commissioner.                                                          
 SENATOR RANDY PHILLIPS made a motion to adopt amendment #4.                   
 Number 225                                                                    
 CHAIRMAN SHARP, hearing no objection, stated amendment #4 is                  
 SENATOR RANDY PHILLIPS made a motion to discharge SB 275 from the             
 Senate State Affairs Committee with individual recommendations.               
 CHAIRMAN SHARP, hearing no objection, stated SB 275 was discharged            
 from the Senate State Affairs Committee.                                      
 CHAIRMAN SHARP adjourned the Senate State Affairs Committee meeting           
 at 5:23 p.m.                                                                  

Document Name Date/Time Subjects