SB 19 - ETHICS: EXECUTIVE BRANCH & MUNICIPAL SB 20 - LEGISLATIVE DISCLOSURES 1:06:43 PM CHAIR RAMRAS announced that the first order of business would be CS FOR SENATE BILL NO. 19(FIN) am, "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; relating to restrictions on employment after leaving state service; prohibiting certain persons from engaging in activity as lobbyists; relating to financial disclosures from former public officials; and defining 'official action' under the Alaska Executive Branch Ethics Act and related law."; and CS FOR SENATE BILL NO. 20(STA) am(efd fld), "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; and relating to the applicability of the Legislative Ethics Act." 1:07:25 PM SENATOR HOLLIS FRENCH, Alaska State Legislature, joint prime sponsor of SB 19 and SB 20, said that SB 19 was engendered by the problem which arose several years ago when then-Attorney General Renkes maintained [substantial] investments in certain entities and then took public action on those entities. The subsequent investigation revealed a weakness in the state's ethics laws, and [SB 19] seeks to better define what amount of investment a public official can maintain and still take public action on the entity involved. He relayed that under Section 3 of SB 19, it would not be a violation for a public official to take an action if the action has only an insignificant effect on his/her investment regardless of how much he/she has invested, but it would be a violation if the action has a significant effect on his/her investment and the investment is greater than $5,000. SENATOR FRENCH explained that Section 1 of SB 19 provides that a former executive branch public official may not act as a lobbyist, except as a representational or volunteer lobbyist, for one year after leaving public service. Section 2 provides that a former executive branch public official must file a final report of financial and business interests upon leaving public office. Section 4 [provides that stock or ownership interest in an amount less than $5,000 is presumed to be insignificant]; he offered his understanding that this presumption is rebuttable should a public official take an action that increases the value of the stock or ownership interest to $5,000 or more. 1:13:25 PM SENATOR FRENCH relayed that Section 5 would preclude a public official - for two years after leaving state service - from representing, advising, or assisting a person for compensation regarding a legislative or regulatory matter that was under consideration by the administrative unit the public official served. Section 6 expands the list of those public officials that would be precluded - for one year after leaving state service - from acting as a lobbyist; the additional persons are deputy heads of principal departments, division directors, legislative liaisons, employees of the governor and lieutenant governor who've held policy-making positions, members of boards or commissions that have the authority to adopt regulations, and members of the governing board and executive officer of a state public corporation. REPRESENTATIVE SAMUELS asked why Section 5 has a two-year limitation and Section 6 has a one-year limitation. SENATOR FRENCH indicated that Section 5 would apply to all public officers who would have participated in a matter personally and substantially through the exercise of official action, whereas the public officers specifically referenced in Section 6 wouldn't necessarily have done so. REPRESENTATIVE HOLMES asked whether the two-year limitation established via Section 5 would also apply to someone specifically listed in Section 6 who actually does participate personally and substantially through the exercise of official action. SENATOR FRENCH surmised that it would apply. REPRESENTATIVE GRUENBERG opined that not all who are listed in Section 6 are actually public officers as defined in AS 39.52.960, whereas Section 5 appears to apply specifically only to public officers. SENATOR FRENCH suggested that a representative from the Department of Law (DOL) might be able to clarify that point. REPRESENTATIVE HOLMES offered her understanding that AS 39.52.960 includes all public employees, and surmised, therefore, that all who are listed in Section 6 would be covered by Section 5. REPRESENTATIVE COGHILL pointed out that Section 6 specifically precludes lobbying, whereas Section 5 precludes representing, advising, and assisting for compensation. 1:23:15 PM REPRESENTATIVE SAMUELS offered an example involving a legislative liaison for the Department of Environmental Conservation (DEC): under Section 6, such a person could become a lobbyist one year after leaving state service, but under Section 5, he/she would have to wait two years after leaving state service before addressing matters that fall under the purview of the DEC. Following this example, the governor's legislative liaison, because he/she works on matters involving all departments, would be precluded for two years after leaving state service from addressing any matter. SENATOR FRENCH acknowledged that it would be hard to identify concretely which specific matters the governor's legislative liaison participated personally and substantially through the exercise of official action. REPRESENTATIVE SAMUELS questioned whether the two-year limitation set out in Section 5 would make it difficult to recruit someone for the position of governor's legislative liaison. SENATOR FRENCH said: I know you have wrestled with these topics like we wrestled with them, and there's no right answer - ... there just isn't. You just have to find some balance point where you're satisfied that you're protecting the public good vis-a-vis ... the demands of public service and the requirement that you get qualified individuals [to] fill positions. ... I wish I could tell you there's a bright line. ... My default response is, if you're called to public service, you're called to public service, and there's a reason why you're called and there's a reason why you want to do it, and it involves sacrifice. The person that you mentioned, I believe, could probably find lots of valuable work in that profession, whether it's DEC or some other related field, they just can't come to the building and use that influence they gained, at public expense, and push pieces of legislation. They can write laws, they can draft laws, they can analyze laws, they can ... work in the office, they can go to trade groups, they can promote all kinds of agendas without being a lobbyist. I think that's the special point of influence that the public is concerned about. 1:27:53 PM SENATOR FRENCH said that SB 20 pertains to legislative disclosures, and embodies the concept of informing the public more concretely and more specifically, though this may also put more of a burden on legislators. "We should ... disclose to the public what it is we do in exchange for the money we earn outside the building," he added. Characterizing Section 3 of SB 20 as the heart of the bill, he explained that it lowers the monetary threshold requiring disclosure to $1,000, and requires a clear description of services performed, hours worked, and income received and/or deferred. REPRESENTATIVE COGHILL noted that Section 3 of SB 20 proposes to significantly change statutory language adopted recently via ballot initiative. SENATOR FRENCH characterized the language created by the ballot initiative as burdensome. In response to another question, he indicated that other Senate legislation currently going through the process specifically precludes a legislator from being paid for work that mirrors his/her legislative work. CHAIR RAMRAS surmised that such legislation could impede the ability of many legislators to perform the duties of their chosen non-legislative profession. REPRESENTATIVE COGHILL said he would be doing further research on the restrictions imposed by Sections 5 and 6 of SB 19. REPRESENTATIVE SAMUELS surmised that as currently written, Section 5 of SB 19 would preclude a public officer from doing any legislation/regulation-related work for compensation for two years after leaving state service, and offered his belief that such a person would essentially become unemployable for that time period. 1:35:37 PM REPRESENTATIVE HOLMES pointed out that that two-year limitation in Section 5 is part of existing law. REPRESENTATIVE COGHILL concurred, but noted that that existing law currently provides an exemption [for legislation-related matters], and this exemption would be removed via the change proposed via Section 5. CHAIR RAMRAS relayed that SB 19 and SB 20 would be held over.