HB 87-CONFLICT OF INTEREST: BD FISHERIES/GAME  4:44:23 PM CO-CHAIR JOSEPHSON announced that the next order of business would be HOUSE BILL NO. 87, "An Act relating to participation in matters before the Board of Fisheries and the Board of Game by the members of the respective boards; and providing for an effective date." [Before the committee was CSHB 87(FSH), reported out of the House Special Committee on Fisheries 2/14/17.] 4:45:13 PM REID HARRIS, Staff, Representative Louise Stutes, Alaska State Legislature, on behalf of Representative Stutes, prime sponsor of HB 87, informed the committee that in 1949 the Territorial Legislature created the Alaska Territorial Fisheries Service, which upon statehood became the Alaska Department of Fish & Game (ADF&G). At that time, a nine-member Board of Fisheries and Game was established. In 1975, ADF&G separated the board into two boards: Board of Fisheries and Board of Game. Currently each board consists of seven members who serve a three-year term and are appointed based on their interest in public affairs, good judgement, knowledge, and ability. The role of the Board of Fisheries is to conserve and develop the fisheries resources in the state, including subsistence, commercial, sport, guided sport, and personal use fisheries; the role of the Board of Game is to conserve and develop Alaska's wildlife resources. Mr. Harris said the boards serve as the state's regulatory authority over fisheries and wildlife respectively, and for each board the commissioner of ADF&G participates as an ex-officio member of board. The Joint Board of Fisheries and Game meets to set regulations for the advisory committees, which bring proposals before the boards. Before the committee was CSHB 87, Version R, which makes two changes to the functions of the boards. The first change is that the bill allows members with a declared conflict of interest to deliberate on subjects, but not to vote. Currently, before a meeting, members declare a conflict either based on familial or financial interest. The conflicted member must leave the dais and participate only as a member of the public; when this happens the expertise of one or more board members is lost. In addition, board members can be repeatedly recused from deliberations. The second change made by Version R is to narrow the scope of who is defined as an immediate family member, when pertaining only to the Board of Fisheries and the Board of Game. Currently, AS 39.52 defines an immediate family member to include grandparents, aunts, and uncles; however, on page 1, beginning on line 13, the bill narrows the definition as follows: In this subsection, "immediate family member" means (1) the spouse of the member; (2) a person cohabiting with the member in a relationship that is like a marriage but is not a legal marriage; or (3) a parent, sibling, or child, including a stepchild and an adopted child, of the member if the parent, sibling, or child (A) resides with the member; (B) is financially dependent on the member; or (C) shares a substantial financial interest with the member. MR. HARRIS pointed out the difference between AS 39.52 and the language in the bill is that grandparents, aunts, and uncles are removed. 4:49:17 PM CO-CHAIR JOSEPHSON offered his understanding that the bill seeks to narrow the conflicts that arise due to family members, but asked about other conflicts based on economic interests. MR. HARRIS said the definition of financial interest is unchanged in statute and read the following: Financial interest means an interest held by a public officer or an immediate family member which includes an involvement or ownership in an interest in a business, including a property ownership, a professional or private relationship that is a source of income, or from which, or as a result of which, a person has received or expects to receive a financial benefit. CO-CHAIR JOSEPHSON asked if limiting the definition to nuclear family members will mean board members will be eligible to vote more often. MR. HARRIS indicated yes, and offered to provide supporting testimony. CO-CHAIR JOSEPHSON pointed out proposed AS 39.52.120(g) prohibits a board member from voting if a conflict from a financial interest is determined to exist. MR. HARRIS added that related legislation was previously introduced in the Nineteenth, Twentieth, and Twenty-Fifth Alaska State Legislatures. CO-CHAIR JOSEPHSON questioned whether, after a member has declared a conflict, the board can find that the member need not be recused. MR. HARRIS explained the board has a policy for members to "over-declare" and then the board chair decides whether to uphold the conflict. CO-CHAIR JOSEPHSON asked if the aforementioned "unilateral power of the chair to make the final decision" applies to both the Board of Game and the Board of Fisheries. MR. HARRIS answered that's correct. REPRESENTATIVE LOUISE STUTES, Alaska State Legislature, speaking as the sponsor of HB 87, added that qualified potential board members are reluctant to apply for a seat on either board because they anticipate many conflicts that would prevent them from meaningful service to their industry. 4:53:03 PM GLENN HAIGHT, Executive Director, Board of Fisheries, Board Support Section, Alaska Department of Fish & Game, in response to Co-Chair Josephson's question regarding a board member who may be overly conservative in his/her recusal, said members usually discuss potential conflicts with the Department of Law and the board chair in advance of a meeting. MR. HARRIS concluded his presentation, noting that the bill has a zero fiscal note and seeks to allow both boards to make more informed decisions and thereby create stronger resource management for the state. REPRESENTATIVE TALERICO gave an example of two acquaintances who are in partnership with their grandsons and who would be qualified to serve on the Board of Game, and he said this circumstance is not uncommon in the Interior. He acknowledged that family businesses are wonderful; however, he suggested that grandparents should not be removed as immediate family members, and he noted that board members with a conflict would still be allowed to participate. 4:55:57 PM MR. HARRIS said currently if a grandparent is in partnership with a board member, then the board member would need to recuse himself/herself; however, HB 87 would allow said member to deliberate and vote. REPRESENTATIVE PARISH agreed with the intent of the bill to keep members with expertise fully engaged in the deliberations of the board; however, he expressed concern about the new definition of immediate family, which differs from that of the Alaska Executive Branch Ethics Act. He referred to the bill on page 2, beginning on line 2, paragraph (3), subparagraphs (A), (B), and (C) [text previously provided] and said this is a dramatic narrowing of the scope of who can be considered an immediate family member; for example, none of his siblings lives with him, is financially dependent on him, or shares a substantial financial interest with him, and thus would not be immediate family members, which is obviously incorrect. MR. HARRIS said narrowing the scope allows the boards to retain more expertise, without granting any one member undue power over legislation benefitting one member over another. He advised the sponsor reviewed many definitions of immediate family membership and noted the definition would specifically pertain to the aforementioned boards. REPRESENTATIVE PARISH asked for clarification that in the event the immediate family member - parent, sibling, or child - didn't meet the standards of [subparagraphs (A), (B), or (C)], the member would not declare a conflict. REPRESENTATIVE PARISH restated the question and gave the following example: If my brother owned a fishing boat, and I serve on the Board of Fisheries, I would not declare a conflict of interest. 5:02:53 PM ALPHEUS BULLARD, Attorney, Legislative Legal Counsel, Legislative Legal Services, Legislative Affairs Agency, said under AS 39.52.120(c), a member of the Board of Fisheries or Board of Game is prohibited from acting on a matter if they have not disclosed a conflict. Further, under AS 39.52.220, members of the board, after a conflict is disclosed, vote as to whether the member can continue to participate, deliberate, and vote. The bill would require, after a conflict is determined to exist, that the member continue deliberating, but not vote. REPRESENTATIVE PARISH asked if the bill redefines what would qualify as a conflict. MR. BULLARD directed attention to the bill on page 1, line 11, which read: "If a conflict is determined to exist". He advised that this is passive language that does not provide how a conflict is determined to exist, and the court would look to AS 39.52.220 for interpretation. REPRESENTATIVE RAUSCHER referred to AS 39.52.120 and surmised subsections (a) through (f) would be unaffected by the bill. CO-CHAIR JOSEPHSON suggested members review AS 39.52.120 subsections (a) through (f) and AS 39.52.220. REPRESENTATIVE BIRCH asked for an example of the problem addressed by the bill. MR. HARRIS said the problem is that because Alaska is a small state, and families are nuclear, many members of both the Board of Fisheries and the Board of Game are "conflicted out" and cannot participate in the duties of the board due to certain activities of their family members. REPRESENTATIVE BIRCH asked for an example. 5:07:05 PM REPRESENTATIVE STUTES responded that recently at a meeting of the Board of Fisheries, a member was "conflicted out" due to a financial interest with her fisherman ex-husband, which led to a tie vote on the board and prevented "a season from taking place." In addition, in Sitka, the Board of Fisheries had two members declare a conflict and could only make a quorum with four unanimous votes. REPRESENTATIVE BIRCH asked, "By whose judgement was she conflicted?" REPRESENTATIVE STUTES answered the existing statute and the chair. REPRESENTATIVE BIRCH cautioned the legislature is embarking on a tangled ethics road. He restated the circumstances were that the member declared a conflict and asked for a ruling from the chair. REPRESENTATIVE STUTES said yes. The member was conflicted out based on existing statute. MR. HAIGHT added that, in consultation with DOL, the conflict was upheld by the chair, who is the ethics officer for the board. REPRESENTATIVE BIRCH asked for the composition of the board. MR. HAIGHT explained a few members are commercial fisherman, others are active in the sport guiding fishery, or personal use, and/or subsistence. Board members are not placed by geographic preference or location, but must be good at public affairs, have good judgement, and be knowledgeable about fishing issues. Mr. Haight related that at a finfish meeting in upper Cook Inlet, there were 173 proposals, and no one was recused; however, at a Southeast finfish meeting in 2015, two members were recused from 55 of 130 proposals, one because his brother trolled and one because his son was involved in various fisheries. He said the situations change. REPRESENTATIVE BIRCH clarified that there is no allocation on the Board of Fisheries for specific interests, or any diversity with respect to the composition of the board, unlike the Board of Registration for Architects, Engineers and Land Surveyors. MR. HAIGHT said the board is not filled by user category; members are appointed by the governor and confirmed by the legislature. CO-CHAIR JOSEPHSON, speaking from his experience, observed appointments to the board are selected through a competitive process surrounded by culture and tradition. REPRESENTATIVE RAUSCHER expressed his belief that the bill would allow a conflicted member to continue in discussions, but not to vote. 5:14:09 PM REPRESENTATIVE STUTES responded that's correct; a conflicted member can participate in board discussions, but is unable to vote. Currently, the member is unable to participate in discussion, which excludes pertinent knowledge, thus the intent is to utilize their knowledge "but not give them the advantage of a vote." REPRESENTATIVE RAUSCHER restated his confusion related to how the change would affect a tie vote. REPRESENTATIVE STUTES further explained fewer members will be conflicted out of the boards' discussions. In further response to Representative Rauscher, she said the bill reduces the scope of what a conflict is, so under the same conditions, a member may not be conflicted out and will be able to participate and vote. REPRESENTATIVE BIRCH returned attention to the example given and opined the member who was receiving a check from her ex-husband was rightly disqualified. REPRESENTATIVE STUTES advised the board in question was discussing a different fishery with no competing interest. In response to Co-Chair Josephson, she said the board member was forthcoming in her disclosure. REPRESENTATIVE DRUMMOND asked whether the board member's check qualified as a "substantial" financial interest. REPRESENTATIVE STUTES said she was unsure and suggested it could be, relative to one's income. REPRESENTATIVE DRUMMOND concluded that the bill allows a conflicted member to continue deliberation, and thereby perhaps influence fellow board members by sharing information, even though he/she could not vote. REPRESENTATIVE STUTES answered that's correct. She asked, "Why have a board member with all this information and knowledge and ... not be able to utilize it or have them participate in the discussion and impart that knowledge to others?" 5:20:36 PM CO-CHAIR JOSEPHSON opened public testimony on HB 87. 5:20:51 PM JERRY MCCUNE, President, United Fisherman of Alaska, informed the committee United Fisherman of Alaska is the largest commercial fishing group, including members from the Bering Sea to Southeast, and testified in support of the bill. He spoke to a situation in which a Board of Fisheries member was conflicted out because, although he had no commercial fishing permit, his aunt held a permit. Mr. McCune acknowledged that the financial part of the ethics code has been tightened; however, if a member has no financial gain, there should not be a conflict, and if there is a conflict, the member cannot participate. He said the bill is a modest change to the status of family members, and for a seven-man board, allowing a member to speak on a particular fishery is important. Mr. McCune said this situation has been a problem in Southeast. REPRESENTATIVE BIRCH asked how often a conflict is declared. MR. MCCUNE said declarations of conflict are more frequent in the Board of Fisheries than in the Board of Game; he provided examples of families who are in the fishing industry in small towns, especially in commercial fishing. In further response to Representative Birch, he said a conflict could occur at every meeting of the Board of Fisheries. REPRESENTATIVE PARISH expressed his understanding the bill addresses two problems: members with a conflict cannot participate and share their expertise, and the conflict of interest rules are too broad related to family members. 5:25:22 PM MR. MCCUNE said yes. He restated his belief a member must have a financial or economic interest to gain from a certain proposal, in order to have a conflict of interest. 5:25:47 PM JOHN MURRAY said he is a commercial fisherman who has fished in Sitka since the late '70s. From his experience attending Southeast Board of Fisheries meetings over the last 20 years, representing many interests in the industry, he said the bill is a commonsense way to help the board complete its work. 5:27:00 PM RICHARD DAVIS, Principal, Seafood Producers Cooperative, informed the committee he is a 53-year Alaska resident and has been a commercial fisherman in Juneau for 45 years. He said the Seafood Producers Cooperative represents 600 commercial fisherman-owner members and is North America's largest and longest surviving fishermen's seafood harvesting, processing, and marketing cooperative; 500 of the cooperative's fisherman- owners are Alaska residents. For the last 20 years, the cooperative has advocated for a change to the stringent existing conflict of interest restrictions of commercial fishermen - and others with economic ties to fisheries in Alaska - who serve on the Board of Fisheries. Members of the board with economic, personal, or familial ties to commercial fisheries are excluded from deliberations and voting on proposals after a disclosure, and thus the experience of affected appointees is not utilized. He acknowledged that the members are appointed by the governor and confirmed by the legislature without regard to constituency, career, activities, geography, or diversity; for this reason, many qualified Alaskans fail to seek appointment to the Board of Fisheries. Speaking from his experience in Southeast, Mr. Davis said a conflict of interest due to familial ties is common. He said members of the Seafood Producers Cooperative support HB 87. REPRESENTATIVE BIRCH inquired as to how close a relationship is permissible. MR. DAVIS said he believed about one-half of the finfish proposals in Southeast required one member to recuse himself due to the conflict established by his son, brother, and another relative. In further response to Representative Birch, he said if the bill is enacted, in the aforementioned circumstance, as long as the son did not live with the member or share a financial interest in the fishery, the restriction would be alleviated. 5:31:00 PM MATT ALWARD, a commercial fisherman from Homer, testified in support of HB 87. He said working people with knowledge and experience in different professions are asked to serve on boards, which entails a month of their time per year, yet those with family members involved in a fishery proposal may not participate. Mr. Alward opined board members are closely vetted and have high integrity and morals; to change the conflict of interest standards of immediate family is responsible and reasonable. He agreed a conflicted member should not vote; however, board members are experts and should participate in board deliberations. Mr. Alward said if an individual is involved in business with a grandparent, under the provisions of HB 87, then the member would still have a conflict of interest. He urged for passage of the bill. 5:32:30 PM CO-CHAIR JOSEPHSON announced HB 87 was held over with public testimony open.