SB 105 - ETHICS/LOBBYING/CAMPAIGN FINANCE Number 0009 CHAIR JAMES announced CS FOR SENATE BILL NO. 105(FIN) am, "An Act relating to legislative and executive branch ethics; relating to campaign finances for candidates for state office; relating to the conduct and regulation of lobbyists with respect to public officials; relating to the filing of disclosures by certain state employees and officials; making a conforming amendment to the definition of 'public official' for employment security statutes; and providing for an effective date," is before the committee. CHAIR JAMES called an at-ease, awaiting Mr. Brown. Number 0012 CHAIR JAMES stated they are now on Amendment P.4. Number 0017 MR. BROWN added that P.2 may be replaced by P.7 if it's to the liking of the committee. He said Version P.2 is the state travel ban, and P.7 has grown to three pages but it's very specific about what a fund-raising event is. Number 0025 REPRESENTATIVE BERKOWITZ pointed out that it shouldn't be P.4 because P.4 was the open meetings requirement. He said, "Of course if you want to adopt the original P.4 we'd be happy for that, but P.4 was the open meetings requirement," [which was defeated]. The committee discussed renumbering the amendments. Number 0049 CHAIR JAMES suggested they call the next amendment, Amendment P.5. Number 0062 MR. BROWN explained proposed Amendment P.5 responds to a concern that step relationships ought to be included in the definition of immediate family for purposes of exemptions from the restrictions on gifts in the Ethics Code. Page 21, line 5, following "equivalent": Insert: ; Page 21, lines 7 through 9: Delete: AND ALSO INCLUDES A PERSON DESCRIBED IN THIS SUBSECTION OR AS 24.60.990(a)(5) WHO IS RELATED TO THE PERSON BY MARRIAGE] Insert:: ] and (6) [ALSO INCLUDES] a person described in this subsection [OR AS 24.60.990(a)(5)] who is related to the person by marriage, including step relationships Number 0067 REPRESENTATIVE HODGINS made a motion to adopt proposed Amendment P.5. CHAIR JAMES asked if there were any objections. There being none, Amendment P.5 was adopted. Number 0070 REPRESENTATIVE HODGINS made a motion to adopt proposed Amendment P.6 for purposes of discussion. There being no objections, Amendment P.6 was adopted. Number 0072 MR. BROWN explained Amendment P.6 makes several changes to the executive branch ethics statute. He said, "The substantial changes ... had a few glitches' still, as sometimes happens to things this complex - primarily dealing with the confidentiality issue of the release of information about a person with whom the attorney general has resolved the case. And then the (indisc.) Personnel Board - the way we drafted it, gives them greater oversight authority, we were going to enable them to publicly release the details of that resolution if they thought that it wasn't in the best interest of the state, if it didn't meet the purposes of the Executive Branch Ethics Act. But that might have a due process constitutional problem built in because that person's never had a hearing. That person's never been able to, other than the one-on- one negotiations to reach a settlement, really speak to his or her own innocence - or the wrongs of the allegation." Number 0084 CHAIR JAMES asked if there were any objections to Amendment P.6. MR. BROWN stated an amendment to the amendment is going to be offered, this is in addition to AS 39.52.120 which is the section that restricts unethical behavior in the executive branch. Page 48, line 3: Delete: as described in this subsection MR. BROWN explained it's deleted because, earlier in that sentence, on line 2, "incidental campaign activities" are not described in this subsection, so that was an erroneous reference. He asked Mr. Slotnick if he would like us to delete the entire phrase "other than incidental campaign activities as described in this subjection." A public officer other than the governor and lieutenant governor who engages in political campaign activities [OTHER THAN INCIDENTAL CAMPAIGN ACTIVITIES AS DESCRIBED IN THIS SUBSECTION] during the work day shall take approved leave for the period of campaigning. Number 0098 UNIDENTIFIED SPEAKER asked why. Number 0098 NEIL SLOTNICK, Assistant Attorney General, Department of Law, said they have always advised executive branch public officers that they cannot engage in campaign activities, on state time at all, period. To allow this, other than incidental campaign activities, is troubling to him because it implies that there can be such a thing as incidental campaign activities, they just don't allow it. He explained if it's part of your normal job duties then it's not campaign activities as far as they have always interpreted the Act on the executive branch side. He thinks that we need probably more explicit language on the legislative side because there is so much more political involvement. MR. SLOTNICK concluded that he doesn't think we need to allow incidental campaign activities, they're not trying to catch anyone in a trap, but if you're going to require that they take leave for campaign activities it should be explicit, "all campaign activities." Number 0108 REPRESENTATIVE BERKOWITZ asked how are you going to make a campaign contribution, and you're working for the executive branch, you have a campaign check inside your coat pocket or in your purse, you have to drop off some mail, it's part of your job, and you put that check in the mailbox along with everything else. That's incidental campaign activity. What are you going to say, that we have to take nanoseconds, it's absurd? There's got to be a little hole, if something incidental comes along you can just deal with it rather than saying you can't touch it at all. Representative Berkowitz said he would suspect, that ultimately that winds up costing more time to the state than just allowing someone to deal with their other responsibilities or their other political (indisc.) simply. Number 0117 MR. SLOTNICK replied we already have a provision in the Executive Branch Ethics Act that speaks to significance. A violation has to be significant, it has to be a significant use of state time, it can't just be conjectural, it has to be a significant benefit to your personal or financial interest. He said, "I believe I can use that and that's in Section 110 of the Act. We would use that to interpret this as a rule of reason, what you just described would not be a significant violation in our view." Number 0122 CHAIR JAMES added that she is trying to visualize these things happening. She would say, in the legislature, we have to have that because, as people will mail checks to their offices, staff processes the mail, handles phone calls, and that sort of thing, and there's no way to avoid it. It may well be that the executive offices might get money in the mail at the government address. Number 0131 MR. SLOTNICK noted that he was informed by Mike Nizich [Governor's Office] that that does happen but it's the mailroom's responsibility to deal with it, that's not engaging in campaign activities. The way they deal with that is they call campaign headquarters and say there's a check here, you must come and pick it up. CHAIR JAMES asked how do they know it's a check. MR. SLOTNICK replied they open it up and see. Number 0136 REPRESENTATIVE BERKOWITZ stated that is incidental to a campaign. MR. SLOTNICK remarked that they would do the same thing if it was not campaign. REPRESENTATIVE BERKOWITZ said that doesn't matter, he's not worried about the campaign because that's not covered. And this is campaign related. He understands that no complaints will be filed if it's substantial, he also wants to cut off the possibility of people filing complaints based on incidental activity. Number 0141 CHAIR JAMES said she understands Mr. Slotnick's argument, because when you say incidental campaign activities it indicates more than that. She also understands Representative Berkowitz' concern, to have this loose enough to be sure that people don't get entrapped in something that they just kind of walk into. She asked if they could think of any other kinds of times besides the mail coming in or going out that would not necessarily be their job. MR. SLOTNICK replied answering the phone would be an example because campaign related phone calls could come into the governmental offices and they'd have to steer them away. CHAIR JAMES stated see there again - that's part of their job to answer the phone. Number 0158 REPRESENTATIVE BERKOWITZ asked about the situation where someone says, "Hey, are you going to go down to the campaign event." Not necessarily for the governor, for someone else, or for another issue. He stressed that those are incidental. CHAIR JAMES remarked you shouldn't be talking about that on state business. REPRESENTATIVE BERKOWITZ stated but it's incidental - is someone going to stand outside on the steps of the Capital and wait for the people they're trying to get a hold of to come out. Number 0164 MR. SLOTNICK said he would be very concerned about the use of the term incidental campaign activities. He said it would seem to him that a state worker might start using a state fax machine only to do it once, only to do it twice, for campaign related materials, could lend other state equipment, could get involved in a campaign but not to a large extent. But then would come back and argue that that was an incidental campaign activity. He reiterated what they've always said in the past, is that you do not engage in campaign related activity during the work day, period. Now this is saying you can engage in incidental campaign related activity during the work day. CHAIR JAMES agrees. Number 0171 REPRESENTATIVE BERKOWITZ asked what's the standard for the legislature. Number 0172 MR. BROWN replied, "This comes back to the whole issue of - for different branches of government. Our original approach was to give them all of our language and we've really come back from that on his advice, but this is an example where different language may be appropriate." Mr. Brown read the following standards: In this section, when determining whether an employee is considered to be performing a task on government time, the committee shall consider the employee's work schedule as set by the employee's immediate supervisor. An employee who engages in political campaign activities other than incidental campaign activities during the employee's work day shall take leave (indisc.) campaign activity. Number 0177 MR. BROWN noted we also define them, political campaign activities while on government time are permissible if the activities are part of the normal legislative duties of the employee including answering telephone calls and handling incoming correspondence. Number 0179 REPRESENTATIVE BERKOWITZ referred to the phrase, "political campaign activities other than incidental campaign activities." That's the standard the legislature lives by. He said, "We all operate under that, we all know what it means. I don't see why the executive should be in any other position than that." Number 0183 MR. BROWN replied they explicitly discussed having a different standard for employees in the governor's and lieutenant governor's office for this kind of issue. But "he" didn't think it's a good idea to muddy the waters of having a uniform Executive Branch Ethics Code apply to everyone in that branch uniformly, other than the two elected officials in that branch - that's part of the trade off. He said specifically referring to these activities, "he" thinks opens up more loopholes. Mr. Brown indicated the executive branch has ultimately a higher standard that it's trying to achieve, but it's much easier for the vast majority of the people in that branch of government to achieve that because they're not as involved in political activities as inherently as people in our branch are. Number 0194 REPRESENTATIVE KIM ELTON asked Mr. Brown, what he read a few minutes ago, is that the definition of incidental campaign activities. MR. BROWN replied yes as proposed in Version P, at the committee's recommendation. REPRESENTATIVE ELTON said that definition does not automatically transfer to the Executive Branch Ethics because it's under a different statute. So there is no definition of incidental campaign activities now or proposed for the Executive Branch Ethics Act. Number 0199 MR. SLOTNICK replied as SB 105 came over from the Senate, that language on the legislative side was incorporated wholesale into the executive branch side. In subcommittee, that definition was taken out because it was decided that it was too problematic to determine who is that person that is answering the phone in the executive side that's engaging in incidental campaign activities. It opened up far too many doors. He said they have a vast civil service and they don't want any of them using state equipment to engage in incidental campaign activities. So the definition was taken out, he thought at the same time that that was taken out in subcommittee they took out the permissive language other than incidental campaign activities and yet, somehow it stayed in the draft. So it's his recommendation, if we take the definition out we also take out the permissive phrase that would allow incidental campaign activities. Number 0207 REPRESENTATIVE ELTON said we would either have to do that or we would have to define in the Executive Branch Ethics Act and what incidental campaign activity is. MR. SLOTNICK said he agrees with that. Yet he feels, because we do have the provision in the code that allows for us to employ - what he calls the "rule of reason," the significant factor, the conjectural factor. Number 0212 CHAIR JAMES said if there is a complaint in the Administrative area, it's going to go to Mr. Slotnick, or the supervisor, and it's going to be filed within the Administration. In the case of the legislature, if there's a complaint, it's an outside body that doesn't have the same total understanding of how we do things. Chair James noted that we have to specifically define things for the ethics committee, and subsequently for us, specifically what we can and can't do. MR. SLOTNICK read AS 39.52.110, "Standards of ethical conduct for members of the executive branch need to distinguish between those minor and inconsequential conflicts that are unavoidable in a free society and those conflicts of interests that are substantial and material." Mr. Slotnick stressed that that's what they use. Number 0230 REPRESENTATIVE BERKOWITZ suggested a friendly amendment to the amendment. Delete: incidental Insert: other than minor, inconsequential, and unavoidable MR. SLOTNICK stated the only problem he has with that is, that we apply that standard from "110.3," we apply it throughout the ethics Act. And to reincorporate it only into one phrase, only one section of "120" is a little troubling to him because (indisc.) understood when interpreting and applying the ethics Act that you are to apply this standard, that comes from "110.3," for everything in here. So to repeat that language, (indisc. - noise) that you don't do things that are superfluous and unnecessary. Number 0239 MR. BROWN pointed out it would read "for the period of campaigning" at the end. He thinks this almost narrows the applicability of this language to "see you at the fund-raiser, here's the check I was going to mail." REPRESENTATIVE BERKOWITZ indicated when people read the law they're not going to read the entire body of law associated with this particular subject matter, they might go right to this particular section, which is, "Do I got the Gov. or the Lt. Gov., or the clerk or not." If it says that minor and inconsequential - they'll say, "Well, I don't (indisc.) him or beyond minor and inconsequential." He said this is the starting point of the cookbook, it seems to him that it bears repeating that phrase. Number 0255 CHAIR JAMES made a motion to adopt the amendment to the amendment, which would be to take out "other than incidental campaign activities," lines 2 and 3. REPRESENTATIVE BERKOWITZ objected. CHAIR JAMES asked for a roll call vote. Representatives Ivan, Elton and James voted for the amendment to the amendment. Representatives Berkowitz and Ryan voted against it. Therefore, the amendment passed by a vote of 3-2. Number 0261 CHAIR JAMES asked if there was objection to amended Amendment P.6. There being no objections, Amendment 6 was adopted. Number 0264 REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment P.7, insert: political campaign activities other than minor, inconsequential and unavoidable campaign activities. A public officer other than the governor or lieutenant governor who engages in political campaign activities other than minor, inconsequential and unavoidable campaign activities during a work day shall take approved leave for the period of campaigning. Number 0272 CHAIR JAMES asked if there were any objections to that amendment. There being none, Amendment P.7 was adopted. Number 0282 MR. BROWN said Amendment P.8 is in response to an amendment which removed the restriction on legislators and legislative employees from taking administrative political or legislative action unless required by the Uniform Rules and changes that so it simply says you cannot vote unless it's required by the Uniform Rules. He indicated Ms. Barnett was concerned that deleting the reference to legislative employees in that restriction might open up problems. MS. BARNETT replied that she does think it improves the situation and would recommend it. Number 0289 CHAIR JAMES read Amendment P.8 [Page 15, following line 7, insert a new subsection to read]: (i) A legislative employee may not directly, or by authorizing another to act on the employee's behalf, (1) seek to induce or induce a person to provide or not provide a political contribution, donate or not donate to a cause identified by the legislative employee, or provide or not provide a thing of value by starting or implying that, based on the person's decision about contributing, donating, or providing value, the legislative employee will seek to persuade or will cause a legislator to (A) take or withhold a legislative, administrative, or political action, including support or opposition to a bill, employment, nominations, and appointment; or (B) perform or refrain from performing a lawful constituent service; or (2) unless required by the Uniform Rules of the Alaska State Legislature, take or withhold official action or exert official influence that could substantially benefit or harm the financial interest of another person with whom the legislative employee is negotiating for employment. Number 0296 CHAIR JAMES asked what was the original language. MR. BROWN read, "Unless required by the Uniform Rules of the Alaska State Legislature a legislator or legislative employee may not participate in legislative, administrative, or political action if the legislator or legislative employee has an equity or ownership interest in a business, investments, real property, lease or other enterprise, if the interest is substantial and the effect on the action on that interest is greater than the effect on a substantial (indisc.) person to which the legislator or legislative employee belongs as a member of a profession, occupation, industry or region." Number 0303 MR. BROWN noted that was amended at the last meeting. This is a new subsection that would only apply to employees because employees were taken out. By taking out the reference to political, administrative and legislative action and making it just a reference to voting, as a restriction as legislators, that substantially frees-up your range of action, that's not going to conflict with the law. He said if we put this in, it will substantially increase the potential for violating the law for all of your employees. Number 0314 CHAIR JAMES said there is a problem here. In number 1 they're talking about campaign funds and... MR. BROWN interjected or charitable causes. He said, "It certainly would be illegal for me to say your bill isn't going to get scheduled unless you buy a raffle ticket." This makes that more explicit. CHAIR JAMES said we all know we're not supposed to do that. MR. BROWN stated it was probably already illegal under the code in terms of personal benefits. Number 0318 CHAIR JAMES said, "This all has to do with campaign funds doesn't it, and I don't see any problem with that." MR. BROWN remarked this goes beyond political contributions, this gets down to manipulating the flow of financial resources through misuse of... CHAIR JAMES asked for a motion on Amendment 8. Number 0324 REPRESENTATIVE ELTON made a motion to adopt proposed Amendment P.8 for purposes of discussion. REPRESENTATIVE ELTON asked Mr. Brown, "Did I hear you say that what we're doing is we're setting a much higher standard or threshold for employees than we are for legislators." MR. BROWN replied yes. ... He asked Ms. Barnett if this would open up potential abuse by legislators who weren't covered by this explicit language. CHAIR JAMES said we can fix that easily. Number 0334 MS. BARNETT replied she thinks it's probably not going to be implied in there that a legislator can get away with something because they're not directly listed because still have these - over their head in different places. MR. BROWN asked Ms. Barnett what was her concern when they took legislative employees out of "g," does this really solve that problem. UNIDENTIFIED SPEAKER said let's just vote. Number 0339 CHAIR JAMES said by taking them out of there that doesn't restrict them from having any influence when they have personal interest, which is different from this. She said they should also have a line in here that says if they have a personal interest that they're not allowed to do these things either. But she didn't know if they wanted to be that restrictive because they're presuming that the legislator makes the decisions in these offices and not the staff. It seems to her that we don't need to say that. Number 0349 MR. BROWN mentioned this prevents staff from stating or implying that. It's an attempt to prevent horse trading ones' bosses potential influence. CHAIR JAMES asked if there was objection to Amendment P.8. Number 0352 REPRESENTATIVE RYAN objected. He said he didn't think it's necessary. A lot of people contact staff, wanting to get to the boss, presuming that the person is wheeling and dealing - he spent four years as staff and doesn't remember wheeling and dealing on behalf of his boss. He said you make a presumption here that somebody is doing something so we have to close the loophole. He asked who the sponsor is. MR. BROWN said he didn't know. Number 0363 REPRESENTATIVE RYAN asked if there was a real compelling need for this or is it just adding another brick to the wall. CHAIR JAMES replied, "When we changed - because we had the absurdity, ... that the paragraph that we had in here indicated if we had any kind of a financial interest in something, and as a legislator we were drafting a piece of legislation or drafting an amendment, or doing something other than sitting in a committee meeting and having a vote, that we did something and we had a conflict, and there was no place to put it on the record we had to make a little note to the ethics committee and tell them that we drafted this amendment for this bill and it's going to affect us in some way because of our own financial interest. And so then the ethics committee gives it to the clerk and then they file this conflict. I think that is absurd because the only real time that we take a real action is when we vote either in committee or on the floor. And so I certainly didn't want to be considering every time I make something little as to whether or not I have a personal interest in it. It seems like if it ever gets to the floor I can certainly say - and we do that we have a personal interest or we could do it in a committee. When we took that out, then that paragraph that said that anybody who has a financial interest can't be in any way participating or working on something that might be construed that he or she would have a conflict. When we said the only thing that we're talking about political action that you can't do is you can't vote without declaring that. All these other little things you do, you don't have to declare it. Well when we did that, then we actually excluded legislative employees because they never vote and they were included in there with legislators. So there in - now we have legislative employees hanging out there with no restrictions for them if they have a financial interest to do things that might pursue or do their financial interest. Quite frankly I think that's up to the legislator to be sure that they work for, that they don't do that. I think that's an employee issue, I don't know that we need this in that case, however, I don't see any problem with it..." TAPE 98-55, SIDE B Number 0023 REPRESENTATIVE BERKOWITZ said this whole bill describes exactly what we're trying to get to which is you don't make deals for votes or for legislation. He indicated that was his first thought and then he thought, "well, what happens - as happens inevitably, people say I'll give you - you know this bill's not important to me, and I know you've got something that is, and that kind of horse trading starts happening." CHAIR JAMES mentioned she was looking for it but that's not defined. Number 0029 REPRESENTATIVE IVAN IVAN said, "I haven't experienced anything like this whatsoever. I don't know if it's a problem, I've never experienced it, I've never seen it. I don't know why we're restricting our offices. We do enough on the floor to disclose this, we fill out forms to disclose what we own or what interest we have. How far are we going to go into this - pretty soon you're going to restrict my thinking?" REPRESENTATIVE RYAN stated he has temporary employees, session only, who have other business interests. He said his employee raises money for a nonprofit and it could very easily be misconstrued as somehow using his influence, not whether it's justified or not, but here come the complaints. Number 0053 CHAIR JAMES asked for a roll call vote on Amendment P.8. Representative Elton voted for the amendment. Representatives Ryan, Ivan, Berkowitz and James voted against it. Therefore, Amendment P.8 failed. Number 0061 MR. BROWN addressed Amendment P.9. He said the concern was that in our attempt to ban fund-raising, at state expense, we weren't being explicit enough in defining what a fund-raising event was. There are two sections here. One deals with the legislative branch one deals with the executive branch. MR. BROWN explained a legislator can't travel at state expense to a place where you're going to have a fund-raising event within 48 hours before the event is scheduled to begin. But, if the travel is more than 48 hours then it's permissible. The idea there being that you weren't traveling just for the purpose of the event. MR. BROWN said, "Second, we have an exemption - that if you go there, come back, and go back at personal expense, which would allow Representative Hodgins to go from Kenai to Anchorage at state expense for state business, go back to Kenai and then drive at his own expense or fly on his campaign expense, and not have that 48- hour window mess up his ability to have a fund-raiser." Number 0073 MR. BROWN said and third, we allow the convening and adjourning travel. He said it specifically allows incidental receipt of money. (d) In (c) of this section, an event is considered to be a campaign fund raising event only if the legislator, or another person acting on behalf of the legislator with the legislator's express or implied permission, (1) asks for contributions for the legislator's campaign at the event; (2) announces that the legislator will accept contributions for the legislator's campaign at the event; or (3) otherwise uses the event in a manner that clearly demonstrates that a primary purpose of the event is to raise contributions for the legislator's campaign; the fact that a legislator received campaign contributions at an event is insufficient, without other evidence, to satisfy the proof required by the paragraph. Number 0086 CHAIR JAMES asked if there were any objections to proposed Amendment P.9. There being no objections, Amendment P.9 was unanimously adopted. CHAIR JAMES asked is that all of our amendments. It is her intention to stop at noon. MR. BROWN replied yes. Number 0089 CHAIR JAMES announced, before we move it out, she would like to have another CS so we can see what we've done and maybe move it out on Tuesday. She asked if anybody else has anything that they want to change now is the time. Number 0093 MR. BROWN stated the speaker had a few more concerns and Mike McMullen wants to talk about a big problem that came out of trying to restrict the exempt service from running for office which begins on page 38, Section 63 of Version P. We added exempt service and the ability to take leave. By doing that we basically opened it up for all the classified and partially exempt people which didn't exist before. Mr. Brown said, "I don't know if it's the policy call of the House State Affairs Committee that it wants everyone in the classified and partially exempt service all of a sudden to be able to just take leave and be a candidate..." Number 0104 MR. BROWN referred to line 24, page 38, Section 63. He read: The employee's position becomes vacant on the date MR. BROWN stated, "But if I've taken leave, well then I'm on leave so my position can't really become vacant, I'm just on leave." He indicated they didn't need to deal with it now. Allowing them to take leave is a huge change, which he believes the Alaska State Employees Association would be in favor of. Number 0109 CHAIR JAMES asked why did we make this change. MR. BROWN replied currently it's technically legal for people in the exempt service to run for office. And it's really out of all categories of employees. They're the political appointees and it's probably the likeliest that would not really be conducive to good government to have your director of a division or your commissioner running for office while serving in that capacity. Right now the exempt service can run for office because they're not covered by the Personnel Act. Mr. Brown said, "That's another potential problem, the Personnel Act specifically is not supposed to apply to the exempt service unless it specifically says that it does..." Number 0118 MR. BROWN further explained, "Right now in the law, if you're in the exempt service you can run for office. We attempted to change it to prevent that which is probably a pretty consensus-oriented thing. But that was a concern of Representative Ryan because he doesn't want to mess up -- it's not just the commissioners - by getting all the exempt service, we were taking teachers, university employees, firefighters, and executive director's rights away to run. And so the question became, Well, do we really want to do that, we should allow them to take leave. He mentioned the leave- taking language doesn't just apply to a new class of people we've banned, it applies to everyone who is already banned in the classified and partially exempt service." Number 0125 MR. BROWN asked, "Do you want to allow everyone in all three categories of state service to take leave? You thought it should be leave-without-pay, but that didn't stay in but it's another option that may be revisited. Or do you just want to allow those in the exempt service to take leave of one form or another. And keep the prior restrictions in (indisc.) on those in the classified and partially exempt service." Number 0129 REPRESENTATIVE RYAN said his concern was personal. In as much as the University of Alaska-Anchorage is in his district and it opened a whole new field of candidates of which he was going to contend. He explained that's why he didn't favor that particular amendment. Number 0132 MR. BROWN stated he knows representatives resigned their positions, at the university, when they ran. He said that's not required by the Personnel Act because they're in the exempt service, that's required by the University of Alaska, personnel policy - he's guessing. They were not prevented by AS 39.25.160 from running, however we would explicitly be prohibiting their running, in a way that was not done before, by adding the words "exempt service." Because adding exempt in this section we refer to that whole list of people that was attached to the amendment, that composed the exempt service. Number 0143 MR. BROWN suggested taking "exempt" out of the first sentence and "take leave there" and you just have a separate sentence in this section that says, "those in the exempt service cannot unless they take leave - this doesn't apply to." He said this goes back to a certain employee in the Department of Community and Regional Affairs, in the prior Administration, who ran for State House while he was the director of the division. It was Don Tanner when he was Deputy Commissioner and the commissioner put an end to it. Number 0148 CHAIR JAMES said we've already taken out the travel but it's very difficult. She said, "As a legislator, I face this same issue of separating between when I'm doing legislative work and campaign work in the odd year. And I try to be very very careful. It's the other thing that is very easy to do, if you're not careful, is campaign so much that you can't get your legislative work done. And yet our paycheck comes in every month, therefore, we better be doing whatever we would be doing if it wasn't a campaign year. My personal feeling about that is you don't just take off and just campaign this year, you do your work and you campaign too. Anyone else who's a challenger, if they have a job, ... many of them take leave because campaigning is an extensive amount of time." She concluded she doesn't think it's right for people who have a full- time job on state pay to be out there running a campaign which tells her that they're getting paid for not doing their job. Number 0181 REPRESENTATIVE ELTON stated, "Im not sure we did the right thing when they adopted the amendment. I don't know how we fix it, my inclination is we want to expand the number of people that can - that are running for government." He mentioned he was an exempt employee when he ran for borough assembly. He had to take leave, it was difficult for him to campaign as well as do his job as a state employee. But he did that and he thought he did a pretty good job once he got to the assembly, so he thinks that type of activity should be allowed. Representative Elton said when he made the decision, as an exempt employee, to run for the State House he came to a different conclusion. He announced fairly early on what he wanted to do, at that time he had control of a $15 million budget and he didn't want to deal with the legislature and have them see him as a candidate rather than as somebody who had control of $15 million that had to go through the legislative budget process. He also mentioned if we're going to treat the exempt service differently than the classified service, or the partially exempt service, that's not really fair either. He said he's sorry that we adopted the amendment. Number 0206 CHAIR JAMES indicated she didn't know if just taking it back out is going to solve the problem. She thought maybe they should rescind their action but didn't have a quorum. CHAIR JAMES said when we changed the campaign finance law last year we made it so that you cannot spend any of your campaign funds on any personal expenses. When we did that we shut out a whole bunch of people that could run because they aren't able to keep their personal finances going for a three or four-month period while they're campaigning. She mentioned she was totally opposed to that amendment, but the reason that was in there is because of wanting to be sure that people couldn't build up large sums and then take it personally. She felt that, because if you do take anything and it's not considered to be actual campaign expense, then it is subject to federal income tax, if it's personal. She said she felt comfortable to be able to have that. Number 0226 CHAIR JAMES reiterated, "But if they're paid, by the state - they're being paid for something, they can't be doing it while they're campaigning. That's the other issue and I really don't think that anyone who is working for the government should be able to continue to have their paycheck and be campaigning, no matter who they are." Number 0229 MR. BROWN recommended taking the phrase "or take leave from" out because (indisc.) is going to be perceived as fair that you treat the exempt service differently than the partially exempt and classified service? Number 0232 CHAIR JAMES asked Mr. McMullen if that would solve the problem. Number 0232 MIKE MCMULLEN, Manager, Division of Personnel, Department of Administration, was next to testify. He said he appreciates the debate because it's a different perspective than theirs entirely. He indicated the legislators are viewing this in terms of whom the competition is and good campaigns out there. The merit system point of view here is that the public expectation, that public employees are going to do their job, free of political influences, that they're going to fairly and equitably administrate laws, regulations, etcetera. He thinks the problem is when employees, who are doing those things - one day, on a campaign trail the next, and back in their office the day after, and then on the campaign trail by going in and out of leave periods raises the suspicion of the public that the employee's work is influenced by the political agenda. And the whole view of public service, free from political influence, he thinks runs completely afoul of allowing employees to take leave, go campaign, and come back secure in their jobs. Number 0242 MIKE MCMULLEN concluded a public job is not a right, people take choices when they take those jobs, they take choices to leave those jobs. Good employees and good candidates can go back and compete for jobs afterwards. And their selection after a campaign, based on merit and ability, need not have anything to do with a political point of view, in fact shouldn't have. So the emphasis here isn't on the ability to have good campaigning going on, which is the debate which is going on, but in terms of the public perception of the day-to-day delivery of governmental services. And if those services are being performed by employees, who are politically neutral following the statutes, regulations, and not some personal or political agenda. Number 0250 CHAIR JAMES asked, "Would taking out what we took, 'or take leave from' out of here, would that meet your concerns?" Number 0250 MIKE MCMULLEN replied yes, taking that out puts the ban back where it was for (indisc.) and partially exempt for the committee to... CHAIR JAMES interjected and adds the exempt people - which she thinks should be in there. MIKE MCMULLEN said the interesting thing about the exempt service, is there are more nonpolitical appointees there than political appointees. Emergency firefighters aside, there's up to 1,800 of those in a summer - making up over half of the exempt service in the executive branch even. The executive branch exempt service includes the entire Marine Highway System. As a concession in the early age statehood when the ferry system was first developed that the maritime unions were already in place, and union halls would be the way to hire those people, not a competitive (indisc. - coughing). He indicated the three teaching units we have, at Mount Edgecumbe, at (indisc.) and some correspondence studies, they're in the exempt service, but not for political reasons. Number 0258 MIKE MCMULLEN stated, "In terms of exempt service, not exempt service, that the exempt service are not political appointees necessarily. In fact the whole university system's exempt from (indisc.). The exemption is (indisc.) the Personnel Act because it implies there are other ..." Number 0261 CHAIR JAMES said she understands that, but nevertheless they're employees and they're getting paid a salary. It's not necessarily what classification they're in it's that they're being paid for what they're doing and they can't be doing it while they're campaigning. Number 0262 MIKE MCMULLEN continued. "So the ban going into - till the amendment came up, was classified and partially exempt service were banned, they declared candidacy, they give up their job. The question on the exempt service - I don't think there's a single question, I think the exceptions approach makes sense to say, 'Who are political appointees,' that you'd expect to be able to run, and who are not political appointees. And the public should expect them to be free from political influence - is a reasonable approach to dividing up that list." Number 0268 CHAIR JAMES said if she had another vote we could take "leave from" out of here. Number 0269 MR. BROWN mentioned that would certainly be his recommendation because it closes down a host of other potential problems. He addressed the other problem that Mr. McMullen pointed out to him which is, AS 39.20.225, the Compensations and Allowances Act, the leave has to be approved. What this would do is give your supervisor veto power over your candidacy. Number 0273 REPRESENTATIVE ELTON asked when do you become a candidate, when you file the letter of intent or when you file. MR. BROWN replied, "In this case (indisc.) would be either, I believe, but I don't have Brook here to back-up for me, but I think the way that this is intended to be written is the declaration to raise money -- unless you specify that it was for a municipal office." Number 0275 REPRESENTATIVE ELTON stated this only covers state. MR. BROWN replied exactly. Number 0279 CHAIR JAMES noted Amendment 10, page 38, line 23, delete "or take leave from" and leave it so that they have to resign and taking leave is not an option. She asked if there was any objection to that amendment. There being no objections, Amendment 10 was adopted. [CSSB 105(FIN)am WAS HELD IN COMMITTEE]