SB 89-LEGISLATIVE ETHICS ACT  8:06:48 AM CHAIR LYNN announced that the first order of business was CS FOR SENATE BILL NO. 89(JUD), "An Act clarifying that a legislator or legislative employee is allowed to accept certain compassionate gifts; allowing legislators and legislative employees who are representing persons in an administrative hearing to contact hearing officers and attempt to influence the outcome of the hearing if they are professionals licensed in the state, and allowing legislators and legislative employees who are not professionals licensed in the state to contact hearing officers for the purpose of influencing the outcome of the hearing in certain instances; requiring the Select Committee on Legislative Ethics to maintain a public record of certain ethics disclosures made by legislators and legislative employees; prohibiting a public member of the Select Committee on Legislative Ethics from disclosing confidential information without authorization; clarifying the ethics disclosure requirements for tickets to or gifts in connection with charity events; amending disclosure deadlines under the Legislative Ethics Act; relating to requests to refrain from disclosure under the Legislative Ethics Act; relating to the applicability of certain provisions of the Legislative Ethics Act to certain legislative employees, volunteers, and interns; establishing a seat for an alternate public member on the Select Committee on Legislative Ethics; clarifying the requirements related to participation by alternate public members and alternate legislative members in the proceedings of the committee; amending the definition of 'legislative employee' in the Legislative Ethics Act; and repealing a procedure for appointment of alternate legislative members." 8:07:06 AM SENATOR JOHN COGHILL, Alaska State Legislature, presented SB 89 as a member of the Senate Judiciary Standing Committee, sponsor. He related the reason for his selection as presenter was due to his being a member of the Select Committee on Legislative Ethics (SCLE). He said the impetus for the bill was the need for clarification of existing statute that pertains to the state's ethics laws. He explained that the SCLE sometimes finds itself in the position of having to ascertain legislative intent. SENATOR COGHILL said he would talk about the housekeeping measures of the proposed legislation. He indicated that currently there are limitations to the administrative hearing process that prohibit legislators from advocating for constituents in administrative hearings; however, under SB 89, some exceptions would be made. One example is that a legislator who is hired as a lawyer by a person who is his/her constituent would be allowed to represent that constituent at an administrative hearing. Another example is that a legislator who is witness to some of the facts within a case could be called forward to bear witness. He said if a [legislator] talks to a constituent without knowing the constituent is involved in an administrative hearing, "there is an excuse for that called, 'ex parte'." 8:11:09 AM SENATOR COGHILL relayed that under SB 89, instead of compiling a list of financial disclosure statements, the SCLE would only have to keep a report of those lists. In response to the chair, he clarified that he is talking about state loans. He said he would defer a question from Representative Petersen, regarding Alaskan Housing Authority Loans, to someone who could better provide an answer. Senator Coghill said current confidentiality requirements apply only to legislative members of the SCLE, and, under SB 89, the requirements would extend to public members of the committee. Regarding those who have to "report," he said those who do not will all be categorized as "hourly" employees: those who keep the capitol operating but are not involved in policy work. 8:14:46 AM SENATOR COGHILL turned next to the substantive issues in SB 89. He said currently legislators are restricted as to what charitable gifts they can accept. The proposed legislation would clarify that a ticket to a charity event from a lobbyist or gifts received because of the ticket from a lobbyist cannot exceed $250. The gift would have to be reported, and the event must be sanctioned by Legislative Council and must be "501c3." In response to Representative Seaton, regarding whether there is a distinction between the lobbyist and the organization the lobbyist represents, said he would address that question forthcoming. 8:18:33 AM SENATOR COGHILL said under SB 89, there would be alternate members for public members of the SCLE, and they would be appointed by the Alaska Supreme Court justice and confirmed by the Alaska State Legislature. Furthermore, if an alternate - public or legislative - gets involved in an issue, he/she would be held by rules of confidentiality and would see that issue through to conclusion. Another change under SB 89 would be a change from the current 30-day reporting deadline to a 60-day deadline, which would allow legislators flexibility in compiling the necessary information. Senator Coghill noted that also under SB 89, there would be ethics training for volunteers who work [more than] 30 days. In response to Representative P. Wilson, he said the term, "educational trainees", [in Section 9 of the proposed legislation], would include, for example, a university student who is serving as an intern to a legislator. 8:22:58 AM REPRESENTATIVE SEATON asked if volunteers would include legislators' spouses and if the 30 days would be 30 consecutive days, 30 days in a session, or 30 days in a legislature. SENATOR COGHILL deferred to Joyce Anderson, the administrator for the SCLE. 8:23:42 AM SENATOR COGHILL, in response to Representative Johansen, said a legislator hired by a constituent as an attorney would disclose that relationship. 8:24:41 AM JOYCE ANDERSON, Ethics Committee Administrator, Select Committee on Legislative Ethics, stated that there is a form called, "representation for compensation," which would be filled out by "attorneys or other people that are representing clients before any state agency, board, or commission," and that form must be disclosed. REPRESENTATIVE JOHANSEN offered his understanding, "So, this administrative hearing portion is just not included in that, and we're adding that to this, and it fits right in to what we're already doing?" MS. ANDERSON confirmed that is correct. REPRESENTATIVE JOHANSEN said currently when an issue becomes an administrative hearing, legislative staff is no longer allowed to be involved, and he asked for confirmation that SB 89 would not change that. SENATOR COGHILL said that is correct. 8:26:17 AM SENATOR COGHILL, in response to Representative Johansen, said [the new language regarding the SCLE's record keeping of loan information] is on page 6, line 3. MS. ANDERSON added that the SCLE has a list of state benefits and loans awarded on a discretionary basis that require disclosure. In response to Representative Petersen's previous query, she said the Alaska Housing Finance Corporation (AHFC) loans are not discretionary loans. In response to Representative Johansen, she said ADA loans do have to be disclosed. 8:28:29 AM REPRESENTATIVE JOHANSEN questioned if there would be less money for charities as a result of limits placed on charitable giving by lobbyists. 8:29:57 AM SENATOR COGHILL reiterated that SB 89 would clarify the $250 limit on charitable gifts given by lobbyists and received by legislators. MS. ANDERSON clarified that the $250 limit is already in statute, but SB 89 is "opening it up to have other individuals, other than lobbyists, give tickets to you, which are over the $250 limit." Those gifts would have to be disclosed within 60 days under SB 89. SENATOR COGHILL offered an example. REPRESENTATIVE JOHANSEN offered his understanding that the proposed legislation would actually broaden the category. SENATOR COGHILL, in response to a question, said the need for the bill was brought by legislators who have found themselves in awkward positions. He offered examples. 8:34:23 AM MS. ANDERSON, in response to Representative P. Wilson, said discretionary loans are those for which there is no fixed criterion to award the loan. She offered, as examples, the following loans: the Alaska Capstone Avionics Revolving Loan Fund; the Commercial Fishing Revolving Loan Fund; and the Fisheries Enhancement Revolving Loan Fund. She said the list of loans that are awarded on a discretionary basis is approximately two and a half pages long. MS. ANDERSON, in response to Representative P. Wilson, said the aforementioned $250 limit on tickets to charity events given to legislators by lobbyists is a limit set each year and per lobbyist. The lobbyists are required to report the gifts they give legislators on the lobbyist disclosure form. 8:39:50 AM SENATOR COGHILL, in response to Representative Seaton, stated the following: The lobbyist is given a definite amount that they cannot exceed: $250, cumulative, per year. But those that are non-lobbyists are now able to do that, but there's three very clear conditions: they must report it; it has to be a 501(c)(3); and it has to be sanctioned by the [Legislative] Council. So, it's all very clearly reported as to who is giving, but they are able to give beyond the $250 limit. REPRESENTATIVE SEATON asked for confirmation that in the case of a company with three lobbyists, each lobbyist can give a legislator a ticket valued up to $250 for a sanctioned event. MS. ANDERSON answered that is correct. 8:42:04 AM REPRESENTATIVE PETERSEN asked who sets the values related to charitable events. He said he can see that legislators might receive better seats or food at a charitable event. MS. ANDERSON replied that that very issue is being brought before the SCLE at its 9 a.m. meeting the following Thursday, 2/23/12, and a draft advisory opinion will be heard. She said the advisory opinion suggests that in an event where there is more than one price, the committee would consider that a person could have taken part in the event at the lowest price. Regarding travel, she said most times there are costs associated with that travel, but not always. She said, "The statute uses the ... fair market value, and so, we would look at that and see if we could come up with some sort of a cost." 8:45:28 AM SENATOR COGHILL presented the Sectional Analysis. Section 1 read as follows [original punctuation provided]: Sec. 1. Replaces "lawful gratuity" with "gift" to make section of law consistent with the usage of "gift". 8:47:52 AM SENATOR COGHILL, in response to Representative Seaton, said he thinks the word "knowingly", on page 4, line 3, and on page 6, line 20, "applies in both cases." 8:48:19 AM MS. ANDERSON concurred. She noted that there is a definition of "knowingly" in statute. REPRESENTATIVE SEATON said he is happy to have it on the record that the SCLE agrees that "knowingly" also applies to "make false statements". 8:48:41 AM SENATOR COGHILL directed attention to Section 2 in the sectional analysis, which read as follows [original punctuation provided]: Sec. 2. Bright line for legislators or staff being actively involved in constituent problems with the State. Once the issue is assigned to an administrative hearing the involvement of the legislative office ceases. Exceptions are included for lawyers and provision for inadvertent ex parte contact. REPRESENTATIVE SEATON recollected the statement was made that a [legislator who is a] lawyer acting on behalf of his/her client would report that activity. He queried, "I thought doctors and lawyers were exempt from reporting ... the names of their clients; am I mistaken in that?" MS. ANDERSON responded that ethics statute does require [a legislator] to report [when he is acting as a lawyer on behalf of a client]. She said no one has questioned that reporting in the past. She said there has only been one individual in the past who has actually reported representation for compensation and did so for 10-12 clients. That legislator listed the names of the clients and the boards before which he/she was representing those clients. SENATOR COGHILL noted that new language was proposed in Section 8, which would provide that "a person" may submit a written request to refrain from making a disclosure that is required by this chapter if making the disclosure would violate state or federal law". 8:52:15 AM SENATOR COGHILL turned to Sections 3-7 of the sectional analysis, which read as follows [original punctuation provided]: Sec. 3. Eliminates requirement of committee to compile lists of financial disclosure statements. They must only maintain public records and forward them to chief clerk and senate secretary. Sec. 4. Adds public members to statute prohibiting disclosure of confidential information. Sec. 5. Clarifies that a ticket to a charity event from a lobbyist, or gifts received because of the ticket from a lobbyist cannot exceed $250. Sec. 6. Further describes "a contribution to a charity event" by clarifying it could be a ticket to a charity event or a gift in connection with a charity event. Sec. 7. Extend the reporting period for gifts of travel for the purpose of obtaining information on legislative matters and disclosure of gifts from charitable events from 30 days to 60 days. 8:55:13 AM MS. ANDERSON, in response to Representative Seaton, said AS 24.60.030 states that legislators may solicit and accept contributions for a charity event, because a contribution to a charity event is not considered a gift. 8:55:46 AM REPRESENTATIVE KELLER turned attention to Section 2 and the phrase, "administrative hearing". He expressed concern that without a definition, that phrase may be misinterpreted. 8:57:17 AM SENATOR COGHILL noted that there are administrative law judges. He said the Dental Board has disciplinary action for dentists, and he said the question is: "Should we go to bat for a dentist at that board when they really are going to have legal counsel?" He continued as follows: And so, I think that is what we were trying to say is we're not really the legal counsel; we're the legislator. ... We're advocates for them generally, but to advocate for them specifically in a matter of law then starts to get into that area where we might be stepping out of our bounds. So, it's probably not as tight as many would like, but that's the best definition I think we can come up with. REPRESENTATIVE KELLER ventured that stating that for the record is probably sufficient. SENATOR COGHILL, in response to Chair Lynn, said the point is that legislators are not to use their power to overly influence a hearing. He stated that a legislator is meant to be a public servant, to help and advocate for his/her constituent; however, there comes a point where too much influence can be destructive to justice. He said there are many times where administrative action, because of rules, can be arcane and unjust. He said he thinks the job of the legislature is to find out where the rules are unjust and advocate for change. SENATOR COGHILL pointed to a handout [included in the committee packet] showing the definitions in AS 44.64.200 for: "administrative hearing", "administrative law judge", "agency", "hearing officer", and "office". He said he would defer to the House State Affairs Standing Committee as to whether these definitions should be included in SB 89; however, he asked the committee to consider that when the SCLE makes decisions based on nuance, it would most likely "look into this issue." 9:01:02 AM SENATOR COGHILL, in response to Representative Johansen, stated that the intent of law is to ensure that legislators are using their authority correctly for constituent work. He said "this" deals with constituent work and "what you may be able to do up to the point of administrative hearings." He said care must be taken by legislators not to influence the outcome of a hearing, because to do so would be unethical. In response to the chair, he reiterated that the moment an administrative hearing begins is key. 9:05:12 AM SENATOR COGHILL, in response to Representative Petersen, confirmed that it is up to the legislators to know and be able to convey to their constituents the point at which they must say when they cannot go any further on the constituents' behalf. In response to Chair Lynn, he said SB 89 proposes that a legislator be allowed to testify at an administrative hearing when he/she is a party to or witness to something that is vital to the administrative hearing. Under current law, he said, that is prohibited. He said a legislator may not realize that he/she is giving advice to someone who is involved in an administrative hearing. 9:07:40 AM REPRESENTATIVE SEATON asked if it would be helpful to the SCLE to include in the bill the definition of "administrative hearing", which read as follows: Sec. 44.64.200. Definitions. In this chapter, (1) "administrative hearing" means a quasi- judicial hearing before an agency; it does not include an informal conference or review held by an agency before a final decision is issued or a rate-making proceeding or other nonadjudicative public hearing; 9:09:14 AM SENATOR COGHILL said he knows of no reason to keep that definition out of the bill. 9:09:37 AM SENATOR COGHILL, in response to Representative Johansen and Chair Lynn, said he would like to think about how best to add that language. 9:11:42 AM SENATOR COGHILL directed attention to Sections 8-12 of the sectional analysis, which read as follows [original punctuation provided]: Sec. 8. Allows for exceptions from disclosure under the legislative ethics law if it would be in violation of the state or federal constitution or state or federal law. The State Affairs Committee added language that includes exceptions for disclosures for a rule, adopted formally by a trade or profession, that state or federal law requires the person to follow. A written request with justification must be submitted to the committee. Sec. 9. Requires anyone who is a volunteer or educational trainee for more than 30 days to take the ethics training. The 30 day guideline was added in State Affairs. Sec. 10. Adds cite for new section on Alternate Members to statute describing the committee, its structure and its duties. Sec. 11. Adds cite for new section on Alternate Members to statute describing the committee, its structure and its duties. Sec. 12. This is a new section describing the process for appointing alternates. The section adds a new provision that provides for the Chief Justice to appoint an alternate public member. SENATOR COGHILL said Section 12 pertains to quorums and the requirement that once an alternate member becomes involved in a discussion involving confidentiality, he/she follows the discussion through to its conclusion. 9:13:24 AM MS. ANDERSON interjected that the SCLE has two quorums to meet: one of public members and one of legislators. 9:13:40 AM SENATOR COGHILL noted that travel is involved for public members of the SCLE. 9:13:51 AM SENATOR COGHILL turned to Sections 13-15 in the sectional analysis, which read as follows [original punctuation provided]: Sec. 13. Adds legislative volunteers and educational trainees who are in that capacity for more than 30 days to the statute requiring the Legislative ethics course. The 30 day guideline was added in State Affairs. Sec. 14. Redefines legislative employee. Sec. 15. Repeals old statute describing the process for appointing alternates. 9:14:57 AM REPRESENTATIVE JOHANSEN said next time the bill is heard he will want a good definition of an hourly employee, because he does not want to exempt anyone who works on policy. SENATOR COGHILL directed attention to language on page 13, [lines 21-22], which read as follows: it does not include individuals who are hourly  employees who perform functions that are incidental to legislative functions SENATOR COGHILL said that if someone was an hourly employee and working on functions that were beyond incidental, that would be clear to the SCLE. He said he thinks the language makes it clear that anyone involved in policy questions must be reporting. 9:16:17 AM MS. ANDERSON provided examples of hourly employees. REPRESENTATIVE JOHANSEN noted that legislators have the option to hire staff on an hourly basis, and he wanted it clear for the record that "we don't have staff that is exempted from anything just because they're hourly." MS. ANDERSON pointed out that "those employees" do not "perform functions that are incidental." SENATOR COGHILL noted that throughout the bill title, both legislators and legislative employees are "included in almost all recording requirements." 9:17:36 AM REPRESENTATIVE SEATON reminded Senator Coghill that at the next bill hearing he would like to know whether Section 9 includes spouses, and whether 30 consecutive days refers to per session or per legislature. 9:18:35 AM CHAIR LYNN announced that SB 89 was held over.