SENATE CS FOR CS FOR HOUSE BILL NO. 109(JUD) "An Act relating to bribery, receiving unlawful gratuities, and campaign contributions; denying public employee retirement pension benefits to certain legislators, legislative directors, and public officers who commit certain offenses, and adding to the duties of the Alaska Retirement Management Board and to the list of matters governed by the Administrative Procedure Act concerning that denial; relating to campaign financing and ethics, including disclosures, in state and municipal government, to lobbying, and to employment, service on boards, and disclosures by certain public officers and employees who leave state or municipal service or leave certain positions in state or municipal government; restricting representation of others by legislators; relating to blind trusts approved by the Alaska Public Offices Commission; and providing for an effective date." This was second hearing for this bill in the Senate Finance Committee. 9:22:41 AM Amendment #6: This amendment supersedes Committee action taken by the adoption of Amendment #4 during the May 8, 2007 hearing on this bill which changed $10 to $50 in paragraph (1) of subsection (b) added to AS 24.45.051 by Section 12, page 6 lines 17 through 24. This amendment instead changes the $10 to $30. The revised language reads as follows. (b) A lobbyist required to report to the commission under (a) of this section, who provides or pays for food or beverage for immediate consumption by a legislator or legislative employee or a member of the immediate family of a legislator or legislative employee shall report the date the food or beverage was provided or paid for and the recipient's name and relationship to the legislator or legislative employee, unless the food and beverage (1) cost $30 or less; or Co-Chair Stedman moved and objected for purposes of discussion. 9:23:32 AM Senator Huggins understood that this action would not prevent a lobbyist from taking someone out to dinner; it simply pertained to the reporting and bookkeeping requirement associated with that activity. Nonetheless, he questioned whether the requirement might be an "administrative burden". Co-Chair Stedman affirmed that a meal or beverage costing more than $30 would be required to be logged in and reported to the Alaska Public Offices Commission (APOC). It would not significantly add to a lobbyist's administrative duties as they typically provide a copy of such expenses to their employers for reimbursement. Increasing the reporting threshold to $30 is an attempt to find a middle ground that would not be "overly burdensome" but would allow the public "to know who is lobbying who, particularly outside of this building at lunch and in the evenings." Co-Chair Stedman removed his objection. Without further objection, Amendment #6 was ADOPTED. 9:25:21 AM Conceptual Amendment #1, as amended: This amendment inserts a new section on page 1 following line 12 as follows. Section 1. AS 11.56 is amended by adding a new section to read: Sec. 11.56.124. Failure to report bribery or receiving a bribe. (a) A public servant commits the crime of failure to report bribery or receiving a bribe if the public servant (1) witnesses what the public servant knows or reasonably should know is (A) bribery of a public servant by another person; or (B) receiving a bribe by another public servant; and (2) does not as soon as reasonably practicable report that crime to a peace officer or law enforcement agency. (b) Failure to report bribery or receiving a bribe is a class A misdemeanor. This amendment also deletes the entirety of subsection (a) of Section 65, page 38 lines 26 through 27, and replaces it with the following. (a) AS 11.56.124, added by sec. 1 of this Act, and the amendment of AS 11.56.130(1) made by sec. 2 of this Act apply to offenses occurring on or after the effective date of secs. 1 and 2 of this Act. This amendment also adds the definition of "Public Servant" to the bill, as follows. "Public Servant" is defined in 11.81.900(54) (54) "public servant means to each of the following, whether compensated or not, but does not include jurors or witnesses: (A) an officer or employee of the state, a municipality or other political subdivision of the state, or a governmental instrumentality of the state, including legislators, members of the judiciary, and peace officers; (B) a person acting as an advisor, or consultant, or assistant at the request of, the direction of, or under contract with the state, a municipality or other political subdivision of the state, or another governmental instrumentality; in this subparagraph "person includes an employee of the person; (C) a person who serves as a member of the board or commission created by statute or by legislative, judicial, or administrative action by the state, a municipality or other political subdivision of the state , or a governmental instrumentality; (D) a person nominated, elected, appointed, employed, or designated to act in a capacity defined in (A) - (C) of this paragraph, but who does not occupy the position; [Note: This amendment was drafted to CS HB 109(JUD) am, Version 25-GH1059\N.A. Therefore, conforming changes must be made.] 9:25:27 AM Senator Dyson moved Conceptual Amendment #1, as amended, and objected for purposes of explanation. [NOTE: Conceptual Amendment #1 had been offered and then withdrawn from consideration during the Committee's May 8, 2007 hearing on the bill.] Senator Dyson stated that when Amendment #1 was offered during the first hearing on this bill, a question had arisen regarding the definition of "public servant". After conferring with the amendment's drafter, Tamara Cook, Director, Legislative Legal and Research Services, the decision was made to amend the amendment to add the definition of "public servant". Senator Dyson noted that there has been a national political movement "to add some responsibilities" that would assist in preventing "good people from turning into bad people". This amendment is one such action. Co-Chair Hoffman understood that the provisions of the amendment would only require public servants, rather than members of the public, to report a bribe. 9:28:29 AM Senator Dyson affirmed that to be the intent. While Senator Elton appreciated the addition of the definition to the amendment, he was unsure how language in subsection a(1) of Section 1, which reads "(1) witnessing what the public servant knows or reasonably should know is…", would be interpreted by the court system. DAVID JONES, Senior Assistant Attorney General, Opinions, Appeals, and Ethics Section, Civil Division, Department of Law communicated that this "would involve a combined standard. First of all because this is a criminal statute, 'the beyond a reasonable doubt' standard of proof would apply." The second standard, "reasonably should know" would be a "more objective standard". 9:29:49 AM Mr. Jones continued that the combination of these two standards would provide the circumstance in which someone could be convicted of this offense. It would be quite obvious a bribe was occurring if both standards were present. 9:30:10 AM Senator Dyson appreciated Senator Elton's question as he also had wrestled with the interpretation of language during a separate bill on child crime reporting that specified that a person had the duty to report a child being raped, kidnapped, assaulted, or murdered. To that point, he shared having experienced a quandary once when trying to determine whether he was witnessing a child kidnapping or simply a child upset with his father. Thus, the question is whether a reasonable person could make a determination; the body of law "says that unless it was really clear, you're off the hook, but you do have a duty." Senator Thomas sought further clarification about how to interpret language in the definition of public servant that reads "includes an employee of the person"; particularly as he would not consider consultants, advisors, and other professions to qualify as "public servants". Mr. Jones specified that "person" in the legal definition includes corporations and other non-human entities. Thus, "employees of a corporation that is under contract with the State" must abide by this reporting requirement. 9:32:46 AM Senator Thomas understood therefore that it would not pertain to "a private citizen". Mr. Jones clarified that it would apply to a private citizen who was under contract to the State. Senator Thomas surmised therefore, that the individual must be receiving some type of compensation by the public entity. Mr. Jones affirmed. The person must be "under contract with the State" to provide their service. 9:33:16 AM Senator Dyson expressed that "the definition was crafted to include" all who could "influence the public process". For instance, people on boards and commissions are specifically identified regardless of whether they receive compensation for their service. Senator Dyson removed his objection. There being no further objection, Conceptual Amendment #1, as amended, was ADOPTED. 9:34:13 AM Amendment #5: This amendment inserts a new paragraph following "commission;" on page 6 line 15 of AS 24.45.041(b), amended by Section 11, as follows. (9) A sworn affirmation by the lobbyist that the lobbyist has not been previously convicted of a felony involving moral turpitude; in this paragraph "felony involving moral turpitude" has the meaning given in AS 15.60.010, and includes convictions for a violation of the law of this state or a violation of the law of another jurisdiction with similar elements to a felony involving moral turpitude in this state. In addition, this amendment adds a new bill section as follows. Section 12. AS 24.45.041 is amended by adding new subsections to read: (i) A person may not register if the person has been previously convicted of a felony involving moral turpitude in violation of a law of this state or the law of another jurisdiction with elements similar to a felony involving moral turpitude in this state. (j) In this section, (1) "felony involving moral turpitude" has the meaning given in AS 15.60.010; (2) "previously convicted" means the defendant entered a plea of guilty, no contest, or nolo contendere, or has been found guilty by a court or jury; "previously convicted" does not include a conviction that has been set aside under AS 12.55.085 or a similar procedure in another jurisdiction, or that has been reversed or vacated by a court. Co-Chair Stedman moved the amendment and objected for purposes of discussion. Co-Chair Stedman advised that this amendment would exclude a person convicted of a felony involving moral turpitude from being a paid lobbyist. He reviewed the list of offenses that qualify as a felony involving moral turpitude. Co-Chair Stedman felt that the responsibilities of the Legislature, specifically the allocation of money to various communities and projects "that move the direction of the State that have the affect that ripples through decades", require there being "tight requirements on who is allowed to be a lobbyist and lobby the individual elected officials to try to persuade them in particular directions." In a similar fashion to laws that prevent convicted felons from holding certain licenses and undertaking a multitude of other activities, a person convicted of a felony involving moral turpitude should not be allowed to be a paid lobbyist. 9:36:49 AM Senator Thomas asked whether a person convicted of this offense could be elected to the Legislature. 9:37:09 AM ANNE CARPENETI, Assistant Attorney General, Criminal Division, Department of Law, deferred to Mr. Jones. 9:37:46 AM Mr. Jones communicated that following the previous day's discussion on this issue, he had conducted further research. One of the qualifications required to serve in the Legislature is that the person be a registered voter. He reviewed this statute as follows. Alaska Statute (AS) 15.050.030. Loss and restoration of voting rights. provides that a person convicted of a crime that constitutes a felony involving moral turpitude under state or federal law may not vote in a state, federal, or municipal election from the date of the conviction through the date of the unconditional discharge of the person. Upon the unconditional discharge, the person may register under AS 15.07, which of course invites the question, what is unconditional discharge. Mr. Jones continued. AS 15.06.010 provides, in subsection (b)(39), unconditional discharge means that a person is released from all disability arising under a conviction and sentenced, including probation and parole. 9:39:09 AM Senator Thomas understood that, after a certain period of time, an unconditional discharge is the typical course of action. Mr. Jones believed that to be true. 9:39:31 AM Co-Chair Hoffman asked whether this was State or federal law; if it was State law, the State could change the language to prohibit a convicted felon from running for public office. 9:39:55 AM Mr. Jones suspected, but was uncertain as to whether a Constitutional provision established the qualifications for the Legislature. If that were the case, a Constitutional amendment would be required to change it. Ms. Carpeneti understood that a separate bill had been introduced this year that would change when a person convicted of a felony would be eligible to vote. That bill would allow a person released from custody to register to vote regardless of whether they were on probation, parole, or another provision. 9:40:54 AM Senator Elton pointed out that "a fundamental difference between a Legislator and a lobbyist" is the manner in which they are "hired". The issue of whether a candidate has a past felony conviction would likely be part of a campaign discussion. "It's not necessarily part of a discussion when an entity is hiring a lobbyist." Senator Elton considered this hiring process difference to be a significant factor. Thus, while he had previously questioned treating a lobbyist differently than a Legislator, he was comfortable with the approach proposed in this amendment. 9:41:57 AM Senator Dyson requested a copy of Mr. Jones' research. Co-Chair Stedman noted that the material would be provided. 9:42:21 AM In response to a question from Senator Thomas, Mr. Jones stated that the Legislative voting provisions referenced in his remarks were in the State Constitution. Co-Chair Stedman removed his objection. AT EASE 9:42:56 AM / 9:43:30 AM Senator Dyson objected. Clarification was sought as to whether the amendment's language would allow a person who had regained their voting right to become a lobbyist. Co-Chair Stedman considered "the amendment, as written," to be appropriate in its prohibition on allowing a person convicted of a felony of moral turpitude from becoming a lobbyist. It could be revisited in the future if the determination changed. Senator Dyson asked whether a court challenge to the amendment is anticipated. Ms. Carpeneti communicated that a person could file a lawsuit about any law adopted by the Legislature. A "more important question is" whether this prohibition would be upheld by the Court. She "wouldn't be surprised if a lawsuit were filed challenging it. I'm not sure exactly what issues, probably expos facto or other issues. It's hard to predict exactly what would happen, but I think it would be defensible by the Department." Senator Dyson removed his objection. Without further objection, Amendment #5 was ADOPTED. 9:45:54 AM Amendment #7: This amendment inserts the words "before or" following the word "year" on page 40 line 9 of AS 39.52.180(d) amended by Section 66. The revised language would read as follows. (d) An individual who formerly held a position listed in this subsection [A FORMER GOVERNOR, LIEUTENANT GOVERNOR, OR HEAD OF A PRINCIPAL DEPARTMENT IN THE EXECUTIVE BRANCH] may not engage in activity as a lobbyist under AS 24.45 for a period of one year before or after leaving that position [SERVICE AS THE GOVERNOR, LIEUTENANT GOVERNOR, OR DEPARTMENT HEAD, AS APPROPRIATE]. This subsection does not prohibit service as a volunteer lobbyist described in AS 24.45.161(a)(1) or a representational lobbyist as defined under regulations of the Alaska Public Offices Commission. This subsection applies to the position of (1) the governor; (2) lieutenant governor; (3) head or deputy head of a principal department in the executive branch; (4) director of a division or legislative liaison within a principal department in the executive branch; (5) legislative liaison, administrative assistant, or other employee of the Office of the Governor or Office of the Lieutenant Governor in a policy making position; (6) member of a state board or commission that has the authority to adopt regulations, other than a board or commission named in AS 08.01.010; (7) member of the governing board and executive officer of a state public corporation. Senator Huggins moved Amendment #7. This amendment would close a "huge loophole" in lobbying activities by precluding a lobbyist from serving in a position subject to the provisions of this bill for one year before or after being a lobbyist. Senator Huggins declared that this prohibition had the same merits as current laws which prevent a person holding a public service position subject to the provisions of this bill from becoming a lobbyist for one year after leaving their position. Senator Dyson objected. Senator Dyson stated that the amendment, while "well-intended", might have the adverse affect of precluding people who provide "an extemporary service" by lobbying because of their conviction to a cause, such as those who "lobby on behalf of abused children, and who typically receive no monetary consideration for their effort from running for public office. Senator Huggins acknowledged Senator Dyson's remarks, but pointed out that the amendment would not alter language in the subsection that excluded those who serve "as a volunteer lobbyist described in AS 24.45.161(a)(1) or as a representational lobbyist as defined under regulations of the Alaska Public Offices Commission" from running for one of the identified positions. 9:48:55 AM Senator Dyson appreciated the clarification, but continued to worry that the amendment might inadvertently preclude people who serve in certain lobbying capacities. AT EASE 9:49:14 AM / 9:50:11 AM Without objection, Senator Huggins WITHDREW Amendment #7. Conceptual Amendment #8: This amendment adds new language to the bill to prohibit a person from being appointed or elected to a position listed in Section 66 39.52.180(d) (1) through (7) for a period of one year after engaging in activity as a lobbyist. Senator Huggins moved the amendment. Co-Chair Stedman objected for purposes of discussion. Senator Elton understood the intent of the amendment, but could not agree to precluding people who had been involved in the governmental process as a lobbyist from running for Governor or Lieutenant Governor. Adoption of the amendment would prohibit such people from filing for those offices even though the issue could be addressed during their election campaign. Senator Elton stated that he had supported Section 66 because it addressed the "legitimate public issue on whether or not somebody was angling to get a job potentially as a lobbyist while they were a public officer." He was unsure whether prohibiting a lobbyist from becoming a public officer was a real concern. 9:53:12 AM Senator Thomas asked whether the action proposed by the amendment was contrary to the Constitution in respect to a person's right to run for office. 9:53:36 AM Amendment to Amendment #8: This amendment removes Governor and Lieutenant Governor from the positions subject to the prohibition specified in Amendment #8. Thus the prohibition would apply to the positions listed in Section 66 39.52.180(d) (3) through (7). Senator Huggins moved the amendment to Amendment #8. Co-Chair Stedman objected for discussion. 9:54:19 AM Senator Dyson concurred with Senator Elton's remarks. Regardless of the "honor and prestige" associated with a State position, he found it "hard to conceive" that a lobbyist would desire to move to a position with the State because they would earn less money. Senator Dyson understood that this amendment would prohibit the Governor from hiring, for example, Joel Gilbertson, a former Department of Health and Social Services commissioner, who, due to his experience with public health issues and associated financial aspects, was now employed as a lobbyist with Providence Hospital in Anchorage. Senator Dyson considered most lobbyists to be "honorable people with a wealth of knowledge", and "limiting … the pool of experienced people" might be detrimental to the State. 9:55:54 AM Senator Huggins stated that there were a number of people, including Mr. Gilbertson, whom he admired. However, were people's biases a constant consideration "we would never pass legislation." Defining what people could do before or after is part of the solution. "It is a safeguard that's worth putting into place." Co-Chair Stedman removed his objection to the amendment to the amendment There being no further objection, the amendment to the amendment was ADOPTED. 9:57:02 AM Co-Chair Stedman stated that Amendment #8, as amended, was before the Committee. Senator Elton argued against the amendment. While he understood the point that a person, formerly employed as a lobbyist, who was appointed to a policy position in State government, could have a bias toward their employer, a similar potential for bias could be found in people with other backgrounds. He provided examples and concluded that a person does not have to be employed by an entity as a lobbyist to display a bias. Senator Elton contended that a person's background would likely be a consideration and a point of discussion in the hiring process. 9:59:14 AM Senator Huggins stressed that a lot of issues are addressed in the bill, including some issues that might not require "fixing". Nonetheless, he intended to vote for the bill "to safeguard Alaskans and restore the confidence in this State in people who work at the State level, period." Co-Chair Stedman removed his objection to the amendment. Senator Elton objected to the amendment. A roll call was taken on the motion. IN FAVOR: Senator Huggins, Senator Olson, Senator Thomas, Co- Chair Hoffman and Co-Chair Stedman OPPOSED: Senator Dyson and Senator Elton The motion PASSED (5-2) Amendment #8, as amended, was ADOPTED. No further amendments were forthcoming. 10:00:39 AM Co-Chair Stedman asked that the bill's fiscal notes be reviewed. TAMMY KEMPTON, Juneau Branch Administrator, Alaska Public Offices Commission, Department of Administration, stated that this bill would require APOC to accept handwritten campaign disclosure reports and have them available for viewing on APOC's website within two days after receipt. In order to comply with this provision, APOC must acquire two high speed scanners and add one additional fulltime employee and an additional halftime employee during State election years. The projected cost for FY 2008 is $250,000 as reflected in the Department of Administration May 8, 2007 fiscal note. 10:03:24 AM GEOFF BULLOCK informed the Committee that he was a lobbyist, a father of five, a foster parent, and a felon. The adoption of Amendment #5 "puts me out of work." He made some bad business decisions in 1998, was convicted, served time, and eventually reestablished his lobbying business. He does not agree with the amendment and considers it "collateral damage". Mr. Bullock could understand furthering such action if "a felony was committed in the act of a lobbyist or the act of a legislator," but he could not understand the broad action of labeling all felons as being bad. They are not. He "wouldn't mind if any" of the 515 inmates he served time with were his neighbors. "We all make mistakes, we all reach for the first stone to throw, and you guys threw it and it hit me and my family and it hurts." 10:05:14 AM Senator Elton spoke to the Department of Administration's "purely administrative" fiscal note which provided for the cost of compiling reports. Missing from the discussion was "the investigatory function of APOC", particularly as APOC was "created to be a watchdog for Alaskans." Not addressing this function in the fiscal note was "bothersome" to him. Nonetheless, he appreciated the efforts exerted to develop this bill and "looked forward to its adoption." 10:06:45 AM Senator Dyson was "moved by" Mr. Bullock's testimony and wished that the Committee "had allowed for felons who had served their time and got their rights restored." 10:07:08 AM Co-Chair Hoffman moved to report the bill, as amended, from Committee with individual recommendations and accompanying fiscal notes. There being no objection, SCS CSHB 109(FIN) was REPORTED from Committee with previous zero fiscal note #2 from the Department of Law and new $250,000 fiscal note, dated May 8, 2007, from the Department of Administration. 10:07:42 AM