SSTA 2/6/96 SB 141 LEGISLATIVE ETHICS  CHAIRMAN SHARP announced SB 141 to be up for consideration and they would be starting on section 31. JOE DONAHUE, a public member of Legislative Ethics Committee, said the reason for section 31 was to clarify the vote they take is to be kept confidential. SENATOR DONLEY asked if there was anything in existing law that says those functions are private. MR. DONAHUE answered that the existing law was not clear. MR. DONAHUE said section 32 clarified the discovery aspect. In addition, there are some procedures on releasing some information the committee acquires in the course of its deliberation. Section 33 concerns attendance in executive sessions and confidentiality. They have chosen not to allow legislators into the deliberations. Sections 34 and 35 recommends who the appointing authority is for legislative employees when the violator is a legislative employee and gives the authority to impose sanctions. SENATOR DONLEY commented that section 35 is new and it goes through item by item and explains who the appointing authority is. SENATOR DUNCAN asked, under (b) (1) if some who works for him, as an individual, is the appointing authority considered the legislative council. MR. DONAHUE said it would be the legislator, himself. SENATOR DUNCAN said it didn't say that anywhere and that needed clarification. SENATOR DUNCAN said he wanted individual legislators to have the authority to be the appointing authority for their own members. He didn't have a problem with the Budget and Audit Committee being the one that oversees fiscal analysts and employees of that Division. Standing committees needed clarification, also. MR. DONAHUE explained that section 34 says the appointing authority has the power to impose a sanction recommended by the committee or to impose a different sanction. It is clear they couldn't be directed. SENATOR DUNCAN said he was concerned that they were changing something that had been standing for a long time. Right now the Rules Committee does not dictate who you hire, they tell you how many positions you have. He didn't want to imply that the Rules Committee has to sign off on who every individual legislator hires. CHAIRMAN SHARP agreed with that. TAPE 96-9, SIDE B Number 578 SENATOR LEMAN illustrated his point by describing a scenario in which he had a service station business as a client. The fuel tax is paid by the customer, through the conduit of a service station. According to APOC's definition, that business would have a substantial interest in state government even though the service station owner's participation in state government might only be to vote. That scenario differs considerably from ARCO's lobbyists who deal with legislation. SENATOR DONLEY suggested clarifying that section. CHAIRMAN SHARP asked committee members to submit suggestions on Section 37 before the end of next week. He explained the only change to Section 38 discussed by committee members was the date change to an earlier date during the legislative session. MR. DONAHUE explained that there was a two-fold purpose for choosing that date. First, all required reports would have the same filing date (February 15), and that date would provide the public more complete information of possible conflicts of interests earlier in the session, than the April 15 deadline. Section 39 provides a penalty for late disclosure or failure to disclose. SENATOR PHILLIPS asked if failure to file is a big problem. MR. DONAHUE explained it is usually a case of people forgetting to file and notifying the committee six months after the deadline. The committee has been allowing people to file late, but did not have a penalty for doing so. The purpose of the disclosures is to provide information to the public, not to penalize, but without a penalty, people tend to put off filing. Section 39 provides authority to establish a fine, Section 40 establishes the amounts. Number 367 CHAIRMAN SHARP noted Section 41 provides an effective date. MR. DONAHUE stated the committee would prefer the date to coincide with start of the calendar year rather than the start of session. SENATOR LEMAN suggested if guidelines are included for fines, the committee consider similar fines for inadvertent omissions of APOC filing requirements. He felt APOC's fines are very inconsistent. The committee discussed amendments to SB 141. MR. DONAHUE explained amendment K.10 is an entirely new section which would provide a definition of "substantial interest", which was originally defined in the handbook. The definition is a proposal of a series of tests that must be met to determine whether a substantial interest exists. Ethics Committee members were concerned about requiring a declaration of conflict of interest on votes, even though most legislators vote anyway according to the Uniform Rules. The Ethics Committee proposed the change from prohibition to disclosure. Current law prohibits a legislator from taking action at the moment on any administrative or political action, which includes committee actions. Number 325 CHAIRMAN SHARP commented he has heard a declaration of conflict of interest during floor sessions many times, but not during committee hearings. MR. DONAHUE stated the Ethics Committee is primarily concerned with declaration and countered that legislators may want to review what is considered legislative or administrative action. The Ethics Committee interpreted that to include committee action. SENATOR DONLEY felt legislators should be required to orally disclose the conflict prior to a vote, rather than to file written documents. SENATOR PHILLIPS questioned whether under test #1 of the "substantial interest" provision, a person who owned shares in a mutual fund that may have $2,000 of oil company stock would be considered to have substantial interest in that company. MR. DONAHUE stated $2,000 worth of stock would not be considered substantial, and explained that clients often only control which mutual fund is purchased, rather than the mutual fund's investment portfolio which changes constantly. SENATOR DONLEY asked, if the amendments are adopted into a committee substitute, whether oral disclosure could be included. MR. DONAHUE replied the Ethics Committee intent was oral disclosure for both committee and floor action. Written disclosure would only be required when drafting legislation or testifying at an administrative hearing. SENATOR DONLEY asked for clarification. MR. DONAHUE stated the testimony at an administrative hearing would have to be related to legislation, but could be presented by a legislator representing his or herself. The committee discussed when legislators testify before boards, to determine whether or not they are acting in a legislative capacity, they would have to have a substantial interest in the issue to necessitate disclosure. MR. DONAHUE explained amendment K.17 which relates to the immediate family. This amendment changes the term "spousal equivalent" to a "person cohabitating with the person in a conjugal relationship." SENATOR LEMAN thought this term was sufficient and found it preferable because it removes the element that develops the equivalency to the legal relationship of marriage. The other intent of the amendment is to lessen the burden of legislators from knowing what associations every family member has with the state. Right now, a legislator could be held liable for an adult sibling who is involved in deals with the State. This definition tightens the meaning to immediate family members. Amendment K.15 gives the Ethics Committee a right of follow-up to ensure that corrective action occurs for a violation. CHAIRMAN SHARP asked if the committee would have the ability to charge the violator under civil procedure. MR. DONAHUE explained if the Ethics Committee formally charged a person, the formal charges currently in the code would be used. At present it is not clear whether a person can be formally charged which makes the process toothless. Amendment K.15 addresses corrective action as well as sanctions for legislative employees. MR. DONAHUE explained amendment K.19 covers corrective action for legislators, but does not cover sanctions. SENATOR DONLEY asked if amendment K.19 adds a timeline to a sanction. MR. DONAHUE replied that the Ethics Committee can already add a timeline, however if the corrective action does not occur within that timeline, the Ethics Committee can take no further action. SENATOR DONLEY believed the Ethics Committee already has the authority to take further action. MR. DONAHUE stated the Ethics Committee has tried to exercise it, but was not successful. SENATOR DONLEY felt the Ethics Committee does not have the ability to do follow-up, but it does have the authority to recommend sanctions to the legislature of time lines and penalties for failure to comply. MR. DONAHUE believed the amendment would require the Ethics Committee to include a time frame. SENATOR DONLEY felt the amendment to be redundant as that ability is already permitted by statute. MR. DONAHUE clarified amendment K.19 allows for follow-up when a legislator does not comply with a sanction. CHAIRMAN SHARP discussed amendment K.20 which allows trainees to volunteer services. It addresses concerns of interns under bona fide programs. MR. DONAHUE stated the Ethics Committee had no problem with that amendment. SENATOR DONLEY brought up topics discussed at an earlier date, such as telephone usage, and vague language about office usage (regarding back-up data from campaigns). He explained that records were never intended to fall under the general prohibition on keeping campaign materials. He suggested making a simple exception for maintaining campaign and APOC records. TAPE 96-10, SIDE B Number 000 Regarding telephone usage, SENATOR DONLEY commented that a legislator has no control over who calls the legislator, and whether the call is for state-related business. He felt there should not be a rule requiring legislators to control who can call the office, and people should not be prohibited from calling on the phone, since providing phone access allows the legislator to be available at the office. MR. DONAHUE commented that the words "limited" and "nominal" are currently in the law. If it is the legislature's intent that any amount of telephone use is acceptable, then the language needs to be changed. He did not know whether the Ethics Committee would recommend that change. SENATOR DONLEY clarified the law allows unlimited use of the phone as long as there is no special charge attached; but limits use for other things. He felt there is confusion about seminars, and felt the original intent was not to limit people from making non-charge phone calls. MR. DONAHUE felt there are probably legislators and legislative employees who spend more time during the day making personal phone calls than doing legislative business. SENATOR DONLEY stated that was never the intent of the law, and those cases should be management decisions rather than an ethics question, and such a person should be fired. CHAIRMAN SHARP thanked Mr. Donahue for his testimony and announced the committee would reschedule SB 141 in the form of a committee substitute incorporating the recommended amendments. He adjourned the meeting at 5:10 p.m.