SB 127-EXEC. BRANCH ETHICS: FINANCIAL INTERESTS  CHAIR GENE THERRIAULT announced SB 127 to be up for consideration. 6:16:38 PM SENATOR HOLLIS FRENCH, Sponsor, described SB 127 as a straightforward attempt to clearly define a significant financial interest. When Mr. Bunde investigated former Attorney General Renkes in the KFx matter, he found there was ambiguity associated with determining significant financial interest because Alaska law doesn't provide a hard or fast number or percentage for that. The bill defines financial interest on page 2. A financial holding is significant if it amounts to $5,000 or 1% of the total value of the company stock, whichever is less. He reviewed Section 1 and read the statutory definitions for personal and financial interests. That section contained the word "or" too many times, which made it too broad. He narrowed it to just the instances where your action has a conjectural effect. Proposed Section 1(b)(2) is new and relates to personal interest. No money is involved; there are only those interests that are held without any potential for profit. 6:20:44 PM CHAIR THERRIAULT said assuming he works gas pipeline issues and that the pipeline goes through, would he have to disclose if his Fairbanks property value skyrockets in proportion to all other Fairbanks property. SENATOR FRENCH replied that wouldn't be a personal interest because property is a financial interest. Nevertheless, he opined that he would be absolved because the action has a conjectural effect. "You can posit a boom off of the gas pipeline, but it's not necessarily going to be true." Section 1(b)(3) focuses on financial interest and subparagraphs (A)(B) and (C) lay out the following three criteria that must be met to for an insignificant financial interest to occur: A. You or an immediate family member must hold the interest. The current ethics statutes already adequately addresses how you are charged with knowledge of what your relatives may own in their stock portfolio. B. It has to involve an ownership that is source of income or from which a person receives or expects to receive a financial benefit. That's some sort of concrete financial relationship that will bring you money. C. The value is reset to less than $5,000 or 1% of the total value of the business, whichever is less. Determining the amount is a balance, but it should be at an amount that would give the public confidence that decisions are being made with them in mind and not the public officer. Finally, the bill broadens the definition of official action because current statute is ambiguous. As proposed, official action would include just about anything that is done in the course of a workday as a state employee. 6:24:52 PM CHAIR THERRIAULT asked how the $5,000 compares to other states. SENATOR FRENCH replied Idaho, Kentucky and three or four others have a limit similar to $5,000. SENATOR WAGONER asked if the public office disclosure statements don't require about the same information as (3)(A)(B) and (C) and would therefore already be available to the public. SENATOR FRENCH responded there are two things going on there. The object of disclosure is to let folks know what you own. It doesn't get you out of an ethical conflict if you have money on the line. The other thing is that you as a public official don't make a decision that affects your investments. CHAIR THERRIAULT posed the hypothetical situation of a Department of Law employee whose family owned a particular business and asked if that employee would have to avoid involvement with anything dealing with that type of business. SENATOR FRENCH replied if the action that is taken would be more than conjectural then the answer would be yes. Assume that your family owns fishing permits in Kachemak Bay and you're an attorney for the Department of Natural Resources. If a regulator asks for a written opinion on fishing permits in Kachemak Bay you should send the work to the next attorney. 6:27:32 PM CHAIR THERRIAULT noted there were no further questions. He asked Senator Seekins if he had SB 186, SB 187, and SB 127 noticed in the Judiciary Committee. SENATOR SEEKINS said he thought so. CHAIR THERRIAULT asked the committee members if they preferred to amend Senator Seekins bills in this committee or move them to Judiciary to make the changes. SENATOR ELTON said his preference would always be to see the changes. He pointed out that he doesn't sit on Judiciary. The sponsor has said he would change some sections in one of the bills but the committee doesn't know what those changes are. CHAIR THERRIAULT asked Senator Seekins if he was close to having a committee substitute. SENATOR SEEKINS said one difficulty is that the drafters are very busy. He said that Senator Elton or any other member would be welcome to join the Judiciary Committee and ask any questions, he said. SENATOR ELTON expressed appreciation for the offer and said the unspoken point is that he wouldn't have a vote. These are substantive issues on bills that were introduced just a few days ago, he said. SENATOR HUGGINS remarked he is on Judiciary, but the challenge is getting the fix. SENATOR DAVIS suggested talking about moving the bills individually. SB 186 needs more change than the others. SENATOR SEEKINS stated that the same concepts would be embodied in the final bill; it's just getting the right language to accommodate those concepts. CHAIR THERRIAULT called a brief at ease from 6:32:53 PM to 6:36:14 PM CHAIR THERRIAULT announced he would like to move the three bills as a package. He recessed the meeting to the call of the chair at 6:37:59 PM. CHAIR GENE THERRIAULT reconvened the April 26, 2005 Senate State Affairs Standing Committee meeting at 8:11:49 PM April 27, 2005. Present were Senators Elton, Wagoner, Huggins, and Chair Therriault. SB 127-EXEC. BRANCH ETHICS: FINANCIAL INTERESTS  8:13:41 PM CHAIR GENE THERRIAULT announced SB 127 to be up for consideration. He asked the sponsor to provide explanation for why he settled on the particular dollar amount. 8:14:04 PM SENATOR HOLLIS FRENCH, Sponsor, explained that the basic idea is to promote the public trust. First, the lower the number the more likely it is that the public will view public official decisions as being in the public's interest rather than as an investment interest. Second, $5,000 was selected because it is similar to what is used in other states. The third reason is that the median income for Alaskans is about $35,000 and so $5,000 represents over 10% of that annual earning. From the public's perspective, that's a lot of money. CHAIR THERRIAULT restated his interest in passing the three ethics bills as a package and asked for a motion. SENATOR WAGONER motioned to report SB 127 and attached fiscal notes from committee with individual recommendations. CHAIR THERRIAULT announced that without objection the bill would move to the next committee of referral.