Legislature(2003 - 2004)
03/31/2003 01:38 PM Senate JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 89-LOBBYING/ LEGISLATIVE ETHICS CHAIR SEEKINS reminded members that the committee would continue taking public testimony on SB 89 today. MR. STEVE CLEARY, Executive Director, Alaska Public Interest Research Group (AkPIRG), expressed opposition to SB 89. They believe it would gut the lobbying regulations and don't feel there are any problems with the current lobbying act. The extensive discussion on a similar House bill shows confusion about what lobbying is. It's erroneous to say that registration limits on free speech he said. AkPIRG's biggest concern with SB 89 is that it will exempt many people who are lobbyists from having to register as lobbyists. This will allow lobbyists to host fundraisers and donate to political candidates who are outside of their legislative districts. MR. CLEARY said he reviewed the 2003 lobbyist directory and found 3 volunteer lobbyists, 16 representational lobbyists, 65 professional lobbyists, and 96 employee lobbyists. It is the employee lobbyists that will be exempted from regulation as lobbyists, which will encourage more companies to employ in- house lobbyists than to hire professional lobbyists. He said he understands that small businesses need to be represented, but he doesn't think the current regulations prohibit them from doing that. He repeated that AkPIRG's main concern is that SB 89 will allow employee lobbyists to back up their lobbying with cash and fundraisers. SENATOR THERRIAULT commented that Mr. Cleary said SB 89 guts the lobbyist statutes, yet he acknowledged that the paid professional lobbyists are still covered by another section of the bill and will not be impacted. In addition, Mr. Cleary indicated the real problem is that a lobbyist, even one employed by a company who lobbies more than four hours, would be able to contribute to a campaign. He noted that contributions would have to be fully disclosed and capped at $500. He asked Mr. Cleary how it would harm the process if a mom and pop gift shop owner spent more than four hours testifying on a piece of legislation and talking to legislators and then wanted to contribute to a Senate campaign and disclosed that. He said he spoke with APOC staff last week that said it was always a bit nonsensical that such a person is precluded from donating to a campaign since disclosure would be required. MR. CLEARY said he believes the four hour limit is a good one and eliminating the ban on donating outside of one's election district is of concern because they believe that influences the process. That is the reason that bit of campaign finance reform was instituted and has been upheld by the courts. Donations are capped at $500 and must be disclosed, but whether a person donates outside of his or her district is of importance because it gives that lobbyist too much power. SENATOR THERRIAULT said to be a lobbyist requires four hours and one minute and the lobbyist then loses the right to participate in the political process, even if the person is a small mom and pop operator because the language in this bill does not impact contract lobbyists. He again asked where the real danger is of a small business owner wielding tremendous influence in the legislative process, especially if that small business owner must disclose his or her contributions. MR. CLEARY replied the danger is not from small businesses wielding more power. To talk to your own legislator is participating in the political process, but to talk to legislators in an attempt to change something for your business is lobbying so AkPIRG is going to try to keep them separate. In 1996 the vote was to put a limit on fundraising and donations. He said his greater concern with SB 89 is the employee lobbyist. A company with enough financial resources to pay an employee to go to Juneau will have an advantage because smaller businesses in the same field will not have the same access to their legislators. If that lobbyist can fundraise and donate, that company will get more of an ear from legislators. SENATOR THERRIAULT noted that last week APOC said that four hours is unreasonable and suggested 16 hours. In addition, he told members that if a business hires an employee to engage in lobbying, there is a good chance that employee will have to register. MR. CLEARY said his concern is that a company might hire two or three lobbyists to split up the work so they could sidestep the intent. He said he doesn't see any problem with the law right now because it provides full disclosure of who is trying to influence lawmakers. To raise the bar will not inspire more small businesses to lobby. Their time is more valuable than the $100 registration fee. This bill would open it up for medium and larger businesses to be able to back up their lobbying with cash and AkPIRG believes that is very harmful. CHAIR SEEKINS asked Mr. Cleary if AkPIRG wants to take away the average person's ability to talk to their legislator and any legislator they thought was friendly toward their cause. MR. CLEARY said it depends. Talking to your legislator is a civic duty, but if a person is talking to 60 legislators about a business matter, that is lobbying. If a person is going to lobby, that person should register and should not be able to back up lobbying efforts with fundraising and donations. CHAIR SEEKINS asked Mr. Cleary if he limits his conversation on topics of interest to AkPIRG to his own legislator. MR. CLEARY said he does not. CHAIR SEEKINS asked if he is a registered lobbyist. MR. CLEARY said he is not because he hasn't reached the number of hours for which he would be required to register. CHAIR SEEKINS asked what the number is. MR. CLEARY said currently that number is four hours of any direct lobbying. CHAIR SEEKINS asked if he limits his lobbying activities to appearances before public sessions of the legislature. MR. CLEARY said he does, but he has also spent about 30 minutes making phone calls to legislators. CHAIR SEEKINS asked Mr. Cleary how close he is to spending four hours. MR. CLEARY said he would have to look at his records and respond at a later date. CHAIR SEEKINS asked who funds AkPIRG. MR. CLEARY said they are funded from individual donations and grant money from foundations. CHAIR SEEKINS asked Mr. Cleary if he is lobbying while giving testimony. MR. CLEARY said that is his understanding. CHAIR SEEKINS said he wants to hear from anyone that wants to talk to him on an issue. He doesn't believe he is just supposed to represent one district. As a legislator, he should be able to listen to people from all areas of the state. His intent is to make sure that the real lobbyists are not let out of the net, but that other people who want to influence legislators aren't made into lawbreakers. SENATOR FRENCH said he believes the current exemption on the lobbying law excludes Mr. Cleary's activities here today. CHAIR SEEKINS agreed with Senator French. He said the problem is confusion and his intent is to not make criminals out of people. He then called Graham Storey to testify. MR. GRAHAM STOREY, Nome Chamber of Commerce, stated support for SB 89 for several reasons. First, Alaska has the most restrictive time requirements of any state. California uses one third of the time spent in direct communications as its yardstick. The Nome area has one Representative and one Senator and, although they are very capable individuals, they do not sit on every committee and do not have time to closely examine every bill that might affect Nome. For example, the Senate Labor and Commerce Committee is considering a bill that will have a substantial impact on the Nome Chamber of Commerce, but the Senator for Nome is not on that committee. Therefore, he would like to be able to talk to the Labor and Commerce Committee members without having to count that time toward making him a professional lobbyist. He advised that during testimony in the House it came out that direct testimony before a committee is indeed a lobbying activity and APOC was present and agreed that that is the case. During a previous Senate hearing, it was conjectured that testifying before a committee might not be lobbying. This alone shows there is confusion at APOC about what is and is not lobbying and needs to be clarified in law. Mr. Storey said the opponents of this bill seem to be in favor of punishing the smaller and medium sized businesses such as those that make up the Nome Chamber of Commerce in favor of large businesses that can afford to have professional lobbyists. MS. TAMMY KEMPTON, the Juneau branch administrator of the Alaska Public Offices Commission (APOC) and the regulator of lobbyists, told members that the question of whether testifying before a committee is considered to be lobbying depends. AS 24.45.161 says this chapter does not apply: ...to an individual who lobbies without payment of compensation or other consideration ... and who limits lobbying activities to appearances before public sessions of the legislature, its committees or subcommittees or to public hearings or other public proceedings of state agencies. Therefore, if a person is not getting paid to sit before a committee and testify, that person is not subject to the law. If that person is an employee who is testifying, once that person hits four hours, that person needs to register. CHAIR SEEKINS asked if Mr. Cleary's time spent testifying before the committee would count if he spent time lobbying his own legislator. MS. KEMPTON said it depends on whom else he talked to, if he talks to his own legislator that is specifically exempt. CHAIR SEEKINS asked where that is located in statute. MS. KEMPTON said it is in the same section, paragraph (b). It reads: Nor does anything in this chapter prevent members of the legislature from discussing with constituents the advisability of passing legislation then pending before or to be presented to the legislature. That has always been interpreted to mean a constituent talking to his or her legislator is not subject to the lobbying law. SENATOR OGAN said the Key Campaign gives a presentation to the Legislature every year. He suspects someone pays his or her expenses, but he hasn't confirmed that. Other groups, such as school districts, do the same thing and their students spend more than four hours in the Capitol. He asked if they are considered to be lobbyists if they get reimbursed for reasonable travel and living expenses. MS. KEMPTON said yes, someone whose travel and living expenses are reimbursed is supposed to register as a representational lobbyist. There is no fee and all of the other prohibitions, such as contributions, don't apply. SENATOR OGAN asked if APOC issues cards for representational lobbyists. MS. KEMPTON said APOC doesn't issue cards, but they do list those names on their website. For the most part, APOC has never gone out and tracked down representational lobbyists. Groups, such as the Key Campaign, are not being compensated. They are only reimbursed for expenses. SENATOR THERRIAULT asked if a company employee that testifies before a committee on legislation would have to count that time as lobbying hours. MS. KEMPTON replied the employee would have to count that time and that's why APOC believes the four hour limit should be raised to 16 hours. SENATOR THERRIAULT asked if Mr. Cleary's testimony on behalf of AkPIRG would count toward lobbying hours. MS. KEMPTON said it should and Mr. Cleary called APOC with that question. SENATOR THERRIAULT asked if APOC still contends the word "regular" should be struck from the statute. MS. KEMPTON replied: I have a copy of what the commission marked up and I believe they provided you with a copy. I believe they decided 'regular' should be left in the statute, but that in the explanation where you have it divided out between small [i] regular, small [ii] substantial, that should be changed so that you're only defining - and defining together - substantial or regular. The reason for this, one thing, is because when you're defining regular in that lower case i, it's only relating it to legislative action but lobbying is also executive branch. And, so, if you just do this, now you have a regulation that's in effect that would remain in effect. It would be four hours now for administrative action and it would be 60 hours for legislative action and I think that's probably a real problem. So what the commissioner proposed is that substantial and regular receive the same definition, which would be 16 hours in a 30-day period for direct communication with a public official or legislative employee. SENATOR THERRIAULT asked if APOC believes those two words need further refinement in the statute and that the existing four hour limitation in regulation is too restrictive. MS. KEMPTON said APOC prefers 16 hours because they believe that four hours is too restrictive. APOC would be happy to change the number in regulation if that is easier than placing it in statute. SENATOR THERRIAULT asked if APOC would portray those changes as gutting the law. He wanted to make it clear that a watchdog group is aware of the issue. Although part can be changed through regulation and the other through statutory changes, making those changes will not strip the oversight of lobbyists. MS. KEMPTON asked members to note the other change proposed by APOC. CHAIR SEEKINS interjected to say he had not yet distributed that change to the members. He said he would copy the written suggestions he received from Mr. Wood and distribute them to members and then the committee would take them up as possible amendments at the next meeting. SB 89 was held in committee.