Legislature(2017 - 2018)HOUSE FINANCE 519
02/05/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB91 | |
| HB79 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 79 | TELECONFERENCED | |
| += | HB 91 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 91
"An Act relating to fees for certain persons filing
disclosure statements or other reports with the Alaska
Public Offices Commission; relating to a tax on
legislative lobbyists; and providing for an effective
date."
1:33:59 PM
REPRESENTATIVE SAM KITO, SPONSOR, shared that the intent of
the legislation was to help provide the resources needed by
the Alaska Public Offices Commission (APOC) to do the work
of protecting the public interest by being able to have
receipts to support their operations. He said that the bill
reflected and estimated level of receipt collection of
approximately $250 thousand; the receipts collected in past
years had been as much as $113 thousand. He said that the
commission could only charge fees as identified in statute;
current fees for registration for each lobbyist client was
$250, which generated $113 thousand per year. He relayed
that the commission had struggled to maintain staff to
provide necessary audits. Auditing each campaign and each
lobbyist was time consuming and sometimes resulted in
accumulating penalties, which were then forgiven because
the accumulation occurred under circumstances beyond the
auditees control. The additional receipt authority would
help to support operations and would aid in righting the
state's fiscal situation.
1:37:10 PM
Vice-Chair Gara understood the additional revenue the bill
would raise, and he supported the bill. He believed the
bill would enable the commission to hire staff to operate
APOC efficiently. He surmised that implementation of the
bill would raise the cost of running the commission to $245
thousand per year.
Representative Kito replied that at present there was
receipt authority available to the commission of up to
$145,000. He stated that providing the receipt authority
would not give the commission excess authority and the
commission would still need to present to the legislature
before adding additional staff. Currently, the commission
did not have the authority to be able to generate
additional revenue.
1:39:27 PM
Co-Chair Foster noted that Representative Guttenberg and
Representative Pruitt had joined the meeting.
Vice-Chair Gara understood the bill would increase the
receipt authority of designated general funds (DGF). He
asked about the $220 thousand under Personnel Services on
the fiscal note.
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, answered
that the fiscal note indicated that funding was necessary
on the personal services line to decrease the vacancy in
APOC; by reducing the vacancy they would be able to better
provide service to the public.
Representative Wilson asked whether the money funds would
be DGF.
1:41:26 PM
Representative Kito answered that the funds would be DGF
and made available to the level of the APOC. He added that
the if fund exceeded the costs of facilitating the program,
they could return to the legislature for an audit of the
program.
Representative Wilson asked about the agency's current
receipt authority. She asked whether the bill would
increase the amount of receipt authority.
Representative Kito responded increasing the receipt
authority would allow APOC to decrease the amount of
general fund that they were expending.
Representative Wilson wanted to make sure that the money
from an increase in the fees would be used as the
legislation intended. She referred to Page 1 of the bill
and asked about "non-group" entities and how much they
would pay in registration fees.
Representative Kito answered that all entities would pay
the same registration fees.
Ms. Koeneman elaborated that any non-group entity with an
annual operating budget of $250, or less, would be exempt.
They would be able to fundraise to take in additional
monies but if their annual operating expense was under
$250, they would be exempt.
Representative Wilson understood that the language did not
pertain to volunteer groups, without operating expenses.
Ms. Koeneman replied in the affirmative; the language
included personal services and office space.
Representative Kawasaki spoke to people that may not have
the ability to pay if the fee was increased. He wondered
whether the fees could be waived.
1:45:27 PM
Representative Kito answered that there was a currently a
process whereby a candidate could file an exempt campaign
where they were not subject to any of the fees that applies
to candidates. He understood that the election filing fee
would still need to be paid but they would be exempt from
paying the registration fee to APOC.
Representative Kawasaki asked for clarification on the
answer from APOC.
HEATHER HEBDON, ALASKA PUBLIC OFFICES COMMISSION, ANCHORAGE
(via teleconference), asked for Representative Kawasaki to
repeat the question.
Representative Kawasaki complied.
Ms. Hebdon replied that there was a provision in statute
that allowed for an exempt campaign; campaigns that had
limited financial activity of less than $5,000 during the
duration of the campaign could file an exemption statement
and not have to report. She said that the exemption was not
available on a statewide level and only applied to a
municipal or judicial retention candidate.
Representative Kawasaki asked whether anyone had ever come
to APOC wanting to file but had been unable to pay the
filing fee.
Ms. Hebdon answered that it was a new fee, which meant that
there was not history of such a circumstance.
1:48:05 PM
Representative Ortiz asked whether there had been a further
reduction in appropriated APOC funds since FY16.
Ms. Hebdon replied that the agency had received a cut in
program authority the previous session, from $242.6 million
to $143.3 million. She said that the fees had been
unrealized as there had not been fees in statute to allow
receipt authority up to the full $242.6 million.
Representative Ortiz surmised that the agency had remained
flat funded since FY16, and receipt authority had been
reduced for receipts that had never been collected anyway.
Ms. Hebdon answered in the affirmative.
Representative Ortiz asked how long the current $250
lobbying registration fee been in place.
Ms. Hebdon did not know the origination date, but the fee
had been increased to $250 in 2003.
1:50:25 PM
Representative Guttenberg offered a hypothetical of someone
exceeding the $250 in operating expenses, but in in-kind
donations, he wondered where this would fit in under the
bill.
Ms. Hebdon did not believe the hypothetical was the proper
definition of non-group entity. She said a non-group entity
was defined as a person, other than an individual, whose
primary purpose was to influence an election. Those people
had to meet certain criteria and could not participate in
business activities, they did not have shareholders and
were independent from the influence of business
corporations. She said that to her knowledge only one non-
group entity had ever registered with APOC, but that
Citizens United had rendered the definition obsolete and
groups no longer had to go through the steps to achieve
non-group status, instead they registered as an entity and
could make unlimited independent expenditures.
1:52:46 PM
Vice-Chair Gara did not believe in holding a bill for a
technical question that could be fixed on the floor. He
pointed to an exemption on Page 2, line 3 for municipal
office holders. He surmised that APOC did not have a fee
for Tribal office holders.
Ms. Hebdon answered that the office did not regulate Tribal
elections.
Vice-Chair Gara surmised that village office holders would
not be charged a fee.
Ms. Hebdon answered in the affirmative.
Vice-Chair Gara spoke to the fee for a lobbying contract.
He understood that the fee was for each contract and not
per lobbyist.
Ms. Hebdon replied in the affirmative; the fee was per
client.
Representative Wilson surmised that a group of volunteers
that raised $3,500 for a local election would be charged
the same fee as a larger organization that raised tens of
thousands of dollars.
Ms. Hebdon answered in the affirmative.
Representative explained that the fee was not a tax. He
said registering to participate in the process would cost
the same for small or large entities. He said that the fee
was nominal at $100 and would not apply to those who
qualifies for an exemption.
Representative Wilson thought that the tier for lobbyists
was questionable. She asked whether it would take longer
for APOC to track a donation of $100,000, rather than
$4,000.
1:57:25 PM
Ms. Hebdon answered that the amount did not necessarily
change the number of reports submitted, but it changed the
amount of audit hours tracking the transactional history.
Representative Wilson asked why the amount had been
selected for the lobbyist tiers.
Representative Wilson answered that the lobbying side began
at $250 per client. He believed that the $100 was nominal,
but $250 was not for an organization raising only $1000 was
not. The ranges of client volume reviewed by APOC fit more
effectively to have a tiered structure for lobbyists that
allowed a nominal fee to be identified for clients spending
less money to lobby the legislature.
1:59:07 PM
Co-Chair Seaton asked whether independent expenditure
groups were not covered in the bill because of Citizens
United.
Ms. Hebdon believed they would be covered under the term
"group."
Co-Chair Seaton asked whether the term "non-group entity"
did not apply because every non-group entity would be under
the definition of a "group." definition of a group.
Ms. Hebdon answered that, technically, it would be defined
as a person, which included a group.
Co-Chair Seaton expressed curiosity about fees not being
collected because a credit or debit card could not be used.
Ms. Hebdon answered that the issue had been fixed;
lobbyists could now use a credit card. The issue had been
that the agency had lacked a programmer to process
electronic payments.
Co-Chair Seaton asked for verification that that electronic
payment process included candidate payments.
Ms. Hebdon answered that currently the only people that
paid fees to APOC were lobbyists.
Co-Chair Seaton understood that if the bill passed, anyone
paying fees to APOC could do so with a credit card.
2:03:13 PM
Ms. Hebdon answered in the affirmative.
Representative Kawasaki asked how the fees would be
assessed on individuals that were paid monthly, salary and
hourly.
Ms. Hebdon deferred to the sponsor. Currently everyone paid
the same fee regardless of how they were compensated. He
said that APOC would entertain regualtion in order to
clarify any nuances.
Representative Pruitt asked for the definition of
"representational lobbyist."
2:06:27 PM
Ms. Hebdon replied that representational lobbyists filed
registration but did not submit reports and received no
compensation or fees other than reimbursement for travel
and personal living expenses.
Vice-Chair Gara asked whether a lobbyist on a contract
could avoid the fee.
Ms. Hebdon answered that they would pay a fee regardless of
salary.
Representative Kito understood there was a conceptual and
other amendment. He did not object to either.
2:08:53 PM
Representative Kawasaki MOVED to ADOPT Amendment 1:
Page 3, lines 2-5:
Delete all material and insert:
"(1) $150 for a contract with a value of
less than $10,000;
(2) $350 for a contract with a value of at
least $10,000 but less than $25,000;
(3) $650 for a contract with a value of at
least $25,000 but less than $45,000; and
(4) $850 for a contract with a value of
$45,000 or more."
Representative Wilson OBJECTED for discussion.
Representative Kawasaki explained that the amendment would
keep the original concept of a progressive system being in
place for contracts.
Representative Wilson wondered how the sponsor felt about
the figures in the amendment.
Representative Kito replied that he had not worked on the
numbers in the amendment, but he did not disagree with the
concept. He agreed that there were lobbying clients that
did not spend as much in Juneau and believed that it was
appropriate to be sure that they were not making excessive
payments to come to Juneau.
Representative Wilson WITHDREW her OBJECTION.
There being NO OBJECTION, Amendment 1 was ADOPTED.
Co-Chair Foster MOVED to ADOPT Conceptual Amendment 2 to
alter the bill's effective date from January 1, 2018 to
January 1, 2019.
There being NO OBJECTION, it was so ordered.
2:13:06 PM
Representative Pruitt offered Conceptual Amendment 3. He
explained the requirement that APOC have an office in every
senate district was not currently enforced and was also
unnecessary. He moved that the statutory language requiring
an APOC office in every senate district be removed from
regulations.
Co-Chair Seaton OBJECTED for discussion.
2:14:17 PM
AT EASE
2:14:51 PM
RECONVENED
Representative Pruitt WITHDREW the conceptual amendment.
Vice-Chair Gara reviewed the fiscal note from the
Department of Administration, OMB Component Number 70. The
note reflected operating expenditures of $226.6 through
FY24.
Representative Wilson pointed to Page 2 of the fiscal note
related to the vacancy rate. She understood that although
the agency did not have the authority to use the funds for
personal services, the fiscal note implied that maybe it
could; she expressed confusion about the vacancy as
addressed in the fiscal note.
2:17:18 PM
Ms. Hebdon relayed that the agency would be looking at
adding at least one more position.
Representative Wilson wondered how a change in the vacancy
rate would affect the legislation.
Representative Kito answered that the department was
authorized a certain number of positions not funded to the
full level of positions. He said that if the vacancy rate
were reduced it would create an opportunity for one of the
positions to be filled utilizing the receipts that were
collected.
Representative Wilson felt that vacancy rates were usually
addressed in appropriation bills. She expressed confusion
about the 2 positions reflected in the note.
2:19:16 PM
Representative Kito answered that adding 2 positions would
increase the PCN count, but they would still not have the
funding to fill the position. If the filled positions were
existing PCNs, the vacancy rate would remain the same. He
related that the challenge was that a certain number of
PCNs had been authorized but there was not funding to fund
the PCNs.
Representative Wilson wanted assurances that the bill was
not acting as an appropriation bill.
2:20:42 PM
Co-Chair Seaton explained that if the bill passed there
would be $220,500 appropriated for personal services within
APOC. He asserted that the bill did not circumvent the
appropriation process.
Representative Wilson understood.
2:22:45 PM
ALEXEI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
shared that the fiscal note in itself was not an
appropriation, but typically fiscal notes were incorporated
into the operating budget during conference committee. He
stated that the additional funding included in the fiscal
note would be added into the budget were the bill to pass.
Representative Wilson understood. She maintained concern
that the vacancy rate was being discussed under the bill
rather than in the operating budget process.
Mr. Painter answered that the budgeted vacancy rate would
not necessarily change. However, currently there was
funding for 5 of the 7 positions. The bill would give the
funding for the remaining 2 positions.
2:24:55 PM
Vice-Chair Gara understood that there were vacancy factors,
and then there were vacancies of positions that could be
funded. He did not recognize the discussion of vacancy
factor in the fiscal note that Representative Wilson had
suggested.
Co-Chair Seaton MOVED to REPORT CSHB 91(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
Representative Wilson OBJECTED. She expressed concern with
the tier levels for lobbyists. She WITHDREW her OBJECTION.
CSHB 91(FIN) was REPORTED out of committee with a "do pass"
recommendation and with
2:27:30 PM
AT EASE
2:31:28 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 91 Amendment #1.pdf |
HFIN 2/5/2018 1:30:00 PM |
HB 91 |
| HB 79 DOL 02.05.18.pdf |
HFIN 2/5/2018 1:30:00 PM |
HB 79 |
| HB 79 Legal Opinion.pdf |
HFIN 2/5/2018 1:30:00 PM |
HB 79 |