Legislature(2009 - 2010)CAPITOL 120

03/17/2010 01:00 PM House JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 287 UNIFORM ACT: PROPERTY INTEREST DISCLAIMER TELECONFERENCED
Moved CSHB 287(JUD) Out of Committee
+ HB 409 CAMPAIGN EXPENDITURES TELECONFERENCED
Heard & Held
*+ HB 386 CITATIONS TELECONFERENCED
Moved CSHB 386(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 HB 409 - CAMPAIGN EXPENDITURES                                                                             
                                                                                                                                
1:57:20 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS announced that the  final order of business would be                                                               
HOUSE  BILL  NO.   409,  "An  Act  relating   to  state  election                                                               
campaigns, the  duties of the  Alaska Public  Offices Commission,                                                               
the  reporting and  disclosure  of  expenditures and  independent                                                               
expenditures, the  filing of reports,  and the  identification of                                                               
certain   communications  in   state   election  campaigns;   and                                                               
providing  for an  effective date."   [Before  the committee  was                                                               
CSHB 409(STA).]                                                                                                                 
                                                                                                                                
REPRESENTATIVE LYNN,  speaking as  the chair  of the  House State                                                               
Affairs  Standing Committee,  sponsor of  HB 409,  explained that                                                               
CSHB  409(STA) is  intended  to address  the  U.S. Supreme  Court                                                               
decision on  Citizens United.   The  legislation isn't  about the                                                             
decision   itself,   but   rather  about   letting   constituents                                                               
throughout the state know who  contributes and makes expenditures                                                               
in  corporations and  unions.   He  explained  that the  Citizens                                                             
United decision basically established  corporations and unions as                                                             
persons  and  thus  they  can   contribute  and  make  individual                                                               
expenditures  as  would individual  candidates  so  long as  that                                                               
independent  decision isn't  coordinated with  a candidate  or an                                                               
entity  putting  together  an initiative.    Representative  Lynn                                                               
expressed concern  about foreign  nationals who  are part  of the                                                               
decision-making  process  in  terms of  [the  candidates]  and/or                                                               
initiatives  they will  support or  oppose.   Language in  HB 409                                                               
addresses some  of those concerns.   Representative  Lynn pointed                                                               
out that with elections around the  corner time is of the essence                                                               
with this legislation.                                                                                                          
                                                                                                                                
2:00:22 PM                                                                                                                    
                                                                                                                                
MIKE  SICA,   Staff,  Representative   Bob  Lynn,   Alaska  State                                                               
Legislature,  speaking  as  staff  to  the  House  State  Affairs                                                               
Standing Committee,  sponsor, informed the committee  that Alaska                                                               
is   one  of   twenty-four  states   developing  disclosure   and                                                               
disclaimer laws  regarding independent expenses  by corporations,                                                               
labor  unions,  and  limited  liability  companies  (LLCs).    He                                                               
explained  that  in   many  of  the  sections  of   HB  409,  the                                                               
legislation  specifies a  definition  of  "person" that  includes                                                               
"corporations,   companies,   partnership,  firm,   associations,                                                               
organizations,  business trust  society, natural  person, union".                                                               
He  pointed  out that  Section  4,  the disclosure  section,  and                                                               
Section 11, the  disclaimer section, are the [major  focus] of HB
409.   Mr. Sica  then turned to  the aforementioned  U.S. Supreme                                                               
Court ruling  in which it  specifies that the  federal government                                                               
can  still  prohibit foreign  nationals  from  being involved  in                                                               
federal   and  state   election  campaigns   through  independent                                                               
expenditures.   The  legislation before  the committee  addresses                                                               
that  matter  in HB  409  by  condensing  the federal  law  while                                                               
basically  accomplishing what  the ruling  requires.   He related                                                               
his belief that any federal  preemption problems with the federal                                                               
government are  addressed by placing  in state code  the language                                                               
of the federal law.                                                                                                             
                                                                                                                                
MR.  SICA then  highlighted  various changes  made  in the  prior                                                               
committee.    On  page  5, Section  10  originally  included  the                                                               
ability  to make  anonymous  expenditures  in certain  restricted                                                               
circumstances.   However, the aforementioned was  deleted in CSHB
409(STA).   He pointed out that  the language on page  6, Section                                                               
11(a)(2)(D)  requires that  corporations, unions,  and LLCs  that                                                               
utilize  an  audio  and  video component  of  their  campaign  or                                                               
independent expenditure  advertisement clearly identify  the name                                                               
and city  and state of  residence of the top  three contributors.                                                               
He noted  that requirements surrounding  communications continues                                                               
in Section 12, on page 7, of CSHB 409(STA).                                                                                     
                                                                                                                                
CHAIR   RAMRAS  inquired   as  to   whether  the   term  ["easily                                                               
discernable"] is  in existing law.   He  also inquired as  to its                                                               
definition,   noting  that   the   "paid  for"   portion  of   an                                                               
advertisement can be done very quickly.                                                                                         
                                                                                                                                
MR. SICA stated that the term is being added.                                                                                   
                                                                                                                                
REPRESENTATIVE  LYNN  offered  his understanding  that  the  term                                                               
means  a person  of normal  hearing can  understand what's  being                                                               
said.                                                                                                                           
                                                                                                                                
CHAIR RAMRAS questioned how quickly  someone can speak and remain                                                               
[easily discernable].                                                                                                           
                                                                                                                                
REPRESENTATIVE  GATTO  questioned  whether  [easily  discernable]                                                               
refers to an unaltered voice speed.                                                                                             
                                                                                                                                
2:08:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  concurred  with  Representative  Gatto                                                               
that [the  term should  refer to an  unaltered voice  speed] such                                                               
that  it   should  be  heard  and   understood.    Representative                                                               
Gruenberg  noted that  this term  was  added by  an amendment  he                                                               
proposed.    He  then  pointed  out that  on  page  7,  line  16,                                                               
following "The" the  term "three" should be inserted  as that was                                                               
part  of  the  amendment  adopted  in  the  House  State  Affairs                                                               
Standing Committee.                                                                                                             
                                                                                                                                
MR. SICA  directed the committee's  attention to the  language on                                                               
page 7,  lines 8-9, which  refers to Section 11(a)(2)(D)  on page                                                               
6.  The  language in Section 11(a)(2)(D) on page  6, lines 20-21,                                                               
specify that it's the "three largest contributors".                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG acknowledged that point.                                                                               
                                                                                                                                
CHAIR RAMRAS asked  if in a television commercial,  the top three                                                               
contributors have to be communicated  via audio and video or just                                                               
in print on the screen.                                                                                                         
                                                                                                                                
MR.  SICA   offered  his  understanding  that   in  a  television                                                               
commercial  the   top  three  contributors   would  have   to  be                                                               
communicated  via  audio  and  [print   on  the  screen].    This                                                               
requirement would allow a hearing  impaired individual to see the                                                               
list and a visually impaired individual to hear the list.                                                                       
                                                                                                                                
CHAIR  RAMRAS questioned  why there's  suddenly a  requirement to                                                               
relate  the information  via  audio, when  that  hasn't been  the                                                               
practice in  the past.   He expressed  concern that it's  a "knee                                                               
jerk reaction"  to the U.S. Supreme  Court ruling.  He  said that                                                               
he doesn't like "knee jerk legislation."                                                                                        
                                                                                                                                
MR. SICA  opined that  it is  drawn from  the U.S.  Supreme Court                                                               
decision,  which he  further opined  seems to  provide people  as                                                               
much  information   as  possible  to  make   the  best  decisions                                                               
possible.                                                                                                                       
                                                                                                                                
2:11:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN reminded the  committee that this legislation                                                               
addresses the  elective process, not  selling items.  He  said he                                                               
doesn't believe trying to protect  [and inform] voters is a "knee                                                               
jerk   reaction";  it's   important   to  know   who  is   making                                                               
expenditures for or against a candidate or an issue.                                                                            
                                                                                                                                
CHAIR RAMRAS  pointed out  that candidates  in the  last election                                                               
cycle who had  a television advertisement didn't have  to say who                                                               
paid   for   the   advertisement,    while   those   with   radio                                                               
advertisements  were  required  to  say  who  had  paid  for  the                                                               
advertisement.   He asked if Representative  Lynn believes voters                                                               
haven't been aware who paid for advertisements in the past.                                                                     
                                                                                                                                
REPRESENTATIVE  LYNN  indicated  that   he  was  amenable  to  an                                                               
amendment to change that proposed requirement.                                                                                  
                                                                                                                                
REPRESENTATIVE DAHLSTROM asked if  Representative Lynn would want                                                               
an  individual  running for  office  to  disclose the  top  three                                                               
donors in even a 30 second advertisement.                                                                                       
                                                                                                                                
REPRESENTATIVE  GRUENBERG   said  that   he  brought   forth  the                                                               
amendment that  inserted the provisions  requiring the  top three                                                               
contributors be  listed in  order to aid  two classes  of people:                                                               
the visually  impaired and individuals  who merely listen  to the                                                               
television  without   watching  it.    In   further  response  to                                                               
Representative Dahlstrom,  Representative Gruenberg said  that he                                                               
hadn't thought of addressing it prior.   He noted that the timing                                                               
for  listing  the three  names  has  amounted to  eight  seconds.                                                               
Representative  Gruenberg  then  highlighted that  under  federal                                                               
law,  advertisements  for drugs  must  auditorily  state all  the                                                               
potential  side  effects,  which  takes much  longer  than  eight                                                               
seconds.   The  aforementioned  is required  because people  feel                                                               
it's important,  which he said he  believes is also the  case for                                                               
elections.                                                                                                                      
                                                                                                                                
MR. SICA  interjected that the  language "easily  discernable" is                                                               
already in the code.   He then directed the committee's attention                                                               
to page 8, lines 25-26, which  is from where the language "easily                                                               
discernable" came.                                                                                                              
                                                                                                                                
REPRESENTATIVE  DAHLSTROM expressed  concern with  the lack  of a                                                               
legal  definition for  "easily discernable"  and the  possibility                                                               
that  it  could  lead  to litigation.    Although  Representative                                                               
Dahlstrom related  that she's supportive of  full disclosure, she                                                               
pointed out that Alaska consists  of various levels of education,                                                               
various cultures, and various languages.                                                                                        
                                                                                                                                
2:16:46 PM                                                                                                                    
                                                                                                                                
DON ETHERIDGE, Lobbyist, Alaska  AFL-CIO, related that the Alaska                                                               
AFL-CIO is supportive of full  disclosure.  However, he expressed                                                               
concern   that  a   forthcoming  amendment   is  cumbersome   for                                                               
organizations  to fulfill  the [requirement].    He informed  the                                                               
committee  that some  of the  [AFL-CIO]  organizations have  over                                                               
8,000  members scattered  throughout  the state,  [all of]  which                                                               
would  have  to  be  notified   prior  to  collecting  or  making                                                               
expenditures.  Currently, under law  any of the membership of the                                                               
[AFL-CIO] can  opt out of  any political action  contributions or                                                               
funds from  their union  dues being  spent for  political action,                                                               
which was the result of the Beck decision.                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  asked if  Mr. Etheridge  is referring  to a                                                               
political action committee (PAC).                                                                                               
                                                                                                                                
MR. ETHERIDGE  confirmed that  PACs are  what [the  AFL-CIO] uses                                                               
for political actions.                                                                                                          
                                                                                                                                
REPRESENTATIVE  GATTO pointed  out  that the  U.S. Supreme  Court                                                               
decision  says that  dues,  not just  PAC  contributions, can  be                                                               
contributed.   He further pointed  out that those  who contribute                                                               
to  PACs  know  that  the  funds  are  being  [contributed  to  a                                                               
political  campaign or  issue], while  those who  pay dues  don't                                                               
know  whether  dues funds  are  being  used  to contribute  to  a                                                               
political  campaign  or issue.    Therefore,  it's important,  he                                                               
opined, to notify the dues payor.                                                                                               
                                                                                                                                
MR. ETHERIDGE noted  his agreement that the member  who pays dues                                                               
has a right  to know, but the  language regarding "contributions"                                                               
is of concern because it would apply to PACs.                                                                                   
                                                                                                                                
REPRESENTATIVE   GATTO   opined   that  the   legislation   isn't                                                               
addressing PACs.  However, he  emphasized that currently there is                                                               
no law regarding knowledge of how the dues are spent.                                                                           
                                                                                                                                
MR.  ETHERIDGE stated  that  the Alaska  AFL-CIO  doesn't have  a                                                               
problem with the  legislation, but is concerned  with a potential                                                               
amendment  that would  extend this  disclosure to  any membership                                                               
contributions, dues, or fees and the PACs are contributions.                                                                    
                                                                                                                                
2:22:01 PM                                                                                                                    
                                                                                                                                
ALPHEUS BULLARD,  Attorney, Legislative Legal  Services Division,                                                               
Legislative  Affairs  Agency,  offered to  provide  clarification                                                               
regarding the  disclaimer provisions  of CSHB  409(STA), proposed                                                               
AS 15.13.090(c)-(f).   He explained that the language  on page 7,                                                               
lines  12-13, which  says "be  read in  a manner  that is  easily                                                               
heard", modifies  audio communication.   The language  "placed in                                                               
the communication" refers to print  or video.  The aforementioned                                                               
language  is  utilized on  page  8,  lines  20-21.   Mr.  Bullard                                                               
clarified  that  although  colloquially people  "discern"  things                                                               
with their ears,  "to discern" is a visual  function.  Therefore,                                                               
audio  communications must  be  read in  a  manner that's  easily                                                               
heard.   With  regard to  the discussion  of effect  on candidate                                                               
elections,  he directed  the committee  to page  6, lines  11-12,                                                               
which  specifies that  the disclaimer  applies only  to a  person                                                               
other than a candidate, individual, or political party.                                                                         
                                                                                                                                
2:23:44 PM                                                                                                                    
                                                                                                                                
HOLLY HILL, Executive Director,  Alaska Public Offices Commission                                                               
(APOC), pointed out  that current regulation, 2  AAC 50.306, sets                                                               
out "clearly identified" as follows:                                                                                            
                                                                                                                                
      (2) in all audio, audio-visual, automated telephone,                                                                      
     or electronic communications, the information must be                                                                      
                                                                                                                                
      (A) visual and of sufficient size and duration to be                                                                      
     read by the viewer;                                                                                                        
                                                                                                                                
        (B) spoken and audible at the same volume as the                                                                        
     communication; or                                                                                                          
                                                                                                                                
     (C) both visual and spoken, as set out in (A) and (B)                                                                      
     of this paragraph.                                                                                                         
                                                                                                                                
2:24:46 PM                                                                                                                    
                                                                                                                                
JOHN PTACIN, Assistant Attorney  General, Labor and State Affairs                                                               
Section,  Department of  Law, began  by  reminding the  committee                                                               
that any disclaimer  and disclosure law that  burdens free speech                                                               
is  subject to  strict scrutiny.   He  opined that  proposed laws                                                               
must  be   narrowly  tailored  to  serve   compelling  government                                                               
interest.    Turning  to  CSHB 409(STA),  Mr.  Ptacin  said  that                                                               
Section  4 seeks  more disclosure  from corporations,  companies,                                                               
and  labor   unions.    Section   4  twice  mentions   a  suspect                                                               
classification:     "nationality".    The   legislation  requires                                                               
officers,   directors,   and   contributors   to   report   their                                                               
nationality  on  APOC  forms  within   24  hours  of  making  the                                                               
expenditure.    He pointed  out  that  the Citizens  United  case                                                           
didn't address  whether there's a compelling  government interest                                                               
to keep foreign  influence out of political  speech and candidate                                                               
elections.     Therefore,  he  wasn't  sure   whether  there's  a                                                               
compelling government  interest.   Still, such  classification is                                                               
subject to strict scrutiny because it  may or may not burden free                                                               
speech and it's also a suspect classification.                                                                                  
                                                                                                                                
MR.  PTACIN explained  that under  federal law  foreign nationals                                                               
aren't allowed to participate in  the decision-making process for                                                               
such  an  expenditure.   However,  the  addition of  proposed  AS                                                               
15.13.068 in  CSHB 409(STA)  further disallows  foreign nationals                                                               
to make such an expenditure  in a candidate election.  Therefore,                                                               
the  question  becomes  whether it's  significant  enough  for  a                                                               
corporation  or labor  union to  specify, in  APOC filings,  that                                                               
they  have   foreign  nationals   acting  as  leaders   in  their                                                               
organizations  despite the  fact that  the law  already specifies                                                               
that they  have nothing to do  with the expenditure process.   He                                                               
opined that  the courts would  have to address whether  there's a                                                               
compelling  government  interest  or   real  harm.    Mr.  Ptacin                                                               
informed  the   committee  that   with  regard  to   proposed  AS                                                               
15.13.068, he  didn't see  any conflict  between the  federal and                                                               
the proposed law.  Although there  may be some argument for field                                                               
preemption  because there  is substantial  federal regulation  in                                                               
this area,  he didn't believe  that federal preemption  should be                                                               
an issue for Section 8.                                                                                                         
                                                                                                                                
MR. PTACIN then turned attention  to Section 10 of CSHB 409(STA),                                                               
which requires  that the MacIntyre  v. Ohio  Elections Commission                                                             
decision  be placed  back in  the  legislation.   Under the  U.S.                                                               
Constitution  some  expenditures  should remain  anonymous.    He                                                               
identified  those anonymous  expenditures  as leaf  letting.   He                                                               
moved  on to  Section 12,  which includes  a provision  regarding                                                               
precertification   speech    that   isn't   defamatory.       The                                                               
aforementioned provision may be too  onerous of a burden to place                                                               
on an  officer of  a corporation  or labor  union.   He mentioned                                                               
that Section  12 includes a  requirement that  foreign government                                                               
ownership  be   disclosed  in   advertisements  if   the  foreign                                                               
government  owns 10  percent of  the advertisement.   Again,  the                                                               
court  may be  called upon  to vet  whether there's  a compelling                                                               
government  interest  or  not, particularly  given  that  foreign                                                               
nationals can't be part of the expenditures process.                                                                            
                                                                                                                                
MR.  PTACIN highlighted  that the  legislation proposes  that the                                                               
expenditure be reported  within 24 hours of  an expenditure being                                                               
made, incurred, or authorized.   Given that standard, the 24-hour                                                               
rule  would require  close accounting  from third-party  vendors.                                                               
The reporting  accuracy may or  may not suffer under  the 24-hour                                                               
standard.    He  pointed  out that  the  10-day  standard  allows                                                               
entities  making these  types of  expenditures time  to obtain  a                                                               
fair and accurate  report before filing with  APOC.  Furthermore,                                                               
the 24-hour  filing proposed by  CSHB 409(STA) would result  in a                                                               
lot of single filings that  could've been avoided with the 10-day                                                               
rule that  allows multiple independent expenditures  on one form.                                                               
Mr.  Ptacin  questioned whether  the  24-hour  rule is  the  most                                                               
appropriate  approach  to  obtain  the most  clear  and  accurate                                                               
filings  to the  public.    In closing,  Mr.  Ptacin offered  his                                                               
belief that  wherever [HB  409] can  provide clarity,  the better                                                               
enforceability of these laws will result.                                                                                       
                                                                                                                                
2:31:11 PM                                                                                                                    
                                                                                                                                
BARBARA  HUFF  TUCKNESS,  Director,  Governmental  &  Legislative                                                               
Affairs, Teamsters Local 959, related  support for CSHB 409(STA).                                                               
If requirements  are made  of a  corporation, she  expected those                                                               
same requirements to be placed  on labor organizations.  However,                                                               
labor organizations  are a bit  different in that it  has members                                                               
versus  stockholders.    Ms.  Huff   Tuckness  opined  that  CSHB
409(STA) creates a level playing field for all.                                                                                 
                                                                                                                                
CHAIR RAMRAS, upon determining no one else wished to testify,                                                                   
closed public testimony on HB 409, and relayed that CSHB
409(STA) would be set aside.                                                                                                    

Document Name Date/Time Subjects
01 HB386 Sponsor Statement.pdf HJUD 3/17/2010 1:00:00 PM
HB 386
02 HB386 Bill v. A.pdf HJUD 3/17/2010 1:00:00 PM
HB 386
03 HB386 Overview.pdf HJUD 3/17/2010 1:00:00 PM
HB 386
04 HB386-LAW-CRIM-03-12-10.pdf HJUD 3/17/2010 1:00:00 PM
HB 386
05 HB386 Amendments 2010 03 15.pdf HJUD 3/17/2010 1:00:00 PM
HB 386
01 HB409(STA) Sponsor Statement v. S.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
02 HB409 HSTA CS v. S.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
03 HB409(STA) v. S Sectional Analysis.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
04 HB409 Legal Memo for CS 409(STA).pdf HJUD 3/17/2010 1:00:00 PM
HB 409
05 HB409 AG Legal Analysis.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
06 HB409-1-1-031210-ADM-Y.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
07 HB409 NCSL states respond to Supreme Court ruling.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
08 HB409 news stories and opinions.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
09 HB0409-1-1-031210-ADM-Y.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
10 HB409 AARP ltr of support.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
11 HB409 Explaination of changes.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
12 HB409 HJUD Amendment S.4.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
13 HB409 HJUD Amendment S.5.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
14 HB409 HJUD Amendment S.7.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
15 HB409 HJUD Conceptual Amendment.pdf HJUD 3/17/2010 1:00:00 PM
HB 409
16 HB409 HJUD Amendment S.2.pdf HJUD 3/17/2010 1:00:00 PM
HB 409