04/27/1995 08:42 AM House STA

 HB 241 - NO PERSONAL USE OF CAMPAIGN ACCOUNT                                 
                                                                               
 CHAIR JAMES announced the next meeting would be held at the call of          
 the Chair, if she could arrange a time to get the committee                   
 together.  She stated the next bill on the agenda was HB 241.                 
                                                                               
 Number 656                                                                    
                                                                               
 REPRESENTATIVE CON BUNDE mentioned he had prepared a proposed                 
 committee substitute to address some of the concerns raised by the            
 committee at a previous meeting.  These concerns dealt with                   
 defining what was meant by a charity and personal income.  He                 
 directed their attention to Section F of the committee substitute,            
 which clarified that this bill was intended for state offices only            
 and that charitable organizations were defined by the Internal                
 Revenue Service definition.                                                   
                                                                               
 Number 670                                                                    
                                                                               
 CHAIR JAMES stated that in the past, there were items which could             
 be considered campaign expenses that were really personal in                  
 nature.  Should these be audited by the IRS, they may be required             
 to count those as personal expenses.  She cited examples as car               
 repairs and baby-sitting.  These could be considered personal                 
 income, but they are allowed to fund these out of their campaign              
 accounts by simply reporting it.  She asked if this situation would           
 change under this bill.                                                       
                                                                               
 REPRESENTATIVE BUNDE replied it did not, adding this was between              
 the legislator, their constituents, and the IRS.                              
                                                                               
 CHAIR JAMES asked if this applied to individuals that were no                 
 longer candidates for public office, or if it applied to all                  
 candidates.                                                                   
                                                                               
 REPRESENTATIVE BUNDE answered a candidate could still take money              
 from their campaign account and put it into their personal account,           
 as long as they report it as under existing Alaska Public Offices             
 Commission (APOC) regulations.  Having heard the concerns                     
 expressed, he felt that any payment made from the campaign account,           
 as long as it was reported, would be left to the discretion of the            
 legislator.                                                                   
                                                                               
 Number 693                                                                    
                                                                               
 REPRESENTATIVE GREEN asked if a legislator bought an item, such as            
 a printer and computer to handle constituent mail and which may not           
 depreciate rapidly, it could be argued that at the time of leaving            
 office this item was worth less than $1,000, but at the time of               
 acquisition it was worth more than $1,000.  He asked how this bill            
 would affect this situation.                                                  
                                                                               
 TAPE 95-55, SIDE A                                                            
 Number 000                                                                    
                                                                               
 REPRESENTATIVE BUNDE replied that at the year-end report for the              
 year it was acquired, this would be required to be reported.  When            
 that individual is no longer a candidate, they are no longer                  
 required to make these year-end reports.                                      
                                                                               
 REPRESENTATIVE GREEN asked if this could be a loophole.                       
                                                                               
 REPRESENTATIVE BUNDE said he did not think so, because if that                
 individual disposes of an item, then this is required to be                   
 reported.  He reiterated that this bill was just trying to bring              
 the sunshine in on the process.  He thought the public would be               
 the best judge of how a legislator handles their affairs.                     
                                                                               
 Number 032                                                                    
                                                                               
 REPRESENTATIVE PORTER stated he was reading Section E of the bill.            
 Currently, a legislator has the option of taking their office money           
 as income and pay taxes on it or not.  Should they take campaign              
 money and transfer it to their office account, as he said most                
 legislators have to do to print two constituent newsletters, then             
 they can currently take this as personal income and either pay                
 taxes on it or not.  He asked if this bill would require a                    
 legislator to report on expenses out of that account.                         
                                                                               
 REPRESENTATIVE BUNDE stated that this bill would require that                 
 campaign money that went into the office account would have to be             
 reported with an APOC report as campaign spending.                            
                                                                               
 REPRESENTATIVE PORTER verified that the existing process would                
 remain intact without any additional reports being necessary.  He             
 stated that being honest, he chose this option, because as a former           
 and current public official, whose life has been under public view,           
 he liked to take any option available to make any aspect of his               
 life private.  Thus, he would prefer to keep his own records of his           
 office account.                                                               
                                                                               
 Number 069                                                                    
                                                                               
 CHAIR JAMES said the statement included in AS 15.13.105, dealing              
 with the use of the balance of a state candidates campaign account            
 disposition of assets, indicates that this occurs at some point of            
 finality.  However, it continues to say that a candidate for state            
 office, may not take money from the surplus balance of the                    
 candidates campaign account as personal income.  She could foresee            
 a situation where an individual may have to quit their job to run             
 for public office.  They may need to take money out of their                  
 campaign account for personal use during the campaign.  She asked             
 if this could be done under this bill.                                        
                                                                               
 REPRESENTATIVE BUNDE replied it could be done, as long as it was              
 reported to the APOC.                                                         
                                                                               
 CHAIR JAMES said this statement did not say that.  It stated that             
 a candidate for state office may not take money from the surplus              
 balance of a candidates campaign account, as personal income, and             
 every time an APOC report is made, the balance of your campaign               
 account is considered surplus balance.                                        
                                                                               
 REPRESENTATIVE BUNDE responded that Brooke Miles from the APOC was            
 available to testify and he would defer that question for her to              
 answer.  He reminded the committee that this bill only dealt with             
 candidates who were no longer running for office.  He commented               
 that a candidate still planning to run for office, by definition              
 does not have a surplus of money in their campaign account.                   
                                                                               
 CHAIR JAMES disagreed.  She pointed out that any money left in the            
 account at the time of filing an APOC report is considered surplus            
 funds.                                                                        
                                                                               
 REPRESENTATIVE BUNDE clarified that it was not a surplus for the              
 purposes of campaigning.  Those funds would not be there if they              
 were not intended to be used for a campaign.                                  
                                                                               
 CHAIR JAMES thought this wording needed to be clarified, because              
 the current APOC reports refer to this money as a surplus.                    
                                                                               
 REPRESENTATIVE BUNDE asked to have Brooke Miles comment, because              
 the intent was to have this apply when a person was no longer a               
 candidate.                                                                    
                                                                               
 Number 124                                                                    
                                                                               
 BROOKE MILES, Juneau Branch Administrator, Alaska Public Offices              
 Commission, suggested that the APOC would consider it a surplus               
 balance only when the candidate was closing their campaign account.           
 This could happen when they were closing one account to open                  
 another for a new campaign, or if they were no longer running for             
 public office.  She thought maybe this could be solved by an                  
 amendment to Section A, which says a candidate who is closing a               
 campaign account may not take income from their campaign account              
 as personal income.                                                           
                                                                               
 CHAIR JAMES stated it would be hard to fix this bill to her                   
 satisfaction, as she was opposed to the bill.  Should it pass over            
 her objections, she would at least like it to be as least                     
 objectionable as possible.                                                    
                                                                               
 REPRESENTATIVE GREEN asked if this would supersede those statutes             
 dealing with the filing process on a surplus balance.                         
                                                                               
 MS. MILES responded that this would provide guidelines, but added             
 that the current process was in commission regulations, not                   
 statute.  It is interpreted to mean the surplus monies when a                 
 candidate is closing a campaign account.                                      
                                                                               
 REPRESENTATIVE PORTER asked Ms. Miles if she had heard his example            
 of transferring monies from a campaign account to an office account           
 for purposes of printing a newsletter.  If this bill were law,                
 would this be a violation of APOC code?                                       
                                                                               
 MS. MILES answered it would not be a violation, but the legislator            
 would be required to report how this money was used.                          
                                                                               
 REPRESENTATIVE PORTER stated that was his concern.                            
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 CHAIR JAMES said they would have to adjourn this meeting, because             
 the Speaker was requesting their presence on the House chambers               
 floor.  She adjourned the meeting at 10:28 a.m.  She stated this              
 meeting would be continued at the call of the Chair.