Legislature(2001 - 2002)

05/07/2002 09:51 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     CS FOR SENATE BILL NO. 363(STA)                                                                                            
     "An Act relating to  communications and elections, to reporting                                                            
     of contributions  and expenditures, and to campaign  misconduct                                                            
     in the second degree;  relating to disclosure by individuals of                                                            
     contributions  to candidates;  and providing  for an  effective                                                            
     date."                                                                                                                     
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
SENATOR GENE THERRIAULT  stated that this bill was  generated by the                                                            
Senate State Affairs  Committee and clarifies regulations  involving                                                            
campaign   contributions   to   candidates   and  issue-advertising                                                             
guidelines  for State  elections.  He noted  these  issues are  also                                                            
being  addressed  at  the federal  level.  He  voiced  that  citizen                                                            
concerns  about how  contributions  to candidates  and issues  could                                                            
"influence the outcomes  of campaigns" has resulted in a "compelling                                                            
interest"  to prohibit  certain  types  of issue  advertising  while                                                            
working  within the parameters  of the  United States' constitution                                                             
regarding  freedom of speech.  He mentioned  that State regulations                                                             
recognize  "express  advocacy"   as advertising   that,  instead  of                                                            
educating people  about a general  issue or public policy,  attempts                                                            
to influence  the  outcome  of the  campaign. He  communicated  that                                                            
State  regulations align  with the  US Senate  1977 McCain-Feingold                                                             
Bill, which expanded  the definition of express advocacy  to include                                                            
issue advocacy  commercials broadcast  within "30 days of  a primary                                                            
or 60 days before  a general election, as those broadcasts  could be                                                            
recognized as "trying to impact the outcome of the election."                                                                   
                                                                                                                                
Senator  Therriault  furthered  that  this bill  would  "place  some                                                            
restrictions  on  the source  of funding  that  is coming  into  and                                                            
backing that expression."  He noted that Section 8, subsection 14 on                                                            
page  4, line  18 of  this legislation  further  defines  components                                                            
within a  commercial or  communication that  would be recognized  as                                                            
express advocacy by the State.                                                                                                  
                                                                                                                                
Senator  Therriault  explained  that  Sections  7  and  8  primarily                                                            
address issue  advertising while Sections  1, 2, 3, 4, 5,  6, and 10                                                            
address  modifications  to  the  Alaska  Public  Offices  Commission                                                            
(APOC) report requirements  for campaign donations and expenditures,                                                            
specifically  the requirements  of the "15/5  filing report,"  which                                                            
requires  anyone who  contributes  $500 or  more to  a candidate  to                                                            
notify  APOC  of  the contribution   within  30 days  of  its  being                                                            
contributed.  He  stated that  APOC  has  determined that  the  15/5                                                            
ruling  is "meaningless"   as more  recent  law limits  the  maximum                                                            
amount a person could contribute to a candidate at $500.                                                                        
                                                                                                                                
Co-Chair Kelly  asked the penalty for failing to file  or for filing                                                            
late, under the 15/5 regulation.                                                                                                
                                                                                                                                
JOE BALASH,  Staff to Gene  Therriault, responded  that the  penalty                                                            
for  late filing  is  $50 a  day  once APOC  notification  has  been                                                            
issued.                                                                                                                         
                                                                                                                                
Co-Chair  Kelly  asked  whether  the notification   is sent  to  the                                                            
candidate receiving the contribution or to the contributor.                                                                     
                                                                                                                                
Mr. Balash  surmised  that both  the candidate  and the contributor                                                             
receive notice.                                                                                                                 
                                                                                                                                
TAMMY  KEMPTON,  Regulation  of  Lobbying,   Alaska  Public  Offices                                                            
Commission,  Department of Administration,  concurred that  both the                                                            
candidate and the contributor receive notification.                                                                             
                                                                                                                                
Co-Chair   Kelly  stated   that  the  15/5   filing  "was   somewhat                                                            
problematic  and  a  lot  of  citizens  did  not  understand"  their                                                            
obligation   to  report   contributions.   He   asked  whether   the                                                            
elimination  of the  15/5 penalty  should be  retroactive since  the                                                            
15/5 regulation  is recognized  as not being  a "a good idea  in the                                                            
first place," and some  citizens could be prosecuted or fined "under                                                            
the old law".                                                                                                                   
                                                                                                                                
Ms.  Kempton  stated  she  is "fairly  confident"  that  no  one  is                                                            
currently being  fined or prosecuted  because of a violation  of the                                                            
15/5 regulation.                                                                                                                
                                                                                                                                
Senator   Green  asked  how   the  funding   sources  of   political                                                            
advertising "published"  within 60 days of an election are reported.                                                            
                                                                                                                                
Senator  Therriault  responded  that  current  regulations   require                                                            
"source" reports  to be filed with APOC for advertising  expenditure                                                            
contributions  coordinated  with a  candidate's  campaign, and  that                                                            
independent  expenditure  reports  include  "where the  money  comes                                                            
from" and whether  the funding is  from "out-of-State" sources  or a                                                            
wealthy individual expending thousands of dollars.                                                                              
                                                                                                                                
Senator Green  commented that APOC  reporting restrictions  focus on                                                            
the funding  sources, not necessarily  what the funds are  used for.                                                            
She shared  that candidates are often  "surprised by something  that                                                            
happens out  there that you  know nothing  about either pro  or con,                                                            
where you thinkā€¦  do I have to take the hit for this  contribution."                                                            
                                                                                                                                
Co-Chair Kelly  asked for clarification  as to whether a  person who                                                            
neglects  to  file  the  15/5  report  would be  fined  $500  a  day                                                            
beginning on the thirty-first  day after the contribution is made or                                                            
beginning the day the APOC notification is received.                                                                            
                                                                                                                                
Ms.  Kempton  clarified  that  current  law  specifies  that  anyone                                                            
contributing  $500 to a  campaign must report  that contribution  to                                                            
APOC within  30 days. She continued  that if APOC finds that  a $500                                                            
contribution   has  not  been  reported,   APOC  would  notify   the                                                            
contributor, and  from that date on, the contributor  would be fined                                                            
$50 a day until the filing is completed.                                                                                        
                                                                                                                                
Co-Chair  Kelly stated  that Section  6 in this  bill specifies  the                                                            
non-filing penalty amount to be $500 a day.                                                                                     
                                                                                                                                
Senator Therriault  interjected  that the $500  fine referred  to in                                                            
line 14, Section 6 applies to a candidate or group.                                                                             
                                                                                                                                
Co-Chair  Kelly asked  if  State statute  specifies  when a  penalty                                                            
would begin to accrue.                                                                                                          
                                                                                                                                
Ms. Kempton  stated that  APOC has the authorization  to levy  lower                                                            
fines  than those  specified  in  regulation,  with $500  being  the                                                            
maximum  per day fine.  She reiterated  that a  fine would begin  to                                                            
accrue after APOC notification is given.                                                                                        
                                                                                                                                
Co-Chair Kelly stressed  that statute should clearly define at which                                                            
point  the levying  of fines  would begin  to accrue.  He asked  the                                                            
sponsor if the addition of this language would be problematic.                                                                  
                                                                                                                                
Senator Therriault  asserted the need  to continue allowing  APOC to                                                            
have the flexibility  to adjust the level of fines  according to the                                                            
circumstances.                                                                                                                  
                                                                                                                                
Co-Chair Kelly  assured that APOC's  flexibility in determining  the                                                            
amount of fines  would not be affected  by the addition of  language                                                            
such as "delinquency continues after notification by APOC."                                                                     
                                                                                                                                
Ms. Kempton spoke to the need to clarify current regulations.                                                                   
                                                                                                                                
Senator Therriault  suggested that the Senate Rules  Committee might                                                            
need to  address the addition  of this language;  however,  there is                                                            
sufficient time to do that  before the Legislative session adjourns.                                                            
                                                                                                                                
Co-Chair Kelly  recommended that penalty  clarification be  included                                                            
in this legislation.                                                                                                            
                                                                                                                                
Senator  Leman  asked whether  anyone  has  ever been  convicted  of                                                            
campaign  misconduct in  the second  degree, which  is specified  by                                                            
State statute as a class B misdemeanor.                                                                                         
                                                                                                                                
Ms. Kempton stated she is not aware of any such conviction.                                                                     
                                                                                                                                
Senator Leman  asked the penalty amount levied to  someone convicted                                                            
of this offense.                                                                                                                
                                                                                                                                
Ms. Kempton responded that  a $1,000 fine could be levied along with                                                            
jail sentencing of up to one year.                                                                                              
                                                                                                                                
Senator Leman clarified  this might be the penalty for neglecting to                                                            
include the language "paid for by" in an advertising message.                                                                   
                                                                                                                                
Ms. Kempton concurred.                                                                                                          
                                                                                                                                
Senator Leman  asked if APOC has ever pursued this  course of action                                                            
for this violation.                                                                                                             
                                                                                                                                
Ms. Kempton replied that APOC has not.                                                                                          
                                                                                                                                
Co-Chair  Kelly stated that  although APOC  has recommended  against                                                            
this  course of  action,  there have  been  instances  in which  the                                                            
Department  of Law pursued  people according  to these statutes.  He                                                            
opined  that the  penalty  for not  including  "paid for  by" in  an                                                            
advertising  message  is  "silly."  He  complimented  APOC  for  its                                                            
discretion in invoking  penalties on various APOC violations as some                                                            
of the laws "are absurd."                                                                                                       
                                                                                                                                
CHIP WAGONER  informed the  Committee that  APOC had charged  a pro-                                                            
life organization he represented  of express advocacy violations for                                                            
distributing a  postcard mailing during a local election.  He stated                                                            
that the postcard had "merely  presented information" stating that a                                                            
certain  candidate "had  as his campaign  manager,  the head  of the                                                            
Juneau  Pro-Choice  Coalition."   He  stated  the  message  did  not                                                            
recommend  nor  encourage  people  "to  vote for,  vote  against  or                                                            
support or  oppose" the candidate.   He stated that even  though the                                                            
organization  was not fined; APOC  held them to be in violation.  He                                                            
stated that he  "is not sure this bill is a vast improvement"  as "a                                                            
bright line test" to further define express advocacy.                                                                           
                                                                                                                                
Mr. Wagoner suggested  that Section 8, subsection  16 be expanded to                                                            
include language  regarding "imparting of information,  so that what                                                            
happened to his client does not happen to anyone else."                                                                         
                                                                                                                                
Senator Therriault  stated APOC has  acknowledged that the  proposed                                                            
language  in this  legislation  would  assist in  establishing  some                                                            
definite "bright  lines" in determining whether express  advocacy or                                                            
the influencing  of an election  is occurring.  He stated that  both                                                            
APOC and  the Alaska Court  System support  the establishment  of "a                                                            
definite line."                                                                                                                 
                                                                                                                                
Senator Wilken moved "to  report Senate Bill 363 from Committee with                                                            
individual recommendations and attached fiscal notes."                                                                          
                                                                                                                                
There being no  objections, CS SB 363 (STA) reported  from Committee                                                            
with a new  fiscal note dated  May 6, 2002  in the amount  of $5,000                                                            
from the Department  of Administration,  and a previous zero  fiscal                                                            
note dated April 22, 2002  from the Division of Elections, Office of                                                            
the Lieutenant Governor.                                                                                                        
                                                                                                                                
                                                                                                                                

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