Legislature(1999 - 2000)

05/14/1999 02:48 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         HB 225-CAMPAIGN FINANCE AND LEGISLATIVE ETHICS                                                                         
PETER TORKELSON, legislative aide to Representative John Cowdery,                                                               
prime sponsor of HB 225, made the following comments.  The House                                                                
Judiciary Committee version, CSHB 225(JUD), addresses two issues.                                                               
First, it resolves a technical error made in SB 105 last year.  The                                                             
Legislature foresaw legal challenges to the original ethics law and                                                             
wisely enacted Session Law 1996, Section 12, Chapter 48, to self-                                                               
execute upon such time as the court may strike down portions of the                                                             
original ethics law.  Recently the court did strike down a portion                                                              
of the ethics law.  Chapter 46 is set to become law when the court                                                              
decision becomes final.  Last year the Legislature passed SB 105                                                                
but inadvertently neglected to amend Chapter 46, so when it becomes                                                             
law in the next few weeks, it will repeal the actions made in SB
105.  HB 225 amends Chapter 46 to allow the actions in SB 105 to                                                                
take effect.  Second, HB 225 clarifies and codifies portions of the                                                             
ethics law that currently exist in ethics rulings, for example, use                                                             
of photographs and greeting cards.                                                                                              
Number 394                                                                                                                      
SENATOR DONLEY moved to adopt version M, dated 5/14/99, as the                                                                  
proposed Senate Judiciary Committee substitute.  SENATOR ELLIS                                                                  
objected and noted he would voice his specific objections as                                                                    
version M is discussed.  The motion to adopt version M as the                                                                   
proposed Senate Judiciary Committee substitute carried with                                                                     
Senators Halford, Donley, and Taylor voting "yea," and Senator                                                                  
Ellis voting "nay."                                                                                                             
CHRIS NELSON, legislative aide to Senator Tim Kelly, stated two                                                                 
years ago the Legislature passed a comprehensive ethics act that                                                                
was substantially similar to the initiative passed by the people.                                                               
That law has been challenged in court; parts of it have been                                                                    
upheld, parts of it have not.  The Legislature wants to encourage                                                               
people to run for office and to be involved in political                                                                        
activities, but that process must avoid the appearance of                                                                       
corruption.  The contents of the proposed committee substitute are                                                              
not an attempt to overturn the current law, nor are they a major                                                                
revision of the law; the contents are a series of items that                                                                    
respond to specific problem areas identified after having gone                                                                  
through a complete campaign cycle.  These adjustments can be made                                                               
to improve the law to encourage more individuals to participate in                                                              
the political process and to provide a system that encourages                                                                   
public confidence.                                                                                                              
MR. NELSON gave the following sectional analysis of version M.  New                                                             
language was added to Section 4 that reads, "More than one group                                                                
may be registered by a candidate to support that candidate;                                                                     
however, multiple groups controlled by a single candidate shall be                                                              
treated as a single group for the purposes of the contribution                                                                  
limit in AS 15.13.070(b)(1)."  This language allows an individual                                                               
the freedom to choose how many and which groups become active in                                                                
his or her campaign, but not for the purpose of collecting                                                                      
contributions over the limit amount that was enacted and upheld by                                                              
the court.                                                                                                                      
Section 5 increases the campaign contribution limit of $1000 per                                                                
year to $2000 per year.  One problem that has surfaced is that                                                                  
while limits have been placed on contributions to campaigns,                                                                    
corresponding limits were not placed on campaign costs.                                                                         
Candidates and political activities are affected by the                                                                         
marketplace;  campaign costs are fixed by market factors and cannot                                                             
be limited.  Providing the opportunity to spend more is a response                                                              
to market conditions, particularly when one considers the change to                                                             
Section 5, which allows campaign funds to be used for publicizing                                                               
and reporting the activities of an organized group as defined in                                                                
the statute cited.  Essentially, this provision pertains to groups                                                              
formed within the Legislature, such as the Anchorage Caucus.  Those                                                             
groups do not receive appropriations but travel and hold meetings                                                               
to seek constituent input and to report to constituents.  When the                                                              
Anchorage Caucus last held a public meeting, funds to advertise                                                                 
came from members' campaign funds.                                                                                              
CHAIRMAN TAYLOR questioned whether he could use his campaign funds                                                              
to purchase an airline ticket to attend a function sponsored by a                                                               
political party or a subordinate unit of a political party.  He                                                                 
also questioned how this provision would apply to the Governor's                                                                
use of the State Troopers' aircraft to travel to Kodiak to attend                                                               
a statewide gubernatorial debate and to hold two fundraisers.  He                                                               
asked if the Governor and Lt. Governor will be limited to $2000                                                                 
each, rather than the $80,000 of state funds they spent on their                                                                
MR. NELSON claimed no expertise in that area.                                                                                   
Number 497                                                                                                                      
SENATOR DONLEY thought Chairman Taylor's concern was legitimate but                                                             
not within the scope of HB 225.                                                                                                 
MR. NELSON said legislation that deals specifically with the                                                                    
Governor and Lt. Governor who have access to those resources would                                                              
be unique; candidates for other offices do not have that kind of                                                                
CHAIRMAN TAYLOR stated Section 5 only restricts people who are not                                                              
multimillionaires or incumbent governors.                                                                                       
MR. NELSON maintained Section 5 actually broadens a candidate's                                                                 
ability to use campaign funds.  The statute, however, does not                                                                  
address other modes of transportation.                                                                                          
CHAIRMAN TAYLOR said he does not believe he could accept an                                                                     
invitation to fly in a corporate aircraft to attend a function                                                                  
because the flight would be considered a corporate contribution for                                                             
the value of the transportation.  He asked if HB 225 applies to                                                                 
gubernatorial candidates as well as House and Senate candidates.                                                                
MR. NELSON stated it does apply to gubernatorial candidates but                                                                 
indicated that the example Chairman Taylor cited, of Governor                                                                   
Knowles using state transportation to attend a political function,                                                              
would be covered under other ethics areas.  HB 225 assumes that                                                                 
candidates will be using commercial carriers and paying for their                                                               
travel.  HB 225 enables them to do so in a more realistic way.                                                                  
CHAIRMAN TAYLOR questioned whether any sections of HB 225 address                                                               
the Governor's use of state transportation as he was sure a                                                                     
complete revision of the ethics law would not be drafted that                                                                   
allowed such a gross abuse of state assets to continue.                                                                         
MR. NELSON said perhaps an amendment could be offered that would                                                                
prohibit officeholders from using state funds to travel to                                                                      
political party activities.                                                                                                     
CHAIRMAN TAYLOR said that prohibition is in law but it is not                                                                   
Number 534                                                                                                                      
SENATOR ELLIS asked if the bill would allow members of the                                                                      
Anchorage Caucus to purchase display advertising and promote a                                                                  
meeting in Anchorage with campaign funds.  He questioned why we                                                                 
would want to allow that when government funds are an appropriate                                                               
expenditure for that sort of official government function.  He                                                                  
expressed concern about mixing political and government functions                                                               
too closely.                                                                                                                    
MR. NELSON asked Senator Ellis why he believes using campaign funds                                                             
would be inappropriate.                                                                                                         
SENATOR ELLIS said it might appear that members of the Anchorage                                                                
Caucus were using campaign funds to publicize a meeting for the                                                                 
name identification in the state's largest newspaper and for other                                                              
political benefits that accrue from holding those meetings.  He                                                                 
believes using campaign funds to advertise such meetings mixes                                                                  
partisan campaign considerations with a government function.                                                                    
SENATOR DONLEY maintained that would be similar to the Governor's                                                               
and Lt. Governor's use of state funds to pay for advertisements                                                                 
inviting the public to talk to them during open door sessions,                                                                  
which he did not find particularly offensive.   He noted that                                                                   
legislators do not have that sort of slush fund available, so the                                                               
provision in HB 225 provides groups of legislators with an                                                                      
alternative method of financing meetings.                                                                                       
SENATOR ELLIS argued that legislators are given a $6,000 office                                                                 
account and the Legislature has a multi-million dollar budget, so                                                               
they do have access to funds to use for Anchorage Caucus meetings.                                                              
To pool campaign funds together to pay for advertising for                                                                      
Anchorage Caucus meetings mixes the political and governmental                                                                  
arenas together and could increase cynicism on the part of the                                                                  
SENATOR DONLEY thought the public would appreciate that legislators                                                             
are not using public dollars.                                                                                                   
MR. NELSON continued with the sectional analysis.  Section 6                                                                    
increases the time limit for collecting campaign contributions to                                                               
run for statewide office to accommodate the increasing costs of                                                                 
campaigning in such a large state.  Section 7 adds language that                                                                
allows corporations, companies, partnerships, firms, associations,                                                              
organizations, business trusts or sureties, labor unions, or                                                                    
publicly funded entities to sponsor a political party event within                                                              
Alaska by paying for advertising, food, hall rentals, and other                                                                 
expenses associated with the events.  The costs of political party                                                              
events have traditionally been offset by groups or organizations                                                                
that support the goals of a particular party, but not to influence                                                              
a specific election.                                                                                                            
TAPE 99-34, SIDE B                                                                                                              
MR. NELSON explained the new language in Section 7 does not open                                                                
the door for corporate contributions to specific candidates.  It                                                                
does support healthy and active political parties because they make                                                             
a positive contribution to the political process.  By offsetting                                                                
the costs of party events, more individuals can afford to attend.                                                               
He noted the cost of attending a state convention has increased                                                                 
dramatically as of result of the new ethics law, an unforeseen and                                                              
unintended consequence.                                                                                                         
Number 574                                                                                                                      
CHAIRMAN TAYLOR asked whether he would be violating the law if he                                                               
made the maximum contribution allowable to the Democratic Party and                                                             
then attended a Democratic Party banquet which cost $50 per plate.                                                              
MR. NELSON said his understanding is he would not because Chairman                                                              
Taylor's limit to the party is separate from the contribution to                                                                
the campaign.                                                                                                                   
CHAIRMAN TAYLOR clarified he was referring to attending the party's                                                             
convention.  He explained that every time a women's organization                                                                
held a monthly meeting in which lunch was available as a fundraiser                                                             
for $10, the women had to fill out a contribution form if they had                                                              
contributed the maximum amount.  He noted people who want to be                                                                 
politically active cannot contribute the maximum amount otherwise                                                               
they will be guilty of making additional contributions when buying                                                              
a hot dog at a convention and subject to criminal penalties.                                                                    
MR. NELSON said he believes the criminal penalties were removed.                                                                
CHAIRMAN TAYLOR said the bill contains steep civil penalties.                                                                   
MR. NELSON said, as a practical matter, there are not many                                                                      
individuals in Alaska who contribute the maximum to a political                                                                 
party.  He suggested the parties give maximum donors a free ticket                                                              
to any party function.                                                                                                          
CHAIRMAN TAYLOR expressed concern that these provisions spin out to                                                             
a point where they affect every political activity, such as putting                                                             
a poster in a store window.                                                                                                     
MR. NELSON agreed, and said the store window scenario was a far                                                                 
fetched interpretation that had a chilling effect on free speech                                                                
and free association in political activities.  He said Section 7                                                                
differs, however, in that it is designed to look at party                                                                       
activities and to allow groups who are prohibited from a direct                                                                 
advocacy role in a campaign to support the building of vital,                                                                   
active and productive political parties.  He said his personal                                                                  
opinion is that current law goes way too far in trying to restrict                                                              
free association and free speech, but without trying to change the                                                              
entire thrust of that law, major portions of which have been upheld                                                             
by the court, HB 225 is a vehicle to solve individual problems                                                                  
within the existing law.                                                                                                        
MR. NELSON explained Section 10 increases to $2,000 the amount                                                                  
candidates can use from campaign contributions to pay for various                                                               
kinds of activities.  Section 10 also pertains to meetings or                                                                   
activities of organized groups of legislators as defined by                                                                     
statute, such as the Bush or Anchorage Caucus.  It allows                                                                       
legislators to use campaign funds to defer the costs of                                                                         
participating in those meetings.                                                                                                
MR. NELSON stated a new provision added to Section 11 allows                                                                    
candidates to use unused campaign contributions to pay for thank                                                                
you advertisements.  Section 11 also contains a provision that                                                                  
repeals portions of the restrictions on transferring unused                                                                     
campaign contributions into future election campaigns.                                                                          
CHAIRMAN TAYLOR asked what amount a candidate can transfer.                                                                     
MR. NELSON explained Section 13 establishes future election                                                                     
Number 484                                                                                                                      
SENATOR DONLEY noted Section 13 changes the structure of the                                                                    
current carryovers from the particular seat a person ran for to                                                                 
what seat they plan to run for.  Under existing law, a                                                                          
gubernatorial candidate can carryover $50,000 for any future                                                                    
campaign, while a candidate for a House seat can only carryover                                                                 
$5,000, even though they both may run for the same seat next time.                                                              
He thought those differing limits violate equal protection rights.                                                              
To level the playing field, the new section places a limit on the                                                               
amount of carryover allowed based on the seat the candidate plans                                                               
to run for.                                                                                                                     
MR. NELSON said Section 12 increases the limits on carry-over                                                                   
property, such as computers used during a campaign, based on costs                                                              
and market factors.  Subsection 1 is self-explanatory.  Subsections                                                             
2, 3, and 4, address specific concerns raised and allow a candidate                                                             
to retain campaign photographs, seasonal greeting cards purchased                                                               
with campaign funds, and campaign signs prepared for a prior                                                                    
election that have no monetary value.                                                                                           
MR. NELSON explained Section 13 addresses public office expense                                                                 
SENATOR ELLIS questioned what the term, "public office expense term                                                             
account reserve" refers to on page 10, line 12.                                                                                 
SENATOR DONLEY said that term is in existing law and refers to the                                                              
account from which legislators make deposits to their public office                                                             
expense accounts.                                                                                                               
SENATOR ELLIS asked if this proposal changes the amount.                                                                        
SENATOR DONLEY clarified this proposal parallels existing procedure                                                             
in current law; it increases the amount for Senate district                                                                     
candidates to $10,000, and for House district candidates to $8,000.                                                             
MR. NELSON explained that voluntary accounting and legal services                                                               
were removed from the definition of "contribution" in Section 15.                                                               
Under existing law, services provided by an accountant or another                                                               
person to prepare reports and statements are not considered                                                                     
contributions.  Section 15 (iv) exempts services provided by legal                                                              
professionals to ensure that candidates, parties, and campaigns are                                                             
able to fully comply with the law by availing themselves of the                                                                 
best legal counsel.  A person who voluntarily serves as legal                                                                   
counsel to the Republican Party can only offer services worth                                                                   
$5,000 under existing law.  MR. NELSON maintained that allowing                                                                 
candidates and parties to have continuous legal advice serves a                                                                 
good public purpose.  Subsection (iv) also allows the accountant or                                                             
attorney to volunteer time on his/her own behalf, despite the                                                                   
entity under which that individual conducts business.                                                                           
CHAIRMAN TAYLOR asked if that provision applies to parties only.                                                                
MR. NELSON clarified it applies to a candidate, group, or political                                                             
CHAIRMAN TAYLOR said a law school classmate of his now practices                                                                
for Boeing in Seattle.  He also passed the Alaska Bar Exam.  He                                                                 
asked whether his friend could only contribute $5000 in services                                                                
toward Chairman Taylor's defense under current law if John Lindauer                                                             
filed a lawsuit against him.                                                                                                    
MR. NELSON said serious questions have been raised about how much                                                               
time an individual can volunteer.                                                                                               
CHAIRMAN TAYLOR questioned whether that same logic was applied to                                                               
the last gubernatorial campaign when there was significant                                                                      
involvement by a Chicago attorney who assisted a candidate.  He                                                                 
asked if those legal services were listed as a campaign                                                                         
contribution or a cost.  CHAIRMAN TAYLOR also questioned whether                                                                
the current law is applied to all candidates.                                                                                   
MR. NELSON said the enforcement of statutes is the job of the                                                                   
Attorney General.                                                                                                               
CHAIRMAN TAYLOR said he was asking whether the current law was                                                                  
applied to those circumstances that Mr. Nelson indicated were a                                                                 
problem and are the reason for amending the law.  CHAIRMAN TAYLOR                                                               
stated," Obviously it's not a problem if it's okay to make that                                                                 
kind of a monetary contribution to your own campaign if you're                                                                  
wealthy, to hire whatever attorney you want in-state, out-of-state,                                                             
have two or three of them.  That's not a problem.  It's only a                                                                  
problem if some attorney in-state wants to volunteer his time to                                                                
the Republican Party.                                                                                                           
MR. NELSON said that is why Section 15 is being amended.  He                                                                    
explained the last thing added to Section 15, in response to a                                                                  
question raised, is the removal from the definition of                                                                          
"contributions" of the value to each candidate of mass mailings by                                                              
a political party, describing the party's slate of candidates,                                                                  
which may include photographs and biographies of the party's                                                                    
CHAIRMAN TAYLOR asked if the mailing must include everyone on the                                                               
slate before it so qualifies.                                                                                                   
MR. NELSON thought party rules would determine that.  He noted one                                                              
prominent Alaska political figure refused to sign a letter on a                                                                 
slate because it included a certain candidate.  The decision was                                                                
made to remove the candidate from that particular mailing.                                                                      
SENATOR DONLEY suggested removing the words "each of" on line 11,                                                               
page 12, to address Chairman Taylor's concern.                                                                                  
CHAIRMAN TAYLOR thought the removal of those words would have the                                                               
same effect.  He noted a party might want to target a mailing at a                                                              
particular region and not contain all candidates.                                                                               
SENATOR DONLEY said he thought a basic party function is to let                                                                 
people know who its candidates are.                                                                                             
MR. NELSON stated Section 16 addresses questions raised about what                                                              
an office holder or staff member can do.                                                                                        
SENATOR DONLEY interjected that Section 16 is identical to the bill                                                             
that came from the House and that the committee has had this                                                                    
language before it for about three weeks and has reviewed it.                                                                   
SENATOR DONLEY also noted Section 17 clarifies, at the request of                                                               
APOC, that a particular caucus, such as the Children's Caucus,                                                                  
could not be related to the individual's election campaign.                                                                     
CHAIRMAN TAYLOR asked if an individual could receive a gift from                                                                
the Children's Caucus.                                                                                                          
SENATOR DONLEY said the Children's Caucus could receive a gift to                                                               
cover the cost of meetings and other activities within the State of                                                             
CHAIRMAN TAYLOR asked if that could benefit legislators in some                                                                 
Number 290                                                                                                                      
SENATOR DONLEY said it would help them hold public meetings in                                                                  
locations and it would allow the public to participate in the                                                                   
public policy decision making process.                                                                                          
CHAIRMAN TAYLOR asked if this provision could apply to the NCSL, or                                                             
a situation in which legislators want to get together and a                                                                     
corporate sponsor may want to make gifts so that the event could                                                                
SENATOR DONLEY said an organized group of legislators for caucuses                                                              
is defined in existing statute as, "other than the majority caucus,                                                             
minority caucus,...".                                                                                                           
MR. NELSON concluded by saying the discussions about how                                                                        
legislators stimulate political participation and activities in the                                                             
state are necessary.  The initiative process, existing law, and                                                                 
court decisions have provided the framework for the campaign                                                                    
finance reform laws that people want.  He said he personally  finds                                                             
it troublesome and too restrictive but the framework has been put                                                               
in place.  He thought this legislation is a good package for the                                                                
committee's consideration.                                                                                                      
CHAIRMAN TAYLOR proposed an amendment (Amendment 1) to page 4,                                                                  
lines 21 - 25 to read as follows.                                                                                               
     Page 4, lines 21-25:                                                                                                       
          Delete all material and insert:                                                                                       
               "(e)  A campaign expenditure for goods or services                                                               
          made by the candidate from personal funds or by cash,                                                                 
          personal check, or personal credit card and reimbursed to                                                             
          the candidate by the campaign before the end of the                                                                   
          reporting period for the report due February 15 under AS                                                              
          15.13. 110(a) is not a loan or contribution for purposes                                                              
          of this section and shall be reported to the commission                                                               
          as a campaign expenditure."                                                                                           
CHAIRMAN TAYLOR explained the amendment clarifies what has been a                                                               
confusing section within the law, Section 8, which said that if one                                                             
was to make an expenditure toward his/her own campaign out of                                                                   
personal cash, check, credit card, or personal funds, that amount                                                               
would have to be reimbursed back to the donor within the reporting                                                              
period in which the expenditure was made.  He said a candidate                                                                  
would not be making that kind of expenditure in the last few days                                                               
of a campaign if he/she had the money from another source, so to                                                                
have to pay him/herself back in a few days is silly.  He said this                                                              
will not affect the rules governing personal contributions.                                                                     
CHAIRMAN TAYLOR moved to adopt Amendment 1.  There being no                                                                     
objection, Amendment 1 was adopted.                                                                                             
CHAIRMAN TAYLOR announced that Senator Hoffman proposed an                                                                      
amendment (Amendment 2).  He explained that Senator Hoffman employs                                                             
a Representative's son during the legislative session.  Because of                                                              
the existing nepotism law, he cannot hire this same employee during                                                             
the interim.  Amendment 2 amends the nepotism provision so that a                                                               
relative of a member from the other house could be employed during                                                              
the interim.                                                                                                                    
Amendment 2 reads as follows.                                                                                                   
Page 5, following line 20:                                                                                                      
     Insert a new bill section to read:                                                                                         
     "*Sec. 4. AS 24.60.090 is repealed and reenacted to read:                                                                  
          Sec. 24.60.090.  Nepotism.  (a)  An individual who is                                                                 
     related to a member of the legislature may not be employed for                                                             
          (1) during the legislative session of the house in which                                                              
     the legislator is a member;                                                                                                
          (2) by an agency of the legislature established under AS                                                              
     24.20; or                                                                                                                  
          (3) in either house during the interim between sessions.                                                              
     (b) An individual who is related to a member of the                                                                        
legislature may not be employed by the committee, whether for                                                                   
compensation or not.                                                                                                            
     (c)  An individual who is related to a legislative employee                                                                
may not be employed in a position over which the employee has                                                                   
supervisory authority.                                                                                                          
     (d)  Notwithstanding (a)(3) of this section, an individual who                                                             
is related to a member of the legislature may be employed in the                                                                
other house of the legislature during the interim between sessions                                                              
if, while the individual was disqualified from employment in either                                                             
house of the legislature during the interim under this section, the                                                             
individual worked for at least 100 days in each of four regular                                                                 
legislative sessions.                                                                                                           
     (e) In this section,                                                                                                       
          (1) "an individual who is related to" means a member of                                                               
the legislator's or legislative employee's immediate family or a                                                                
person who is a legislator's or legislative employee's spousal                                                                  
equivalent living together in a conjugal relationship not a legal                                                               
marriage with the legislator or legislative employee; and                                                                       
          (2) "interim between sessions" means the period beginning                                                             
on the eighth day after the legislature adjourns from a regular or                                                              
special session and ending eight days before the date that the                                                                  
legislature next convenes in regular session under AS 24.05.090 or                                                              
in special session under AS 24.05.100;                                                                                          
          (3) "other house of the legislature" means the house in                                                               
which the individual's relation is not a member.                                                                                
Renumber the following bill sections accordingly.                                                                               
Page 5, line 21:                                                                                                                
     Delete "sec. 5"                                                                                                            
     Insert "sec.6"                                                                                                             
SENATOR DONLEY questioned the logic of the existing restriction.                                                                
SENATOR HALFORD explained the reason for the limit is that family                                                               
members of legislators are often stuck in Juneau so they were                                                                   
allowed to work for the other body while in session, despite the                                                                
general prohibition against hiring relatives.                                                                                   
CHAIRMAN TAYLOR moved the adoption of Amendment 2.  There being no                                                              
objection, the motion carried.                                                                                                  
CHAIRMAN TAYLOR offered Amendment 3 (M.1) which reads as follows.                                                               
Page 5, line 12, following "may":                                                                                               
               "(1) donate money, goods, or services to a political                                                             
     party for the purpose of party administration, overhead,                                                                   
     party-building, and other uses that are not for the purpose of                                                             
     influencing the nomination or election of a candidate and,                                                                 
     under AS 15.13.010(b), that are not for the purpose of                                                                     
     influencing a ballot proposition or question; and                                                                          
Page 5, line 14:                                                                                                                
          Delete "(1)"                                                                                                          
          Insert "(A)"                                                                                                          
Page 5, line 17:                                                                                                                
          Delete "(2)"                                                                                                          
          Insert "(B) [(2)]"                                                                                                    
Page 5, line 20:                                                                                                                
          Delete "(3)"                                                                                                          
          Insert "(C) [(3)]"                                                                                                    
Page 5, line 22:                                                                                                                
          Delete "(4)"                                                                                                          
          Insert "(D)"                                                                                                          
Number 172                                                                                                                      
SENATOR ELLIS objected because he believes Amendment 3 conflicts                                                                
with the spirit of the citizens' initiative.  Allowing donations to                                                             
political parties for overhead will free up money parties can then                                                              
use for candidate contributions.                                                                                                
SENATOR DONLEY stated different versions of HB 225 have been before                                                             
the committee for three weeks, and those versions have been                                                                     
consistent with the law that passed.  Amendment 3 is a major                                                                    
expansion of what can be directly donated to political parties, and                                                             
he is reluctant to make that change.                                                                                            
SENATOR HALFORD noted if the committee is looking at getting this                                                               
bill passed at this late date, it is less likely to happen with                                                                 
controversial provisions.                                                                                                       
A roll call vote was taken.  The motion to adopt Amendment 3 failed                                                             
with Senators Halford and Taylor voting "yea," and Senators Donley                                                              
and Ellis voting "nay."                                                                                                         
CHAIRMAN TAYLOR offered Amendment 4 which reads as follows.                                                                     
Page 11, line 26, following "behalf of a":                                                                                      
     Insert "political party."                                                                                                  
Number 117                                                                                                                      
CHIP WAGONER, Republican National Committee Chairman, stated he is                                                              
the promoter of the packet of amendments before the committee.  He                                                              
noted the adoption of the amendments would make APOC's and the                                                                  
parties' lives a lot simpler.  He explained that parties right now,                                                             
under the campaign finance law, are defined as groups, but they are                                                             
also separately defined as political parties.  The Republican Party                                                             
does not have a problem with what the voters did in terms of                                                                    
wanting to regulate attempts to influence an election.  What the                                                                
sponsors of the initiative did not understand is that, unlike a                                                                 
group, whose sole purpose may be to influence an election by                                                                    
defeating a candidate or a bond issue, parties have other purposes.                                                             
The purpose of the series of amendments is to maintain the existing                                                             
prohibitions and limitations on parties with regard to their                                                                    
attempts to influence anything, but to give the parties a little                                                                
bit of leeway in terms of those things that have nothing to do with                                                             
trying to influence an election, i.e. a state convention.                                                                       
CHAIRMAN TAYLOR noted he thought Amendment 4 was taken care of in                                                               
the committee substitute in the provision that deals with volunteer                                                             
attorneys and others.                                                                                                           
MR. WAGONER suggested inserting the words "political party" on                                                                  
lines 1 and 2 in that section of the bill because although APOC                                                                 
includes political parties in that provision, it would prefer to                                                                
have it specifically spelled out in statute.                                                                                    
SENATOR DONLEY asked for an opinion on Amendment 4 from an APOC                                                                 
BROOKE MILES, APOC, stated APOC has no problem with including the                                                               
term "political party" on line 26.                                                                                              
CHAIRMAN TAYLOR clarified the second part of Amendment 4 is                                                                     
included in the proposed committee substitute, therefore Amendment                                                              
4 would only add the term "political party" to page 11, line 26.                                                                
There being no objection, Amendment 4 was adopted.                                                                              
MR. WAGONER informed committee members he was working off of a                                                                  
different version of the proposed committee substitute.  He noted                                                               
Amendment 5 is similar to Amendment 3 which  previously failed.  He                                                             
explained the purpose of the amendment is to allow an individual to                                                             
donate money, goods or services to a political party for the                                                                    
purpose of party administration overhead, party building, and other                                                             
uses not associated with the nomination or election of a candidate.                                                             
Amendment 5 would directly take care of the problem raised by                                                                   
Chairman Taylor earlier in which a person who made the maximum                                                                  
contribution to a political party could not pay to attend a                                                                     
convention.  Mr. Wagoner said he does not believe APOC is opposed                                                               
to Amendment 5.                                                                                                                 
TAPE 99-35, SIDE A                                                                                                              
BROOKE MILES said that APOC has been sensitive to its interaction                                                               
with the political parties since the campaign finance reform law                                                                
was enacted.  For example, when issues with the most recent                                                                     
Republican Party convention arose in which it could not use its                                                                 
customary business support for that function, APOC wished that the                                                              
law could be interpreted to allow that.  Amendment 5 would set up                                                               
a different system for the parties; they would have both an                                                                     
administrative and political branch.  In essence, that system would                                                             
free up a lot of money that could be used for candidate campaigns.                                                              
The Republican National Party uses this system and has segregated                                                               
CHAIRMAN TAYLOR verified the Republican National Party keeps two                                                                
sets of books; one for the administrative arm, and one for the                                                                  
political arm.                                                                                                                  
SENATOR ELLIS maintained that would not be a good model for Alaska                                                              
given the large number of problems that have occurred on the                                                                    
national level.                                                                                                                 
MR. WAGONER thought it would make the parties' efforts to comply                                                                
with the campaign finance laws much easier and it would make the                                                                
efforts of APOC staff to enforce those laws much easier as well.                                                                
SENATOR ELLIS noted his objection to adopting Amendment 5 was based                                                             
on the same reason he opposed Amendment 3.                                                                                      
The motion to adopt Amendment 5 failed with Senators Donley,                                                                    
Halford, and Ellis voting "nay," and Chairman Taylor voting "yea."                                                              
Number 060                                                                                                                      
MR. WAGONER explained Amendment 6 eliminates part of the definition                                                             
of the word "expenditure" that relates to anything of value                                                                     
incurred or made for the purpose of use by a political party.   The                                                             
existing law makes every single dime spent by a political party                                                                 
subject to APOC regulations.  If a party spends money trying to                                                                 
influence an election, or the outcome of a ballot proposition, that                                                             
should be regulated and the public should know about it.  However,                                                              
if a party pays a bookkeeper to pay electric bills, that                                                                        
expenditure should not have to be reported to APOC.  Amendment 6                                                                
eliminates such expenditures from the definition.                                                                               
Amendment 6 reads as follows.                                                                                                   
Page 12, following line 11:                                                                                                     
          Insert a new bill section to read:                                                                                    
     "Sec.16 AS 15.13.400(4) is amended to read:                                                                                
          (4) "expenditure"                                                                                                     
               (A) means a purchase or a transfer of money or                                                                   
     anything of value, or promise or agreement to purchase or                                                                  
     transfer money or anything of value, incurred or made for the                                                              
     purpose of                                                                                                                 
                    (i) influencing the nomination or election of                                                               
          a candidate or of any individual who files for nomination                                                             
          at a later date and becomes a candidate;                                                                              
                    (ii) [USE BY A POLITICAL PARTY;                                                                             
                    (iii)] the payment by a person other than a                                                                 
          candidate or political party of compensation for the                                                                  
          personal services of another person that are rendered to                                                              
          a candidate or political party; or                                                                                    
                    (iii) [(iv)] influencing the outcome of a                                                                   
          ballot proposition or question;                                                                                       
               (B) does not include a candidate's filing fee or the                                                             
          cost of preparing reports and statements required by this                                                             
Renumber the following bill sections accordingly.                                                                               
Page 15, line 29:                                                                                                               
          Delete "sec. 21"                                                                                                      
          Insert "sec. 22"                                                                                                      
Page 15, line 31:                                                                                                               
          Delete "sec. 20"                                                                                                      
          Insert "sec. 21"                                                                                                      
CHAIRMAN TAYLOR moved the adoption of Amendment 6.  SENATOR ELLIS                                                               
objected and stated he is aware that it is difficult for all                                                                    
political parties to adjust to the realities of the new law,                                                                    
however, he sees no reason to limit the amount of public                                                                        
information available because all expenditures are interconnected.                                                              
The motion to adopt Amendment 6 failed with Senators Halford and                                                                
Taylor voting "yea," and Senators Donley and Ellis voting "nay."                                                                
Number 100                                                                                                                      
CHAIRMAN TAYLOR offered Amendment 7 which reads as follows.                                                                     
Page 12, following line 10:                                                                                                     
          Insert a new bill section to read:                                                                                    
     "*Sec.16 AS 15.13.400 is amended by adding a new paragraph to                                                              
               (12) "influence" or "influencing" means the use of                                                               
     explicit words of advocacy for                                                                                             
                    (A) the nomination, election, or defeat of a                                                                
          clearly identified candidate; or                                                                                      
                    (B) the adoption or defeat of a clearly                                                                     
          identified ballot proposition or question."                                                                           
Renumber the following bill sections accordingly.                                                                               
Page 15, line 29:                                                                                                               
          Delete "sec.21"                                                                                                       
          Insert "sec. 22"                                                                                                      
Page 15, line 31:                                                                                                               
          Delete "sec. 20"                                                                                                      
          Insert "sec. 21"                                                                                                      
MR. WAGONER explained the key word of the entire campaign finance                                                               
law is the word "influence."  That word is not currently defined in                                                             
Alaska Statute, it is however defined in U.S. Supreme Court case                                                                
law, i.e., Buckley v. Vallejo.  The definition in Amendment 7 meets                                                             
the express advocacy test in Buckley v. Vallejo and provides more                                                               
of a bright line test between issue advocacy versus trying to                                                                   
influence or defeat a candidate.                                                                                                
MS. MILES agreed with Mr. Wagoner in that this definition is the                                                                
term of art in the United States Supreme Court Case, Buckley v.                                                                 
Vallejo.  When APOC deliberates a case involving activities                                                                     
conducted to influence, it uses the definition provided in that                                                                 
SENATOR ELLIS objected to the adoption of Amendment 7 and stated it                                                             
appears the amendment is intended to open a door that would allow                                                               
a party to spend money in an election to endorse a candidate                                                                    
without using words of advocacy.                                                                                                
MS. MILES noted if political parties are required to continue                                                                   
disclosing expenditures to APOC, it does not make much sense to                                                                 
open this area.                                                                                                                 
The motion to adopt Amendment 7 failed with Senators Donley, Ellis,                                                             
and Halford voting "nay," and Chairman Taylor voting "yea."                                                                     
Number 188                                                                                                                      
CHAIRMAN TAYLOR moved to delete the words "of each" from page 12,                                                               
line 11 (Amendment 8), which relates to mass mailings by political                                                              
parties and would not require all party candidates to be included.                                                              
SENATOR ELLIS asked if one candidate is omitted from the slate,                                                                 
would the fact that the others are included be considered a party                                                               
CHAIRMAN TAYLOR clarified his intent is to prevent political                                                                    
parties from having to include all candidates in mass mailings                                                                  
targeted at specific zip codes.                                                                                                 
SENATOR ELLIS said he understands Chairman Taylor's point and does                                                              
not object to it, however he does not understand why the valuable                                                               
exposure provided to certain candidates is not counted against the                                                              
party contribution limit.                                                                                                       
SENATOR DONLEY pointed out political parties should be able to tell                                                             
people who their candidates are.                                                                                                
SENATOR ELLIS agreed but thought that service should count as a                                                                 
SENATOR DONLEY indicated it might be very difficult to proportion                                                               
out the percentage of each candidate's benefit from each mailing                                                                
when the pamphlet may contain a combination of candidates from                                                                  
different districts.  He maintained it is unnecessary and that by                                                               
putting a financial limit on it, mass mailings will become complex                                                              
and difficult to administer.                                                                                                    
CHAIRMAN TAYLOR added it would come down to measuring the size of                                                               
the print on the page, the value of the placement on the page, the                                                              
number of people on each page, etcetera.                                                                                        
MR. NELSON informed committee members he has worked on several                                                                  
campaigns, and this issue is a can of worms.  The typical slate                                                                 
contains both state and federal candidates, in which case the                                                                   
federal law applies.  Three years ago, he divided the slate mailer                                                              
with all state candidates on it three mailers, because of the                                                                   
number of pictures that fit on a page.  He agreed with Senator                                                                  
Donley that this activity should be considered a basic party                                                                    
function, and that constraining that activity will have a chilling                                                              
effect on party activities.  He did not believe the constraint                                                                  
would serve any good public purpose.                                                                                            
The motion to adopt Amendment 8 carried with Senators Halford,                                                                  
Donley and Taylor voting "yea," and Senator Ellis voting "nay."                                                                 
CHAIRMAN TAYLOR offered Amendment 9 as a conceptual amendment.                                                                  
Amendment 9 would add language to Amendment 2, which was adopted,                                                               
to read:                                                                                                                        
On page 1, line 10, insert                                                                                                      
     (4)  as a registered lobbyist or by a registered lobbyist.                                                                 
SENATOR DONLEY cautioned that language is outside of the title of                                                               
the bill because nepotism falls under legislative ethics and                                                                    
lobbying is a separate issue.                                                                                                   
CHAIRMAN TAYLOR thought it would fall under the legislative ethics                                                              
portion of the title because the legislator would need to resign if                                                             
related to, or married to, a lobbyist.                                                                                          
SENATOR ELLIS said Chairman Taylor might want to make sure his                                                                  
conceptual amendment covers subcontracts and other financial                                                                    
arrangements that differ from direct employment.                                                                                
SUSIE BARNETT, Select Committee on Legislative Ethics, noted                                                                    
Section 24.60.070 relates to close economic associations and would                                                              
also need to be amended.  She recounted that last year when the                                                                 
bill was amended, legislators decided not to ban lobbyists, but                                                                 
required disclosure under close economic association.                                                                           
CHAIRMAN TAYLOR said he would include in Amendment 9 modification                                                               
of the disclosure and close economic association requirements to                                                                
make those sections consistent with the intent.                                                                                 
SENATOR DONLEY objected to the adoption of Amendment 9.  The motion                                                             
to adopt Amendment 9 carried with Senators Ellis, Halford, and                                                                  
Taylor voting "yea," and Senator Donley voting "nay."                                                                           
CHAIRMAN TAYLOR stated he would have a new committee substitute                                                                 
that incorporates today's amendments prepared for the meeting                                                                   
tomorrow.  There being no further business to come before the                                                                   
committee, CHAIRMAN TAYLOR adjourned the meeting at 4:45 p.m.                                                                   

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