Legislature(2003 - 2004)
04/15/2003 09:05 AM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 119-APOC/ CAMPAIGNS/ LOBBYING/ DISCLOSURE
CHAIR GARY STEVENS asked for a motion to adopt the committee
substitute (CS).
SENATOR JOHN COWDERY made a motion to adopt CSSB 119 bil2.doc
dated 4/15/03 for discussion purposes. There was no objection.
CHAIR GARY STEVENS explained this is a Governor's bill, which
would eliminate the Alaska Public Office Commission. The CS
would not eliminate the commission, but it would make
substantial changes.
SENATOR COWDERY asked for the differences between this work
draft and the one dated 4/14/03.
KEVIN JARDELL, Assistant Commissioner with the Department of
Administration, explained there were no substantive changes
between the two. The changes were technical clean up.
The original intent of the legislation was to address candidate
frustrations with APOC and the current financial laws. Many of
the frustrations came from not having a mechanism to allow for
an expedited process to stop ongoing violations prior to an
election. After the legislation was introduced, APOC stepped
forward with ideas to fix the problem areas they had identified.
The changes are significant and deserve attention.
BROOKE MILES, APOC Executive Director, briefed the committee on
the bill.
· Raises annual campaign contribution limits for individuals
to contribute to candidates or groups - political action
committees (PACs) from $500 per year to $1,000 per year
· For individuals to contribute to political parties from
$5,000 per year to $10,000 per year
· For groups (PACs) to contribute to candidates from $1,000
under current law to $5,000 per year
· For groups (PACs) to contribute to political parties from
$1,000 to $10,000
Non-group entities or non-profit organizations that participate
differently than PACs:
· Non-group entity to a candidate is raised from $500 to
$1,000
SENATOR COWDERY asked whether a candidate could give surplus
campaign funds to a non-profit and, assuming that was
acceptable, how the non-profit could use those funds.
MS. MILES told him a candidate could give surplus fund to a non-
profit and that wouldn't change under SB 119. She continued to
explain non-profit corporations that form non-group entities
must comply with campaign disclosure laws. They could accept
contributions from individuals of up to $1,000. Ninety percent
of those individuals would have to be Alaska residents and they
would have to report just as a group or candidate reports.
SENATOR COWDERY asked if a candidate could give money to a non-
profit then get it back in the next campaign.
MS. MILES thought that was acceptable but the candidate could
get just $1,000 back.
CHAIR GARY STEVENS asked if a candidate's church would be
required to report a $500 contribution.
MS. MILES replied churches don't have to report to APOC. Many
charitable organizations don't have non-group entities. There is
a requirement in law that a non-group entity register as the
entity that would participate in political activities and file
campaign disclosure reports. For instance, Boy Scouts, Big
Brothers Big Sisters don't have non-group entities.
MS. MILES explained:
· SB 119 removes municipal elections and candidates from the
state campaign disclosure law. The commission feels that
should be carefully considered and perhaps conceptually
plan for a way that municipalities could opt into the law
and pay a user fee to the state for doing that. The current
campaign disclosure law was enacted in the early 1970s and
municipalities have been part of it. That isn't an area
that the commission is very effective given there are 31
communities that are subject to the law and the commission
has limited resources.
CHAIR GARY STEVENS remarked school boards, city councils and
borough assemblies must have accounted for enormous quantities
of paperwork.
MS. MILES replied the financial disclosure statements and some
campaign disclosure reports are opted out in SB 119. Under
current law a candidate can file a form stating he or she will
not spend more than $2,500 on their campaign and in many
communities all school board and some assembly members file
under that exemption but they still needed to file a financial
disclosure statement. In the years the commission staff is very
busy with state elections, it's quite an effort for the
commission to get materials out for the October municipal
elections.
CHAIR GARY STEVENS said that's all been eliminated in this bill
but there may be some option to buy into the system if so
desired.
MS. MILES replied that was correct, availability was the
commission's concern.
SENATOR COWDERY asked if school districts have ever contributed
to APOC.
MS. MILES replied they haven't in the 20 years she has worked
with the commission.
SENATOR COWDERY asked how they'd determine a value they wanted
to opt in at now.
MS. MILES said they haven't had time to consider that yet, but
it would probably need to be based on the number of candidates
and the number of reports they would be required to file so the
cost would be fair to each community.
SENATOR COWDERY asked for verification that they could do their
own.
MS. MILES said they could. Other states frequently have separate
municipal coverage for each community so they could determine
their own campaign disclosure limits. The commission has set
limits that are practical to state campaigns, but a municipality
might elect to have a lower limit.
SIDE B
10:00 am
SENATOR COWDERY asked how the new limits compare with other
states.
MS. MILES replied it's in the middle.
CHAIR GARY STEVENS asked about municipalities that opt in and
remarked they don't appear to get much service. He then asked
whether the commission analyzed the financial disclosures from
city councils and borough assemblies or did anything that might
be seen as a benefit to the municipalities.
MS. MILES said the commission has a manager of the financial
disclosure law and she reviews each state filing from judges,
directors, commissioners, or legislators, but she only does
municipal filings every other year.
CHAIR GARY STEVENS opined it's good for the state to get out of
that business. It's not a state responsibility and eliminating
municipalities is wise.
MS. MILES continued:
· SB 119 removes the requirement to file the ten day after
campaign disclosure report. This report is required after
the election when interest is no longer high, but it
doesn't include the total cost of the election. In
addition, this legislation requires the year-end report to
be filed on February 15. It must contain all the costs of
the election and all disbursements must be made by February
1.
· Added is a requirement to file a report 90 days after a
special election. This was a technical requirement that was
needed when the reporting period for state candidates in a
regular election was moved to February 1.
SENATOR COWDERY asked what circumstances might require a special
election.
MS. MILES replied they aren't very common but the bill drafters
wanted to make sure that whatever activity was in a state
special election was captured in the campaign disclosure law.
· The bill would require candidates and groups to report the
names and addresses of all contributors, regardless of the
amount. For contributors giving more than $250 the
candidate and group would also be required to report their
occupation and employer. Currently individuals giving less
than $100 are given a head count while those giving more
must give name, address, occupation and employer. The
changes look forward to the day when there is electronic
filing. Because a candidate is required to keep that
information, as are groups, it was considered expeditious
to have it all reported. The detailed reporting doesn't
come until after $250.
CHAIR GARY STEVENS asked what the rationale was for reporting
every contribution including names, even those under $100.
MS. MILES said it's simply because candidates are required to
keep those records and, once electronic filing is standard, that
information would need to be entered.
SENATOR COWDERY asked about cases in which a candidate receives
a contribution and doesn't know any of the required information
about the contributor.
MS. MILES explained the commission has a regulation and policy
regarding good faith effort to determine occupation and
employer.
She continued:
· Although the detailed reporting threshold has been
increased to $250 and they ask for the name and address of
everyone, the commission has moved exempt fundraisers into
statute.
· The limit that people could give to candidates was
increased from $250 to $500. The commission looks upon that
as an inflationary increase. This applies to leaflets or
yard signs that an individual pays for.
· For campaign disclosure, financial disclosure and for
lobbying the bill prepares the ground for mandatory
electronic filing. Exemptions would be available as
appropriate. The commission would provide support for those
not in the computer age, but that would likely be an
exemption.
CHAIR GARY STEVENS observed electronic filing would be a
substantial cost savings in terms of doing business.
MS. MILES agreed and added it would allow a reallocation of
staff resources to provide increased training and support.
She continued:
· The bill would remove the prohibition on lobbyists making a
lawful campaign contribution to candidates living outside
the lobbyist's district. The restrictions under the
lobbying law that prohibit lobbyists from being treasurers,
deputy treasurers, campaign managers and delivering
contributions would remain. The lobbyist would be required
to report the contributions made to candidates.
CHAIR GARY STEVENS asked for the definition of lobbyist.
MS. MILES defined a lobbyist as a person who is paid to directly
communicate with public officials in an effort to influence
official action. If the person is an occasional lobbyist, a
regular employee of a company, they would be subject to the law
once they spend 16 hours in a thirty day period communicating
directly with public officials in efforts to influence official
action.
SENATOR COWDERY asked about school children visiting
legislators.
MS. MILES replied they aren't paid. If the group had reimbursed
expenses and spent more than 16 hours in a 30 day period they'd
be required to file as a representational lobbyist. They
wouldn't be required to pay the fee and wouldn't be subject to
the fund raising restrictions. The company would simply file the
report disclosing the expenses.
CHAIR GARY STEVENS stated, a locally elected official may spend
more than 16 hours, but they aren't paid so they would be
exempted under this proposal.
MS. MILES replied current law exempts all elected and appointed
state and municipal officials from these provisions.
SENATOR COWDERY asked if a dinner engagement would figure in the
total.
MS. MILES replied it would for the salaried person, but not for
children visiting their legislator.
SENATOR COWDERY asked if that was 16 hours in a 30 day period.
MS. MILES said it was and that is four times greater than the
existing regulation and it is put into statute.
SENATOR COWDERY asked about the person that lobbies 20 hours in
one month then never returns to lobby again.
MS. MILES explained that for purposes of being a fundraiser,
that person would be considered to be a lobbyist for one year
from the date of the last registration. As far as being subject
to the lobbying law filing reports, after they've filed the last
report of compensation paid to them for lobbying, they could
terminate and that would end their report filing obligation.
She continued:
· The bill repeals the legislative session bans on soliciting
or accepting campaign contributions for legislative and
gubernatorial candidates.
· She added, campaign disclosure law doesn't prohibit
accepting a contribution during the session; it's the
legislative ethics law. The Alaska State Supreme Court
said this was not constitutional and specifically
struck it from one side of the campaign disclosure
law, but inadvertently left it on another side making
this a housekeeping measure.
SENATOR COWDERY asked if that meant he could have a fundraiser
during session.
MS. MILES advised he could under campaign disclosure law, but he
would be in violation under legislative ethics law.
SENATOR COWDERY asked why the ethics law was in conflict in
light of the supreme court ruling.
MR. JARDELL understood the supreme court was recognizing the
inherent authority of the body to police itself. If the body
imposes the requirement, it is different than the statute.
MS. MILES continued:
· The CS would repeal the requirement that a candidate notify
APOC within five days when he or she makes a contribution
to their own campaign with the hope that will be repaid
once there are surplus funds. On the next campaign
disclosure report the candidate would indicate whether or
not they would like to recoup the contribution if surplus
funds were available. The recoup limit remains the same.
· This allows complaint violations to be expedited by the
commission in appropriate circumstances.
· APOC would have to hold a hearing within 48 hours.
· It would give APOC a cease and desist authority for
advertisements.
· The CS moves the complaint process into statute and
requires a 15 day response and 90 days is the maximum
from complaint to adjudication under any circumstance.
· This shortens the time period for bringing the statute of
limitations on bringing an administrative complaint from
four years to one year.
· It amends the definition of political party to be the same
as the definition used by the Division of Elections.
· On the financial disclosure statement for legislators, the
source of income threshold would be raised to $10,000 from
$1,000.
SENATOR COWDERY asked why public officials must disclose
property ownership.
MS. MILES replied real property has always been part of the law
written by citizen initiative. If the property is sold and
valued at more than $10,000, the name of the purchaser would be
disclosed as well. If the property were gifted, the public
official would still need to show they no longer owned the
property.
CHAIR GARY STEVENS referred to page 25 of the work draft
regarding sources of income. He noted there was no
differentiation between child and dependent child and asked if
he would be expected to disclose his son's employer who lives in
San Diego or his daughter's employer who is a teacher in
Seattle.
MS. MILES replied under AS 39.50 and AS 24.60.200, the
definition section, child only applies to dependent child.
SENATOR COWDERY asked her to clarify that and make it a proposed
amendment.
CHAIR GARY STEVENS agreed that would be a good idea. He noted
this includes page 25, line 11, line 25, line 27 and page 26,
line 1, line 11, line 17.
MS. MILES replied under AS 39.50.400 H1, child means a person's
dependent child or a person's non-dependent child who is living
with the person.
CHAIR GARY STEVENS expressed comfort with that clarification.
SENATOR COWDERY wanted to see reference to the statute to make
it clear.
MS. MILES continued:
· With regard to publicly traded stock holdings, they made an
exception when the filers interest is less than $10,000
That concluded the summary.
CHAIR GARY STEVENS asked about the differences between the Poet
Account and the Account Poet Reserve.
MS. MILES said they didn't address that and frankly she has
never understood it. Senator Donley asked that there be a Poet
Reserve Account where candidates could put all the money allowed
for transfer for the term of office. She thought it was $5,000
per year so some Senators might have $20,000 and House members
might have $10,000. In the original law they could put the money
in an office account that was named "Poet" by a creative staff
member. Senator Donley determined there was a tax liability
question with the money in the Poet Account so he created the
Poet Reserve Account. The law requires a candidate to have both
accounts. They must put the money in the reserve account then
transfer it out at $5,000 per year. It's a problem for
candidates and she's sorry it's not included in the proposed CS.
If legislators want just one Poet Account the commission
wouldn't take issue with that.
She added, with reapportionment and knowing some Senators would
have two year terms, the commission made an exception in 2002
and allowed some Senators to keep $20,000 for a two year term.
CHAIR GARY STEVENS remarked it's confusing and he would
certainly like to see some clarification of the issue.
SENATOR COWDERY said it could be addressed in the Finance
Committee.
There was an inaudible response from Mr. Jardell who was seated
in the audience.
SENATOR COWDERY asked how much this would reduce the commission
budget.
MS. MILES replied it was difficult to quantify. Paper printing
and postage would amount to about $5,000. Once there is
electronic filing, there would be additional reductions due to
staff reallocation.
SENATOR COWDERY asked how many staff APOC had currently.
MS. MILES replied there are ten full time staff and one part
time staff. The Juneau administrator that does the lobbying law
is full time and they have part time clerical staff. In
Anchorage there are nine staff. The current budget is $752.6
with just enough contractual services to conduct business. The
commission will have to meet more frequently to adjudicate
claims.
CHAIR GARY STEVENS asked about the cost associated with
electronic filing.
MS. MILES replied it is substantial and is currently in the
Governor's Capital Budget funding request for a one time
$450,000 for campaign disclosure, lobbying, financial disclosure
for legislators and all public officials.
CHAIR GARY STEVENS asked if it was for new equipment and
software.
MS. MILES advised it was mostly for programming. Fifty thousand
dollars is in hardware. It's a one-time expense after which
there would just be standard agency support for software.
SENATOR COWDERY made a motion to adopt amendment #1 to remove
"spousal equivalent" wherever it appears and replace it with
"domestic partner" or other appropriate language.
CHAIR GARY STEVENS asked if Ms. Miles could outline the
difference.
MR. JARDELL said,
The intent is to recognize the sanctity of marriage
and the spouse, but there is no true equivalent
partner or other relationship with a spouse and in
recognizing that respect I think the Administration
would support the concept and idea behind that.
It's a legal and social equivalent. Senator Cowdery's amendment
is conceptual and would give the drafters the ability to get the
substance of the law.
CHAIR GARY STEVENS asked if there was objection to amendment #1
and there was none.
MR. JARDELL suggested amendment #2 to remove occupation
information when the contribution is under $250. This clears a
drafting error because the drafters intended to remove it.
SENATOR COWDERY moved conceptual amendment #2 as suggested.
There was no objection.
CHAIR GARY STEVENS made a motion to adopt conceptual amendment
#3 to clarify that any reference to child meant dependent child.
There was no objection.
LAURIE CHURCHILL from Nikiski testified she was concerned with
significant changes that would impair the general public's
availability for public information as far as financial
disclosures. They want to ensure APOC is able to function to
provide educational information to the public.
CHAIR GARY STEVENS remarked there would be real advantages with
electronic filing and with regard to full disclosure, it's
important to know who contributed to which campaign immediately.
SENATOR COWDERY made a motion to move CSSB 119 (STA) from
committee with individual recommendations and attached, revised,
fiscal notes. There being no objection, it was so ordered.
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