Legislature(2001 - 2002)
04/23/2002 03:45 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 363-CAMPAIGN FINANCE PROVISIONS CHAIRMAN THERIAULT said that the committee would now take up SB 363 regarding issue ads and what is taking place in Congress in regards to soft-money issue ads. SB 363 tries to achieve a better understanding of issue ads and express advocacy and the line between them. He said that he is trying to come up with a workable definition of an "electioneering communication." This moves towards express advocacy and has a clear intent to shape the outcome of an election. MR. JOE BALASH, staff to Senate State Affairs Committee, pointed out that on page 1, line 11 in the section describing the "paid for by" statement that all communications are supposed to have, the language "and the total production costs of the advertising" was added. He said that section was intended to be part of the overall disclosure in Sec. 2 dealing with when a communication is made by a group. SENATOR PHILLIPS asked if that was a drafting error. MR. BALASH said yes. SENATOR PHILLIPS asked if Mr. Balash was proposing to delete that language and add it in Section 2. MR. BALASH said yes, it could be inserted into line 2 on page 2. CHAIRMAN THERRIAULT asked if Mr. Balash had spoken to legal drafters about that. MR. BALASH said yes. SENATOR PHILLIPS asked if that would be reflected in the committee substitute. CHAIRMAN THERRIAULT said yes. He said that he planned to take public testimony today to figure out areas of concern in SB 363. There might be some additions, deletions or clarifications. SENATOR PHILLIPS said that he wanted to clarify that for the record. CHAIRMAN THERRIAULT said that was something that should have been caught before it was introduced. MR. BALASH noted the language on page 3 starting on line 10 dealing with a definition of an electioneering communication, "Must, when read as a whole, and with limited reference to external events, be susceptible of no other reasonable interpretation but as an exhortation to vote for or against a specific candidate," came directly from a decision in the '80's th by the 9 Circuit Court of Appeals. The United States Supreme Court has one major decision saying that express advocacy may be regulated as speech and issue advocacy is in the free zone of political expression. However, the Court didn't provide much th guidance as to where to draw the line. The 9 Circuit Court did issue a decision using the language cited in the bill, which wasn't accepted by the United States Supreme Court for further consideration, so Alaska takes that as the rule of law. CHAIRMAN THERRIAULT asked if the Supreme Court chose not to take th the issue up to provide clarification, therefore the 9 Circuit decision became the law. MR. BALASH said that was correct. CHAIRMAN THERRIAULT said that case was the Furgatch case. He noted that there were a number of examples in the campaign finance paper in the packets of radio or TV advertisements that were clearly issue ads. He said that issue ads can easily become express advocacy with the change of a few words and there is a gray area in between issue ads and express advocacy. Rather than try to draw a clear line between issue ads and express advocacy, SB 363 sought to identify "electioneering communications" and determine what kinds of limitations or disclosure they can have on the gray area between advocacy and expression. The courts had said that if you write a law and it's overly vague and broad and people can't tell what side of the line they fall on, it has a chilling effect on expression. The McCain-Feingold legislation drew a line of 30 days from a primary election and 60 days from a general election so the courts couldn't say that people didn't know and therefore out of fear they are refraining from expressing themselves. He said that SB 363 tries to draw the line between "electioneering communication" and when the person clearly is trying to impact the outcome of an election. In the Buckley v. Valeo case, the court put together a list of words that indicated express advocacy, using the phrase "such as." Some of the courts have said that if you don't use the words on that list, then you're okay. However, the language of the decision says "words such as," so he feels that it wasn't the intent of the court to provide a definitive list of words. CHAIRMAN THERRIAULT said SB 363 attempts to come up with a common sense definition and application of that definition in restrictions and requirements for disclosure of the source of that money as we get closer and closer to an election. MS. BONNIE JACK said that she is glad that the bill clarifies the location of total production costs of advertising, but she still has a question about that. Most of the time during a campaign it is hard to come up with total production costs when you haven't completed the project yet. But SB 363 asks for total production costs. She used an example of initial costs of printed material as compared with reprinting costs. She wondered if you included the first time you printed it, or if you only included the reprinting costs. She noted that the same sort of thing would happen if you made a TV commercial, and then used the sound track from the TV commercial and put it in a radio commercial, how do you determine what the total costs were? She wondered if you included in the radio costs the cost of the TV commercial. She said that she is confused and doesn't know what this bill is getting at. She noted that the bill had been introduced on the th 18 on April and she would like to see a sponsor letter to explain why this was done. She noted that the Alaska Public Offices Commission (APOC) was all about disclosure, and if you just disclosed everything, including the costs, where the money comes from, what the expenses are, she would think that would take care of it. She cited, the language "a party group, or nongroup entity making a communication" in line 14 on page 1. She asked why you should have to repeat all this. If you're advocating for a candidate, you have to file with APOC. She doesn't understand the purpose behind this. Page 3, line 12 makes reference to a "vote for or against a specific candidate." She wondered about ballot propositions or initiatives? She feels the bill was put together too quickly and the drafting error proves that point. She feels that there was not a lot of thought put into the bill. It bothers her that this type of bill was put together so late in a sine die session. She would like to see SB 363 thrown out. CHAIRMAN THERRIAULT said that was why there is a committee process. MS. BROOKE MILES, Director of APOC, said that this bill would make no change to campaign disclosure law except to add additional requirements for all candidates, groups, non-group entities and parties to place the production costs at the end of the "paid for by" disclosure. She pointed out that production costs could be professional services donated, which is permitted as a result of SB 103, and therefore would not seen in the production costs. There are requirements by the Commission that this information has to be readable and the costs will also have to be readable. FCC costs would also be included in radio and television. All communications that are intended to influence the outcome of an election or a ballot proposition are currently covered by the campaign disclosure law, which requires registration, periodic reports and identification of communications. She said that if Sec. 2 is intended to require a 24-hour expenditure report, which was part of the original campaign disclosure law but was thrown out by Buckley v. Valeo, then it should probably be done in the sections that talk about reports, that being Sec. 1 of Sec. 040 of the law. She said that APOC hasn't had the chance to look at the bill closely yet. She offers her comments on behalf of the Commission staff who have looked at the bill. APOC discussed the question of drawing a line between issue advocacy and express advocacy at length during their meeting in March and determined that it would be best for them to look at each case on a case-by-case basis. She noted that election communications rules are all in AS 15.56 and the enforcement burden of that would fall to the Division of Elections, the Commission has no authority over that. But when people are looking to the campaign disclosure law to get guidance on what's required, they may not fall to the definition of electioneering communications in AS 15.60. She noted that the fiscal note sent over by the APOC was modest, but SB 363 would impact APOC because approximately 80% of the inquiries pending to move toward complaint actions start with "paid for by" questions and concerns. If SB 363 were to pass, they would have to disclose total production costs, which might be inaccurate or missing, that would have to match what is finally reported on the campaign disclosure reports or they would be subject to a penalty of $50 per day for a false or inaccurate claim. The fiscal note would include funding for a hearing, some travel to conduct training to help people and printing paper and postage. She noted that this would be the second major campaign disclosure revision and it would occur during the most active election session in over ten years and APOC's budget had already been significantly decreased. CHAIRMAN THERRIAULT said that he wanted to talk about the 15-5 reports. MS. MILES asked if he was referring to the contributor reports. CHAIRMAN THERRIAULT said he understood that this might be a holdover from previous times in which APOC personnel expended time and energy needlessly. He asked if this was something that no longer serves a useful purpose. 5:00 pm MS. MILES said that it could save a little time by no longer needing to enter the 15-5 reports into their database. The 15-5 report was an evolutionary process in public information. She explained that the 1996 campaign finance revision, the Legislature wanted to delete the requirement to file a 15-5 entirely, but APOC was uncomfortable with that and they came up with a system in which a report is required only when the contribution is more than $500 and it must be filed within 30 days. This was changed again in SB 103 so that candidates can file the report on behalf of the contributor. At that point since the candidate is not only filing their own report but also filing the contributor's report, it is no longer a useful check and balance. She feels that the $500 limit is a little chilling. Campaign disclosure reports show a lot of contributions at $499 or even $499.99 to keep the burden of reporting from contributors. She agrees that the report is not of much use anymore, but in the past it provided useful information to the public during the times that campaign disclosure reports aren't filed. It still does that to a degree with respect to large contributions to ballot proposition groups. But other than that, it wasn't needed much. CHAIRMAN THERRIAULT noted that the original disclosure amount was more than $500 on the 15-5s. MS. MILES said that the 15-5s were required when people gave $250 or more. CHAIRMAN THERRIAULT said there was still a provision that said as you get close to the election if a person with either one or multiple contributions over $250, you would still have the 24- hour requirement for filing a report. MS. MILES said that contributors have never been required to report in 24 hours. Contributors used to have 10 days if they contributed more than $250. Now they have 30 days when they give $500. And they can't give more than $500 to a candidate. Candidates must report a contribution of more than $250 from a single source during the 9 days that precede the election in an abbreviated format within 24 hours. This information is repeated in further detail in the 10-day-after report. She noted that the contributor reports and 24-hour reports are two different things. She thinks that a lot of discussion came about because APOC at their March meeting directed staff to begin assessing civil penalties at the statutory level of $50 per day that the contributor reports are late. She feels that many candidates have concerns regarding that. CHAIRMAN THERRIAULT asked if there were any further comments, questions from committee members, or anybody else who wished to testify. SB 363 was held in committee.