Legislature(2001 - 2002)

05/04/2002 01:35 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SB 363-CAMPAIGN FINANCE PROVISIONS                                                                           
CHAIRMAN THERRIAULT noted there was  a new proposed CS, version L.                                                              
MR.  JOE BALASH,  Aide  to  the Senate  State  Affairs  Committee,                                                              
outlined the following changes in the CS:                                                                                       
   · The former Section 1 regarding the "paid for by" statement                                                                 
     was removed.                                                                                                               
   · Testimony from Ms. Brooke Miles of the Alaska Public Offices                                                               
     Commission  (APOC) suggested that  the 15-5 reporting  burden                                                              
     on contributors might be unnecessary  so Sec. 9 repealed that                                                              
     requirement.  Sections 1, 2,  3, 4, and 5 of the CS conformed                                                              
     to that by removing "contribution  and" from contribution and                                                              
     expense expenditure reporting requirements.                                                                                
   · It was decided that defining communications that could and                                                                 
     could not be regulated in the  definitions section and making                                                              
     them  part   of  the  definition  of  an   expenditure  would                                                              
     accomplish the  intent of SB 363.  If something  were defined                                                              
     as an expenditure, it would  be subject to all the disclosure                                                              
     requirements  and restrictions  would be  put on where  money                                                              
     could  be  raised.    Money   could  not  be  raised  from  a                                                              
     corporation or  labor union and no more than  10% of it could                                                              
     be raised outside  of the state.  Depending  upon the type of                                                              
     organization there were limitations  on the amount that could                                                              
     be  raised from  individuals.   To  this  end, the  language,                                                              
     "includes  an  express communication  and  an  electioneering                                                              
     communication,    but   does    not   include   and    issues                                                              
     communication" was added in lines 17-19 in Sec. 6.                                                                         
   · Sec. 7 defined a communication.  This was not intended to be                                                               
     an exhaustive  list of  items that  might be a  communication                                                              
     but  identified the  kind of things  that were  traditionally                                                              
     seen in campaigns.                                                                                                         
        o Paragraph (13) excluded communications that cost $500                                                                 
          or  less  to  comply  with   the  Supreme  Court's  1995                                                              
          MacIntire  decision.    In that  case  a woman  felt  so                                                              
          strongly  about a  local school  bond proposal  that she                                                              
          printed a  flyer and distributed  it.  She was  found to                                                              
          be  in  violation  of  Ohio  statutes.    The  exception                                                              
          provided protection to keep that from happening.                                                                      
        o Paragraph (14) defined an electioneering communication                                                                
          as   a  communication  that   "occurs  within   30  days                                                              
          preceding  a primary election  or a municipal  election,                                                              
          or  within  60  days  preceding   a  general  election,"                                                              
          "directly  or  indirectly  identifies a  candidate"  and                                                              
          "addresses  an  issue   of  national,  state,  or  local                                                              
          political importance  and attributes a position  on that                                                              
          issue to the candidate  identified."  This came from the                                                              
          Buckley v.  Valeo decision, which said  express advocacy                                                              
          could  be  regulated but  issue  advocacy  could not  be                                                              
          regulated.   Finding  a line  between the  two had  been                                                              
          very  difficult.   Congress recently  passed the  Shays-                                                              
          Meehan version of the McCain-Feingold  legislation.  The                                                              
          parts  of the  definition  regarding  the timeframe  and                                                              
          identifying  a  candidate  came from  that  legislation.                                                              
          The   other   aspect   of   the   definition   regarding                                                              
          attributing  a position  to  a candidate  was a  further                                                              
          step  toward  trying  to  define advocacy  that  can  be                                                              
        o Paragraph (15) defined an express communication as "a                                                                 
          communication  that,  when read  as  a  whole, and  with                                                              
          limited reference to external  events, is susceptible of                                                              
          no other reasonable interpretation but as an                                                                          
          exhortation to vote for or against a specific                                                                         
          candidate."  This came from the Furgatch decision.                                                                    
   · Sec. 8 changed the crime of campaign misconduct in the 2                                                                   
     degree to conform to the changes in SB 363.                                                                                
   · Sec. 9 repealed AS 15.13.080, which was the 15-5 reporting                                                                 
   · Sec. 10 provided for an immediate effective date.                                                                          
SENATOR  PHILLIPS  wanted  to  make  it  clear  that  the  section                                                              
regarding the  "paid for by" statements  had been removed  from SB                                                              
MR. BALASH said it had been.                                                                                                    
CHAIRMAN  THERRIAULT  said the  courts  wanted  a bright  line  so                                                              
citizens would know  when they crossed the line and  were doing an                                                              
activity that  required disclosure  or had limitations  on funding                                                              
sources.  The  courts said if the  citizens had no way  of knowing                                                              
when  they crossed  the line,  it had  a chilling  effect on  free                                                              
speech  because they  might not  express opinions  that might  get                                                              
them into trouble.  He said a clear  line was drawn in SB 363.  He                                                              
said the  Buckley v.  Valeo decision  listed some  words that  had                                                              
been taken  as a complete  list.  He  said with the  definition of                                                              
express  communication  in  SB 363,  those  magic  words  wouldn't                                                              
necessarily need to be used for a communication to qualify.                                                                     
MR. BALASH said that was correct.                                                                                               
CHAIRMAN THERRIAULT said that went  back to the Furgatch decision,                                                              
which  said it  was nonsensical  to use  a list  of words  because                                                              
anybody with a thesaurus could circumvent it.                                                                                   
MR. BALASH said that was correct.                                                                                               
CHAIRMAN  THERRIAULT said  a communication  such as,  "We want  to                                                              
develop  industry  in Alaska,  Senator  Gene Therriault  has  been                                                              
striving  to create jobs  and we  just wanted  you to know  that,"                                                              
would qualify  as an electioneering  communication even  though it                                                              
didn't  say to  vote for  or against  the candidate.   Because  it                                                              
identified  an issue  of importance,  identified  a candidate  and                                                              
attributed a position to that candidate  and was being done around                                                              
an election it would be an electioneering  communication.  He said                                                              
SB  363 tried  to draw  a line  that  indicated to  a citizen  the                                                              
criteria under which  you were trying to influence  the outcome of                                                              
an  election.   The  courts  said that  when  you were  trying  to                                                              
influence the outcome  of an election, the government  had a right                                                              
to  limit the  influence individuals  or  out-of-state sources  of                                                              
funds could exert on elections.   He said SB 363 combined a number                                                              
of  court cases  and  the McCain-Feingold  legislation  to try  to                                                              
define when the intent of issue advocacy  is to affect the outcome                                                              
of an  election.   He asked  Mr. Balash  if he  wished to  discuss                                                              
anything else.                                                                                                                  
MR.  BALASH  said  the standard  of  intending  to  influence  the                                                              
outcome of an  election was used throughout AS 15.13  and tried to                                                              
describe the  things that  were done in  the course of  a campaign                                                              
and  the disclosure  of those  items.   The  4   Circuit Court  of                                                              
Appeals in  Perry v.  Bartlett decided  that a similar  definition                                                              
used in North  Carolina was too vague and not  specific enough for                                                              
the  public to  know when  they were  required  to disclose  their                                                              
publications.  Because  this wasn't a 9  Circuit  Court of Appeals                                                              
or a U.S. Supreme  Court decision, it didn't necessarily  apply in                                                              
Alaska.  However, it should be looked  at to find out exactly what                                                              
standard was used in deciding the case.                                                                                         
CHAIRMAN THERRIAULT asked if there  were any further questions for                                                              
Mr. Balash.  There were none.                                                                                                   
MS. BROOKE MILES,  Executive Director of APOC,  said she applauded                                                              
the committee for their courage in  defining express communication                                                              
and issues communication.  She said  APOC staff really appreciated                                                              
a bright  line being  drawn.   She said  she suspected the  courts                                                              
would decide  the definitions eventually.   She wanted  to discuss                                                              
Section 1.  She said she did not  have a problem with removing the                                                              
contributor reporting  requirements, but  she did find  issue with                                                              
the language.  She said it would  probably be better to delete all                                                              
the language in  this section after the word "commission"  on page                                                              
1, line  7.  She said  the rest of  the language in  (d)(1)(A) and                                                              
(B)  would cause  confusion.   She  said independent  expenditures                                                              
made of behalf  of a candidate or ballot question  were reportable                                                              
in any amount so  the $500 limit would cause confusion.   She said                                                              
a strict reading  might compel a group that talked  to a candidate                                                              
and wanted  to buy  a communication  to think  they would  have to                                                              
CHAIRMAN  THERRIAULT said  he wanted  to  make sure  that she  was                                                              
suggesting to  delete all of the  language in Section 1  after the                                                              
word "commission" on page 1, line 7.                                                                                            
MS. MILES said that was correct.                                                                                                
SENATOR PHILLIPS asked if that would end on page 2 at line 9.                                                                   
MS. MILES said that was correct.                                                                                                
CHAIRMAN  THERRIAULT asked  if this  deletion  would change  other                                                              
sections of the statute.                                                                                                        
MS.  MILES said  it would  be necessary  to  retain paragraph  (2)                                                              
because  it  talked  about  being   exempted  from  the  reporting                                                              
requirement because of the MacIntire decision.                                                                                  
CHAIRMAN THERRIAULT  asked if she  was talking about  the language                                                              
in Sec. 2.                                                                                                                      
MS. MILES  said the language starting  on page 2, line  4 provides                                                              
for  the MacIntire  exemption for  small expenditures.   She  said                                                              
that should not be deleted.                                                                                                     
SENATOR PHILLIPS  said he wanted  to make sure he  understood what                                                              
she  was suggesting.   He  said it  would  be necessary  to put  a                                                              
period on page 1, line 7, after the  word "commission," and delete                                                              
everything thereafter on page 1 and  the first three lines on page                                                              
2, but leave paragraph (2), which would be renumbered to (1).                                                                   
MS. MILES said  it could also be incorporated  but his description                                                              
was correct.                                                                                                                    
SENATOR PHILLIPS moved a conceptual  Amendment #1 putting a period                                                              
after  the  word   "commission"  on  page  1,   line  7,  deleting                                                              
everything  after that  on page  1  and lines  1-3 on  page 2  and                                                              
leaving paragraph (2).                                                                                                          
CHAIRMAN  THERRIAULT said  he wasn't  so sure  the drafters  would                                                              
want to put a period after "commission."                                                                                        
SENATOR PHILLIPS said that was where the section would end.                                                                     
CHAIRMAN THERRIAULT  said they would probably want to  put a comma                                                              
and  go on  to  paragraph  (2).   He  said as  long  as  it was  a                                                              
conceptual amendment, the drafters could work with it.                                                                          
TAPE 02-28, SIDE B                                                                                                            
CHAIRMAN  THERRIAULT   asked  if   there  was  any   objection  to                                                              
conceptual Amendment #1.                                                                                                        
SENATOR PHILLIPS asked Ms. Miles if that was all.                                                                               
MS. MILES  said it was.   She said she  was happy to  see Internet                                                              
communications  included.    She  said APOC  had  been  discussing                                                              
Internet communications more and  more over the last few years and                                                              
they considered  them to  be subject  to the law  but it  would be                                                              
helpful to have it codified.                                                                                                    
CHAIRMAN THERRIAULT  said the Internet was becoming  a bigger tool                                                              
for good and bad.   He wanted to make sure that  dropping the 15-5                                                              
requirement was not  going to create problems.  He  also wanted to                                                              
be sure  the 15-5s would be  needless paperwork after  the changes                                                              
in SB 363.                                                                                                                      
MS. MILES said  APOC staff believed there was  probably still some                                                              
value in  the 15-5s for  contributions given to  political parties                                                              
or  ballot  proposition  groups,   the  two  groups  to  which  an                                                              
individual can  contribute more than  $500.  She said  $5000 could                                                              
be  contributed  to a  political  party  in  a calendar  year  and                                                              
contributions to  ballot proposition  groups were unlimited.   She                                                              
said  the  15-5s  provided  meaningful  information  in  the  time                                                              
periods  when  other information  was  not  available.   She  said                                                              
without  the  15-5s  the first  information  on  contributions  to                                                              
ballot proposition  groups would  not be  available until  30 days                                                              
before the general  election.  She said that would  also hold true                                                              
to some extent with political parties.                                                                                          
CHAIRMAN THERRIAULT asked if Ms.  Miles only saw that problem with                                                              
regards to contributions to ballot proposition groups.                                                                          
MS. MILES said yes.                                                                                                             
CHAIRMAN THERRIAULT asked if that could be easily retained.                                                                     
MS. MILES  said the 15-5  language could  be written to  require a                                                              
contributor  report for contributions  of more  than $500  made to                                                              
ballot  proposition groups.   She  said  ballot propositions  were                                                              
often very controversial  and if the 15-5 report  was required for                                                              
contributions to  ballot proposition groups, APOC  could have some                                                              
information available for the public.                                                                                           
CHAIRMAN  THERRIAULT said  Senator  Phillips told  him they  could                                                              
work on that in the Senate Rules Committee.                                                                                     
SENATOR PHILLIPS said SB 363 was a Senate Rules Committee bill.                                                                 
CHAIRMAN THERRIAULT  said he wanted to deal with  the 15-5 reports                                                              
and remove the  requirements that didn't make sense.   But if they                                                              
were a  source of  valuable information,  he didn't  want to  lose                                                              
that.   He said  Ms. Miles  had said  it was  nice to have  bright                                                              
MS. MILES  said bright lines make  it easier to  conduct training,                                                              
review the courts, and identify advertisements.                                                                                 
CHAIRMAN THERRIAULT said the courts like bright lines as well.                                                                  
MS. MILES said it would probably  go before the courts eventually.                                                              
She said  the definitions seemed  very similar to the  new federal                                                              
statutes, especially the timelines  separating electioneering from                                                              
issue advocacy.                                                                                                                 
CHAIRMAN THERRIAULT  said they were from the  federal legislation.                                                              
SB   363  added   some   further  definition   to   electioneering                                                              
communications  by adding that  they attributed  a position  on an                                                              
issue to an identified candidate.                                                                                               
MS. MILES  said for the  most part, the  changes would  be enacted                                                              
before advocacy became a big issue.                                                                                             
CHAIRMAN THERRIAULT  said communications that would  be defined as                                                              
electioneering communications  would be allowed at  any other time                                                              
except for right before an election.                                                                                            
MS. MILES  said if  they did  it right  before the election,  they                                                              
would be  required to  file a report  and the  money spent  on the                                                              
communication would have to be funding authorized by the State.                                                                 
CHAIRMAN  THERRIAULT  said that  was  because  at that  point  the                                                              
communication  would be  trying  to influence  the  outcome of  an                                                              
election and  the State  would be able  to require disclosure  and                                                              
limitations on outside sources of money.                                                                                        
MS. MILES said that was correct.   She said an outside corporation                                                              
would not  be allowed to  engage in that  kind of activity  within                                                              
close proximity to an election.                                                                                                 
CHAIRMAN THERRIAULT asked about the fiscal note.                                                                                
MS. MILES said it would be revised.                                                                                             
MR. BALASH said he had a fiscal note  for $30,000 to distribute to                                                              
the committee.                                                                                                                  
CHAIRMAN THERRIAULT  asked if that  fiscal note would  change with                                                              
the new CS.                                                                                                                     
MS. MILES hoped  it would.  She  said it would still  be necessary                                                              
to conduct a training program so  everybody understood the changes                                                              
in the law but the other problems  she had discussed earlier would                                                              
no longer exist.                                                                                                                
CHAIRMAN THERRIAULT read the following from the fiscal note:                                                                    
     This   bill   creates   additional    requirements   for                                                                   
     candidates  and  groups  when   identifying  their  paid                                                                   
     political  communications.   It  represents  significant                                                                   
     administrative  difficulties in that  it also creates  a                                                                   
     new  kind of  political  communication  (electioneering)                                                                   
     which  is  defined  and  enforced  by  the  Division  of                                                                   
     Elections.   The funding request is for  training, paper                                                                   
     and printing, and enforcement.                                                                                             
MS.  MILES said  she  didn't see  the same  enforcement  concerns.                                                              
Initially, she was concerned with  the requirement that production                                                              
costs be included  in the "paid for by" statement.   She said most                                                              
of  the inquiries  APOC  received  were about  the  "paid for  by"                                                              
statement and  they spent  a lot of time  working with  groups and                                                              
candidates to get them corrected.   She said a lot of people might                                                              
have made  mistakes with production  costs because they  might not                                                              
have been sure of  them and given an estimate.   She said with the                                                              
new CS that would  no longer be a concern.  She  still felt it was                                                              
necessary to have funds to let everybody know about the changes.                                                                
SENATOR DAVIS asked if the CS had been adopted.                                                                                 
CHAIRMAN  THERRIAULT said  it had  not.   He noted  that they  had                                                              
discussed conceptual Amendment #1  without the CS before them.  He                                                              
said they were working on an unofficial  document.  He asked for a                                                              
motion on the L version.                                                                                                        
SENATOR PHILLIPS  moved the  L version of  SB 363 with  conceptual                                                              
Amendment  #1  out of  committee  with  attached fiscal  note  and                                                              
individual recommendations.                                                                                                     
There being  no objection,  CSSB 363(STA)  moved out of  committee                                                              
with attached fiscal note and individual recommendations.                                                                       

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