Legislature(2009 - 2010)HOUSE FINANCE 519
02/08/2010 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB36 | |
| HB225 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 36 | TELECONFERENCED | |
| + | HB 225 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
February 8, 2010
1:36 p.m.
1:36:37 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:36 p.m.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Vice-Chair
Representative Allan Austerman
Representative Mike Doogan
Representative Anna Fairclough
Representative Neal Foster
Representative Les Gara
Representative Reggie Joule
Representative Mike Kelly
Representative Woodie Salmon
MEMBERS ABSENT
None
ALSO PRESENT
Representative Kyle Johansen; Sonia Christensen, Staff,
Representative Johansen; John Cramer, Chief of Staff, Office
of the Lt. Governor; Gail Fenumiai, Director, Division of
Elections, Office of the Governor; Chip Thoma, Juneau;
Representative Harry Crawford; John MacKinnen, Executive
Director, Associated General Contractors of Alaska; Vern
Jones, Chief Procurement Officer, Department of General
Services
PRESENT VIA TELECONFERENCE
Pauly Hill, Executive Director, Alaska Public Offices
Commission; John Ptacin, Assistant Attorney General,
Department of Law; Representative Eric Croft; Jason Bruny,
Executive Director, Resource Development Council
SUMMARY
HB 36 INITIATIVES: CONTRIBUTIONS/ PROCEDURES
HB 36 was HEARD and HELD in Committee for
further consideration.
HB 225 STATE PROCUREMENT CODE
HB 225 was HEARD and HELD in Committee for
further consideration.
1:36:45 PM
Co-Chair Stoltze brought the meeting to order. He indicated
that the bills would not be moved out of committee today in
order to hear public testimony.
1:37:53 PM
HOUSE BILL NO. 36
"An Act prohibiting initiatives that are substantially
similar to those that failed within the previous two
years; relating to financial disclosure reporting dates
for persons, groups, and nongroup entities that expend
money in support of or in opposition to initiatives,
initiative information contained in election pamphlets,
initiative petitions, initiative petition circulators,
and public hearings for initiatives; and requiring a
standing committee of the legislature to consider
initiatives scheduled for appearance on the election
ballot."
REPRESENTATIVE KYLE JOHANSEN, the bill sponsor, reviewed the
sponsor statement (copy on file).
SPONSOR STATEMENT
Alaska's lawmaking process is highly public and
strives to be transparent. Shown by the passage of an
omnibus ethics bill in 2006, Alaskan voters want to
know who is contributing to candidate campaigns.
Initiative-created law has the same authority and
effect as law created by elected officials; therefore
voters should be allowed to know who is making law
through the initiative process. House Bill 36, also
known as the Open and Transparent Initiative Act
(OTIA), seeks to identify people and/or groups who
financially contribute to initiative campaigns and
requires all initiative groups to register with the
Alaska Public Office's Commission. These guidelines
are similar to those imposed upon elected officials.
In addition, OTIA mandates that initiative sponsors h
old public hearings in 30 house districts, limits
signature-gathers to work one petition at a time,
restricts the use of per-signature commission, and
requires all of the language of a proposed ballot
measure be published in the petition booklets so
potential signers have the opportunity to read all of
the language rather than a short summary.
Initiative committees in Alaska are not held to a high
enough disclosure standard. There are loopholes in the
current disclosure process that allow groups to hide
contributors. These are signature-gathers without
accountability. There is a lack of public hearings and
input. There is financial information that is not
disclosed until after the election. These shortcomings
are not acceptable, and the Open and Transparent
Initiative Act seeks to close these loopholes, repair
the initiative process, and restore the faith of
Alaskans in our election process.
Representative Johansen noted that this bill was first
brought before the committee at the end of last session. He
reported a major issue in the legislation was the disclosure
of money spent during the initiative process. He noted there
is a gap in the disclosure process between the time a
question is submitted to the Lt. Governor and the Department
of Law decides if it is a valid question that can be legally
put on the ballot. From that time until the boxes of
signatures are handed to the Lt. Governor to be reviewed and
approved, there is a gap in the disclosure law. The source
of the money is not known during that period of time.
Representative Johansen indicated that HB 36 would ensure
the source is disclosed to the public. He continued that the
second part of the bill would include two required public
hearings in each judicial district overseen by the Lt.
Governor. After the pro and con statements of the initiative
were read, there would be public testimony and questions.
1:42:46 PM
Co-Chair Stoltze requested an outline of the major points of
the bill. He added that the bill was heard last year, but
Representative Johansen insisted on inserting the five day
notice for the public.
Representative Johansen believed the public should know who
is influencing the statutes and initiatives being passed. He
recognized that the public is sensitive to changes in the
initiative process, but he believed that it needs to be
better. Representative Johansen referred to CS SSHB 36(JUD)
26-LS0197\S and proceeded to define the sections of the
bill.
Section 1. Requires an individual, person, non- group
entity, or group that contributes a total of $500 or more
to a group organized for the principal purpose of
influencing a bill proposed for inclusion on the ballot
as an initiative under AS 15.45.020, to report the
individual's, person's, non=group entity's, or group's
contribution or contributions on a form prescribed by the
Alaska Public Offices Commission (APOC) not later than 30
days after the contribution is made.
1:45:05 PM
Representative Johansen referred to the Sectional Analysis
for House Bill 36 and reviewed section by section (copy on
file).
Section 2.Provides that each person other than an
individual shall register with APOC before making an
expenditure in support of or in opposition to a
proposed initiatives bill filed with the lieutenant
governor under AS 15.45.020
Section 3.Expands the meaning of "proposition" under
AS 15.13.065© to include an ini9tiative proposal
application filed with the lieutenant governor under
AS 15.45.020
Section 4.Conforms subsection AS 15.13.110(e) to the
enhanced initiative reporting requirements found in the
bill's sec.5.
Section 5.Establishes new reporting requirements for
initiative committees, persons, groups or non- group
entities making certain contributions or expenditures in
support of or in opposition to an initiative proposal
application filed with the lieutenant governor under
AS.15.45.020 or an initiative that has been approved for
placement on the ballot.
Section 6.Expands the definition of "contribution"
applicable to state election campaigns to include Certain
purchases, payments, promises, or obligations to pay, loans
or loan guarantees, deposits or gifts of money, good, or
services for which a charge is ordinarily made that is
made for the purpose of supporting or proposing an
initiatives proposal application filed with the
lieutenant governor under AS 15.45.020.
Section 7.Expands the definition of "expenditure"
applicable to state election campaigns to include
certain purchases or transfers of money or anything of
value, or promises or agreements to purchase or
transfer money or anything value, incurred or made for
the purpose of supporting or opposing an initiative
proposal application filed with the lieutenant
governor under AS.15.45.020.
Section 8.Prohibits an initiative that is
substantially similar to an initiative that has
appeared on the ballot in the previous two years that
was not adopted by the electorate.
Section 9.Requires that each initiative petition
contains a copy of the proposed initiative bill.
Section 10. Prohibits paying initiative petition
circulators on a per signature basis.
Section 11: Requires that the Lieutenant Governor
(1) hold at least 2 hearings in each judicial
district of the State and (2) provide reasonable
notice of each public hearing. Provides a time frame
for the Lieutenant Governor to hold the public
hearings, which is after a measure is to appear on the
ballot and at least 30 days prior to the election.
1:50:04 PM
Representative Johansen continued with Section 12.
Section 12. Requires an election pamphlet to be
prepared and mailed to each household for any special
election at which a ballot proposition is scheduled to
appear on the ballot.
Section 13. Provides that an election pamphlet for
a special election at which a ballot measure is
scheduled to appear on the ballot shall contain (1)
the full text of the proposition, (2) the ballot title
and summary of the proposition, (3) a statement of the
costs to the state of implementing the law proposed in
an initiative, (4) a neutral summary of the
proposition, (5) statements submitted that advocate
voter approval or rejection of the proposition not to
exceed 500 words, and (6) any additional information
on voting procedures that the lieutenant governor
considers necessary.
Section 14. Requires that a standing committee of
the legislature review initiatives that the lieutenant
governor has approved for placement on the ballot.
Representative Johansen noticed with initiatives that had
passed when it comes to the subcommittee in the operating
budget there are often impacts not anticipated. He added
that this prompts departments to ask for more money or
employees to carry out the initiative. Section 14 requires a
standing committee of the legislature conduct a review
within 30 days of the session convening to have a discussion
and put on the record what this new initiative will cost.
Co-Chair Stoltze asked if that was only an informational
hearing. Representative Johansen agreed, but the
conversations on the impact on the budget are extremely
important. Co-Chair Stoltze wondered if the attorney general
and Supreme Court would retain their rights to make changes.
Representative Johansen replied that this legislation does
not affect those entities at all.
Section 15. Provides that the provisions of the Act
apply to an initiative proposed by filing an
application with the lieutenant governor under AS
15.45.020 on or after the effective date of the Act.
1:54:07 PM
Representative Austerman asked if most of this applies after
the Lt. Governor has certified that the initiative process
is valid. Representative Johansen agreed. He added that once
the Lt. Governor runs the question through the Department of
Law and it is considered legal for the ballot, then the
reporting and disclosure and following statutes become
relevant. Representative Austerman asked on average how many
initiatives are certified per year
SONIA CHRISTENSEN, STAFF, REPRESENTATIVE JOHANSEN, replied
that was a good question. She believed there were three or
four certified for the next election.
Representative Johansen responded that the information would
be provided to the committee. He added that there is a
strong upward turn in the initiative process as an option
for statute change.
Representative Austerman noted there were four judicial
districts which would require eight meetings for each
initiative. He elaborated that a zero fiscal note was
attached and wondered how the department would absorb the
cost for all the required travel.
1:56:34 PM
Representative Johansen indicated that the state has been
split in many different ways to accomplish this. He
mentioned the Lt. Governor has proposed an Initiative Day
where two or three initiatives could be discussed at one
time. He stated that the Lt. Governor's office indicated the
travel requirements could fit within their budget.
Vice-Chair Thomas voiced his concern about contributions
from out of state and asked if there was any limit on how
much out of state money could be contributed.
Representative Johansen replied that he was not aware of the
any set amount, but no portion of this bill refers to that
issue. Vice-Chair Thomas reiterated his concern that people
outside of Alaska could contribute to local affairs. He
believed there should be a limit to how much money can be
contributed from outside of the state in dealing with an
initiative. He thought an amendment to cap the amount of
outside contributions was needed. Representative Johansen
agreed that was a valid point and would research the answer
for the committee.
2:00:40 PM
Representative Doogan asked for more information regarding
Section 12. He inquired if there were initiative petitions
for special elections and wondered under what provision that
would happen.
Ms. Christensen answered that initiatives can be on a
special election ballot if the timing was correct. She
explained that ballot measure groups cannot choose which
ballot the initiative will be on. She indicated that the
language in Sections 12 and 13 was not requested by the
sponsor, but a legal change from the drafters.
Co-Chair Stoltze suggested looking into some past special
elections.
2:02:59 PM
Representative Gara referred to Section 8. He noted that a
bill under the Alaska Constitution is subject to the single-
subject rule which has been defined by the courts. He
wondered if initiatives were subject to the single subject
rule.
Ms. Christensen responded that initiatives are subject to
the single subject rule, but added that there are a few
subjects that ballot measures cannot address, such as
constitutional issues and appropriations.
2:03:58 PM
Co-Chair Hawker informed the committee that the statutory
reference was AS 15.45.040 which states:
(1) the bill shall be confined to one subject;
(2) the subject of the bill shall be expressed in the
title;
(3) the enacting clause of the bill shall be: "Be it
enacted by the People of the State of Alaska;"
(4) the bill may not include subjects restricted by AS
15.45.010.
Representative Gara wanted to make sure the scope of what an
initiative can cover is not changed. He noted that an
initiative is subject to the single subject rule and wanted
to make sure if that one subject rule further restricts the
initiative.
Representative Johansen responded that the intent is not to
tighten up or put more restrictions on initiatives. He
acknowledged that there might be a better way to write it.
Representative Gara voiced his concern over anything making
it harder for someone to get an initiative on the ballot. He
referred to Section 10 and questioned the payment of
petition signature collectors. He stated that at present
collectors receive one dollar per signature. He questioned
what would not be allowed now under Section 10 and what is
being proposed.
Representative Johansen reported that the one dollar per
signature rule would be appealed under this bill and another
method would be found to pay signature gatherers. He
emphasized that the goal was to weed out individuals who
might practice fraudulent methods to receive the one dollar
per signature. He believed the safest method would be to pay
an hourly wage with a possible bonus for those good at
gathering signatures.
Representative Gara voiced his concern that someone trying
to get initiatives on the ballot may have a more difficult
time hiring a signature gatherer if the process for
compensation was made more difficult. He asserted that
hourly employees would require more supervision and
monitoring which could make it harder to get an initiative
on the ballot.
2:08:48 PM
Representative Doogan asked if the Lt. Governor was not
certifying signatures then he wondered how they are
verified. Representative Johansen explained that the
motivation came from evidence in other states that revealed
problems with paying people per signature. He remarked on
his experience with signature gathers who were more
interested in getting the signatures from as many people as
possible and not interested in answering questions or
providing information.
2:11:15 PM
Co-Chair Stoltze interjected that Ms. Fenumiai could answer
this question when she testifies.
Representative Gara alleged in Section 11 that a Lt.
Governor who does not like an initiative may try to make it
more difficult to get on the ballot by not having a public
hearing within the 30 day time period. If the Lt. Governor
failed to have the public hearing before 30 days, then it
could be argued that the initiative was not valid.
Representative Johansen agreed that could be a concern,
although it was not the intent of the sponsor. He declared
it hard to believe that any Lt. Governor would try to block
an initiative process.
Representative Gara countered that it would not shock him if
this happened, but went on to question other possible
delays, such as weather. Representative Johansen declared if
anyone could provide better language for additional comfort,
he was open to it. He emphasized that there was no intent in
the bill for anyone to stop the initiative process through
some backdoor scheduling problem.
2:14:52 PM
Representative Fairclough suggested that that legislation go
straight to ballot if the Lt. Governor did not handle the
initiative requirements in a timely manner.
Co-Chair Stoltze informed the committee that he intends to
take testimony from the Office of the Lt. Governor, Division
of Elections, Alaska Public Offices Commission (APOC) and
finally public testimony to answers some of the issues and
questions.
Representative Gara inquired on the limitations of money
that can be donated.
Ms. Christensen answered that the current definition of a
ballot measure does not include ballot measure propositions
therefore there is a loophole for the money funded to fly
people around the state to collect signatures. She noted
that the information is not being disclosed until it becomes
an official ballot measure. There are currently no limits or
reports filed for initiative contribution disclosures. She
emphasized that HB 36 does not impose any limits on
contributions, only the disclosure.
Representative Gara contended that first a report must be
made to APOC after getting the signatures, followed by
periodic reports. He surmised then that before one votes on
an initiative the information would be available at APOC on
who donated to the initiative, but while signatures were
being gathered there was no reporting. Ms. Christensen
agreed.
Representative Kelly requested the research on capping
outside contributions. Co-Chair Hawker reiterated that all
information would be disseminated to the committee members.
2:18:38 PM
Representative Kelly asked if the Administration supports HB
36 as written.
JOHN CRAMER, CHIEF OF STAFF, OFFICE OF THE LT. GOVERNOR,
replied that the Administration supports the bill. He agreed
some valid questions had been raised. Once an initiative has
been certified it will appear on the ballot.
Co-Chair Stoltze asked for the definition of Administration.
Mr. Cramer responded he was referring to the Lt. Governor's
office.
2:20:55 PM
Co-Chair Stoltze asked what would be the difference in the
process between using a salaried employee for collecting
signatures or someone who receives one dollar per signature.
GAIL FENUMIAI, DIRECTOR, DIVISION OF ELECTIONS, OFFICE OF
THE GOVERNOR, remarked that the process for handling the
petition booklets would be the same.
Co-Chair Stoltze asked if a salaried employee would have the
same requirements to be the only one that collected
signatures for a petition book. He asked for her to outline
some of the safeguards.
Ms. Fenumiai answered that when the application has been
approved by the Lt. Governor's office, the division of
elections prepares and releases 500 petition booklets. These
booklets are released to the initiative committee's prime
sponsors. Once the books are handed over, the Lt. Governor's
office has no further involvement in the books until they
are turned over to determine if the correct number of
signatures exist for the initiative to be put it on the
ballot. There is no policing of how the signatures are
obtained. She added that the Division of Elections has not
come across any incidences of outright fraud in collecting
signatures.
Co-Chair Stoltze asked if the petition booklets can be left
somewhere unattended. Ms. Fenumiai responded that the
petition booklet is assigned to a signature gatherer and all
signatures must be witnessed by that person.
2:23:45 PM
Representative Fairclough wanted to know if the Lt.
Governor's office saw any challenges in implementing the
bill and if there was anything in the bill that prohibits
them from putting more than one initiative together in a
judicial district at one hearing.
Mr. Cramer acknowledged the Lt. Governor's office looked at
that point and did not see any problems with having more
than one initiative during a scheduled hearing.
Representative Fairclough reiterated if the division saw any
challenges in implementing this bill. Mr. Cramer responded
they do not foresee any challenges in implementing the bill,
but added that the division would need to draft some
regulations to carry it out.
2:25:37 PM
Representative Austerman asked if the Lt. Governor's office
would return with a new supplemental or addition in the
budget. Mr. Cramer answered that the division does not
anticipate needing any supplemental.
Representative Gara noted that it did not seem credible that
eight statewide hearings on every single initiative could
result in a zero fiscal note.
Mr. Cramer replied that the Lt. Governor lives in one of the
four judicial districts. He noted there are usually two to
three, maybe as high as four initiatives for 2010 ballot. If
the number of initiatives were higher, then the division
might have to ask for additional funds. He believed that for
2010 the existing staff and budget could handle the travel
load.
Representative Gara contended that there would be costs with
advertising the meetings. Mr. Cramer responded that most
state hearings are advertised now on the state website. He
added that those pushing the initiative would probably do
their own advertising to get the word out.
2:28:45 PM
Vice-Chair Thomas questioned if the salaried employee would
be eligible for unemployment. Mr. Cramer responded that the
Department of Labor would have to answer that question.
Representative Doogan asked if there was any part of the
bill the Lt. Governor's office did not support. Mr. Cramer
answered that the Lt. Governor's office had no opposition to
the bill.
Representative Gara wondered with the new U.S. Supreme Court
decision if there would be any problem having corporations
as well as individuals identified who contribute to an
Alaska election. Ms. Fenumiai responded that the Division of
Elections does not track expenditures or campaign donations
only the Alaska Public Offices Commission (APOC).
Representative Gara indicated that the state constitutional
issue of paying one dollar per signature has been upheld in
five states and struck down in five states. He asked if an
Alaska Constitutional analysis had been done on this
subject. Mr. Cramer replied that he did not believe so.
Co-Chair Stoltze interjected that the issue has been debated
in past legislative sessions so there might be some other
legal memos on the subject.
Representative Gara responded he would get his legal memo
out to the committee.
2:32:38 PM
PAULY HILL, EXECUTIVE DIRECTOR, ALASKA PUBLIC OFFICE
COMMISSION (via teleconference), remarked that by law there
are no contribution limitations for ballot groups, whether
from individuals, corporations, business organizations,
political parties, groups or non groups based in or out of
Alaska.
Vice-Chair Thomas asked if during the last election there
were some money limits questions. Ms. Hill responded that
she was not at liberty to discuss a current case. Vice-Chair
Thomas wanted it on the record that someone tried to give
money three different ways.
Representative Kelly questioned if a limit imposed on
someone in or out of Alaska is constitutional or if a limit
similar to campaign financing limit which limited outside
funds to a smaller value than funds inside Alaska is
constitutional.
JOHN PTACIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW
(via teleconference), responded that the law currently
contemplates no upward limit on contributions of this
nature. He added that whether there can be a difference for
in or out of state groups or individual contribution, the
office would need to study the issue to make a
determination. Representative Kelly relayed that he would
like to receive the information and also the sponsor's
reaction if there is a negative response.
2:37:59 PM
Vice-Chair Thomas pointed out that since there were
contribution limits in campaigns for the governor and
legislators, he wondered if limits would be possible for in
the initiative process.
Representative Gara proposed that if there was an initiative
campaign and someone or group does not want anyone to know
they are big donors, they might create a fictitious group to
sponsor it. He wondered when an ad is place on television is
there a disclosure requirement on naming the sponsors. Ms.
Hill responded that any time a communication is made to
influence an election there must be a disclosure.
Representative Gara asked for APOC's position if these
groups could be made to disclose their top three
contributors. Ms. Hill responded that the Alaska Public
Office Commission staff cannot render an opinion.
2:41:45 PM
Representative Kelly noted that with the U.S. Supreme Court
decision on contributions, questions will be raised,
therefore the chair and sponsor need to provide more
information.
Representative Fairclough questioned if the Department of
Law could research if there were constitutional issues that
resulted in some state courts ruling to overturn some of
these proposals.
Co-Chair Stoltze referred to a question with the fiscal note
and asked why the department needs the extra resources.
Representative Gara contended there will be a legal
challenge to parts of the bill that have been challenged
beofre, therefore he wondered if the Department of Law would
add a fiscal note for this. Mr. Ptacin agreed that the
Department of Law could add a fiscal note. Co-Chair Hawker
maintained that the department should continue with a zero
fiscal note.
2:45:27 PM
Representative Doogan voiced concern about the provision to
require public meetings in each district. He wondered if
this requirement puts an unconstitutional burden on either
side proposing or opposing the initiative. He also asked for
the department's view of the constitutionality of this
provision. Mr. Ptacin answered that it was best to put this
question in memo form and the department would study it and
reply.
2:49:11 PM
Representative Kelly alleged that there could be a challenge
from those who believe the Lt. Governor came to the
community to try and sell or refute an initiative.
Representative Doogan agreed and wondered whether the system
was being set up to tilt the playing field so that one group
would need more money than the other group.
Representative Kelly requested answers to these questions
because a challenge could be made that the Lt. Governor had
his own agenda.
Representative Austerman cited the necessity of not mingling
the initiative process and legislative election process
within this initiative bill, so that it stays just an
initiative decision.
2:52:44 PM
CHIP THOMA, JUNEAU read from a prepared speech (copy on
file):
HB 36 is a Campaign Disclosure bill directed
specifically at those who support and oppose
Initiatives. Yet a few weeks ago, the U.S. Supreme
Court issued a ruling on the Bigger Issue of WHO can
Contribute to all political Campaigns and Issues,
federal & state. And the Answer is: All Bets Are Off.
It is wide open and could be a Major Sea Change in
Alaska politics very soon. HB 36 has no become Piece-
Meal legislation-a small piece of the Big Pie of
campaign contributions in Alaska. Alaska in An Oil
State - that is our Strength…and it also make us
Vulnerable to Mischief Created by Others. There are
Major Players at work here already-what if someone, or
some company want to Seriously Get Involved in oil
taxes - $10-20 million worth - can We Restrict that
Entity? As I said, Alaska in an Oil State - If Hugo
Chavez and CITCO oil company want to influence state
elections - or push initiatives, referendums, or
recalls, can we restrict these foreign players or not?
The question is now Wide Open - That's why HB 36 is
Piece-meal - and passage without full review could
invite campaign mischief through unlimited financing.
Instead, there should be a Bipartisan Taskforce with
an Interim Committee of House and Senate members to
look at the big picture of campaign finance in Alaska
& HB36. Please hold HB 36 and review it with an
Interim Committee.
Mr. Thoma answered Representative Austerman's question by
reporting that the Division of Elections has an initiative
status section on their website that lists all proposed
initiatives since 1995. He reported reviewing the last eight
years, since 2000, and noted that 52 initiatives have been
proposed to the Division of Elections. He added that 73
percent were denied or withdrawn, 15 percent failed, and 12
percent passed for a total of 6 initiatives passed in 8
years. In 2005 and 2006 there were a series of lawsuits
brought against the Division of Elections and the state of
Alaska by a group in opposition to an initiative. Before the
signatures could be checked and authorized, lawsuits were
brought against the process taking months to resolve at a
big cost to the state and to those opposing the initiative.
He argued that if there were checks on all the financing for
those collecting signatures then the finances of those
opposed to gathering the signatures should be checked. He
also contended that those in opposition to an initiative are
the ones that spend the most money. He added this money is
unregulated and could be from foreign interests.
Vice-Chair Thomas observed that there should be a cap on
initiative money similar to the governor and legislative
elections.
2:58:19 PM
REPRESENTATIVE HARRY CRAWFORD testified against the
legislation. He reported than in his 10 year experience this
is one of the most important bills he has seen. He
acknowledged, in the interest of full disclosure, that he
has been involved in the initiatives process in the past. He
has been one of the three prime sponsors on campaign finance
reform, a trust-the-people initiative, and a reserve tax
initiative. He stated that every section of HB 36 is
targeted at making the initiative process more difficult. He
emphasized that there is one part that could kill the
initiative process. He provided a background history of the
initiative process from the early western frontier days when
some corporations, such as the railroads, were taking
control of different legislatures in some states. He stated
that there needed to be a way for people to affect the
democratic process therefore the initiative process was
formed. The framers in Alaska knew from experience that an
initiative could be killed in the very beginning when
corporations came in to intimidate people trying to put an
initiative on the ballot. Alaska state law does not have a
disclosure provision in the initial process so that big
corporations cannot come in and intimidate those people
trying to get the initiative on the ballot. He added that
once the initiative is on the ballot, there are disclosure
laws.
3:02:13 PM
Representative Crawford emphasized that HB 36 would put the
choke point right at the beginning of the process to
intimidate any potential donors. He mentioned the Reserve
Tax initiative as a perfect example because people within
the oil industry believed that the only way to get a gas
line was by a reserve tax, so they gave money to help get
the initiative on the ballot. He stressed that had they been
exposed at that point, they would have been fired by their
employers. The second time the reserve tax was brought up,
the oil companies went to each of the labor unions and
indicated they would make it difficult if the labor union
supported this tax. He believed intimidation is real and
this bill would allow that to proceed. He added that when
dealing with the trust-the-people initiative, the sponsors
had to go to court four times to overrule the Lt. Governor
to get the initiative on the ballot.
Representative Gara stated that Representative Crawford had
broad experience with initiatives. He pointed to a provision
in HB 36 that says the signature collectors cannot be paid
one dollar per signature and wondered if the Representative
had any thoughts regarding this. Representative Crawford
replied that this provision would make it more difficult for
small entities to fund initiatives by putting the process
under the minimum wage law or hourly provisions.
Representative Gara asked if Representative Crawford had any
concerns or experience with signature gatherers not taking
the time to explain or answer people's questions.
3:07:12 PM
Representative Crawford responded that he has gathered
thousands of signatures on many different subjects and has
never failed to give someone all the information requested.
He emphasized that when trying to get signatures for
initiatives it is the sponsor's intention there not be any
fraud or liability that can throw the initiative off the
ballot. Representative Gara asked that since the signatures
get checked by the Division of Elections, it would not be
worth paying someone who tried to defraud the system.
Representative Crawford emphasized that initiative sponsors
work too hard to get initiative on the ballot to risk even
the slightest question of misconduct. Representative Gara
credited Representative Crawford for his hard work with
initiatives.
3:10:14 PM
Representative Fairclough referred to Section 10 and asked
the Department of Law if there was a requirement that does
not allow a person or an organization into a contract
concerning wage law. Mr. Ptacin responded he cannot take a
position on wage and hour laws. Representative Fairclough
repeated her question to ask if Section 10 precludes a
contract. Mr. Ptacin again stated he could not answer the
question and would like time to review it.
Representative Austerman wondered if Representative Crawford
thought there should be a cap on some of the dollar figures
from inside and outside interests.
Representative Crawford stated he would like to see limits
put on how much an individual or corporation can give to the
initiative process. He informed that in the Finance Campaign
Reform Act a limit was set at $3,000 for individual
campaigns or ten percent of the total a person collects. He
emphasized that he did not want corporations to speak more
loudly through their money than an individual in the state.
3:14:10 PM
Co-Chair Stoltze contended that Representative Crawford was
passionate about his experiences of individuals being
intimidated or facing recriminations for open involvement in
the initiative process. He asked if this was a correct
characterization.
Representative Crawford observed that Co-Chair Stoltze
represented his thoughts perfectly. Representative Crawford
maintained that there were intimidating visits made by
opposing sides of the Reserve Tax issue to individuals
supporting the initiative.
Co-Chair Stoltze asked if he felt that the real concern for
the privacy issue was to protect individuals.
Representative Crawford responded that the choke point was
when you can stop the process right at the very beginning.
Co-Chair Stoltze noted that the word "secret ballot" seemed
very important. Representative Crawford agreed. Co-Chair
Stoltze observed that there was a national debate on a union
bill and he was curious about elections.
Representative Gara believed that the "big money" funding
ads gets reported to APOC at present resulting in some
disclosure, but not for the people gathering the signatures.
He believed it important to see who was funding the ads, but
had more difficulty understanding the need to know who was
providing funding at the beginning.
Representative Crawford responded that the way the present
law reads that once an initiative is approved for the ballot
and becomes a campaign, then disclosure is mandatory. He
noted that HB 36 wanted disclosure on who is giving money at
the very beginning, the choke point and HB 36 would take the
process out of the hands of Alaskans to affect their
government.
3:19:21 PM
REPRESENTATIVE ERIC CROFT (via teleconference), remarked
that the initiative process is a constitutional right given
to the people to limit and check legislative power. He urged
all legislators to remember that it was intentionally put
there for that purpose and they should take a hands-off
approach. Its purpose is to be unpopular with legislators
and he agreed it is. Legislators are frustrated by the
initiative process, but again that is the purpose to do
things the legislature decided not to do. He urged the
committee not to put up bars on people's rights and to not
pass this bill. He acknowledged that it does damage the
initiative rights in some areas by making an efficient
method more difficult. He added that the founding members
believed in a robust initiative process for the people, but
did put on limitations; constitutional changes cannot be
handled through the initiative process. He believed Alaska
needs to be very careful when using other states as models.
He noted three different standards used throughout the bill.
On page one it notes a group organized for the principle
purpose of filing an initiative, later it talks about a
group that has filed an initiative and even later where the
Lt. Governor determines if it was properly filed. These are
three different stages in the initiative right that the
people possess. He noted that having the idea, having it
filed, and having it approved are very different branch
points and this bill covers each of them.
3:27:47 PM
Representative Croft continued with his objection to this
bill. He contended that HB 36 puts limits that run from the
inconvenient, to debilitating, to unconstitutional. He
declared that the government should stay out of the
initiative process.
3:29:53 PM
JASON BRUNY, EXECUTIVE DIRECTOR, RESOURCE DEVELOPMENT
COUNCIL (via teleconference), testified in support of HB 36.
The Resource Development Council appreciated the rights of
Alaskans to change state law through the initiative process,
but contended that a number of proposed initiatives have
been brought forth that do not have the best interests of
the state or the people of Alaska. He argued that the public
is often misled by signature gathering tactics. The Resource
Development Council believed that transparency must be at
the forefront of good government. He pointed out that Vic
Fisher, one of the 55 delegates to the Alaska Constitutional
convention and a previous ballot initiative sponsor,
believed that the imitative was a device that lends itself
to special interests and groups that want to get something
that they cannot get through the legislative process. He
declared that special interests have embraced the initiative
process over the last decade. He noted that in the past 5
years that Alaska business community has been the target of
numerous punitive ballot initiatives pushed by anti-business
and environmental interest groups. This bill would require
both public and legislative hearings for initiatives which
he believed to be good idea. Mr. Bruny believed that those
trying to change state law should be held to the same
standard as legislators to disclose the source of their
funds while gathering signatures statewide. He added that
the RDC will actively oppose an amendment that prohibits or
limits outside contributions to this process. He remarked
that many outside companies invest in Alaska and employ
Alaskans and should have a right to participate in the
process. He concluded that standards must be put in place to
ensure a candid process and he applauded the sponsor and
authors of the bill.
3:34:57 PM
Representative Gara asked Mr. Bruny if he cared about the
provision on how signatures gatherers were paid.
Mr. Bruny maintained that he has witnessed first hand that
signature gatherers want to get as many signatures as
possible and often do not answer questions. He believed that
to inform and educate the people, questions about the
initiative need to be answered.
Representative Gara asked if someone gathering signatures
who will not talk or answer question, did he want a rule to
make them have to speak. Mr. Bruny wanted a process where
information is dispensed to the people by the signature
gatherer and he believed that removing the one dollar per
signature would accomplish this.
Representative Gara continued that Mr. Bruny was arguing
that a gatherer might have the incentive to get the
signature quickly under the one dollar per signature rule,
but the bill now says that the gatherer can be paid on their
productivity, so he wondered how this changes anything. Mr.
Bruny agreed that they can be paid on being productive, but
at present that is not the case. He believed this to be a
more responsible way to gather signatures.
3:38:57 PM
Representative Austerman wanted clarification regarding caps
on the amount of money that a group in or outside can
contribute for an initiative campaign.
Mr. Bruny replied that he would not want outside groups
trying to get initiatives passed without the will of the
people being considered, but many of the outside companies
employ Alaskans and should be able to defend themselves in
this process.
Co-Chair Stoltze closed public testimony.
3:41:32 PM
Representative Johansen closed by asserting that the intent
of the bill is about the disclosure of money spent to change
state statute. He believed the people of Alaska have right
to know who is spending money and how much. He restated that
the public right to know outweighs any actual or perceived
acts of intimidation.
Representative Gara appreciated the way bill was presented,
but did not understand the disclosure. He agreed that
Alaskans do want to know who is paying for the ads and
contributing to an initiative, but in the beginning there
might be a local issue concerned citizens want to deal with
and he wondered why the disclosure was so important at this
stage.
Representative Johansen maintained that he does not see mass
intimidation as an issue, but the disclosure of all money
that could change Alaska's laws.
HB 36 was HEARD and HELD in Committee for further
consideration.
3:48:11 PM
HOUSE BILL NO. 225
"An Act relating to the State Procurement Code;
relating to the procurement of supplies, services,
professional services, construction services, state
fisheries products, state agricultural products, state
timber, and state lumber; relating to procurement
preferences; relating to procurement by the office of
the ombudsman, the Alaska Industrial Development and
Export Authority, the Alaska Energy Authority, and
other state agencies and public corporations; and
providing for an effective date."
3:48:19 PM
Representative Fairclough introduced HB 225 as a technical
and comprehensive way to streamline the procurement
processes in the state of Alaska. She stated that her office
started with the Veteran's Preference bill which has passed
the House. She would like to hear from those who have voiced
concerns regarding Section 18 of the bill. She noted that
Vern Jones, Chief Procurement Officer, believes that
technical issues raised in Section 18 are being
misinterpreted. She wanted those who had flown to Juneau to
testify regarding their concerns and then set aside the
bill.
3:49:51 PM
JOHN MACKINNEN, EXECUTIVE DIRECTOR, ASSOCIATED GENERAL
CONTRACTORS OF ALASKA, voiced his concern regarding two
areas of this bill. He referred to past history where there
were commonplace practices among some contractors who won
bids then would go back to subcontractors that bid with him
and negotiate on the side. Many people considered unethical.
This process was known as bid shopping. Many contractors in
the industry enlisted the help of the Department of
Transportation, the prime contractor in the state, to pass a
bill resulting in AS 36.30.115 requiring a contractor to
list their subcontractors within five working days of a bid
opening. This process has worked very well. He referred to
HB 225, Section 14, which allows for multi-step revised
sealed bidding. This would allow the contracting agency to
include successive sets of sealed bids in a process. He
believed this was not intended for construction contracting
business therefore it should be stated as such. Mr.
MacKinnen elaborated that the present management in the
Department of Transportation says that it would not use the
multi-step revised sealed bidding and he believes them, but
is concerned that some future management may change this. He
indicated that Section 18 has a similar provision that
allows multiple rounds of best and final offers. He would
like language in the provision that says it is not for
construction contracting.
Representative Doogan asked how the language as Mr.
MacKinnon fears it might be applied, would work.
Mr. MacKinnen replied that a contracting agency would put a
project out for a competitive bid and once the bids were in
the agency might want to see if there was a better offer and
put it out for a second round of competitive bids. He
indicated that there are cases where projects are rebid
which puts the contractors in difficult position because the
numbers are known.
Representative Doogan asked if this was a situation where
the first successful bidder may be pitted against everyone
else, including themselves. Mr. MacKinnon agreed.
3:56:10 PM
VERN JONES, CHIEF PROCUREMENT OFFICER, DEPARTMENT OF GENERAL
SERVICES, agreed with Mr. MacKinnon that the Department of
Transportation does not plan to use this in construction
procurement. The reason behind the changes is that there is
seldom a chance to do a comprehensive review and updating of
the procurement codes, so things were added that were
believed could be useful at a future point. He noted that in
Sections 14 and 18 there are techniques that private sector
companies have used with some success. He pointed out that
these changes were not aimed at construction. He thought it
important to put in all the tools possible in the
procurement codes to be successful to get cost effective
contracts. He added that the points brought up by Mr.
MacKinnon were valid and had no problem with making an
amendment to limit or exempt construction.
3:58:19 PM
Representative Fairclough explained it was never the intent
of the bill to make unfair business practices. She wanted to
propose a tool to save the state money. The Department of
Transportation does not plan to use this practice so she is
not opposed to an amendment.
Representative Gara mentioned that in the past some
procurement bills have been hugely divisive, but often it
was a housekeeping method to make things work better. He
wondered if there were cleanups necessary to get items for
the state at a cheaper point than might be arrived with the
bidding process.
Mr. Jones responded there are many housekeeping provisions
specific to modernizing and streamlining the procurement
code contained in HB 225. One of the provisions raised the
threshold for a formal bid from $50,000 to $100,000.
Construction bids would be raised from $100,000 to $200,000.
This would avoid the time consuming publicly noticed bidding
process until the threshold is met thereby simplifying the
process.
Representative Gara wondered once the bids were turned in
there might still be circumstances where going to the store
to buy the item is easier and cheaper.
Mr. Jones responded that the procurement officer must
certify that the bids are appropriate in price. If an
unanticipated high price occurs, then it can be revisited.
4:03:30 PM
Representative Salmon noticed approximately 45 changes in
the bill and wondered if this speeds up the procurement
process. Mr. Jones replied that the bill attempts to
streamline, modernize, simplify and speed up the procurement
process.
4:05:17 PM
Representative Fairclough interjected that she would like an
opportunity to address the issues that have been raised and
reach out to the business community for comments.
Representative Kelly commented that if the Associated
Builders and Contractors (ABC) have not weighed in then to
try and get their comments before rather than after the bill
is passed. Representative Fairclough raised her concern to
make the extra efforts to get businesses to respond. She
indicated talking with Wayne Stevens directly and asked him
to look at Section 14 and 18 and ABC was in her office
earlier. Both have been tracking the issue. She added that
there is an elimination of two preferences that might be
controversial to the two individuals that access that
preference.
Co-Chair Stoltze added that Wayne Stevens is with the Alaska
State Chamber of Commerce and ABC is a building and
construction organization. Representative Kelly suggested
consulting the state bidders list.
4:09:10 PM
Co-Chair Stoltze noted that bid shopping is a tool or dirty
word depending on the individual perspective.
SB 225 was HEARD and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 4:08 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 HB36 Sponsor Statement.pdf |
HFIN 2/8/2010 1:30:00 PM HFIN 3/15/2010 1:30:00 PM HFIN 3/16/2010 9:00:00 AM |
HB 36 |
| 06 HB36 Letters SupportOpposition.pdf |
HFIN 2/8/2010 1:30:00 PM HFIN 3/15/2010 1:30:00 PM HFIN 3/16/2010 9:00:00 AM |
HB 36 |
| 07 HB36 Legal Opinions.pdf |
HFIN 4/18/2009 8:30:00 AM HFIN 2/8/2010 1:30:00 PM HFIN 3/15/2010 1:30:00 PM HFIN 3/16/2010 9:00:00 AM |
HB 36 |
| HB 36 Sectional Analysis Version S CSSSHB36 Recent.pdf |
HFIN 2/8/2010 1:30:00 PM HFIN 3/15/2010 1:30:00 PM HFIN 3/16/2010 9:00:00 AM |
HB 36 |
| 02 HB 225 Sponsor Statement.doc |
HFIN 2/8/2010 1:30:00 PM HFIN 3/11/2010 9:00:00 AM HSTA 4/14/2009 8:00:00 AM |
HB 225 |
| 03 HB 225 Sectional Analysis.doc |
HFIN 2/8/2010 1:30:00 PM HSTA 4/14/2009 8:00:00 AM |
HB 225 |
| CSHB225 Explanation of Changes HFIN.doc |
HFIN 4/16/2009 8:30:00 AM HFIN 2/8/2010 1:30:00 PM |
HB 225 |
| SSHB 36 Backup.pdf |
HFIN 2/8/2010 1:30:00 PM HFIN 3/15/2010 1:30:00 PM HFIN 3/16/2010 9:00:00 AM |
HB 36 |
| HB36 NEW Fiscal Note Admin.pdf |
HFIN 2/8/2010 1:30:00 PM HFIN 3/15/2010 1:30:00 PM HFIN 3/16/2010 9:00:00 AM |
HB 36 |
| HB36 Thoma Opinion.pdf |
HFIN 2/8/2010 1:30:00 PM HFIN 3/15/2010 1:30:00 PM HFIN 3/16/2010 9:00:00 AM |
HB 36 |