Legislature(1995 - 1996)
03/22/1996 01:12 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
March 22, 1996
1:12 p.m.
MEMBERS PRESENT
Representative Brian Porter, Chairman
Representative Joe Green, Vice Chairman
Representative Con Bunde
Representative Bettye Davis
Representative Al Vezey
Representative Cynthia Toohey
Representative David Finkelstein
MEMBERS ABSENT
All members were present.
COMMITTEE CALENDAR
HOUSE BILL NO. 368
"An Act relating to election campaigns, election campaign
financing, the oversight and regulation of election campaigns by
the Alaska Public Offices Commission, the activities of lobbyists
that relate to election campaigns, and the definitions of offenses
of campaign misconduct; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 443
"An Act relating to the tax on transfers or consumption of motor
fuel, and repealing the exemption from that tax for motor fuel
which is at least 10 percent alcohol by volume; and providing for
an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 474
"An Act relating to violations of municipal ordinances and
regulations; and amending the definition of the jurisdiction of the
superior court and the Department of Health and Social Services
over delinquent minors to add a further exclusion from that
jurisdiction for a minor's violation of a municipal ordinance or
regulation that is punishable as an infraction or violation, and
making a related technical amendment to that jurisdictional
definition."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 414
"An Act requiring conciliation panel review in a civil action
against an architect, engineer, or land surveyor; and providing for
an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 368
SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM
SPONSOR(S): REPRESENTATIVE(S) JAMES
JRN-DATE JRN-DATE ACTION
12/29/95 2362 (H) PREFILE RELEASED
01/08/96 2362 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2362 (H) STA, JUDICIARY, FINANCE
01/25/96 (H) STA AT 8:00 AM CAPITOL 102
01/25/96 (H) MINUTE(STA)
01/30/96 (H) STA AT 8:00 AM CAPITOL 102
01/30/96 (H) MINUTE(STA)
02/01/96 (H) STA AT 8:00 AM CAPITOL 102
02/01/96 (H) MINUTE(STA)
02/29/96 (H) STA AT 8:00 AM CAPITOL 102
02/29/96 (H) MINUTE(STA)
03/05/96 (H) STA AT 8:00 AM CAPITOL 102
03/05/96 (H) MINUTE(STA)
03/09/96 (H) STA AT 10:00 AM CAPITOL 102
03/09/96 (H) MINUTE(STA)
03/12/96 3087 (H) STA RPT CS(STA) NT 2DP 3NR
03/12/96 3088 (H) DP: JAMES, PORTER
03/12/96 3088 (H) NR: GREEN, IVAN, ROBINSON
03/12/96 3088 (H) FISCAL NOTE (ADM)
03/12/96 3088 (H) REFERRED TO JUDICIARY
03/20/96 (H) JUD AT 1:00 PM CAPITOL 120
03/20/96 (H) MINUTE(JUD)
03/22/96 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
JEANNETTE JAMES, Representative
Alaska State Legislature
State Capitol Building, Room 102
Juneau, Alaska 99801
Telephone: (907) 465-3743
POSITION STATEMENT: Presented sponsor statement for HB 368.
BROOKE MILES, Juneau Branch Administrator
Alaska Public Offices Commission (APOC)
P.O. Box 110222
Juneau, Alaska 99811-0222
Telephone: (907) 465-4865
POSITION STATEMENT: Provided commission's position and answered
questions regarding HB 368.
C.S. "CHRIS" CHRISTENSEN III, Staff Counsel
Alaska Court System
303 K Street
Anchorage, Alaska 99501
Telephone: (907) 264-8228 (Anchorage)
(907) 463-4771 (Juneau)
POSITION STATEMENT: Testified on HB 368.
GLEN SCHRADER
P.O. Box 1264
Kenai, Alaska 99611
Telephone: (907) 283-4359
POSITION STATEMENT: Testified on HB 368.
KATHY ASHBY
Alaska Public Interest Research Group (AKPIRG)
1835 West 15th
Anchorage, Alaska 99501
Telephone: (907) 278-3661
POSITION STATEMENT: Testified on HB 368.
ANNE CARPENETI, Assistant Attorney General
Criminal Division
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3428
POSITION STATEMENT: Answered questions on HB 368.
ACTION NARRATIVE
TAPE 96-40, SIDE A
Number 0001
CHAIRMAN BRIAN PORTER called the House Judiciary Committee meeting
to order at 1:12 p.m. Members present at the call to order were
Representatives Porter, Green, Bunde, B. Davis, Toohey and
Finkelstein; Representative Vezey joined the meeting at 1:21 p.m.
HB 368 - ELECTION CAMPAIGN FINANCE REFORM
Number 0060
CHAIRMAN PORTER noted that Representative James, sponsor of HB 368,
would present the bill.
REPRESENTATIVE JEANNETTE JAMES explained she introduced HB368
because of the related initiative that had been filed. The
original bill was as close to the initiative as possible. Despite
good intentions, she said, people voting on the initiative would
not have had the benefit of a close look at what they were voting
on. Neither would they have known what unintended consequences
might have arisen from the initiative. Therefore, she had felt the
public was entitled to have the bill go through a public process.
Number 0200
REPRESENTATIVE JAMES said Representative Finkelstein had also had
a bill. After discovering needed changes, he and Representative
Jame had begun to work together to get a bill through the
legislature that was substantially similar to the initiative and
that addressed concerns that might arise if the initiative went
forward. In addition, they both wanted to provide the opportunity
for public input. Changes to HB 368 had been made in the State
Affairs Committee and Representative James expected there would be
more. She thanked Representative Finkelstein for his work and
voiced that the bill ought to have bi-partisan support.
Number 0344
CHAIRMAN PORTER stated his intention of taking amendments that
would improve the bill in terms of addressing questions, anomalies
and gaps in the initiative, but that would maintain a substantially
similar posture to the initiative, especially in terms of its
intent.
Number 0404
BROOKE MILES, Juneau Branch Administrator, Alaska Public Offices
Commission (APOC), testified that the commission had met via
teleconference and reviewed CSHB 368(STA). They had a couple of
technical and substantive concerns, which were addressed by
amendments drafted by Representative Finkelstein.
MS. MILES referred to page 4, line 16. She said CSHB 368(STA)
changed an existing policy of the commission, which was to exempt
municipal candidates who spent $1,000 or less from campaign
disclosure reporting. Under CSHB 368(STA), that threshold was
raised to $2,500, which the commission viewed as too high. The
commission feared that would eliminate virtually all of the
municipal reports in most communities. Therefore, APOC was
requesting that the amount be reinstated at $1,000.
Number 0526
MS. MILES said the other area of substantive concern was the
complaint process. She referred to page 16, line 29, which
followed through in Section 21 on page 17, line 15, and said she
understood Representative Finkelstein had proposed an amendment
that addressed most of the commission's concerns.
MS. MILES indicated two issues remained. Both were of a question
nature. First, there was reference to `publicly funded entity' in
a few sections of the bill. She stated, "There is a definition in
there of what a publicly funded entity is, but because this bill
addresses the activities of individuals, of persons - and `person'
under the statute includes associations, corporations,
organizations, companies, labor unions, natural persons - and there
are also provisions in this statute that include what is required
of the state and its political subdivisions, the commission just
would like to know what a publicly funded entity is. If that
language is going to remain in the bill and we'll be responsible
for administering it, we would need to know that."
Number 0629
MS. MILES said the other question concerned the section addressing
honoraria, page 20, line 29. Although they had discussed it and
understood the idea behind having it in the statute, the commission
believed there could be no enforcement. She noted that the
legislature had a section about honoraria very similar, if not
word-for-word, in the ethics code. "And a way that that can be
double-checked for a legislator is that these high-profile earned-
income employers would have a dollar figure, so if you were
receiving a salary that was not commensurate with the work that was
required, a member of the public could look at that and say, `wait,
how does an administrative assistant make a million dollars?' and
a complaint could be filed," she said. On the other hand, in this
statute, it would be difficult, and perhaps impossible, to enforce.
Number 0759
MS. MILES mentioned the commission's fiscal note, which provided
APOC's fair finding of what the law would cost to enforce and
administer.
CHAIRMAN PORTER asked why honoraria would not be on one of the
reports that the candidate or a legislator would submit.
Number 0802
MS. MILES said if a candidate was running for office and prohibited
from taking this honoraria, because their financial disclosure
statement would provide APOC their financial picture from the
previous calendar year, it would not be on the document held by the
commission at that point. Although a person could file a complaint
with APOC, resulting in investigation and possible enforcement,
there would be no way to look at the prima facia material on
publicly filed reports and cross-reference it.
CHAIRMAN PORTER indicated the information would come in the next
year.
MS. MILES replied, "It would come in the next year if the person
attained office. If the person ran for office and did not attain
office, the next year they would probably not be required to file
a conflict of interest statement unless they were appointed to a
board or commission or a position that required the filing."
REPRESENTATIVE CYNTHIA TOOHEY asked if it would be in the year-end
report.
MS. MILES replied that usually honoraria would not be shown on a
campaign disclosure report. "It would be shown on a financial
disclosure report," she said, "because it wouldn't be considered a
contribution to a campaign." She understood the intent was that
that a person could not travel around, taking large honoraria, and
then use that as personal contributions to her or his own campaign.
Number 0890
CHAIRMAN PORTER said, "I don't think it's necessarily that. It's
the idea of receiving money in any shape or form that influences
the legislator, whether it's campaign or whether it's legislation."
MS. MILES replied, "Right. And it already applies to legislators.
This is to get it to apply to candidates."
Number 0925
C.S. "CHRIS" CHRISTENSEN III, Staff Counsel, Alaska Court System,
indicated he was general counsel to the judicial branch. He
referred to Section19, page 16, of CSHB 368(STA), which he said
affected the court system. He said there were two issues. For
one, he would propose a solution; for the other, he would just
bring the problem to the committee's attention, as he was not sure
a solution was possible.
Number 0956
MR. CHRISTENSEN stated, "The original bill, as it was introduced,
gave a person the choice of either going to APOC to file a
complaint or going straight to court. And if you went straight to
court, the court was required to impose treble damages and the
complainant got to keep half. So, essentially, the original bill
created a bounty hunter system. And, as you can expect, the small
number of complaints that APOC gets right now is going to skyrocket
if people out there know that all they have to do is find something
wrong and they get half of the treble damages that a court
imposes." Mr. Christensen suggested most of those people would be
pro se litigants and that the cases would take longer than normal.
MR. CHRISTENSEN noted that the State Affairs Committee had
attempted to correct the problem. "And, of course, you're bound by
the problem of doing something that's substantially similar," he
said. "They said that you have to go to APOC first and you can go
to court only if APOC hasn't issued a preliminary investigation
within 60 days of your filing the complaint with APOC." He thought
the problem would remain to some extent, because APOC did not have
the resources to deal with most complaints within 60 days. "So,
you're still going to see, I think, a lot more complaints filed, as
long as people have the right to go to court and get half of the
treble damages that are awarded," Mr. Christensen concluded.
Number 1036
REPRESENTATIVE AL VEZEY referred to the clause about going straight
to court, treble damages and half going to the plaintiff. He asked
if that came from the initial referendum.
MR. CHRISTENSEN replied yes.
REPRESENTATIVE VEZEY asked if there was any indication about how a
federal or state court would look upon a bounty hunter system. He
was unaware of any retribution, punishment or fine system ever
structured like that and thought the whole thing might be thrown
out as unconstitutional.
MR. CHRISTENSEN said some states actually allowed private
prosecution of criminal matters, although Alaska did not. "But I
don't know that private prosecution is necessarily prohibited by
the constitution," he said. "I think if the legislature passes a
statute or the voters enact a statute through the initiative
process that says people can bring something to the attention of
the court, I'm not sure what the answer would be. I'm sure it
would be challenged, but I can't tell you, `yes, it would be thrown
out.'"
Number 1145
REPRESENTATIVE VEZEY voiced his belief that a bounty system would
strike at fundamental judicial issues.
MS. CHRISTENSEN indicated he could not shed too much light on the
subject. "This is unique," he said. "I haven't seen this sort of
thing elsewhere in our law and I don't know whether other states do
it. It is a can of worms and that's why I wanted to bring it to
the committee's attention." He emphasized the potential for
tremendous cost, as it was more expensive to go through the courts
than through an administrative agency.
Number 1207
REPRESENTATIVE DAVID FINKELSTEIN explained he would later propose
an amendment to the relevant sections, Sections 19 and 20. He
indicated there had been "huge debates" on the disposition of the
penalties in the court system, relating to how much would go to the
plaintiff and how much to the state.
CHAIRMAN PORTER said he was looking at version F and pointed out
that the provision was on page 18, Section 22.
MR. CHRISTENSEN concurred and said it referred back to Section 19,
the section he was referring to which provided a complainant had to
wait 60 days before going to court. He specified that the two
sections worked with each other.
Number 1282
REPRESENTATIVE FINKELSTEIN did not believe there was any evidence,
even with the original provisions in the initiative, that there
would be a stampede to the courtroom. Whoever filed the complaint
could lose and end up paying court costs. He referred to page 18,
which said that if the superior court found the violation was not
a repeat violation or part of a series or pattern of violations, or
was inadvertent, that imposition of the penalty may be suspended or
set aside. "You're going to get part of nothing," he said.
"There's every provision in here to allow justice to be served, and
you're not going to be much of a bounty hunter when the judge has
the ability to bring it down to zero."
MR. CHRISTENSEN responded that because there would be many pro se
litigants, there might be potential for mischief. He said, "I
realize that to an extent, the legislature's hands are tied by the
substantial similarity problem. I just wanted to draw this to your
attention."
REPRESENTATIVE FINKELSTEIN pointed out that an upcoming amendment
addressed these concerns.
Number 1375
MR. CHRISTENSEN referred to Section 19, which allowed imposition of
civil penalties. He said he had asked two attorneys in the court
system and two from the Department of Law whether a person sued in
court for civil penalties would have the right to a jury. "And
these four attorneys couldn't really agree," he said. If a person
got a decision from APOC and then appealed it to court, the law was
clear there was no right to a civil jury. If the complainant
merely asked for an injunction, the law was also clear that there
was no right to a civil jury, he said. "But it's not entirely
clear that if you're asking for civil penalties you don't have the
right to a civil jury."
Number 1419
MR. CHRISTENSEN pointed out there was a subsidiary issue. "We have
the whole problem of when does a person get a jury for a criminal
charge," he said. "And typically the courts have held that they
will accept the legislature's characterization of something as
civil and not criminal, particularly when it's a regulatory matter
such as this. But still, I think it would be better, and certainly
less expensive for the state, if it were clear that this did give
no right to a jury trial if someone were to sue for civil
penalties."
MR. CHRISTENSEN referred to HB 474 and said the committee
substitute for that bill contained language that would be fairly
suitable. He indicated that the last few lines of page 2 of HB474
said, "an action for civil penalty under this section does not give
rise to the right to a trial by jury or counsel at public expense".
Mr. Christensen stated, "I think if that were simply inserted at
the end of Section 19, it would clarify it."
Number 1482
REPRESENTATIVE CON BUNDE asked what would happen if a candidate was
indigent.
MR. CHRISTENSEN replied, "If you're charged with something and the
state characterizes it as criminal, and you're facing a fine that
is so great as to denote criminality in the eyes of the public,
then you'd be entitled to a public defender if you were indigent.
Typically, as I indicated, the courts will accept the legislature's
characterization of something as a civil penalty rather than a
criminal penalty, although not always. They generally will do it
if you're dealing with a regulatory area like this." He indicated
that was true even if there was a huge fine.
Number 1565
GLEN SCHRADER testified via teleconference from Kenai. Because of
the numerous amendments, he had not had adequate time to research
them. He expressed concern about the time and effort put into the
bill, suggesting the initiative should simply go to the voters in
the fall. If they passed it, fine; if they did not, the next
legislature could work on it, he said. He believed it was
unconstitutional but felt there should be some limit on the amount
a candidate could spend on any particular office, whether it be
from contributions or his or her own money.
CHAIRMAN PORTER responded, "During the discussions on the bill and
the initiative, I think it's pretty well been concluded in this
body that you're correct, that trying to limit the amount of money
that an individual can him[self] or herself put into his own or her
own campaign is unconstitutional." He explained there was some
inability of the legislature to respond to an initiative for two
years after it passed. "So, the problems with the wording of the
initiative that are now known and admitted by even the drafters of
the initiative would be in effect for another election, at least,
and create, probably, more problems than the initiative would
solve," Chairman Porter said, emphasizing they were not trying to
create something in any way dissimilar from the initiative.
Number 1738
REPRESENTATIVE BUNDE said the initiative limited the ability of
people to raise money. "What is unconstitutional is limiting the
ability of someone to take their own money and put [it] into a
campaign," he said.
CHAIRMAN PORTER said, as Representative Finkelstein had pointed out
in the previous committee, the only step not being taken here was
public financing of campaigns. He suggested that was the only way
that someone's personal contributions could be limited.
MR. SCHRADER asked if there was any way to limit contributions from
the district or the state.
CHAIRMAN PORTER replied he thought there was case law on that.
"We're probably passing something that is going to be
constitutionally questionable anyway in limiting outside
contributions," he said, explaining that the initiative totally
prohibited contributions from outside the state. However, HB 368
made slight exceptions to that regarding relatives. "Probably, if
it were challenged, we'd lose that, too," he added.
Number 1911
KATHY ASHBY, Alaska Public Interest Research Group (AKPIRG),
testified via teleconference from Anchorage. She prefaced her
remarks by saying the amendments before her were not current
versions. She shared concerns about campaign financing and the use
of funds. She believed the initiative, signed by 33,000 Alaskan
voters, was being diluted. Even today, APOC was evidently unable
to do adequate enforcement because of lack of funds, staff and
technology, she said. "It seems to me that many of these stabs are
going to be futile and the electorate is going to be back, worse
off than we were with the hope of an initiative. ... I would like
very much to see the initiative go to the ballot with all of its
blemishes," she concluded.
REPRESENTATIVE BUNDE said he shared Ms. Ashby's goal and would much
prefer that the initiative, "warts and all," go to the public.
Number 2048
ANNE CARPENETI, Assistant Attorney General, Criminal Division,
Department of Law, explained she was raising concerns of the
Criminal Division regarding criminal offenses contained in the
bill. She had spoken with Representative Finkelstein and had
prepared rough-draft conceptual amendments.
MS. CARPENETI referred to page 25, lines 29-31, which defined the
terms of intentionally, knowingly, recklessly and with criminal
negligence, the mental states for criminal law, as defined in
Title11 criminal law. "But the problem is, their use in the
criminal statutes in the bill don't work in relation to their
definitions," she stated. She referred to page 24, line 12,
relating to campaign misconduct in the first degree. "The way
these mental states are defined in Title 11, you act intentionally
as to a result, not as to what you do, what you act," she
explained. "The way they're defined, you really can't
intentionally violate a statute. You can intentionally do an act
and intentionally cause a death, but you don't intentionally
violate the murder statute," she said, emphasizing that
"intentionally" was defined in relation to the result, not what
statute they were intending to violate.
Number 2125
MS. CARPENETI said the three levels of crimes in the bill all
suffered from similar problems in terms of "knowingly and with
criminal negligence". She offered to work with the committee on
it.
CHAIRMAN PORTER voiced his preference to have Ms. Carpeneti draft
that language and run it by him and Representatives Finkelstein and
James. He asked if there was further testimony. Hearing none, he
closed the public hearing.
Number 2211
REPRESENTATIVE FINKELSTEIN expressed appreciation to Representative
James and the House State Affairs Committee for their work on the
bill. He noted that only the last amendment, not yet handed out,
was major and substantive. Most others were relatively minor
conforming provisions. The stack of amendments he provided, dated
March 20, 1996, had a cover page entitled, "R. Finkelstein's
proposed amendments to HB 368 in House Judiciary (13 amendments)."
Number 2298
REPRESENTATIVE FINKELSTEIN offered Amendment 1 to CSHB 368(STA),
which read:
Page 23, Line 8
Delete: "33 1/3"
Insert: "50"
Page 23, Line 16
Delete: "33 1/3"
Insert: "50"
REPRESENTATIVE FINKELSTEIN indicated Amendment 1 was a correcting
amendment in response to APOC's request for a change in the
percentage as it applied to when the name of a candidate had to be
included in the name of a group. "So, that was changed but we also
mistakenly changed it in another place that is unrelated," he said.
"This just corrects that."
CHAIRMAN PORTER noted there was a motion to move Amendment 1,
addressing page 23, line 8, and page 23, line 16.
REPRESENTATIVE BUNDE asked if the 50 percent was reflected in
existing law.
REPRESENTATIVE FINKELSTEIN replied that was correct. "This 50
percent we're changing back here ... has to do with when a group is
controlled by a candidate, which is a different subject that when
the name has to be included in the name of the group."
Number 2340
REPRESENTATIVE VEZEY said the definition of "group" was the most
complex aspect of public campaign disclosure law. The section was
fraught with things he considered unconstitutional. He suggested
that what was on page 23 should probably be consistent with what
was on page 5. He thought the 33-1/3 was an absurd standard and
said, "I think the standard of more than 50 percent is a clearer
line."
CHAIRMAN PORTER referred to the section on page 5 and said that in
the previous rendition, if a group spent more than 50 percent of
its money on the activities of one issue or one candidate, they
were required to have that issue or candidate in their name.
REPRESENTATIVE VEZEY clarified that was only for a candidate.
CHAIRMAN PORTER said, "What we're saying is we want to move that to
33-1/3 percent, considering ... that somebody could kind of defeat
the purpose by spending 40 percent of their money on one issue."
Number 2462
MS. MILES explained that the section on page 5 was a naming
convention for a group spending 50 percent, under the existing
language, or 33-1/3 percent, under the new language, on one
candidate.
TAPE 96-40, SIDE B
Number 0001
MS. MILES expressed that it was not the commission's intention to
alter the language found on page 23, which constituted what a
"controlled group" was. "A controlled group should remain at least
... at 50 percent or more," she said, "because a contribution to a
controlled group is just the same as a contribution to the
candidate." She cited an example in the legislature, saying, "A
person who gives a maximum contribution to Republicans to Dave
Donley could not also give a contribution to the Citizens for Dave
Donley. So, we wouldn't want that to be any less than 50 percent."
She concluded, "If it's too confusing to have a different level for
the naming convention and for the controlled group, then it would
be the commission's preference that they both remain at 50
percent."
Number 0056
REPRESENTATIVE VEZEY referred to paragraph (B), line 1-19, page 23,
and asked whether Ms. Miles was saying that was basically in
existing law.
MS. MILES replied, "Basically, under existing law, a group that
spends more than 50 percent of its money on behalf of one candidate
is a controlled group. It's a group that's considered to be
controlled by that candidate and then is joined together, for
purposes of the contribution limit, as one and the same."
REPRESENTATIVE VEZEY responded, "But I'm not aware of any wording
like this in statute or regulation."
MS. MILES said although it was in current statute, she did not have
that statute with her.
REPRESENTATIVE VEZEY referred to page 21 and suggested this was
creating new definitions.
MS. MILES responded, "Right. This is defining `group,' which is
currently defined under regulation and statute."
Number 0108
REPRESENTATIVE VEZEY expressed that, according to his
interpretation of current supreme court rulings relating to
campaign expenditures, this definition would not stand up to
supreme court scrutiny as far as what independent expenditure
groups could do.
MS. MILES clarified that independent expenditures were a different
issue.
REPRESENTATIVE VEZEY said, "But you are trying to take an
independent group and create a statutory definition for a
controlled group." He clarified that by "you" he did not mean Ms.
Miles. He was not familiar with current statutory wording that
defined when a group became a controlled group, he said. That had
been defined through court cases but not clearly in statute.
MS. MILES replied, "Right. Under current statute, I think, it's
any combination of two or more individuals acting jointly to bring
money into the group is a group."
REPRESENTATIVE VEZEY said he was not aware of any statutory
definition of controlled group.
Number 0163
REPRESENTATIVE FINKELSTEIN indicated they were discussing a
different subject, on page 5, which might be appropriate for
another amendment. However, Amendment 1 corrected something
changed inadvertently and was purely technical, he said.
CHAIRMAN PORTER referred to page 5 and asked: "Why don't we want
to say that if you spend more than a third, then that is the
purpose of your group?"
Number 0216
MS. MILES responded, "I believe that it's the commission's position
that that's really at too low of a level and again, keeping in mind
that this is now changing the contribution limit to $500 from an
individual, so a person who gave $500 to a group that spent one-
third of its money on one candidate could then not make a
contribution to the candidate." She suggested it might be better
to change both the naming convention and the controlled group
definition back to 50 percent, if that was clearer.
CHAIRMAN PORTER suggested they should do one or the other.
REPRESENTATIVE FINKELSTEIN said, "I don't disagree with you, Mr.
Chairman, at all about this. I was just trying to follow the
commission's recommendation here. But I don't think there's any
real reason that a controlled group shouldn't be at 33-1/3
percent." He acknowledged that the argument could be made the
other way, as well. He explained that he had tried not to get into
controversial areas not covered by the initiative. "It just says
that existing law prevails," he added.
CHAIRMAN PORTER asked if that was what the amendment did.
REPRESENTATIVE FINKELSTEIN affirmed that.
Number 0280
CHAIRMAN PORTER pointed out that it was changed to 33-1/3 percent
in Section 5. With this amendment, he thought it would still be
inconsistent.
REPRESENTATIVE FINKELSTEIN responded with an example, saying that
a group that gave 51 percent to one candidate would be counted as
part of that candidate's campaign and the candidate could be
considered controlled by that group. However, if the group gave 50
percent to two different candidates, there would be a question as
to whose campaign they would be counted as part of.
CHAIRMAN PORTER said they would have to make up their minds,
because under Section 5, if they spent 33-1/3 percent on one
person, they had to put that name in the title of their group.
REPRESENTATIVE FINKELSTEIN indicated there could be a circumstance
where two names would be in the title. He said the issue was
whether they were really independent groups or controlled by
somebody.
Number 0360
CHAIRMAN PORTER commented that he understood, after hearing the
debate, the rationale for passing the amendment and having
inconsistency in the numbers. However, someone could read the bill
and be confused by the different standards. He asked if there was
further discussion or an objection to Amendment 1. There being no
objection, Amendment 1 passed.
Number 0405
REPRESENTATIVE FINKELSTEIN offered Amendment 2 in response to a
memo from Jack Chenoweth requesting for the change because of an
internal inconsistency in the bill. The House State Affairs
Committee had decided to allow limited contributions from groups to
other groups. However, separate provisions said campaign money
would not be given to groups. Amendment 2 corrected that and made
it internally consistent. Amendment 2 to CSHB 368(STA) read:
Page 13, Line 23, after "(a)"
Delete: "Campaign"
Insert: "Except as otherwise provided, campaign"
Page 14, Line 1, after "fine"
Insert: "or"
Page 14, Lines 10-11
Delete: ";or"
(7) used to make contributions to another candidate or to
a group."
Insert a new subsection to read:
"(c) Campaign contributions held by a candidate may not
be contributed to another candidate or to a group"
CHAIRMAN PORTER asked if Amendment 2 left it unequivocal that a
group could not give money to another group.
Number 0432
REPRESENTATIVE FINKELSTEIN replied, "No. It actually goes with the
State Affairs Committee approach which says groups can give to
other groups, up to a $1,000 limit in the case of groups and
unlimited within parties."
REPRESENTATIVE BUNDE indicated he would have an amendment regarding
that section.
CHAIRMAN PORTER pointed out that Representative Bunde's amendment
did not deal with campaign money from group to group.
REPRESENTATIVE BUNDE agreed it was from one campaign to another.
However, it applied when a person was no longer a candidate, he
said.
Number 0538
CHAIRMAN PORTER referred to page 13, line 27, and said, "The lead-
in statement is, `Campaign contributions held by a candidate or
group may not be' and we're adding `(7) used to make contributions
to another candidate or to a group.'"
REPRESENTATIVE FINKELSTEIN clarified, "That's meant to say delete
there. It says "delete `or [(7)] used to make contributions to
another candidate or to a group.' and then insert. So, it's
deleting (7) with this amendment."
Number 0583
CHAIRMAN PORTER asked, if the amendment passed, what the monetary
limit would be for a group giving money to a group.
REPRESENTATIVE FINKELSTEIN replied "$1,000." Party to party, the
amount was unlimited.
CHAIRMAN PORTER asked what the bill now provided for party to
party.
REPRESENTATIVE FINKELSTEIN said, "Zero." He added that it depended
on how it was defined.
Number 0614
REPRESENTATIVE BUNDE referred to page 14, line 11, and said he
understood that groups could contribute group to group.
CHAIRMAN PORTER added, "Because we've eliminated number (7) above
there, which precluded it. So groups can give to groups to the
limit of $1,000." He asked how it affected what a party could do.
REPRESENTATIVE VEZEY responded, "A party, as defined in APOC
statutes, is a group." He noted there were two contributors in
Alaska statutes, individuals and groups. "You fall into one or the
other category," he said.
Number 0657
CHAIRMAN PORTER suggested the bill changed that to three
categories.
REPRESENTATIVE FINKELSTEIN clarified that intra-party activity was
allowed. Amendment 2 was a technical amendment to fix an
inconsistency that could have been interpreted to disallow that
kind of group transfer.
CHAIRMAN PORTER specified it was group transfers, not party
transfers.
REPRESENTATIVE FINKELSTEIN referred to (7), which said, "used to
make contributions to another candidate or to a group". He
explained, "If that wasn't fixed, it ... might have precluded those
group transfers or party transfers."
REPRESENTATIVE TOOHEY stated, "What he's saying is a party and a
group are two different things."
REPRESENTATIVE FINKELSTEIN indicated Representative Vezey was
right. Although all parties were groups, not all groups were
parties.
Number 0716
CHAIRMAN PORTER asked, if the bill passed, whether the statute
would remain the same, with just groups and parties.
MS. MILES replied, "Essentially, yes. A party is always a group.
But a party is a group with special dispensation for greater
contributions and also greater ... unlimited interaction between a
statewide party and its subdivisions."
REPRESENTATIVE BUNDE asked, if this amendment was accepted, whether
a legislator would be prohibited from contributing to another
legislator out of campaign funds.
REPRESENTATIVE FINKELSTEIN responded that was already precluded by
(7).
CHAIRMAN PORTER said, "Basically, without the amendment, that would
be precluded. We're taking out language that precludes both party
to party and campaign to campaign, and leaving campaign to campaign
or candidate to candidate," he said.
Number 0778
REPRESENTATIVE BUNDE opposed Amendment 2.
CHAIRMAN PORTER asked whether Representative Bunde thought groups
should not be able to give money to each other.
REPRESENTATIVE FINKELSTEIN referred to a letter dated March 12,
1996, from Jack Chenoweth to Chairman Porter, which said Mr.
Chenoweth had made a minor error in two provisions that now
conflicted and needed correction. Representative Finkelstein
stated, "If the person objecting wants to propose a substantive
amendment, that's fine, we can discuss it. But I'm doing nothing
more here than trying to fix a minor drafting matter."
Number 0814
REPRESENTATIVE VEZEY moved to amend Amendment 2 by deleting the
last five lines and inserting a new subsection. "Just delete from
`insert a new subsection' down," he said.
CHAIRMAN PORTER objected for the purpose of discussion.
REPRESENTATIVE VEZEY expressed that he had serious concerns and
suggested someone be brought in to consult with the committee on
the bill. He questioned its constitutionality as to campaign
expenditures and believed it had philosophical flaws.
CHAIRMAN PORTER emphasized the goal of crafting legislation that
did not vary from the nature of the initiative, as opposed to
crafting legislation that he liked. He asked if candidate-to-
candidate contribution from campaign funds was precluded in the
initiative.
REPRESENTATIVE FINKELSTEIN said that was correct. He emphasized
the technical nature of the amendment and indicated that amending
the amendment would create a new conflict.
Number 0960
REPRESENTATIVE VEZEY withdrew his amendment to Amendment 2.
CHAIRMAN PORTER asked members with substantive concerns to draft
amendments with Mr. Chenoweth for presentation at the next meeting.
REPRESENTATIVE FINKELSTEIN requested that he and Representative
James receive a copy of any proposed amendments.
CHAIRMAN PORTER asked if there was further discussion or an
objection to Amendment2. There being none, Amendment2 passed.
Number 1023
REPRESENTATIVE FINKELSTEIN offered Amendment 3 to CSHB 368(STA),
which read:
Page 5, Lines 10-11
Delete: An individual may make a contribution to a group
or to a political party."
Insert: "Only an individual may make a contribution to
a group or political party. Only individuals, groups or
political parties may make contributions to a candidate."
Page 6, Line 20:
Delete: "an individual or group"
Insert: "a person"
REPRESENTATIVE FINKELSTEIN explained Amendment 3 conformed to the
initiative and the Senate bill. The initiative said individuals
made contributions to groups or parties; individuals, groups and
parties made the contributions to a candidate. "What we're trying
to do is make something that's easily understood without having to
read every provision together," he said.
CHAIRMAN PORTER noted that as a motion to move Amendment 3.
Number 1064
REPRESENTATIVE VEZEY objected and asked for an explanation.
REPRESENTATIVE FINKELSTEIN responded, "Right now, it says an
individual may make a contribution to a group or to a political
party, on page 5, lines ... 10-11. [At] later points, we limit
what can be given to a candidate ... but there's never one place
set in clear language what that limit is." He said the bottom
change was technical. "There are entities other than individuals
or groups," he said, indicating there was an amendment coming up
that fixed all the "persons" and "individuals" throughout the
bill.
Number 1141
REPRESENTATIVE VEZEY maintained his objection. Regardless of the
wording being directly out of the initiative, the legislature was
obliged to write statutes that conformed to established law and
would stand up to constitutional scrutiny, he said. He believed
the initiative was so fraught with constitutional problems that
Alaska's law would be in flux for 10-20 years if it passed. "I do
think that we have an obligation to go through this and try to
bring the statute in conformity to the state of the law as it
exists today," he said.
Number 1202
CHAIRMAN PORTER said the amendment made it purely clear that a
business could not give money. Although he did not personally
agree with that, it was the provision of the initiative. "Again,
if we wanted to debate that issue, let's get an amendment that
specifically does all of that," he suggested.
REPRESENTATIVE VEZEY viewed the amendment as being broader than
that. "[I]t also says `only an individual' excludes groups," he
said.
Number 1290
CHAIRMAN PORTER agreed an individual and a group were distinct
entities.
REPRESENTATIVE JAMES asked: "Didn't we just say that groups could
give money to groups, and now we're saying only individuals can
give money to groups?"
REPRESENTATIVE VEZEY said, "And this does not say that a business
cannot give a contribution, because a business can be defined as a
group."
REPRESENTATIVE JAMES concurred.
REPRESENTATIVE VEZEY stated that only individual groups or
political parties may make contributions to a candidate.
CHAIRMAN PORTER agreed. "We just said that a group could give
money to a group and now we're just specifically saying they
can't," he added.
Number 1327
REPRESENTATIVE FINKELSTEIN explained the language came from the
Senate bill before another change was made. He offered to try
again on the amendment and said the intention was only to correct
the language in that particular place.
CHAIRMAN PORTER noted they were withdrawing Amendment 3 and would
work on it next time. He suggested also thinking about why a group
would want to give money to a group in the first place.
REPRESENTATIVE VEZEY commented that he wanted to bring in an expert
to advise the committee. He suggested the issue had been around
ever since Watergate and that there were thousands of court cases
defining what was allowed or prohibited in those areas.
Number 1439
REPRESENTATIVE FINKELSTEIN said at least four opinions had been
offered in writing to the legislature. "If you read them all, the
conclusion you come to is that, in general, this initiative has
avoided the areas that are explicitly unconstitutional," he said.
"But there's also many of them that are not explicitly
constitutional." He noted that the one being discussed was least
likely to have a problem because the federal government, as well as
the majority of states, banned contributions except from
individuals.
Number 1514
REPRESENTATIVE VEZEY referred to the 1936 federal election campaign
reform which outlawed contributions from corporations, labor unions
and other entities. In so doing, he said, they created the "PAC"
or political action committee, a group formed to contribute for
other entities. Businesses and labor unions still contributed,
but in the name of a PAC.
REPRESENTATIVE FINKELSTEIN thought that was incorrect and said,
"Only individual contributions are allowed to those groups."
Number 1575
REPRESENTATIVE VEZEY replied there were limitations on the money
that could go into PACs. But the federal government, when it
created the ban on contributions by labor unions and corporations,
created the PACs.
CHAIRMAN PORTER pointed out that the source of funds contributed by
the PAC was totally different from that contributed by a business.
"A business can contribute from business funds," he said. "There's
a total prohibition in this initiative, and in the federal law,
from that happening. The PACs must have their contributions from
individuals."
REPRESENTATIVE VEZEY interjected, "All of whom can be employees of
the business."
Number 1625
CHAIRMAN PORTER agreed. "And this is, of course, a proof problem,
but if it is determined that the business is giving money to
employees with the expectation that that money is to be given to a
certain candidate, that is a violation of federal law," he said.
REPRESENTATIVE FINKELSTEIN added, "And in existing state law." He
mentioned there had been prosecutions over that provision.
REPRESENTATIVE VEZEY indicated that federal law clearly provided
for payroll deductions for PACs.
CHAIRMAN PORTER replied, "But the PAC cannot be a PAC for a
candidate. It is just a PAC for the organization. Then they get
together and decide how it is they want to distribute their funds.
But that is a total violation of the law if it is determined that
all of those funds, 33-1/3 percent or 50 percent or however they've
got their statute written, [are] going to one place."
Number 1679
REPRESENTATIVE FINKELSTEIN commented that while it seemed new,
because it had not been seen in Alaska, it was not unusual.
However, there were unusual provisions in the bill, such as the
lobbyist provision, which were the ones most likely to be subject
to constitutional challenge, he said.
Number 1736
REPRESENTATIVE FINKELSTEIN moved Amendment 4 to CSHB 368(STA),
which read:
Page 15, Lines 10-12
Delete
"(6) repay contributions to contributors, but only
if repayment of the contribution is made to all
contributors pro rata in approximate proportion to the
contributions made;"
Insert
"(6) repay contributions to contributors, but only
if repayment of the contribution is made pro rata in
approximate proportion to the contributions made using one
of the following, as the candidate determines:
(A) to all contributors;
(B) to contributors who have made contributions
most recently;
or
(C) to contributors who have made larger
contributions;"
REPRESENTATIVE FINKELSTEIN explained Amendment 4 expanded what
could be done with excess campaign funds. The previous bill said
money could be given to contributors in a pro rata manner. "There
was an expression that would be too hard, because maybe it would
make more sense just to give to the most recent contributors or
only to people who have given larger contributions. So, this
allows all those options." He expressed it was a minor provision
because it seldom happened.
CHAIRMAN PORTER noted the motion to move Amendment 4 and asked if
there was an objection.
Number 1789
REPRESENTATIVE VEZEY objected for purposes of discussion and asked
for a rationale.
REPRESENTATIVE FINKELSTEIN said the concern expressed in previous
committees was that it precluded, for example, just giving the
money back to the most recent contributors. Not giving it to the
smallest contributors, to avoid accounting and distribution
hassles, might not have been allowed, either. The amendment
clarified that money could be returned in any of those ways.
CHAIRMAN PORTER indicated there was a whole list of other things
that could be done with the money, including giving it to charities
or repaying loans. This expanded methods for giving it back to
contributors, however.
REPRESENTATIVE VEZEY withdrew his objection.
CHAIRMAN PORTER asked if there was any further objection to
Amendment 4. There being none, Amendment 4 passed.
Number 1889
REPRESENTATIVE FINKELSTEIN offered Amendment 5 to CSHB 368(STA),
which read:
Page 16, Line 9:
Delete: "The total value of the property retained may
not exceed $2,500."
Insert: "The current fair market value of the property
retained may not exceed a total of $2,500."
REPRESENTATIVE FINKELSTEIN explained a concern had been expressed
that the value was not purchase price. He said the initiative
always had intended that.
CHAIRMAN PORTER asked if there was discussion or an objection to
Amendment 5. There being none, Amendment 5 passed.
Number 1935
REPRESENTATIVE FINKELSTEIN offered Amendment 6 to CSHB 368(STA),
which read:
Page 25, Line 25:
Delete: "AS 15.56.014(a)"
Insert: "AS 15.56.012"
REPRESENTATIVE FINKELSTEIN noted that Amendment 6 just fixed a
mistake in drafting. In the provisions of the initiative, a person
found guilty of the highest level of penalty, the first degree,
would lose his or her business license. As written in the bill, a
person would no longer lose a business license for a first-degree
offense but would lose it for a second-degree offense. The
amendment moved it back to the first degree, so that only the
highest level of penalty, for the actual intentional violation,
could result in losing a business license for a year.
Number 1980
CHAIRMAN PORTER asked if there was discussion or an objection to
Amendment 6.
REPRESENTATIVE VEZEY objected and asked for time to review it.
REPRESENTATIVE FINKELSTEIN clarified the question was whether
losing a business license should be for the highest-level
violation, as in the initiative, or for a lower-level violation.
He said for the highest level of violation, a person had to
intentionally break the law.
CHAIRMAN PORTER asked what AS 15.56.012 was.
REPRESENTATIVE FINKELSTEIN replied that was the first degree.
Number 2080
CHAIRMAN PORTER said it was in the bill on page 24, line 9. He
asked why, if a campaign prohibition was violated, a person would
lose a business license.
REPRESENTATIVE BUNDE speculated that if a business was violating
it, this would be an attempt to impose an additional penalty.
Number 2128
REPRESENTATIVE FINKELSTEIN agreed it was an interesting subject but
pointed out the amendment was purely technical. "Even if you
didn't believe in it, you'd certainly want it to apply only to the
highest level penalty," he said.
CHAIRMAN PORTER suggested the committee write that down for future
consideration. He asked if there was further discussion or an
objection to Amendment 6. There being none, Amendment 6 passed.
Number 2212
REPRESENTATIVE FINKELSTEIN offered Amendment 7 to CSHB 368(STA),
which read:
Page 7, Line 6 after "representative"
Insert: ", or municipal or other office"
REPRESENTATIVE FINKELSTEIN said that while in the initiative
prohibited money from out of state, the bill allowed minor amounts.
The intention was to allow family members to contribute. However,
there was no provision for municipal or other offices. The
question was whether someone running for a municipal office should
be allowed a minor amount of out-of-state money.
CHAIRMAN PORTER asked if there was discussion or an objection.
Number 2267
REPRESENTATIVE VEZEY asked if, as currently written, there was a
limit on the contribution to a municipal or other office.
CHAIRMAN PORTER replied there was an absolute prohibition from out
of state.
REPRESENTATIVE VEZEY noted Amendment 7 was trying to add "municipal
or other office" to the $2,000 contribution from a party, from out
of state.
CHAIRMAN PORTER commented that without this, people running for
municipal or other office would not be able to receive a limited
contribution from out of state, as people running for state office
were allowed to do.
REPRESENTATIVE VEZEY asked if this was a substantive amendment.
REPRESENTATIVE FINKELSTEIN replied, "Absolutely."
REPRESENTATIVE VEZEY asked Chairman Porter if he preferred to
discuss the concept later.
CHAIRMAN PORTER said yes and indicated he was writing down topics
for consideration. Recognizing that the committee was voting on
the amendment, not the issue, he asked if there was any objection
to Amendment 7. There being none, Amendment 7 passed.
Number 2450
REPRESENTATIVE FINKELSTEIN offered Amendment 8 to CSHB 368(STA),
which read:
Page 24, Line 21 after "(2)"
Insert: "except as provided in AS 15.13.090(b),"
REPRESENTATIVE FINKELSTEIN referred to a court decision called the
McIntyre case, to which Amendment 8 attempted to conform Alaska law
by not requiring filing or paid-for-by statements from an
individual who tried to affect a campaign with signs or other
means.
TAPE 96-41, SIDE A
Number 0001
CHAIRMAN PORTER asked if there was discussion or any objection to
Amendment 8. There being none, Amendment 8 passed.
Number 0059
REPRESENTATIVE FINKELSTEIN offered Amendment 9 to CSHB 368(STA),
which read:
Page 13, line 6:
Delete "expenditures from"
Insert "all amounts expended from"
Page 16, line 1:
Delete "the expenditures made"
Insert "all amounts expended"
REPRESENTATIVE FINKELSTEIN explained that unlike the initiative,
the bill allowed a limited amount of money to go into a legislative
office account, with caps. In doing so, it required that any
expenditures from that account be reported publicly. In using the
word "expenditures", they had discovered that the commission had a
specific definition for "expenditures". The English word was
intended, not that definition. The amendment was purely technical,
he added.
Number 0120
REPRESENTATIVE VEZEY objected, saying, "I'm not sure that we want
to address all amounts expended."
REPRESENTATIVE FINKELSTEIN indicated if that approach was accepted,
there would be no reporting because no campaign expenditures
occurred out of the office account. The concept was that if
campaign funds were converted to an office account, which was
essentially a category of personal funds, a person should disclose
what happened to that money, so it could not be interpreted that
personal use was made of those funds, he said.
Number 0199
REPRESENTATIVE VEZEY pointed out that expenses from legislative
office accounts were public records.
CHAIRMAN PORTER disagreed and said his were not.
REPRESENTATIVE VEZEY indicated there were two ways of operating and
said apparently Chairman Porter had used the method where
Legislative Affairs wrote a single check to him. "That is a public
record," he said.
CHAIRMAN PORTER stated that how he spent those funds was not a
public record and briefly discussed office accounts. He referred
to page 13, line 6, the language "including, if applicable,
expenditures". He suggested that meant that if he took money from
his campaign and put it into his account, he would have to report
how he spent it, not that he put it in there. "But it still
doesn't change the rules on the rest of the money that I got from
the state," he added.
Number 0389
REPRESENTATIVE JAMES said, "If you put money into an account and
you already had money in there, or you put some other money in
there, there's absolutely no way to identify how much of that money
you spent in that account. You're going to have to report the
account and where the money came from."
REPRESENTATIVE VEZEY stated, "We're saying the same thing, except
that I submit that the fact that you have taken moneys in your
legislative office account as personal income is a reportable item.
... That is a public record. If we leave the wording as it is, I
would interpret that as being, 1) illegal and 2) if it was legal,
that you would then be required to report expenditures, as opposed
to all funds expended, which is a difference. However, if a person
decides to ... put $10,000 into their legislative office account,
they could take out the $6,000 that the state put in there, ...
leave $10,000 in there and report the expenses of that. They could
take all $16,000 out as personal income and report it to the IRS,
but I think under the statute, they'd be breaking the law to do
that. But if they did, if it was legal under the statute, you
would then be required to report the expenditures, as defined under
the APOC statutes." He added that was his interpretation of the
existing wording.
REPRESENTATIVE VEZEY referred to the proposed wording and said,
"You would then be required, if you put any campaign money into
your office account and took any amount as personal income, you
would then have to ... account for every dollar of both the
personal income and the office account moneys."
Number 0536
CHAIRMAN PORTER indicated Representative James's understanding was
not quite right. "If it's in there, the report that I would have
to make would be a report on how I spent that amount of money.
Whether it was `the money' or other money wouldn't make any
difference." He added, "I would have to explain expenditures up to
the amount of the money that I drew from campaign."
REPRESENTATIVE FINKELSTEIN concurred. "And if people felt there
was a problem, they always have the option of setting up a separate
account," he said. He emphasized it was a technical amendment and
reiterated, "We meant its English version, not its definitional
version."
REPRESENTATIVE BUNDE understood that if a person were challenged by
someone else or by APOC, an accounting of how checks had been
written would be required. He asked Ms. Miles if that was correct.
Number 0634
MS. MILES clarified, "Under current law, if you took money out of
your campaign as income, you report that; that's that. That's all
you have to report to APOC."
REPRESENTATIVE VEZEY commented, "This statute clearly says that
we're talking about the legislative office account established
under current law. There can only be one of those."
REPRESENTATIVE FINKELSTEIN replied, "This doesn't say that."
REPRESENTATIVE VEZEY asked about AS 15.13.(indisc.).
REPRESENTATIVE FINKELSTEIN said, "That's just the one in the bill.
That's the new one that's the opportunity to transfer money. And
this is only the part that's not the other office account. This is
just excess campaign funds."
Number 0683
REPRESENTATIVE VEZEY asked if Representative Finkelstein was saying
that, under this statute, a person could have more than one
legislative office account.
CHAIRMAN PORTER indicated that was right.
REPRESENTATIVE FINKELSTEIN said, "Well, you could have a hundred if
you want."
REPRESENTATIVE VEZEY thought that still strengthened the fact that
reporting should be limited to expenditures. "Only the funds that
would reported as an expenditure, as defined by APOC, really are
applicable," he said, adding that if the bill became statute, he
thought it would be imprudent of a person to mix the accounts.
REPRESENTATIVE FINKELSTEIN said, "The expenditures definition is
unrelated to what you'd use an office account for. It's about
campaign expenses. Using that definition for expenditures from an
office account would be illogical." He explained, "It's just a
word-play thing that happened. This is supposed to say money that
comes from this account, you're going to report what happens to
it." He added that although policies could be debated, the
amendment was not about those policies but merely fixed a technical
error.
Number 0772
MS. MILES agreed it was only a word problem. "Expenditures is
defined in this chapter on page 22 at line 15," she said. "And
under ... these new ideas for campaign finance, expenditures are
going to have to ... be reasonably connected to a campaign to be
considered. And that's why that's the wrong word for moneys that
are transferred to an office account and then are spent for your
official legislative ... activities."
CHAIRMAN PORTER asked if there was further discussion and whether
the objection was maintained.
REPRESENTATIVE VEZEY maintained his objection.
Number 0811
CHAIRMAN PORTER asked for a roll call vote on Amendment 9. Voting
against the amendment were Representatives Toohey and Vezey.
Voting for the amendment were Representatives B. Davis,
Finkelstein, Bunde and Porter. Representative Green was absent.
Chairman Porter noted that Amendment 9 passed.
REPRESENTATIVE FINKELSTEIN offered Amendment 10 to CSHB 368(STA),
which made the following changes:
Page 6, line 17: Delete "a person" and insert "an individual"
Page 6, line 18: Delete "the person" and insert "that individual"
Page 6, line 28: Delete "a person" and insert "an individual"
Page 6, line 29: Delete "the person" and insert "that individual"
Page 7, line 1: Delete "person" and insert "individual"
Page 7, line 3: Delete "person" and insert "individual"
Page 7, line 5: Delete "person" and insert "individual"
Page 7, line 7: Delete "a person" and insert "an individual"
Page 7, line 8: Delete "the person" and insert "that individual"
Page 7, line 10: Delete all material and insert:
"(d) An individual, or one acting directly or indirectly
on behalf of that individual,"
Page 7, line 16: Delete "a person" and insert "an individual"
Page 7, line 17: Delete "the person" and insert "that individual"
Page 7, line 19: Delete "person" and insert "individual"
Page 7, line 22, after "person": Insert "or group"
Page 7, line 24, after "person": Insert "or group"
Page 7, line 26, after "person": Insert "or group"
Page 7, line 27: Delete "a person" and insert "an individual"
Page 7, line 28: Delete "the person" and insert "that individual"
Page 7, line 32: Delete "person" and insert "individual"
Page 8, line 3: Delete "person" and insert "individual"
Page 8, line 6: Delete "a person" and insert "an individual"
Page 8, line 7: Delete "the person" and insert "that individual"
Page 8, line 10: Delete "person" and insert "individual"
Page 8, line 13: Delete "person" and insert "individual"
Page 8, line 16: Delete "a person" and insert "an individual"
Page 8, line 17: Delete "the person" and insert "that individual"
Page 8, line 20: Delete "person" and insert "individual"
Page 8, line 23: Delete "person" and insert "individual"
Page 8, line 27: Delete "person" and insert "candidate or
individual"
Page 8, line 29: Delete "person" and insert "candidate"
Page 9, line 1: Delete "person" and insert "candidate"
Page 9, line 4: Delete "person" and insert "candidate"
Page 9, line 6, after "person": Insert "or group"
Page 9, line 8, after "person": Insert "or group"
Number 0898
REPRESENTATIVE FINKELSTEIN noted that the commission had alerted
him to issues on the use of the word "person". "When you say
`person' meaning an individual, it fouls things up because
`persons' are a category that includes individuals, groups, other
entities," he said. "`Persons' is everybody." Amendment 10 made
it clear when it was an individual, he added.
MS. MILES indicated the commission and its staff had spent a lot of
time on this issue. Because the bill established actions allowed
for individuals, who were allowed to contribute, and those
prohibited for persons, meaning corporations, labor unions and
entities of that nature, APOC had identified places where the
wording was wrong.
Number 0964
CHAIRMAN PORTER asked if there was further discussion or any
objection to Amendment 10.
REPRESENTATIVE VEZEY said he understood the difference between a
person and an individual but asked what the problem was. He
referred to page 6, line 17, and said only individuals could file
with the commission.
CHAIRMAN PORTER replied that a group also had to file with the
commission.
REPRESENTATIVE VEZEY concurred.
REPRESENTATIVE FINKELSTEIN clarified they were not discussing
groups there, just candidates. "We have to use person there
because candidate doesn't cover everyone," he said, adding that
there were individuals who filed like candidates. "By using
person, we pull someone [in] that we don't mean to pull in there,
which is groups."
Number 1036
REPRESENTATIVE VEZEY withdrew his objection.
CHAIRMAN PORTER asked if there was any other objection. There
being none, Amendment 10 passed.
Number 1066
REPRESENTATIVE FINKELSTEIN offered Amendment 11 to CSHB 368(STA),
which read:
Page 17, line 18:
Delete "AS 15.13.040(f)"
Insert "AS 15.13.040(d) - (f), 15.13.050, 15.13.060(b) -
(d), 15.13.080(c) [AS 15.13.040(f)]"
Delete "or 15.13.110(f)"
Insert ", (e), or (f) [OR AS 15.13.110(f)]"
Page 17, line 24, after "court.":
Insert "A person who violates a provision of this
chapter, except a provision requiring filing of a report
within a time required as otherwise specified in this
subsection, is subject to a civil penalty of not more than
$500 as determined by the commission, subject to right of
appeal to the superior court."
REPRESENTATIVE FINKELSTEIN explained that the initiative had a high
level of standards for determinants of when civil penalties should
be provided, plus a set of standards for aggravating and mitigating
factors. "The House State Affairs Committee took all those out
[and] instead, just raised the maximum and left in the existing
approach," he said. Whereas the initiative covered per-day items,
with a $50-per-day maximum, this allowed civil penalties for items
that were not per-day violations, with a $500 maximum.
Number 1158
CHAIRMAN PORTER asked if there was any discussion or objection.
There being none, Amendment 11 passed.
REPRESENTATIVE FINKELSTEIN offered Amendment 12 to CSHB 368(STA),
which read:
Page 19, line 30:
Delete "a state, municipal, municipal runoff, or federal
office"
Insert "a state or municipal office"
Number 1166
REPRESENTATIVE FINKELSTEIN said Amendment 12 was a point made by
the commission in a letter. "We preclude in here use of state and
local funds for trying to affect candidates in a state, municipal
or federal race," he explained. Because the commission had thought
federal law might preempt it, the amendment removed "federal
office". "I doubt that under federal law you'd be able to spend
state or municipal money to try to affect the outcome at that
election, anyway," he said.
CHAIRMAN PORTER asked if municipal runoff was removed because of
being redundant with a municipal office race.
REPRESENTATIVE FINKELSTEIN affirmed that.
CHAIRMAN PORTER asked if there was any discussion or objection.
There being none, Amendment 12 passed.
Number 1228
REPRESENTATIVE FINKELSTEIN noted that the next amendment in the
packet was identical to Amendment 1. Therefore, it was not
offered. He offered Amendment 13 to CSHB 368(STA):
Page 23, Line 28, after "union": Insert "and political group"
Number 1285
REPRESENTATIVE FINKELSTEIN explained that page 23, line 28,
contained an odd, antiquated definition of "person". It cross-
referenced the definition in 01.10.060, which included everyone.
He said the amendment just made it easier to write the bill.
REPRESENTATIVE VEZEY voiced that "labor union" was redundant.
"There's no reason for having a statutory definition of `person' if
we're going to have to go through and think of everybody that we
might have left off," he said. He opposed the amendment for that
reason.
Number 1348
REPRESENTATIVE FINKELSTEIN said he would agree with respect to
labor union.
CHAIRMAN PORTER asked if it was language from the initiative.
REPRESENTATIVE FINKELSTEIN indicated it was a drafting matter. He
said the commission's executive director had believed that `group'
was not included in `person'.
CHAIRMAN PORTER asked if there was further discussion or any
further objection.
REPRESENTATIVE VEZEY maintained his objection.
CHAIRMAN PORTER stated the desire to include `political group'
under `person'. "And if the director has a concern about whether
that's in there or not, I don't feel put out to make it explicit,"
he said. He asked for a roll call vote on Amendment 13. Voting
against the amendment was Representative Vezey. Voting for the
amendment were Representatives B. Davis, Finkelstein, Bunde and
Porter. Absent were Representatives Green and Toohey. Chairman
Porter noted that Amendment 13 passed.
Number 1510
REPRESENTATIVE FINKELSTEIN offered Amendment 14 to CSHB 368(STA):
Page 4, Line 19: Delete "election;"
Page 4, Line 19, after "in seeking": Insert "statewide or
legislative office or $1,000 in seeking municipal or other
office;"
Page 4, Line 21: Delete "election;"
Page 4, Line 20, after "in seeking": Insert "statewide or
legislative office or $1,000 in seeking municipal or other
office;"
Page 4, Line 23: Delete "election."
Page 4, Line 22, after "in seeking": Insert "statewide or
legislative office or $1,000 in seeking municipal or other
office."
REPRESENTATIVE FINKELSTEIN explained that in existing law, only for
expenditures under $1,000 for municipal races would a person
receive an exemption from reporting. The initiative added state
races to that. The House State Affairs Committee increased that
amount to $2,500. The commission responded that for municipal
races, that was too high. Therefore, the amendment left the amount
at $2,500 for state races but kept it at the original $1,000 for
municipal races.
CHAIRMAN PORTER noted that the amendment had been discussed by Ms.
Miles.
REPRESENTATIVE FINKELSTEIN said, "It still is going to lead to a
lot more people who don't have to file."
Number 1565
REPRESENTATIVE VEZEY said he could not see that $2,500 in campaign
expenditures was excessive, even for municipal elections. He
reminded members of inflation that had occurred since the APOC
statutes were written in 1974. He felt people who limited expenses
to $2,500 should be relieved of as many reporting burdens as
possible.
REPRESENTATIVE FINKELSTEIN indicated he did not disagree.
MS. MILES said the commission's position was that $2,500 was too
high for municipal races. Outside of the larger communities, there
would be no reports available in communities, she said, explaining
that although reports were filed with APOC, copies of reports were
retained at the city clerk's office for public use.
REPRESENTATIVE VEZEY expressed that $2,500 was minuscule by
anybody's standards. He wanted to see a balance between the public
right to know and the value of the information being received.
Number 1714
MS. MILES pointed out that municipalities under 1,000 in population
were not required to report. "Communities would have the ability
to vote themselves out of this law, and haven't done it, which
makes the commission believe that the information's useful to
them," she explained.
REPRESENTATIVE B. DAVIS asked what the average amount of money
spent was for those kinds of races.
Number 1795
MS. MILES referred to municipal races and said that excluding
amounts below $1,000, the amounts between $1,000 and $2,500
included most of the assembly and school board races in smaller
communities.
REPRESENTATIVE B. DAVIS stated her understanding that many people
running for office did not come up even to the $1,000 level.
MS. MILES indicated that was correct. She estimated that in
smaller communities, an average of 70 percent spent less than
$1,000. "So, what's left, a lot of times, is between $1,000 and
$2,500," she said.
Number 1848
CHAIRMAN PORTER noted that the objection was maintained. He asked
for a roll call vote on Amendment 14. Voting for the amendment
were Representatives B. Davis and Finkelstein. Voting against the
amendment were Representatives Bunde, Vezey and Porter.
Representatives Green and Toohey were absent. So, Amendment 14
failed.
Number 1915
REPRESENTATIVE FINKELSTEIN offered Amendment 15 to CSHB 368(STA),
which read:
Page 16, Lines 17-28
-Delete all material
-Insert: "(d) A member of the commission, the commission's
executive director, a person or group who believes a violation of
this chapter or a regulation adopted under it has occurred or is
occurring may file an administrative complaint with the commission
within four years of the date of the alleged violation. If a
member of the commission has filed the complaint, that member may
not participate as a commissioner in any proceeding of the
commission with respect to the complaint. If the commission
accepts the complaint and opens a preliminary investigation, it
shall do so within 90 days of the filing date of the complaint and
shall investigate the complaint. After affording the respondent
notice and an opportunity to be heard, if the commission finds that
the respondent has engaged in or is about to engage in an act or
practice that constitutes or will constitute a violation of this
chapter or a regulation adopted under it, the commission shall
enter an order requiring the violation to be ceased or to be
remedied, and shall assess civil penalties under AS 15.13.125. A
commission order may be appealed to the superior court by either
the complainant or respondent within 30 days. The commission or
its executive director shall promptly report to the attorney
general concerning any acts or practices that may constitute
violations of this chapter or regulations adopted under this
chapter, or concerning the violation of any order of the
commission."
Page 16, Line 30 - Page 17, Line 14
-Delete all material
-Insert: "(e) If the commission does not open a preliminary
investigation within 90 days of the filing date of the complaint or
complete action on the complaint within 120 days of the filing, the
complaint is rejected. A complainant whose complaint is rejected
may file a complaint in superior court alleging a violation of this
chapter by a person charged in the administrative complaint. The
superior court summons and complaint shall be served on the
commission and the attorney general. The state shall have the
right to intervene in a timely manner. A complaint may not be
filed in superior court under this subsection if more than four
years have elapsed from the date of the alleged violation. Nothing
in this subsection creates a private cause of action against the
commission."
REPRESENTATIVE FINKELSTEIN explained that the complaint registered
in the House State Affairs Committee and elsewhere was that the
ability to go to court would be used as a tool to harass candidates
in circumstances where no significant violation had occurred. With
the amendment, before a person went to court, he or she had to file
a complaint with the commission. After filing, APOC had 90 days to
begin and action and 120 days to complete it; a person could not go
to court until after that. "I've never completely agreed with that
argument myself," he said, "because already ... complaints to the
commission can be used to harass a candidate." However, many
commission members had felt otherwise, he said.
Number 1982
MS. MILES affirmed that Amendment 15 addressed the commission's
concern over the current language in CSHB 368(STA), which gave the
commission 60 days to open the investigation, conduct it and
adjudicate it. She suggested it was a fair and workable
compromise. She mentioned that the fiscal note contained a new
investigator position.
CHAIRMAN PORTER asked if there was an objection to Amendment 15.
Number 2029
REPRESENTATIVE VEZEY objected and asked for clarification. He
noted that the new language provided four years from the date of
the alleged violation to file a complaint.
CHAIRMAN PORTER asked why it had been extended from two years to
four years.
REPRESENTATIVE FINKELSTEIN responded that the four-year limit on
complaints to the commission was in the initiative. He referred to
the new section (e), the second-to-last sentence in the amendment,
which applied to when a person could go to court. He believed that
change to four years had come from the commission's recommendation
rather than from the initiative.
Number 2200
REPRESENTATIVE BUNDE referred to the second-to-last sentence of (e)
in Amendment 15. He moved to amend "four" years to "two" years.
CHAIRMAN PORTER noted the motion and asked if there was an
objection. There being none, the amendment to Amendment 15 passed.
REPRESENTATIVE VEZEY moved to amend the first sentence of (d) in
Amendment 15 by changing "four" years to "two" years.
MS. MILES commented that current law had a statute of limitations
of four years. "So, if you want to reduce that, that's a policy
call of the legislature," she said.
CHAIRMAN PORTER asked if it would affect the initiative.
MS. MILES said the initiative had a four-year statute of
limitations for the commission.
Number 2259
CHAIRMAN PORTER suggested including it with issues for the next
meeting and noted they were holding the second amendment to
Amendment 15. He affirmed that Amendment 15, as amended, was the
initiative approach.
CHAIRMAN PORTER asked if there was an objection to Amendment 15, as
amended. There being none, Amendment 15 passed.
Number 2312
REPRESENTATIVE FINKELSTEIN offered Amendment 16 to CSHB 368(STA),
which read:
Page 10, Line 18, after "(c)"
Insert: "On and after the date determined under AS
15.13.110 as the last day of the period ending three
days before the due date of the report required to be
filed under AS 15.13.110(a)(1) and until the date of the
election for which the report is filed, a candidate may
not give or loan, or both, to the candidate's campaign
the candidate's money or other thing of value of the
candidate in an amount that exceeds $5,000."
Page 10, Line 18
Delete: "(c)"
Insert: "(d)"
REPRESENTATIVE FINKELSTEIN explained that Amendment 16 recognized
that candidates could give unlimited money to give their own
campaign. However, they could not give more than $5,000 within 30
days of the election. It was an approach recently adopted by the
state of Washington to avoid stealthy campaigns, he indicated.
Although it had nothing to do with the initiative, there were
already portions of the bill that were not part of the initiative
but which clarified or strengthened it, he said. He expressed that
he thought it reasonable. "It's fine to use your own money," he
said. "You just have to say you're using your own money."
CHAIRMAN PORTER asked if there was any discussion or objection to
Amendment 16.
REPRESENTATIVE VEZEY objected.
CHAIRMAN PORTER asked for a roll call vote. Voting for the
amendment were Representatives Finkelstein, B. Davis and Porter.
Voting against the amendment were Representatives Bunde and Vezey.
Representatives Green and Toohey were absent. Chairman Porter
noted that Amendment 16 passed.
Number 2387
REPRESENTATIVE FINKELSTEIN indicated that he had a conceptual
amendment and explained he wanted to ask the bill drafter to
prepare an amendment precluding jury trial.
REPRESENTATIVE VEZEY said, "There are some clauses in here which
are borderline criminal penalties."
REPRESENTATIVE FINKELSTEIN indicated he would withdraw it since
there was an objection.
REPRESENTATIVE BUNDE said he had an amendment that he would not
offer currently but would rework for the next meeting.
Number 2441
CHAIRMAN PORTER said the bill would be heard again the following
Monday. He asked members who had issues to write them down for
that meeting.
ADJOURNMENT
There being no further business to conduct, CHAIRMAN PORTER
adjourned the House Judiciary Committee meeting at 3:35 p.m.
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