Legislature(1995 - 1996)
02/29/1996 08:08 AM House STA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 29, 1996
8:08 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Joe Green
Representative Ivan Ivan
Representative Brian Porter
Representative Caren Robinson
Representative Ed Willis
MEMBERS ABSENT
Representative Scott Ogan, Vice Chair
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. 317
"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
(* First public hearing)
PREVIOUS ACTION
BILL: HB 368
SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM
SPONSOR(S): REPRESENTATIVE(S) JAMES
JRN-DATE JRN-PG 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
BILL: HB 317
SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM
SPONSOR(S): REPRESENTATIVE(S) FINKELSTEIN
JRN-DATE JRN-PG ACTION
04/21/95 1427 (H) READ THE FIRST TIME - REFERRAL(S)
04/21/95 1427 (H) STATE AFFAIRS, JUDICIARY, FINANCE
01/08/96 2358 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
01/08/96 2358 (H) STATE AFFAIRS, 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
WITNESS REGISTER
REPRESENTATIVE DAVID FINKELSTEIN
Alaska State Legislature
State Capitol, Room 424
Juneau, Alaska 99801-1182
Telephone: (907) 465-2435
POSITION STATEMENT: Provided testimony on HB 317 and HB 368.
MIKE FRANK, Chair
Campaign Finance Reform Now
2224 Turnagain Parkway
Anchorage, Alaska 99517
Telephone: (907) 248-5078
POSITION STATEMENT: Provided testimony on HB 317 and HB 368.
ACTION NARRATIVE
TAPE 96-25, SIDE A
Number 0034
The House State Affairs Committee was called to order by Chair
Jeannette James at 8:08 a.m. Members present at the call to order
were Representatives Ivan, Porter, Willis and James. Members
absent were Representatives Ogan, Green and Robinson.
HB 368 - ELECTION CAMPAIGN FINANCE REFORM
HB 317 - ELECTION CAMPAIGN FINANCE REFORM
The first order of business to come before the House State Affairs
Committee was HB 368 and HB 317.
CHAIR JEANNETTE JAMES called on Representative David Finkelstein to
discuss the sections in HB 368 and HB 317.
Number 0062
REPRESENTATIVE DAVID FINKELSTEIN explained Section 9, "LIMITATIONS
ON AMOUNT OF POLITICAL CONTRIBUTIONS," included the various
contribution limitations. He cited the existing law was reduced
from $1,000 to $500 as a maximum contribution from individuals to
candidates, or from groups to candidates. He further cited the
contribution maximum to groups was $250 with the exception of
parties which was $5,000. The maximum from a group that was a
party was $50,000 statewide or if the governor and lieutenant
governor teamed up it was $100,000.
Number 0253
REPRESENTATIVE BRIAN PORTER asked if Section 9 cut in-half the
existing provisions in law?
Number 0255
REPRESENTATIVE FINKELSTEIN replied, "no." The section also
established new provisions as well. He cited currently there were
no limits to groups or to parties, or from parties.
Number 0277
CHAIR JAMES responded there was a $5,000 contribution limit applied
to groups giving to candidates.
Number 0294
REPRESENTATIVE FINKELSTEIN replied right now the $1,000 limit
applied to groups giving to candidates.
CHAIR JAMES reiterated there was not a limit to a party giving to
a candidate right now, and there was not a limit to giving to a
party either.
Number 0310
REPRESENTATIVE PORTER wondered if the contribution was limited to
the party the candidate was registered with, or a subgroup of the
party. He questioned if each of the subgroups could give $5,000 to
a candidate, or if, collectively, a candidate could accumulate a
total of $5,000?
Number 0371
REPRESENTATIVE FINKELSTEIN replied the intent was cumulative. The
definition of a party in both HB 368 and HB 317 was in statute
which required 3 percent of the total votes for a governor in an
election. The group that received 3 percent was the umbrella
group. That, he explained, was the only way to distinguish between
a group and a party. The Libertarian Party complained according to
the definition because they had not reached the 3 percent threshold
in many years.
The record reflected the arrival of Representative Caren Robinson
at 8:10 a.m.
Number 0457
REPRESENTATIVE PORTER said, if it was left alone, it would be left
to speculation, and wondered if it should be clarified.
Number 0471
REPRESENTATIVE FINKELSTEIN commented he thought it was clear.
Number 0485
REPRESENTATIVE PORTER asked if "it" referred to the bill or the
initiative?
REPRESENTATIVE FINKELSTEIN replied the definition was tied to the
political party definition. He reiterated he thought it was clear.
He suggested asking Mike Frank, Chair, Campaign Finance Reform Now,
the opinion of the initiative group.
Number 0558
REPRESENTATIVE PORTER said, according to the Legislative Legal
Department, it was a question open to debate.
Number 0578
REPRESENTATIVE FINKELSTEIN referred the committee members to page
8 of the initiative and read, "a political party has a meaning
given in AS 15.16.010.20."
Number 0590
REPRESENTATIVE PORTER explained there was not an answer to the
question, if all subgroups could contribute in total or up to
$5,000.
Number 0600
REPRESENTATIVE FINKELSTEIN said he thought he could convince the
Legislative Legal Department according to the definition that the
entities receiving 3 percent of the total votes should receive the
higher maximum contributions.
Number 0643
CHAIR JAMES asked if a subgroup could qualify as a group and give
another $500?
Number 0654
REPRESENTATIVE FINKELSTEIN replied that was an interesting
question. There was a provision that said subdivisions were part
of the group. He said a subdivision would probably be disinclined
to separate from the group because it would then face the lower
maximum donation contributions to itself.
Number 0695
CHAIR JAMES did not agree with Representative Finkelstein because
the main party could give $5,000 and a subgroup could give $500.
She did not see the disadvantage.
CHAIR JAMES called on the first witness via teleconference in
Anchorage, Mike Frank, to respond.
Number 0715
MIKE FRANK, Chair, Campaign Finance Reform Now, explained according
to the initiative, a political party was allowed to give $5,000 to
a candidate, and the other subdivisions were allowed to give $500
to a candidate, if they were not legally part of the party. If the
subdivision was closely tied to the party, a contribution was an
accounting transfer, and it would count against the $5,000 limit
because it was not an independent group. He said the Legislative
Legal Department was correct in the fact that there was a "gray
area" involved. The gray area was whether or not a subdivision was
closely tied to the party.
Number 0809
CHAIR JAMES said based on her experience subgroups gave money to
the party and seldom did the party give money to the subgroups.
She said the subgroups raised and spent their own money, and were
only part of the party in name and affiliation.
Number 0849
MR. FRANK stated based on the explanation by Chair James, the group
would be subject to the $500 contribution limit.
Number 860
CHAIR JAMES agreed with Mr. Frank, because it acted separately and
qualified as a group and did not decrease the $5,000 that the party
could give to a candidate.
Number 0902
REPRESENTATIVE FINKELSTEIN moving forward explained Section 10,
"RESTRICTIONS ON SOLICITATION AND ACCEPTANCE OF CONTRIBUTIONS,"
restricted contributions from nonresidents and out of district
contributions from lobbyists. He cited the cash limit was reduced
to $25 in HB 368, whereas in HB 317 it remained as stated in
current statute. Section 10 also addressed time limits, he
explained. House Bill 368 allowed the collection of money 11
months before an election and up to 30 days after an election. The
section also banned honorariums. The section also addressed family
member loans. House Bill 368 included the family member loan while
HB 317 did not. He called it an exception to the out-of-state
rule.
CHAIR JAMES asked for clarification. She wondered if a family
member loan was included in the initiative.
REPRESENTATIVE FINKELSTEIN replied, "yes," it was in the
initiative.
CHAIR JAMES responded, therefore, because it was in the initiative
it was allowed in HB 368.
Number 1040
REPRESENTATIVE FINKELSTEIN explained there were limits for the
first time in HB 368 and HB 317 for candidates recovering loans
that exceed $10,000 for a House or Senate race, $25,000 for a
governor or lieutenant governor race, and $5,000 for other races.
Number 1101
REPRESENTATIVE PORTER asked if Section 10 precluded the acceptance
of money in non-election years also?
Number 1113
REPRESENTATIVE FINKELSTEIN replied, "that's correct." It set the
time limits for the first time of starting and ending points in a
campaign.
Number 1119
CHAIR JAMES asked if it was 11 months before any election?
Number 1150
REPRESENTATIVE FINKELSTEIN replied, "that's correct." He said the
Alaska Public Offices Commission (APOC) recommended a shorter
period up front and a longer period after the election.
Number 1166
CHAIR JAMES said the subcommittee recommended shortening the time
limit to allow contributions during the legislative session for
legislators. Currently, a legislator could not receive
contributions, but a challenger could during the legislative
session. The idea was to level the playing field between the
challenger and the incumbent. She believed, however, there never
would be a level playing field for the incumbent, and cited name
recognition, contacts and constituent satisfaction as advantages
for an incumbent over a challenger. She said this gave the
incumbent an edge and should not be legislated.
Number 1245
REPRESENTATIVE PORTER replied, "conversely, if you've never had to
push the buttons, you can say just about anything."
Number 1249
CHAIR JAMES further replied a candidate could make promises and
commitments unknowingly.
REPRESENTATIVE CAREN ROBINSON said, "we all learned."
Number 1259
REPRESENTATIVE FINKELSTEIN said the citizens of Alaska liked short
campaigns and was concerned about constitutional protections,
because short campaigns could restrict the right of free speech.
Therefore, there was a balance issue as well.
Number 1291
CHAIR JAMES replied, if the time was to be shortened for
contributions, the people would be "hammered" by the candidates.
She agreed with Representative Finkelstein a constitutional
challenge would be made based on the right of free speech because
it would be inhibited, however.
Number 1339
REPRESENTATIVE FINKELSTEIN moving forward explained Section 11,
"STATEMENT BY CONTRIBUTOR," was an interpretation problem. He
cited a copy of the $250 filing statement needed to be given to the
candidate as well as APOC. He called it an "odd provision" in the
law. The reports were not enforced and generally not given to the
candidates.
CHAIR JAMES asked if Section 11 did not require a report filed to
the candidate but only with APOC?
REPRESENTATIVE FINKELSTEIN replied, "that's correct."
Number 1447
REPRESENTATIVE PORTER asked if that was in the initiative?
Number 1451
REPRESENTATIVE FINKELSTEIN asked Mr. Frank if that provision was in
the initiative?
Number 1460
MR. FRANK said he did not remember, and wondered if it was
suggested by APOC.
Number 1468
REPRESENTATIVE FINKELSTEIN replied the extra requirement was taken
out in HB 317 but remained in the initiative. The law remained
unchanged, he explained, a copy of the report was still required to
be given to the candidate.
Number 1498
REPRESENTATIVE ROBINSON asked why an individual was required to
give a copy of a report to a candidate when a candidate already
filed it on his report?
Number 1535
REPRESENTATIVE FINKELSTEIN replied it was a relatively inexpensive
way for APOC to receive information from a non-group. It was a
double check because it was reported by the candidate who received
the money and by the group who gave the money. He further said the
initiative added a provision that required individuals to give a
copy of the report to the candidates towards the end of a campaign.
Number 1612
REPRESENTATIVE ROBINSON wondered what was gained. She asked if it
was a check and balance?
Number 1646
REPRESENTATIVE FINKELSTEIN said one of the problems with campaign
finance reform was that no one was privy to the information.
Therefore, enforcement was difficult, and this was one provision
that could be used to check if a transaction occurred. He said in
practice many people did not file, however. He cited one-half did
not turn the forms in. He said he was describing the goal, and it
would be useful information in an investigation.
Number 1717
REPRESENTATIVE IVAN IVAN said he spent a good 50 percent of his
time trying to comply with the APOC reporting requirements as a
first time candidate. He said he understood the intent, however.
Number 1760
CHAIR JAMES said she discovered a gap before the final report, a
contribution of over $250 did not have to be reported. She
wondered if the gap had been closed?
REPRESENTATIVE FINKELSTEIN replied a bill closed the gap in a
previous legislative session.
Number 1798
REPRESENTATIVE FINKELSTEIN said the initiative actually removed
reporting requirements. He cited the removal of the over $250
contributor report and groups at the low end that were exempted
from filing a report. The initiative increased the filing
requirements to $1,000, and HB 317 removed the 24 hour expenditure
reporting requirements.
Number 1857
CHAIR JAMES said the APOC reporting requirements were difficult,
and suggested a computerized filing system. The information would
also be available for everyone to see as an example or for general
public information.
REPRESENTATIVE PORTER asked if that was going to happen?
Number 1915
REPRESENTATIVE FINKELSTEIN said there was money in the APOC budget,
but compatibility problems needed to be solved before proceeding.
He said most candidates would probably still file their reports on
paper so a transition system was needed. He reiterated the money
was there, but there were more problems than originally believed
and it was taking longer than expected.
Number 1965
CHAIR JAMES said it would help computer users to produce reports.
REPRESENTATIVE FINKELSTEIN said the key was to make the computer
screen look like the current form used.
CHAIR JAMES said the biggest problem was that there was not enough
space to write-in on the reports.
REPRESENTATIVE FINKELSTEIN responded a computerized system would
solve that problem.
REPRESENTATIVE ED WILLIS said he was still trying to determine how
to find books in the library.
Number 2038
REPRESENTATIVE FINKELSTEIN moving forward explained Section 15,
"USES OF CAMPAIGN CONTRIBUTIONS HELD BY CANDIDATE OR GROUP," was
the next section with any content to discuss. He explained Section
15 described the use of campaign contributions held by a candidate
or group. He said the provision of personal use was eliminated.
He further explained contributions could be used to pay a civil
fine if the candidate did not cause or participate in an activity
that lead to a violation.
Number 2111
CHAIR JAMES asked Representative Finkelstein to list the places
where a candidate could not use the contributions.
Number 2116
REPRESENTATIVE PORTER commented personal campaign money could not
be given to another candidate or group, but it could be given to a
party.
Number 2130
REPRESENTATIVE FINKELSTEIN replied that was correct. He explained
it was a new restriction.
CHAIR JAMES asked which was a new restriction?
REPRESENTATIVE FINKELSTEIN replied the theory was that the
individual giving might not support the third party.
Number 2138
CHAIR JAMES read the following provisions from HB 368, page 13,
Sec. 15.13.112, "loaned to a person, knowing used to pay more than
the fair market value for goods or services purchased for the
campaign, used to pay a criminal fine, used to pay civil penalties;
however, campaign contributions held by a candidate or group may be
used to pay a civil penalty assessed under this chapter if
authorized by the commission after it first determines that a
candidate did not cause or participate in the violation, and/or
that the candidate cooperated in the revelation of the violation,
and cannot be used to make a contribution to another candidate or
group." She explained that would be only if political parties were
parties, and that subdivisions of political parties were groups.
Therefore, money would not be given to the subdivision.
Number 2192
REPRESENTATIVE PORTER commented the assumption that what the
committee members decided was not always true for everyone.
Number 2199
REPRESENTATIVE FINKELSTEIN replied the committee members needed to
consider the use of surplus campaign funds, which did allow
unlimited amounts to be given to a party. Taken literally, this
read, a group included a party. Thus contributions could be made
from a candidate to a group. This area could be open to different
approaches, however.
CHAIR JAMES suggested addressing the surplus provisions in the
bills.
Number 2225
REPRESENTATIVE PORTER reiterated campaign contributions held by a
candidate or group could not be used to make contributions to
another candidate or a group.
Number 2330
REPRESENTATIVE FINKELSTEIN replied, "right." The next section,
Sec. 15.13.116, "DISBURSEMENT OF CAMPAIGN ASSETS AFTER ELECTION,"
said surplus campaign money could be given to a political party.
Number 2249
CHAIR JAMES responded there was a contradiction.
Number 2241
REPRESENTATIVE PORTER agreed with Chair James. He said, "you can't
have it both ways." He asserted either the subgroups were part of
the party and limited to a total of $5,000 and could not give
another $500 as a group, or not.
Number 2256
REPRESENTATIVE FINKELSTEIN replied a group could choose another
approach. The section said, prior to the election, contributions
could not be made with campaign funds. After the election, the
funds could be given to a party or a charity, for example.
REPRESENTATIVE PORTER said a consistent definition was needed for
a party. He cited the District 20 Republicans did not fall under
the category of a party, therefore, it was classified as a group.
According to Section 15, he could not contribute funds to it from
his campaign, but he could to the party.
REPRESENTATIVE FINKELSTEIN asked if Representative Porter was
referring to Sec. 15.13.116?
REPRESENTATIVE PORTER replied, according to Sec. 15.13.116, he
could make donations without conditions to a political party. He
explained that did not mean the District 20 Republicans.
Number 2308
REPRESENTATIVE FINKELSTEIN agreed the subdivision issue was
confusing. He said the subdivision had options, however. If a
subdivision chose to be a group, it could only give a certain
amount under current law and under the initiative. If it chose to
be part of the party, it could give higher amounts, however.
Number 2343
CHAIR JAMES asked how that was possible? Where was the benefit to
remain as part of the party, if the maximum contribution limit was
$5,000?
Number 2352
REPRESENTATIVE FINKELSTEIN replied it could also "receive" a larger
amount from a contributor as a party. There was the possibility a
subdivision could organize as a non-party group because it allowed
an additional $500 contribution limit. He said Mr. Frank
acknowledged that as a possibility. He explained the subdivision
could chose to remain as part of the party to allow the $5,000
contribution limit from anyone. He said that level was rarely
reached by most contributors, however.
Number 2377
CHAIR JAMES replied the money would not be useful if it could not
be given to a campaign.
Number 2380
REPRESENTATIVE FINKELSTEIN responded there were plenty of campaigns
and campaign activities for the common good of all a party's
candidates to contribute to and cited polling as an example.
Number 2389
CHAIR JAMES commented if it was part of the party, then the
contributions could be given to the party and the party could give
it to all the subdivisions.
Number 2400
REPRESENTATIVE FINKELSTEIN replied, "up to a cumulative maximum of
$5,000." He reiterated the maximum was rarely reached, however.
Number 2403
CHAIR JAMES said it would not be advantageous for a subgroup to be
part of the party because the $5,000 was tallied up with the other
money the party could contribute.
Number 2435
REPRESENTATIVE FINKELSTEIN commented it depended if the candidates
already received the maximum amount. He reiterated there was still
the option for a subdivision to be a non-party group. However, he
believed most subdivision would continue to be party subdivisions.
Number 2449
CHAIR JAMES replied the advantage for a subdivision would be the
ability to select the candidate to contribute money to rather than
the state party deciding.
Number 2467
REPRESENTATIVE PORTER stated this issue needed to be clarified. He
explained the District 20 Republicans could be a group, and the
District 21 Republicans could be a party subdivision. In this
explanation two similar entities fell under different rules. He
reiterated, this issued needed to be clarified.
TAPE 96-25, SIDE B
Number 0027
REPRESENTATIVE FINKELSTEIN replied, "it is a good point." He said
he had not thought about this issue to any great degree. He
explained under current laws the entities had the same choice. He
called it a simple choice because there were not any restricts on
parties and most chose to be a subdivision of the party. He
reiterated, he believed, most entities would remain as part of the
party. The contribution limit difference was enough incentive to
remain part of the party, he cited.
Number 0058
REPRESENTATIVE PORTER asserted there was not language that
mentioned the cumulative contribution limit. He said it was
assumed.
Number 0065
REPRESENTATIVE FINKELSTEIN reiterated, if a party was defined as an
entity that received 3 percent of the total votes in the last
election for governor, that party could spread out the
opportunities to the subdivisions.
Number 0086
CHAIR JAMES replied that did not give a subdivision an advantage to
remain part of the party. The advantage would be to be a group to
maintain the decision making advantages. She said the issue was
not clear and suggested looking at various scenarios for
clarification.
CHAIR JAMES explained the reason she filed HB 368 was to encourage
discussion among the legislators and the public. She stated if HB
317 and HB 368 were not filed, the initiative would not be
discussed here in Juneau. She commented she did not want to change
the initiative, but discuss the problems and fix them. She said
the underlying question was whether or not a bill was necessary.
There were a lot of people who wanted the initiative to go directly
to the ballot. She asserted she was not trying to usurp the
authority of the initiative movement, but was trying to create an
environment for further discussion. She asked Representative
Finkelstein to respond.
Number 0216
REPRESENTATIVE FINKELSTEIN said Chair James described the situation
well. He said all the concerns were legitimate concerns, and an
adjustment or a change might be in the best interest of the public.
He stated no one claimed the one and only answer. He explained his
preference was for campaign public financing with voluntary limits.
He said he would toss HB 317 in a second if there was an amendment
proposed for public financing. He said this was a subject where
reasonable people could disagree.
Number 264
CHAIR JAMES asked Mr. Frank to respond to her comments also.
Number 0268
MR. FRANK said Chair James should not feel defensive about the
committee's approach. He called it a positive and problem solving
approach. He further said he was very encouraged when he heard
that bills were being introduced to contribute to the initiative.
He agreed with Representative Finkelstein that there were many
approaches. He said he also preferred campaign public financing,
but it could not be done by an initiative. He said the issue of
subdivisions was debated while drafting the initiative. It was
decided the initiative group did not want to dictate to local party
committees. He called it a gray area, and several approaches were
possible.
Number 0264
CHAIR JAMES thanked Mr. Frank, and commented she was feeling
frustrated and wanted to reiterate the goal of the exercise today.
Number 0343
REPRESENTATIVE PORTER commented, if HB 317 and HB 368 did not make
it through the system, and the initiative was enacted, he asked how
the gray issue would be resolved? He wondered if it would be
resolved by APOC or by a court case, for example.
Number 0371
REPRESENTATIVE FINKELSTEIN replied APOC would issue regulations on
anything put forward. He said there was not a prohibition on
regulations. Moreover, if someone was unhappy they could sue.
Number 0384
REPRESENTATIVE FINKELSTEIN further stated there were two points
involved regarding the subdivision issue. He cited a bill could
not stop an entity from deciding whether it could be a group or a
subdivision. It could simply reorganize under a new name, for
example. He also cited this issue would probably not be a big
issue in practice because the maximums would not be reached, based
on past contribution records.
Number 0455
REPRESENTATIVE PORTER said some apparent subdivisions did not even
know the address of the main party. He wondered if any entity
could be a subdivision of a party without its knowledge.
Number 0468
REPRESENTATIVE FINKELSTEIN replied, that was an interesting
question. He wondered if a party could reject a group. Currently,
a group could reject a party, but again wondered if a party could
reject a subdivision. He said the Commission recognized a central
party and the rules emanated from there. He said the initiative
confirmed that because it referenced the 3 percent definition. He
said a party did not have to take a subdivision just because it
wanted to sign-up.
Number 0513
REPRESENTATIVE PORTER said it was necessary to forget about logic
sometimes. He agreed with Representative Finkelstein, logically,
and was concerned about someone else interpreting it differently.
REPRESENTATIVE FINKELSTEIN replied he needed to look at the issue
again.
Number 0531
CHAIR JAMES said there were many different groups and cited the
College Republicans as an example. She said it was affiliated with
the party, but not part of the party. She explained subdivisions
were generally managed by the elected officials of the party. It
was clear in that case the subdivision was part of the party.
However, the affiliated groups such as the College Republicans were
not managed by the party.
Number 0580
REPRESENTATIVE FINKELSTEIN said it was confusing. He cited
approval was needed from the Democratic Party to be a subdivision
as well as donate a certain percentage of money raised to the main
party. There was a straight forward tie otherwise it did not
exist.
CHAIR JAMES said this was a good discussion and suggested moving
forward.
Number 0605
REPRESENTATIVE FINKELSTEIN moving forward referred the committee
members to page 14, Sec. 15.13.116, "DISBURSEMENT OF CAMPAIGN
ASSETS AFTER ELECTION." The subsection explained what could be
done with the money after a campaign. He stated in the initiative
and in HB 368, 60 days were given, while in HB 317, 90 days were
given. A legislator, however, was given until February 15 because
it was the reporting date. He explained the distribution could be
made to pay bills, hold a party, make donations to a political
party, charity or to the state of Alaska, repay loans, establish a
fund for legal fees, and pass forward property up to $2,500 for
future campaigns, such as computers. If failed to distribute the
funds as described in the subsection, the disbursements went to the
general fund.
Number 0662
CHAIR JAMES asked what of value went onto the computers?
Number 0667
REPRESENTATIVE FINKELSTEIN explained in the cases of "in kind"
contributions, such as the donation of a computer, the candidate
did not have to use the purchase price but rather an assessment.
He called it the fair market value. He said it would be up to APOC
to issue a regulation to make this area more specific.
Number 0703
CHAIR JAMES asked about campaign materials such as signs and
buttons, for example? She commented they did not have any value
except to the candidate.
Number 0713
REPRESENTATIVE FINKELSTEIN replied campaign materials had nominal
value. He said it was hard to get into that level of detail and
reiterated the APOC would need to issue regulations to make it more
specific.
Number 0725
CHAIR JAMES reiterated campaign materials did not have any value,
unless the candidate turned out to be someone famous.
CHAIR JAMES announced she had a problem with relying on regulations
because the statutes were not written clear enough. She said this
was true in every area of the government. The legislature wrote
things very vague so that the Administration had to decide how to
implement it creating an interpretation problem. In effect, this
created a situation where the Administration was making the law
when it should be making the application of the law.
Number 0813
REPRESENTATIVE FINKELSTEIN said he agreed with Chair James, but in
this area of the law it was difficult to "jam" all the details into
a bill. The initiative group already complained the bill was too
long. He said there were other areas that her comment applied to,
but in this area the fair market value concept would probably not
be misinterpreted.
Number 0840
REPRESENTATIVE PORTER asked what the carry over value was again to
a non-election year?
Number 0858
REPRESENTATIVE FINKELSTEIN replied, it was zero. He said it was
reasonable to allow some funds carried forward. He said it was an
area for discussion, however.
Number 0873
REPRESENTATIVE PORTER wondered about returning contributions to the
original donors.
Number 0892
REPRESENTATIVE FINKELSTEIN said that provision was included in HB
317, and not HB 368. It was addressed in HB 317 on a pro-rata
basis, whereby an approximation would be calculated.
Number 0911
CHAIR JAMES replied that would be difficult because she received $2
and $5 contributions, for example.
Number 0919
REPRESENTATIVE FINKELSTEIN responded it was an approximation. He
said contributions could be eliminated below a certain level. The
intent was to eliminate the return of funds to a friend, for
example.
Number 0928
REPRESENTATIVE ROBINSON explained when she left the City and
Borough of Juneau Assembly she had a campaign account of which
either a check was made to the donator or to a candidate of their
choice. The leftover amount was given to the Police Department for
the Teddy Bear Program. She asked if she would be able to do that
according to HB 368 and HB 317?
Number 0954
REPRESENTATIVE FINKELSTEIN replied, "no." He explained she could
give the money back to the donor, give it to a party of their
choice, or give it back to the donor so he could give it to a
candidate of his choice.
Number 0965
REPRESENTATIVE ROBINSON said it was double paperwork. She said it
was just as easy for her to write the check and let it be known
where the money came from.
REPRESENTATIVE FINKELSTEIN replied it could be done if it was a
charity case.
Number 0986
CHAIR JAMES commented the approach was different in HB 317 and HB
368.
REPRESENTATIVE FINKELSTEIN said Chair James was correct.
CHAIR JAMES said the contributions could be returned to the
donators in HB 317, but not in the initiative and not in HB 368.
Number 1014
REPRESENTATIVE FINKELSTEIN explained he had been focusing his
comments on the initiative.
CHAIR JAMES replied it was important to note the changes in HB 317
because it indicated second thoughts and a clean-up on your part.
She agreed it was also important to focus on the initiative as it
might become law of the land.
Number 1082
REPRESENTATIVE FINKELSTEIN moving forward referred the committee
members to Sec. 15.13.125, "CIVIL PENALTIES." He explained in HB
368 there was an alternative for a citizen suit. He said there
were higher penalties imposed for administrative decisions. He
cited in HB 368 a new set of standards was also included. They
were: knowing violations, negligent violations, and aggravating
and mitigating factors. He cited in HB 317 a more simple approach
was taken which increased the penalties incurred. He further said
in the event a citizen chose to go to court, the court was
authorized to fine at a level three times higher than what the
penalty would have been. The winner of the case could win
reasonable attorney fees and cost from the loser. Furthermore, the
winner could receive one-half of the amount of the penalty
according to HB 368. He cited in HB 317 the violations were at a
lower level. He said in the initiative and HB 368 the violations
called for a class C felony for an intentional violation, whereas
in HB 317 the violations called for a class A misdemeanor for the
worst penalty.
Number 1229
REPRESENTATIVE PORTER asked what the violation was for a class C
felony in the initiative?
Number 1238
REPRESENTATIVE FINKELSTEIN replied, "an intentional violation." He
called on Mr. Frank to further address the question.
Number 1246
MR. FRANK said all the intentional violations were subject to a
class C felony. He explained under current law, the violations
were classified as an unclassified misdemeanor. The initiative
tried to tie the violations to the existing criminal codes with a
graduated step-down approach to a class C felony for intentional
violations and so forth. The idea was to treat the matter
seriously, if a someone tried to cheat the voter. He further said
a lower contribution level was included as a possible deterrent to
violate the laws.
The record reflected the arrival of Representative Joe Green at
9:20 a.m.
Number 1325
REPRESENTATIVE PORTER wondered if it was a knowingly intentional
violation of a provision rather than an intentional act that
violated a provision. He cited, if he accepted a check, for
example, then discovered it was improper, did he committed a
felony?
Number 1359
REPRESENTATIVE FINKELSTEIN replied the language in the bill called
for an "intentional" violation of a provision. Therefore,
Representative Porter's interpretation was correct. He said a
candidate did not have to intentionally act in a way that violated
a provision, but intentionally violate it.
Number 1370
MR. FRANK replied a candidate needed to cognitively violate the
law. He said the act of accepting the check in Representative
Porter's example was not in violation.
Number 1390
REPRESENTATIVE FINKELSTEIN said he had received more complaints and
concerns about this section compared to any other section from
legislators. He cited the problems expressed were potential abuse
of citizen suits before an election. Furthermore, it was believed
that the system now worked and wondered why a new one was
necessary.
CHAIR JAMES announced for the record that Representative Joe Green
was present.
CHAIR JAMES further announced Representatives Robinson and Willis
need to leave shortly.
Number 1474
REPRESENTATIVE FINKELSTEIN referred the committee members to
subsection 15.13.135, "INDEPENDENT EXPENDITURES FOR OR AGAINST
CANDIDATES." He explained based on the Buckley v. Valeo decision,
an independent expenditure could not be limited. He stated an
individual could give an unlimited amount, however. A requirement
was added to HB 317 and HB 368 based on a suggestion by APOC to
include the following disclaimer statement to a piece of
communication.
"This NOTICE TO VOTERS is required by Alaska law. (I/we) certify
that this (mailing/literature/advertisement) is not authorized,
paid for, or approved by the candidate."
REPRESENTATIVE FINKELSTEIN explained the disclaimer was needed to
make it clear it was an independent expenditure.
Number 1518
CHAIR JAMES stated an individual could not be denied to place an
add in the paper of which the candidate had nothing to do with it.
Number 1530
REPRESENTATIVE FINKELSTEIN further stated a group or a party could
place an add in the paper of which the candidate had nothing to do
with it.
Number 1538
CHAIR JAMES commented a disclaimer would have to be present on the
notice that it was not authorized by the candidate.
REPRESENTATIVE FINKELSTEIN replied, "exactly."
Number 1550
REPRESENTATIVE PORTER wondered if an independent expenditure could
be the financing of a television spot for a candidate the last two
weeks of its exposure, for example.
Number 1563
REPRESENTATIVE FINKELSTEIN replied only if it was not done in
concert with the campaign. He said it was highly unlikely,
however, and no one had tried something that blatant before.
Number 1579
CHAIR JAMES further commented there was nothing stopping an
independent expenditure from placing an ad against a candidate.
She wondered if the disclaimer would apply to that scenario as
well.
Number 1599
REPRESENTATIVE FINKELSTEIN said the suggestion from APOC was to add
the language "all candidates" which would address the scenario
Chair James presented.
REPRESENTATIVE PORTER wondered if it said that in the initiative.
REPRESENTATIVE FINKELSTEIN replied, the initiative read, "...is not
authorized, paid for, or approved by "the" candidate." Leaving the
question of who was the candidate unanswered.
Number 1634
REPRESENTATIVE FINKELSTEIN moving forward referred the committee
members to Sec. 15.13.145, "MONEY OF THE STATE AND ITS POLITICAL
SUBDIVISION." He explained the approach was to allow money spent
by a government entity on ballot propositions based on the approval
of the local government body. He cited a civic concern was a
possible issue, however. The subsection banned contributions from
government entities to candidates. He explained there was a case
where a local government body gave a contribution to a candidate.
He explained most felt it was inappropriate.
REPRESENTATIVE ROBINSON announced she was sorry, but she needed to
leave the meeting.
REPRESENTATIVE FINKELSTEIN moving forward referred the committee
members to Sec. 15.13.150, "ELECTION EDUCATIONAL ACTIVITIES NOT
PROHIBITED." The subsection described the activities not
prohibited, and cited the publication of the date and location of
an election, educating the public, and sponsoring forums, as
examples. He explained that included get-out-the-vote and voter
registration as well.
Number 1751
REPRESENTATIVE FINKELSTEIN moving forward referred the committee
members to Sec. 15.13.400, "DEFINITIONS." He explained the
subsection addressed the area of honorarium. He cited HB 317
incorporated the existing honorarium approach that the legislature
followed which differentiated an honorarium speech based on subject
content. He further explained the subsection clarified the words
"individual" which meant a natural person and "person" which meant
the same as in AS 01.10.060 and labor union. He called it a
technical issue.
Number 1870
REPRESENTATIVE JOE GREEN wondered if a speech made at a luncheon
was in violation of the honorarium provisions in the initiative.
Number 1930
REPRESENTATIVE FINKELSTEIN reiterated HB 317 was in compliance with
the ethics code. He said Representative Green's concern could be
a problem according to HB 368, however. He said it needed to be
clarified further and remain consistent with the ethics code.
Number 2093
REPRESENTATIVE PORTER wondered if the key chain he received from
the State Chamber of Commerce which was something of value was in
violation?
REPRESENTATIVE FINKELSTEIN replied, "I suppose." He said it was a
good point and the intention was to exempt a gift such as a key
chain, however.
Number 2122
REPRESENTATIVE FINKELSTEIN moving forward referred the committee
members to Sec. 15.56.012, 15.56.014, and 15.56.016, "CAMPAIGN
MISCONDUCT IN THE FIRST, SECOND AND THIRD DEGREE." He said these
sections were discussed and mentioned earlier.
Number 2147
REPRESENTATIVE FINKELSTEIN moving forward referred the committee
members to Section 21 addressing lobbyists. He explained the
section allowed contributions from lobbyists who lived in the
candidates own district, statewide candidates, and parties.
Number 2194
CHAIR JAMES wondered about the spouse of a lobbyist.
Number 2202
REPRESENTATIVE FINKELSTEIN replied the spouse of a lobbyist could
make contributions using their own money. He said it was a
potential problem, and when the ethics code was passed in 1992 that
banned lobbyists from holding fund raisers everyone assumed the
spouse would host the fund raiser instead. The reason it did not
turn out that way was because the lobbyist had an image to
preserve. The Alaska State Constitution said "we shall regulate
lobbying," and not the spouses. He said there was a direct
connection between the behavior of a lobbyist and the Alaska State
Constitution.
Number 2364
CHAIR JAMES said she was pleased to hear that lobbyists were
concerned about following the law, because that was not the
perception of the public. She said lobbyists were careful about
what they could and could not do according to her experiences.
REPRESENTATIVE FINKELSTEIN said after the 1992 ethics code was
passed, the lobbyists were very concerned about what was allowed
and not allowed. He said HB 368 said a lobbyist could not
"directly or indirectly collect contributions for, or deliver
contributions to, a candidate." He explained that was the
interpretation of APOC and it was added to HB 368 for
clarification.
TAPE 96-26, SIDE A
Number 0000
REPRESENTATIVE PORTER explained, according to the initiative, the
penalties also applied to the members of the public. Therefore, if
an illegal donation was made, the individual was subject to
prosecution.
Number 0037
CHAIR JAMES replied, "it's pretty scary."
REPRESENTATIVE GREEN replied, "It's very scary."
Number 0046
REPRESENTATIVE FINKELSTEIN moving forward referred the committee
members to Section 26, "This Act takes effect immediately under AS
01.10.070(c)." He explained the initiative was governed by the
Alaska State Constitution. He stated the logical effective date
would be January 1 which was also recommended by APOC.
Number 0105
CHAIR JAMES said HB 368 read, "This Act takes effect immediately
under AS 01.10.070(c)."
REPRESENTATIVE FINKELSTEIN replied it was the best the bill drafter
could do to match the initiative. He agreed it was not be logical
to use any other date than January 1.
Number 0142
CHAIR JAMES said it would be unfair to restrict or make these
changes in an election year.
REPRESENTATIVE GREEN said there was already a conflict because this
was an election year.
Number 0183
REPRESENTATIVE PORTER wondered if the provisions would be
retroactive.
Number 0199
REPRESENTATIVE FINKELSTEIN replied the issue of surplus addressed
about $1.5 million to $2.0 million, a big amount of money prior to
the 1996 fund raising season. He explained the current law would
apply until the effective date of the new law. Therefore,
candidates could quit and take their surplus, or give it away, for
example. However, if money was retained until the effective date
of the new law it would be subject to those provisions.
Number 0281
CHAIR JAMES said, if the effective date was January 1, the surplus
would need to be eliminated by December 31.
Number 0295
REPRESENTATIVE FINKELSTEIN replied, "right." He cited the federal
government addressed this same issue and incorporated a phase-out
period of which one-third of the candidates quit and took the
money, while two-thirds remained.
Number 0356
REPRESENTATIVE PORTER asked what the effective date would be if the
initiative passed?
REPRESENTATIVE FINKELSTEIN replied approximately March. He
explained the date was directly related to the election
certification process.
Number 0391
CHAIR JAMES said there would be a period of time before the
initiative went into effect to collect contributions in the first
part of January because it would be a non-election year.
Number 0426
REPRESENTATIVE PORTER said the money would be available for lawful
expenditure until December 31.
CHAIR JAMES replied, "that's correct," and the expenditures could
only be campaign related.
REPRESENTATIVE PORTER replied, "or legislative related."
CHAIR JAMES replied she was not sure if it said legislative
related.
REPRESENTATIVE FINKELSTEIN replied it would require an amendment to
allow a transfer to an office account.
CHAIR JAMES cited an example whereby there was a fund raiser in the
first part of January. She explained the money could not be spent
in a non-election year.
Number 0479
REPRESENTATIVE FINKELSTEIN explained the bills did not restrict
spending, it only restricted fund raising. He said the funds could
be expended at any time in the scenario Chair James presented.
Number 0492
CHAIR JAMES said there was a specific list that detailed the
spending prohibitions.
Number 0529
REPRESENTATIVE FINKELSTEIN answered, he thought Chair James was
referring to campaign activities.
Number 0556
CHAIR JAMES referred to the prohibition against spending funds for
personal benefit. She said it would include legislative expenses.
Number 0560
REPRESENTATIVE FINKELSTEIN replied he did not completely agree with
Chair James. He said the best way was to transfer the funds was to
an office account to separate the expenditures.
Number 0568
CHAIR JAMES asked Representative Finkelstein if he agreed the
initiative did not allow surplus funds to be spent until campaign
time?
REPRESENTATIVE FINKELSTEIN replied, "no." The initiative allowed
spending on campaign related activities at any time.
CHAIR JAMES asked if she could buy signs and campaign buttons for
example?
REPRESENTATIVE FINKELSTEIN reiterated the only limitations were on
the fund raising periods. Furthermore, a candidate could always
spend his own money.
Number 0587
CHAIR JAMES asked if a newsletter could be sent, for example?
Number 0593
REPRESENTATIVE FINKELSTEIN said a newsletter was in the gray area.
He explained, if the disclaimer was included, it was appropriate.
Number 0659
MR. FRANK said the effective date was controlled by the Alaska
State Constitution. He said legislation, however, could be used to
affect the transition period. In conclusion, he thanked the
committee members for the discussion today.
CHAIR JAMES announced HB 317 and HB 368 were scheduled again for
Saturday, March 9, 1996. She commented a comparison of the
provisions would be helpful for further analysis. She stated she
would like to work on the bills further and offer a possible
committee substitute.
Number 0798
REPRESENTATIVE GREEN said he was concerned about the potential
consequences of such a bill.
Number 0835
CHAIR JAMES replied there was nothing in HB 317 or HB 368 that
could not be amended before passing it to the floor. She
reiterated there still was the possibility the initiative would
move forward. There was also the possibility of the initiative
moving forward along with a bill of which would create conflicts
and confusion. Therefore, it was important to include all the
parties involved.
Number 1014
ADJOURNMENT
CHAIR JAMES adjourned the House State Affairs Committee meeting
at 9:55 a.m.
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