Legislature(2009 - 2010)CAPITOL 106
03/02/2010 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Confirmation(s): Personnel Board, Dr. Keith J. Hamilton | |
| HB409 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 409 | TELECONFERENCED | |
| = | HB 401 | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 2, 2010
8:04 a.m.
MEMBERS PRESENT
Representative Bob Lynn, Chair
Representative Paul Seaton, Vice Chair
Representative Peggy Wilson
Representative Max Gruenberg
Representative Pete Petersen
MEMBERS ABSENT
Representative Carl Gatto
Representative Craig Johnson
OTHER LEGISLATORS PRESENT
Representative Scott Kawasaki
COMMITTEE CALENDAR
CONFIRMATION HEARING(S)
Personnel Board
Dr. Keith J. Hamilton - Soldotna
- CONFIRMATION(S) ADVANCED
HOUSE BILL NO. 409
"An Act relating to state election campaigns, the duties of the
Alaska Public Offices Commission, the reporting and disclosure
of expenditures and independent expenditures, the filing of
reports, and the identification of certain communications in
state election campaigns; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 401
"An Act relating to state election campaigns, the duties of the
Alaska Public Offices Commission, the reporting and disclosure
of expenditures and independent expenditures, the filing of
reports, and the identification of certain communications in
state election campaigns; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 409
SHORT TITLE: CAMPAIGN EXPENDITURES
SPONSOR(s): STATE AFFAIRS
02/26/10 (H) READ THE FIRST TIME - REFERRALS
02/26/10 (H) STA, JUD
03/02/10 (H) STA AT 8:00 AM CAPITOL 106
WITNESS REGISTER
DR. KEITH HAMILTON
Soldotna, Alaska
POSITION STATEMENT: Testified as appointee to the Personnel
Board.
MIKE SICA, Staff
Representative Bob Lynn
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 409 on behalf of the House
State Affairs Standing Committee, sponsor, which is chaired by
Representative Lynn.
JOHN PTACIN, Assistant Attorney General
Labor and State Affairs Section
Civil Division (Anchorage)
Department of Law
Anchorage, Alaska
POSITION STATEMENT: Discussed a memorandum from the attorney
general and answered questions during the hearing on HB 409.
PATTY WARE
Regulation of Lobbying
Alaska Public Offices Commission (APOC)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
409.
HOLLY ROBERSON HILL, Executive Director
Alaska Public Offices Commission (APOC)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
409.
ALPHEUS BULLARD, Attorney at Law
Legislative Legal Council
Legislative Legal and Research Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Provided comments and answered questions
during the hearing on HB 409.
ACTION NARRATIVE
8:04:02 AM
CHAIR BOB LYNN called the House State Affairs Standing Committee
meeting to order at 8:04 a.m. Representatives Seaton, Wilson,
Petersen, and Lynn were present at the call to order.
Representative Gruenberg arrived as the meeting was in progress.
^CONFIRMATION(S): PERSONNEL BOARD, DR. KEITH J. HAMILTON
CONFIRMATION(S): PERSONNEL BOARD, DR. KEITH J. HAMILTON
8:04:35 AM
CHAIR LYNN brought before the committee the appointment of Dr.
Keith Hamilton to the Personnel Board. [The committee packet
contains biographical information on Dr. Hamilton.]
8:05:09 AM
DR. KEITH HAMILTON, testifying as appointee to the Personnel
Board, offered his background. He said he is an educator who
was involved with the Faith-Based and Community Initiatives
Council. He said he understands what serving on the Personnel
Board entails and thinks he would serve on the board as a fair
and unbiased individual who does not necessarily "come in with
any political or government experience."
8:06:00 AM
REPRESENTATIVE SEATON remarked that Dr. Hamilton's resume is
impressive, and he said he appreciates Dr. Hamilton's desire to
serve the state.
8:06:23 AM
REPRESENTATIVE SEATON moved to advance the confirmation of Dr.
Keith Hamilton to the joint session of the House and Senate.
There being no objection, the nomination of Dr. Keith Hamilton
to the Personnel Board was advanced.
HB 409-CAMPAIGN EXPENDITURES
8:07:17 AM
CHAIR LYNN announced the next order of business was HOUSE BILL
NO. 409, "An Act relating to state election campaigns, the
duties of the Alaska Public Offices Commission, the reporting
and disclosure of expenditures and independent expenditures, the
filing of reports, and the identification of certain
communications in state election campaigns; and providing for an
effective date."
CHAIR LYNN reviewed that there was a recent [U.S.] Supreme Court
decision involving corporations being defined as a "person" and
making independent campaign expenditures in support of or in
opposition to a candidate or initiative. He said the decision
has had repercussions throughout the political community and
affects the all people.
8:09:21 AM
CHAIR LYNN said the committee's purpose today is not to debate
the U.S. Supreme Court decision. Chair Lynn said the committee
recently heard a bill he sponsored, which addresses the same
issue; however, he said that bill would be held in order to work
with the committee sponsored HB 409. He said he thinks everyone
will acknowledge the need to create some "side bars" - some
rules - before the end of this session. He stated that the
proposed bill is a bipartisan effort.
8:11:45 AM
MIKE SICA, Staff, Representative Bob Lynn, Alaska State
Legislature, presented HB 409 on behalf of the House State
Affairs Standing Committee, sponsor, which is chaired by
Representative Lynn. He stated that when the U.S. Supreme Court
decision was made on January 21, 2010, all Alaska's prohibitions
on independent expenditures were likely made unconstitutional.
He said the House State Affairs Standing Committee has worked
quickly to address this issue, sending a letter to the governor
of Alaska by February 12, which outlined the committee's
concerns. Mr. Sica reported that on Friday, February 19, the
attorney general issued a legal analysis supporting "the kind of
things this bill is doing" related to disclosures and
disclaimers and ensuring fair and credible elections while
upholding people's right to free speech. He expressed
appreciation for all those who have been involved with the
proposed legislation.
8:13:43 AM
MR. SICA paraphrased the sectional analysis, which read as
follows:
Section 1.Amends language relating to the
applicability of AS 15.13 (state election campaigns)
to clarify that the chapter applies to all
contributions, expenditures, and communications made
for the purpose of influencing the outcome of an
election covered by the chapter.
Section 2.Requires the Alaska Public Offices
Commission (APOC) to make certain information
available to the public within 24 hours after being
received by the commission and amends language
relating to APOC's duties to clarify that the
commission will assist all persons to comply with the
requirements of AS 15.13.
Section 3.Amends AS 15.13.040(d) to clarify that every
person making an expenditure must report to the
commission unless the person is exempted from
reporting by another provision of the chapter.
Section 4.Adds new requirements to the expenditure
report required under AS 15.13.040(d) and specifies
that (1) if the report is filed by a person who is not
an individual, it must be certified by the person's
treasurer or fiscal officer, and (2) the report must
be filed in accordance with AS 15.13.110(g).
Regarding Section 2, he directed attention to a conforming
language change on page 2, line 4, wherein APOC would be
required to assist "all persons" rather than candidates, groups,
and individuals.
Regarding Section 4, he directed attention to new language
beginning on page 3, line 5, which read:
If the report is filed by a person that is not an
individual, the report must be certified as correct by
the treasurer or fiscal officer of the person.
MR. SICA offered his understanding that the intent of that
language is to ensure accuracy. He noted that other new
language in Section 4 includes requirements, including: "the
name, address, and nationality of each officer and director of
the person", "principal occupation", and "employer of the
contributor".
MR. SICA, in response to Chair Lynn, explained the purpose of
the proposed requirement to report nationality is "to capture
whether the person behind these independent expenditures was a
foreign corporation."
8:17:06 AM
MR. SICA returned to the sectional analysis. He paraphrased
Sections 5 through 10, which read as follows:
Section 5.Amends language in AS 15.13.040(h) to
clarify that the reporting requirements of
AS 15.13.040(d) do not apply to an expenditure made by
certain individuals acting independently of any other
person.
Section 6.Amends AS 15.13.040(p) to clarify that a
person who is required to disclose contributions
received by that person in an expenditure report under
AS 15.13.040(d) must report the true source of the
contributions as the "contributor."
Section 7.Provides that no person, other than an
individual exempt from reporting under
AS 15.13.040(h), may make an expenditure unless the
source of the expenditure has been disclosed.
Section 8.Amends language in AS 15.13.084 to clarify
that a person may not make an expenditure anonymously
unless it is made (1) for certain communications, (2)
in connection with a ballot proposition as that term
is defined by AS 15.13.065(c), and (3) by an
individual acting independently of any other person.
Section 9.Amends language in AS 15.13.086 to conform
with the bill's repeal of AS 15.13.067.
Section 10.Expands the communication identification
requirements of AS 15.13.090 to apply to
communications made by all persons, and additionally
requires a person other than a candidate, individual,
or a political party to (1) identify the person's
principal officer, (2) include a statement from that
officer approving the communication, (3) provide the
address of the person's principal place of business,
and (4) identify certain contributors to the person.
MR. SICA, regarding Section 10, said the "certain contributors"
would be the five largest donors.
8:20:13 AM
MR. SICA continued paraphrasing the sectional analysis,
directing attention to Sections 11 through 16, which read as
follows:
Section 11. Adds a new subsection to AS 15.13.090
that does not permit a communication to be made by a
person other than a candidate, individual, or
political party, unless the person's principal officer
has certified to APOC that the officer has reviewed
the communication, and based on the officer's
knowledge, the communication is not defamatory and
does not contain defamatory statements.
Section 12.Requires expenditure reports filed under AS
15.13.040(e) to be filed within three days of the
expenditure being made, except for an expenditure that
exceeds $250 and that is made within nine days of an
election must be reported to APOC within 24 hours of
the expenditure being made.
Section 13.Amends the language of AS 15.13.111(a) to
oblige all persons who are required to report under AS
15.13 to preserve certain records for a period of six
years.
Section 14.Removes language from AS 15.13.135 that
permitted only individuals, groups, or nongroup
entities to make independent expenditures in support
or in opposition to a candidate for public office.
Adds language requiring all persons making certain
independent expenditures to comply with AS 15.13.090.
Section 15.Repeals AS 15.13.067, a provision
permitting only certain persons to make expenditures
in an election for public office and AS 15.13.140(a),
a provision that provided that AS 15.13 should not be
interpreted to prohibit a person from making
independent expenditures in support or in opposition
to a ballot proposition or question. As the chapter
now reads, there is no ambiguity as to whether the
chapter prohibits persons from making independent
expenditures relating to a ballot proposition or
question.
Section 16. Gives the Act an immediate effective
date.
MR. SICA, regarding Section 15, offered his understanding that
registration before expenditure is already in AS 13.15.050;
therefore it is redundant in AS 15.13.067.
8:23:28 AM
REPRESENTATIVE GRUENBERG directed attention to an article in
The New York Times, entitled, "Anonymous Donation," which
brings up the possibility of corporate contributions being
funneled through nonprofit organizations. He questioned whether
it would be constitutional for the legislature to prohibit this.
MR. SICA responded that he has discussed this issue, but has not
had communication from Legislative Legal and Research Services
regarding it.
8:25:20 AM
REPRESENTATIVE PETERSEN, regarding the issue of nationality,
offered his understanding that even though a person who is not a
U.S. citizen is not allowed to vote, under the proposed
legislation, a foreign national would be able to influence
Alaska's elections. He opined that that is not right, and he
said he does not think the people of Alaska would like that to
happen.
CHAIR LYNN responded that he would not want that to happen. He
said it is illegal for a foreign national to contribute to any
candidate, and he opined that it should also be illegal for
"that person representing the corporation to essentially do the
same thing, even though it's an independent expenditure." He
said the proposed requirement to identify nationality is there
for the purpose of full disclosure. He stated his concern that
it should also be disclosed when a corporation is "an Alaska
subsidiary of a foreign nation."
8:27:41 AM
MR. SICA added that the legislature legally could prohibit not
just foreign corporations, but subsidiaries therein, and it may
wish to consider that in the future. He echoed Chair Lynn's
comment that the proposed requirement to identify nationality is
for the purpose of full disclosure.
CHAIR LYNN said the idea is to give the public information by
which to know if they may have been influenced by foreign
persons.
8:28:51 AM
REPRESENTATIVE PETERSEN noted that the disclosure showing the
name of the group or candidate who sponsored an election
advertisement shows at the bottom of the television screen in
small print. Adding further names will make it difficult for
the average person to be able to read. He asked if there is any
way to require the advertisement sponsorship to be announced
audibly. He suggested that that would allow the public to
instantly recognize a foreign corporation name.
CHAIR LYNN pointed out that many U.S. corporations have foreign
sounding names, because America is comprised of a myriad of
ethnicities.
8:30:39 AM
MR. SICA said the proposed requirement to report nationality, to
which Representative Petersen referred, is related to filing
reports. He then highlighted language on page 5, lines [8-11],
which read as follows:
Sec. 15.13.090. Identification of communication.
(a) All communications shall be clearly identified by
the words "paid for by" followed by the name and
address of the person [CANDIDATE, GROUP, NONGROUP
ENTITY, OR INDIVIDUAL] paying for the communication.
CHAIR LYNN said he hopes the media would help in identifying the
sponsor of the [political] advertisement.
8:31:35 AM
REPRESENTATIVE SEATON regarding nationality, said Alaska is
currently relying on federal law, which prohibits foreign
nationals from contributing to a campaign, "et cetera." He said
he is waiting on a response from Legislative Legal and Research
Services as to whether federal law preempts state law from
instituting "a mirror kind of language." If not, he suggested
that the committee adopt an amendment incorporating that
restriction into state law.
8:32:49 AM
REPRESENTATIVE GRUENBERG remarked that no law is more effective
than the state's ability to enforce it. He said the committee
is getting into an issue that involves legal "tracing," which he
explained is an expensive process of finding out where the money
leads. He questioned how much money would be needed to enforce
the law.
8:33:25 AM
MR. SICA offered his understanding that the current fiscal note
is $131,000. He said he does not know how much additional money
would be needed to do tracing and cover investigations.
8:33:46 AM
REPRESENTATIVE SEATON offered his understanding that
Representative Kawasaki was concerned about hidden funds. He
directed attention to language on page 4, line 9, which read:
"contributor" means the true source of the funds,
property, or services being contributed.
REPRESENTATIVE SEATON expressed his hope that the committee
would obtain a legal opinion as to the meaning of that language
and what the penalties would be if someone was shown to be
attempting to hide the true source of funds.
8:34:58 AM
REPRESENTATIVE P. WILSON opined that the penalty for hiding
funds must have an impact. She talked about perception and
truth and taking a message out of context, and she emphasized
that the legislature must punish those giving other than the
facts. She said, "So, I think this goes a little further than
just financing ...."
CHAIR LYNN concurred.
8:36:15 AM
REPRESENTATIVE GRUENBERG stated that making a good case requires
right, remedy, and enforcement. He mentioned the Pebble Mine
case and said having a penalty in place is extremely important.
He relayed that AS 12.55.035 addresses how corporations are
punished. He said the statute has some loopholes, but he
suggested that the committee consider its implications. He said
corporations can influence legislation or the election of
candidates not only by bribing people, but also by committing
various campaign violations, and he reemphasized the importance
of addressing "terrific potential losses for the public" through
enacting "good remedy statutes."
CHAIR LYNN responded, "I like that."
8:38:33 AM
MR. SICA cautioned that the intent of the legislation is not to
penalize people for "exercising their political speech that they
now have through the [U.S.] Supreme Court decision."
8:41:06 AM
JOHN PTACIN, Assistant Attorney General, Labor and State Affairs
Section, Civil Division (Anchorage), Department of Law, said he
would outline some points from a memorandum from the attorney
general, dated 2/19/10 [included in the committee packet]. As
shown in the summary of the memorandum, Mr. Ptacin said that
under Citizens United v. Federal Election Commission ("Citizens
United"), Alaska may not prohibit political speech altogether in
candidate elections; therefore, AS 15.13.067 and AS 15.13.135
are likely unconstitutional. In response to Representative
Wilson, he explained that the aforementioned statutes have been
called into question "to the extent that they prohibit
independent expenditures attenuated to free speech and candidate
elections."
MR. PTASIN said given the current "landscape of the law," the
department also considered how current disclosure and disclaimer
law applies to corporations and labor unions. He said [AS
15.13.040], as currently written, requires corporations and
labor unions making independent expenditures in candidate
elections to disclose that speech within 10 days of making it.
Regarding disclaimer law, Mr. Ptasin said AS 15.13.084 does
apply; the corporation or labor unions cannot make that speech
anonymously. He said that in the memorandum, it was noted that
AS 15.13.084 could lead to some confusion where a corporation or
labor union could force the issue and make a political speech
expenditure. He said a question he thinks the committee and
many proposed bills are trying to address is what it means to
make speech not be anonymous.
MR. PTASIN continued as follows:
We did point out that there is this issue with true
source ... of funds. Arguably there's a gap in the
law, because a corporation can make an expenditure
from its own treasury. But the real question, and I
think that what a lot of the legislators this session
are trying to understand is: How do we follow the
money from person to person down into the actual act
of speech? And I think that's what these bills are
trying to address.
MR. PTASIN, regarding foreign corporations, said the memorandum
points out that federal law does not allow foreign nationals or
foreign associations to make expenditures in state candidate
elections. He relayed that the U.S. Supreme Court decision
resulting from the Citizens United case did not invalidate that
federal law, but it also did not rule whether or not there is a
compelling government interest in upholding that law.
8:44:42 AM
REPRESENTATIVE PETERSEN asked Mr. Ptasin if he is saying there
seems to be gray area when it comes to whether foreign entities,
governments, or individuals will be allowed to try to influence
elections; therefore, if the state specifically excluded those
entities from Alaska election law, that may be unconstitutional.
MR. PTASIN responded that Representative Petersen's question is
difficult to answer, because [the U.S. Supreme Court] "spent
about two sentences addressing the issue of [2 U.S.C. § 441e]."
He stated, "All they said is they don't have to address it in
this case, and they don't rule whether there is a compelling
government interest in that law as opposed to restricting
expenditures by United States corporations and labor unions in
this context then." He said it is difficult to predict whether
or not there will be a compelling government interest in that
area.
8:45:53 AM
REPRESENTATIVE SEATON asked if the Office of the Attorney
General believes that there is federal preemption in that
restriction or it would be possible for Alaska to enact state
law mirroring the restrictions in federal law.
MR. PTASIN answered that in other states' expenditure
restriction laws, which are now likely unconstitutional, the
definitions of corporations include "any corporation foreign or
domestic." He said he cannot find anything to show that that
distinction would "represent a compelling government interest at
this point." He stated, "I think it merits a lot more work to
determine whether there is preemption in that area and to kind
of flush out that idea."
REPRESENTATIVE SEATON asked what the state's recourse would be
if it relies on federal law and a foreign national spends money
in state election. He asked if there needs to be state statute
addressing this issue.
MR. PTASIN responded that Alaska's current law does not
contemplate distinguishing between foreign national corporations
and associations and U.S. corporations, because "we" used to
have an outright ban on all expenditure. The attorney general
memorandum points out that there is no state law on this issue,
he said. Mr. Ptasin offered his perspective that he is almost
certain he could not bring a federal elections campaign case in
front of APOC; the issue could not be litigated in state courts.
8:48:08 AM
REPRESENTATIVE PETERSEN said even though Alaska might not be
able to restrict a foreign corporation or foreign government
from getting involved in an election, the state would not be
restricted in how it requires disclosure.
MR. PTASIN responded as follows:
Laws which burden political speech are always subject
to scrutiny, and the government must always show a
compelling government interest in passing that law,
and ... [its] interest needs to be narrowly tailored.
With respect to foreign nationals, ... to the extent
there is a compelling government interest, I think
that's an issue that has to be thought about. ...
Given that standard, when you're trying to burden free
speech, there has to be a compelling government
interest to do any kind of disclosure or disclaimer
law.
8:49:30 AM
REPRESENTATIVE PETERSEN concluded then that Alaska would have to
require the same disclosure by everyone as a matter of fairness
and "to pass scrutiny."
MR. PTASIN replied that that is more of an equal protection
issue. He said, "When you talk about this particular set of
laws, you just have to pass strict scrutiny, and the government
has to show a compelling government interest for requiring that
type of disclosure." He said he thinks there is room to treat
certain groups one way versus another, and he said "these laws
already contemplate that." For example, he said individuals
have different types of filing requirements than [corporations].
8:50:13 AM
CHAIR LYNN concluded that the proposed legislation would "buy us
some time" by "disclosing disclosing." He suggested that future
legislation may pass some restrictions that would pass scrutiny.
MR. PTASIN responded as follows:
The new disclosure and disclaimer landscape ...
certainly builds on what's already in place. And
again, disclosure and disclaimer laws are subject to
strict scrutiny. And these laws are ... subject to
challenge from groups or from corporations or labor
unions - whoever you're applying the burden to, but at
this point, it's passed into law ....
8:51:18 AM
REPRESENTATIVE GRUENBERG asked Mr. Ptasin to confirm that the
remedies available to APOC are contained in AS 15.13.390, and
that they involve only civil penalties.
MR. PTASIN responded that there are criminal sanctions for
certain violations in another section of statute.
8:51:52 AM
REPRESENTATIVE GRUENBERG asked Mr. Ptasin if he is aware of
whether Alaska allows APOC to seek a court order or any type of
injunctive relief if there is an egregious case, and whether he
is aware of "any other types of remedies that are on the books
in any other jurisdiction."
8:53:02 AM
MR. PTASIN answered no.
8:53:41 AM
REPRESENTATIVE P. WILSON cited two sentences from the summary of
the aforementioned memorandum, which read as follows:
Alaska's laws continue to regulate corporate and labor
union political speech through disclaimer and
disclosure requirements. However, some disclaimer and
disclosure laws that provide specific standards for
reporting and identification of expenditures do not
currently apply to corporations and labor unions.
REPRESENTATIVE P. WILSON concluded as follows:
So, in that mode, we should be able to say we are just
covering those ... in areas ... that ... weren't
covered before and feel comfortable doing that.
8:54:42 AM
MR. PTASIN said there certainly has been discussion as to how
[AS 15.13.090 and AS 15.13.135] can apply to corporations and
labor unions. He indicated that proposed bills currently before
the legislature contemplate "even further discussion from that,"
based on the [proposed] changes to [AS 15.13.040 (d) and (e)].
8:55:29 AM
REPRESENTATIVE SEATON noted that Mr. Ptasin had mentioned two
statutes that he believed susceptible to constitutional
challenge: AS 15.13.067, which would be repealed by HB 409; and
AS 15.13.135. He asked Mr. Ptasin if he is comfortable that the
changes proposed in HB 409 would "take care of that situation,"
or if he would recommend further changes be made.
8:56:19 AM
MR. PTASIN responded, "What you've done to [AS 15.13.135] is
just not made any kind of restriction language in there, so it
does open it to the ... full panoply of entities and people in
groups who can make expenditures. So, I don't see anything in
the way that you've done that to ... raise an issue."
8:57:02 AM
REPRESENTATIVE SEATON, regarding "true source of funds", on page
4, line 9, asked Mr. Ptasin if this language would give the
department "ample cause to take a complaint through APOC or
through the courts."
MR. PTASIN responded that trying to "follow the money" can be an
arduous process. He indicated that the proposed legislation
would require "the one making the message to tell you who the
source of funds is." He stated, "If there's an implication that
there's one corporation giving to another corporation, giving to
another corporation, and funneling it all the way to the
messaging, conceivably under that language, we could take the
case and try to relate it all the way back to the true source of
funds, but I'd like to take a harder look at that."
8:59:31 AM
REPRESENTATIVE SEATON referred to language on page 3, beginning
on line 5, which read as follows:
If the report is filed by a person that is not an
individual, the report must be certified as correct by
the treasurer or fiscal officer of the person.
REPRESENTATIVE SEATON asked Mr. Ptasin if that language would be
sufficient to "attach liability to an individual if that is
shown to be willfully done."
MR. PTASIN pointed out that HB 409 further proposes that the
report must contain, for all contributions to the person that
exceed $100, ["the date of the contribution and amount
contributed by each contributor"]. He said that proposed
requirement would give the department the precursor to determine
whether or not there was a violation. Furthermore, he said the
proposed requirement for six years of record keeping would give
the department "broad subpoena power to ask the questions that
need to be asked if an allegation's made." He said he would
like to take a second look at "that language."
9:02:58 AM
REPRESENTATIVE PETERSEN asked then if it would be possible
legally to find someone guilty if the intent to hide true
identity could be proved.
MR. PTASIN responded that his experience has shown that proving
intent can be difficult; however, the stronger the disclosure
and disclaimer laws are, the better the chance is of finding
"certain things."
9:04:52 AM
REPRESENTATIVE GRUENBERG directed attention to AS 15.13.390
(f)(1), which read as follows:
(f) A party who has filed a civil action under AS 15.13.380
(1) is not entitled to trial by jury on the civil
action;
REPRESENTATIVE GRUENBERG said he would like to know if it is
constitutional to not allow a juried trial.
REPRESENTATIVE GRUENBERG questioned whether the aforementioned
language on page 3, beginning on line 5, should be amended to
say that the report should be certified "under penalty of
perjury".
MR. PTASIN responded that any "burdening speech" would have to
"survive strict scrutiny, narrow tailoring, [and have]
compelling government interest." He said he thinks there is
compelling government interest to keep individuals from lying to
the public. He indicated that the issues of narrow tailoring
and "whether perjury is the lever" have not been vetted at this
point.
9:05:56 AM
REPRESENTATIVE GRUENBERG said "the conspiracy statute"
apparently applies only to serious crimes. He explained, "I'm
wondering if the stuff we're talking about here would be covered
by conspiracy, because that would seem to me to be a relatively
easy way of prosecuting a violator." He asked Mr. Ptasin if he
would consider that idea.
9:07:41 AM
REPRESENTATIVE SEATON clarified that the committee is
anticipating two communications: one regarding the nationality
prohibition and whether the state could enact such a law, and
the other one regarding the true source of funds, which is
related to the conspiracy issue.
9:08:44 AM
MR. PTASIN, in response to Representative Gruenberg, said that
as the attorney who works on APOC issues, he is ready to enforce
any laws that are passed. In response to a follow-up question,
he said the Department of Law and APOC work closely on
investigations. He said APOC receives complaints and the
department is relied upon to ensure that investigations move
forward.
9:11:21 AM
MR. PTASIN, in response to Representative Seaton's former
summary of the questions that would be answered for the
committee, offered his understanding that the Department of Law
is going to consider certification under penalty and conspiracy
issues, and Legislative Legal and Research Services is going to
look at the nationality preemption issue.
9:11:52 AM
REPRESENTATIVE SEATON clarified that the question for the
attorney general is related to the federal law regarding foreign
nationals and "how that would flow into this new area where we
... could have foreign directors of a corporation" - how the
department "would be able to prosecute that." He said that is a
different questions from that which he is asking Legislative
Legal and Research Services to answer.
MR. PTASIN, in response to a question from Representative
Seaton, said he can enforce state laws, but needs to think about
what the state's role would be regarding the language in HB 409
that addresses foreign nationals.
9:13:48 AM
PATTY WARE, Regulation of Lobbying, Alaska Public Offices
Commission (APOC), reported that four out of five APOC
commissioners met with legislators in Juneau last week and,
while APOC does not take an official position on legislation,
the commissioners made it clear that this is an urgent matter
for which legislation must be passed this session with an
immediate effective date. She thanked the committee for
introducing HB 409.
9:14:32 AM
REPRESENTATIVE SEATON directed attention to the aforementioned
language, "contributions to the person that exceed $100", on
page 3, line 20, and he asked if that is the current limit. He
said he does not think the intent of the committee is to change
the standard.
MS. WARE offered her understanding that the amount in current
statute is $100. She deferred to the executive director of APOC
for confirmation.
9:15:36 AM
HOLLY ROBERSON HILL, Executive Director, Alaska Public Offices
Commission (APOC), said one of her staff has told her that is
correct. Regarding a previous comment by Mr. Ptasin, she cited
AS 15.13.380(f), which read as follows:
(f) If the complaint involves a challenge to the
constitutionality of a statute or regulation,
necessary witnesses that are not subject to the
commission's subpoena authority, or other issues
outside the commission's authority, the commission may
request the attorney general to file a complaint in
superior court alleging a violation of this chapter.
The commission may request the attorney general to
file a complaint in superior court to remedy the
violation of a commission order.
MS. HILL then cited Regulation 2AAC 50.476, which she said
allows APOC to refer matters to the attorney general. She
stated that AS 15.56.012, AS 15.56.014, and AS 15.56.016 involve
campaign misconduct which is criminal in nature. She said, "So,
the mechanism would be a referral by the commission to the AG's
office for more action taken against particular matters." In
response to Representative Seaton, she confirmed that AS
15.13.040(a)(2)(B)(ii) shows $100 in the aggregate.
9:17:37 AM
REPRESENTATIVE GRUENBERG offered a hypothetical example in which
one corporation funnels money through a nonprofit corporation.
He asked, "Would there be any possible problem with asserting
... in personam jurisdiction in a case like that, and, if so,
should we consider a statutory amendment to allow you to have
jurisdiction in that case to the maximum extent constitutionally
permissible?"
MR. PTASIN responded that under 074(f), a corporation couldn't
give to a group or a nongroup entity.
REPRESENTATIVE GRUENBERG said he would like an opinion from the
attorney general regarding whether that would be constitutional
after the Citizens United case. He said his question regarding
jurisdiction still stands.
MR. PTASIN explained that 074(f) is a contribution law, which
does not allow certain corporations, labor unions, and those
types of entities, to make a contribution to a group or a
nongroup entity or a candidate.
REPRESENTATIVE GRUENBERG said he understands what Mr. Ptasin has
said, but he wants to know if, in view of the Federal Election
Commission v. Massachusetts Citizens For Life case and Citizens
United, 074(f) is still constitutional.
MR. PTASIN explained as follows:
074(f) is a contribution law, and ... Citizens United
... is an expenditure case, so, I don't see any reason
why 074 is on any different grounds than it was prior.
9:20:56 AM
ALPHEUS BULLARD, Attorney at Law, Legislative Legal Council,
Legislative Legal and Research Services, Legislative Affairs
Agency, related that currently foreign nationals, under 2 USC
441 E, are prohibited from direct or indirect involvement in a
federal, state, or local elections of candidates, ballot
initiatives, or questions. Currently under federal law, those
entities are not allowed to use a foreign expenditure to
influence an election.
CHAIR LYNN said he assumes a board of directors may cast a vote
related to the support or opposition to a candidate or issue,
and he questioned whether a foreign national serving on that
board would be participating in an election when casting a vote.
MR. BULLARD answered as follows:
It would be a fact-intensive analysis as to where the
decision was made and how it was made and who made
that decision. The American subsidy could only use
that subsidy's funds from their American general
treasury to fund any sort of independent expenditure
in a state election. They wouldn't be able to use the
foreign parents' funds, et cetera.
MR. BULLARD, in response to a follow-up question from Chair
Lynn, stated his belief that under federal law, it would be
prohibited for a foreign national to be at the root of a
[board's] decision.
CHAIR LYNN asked how it is possible to determine who was the
determining influence in a closed board meeting.
MR. BULLARD said he does not have an answer for that question.
9:24:49 AM
MR. BULLARD, regarding conduit contributions and true source
language, noted that there is a 2001 attorney general's opinion
interpreting the true source language found in AS 15.13.040.
The opinion is that true source, in that context, means the
ultimate source of the contribution. He continued as follows:
I believe the issue is more of a sort of "boots-on-
the-ground" investigatory issue than it is a legal
issue. True source is true source; I don't believe
it's ambiguous. It's not money from the general fund;
it's where that money came from before it was in that
organization's general fund [that] would be its true
source.
MR. BULLARD said he does not know how much there is that can be
done in statute or how desirable it would be to attempt to
"isolate that notion of true source" in statute.
9:25:59 AM
REPRESENTATIVE GRUENBERG asked, "So, it's a factual question?"
MR. BULLARD offered his understanding that Representative
Gruenberg was referring to the issue of true source, and to that
he answered yes.
9:26:18 AM
REPRESENTATIVE PETERSEN asked if the State of Alaska would be
allowed to require that the true source of funds be disclosed as
a part of the advertisement.
MR. BULLARD responded that although he can imagine squabbles
occurring regarding true source in that context, he does not
know what the state's interest is and whether it would be a
compelling interest.
9:27:44 AM
CHAIR LYNN asked if it would be possible to require a
corporation to disclose when it is a subsidiary of a foreign
corporation.
MR. BULLARD answered that like prohibiting or limiting an
expenditure, a disclosure provision is a burden on speech and,
while the jurisprudence is not crystal clear, it needs to be
narrowly tailored to a compelling state interest. He said he is
not certain whether such a requirement would be interpreted by a
court to satisfy compelling state interest. He added, "It's
possible."
CHAIR LYNN explained he was thinking that, at least, a
disclosure could be made at the bottom of a television
advertisement or written advertisement, or at the end of a radio
announcement.
MR. BULLARD responded that there are possible constitutional
arguments that that would offend equal protection of First
Amendment rights of association and arguments regarding whether
such a requirement would be justified by a compelling state
need. He said he does not know the answer to that question.
9:29:12 AM
REPRESENTATIVE SEATON directed attention to Section 11, on page
6, lines 4-9, which read as follows:
Sec. 11. AS 15.13.090 is amended by adding a new
subsection to read:
(c) A person other than a candidate,
individual, or political party may not make a
communication under (a) of this section unless the
person's principal officer has certified to the
commission in writing that the officer has reviewed
the communication, and, based on the officer's
knowledge, the communication is not defamatory and
does not contain any defamatory statements.
REPRESENTATIVE SEATON said there has been discussion regarding
whether it would be better to have a chief executive or board of
directors, rather than the principal officer, do the
certification. He asked Mr. Bullard if there is a legal reason
why the committee should choose one over the other, or whether
this is a policy call.
9:31:14 AM
MR. BULLARD responded that he has not given this provision the
legal analysis it deserves; therefore, he is not certain how the
provision would work. He said the only analogous provisions
with which he is familiar are within the federal Sarbanes-Oxley
Act [15 USC 7241 section 302 and 18 USC 1350 section 906], which
requires a chief financial officer of various large corporations
to certify the disclosures that they sign off on in an attempt
to bring accountability to a personal level. He said he does
not know what the litigation surrounding those has been or how
analogous that is to the provision here in HB 409.
REPRESENTATIVE SEATON requested a legal opinion. He said the
chief area of concern for him is that limited liability
companies (LLCs), corporations, and unions have more rights and
protection than individuals making that same communication.
CHAIR LYNN said he shares Representative Seaton's concern.
9:35:30 AM
REPRESENTATIVE GRUENBERG mentioned two ways of proving
defamation, related to knowing a statement is defamatory and
reckless disregard of the truth. He said they are found in New
York Times v. Sullivan. He asked Mr. Bullard if the language in
Section 11 could be expanded with a conceptual amendment, which
may include the following language: "based on the officer's
knowledge" or "in reckless disregard of the truth".
MR. BULLARD said that language could be included; however, since
the legal test for legal defamation under New York Times v.
Sullivan "has that on board," he said it is not clear that the
amendment would be necessary.
REPRESENTATIVE GRUENBERG explained that he is concerned about
clarity. He remarked that it is possible that something said
can be untrue, without being defamatory. He asked if it would
be constitutional to expand the bill language to include not
only defamatory statements, but also "serious untruths" that may
be politically injurious or affect an election.
MR. BULLARD said he is unsure.
REPRESENTATIVE GRUENBERG indicated that he would talk further
with Mr. Bullard at a later date. He said he wanted to flag the
issue.
9:38:54 AM
REPRESENTATIVE PETERSEN indicated that he would like feedback
from Mr. Bullard regarding an amendment in which he held
interest.
The committee took an at-ease from 9:40:22 AM to 9:41:49 AM.
9:41:52 AM
CHAIR LYNN, after ascertaining that there was no one else who
wished to testify, closed public testimony.
9:43:35 AM
REPRESENTATIVE SEATON moved to adopt Amendment 1, labeled 26-
LS1495\R.1, Bullard, 3/1/10, which read as follows:
Page 2, line 27:
Delete "not less than 24 hours after the report
is filed"
Insert "within 24 hours after the filing of the
report"
REPRESENTATIVE GRUENBERG objected for discussion purposes.
REPRESENTATIVE SEATON explained that Amendment 1 would change
the language to that which better meets the intent of the
committee. In response to Representative Gruenberg, he offered
his understanding that as soon as reports come in to APOC, they
are available to the public; therefore, APOC would be able to
comply with Amendment 1.
9:46:41 AM
MS. HILL confirmed that Representative Seaton is correct that
anything that "comes through the door" is available to the
public. She noted that currently those items being filed by
Excel spreadsheet may need adjusting before printing for the
public, unless APOC is able to simply e-mail that information to
a person. She stated, "Changing it to 'within 24 hours' - as
long as that is not presumed to be electronic filing - that's
acceptable to APOC."
9:47:21 AM
REPRESENTATIVE GRUENBERG removed his objection. There being no
further objection, Amendment 1 was adopted.
9:47:48 AM
REPRESENTATIVE SEATON moved to adopt Amendment 2, labeled, 26-
LS1495\R.2, Bullard, 3/1/10, which read as follows:
Page 2, line 26, following "public":
Insert "on the commission's Internet website"
Page 2, line 27:
Delete "not less than 24 hours"
Insert "within three days"
REPRESENTATIVE GRUENBERG objected for discussion purposes.
REPRESENTATIVE SEATON, in response to Chair Lynn, offered his
understanding that "three days" means three consecutive days.
9:49:00 AM
MS. HILL responded that currently APOC does not have the ability
to post within 3 days. In response to Chair Lynn, she relayed
that the timing is closely tied to electronic filing. She
explained that APOC's electronic filing system is a database
from the mid '90s and slows down with more than one user;
therefore, the more staff applied to the problem, the slower the
system becomes.
9:49:59 AM
REPRESENTATIVE SEATON opined that it is incumbent upon the
legislature to modernize the method of reporting to the public;
however, he acknowledged that APOC currently does not have the
means to carry out Amendment 2.
REPRESENTATIVE SEATON withdrew Amendment 2.
9:50:35 AM
MS. HILL, in response to Representative Gruenberg, said APOC has
a $600,000 capital improvement project (CIP) request in the
fiscal year 2011 (FY 11) budget for the purpose of continuing
the commission's filing project called, "Insight." She said the
first phase of that filing was the lobbyist module, which is up
and running, but not without glitches. The CIP for FY 10 will
correct those glitches and provide APOC with interim solutions
that can assist with posting data. It will not be as
"searchable" as the Oxford database, she remarked, but will be a
method by which to load data more efficiently. Ms. Hill said
the Insight filing program is the process that was envisioned by
the legislature, but APOC does not have the funding to "engage
in a second task order." In response to a follow-up question,
she expressed her personal preference to not have a delayed
effective date.
9:53:00 AM
REPRESENTATIVE SEATON, in response to Chair Lynn, said as soon
as the legislature and the administration acquire a system that
works, he is certain that APOC will be using it.
CHAIR LYNN stated that without objection, Amendment 2 was
withdrawn.
9:53:50 AM
REPRESENTATIVE SEATON moved to adopt Amendment 3, labeled 26-LS
1495\R.3, Bullard, 3/1/10, which read as follows:
Page 6, line 12:
Delete "three days"
Insert "24 hours"
Page 6, lines 12 - 16:
Delete "An expenditure report filed under this
subsection must include any expenditure not yet
reported that was made before the filing of the
report. However, an expenditure that exceeds $250 and
that is made within nine days of an election shall be
reported to the commission not later than 24 hours
after the expenditure is made."
REPRESENTATIVE GRUENBERG objected for discussion purposes.
REPRESENTATIVE SEATON said Amendment 3 addresses the time in
which an independent expenditure report must be filed. In
response to Chair Lynn, he explained that this report is that
which must be turned in by the entity making the independent
expenditure; it does not relate to APOC's timing in making
information public.
REPRESENTATIVE GRUENBERG said he has no problem with the first
part of the amendment, but questioned the reason for deleting
the language [from page 6, lines 12-16].
9:56:05 AM
MR. BULLARD, at the request of Representative Seaton, explained
as follows:
The reason that that language appears in the bill and
not the amendment is [that] with the three-day
provision, ... you want things in the last nine days
to be reported - certain expenditures - within 24
hours. And there was also the concern that an
expenditure that was made on the tenth day before the
election could be reported within three days, but an
expenditure within nine days would have to be reported
within 24 hours. So, it's possible that for two days
certain expenditures would drop out. Once all the
expenditure reports required under [AS] 15.13.040(e)
must be filed within 24 hours, the rest of that is
arguably superfluous.
9:57:28 AM
REPRESENTATIVE GRUENBERG moved to divide Amendment 3 into
Amendment 3a and Amendment 3b. He said Amendment 3a would
include the first [three lines] of Amendment 3, while Amendment
3b would include [the last 5 lines].
9:57:47 AM
REPRESENTATIVE SEATON moved to adopt Amendment 3a, which read as
follows:
Page 6, line 12:
Delete "three days"
Insert "24 hours"
There being no objection, Amendment 3a was adopted.
CHAIR LYNN announced that Amendment 3b was tabled.
9:58:08 AM
REPRESENTATIVE SEATON moved to adopt Amendment 4, labeled 26-
LS1495\R.7, Bullard, 3/1/10, which read as follows:
Page 2, line 31, following "an":
Insert "independent"
Page 6, line 11, following "An":
Insert "independent"
Page 6, line 12, following "An":
Insert "independent"
Page 6, line 14, following "an":
Insert "independent"
REPRESENTATIVE SEATON said Amendment 4 relates to expenditure
reports.
There being no objection, Amendment 4 was adopted.
10:00:09 AM
REPRESENTATIVE SEATON requested that the committee get a
committee substitute to incorporate the amendments that were
adopted.
[HB 409 was held over.]
10:01:39 AM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 10:02
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 HB 409 Version R.PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| 02 HB409 Sponsor Statement.PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| 03 HB 409 Leg Legal Sectional.PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| 04 Lynn letter to Governor HB 409.PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| 05 AG Legal Analysis HB 409 .PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| 06 Bullard memo for Hb 409 version A.PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| 07 HB 409 news stories and opinions.PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| 08 HB 409 NCSL states respond to Supreme Court ruling.PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| 09 HB 409 Relevant Statutes.PDF |
HSTA 3/2/2010 8:00:00 AM |
HB 409 |
| Keith Hamilton.pdf |
HSTA 3/2/2010 8:00:00 AM |
Governor Appointments |