Legislature(2001 - 2002)

05/08/2002 08:08 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                          May 8, 2002                                                                                           
                           8:08 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Coghill, Chair                                                                                              
Representative Jeannette James                                                                                                  
Representative Hugh Fate                                                                                                        
Representative Gary Stevens                                                                                                     
Representative Peggy Wilson                                                                                                     
Representative Harry Crawford                                                                                                   
Representative Joe Hayes                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 531                                                                                                              
"An Act  relating to communications  and elections,  to reporting                                                               
of contributions and expenditures,  and to campaign misconduct in                                                               
the  second  degree; relating  to  disclosure  by individuals  of                                                               
contributions  to  candidates;  and providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - MOVED CSHB 531(STA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 371                                                                                                              
"An  Act establishing  the  Alaska  veterans' memorial  endowment                                                               
fund  and  providing  for  credits   against  certain  taxes  for                                                               
contributions to  that fund;  relating to  other tax  credits for                                                               
certain contributions; and providing for an effective date."                                                                    
                                                                                                                                
     - MOVED CSHB 371(STA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 531                                                                                                                  
SHORT TITLE:ELECTIONEERING COMMUNICATIONS/DISCLOSURES                                                                           
SPONSOR(S): STATE AFFAIRS                                                                                                       
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
05/07/02     3421       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
05/07/02     3421       (H)        STA, FIN                                                                                     
05/08/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
BILL: HB 371                                                                                                                  
SHORT TITLE:ALASKA VETERANS' MEM.ENDOWMENT FUND                                                                                 
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
02/01/02     2119       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
02/01/02     2119       (H)        MLV, STA, FIN                                                                                
02/01/02     2119       (H)        FN1: INDETERMINATE(CED)                                                                      
02/01/02     2119       (H)        FN2: INDETERMINATE(REV)                                                                      
02/01/02     2119       (H)        FN3: (MVA)                                                                                   
02/01/02     2119       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
03/05/02                (H)        MLV AT 3:00 PM CAPITOL 124                                                                   
03/05/02                (H)        Heard & Held                                                                                 
03/05/02                (H)        MINUTE(MLV)                                                                                  
03/14/02                (H)        MLV AT 3:00 PM CAPITOL 124                                                                   
03/14/02                (H)        Scheduled But Not Heard                                                                      
03/26/02                (H)        MLV AT 3:00 PM CAPITOL 124                                                                   
03/26/02                (H)        Scheduled But Not Heard                                                                      
04/04/02                (H)        MLV AT 3:00 PM CAPITOL 124                                                                   
04/04/02                (H)        Moved Out of Committee                                                                       
04/04/02                (H)        MINUTE(MLV)                                                                                  
04/05/02     2815       (H)        MLV RPT 3DP 2NR                                                                              
04/05/02     2815       (H)        DP: GREEN, HAYES, CHENAULT;                                                                  
04/05/02     2815       (H)        NR: KOTT, MURKOWSKI                                                                          
04/05/02     2815       (H)        FN1: INDETERMINATE(CED)                                                                      
04/05/02     2815       (H)        FN2: INDETERMINATE(REV)                                                                      
04/05/02     2815       (H)        FN3: (MVA)                                                                                   
04/23/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
04/23/02                (H)        Heard & Held                                                                                 
04/23/02                (H)        MINUTE(STA)                                                                                  
05/08/02                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JOE BALASH, Staff                                                                                                               
to Senator Gene Therriault                                                                                                      
Alaska State Legislature                                                                                                        
Capitol Building, Room                                                                                                          
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Presented HB 531.                                                                                          
                                                                                                                                
BROOKE MILES, Executive Director                                                                                                
Alaska Public Offices Commission                                                                                                
2221 East Northern Lights, Room 128                                                                                             
Anchorage, Alaska  99508-4149                                                                                                   
POSITION STATEMENT:  Testified on HB 531.                                                                                       
                                                                                                                                
CAROL CARROLL, Director                                                                                                         
Central Office                                                                                                                  
Administrative Services Division                                                                                                
Department of Military & Veterans Affairs (DMVA)                                                                                
400 Willoughby Avenue, Suite 500                                                                                                
Juneau, Alaska  99811                                                                                                           
POSITION STATEMENT:  Testified on HB 371.                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-54, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  JOHN  COGHILL  called the  House  State  Affairs  Standing                                                               
Committee  meeting  to  order  at   8:08  a.m.    Representatives                                                               
Coghill, Fate, Stevens, Wilson,  Crawford, and Hayes were present                                                               
at  the call  to  order.   Representative  James  arrived as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
HB 531 - ELECTIONEERING COMMUNICATIONS/DISCLOSURES                                                                            
                                                                                                                                
[Contains discussion of SB 363]                                                                                                 
                                                                                                                                
CHAIR COGHILL  announced that the  first order of  business would                                                               
be HB 531,  "An Act relating to communications  and elections, to                                                               
reporting  of contributions  and  expenditures,  and to  campaign                                                               
misconduct  in  the  second degree;  relating  to  disclosure  by                                                               
individuals of contributions to  candidates; and providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
Number 0139                                                                                                                     
                                                                                                                                
JOE  BALASH,  Staff  to Senator  Gene  Therriault,  Alaska  State                                                               
Legislature, explained  that [SB  363, legislation similar  to HB                                                               
531] was introduced  as an attempt to try to  get some disclosure                                                               
on issue ads.  There is a  huge gray area in election law between                                                               
an express ad, in which a  supporter opposes a candidate, and [an                                                               
issue ad], in which somebody advocates  an issue to the public in                                                               
the  context  of the  campaign  season.   Candidates'  names  and                                                               
images get  mentioned all the  time, and  if there could  just be                                                               
some disclosure on  these issue ads, perhaps a  little more light                                                               
could be shed on what's going on.                                                                                               
                                                                                                                                
Number 0228                                                                                                                     
                                                                                                                                
MR. BALASH  acknowledged that simply  requiring disclosure  on an                                                               
issue-based ad  provided some constitutional problems.   The bill                                                               
before the  committee [HB  531] is based  largely on  the McCain-                                                               
Feingold or Shays-Mehan bill, which  Congress passed recently and                                                               
the President  signed into law.   McCain-Feingold  basically says                                                               
if an  ad identifies a candidate  30 days before a  primary or 60                                                               
days before a  general election, it cannot be run  unless it's by                                                               
a candidate, a party, or a group.                                                                                               
                                                                                                                                
MR.  BALASH mentioned  discussions  with the  Legal and  Research                                                               
Services Division  ("Legislative Legal"),  and he  indicated that                                                               
there is  case law -  either in the  Tenth or the  Fourth Circuit                                                               
Court  [of Appeals]  - that  defines a  political message  as one                                                               
that  unambiguously identifies  the candidate.   That  particular                                                               
court  of  appeals struck  it  down  because  it was  thought  to                                                               
infringe  on one's  ability to  speak  about issues.   This  bill                                                               
takes it  one step further than  McCain-Feingold did.  It  has to                                                               
be an  ad that directly  or indirectly identifies  the candidate,                                                               
occurs within that  window of time before  an election, addresses                                                               
an  issue of  national, state,  or local  political concern,  and                                                               
attributes a position  on that particular issue  to the candidate                                                               
identified.                                                                                                                     
                                                                                                                                
Number 0450                                                                                                                     
                                                                                                                                
MR. BALASH  noted that  type of communication  was defined  as an                                                               
expenditure.   So, corporations and  unions are not able  to make                                                               
those kinds  of communications  to the  public.  It  has to  be a                                                               
party,  a  group,  a  nongroup  entity, or  the  candidate.    An                                                               
individual is  still able to  make that type of  communication on                                                               
his/her own and  out of his/her own pocket,  independently of any                                                               
of those types of entities.                                                                                                     
                                                                                                                                
MR. BALASH referred to the 5-15 form.   He said he thinks this is                                                               
the first year the Alaska  Public Offices Commission (APOC) began                                                               
levying  the  civil  penalties for  contributor  statements  that                                                               
either were  not filed  or were filed  late.   Senator Therriault                                                               
had  asked [the  APOC executive  director], and  she explained  a                                                               
little  bit of  the  history of  this form.    Basically, as  the                                                               
campaign finance  laws have evolved,  the usefulness of  the form                                                               
has worn itself  out as it pertains to candidates  or groups with                                                               
these limits.   That requirement was deleted  in AS 15.13.080 and                                                               
repealed and  reenacted another section  of AS 15.13.040  to make                                                               
it purely  an expenditure  report instead  of a  contribution and                                                               
expenditure report.                                                                                                             
                                                                                                                                
CHAIR COGHILL told  the committee that he took  the language from                                                               
the latest version in the Senate,  and that is what is before the                                                               
committee.                                                                                                                      
                                                                                                                                
Number 0629                                                                                                                     
                                                                                                                                
REPRESENTATIVE HAYES asked  when the information would  be out to                                                               
the public if the 15-5 form is repealed.                                                                                        
                                                                                                                                
Number 0670                                                                                                                     
                                                                                                                                
MR. BALASH answered that currently  a contribution has to be $500                                                               
in order  to trigger  the 15-5  form.  A  great number  of people                                                               
contribute  $499;   that  speaks  for   itself.    If  it   is  a                                                               
contribution  to  a  candidate,  each candidate  is  required  to                                                               
report  all contributions  and expenditures  30  days before  the                                                               
primary.   The  contributions will  show  up 30  days before  the                                                               
primary and  then 10 days before  and 7 days after  and then that                                                               
cycle repeats itself for the general election.                                                                                  
                                                                                                                                
REPRESENTATIVE HAYES asked what happens now.                                                                                    
                                                                                                                                
MR.  BALASH  said   that's  how  the  mechanism   works  now  for                                                               
candidates' reporting.   The 15-5 is required to  be filed within                                                               
30 days  of the contribution.   For example, if  the contribution                                                               
was made  on March 1, the  candidate would have until  April 1 to                                                               
file the  15-5 with the APOC.   He indicated that  information is                                                               
on the Web, and it would  be the contributions at the $500 level.                                                               
The form is not required  to be submitted for other contributions                                                               
up to $499.99.                                                                                                                  
                                                                                                                                
Number 0844                                                                                                                     
                                                                                                                                
BROOKE   MILES,  Executive   Director,   Alaska  Public   Offices                                                               
Commission,  testified  via  teleconference.   She  reviewed  the                                                               
history  of the  15-5  reporting.   It has  been  a component  of                                                               
Alaska campaign disclosure  law since its inception, and  it is a                                                               
unique  requirement   to  the  State  of   Alaska.    Originally,                                                               
contributors were required  to file this report when  they made a                                                               
contribution  that   was  more  than   $250.    In   those  days,                                                               
contributors could give up to  $1,000 to a candidate per calendar                                                               
year, and it was  required to be filed within 10  days.  When the                                                               
state undertook  campaign finance reform, the  15-5 reporting was                                                               
changed:  it  was increased to be only the  $500 contributors and                                                               
the time  period for submitting  it was within  30 days.   As Mr.                                                               
Balash  indicated, it  is true  that when  one reviews  candidate                                                               
campaign  disclosure  reports, one  will  see  a number  of  $499                                                               
contributions,  which is  probably  because they  didn't wish  to                                                               
have the  burden of filing the  contributor report.  In  the past                                                               
several years,  the commission  has become  aware of  concerns on                                                               
behalf of  the candidates  that this is  an additional  burden to                                                               
their contributors.                                                                                                             
                                                                                                                                
Number 0971                                                                                                                     
                                                                                                                                
MS.  MILES  told the  members  that  also with  campaign  finance                                                               
reform came civil  penalty for filing [the report]  after the 30-                                                               
day period.  The  civil penalty is $50 per day  from the date the                                                               
report  was due  until it's  received.   For several  years after                                                               
campaign finance reform, the commission  had a moratorium or hold                                                               
harmless  on  any  of  the  reports  that  were  submitted  late.                                                               
However, the  legislature overrode the governor's  veto last year                                                               
on SB 103, which made an  additional change to the 15-5 reporting                                                               
that said a candidate could file  the report on behalf of his/her                                                               
contributor.    With  that,  the  audit  component  of  the  15-5                                                               
reporting as it  relates to candidates became  not very workable.                                                               
In addition,  when the  commission reviewed  this at  its meeting                                                               
last March,  it no  longer wished to  maintain the  moratorium or                                                               
hold harmless.   The composition  of the commission  has changed,                                                               
and the members  were uncomfortable not administering  the law as                                                               
written by the legislature and  directed staff to begin after the                                                               
effective  date, April  16, to  assess the  civil penalties  on a                                                               
late 15-5.                                                                                                                      
                                                                                                                                
Number 1098                                                                                                                     
                                                                                                                                
MS. MILES said  to the best of her knowledge  she doesn't believe                                                               
that a  civil penalty has been  assessed on a 15-5  unless it was                                                               
an  aggravator  in  a  complaint   action  or  other  substantial                                                               
noncompliance.                                                                                                                  
                                                                                                                                
Number 1123                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  indicated that  he had talked  to former                                                               
Senator Tim Kelly  - who wrote the campaign finance  reform law -                                                               
who  told him  that going  up to  $500 on  the 15-5  form was  an                                                               
oversight; it had not been the  intention to leap the lower limit                                                               
of $250.  He wondered if Ms. Miles remembered it that way.                                                                      
                                                                                                                                
MS. MILES said, absolutely not.   In fact, it was Senator Kelly's                                                               
staff who came  to a commission meeting in  Juneau and negotiated                                                               
with  them  because he  wanted  to  completely  get rid  of  15-5                                                               
reporting.   At that time  it was  negotiated to expand  the time                                                               
period and the amount, so  it's only the maximum contributors and                                                               
only within 30  days rather than 10.  That  was a Senate majority                                                               
issue.   She confirmed that  she has a different  recollection of                                                               
that.                                                                                                                           
                                                                                                                                
Number 1226                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD   told  the  members  that   he  has  an                                                               
amendment that would take the  amount back to reporting from $250                                                               
up to  the $500 maximum.   He said he  thinks that would  be more                                                               
disclosure rather than  less disclosure.  On the  15-5 form there                                                               
is a  part that says a  person did not  get that money -  that it                                                               
was  his/her  money  being  contributed.   It  didn't  come  from                                                               
employers, parents, or  somebody else.  If the 15-5  form is done                                                               
away  with, he  said, there  wouldn't  be anyway  to track  that.                                                               
[This amendment was never offered.]                                                                                             
                                                                                                                                
MS. MILES replied  that it's true that there wouldn't  be a sworn                                                               
statement  by the  contributor; however,  the requirement  in law                                                               
remains the same,  and a candidate is  ultimately responsible for                                                               
the  legality  of his/her  contribution,  as  is the  candidate's                                                               
treasurer.                                                                                                                      
                                                                                                                                
REPRESENTATIVE CRAWFORD suggested  that if the 15-5  is no longer                                                               
required, there  won't be a  place to check the  online reporting                                                               
to   see  where   contributors  have   contributed  to   numerous                                                               
campaigns; someone  would have to  go through all  the individual                                                               
campaigns to see if one contributor  was contributing to 20 to 30                                                               
campaigns.                                                                                                                      
                                                                                                                                
Number 1340                                                                                                                     
                                                                                                                                
MS. MILES noted  that the databases are  undergoing some changes,                                                               
and searches by contributors' names will be accessible.                                                                         
                                                                                                                                
Number 1362                                                                                                                     
                                                                                                                                
REPRESENTATIVE STEVENS commented that it  seems to him that there                                                               
is duplication  here because both  the candidate  and contributor                                                               
are required  to file this  form.  He wondered  if it is  truly a                                                               
duplication and if it is necessary.                                                                                             
                                                                                                                                
Number 1463                                                                                                                     
                                                                                                                                
MS. MILES  agreed it is  a duplication of  identical information.                                                               
It was  intended to  be filed  in its  original form  by separate                                                               
entities:  by the candidate  or group receiving the contribution,                                                               
and by the contributor.  Early on,  it was a useful audit tool to                                                               
the commission.   Also,  in some  cases, it  provided information                                                               
that was not otherwise available because  it was prior to 30 days                                                               
before a  primary or the  end of  a year, or  it was in  a period                                                               
where  other campaign  disclosure  reports weren't  filed.   Once                                                               
that requirement  was changed  - that in  fact the  candidate can                                                               
file them  on behalf of  his/her contributors  - it does  seem to                                                               
make a lot  less sense.  Because now the  candidates are filing a                                                               
15-5  report  at the  same  time  they're filing  their  campaign                                                               
disclosure report,  all the  same information  is being  filed by                                                               
the same people.                                                                                                                
                                                                                                                                
REPRESENTATIVE  STEVENS   commented  that  it  seems   to  be  an                                                               
unnecessary burden on the candidates.   A more important issue to                                                               
him  is  that contributors  are  often  local  people who  see  a                                                               
neighbor  running  and  want  to  give  some  money  towards  the                                                               
campaign and  may not even  know the report is  due.  He  said he                                                               
thinks it  makes it  extremely difficult  for an  Alaskan citizen                                                               
who just wants  to help out in  a campaign.  It's a  good idea to                                                               
at least take the $500 level reporting by the contributor out.                                                                  
                                                                                                                                
Number 1583                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON asked about the civil penalty.                                                                            
                                                                                                                                
MS. MILES  explained that  the civil penalty  provided by  law is                                                               
$50  per  day  for each  day  that  a  report  is late.    It  is                                                               
administered  by the  commission,  although it  hasn't been  done                                                               
[before].  When  a report is received late,  the commission staff                                                               
sends  to  the  filer  a   notice  of  civil  penalty  assessment                                                               
explaining how  the assessment was  calculated and the  amount of                                                               
the assessment.  The person has  30 days to pay the assessment or                                                               
to file  an appeal to  be heard  before the commission  to reduce                                                               
the civil penalty based on mitigating factors.                                                                                  
                                                                                                                                
REPRESENTATIVE WILSON  commented that it  sounds like a  lot more                                                               
paperwork and time for the commission.                                                                                          
                                                                                                                                
MS. MILES  agreed that  the staff  wasn't very  enthusiastic when                                                               
directed to do it.                                                                                                              
                                                                                                                                
Number 1700                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  said he'd be  happy to do away  with the                                                               
15-5 altogether  if it was  available on the Internet  so someone                                                               
could  look  up   one  contributor  and  find  out   all  of  the                                                               
contributions in one search, rather  than have to go through each                                                               
candidate's APOC forms.                                                                                                         
                                                                                                                                
MS. MILES  commented that  that was certainly  the intent  of the                                                               
commission,  and the  programmer has  been  working on  it.   She                                                               
pointed out  that it's  only fair  to say that  a lot  depends on                                                               
funding support for the online project.                                                                                         
                                                                                                                                
Number 1784                                                                                                                     
                                                                                                                                
REPRESENTATIVE WILSON referred to page  5, line 21 and asked what                                                               
"false factual" means.                                                                                                          
                                                                                                                                
MS. MILES answered  that that section of the  law is administered                                                               
by the Department of Law, but  she has always considered it to be                                                               
false information.  She noted  that the false information is only                                                               
about  a candidate;  ballot  issues would  not  be included,  and                                                               
they're not in the campaign  disclosure law anywhere either.  The                                                               
campaign  disclosure law  only requires  that advertisements  and                                                               
communications be identified  and disclosed but not  that they be                                                               
factually correct.                                                                                                              
                                                                                                                                
REPRESENTATIVE WILSON said she thought that ought to be fixed.                                                                  
                                                                                                                                
The committee took an at-ease from 8:35 a.m. to 8:36 a.m.                                                                       
                                                                                                                                
CHAIR COGHILL  announced that  in case HB  531 takes  longer than                                                               
anticipated, he was holding it to the bottom of the calendar.                                                                   
                                                                                                                                
HB 371 - ALASKA VETERANS' MEM.ENDOWMENT FUND                                                                                  
                                                                                                                                
Number 1948                                                                                                                     
                                                                                                                                
CHAIR COGHILL announced that the  next order of business would be                                                               
HOUSE BILL  NO. 371,  "An Act  establishing the  Alaska veterans'                                                               
memorial  endowment  fund  and   providing  for  credits  against                                                               
certain taxes for  contributions to that fund;  relating to other                                                               
tax  credits  for certain  contributions;  and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
Number 1985                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  made  a   motion  to  adopt  the  proposed                                                               
committee substitute (CS) for HB  371, version 22-GH2003\C, Cook,                                                               
5/7/02, as  a work draft.   There  being no objection,  Version C                                                               
was before the committee.                                                                                                       
                                                                                                                                
Number 2030                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES made a motion to adopt Amendment 1, which                                                                  
read [original punctuation provided, but formatting changed]:                                                                   
                                                                                                                                
     Page 1, Line 1:                                                                                                            
          After the words "endowment fund", Delete:                                                                             
     "providing   for   credits   against   certain   taxes   for                                                               
     contributions  to that  fund; providing  that the  amount of                                                               
     each tax  credit for contributions  to the  Alaska veterans'                                                               
     memorial  endowment  fund  on amounts  that  do  not  exceed                                                               
     $100,000 is 50  percent and on amounts  that exceed $100,000                                                               
     but do not exceed $200,000  is 75 percent; relating to other                                                               
     tax credits for certain contributions;"                                                                                    
                                                                                                                                
     Page 1, Line 8, after the term "*Section 1."                                                                             
          Delete all language from "AS 21.89.070(c) through Page                                                              
     3, line 1.                                                                                                                 
                                                                                                                                
     Page 3, line 2:                                                                                                            
          Delete "*Sec. 4."                                                                                                   
                                                                                                                                
     Page 4, line 13:                                                                                                           
          Delete all language beginning with line 13 through                                                                    
     page 9, line 12.                                                                                                           
                                                                                                                                
     Page 9., Line 13:                                                                                                          
          Delete: "*Sec. 17."                                                                                                 
          Insert: "*Sec. 2."                                                                                                
                                                                                                                              
     Page 9, line 20:                                                                                                           
          Delete: "sec. 4"                                                                                                      
          Insert: "sec.1                                                                                                        
                                                                                                                                
     Page 10, Line 1:                                                                                                           
          Delete:  "*Sec. 18."                                                                                                
          Insert: "*Sec. 3."                                                                                                
                                                                                                                                
CHAIR COGHILL objected.                                                                                                         
                                                                                                                                
REPRESENTATIVE JAMES explained that Amendment 1 takes out the                                                                   
tax credit provisions in the bill.  She said she would do                                                                       
everything in her  power to raise money for this  fund but is not                                                               
willing to do  the tax credit at  this time.  She  noted that the                                                               
title would be changed with this amendment.                                                                                     
                                                                                                                                
Number 2179                                                                                                                     
                                                                                                                                
CAROL CARROLL, Director,  Central Office, Administrative Services                                                               
Division,  Department  of  Military &  Veterans  Affairs  (DMVA),                                                               
explained  that the  tax  credit  had two  sections.   The  first                                                               
$100,000 allowed  50 percent  credit and  the second  $100,000 in                                                               
the original  bill allowed 100 percent  of that as a  tax credit.                                                               
The Senate  reduced the  second $100,000 down  to 75  percent tax                                                               
credit.                                                                                                                         
                                                                                                                                
CHAIR COGHILL asked  if there was further  objection to Amendment                                                               
1.  There being no further objection, Amendment 1 was adopted.                                                                  
                                                                                                                                
Number 2198                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES  moved  to  report CSHB  371,  version  22-                                                               
GH2003\C,  Cook,  5/7/02,  as  amended,  out  of  committee  with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There  being no  objection, CSHB  371(STA) moved  from the  House                                                               
State Affairs Standing Committee.                                                                                               
                                                                                                                                
HB 531 - ELECTIONEERING COMMUNICATIONS/DISCLOSURES                                                                            
                                                                                                                                
[Contains discussion of SB 363 and HB 177]                                                                                      
                                                                                                                                
Number 2224                                                                                                                     
                                                                                                                                
CHAIR  COGHILL  announced that  the  committee  would resume  the                                                               
hearing   on  HOUSE   BILL   NO.  531,   "An   Act  relating   to                                                               
communications and  elections, to reporting of  contributions and                                                               
expenditures, and  to campaign misconduct  in the  second degree;                                                               
relating  to  disclosure  by   individuals  of  contributions  to                                                               
candidates; and providing for an effective date."                                                                               
                                                                                                                                
Number 2299                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD  made a  motion  to  adopt Amendment  1,                                                               
which read:                                                                                                                     
                                                                                                                                
     Page 2, line 17:                                                                                                           
          Delete "advertising"                                                                                                  
          Insert "communication [ADVERTISING]"                                                                              
                                                                                                                                
There being no objection, Amendment 1 was adopted.                                                                              
                                                                                                                                
Number 2375                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD  made a  motion  to  adopt Amendment  2,                                                               
which read:                                                                                                                     
                                                                                                                                
     Page 4, line 17, following "candidate":                                                                                    
        Insert "or proposition, as that term is defined                                                                         
          in AS 15.13.065(c)"                                                                                                   
                                                                                                                                
CHAIR COGHILL objected.                                                                                                         
                                                                                                                                
Number 2460                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE  asked what  inserting "proposition"  does to                                                               
the intent of the bill.                                                                                                         
                                                                                                                                
Number 2484                                                                                                                     
                                                                                                                                
MS.  MILES  answered  that current  law  requires  all  political                                                               
communication with  respect to candidates or  ballot propositions                                                               
to   be   reported.     With   the   change  in   language   from                                                               
"advertisement" to  "communication", the specification  of ballot                                                               
proposition  being  included  was  left off.    Amendment  2,  as                                                               
proposed,  would  make  sure   that  communications  intended  to                                                               
influence  the outcome  of  a ballot  question  are included  and                                                               
subject to the law.                                                                                                             
                                                                                                                                
Number 2535                                                                                                                     
                                                                                                                                
MR. BALASH  noted that there may  be a similar amendment  to this                                                               
on the Senate floor [to SB 363, the bill similar to HB 531].                                                                    
                                                                                                                                
Number 2552                                                                                                                     
                                                                                                                                
The objection  was removed.   There  being no  further objection,                                                               
Amendment 2 was adopted.                                                                                                        
                                                                                                                                
Number 2588                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD asked  Mr. Balash  to explain  "nongroup                                                               
entity".                                                                                                                        
                                                                                                                                
Number 2620                                                                                                                     
                                                                                                                                
MR. BALASH  explained that  some of these  statutes appear  as if                                                               
nongroup  entities are  not included,  and that  is because  when                                                               
Legislative  Legal prepares  for the  upcoming session,  it deals                                                               
with  the statutes  as they  read on  the first  day of  session.                                                               
Because HB 177 was vetoed by  the governor and then overridden by                                                               
the legislature  after session  had begun [in  2001], all  of the                                                               
files  and databases  Legislative Legal  was working  from didn't                                                               
include those changes from HB  177.  Instead of Legislative Legal                                                               
trying to keep up on the  statutes in real time, it simply throws                                                               
down  a line  of demarcation  and  works from  there through  the                                                               
course  of the  session.   There are  statutes in  place for  the                                                               
revisor  to deal  with these  issues.   In no  way are  nongroups                                                               
expected  or  anticipated  to  be  excluded  from  any  of  these                                                               
requirements.                                                                                                                   
                                                                                                                                
REPRESENTATIVE CRAWFORD referred to page  4, line 16, and said he                                                               
thought "nongroup  entity" should  be deleted  unless there  is a                                                               
good reason not to.                                                                                                             
                                                                                                                                
MR.  BALASH  explained  that the  reason  nongroup  entities  are                                                               
excluded in that  particular case is due to a  U.S. Supreme Court                                                               
decision  [McIntyre v.  Ohio Elections  Comm'n]  that involved  a                                                             
situation in Ohio where there  was a school bond proposition, and                                                               
a grandmother  wanted to do  her part  to support the  efforts of                                                               
the school district to get the  bonding measure passed.  She made                                                               
a  flyer and  passed it  out,  but she  didn't put  a "paid  for"                                                               
statement on it.  Under Ohio's  election laws, she is required to                                                               
do that.   The ACLU  [American Civil Liberties Union]  helped her                                                               
challenge it all the way through  the Supreme Court.  The Supreme                                                               
Court said in that situation, her  speech did not in any way pose                                                               
a  threat  or have  an  appearance  of  corruption.   She  wasn't                                                               
dealing  with  a  public  official,  and  the  communication  was                                                               
initiated by  her and was also  limited - it wasn't  a $50,000 ad                                                               
campaign.   The court has  said that expenditures that  are minor                                                               
in dollar value and are initiated  by an individual don't have to                                                               
be regulated.   They can fall  under the First Amendment  and get                                                               
some  additional protection.    The  ad has  to  be  placed by  a                                                               
nongroup entity  and cost less than  $500.  He noted  that any ad                                                               
placed in the newspapers around  the state or any direct mailings                                                               
will cost more than $500.                                                                                                       
                                                                                                                                
Number 2800                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  referred to the example  Mr. Balash just                                                               
used and asked if "individual"  wouldn't cover that.  He wondered                                                               
if  a nongroup  entity was  like  Common Sense  [for Alaska]  and                                                               
would it be excluded.                                                                                                           
                                                                                                                                
MR. BALASH  replied whether or  not Common Sense for  Alaska fits                                                               
the definition  of a  nongroup entity is  unclear at  this point.                                                               
In HB  177, a nongroup entity  was defined by a  three-part test:                                                               
it cannot  engage in business,  its assets  do not belong  to any                                                               
shareholders, and it's  not under the influence of  business.  If                                                               
Common  Sense for  Alaska wanted  to make  expenditures during  a                                                               
campaign  season,  it  would  have  to  demonstrate  that  it  is                                                               
insulated from the influence of business.                                                                                       
                                                                                                                                
REPRESENTATIVE  CRAWFORD said  he  wasn't sure  what a  nonentity                                                               
group is  and how it's defined.   He wondered if  the District 22                                                               
Democrats, Common  Sense for Alaska,  or other  issue-type groups                                                               
are nongroup  entities.  It seems  to him if they're  going to be                                                               
included in HB 177, they should be included in HB 531.                                                                          
                                                                                                                                
Number 2903                                                                                                                     
                                                                                                                                
MS. MILES  acknowledged that the  commission staff has  also been                                                               
trying to  figure out  exactly what  a nongroup  entity is.   She                                                               
reported that there  are none registered.   Previously, there was                                                               
a regulation  providing for  qualified nonprofit  corporations to                                                               
participate in elections  in a manner similar  to individuals but                                                               
with  the  giving  power  of  a   group.    There  was  only  one                                                               
association  that  had  qualified   and  participated,  and  that                                                               
resulted in  a significant  amount of controversy.   In  the past                                                               
legislative session,  HB 177  was passed  which changed  that and                                                               
described  a  nongroup  entity  "as  a  'person'  other  than  an                                                               
individual that  takes action  the major purpose  of which  is to                                                               
influence  the outcome  of an  election and  that meets  the same                                                               
three-part  test described  by  the  court in  ACLU  v. State  of                                                             
Alaska following campaign  finance reform.  That  is, they cannot                                                             
participate   in   business   activities,  they   do   not   have                                                               
shareholders who  have a  claim on  corporate earnings,  and that                                                               
they're independent from the influence of business."                                                                            
                                                                                                                                
MS. MILES pointed  out that under the new  guidelines provided in                                                               
HB  177,   these  nongroup  entities  could   register  with  the                                                               
commission and then have the  same giving power as an individual.                                                               
Commission  staff  doubts there  will  be  any nongroup  activity                                                               
because  it makes  more sense  for these  associations to  form a                                                               
standard political action committee.                                                                                            
                                                                                                                                
TAPE 02-54, SIDE B                                                                                                              
Number 2990                                                                                                                     
                                                                                                                                
MS.  MILES  said  the  political   action  committee  may  accept                                                               
contributions and then  give up to $1,000 to a  candidate.  These                                                               
nongroup  entities  are  small associations  informally  combined                                                               
that may wish to combine money  and support a candidate.  Because                                                               
their giving  level is only  half of  that of a  political action                                                               
committee and  their limitations  and restrictions are  the same,                                                               
it really wouldn't  make sense for someone to go  that route, she                                                               
noted.                                                                                                                          
                                                                                                                                
Number 2965                                                                                                                     
                                                                                                                                
CHAIR COGHILL  said that pulling  [nonentity groups] out  in this                                                               
amendment still doesn't change the conundrum.                                                                                   
                                                                                                                                
MS. MILES  agreed that that  issue would  still have to  be dealt                                                               
with.                                                                                                                           
                                                                                                                                
Number 2849                                                                                                                     
                                                                                                                                
MR.  BALASH pointed  out that  in HB  177, the  nongroup entities                                                               
consistently  throughout the  statute  are treated  in a  similar                                                               
fashion to individuals,  and that's why they're  mentioned in the                                                               
same  breath  as  an  individual  in this  case;  that  was  done                                                               
deliberately.                                                                                                                   
                                                                                                                                
[Representative Crawford  did not  offer other amendments  he had                                                               
prepared.]                                                                                                                      
                                                                                                                                
Number 2777                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE  moved to report  HB 531, as amended,  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There being  no objection,  CSHB 531(STA)  moved                                                               
from the House State Affairs Standing Committee.                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 2749                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
State Affairs  Standing Committee  meeting was adjourned  at 9:04                                                               
a.m.                                                                                                                            

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