Legislature(2001 - 2002)
05/08/2002 08:08 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ 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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