04/24/2003 08:06 AM House STA
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ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 24, 2003
8:06 a.m.
MEMBERS PRESENT
Representative Bruce Weyhrauch, Chair
Representative Jim Holm, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Paul Seaton
Representative Ethan Berkowitz
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 174
"An Act relating to the state centralized correspondence study
program, to funding for educational programs that occur
primarily outside school facilities, and to the duties of school
boards of borough and city school districts and regional
educational attendance areas; and providing for an effective
date."
- MOVED CSHB 174(STA) OUT OF COMMITTEE
HOUSE BILL NO. 250
"An Act relating to protests of state contract awards, to claims
on state contracts, to the arbitration of certain state
construction contract claims, and to hearings and appeals under
the State Procurement Code; making conforming amendments in the
State Procurement Code; and providing for an effective date."
- MOVED CSHB 250(L&C) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 49(STA)
"An Act making corrective amendments to the Alaska Statutes as
recommended by the revisor of statutes; and providing for an
effective date."
- WAIVED OUT OF COMMITTEE TO JUD
HOUSE BILL NO. 215
"An Act repealing statutes that relate to art works in public
buildings and facilities and that require a set percentage of
construction costs to be spent on art."
- HEARD AND HELD
HOUSE BILL NO. 157
"An Act eliminating the Alaska Public Offices Commission;
transferring campaign, public official, and lobbying financial
disclosure record-keeping duties to the division of elections;
relating to reports, summaries, and documents regarding
campaign, public official, and lobbying financial disclosure;
providing for enforcement by the Department of Law; making
conforming statutory amendments; and providing for an effective
date."
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 4
Proposing an amendment to the Constitution of the State of
Alaska relating to the duration of a regular session.
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 149
"An Act requiring nonprofit corporations under the Alaska Net
Income Tax Act to provide prior public notice of lobbying
expenditures and an annual report of lobbying expenditures to
the Department of Revenue; providing for a civil penalty for
failure to provide the notice; and providing for an effective
date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 174
SHORT TITLE: CORRESPONDENCE STUDY
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/05/03 0449 (H) READ THE FIRST TIME -
REFERRALS
03/05/03 0449 (H) EDU, HES, FIN
03/05/03 0449 (H) FN1: (EED)
03/05/03 0449 (H) GOVERNOR'S TRANSMITTAL LETTER
03/10/03 0496 (H) FN2: (EED)
03/11/03 (H) EDU AT 11:00 AM CAPITOL 124
03/11/03 (H) Heard & Held
03/11/03 (H) MINUTE(EDU)
03/13/03 (H) EDU AT 11:00 AM CAPITOL 124
03/13/03 (H) Heard & Held
03/13/03 (H) MINUTE(EDU)
03/18/03 (H) EDU AT 11:00 AM CAPITOL 124
03/18/03 (H) Moved Out of Committee
03/18/03 (H) MINUTE(EDU)
03/19/03 0583 (H) EDU RPT 3DNP 2NR 1AM
03/19/03 0583 (H) DNP: KAPSNER, GARA, SEATON;
NR: WOLF,
03/19/03 0583 (H) GATTO; AM: WILSON
03/19/03 0583 (H) FN1: (EED)
03/19/03 0583 (H) FN2: (EED)
03/20/03 (H) HES AT 3:00 PM CAPITOL 106
03/20/03 (H) -- Meeting Canceled --
03/27/03 (H) HES AT 3:00 PM CAPITOL 106
03/27/03 (H) Moved Out of Committee
03/27/03 (H) MINUTE(HES)
03/28/03 0666 (H) HES RPT 2DP 2DNP 2NR
03/28/03 0666 (H) DP: COGHILL, WOLF; DNP:
SEATON,
03/28/03 0666 (H) KAPSNER; NR: GATTO, WILSON
03/28/03 0667 (H) FN1: (EED)
03/28/03 0667 (H) FN2: (EED)
04/02/03 0747 (H) STA REFERRAL ADDED AFTER HES
04/08/03 (H) STA AT 8:00 AM CAPITOL 102
04/08/03 (H) Scheduled But Not Heard
04/14/03 (H) FIN AT 1:30 PM HOUSE FINANCE
519
04/14/03 (H) <Bill Hearing Postponed>
04/24/03 (H) FIN AT 1:30 PM HOUSE FINANCE
519
04/24/03 (H) <Bill Hearing Postponed>
04/24/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 250
SHORT TITLE:STATE CONTRACTS
SPONSOR(S): REPRESENTATIVE(S)HOLM
Jrn-Date Jrn-Page Action
04/07/03 0818 (H) READ THE FIRST TIME -
REFERRALS
04/07/03 0818 (H) L&C, STA
04/16/03 (H) L&C AT 3:15 PM CAPITOL 17
04/16/03 (H) Moved CSHB 250(L&C) Out of
Committee
MINUTE(L&C)
04/17/03 1030 (H) COSPONSOR(S): CRAWFORD
04/22/03 1047 (H) L&C RPT CS(L&C) 6DP
04/22/03 1047 (H) DP: GATTO, CRAWFORD,
GUTTENBERG,
04/22/03 1047 (H) DAHLSTROM, ROKEBERG, ANDERSON
04/22/03 1048 (H) FN1: INDETERMINATE(DOT)
04/24/03 1108 (H) FIN REFERRAL ADDED AFTER STA
04/24/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: SB 49
SHORT TITLE:2003 REVISOR'S BILL
SPONSOR(S): RLS BY REQUEST OF LEGISLATIVE COUNCIL
Jrn-Date Jrn-Page Action
01/31/03 0087 (S) READ THE FIRST TIME -
REFERRALS
01/31/03 0087 (S) STA, JUD
02/20/03 (S) STA AT 3:30 PM BELTZ 211
02/20/03 (S) Moved CSSB 49(STA) Out of
Committee
02/20/03 (S) MINUTE(STA)
02/24/03 0256 (S) STA RPT CS 5DP SAME TITLE
02/24/03 0256 (S) DP: TAYLOR, HOFFMAN, COWDERY,
02/24/03 0256 (S) DYSON, GUESS
02/24/03 0257 (S) FN1: ZERO(S.STA)
03/17/03 (S) JUD AT 1:30 PM BELTZ 211
03/17/03 (S) Heard & Held
MINUTE(JUD)
04/07/03 (S) JUD AT 1:30 PM BELTZ 211
04/07/03 (S) Moved CSSB 49(STA) Out of
Committee
MINUTE(JUD)
04/08/03 0745 (S) JUD RPT CS(STA) 2DP 2NR
04/08/03 0745 (S) DP: SEEKINS, THERRIAULT;
04/08/03 0745 (S) NR: ELLIS, FRENCH
04/08/03 0745 (S) FN1: ZERO(S.STA)
04/09/03 0783 (S) RULES TO CALENDAR 4/10/2003
04/10/03 0783 (S) READ THE SECOND TIME
04/10/03 0783 (S) STA CS ADOPTED UNAN CONSENT
04/10/03 0783 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/10/03 0784 (S) READ THE THIRD TIME CSSB
49(STA)
04/10/03 0784 (S) PASSED Y19 N- E1
04/10/03 0784 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
04/10/03 0794 (S) TRANSMITTED TO (H)
04/10/03 0794 (S) VERSION: CSSB 49(STA)
04/11/03 0925 (H) READ THE FIRST TIME -
REFERRALS
04/11/03 0925 (H) STA, JUD
04/22/03 (H) STA AT 8:00 AM CAPITOL 102
04/22/03 (H) Heard & Held
04/22/03 (H) MINUTE(STA)
04/24/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 215
SHORT TITLE:REPEAL ONE PERCENT FOR ART
SPONSOR(S): REPRESENTATIVE(S)STOLTZE
Jrn-Date Jrn-Page Action
03/26/03 0640 (H) READ THE FIRST TIME -
REFERRALS
03/26/03 0640 (H) STA, FIN
03/26/03 0640 (H) REFERRED TO STATE AFFAIRS
04/03/03 (H) STA AT 8:00 AM CAPITOL 102
04/03/03 (H) Heard & Held
MINUTE(STA)
04/17/03 (H) STA AT 8:00 AM CAPITOL 102
04/17/03 (H) <Bill Hearing Postponed to
4/24/03>
04/24/03 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 157
SHORT TITLE:ELIMINATE APOC
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/05/03 0426 (H) READ THE FIRST TIME -
REFERRALS
03/05/03 0426 (H) STA, JUD, FIN
03/05/03 0426 (H) FN(S) FORTHCOMING
03/05/03 0426 (H) GOVERNOR'S TRANSMITTAL LETTER
03/05/03 0426 (H) REFERRED TO STATE AFFAIRS
03/11/03 (H) STA AT 8:00 AM CAPITOL 102
03/11/03 (H) Scheduled But Not Heard
03/12/03 0522 (H) FN1: ZERO(GOV)
03/12/03 0522 (H) FN2: (ADM)
03/12/03 0522 (H) FN3: (ADM)
04/22/03 (H) STA AT 8:00 AM CAPITOL 102
04/22/03 (H) Heard & Held
MINUTE(STA)
04/24/03 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
MARK O'BRIEN, Chief Contracts Officer
Contracting, Procurement and Appeals
Office of the Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Explained the genesis of HB 250.
DICK CATTANACH, Executive Director
Associated General Contractors of Alaska
Anchorage, Alaska
POSITION STATEMENT: Urged the committee's support of HB 250.
RICHARD J. MONKMAN, Assistant Attorney General
Transportation Section
Civil Division (Juneau)
Department of Law
Juneau, Alaska
POSITION STATEMENT: Testified on HB 250.
CHARLOTTE FOX, Executive Director
State Council on the Arts
Anchorage, Alaska
POSITION STATEMENT: Expressed concern with HB 215, Version D.
BARBARA BITNEY, Staff
to Representative Bill Stoltze
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 215, on
behalf of Representative Stoltze, sponsor.
RUTH SANDVIK
Petersburg, Alaska
POSITION STATEMENT: During the hearing on HB 215, testified
that she didn't want the art program to become anything less
than it is now.
PAULINE LEE
Petersburg Arts Council
Petersburg, Alaska
POSITION STATEMENT: During the hearing on HB 215, responded to
the changes proposed in Version D.
BROOKE MILES, Executive Director
Alaska Public Offices Commission (APOC)
Anchorage, Alaska
POSITION STATEMENT: Discussed the changes to HB 157 proposed in
[the committee substitute (CS) labeled HB157, 4/14/2003], and
answered question by the committee.
ACTION NARRATIVE
TAPE 03-43, SIDE A
Number 0001
CHAIR BRUCE WEYHRAUCH called the House State Affairs Standing
Committee meeting to order at 8:06 a.m. Representatives Holm,
Seaton, Dahlstrom, Lynn, Gruenberg, and Weyhrauch were present
at the call to order. Representative Berkowitz arrived as the
meeting was in progress.
HB 174- CORRESPONDENCE STUDY
Number 0038
CHAIR WEYHRAUCH announced that the first order of business was
HOUSE BILL NO. 174, "An Act relating to the state centralized
correspondence study program, to funding for educational
programs that occur primarily outside school facilities, and to
the duties of school boards of borough and city school districts
and regional educational attendance areas; and providing for an
effective date."
Number 0046
REPRESENTATIVE SEATON moved to adopt CSHB 174, Version 23-
GH1126\H, Ford, 4/21/03, as the working document.
CHAIR WEYHRAUCH said, "Without objection, then, we've adopted
the CS. And your motion was also to move it out of committee,
with individual ..."
REPRESENTATIVE SEATON moved to report CSHB 174, Version 23-
GH1126\H, Ford, 4/21/03, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 174 was reported from the House State Affairs
Standing Committee.
CHAIR WEYHRAUCH thanked the committee and related his belief
that with the CS the state will benefit. He remarked, "We'll
hope we can get the Senate, governor, and House to agree."
HB 250-STATE CONTRACTS
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 250, "An Act relating to protests of state
contract awards, to claims on state contracts, to the
arbitration of certain state construction contract claims, and
to hearings and appeals under the State Procurement Code; making
conforming amendments in the State Procurement Code; and
providing for an effective date."
Number 0285
REPRESENTATIVE HOLM, Alaska State Legislature, spoke as the
sponsor of HB 250. He informed the committee that HB 250 was
legislation negotiated between the Department of Transportation
& Public Facilities' procurement officers and the Associated
General Contractors (AGC). Representative Holm paraphrased the
following sponsor statement:
Construction claims occur when parties to the contract
disagree as to whether a specific element of a project
is within the scope of work defined by a construction
contract. For projects undertaken by the State of
Alaska, the Alaska procurement code defines a process
for resolving those differences.
Ideally such a process should resolve differences in a
fair and expeditious manner.
At this time, however, the perception in the
construction community is that the process has slowly
deteriorated so that it is no longer fair or
expeditious. As now prescribed, when a contractor
files a claim, the procurement officer involved with
the claim initially evaluates the claim and issues a
ruling on the perceived merits. If the contractor is
not satisfied, an appeal is made to the procurement
officer's supervisor.
There is no review by an independent party unless a
contractor elects to appeal the supervisor's decision.
Even then, the hearing officer is selected by the
state, which raises concern about the true
independence of the hearing officers, since the state
has sole discretion to maintain the hearing officer
list. Delays are rampant. Justice is delayed.
Contractors are forced to expend money defending their
claim, but that money cannot be recovered in the
process. Small contractors cannot afford to
participate in the claims process because of these
costs. Claims of less than $250,000 are frequently
not pursued because of the great expense involved.
The entire process is ripe for review and revision.
The purpose of HB 250 is to modify the construction
claims process to once again create a fair and
expeditious claims process. Specifically, HB 250 will
modify the procurement code pertaining to construction
claims in the following manner:
1. If a procurement officer does not issue a written
decision by the due date, the contractor may seek
arbitration.
2. On appeals of all construction claims, the parties
can agree to binding arbitration.
3. The timelines for decisions have been tightened,
and redundant requirements have been eliminated.
4. An arbitrator or hearing officer who does not issue
a decision by the deadline is disqualified for a year.
5. Qualifications for arbitrators and hearing officers
will be established by the commissioner of
administration in regulation.
6. The contractor is entitled to recover some of the
claims costs incurred.
Prompt passage of HB 250 will expedite contractor's
claims and return fairness to the process.
REPRESENTATIVE HOLM concluded by urging the prompt passage of HB
250, adding that there is nearly $400 million worth of work for
the fiscal year 2003.
Number 0638
MARK O'BRIEN, Chief Contracts Officer, Contracting, Procurement
and Appeals, Office of the Commissioner, Department of
Transportation & Public Facilities (DOT&PF), explained that
about two years ago the department began a process with the AGC
in order to review revisions to the claims process. The
discussions resulted in review of a way to improve the process
such that it was faster, fairer, and less expensive. In terms
of faster, the legislation proposes specific timeframes where
there were none and shortens existing timeframes by which action
must be taken to keep the claims moving forward. Arbitration is
offered as an alternative to the hearing officer process. Mr.
O'Brien related the general belief that arbitration process
offers a faster and fairer resolution. Furthermore, this
legislation makes arbitration final and there is no lengthy
court appeal process. With regard to fairer, the arbitration
process together with regulations govern the selection. The
contractors and the state believe that it will provide an
opportunity to provide a true, fair, and neutral third party to
hear the claim. The less expensive aspect is [borne through]
arbitration, which is generally considered less formal, more
expeditious, and therefore a less expensive process.
Additionally, he said, there will be no additional cost for
appeals under arbitration, with very few exceptions.
MR. O'BRIEN noted that the only issue that the administration
can't completely agree with the AGC on are the provisions for
cost and fee. He explained that Rule 79 and 82 [of the Alaska
Rules of Civil Procedure] allow the contractor and the state, if
they are the prevailing party, to recover partial fees under
different circumstances. For example, if there was a $2 million
claim and the arbitrator awarded the contractor $50,000, the
arbitrator would estimate that the Rule 82 fees and Rule 79
costs would amount to about $73,000. If one were to apply those
figures to the last 11 years worth of cases on claims and
average out the costs depending upon the prevailing party, it
would amount to about $145,000 a year in additional claims
costs. Mr. O'Brien informed the committee that the arbitrator
has the authority, based on factors such as complexity or length
of litigation, to increase those costs. Therefore, the $145,000
a year in additional claims costs represents the minimum
additional cost estimate based on the past 11 years worth of
claims history. Mr. O'Brien highlighted that these fees aren't
eligible for reimbursement under the federal aid provisions.
Most of the claims are funded under federal appropriations, and
therefore the additional costs would be obligations.
Number 0993
CHAIR WEYHRAUCH posed a situation in which there is a dispute
between DOT&PF and a contractor and the dispute goes to court
where there is a prevailing party. He asked if the state or the
contractor are entitled to attorney fees incurred before the
administrative part of the dispute.
MR. O'BRIEN replied no and specified that those aren't
recoverable fees. Past court decisions have held that the
claimant isn't eligible to recover cost and fees for hearings
under the administrative process.
Number 1125
DICK CATTANACH, Executive Director, Associated General
Contractors of Alaska, testified in support of HB 250 and
thanked the sponsor. Mr. Cattanach related that contractors
currently view the process as very expensive.
[Due to technical difficulties, the committee held HB 250 until
later in the meeting and had Mr. Cattanach call back. In the
meantime, the committee turned attention to other legislation.]
SB 49-2003 REVISOR'S BILL
Number 1300
CHAIR WEYHRAUCH announced that the next order of business was CS
FOR SENATE BILL NO. 49(STA), "An Act making corrective
amendments to the Alaska Statutes as recommended by the revisor
of statutes; and providing for an effective date."
CHAIR WEYHRAUCH, in response to a question by Representative
Gruenberg, confirmed that the House Judiciary Standing Committee
was also a committee of referral for SB 49.
REPRESENTATIVE GRUENBERG noted that [Revisor's Bills] are
typically heard only by the House Judiciary Standing Committee.
Number 1356
REPRESENTATIVE GRUENBERG, at the chair's suggestion, moved to
either waive SB 49 to the House Judiciary Standing Committee or
report SB 49 out of committee, with individual recommendations.
There being no objection, it was so ordered. [It was later
decided that SB 49 would be waived out of the House State
Affairs Standing Committee.]
HB 250-STATE CONTRACTS
CHAIR WEYHRAUCH returned to the discussion on HOUSE BILL NO. 250
"An Act relating to protests of state contract awards, to claims
on state contracts, to the arbitration of certain state
construction contract claims, and to hearings and appeals under
the State Procurement Code; making conforming amendments in the
State Procurement Code; and providing for an effective date."
Number 1499
DICK CATTANACH, Executive Director, Associated General
Contractors of Alaska, returning to the issue of cost, informed
the committee that a contractor who had settled a claim for
$530,000 settled because the contractor couldn't afford to go
any further. The contractor had already spent over $25 million.
The construction industry believes that the cost of the claim is
sometimes used to delay the claim, and therefore the contractors
are at a disadvantage when dealing with an organization as large
as the state, which can financially outlast the contractor.
Therefore, the cost containment provisions which bring in Rules
68, 79, and 82 of the Alaska Rules of Civil Procedure are
important elements of this legislation. Mr. Cattanach urged the
committee to support HB 250.
Number 1540
RICHARD J. MONKMAN, Assistant Attorney General, Transportation
Section, Civil Division (Juneau), Department of Law, explained
that HB 250 provides for arbitration at the contractor's request
for claims under $250,000, which provides for a faster and final
decision on those claims. For claims above $250,000, if the
contractor and department agree, those claims can also be
arbitrated. Again, a faster and more final decision is
provided.
CHAIR WEYHRAUCH asked if parties can still agree not to have
attorney fees and costs awarded in an arbitration. Or does the
legislation require such.
MR. MONKMAN specified that HB 250 would allow the prevailing
party to request attorney fees and costs in accordance with the
Alaska Rules of Civil Procedure. Therefore, the prevailing
party would have the right, in either arbitration [or a
hearing], to [request] attorney fees and costs from the other
side.
CHAIR WEYHRAUCH mentioned that many times parties want to go to
arbitration, but don't want to have the possibility of having
attorney fees and costs awarded against one another. He asked
if the parties can agree to go to arbitration with each party
bearing their own fees and costs.
MR. MONKMAN answered that he supposed that could be the case.
However, either party would have a statutory right to claim
those fees and costs. The provision in HB 250 references the
Uniform Arbitration Act, which has broad language allowing the
parties to agree to the parameters of an arbitration and to the
boundaries of an arbitrator's award. Mr. Monkman clarified that
although he hasn't looked at that question specifically, he
believes the parties could agree to waive the attorney fees and
costs.
Number 1727
REPRESENTATIVE GRUENBERG directed attention Section 7 and
acknowledged the chair's concern with regard to the word
"shall." Representative Gruenberg related his belief that
Alaska's current rules of civil procedure would allow a party to
waive attorney fees. Actually, the aforementioned does occur,
he added, when one doesn't make an application for it.
MR. MONKMAN agreed.
REPRESENTATIVE GRUENBERG turned to Section 7(b), specifically
the reference to Rule 68. He noted that there is also a
statutory offer of judgment in AS 09.30.065. Basically, an
offer of judgment allows a person to make an offer of judgment.
For example, if a person is offered a better deal, but the
offeree rejects it and the case is forced to go to trial, the
attorney fees can be obtained and any resulting interest goes to
[the offeror]. Although the court rule and the statute work
together, the statute isn't referenced in HB 250. He asked if
the statute was intentionally not referenced or should the
legislation be amended to include it.
MR. MONKMAN related his belief that the when Legislative Legal
and Research Services reviewed the legislation, it was felt that
the reference to the rule was sufficient to bring offers of
judgment. Mr. Monkman said he didn't have any particular
objection to referencing the statute, although the rule alone is
probably adequate for these purposes.
REPRESENTATIVE GRUENBERG suggested that members should review
the statute and the rule so that they will see there really is a
difference. If this legislation only provides the benefit of
the rule, then the parties aren't being provided the full
benefit of the offer of judgment scheme. Representative
Gruenberg explained that the court rule provides that one can
obtain actual costs, which can include enhanced attorney fees.
The statute refers to certain deadlines and specifies that one
can recover 75 percent of the attorney fees and [lower]
depending upon when the offer occurs. He wasn't sure whether it
would require additional work. He inquired as to Mr. Monkman's
view on including the statute.
MR. MONKMAN related his belief that the percentage of recovery
referred to by Representative Gruenberg is included in Rule 68
itself. Mr. Monkman characterized Rule 68 as the "meet or beat"
provision of the civil rules. Rule 68 is there to enhance the
possibility of settlement and to encourage the parties, early in
litigation, to realistically evaluate their claim and
possibility of succeeding. Most claims, like most court cases,
settle. Mr. Monkman explained that under Rule 68 the offeror
reviews the case and relates that the claim is worth a specified
amount. The offeree can take the money or go to a hearing and
try to beat the offer. If the offeree doesn't beat the offer,
the offeree will have to pay for [the offeror's] attorney fees,
costs, and enhanced interest. Therefore, it's an important
piece of the legislation.
Number 2086
CHAIR WEYHRAUCH pointed out that Rule 68 references Title 9, the
offer of judgment statute. Chair Weyhrauch explained that the
committee will receive copies of the rules. He announced that
if there was going to be a conceptual amendment he wanted it to
occur today in order to move the legislation today.
REPRESENTATIVE GRUENBERG related his understanding that the
current amended Rule 68 is tied closely to the statute.
MR. MONKMAN agreed and explained that's why the legislation only
included the rule.
CHAIR WEYHRAUCH noted that the intent is to include any
statutory provision that would allow parties to deal with offers
of judgment.
REPRESENTATIVE GRUENBERG announced that he wouldn't offer a
conceptual amendment. He noted that the House recently passed
the revised Uniform Arbitration Act and asked if anything in HB
250 needs to conform to that.
REPRESENTATIVE BERKOWITZ said that he couldn't say.
CHAIR WEYHRAUCH, speaking as a cosponsor of the revised Uniform
Arbitration Act, said that he didn't see anything [that
necessitated conformity].
MR. MONKMAN informed the committee that HB 250 was drafted with
the expectation that the revised Uniform Arbitration Act would
be passed.
CHAIR WEYHRAUCH, upon determining there was no one else who
wished to testify, closed public testimony.
Number 2230
REPRESENTATIVE HOLM moved to report CSHB 250(L&C) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, it was so ordered.
HB 215-REPEAL ONE PERCENT FOR ART
CHAIR WEYHRAUCH announced that the next order of business was
HOUSE BILL NO. 215, "An Act repealing statutes that relate to
art works in public buildings and facilities and that require a
set percentage of construction costs to be spent on art."
Number 2390
REPRESENTATIVE HOLM moved to adopt CSHB 215, Version 23-
LS0605\D, Kurtz, 4/23/03, as the working document. There being
no objection, Version D was before the committee.
Number 2340
CHARLOTTE FOX, Executive Director, Alaska State Council on the
Arts (ASCA), noted that she appreciates that Representative
Stoltze has come a long way, from the initial bill that repealed
the statute, to Version D, which, in many ways, makes the
process better. Ms. Fox informed the committee that since this
original statute was passed 25 years ago, [ASCA] has struggled
with the following two conflicting statutes: the "art in public
places" statute and the "one percent for art" statute. Those
two statutes have never worked together and the two still don't
quite work together in Version D. Version D doesn't include a
mechanism by which ASCA has the authorization to expend the
funds. However, Ms. Fox expressed her pleasure that Version D
provides ASCA the authority to run the program. Furthermore,
Version D sets aside money for maintenance. Still, Ms. Fox said
she wasn't sure that ASCA is ready to give its wholehearted
support to Version D because it hasn't had the opportunity to
thoroughly review it.
REPRESENTATIVE GRUENBERG asked if the ASCA's authority to manage
the program is found in Section 3 of Version D.
MS. FOX pointed out that Version D refers to two statutes, AS
44.27 and AS 35.27. She explained that the problem has been
that for projects under $250,000, the state department doing the
construction has the ability to deposit the money into ASCA's
"art in public places" fund. Currently, ASCA is authorized to
expend $75,000 a year on art for the Contemporary Art Bank. The
problem is that if 5 percent of the total 1 percent is put into
that fund for maintenance, there is no idea how much money that
will be. Therefore, it could amount to more than ASCA's
authorization.
MS. FOX, in response to Representative Gruenberg, specified that
[Version D] does provide ASCA the authority. However, she
wasn't clear of the difference this legislation would create and
thus she isn't very comfortable with Version D at this time.
Ms. Fox noted that this program has been confusing for the last
25 years and the desire is for it to be a good program that
benefits the state.
Number 2659
REPRESENTATIVE GRUENBERG referred to page 1, line 15, which
specifies that the 5 percent is to be used to meet future
maintenance needs of art works. He asked if the term
"maintenance" is sufficiently broad to encompass anything that
might occur.
MS. FOX answered that she believes so. She noted that ASCA
can't continually maintain all the artwork around the state,
although it can be repaired [when necessary].
REPRESENTATIVE GRUENBERG posed a situation in which the fund
grows and asked if ASCA might want to use those additional funds
to acquire additional art.
MS. FOX said that acquiring additional art is part of what the
art in public places fund is for. She said she wanted to be
sure that under Version D, if 5 percent of the [fund] goes
toward maintenance, then the [monies generated by] other
provisions of the statute - [assuming that the project] is under
$250,000 or the building isn't of substantial public use - are
placed into the fund to purchase art.
Number 2754
BARBARA BITNEY, Staff to Representative Bill Stoltze, Alaska
State Legislature, spoke on behalf of Representative Stoltze,
the sponsor of HB 215. Ms. Bitney explained the changes
encompassed in Version D. Section 1 limits the percent for art
to the first $10 million of total construction costs and to .5
percent thereafter. The same reduction was made for rural
schools: .5 percent for the first $10 million for construction
and a .25 percent thereafter. She explained that the intention
with Section 1 is to set aside 5 percent in order to maintain
the art that was being purchased. The funds would be monitored
by ASCA. Therefore, when it was noticed that artwork is
deteriorating, then there would need to be a request for funds
from the ASCA.
MS. BITNEY explained that Section 2 intends to strengthen the
existing statute for choosing Alaskan artists. Although she
understood that has been the focus, some of the larger artwork
requires bringing up an artist from the Lower 48 to do it.
Therefore, the [sponsor] didn't want to completely restrict it.
Section 3 ensures consistency in the identification, monitoring,
and maintenance. Ms. Bitney noted that every agency manages
this differently and thus having ASCA provide the information
for the ongoing construction and the percentage for the art and
the inventory to the Joint Committee on Legislative Budget and
Audit is an appropriate control. Section 4 exempts correctional
facilities and strengthens the language [specifying that]
"buildings not subject to substantial use" wouldn't be subject
to the "one percent for art" program. Section 5 specifies that
["state funding" means] general funds or general obligation
bonds and the [program] wouldn't apply to federal funds any
longer, save construction projects that are less than $250,000
which would continue to require a deposit to the "art in public
places" fund. Section 6 allows ASCA to use the "art in public
places" fund for maintenance of the artwork.
CHAIR WEYHRAUCH asked if the state builds or maintains buildings
outside the state.
MS. BITNEY said that she would have to check on that.
CHAIR WEYHRAUCH directed attention to Section 4, paragraph
(1)(B)(iii), which refers to "buildings that are not subject to
substantial public use". He pointed out that [in Section 4,
paragraph (1)(A)(ii),] the language "designed for substantial
public use" was used. He inquired as to the difference in
language.
MS. BITNEY answered that she would have to check on that also.
TAPE 03-43, SIDE B
CHAIR WEYHRAUCH turned to Section 8. He asked if, for example,
a high school, museum, or facility built with bond sales would
have art in it.
MS. BITNEY said that the language means to say that those
facilities built with the funds from bond sales would have art
in them. Ms. Bitney agreed with Chair Weyhrauch that those
projects approved by the voters in November would be enhanced by
art under the existing program or this revised program.
Number 2949
REPRESENTATIVE LYNN related his observation that Version D
appears to be almost completely different than the original. He
inquired as to how and why Version D was developed.
MS. BITNEY answered that [Version D] is a compromise, reducing
it by making it apply to the first $10 million for a
construction project and .5 percent thereafter. The intent was
also to make the monitoring and maintenance of the art work
better as well. Ms. Bitney agreed with Chair Weyhrauch that
there was also the intent to manage the funds.
REPRESENTATIVE LYNN inquired as to how much money is saved under
Version D as compared to the original legislation. He then
posed the question in reverse by asking how much more money is
being spent under Version D versus the original version.
MS. BITNEY responded that she didn't have an exact figure. She
related that the intent was to have significant savings, but
[the sponsor] realized that communities are supportive of art.
Ms. Bitney indicated agreement that not as much money would be
saved under Version D as under the original legislation.
REPRESENTATIVE LYNN noted his support of art. However, he said
he wasn't sure that the public should pay for this during a time
of fiscal strife in the state.
Number 2825
REPRESENTATIVE SEATON surmised that per the language in Section
8, the general obligation bonds approved by voters on or after
July 1, 2003, would fall under the new program while anything
that was passed under the last general obligation bond would
fall under the old program. This language doesn't speak about
expenditures of general obligation bond money for projects but
rather to when the bonds are approved.
MS. BITNEY agreed with Representative Seaton's understanding.
With regard to Chair Weyhrauch's earlier question about bonds
approved in November 2002, Ms. Bitney corrected her earlier
answer by saying that those bonds wouldn't apply under this act.
REPRESENTATIVE SEATON inquired as to why one wouldn't want to
make this program apply to the bond issues passed in November
[2002].
MS. BITNEY answered that a date viewed as a good starting date
was chosen. However, a different starting date could be chosen,
she said.
CHAIR WEYHRAUCH interjected that the sponsor and Representative
Lynn should discuss that and bring something back to the next
hearing. Additionally, he requested that Ms. Bitney check into
the "not subject to" language in Section 4. He further
requested that Ms. Fox work with the sponsor to have her
concerns addressed. He announced that he wanted to hold HB 215
over.
REPRESENTATIVE LYNN remarked that there should be a fiscal note
and he indicated that he would like to have a fiscal note
prepared for the original legislation and Version D.
REPRESENTATIVE BERKOWITZ reminded committee members that cave
men created public art with their own funds. Representative
Berkowitz pointed out that there is a distinction between
construction, generally, and rural school construction and thus
he inquired as to what rural means.
MS. BITNEY said that rural can be interpreted differently and
thus she offered to review it.
Number 2600
REPRESENTATIVE BERKOWITZ [indicated a desire to] propose a
conceptual amendment that would delete the terms "rural school
facility" and the disparate funding that goes to rural school
facilities because he believes it to be problematic in many
ways.
CHAIR WEYHRAUCH said that would be taken under advisement.
REPRESENTATIVE BERKOWITZ pointed out that there needs to be a
bright-line rule specifying the difference between urban and
rural, which brings in the specter of subsistence debate. If
the term rural is eliminated, then this problem could be
avoided. Furthermore, he inquired as to why urban schools are
given one percent for art while rural schools receive one-half
percent for art. Such a disparate treatment would seem
unconstitutional.
MS. BITNEY answered that she believes it has to do with the
construction costs and the increase [in the cost] of flying.
CHAIR WEYHRAUCH requested that Representative Berkowitz provide
his conceptual amendment to the committee and the sponsor in
writing so that it could benefit from the sponsor's input and
committee debate.
REPRESENTATIVE BERKOWITZ expressed the need for a tighter title.
REPRESENTATIVE GRUENBERG recalled that this issue was hotly
contested in 1987 when there [was a proposal] to eliminate the
entire program. He recalled that there was contention over
[obtaining art work] only from Alaskan artists. At the time,
the House resisted it. However, he said he wasn't going to
resist it this time because this program will provide jobs.
Therefore, Representative Gruenberg expressed the need to view
the program with regard to the economics as well as the inherent
value of the art.
REPRESENTATIVE LYNN commented that he hadn't considered that
artists would be employed by this and it's a valid point.
REPRESENTATIVE HOLM highlighted that art can mean many different
things, including landscaping and painting buildings.
Representative Holm turned to the rural versus urban issue and
related his belief that sometimes a parochial view is taken. He
said if the desire is to be inclusive rather than divisive,
perhaps the distinctions shouldn't be made, regardless of the
cost.
REPRESENTATIVE SEATON suggested that the term rural, regarding
school facilities, should include schools in regional education
attendance areas (REAAs) because schools in a REAA have a
different funding mechanism. For the REAA districts, 100
percent of the school costs are being funded, whereas with the
nonrural settings, [the state] is reimbursing a portion of the
bonding. Therefore, there is a difference in the amount of
state money going in to the two different types of facilities.
He requested a fiscal note or analysis of the aforementioned.
Although he said there may be some justification for this
distinction, he proposed referring to those schools as those
that are 100 percent funded by state funds rather than using the
term rural.
CHAIR WEYHRAUCH commented that such language would address the
emotional aspects of the issue.
Number 2197
RUTH SANDVIK informed the committee that she joined the
Petersburg Arts Council when it began 30 years ago. She said,
"My heart is with the fine job that Alaska has done so far."
Anything that can be done to retain the [current funding level]
will be appreciated, she indicated. She specified that she
didn't want the art program to become anything less than it is
now.
Number 2149
PAULINE LEE, Petersburg Arts Council, noted that she was the
chair of the ASCA when the original legislation [first
established] the ASCA. Ms. Lee turned to Version D and noted
that the title is cumbersome and unclear and thus she suggested
a more concise title. She didn't believe there should be a
$10,000,000 cap before funding begins and thus she suggested
retaining the original language. She indicated agreement with
the earlier stated concerns regarding the use of the language
"rural." The reasons for the differences in the amount of
funding should be clearly stated, she said. Ms. Lee directed
attention to the language on page 1, line 14, and recommended
establishing a cap on the amount of the fund and any money over
the cap should be designated for future or additional works of
art.
MS. LEE moved on to the language "who are residents of the state
under AS 01.10.055" on page 2, lines 6-7. When this law was
originally passed, there were numerous problems with attempting
to restrict who will receive commission. The guiding principle
has been to obtain the very best works of art and hopefully
those will be presented by Alaskan artists. Quality was the
issue, she said. With regard to the proposed Sec. 35.27.022 on
page 2, line 9, Ms. Lee said she wondered whether it's redundant
with what the ASCA is presently doing. Ms. Lee concluded by
relating that the value of public works of art is difficult to
estimate. However, studies show the great value of public works
of art, especially economic value, and thus that should be
considered, she said.
Number 1829
CHAIR WEYHRAUCH remarked that the legislature is trying to do
good things for the public and hard work has been done to make
the legislation satisfactory for everyone involved. He
announced that HB 215 would be held over.
HB 157-ELIMINATE APOC
CHAIR WEYHRAUCH announced that the final order of business was
HOUSE BILL NO. 157, "An Act eliminating the Alaska Public
Offices Commission; transferring campaign, public official, and
lobbying financial disclosure record-keeping duties to the
division of elections; relating to reports, summaries, and
documents regarding campaign, public official, and lobbying
financial disclosure; providing for enforcement by the
Department of Law; making conforming statutory amendments; and
providing for an effective date."
Number 1635
REPRESENTATIVE HOLM moved to adopt the proposed committee
substitute (CS) for HB 157, labeled HB157.doc, 4/24/2003, as a
work draft.
Number 1657
REPRESENTATIVE BERKOWITZ objected in order to hear about the
differences [between the original bill and the proposed CS].
CHAIR WEYHRAUCH confirmed that Jan DeYoung and Nancy Gordon from
the Department of Law are available to answer questions, and
that Ms. DeYoung's client agency is the Alaska Public Offices
Commission (APOC).
Number 1536
BROOKE MILES, Executive Director, Alaska Public Offices
Commission (APOC), stated that the proposed CS came about as the
result of the commission meeting with members of the
administration to discuss concerns that may have been the
foundation for the original bill proposing to eliminate APOC.
During those conversations, she noted, the APOC set forth some
concepts that its members had been discussing even prior to the
introduction of [HB 157] regarding ways to streamline some of
the functions of the APOC, particularly with respect to the way
complaints are processed. She noted that this is an issue that
APOC has been working on for over a year.
MS. MILES said there were issues not completely resolved "with
the Alaska State Supreme Court case after campaign finance
reform." She said, "That's an issue that has to do with
fundraising during the legislative session, that the court
specifically removed from one part of the statute, but not the
other, leaving a reader very confused." She revealed that
[APOC] has a former attorney general's opinion that says that
that provision of the law was not enforceable. She added that
that issue is addressed in the proposed CS.
MS. MILES said that [the proposed CS] would codify the authority
for the commission to issue advisory opinions - a function that
the commission has been performing since 1990. She added,
"Although at our last go-around with writing regulations, which
happened after campaign finance reform in 1996, the person in
charge of regulations was concerned that APOC may not have had
statutory authority for providing advisory opinions." She
stated that [APOC] thinks it is an important function, because
it is formal binding advice that protects the requestor from a
complaint procedure, so long as the requestor follows that
advice.
MS. MILES noted that there would also be a change to the
lobbying law "in this statute" that will codify a regulation
about certain activities performed by those in executive branch
who are not subject to the lobbying law. She explained that
this is in regard to a person who works with the executive
branch in its quasi-legislative or quasi-judicial function, with
permitting, licensing, or requesting advice about how current
statutes apply to proposed activity, for example. She noted,
"That regulation has been on the commission's books since ...
1977 or 1978, and will now be in statute."
MS. MILES also noted that the proposed legislation would provide
increases to the amount that an individual can give to a
candidate, to political parties, and to a political group, as
well as the amount that a group can give to a candidate. She
listed [some existing requirements] that the proposed
legislation would not change.
Number 1185
REPRESENTATIVE SEATON said he did not see the "24-hour reporting
rule" in the proposed legislation, and he said he would like
some explanation for the reasoning behind the 24-hour rule.
MS. MILES replied that the philosophy behind the requirement to
report major contributions within 24 hours, during the 10-day
period that proceeds the primary or general election, is that
that would be information important for the public to know. She
said she can understand questioning how valuable this is in
terms of a $500 dollar limit "of a contribution." She stated
that the report is currently required when a contributor gives
more than $250 within ten days [of an election]. She said,
"That was not an issue that was included in this bill at this
time, and I believe part of not going to that is that it's being
recommended that individuals be permitted to give $1,000. So,
certainly, if somebody gives $500 or $1,000 the week before the
election, that is significant public information."
REPRESENTATIVE SEATON stated his understanding that "without
changing this, we're still at requiring recording the $250."
MS. MILES answered that that's correct. She stated, "If it's
not included in this at some kind of an increase, then it would
be required when someone gives more than $250."
Number 1056
REPRESENTATIVE BERKOWITZ asked Ms. Miles who the individual is
who requested the proposed legislation.
MS. MILES answered that [APOC] wants the legislation. In
response to a follow-up question by Representative Berkowitz,
she clarified that the commission has always wanted many
components of this bill.
REPRESENTATIVE BERKOWITZ asked if there are parts of the
legislation that the commission did not initiate.
MS. MILES responded that she doesn't think there are. She
stated that she does not think there is anything in the proposed
legislation that wasn't brought forward by the commission as a
concept.
REPRESENTATIVE BERKOWITZ stated the following:
I have not heard anyone explain to me why this is in
the public interest, and this seems to me to be driven
by (indisc.) in the pocket. And I will fight it every
inch of the way. And I want you to know that. I do
not hold you personally responsible, but I assure you
that this is one of the worst pieces of legislation
that's come before me in my seven years in the
legislature.
REPRESENTATIVE BERKOWITZ turned to [Section (1) of the proposed
CS for HB 157, labeled HB157.doc, 4/24/2003]. He noted that it
would effectively push municipal elections out of APOC's
purview, unless municipalities opt in. He asked if that would
effect the communities of Anchorage, Homer, Juneau, and
Fairbanks.
MS. MILES answered yes.
REPRESENTATIVE BERKOWITZ asked what the cost to those
communities would be to pick up "the APOC requirements here."
MS. MILES replied that APOC is working on determining that, but
at this point doesn't know.
REPRESENTATIVE BERKOWITZ asked what portion of APOC's budget
currently goes to handling municipal elections.
MS. MILES responded that that is also difficult to determine,
because municipal and state elections are all handled the same.
She clarified that she has three senior staff members who work
with elections - both state and municipal. She indicated they
also work on complaints from state and municipal [elections].
Complaints from municipalities regarding ballot and funding
questions can be complex and time-consuming to address. In
response to a question by Representative Berkowitz, Ms. Miles
noted that [APOC's] current budget is $752,600.
Number 0815
CHAIR WEYHRAUCH referred to [page 2, lines 18-21 of the proposed
CS], which read as follows:
A municipality that opts for the application of the
requirements of this chapter shall pay a fee to the
state for services under this chapter. The amount of
the fee will be set by the Department of
Administration in regulation.
CHAIR WEYHRAUCH asked if the fee that was paid would be the full
and true cost to the state for services.
MS. MILES answered that she is not familiar with "how this would
come about," because this regulation would be written by the
department that's more familiar with accessing fees than APOC
is; although, she noted that APOC does have a program receipt
fee for paid lobbyists who register. She stated her
understanding that "they would attempt to be writing a
regulation that would fairly assess a fee concerning the actual
costs of administering it per community."
CHAIR WEYHRAUCH turned to the new proposed language on page 3,
[beginning on line 26 of the proposed CS for HB 157, labeled
HB157.doc, 4/24/2003], which read as follows:
and, for contributions in excess of $250 in the
aggregate a year, listing the principal occupation and
employer of the contributor.
CHAIR WEYHRAUCH asked if that referred to a calendar year.
MS. MILES answered yes. She added that this [language] is a
major change from existing law. Presently, only those
contributors who give more than $100 are listed by name and
address; however, the proposed change would mean that all
contributors would be reported by name and address. She added
that the foundation for mandatory filing is also set forth "in
this bill."
CHAIR WEYHRAUCH noted that page 5 and page 8 [of the proposed CS
for HB 157, labeled HB157.doc, 4/24/2003] contain similar
changes. He turned to page 5, lines 30-31, which read:
(l) Upon request of the commission, the information
required under this chapter shall be submitted
electronically.
CHAIR WEYHRAUCH said he assumed that means that "this is the
electronic reporting component of this statute."
MS. MILES concurred.
CHAIR WEYHRAUCH asked Ms. Miles to define the "request of the
commission".
Number 0595
MS. MILES stated that [this amendment to AS 15.13.040] would
most likely "cover everyone." [Regarding electronic filing],
she noted that a new system will be used, which will be web-
based and, hopefully, user-friendly. She noted that a candidate
can buy a computer with campaign funds and keep that computer
afterward. She indicated [electronic filing] would be
mandatory, with "narrow exceptions." She concluded, "When we
get there, I'm sure that the Department of Law will most likely
recommend that we do so by a formal regulation."
CHAIR WEYHRAUCH noted that many times during an election,
reporting is done at the last minute. He remarked that some
time may lapse between a candidate's pushing the send button and
the commission's receipt of that report. He asked what the rule
would be concerning that.
MS. MILES answered that the commission hasn't discussed that
issue, but she stated that she is certain it would be when the
report was sent. She added that that is what [APOC] considers
when a report is postmarked. Under the current APOC electronic
filing system, the time issue is treated liberally, especially
if someone has a problem with E-mail or has a system crash, for
example. She added that [APOC] has even made house calls to
help people.
CHAIR WEYHRAUCH commented, "You may be very liberal about it,
but I know when it's very tense and it's very contentious about
when somebody sent something in, it needs to be very clear to
those people, because a lot of these end up in court. And I
would like to know on the record now what you're thinking is
...."
MS. MILES stated, "It would be when it was sent. Likewise, when
we receive [a fax] form on a due date, we count it timely, as
long as it came on that due date before midnight ...." In
response to follow-up questions by Chair Weyhrauch, she
confirmed that [the transmittal would count as timely] as long
as the send button on a fax machine or E-mail was pushed before
midnight.
CHAIR WEYHRAUCH noted that in some cases, individuals have filed
with APOC or the Division of Elections and have found later that
there's no record of that filing. If the candidates had not
kept a record for themselves, there would be no record at all,
he said. He asked what candidates should do to ensure they have
their own records if they file electronically.
MS. MILES said she knows of electronic record-keeping mechanisms
that can be activated on a person's computer and fax machine.
She revealed that the rules are stricter at the Division of
Elections. For example, if a person has not signed "the
declaration" by 5:00 [p.m.] on June 1, it doesn't matter if that
person is in line - he/she is not a candidate. She stated her
understanding that that comes from a supreme court decision.
Number 0267
CHAIR WEYHRAUCH turned to page 6, Section 9 [of the proposed
CS]. He offered his understanding that this section addresses
fundraising issues. He noted [subsections] (a) through (e). He
asked if it is APOC's intent that "only these entities are ...
to be included in fundraisers, and no other specific provision
of fundraising activity is to be included."
MS. MILES answered no. She noted that [Section 9] has troubled
the drafters and attorneys "because of that very construction
rule," and she indicated that any help would be welcome. She
clarified that the intended concept of this section is in regard
to the high volume, low contribution activities, such as selling
tee shirts or holding a dance, for example.
CHAIR WEYHRAUCH stated, "It's a very difficult and troubling
thing for the public who wants to just innocently run for
office, to know whether they're going to be subject to some sort
of potentially criminal violation, by having a fundraiser,
because they're innocently trying to raise ... some money by
selling cookies, or something else that's not included here."
He posited that it would save APOC time to send out letters
"before everybody runs out to have a fundraiser," in order to
have some certainty on this issue.
MS. MILES explained that [Section 9] is meant to provide relief
from reporting certain contributors by name and address and
accounting for them in that manner, so that when a high volume,
low cost fundraising event takes place, "you are permitted to
simply report the proceeds of that, ... your end costs of that,
and the number of people who attended." She indicated some
concern on the part of attorneys regarding particular items that
[may or may not be covered under subsection (c)].
CHAIR WEYHRAUCH stated that most people he knows want to run an
honest campaign and don't want to be accused of being unethical.
He indicated he thinks it's important to make certain that
people are encouraged to run for public office, and that the
voters are informed.
MS. MILES stated that APOC concurs.
CHAIR WEYHRAUCH noted that he has held fundraisers where cash
has been given, and he had to send the cash back to the
government, because he could not tell who had donated it.
TAPE 03-44, SIDE A
Number 0033
MS. MILES explained that [a candidate] wouldn't have to send the
money back if it was $50 and the name and address of the
contributor was known. In response to a comment by Chair
Weyhrauch, she acknowledged that $50 dollars would be too much
if the name of the contributor was not known. She said that
[APOC] staff tries to encourage anyone who may be holding a
fundraiser, such as a cookie sale, to have a person sit where
the donations are placed and add notes to those donations that
are for more than the amount allowed in the exemptions.
CHAIR WEYHRAUCH turned to [line 3] of Section 10 [at the top of
page 7 of the proposed CS] and asked for the definition of
"nongroup entity".
MS. MILES stated that the nongroup entities are nonprofit
corporations that, because of the way they are organized, are
unable to have a political action committee. She noted that the
Alaska State Supreme Court said that those nonprofit
corporations should be able to participate somehow in political
campaigns. Ms. Miles told the committee that the poster child
of nongroup entities is the [Alaska Conservation Alliance and
Alaska Conservation Voters (ACA/ACV)]. She noted that there are
other groups like that and "this is how we have - after some
regulatory [language] turning to statutory language - dealt with
them."
REPRESENTATIVE BERKOWITZ asked if there is a problem causing the
necessity to increase the contribution amounts. He offered the
amounts shown in [Section 10, subsection(b)(1) and (2)] as
examples.
MS. MILES replied that the philosophy is that if there is more
availability for legal participation in the process of
contributing to campaigns and helping to fund political groups
that want to participate in campaigns, then there will be less
"stuff going on that we can't regulate and can't provide public
information on." For example, she listed: issue advocacy, soft
money, and - in some ways - independent expenditures; although
she said that the latter is reportable.
Number 0311
REPRESENTATIVE BERKOWITZ opined, "This is just a laundering
machine for soft money." He stated that everybody knows that
money is the mother's milk of politics and when the amount of
money that's available to political parties and nongroup
entities is increased, that invites corruption, decreased public
participation, and decreased public confidence in the process.
He added:
And what you do in a state that is currently dominated
by a single political party is you make it very hard
for people who have (indisc. - coughing) and it makes
it incredibly difficult, even for members of that
dominate party who have left [the] majority
perspectives in that party, to maintain their
perspective. ... You will see within the Republican
Party - and I have seen it - that the moderates get
whacked on account of these kind of fundraising tools.
REPRESENTATIVE BERKOWITZ, regarding the increased funds, stated,
"There is no problem that exists, and there is no problem that
needs to be redressed through this legislation."
REPRESENTATIVE LYNN stated that an incumbent's circle of
supporters is typically much larger than somebody who is just
getting into the process; therefore, it may be easier for an
incumbent to attract larger contributions. He concluded, "It
may work against opening up the political process so that
anybody can run."
MS. MILES acknowledged Representative Lynn's remark and said
that it wasn't an issue that had been discussed.
CHAIR WEYHRAUCH complimented Ms. Miles as "a wonderful
bureaucrat to work with."
Number 0590
REPRESENTATIVE LYNN suggested he may introduce future
legislation to establish some kind of bank account for candidate
contributions and payments of expenses that would be viewable by
the public over the Internet without a password. He pointed out
the merits of the idea, including that it would help people
report contributions in a timely manner and would save APOC from
extra work. He added that he used electronic filing during his
own campaign and it was a big help.
REPRESENTATIVE SEATON said he thinks that the public has
strongly expressed the desire for campaigns that are run by
candidates who talk to individuals in their districts rather
than by those using a separate pot of money under which they
conduct campaigns without contacting or involving the people in
their district. He said, "I feel that these increases in
campaign contributions are going to be exactly opposite [of]
what I've heard from my constituents." He stated that he will
be in opposition to the increases. Furthermore, he said, he
thinks that the change proposed to allow lobbyists who don't
reside in a candidate's district to contribute [to that
candidate's campaign] would give incumbents such as himself a
separate pot of money to run a political campaign; therefore, he
stated that he would be opposing that section of change.
REPRESENTATIVE SEATON turned back to the 24-hour reporting rule.
He said that he doesn't see the benefit of having the rule with
the $500 limit in campaign contributions, because [that amount
is] not substantial enough to influence an election, although
perhaps it could allow a candidate to strong-arm [the opponent's
contributors]. He stated that it's a burden on any candidate to
run a campaign, especially without a professional treasurer to
assist in complying with the 24-hour reporting.
REPRESENTATIVE SEATON stated that if individual campaign
contributions of up to $50 are being allowed at events, without
reporting the [contributor's] name, then he doesn't understand
why a requirement is being made to report a $15 contribution
"outside of that event." He clarified that it doesn't make any
sense to let somebody pay $50 one time and $5 another and have
different reporting requirements. He stated that he would like
to see that changed.
Number 1137
CHAIR WEYHRAUCH turned to Section 14. He asked if the bill
still maintains the prohibition on fundraisers during
legislative session.
MS. MILES answered that this bill does not. She noted that the
campaign disclosure law does not prohibit candidates - whether
incumbents or not - from accepting campaign contributions during
the legislative session. She noted that the legislative ethics
law is where the prohibition on that activity applies to
incumbents. In fact, she added, the Alaska Supreme Court
decided that there was no purposed in having a legislative time-
out for all candidates.
MS. MILES referred to Section 14, [on page 8, lines 8, 10, and
12], where the words per year were added. She explained that
that language was [proposed] because the revisor of statutes in
the Department of Law thought that, without it, "it looked like
it was a lifetime contribution."
REPRESENTATIVE GRUENBERG stated that he supports that change.
[HB 157 was heard and held. The motion to adopt the proposed
committee substitute (CS) for HB 157, labeled HB157.doc,
4/24/2003 as a work draft was left pending.]
ADJOURNMENT
Number 1283
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 10:00
a.m.
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