Legislature(1995 - 1996)
03/19/1996 03:38 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE March 19, 1996 3:38 p.m. MEMBERS PRESENT Senator Bert Sharp, Chairman Senator Randy Phillips, Vice-Chairman Senator Loren Leman Senator Jim Duncan Senator Dave Donley COMMITTEE CALENDAR SENATE BILL NO. 304 "An Act relating to eligibility for the longevity bonus program; and providing for an effective date." CS FOR HOUSE BILL NO. 179(FSH) "An Act relating to the commissioner of education and the commissioner of fish and game; and providing for an effective date." SENATE BILL NO. 191 "An Act relating to election campaigns, election campaign financing, the oversight and regulation of election campaigns by the Alaska Public Offices Commission, the activities of lobbyists that relate to election campaigns, and the definitions of offenses of campaign misconduct; and providing for an effective date." SB 273 (NATIVE HANDICRAFTS & INSTATE PRODUCTS) was scheduled, but not taken up on this date. SB 141 (LEGISLATIVE ETHICS) was scheduled, but not taken up on this date. SB 275 (STATE PROCUREMENT PRACTICES & PROCEDURES) was scheduled, but not taken up on this date. PREVIOUS SENATE COMMITTEE ACTION SB 304 - No previous senate committee action. HB 179 - No previous senate committee action. SB 191 - See State Affairs minutes dated 1/25/96 and 3/12/96. WITNESS REGISTER Joshua Donaldson, Staff Representative Gene Therriault State Capitol, Juneau, AK 99801-1182¶(907)465-4797 POSITION STATEMENT: prime sponsor of HB 179 Chrystal Smith, Legal Administrator Office of the Attorney General Department of Law P.O. Box 110300, Juneau, AK 99811-0300¶(907)465-3600 POSITION STATEMENT: supports HB 179 Jack Chenoweth, Attorney Legislative Legal and Research Services 130 Seward St., Ste. 409, Juneau, AK 99801-2105¶(907)465-2450 POSITION STATEMENT: testified on SB 191 Representative David Finkelstein State Capitol, Juneau, AK 99801-1182¶(907)465-2435 POSITION STATEMENT: testified on SB 191 Brooke Miles Regulation of Lobbying Alaska Public Offices Commission P.O. Box 110222, Juneau, AK 99811-0222¶(907)465-4864 POSITION STATEMENT: testified on SB 191 ACTION NARRATIVE TAPE 96-21, SIDE A Number 001 CHAIRMAN SHARP called the Senate State Affairs Committee to order at 3:38 p.m. The chairman stated that several bills have been pulled from the schedule, one at the request of the sponsor. SB 304 ELIGIBILITY FOR LONGEVITY BONUS Number 025 CHAIRMAN SHARP brought up SB 304 as the first order of business before the Senate State Affairs Committee. He stated that SB 304 is a committee bill that incorporates a section that was in SB 217. That section received unanimous support from senior citizens. It would establish that a cumulative total absence of 180 days from the state would result in ineligibility to receive longevity bonuses. That would pretty closely match current requirements for the permanent fund dividend. Number 065 SENATOR DONLEY asked if SB 304 would result in a dual system. Would seniors lose for months they were out, and then if they were gone for more than 180 days, they would be permanently ineligible? CHAIRMAN SHARP responded that is correct. If they are gone for more than 180 days in a twelve-month period, they would be ineligible. He asked if anyone wished to testify on the legislation. Hearing none, the chairman stated SB 304 will have a hearing in the Finance Committee, and asked the pleasure of the committee. Number 095 SENATOR LEMAN made a motion to discharge SB 304 and accompanying fiscal note from the Senate State Affairs Committee with individual recommendations. CHAIRMAN SHARP, hearing no objection, stated SB 304 was discharged from the Senate State Affairs Committee. HB 179 LIMIT TERM OF COMMRS OF EDUC. & FISH/GAME Number 105 CHAIRMAN SHARP brought up HB 179 as the next order of business before the Senate State Affairs Committee. He called the sponsor's representative to testify. Number 115 JOSHUA DONALDSON, Staff to Representative Gene Therriault, prime sponsor of HB 179, read the sponsor's statement. HB 179 would change the term of office for the commissioners of Education and Fish and Game, so that their terms would not exceed the term of the governor who appointed them. Number 135 SENATOR LEMAN asked what the employment contracts specify for the current commissioners. Number 145 CHRYSTAL SMITH, Legal Administrator, Office of the Attorney General, Department of Law, stated the administration supports HB 179. She is not aware of the terms of the contract--or if there is a contract, of the current commissioners. It would be her guess that the current Commissioner of the Department of Education does not have a contract. She did some research into former commissioners of the Department of Education and their contracts, and so far as she can discover there were not written contracts in the past, prior to Commissioner Covey's situation. Ms. Smith stated that the committee substitute does parallel the governor's effort to ensure that these commissioners, like the other commissioners, serve at the pleasure of the appointing entity and that there are no fixed terms which could potentially overlap the governor's term. The administration has been pleased to work with Representative Therriault on this issue. Ms. Smith reviewed current statute relating to appointing and dismissing the commissioners of Education and Fish & game. She thinks HB 179 will benefit the state. CHAIRMAN SHARP asked if there are questions of Ms. Smith. Hearing none, he asked the pleasure of the committee. SENATOR LEMAN made a motion to discharge HB 179 and accompanying zero fiscal note from the Senate State Affairs Committee with individual recommendations. Senator Leman noted for the record he thinks the fiscal note should have shown savings to the state. Number 230 CHAIRMAN SHARP, hearing no objection, stated HB 179 was discharged from the Senate State Affairs Committee. SB 191 ELECTION CAMPAIGN FINANCE REFORM Number 240 CHAIRMAN SHARP brought up SB 191 as the next order of business before the Senate State Affairs Committee. He informed the committee that the proposed committee substitute wraps in all the amendments that were attached to the previous version the committee reviewed. The chairman asked Mr. Chenoweth to review the proposed committee substitute. Number 255 JACK CHENOWETH, Attorney, Legislative Legal and Research Services, stated the proposed committee substitute wraps in about a dozen amendments which have either been before the committee in written form or had been the basis of discussion previously. He stated he would quickly review the amendments so that the committee could decide whether it wanted to keep them in the bill or take them out. The amendments are as follows: Page 5, lines 4-10: Group support/opposition of one candidate of more than 33 1/3%. Page 5, lines 12-13: Technical amendment: An individual may make a contribution to a group or a political party. Page 5, line 13: Technical amendment: Only individuals/groups may make contributions to a candidate. Page 6, line 32: Technical amendment: regarding "person". Page 9, line 30: Technical amendment: regarding corporation, company, partnership, etc. may not make a contribution to a candidate. Page 5, line 28 through page 6, line 15: Technical amendment: Individual and group contribution limitations. Page 9, following line 30: Governor/Lieutenant Governor limitations on campaign contributions. Page 14, lines 3, 13, 22-23 Technical amendment: regarding contributions to candidates or group. Page 15, line 23: Technical amendment: regarding disposition of contributions. Page 16, lines 15-18: Transfer of campaign funds to office account limited to $2,500.00 per election district times number of years in term to which candidate is elected. Page 16, line 21: Technical amendment: regarding current fair market value of campaign assets. Page 24, lines 9-13 (to CSHB 368()): Technical amendment: regarding definition of "political party". Page 26, line 1: Technical amendment: regarding cross reference adjustment to intentional violation of campaign misconduct in the first degree. Number 295 SENATOR DUNCAN asked if, under SB 191, the democratic or republican party can contribute $15,000.00 - would that be the state party? MR. CHENOWETH responded, yes. SENATOR DUNCAN asked if the Juneau Democratic Party, which is a district party, could also contribute $15,000.00. MR. CHENOWETH responded, no. The idea would be that the umbrella cover all contributions from political parties, and political parties intend to cover all of these things. Number 310 SENATOR DUNCAN asked if any sub-unit of a state political party would fall under this umbrella. MR. CHENOWETH responded, yes. CHAIRMAN SHARP stated he had the same question earlier. SENATOR DUNCAN noted that means that a local political party, that has no connection with the state party - a candidate cannot receive more than a total of $15,000.00 from both organizations. He is not sure he agrees with that. Is that specified in the initiative? MR. CHENOWETH responded, no. The initiative only addresses a political party. Trying to sort through this relationship of these other groups is something that arose out of discussions with Representatives James and Finkelstein and Senator Kelly. The initiative is largely silent on this. CHAIRMAN SHARP stated he asked for clarification, because they need to know one way or the other how that was going to come down. He thinks it could have been interpreted either way. Number 337 SENATOR LEMAN stated that one other option organizations might have would be to be a "group". Then the $1,000.00 limit would apply. They would be out from under that umbrella, but there would be $1,000.00 limit. SENATOR DUNCAN commented that is comforting. SENATOR LEMAN stated they could make the democratic party just a group. SENATOR DUNCAN responded if Senator Leman would make the democrats an organized group, they would appreciate it. They haven't been organized for years. CHAIRMAN SHARP asked Mr. Chenoweth to continue reviewing the previously listed amendments. Number 345 MR. CHENOWETH continued review of the previously listed amendments. Number 370 SENATOR RANDY PHILLIPS asked if senators shouldn't receive double the amount that representatives receive, concerning the language on page 6, lines 13-14. MR. CHENOWETH responded that is a policy call. The thinking on the part of the committee (Senator Kelly and Representatives James and Finkelstein) was that the relationship should be roughly 1.5:1, or 3:2. Once they had settled upon that relationship among themselves, they indicated that they wanted that relationship kept in certain places. That's how the $15,000.00:$10,000.00 distinction was reached. SENATOR DUNCAN concurred with Senator Phillips. We might be able to use the "amount per election district" language in this place, which was used in the area addressing transfer of excess campaign funds to office accounts. CHAIRMAN SHARP asked Mr. Chenoweth what the petition said, regarding that subject: did it refer to maximum amounts allowed by party? He wants to stay as close to the initiative as possible. MR. CHENOWETH replied, $5,000.00 per year to a legislative candidate, $50,000.00 per year for the state-wide races. SENATOR RANDY PHILLIPS stated that would be $10,000.00 per year for representatives and $20,000.00 for senators. MR. CHENOWETH responded, yes. The initiative allows $5,000.00 per year to legislative candidates for contributions from political parties. SENATOR DUNCAN asked, "Not per year, per election, you mean?" MR. CHENOWETH replied it is expressed in terms of per year. But because of the window that you have in which to raise money, it would have been just that period of time. SENATOR DUNCAN said, "Then it means per election. So this is really an increase." SENATOR RANDY PHILLIPS stated it should be $20,000.000 and $10,000.00 then. SENATOR DUNCAN agreed that it should be $20,000.00 and $10,000.00. Number 395 CHAIRMAN SHARP stated that in the utility business, you would refer to this as not doubling, but efficiencies of size. He asked if there were further comments on that section. Hearing none, he asked Mr. Chenoweth to continue reviewing the previously listed amendments. MR. CHENOWETH continued review of the previously listed amendments. SENATOR DUNCAN asked what the amendment on page 5, line 14 means: only individuals and groups can make contributions to candidates. MR. CHENOWETH responded the amendment is not concerned with that sentence. It is the second one. The first one raises a different problem: it puts us in conflict with something later in the bill, or at least impliedly in conflict with subsection (d) on page 6. So he thinks they may want to revisit the first sentence, or take it out all together. In point of fact, all three entities mentioned in SB 191, individuals, groups, and political parties, are able to make contributions to candidates. What gets us back to where the initiative was taking us, is subsection (h) on page 10. Number 430 MR. CHENOWETH continued his review of the previously listed amendments. Number 460 SENATOR DUNCAN asked, wouldn't the maximum amount a governor or lieutenant governor could contribute to a candidate be $1,000.00? Why have this prohibition? If all they can contribute is $500.00 individually, or $1,000.00 if they form a group, that's not a great amount of money. Why is that in the bill at all? He thought the purpose of this was so that a group controlled by the governor couldn't go out and raise $200,000.00 at a fund raiser, and then use that money to contribute to legislative candidates. If they're prohibited under SB 191, absent this provision, from contributing no more than $1,000.00-- SENATOR LEMAN replied that's $60,000.00. SENATOR DUNCAN stated the governor wouldn't contribute to Senator Leman, so it would only be $59,000.00. SENATOR LEMAN stated there are 60 seats. SENATOR DUNCAN stated his point is he is not sure they're doing what they think they're doing. It's not stopping large contributions, because they're already limited to $1,000.00. CHAIRMAN SHARP stated that's true. He thinks all it is doing is saying that the intention of allowing the extra six months for governor and lieutenant governor for state-wide campaigns is that the time is to be used for those campaigns, and not channeled into legislative races, which are forbidden from raising money during the session. This purifies it to the point of no contributions. SENATOR DUNCAN thinks it is on the edge of being ridiculous. If we do that, we should extend this provision to other public office- holders with the ability to raise money during an off year. U.S. Senators could do the same thing, and they do. Ted Stevens comes to the state and holds fund raisers for groups he controls to contribute to legislative races. SENATOR RANDY PHILLIPS stated, "He has?" SENATOR LEMAN stated, "He does?" SENATOR DUNCAN asserted that (Senator Stevens) raises money for you guys all the time. SENATOR RANDY PHILLIPS stated that was news to him. CHAIRMAN SHARP stated that is a hypothesis that hasn't had beneficial results for anyone he knows of. SENATOR DUNCAN stated that Senator Stevens held a fund raiser in Anchorage last year for legislative candidates. He thinks it's a ridiculous prohibition, but if we're going to prohibit the lieutenant governor and the governor from doing that, then we should also prohibit U.S Senators and others from doing it. SENATOR LEMAN stated he's held fund raisers too. SENATOR RANDY PHILLIPS stated he agrees with the general policy, anyway. CHAIRMAN SHARP asked if the petition targeted congressional races. SENATOR DUNCAN stated we would not be targeting congressional races by doing this: we're not saying they can't raise as much as they want for their own campaign. His only suggestion is to specify that they can't raise money for legislative candidates. He doesn't think it's a big problem; he doesn't think the language is even necessary, because the group contribution would limit contributions. CHAIRMAN SHARP thinks it's a matter of fairness: if they're going to be allowed to raise one penny during session, it ought to go towards the races for which they're raising the money. SENATOR DUNCAN stated, then the same should be true for other state-wide officer holders. CHAIRMAN SHARP stated he agrees on one point: since this limits the raising of money by governor and lieutenant governor candidates starting on January 1 of the election year, he doubts if those candidates would be distributing much of that money to other races, when they've got their own race ahead of them. SENATOR DUNCAN thinks everyone should be prohibited from doing that. SENATOR RANDY PHILLIPS asked if the initiative addressed that. MR. CHENOWETH responded it does not. SENATOR DUNCAN asked if the initiative addressed subsection (g). MR. CHENOWETH responded the initiative does not address that either. SENATOR RANDY PHILLIPS stated he would entertain an amendment, if Senator Duncan wants to cover them all. It's fine with him; he thinks it's good public policy. He's still trying to figure out Senator Duncan's comment about Steven's fund raiser. SENATOR DUNCAN asserted that Senator Steven's came to Anchorage and held a fund raiser for republicans. CHAIRMAN SHARP asked Mr. Chenoweth to continue reviewing the previously listed amendments. Number 517 MR. CHENOWETH continued review of the previously listed amendments. SENATOR DONLEY stated he is concerned with language on page 17, line 8, that specified no property with a fair-market value in excess of $2,500.00 could be retained. He had hoped that the committee would consider establishing a formula that would exclude one computer and one printer from that amount. CHAIRMAN SHARP thinks that is the next amendment Mr. Chenoweth is going to discuss. The discussion revolved around how fast computers and electronic equipment lose value from the day it's purchased. SENATOR DONLEY stated that's why he thought the bill could allow one computer and one printer. It seems appropriate to him. It's not like you're keeping an airplane, or something. Number 534 CHAIRMAN SHARP asked if subparagraph (D) on page 17 is clear enough. SENATOR DUNCAN asked Mr. Chenoweth for a definition of "election district". MR. CHENOWETH responded "election district" is defined in AS 15.60, in the election code to mean a house district. CHAIRMAN SHARP asked Mr. Chenoweth if the next amendment was the one with which Senator Donley was concerned. MR. CHENOWETH replied it is not, but he can jump ahead, if the committee wishes. He did not give a lot of thought to the particular language Senator Donley suggested, but SB 191 can be modified as anyone sees fit. SENATOR DUNCAN asked if "current fair market value" is new language. MR. CHENOWETH responded, yes. SENATOR DUNCAN asked how current fair market value would be determined: would they have to hire an appraiser? MR. CHENOWETH thinks value could be established fairly easily, and wouldn't need to retain the services of an appraiser. Number 556 SENATOR DONLEY stated that's why he wants to specify the type of property for those two large ticket items: you wouldn't have to assess the fair market value of them. CHAIRMAN SHARP stated he doesn't have a problem with that, other than being led into a maze of other equipment that might be valuable to other people. He would venture to say, if one walked into the shop in which one's computer was purchased, they could probably give you a good idea of what it's worth. He hasn't been able to find any shop that would take in any kind of a computer for a trade for any money. So he thinks value is pretty close to zero after a while. SENATOR DONLEY stated it would remove a lot of questions if it was just specified. CHAIRMAN SHARP stated he has no problem with that, if Senator Donley would like to craft the language. So moved. SENATOR DONLEY stated just a conceptual amendment. SENATOR RANDY PHILLIPS asked Mr. Chenoweth how the initiative addressed this issue. He doesn't understand what they're talking about, because he doesn't have this problem. MR. CHENOWETH stated, we did not- SENATOR DONLEY interjected that it's the same language that's in the initiative, except for the fair market value. SENATOR RANDY PHILLIPS asked if it was limited to $2,500.00 for equipment. SENATOR DONLEY stated it says "property". SENATOR RANDY PHILLIPS asked if other committee members have property after the campaign. SENATOR DONLEY responded, arguably: there are sledgehammers- SENATOR DUNCAN interjected there are bumper stickers and buttons. CHAIRMAN SHARP said there are post-hole diggers. SENATOR LEMAN said there are stakes and old signs, the ones certain groups haven't stolen. SENATOR DONLEY stated that, arguably, that would all fall under this clause. SENATOR DUNCAN commented he has no idea to what the bill is referring when it specifies "property". SENATOR DONLEY stated that "property" could even be signs. SENATOR RANDY PHILLIPS asked Representative Finkelstein what was meant by "property". Surely it didn't mean wooden stakes, did it? REPRESENTATIVE DAVID FINKELSTEIN responded, no. It's to try to make sure those kind of things could be carried forward from one campaign to the next. If stakes have a value, it certainly is nominal. But the initiative was absolute, other than this: no items of value and no money could be transferred forward. So this is the only way that things could be transferred forward. The sense was that people could generally fit under $2,500.00 the kind of assets they would have from a campaign that they would want to keep. SENATOR DUNCAN asked for clarification that would include campaign materials, like signs. REPRESENTATIVE FINKELSTEIN replied with those, the value is probably zero, or close to it. SENATOR DONLEY commented, fair market value... SENATOR RANDY PHILLIPS asked what would happen if you had a bad campaign manager, and he or she bought more signs than you could use, but you want to keep those signs for the next election? Do you have to burn everything under $2,500.00? REPRESENTATIVE FINKELSTEIN stated the concept would be... TAPE 96-21, SIDE B ...campaign yard signs with someone's name on them are pretty much close to nominal, as close to zero value as you can get. No one's going to buy them at a yard sale. SENATOR DONLEY thinks that's why it's important to specify fair market value. REPRESENTATIVE FINKELSTEIN stated the problem with determining value isn't that unusual. If you get a non-monetary contribution to your campaign, you have to figure out what it's worth. He thinks that a computer would be the only item that might ever butt up against the limit, and there aren't many computer-printer combinations that have been around for eight months that are going to be worth anywhere near $2,500.00. So he doesn't see a problem. CHAIRMAN SHARP stated his only concern with specifying a computer in SB 191 is that there is a vast range of costs on computers, and it could be fairly expensive, or not. Number 575 SENATOR DONLEY commented if you go back to what the purpose is, he thinks it's to keep someone from buying a house or a car or an airplane. He doesn't think the purpose was ever to keep a candidate from utilizing a computer and a printer. The value of that equipment to the public continues through the person's term in office. SENATOR LEMAN stated one can get a computer today with a gigabyte of storage on the hard drive and a pentium chip, with a printer, for under $2,500.00. Used, the value would be well under that. He thinks that range is ok. What else might there be of value that could be carried over? He thinks stakes are almost worthless, and you would almost want to pay someone to take your old signs. CHAIRMAN SHARP stated he is more concerned with 4x8 sheets of plywood, than with computers. He asked that the committee continue the review of the amendments. If there is desire to offer amendments, members should mark the area in which they're interested, and we will return to that section. Number 565 MR. CHENOWETH continued review of the previously listed amendments. SENATOR DUNCAN asked if paragraph (8) is worded the same as it was in the original version of SB 191. Number 520 MR. CHENOWETH replied, no. That was revised by the working committee because the initiative did not allow transfer of unused campaign contributions for a future election campaign. The committee then further refined it by making the ratio between senate and house candidates 3:2. SENATOR DUNCAN thinks that language should be consistent with other language in the bill. He thinks that language should be changed to "election districts" in this case also. MR. CHENOWETH noted that (8)(B) and (C), where there are specific dollar amounts, would be replaced with specific amounts per election district. He asked, what if you're the losing candidate? The approach in paragraph (9), which is the transfer of $2,500.00 per election district, applies only for legislative office accounts. But paragraph (8) is not limited to those who are elected. It is a transfer for a future election campaign, if you were to lose, with the expectation that you might want to run in the future. SENATOR DUNCAN stated, if you're a losing candidate, maybe you shouldn't be able to transfer anything. He said he was kidding. CHAIRMAN SHARP asked Senator Duncan if he still wanted to see 2:1. SENATOR DUNCAN thinks Mr. Chenoweth made a good point: he doesn't think you can use the same language there as was used on page 17, subparagraph (D). He is wondering if the committee wants to consider $10,000.00:$5,000.00, instead of $7,500.00:$5,000.00. Number 485 CHAIRMAN SHARP stated he doesn't have a problem with it one way or the other, as long as it doesn't become apparent as the legislation moves through other committees that it is not close enough to the initiative. SENATOR DUNCAN made a motion that in paragraph (8), subparagraph (B) on page 16, "$7,500.00" be changed to "$10,000.00". CHAIRMAN SHARP asked if there was any objection to that. SENATOR LEMAN objected for the purpose of comparing that to the initiative. Would it be similar? REPRESENTATIVE FINKELSTEIN replied it is all zero in the initiative. This provision was developed in discussions with house and senate members. The 3:2 ratio was a compromise based on two things: actual spending patterns for elections. When he runs for a seat in Anchorage, his costs are exactly the same as Senator Donley for advertisements and travel. Existing law states that the contribution maximum is $1,000.00 to a house candidate or a senate candidate. There is no differentiation made. So it is a significant concession to go even to a 3:2 ratio. Number 465 SENATOR DUNCAN stated what Representative Finkelstein said makes sense as far as what an urban senate race would cost compared to an urban house race. But he submits that in a rural district, where a candidate could have 92 villages in a senate district and half that in a house district, the travel costs will be much, much higher. He thinks that needs to be recognized. REPRESENTATIVE FINKELSTEIN stated that is a good point. The idea wasn't to start a major fund for the next campaign. It was to have some start up money. $5,000.00 isn't very much for a race that's going to cost $70,000.00. SENATOR RANDY PHILLIPS stated $5,000.00 is a lot of money for him. He spent $10,000.00 last time, so that is half of his whole campaign. CHAIRMAN SHARP asked Senator Leman if he still maintained his objection. SENATOR LEMAN responded he did not hear a judgement on whether Representative Finkelstein thinks that would be substantially similar, not that the decision is his. SENATOR DUNCAN doesn't think Representative Finkelstein can make that recommendation. SENATOR LEMAN knows, but since Representative Finkelstein was an integral part of the initiative process, and since Representative Finkelstein is present, Senator Leman assumes he has some feelings about it. What's your opinion? REPRESENTATIVE FINKELSTEIN replied he has lots of opinions on everything, but he doesn't think he can answer Senator Leman's question. SENATOR LEMAN stated, for once he would ask Representative Finkelstein's opinion. REPRESENTATIVE FINKELSTEIN stated, if Senator Leman wants his opinion, he believes the $5,000.00:$7,500.00:$50,000.00 reflects the ratios of house:senate:governor's races, and is a significant concession already. Going further would push the limit too far, and leads to some degree of antagonism between house and senate provisions on something which may not be necessary. Number 437 SENATOR LEMAN stated, in that case, he removes his objection. CHAIRMAN SHARP asked Senator Leman if he wanted to promote antagonism. CHAIRMAN SHARP, hearing no further objection, stated that the amendment was adopted. In paragraph (8), subparagraph (B) on page 16, "$7,500.00" is changed to "$10,000.00". SENATOR LEMAN thinks the house will probably take a look at that. SENATOR DUNCAN said then it will be $2,500.00 for the senate and $7,500.00 for the house. Number 430 MR. CHENOWETH continued review of the previously listed amendments. SENATOR DONLEY thinks it would be appropriate to identify a computer and printer as off the table, and then everything else can be tallied up. CHAIRMAN SHARP asked if that was on page 17. SENATOR DONLEY responded, yes. That would just be a conceptual amendment. It would be, "one computer, one printer, and $2,500.00 fair market value other items". SENATOR LEMAN asked, why not just raise the amount so that you know a computer, a printer, and a few sheets of paper could be covered under that amount. SENATOR DUNCAN stated the problem with that is that things get more expensive. This does not have inflation proofing. SENATOR LEMAN commented we have to eat inflation, just like everyone else. SENATOR DONLEY doesn't think it was intended. SENATOR DUNCAN thinks it was intended. He does not think they even wanted candidates to have excess buttons. SENATOR LEMAN asked Senator Duncan if he had excess buttons. SENATOR DUNCAN replied he's had excess buttons for years. SENATOR LEMAN asked if he could have one of Senator Duncan's excess buttons. CHAIRMAN SHARP asked if there is any objection to Senator Donley's amendment. Hearing no objection, the amendment is adopted. The conceptual amendment will be something along the lines of: one computer, one printer, and $2,500.00 fair market value other items. CHAIRMAN SHARP asked for a motion to adopt the committee substitute for SB 191. SENATOR RANDY PHILLIPS made a motion to adopt the State Affairs Committee substitute, as amended, for SB 191. CHAIRMAN SHARP, hearing no objection, stated the committee substitute for SB 191 was adopted. SENATOR RANDY PHILLIPS asked Representative Finkelstein if the group supporting the initiative has seen this version of SB 191. If so, what is their opinion of it? REPRESENTATIVE FINKELSTEIN responded that Mike Frank has reviewed the version just prior to this version; he hasn't seen this version. Mr. Frank's comments were in the newspaper, and his comment was that he thought the committees were working on reasonable subjects in a serious fashion to try to find a compromise. But Mr. Frank wasn't going to offer his opinion as to whether any version met that standard. CHAIRMAN SHARP thinks that's all that can be expected. REPRESENTATIVE FINKELSTEIN stated Mr. Frank hadn't seen the most recent changes. SENATOR DUNCAN stated there hasn't been anything major in the most recent changes. Number 380 SENATOR DONLEY stated his biggest concern with the campaign finance reform area is an increase in the possibility that a person with a lot of individual, personal wealth could buy an election, and that another candidate would not be able to match the other person's wealth through contributions. Senator Donley stated he's done research, and there are several states with provisions relating to this subject. In Arizona, if a candidate contributes more than $20,000.00 of his or her own money for state-wide office, or $10,000.00 for other offices, the other candidates for the same office are exempt from the caps on individual donations up to the amount that the other candidate put into the election. In Washington, there is a provision that states, if a candidate does make a contribution to your own campaign, it has to be made within 21 days of the general election. A candidate couldn't wait until seven days before an election and dump $50,000.00 into a media buy. SENATOR DUNCAN likes that provision. SENATOR DONLEY stated that situation was not addressed in the initiative, but both seem to be in the spirit of the initiative. They address the number one objection he has heard to the initiative, and that is it would handicap individuals who don't have a lot of money. He wanted to introduce those ideas to the committee, and wondered if they had any interest in either of those provisions. Number 348 CHAIRMAN SHARP shares Senator Donley's concern. He thinks they could put limits on what could be spent. SENATOR DONLEY stated he has a resolution on adopting campaign spending limits, which is stuck in the Senate Judiciary Committee. SENATOR DUNCAN likes the second proposal that the state of Washington has in place. He thinks it might be too complicated to control a provision like that of Arizona. That might be a monitoring nightmare. But he thinks specifying that if people are going to make personal contributions to their own campaign, those contributions have to be made by a certain date has a lot of merit. Senator Duncan is not sure 21 days is the correct length of time; maybe it should be 60 days. CHAIRMAN SHARP thinks that 30 days out, most of the time has been bought up. No later than 30 days before would probably cover it and it wouldn't be too excessive. He is open for conversation on that; he doesn't have a problem with it. Especially since one of his opponents dumped $50,000.00 into the race in the last ten days before the election. SENATOR DONLEY thinks 21 days might be too short a time frame, especially the way media buys occur in Alaska. SENATOR RANDY PHILLIPS asked if the chairman and Senator Donley were referring to both the primary and general elections. SENATOR DONLEY replied it would probably be more reasonable to have it for both elections. SENATOR DUNCAN thinks that is a good idea, also. Number 310 SENATOR LEMAN stated it could be done so that it precedes the thirty-day report, so it would show up on that report. SENATOR DUNCAN stated they could have it precede the thirty-day report for the primary and the general elections. SENATOR DONLEY thinks that would be a reasonable guideline. SENATOR LEMAN stated that the money wouldn't have to be spent, it would just have to be transferred to the campaign account. SENATOR DONLEY stated that's the way it is in Washington. SENATOR RANDY PHILLIPS asked, what's wrong with just doing it on the day you file? SENATOR DUNCAN stated you might just be able to limit total campaign expenditures that way. He asked Mr. Chenoweth if they could go back that far. MR. CHENOWETH does not think they could go back that far. You've got to give people who have the ability to contribute to their own campaign the opportunity to take advantage of that ability. CHAIRMAN SHARP thinks if they tied it to a present required filing report, which is a thirty-day report prior to each election, it would probably be easier to enforce. SENATOR DUNCAN stated he would like to make that motion. CHAIRMAN SHARP stated he is looking for a conceptual amendment. Number 285 SENATOR DONLEY stated the amendment would read something like: if a candidate wanted to put their own money in, they would have to do it prior to the 30 day report for that particular election. It's pretty simple. SENATOR LEMAN added, prior to the cut-off date for the thirty-day report. SENATOR DONLEY responded, yes, prior to the deadline for reporting. SENATOR LEMAN asked if there would be a dollar limit on this amount. SENATOR DONLEY responded, no, because if you're just going to use your own funds, you have to do it before the thirty-day filing report cut-off. SENATOR LEMAN asked if that meant you couldn't use any of your own funds if you didn't put them in thirty days before the election. CHAIRMAN SHARP responded that's correct. All personal contributions from the candidate would have to be made publicly known prior to the thirty-day report. SENATOR DONLEY commented the thing that's nice about it, is it's so simple. SENATOR LEMAN stated it's simple, and you're going to see a bunch of funny things happening. SENATOR DONLEY responded, you mean candidates giving money to other people to give back to them? SENATOR LEMAN replied, no. You're going to see a bunch of people buying insurance for their campaign by putting money into that account thirty days before, whether or not they intend to use it. SENATOR DONLEY stated, at least people would know it, and you wouldn't get the last ten days, $50,000.00 scenario. Number 260 SENATOR LEMAN thinks they would just want to put a dollar limit on it: anything over a certain amount. He thinks it's fairly complex. SENATOR DONLEY suggested, "personal contributions can't exceed $5,000.00 after the twenty-first day. MR. CHENOWETH added, "ahead of the election." SENATOR DONLEY replied, yes. MR. CHENOWETH asked, could you give $40,000.00 ahead of twenty-one days out, but nothing after twenty-one? SENATOR DONLEY replied, yes. CHAIRMAN SHARP added, once you've exceeded $5,000.00, you couldn't contribute anything more after the thirty-day filing. Number 230 SENATOR LEMAN suggested that if an amendment is made, they specify "anything in excess of $5,000.00". That would allow for fairly small contributions. SENATOR DONLEY stated, that's the way it's written in Washington, and that's reasonable. The only difference would be we would have the thirty-day reporting period, instead of a twenty-one day period. CHAIRMAN SHARP stated then that would be a $5,000.00 total maximum on contributions and loans. SENATOR LEMAN added that candidates could contribute more than $5,000.00, they would just need to report anything in excess of $5,000.00 at least thirty days before the election. CHAIRMAN SHARP clarified, once a candidate reaches the $5,000.00 threshold, they cannot contribute any more after the thirty-day reporting deadline. SENATOR DONLEY stated then, if someone had only contributed $2,000.00 or $3,000.00, then they could still contribute $1,000.00. He thinks that's reasonable, because that's not really buying the election. Number 213 CHAIRMAN SHARP asked if anyone had a problem with that conceptual amendment. Hearing none, the amendment is adopted. SENATOR DUNCAN stated he had a conforming amendment on page 7, line 9. He suggested changing the language to read, "$1,000.00 per election district times the number of years of the term." That is basically the same language used later on. CHAIRMAN SHARP doesn't think it's quite the same as the other area where that language was used. This is a one-time expense for a campaign, not a four-year term for office expense. SENATOR DUNCAN states, but it's for a senate campaign where the district is twice as big. He understands what the chairman is saying. But Senator Duncan stated he's just trying to get to the $2,000.00 for the house and $4,000.00 for the senate. How would you do that? CHAIRMAN SHARP hearing no objections, stated that amendment was approved. Number 158 SENATOR DONLEY asked Mr. Chenoweth about the U.S. Supreme Court Decision that affected the disclosure statutes. He asked if SB 191 might not be consistent with existing law. It seems to him like SB 191 might be squarely unconstitutional. CHAIRMAN SHARP asked Senator Donley what part of the bill he was looking at. SENATOR DONLEY replied he's looking at page 25. The U.S. Supreme Court says the First Amendment of the U.S. Constitution prohibits governments from restricting free speech to the extent that you require people to disclose authorship of political materials. The specific case had to do with a flyer involving a ballot proposition. He thinks this is unconstitutional. CHAIRMAN SHARP offered that there may be a lot of items in SB 191 that are unconstitutional. He does not know that the committee is there to solve the constitutionality of the petition. MR. CHENOWETH stated they did go back in to the bill to make an exception based upon the MacEntire Decision. One of the places we made it was Section 14. He thinks it is drawn to reflect the concept involved in the MacEntire Decision. What they did not do, and perhaps needs to be done, is put an exception in at the point which Senator Donley noted on page 25, so that there is recognition of the exception so the campaign misconduct of the criminal statute only provides when it ought to apply: that is when the individual is required elsewhere in the bill to print the "paid for by" legend. So we are not inferring that someone has to do it in all cases to avoid criminal prosecution, that there is an exception based upon the exception identified in MacEntire. If that's a satisfactory approach to the committee, he can try his hand at that. SENATOR DONLEY stated that's the least we ought to do. He thinks the whole thing is constitutionally infirm. CHAIRMAN SHARP stated he has no problem with that. Number 090 SENATOR LEMAN asked if everywhere 33 1/3% appears, on page 5 and page 24, that will be 50%. MR. CHENOWETH responded he has been asked to prepare an amendment that would restore 50%. It is not an amendment that has been before this committee. SENATOR LEMAN asked if the committee should not adopt that now. Would that be easier for Mr. Chenoweth? MR. CHENOWETH replied, certainly. It is not there, however, where they sought to change it. His understanding is that the request was made by the APOC, and the error was on his part. They seem to be supportive of the change made in 050. But what they do not want to see changed is the change made in the definition of group on page 24, lines 7 and 15, which he had mistakenly changed. SENATOR LEMAN offered an amendment on page 24 to change 33 1/3% to 50%. CHAIRMAN SHARP asked if there was any objection. Hearing none, he stated the amendment was adopted. Number 060 SENATOR LEMAN asked why, on page 5, the same thing would not be true. How does that particular section differ? MR. CHENOWETH responded he does not have an explanation for Senator Leman. He can only say that the APOC wanted the change there, and he made it in the wrong place. BROOKE MILES, Alaska Public Offices Commission, stated the commission's position is one, what a controlled group is. A controlled group is a group controlled by the candidate. In that scenario, a contribution to a controlled group is the same as a contribution to the candidate. So the commission didn't want that reduced to only 33 1/3%. The language on page 5, line 8 concerns a naming convention for groups. It was the commission's position that if the group was going to be spending 1/3 of its' money on behalf of one candidate, to have the candidate's name be part of the group's name would provide the public more notice of what that group is about. TAPE 96-22, SIDE A 001 CHAIRMAN SHARP asked for a technical amendment on page 5, lines 13 and 14: who may make contributions... MR. CHENOWETH interjected he will fix it up to pick up a reference to "political party" or eliminate it to do what is necessary, because it is inconsistent with what is allowed later in 070. CHAIRMAN SHARP asked if there are any other comments or suggested amendments by committee members. Hearing none, he asked the pleasure of the committee. Number 013 SENATOR RANDY PHILLIPS made a motion to discharge CSSB 191(STA), with accompanying fiscal notes, from the Senate State Affairs Committee with individual recommendations. CHAIRMAN SHARP stated SB 191 has referrals to the Judiciary and Finance Committees. Number 025 CHAIRMAN SHARP, hearing no objection, stated SB 191 was discharged from the Senate State Affairs Committee. The committee staff-person was thanked for her work on the bill. Number 035 CHAIRMAN SHARP adjourned the Senate State Affairs Committee meeting at 5:12 p.m.