Legislature(2017 - 2018)BUTROVICH 205

01/31/2017 03:30 PM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 1 APPROP: 2016 PFD SUPPLEMENTAL PAYMENT TELECONFERENCED
Moved CSSB 1(STA) Out of Committee
-- Testimony <Invitation Only> --
+= SB 2 2016 PFD SUPPLEMENTAL PAYMENT TELECONFERENCED
Moved SB 2 Out of Committee
-- Testimony <Invitation Only> --
*+ SB 5 POLITICAL CONTRIBUTION LIMITS/PROHIBITION TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                        January 31, 2017                                                                                        
                           3:30 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Mike Dunleavy, Chair                                                                                                    
Senator David Wilson                                                                                                            
Senator Cathy Giessel                                                                                                           
Senator John Coghill                                                                                                            
Senator Dennis Egan                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 5                                                                                                               
"An  Act  prohibiting  groups controlled  by  a  legislator  from                                                               
soliciting  and accepting  contributions or  from making  certain                                                               
contributions  and  expenditures  during  a  regular  or  special                                                               
legislative session;  and prohibiting some lobbyists  from making                                                               
campaign contributions to certain groups."                                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 1                                                                                                               
"An Act making a special  appropriation from the earnings reserve                                                               
account  for  the  payment  of   permanent  fund  dividends;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED CSSB 1(STA) OUT OF COMMITTEE                                                                                       
                                                                                                                                
SENATE BILL NO. 2                                                                                                               
"An  Act  increasing  the  amount  of  the  2016  permanent  fund                                                               
dividend  and  directing  the  Department of  Revenue  to  pay  a                                                               
supplemental dividend to eligible  individuals; and providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
     - MOVED SB 2 OUT OF COMMITTE                                                                                               
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 5                                                                                                                    
SHORT TITLE: POLITICAL CONTRIBUTION LIMITS/PROHIBITION                                                                          
SPONSOR(s): SENATOR(s) MEYER                                                                                                    
                                                                                                                                
01/09/17       (S)       PREFILE RELEASED 1/9/17                                                                                
01/18/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/17       (S)       STA, JUD                                                                                               
01/31/17       (S)       STA AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 1                                                                                                                    
SHORT TITLE: APPROP: 2016 PFD SUPPLEMENTAL PAYMENT                                                                              
SPONSOR(s): SENATOR(s) DUNLEAVY                                                                                                 
                                                                                                                                
01/09/17       (S)       PREFILE RELEASED 1/9/17                                                                                
01/18/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/17       (S)       STA, FIN                                                                                               
01/24/17       (S)       STA AT 3:30 PM BUTROVICH 205                                                                           
01/24/17       (S)       Heard & Held                                                                                           
01/24/17       (S)       MINUTE(STA)                                                                                            
01/28/17       (S)       STA AT 10:00 AM BUTROVICH 205                                                                          
01/28/17       (S)       Heard & Held                                                                                           
01/28/17       (S)       MINUTE(STA)                                                                                            
01/31/17       (S)       STA AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 2                                                                                                                    
SHORT TITLE: 2016 PFD SUPPLEMENTAL PAYMENT                                                                                      
SPONSOR(s): SENATOR(s) DUNLEAVY                                                                                                 
                                                                                                                                
01/09/17       (S)       PREFILE RELEASED 1/9/17                                                                                
01/18/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/17       (S)       STA, FIN                                                                                               
01/24/17       (S)       STA AT 3:30 PM BUTROVICH 205                                                                           
01/24/17       (S)       Heard & Held                                                                                           
01/24/17       (S)       MINUTE(STA)                                                                                            
01/28/17       (S)       STA AT 10:00 AM BUTROVICH 205                                                                          
01/28/17       (S)       Heard & Held                                                                                           
01/28/17       (S)       MINUTE(STA)                                                                                            
01/31/17       (S)       STA AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                              
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR KEVIN MEYER                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SB 5, explained the bill's                                                                     
intent.                                                                                                                       
                                                                                                                                
EDRA MORLEDGE, Staff                                                                                                            
Senator Meyer                                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided an overview of SB 5.                                                                             
                                                                                                                                
JERRY BURNETT, Deputy Commissioner                                                                                              
Alaska Department of Revenue                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Addressed the fiscal note for SB 2.                                                                       
                                                                                                                                
GINA RITACCO, Staff                                                                                                             
Senator Mike Dunleavy                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Reviewed SB 1 and SB 2.                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:30:30 PM                                                                                                                    
CHAIR  MIKE DUNLEAVY  called the  Senate  State Affairs  Standing                                                             
Committee meeting  to order at 3:30  p.m. Present at the  call to                                                               
order were  Senators Giessel, Wilson,  Egan, and  Chair Dunleavy.                                                               
Senator Coghill arrived shortly thereafter.                                                                                     
                                                                                                                                
3:30:50 PM                                                                                                                    
CHAIR DUNLEAVY reviewed the committee's agenda.                                                                                 
                                                                                                                                
                                                                                                                                
         SB 5-POLITICAL CONTRIBUTION LIMITS/PROHIBITION                                                                     
                                                                                                                                
3:31:09 PM                                                                                                                    
CHAIR DUNLEAVY announced the consideration  of SB 5 and asked for                                                               
a motion to adopt the proposed committee substitute (CS).                                                                       
                                                                                                                                
3:31:22 PM                                                                                                                    
SENATOR GIESSEL  moved to adopt the  work draft CS for  SB 5, 30-                                                               
LS0112\O, as the working document.                                                                                              
                                                                                                                                
3:31:41 PM                                                                                                                    
CHAIR DUNLEAVY objected for discussion purposes.                                                                                
                                                                                                                                
3:31:54 PM                                                                                                                    
SENATOR KEVIN MEYER,  Alaska State Legislature, sponsor  of SB 5,                                                               
explained that the  bill's intent is to  eliminate the appearance                                                               
of  corruption  in  the  campaign-finance   system  in  order  to                                                               
maintain  and  keep  the  public's  trust.  In  1996  the  Alaska                                                               
Legislature passed sweeping campaign  finance reforms in response                                                               
to  actual and  apparent  corruption. One  purpose  was to  limit                                                               
soft-money  contributions  from  lobbyists and  special  interest                                                               
groups. The  1996 Act  included the  following statement:  "It is                                                               
the  purpose  of  this  Act   to  substantially  revise  Alaska's                                                               
campaign finance laws  in order to restore the  public's trust in                                                               
the electoral process and to foster good government."                                                                           
                                                                                                                                
SENATOR   MEYER  explained   that  lobbyists'   contributions  to                                                               
candidates  were  limited  to  only  those  candidates  from  the                                                               
district from which the lobbyist is  allowed to vote; this was to                                                               
allow  individuals to  exercise  their first  amendment right  to                                                               
support a  political candidate within their  voting district, but                                                               
not to influence  other elections throughout the  state. What was                                                               
not  considered  in  1996  were  contributions  by  lobbyists  to                                                               
political  action groups  (PACs)  controlled by  a legislator  or                                                               
candidate; SB 5 aims to address that loophole.                                                                                  
                                                                                                                                
He  provided  examples  of  how   a  lobbyist  could  potentially                                                               
influence decisions  by sitting  legislators on which  bills will                                                               
be heard in a committee, scheduled  for a floor vote, or even how                                                               
a legislator votes  on a particular bill. He concluded  that SB 5                                                               
will close  the loophole that  allows lobbyists to  contribute to                                                               
PACs  controlled  by  a  legislator or  candidate  and  places  a                                                               
restriction  on  when  these  groups   can  engage  in  political                                                               
fundraising.                                                                                                                    
                                                                                                                                
He summarized that  the bill aims to make raising  money for PACs                                                               
similar  to  what  it  is  for  candidates  running  for  office.                                                               
Legislators cannot  accept money  during the session,  nor accept                                                               
money  from   lobbyists  that   live  outside   the  legislator's                                                               
district.                                                                                                                       
                                                                                                                                
CHAIR DUNLEAVY  requested that Ms.  Morledge explain  the changes                                                               
in the bill.                                                                                                                    
                                                                                                                                
3:36:37 PM                                                                                                                    
EDRA MORLEDGE,  Staff, Senator  Meyer, Alaska  State Legislature,                                                               
Juneau,  Alaska,  explained that  SB  5  prohibits soliciting  or                                                               
accepting  contributions  and  prohibits making  expenditures  or                                                               
contributions during  the legislative session by  groups that are                                                               
controlled  by  a  legislator  or   a  candidate  for  the  state                                                               
legislature. The  bill also  limits the  ability of  lobbyists to                                                               
contribute to those groups.                                                                                                     
                                                                                                                                
She detailed that Section 1 places a restriction on the                                                                         
solicitation or acceptance of contributions. The original draft                                                                 
also had the restriction on making contributions and was placed                                                                 
in the wrong section of statute.                                                                                                
                                                                                                                                
Section 2 discusses the prohibited contributions.                                                                               
                                                                                                                                
Section 3 adds a new section to the prohibited contributions and                                                                
places back into the statute the exceptions for lobbyists to                                                                    
make contributions to candidates from their own voting district.                                                                
                                                                                                                                
Section 4 places the limitation on expenditures during the                                                                      
legislative session.                                                                                                            
                                                                                                                                
Section 5 is the definition section. The CS changes a sentence                                                                  
to "unless the context clearly requires otherwise, these                                                                        
definitions apply."                                                                                                             
                                                                                                                                
3:39:22 PM                                                                                                                    
CHAIR DUNLEAVY removed his objection.                                                                                           
                                                                                                                                
3:39:35 PM                                                                                                                    
CHAIR DUNLEAVY found no further  objection and announced that the                                                               
CS for SB 5, version O, was adopted.                                                                                            
                                                                                                                                
CHAIR  DUNLEAVY  asked  if  the  bill  prohibits  lobbyists  from                                                               
donating to a PAC.                                                                                                              
                                                                                                                                
SENATOR MEYER answered yes.                                                                                                     
                                                                                                                                
CHAIR DUNLEAVY  pointed out  that lobbyists  cannot donate  to an                                                               
individual now.                                                                                                                 
                                                                                                                                
SENATOR MEYER replied yes.                                                                                                      
                                                                                                                                
CHAIR DUNLEAVY detailed that lobbyists  currently can donate to a                                                               
PAC  controlled by  an  individual and  the  bill would  prohibit                                                               
that. He  added that the  bill would  also prohibit the  PAC from                                                               
raising  funds during  the session,  but  a PAC  controlled by  a                                                               
legislator can raise funds after the session.                                                                                   
                                                                                                                                
SENATOR  MEYER answered  yes, but  noted that  a lobbyist  cannot                                                               
contribute to a PAC even after session is over.                                                                                 
                                                                                                                                
SENATOR GIESSEL  noted in Section  3 that an  individual lobbyist                                                               
cannot contribution  unless they  live in  the district  in which                                                               
the individual is eligible to vote. She requested clarification.                                                                
                                                                                                                                
MS.  MORLEDGE answered  that  Section 3  in the  CS  is the  same                                                               
language as in  current law that allows a  lobbyist to contribute                                                               
to  a   legislator.  She  added   that  Section  2   prohibits  a                                                               
contribution to a group controlled by a legislator or candidate.                                                                
                                                                                                                                
SENATOR WILSON asked for clarification  on the registered address                                                               
of a PAC.                                                                                                                       
                                                                                                                                
SENATOR MEYER deferred to Ms. Morledge  to answer. He said he has                                                               
concerns about that because it would  prohibit a spouse to have a                                                               
PAC and  receive donations from  lobbyists. He suggested  that an                                                               
open-ended  full disclosure  might  work better  due  to all  the                                                               
possible loopholes.                                                                                                             
                                                                                                                                
3:43:11 PM                                                                                                                    
SENATOR COGHILL joined the committee meeting.                                                                                   
                                                                                                                                
MS. MORLEDGE referred  to page 5 of the CS  beginning on line 24,                                                               
the definition of  "group" is provided and it also  states when a                                                               
group is considered controlled by a candidate.                                                                                  
                                                                                                                                
CHAIR DUNLEAVY  asked if the  bill impacts the situation  where a                                                               
legislator has a PAC whose purpose is informational only.                                                                       
                                                                                                                                
SENATOR MEYER  replied that it  is treated  the same as  any PAC;                                                               
the  legislator would  not be  able  to accept  funds during  the                                                               
session.                                                                                                                        
                                                                                                                                
CHAIR DUNLEAVY  said the  purpose of  the PAC  has nothing  to do                                                               
with whether they can raise money or not.                                                                                       
                                                                                                                                
MS. MORLEDGE answered correct.                                                                                                  
                                                                                                                                
CHAIR DUNLEAVY asked if the prohibitions  would be in place for a                                                               
legislator who is a member of a PAC.                                                                                            
                                                                                                                                
MS. MORLEDGE referred back to  the definition of the "group." She                                                               
said unless  the legislator is in  control of the group  it would                                                               
not prohibit their activity within a PAC.                                                                                       
                                                                                                                                
3:46:53 PM                                                                                                                    
CHAIR  DUNLEAVY announced  he would  hold SB  5 in  committee for                                                               
further consideration.                                                                                                          
                                                                                                                                
3:47:04 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
                                                                                                                                
           SB 1-APPROP: 2016 PFD SUPPLEMENTAL PAYMENT                                                                       
                                                                                                                                
3:48:19 PM                                                                                                                    
CHAIR DUNLEAVY called  the committee back to  order and announced                                                               
the  consideration of  SB 1.  He noted  that the  committee heard                                                               
public testimony on SB 1 at the previous meeting.                                                                               
                                                                                                                                
3:48:39 PM                                                                                                                    
CHAIR DUNLEAVY closed public testimony.                                                                                         
                                                                                                                                
3:48:50 PM                                                                                                                    
SENATOR  GIESSEL moved  to report  CSSB 1(STA),  version D,  from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
notes.                                                                                                                          
                                                                                                                                
3:49:06 PM                                                                                                                    
CHAIR  DUNLEAVY announced  that  without  objection, CSSB  1(STA)                                                               
moved from the Senate State Affairs Standing Committee.                                                                         
                                                                                                                                
3:49:15 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
                                                                                                                                
               SB 2-2016 PFD SUPPLEMENTAL PAYMENT                                                                           
                                                                                                                                
3:51:20 PM                                                                                                                    
CHAIR DUNLEAVY called  the committee back to  order. He announced                                                               
the consideration  of SB  2. He noted  that public  testimony was                                                               
still open.                                                                                                                     
                                                                                                                                
3:51:50 PM                                                                                                                    
JERRY BURNETT, Deputy Commissioner,  Alaska Department of Revenue                                                               
(DOR),  addressed the  fiscal  note  for SB  2  that indicates  a                                                               
$279,000 operating  cost primarily  for mail.  He added  that the                                                               
amount of  the dividend in  the fiscal  note is $1,030.  He added                                                               
that the  amount of the dividend  would be adjusted to  the total                                                               
appropriation in SB 1.                                                                                                          
                                                                                                                                
He noted that  two issues were not  addressed in SB 2  nor in the                                                               
DOR  fiscal note.  The  Alaska Department  of  Health and  Social                                                               
Services (DHSS)  is not sure  how beneficiaries will  be effected                                                               
and has not brought forward a fiscal note.                                                                                      
                                                                                                                                
He explained  that the second  issue pertained to  the historical                                                               
calculation  for the  felon funds  where the  amount goes  to the                                                               
Department of  Corrections. He detailed that  the calculation for                                                               
felon funds for the $1,022 dividend  in the FY18 budget was $12.4                                                               
million. He  said with  the larger  amount the  calculation would                                                               
have been $25  million. He added that the bill,  as written, does                                                               
not address the supplemental dividend.                                                                                          
                                                                                                                                
He concluded that the next committee  may want to address the two                                                               
issues that he noted.                                                                                                           
                                                                                                                                
CHAIR DUNLEAVY asked Mr. Burnett if he had additional comments.                                                                 
                                                                                                                                
MR. BURNETT  replied that  the appropriation  is contrary  to the                                                               
Governor's  fiscal plan  so everyone  should think  about whether                                                               
that money is needed for  other purposes. The issues he mentioned                                                               
are the only administrative issues.  He added that in response to                                                               
a comment from Chair Dunleavy, there is no intentional delay.                                                                   
                                                                                                                                
CHAIR  DUNLEAVY noted  that  the next  committee  of referral  is                                                               
Senate Finance.                                                                                                                 
                                                                                                                                
SENATOR COGHILL  asked if garnishing the  PFD would be a  part of                                                               
the second issuance, as well.                                                                                                   
                                                                                                                                
MR.  BURNETT  answered  yes  and   noted  the  cost  of  one-time                                                               
garnishment includes 48 hours of programming time.                                                                              
                                                                                                                                
SENATOR COGHILL asked if it was administrative costs.                                                                           
                                                                                                                                
MR. BURNETT replied yes.                                                                                                        
                                                                                                                                
3:57:02 PM                                                                                                                    
CHAIR DUNLEAVY asked if SB 2  is still contrary to the governor's                                                               
fiscal plan.                                                                                                                    
                                                                                                                                
MR.  BURNETT  answered  that  the  budget  documents  before  the                                                               
Legislature are consistent with not paying the second dividend.                                                                 
                                                                                                                                
CHAIR DUNLEAVY noted  that there was a majority vote  in both the                                                               
House and the  Senate for the appropriation last  session and the                                                               
governor  vetoed  it.  SB  2   is  an  attempt  to  restore  that                                                               
appropriation.                                                                                                                  
                                                                                                                                
SENATOR  COGHILL asked  about  contingency  language and  whether                                                               
there is  legal precedent for  passing a bill that  is contingent                                                               
upon another one.                                                                                                               
                                                                                                                                
CHAIR DUNLEAVY deferred to his staff to answer.                                                                                 
                                                                                                                                
3:59:08 PM                                                                                                                    
GINA RITACCO, Staff, Senator  Dunleavy, Alaska State Legislature,                                                               
Juneau, Alaska,  explained that  SB 1  is the  appropriation bill                                                               
for $683,234,813  for a dividend of  about $1,030 for 2016.  SB 2                                                               
is a  directive to DOR to  issue the check immediately.  SB 2 has                                                               
an  effective date  of May  1, 2017,  for both  bills to  pass in                                                               
order to  use FY18 funds. SB  2 also has a  section that provides                                                               
if SB 1 fails, SB 2 is not enacted.                                                                                             
                                                                                                                                
SENATOR COGHILL confirmed that Ms.  Ritacco's review answered his                                                               
previous question.                                                                                                              
                                                                                                                                
MS. RITACCO  explained that the  reason SB  2 directs DOR  to pay                                                               
immediately is  that if it  didn't the appropriation would  go in                                                               
with next  year's dividend,  rather than  as a  supplemental, and                                                               
end up adjusting 2017's dividend amount.                                                                                        
                                                                                                                                
4:01:25 PM                                                                                                                    
SENATOR GIESSEL moved  to report SB 2, version  A, from committee                                                               
with individual recommendations and attached fiscal notes.                                                                      
                                                                                                                                
4:01:36 PM                                                                                                                    
CHAIR DUNLEAVY announced  that without objection, SB  2 moved out                                                               
of Senate State Affairs Standing Committee.                                                                                     
                                                                                                                                
4:01:47 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
4:03:19 PM                                                                                                                    
CHAIR DUNLEAVY  called the committee  back to order  and reviewed                                                               
the next meeting's agenda.                                                                                                      
                                                                                                                                
4:04:12 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair  Dunleavy  adjourned  the  Senate  State  Affairs  Standing                                                               
Committee at 4:04 p.m.                                                                                                          

Document Name Date/Time Subjects
SB 5- Written Testimony Willis.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
SB 5 Version D.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
SB 5 Sponsor Statement.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
SB 5 Sectional Summary.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
SB 5 Contribution Limit Chart.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
SB 5 AS 15.13.400 Group Definition.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
SB 5 Changes from V.D to V.O.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
SB 5 - Fiscal Note.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
SB 5 Comparison V.D & V.O.pdf SSTA 1/31/2017 3:30:00 PM
SB 5
CS for SB 5 Version O.PDF SSTA 1/31/2017 3:30:00 PM
SB 5
SB 1 & SB 2 - Letters of Opposition 02.01.17.pdf SSTA 1/31/2017 3:30:00 PM
SB 1
SB 2
SB 1 & SB 2 - Letters of Support 02.01.17.pdf SSTA 1/31/2017 3:30:00 PM
SB 1
SB 2