04/13/2012 09:00 AM Senate STATE AFFAIRS

         HB 347-USE OF MUNICIPAL FUNDS FOR INITIATIVES                                                                      
                                                                                                                                
Chair  Wielechowski  announced that  the  first  bill before  the                                                               
committee  would be  HB  347,  which would  prohibit  the use  of                                                               
municipal funds  to support  or oppose an  initiative. It  is the                                                               
first  hearing on  the bill  and is  sponsored by  Representative                                                               
Olson.                                                                                                                          
                                                                                                                                
ANNA LATHAM, Staff, Representative  Kurt Olson, introduced HB 347                                                               
on behalf of  the sponsor. She explained that the  bill is an Act                                                               
that prohibits  the use of  municipal funds to support  or oppose                                                               
an initiative proposal filed with  the Lieutenant Governor, or to                                                               
circulate a  petition for a statewide  ballot initiative, without                                                               
approval  by municipal  voters at  an election,  relating to  the                                                               
reporting of certain expenditures  and providing for an effective                                                               
date.                                                                                                                           
                                                                                                                                
She  provided  a sectional  analysis.  Section  1 is  amended  to                                                               
include that  expenditures authorized  by municipal  voters still                                                               
must  be  reported  to  the  commission in  the  same  manner  as                                                               
individuals  required to  report  under AS  15.13.040. Section  2                                                               
amends AS 15.13.145 and adds a  new subsection to read that money                                                               
held  by a  municipality  may be  used to  support  or oppose  an                                                               
initiative proposal  filed with the Lieutenant  Governor under AS                                                               
15.13.020,   or  to   circulate  a   petition  for   a  statewide                                                               
initiative, but  only if the  use of  funds for that  purpose has                                                               
been  approved by  municipal  voters at  an  election. Section  3                                                               
provides an effective date of August 29, 2012.                                                                                  
                                                                                                                                
She related that currently municipalities  can spend thousands of                                                               
dollars  on   consultants  and   paid  signature   collectors  to                                                               
influence  outcome  of the  ballot  initiative.  She provided  an                                                               
example of  quarterly APOC reports from  October through December                                                               
of  2011, which  show that  the North  Slope Borough  contributed                                                               
$25,000,  the Bristol  Bay Borough  contributed  $4,000, and  the                                                               
City of  Valdez contributed $5,000  to the Alaska Sea  Party, the                                                               
group formed to restore coastal  zone management. Although, these                                                               
aren't  particularly large  sums  of  money from  municipalities,                                                               
it's the expenditure of public  funds for special interest groups                                                               
that was the genesis of this bill.                                                                                              
                                                                                                                                
MS.  LATHAM continued  to  say  that although  voters  may be  in                                                               
support of  the ballot initiative,  they may  not be in  favor of                                                               
municipal  funds being  allocated to  special interest  groups to                                                               
finance that initiative as Alaska law currently allows.                                                                         
                                                                                                                                
She  related  that  she requested  information  from  legislative                                                               
research as  to how many  states had enacted  legislation similar                                                               
to HB  347. The ensuing  report showed that  14 out of  20 states                                                               
that were reviewed prohibited the  use of public funds to support                                                               
or oppose an  initiative altogether. She pointed out  that HB 347                                                               
is far less  restrictive and only prohibits  municipal funds from                                                               
being spent  on a statewide  ballot initiative.  Municipal ballot                                                               
initiatives would not be affected.                                                                                              
                                                                                                                                
MS. LATHAM  reported that at  previous hearings,  questions about                                                               
the constitutionality  of the bill arose,  particularly in regard                                                               
to  the First  Amendment. She  maintained  that HB  347 does  not                                                               
infringe  on municipalities'  rights of  free speech.  Government                                                               
entities  have no  independent First  Amendment rights.  She said                                                               
that she has concurred with  Legislative Legal and the Department                                                               
of Law that HB 347 is constitutional.                                                                                           
                                                                                                                                
MS.  LATHAM stated  that the  intent  of HB  347 is  to keep  the                                                               
ballot initiative process fair and  to ensure that the priorities                                                               
of  the  municipality are  the  same  as  the priorities  of  its                                                               
citizens. She thanked the committee for hearing the bill.                                                                       
                                                                                                                                
9:09:22 AM                                                                                                                    
CHAIR WIELECHOWSKI opened public testimony.                                                                                     
                                                                                                                                
KATHY  WASSERMAN, Alaska  Municipal  League  (AML), testified  in                                                               
opposition to HB  347. She said that AML has  been opposed to the                                                               
bill from  the beginning  because it  believes in  protecting the                                                               
ability  of municipalities  to make  their own  decisions at  the                                                               
local level.  She opined that  the municipalities have  the right                                                               
to support  an initiative. She  stated that in  state regulations                                                               
there is a  requirement to have two ordinances  held before money                                                               
is  appropriated.  These  are publicly  noticed  hearings  and  a                                                               
chance for the public to comment.                                                                                               
                                                                                                                                
She gave an example of the  extreme cost of a special election in                                                               
Anchorage if the municipality were  to follow the requirements of                                                               
the bill.                                                                                                                       
                                                                                                                                
She  credited   Representative  Olson  for  listening   to  AML's                                                               
concerns.                                                                                                                       
                                                                                                                                
9:12:03 AM                                                                                                                    
BRUCE  BOTHELO, Mayor,  City and  Borough of  Juneau, and  Chair,                                                               
Alaska Sea  Party, testified  in opposition to  HB 347.  He noted                                                               
that the  sponsor stated that the  focus of the bill  is directed                                                               
at the action the Sea Party  undertook last fall in their efforts                                                               
to  restore coastal  management to  the state  and the  resulting                                                               
support by  three communities  for that  act. The  sponsor called                                                               
the municipalities'  action to appropriate monies  to support the                                                               
initiative, support  for "special interests." Mayor  Bothelo took                                                               
exception  with that  thinking.  He said  the  effort to  restore                                                               
coastal zone  management was a  result of organizations  of which                                                               
all  three  municipalities  are  a  part,  the  Alaska  Municipal                                                               
League, and  the Alaska Council  of Mayors. He questioned  if the                                                               
bill reflects  unease with representative democracy  in the sense                                                               
that  elected  officials  were making  decisions  about  how  the                                                               
resources of the  community, consistent with its  charter, may be                                                               
expended. He suggested that the  bill's model be applied to other                                                               
areas of representative democracy,  such as corporations, so that                                                               
corporate  monies  cannot  be  spent   without  approval  of  the                                                               
shareholders.  He maintained  that the  bill would  prevent local                                                               
governments'  participation in  initiatives, due  to the  cost of                                                               
running elections for appropriations and the timing.                                                                            
                                                                                                                                
9:15:44 AM                                                                                                                    
CHAIR  WIELECHOWSKI  noted  the  arrival of  Senators  Meyer  and                                                               
Kookesh.                                                                                                                        
                                                                                                                                
SENATOR PASKVAN said he liked  Mayor Bothelo's thought process of                                                               
extending the conditions of the bill to private corporations.                                                                   
                                                                                                                                
MS.  LATHAM pointed  out  that the  bill  only affects  statewide                                                               
ballot initiatives.                                                                                                             
                                                                                                                                
CHAIR  WIELECHOWSKI asked  if Ms.  Latham  liked Mayor  Bothelo's                                                               
suggestion.                                                                                                                     
                                                                                                                                
MS. LATHAM replied that the sponsor could consider it.                                                                          
                                                                                                                                
SENATOR PASKVAN  asked if private  corporations have  free speech                                                               
rights under Citizen United. He  asked if the bill would restrict                                                               
the free speech rights of municipalities.                                                                                       
                                                                                                                                
MS. LATHAM  replied that the bill  needs more work in  that area.                                                               
She offered to research that information.                                                                                       
                                                                                                                                
9:18:04 AM                                                                                                                    
CHAIR  WIELECHOWSKI  recessed the  meeting  to  the call  of  the                                                               
chair.                                                                                                                          
                                                                                                                                
[The meeting was not reconvened  and on 4/15/12 the State Affairs                                                               
Committee referral was waived.]