Legislature(2023 - 2024)BUTROVICH 205
01/19/2024 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB28 | |
| SB17 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 28 | TELECONFERENCED | |
| + | SB 17 | TELECONFERENCED | |
SB 17-CAMPAIGN CONTRIBUTIONS
2:00:15 PM
CHAIR CLAMAN announced the consideration of SENATE BILL NO. 17
"An Act relating to political contributions; and providing for
an effective date."
[This is the first hearing of this bill in the Senate Judiciary
Committee.]
CHAIR CLAMAN invited Senator Kawasaki and Mr. Hayes to identify
themselves for the record and begin their remarks.
2:01:22 PM
SENATOR SCOTT KAWASAKI, District P, Alaska State Legislature,
Fairbanks, Alaska, sponsor of SB 17, presented the following
sponsor statement:
[Original punctuation provided.]
Sponsor Statement
Alaska has long regulated campaign contributions and
limited the amount that can be donated to political
campaigns. Following the VECO scandal in 2006, the
people of Alaska approved a ballot initiative that
established strict contribution limits. Part of the
argument behind that initiative was that limiting the
amount of money candidates can raise would curb the
type of corruption seen during VECO.
In 2019 the 9th Circuit Court of Appeals overturned
some of Alaska's political contribution limits in the
case Thompson v. Hebdon. The Thompson decision struck
down the limits, including the limits on contributions
from individuals, nongroup entities, nonpolitical
party entities, and joint campaigns for Governor and
Lieutenant Governor.
This bill establishes new campaign contribution limits
compliant with the Thompson decision. It increases
these limits such that they are nearly indexed for the
rate of inflation between 2006 and 2023. The limits
are rounded to the nearest hundred. Here are the new
limits:
• Individual contribution limits from $500 to $700
• Nonpolitical party group limits from $1,000 to
$1,400
• Nongroup entity limits from $1,000 to $1,400
• Individual limits to a joint candidacy for Governor
and Lieutenant Gov. from $1,000 to $1,400
• Group limits to a joint candidacy for Governor and
Lieutenant Gov. from $2,000 to $2,800
The Thompson decision also stipulated that
contribution limits must be indexed for inflation. SB
17 requires APOC to index contribution limits for
inflation by regulation starting in 2024 and after
subsequent terms of four years.
I respectfully urge your support for SB17 to help
limit corruption by establishing new campaign
contribution limits. Please reach out to my office
with any questions or concerns.
2:04:47 PM
SENATOR KAUFMAN asked how the VECO Corporation scandal was
connected to campaign contribution limits.
SENATOR KAWASAKI replied that the public has embraced the
concept of having campaign contribution limits. He said that
most people would probably be astounded to hear that Alaska used
to have a $500 limit, adding most of the contributors he talks
to donate in the $10 range. People are pretty shocked to learn
how much money can get into campaigns, especially at the federal
level. He said that most competitive congressional races are at
the $1 million to $1.5 million level, which does not seem like a
practical number for most of the public. He said that the VECO
scandal was something that just happened. He asserted that the
public prefers to see some limitations placed on the amount of
money in individual elections and transparency in the amount
involved.
2:06:18 PM
SENATOR KAUFMAN shared an issue of concern. He explained that
contributions to candidates are limited, and they are all fairly
transparent. The State requires candidates to adhere to
extensive reporting requirements for contributions and expenses
through the Alaska Public Offices Commission (APOC) system,
which is rather strident in its reporting requirements. It
tabulates everything a candidate takes in and spends against
either the political organization or the candidate. He compared
the reporting requirements of APOC to independent expenditure
requirements, stating they do not have that transparency. He
asked whether SB 17 addresses this issue.
SENATOR KAWASAKI answered SB 17 only addresses the Thompson v.
Hebdon case. It deals with individual limits, political parties,
and political action committees. He said a different part of the
law governs independent expenditure groups.
2:07:31 PM
SENATOR KAUFMAN said that while this limits the transparent
reporting process for candidates, it leaves the obscure,
independent expenditure process wide open. He pointed out this
creates a very asymmetrical playing field.
SENATOR KAWASAKI reassured the committee that SB 17 does not
impose limitations on transparency. According to APOC, the level
of transparency remains unchanged. Candidates will continue to
report contributions over a certain amount and for:
- the 30-day filing,
- the 10-day filing, and
- the 24-hour report if the contribution is over a $500
aggregate.
These requirements remain in effect regardless of whether SB 17
passes. If the bill passes, it will restrict the total
contribution amount specified in the sponsor statement.
2:08:29 PM
SENATOR KAUFMAN clarified that his intention was not to suggest
that this bill limits transparency. He clarified that it limits
funding going into the most transparent system that Alaska has.
The APOC reporting requirements have a higher transparency
threshold compared to the independent expenditure process. He
asked about the transparency imbalance between the two reporting
requirements.
SENATOR KAWASAKI replied that he is willing to look into the
issue further. He said the public wants to know where every
campaign dollar comes from and whether the money comes from
outside or inside the state. Since 2019, different versions of
this bill have had various types of filing requirements. This
bill is more simplified.
2:09:36 PM
SENATOR TOBIN drew attention to slide 4 of the presentation "SB
17 Campaign Contributions." It indicates the process of limiting
campaign contributions dates back to 1995. She asked about the
contribution limits in SB 17 and their likelihood of
withstanding further litigation.
SENATOR KAWASAKI replied that he took the $500 individual
contribution limit and indexed it, based on inflation, over time
since 2006. He expressed his belief the dollar amount is roughly
accurate.
2:10:42 PM
SENATOR KIEHL drew attention to slide 4 of the presentation. He
conjectured that while Alaskans would agree to lower the
campaign contribution limit to $50 if asked the question, courts
ask a different question to examine contribution limits. The
question is not whether people want to enrich themselves with
politics. He expressed his belief the question has to do with
quid pro quo corruption or its appearance. He asked the sponsor
to elaborate on the difference between contributions where an
individual hands a candidate a direct, discreet amount of money
versus something indirect, disconnected, and uncoordinated like
the independent expenditures Senator Kaufman mentioned.
SENATOR KAWASAKI answered that independent expenditure campaigns
exist and are legal under current law, but they cannot
coordinate with the candidate they support. They are not allowed
to work with the candidate's campaign committee.
2:12:32 PM
SENATOR KIEHL asked whether he agreed with the viewpoint that
the risk of quid pro quo corruption associated with
contributions diminishes if the donor cannot coordinate with the
candidate. He asked whether this viewpoint is relevant as a
defensible approach in court.
SENATOR KAWASAKI replied yes, that is a fairly definitive
difference. He revisited a prior question concerning attachments
to independent expenditure campaigns; he said he would like to
this happen. He expressed a mutual concern with the public to
know where the source of donated dollars originated. He said
Alaska has had sunshine laws and transparency laws on third-
party groups. For instance, groups that advocate for or against
an initiative must disclose their top three donors. He stated
that although SB 17 does not deal specifically with these
issues, he is open to discussions.
2:13:54 PM
CHAIR CLAMAN asked why SB 17 proposes annual limits rather than
campaign limits.
SENATOR KAWASAKI replied that he did not draft the bill that
way. He expressed his belief that a spokesperson for the ballot
initiative may want to speak to the question.
CHAIR CLAMAN asked about the policy rationale behind opting for
annual limits over campaign limits in drafting the bill. He
highlighted that federal campaigns consider campaign limits
rather than annual limits.
SENATOR KAWASAKI answered he drafted the legislation four years
ago. He expressed familiarity with Alaska's typical contribution
deadlines and said that he had not taken campaign limits into
account. He said that Mr. Hayes, his aide, has a brief
presentation on SB 17.
CHAIR CLAMAN invited Mr. Hayes to begin.
2:15:53 PM
JOE HAYES, Staff, Senator Scott Kawasaki, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
and delivered a presentation on SB 17. The sectional analysis
follows:
[Original punctuation provided.]
Sectional Analysis
Section 1. AS 15.13.070(b)
This amends the statute by increasing the individual
contribution limit from $500 to $700. This applies to
individuals donating to nongroup entities, candidates,
write-in candidates, or nonpolitical party groups.
Section 2. AS 15.13.070(c)
Amends the statute by increasing the contribution
limit for groups that are not political parties from
$1,000 to $1,400. This applies to nonpolitical party
groups donating to a candidate, a write-in candidate,
to another group, a nongroup entity, or to a political
party.
Section 3. AS 15.13.070(f)
This section amends the statute by increasing the
amount nongroup entities can donate from $1,000 to
$1,400. This applies to nongroup entities donating to
another nongroup entity, to candidates, to write-in
candidates, to groups, or to political parties.
Section 4. AS 15.13.070(g)
This amends the statute by increasing the amount
individuals and groups can donate to joint
Gubernatorial and Lieutenant Gubernatorial campaigns.
It increases the amount individuals can donate from
$1,000 to $1,400, and groups from $2,000 to $2,800.
Section 5. AS 15.13.070(h)
This section adds a new subsection that indexes these
campaign limits to inflation. Starting in 2024, and
every term of four years thereafter, the commission
shall by regulation adjust these contribution limits
to account for inflation.
Section 6.
Provides this bill with an immediate effective date.
2:17:57 PM
MR. HAYES presented a slideshow titled "Senate Bill 17 Campaign
Contributions."
MR. HAYES moved to slide 2:
Increasing the Limits on Campaign Contributions
Section 1:
Individuals: $500 >> $700 per year
Section 2:
A non political party group: $1000 >> $1,400 per year
Section 3:
Nongroup entity (such as XXX): $1000 >> $1,400 per
year
Section 4
Concerning Governor and Lt. Governor campaigns:
Individuals $1,000 >> $1,400;
Groups $2,000 >> $2,800 per year
MR. HAYES explained the calculation method used to determine
contribution limits on slide 3:
Effective Date and CPI Increases
Section 5:
Beginning in the first quarter of calendar year 2024
and every four years thereafter, the commission shall,
by regulation, adjust the contribution limitations set
out in this section by a percentage equal to the
percentage of increase over the preceding four-year
period in all items of the Consumer Price Index for
all urban consumers for Anchorage, Alaska, rounded to
the nearest $10 increment.
2:18:29 PM
MR. HAYES reviewed a brief history of campaign limits on slides
4 and 5:
A Brief History
• In 1995, citizens filed an initiative that
included lowering the limits on individual
campaign contributions from $1000 to $500.
• The legislature heard the call of the people
and enacted a new law before the initiative
came to fruition. The stated purpose of the new
law was "to restore the public's trust in the
electoral process and to foster good
government."
• Years later, the legislature raised the limit
back to $1,000.
• In 2006, the people once again filed an
initiative, and this time it came to be, lowering
the limits again to $500 with 73% support.
• In 2021, the U.S. Ninth Circuit Court of Appeals
ruled the limit unconstitutional.
• The Court argued that because $500 was
unusually low, applied to all state races, and
was not indexed with inflation to grow over
time, that it infringed on donors' freedom of
speech and gave an unfair advantage to
incumbents.
• In the aftermath of the decision, Alaska's
Public Office Commission set the individual-
to-candidate limit at $1,500.
SB 17's ceilings would roughly track inflation for
what Alaskans approved in 2006, though are a bit
higher.
2:20:01 PM
MR. HAYES read slide 6:
How it Could Survive Legal Challenge
To review, The Ninth Circuit Court argued that, since
$500 was unusually low, applied to all state races,
and was not indexed with inflation to grow over time,
it infringed on donors' freedom of speech and gave an
unfair advantage to incumbents.
SB 17's limits are not unusually low and are indexed
with inflation to grow over time. Thus, it follows
from that ruling that these would survive a challenge
made on the same grounds as the last one.
In the 40 states that do have limits on contributions
to legislative candidates, the average is $2,848 per
election, ranging from $180 in Montana to $13,704.
Ours would be slightly higher or lower depending on
the source of the contributionnot unusual.
2:20:54 PM
MR. HAYES moved to slide 7:
Reviewing the Increases
Section 1:
Individuals: $500 >> $700 per year
Section 2:
A non-political party group: $1000 >> $1,400 per year
Section 3:
Nongroup entity (such as XXX): $1000 >> $1,400 per
year
Section 4
Concerning Governor and Lt. Governor campaigns:
Individuals $1,000 >> $1,400;
Groups $2,000 >> $2,800 per year
2:21:08 PM
MR. HAYES read slide 8:
You may be familiar with some related cases
In McCutcheon v. Federal Election Commission (2014),
the court held that states cannot place limits on
aggregate contributions (the total of all
contributions to all candidates) by individuals or
groups. Existing limits on per-candidate contributions
were not addressed and thus not changed. (NCSL)
In Citizens United v. Federal Election Commission
(2010), independent expenditures were at hand. SB 17
would not limit those.
2:21:43 PM
MR. HAYES moved to slides 10 11 pertaining to definitions:
Definition of Nongroup entities
15.13.400
(14) "nongroup entity" means a person, other than an
individual, that takes action the major purpose of
which is to influence the outcome of an election, and
that
(A) cannot participate in business activities;
(B) does not have shareholders who have a claim on
corporate earnings; and
(C) is independent from the influence of business
corporations.
"Group that is not a political party"
15.13.400
(9) "group" means (A) every state and regional
executive committee of a political party;
(B) any combination of two or more individuals acting
jointly who organize for the principal purpose of
influencing the outcome of one or more elections and
who take action the major purpose of which is to
influence the outcome of an election; a group that
makes expenditures or receives contributions with the
authorization or consent, express or implied, or under
the control, direct or indirect, of a candidate shall
be considered to be controlled by that candidate; a
group whose major purpose is to further the
nomination, election, or candidacy of only one
individual, or intends to expend more than 50 percent
of its money on a single candidate, shall be
considered to be controlled by that candidate and its
actions done with the candidate's knowledge and
consent unless, within 10 days from the date the
candidate learns of the existence of the group the
candidate files with the commission, on a form
provided by the commission, an affidavit that the
group is operating without the candidate's control; a
group organized for more than one year preceding an
election and endorsing candidates for more than one
office or more than one political party is presumed
not to be controlled by a candidate; however, a group
that contributes more than 50 percent of its money to
or on behalf of one candidate shall be considered to
support only one candidate for purposes of AS
15.13.070, whether or not control of the group has
been disclaimed by the candidate; and
(C) any combination of two or more individuals acting
jointly who organize for the principal purpose of
filing an initiative proposal application under AS
15.45.020 or who file an initiative proposal
application under AS 15.45.020; I should repeat that
this law would not apply to independent expenditures.
2:21:55 PM
CHAIR CLAMAN invited questions from committee members.
2:21:59 PM
SENATOR TOBIN drew attention to slide 3 and asked why the
Consumer Price Index (CPI) for Anchorage was selected for
calculating the contribution limit when the cost-of-living
disparity between urban and rural districts is rather high.
SENATOR KAWASAKI replied that Anchorage is the only place in
Alaska where the CPI is consistently calculated. He said the
Fairbanks City Council uses it for its labor contracts. He
acknowledged that it is probably not the best measure, but it is
the most consistent information gathered and evaluated.
2:23:11 PM
SENATOR TOBIN drew attention to slide 6 and asked three
questions:
1. The slide indicates that $500 is an unusually low
contribution limit. She asked about potential legal
implications based on the use of this figure.
2. She sought clarification about whether per election, in the
3rd paragraph, means a combined total for state and
gubernatorial elections.
3. The 3rd paragraph indicates that among the 40 states with
contribution limits, the range spans from $180 to $13,704. She
asked what the calculated average for Alaska is and where it
falls in this range.
SENATOR KAWASAKI said he would do some calculations and get back
to the committee.
2:25:12 PM
SENATOR KAUFMAN reported that the U.S. Senate and House of
Representatives campaign finance limits are $3300 per election.
He contended that the lieutenant governor and governor have the
same burden in mounting a statewide campaign as those running
for a U.S. Senate or House seat. He questioned why their
contribution limits are a third below those running for a U.S.
Senate or House seat. He suggested defaulting to the federal
limits, which are already inflation-adjusted.
SENATOR KAWASAKI replied that the state has always had limits
different from the federal limits. He said that he understood
the elements of running a statewide campaign but opined these
were distinctly different races.
SENATOR KAUFMAN suggested further discussion offline. He
expressed the effort and cost associated with the races are
aligned.
2:27:30 PM
CHAIR CLAMAN opened public testimony on SB 17.
2:27:52 PM
PAT RACE, representing self, Juneau, Alaska, testified in
support of SB 17. He addressed a previous question about the
VECO scandal, stating that the VECO scandal was not a one-time
incident. It was a long-running scandal. Bill Allen illegally
donated to campaigns under his employees' names and was found
guilty of that. He contributed about $41,000 through 415
employees. The idea of campaign limits is tied directly to the
history of the VECO scandal.
MR. RACE clarified that the ballot proposition mentioned above
failed to get enough signatures in time for this election.
However, it continues to collect signatures and will go on the
ballot if the legislature does not act. He recommended the
legislature act on this matter. He said he has retired judges,
legislators, and his mom out gathering signatures in the cold.
He expressed his belief that this is work they should not have
to do. It is work the legislature should do inside the Capitol.
Seventy-three percent of Alaskan voters passed campaign
contribution limits in 2006. Voters spoke in 2006 and the
initiative and signature-gathering process should not be
reoccurring. Legislators should establish campaign contribution
limits this year.
MR. RACE changed focus to federal rules, asserting these rules
create a cloudy miasma of shadowy dark money donors. He pointed
out that the problem of not having campaign limits is that money
wins elections. He said he is not married to any particular
number and trusts the legislature to decide on a good
contribution limit.
2:30:50 PM
JIM SYKES, representing self, Palmer, Alaska, testified in
support of SB 17. Alaskans like small limits, and it is a good
idea to have contribution limits. Alaskans do not like outside
money in state politics. He expressed his belief that there is
less bad political influence with limits, and most Alaskans will
support it.
2:32:02 PM
CHAIR CLAMAN closed public testimony on SB 17.
CHAIR CLAMAN held SB 17 in committee.