Legislature(2001 - 2002)
04/10/2001 02:00 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 103(FIN)
"An Act relating to election campaigns and legislative
ethics."
JOE BALASH, STAFF, SENATE STATE AFFAIRS COMMITTEE testified
in support of the legislation. He observed that Senate Bill
103 is largely a clean-up bill to address conflicts and
concerns that have arisen in the campaign finance and
legislative ethics statutes. It also incorporates
administrative rulings made by the Alaska Public Offices
Commission (APOC) and informal advice given by the
Legislative Ethics Committee. He noted that the legislation
includes provisions to:
Require a single form for public disclosures.
Treat multiple groups controlled by a single candidate
as a single group for purposes of the contribution
limit.
Eliminate the public office expense term accounts
(POET) reserve mechanism, so that there is a single
POET account for legislators and successful candidates.
Expand the amount of personal property that can be
carried forward after an election and to include
photographs and seasonal greeting cards.
Define contributions to exclude certain services such
as attorney and accounting services, mass mailings by
parties and newsletters to constituents.
Mr. Balash added that changes were made to the use of public
assets and resources for non-legislative purposes, such as:
preparing seasonal greeting cards, transporting personnel
computers, photographs, solicitation and acceptance of
donations for non political charities, writing newsletters,
use of offices before and after session. The legislation
also clarifies the prohibition on the use of public assets
and resources by legislators and legislative employees for
nonlegislative purposes and certain previously prohibited
public political uses. The legislation allows legislators to
give and receive the gift of transportation from one
another.
Co-Chair Mulder observed that there is a focus on advocacy
for constitutional amendments. He maintained that the people
who are the most knowledgeable [legislators] could dissemble
information but would not be able to use their office to
solicit funds. Mr. Balash clarified that they would not be
able to use their office to solicit or accept campaign
contributions, use their phones to call up potential donors,
or use staff to send out [campaign or election] mailings.
They could prepare speeches and ask groups to support the
amendment along with them.
Co-Chair Mulder clarified that legislators could ask support
for constitutional amendments. The legislation only limits
the use of their staff and office [to elicit support for a
constitutional amendment].
Representative John Davies referred to the POET Reserve
Account. Mr. Balash noted that the POET Reserve Account was
created in response to concerns regarding tax implications.
He noted that with the limitations [contained in the
legislation] the POET Account is considered a business
expense, just like any other business expense, for tax
purposes. If the full amount in the POET Account were
carried forward it would not count against the legislator on
their personal income tax. The POET Reserve Account was
removed since there is no threat of taxation.
Representative John Davies questioned if tax status changes
are being made. Mr. Balash explained that there was never a
tax liability on the money. Representative John Davies noted
that the APOC had advised legislators that there were tax
implications.
Mr. Balash noted that changes to the existing POET Account
limitations were made on page 4, lines 24 - 27. The POET
Reserve Account was appealed on page 12, line 24.
Representative Davies referred to page 7 line 10:
communication in form of a newsletter. He observed that he
does not send newsletters in an election year later than
early July. He expressed concern with the allowance of
newsletters in an election year and felt that it would allow
abuse. He recommended limiting the time that newsletters are
allowed when a legislator is up for election and questioned
if the sponsor would support a July 15th deadline. Mr.
Balash observed that many state issues come to the forefront
of voters' minds in the months preceding an election, which
are not present at other times.
Co-Chair Mulder summarized that a newsletter from a
legislator to their constituents would not be a
contribution.
Representative John Davies felt that it would be
inappropriate to use office accounts to send newsletters
close to an election. He maintained that any time a picture
is sent it is a campaign device. He acknowledged that the
legislation might not be the appropriate place to address
his concerns. He suggested that July 15, would be the
appropriate cutoff date.
Co-Chair Mulder stated that he did not disagree with the
point made by Representative Davies.
Representative Davies suggested that there could be
confusion relating to a newsletter as a contribution to the
campaign. He added that there would be ethics questions
regarding campaign related use of the office account. He
felt that the issue should be clarified. Co-Chair Mulder
suggested that Representative Davies work on an amendment.
Representative John Davies provided members with Amendment 1
(copy on file). Amendment 1 would address campaign
contribution reports and allow the campaign to file reports
on behalf of the contributor. The contributor would retain
responsibility to assure that the report has been filed. The
filing would follow the same time lines. Co-Chair Mulder did
not object to the amendment.
Representative Hudson agreed and pointed out that the intent
is disclosure.
Co-Chair Mulder agreed and noted that contributors could be
informed that the report was filed on their behalf when
legislators send their thank you notes.
BROOK MILES, EXECUTIVE DIRECTOR, ALASKA PUBLIC OFFICERS
COMMISSION testified via teleconference. She noted that
while many of the provisions of SB 103 can fairly be
considered, "clean-up" other sections do not fall within
that description, but rather constitute a significant change
to the campaign disclosure law.
Ms. Miles identified areas that will result in
administrative costs, loss of public information, and
confusion to both filers and members of the public.
Section 1 contains a legislative mandate that the Commission
develop only one form to be used for financial disclosure
filing. Ms. Miles noted that AS 24.60 requires Legislative
Financial Disclosure statements from all 60 legislators, the
5 public members of the legislative ethics committee and
three legislative directors; AS 39.50 requires Public
Official Financial Disclosure reports from over 2000
executive branch and municipal officials, and candidates for
state and municipal office.
Ms. Miles observed that these statutes are not exactly
alike. They differ in three significant ways. Legislators
are required to disclose dollar amounts for sources of
income and loans that have a substantial interest in
legislative, administrative, or political action. No such
requirement exists under AS 39.50. State officials are not
permitted to have outside employment of that nature. Under
AS 39.50, filers must report all gifts of more than $250
except gifts from family. Legislators, legislative
directors, and the legislative ethics committee members file
gift disclosure under AS 24.60.
This section mandates the Commission to mix apples and
oranges to provide one form to cover filing under two
separate laws. The result of this mandate is likely to
cause substantial confusion to the over 2000 filers under AS
39.50.
In Section 5 (page 6, line 6) the bill amends the campaign
disclosure law to conform with an amendment to legislative
ethics in section 7 (p. 10, line 31). Ms. Miles concluded
that the effect of this amendment to the campaign disclosure
law will permit legislators and legislative employees to use
public resources in campaign activities to support of or
oppose ballot questions concerning constitutional
amendments.
Under current law, public officials are currently permitted
to communicate on ballot questions when the communications
are made in the usual and customary performance of the
official's duties. Ms. Miles explained that this means that
a legislator has the right to advocate for a ballot
question, particularly one concerning a constitutional
amendment. Legislators could appear before the chamber of
commerce, state their position in mailings to their
constituents.
Ms. Miles maintained that legislative use of public
resources to conduct constitutional amendment ballot
questions campaigns is likely to attract public inquiries
and complaints. Persons on the opposing side of
constitutional amendment ballot questions will probably have
concerns regarding this issue and may even pursue public
funds for equal treatment. Ms. Miles stated that if this
language [were removed] from the campaign disclosure law,
but retained under the legislative ethics law, then "it is
our opinion that we would all be on the same page".
Ms. Miles noted that section 6 (page 7, line 6) removes
polls that are limited to issues and do not name a candidate
unless the poll was designed primarily to benefit or was
requested by a candidate. Campaigns pay for polls that they
issue. If someone else issues a poll and provides it to the
candidate in order to influence the outcome of that
candidate it would be considered a contribution. This
provision will permit currently prohibited entities (other
than lobbyists) to provide polls to individual candidates.
Administrative costs will result as the Commission will be
put in the position of determining the source and the
"intent" of polls when members of the public or opposing
candidates make inquiries or file complaints.
Ms. Miles discussed section 7 (page 8, line 1), which
provides an exemption from the definition of expenditures
for "communications with a value of $500 or less a year on
any subject made by a corporation." She observed that the
Commission is confused regarding current administrative
regulation [AAC 50.25], which provides that a business,
corporation, trade association, labor union or other
organization that are not organized primarily to influence
elections may communicate directly with its members,
employees or their families, on any subject, if the
communication is of the same format used by the organization
when communicating on non-political subject. She observed
that telephone trees, newsletters and email may be used. As
long as the communication does not solicit contribution or
any action other than voting for or against a candidate or
ballot question it would not considered to be regulated by
the campaign disclosure law. The language on page 8 changes
this provision. These communications would now be an
expenditure and would be limited to $500 dollars a year. She
questioned if the intent is to override the regulation.
SUZI BARNETT, ADMINISTRATOR, SELECT COMMITTEE ON LEGISLATIVE
ETHICS, ANCHORAGE testified via teleconference. She pointed
out that language regarding the issuance of newsletters
appears on page 7 and 9. There are provisions in the Ethic
Code that reference campaign periods. One is a campaign
period of 45 days prior to an election. The other provides a
90-day period for mass mailings from other than office
accounts. She explained that the use of a specific day, such
as July 15 could be problematic when there are special
elections. The Ethic Code references the number of days
prior to an election. Mass mailings that talk about a
candidate and use funds other than office allowances, such
as leadership, council, finance funds are restricted to 90
days prior to an election.
Representative John Davies explained that he wanted to
restrict the use of office accounts for newsletters prior to
an election that a person running for office would be
standing in without restricting the use of newsletters prior
to a special election or a ballot issue. He felt that the
use of a newsletter prior to special elections on issues
would be appropriate as long as it is in the same format
normally used to communicate with constitutions and one
outcome was not advocated over another. Ms. Barnett agreed
that there would not be a concern if the legislator was not
a candidate in the election.
SB 103 was heard and HELD in Committee for further
consideration.
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