Legislature(1995 - 1996)
03/20/1996 01:10 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 368 - ELECTION CAMPAIGN FINANCE REFORM Number 1158 CHAIRMAN PORTER introduced Jack Chenoweth to make a presentation regarding HB 368. Mr. Chenoweth came forward. Number 1165 JACK CHENOWETH, Attorney, Legislative Legal Counsel, Legislative Legal and Research Services, presented an overview on how HB 368 was drafted in it's present form. Representative James had asked at the outset that they prepare a bill based upon the initiative that was then in circulation and which was subsequently certified for the November general election ballot. This they did. The drafting differed from the initiative, but basically covered the same points. In a hearing before House State Affairs, the principal sponsor of the initiative, Mr. Mike Frank from Anchorage, indicated on the record that he thought that the bill as originally introduced was in fact virtually the same as the initiative. From this point there was a work committee formed composed of Representative James, Finkelstein and Senator Tim Kelly who met on a few occasions. Using materials provided in significant part by Representative Finkelstein, these consisted of about 30 changes to the original bill as introduced. MR. CHENOWETH stated that this work committee made about 30 changes to the original bill and this was the bulk of the differences between the original bill as introduced, the initiative, and the bill as being reported from the State Affairs Committee. The following sets out the changes undertaken by the committee as noted. MR. CHENOWETH said that the initiative included an indexing requirement which said that at periodic intervals the dollar figure set in the initiative would be adjusted to reflect changes in the cost of living. This was taken out of the bill and no longer appears here. The legal services division read the initiative to require a registration before making contributions. In point of fact, the committee opted to eliminate any requirement of registration before individuals could make contributions. The bill reflects this portion of the initiative. MR. CHENOWETH noted that the initiative proposed to reduce cash contributions from $100 in current law to $25. The committee and hence, the State Affairs version took this back to current law restoring the reference to $100. The initiative came down rather prohibitively on the acceptance of payment to and acceptance of honoraria by people who are candidates after they have become candidates. The work committee took this back more in the direction of current law, allowing some compensation for the giving of personal services and payment, as well as, receipt of honoraria by persons who are candidates. MR. CHENOWETH offered that the initiative set an 11 month period preceding a general election as the period of time in which candidates could go out and fund raise. The work committee substituted for the principle races, statewide and legislative, fixed dates for statewide elections. For the governor and lieutenant governor, the initial dates these folks may begin to raise funds is January 1 of the general election year of which they are to be elected or re-elected. For legislators it is June 1 of the general election year in which the legislative seat is contested, for all others, which is the state's special elections and municipal elections, the five month window period was left in place. The result of this was to change the window period, but it leaves in place the concept as set out in the original initiative, which is that money raised is in the election year only. Money cannot be raised in off years. MR. CHENOWETH stated that the initiative allowed family members to make loans to candidates. The work committee disallowed this and the language authorizing loans by family members came out of the bill. A technical amendment was made which eliminated a provision in current law which required that when contributions in excess of $250 be disclosed that a copy of the report filed with the Alaska Public Offices Commission (APOC) must also be sent to the candidate receiving the contribution. The work committee conformed the definition of prohibitive contributions as a drafting matter. The committee was interested in the authorized uses of surplus uses of campaign funds. He recalled an initiative which allowed for five or six ways these funds could be used. The work committee adds to this disposition in three ways: money can be returned to contributors on a pro rata basis; some of the surplus money can be carried forward to be set aside for a subsequent legislative race or campaign; and a certain amount may be put in a legislative office account and to be used as a supplement to a current legislative office allowance. MR. CHENOWETH noted that the penalty provisions were modified. The initiative used a sliding scale of civil penalty which drew from criminal law concepts of criminal culpability and noted notions of aggravating and mitigating factors. The work committee abandoned this approach, went back to something which approximates the current civil penalty arrangement, does allow aggravation in limited situations, but generally the approach taken in the State Affairs version comes closer to what is more familiar with in current law. MR. CHENOWETH said the initiative drew a definition of political party out of AS 15.60.00, the election code, and brought it forward into the campaign financing provisions. The question arose from a minor party about whether they would be treated as a political party for purposes of receiving the higher amounts that political parties could receive as contributions and expenditures. He was asked to go back and reform the definition so that the definition of political party so that this minor political party would clearly qualify as a party and not be restricted to the status of a group. He noted that in this definition of political party if they ever got three percent of the vote in a gubernatorial election across any one of the last five gubernatorial elections, they would continue to quality as a political party for purposes of this act. MR. CHENOWETH added that the criminal penalties in the initiative have been stepped up so that matters which were intentional violations could be treated and prosecuted as C felonies. The committee was of the opinion that these penalties should be stepped down by one step. The most serious penalties in the State Affairs version are A misdemeanors for intentional violations, B misdemeanors for knowing violations, and violations for that category of offense which is punishable by the payment of a fine for reckless or criminally negligent violations. MR. CHENOWETH stated that current laws says that expenditures in excess of $250 made at the close of a campaign have to be reported within a nine or ten day window period. No one reports expenditures, they report the contributions. This bill makes the change to delete the reference to expenditures, but contributions would have to be reported. The statement by contributor requirement was revised to limit it to individuals. The "paid for by" requirement was modified in two places based upon a U.S. supreme court decision about a year ago which carved out an exception for the "paid for by" requirement for independent campaign related expenditures that had to do with propositions or questions. Small amounts which cumulatively did not exceed $250 a year were exempted from the "paid for by" requirement in the State Affairs Committee version. The initiative drew the term "publicly funded entity" in without supplying a definition. He was asked to provide one and he did so. MR. CHENOWETH outlined that the State Affairs version picked up on a request that the definition of a control group has to have in it's name, the name of the individual candidate for or against whom this control group is working, now says that the group has to have 50 percent or more of it's expenditures directed towards this end. They made an amendment in the State Affairs version that drops this down to thirty three and a third percent. He was told that the Public Office of Commission would like to see this taken back to current law. As this legislation came from State Affairs, this change is in there. MR. CHENOWETH said that they have tried to work through and include in the State Affairs version a definition or statement of the relationship between a political party and subordinate units, groups such as district parties and group which come in and ask to be affiliated with the main political parties. They had a discussion on two occasions in the work committee and brought this type of statement into the bill. MR. CHENOWETH noted that as mentioned earlier, the disclaimer provision has been amended to reflect the decision of the U.S. Supreme Court in the MacIntyre decision. The effective date from the initiative has changed so that the entire bill would become effective January 1, 1997. There is in the bill, but not in the original initiative a provision which bars the use of charitable gaming proceeds to support political activities under Section 2 of this bill. The original initiative barred use of money from out- of-state sources. This bill allows it within strict limits so that there can be limited acceptance of money from non-residence in statewide, state Senate, and state House races. The maximum amount that a political party may contribute to a candidate is increased over the amount set in the initiative. The amount that a group can contribute to a candidate which was a $1000 dollars in current form was reduced in the initiative and was taken back to $1000 dollars in the State Affairs version. Groups are not permitted in the initiative to give to other groups. The State Affairs version lifts this prohibition to allow groups to make these contributions to other groups to a maximum of a $1000. After some discussion, the bill incorporated a provision that limits the governor and lieutenant governor from raising election campaign funds during the legislative session. They have in place something which says that they may raise money while the session in progress. MR. CHENOWETH noted that they overhauled the litigation provision. The initiative allowed that the taxpayer who wanted to challenge a candidate could go to one of two forums, the Alaska Public Offices Commission or to court. They revised this to eliminate the automatic chance of going to court unless the APOC is first addressed in the form of a complaint and given 60 days to work through the situation and to come to some preliminary step. If they don't get this far within the 60 days, only then can someone go to court. The object of this was to prevent last minute filings in court which gain a lot of publicity, but would still not cut off the right of access if the APOC drags it's feet. MR. CHENOWETH offered that current laws states that if someone says at the outset that they are going to run and not raise or expend more than $1000 they don't have to worry about disclosure. The committee has recommended that this amount be raised to $2500. A severability provision which appeared in the initiative, but which they took out in the initial drafting because the general severability clause that attaches presumably to all bills under Title 1, Senator Kelly asked that it be put back in this bill as it appears. In addition, in the current draft a clause was enumerated that says that this bill and the initiative cannot both take effect. The idea being, that if the lieutenant governor says that the bill and initiative are substantially the same, the initiative does not go on the ballot and hence this bill becomes law. If the lieutenant governor says that this bill and the initiative are not substantially the same, the initiative alone goes before the voters. This does not become law. The idea is that if one is dropped one on top of the other, there will be quite a mess to sort out for 1997.
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