Legislature(1995 - 1996)
03/25/1996 01:30 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 368 ELECTION CAMPAIGN FINANCE REFORM Number 0210 CHAIRMAN PORTER announced that the first order of business before the House Judiciary Committee was HOUSE BILL NO. 368, "An Act relating to election campaigns, election campaign financing, the oversight and regulation of election campaigns by the Alaska Public Offices Commission, the activities of lobbyists that relate to election campaigns, and the definitions of offenses of campaign misconduct; and providing for an effective date." CHAIRMAN PORTER noted that the committee has already taken up HB 368 in two different hearings. Several amendments are now before the committee, in response to concerns raised by the Department of Law. ANNE D. CARPENETI, Assistant Attorney General, Criminal Division, Department of Law, stated that she would like to address a proposed amendment to the criminal provisions of HB 368, which begin on page 24. The amendment prohibits knowingly engaging in conduct that violates a provision of AS 15.13 or a regulation adopted under AS 15.13. The department is requesting this because they can prove knowingly violating a statute, as opposed to intentionally violating, which is not how the criminal law is written. The amendment would also remove Subsection B, because the section does not relate to the state prosecution of criminal violations. It may have another meaning, in relation to federal violations. MS. CARPENETI further noted that under Campaign Misconduct In The Second Degree, the amendment makes a change on page 25, in connection with the prohibitions starting on page 24, "knowingly write or print or circulate material that would provoke a reasonable person under the circumstances to a breach of the peace." The department added the phrase, "or that a reasonable person would construe as damaging to the candidate's reputation," to clarify what is a reasonable person's standard. CHAIRMAN PORTER noted that the proposed amendment would be number 17. REPRESENTATIVE CON BUNDE made a motion to move amendment number 17. MS. CARPENETI stated that she had not completed her discussion of the amendment. On page 24, lines 4 - 7 were deleted, because the material is covered under campaign misconduct in the first degree, "knowingly engaging in conduct that violates a provision," rather than "knowingly violating a provision." CHAIRMAN PORTER asked if the version being amended was CSHB 368 version F. MS. CARPENETI responded in the affirmative. She further stated that, on page 25, the department's amendment would delete the material on lines 5 - 7. This would delete the provision which states that "violation of this section is a corrupt practice." In terms of state prosecution, this provision is not necessary. On page 25, line 10, the amendment inserts the word "if." The material on lines 11 and 12 of page 25 would be replaced with the following: "If a person violates a provision of AS 15.13, or a regulation adopted under AS 15.13 ...". This would be a strict liability, and would bring the language in line with criminal prosecution in the state. In connection with that, the department would delete the word "intentionally" on line 16, page 25, so that if a person is within 200 yards, their intent does not have to be proved. On line 23, since the provision on line 5 has been deleted, the reference to it must be deleted from line 23. Number 0746 REPRESENTATIVE CYNTHIA TOOHEY asked if the committee should adopt version G as the working version. CHAIRMAN PORTER stated that the committee had adopted the amendments piece by piece. He noted that the committee should ask the bill drafter to make the conforming amendments. Version G is the amended version that conforms to what was adopted at the last meeting. Chairman Porter asked if there was any objection to adopting version G as the working draft. Number 0819 REPRESENTATIVE DAVID FINKELSTEIN commented that the amendments being considered were prepared for the prior version of the bill. CHAIRMAN PORTER responded that the committee would preface each amendment by stating that the bill drafter should make it conform to the page and line of the new version. There being no objection, CSHB 368 version G was adopted as the working version. REPRESENTATIVE BUNDE made a motion to move amendment 17, with the stipulation that the bill drafter make the amendment conform to version G. REPRESENTATIVE FINKELSTEIN stated that much of the material contained in the amendment was unfamiliar, and he wasn't sure that he understood its significance. Some of the changes to provisions of existing law, for instance, have nothing to do with the bill itself. He stated that he had no objections, because he didn't know enough about the law. MS. CARPENETI responded that she would be happy to get information from people who know more about elections, per se. REPRESENTATIVE FINKELSTEIN asked why the committee would get rid of language in existing law, without knowing what it means. MS. CARPENETI responded that she was trying to make the language conform to the way criminal prosecution is handled. Number 0914 REPRESENTATIVE FINKELSTEIN proposed that the committee remove the section which would delete existing language from the proposed amendment. REPRESENTATIVE AL VEZEY stated that he didn't believe the amendment actually changed the bill. He further stated, "I am absolutely amazed that we are making it a misdemeanor to put out some sort of advertisement that would make somebody else fighting mad." REPRESENTATIVE FINKELSTEIN noted that that was the existing law, and was not affected either by the initiative or the bill, prior to the proposed amendment. REPRESENTATIVE VEZEY stated that it would now be campaign misconduct in the second degree, which is a misdemeanor class B. REPRESENTATIVE FINKELSTEIN said that the conduct is now considered a class A misdemeanor, and the amendment would make it a class B misdemeanor. Number 0993 REPRESENTATIVE VEZEY commented that all violations of AS 15.13 could be treated as misdemeanors. Virtually all violations of AS 15.13 also have a civil fine. Violations are normally pursued under civil penalties, rather than as misdemeanors. He reiterated that the entire section strikes him as rather odd. REPRESENTATIVE FINKELSTEIN stated that the committee was actually considering AS 15.56, election offices corrupt practices and penalties. He said his only point was that the initiative would not affect those particular violations. CHAIRMAN PORTER asked Brooke Miles to address the committee. Number 1066 BROOKE MILES, Alaska Public Offices Commission (APOC), Department of Administration, stated that the reference to corrupt practices is contained in current law, although it is not a part of the law over which the APOC has purview. It is in the election code under AS 15.56, and it refers to election misconduct. Ms. Miles stated that she is somewhat familiar with the provisions, because the APOC sometimes receives concerns from members of the public about truth in public advertising. The only place where that issue is addressed is AS 15.56. CHAIRMAN PORTER asked Ms. Carpeneti if she felt the issue was a policy call. MS. CARPENETI responded that it is a policy call. Number 1139 REPRESENTATIVE TOOHEY asked if Ms. Carpeneti was upset with the definition of corrupt practices. MS. CARPENETI responded that she was not upset. She stated it was a policy call, whether to leave the section in or take it out, and would not affect the criminal division. REPRESENTATIVE FINKELSTEIN stated that he was proposing an amendment to the amendment, which would change page 25, lines 4 - 7, to lines 4 - 6, by deleting the referenced section. Number 1166 CHAIRMAN PORTER noted the amendment to proposed amendment number 17. On the third reference to page 25, lines 4 - 7, the amendment to the amendment would change the reference to lines 4 - 6. MS. CARPENETI interjected that the committee would also want to add, under campaign misconduct in the first degree, that violation of this subject is a corrupt practice. REPRESENTATIVE FINKELSTEIN noted that his amendment was a conceptual amendment. CHAIRMAN PORTER reiterated that the amendment to the amendment was to reincorporate the reference to corrupt practices, in the two places where amendment number 17 removed it. REPRESENTATIVE VEZEY objected, on the grounds that he did not understand the proposed amendment to the amendment. Number 1253 REPRESENTATIVE BUNDE commented that Ms. Carpeneti was proposing to take out a reference that the committee didn't understand, and Representative Finkelstein was proposing to leave in the reference, for the same reason. He further noted that he understood the reference was in existing statute. MS. CARPENETI apologized for bringing up the issue. Number 1295 CHAIRMAN PORTER stated he was inclined to defer to the existing law, in the case where he did not understand something. REPRESENTATIVE FINKELSTEIN noted that there were several more proposed amendments, and suggested that this issue be moved to the bottom of the list. CHAIRMAN PORTER stated that the proposed amendment number 17 would be put aside for the time being. He announced that the next order of business was proposed amendment number 18, version F.11, dated 3/23/96. He explained that the amendment addresses the court system's concern about the need for a jury trial or public appointed council in cases of election law civil violations. REPRESENTATIVE TOOHEY asked who had proposed the amendment. REPRESENTATIVE BUNDE asked if there are other civil actions where statutes specifically proscribe a jury trial. CHAIRMAN PORTER responded that there are. In small claims actions, for instance, the value of the claim is not high enough to justify the cost of a jury trial. REPRESENTATIVE BUNDE commented that the possible damages in this type of case would be greater. CHAIRMAN PORTER responded that the rationale was, this would actually be an appeal. Number 1540 REPRESENTATIVE TOOHEY made a motion to adopt amendment number 18. Hearing no objection, amendment number 18 was adopted. REPRESENTATIVE BUNDE made a motion to adopt proposed amendment number 19. CHAIRMAN PORTER objected, for purposes of discussion. Number 1588 REPRESENTATIVE BUNDE explained that the proposed amendment speaks to the disposition of a candidate's campaign account. He noted that the amendment refers to the previous CS, and would need to be redrafted to conform to the present version. CHAIRMAN PORTER noted for the record that all amendments offered today would be so conformed. REPRESENTATIVE BUNDE continued his explanation of the proposed amendment number 18. It would insert new bill sections, regarding the balance left in a campaign account after the election, and would stipulate that the funds cannot be used as personal income. REPRESENTATIVE FINKELSTEIN asked if this was a different amendment from the one proposed at the last meeting. REPRESENTATIVE BUNDE responded in the affirmative. REPRESENTATIVE FINKELSTEIN stated that the premise that any personal use of campaign funds would be allowed by HB 368 is wrong. He stated that the bill absolutely bans in specific terms any personal use of campaign funds. The money can only be carried forward to the next campaign, for a list of specific campaign uses. REPRESENTATIVE BUNDE stated that he did not believe the bill speaks to what happens to the leftover money. This amendment would do that. Number 1672 REPRESENTATIVE FINKELSTEIN noted that the bill adds to the allowable uses of surplus campaign funds, by saying that $5,000 can be carried forward for an account for future election campaigns. That is on page 15, line 17. Once funds are put into an election account, they fall under use of campaign funds, which is already in the bill. There is never an opportunity to take the funds as personal income. Should a person decide not to run again, the funds must be donated to a party, returned to contributors, donated to a 501(C)(3) charitable group, or given to the state or municipalities. There is no opportunity available for personal use of campaign funds. REPRESENTATIVE BETTYE DAVIS noted that under current law, a candidate can take campaign funds for personal use. REPRESENTATIVE FINKELSTEIN concurred. The proposed bill being amended, HB 368, prohibits any personal use of campaign funds. Therefore, he questioned the need for the amendment. REPRESENTATIVE BUNDE stated that the language of the bill could conceivably allow a person to say that they might run for office at some point in the future, and put up to $5,000 away for that purpose. REPRESENTATIVE FINKELSTEIN responded that the section on pages 14 and 15, regarding dispersement of campaign assets after elections, deals with that issue. He commented that the proposed amendment was confusing, and might actually weaken the bill, by use of the term "surplus balance." The bill currently states that any funds, whether surplus balance or not, can never be used as personal income. Number 1909 REPRESENTATIVE BUNDE stated that because the use of surplus funds as personal income was not specifically prohibited by the bill, he thought the amendment was necessary. He then proposed a conceptual amendment related to funds accrued before the effective date of HB 368, so that those existing funds would fall under the terms of the bill. He also stated that he would like to see the effective date for this section occur before the upcoming primary election, so that candidates can make decisions accordingly. REPRESENTATIVE FINKELSTEIN noted that the concept was interesting. He suggested a conceptual amendment, which would make the provisions related to personal use of campaign funds effective as of July 1, 1996. The remainder of the bill would not take effect until January 1, 1997. CHAIRMAN PORTER asked if the amendment would need to be rewritten. REPRESENTATIVE BUNDE stated that he was comfortable with adopting Section B only, if the committee concurred. REPRESENTATIVE FINKELSTEIN suggested that the easiest way to proceed would be to modify the amendment, as follows: "Lines 28 and 29 of page 13 go into effect on July 1, 1996." CHAIRMAN PORTER noted that amendment number 19, left to the bill drafter to craft appropriately, would say on page 13 of version F, lines 28 and 29 have an effective date of July 1, 1996. There being no objection, proposed amendment number 19, as modified, was adopted. Number 2080 REPRESENTATIVE FINKELSTEIN then returned to the discussion of the proposed amendment number 17. He explained that the reference to corrupt practices ties the law into AS 15.56, which states that corrupt practices trials receive expedited treatment. He stated that he did not have a strong feeling regarding the provision. MS. CARPENETI stated that she thought it would be best to leave the existing language in the section. CHAIRMAN PORTER asked if the committee would accept a conceptual amendment to amendment number 17, deleting the two references to the corrupt practices act. REPRESENTATIVE VEZEY asked for an explanation. CHAIRMAN PORTER responded that existing law would be left as is. REPRESENTATIVE FINKELSTEIN explained that AS 15.56.115 says that cases involving elections matters shall be promptly tried, and the case shall be accorded a preferred status to ensure a speedy disposition. CHAIRMAN PORTER reiterated that the provision is already in existing statutes. Hearing no objection, the proposed amendment to amendment number 17 was adopted. Number 2212 REPRESENTATIVE FINKELSTEIN made a motion to adopt amendment number 17, as amended. Hearing no objection, amendment number 17 to CSHB 368 was adopted. CHAIRMAN PORTER asked if the Department of Law had further concerns. MS. CARPENETI responded that all concerns had been addressed. CHAIRMAN PORTER asked if there were other proposed amendments. Number 2288 REPRESENTATIVE FINKELSTEIN stated that he had two proposed amendments, one with two alternatives. It was pointed out at the last meeting that there was an internal inconsistency in the proposed bill. On page 5 of the previous version, the basic tenets of who can make campaign contributions are laid out. Groups can give, to a limited degree, to other groups. The committee seemed to have some interest in eliminating the ability of groups to give to groups. The approach in the House State Affairs version is that groups can give to groups at the same level as they can give to anyone else, which is a $1,000 contribution. Representative Finkelstein stated that his goal is to make sure the section is clear. CHAIRMAN PORTER said he was trying to think of a situation where a group, which is two or more people gathered together for the purpose of influencing an election, would give money to another group. REPRESENTATIVE FINKELSTEIN noted that groups, such as the Associated General Contractors, sometimes decide to give money to a political party. In this context, the word "group" also applies to a political party. Without this approach, only individuals--as opposed to groups--can donate to political parties. REPRESENTATIVE BUNDE commented that this provision would allow, for instance, the Republican Women's Club to give to the Republican party. CHAIRMAN PORTER stated that the issue is, should such groups be allowed to donate to political parties. In the instance where a group is actually a sub-group of a political party, they should not be able to. TAPE 96-42, SIDE B Number 0002 REPRESENTATIVE DAVIS stated that the provision refers to groups in general. For instance, a group might want to influence an issue, but they don't have much money. Under this provision, they could donate their money to another group, which might be able to exert more influence. REPRESENTATIVE VEZEY stated that the committee needs to think in terms of ballot propositions, in addition to candidates. Ballot propositions are seldom, if ever, advocated by individuals. They are almost always advocated by a group. This creates the group to group relationship. REPRESENTATIVE FINKELSTEIN noted that this particular view of amendment number 19 is alternative 2. CHAIRMAN PORTER noted that it was proposed amendment number 20, not number 19. He asked if there was any objection to adopting amendment number 20, alternative 2, version F.12 dated 3/25/96. Hearing no objection, amendment number 20 to CSHB 368 was adopted. Number 0106 REPRESENTATIVE FINKELSTEIN proposed a conceptual amendment to the new bill version, on page 18, line 8. The amendment would insert the phrase "$50 per day for each day the delinquency continues," between "then" and "as". The entire amendment results from a drafting problem in the original bill. Representative Finkelstein further noted that there should be civil penalties for these offenses, with a maximum fine and a per day charge, because people need a greater incentive to correct delinquencies. REPRESENTATIVE VEZEY asked if the committee was considering version G or version F. REPRESENTATIVE BUNDE noted, for purposes of clarification, that the amendment would require two changes. It would change line 4, from $500 back to $50, and at line 8, insert "not more than $50 per day." REPRESENTATIVE FINKELSTEIN responded that the amendment would not change line 4. According to the section, there are three levels of violations. There are reporting violations, which are $50. There are special reporting violations, which are $500. This last category covers all other potential violations. The amount does not need to be $50. It could be $25, but the important thing is that there is a provision allowing for civil penalties. CHAIRMAN PORTER asked what was being deleted. Number 0302 REPRESENTATIVE FINKELSTEIN responded that nothing was being deleted, but rather the phrase "$50 per day for each day of delinquency" was being inserted. He further explained that the APOC has complete discretion to lower fines. The per day is for the amount of time that the person fails to address the violation. This approach is consistent with the current APOC structure, which seems to be widely supported. REPRESENTATIVE VEZEY asked why the committee would want to let the fine become so large. He noted that $500 is a substantial fine, and the offenses are misdemeanors. REPRESENTATIVE FINKELSTEIN responded that this was the civil penalty provision, and that misdemeanor provisions would not apply. It is true that violations can accumulate; however, APOC will lower fines if the violation was unintentional, and the circumstances are explained. The amendment and the proposed changes are intended to achieve consistency with current law. Number 0346 REPRESENTATIVE VEZEY stated that it was his understanding that the proposed bill says that a person who violates the provisions of AS 15.13, other than a reporting violation, would be subject to a per day fine. How can a per day fine be applied to a violation of that nature? REPRESENTATIVE FINKELSTEIN responded that the commission has discretion, for that exact reason. Some cases will not require a cumulative fine. However, there are major circumstances that can fall under this provision. For instance, knowingly attempting to receive non-allowable donations would not be a reporting violation. In such a case, the APOC might choose to apply the $50 per day fine. More likely, they would set a cap on the fine. REPRESENTATIVE VEZEY asserted that the commission would then have carte blanche to set the level of fines. REPRESENTATIVE FINKELSTEIN responded that the current level, for reporting violations, is already $50 per day. However, this is only the maximum allowable fine. The commission reserves the highest fines for the worse cases. Number 0496 CHAIRMAN PORTER asked what is the existing law in regard to APOC's ability to impose fines for offenses not related to reporting. MS. MILES explained that current statute allows for civil penalties only for late reports, and are per day penalties. Thirty days before election reports, ten day after election reports, and year end reports are fined at a maximum of ten dollars per day. This level would not be changed in the proposed bill. The report that is filed seven days prior to an election, and the 24 hour reports, where a candidate must report larger contributions within the ten days just prior to an election, are currently fined at $50 per day. These are reporting violations only. At present, the commission does not have civil penalty authority for other provisions of the law; for example, not identifying who paid for an advertisement. CHAIRMAN PORTER asked about line 4, referring to violation of AS 110.(A)(2) and 110(B). Does the $500 per day refer only to the last two reports? MS. MILES responded that, yes, the $500 per day refers only to the 24 hour and the 7-day reports. The $50 per day would apply to other reporting violations. CHAIRMAN PORTER noted that the wording of the statute is confusing. Number 0680 REPRESENTATIVE FINKELSTEIN noted that Ms. Miles was referring to the $50 per day on the previous page, page 17, line 2. This $50 does apply to other, non-reporting violations. The problem is that the initiative takes a completely different approach. It states that all violations are subject to a maximum penalty of $500 per day, if certain standards are met. The standards relate to a state of mind. The State Affairs committee was trying to keep the new bill as close as possible to current law. He stated that his proposed amendment would allow a broader application of civil penalties, but would not disturb the APOC's existing fee structure. CHAIRMAN PORTER asked if there was further discussion of the amendment under discussion, amendment number 21. REPRESENTATIVE BUNDE asked if the amendment would insert the phrase "$50 per day for each day." CHAIRMAN PORTER stated that that was accurate. Amendment 21 would amend page 8, line 18, of version G, to insert the phrase, "$50 per day for each day the delinquency continues" between the words "than" and "as." Number 0723 REPRESENTATIVE FINKELSTEIN made a motion to adopt amendment number 21. REPRESENTATIVE VEZEY objected. CHAIRMAN PORTER requested that a roll call vote be taken. Representatives Toohey, Davis, Finkelstein, and Bunde voted yes. Representatives Green and Vezey voted no. Therefore, amendment number 21 was adopted. REPRESENTATIVE BUNDE asked for discussion of version G, page 18, line 4, regarding the $500 per day amount. CHAIRMAN PORTER responded that the existing law imposes higher level fines for violations of reports that are due under short deadlines, immediately before and after an election. This provision recognizes that these are more serious violations. REPRESENTATIVE VEZEY asked Ms. Miles what would be the current maximum fine. Number 0611 MS. MILES responded that the maximum fine is currently $50 per day for late 24-hour report and late 7-day reports, and $10 per day for other reports. CHAIRMAN PORTER noted that these levels would be raised to $500 and $50, under the proposed bill. REPRESENTATIVE FINKELSTEIN commented that this was the maximum allowable fine, and would only apply to a tiny proportion of actual offenses. CHAIRMAN PORTER asked if there were any other proposed amendments to CSHB 368. Number 1009 REPRESENTATIVE TOOHEY made a motion that the committee pass out CSHB 368, as amended, with individual recommendations and attached fiscal notes. Hearing no objection, CSHB 368 was passed out of the House Judiciary Committee.