Legislature(2001 - 2002)
03/22/2001 08:05 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 177-CAMPAIGN FINANCE: CONTRIB/DISCLOS/GROUPS Number 1865 CHAIR COGHILL announced the next order of business would be HOUSE BILL NO. 177, "An Act placing certain special interest organizations within the definition of 'group' for purposes of Alaska's campaign finance statutes; providing a contingent amendment to take effect in case subjecting these organizations to all of the statutory requirements pertaining to groups is held by a court to be unconstitutional; requiring certain organizations to disclose contributions made to them and expenditures made by them; requiring disclosure of the true source of campaign contributions; and providing for an effective date." He noted that Representative Kott also had a committee substitute to offer. REPRESENTATIVE PETE KOTT, Alaska State Legislature, came forward to testify as sponsor of HB 177. REPRESENTATIVE JAMES moved to adopt the CS for HB 177 [22- LSO406/P Kurt] as the working document before the committee. REPRESENTATIVE KOTT explained that the original HB 177 contained contingency language. The CS removes the contingency language, which was not felt to be necessary. That is the only change, he said. REPRESENTATIVE KOTT said HB 177 is a relatively simple piece of legislation. It does two things. In Section 2, the "contributor" is defined as "the true source of funds, property, or service being contributed." This comports with federal law, he said. REPRESENTATIVE KOTT said the language added to Section 3 is "probably the heart of the matter." It defines "a special interest organization" as "a person other than an individual that cannot participate in business activities, does not have shareholders who have a claim on corporate earnings, and is independent from the influence of business corporations." This spells out what a "special interest organization" is and what it can and cannot do. This provision also comports with federal law, he said. REPRESENTATIVE KOTT said the purpose of HB 177 is to keep nonprofit organizations like the Alliance, the Resource Development Council, and "others of that nature" from making unlimited contributions to political campaigns. They could not make any greater contribution than $1,000. Number 1516 REPRESENTATIVE HAYES asked about the motivation for HB 177. He wondered if the intent was to prevent something that has gone on. REPRESENTATIVE KOTT said he thinks the motivation is primarily to close a loophole in the law; and whether something has gone on or not is somewhat irrelevant. Number 1416 CHAIR COGHILL noted that there was testimony to come from at least two groups. Number 1384 BROOKE MILES, Director, Public Offices Commission (APOC), participated by teleconference. She said she was available to answer questions and that the commissioner would review HB 177 next week. She thought the CS removing the contingency sections makes HB 177 a more legible piece of legislation for reviewing. MS. MILES said the APOC staff anticipates that HB 177 will result in a proliferation of groups. Under current regulations, APOC has restricted the definition of "special interest organization" to not-for-profit corporations and has described a process by which those corporations can qualify to participate. Also, she said, although this would mean all these groups could only give up to $1,000 to a candidate in the form of a direct contribution, it would not limit independent expenditures or non-coordinated expenditures. Number 1256 HUGH BROWN III, Volunteer, Alaska Conservation Voters, came forward to testify. He said he was concerned about HB 177 and not certain it was necessary. He liked the CS better than the bill itself. Alaska Conservation Voters is one of the special interest groups that participated in the last election. He has heard some comments that cause him concern, including that Alaska Conservation voters had a lot of Outside money. But Outside money can be good for Alaska, he said, noting that oil money is Outside money. As to closing a loophole in the campaign laws, he thinks "that if we are doing campaign finance reform, we should do it across the board," not just incrementally. As campaign laws are written now, there is a level playing field. He supports full disclosure, and thinks the current system works. MR. BROWN said participating in the election process is a right everyone has. It discourages him when he sees Alaska Conservation Voters described as "some extreme Outside group." He is a 26-year Alaska resident. "I care about clean water. I care about clean air. I care about development," he said. "I don't like to be characterized as an Outside extremist." Number 1008 REPRESENTATIVE JAMES said she, too, supports full disclosure. She would rather have full disclosure than limits on contributions. "That doesn't seem to be an option for us because the general public thinks that we should keep a lid on the spending," she stated. She asked Mr. Brown where he works and about the various levels of funding for Alaska Conservation voters. MR. BROWN said he did not know about levels of funding or where the funds come from. He said he is a volunteer. He is from Anchorage and is in Juneau on vacation, taking some paid leave from his job and getting involved with the legislature as his civic duty. To the best of his knowledge, everything has been above board and Alaska Conservation Voters has qualified as a non-group entity. He is concerned about the issues, such as clean air and clean water. REPRESENTATIVE JAMES said she agreed with him about clean air, clean water, clean soil. (However, she noted, she parts company with those in conservation groups when it comes to visual impact.) She said she does not know much about Alaska Conservation Voters but has heard that the money comes in through different organizations that contribute funds that may or may not be used in political campaigns. She said HB 177 would let people know where the money comes from, and she thinks that information should be disclosed. MR. BROWN observed that it healthy to have both sides talking about issues. Number 0683 REPRESENTATIVE FATE asked Mr. Brown how he thinks HB 177 would impact Alaska Conservation Voters. MR. BROWN said he understands that Alaska Conservation Voters is the only 501C-4, which is a qualified non-group entity. So HB 177 would only affect Alaska Conservation Voters. He said that causes him concern. MR. BROWN explained that his concern was not just for Alaska Conservation Voters, but also for other non-group entities. The definition, "does not have business activities, doesn't have shareholders or corporate earnings, and is independent of business influences" to him described parents, he said. He is concerned about parents because of some of the current education proposals. "When we start giving out diplomas with endorsements and different types of diplomas for different children, parents are going to want to respond to that in the legislature or in the election process," he said. He envisioned parents whose children are going to be getting "inferior diplomas" coming together, forming a non-group entity, and seeking Outside money to help them. Number 0513 REPRESENTATIVE FATE clarified that he did not want to know what the Alaska Conservation Voters was, but how HB 177 would affect them. MR. BROWN said he thought that to participate in the 2002 elections, they would have to list all the people who contributed. He also thinks HB 177 might put a limit on how much a person contributes. CHAIR COGHILL asked Mr. Brown if he would object to that. MR. BROWN said he did not have an objection to knowing where the money came from. Number 0422 STEVE CONN, Executive Director, Alaska Public Interest Research Group (AKPIRG), testified by teleconference. He reminded the committee that the Alaska Supreme Court ruled in 1999 that ideological nonprofit corporations have a right to participate in the political process. He said: Those ideological nonprofit corporations that are formed to promote political ideas and that are independent from the influence of business have a unique status because their political expenditures don't pose the same "dangers" as those of corporations. It would appear even in the amended substitute that this bill is directed at replacing that court opinion with a statute that re-encompasses that sort of entity. The focus ... seems to be [on] the issue of political ideas and political beliefs. That is to say, my "read" of this is that with the disclosure that is being asked for, that some individuals [such as] a high-placed executive in one of the oil companies or in an oil service company like VECO [Corporation] who wants to participate monetarily in this sort of alliance ... would fear that they would suffer some sort of retribution .... This brings me to ... the thrust of my testimony and that is that I think we need to determine whether or not this bill effectively institutionalizes a kind of intolerance of the free flow of political ideas. In other words, I think Alaskans believe that their beliefs should be set in motion in the political process without fear of retribution and that we are served, as the previous witness said, by a free, open discourse. I think in the issue of development versus non-development, the Alaska population is really a blend of ideas, and this is what surveys seem to show, and I don't think that ... most people are deeply on one side or the other, but what they want to see is that all of these ideas are introduced and developed in the political process. And so it would seem to me that this bill is perhaps overreaching and would ultimately be found unconstitutional, but that is a matter for another day and another time. More important is that in this period of time when I know the legislature is quite concerned about an emerging intolerance in our society that they should step back from this ... as a bill that seems to be targeted and [word indisc.] revisit this from the standpoint of the belief that political beliefs should be practiced, there should be a free flow of ideas however unpopular whether about development or non- development, or other forms of civil libertarian belief, and I think this is what ... the logic of the court's decision was about .... TAPE 01-28, SIDE A Number 0040 REPRESENTATIVE JAMES asked Mr. Conn, "Don't you think that Alaska's public ... needs to know where the money is coming from to sell these ideas?" She went on to say the whole issue of campaign finance reform and the ability to have money be your voice and the efforts to actually keep down so much money in different areas, the whole gist of everything seems to be, "It's OK for you to put your money where your mouth is, but the rest of the people need to know whose money it is." Don't you want that in all of the people who are working on the other sides of the issue from you, she asked. MR. CONN returned to what he thinks is the basic logic of the court decision that excluded a particular category of group. In an ideal world, that would be precisely what I would want to see happen. But in the real world, tainted by the possibility of retribution for political expression, some people and some forms of belief are in the minority and are always going to be unpopular. And the court's point of view was that to allow the exercise of political expression, there needed to be a shield for the practice of political activity in some instances, and they carved out a particular area that deals with ... matters of ideology and nonprofits. Now it might be something about parents going up against the educational establishment; it might be in this instance something about how much we develop or don't develop, where, how, and what, but that's the nature of things. And so this is a kind of shield and ... it's a balancing act, and that's the best ...[way I can] put it. Number 0286 REPRESENTATIVE JAMES responded: "It is a shield, and that is the problem with the whole thing. It is a shield and so you have somebody you're talking about who is in the minority, wants to make their voice louder, gets money from people who are not disclosed, who take no blame or no credit for getting the message out. That is the issue and let me tell you as a campaigner for the legislature, I can tell you ... a long list of people who refused to give me more than $100 because they don't want their name disclosed. So certainly there are people out there that don't want their name disclosed but ... in this whole issue of the greater good for the public interest, if you want to participate, you've got to let people know who you are. That's the point .... CHAIR COGHILL observed that there were just 15 minutes remaining in the committee meetings. "Certainly, some of the substance of the bill has been brought to light" along with different points of view, he said. Number 0406 PAMELA LaBOLLE, President, Alaska State Chamber of Commerce, came forward to testify. She said the Alaska State Chamber of Commerce supports HB 177. 1. The special interest group that is being addressed in this legislation is a creation of the court. The courts are creating policy that the State Chamber feels is the purview of the legislature. The Alaska State Chamber of Commerce has a political action committee and must follow the APOC rules and declare who gives money and where that money is coming from. "It's like signing your name on a letter to the editor," she said. "If you believe in it, if you're willing to give any money to the cause, what's wrong with saying who you are and what you believe in?" The State Chamber is not an industry-oriented organization, she said. "We represent people from all [kinds of] businesses across the state. The point is, we have no problem with complying with this law but why because we are a 501C-6 [as opposed to a 501C-4] should we be the only ones who have to say what we believe in. We don't have any problems with putting our money up and then saying who we are and what we believe in, and we don't think any other group in this state that is formed for the purpose of advancing their philosophies or their thinking in the political arena that they should have any problems with saying who they are and where their money is coming from." Number 0632 CHAIR COGHILL noted that HB 177 has a referral to the Judiciary Committee. He then reminded the committee that "the policy of the State of Alaska resides within the legislature and the courts follow suit from that, instead of us following suit from them." Whether or not these [non-group entities] should be subject to the full disclosure requirements, as other groups are required by law to be is the policy decision he thinks the State Affairs Committee is being asked to make. Number 0688 REPRESENTATIVE FATE commented, "I do not know of any court determination that compels an ideology to be based on how much money is spent in a campaign. An ideology ... can be promulgated by a campaigner or by a person who is supporting a campaign, but the dollar amount -- I've never heard of the court ...[doing] any adjudication of that." CHAIR COGHILL observed that people have the right to associate with an organization or group, but if they exercise that right of association by contributing to an organization or group, their names should be on the list of contributors for disclosure to the public. Number 0782 REPRESENTATIVE JAMES moved to report CS FOR HOUSE BILL NO. 177(STA), "An Act placing certain special interest organizations within the definition of 'group' for purposes of Alaska's campaign finance statutes; and requiring disclosure of the true source of campaign contributions," out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 177(STA) was moved from the House State Affairs Standing Committee. [CSHB 177(STA) MOVED FROM COMMITTEE]
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