Legislature(2003 - 2004)
04/24/2003 08:06 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 157-ELIMINATE APOC CHAIR WEYHRAUCH announced that the final order of business was HOUSE BILL NO. 157, "An Act eliminating the Alaska Public Offices Commission; transferring campaign, public official, and lobbying financial disclosure record-keeping duties to the division of elections; relating to reports, summaries, and documents regarding campaign, public official, and lobbying financial disclosure; providing for enforcement by the Department of Law; making conforming statutory amendments; and providing for an effective date." Number 1635 REPRESENTATIVE HOLM moved to adopt the proposed committee substitute (CS) for HB 157, labeled HB157.doc, 4/24/2003, as a work draft. Number 1657 REPRESENTATIVE BERKOWITZ objected in order to hear about the differences [between the original bill and the proposed CS]. CHAIR WEYHRAUCH confirmed that Jan DeYoung and Nancy Gordon from the Department of Law are available to answer questions, and that Ms. DeYoung's client agency is the Alaska Public Offices Commission (APOC). Number 1536 BROOKE MILES, Executive Director, Alaska Public Offices Commission (APOC), stated that the proposed CS came about as the result of the commission meeting with members of the administration to discuss concerns that may have been the foundation for the original bill proposing to eliminate APOC. During those conversations, she noted, the APOC set forth some concepts that its members had been discussing even prior to the introduction of [HB 157] regarding ways to streamline some of the functions of the APOC, particularly with respect to the way complaints are processed. She noted that this is an issue that APOC has been working on for over a year. MS. MILES said there were issues not completely resolved "with the Alaska State Supreme Court case after campaign finance reform." She said, "That's an issue that has to do with fundraising during the legislative session, that the court specifically removed from one part of the statute, but not the other, leaving a reader very confused." She revealed that [APOC] has a former attorney general's opinion that says that that provision of the law was not enforceable. She added that that issue is addressed in the proposed CS. MS. MILES said that [the proposed CS] would codify the authority for the commission to issue advisory opinions - a function that the commission has been performing since 1990. She added, "Although at our last go-around with writing regulations, which happened after campaign finance reform in 1996, the person in charge of regulations was concerned that APOC may not have had statutory authority for providing advisory opinions." She stated that [APOC] thinks it is an important function, because it is formal binding advice that protects the requestor from a complaint procedure, so long as the requestor follows that advice. MS. MILES noted that there would also be a change to the lobbying law "in this statute" that will codify a regulation about certain activities performed by those in executive branch who are not subject to the lobbying law. She explained that this is in regard to a person who works with the executive branch in its quasi-legislative or quasi-judicial function, with permitting, licensing, or requesting advice about how current statutes apply to proposed activity, for example. She noted, "That regulation has been on the commission's books since ... 1977 or 1978, and will now be in statute." MS. MILES also noted that the proposed legislation would provide increases to the amount that an individual can give to a candidate, to political parties, and to a political group, as well as the amount that a group can give to a candidate. She listed [some existing requirements] that the proposed legislation would not change. Number 1185 REPRESENTATIVE SEATON said he did not see the "24-hour reporting rule" in the proposed legislation, and he said he would like some explanation for the reasoning behind the 24-hour rule. MS. MILES replied that the philosophy behind the requirement to report major contributions within 24 hours, during the 10-day period that proceeds the primary or general election, is that that would be information important for the public to know. She said she can understand questioning how valuable this is in terms of a $500 dollar limit "of a contribution." She stated that the report is currently required when a contributor gives more than $250 within ten days [of an election]. She said, "That was not an issue that was included in this bill at this time, and I believe part of not going to that is that it's being recommended that individuals be permitted to give $1,000. So, certainly, if somebody gives $500 or $1,000 the week before the election, that is significant public information." REPRESENTATIVE SEATON stated his understanding that "without changing this, we're still at requiring recording the $250." MS. MILES answered that that's correct. She stated, "If it's not included in this at some kind of an increase, then it would be required when someone gives more than $250." Number 1056 REPRESENTATIVE BERKOWITZ asked Ms. Miles who the individual is who requested the proposed legislation. MS. MILES answered that [APOC] wants the legislation. In response to a follow-up question by Representative Berkowitz, she clarified that the commission has always wanted many components of this bill. REPRESENTATIVE BERKOWITZ asked if there are parts of the legislation that the commission did not initiate. MS. MILES responded that she doesn't think there are. She stated that she does not think there is anything in the proposed legislation that wasn't brought forward by the commission as a concept. REPRESENTATIVE BERKOWITZ stated the following: I have not heard anyone explain to me why this is in the public interest, and this seems to me to be driven by (indisc.) in the pocket. And I will fight it every inch of the way. And I want you to know that. I do not hold you personally responsible, but I assure you that this is one of the worst pieces of legislation that's come before me in my seven years in the legislature. REPRESENTATIVE BERKOWITZ turned to [Section (1) of the proposed CS for HB 157, labeled HB157.doc, 4/24/2003]. He noted that it would effectively push municipal elections out of APOC's purview, unless municipalities opt in. He asked if that would effect the communities of Anchorage, Homer, Juneau, and Fairbanks. MS. MILES answered yes. REPRESENTATIVE BERKOWITZ asked what the cost to those communities would be to pick up "the APOC requirements here." MS. MILES replied that APOC is working on determining that, but at this point doesn't know. REPRESENTATIVE BERKOWITZ asked what portion of APOC's budget currently goes to handling municipal elections. MS. MILES responded that that is also difficult to determine, because municipal and state elections are all handled the same. She clarified that she has three senior staff members who work with elections - both state and municipal. She indicated they also work on complaints from state and municipal [elections]. Complaints from municipalities regarding ballot and funding questions can be complex and time-consuming to address. In response to a question by Representative Berkowitz, Ms. Miles noted that [APOC's] current budget is $752,600. Number 0815 CHAIR WEYHRAUCH referred to [page 2, lines 18-21 of the proposed CS], which read as follows: A municipality that opts for the application of the requirements of this chapter shall pay a fee to the state for services under this chapter. The amount of the fee will be set by the Department of Administration in regulation. CHAIR WEYHRAUCH asked if the fee that was paid would be the full and true cost to the state for services. MS. MILES answered that she is not familiar with "how this would come about," because this regulation would be written by the department that's more familiar with accessing fees than APOC is; although, she noted that APOC does have a program receipt fee for paid lobbyists who register. She stated her understanding that "they would attempt to be writing a regulation that would fairly assess a fee concerning the actual costs of administering it per community." CHAIR WEYHRAUCH turned to the new proposed language on page 3, [beginning on line 26 of the proposed CS for HB 157, labeled HB157.doc, 4/24/2003], which read as follows: and, for contributions in excess of $250 in the aggregate a year, listing the principal occupation and employer of the contributor. CHAIR WEYHRAUCH asked if that referred to a calendar year. MS. MILES answered yes. She added that this [language] is a major change from existing law. Presently, only those contributors who give more than $100 are listed by name and address; however, the proposed change would mean that all contributors would be reported by name and address. She added that the foundation for mandatory filing is also set forth "in this bill." CHAIR WEYHRAUCH noted that page 5 and page 8 [of the proposed CS for HB 157, labeled HB157.doc, 4/24/2003] contain similar changes. He turned to page 5, lines 30-31, which read: (l) Upon request of the commission, the information required under this chapter shall be submitted electronically. CHAIR WEYHRAUCH said he assumed that means that "this is the electronic reporting component of this statute." MS. MILES concurred. CHAIR WEYHRAUCH asked Ms. Miles to define the "request of the commission". Number 0595 MS. MILES stated that [this amendment to AS 15.13.040] would most likely "cover everyone." [Regarding electronic filing], she noted that a new system will be used, which will be web- based and, hopefully, user-friendly. She noted that a candidate can buy a computer with campaign funds and keep that computer afterward. She indicated [electronic filing] would be mandatory, with "narrow exceptions." She concluded, "When we get there, I'm sure that the Department of Law will most likely recommend that we do so by a formal regulation." CHAIR WEYHRAUCH noted that many times during an election, reporting is done at the last minute. He remarked that some time may lapse between a candidate's pushing the send button and the commission's receipt of that report. He asked what the rule would be concerning that. MS. MILES answered that the commission hasn't discussed that issue, but she stated that she is certain it would be when the report was sent. She added that that is what [APOC] considers when a report is postmarked. Under the current APOC electronic filing system, the time issue is treated liberally, especially if someone has a problem with E-mail or has a system crash, for example. She added that [APOC] has even made house calls to help people. CHAIR WEYHRAUCH commented, "You may be very liberal about it, but I know when it's very tense and it's very contentious about when somebody sent something in, it needs to be very clear to those people, because a lot of these end up in court. And I would like to know on the record now what you're thinking is ...." MS. MILES stated, "It would be when it was sent. Likewise, when we receive [a fax] form on a due date, we count it timely, as long as it came on that due date before midnight ...." In response to follow-up questions by Chair Weyhrauch, she confirmed that [the transmittal would count as timely] as long as the send button on a fax machine or E-mail was pushed before midnight. CHAIR WEYHRAUCH noted that in some cases, individuals have filed with APOC or the Division of Elections and have found later that there's no record of that filing. If the candidates had not kept a record for themselves, there would be no record at all, he said. He asked what candidates should do to ensure they have their own records if they file electronically. MS. MILES said she knows of electronic record-keeping mechanisms that can be activated on a person's computer and fax machine. She revealed that the rules are stricter at the Division of Elections. For example, if a person has not signed "the declaration" by 5:00 [p.m.] on June 1, it doesn't matter if that person is in line - he/she is not a candidate. She stated her understanding that that comes from a supreme court decision. Number 0267 CHAIR WEYHRAUCH turned to page 6, Section 9 [of the proposed CS]. He offered his understanding that this section addresses fundraising issues. He noted [subsections] (a) through (e). He asked if it is APOC's intent that "only these entities are ... to be included in fundraisers, and no other specific provision of fundraising activity is to be included." MS. MILES answered no. She noted that [Section 9] has troubled the drafters and attorneys "because of that very construction rule," and she indicated that any help would be welcome. She clarified that the intended concept of this section is in regard to the high volume, low contribution activities, such as selling tee shirts or holding a dance, for example. CHAIR WEYHRAUCH stated, "It's a very difficult and troubling thing for the public who wants to just innocently run for office, to know whether they're going to be subject to some sort of potentially criminal violation, by having a fundraiser, because they're innocently trying to raise ... some money by selling cookies, or something else that's not included here." He posited that it would save APOC time to send out letters "before everybody runs out to have a fundraiser," in order to have some certainty on this issue. MS. MILES explained that [Section 9] is meant to provide relief from reporting certain contributors by name and address and accounting for them in that manner, so that when a high volume, low cost fundraising event takes place, "you are permitted to simply report the proceeds of that, ... your end costs of that, and the number of people who attended." She indicated some concern on the part of attorneys regarding particular items that [may or may not be covered under subsection (c)]. CHAIR WEYHRAUCH stated that most people he knows want to run an honest campaign and don't want to be accused of being unethical. He indicated he thinks it's important to make certain that people are encouraged to run for public office, and that the voters are informed. MS. MILES stated that APOC concurs. CHAIR WEYHRAUCH noted that he has held fundraisers where cash has been given, and he had to send the cash back to the government, because he could not tell who had donated it. TAPE 03-44, SIDE A Number 0033 MS. MILES explained that [a candidate] wouldn't have to send the money back if it was $50 and the name and address of the contributor was known. In response to a comment by Chair Weyhrauch, she acknowledged that $50 dollars would be too much if the name of the contributor was not known. She said that [APOC] staff tries to encourage anyone who may be holding a fundraiser, such as a cookie sale, to have a person sit where the donations are placed and add notes to those donations that are for more than the amount allowed in the exemptions. CHAIR WEYHRAUCH turned to [line 3] of Section 10 [at the top of page 7 of the proposed CS] and asked for the definition of "nongroup entity". MS. MILES stated that the nongroup entities are nonprofit corporations that, because of the way they are organized, are unable to have a political action committee. She noted that the Alaska State Supreme Court said that those nonprofit corporations should be able to participate somehow in political campaigns. Ms. Miles told the committee that the poster child of nongroup entities is the [Alaska Conservation Alliance and Alaska Conservation Voters (ACA/ACV)]. She noted that there are other groups like that and "this is how we have - after some regulatory [language] turning to statutory language - dealt with them." REPRESENTATIVE BERKOWITZ asked if there is a problem causing the necessity to increase the contribution amounts. He offered the amounts shown in [Section 10, subsection(b)(1) and (2)] as examples. MS. MILES replied that the philosophy is that if there is more availability for legal participation in the process of contributing to campaigns and helping to fund political groups that want to participate in campaigns, then there will be less "stuff going on that we can't regulate and can't provide public information on." For example, she listed: issue advocacy, soft money, and - in some ways - independent expenditures; although she said that the latter is reportable. Number 0311 REPRESENTATIVE BERKOWITZ opined, "This is just a laundering machine for soft money." He stated that everybody knows that money is the mother's milk of politics and when the amount of money that's available to political parties and nongroup entities is increased, that invites corruption, decreased public participation, and decreased public confidence in the process. He added: And what you do in a state that is currently dominated by a single political party is you make it very hard for people who have (indisc. - coughing) and it makes it incredibly difficult, even for members of that dominate party who have left [the] majority perspectives in that party, to maintain their perspective. ... You will see within the Republican Party - and I have seen it - that the moderates get whacked on account of these kind of fundraising tools. REPRESENTATIVE BERKOWITZ, regarding the increased funds, stated, "There is no problem that exists, and there is no problem that needs to be redressed through this legislation." REPRESENTATIVE LYNN stated that an incumbent's circle of supporters is typically much larger than somebody who is just getting into the process; therefore, it may be easier for an incumbent to attract larger contributions. He concluded, "It may work against opening up the political process so that anybody can run." MS. MILES acknowledged Representative Lynn's remark and said that it wasn't an issue that had been discussed. CHAIR WEYHRAUCH complimented Ms. Miles as "a wonderful bureaucrat to work with." Number 0590 REPRESENTATIVE LYNN suggested he may introduce future legislation to establish some kind of bank account for candidate contributions and payments of expenses that would be viewable by the public over the Internet without a password. He pointed out the merits of the idea, including that it would help people report contributions in a timely manner and would save APOC from extra work. He added that he used electronic filing during his own campaign and it was a big help. REPRESENTATIVE SEATON said he thinks that the public has strongly expressed the desire for campaigns that are run by candidates who talk to individuals in their districts rather than by those using a separate pot of money under which they conduct campaigns without contacting or involving the people in their district. He said, "I feel that these increases in campaign contributions are going to be exactly opposite [of] what I've heard from my constituents." He stated that he will be in opposition to the increases. Furthermore, he said, he thinks that the change proposed to allow lobbyists who don't reside in a candidate's district to contribute [to that candidate's campaign] would give incumbents such as himself a separate pot of money to run a political campaign; therefore, he stated that he would be opposing that section of change. REPRESENTATIVE SEATON turned back to the 24-hour reporting rule. He said that he doesn't see the benefit of having the rule with the $500 limit in campaign contributions, because [that amount is] not substantial enough to influence an election, although perhaps it could allow a candidate to strong-arm [the opponent's contributors]. He stated that it's a burden on any candidate to run a campaign, especially without a professional treasurer to assist in complying with the 24-hour reporting. REPRESENTATIVE SEATON stated that if individual campaign contributions of up to $50 are being allowed at events, without reporting the [contributor's] name, then he doesn't understand why a requirement is being made to report a $15 contribution "outside of that event." He clarified that it doesn't make any sense to let somebody pay $50 one time and $5 another and have different reporting requirements. He stated that he would like to see that changed. Number 1137 CHAIR WEYHRAUCH turned to Section 14. He asked if the bill still maintains the prohibition on fundraisers during legislative session. MS. MILES answered that this bill does not. She noted that the campaign disclosure law does not prohibit candidates - whether incumbents or not - from accepting campaign contributions during the legislative session. She noted that the legislative ethics law is where the prohibition on that activity applies to incumbents. In fact, she added, the Alaska Supreme Court decided that there was no purposed in having a legislative time- out for all candidates. MS. MILES referred to Section 14, [on page 8, lines 8, 10, and 12], where the words per year were added. She explained that that language was [proposed] because the revisor of statutes in the Department of Law thought that, without it, "it looked like it was a lifetime contribution." REPRESENTATIVE GRUENBERG stated that he supports that change. [HB 157 was heard and held. The motion to adopt the proposed committee substitute (CS) for HB 157, labeled HB157.doc, 4/24/2003 as a work draft was left pending.]
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