Legislature(2005 - 2006)CAPITOL 106
03/29/2005 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB201 | |
| HB183 | |
| HB170 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 201 | TELECONFERENCED | |
| *+ | HB 183 | TELECONFERENCED | |
| += | HB 170 | TELECONFERENCED | |
| += | HB 177 | TELECONFERENCED | |
| += | HB 191 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 183-CAMPAIGN FINANCE: SHARED EXPENSES 8:45:53 AM CHAIR SEATON announced that the next order of business was HOUSE BILL NO. 183, "An Act relating to the use of campaign contributions for shared campaign activity expenses and to reimbursement of those expenses." 8:45:57 AM REPRESENTATIVE MIKE HAWKER, Alaska State Legislature, as sponsor of HB 183, said the bill is a common sense fix that affects every person running for office in the state of Alaska. Under current statute, he said, a vendor has to break a bill into separate components and each candidate has to pay separately. The proposed legislation would allow one candidate to pay the bill, as long as the other candidates involved completely reimburse their share of that expense within 48 hours. He said the decision to make it 48 hours is reasonable. He indicated that what usually happens is that one candidate writes the check and the other candidates hand him/her a check almost simultaneously for ease of record keeping. The bill would clearly place the responsibility for campaign finance compliance upon the candidates themselves. 8:48:34 AM REPRESENTATIVE HAWKER said that Legislative Legal and Research Services has recommended the format in which the bill is written, specifically listing what candidates "may not do." He offered further details. He noted that there is a zero fiscal note in the committee packet. 8:49:08 AM REPRESENTATIVE GARDNER agreed that the concept of the bill is common sense. Notwithstanding that, she directed attention to page 2, line 17, which would require that the candidate [or group participating in the activity] "receives, within 48 hours after payment of the expense, complete reimbursement of the amount of campaign contributions used for payments made on behalf of another candidate or group participating in the activity." She said her concern is that if she were the candidate responsible for receiving that money, she can't control when the others reimburse her. She said she can only control when she asks them for the money. 8:50:06 AM REPRESENTATIVE HAWKER said Alaska has some of the strictest campaign finance laws in the U.S. He stated his intent in crafting the bill was to be careful not to create a loophole that would be too wide, but rather to make a specific provision. He explained, "We didn't want to have an open window that would allow candidate A to make a payment that candidate B could get around to paying sometime, someday, a month in the future." He said it's a judgment call. 8:51:03 AM REPRESENTATIVE GARDNER clarified that the bill should specify that the debtor is in violation in law if he/she doesn't pay within 48 hours. REPRESENTATIVE HAWKER said that's worth considering. 8:51:39 AM CHAIR SEATON said he can foresee that 48 hours might be [too short] a period, depending on weekend timing and mail delivery time. 8:51:56 AM REPRESENTATIVE GATTO said he is looking for a way a person may attempt to conceal a campaign contribution by paying the other person substantially more than a fair share of the bill. He said it would be much more difficult to track because the payment is not made to the vendor and there is no paper trail. He spoke of having 60 days to pay a vendor versus the 48 days to pay a candidate. He asked, "This is an option rather than a requirement, right?" 8:53:32 AM REPRESENTATIVE HAWKER confirmed that "this just provides an option." He said each expense needs to be documented by an invoice, and each candidate is required to maintain the documentary evidence of his/her expenditures. The way the campaign law is structured, the prohibition is against making a contribution to another candidate or group. He added, "We had to structure this exemption within the framework of an overall law that prohibits making contributions." Regarding getting the reimbursement in a situation where there is a bill from a vendor that can be unpaid for 60 days, the trigger, for example, would be when the person pays on behalf of another candidate. In that instance, he/she would then have 48 hours to be paid back. He added, "We're not creating two different time cycles here." 8:54:46 AM BROOKE MILES, Executive Director, Alaska Public Offices Commission (APOC), noted that the commission reviewed the bill at its last meeting and understands the practical reasons for it, since the current law is so restrictive. She said APOC is "fine with the bill," although it takes a neutral position on it. She said the bill speaks to candidates and groups. She pointed out that it is common for political candidates to join together to share a campaign activity, but it is not common for groups to do so. Because of that, she suggested only providing the exemption for candidates. 8:57:16 AM MS MILES, in response to a question from Chair Seaton, said the repayment time for expenditures that a candidate makes on his/her own behalf is "reasonably consistent business practices." In other words, whatever the vendor allows. She noted that most standard business practices don't go beyond 60 days. 8:57:38 AM CHAIR SEATON, regarding "other timing," stated his understanding that if a candidate makes personal expenditures, his/her campaign has to repay that amount within 72 hours. 8:58:00 AM MS. MILES answered that's correct. She added that if the committee thinks it would be more reasonable to expand the 48 hours to a 72-hour period, she doesn't think that would cause the commission concern either. 8:58:13 AM REPRESENTATIVE GATTO asked how APOC would treat "in a timely manner" rather than within 48 hours. 8:58:23 AM MS. MILES replied that APOC wouldn't have a problem, but she stated concern that there may be public perception that candidates are "landing" money or giving money to another candidate, which she said are practices that those interested in campaign finance reform are trying to stop. 8:59:01 AM CHAIR SEATON asked the sponsor if he has any objection to [Ms. Miles' suggestion to only provide the exemption to candidates]. 8:59:17 AM REPRESENTATIVE HAWKER noted that a conjunction is used: "candidate or group". He said, "So, we have not in any way invaded the other provisions of statute which specifically make those prohibitions against partnering between groups and candidates." CHAIR SEATON asked Representative Hawker if he could give some examples of when there would be different groups that would "be having this shared activity." REPRESENTATIVE HAWKER speculated perhaps during joint fund raising or a joint media expense. 9:01:15 AM REPRESENTATIVE RAMRAS suggested that a situation in which there was a majority House fundraiser including several individual candidates would be the mixing of a group and individual, because there would be the opportunity for specific campaign donations to an individual candidate as well as for the House majority. 9:01:39 AM REPRESENTATIVE HAWKER stated his understanding that that sort of an action would be prohibited under current statute. He said he would defer to APOC for a more correct interpretation. He reiterated his emphasis of the conjunctive "or". 9:02:13 AM MS. MILES reiterated that two or more groups don't usually share fundraising events very often. She indicated that she is fine with the language, particularly after hearing the clarification from the sponsor that there is no intent to permit group/candidate combinations that would be problematic with the other provisions of law. 9:03:29 AM CHAIR SEATON, after ascertaining that there was no one else to testify, closed public testimony. 9:03:47 AM CHAIR SEATON encouraged a motion from someone to change "48 hours" to "72 hours", because there exists a 72-hour timeframe for candidates to reimburse themselves and it seems [prudent] to keep the times the same to avoid "inadvertent mix-ups of timelines." 9:04:02 AM REPRESENTATIVE GATTO moved Amendment 1, as follows: On page 2, line 17: Delete "within 48 hours" Insert "within three working days" 9:04:24 AM CHAIR SEATON objected for the purpose of discussion. 9:04:45 AM MS. MILES, in response to a question from Chair Seaton, confirmed that the amount of time [that a candidate has to reimburse his/her campaign] is 72 hours. She said she does not see a problem with using the phrase "within three working days". 9:05:06 AM REPRESENTATIVE GATTO explained that "these things" often occur on a Friday night, so this amendment would allow the individual "some opportunity besides the weekend." 9:05:26 AM REPRESENTATIVE HAWKER said as long as he has the tacit concurrence from APOC that "within three working days" would not be a problem, he would be happy to defer to the wisdom of the committee. 9:05:49 AM CHAIR SEATON removed his objection to Amendment 1. There being no further objections, Amendment 1 was adopted. He added that the amendment is conceptual. 9:06:44 AM REPRESENTATIVE GARDNER moved Amendment 2, as follows: On page 2, line 17: Delete "receives" Insert "submits" On page 2, line 19: Between "on behalf of" and "candidate" Delete "another" Insert "the" REPRESENTATIVE GARDNER said that would put the onus on the person that owes the money, not the one to whom it is owed. 9:07:49 AM CHAIR SEATON objected for the purpose of discussion. REPRESENTATIVE GATTO said hand delivery, postmark, and check date would probably be covered under "submit". REPRESENTATIVE GARDNER said, as a candidate, she doesn't want to be responsible for when someone else repays her, only for when she repays him or her. 9:08:08 AM REPRESENTATIVE HAWKER stated opposition to Amendment 2. He said it is important to be cautious when making changes within the framework of existing statute to consider the entire framework in which the language is being constructed. The committee took an at-ease from 9:09:06 AM to 9:10:49 AM due to technical difficulties. 9:10:51 AM REPRESENTATIVE HAWKER restated for the record his opposition to Amendment 2. He explained that when changes are made in statute, a consideration has to be made that language is being added within the overall construct of the larger campaign finance statutes. He noted that the "largest prefacing comment" is on page 1, line 5, [in Section 1, which amends] AS 15.13.112(b), and which read: "Campaign contributions held by a candidate or group may not be". Following that is a list of things that the candidate may not do with his/her contributions. [Paragraph (7)] - the seventh prohibition in the list - shows that [those campaign contributions] may not be "used to make contributions to another candidate or to a group". He stated, "This is the provision that has been interpreted to say that I cannot make a payment on behalf of a group of candidates, because I would be contributing value or benefit to that group." Representative Hawker said the exemption that is necessary, in order to be consistent with the structure of statute, is that the person making that payment is the one who is in peril if they make the payment in violation of statute. He continued: So, we create an exemption that protects the payor candidate from that peril, by saying that they are not held in violation of [Paragraph] (7) here if they receive back from the other candidate ... the ratable reimbursement. And it's important here, because the ... candidate who is making the payment - placing themselves in peril - that is a risk they are assuming on themselves. And ... if they, in fact, do not have ... arrangements made with the other candidate to receive that money back, ... they have made ... an illegal contribution, in that they are the risk-taker in this piece. ... I believe the onus should be on the paying candidate, not trying to shift this into the other candidate paying. REPRESENTATIVE HAWKER offered a hypothetical example. 9:14:37 AM CHAIR SEATON maintained his objection. 9:14:48 AM REPRESENTATIVE GATTO responded as follows: I guess where I'm going is: I didn't do it in 72 hours or three working days ..., and now I'm in violation. So, I figure, "Well, I can get out of this if I simply go directly to the vendor." But the other guy's already paid the vendor. And now the vendor has money from the other guy and me; now he has to make a reimbursement to my ... rich friend. [Are] there any violations? Have I successfully gotten out of trouble by doing that? 9:15:19 AM REPRESENTATIVE HAWKER responded that he is not in the position to say how APOC would rule on a specific case. Notwithstanding that, he surmised that in that case it would be legitimate to interpret that the wealthy candidate in fact overpaid his/her portion to the vendor and did not make a loan, because "it had been paid by the 'poor' candidate, who paid directly." At that point, it would be incumbent upon the rich candidate who had overpaid the vendor to receive a reimbursement from the vendor. He added, "I think the doctrine of common sense would apply in the interpretation here." 9:16:00 AM REPRESENTATIVE GATTO clarified that a person could delay his/her reimbursement by three months because the vendor is satisfied. He queried, "My rich friend is simply willing to leave himself in that hole of me turning [up] three months later and paying the vendor?" Representative Gatto commented, "No, I can't do that." 9:16:27 AM CHAIR SEATON clarified that "it has to be not only the amount, but it has to be received, otherwise you as the ... rich candidate are in violation." He said [Amendment 2] would shift the burden to the poor candidate whether or not he/she submits or not, instead of saying that the rich candidate "only can do this if they're going to get reimbursed within the three working days." 9:16:56 AM REPRESENTATIVE GARDNER said that's the heart of what she is trying to get at, and she reiterated her previous statements about not being able to be in control of what someone else does. 9:17:13 AM A roll call vote was taken. Representatives Gardner and Gatto voted in favor of Amendment 2. Representatives Ramras, Elkins, and Seaton voted against it. Therefore, Amendment 2 failed by a vote of 2-3. 9:18:41 AM REPRESENTATIVE ELKINS moved to report [HB 183, as amended] out of committee with individual recommendations and the accompanying fiscal notes. There being no objections, CSHB 183(STA) was reported out of the House State Affairs Standing Committee.
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