Legislature(1995 - 1996)

03/05/1996 08:03 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 368 - ELECTION CAMPAIGN FINANCE REFORM                                    
 HB 317 - ELECTION CAMPAIGN FINANCE REFORM                                     
 The next order of business to come before the House State Affairs             
 Committee was HB 368 and HB 317.                                              
 Number 0150                                                                   
 REPRESENTATIVE FINKELSTEIN referred the committee members to the              
 committee substitute 9-LS1260/F.  He said the committee substitute            
 attempted to incorporate the recommendations of the House State               
 Affairs Committee, the Alaska Public Offices Commission (APOC),               
 Senators, and public comments.  He said there were 30 amendments to           
 the initiative and HB 368.  The initiative remained substantially             
 the same, however.  He stated the amendments strengthened,                    
 broadened or liberalized the provisions and were in the best                  
 interest of public policy.                                                    
 Number 0257                                                                   
 REPRESENTATIVE PORTER wondered if Representative Finkelstein                  
 conferred with Mike Frank, Chair, Campaign Finance Reform Now, and            
 asked if he shared the same conclusion?                                       
 Number 0276                                                                   
 REPRESENTATIVE FINKELSTEIN said Mr. Frank had been involved.  He              
 would not say if it was or was not substantially the same because             
 it was beyond his ability.  He said Mr. Frank was concerned about             
 the final product.  The subject areas addressed were appropriate              
 for the legislature to consider and were reasonable public policy             
 debates.  He said Mr. Frank was aware of the amendments and                   
 suggested including him at the next hearing.                                  
 Number 0365                                                                   
 REPRESENTATIVE PORTER said he was not asking for a legal opinion,             
 if it was substantially the same.  He wondered if Mr. Frank would             
 advertise against the committee substitute as written.                        
 Number 0390                                                                   
 REPRESENTATIVE FINKELSTEIN suggested asking Mr. Frank directly.  He           
 further said Mr. Frank was comfortable with the approach                      
 represented in the committee substitute.  He reiterated the                   
 amendments were reasonable areas for debate.                                  
 Number 0432                                                                   
 CHAIR JAMES said she was concerned about "clamping-down" so far               
 that only those with their own money could participate.  She said             
 the best way to deal directly with this issue was to make sure the            
 public knew about the APOC reporting requirements.                            
 CHAIR JAMES asked Representative Finkelstein to explain the                   
 Number 0561                                                                   
 REPRESENTATIVE FINKELSTEIN explained Amendment 1 deleted the                  
 indexing only of contribution limits.  He called it a technical               
 REPRESENTATIVE FINKELSTEIN explained Amendment 2 was a technical              
 correction to clarify the registration of a contribution.  He said            
 it was not the intent of the initiative to require an individual              
 toregister before making a contribution.  He called it an odd                 
 section and said it should have been drafted better.  He further              
 explained it was a change to current law.                                     
 REPRESENTATIVE FINKELSTEIN explained Amendment 3 returned the                 
 contribution limit back to $100 as written in the existing law.               
 REPRESENTATIVE FINKELSTEIN explained Amendment 4 adopted the                  
 approach of the legislature for honorariums rather than the                   
 approach in the initiative.                                                   
 REPRESENTATIVE FINKELSTEIN explained Amendment 5 shortened the fund           
 raising period in the beginning and increased it towards the end.             
 The beginning period for a legislative race was June 1.  The                  
 beginning period for a statewide race was January 1, and for all              
 other races, five months before the date of the election.  He said            
 this area was controversial.  The amendment strengthened the                  
 initiative.  It was bound by constitutional limitations, however.             
 A longer period as in the initiative was more likely to survive a             
 constitutional challenge.  He explained the amendment did not limit           
 the funds raised, just the period of fund raising.  He reiterated             
 the issue was problematic due to past court cases.                            
 REPRESENTATIVE FINKELSTEIN explained Amendment 6 allowed                      
 contributions from out-of-state family members of up to $2,000 for            
 a House race, $3,000 for a Senate race, and $20,000 for a statewide           
 REPRESENTATIVE FINKELSTEIN explained Amendment 7 was a request by             
 APOC to reduce paperwork.                                                     
 REPRESENTATIVE FINKELSTEIN explained Amendment 8 was a conforming             
 REPRESENTATIVE FINKELSTEIN explained Amendment 9 allowed for the              
 repayment of surplus contributions in approximate proportions.                
 This was not allowed in the initiative.  He said a carry forward              
 was limited to $5,000 for a House race, $7,500 for a Senate race,             
 and $50,000 for a statewide race.  He further explained the                   
 amendment allowed some money to be put into an office fund.                   
 Disclosure would be necessary to meet certain standards to ensure             
 it was not used for personal use, however.                                    
 REPRESENTATIVE FINKELSTEIN explained Amendment 10 simplified the              
 initiative.  The initiative applied aggravating and mitigating                
 criminal factors, and state of mind, for APOC to apply certain                
 penalties.  The amendment included the higher maximums when acted             
 knowingly.  Furthermore, he said APOC knew how to determine the               
 difference between an intentional and an accidental late filing               
 REPRESENTATIVE FINKELSTEIN explained Amendment 11 inserted the                
 definition of a political party.  He said it was a clarification              
 based on complaints from the Libertarian Party.  The Party was                
 concerned it would be considered a group rather than a party.  The            
 definition was expanded to include 3 percent of the votes in the              
 past five governor elections.  The definition, if adopted, would              
 increase the official parties to five.  They were:  the Green,                
 Libertarian, Democratic, Republican and AIP Parties.                          
 REPRESENTATIVE FINKELSTEIN explained Amendment 12 was based on                
 discussions to reduce the penalties.  The initiative included a               
 felony penalty for intentional violations.  The amendment changed             
 it to a misdemeanor.                                                          
 Number 1102                                                                   
 REPRESENTATIVE PORTER asked if the expansion of the political party           
 definition in Amendment 11 brought in any more political parties              
 besides the Libertarian Party?                                                
 Number 1140                                                                   
 REPRESENTATIVE FINKELSTEIN replied he did not remember any more.              
 He reiterated the amendment was based on a complaint from the                 
 Libertarian Party.                                                            
 Number 1152                                                                   
 CHAIR JAMES commented if there were any more parties out there,               
 they probably were not a threat to campaign finance reform.                   
 Number 1160                                                                   
 REPRESENTATIVE FINKELSTEIN replied Amendment 11 was a reasonable              
 compromise.  He did believe, however, that at some time a party did           
 become a group.                                                               
 REPRESENTATIVE FINKELSTEIN moving forward explained Amendment 13              
 removed the 24 hour reporting requirement for expenditures from               
 law.  Currently, the Commission did not require it, and the bill,             
 he said, did not want to interfere with the reporting concepts.               
 This was based on a recommendation from APOC.                                 
 REPRESENTATIVE FINKELSTEIN explained Amendment 14 removed the                 
 requirement for a group to report a contribution worth over $250.             
 This was based on a recommendation from APOC.                                 
 REPRESENTATIVE FINKELSTEIN explained Amendment 15 was a conforming            
 amendment to a Supreme Court decision.  The amendment set the limit           
 at $250 for an individual to use expenditures to advertise in a               
 newspaper, for example.                                                       
 REPRESENTATIVE FINKELSTEIN explained Amendment 16 attempted to                
 define a public funded entity to mean, a state, a political                   
 subdivision, and a state-funded agency.  This was based on a                  
 recommendation from Jack Chenoweth, Attorney, Legislative Legal and           
 Research Services.                                                            
 REPRESENTATIVE FINKELSTEIN explained Amendment 17 deleted "one-               
 half" and inserted "one-third" of expenditures in support or in               
 opposition to a candidate, was needed to include the name of the              
 candidate as part of the name of the group.  This was based on a              
 recommendation from APOC.                                                     
 REPRESENTATIVE FINKELSTEIN explained Amendment 18 allowed political           
 parties and their subdivisions to pass money among themselves.                
 This was not allowed in the initiative because they organized as              
 separate groups, whereas, the amendment viewed them as                        
 Number 1446                                                                   
 REPRESENTATIVE PORTER asked, if Amendment 18 were adopted, could              
 anyone who described himself as a subgroup, be treated as part of             
 the party?                                                                    
 Number 1469                                                                   
 REPRESENTATIVE FINKELSTEIN replied, "no."  He explained the                   
 definition or status of a subgroup derived from the party.                    
 REPRESENTATIVE PORTER asked where was that explained in the bill?             
 Number 1532                                                                   
 JACK CHENOWETH, Attorney, Legislative Legal Counsel, Legislative              
 Legal and Research Services, Legislative Affairs Agency, referred             
 the committee members to page 24, lines 12 - 13, which read "to               
 include a subordinate unit of the organized group of voters                   
 qualifying a political party."  He said the initiative did not                
 address the relationship between the main party and subordinates.             
 The amendment, therefore, clarified the relationship between the              
 Number 1605                                                                   
 REPRESENTATIVE PORTER asked what the individual subordinate units             
 could do to raise their own funds, and to distribute their own                
 funds to candidates.  He wondered if the contribution limit of                
 $10,000 was treated individually or cumulatively.                             
 Number 1667                                                                   
 MR. CHENOWETH asked Representative Porter if the groups were                  
 treated as a subordinate unit?                                                
 REPRESENTATIVE PORTER replied some were and some were not.                    
 Number 1658                                                                   
 REPRESENTATIVE FINKELSTEIN replied, if the party claimed them as a            
 subordinate unit, it would fit under the party limits.                        
 REPRESENTATIVE PORTER wondered where that was addressed in the                
 Number 1667                                                                   
 MR. CHENOWETH replied, it was not addressed in the bill.  Language            
 would be needed to clarify that issue.                                        
 REPRESENTATIVE FINKELSTEIN suggested it could be clarified on page            
 24, line 12, to read, "to include a subordinate unit as determined            
 by the qualifying party."                                                     
 Number 1689                                                                   
 REPRESENTATIVE PORTER commented the bill should say what we mean.             
 Number 1697                                                                   
 REPRESENTATIVE FINKELSTEIN replied, in defense of the language, the           
 party itself would answer the question, if a subordinate unit was             
 part of the party.                                                            
 Number 1729                                                                   
 CHAIR JAMES said the bottom line was the contribution.  The                   
 contributions would need to be tallied from all the subdivisions to           
 determine they did not go over the maximum.  Furthermore, she was             
 concerned it would leave groups out of the decision making process.           
 Number 1835                                                                   
 REPRESENTATIVE PORTER asked how a party determined if a subgroup              
 was officially part of the party?  He also asked if a subgroup that           
 was part of the party could give an additional $10,000?  He lastly            
 asked if the subgroup was a group could it give an additional $250?           
 Number 1870                                                                   
 REPRESENTATIVE FINKELSTEIN replied he would suggest an amendment to           
 resolve this issue so that the parent party would decide who became           
 part of the party.                                                            
 Number 1887                                                                   
 CHAIR JAMES said the District 34 Republicans were considered a                
 subdivision because the chair was elected and a member of the                 
 statewide central committee.  The Lincoln Society, on the other               
 hand, was an affiliate.  The Lincoln Society was a fund raising               
 group only.  She called the Lincoln Society a group and said it was           
 limited to the provisions under a group in the initiative and the             
 Number 1968                                                                   
 REPRESENTATIVE PORTER asked if the committee substitute raised the            
 limits on groups also?                                                        
 Number 1975                                                                   
 REPRESENTATIVE FINKELSTEIN replied, it returned the limits to the             
 existing law, $1,000.  He further said the committee substitute               
 addressed the issue of subordinates fitting under the overall                 
 limits.  Furthermore, a group could decide to organize as a group             
 or a party under the current law, the initiative and the bills.               
 Therefore, the Lincoln Society had a choice to be a group or a                
 party.  Right now it was treated as a subgroup of the party                   
 according to APOC.  He said most groups would chose to remain part            
 of the party due to the $10,000 limit for a House race, $15,000 for           
 a Senate race, and $200,000 for a statewide race.  He said there              
 were very few races where the limits had been reached in the past.            
 He reiterated the choice could not be controlled, however.                    
 Number 2059                                                                   
 REPRESENTATIVE PORTER asked where it was addressed in the bill?               
 REPRESENTATIVE FINKELSTEIN replied page 24, lines 12 - 13.  The               
 language addressed the total limit under the party.                           
 Number 2084                                                                   
 CHAIR JAMES replied the Lincoln Society was not part of the party             
 in her opinion because it was a select group of people who chose to           
 be a society, whereas the party itself was elected by the people.             
 Number 2097                                                                   
 REPRESENTATIVE FINKELSTEIN replied, "right," because the Republican           
 Party accepted them and allowed them to operate as a party                    
 subdivision now.  The choice would be the same under the                      
 Number 2111                                                                   
 CHAIR JAMES suggested further discussion with the Democratic and              
 Republican Parties was needed.                                                
 REPRESENTATIVE FINKELSTEIN said the parties did not like a limit on           
 any contribution amount.                                                      
 Number 2134                                                                   
 CHAIR JAMES said all contributions should come directly from the              
 parties for grass root politics and support.  She said a limit                
 should be left to special interests and individuals and not to the            
 Number 2211                                                                   
 REPRESENTATIVE FINKELSTEIN said the committee substitute tried to             
 raise the limits.                                                             
 CHAIR JAMES replied the limits were fine.  She said she was opposed           
 to the idea of limiting.                                                      
 Number 2258                                                                   
 REPRESENTATIVE FINKELSTEIN responded limits were included because             
 of the fear of laundering money through the party.  He said the               
 parties would do great under the proposed system because the bulk             
 of the $500 to $1,000 contributions would probably go to the party            
 due to the restrictions on individual contributions.  Therefore,              
 the total amount of money would probably decrease, but the amount             
 of money going to the parties would probably increase.                        
 Number 2300                                                                   
 REPRESENTATIVE PORTER asked Representative Finkelstein what the               
 bill did again to the contribution limits?                                    
 REPRESENTATIVE FINKELSTEIN said he would answer that question as he           
 explained the amendments further.                                             
 Number 2318                                                                   
 REPRESENTATIVE FINKELSTEIN moving forward explained Amendment 19              
 fixed a technical mistake.                                                    
 REPRESENTATIVE FINKELSTEIN explained Amendment 20 conformed to a              
 previous provision related to a Supreme Court decision.                       
 REPRESENTATIVE FINKELSTEIN explained Amendment 21 changed the                 
 effective date to January 1, 1997.                                            
 REPRESENTATIVE FINKELSTEIN explained Amendment 22 incorporated                
 provisions from the charitable gaming bill recently passed in the             
 House of Representatives, excluding the raffle provision.                     
 REPRESENTATIVE FINKELSTEIN explained Amendment 23 allowed out-of-             
 state contributions of up to $2,000 for a House race, $3,000 for a            
 Senate race, and $20,000 for a statewide race.                                
 REPRESENTATIVE FINKELSTEIN explained Amendment 24 increased the               
 maximum contribution limit from a party to a candidate to $10,000             
 for a House race, and $15,000 for a Senate race.                              
 Number 2390                                                                   
 REPRESENTATIVE PORTER asked if Amendment 23 included individual               
 REPRESENTATIVE FINKELSTEIN replied Amendment 23 allowed                       
 contributions from individuals from out-of-state.                             
 CHAIR JAMES explained it was the cumulative amount.                           
 REPRESENTATIVE FINKELSTEIN moving forward explained Amendment 25              
 increased the contribution amount from a group to a candidate from            
 "$500" to "$1,000."  A return to current law.                                 
 REPRESENTATIVE FINKELSTEIN explained Amendment 26 set the maximum             
 contribution limit at $1,000 from a group to another group.  This             
 was not allowed under the initiative.                                         
 REPRESENTATIVE FINKELSTEIN explained Amendment 27 allowed the                 
 governor and lieutenant governor to raise money during the                    
 legislative session immediately prior to an election.                         
 REPRESENTATIVE FINKELSTEIN explained Amendment 28 included a delay            
 of 60 days before going to court for a citizen suit after a                   
 complaint was filed with APOC.  This was to eliminate last minute             
 TAPE 96-29, SIDE B                                                            
 Number 0000                                                                   
 REPRESENTATIVE FINKELSTEIN explained Amendment 29 expanded the                
 exemption for small campaigns to apply to municipal races.  The               
 approach was expanded to $2,500 for both contributions and                    
 expenditures in an attempt to reduce paperwork.                               
 REPRESENTATIVE FINKELSTEIN explained Amendment 30 attempted to                
 reduce the conflicts if the bill and the initiative were both                 
 passed.  This, was only an issue, however, if they were                       
 substantially different.                                                      
 Number 0093                                                                   
 CHAIR JAMES said HB 368 and HB 317 were scheduled again for                   
 Saturday, March 9, 1996.  She asked what was the will of the                  
 committee members.  She commented the next committee of referral              
 was the House Judiciary Committee.                                            
 Number 0116                                                                   
 REPRESENTATIVE PORTER asked what was the progress of SB 191?  He              
 stated he was concerned about the time remaining, and suggested a             
 push for Saturday.                                                            
 CHAIR JAMES asked the committee members to study the committee                
 substitute carefully before the next hearing.                                 
 Number 0143                                                                   
 REPRESENTATIVE PORTER asked what the limits were for individuals              
 and groups?  He said a group was defined as a political action                
 committee (PAC).  He commented only individuals could give to PACs            
 and only individuals and PACs could give to parties.  He asked                
 again what were the limitations on giving to a party?                         
 REPRESENTATIVE FINKELSTEIN replied, the contribution limits were              
 $5,000 from an individual and $1,000 from a group.  Under the                 
 initiative, however, it was $5,000 from an individual and $0 from             
 anybody else.                                                                 
 REPRESENTATIVE PORTER said an individual could give $5,000 to a               
 party.  He further asked how much an individual could give to a               
 REPRESENTATIVE FINKELSTEIN replied $250.                                      
 REPRESENTATIVE PORTER said a PAC could give $1,000 to a party.                
 REPRESENTATIVE FINKELSTEIN replied a PAC could give $1,000 to a               
 candidate.  He said he did not like the word "PAC" because it had             
 a federal definition that was not being followed.  For this reason            
 he preferred the word "group" instead.                                        
 REPRESENTATIVE PORTER said the public understood the word "PAC"               
 better than the word "group."  A group could be viewed as the local           
 Parent Teacher Association (PTA).                                             
 Number 0235                                                                   
 REPRESENTATIVE FINKELSTEIN said it was a loaded word and was viewed           
 Number 0255                                                                   
 CHAIR JAMES replied she did not like them as PACs or as groups, but           
 understood the Supreme Court decision that allowed them.                      
 REPRESENTATIVE FINKELSTEIN said it was a technicality.                        
 Number 0258                                                                   
 REPRESENTATIVE ROBINSON suggested a comparison of the provisions              
 for the next hearing of the current law, the initiative, and the              
 committee substitute.                                                         
 REPRESENTATIVE FINKELSTEIN said he could provide that for the next            
 hearing on Saturday, March 9, 1996.                                           
 Number 0285                                                                   
 REPRESENTATIVE OGAN asked if the committee substitute had been                
 adopted for consideration.                                                    
 CHAIR JAMES replied, "no."  She said it would be adopted on                   
 Saturday when there was a full committee present.                             

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