Legislature(1995 - 1996)
03/05/1996 08:03 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 amendments. Number 0561 REPRESENTATIVE FINKELSTEIN explained Amendment 1 deleted the indexing only of contribution limits. He called it a technical amendment. 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 race. REPRESENTATIVE FINKELSTEIN explained Amendment 7 was a request by APOC to reduce paperwork. REPRESENTATIVE FINKELSTEIN explained Amendment 8 was a conforming amendment. 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 action. 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 interconnected. 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 two. 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 bill. 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 bill. 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 initiative. 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 parties. 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 contributions? 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 publicity. 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 PAC? 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 negatively. 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.