Legislature(2009 - 2010)CAPITOL 106

03/02/2010 08:00 AM STATE AFFAIRS


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08:04:02 AM Start
08:04:35 AM Confirmation(s): Personnel Board, Dr. Keith J. Hamilton
08:07:17 AM HB409
10:01:39 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearings: TELECONFERENCED
Adjutant General Thomas Katkus,
Commissioner, Dept. Military & Veterans'
Affairs
<Above Item Removed from Agenda>
Personnel Board
*+ HB 409 CAMPAIGN EXPENDITURES TELECONFERENCED
Heard & Held
= HB 401 CAMPAIGN EXPENDITURES & COMMUNICATIONS
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         March 2, 2010                                                                                          
                           8:04 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bob Lynn, Chair                                                                                                  
Representative Paul Seaton, Vice Chair                                                                                          
Representative Peggy Wilson                                                                                                     
Representative Max Gruenberg                                                                                                    
Representative Pete Petersen                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Carl Gatto                                                                                                       
Representative Craig Johnson                                                                                                    
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Scott Kawasaki                                                                                                   
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARING(S)                                                                                                         
                                                                                                                                
Personnel Board                                                                                                               
                                                                                                                                
     Dr. Keith J. Hamilton - Soldotna                                                                                           
                                                                                                                                
     - CONFIRMATION(S) ADVANCED                                                                                                 
                                                                                                                                
HOUSE BILL NO. 409                                                                                                              
"An Act relating  to state election campaigns, the  duties of the                                                               
Alaska Public  Offices Commission,  the reporting  and disclosure                                                               
of  expenditures  and  independent expenditures,  the  filing  of                                                               
reports,  and the  identification  of  certain communications  in                                                               
state election campaigns; and providing for an effective date."                                                                 
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 401                                                                                                              
"An Act relating  to state election campaigns, the  duties of the                                                               
Alaska Public  Offices Commission,  the reporting  and disclosure                                                               
of  expenditures  and  independent expenditures,  the  filing  of                                                               
reports,  and the  identification  of  certain communications  in                                                               
state election campaigns; and providing for an effective date."                                                                 
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 409                                                                                                                  
SHORT TITLE: CAMPAIGN EXPENDITURES                                                                                              
SPONSOR(s): STATE AFFAIRS                                                                                                       
                                                                                                                                
02/26/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/26/10       (H)       STA, JUD                                                                                               
03/02/10       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DR. KEITH HAMILTON                                                                                                              
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Testified as appointee to the Personnel                                                                  
Board.                                                                                                                          
                                                                                                                                
MIKE SICA, Staff                                                                                                                
Representative Bob Lynn                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 409 on behalf of the House                                                                  
State Affairs Standing Committee, sponsor, which is chaired by                                                                  
Representative Lynn.                                                                                                            
                                                                                                                                
JOHN PTACIN, Assistant Attorney General                                                                                         
Labor and State Affairs Section                                                                                                 
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Discussed a memorandum from the attorney                                                                 
general and answered questions during the hearing on HB 409.                                                                    
                                                                                                                                
PATTY WARE                                                                                                                      
Regulation of Lobbying                                                                                                          
Alaska Public Offices Commission (APOC)                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions during the hearing on HB
409.                                                                                                                            
                                                                                                                                
HOLLY ROBERSON HILL, Executive Director                                                                                         
Alaska Public Offices Commission (APOC)                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB
409.                                                                                                                            
                                                                                                                                
ALPHEUS BULLARD, Attorney at Law                                                                                                
Legislative Legal Council                                                                                                       
Legislative Legal and Research Services                                                                                         
Legislative Affairs Agency                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Provided comments  and answered  questions                                                             
during the hearing on HB 409.                                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:04:02 AM                                                                                                                    
                                                                                                                                
CHAIR BOB LYNN called the  House State Affairs Standing Committee                                                             
meeting to  order at 8:04  a.m.  Representatives  Seaton, Wilson,                                                               
Petersen,  and   Lynn  were  present   at  the  call   to  order.                                                               
Representative Gruenberg arrived as the meeting was in progress.                                                                
                                                                                                                                
^CONFIRMATION(S): PERSONNEL BOARD, DR. KEITH J. HAMILTON                                                                        
    CONFIRMATION(S): PERSONNEL BOARD, DR. KEITH J. HAMILTON                                                                 
                                                                                                                                
8:04:35 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  brought before the  committee the appointment  of Dr.                                                               
Keith Hamilton  to the  Personnel Board.   [The  committee packet                                                               
contains biographical information on Dr. Hamilton.]                                                                             
                                                                                                                                
8:05:09 AM                                                                                                                    
                                                                                                                                
DR.  KEITH HAMILTON,  testifying  as appointee  to the  Personnel                                                               
Board, offered  his background.   He said  he is an  educator who                                                               
was  involved  with  the Faith-Based  and  Community  Initiatives                                                               
Council.   He said he  understands what serving on  the Personnel                                                               
Board entails  and thinks he would  serve on the board  as a fair                                                               
and unbiased  individual who does  not necessarily "come  in with                                                               
any political or government experience."                                                                                        
                                                                                                                                
8:06:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON remarked  that  Dr.  Hamilton's resume  is                                                               
impressive, and he  said he appreciates Dr.  Hamilton's desire to                                                               
serve the state.                                                                                                                
                                                                                                                                
8:06:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  moved to  advance the confirmation  of Dr.                                                               
Keith  Hamilton to  the joint  session of  the House  and Senate.                                                               
There being  no objection, the  nomination of Dr.  Keith Hamilton                                                               
to the Personnel Board was advanced.                                                                                            
                                                                                                                                
                  HB 409-CAMPAIGN EXPENDITURES                                                                              
                                                                                                                                
8:07:17 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  announced the next  order of business was  HOUSE BILL                                                               
NO.  409,  "An Act  relating  to  state election  campaigns,  the                                                               
duties  of the  Alaska Public  Offices Commission,  the reporting                                                               
and disclosure of expenditures  and independent expenditures, the                                                               
filing   of   reports,   and  the   identification   of   certain                                                               
communications in state election  campaigns; and providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
CHAIR LYNN reviewed that there  was a recent [U.S.] Supreme Court                                                               
decision involving  corporations being defined as  a "person" and                                                               
making  independent campaign  expenditures  in support  of or  in                                                               
opposition to  a candidate or  initiative.  He said  the decision                                                               
has  had repercussions  throughout  the  political community  and                                                               
affects the all people.                                                                                                         
                                                                                                                                
8:09:21 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  said the committee's  purpose today is not  to debate                                                               
the U.S. Supreme  Court decision.  Chair Lynn  said the committee                                                               
recently  heard a  bill he  sponsored, which  addresses the  same                                                               
issue; however, he said that bill  would be held in order to work                                                               
with the committee sponsored HB 409.   He said he thinks everyone                                                               
will  acknowledge the  need to  create  some "side  bars" -  some                                                               
rules  - before  the end  of this  session.   He stated  that the                                                               
proposed bill is a bipartisan effort.                                                                                           
                                                                                                                                
8:11:45 AM                                                                                                                    
                                                                                                                                
MIKE  SICA,   Staff,  Representative   Bob  Lynn,   Alaska  State                                                               
Legislature,  presented  HB 409  on  behalf  of the  House  State                                                               
Affairs  Standing   Committee,  sponsor,  which  is   chaired  by                                                               
Representative Lynn.  He stated  that when the U.S. Supreme Court                                                               
decision was made on January  21, 2010, all Alaska's prohibitions                                                               
on  independent expenditures  were likely  made unconstitutional.                                                               
He said  the House  State Affairs  Standing Committee  has worked                                                               
quickly to address  this issue, sending a letter  to the governor                                                               
of  Alaska  by  February  12,   which  outlined  the  committee's                                                               
concerns.   Mr. Sica  reported that on  Friday, February  19, the                                                               
attorney general issued a legal  analysis supporting "the kind of                                                               
things   this  bill   is  doing"   related  to   disclosures  and                                                               
disclaimers  and  ensuring  fair  and  credible  elections  while                                                               
upholding  people's   right  to   free  speech.     He  expressed                                                               
appreciation  for  all those  who  have  been involved  with  the                                                               
proposed legislation.                                                                                                           
                                                                                                                                
8:13:43 AM                                                                                                                    
                                                                                                                                
MR.  SICA  paraphrased  the sectional  analysis,  which  read  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Section 1.Amends     language    relating     to    the                                                                
     applicability  of AS 15.13  (state election  campaigns)                                                                    
     to   clarify   that   the  chapter   applies   to   all                                                                    
     contributions,  expenditures,  and communications  made                                                                    
     for  the  purpose  of influencing  the  outcome  of  an                                                                    
     election covered by the chapter.                                                                                           
                                                                                                                              
     Section 2.Requires    the    Alaska   Public    Offices                                                                
     Commission   (APOC)   to   make   certain   information                                                                    
     available  to the  public within  24 hours  after being                                                                    
     received   by  the   commission  and   amends  language                                                                    
     relating  to   APOC's  duties   to  clarify   that  the                                                                    
     commission will  assist all persons to  comply with the                                                                    
     requirements of AS 15.13.                                                                                                  
                                                                                                                              
     Section 3.Amends AS 15.13.040(d) to  clarify that every                                                                
     person  making  an  expenditure   must  report  to  the                                                                    
     commission   unless  the   person   is  exempted   from                                                                    
     reporting by another provision of the chapter.                                                                             
                                                                                                                              
     Section 4.Adds  new  requirements  to  the  expenditure                                                                
     report  required  under AS 15.13.040(d)  and  specifies                                                                    
     that (1) if the report is  filed by a person who is not                                                                    
     an  individual, it  must be  certified by  the person's                                                                    
     treasurer or  fiscal officer, and  (2) the  report must                                                                    
     be filed in accordance with AS 15.13.110(g).                                                                               
                                                                                                                                
Regarding  Section  2,  he directed  attention  to  a  conforming                                                               
language  change  on  page  2,  line 4,  wherein  APOC  would  be                                                               
required to assist "all persons"  rather than candidates, groups,                                                           
and individuals.                                                                                                                
                                                                                                                                
Regarding  Section  4,  he directed  attention  to  new  language                                                               
beginning on page 3, line 5, which read:                                                                                        
                                                                                                                                
     If  the report  is filed  by a  person that  is not  an                                                                
     individual, the report must be  certified as correct by                                                                
     the treasurer or fiscal officer of the person.                                                                         
                                                                                                                                
MR.  SICA  offered his  understanding  that  the intent  of  that                                                               
language  is  to  ensure  accuracy.   He  noted  that  other  new                                                               
language  in Section  4 includes  requirements, including:   "the                                                           
name, address,  and nationality of  each officer and  director of                                                           
the  person",  "principal  occupation",   and  "employer  of  the                                                   
contributor".                                                                                                               
                                                                                                                                
MR. SICA,  in response  to Chair Lynn,  explained the  purpose of                                                               
the  proposed requirement  to report  nationality is  "to capture                                                               
whether the  person behind these  independent expenditures  was a                                                               
foreign corporation."                                                                                                           
                                                                                                                                
8:17:06 AM                                                                                                                    
                                                                                                                                
MR.  SICA returned  to the  sectional analysis.   He  paraphrased                                                               
Sections 5 through 10, which read as follows:                                                                                   
                                                                                                                                
     Section 5.Amends   language   in   AS 15.13.040(h)   to                                                                
     clarify    that   the    reporting   requirements    of                                                                    
     AS 15.13.040(d) do not apply  to an expenditure made by                                                                    
     certain individuals  acting independently of  any other                                                                    
     person.                                                                                                                    
                                                                                                                              
     Section 6.Amends  AS 15.13.040(p)  to  clarify  that  a                                                                
     person  who  is   required  to  disclose  contributions                                                                    
     received by that person in  an expenditure report under                                                                    
     AS 15.13.040(d)  must report  the  true  source of  the                                                                    
     contributions as the "contributor."                                                                                        
                                                                                                                              
     Section 7.Provides  that  no   person,  other  than  an                                                                
     individual     exempt      from     reporting     under                                                                    
     AS 15.13.040(h),  may make  an  expenditure unless  the                                                                    
     source of the expenditure has been disclosed.                                                                              
                                                                                                                                
     Section 8.Amends  language in  AS 15.13.084 to  clarify                                                                
     that a  person may not make  an expenditure anonymously                                                                    
     unless it  is made (1) for  certain communications, (2)                                                                    
     in connection  with a ballot  proposition as  that term                                                                    
     is   defined   by   AS 15.13.065(c),  and   (3) by   an                                                                    
     individual acting independently of any other person.                                                                       
                                                                                                                                
     Section 9.Amends  language in  AS 15.13.086 to  conform                                                                
     with the bill's repeal of AS 15.13.067.                                                                                    
                                                                                                                              
     Section 10.Expands  the   communication  identification                                                                
     requirements    of    AS 15.13.090    to    apply    to                                                                    
     communications  made by  all persons,  and additionally                                                                    
     requires a  person other than a  candidate, individual,                                                                    
     or  a  political party  to  (1)  identify the  person's                                                                    
     principal officer,  (2) include  a statement  from that                                                                    
     officer  approving the  communication, (3) provide  the                                                                    
     address of  the person's  principal place  of business,                                                                    
     and (4) identify certain contributors to the person.                                                                       
                                                                                                                                
MR. SICA, regarding Section 10, said the "certain contributors"                                                                 
would be the five largest donors.                                                                                               
                                                                                                                                
8:20:13 AM                                                                                                                    
                                                                                                                                
MR. SICA continued paraphrasing the sectional analysis,                                                                         
directing attention to Sections 11 through 16, which read as                                                                    
follows:                                                                                                                        
                                                                                                                                
     Section  11.   Adds a  new subsection  to AS  15.13.090                                                                
     that does  not permit a  communication to be made  by a                                                                    
     person   other  than   a   candidate,  individual,   or                                                                    
     political party, unless  the person's principal officer                                                                    
     has  certified to  APOC that  the officer  has reviewed                                                                    
     the   communication,  and   based   on  the   officer's                                                                    
     knowledge,  the  communication  is not  defamatory  and                                                                    
     does not contain defamatory statements.                                                                                    
                                                                                                                                
     Section 12.Requires expenditure reports  filed under AS                                                                
     15.13.040(e)  to  be filed  within  three  days of  the                                                                    
     expenditure being made, except  for an expenditure that                                                                    
     exceeds $250  and that is  made within nine days  of an                                                                    
     election must  be reported to  APOC within 24  hours of                                                                    
     the expenditure being made.                                                                                                
                                                                                                                                
     Section 13.Amends  the language  of AS 15.13.111(a)  to                                                                
     oblige all persons who are  required to report under AS                                                                    
     15.13 to preserve  certain records for a  period of six                                                                    
     years.                                                                                                                     
                                                                                                                                
     Section 14.Removes  language   from  AS 15.13.135  that                                                                
     permitted   only  individuals,   groups,  or   nongroup                                                                    
     entities  to make  independent expenditures  in support                                                                    
     or  in opposition  to a  candidate  for public  office.                                                                    
     Adds  language  requiring  all persons  making  certain                                                                    
     independent expenditures to comply with AS 15.13.090.                                                                      
                                                                                                                                
     Section 15.Repeals    AS    15.13.067,   a    provision                                                                
     permitting  only certain  persons to  make expenditures                                                                    
     in an  election for public office  and AS 15.13.140(a),                                                                    
     a provision that  provided that AS 15.13  should not be                                                                    
     interpreted   to   prohibit   a  person   from   making                                                                    
     independent  expenditures in  support or  in opposition                                                                    
     to a  ballot proposition or  question.  As  the chapter                                                                    
     now  reads, there  is no  ambiguity as  to whether  the                                                                    
     chapter  prohibits  persons   from  making  independent                                                                    
     expenditures  relating  to   a  ballot  proposition  or                                                                    
     question.                                                                                                                  
                                                                                                                                
     Section 16.    Gives  the  Act an  immediate  effective                                                                
     date.                                                                                                                      
                                                                                                                                
MR. SICA,  regarding Section 15,  offered his  understanding that                                                               
registration  before  expenditure  is already  in  AS  13.15.050;                                                               
therefore it is redundant in AS 15.13.067.                                                                                      
                                                                                                                                
8:23:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG directed  attention  to  an article  in                                                               
The   New  York  Times,  entitled,  "Anonymous  Donation,"  which                                                             
brings  up  the  possibility  of  corporate  contributions  being                                                               
funneled through nonprofit organizations.   He questioned whether                                                               
it would be constitutional for the legislature to prohibit this.                                                                
                                                                                                                                
MR. SICA responded that he has  discussed this issue, but has not                                                               
had communication  from Legislative  Legal and  Research Services                                                               
regarding it.                                                                                                                   
                                                                                                                                
8:25:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN,  regarding  the issue  of  nationality,                                                               
offered his understanding that even though  a person who is not a                                                               
U.S.  citizen  is  not  allowed   to  vote,  under  the  proposed                                                               
legislation,  a  foreign  national  would be  able  to  influence                                                               
Alaska's elections.   He opined  that that  is not right,  and he                                                               
said he  does not think the  people of Alaska would  like that to                                                               
happen.                                                                                                                         
                                                                                                                                
CHAIR LYNN responded  that he would not want that  to happen.  He                                                               
said it  is illegal for a  foreign national to contribute  to any                                                               
candidate,  and he  opined that  it  should also  be illegal  for                                                               
"that person  representing the corporation to  essentially do the                                                               
same thing,  even though  it's an  independent expenditure."   He                                                               
said the  proposed requirement to  identify nationality  is there                                                               
for the purpose  of full disclosure.  He stated  his concern that                                                               
it  should also  be disclosed  when a  corporation is  "an Alaska                                                               
subsidiary of a foreign nation."                                                                                                
                                                                                                                                
8:27:41 AM                                                                                                                    
                                                                                                                                
MR. SICA  added that the  legislature legally could  prohibit not                                                               
just foreign  corporations, but subsidiaries therein,  and it may                                                               
wish to  consider that  in the  future.   He echoed  Chair Lynn's                                                               
comment that the proposed requirement  to identify nationality is                                                               
for the purpose of full disclosure.                                                                                             
                                                                                                                                
CHAIR LYNN  said the idea  is to  give the public  information by                                                               
which  to  know if  they  may  have  been influenced  by  foreign                                                               
persons.                                                                                                                        
                                                                                                                                
8:28:51 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN noted  that the  disclosure showing  the                                                               
name  of  the  group  or  candidate  who  sponsored  an  election                                                               
advertisement shows  at the  bottom of  the television  screen in                                                               
small print.   Adding  further names will  make it  difficult for                                                               
the average person to be able to  read.  He asked if there is any                                                               
way  to require  the  advertisement sponsorship  to be  announced                                                               
audibly.   He  suggested  that  that would  allow  the public  to                                                               
instantly recognize a foreign corporation name.                                                                                 
                                                                                                                                
CHAIR LYNN pointed  out that many U.S.  corporations have foreign                                                               
sounding  names, because  America  is comprised  of  a myriad  of                                                               
ethnicities.                                                                                                                    
                                                                                                                                
8:30:39 AM                                                                                                                    
                                                                                                                                
MR. SICA said the proposed  requirement to report nationality, to                                                               
which  Representative Petersen  referred,  is  related to  filing                                                               
reports.  He  then highlighted language on page  5, lines [8-11],                                                               
which read as follows:                                                                                                          
                                                                                                                                
          Sec. 15.13.090. Identification of communication.                                                                    
     (a) All  communications shall be clearly  identified by                                                                    
     the  words  "paid for  by"  followed  by the  name  and                                                                    
     address  of  the  person  [CANDIDATE,  GROUP,  NONGROUP                                                                
     ENTITY, OR INDIVIDUAL] paying for the communication.                                                                       
                                                                                                                                
CHAIR LYNN said he hopes the  media would help in identifying the                                                               
sponsor of the [political] advertisement.                                                                                       
                                                                                                                                
8:31:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  regarding  nationality,  said  Alaska  is                                                               
currently  relying  on  federal   law,  which  prohibits  foreign                                                               
nationals from contributing to a  campaign, "et cetera."  He said                                                               
he is waiting  on a response from Legislative  Legal and Research                                                               
Services  as  to whether  federal  law  preempts state  law  from                                                               
instituting "a  mirror kind of  language."  If not,  he suggested                                                               
that  the   committee  adopt  an  amendment   incorporating  that                                                               
restriction into state law.                                                                                                     
                                                                                                                                
8:32:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  remarked that no law  is more effective                                                               
than the  state's ability to enforce  it.  He said  the committee                                                               
is getting into an issue  that involves legal "tracing," which he                                                               
explained is an expensive process  of finding out where the money                                                               
leads.  He  questioned how much money would be  needed to enforce                                                               
the law.                                                                                                                        
                                                                                                                                
8:33:25 AM                                                                                                                    
                                                                                                                                
MR. SICA offered  his understanding that the  current fiscal note                                                               
is $131,000.  He said he  does not know how much additional money                                                               
would be needed to do tracing and cover investigations.                                                                         
                                                                                                                                
8:33:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    SEATON   offered    his   understanding    that                                                               
Representative  Kawasaki was  concerned about  hidden funds.   He                                                               
directed attention to language on page 4, line 9, which read:                                                                   
                                                                                                                                
       "contributor" means the true source of the funds,                                                                        
     property, or services being contributed.                                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON  expressed  his hope  that  the  committee                                                               
would obtain a  legal opinion as to the meaning  of that language                                                               
and  what the  penalties  would be  if someone  was  shown to  be                                                               
attempting to hide the true source of funds.                                                                                    
                                                                                                                                
8:34:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P.  WILSON opined  that  the  penalty for  hiding                                                               
funds  must have  an impact.    She talked  about perception  and                                                               
truth and  taking a  message out of  context, and  she emphasized                                                               
that  the legislature  must punish  those giving  other than  the                                                               
facts.   She said, "So, I  think this goes a  little further than                                                               
just financing ...."                                                                                                            
                                                                                                                                
CHAIR LYNN concurred.                                                                                                           
                                                                                                                                
8:36:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG stated that  making a good case requires                                                               
right, remedy,  and enforcement.   He  mentioned the  Pebble Mine                                                               
case and said  having a penalty in place  is extremely important.                                                               
He  relayed  that AS  12.55.035  addresses  how corporations  are                                                               
punished.    He said  the  statute  has  some loopholes,  but  he                                                               
suggested that the committee consider  its implications.  He said                                                               
corporations  can  influence  legislation   or  the  election  of                                                               
candidates not  only by  bribing people,  but also  by committing                                                               
various campaign  violations, and he reemphasized  the importance                                                               
of addressing "terrific potential  losses for the public" through                                                               
enacting "good remedy statutes."                                                                                                
                                                                                                                                
CHAIR LYNN responded, "I like that."                                                                                            
                                                                                                                                
8:38:33 AM                                                                                                                    
                                                                                                                                
MR. SICA cautioned  that the intent of the legislation  is not to                                                               
penalize people for "exercising  their political speech that they                                                               
now have through the [U.S.] Supreme Court decision."                                                                            
                                                                                                                                
8:41:06 AM                                                                                                                    
                                                                                                                                
JOHN PTACIN, Assistant Attorney  General, Labor and State Affairs                                                               
Section, Civil  Division (Anchorage), Department of  Law, said he                                                               
would outline  some points  from a  memorandum from  the attorney                                                               
general, dated  2/19/10 [included in  the committee packet].   As                                                               
shown  in the  summary of  the memorandum,  Mr. Ptacin  said that                                                               
under Citizens  United v. Federal Election  Commission ("Citizens                                                           
United"), Alaska may not prohibit  political speech altogether in                                                             
candidate  elections; therefore,  AS 15.13.067  and AS  15.13.135                                                               
are  likely  unconstitutional.   In  response  to  Representative                                                               
Wilson, he  explained that the aforementioned  statutes have been                                                               
called  into   question  "to  the   extent  that   they  prohibit                                                               
independent expenditures attenuated to  free speech and candidate                                                               
elections."                                                                                                                     
                                                                                                                                
MR. PTASIN  said given  the current "landscape  of the  law," the                                                               
department also considered how  current disclosure and disclaimer                                                               
law  applies to  corporations  and  labor unions.    He said  [AS                                                               
15.13.040],  as  currently  written,  requires  corporations  and                                                               
labor  unions   making  independent  expenditures   in  candidate                                                               
elections to  disclose that speech  within 10 days of  making it.                                                               
Regarding  disclaimer  law, Mr.  Ptasin  said  AS 15.13.084  does                                                               
apply; the  corporation or labor  unions cannot make  that speech                                                               
anonymously.  He  said that in the memorandum, it  was noted that                                                               
AS 15.13.084 could lead to  some confusion where a corporation or                                                               
labor union  could force  the issue and  make a  political speech                                                               
expenditure.   He  said a  question he  thinks the  committee and                                                               
many proposed  bills are trying  to address  is what it  means to                                                               
make speech not be anonymous.                                                                                                   
                                                                                                                                
MR. PTASIN continued as follows:                                                                                                
                                                                                                                                
     We did  point out  that there is  this issue  with true                                                                    
     source ...  of funds.   Arguably there's  a gap  in the                                                                    
     law,  because a  corporation  can  make an  expenditure                                                                    
     from its  own treasury.   But the real question,  and I                                                                    
     think that what  a lot of the  legislators this session                                                                    
     are  trying to  understand is:   How  do we  follow the                                                                    
     money from  person to person  down into the  actual act                                                                    
     of speech?   And  I think that's  what these  bills are                                                                    
     trying to address.                                                                                                         
                                                                                                                                
MR. PTASIN,  regarding foreign corporations, said  the memorandum                                                               
points out that  federal law does not allow  foreign nationals or                                                               
foreign  associations to  make  expenditures  in state  candidate                                                               
elections.   He  relayed  that the  U.S.  Supreme Court  decision                                                               
resulting from the  Citizens United case did  not invalidate that                                                             
federal law, but it  also did not rule whether or  not there is a                                                               
compelling government interest in upholding that law.                                                                           
                                                                                                                                
8:44:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  asked Mr. Ptasin  if he is  saying there                                                               
seems to be gray area when  it comes to whether foreign entities,                                                               
governments, or individuals  will be allowed to  try to influence                                                               
elections; therefore,  if the  state specifically  excluded those                                                               
entities from Alaska election law, that may be unconstitutional.                                                                
                                                                                                                                
MR. PTASIN  responded that Representative Petersen's  question is                                                               
difficult  to answer,  because [the  U.S.  Supreme Court]  "spent                                                               
about two sentences  addressing the issue of [2  U.S.C. § 441e]."                                                               
He stated,  "All they said  is they don't  have to address  it in                                                               
this  case, and  they don't  rule whether  there is  a compelling                                                               
government  interest  in  that  law  as  opposed  to  restricting                                                               
expenditures by  United States corporations  and labor  unions in                                                               
this context then."   He said it is difficult  to predict whether                                                               
or not  there will  be a compelling  government interest  in that                                                               
area.                                                                                                                           
                                                                                                                                
8:45:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  asked  if  the  Office  of  the  Attorney                                                               
General  believes  that  there  is  federal  preemption  in  that                                                               
restriction or  it would  be possible for  Alaska to  enact state                                                               
law mirroring the restrictions in federal law.                                                                                  
                                                                                                                                
MR.   PTASIN  answered   that   in   other  states'   expenditure                                                               
restriction  laws, which  are  now  likely unconstitutional,  the                                                               
definitions of  corporations include "any corporation  foreign or                                                               
domestic."   He said he  cannot find  anything to show  that that                                                               
distinction would "represent a  compelling government interest at                                                               
this point."   He stated, "I think  it merits a lot  more work to                                                               
determine whether  there is preemption  in that area and  to kind                                                               
of flush out that idea."                                                                                                        
                                                                                                                                
REPRESENTATIVE SEATON  asked what  the state's recourse  would be                                                               
if it relies  on federal law and a foreign  national spends money                                                               
in state election.   He asked if there needs  to be state statute                                                               
addressing this issue.                                                                                                          
                                                                                                                                
MR.  PTASIN   responded  that  Alaska's  current   law  does  not                                                               
contemplate distinguishing between  foreign national corporations                                                               
and  associations and  U.S. corporations,  because  "we" used  to                                                               
have an  outright ban on  all expenditure.  The  attorney general                                                               
memorandum points out  that there is no state law  on this issue,                                                               
he said.   Mr. Ptasin offered  his perspective that he  is almost                                                               
certain he could  not bring a federal elections  campaign case in                                                               
front of APOC; the issue could not be litigated in state courts.                                                                
                                                                                                                                
8:48:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN said  even  though Alaska  might not  be                                                               
able  to restrict  a foreign  corporation  or foreign  government                                                               
from  getting involved  in an  election, the  state would  not be                                                               
restricted in how it requires disclosure.                                                                                       
                                                                                                                                
MR. PTASIN responded as follows:                                                                                                
                                                                                                                                
     Laws which  burden political speech are  always subject                                                                    
     to  scrutiny, and  the government  must  always show  a                                                                    
     compelling  government interest  in  passing that  law,                                                                    
     and ...  [its] interest needs to  be narrowly tailored.                                                                    
     With respect  to foreign nationals,  ... to  the extent                                                                    
     there  is a  compelling  government  interest, I  think                                                                    
     that's  an issue  that has  to be  thought about.   ...                                                                    
     Given that standard, when you're  trying to burden free                                                                    
     speech,  there  has  to   be  a  compelling  government                                                                    
     interest  to do  any kind  of disclosure  or disclaimer                                                                    
     law.                                                                                                                       
                                                                                                                                
8:49:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN concluded then  that Alaska would have to                                                               
require the same  disclosure by everyone as a  matter of fairness                                                               
and "to pass scrutiny."                                                                                                         
                                                                                                                                
MR.  PTASIN replied  that that  is  more of  an equal  protection                                                               
issue.   He said,  "When you  talk about  this particular  set of                                                               
laws, you just  have to pass strict scrutiny,  and the government                                                               
has to show  a compelling government interest  for requiring that                                                               
type of  disclosure."  He said  he thinks there is  room to treat                                                               
certain groups  one way versus  another, and he said  "these laws                                                               
already  contemplate that."   For  example,  he said  individuals                                                               
have different types of filing requirements than [corporations].                                                                
                                                                                                                                
8:50:13 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN concluded that the  proposed legislation would "buy us                                                               
some time" by "disclosing disclosing."   He suggested that future                                                               
legislation may pass some restrictions that would pass scrutiny.                                                                
                                                                                                                                
MR. PTASIN responded as follows:                                                                                                
                                                                                                                                
     The  new   disclosure  and  disclaimer   landscape  ...                                                                    
     certainly  builds  on what's  already  in  place.   And                                                                    
     again, disclosure  and disclaimer  laws are  subject to                                                                    
     strict scrutiny.   And  these laws  are ...  subject to                                                                    
     challenge  from groups  or from  corporations or  labor                                                                    
     unions - whoever you're applying  the burden to, but at                                                                    
     this point, it's passed into law ....                                                                                      
                                                                                                                                
8:51:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  Mr. Ptasin  to confirm  that the                                                               
remedies available  to APOC  are contained  in AS  15.13.390, and                                                               
that they involve only civil penalties.                                                                                         
                                                                                                                                
MR.  PTASIN  responded  that there  are  criminal  sanctions  for                                                               
certain violations in another section of statute.                                                                               
                                                                                                                                
8:51:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  Mr.  Ptasin if  he  is aware  of                                                               
whether Alaska allows  APOC to seek a court order  or any type of                                                               
injunctive relief if  there is an egregious case,  and whether he                                                               
is aware  of "any other types  of remedies that are  on the books                                                               
in any other jurisdiction."                                                                                                     
                                                                                                                                
8:53:02 AM                                                                                                                    
                                                                                                                                
MR. PTASIN answered no.                                                                                                         
                                                                                                                                
8:53:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON cited two  sentences from the summary of                                                               
the aforementioned memorandum, which read as follows:                                                                           
                                                                                                                                
     Alaska's laws continue to  regulate corporate and labor                                                                    
     union   political   speech   through   disclaimer   and                                                                    
     disclosure requirements.   However, some disclaimer and                                                                    
     disclosure  laws that  provide  specific standards  for                                                                    
     reporting  and identification  of  expenditures do  not                                                                    
     currently apply to corporations and labor unions.                                                                          
                                                                                                                                
REPRESENTATIVE P. WILSON concluded as follows:                                                                                  
                                                                                                                                
     So, in that mode, we should  be able to say we are just                                                                    
     covering  those  ...  in areas  ...  that  ...  weren't                                                                    
     covered before and feel comfortable doing that.                                                                            
                                                                                                                                
8:54:42 AM                                                                                                                    
                                                                                                                                
MR. PTASIN  said there  certainly has been  discussion as  to how                                                               
[AS 15.13.090  and AS  15.13.135] can  apply to  corporations and                                                               
labor unions.  He indicated  that proposed bills currently before                                                               
the legislature contemplate "even  further discussion from that,"                                                               
based on the [proposed] changes to [AS 15.13.040 (d) and (e)].                                                                  
                                                                                                                                
8:55:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON noted  that Mr.  Ptasin had  mentioned two                                                               
statutes   that  he   believed   susceptible  to   constitutional                                                               
challenge:  AS 15.13.067, which would  be repealed by HB 409; and                                                               
AS 15.13.135.  He asked Mr.  Ptasin if he is comfortable that the                                                               
changes proposed in  HB 409 would "take care  of that situation,"                                                               
or if he would recommend further changes be made.                                                                               
                                                                                                                                
8:56:19 AM                                                                                                                    
                                                                                                                                
MR.  PTASIN responded,  "What you've  done to  [AS 15.13.135]  is                                                               
just not  made any kind of  restriction language in there,  so it                                                               
does open  it to the ...  full panoply of entities  and people in                                                               
groups who  can make expenditures.   So, I don't see  anything in                                                               
the way that you've done that to ... raise an issue."                                                                           
                                                                                                                                
8:57:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON, regarding "true  source of funds", on page                                                               
4,  line 9,  asked Mr.  Ptasin if  this language  would give  the                                                               
department  "ample cause  to  take a  complaint  through APOC  or                                                               
through the courts."                                                                                                            
                                                                                                                                
MR. PTASIN responded that trying to  "follow the money" can be an                                                               
arduous  process.   He indicated  that  the proposed  legislation                                                               
would require  "the one making  the message  to tell you  who the                                                               
source of funds is."  He  stated, "If there's an implication that                                                               
there's one corporation giving to  another corporation, giving to                                                               
another  corporation,  and  funneling  it  all  the  way  to  the                                                               
messaging,  conceivably under  that language,  we could  take the                                                               
case and try to relate it all the  way back to the true source of                                                               
funds, but I'd like to take a harder look at that."                                                                             
                                                                                                                                
8:59:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  referred to language on  page 3, beginning                                                               
on line 5, which read as follows:                                                                                               
                                                                                                                                
       If the report is filed by a person that is not an                                                                    
     individual, the report must be certified as correct by                                                                 
     the treasurer or fiscal officer of the person.                                                                         
                                                                                                                                
REPRESENTATIVE SEATON asked Mr. Ptasin  if that language would be                                                               
sufficient  to "attach  liability  to an  individual  if that  is                                                               
shown to be willfully done."                                                                                                    
                                                                                                                                
MR.  PTASIN pointed  out that  HB 409  further proposes  that the                                                               
report must  contain, for  all contributions  to the  person that                                                               
exceed  $100,   ["the  date  of   the  contribution   and  amount                                                           
contributed  by  each  contributor"].    He  said  that  proposed                                                           
requirement would give the department  the precursor to determine                                                               
whether or not  there was a violation.  Furthermore,  he said the                                                               
proposed requirement for  six years of record  keeping would give                                                               
the department  "broad subpoena power  to ask the  questions that                                                               
need to  be asked  if an  allegation's made."   He said  he would                                                               
like to take a second look at "that language."                                                                                  
                                                                                                                                
9:02:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN  asked  then  if it  would  be  possible                                                               
legally  to  find someone  guilty  if  the  intent to  hide  true                                                               
identity could be proved.                                                                                                       
                                                                                                                                
MR. PTASIN responded  that his experience has  shown that proving                                                               
intent  can be  difficult; however,  the stronger  the disclosure                                                               
and  disclaimer laws  are, the  better the  chance is  of finding                                                               
"certain things."                                                                                                               
                                                                                                                                
9:04:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  directed  attention  to  AS  15.13.390                                                               
(f)(1), which read as follows:                                                                                                  
                                                                                                                                
     (f) A party who has filed a civil action under AS 15.13.380                                                                
       (1) is not entitled to trial by jury on the civil                                                                        
     action;                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG said  he would  like to  know if  it is                                                               
constitutional to not allow a juried trial.                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG questioned  whether the  aforementioned                                                               
language on  page 3, beginning  on line  5, should be  amended to                                                               
say  that  the  report  should be  certified  "under  penalty  of                                                               
perjury".                                                                                                                       
                                                                                                                                
MR. PTASIN  responded that any  "burdening speech" would  have to                                                               
"survive   strict   scrutiny,   narrow  tailoring,   [and   have]                                                               
compelling  government interest."   He  said he  thinks there  is                                                               
compelling government interest to  keep individuals from lying to                                                               
the public.   He  indicated that the  issues of  narrow tailoring                                                               
and "whether perjury  is the lever" have not been  vetted at this                                                               
point.                                                                                                                          
                                                                                                                                
9:05:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   said    "the   conspiracy   statute"                                                               
apparently applies  only to serious  crimes.  He  explained, "I'm                                                               
wondering if the stuff we're  talking about here would be covered                                                               
by conspiracy, because  that would seem to me to  be a relatively                                                               
easy way of  prosecuting a violator."  He asked  Mr. Ptasin if he                                                               
would consider that idea.                                                                                                       
                                                                                                                                
9:07:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SEATON   clarified   that   the   committee   is                                                               
anticipating two  communications:  one regarding  the nationality                                                               
prohibition and  whether the  state could enact  such a  law, and                                                               
the  other one  regarding  the  true source  of  funds, which  is                                                               
related to the conspiracy issue.                                                                                                
                                                                                                                                
9:08:44 AM                                                                                                                    
                                                                                                                                
MR. PTASIN,  in response to  Representative Gruenberg,  said that                                                               
as the attorney who works on  APOC issues, he is ready to enforce                                                               
any laws that  are passed.  In response to  a follow-up question,                                                               
he  said  the  Department  of   Law  and  APOC  work  closely  on                                                               
investigations.    He  said  APOC  receives  complaints  and  the                                                               
department  is relied  upon to  ensure  that investigations  move                                                               
forward.                                                                                                                        
                                                                                                                                
9:11:21 AM                                                                                                                    
                                                                                                                                
MR.  PTASIN,  in  response   to  Representative  Seaton's  former                                                               
summary  of  the  questions  that   would  be  answered  for  the                                                               
committee, offered  his understanding that the  Department of Law                                                               
is going  to consider certification under  penalty and conspiracy                                                               
issues, and Legislative  Legal and Research Services  is going to                                                               
look at the nationality preemption issue.                                                                                       
                                                                                                                                
9:11:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  clarified  that   the  question  for  the                                                               
attorney general is related to  the federal law regarding foreign                                                               
nationals and  "how that would flow  into this new area  where we                                                               
...  could have  foreign directors  of a  corporation" -  how the                                                               
department "would be able to prosecute  that."  He said that is a                                                               
different  questions from  that  which he  is asking  Legislative                                                               
Legal and Research Services to answer.                                                                                          
                                                                                                                                
MR.  PTASIN,  in  response  to  a  question  from  Representative                                                               
Seaton, said he can enforce state  laws, but needs to think about                                                               
what the state's  role would be regarding the language  in HB 409                                                               
that addresses foreign nationals.                                                                                               
                                                                                                                                
9:13:48 AM                                                                                                                    
                                                                                                                                
PATTY  WARE,  Regulation  of   Lobbying,  Alaska  Public  Offices                                                               
Commission  (APOC),   reported  that   four  out  of   five  APOC                                                               
commissioners  met  with legislators  in  Juneau  last week  and,                                                               
while APOC  does not  take an  official position  on legislation,                                                               
the commissioners  made it  clear that this  is an  urgent matter                                                               
for  which  legislation  must  be passed  this  session  with  an                                                               
immediate  effective  date.    She   thanked  the  committee  for                                                               
introducing HB 409.                                                                                                             
                                                                                                                                
9:14:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON directed  attention to  the aforementioned                                                               
language,  "contributions to  the  person that  exceed $100",  on                                                             
page 3, line 20,  and he asked if that is the  current limit.  He                                                               
said he does  not think the intent of the  committee is to change                                                               
the standard.                                                                                                                   
                                                                                                                                
MS. WARE  offered her  understanding that  the amount  in current                                                               
statute is $100.  She deferred  to the executive director of APOC                                                               
for confirmation.                                                                                                               
                                                                                                                                
9:15:36 AM                                                                                                                    
                                                                                                                                
HOLLY ROBERSON  HILL, Executive  Director, Alaska  Public Offices                                                               
Commission (APOC),  said one of  her staff  has told her  that is                                                               
correct.  Regarding  a previous comment by Mr.  Ptasin, she cited                                                               
AS 15.13.380(f), which read as follows:                                                                                         
                                                                                                                                
                                                                                                                                
          (f) If the complaint involves a challenge to the                                                                      
     constitutionality   of   a   statute   or   regulation,                                                                    
     necessary  witnesses  that  are   not  subject  to  the                                                                    
     commission's  subpoena   authority,  or   other  issues                                                                    
     outside the commission's  authority, the commission may                                                                    
     request  the attorney  general to  file a  complaint in                                                                    
     superior court  alleging a  violation of  this chapter.                                                                    
     The  commission may  request  the  attorney general  to                                                                    
     file  a  complaint  in superior  court  to  remedy  the                                                                    
     violation of a commission order.                                                                                           
                                                                                                                                
MS.  HILL  then cited  Regulation  2AAC  50.476, which  she  said                                                               
allows  APOC to  refer  matters  to the  attorney  general.   She                                                               
stated that AS 15.56.012, AS  15.56.014, and AS 15.56.016 involve                                                               
campaign misconduct which is criminal  in nature.  She said, "So,                                                               
the mechanism would  be a referral by the commission  to the AG's                                                               
office for  more action  taken against  particular matters."   In                                                               
response  to   Representative  Seaton,  she  confirmed   that  AS                                                               
15.13.040(a)(2)(B)(ii) shows $100 in the aggregate.                                                                             
                                                                                                                                
9:17:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG offered a  hypothetical example in which                                                               
one corporation  funnels money  through a  nonprofit corporation.                                                               
He asked,  "Would there  be any  possible problem  with asserting                                                               
... in  personam jurisdiction in  a case  like that, and,  if so,                                                               
should we  consider a  statutory amendment to  allow you  to have                                                               
jurisdiction in that case to  the maximum extent constitutionally                                                               
permissible?"                                                                                                                   
                                                                                                                                
MR. PTASIN  responded that under  074(f), a  corporation couldn't                                                               
give to a group or a nongroup entity.                                                                                           
                                                                                                                                
REPRESENTATIVE GRUENBERG said  he would like an  opinion from the                                                               
attorney general  regarding whether that would  be constitutional                                                               
after the Citizens  United case.  He said  his question regarding                                                             
jurisdiction still stands.                                                                                                      
                                                                                                                                
MR. PTASIN  explained that  074(f) is  a contribution  law, which                                                               
does  not allow  certain  corporations, labor  unions, and  those                                                               
types  of entities,  to  make  a contribution  to  a  group or  a                                                               
nongroup entity or a candidate.                                                                                                 
                                                                                                                                
REPRESENTATIVE GRUENBERG said he  understands what Mr. Ptasin has                                                               
said, but  he wants to know  if, in view of  the Federal Election                                                             
Commission v.  Massachusetts Citizens For Life  case and Citizens                                                           
United, 074(f) is still constitutional.                                                                                       
                                                                                                                                
MR. PTASIN explained as follows:                                                                                                
                                                                                                                                
     074(f) is a contribution law, and ... Citizens United                                                                    
     ... is an expenditure case, so, I don't see any reason                                                                     
     why 074 is on any different grounds than it was prior.                                                                     
                                                                                                                                
9:20:56 AM                                                                                                                    
                                                                                                                                
ALPHEUS  BULLARD, Attorney  at  Law,  Legislative Legal  Council,                                                               
Legislative  Legal  and  Research Services,  Legislative  Affairs                                                               
Agency,  related that  currently foreign  nationals, under  2 USC                                                               
441 E,  are prohibited from  direct or indirect involvement  in a                                                               
federal,  state,   or  local  elections  of   candidates,  ballot                                                               
initiatives, or  questions.  Currently  under federal  law, those                                                               
entities  are  not  allowed  to  use  a  foreign  expenditure  to                                                               
influence an election.                                                                                                          
                                                                                                                                
CHAIR LYNN said  he assumes a board of directors  may cast a vote                                                               
related to  the support  or opposition to  a candidate  or issue,                                                               
and  he questioned  whether a  foreign national  serving on  that                                                               
board would be participating in an election when casting a vote.                                                                
                                                                                                                                
MR. BULLARD answered as follows:                                                                                                
                                                                                                                                
     It would be  a fact-intensive analysis as  to where the                                                                    
     decision  was made  and how  it was  made and  who made                                                                    
     that  decision.   The American  subsidy could  only use                                                                    
     that  subsidy's  funds   from  their  American  general                                                                    
     treasury to  fund any  sort of  independent expenditure                                                                    
     in a state election.  They  wouldn't be able to use the                                                                    
     foreign parents' funds, et cetera.                                                                                         
                                                                                                                                
MR.  BULLARD, in  response  to a  follow-up  question from  Chair                                                               
Lynn,  stated his  belief that  under  federal law,  it would  be                                                               
prohibited  for  a foreign  national  to  be  at  the root  of  a                                                               
[board's] decision.                                                                                                             
                                                                                                                                
CHAIR LYNN  asked how  it is  possible to  determine who  was the                                                               
determining influence in a closed board meeting.                                                                                
                                                                                                                                
MR. BULLARD said he does not have an answer for that question.                                                                  
                                                                                                                                
9:24:49 AM                                                                                                                    
                                                                                                                                
MR.  BULLARD, regarding  conduit  contributions  and true  source                                                               
language, noted that  there is a 2001  attorney general's opinion                                                               
interpreting  the true  source language  found  in AS  15.13.040.                                                               
The  opinion is  that true  source,  in that  context, means  the                                                               
ultimate source of the contribution.  He continued as follows:                                                                  
                                                                                                                                
     I believe  the issue  is more of  a sort  of "boots-on-                                                                    
     the-ground"  investigatory issue  than  it  is a  legal                                                                    
     issue.   True source  is true  source; I  don't believe                                                                    
     it's ambiguous.  It's not  money from the general fund;                                                                    
     it's where that  money came from before it  was in that                                                                    
     organization's general  fund [that]  would be  its true                                                                    
     source.                                                                                                                    
                                                                                                                                
MR. BULLARD said he  does not know how much there  is that can be                                                               
done  in statute  or  how desirable  it would  be  to attempt  to                                                               
"isolate that notion of true source" in statute.                                                                                
                                                                                                                                
9:25:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG asked, "So, it's a factual question?"                                                                  
                                                                                                                                
MR.  BULLARD   offered  his  understanding   that  Representative                                                               
Gruenberg was referring to the issue  of true source, and to that                                                               
he answered yes.                                                                                                                
                                                                                                                                
9:26:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  asked if  the State  of Alaska  would be                                                               
allowed to require that the true  source of funds be disclosed as                                                               
a part of the advertisement.                                                                                                    
                                                                                                                                
MR.  BULLARD responded  that although  he  can imagine  squabbles                                                               
occurring  regarding true  source in  that context,  he does  not                                                               
know  what the  state's interest  is and  whether it  would be  a                                                               
compelling interest.                                                                                                            
                                                                                                                                
9:27:44 AM                                                                                                                    
                                                                                                                                
CHAIR  LYNN  asked   if  it  would  be  possible   to  require  a                                                               
corporation  to disclose  when it  is a  subsidiary of  a foreign                                                               
corporation.                                                                                                                    
                                                                                                                                
MR.  BULLARD  answered  that  like  prohibiting  or  limiting  an                                                               
expenditure, a  disclosure provision is  a burden on  speech and,                                                               
while  the jurisprudence  is not  crystal clear,  it needs  to be                                                               
narrowly tailored to a compelling state  interest.  He said he is                                                               
not certain whether such a  requirement would be interpreted by a                                                               
court  to satisfy  compelling state  interest.   He added,  "It's                                                               
possible."                                                                                                                      
                                                                                                                                
CHAIR  LYNN  explained   he  was  thinking  that,   at  least,  a                                                               
disclosure  could  be   made  at  the  bottom   of  a  television                                                               
advertisement or written advertisement, or  at the end of a radio                                                               
announcement.                                                                                                                   
                                                                                                                                
MR.  BULLARD responded  that  there  are possible  constitutional                                                               
arguments  that  that  would offend  equal  protection  of  First                                                               
Amendment rights  of association and arguments  regarding whether                                                               
such  a requirement  would  be justified  by  a compelling  state                                                               
need.  He said he does not know the answer to that question.                                                                    
                                                                                                                                
9:29:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  directed attention to Section  11, on page                                                               
6, lines 4-9, which read as follows:                                                                                            
                                                                                                                                
        Sec. 11. AS 15.13.090 is amended by adding a new                                                                      
     subsection to read:                                                                                                        
               (c) A person other than a candidate,                                                                             
     individual,  or   political  party   may  not   make  a                                                                    
     communication  under (a)  of  this  section unless  the                                                                    
     person's  principal   officer  has  certified   to  the                                                                    
     commission  in writing  that the  officer has  reviewed                                                                    
     the   communication,  and,   based  on   the  officer's                                                                    
     knowledge,  the  communication  is not  defamatory  and                                                                    
     does not contain any defamatory statements.                                                                                
                                                                                                                                
REPRESENTATIVE SEATON  said there  has been  discussion regarding                                                               
whether it would be better to  have a chief executive or board of                                                               
directors,   rather   than   the  principal   officer,   do   the                                                               
certification.  He  asked Mr. Bullard if there is  a legal reason                                                               
why the  committee should choose  one over the other,  or whether                                                               
this is a policy call.                                                                                                          
                                                                                                                                
9:31:14 AM                                                                                                                    
                                                                                                                                
MR. BULLARD  responded that he  has not given this  provision the                                                               
legal analysis it deserves; therefore,  he is not certain how the                                                               
provision  would work.   He  said the  only analogous  provisions                                                               
with which he  is familiar are within  the federal Sarbanes-Oxley                                                               
Act [15 USC 7241 section 302  and 18 USC 1350 section 906], which                                                               
requires a chief financial officer  of various large corporations                                                               
to certify  the disclosures that they  sign off on in  an attempt                                                               
to bring  accountability to a  personal level.   He said  he does                                                               
not know  what the litigation  surrounding those has been  or how                                                               
analogous that is to the provision here in HB 409.                                                                              
                                                                                                                                
REPRESENTATIVE SEATON  requested a  legal opinion.   He  said the                                                               
chief  area  of  concern  for   him  is  that  limited  liability                                                               
companies (LLCs),  corporations, and unions have  more rights and                                                               
protection than individuals making that same communication.                                                                     
                                                                                                                                
CHAIR LYNN said he shares Representative Seaton's concern.                                                                      
                                                                                                                                
9:35:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   mentioned   two  ways   of   proving                                                               
defamation,  related to  knowing  a statement  is defamatory  and                                                               
reckless disregard of  the truth.  He said they  are found in New                                                             
York Times v. Sullivan.  He  asked Mr. Bullard if the language in                                                             
Section 11 could  be expanded with a  conceptual amendment, which                                                               
may  include the  following language:   "based  on the  officer's                                                               
knowledge" or "in reckless disregard of the truth".                                                                             
                                                                                                                                
MR. BULLARD said that language  could be included; however, since                                                               
the  legal test  for legal  defamation  under New  York Times  v.                                                             
Sullivan "has that on  board,"  he said it is  not clear that the                                                             
amendment would be necessary.                                                                                                   
                                                                                                                                
REPRESENTATIVE  GRUENBERG explained  that he  is concerned  about                                                               
clarity.   He remarked  that it is  possible that  something said                                                               
can be  untrue, without being defamatory.   He asked if  it would                                                               
be  constitutional to  expand the  bill language  to include  not                                                               
only defamatory statements, but  also "serious untruths" that may                                                               
be politically injurious or affect an election.                                                                                 
                                                                                                                                
MR. BULLARD said he is unsure.                                                                                                  
                                                                                                                                
REPRESENTATIVE  GRUENBERG indicated  that he  would talk  further                                                               
with Mr. Bullard at a later date.   He said he wanted to flag the                                                               
issue.                                                                                                                          
                                                                                                                                
9:38:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN indicated  that he  would like  feedback                                                               
from  Mr.  Bullard  regarding  an  amendment  in  which  he  held                                                               
interest.                                                                                                                       
                                                                                                                                
The committee took an at-ease from 9:40:22 AM to 9:41:49 AM.                                                                
                                                                                                                                
9:41:52 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN,  after ascertaining  that there was  no one  else who                                                               
wished to testify, closed public testimony.                                                                                     
                                                                                                                                
9:43:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  Amendment 1,  labeled 26-                                                               
LS1495\R.1, Bullard, 3/1/10, which read as follows:                                                                             
                                                                                                                                
     Page 2, line 27:                                                                                                           
          Delete "not less than 24 hours after the report                                                                   
     is filed"                                                                                                              
          Insert "within 24 hours after the filing of the                                                                   
     report"                                                                                                                
                                                                                                                                
REPRESENTATIVE GRUENBERG objected for discussion purposes.                                                                      
                                                                                                                                
REPRESENTATIVE  SEATON explained  that Amendment  1 would  change                                                               
the  language  to that  which  better  meets  the intent  of  the                                                               
committee.   In response to Representative  Gruenberg, he offered                                                               
his understanding that  as soon as reports come in  to APOC, they                                                               
are available  to the  public; therefore, APOC  would be  able to                                                               
comply with Amendment 1.                                                                                                        
                                                                                                                                
9:46:41 AM                                                                                                                    
                                                                                                                                
MS.  HILL confirmed  that Representative  Seaton is  correct that                                                               
anything  that  "comes through  the  door"  is available  to  the                                                               
public.   She  noted that  currently those  items being  filed by                                                               
Excel  spreadsheet may  need adjusting  before  printing for  the                                                               
public, unless APOC is able  to simply e-mail that information to                                                               
a person.   She stated,  "Changing it to  'within 24 hours'  - as                                                           
long as  that is not  presumed to  be electronic filing  - that's                                                               
acceptable to APOC."                                                                                                            
                                                                                                                                
9:47:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  removed his objection.   There being no                                                               
further objection, Amendment 1 was adopted.                                                                                     
                                                                                                                                
9:47:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  moved to  adopt Amendment 2,  labeled, 26-                                                               
LS1495\R.2, Bullard, 3/1/10, which read as follows:                                                                             
                                                                                                                                
     Page 2, line 26, following "public":                                                                                   
         Insert "on the commission's Internet website"                                                                      
                                                                                                                                
     Page 2, line 27:                                                                                                           
          Delete "not less than 24 hours"                                                                                   
          Insert "within three days"                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG objected for discussion purposes.                                                                      
                                                                                                                                
REPRESENTATIVE  SEATON, in  response to  Chair Lynn,  offered his                                                               
understanding that "three days" means three consecutive days.                                                               
                                                                                                                                
9:49:00 AM                                                                                                                    
                                                                                                                                
MS. HILL responded that currently  APOC does not have the ability                                                               
to post  within 3 days.   In response to Chair  Lynn, she relayed                                                               
that  the timing  is  closely  tied to  electronic  filing.   She                                                               
explained  that APOC's  electronic  filing system  is a  database                                                               
from  the mid  '90s  and  slows down  with  more  than one  user;                                                               
therefore, the more staff applied  to the problem, the slower the                                                               
system becomes.                                                                                                                 
                                                                                                                                
9:49:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  opined  that  it is  incumbent  upon  the                                                               
legislature to modernize  the method of reporting  to the public;                                                               
however, he  acknowledged that APOC  currently does not  have the                                                               
means to carry out Amendment 2.                                                                                                 
                                                                                                                                
REPRESENTATIVE SEATON withdrew Amendment 2.                                                                                     
                                                                                                                                
9:50:35 AM                                                                                                                    
                                                                                                                                
MS. HILL, in response to  Representative Gruenberg, said APOC has                                                               
a  $600,000  capital improvement  project  (CIP)  request in  the                                                               
fiscal year  2011 (FY  11) budget for  the purpose  of continuing                                                               
the commission's filing project called,  "Insight."  She said the                                                               
first phase of  that filing was the lobbyist module,  which is up                                                               
and running,  but not without glitches.   The CIP for  FY 10 will                                                               
correct those  glitches and provide  APOC with  interim solutions                                                               
that  can  assist  with  posting  data.     It  will  not  be  as                                                               
"searchable" as the Oxford database,  she remarked, but will be a                                                               
method by  which to load  data more  efficiently.  Ms.  Hill said                                                               
the Insight filing program is  the process that was envisioned by                                                               
the legislature,  but APOC does  not have the funding  to "engage                                                               
in a  second task order."   In response to a  follow-up question,                                                               
she  expressed her  personal  preference to  not  have a  delayed                                                               
effective date.                                                                                                                 
                                                                                                                                
9:53:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON,  in response to  Chair Lynn, said  as soon                                                               
as the legislature  and the administration acquire  a system that                                                               
works, he is certain that APOC will be using it.                                                                                
                                                                                                                                
CHAIR  LYNN  stated  that  without  objection,  Amendment  2  was                                                               
withdrawn.                                                                                                                      
                                                                                                                                
9:53:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  moved to adopt Amendment  3, labeled 26-LS                                                               
1495\R.3, Bullard, 3/1/10, which read as follows:                                                                               
                                                                                                                                
     Page 6, line 12:                                                                                                           
          Delete "three days"                                                                                                   
          Insert "24 hours"                                                                                                     
                                                                                                                                
     Page 6, lines 12 - 16:                                                                                                     
          Delete "An expenditure report filed under this                                                                        
     subsection  must   include  any  expenditure   not  yet                                                                    
     reported  that  was  made  before  the  filing  of  the                                                                    
     report. However,  an expenditure that exceeds  $250 and                                                                    
     that is made  within nine days of an  election shall be                                                                    
     reported  to the  commission not  later  than 24  hours                                                                    
     after the expenditure is made."                                                                                            
                                                                                                                                
REPRESENTATIVE GRUENBERG objected for discussion purposes.                                                                      
                                                                                                                                
REPRESENTATIVE  SEATON said  Amendment  3 addresses  the time  in                                                               
which  an  independent expenditure  report  must  be filed.    In                                                               
response to  Chair Lynn,  he explained that  this report  is that                                                               
which  must be  turned in  by the  entity making  the independent                                                               
expenditure;  it  does not  relate  to  APOC's timing  in  making                                                               
information public.                                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he has  no problem with  the first                                                               
part of  the amendment,  but questioned  the reason  for deleting                                                               
the language [from page 6, lines 12-16].                                                                                        
                                                                                                                                
9:56:05 AM                                                                                                                    
                                                                                                                                
MR. BULLARD,  at the request of  Representative Seaton, explained                                                               
as follows:                                                                                                                     
                                                                                                                                
     The reason that  that language appears in  the bill and                                                                    
     not  the   amendment  is  [that]  with   the  three-day                                                                    
     provision, ...  you want things  in the last  nine days                                                                    
     to  be  reported -  certain  expenditures  - within  24                                                                    
     hours.    And  there  was  also  the  concern  that  an                                                                    
     expenditure that was  made on the tenth  day before the                                                                    
     election could  be reported within  three days,  but an                                                                    
     expenditure within nine days  would have to be reported                                                                    
     within 24 hours.   So, it's possible that  for two days                                                                    
     certain  expenditures would  drop  out.   Once all  the                                                                    
     expenditure  reports required  under [AS]  15.13.040(e)                                                                    
     must  be filed  within 24  hours, the  rest of  that is                                                                    
     arguably superfluous.                                                                                                      
                                                                                                                                
9:57:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  moved  to   divide  Amendment  3  into                                                               
Amendment  3a and  Amendment  3b.   He  said  Amendment 3a  would                                                               
include the first  [three lines] of Amendment  3, while Amendment                                                               
3b would include [the last 5 lines].                                                                                            
                                                                                                                                
9:57:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON moved to adopt Amendment 3a, which read as                                                                
follows:                                                                                                                        
                                                                                                                                
     Page 6, line 12:                                                                                                           
          Delete "three days"                                                                                                   
          Insert "24 hours"                                                                                                     
                                                                                                                                
There being no objection, Amendment 3a was adopted.                                                                             
                                                                                                                                
CHAIR LYNN announced that Amendment 3b was tabled.                                                                              
                                                                                                                                
9:58:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON moved to adopt Amendment 4, labeled 26-                                                                   
LS1495\R.7, Bullard, 3/1/10, which read as follows:                                                                             
                                                                                                                                
     Page 2, line 31, following "an":                                                                                           
          Insert "independent"                                                                                              
                                                                                                                                
     Page 6, line 11, following "An":                                                                                           
          Insert "independent"                                                                                                  
                                                                                                                                
     Page 6, line 12, following "An":                                                                                           
          Insert "independent"                                                                                                  
                                                                                                                                
     Page 6, line 14, following "an":                                                                                           
          Insert "independent"                                                                                                  
                                                                                                                                
REPRESENTATIVE SEATON said Amendment 4 relates to expenditure                                                                   
reports.                                                                                                                        
                                                                                                                                
There being no objection, Amendment 4 was adopted.                                                                              
                                                                                                                                
10:00:09 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SEATON requested that the committee get a                                                                        
committee substitute to incorporate the amendments that were                                                                    
adopted.                                                                                                                        
                                                                                                                                
[HB 409 was held over.]                                                                                                         
                                                                                                                                
10:01:39 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
State Affairs Standing Committee meeting was adjourned at 10:02                                                                 
a.m.                                                                                                                            

Document Name Date/Time Subjects
01 HB 409 Version R.PDF HSTA 3/2/2010 8:00:00 AM
HB 409
02 HB409 Sponsor Statement.PDF HSTA 3/2/2010 8:00:00 AM
HB 409
03 HB 409 Leg Legal Sectional.PDF HSTA 3/2/2010 8:00:00 AM
HB 409
04 Lynn letter to Governor HB 409.PDF HSTA 3/2/2010 8:00:00 AM
HB 409
05 AG Legal Analysis HB 409 .PDF HSTA 3/2/2010 8:00:00 AM
HB 409
06 Bullard memo for Hb 409 version A.PDF HSTA 3/2/2010 8:00:00 AM
HB 409
07 HB 409 news stories and opinions.PDF HSTA 3/2/2010 8:00:00 AM
HB 409
08 HB 409 NCSL states respond to Supreme Court ruling.PDF HSTA 3/2/2010 8:00:00 AM
HB 409
09 HB 409 Relevant Statutes.PDF HSTA 3/2/2010 8:00:00 AM
HB 409
Keith Hamilton.pdf HSTA 3/2/2010 8:00:00 AM
Governor Appointments