Legislature(2021 - 2022)GRUENBERG 120
02/01/2022 03:00 PM House STATE AFFAIRS
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HB 245-POLITICAL CAMPAIGN CONTRIBUTION LIMITS 3:06:55 PM CHAIR KREISS-TOMKINS announced that the first order of business would be HOUSE BILL NO. 245, "An Act relating to political contribution limits; and providing for an effective date." 3:07:00 PM REPRESENTATIVE JOSEPHSON, Alaska State Legislature, prime sponsor, introduced HB 245. He paraphrased the sponsor statement [included in the committee packet], which read as follows [original punctuation provided]: HB 245 restores reasonable and common-sense limits on how much money individuals and groups can contribute to political candidates in State elections. Alaskans have repeatedly shown a preference for low limits on contributions to candidate, and in the absence of HB 245, or similar legislation, contributions may become limitless in upcoming elections. Campaign contributions are one of the most obvious ways that wealthy individuals and corporations try to corrupt politicians to serve their interests rather than the interests of all Alaskans. Alaska has historically recognized this risk in campaign contributions and since 1973 has restricted how much individuals can donate to politicians. Between 2006 and 2021, Alaska Statutes placed that limits at $500 over the course of a calendar year. In 2021, however, the United Stated Court of Appeals for th the 9 Circuit ruled that limit unconstitutional. The Court argued that because $500 was unusually low, applied to all state races, and was not indexed wit inflation to grow over time, that it infringed on donors freedom of speech and gave and unfair advantage to incumbents. In the aftermath of the decision, Alaskas Public Office Commission set the individual-to-candidate limit at $1,500. The people of Alaska must have a say on what the limit is, and new legislation is required unless we risk no limit at all. HB 245 addresses the courts concerns by repealing AS 15.13.070(c) and replacing it with new language. The original $500 limit passed by 71% approval among voters in 2006 is closer to $700 in todays dollars. HB 245 uses that adjustment as the new limit on candidates to the State House. Limits on individuals rise accordingly to $1,000 for candidates to the Senate, and $1,500 to candidates for Governor. The new law satisfies the Courts constitutionality test by adjusting for inflation and differentiating the limits for different levels of public office. In addition to restoring common-sense limits on how much money someone can give to a political candidate, HB 245 restores an urgently needed limit on how much candidates can raise from out-of-state contributors. Alaskans are highly attuned to the threat of corruption in our state politics. Out-of-state interests sometimes compete with Alaskan interests and the will of the voters. In order to both satisfy the Courts decision that the old non-resident limit was unconstitutional and fight the appearance of corruption in our elections, HB 245 would limit candidates to raising no more than 50% of their money from out-of-state. I urge your support to bring these reforms to Alaska. 3:15:18 PM MAX KOHN, Staff, Representative Andy Josephson, Alaska State Legislature, on behalf of Representative Josephson, prime sponsor, provided a PowerPoint presentation, titled "Campaign Contribution Limits" [hard copy included in the committee packet]. He began with the sectional analysis on slide 2, which outlined Section 1 of HB 245: contribution limits on individuals. He said Section 1 follows the original framework th that was struck down by the 9 Circuit Court of Appeals. Instead of a flat $500 limit on individuals, HB 245 provides that an individual can give $700 to a House candidate, $1,000 to a Senate candidate, $1,500 to a candidate for governor, $1,000 to groups or PACs that give directly to candidates, and $5,000 to political parties. 3:16:54 PM MR. KOHN turned to slide 3, which outlined Section 2 of HB 245: Limits on groups that are not political parties. He indicated that Section 2 doubles the contributions limits outlined in section 1; therefore, a group could give $1,400 to a House candidate, $2,000 to a Senate candidate, $3,000 to a candidate for governor, $2,000 to groups, and $10,000 to political parties. 3:17:44 PM MR. KOHN continued to Section 4 (slide 4): Joint campaigns for governor and lieutenant governor. He explained that an individual could give $3,000 to a joint campaign, while a group could give $6,000. Section 5, he said, pertains to indexing for inflation and Section 6 limits nonresident contributions to 50 percent of a candidates total contributions during the campaign (slide 5). He said the rationale for the 50 percent limit came from Ballot Measure 2 , which requires an independent expenditure to publicly disclose financial information if they raise more than 50 percent of their money from out of state. 3:19:51 PM MR. KOHN highlighted the goal of HB 245 on slide 6 as follows: To maintain the spirit of previous law and Alaskans preferences as closely as possible while staying in the confines of the Constitution. Combat corruption and the appearance of corruption in our elections. He advanced to slide 7, titled History of Campaign Contribution Limits in Alaska, which read as follows [original punctuation provided]: 1974: AK Leg passes $1,000 contribution limit. 1996: Legislature lowers the limit to $500 to pre-empt a ballot initiative. 2003: Legislature raises the limit back to $1,000. 2006: Ballot initiative passes with 73% support for limit to be lowered back to $500. 2021: Thompson v. Hebdon9thCircuit finds Alaska's $500 limit unconstitutional and APOC reverts to $1,000 + inflation = $1,500. MR. KOHN proceeded to slide 8, which depicted a timeline of the legislative history. Slide 9 provided the historical limits in todays dollars. He pointed out that the limit of $1,000 that was passed in 1974 is equivalent to $5,900 in todays dollars; further, he highlighted the 2006 limit of $500, which was passed by a citizens ballot initiative, indicating that it would equate to about $697 after indexing for inflation. 3:21:12 PM MR. KOHN summarized slides 10-13, noting the difficulty of comparing contribution limits by state, as the structure typically differs. He pointed out that Montanas law was also th challenged and ended up in the 9 Circuit Court of Appeals. He conveyed that the limits displayed for Montana on slide 13 were th upheld by the 9 Circuit using the same test they applied to Alaska. He emphasized that the contribution limits proposed in HB 245 would not be radical compared to other states. 3:24:06 PM MR. KOHN summarized slide 14, titled Alaskans prefer low limits, which read as follows [original punctuation provided]: There have been two ballot initiatives to lower limits and reduce nonresident influence over Alaskan elections. The 1995 initiative quickly gained 32,000 signatures and put pressure on the legislature to pass a similar bill. The Anchorage Daily News published this quote at the time: "VECO's Pete Leathardsaid he fears the initiative might diminish the industry's influence." The 2006 Ballot Initiative went to the ballot and passed with 71% of voters approving the measure. 3:24:57 PM MR. KOHN reviewed APOC disclosures in the 2018 governors race to independent expenditures on slide 15. He noted that prior to Ballot Measure 2 , independent expenditures were not regulated and could accept money from anywhere in the country. He reported that in 2018, 71 percent of the funding came from out-of-state residents totaling nearly $5 million, whereas 29 percent came from Alaska residents. He noted that Ballot Measure 2 addressed this problem, adding that per the Courts, the legislature has less power to regulate independent expenditures than it does with contributions directly to candidates. Without HB 245, he said, independent expenditures would be regulated more than direct contributions to candidates due to the 50 percent disclosure requirement. 3:26:39 PM MR. KOHN addressed constitutionality on slide 16, which read as follows [original punctuation provided]: ? HB 245 passes contribution limit tests laid out in Randall v. Sorrell. ? The previous $3,000 aggregate nonresident limit was found unconstitutional. The judge's opinion in the case also noted "while we do not foreclose the possibility that a state could limit out-of-state contributions in furtherance of an anti-corruption interest, Alaska's aggregate limit on what a candidate may receive is a poor fit." (Thompson v. Hebdon) MR. KOHN conveyed the bill sponsors beliefs that the contribution limits are constitutional; further, despite the Courts indication that the $3,000 aggregate limit is unconstitutional, he noted that they have not tested a similar law to the 50 percent requirement. 3:28:01 PM MR. KOHN turned to slide 17, titled 9th Circuit Thompson v. Hebdon, which read as follows [original punctuation provided]: ? The court considered five primary factors for the contribution limit: 1. Does the limit "significantly restrict the amount of funding available for challengers to run competitive campaigns?" Yes 2. Are political parties subject to the same low limits as individuals? No 3. Are volunteer services counted toward contribution limits? No 4. Are the limits indexed for inflation? No 5. Is there a "special justification" for a uniquely low limit? No 3:30:05 PM MR. KOHN turned to slide 18, titled Constitutionality of this Bill: Limits on Individuals, which read as follows [original punctuation provided]: ? 1. Does the limit "significantly restrict the amount of funding available for challengers to run competitive campaigns?" This factor is improved ? 2. Are political parties subject to the same low limits as individuals? This factor was already satisfactory ? 3. Are volunteer services counted toward contribution limits? This factor was already satisfactory ? 4. The limits are now indexed for inflation. This factor is improved ? 5. The limit is no longer uniquely low. This factor is improved 3:31:06 PM MR. KOHN concluded on slide 19, titled Empirical Evidence, which read as follows [original punctuation provided]: ? Empirical studies have found links between large contributions and public trust in government. ? One study found that "a large majority of Americans believe that the campaign finance system contributes to corruption in government." ? Perceptions of Corruption and Campaign Finance: When Public Opinion Determines Constitutional Law, 153 U. Pa. Law Review 119, 120 (2004) Another found that "members' dependency on outside contributions draws them in a more extremely liberal or extremely conservative ideological direction that is counter to the ideological preferences of the districts they represent." ? Getting Short-Changed? The Impact of Outside Money on District Representation, 97 Social Science Quarterly CHAIR KREISS-TOMKINS invited additional comments from Representative Josephson. 3:31:45 PM REPRESENTATIVE JOSEPHSON, referencing a provision in [SB 155] sponsored by Senator Wielechowski, suggested that the governor should not be allowed to solicit and receive contributions during a legislative session. He indicated that he would welcome such an amendment should the committee propose one. 3:32:35 PM REPRESENTATIVE TARR agreed with the undue influence of contributions. She expressed concern about the impact of raising the out-of-state contribution limit to 50 percent for a House raise and inquired about the rationale behind that provision. REPRESENTATIVE JOSEPHSON agreed with her concern. He explained that the intent is to show deference to the 9th Circuit Court of Appeals, as the Court had been opposed to the $3,000 limit. He opined that that its un-Alaskan if more than 50 percent of a candidates contributions are coming from out of state. 3:34:25 PM CHAIR KREISS-TOMKINS announced that HB 245 was held over. 3:34:33 PM The committee took a brief at-ease.