Legislature(2003 - 2004)

05/14/2003 09:40 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     CS FOR SENATE BILL NO. 119(STA)                                                                                            
     "An  Act authorizing  the Alaska Public  Offices Commission  to                                                            
     issue   advisory   opinions;   amending   campaign    financial                                                            
     disclosure  requirements and the limits on lobbyists'  campaign                                                            
     contributions  to candidates; removing municipal  elections and                                                            
     municipal  officials  from  the  campaign  finance  and  public                                                            
     official   financial   disclosure   laws;   amending   campaign                                                            
     contribution  limits; amending the time limit  on contributions                                                            
     after primary  elections; amending the complaint  procedures of                                                            
     the Alaska  Public Offices Commission; amending  the definition                                                            
     of 'political party'  for state election campaigns; relating to                                                            
     the crime  of campaign misconduct; providing  for increased use                                                            
     of electronic  filing for reports to the Alaska  Public Offices                                                            
     Commission;   amending  the   definitions  of  'administrative                                                             
     action'  and 'lobbyist'  in the  regulation  of lobbying  laws;                                                            
     amending  the  requirements  for  the  reporting  of  financial                                                            
     interests  by  public  officials;  repealing   restrictions  on                                                            
     solicitation    and   acceptance   of   contributions    during                                                            
     legislative   sessions   and  in  the   capital  city;   making                                                            
     conforming  amendments; and providing  for an effective  date."                                                            
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken stated  this  bill "makes  several  changes to  the                                                            
statutes  governing APOC  [Alaska  Public Offices  Commission]."  He                                                            
indicated a proposed committee substitute, Version "Q".                                                                         
                                                                                                                                
BROOK MILES, Executive  Director, Alaska Public Offices  Commission,                                                            
presented the  bill and the proposed  committee substitute,  Version                                                            
"Q".  She  informed  that  this  bill  is  the  result  of  numerous                                                            
Commission discussions  regarding "tools necessary to accomplish its                                                            
mission and concepts to improve the disclosure laws."                                                                           
                                                                                                                                
Ms.  Miles stated  this  bill  would "provide  the  foundation"  for                                                            
mandatory electronic filing  under the campaign disclosure, lobbying                                                            
and financial disclosure laws.                                                                                                  
                                                                                                                                
Ms. Miles  furthered  that this  bill would  "codify" the  complaint                                                            
process   and  provides   more  restrictive   timelines  to   ensure                                                            
complaints  reach final  adjudication  sooner. She  also noted  this                                                            
bill would  provide an  expedited process  that would include  cease                                                            
and  desist powers  for  the  Commission,  with respect  to  alleged                                                            
violations that  if not restrained, could cause irreparable  harm or                                                            
materially affect the outcome of an election.                                                                                   
                                                                                                                                
Ms. Miles remarked  this bill would  require full disclosure  of all                                                            
campaign contributions  and expenditures and would  also require the                                                            
occupation  and  employer  information  only  for  contributors  who                                                            
contribute more  than $250. She noted currently this  information is                                                            
required of contributors of more than $100.                                                                                     
                                                                                                                                
Ms.  Miles informed  that  the  Commission's  regulations  governing                                                            
exempt fundraising  events,  such as "selling  hot dogs on  the park                                                            
strip  for   25  cents,"   would  become   statutory  through   this                                                            
legislation.  She explained  that  in these events,  the  candidates                                                            
must   disclose  only   the  number   of  participants   and   total                                                            
contribution.                                                                                                                   
                                                                                                                                
Ms. Miles stated this bill  would also raise campaign limits to keep                                                            
pace with inflationary  costs of conducting election  campaigns. She                                                            
noted candidates  expending less than $5,000 on a  campaign would be                                                            
exempt from filing disclosure  reports; an increase from the current                                                            
$2,500 limit.  She furthered that  the" McIntire exemption",  titled                                                            
after  a US  Supreme  Court  decision,  permitting  individuals  who                                                            
distribute  handbills or post yard  signs, would be exempt  from the                                                            
campaign  disclosure laws  if they  expend $500  or less, which  she                                                            
noted is  an increase from  the current $250  amount. She also  said                                                            
the amount  of individual contributions  to candidates or  political                                                            
action  committees   would  increase   from  $500  to  $1,000,   and                                                            
individual contributions  to political parities would  increase from                                                            
$5,000 to $10,000, for  reporting purposes.  She summarized that the                                                            
current contribution limits would double.                                                                                       
                                                                                                                                
Ms.  Miles  continued   that  this  legislation  would   codify  the                                                            
Commission's advisory opinion  request. She explained the Commission                                                            
currently  issues  formal  binding  advice upon  request  under  the                                                            
campaign  disclosure  law;  however,  it  was  discovered  that  the                                                            
Commission might not have this statutory authority.                                                                             
                                                                                                                                
Ms.  Miles  stated  that  this  bill  would  increase  the  lobbyist                                                            
registration fees from  $100 to $200 per lobbyist for each client in                                                            
each calendar  year. She pointed out this would generate  additional                                                            
program receipts for the Commission.                                                                                            
                                                                                                                                
Ms. Miles  remarked this  bill would increase  the limit for  filing                                                            
sources of  income under  the financial disclosure  laws for  public                                                            
officials and  legislators from $1,000 to $5,000 and  that ownership                                                            
of  stocks  must   be  reported.  She  qualified  that   the  filing                                                            
requirements relating to  gifts would not change. She noted that the                                                            
process for filing disclosure reports would be streamlined.                                                                     
                                                                                                                                
Ms. Miles  concluded that  the Commission  "strongly" supports  this                                                            
legislation and  is "eagerly seeking many of these  tools" to assist                                                            
in achieving its mission.                                                                                                       
                                                                                                                                
Senator Taylor asked about  prevision changes to prohibit or inhibit                                                            
a  wealthy  individual  from  entering  the  State  and  "buying  an                                                            
election."  He exampled the State  of Washington and Marie  Cantwell                                                            
who ran  for congressional  office against  Slade Gordon,  utilizing                                                            
$37 million of her own funds.                                                                                                   
                                                                                                                                
Ms. Miles informed  that the Supreme  Court has upheld individuals'                                                             
rights  to make  independent  expenditures,  and that  the  campaign                                                            
disclosure laws  permits independent expenditures  by individuals or                                                            
political  groups.  She  agreed  that  a  person  with  significant                                                             
personal wealth could impact on a campaign.                                                                                     
                                                                                                                                
Senator Taylor therefore  surmised that the campaign disclosure laws                                                            
would only restrict middle-income candidates.                                                                                   
                                                                                                                                
Co-Chair Wilken  clarified that the US Supreme Court  prohibits such                                                            
restrictions.                                                                                                                   
                                                                                                                                
Ms. Miles affirmed.                                                                                                             
                                                                                                                                
Ms. Miles pointed  out language in the bill changing  the definition                                                            
of "express communication"  relating to issue advertising  and issue                                                            
advocacy. She  informed that the existing  definition provides  that                                                            
an express  communication  must include  "vote for"  or "don't  vote                                                            
for" "elect  or reject, etc." She  stated that a decision  issued by                                                            
the  US  Ninth  Circuit  Court  of  Appeals   and  upheld  in  other                                                            
proceedings provides that  any inference of an express communication                                                            
to encourage  election or defeat of  a candidate must be  subject to                                                            
campaign disclosure laws.                                                                                                       
                                                                                                                                
Co-Chair Green  clarified that the  changes to financial  disclosure                                                            
requirements  would also apply to  the spouse of a public  official.                                                            
                                                                                                                                
Ms.  Miles  replied  that  in Co-Chair   Green's  situation,  income                                                            
received from  clients of her husband  in amounts $5,000  and higher                                                            
would be subject to disclosure.                                                                                                 
                                                                                                                                
Ms. Miles added  the current $1,000 amount has been  problematic for                                                            
State boards and commissions members.                                                                                           
                                                                                                                                
JOE BALASH, Staff to Senator  Gene Therriault, referenced Section 18                                                            
on page 15 of the committee  substitute, Version "Q", which reads as                                                            
follows.                                                                                                                        
                                                                                                                                
     Sec. 18. AS 15.13.400(7) is repealed and reenacted to read:                                                                
                (7) "express communications" means a communication                                                              
     that,  when  read as  a whole  and  with limited  reference  to                                                            
     outside   events,  is  susceptible   of  no  other   reasonable                                                            
     interpretation  but as an exhortation to vote  for or against a                                                            
     specific candidate;                                                                                                        
                                                                                                                                
Mr. Balash  noted the Senate  adopted this  language unanimously  in                                                            
separate legislation  of the prior session, although  members of the                                                            
House  of  Representatives   expressed  concern   it  might  not  be                                                            
constitutional.  He expressed  that  this language  is necessary  to                                                            
prevent  funding  from  sources outside  Alaska  used  to  influence                                                            
elections.                                                                                                                      
                                                                                                                                
Senator Taylor challenged  that regardless of specific language, the                                                            
provision  is useless  if APOC  requires several  months to  enforce                                                            
violations. He  asked whether this legislation would  provide faster                                                            
resolutions.                                                                                                                    
                                                                                                                                
Mr.  Balash  replied that  this  legislation  contains  a  provision                                                            
relating to  expedited review of complaints.  He commented  that the                                                            
Governor  had proposed  eliminating  the APOC  because  "it was  not                                                            
capable of doing  its job as a watchdog," and that  this legislation                                                            
provides APOC with the  "powers and expectations to act swiftly when                                                            
the timing is meaningful."                                                                                                      
                                                                                                                                
Senator  Hoffman asked  how  this could  be accomplished  given  the                                                            
negative amounts of the fiscal notes for this bill.                                                                             
                                                                                                                                
Mr. Balash  qualified that  the fiscal notes  must be substantially                                                             
revised,  noting  the  $500,000  reduction  is in  relation  to  the                                                            
original version  of the bill, which would have eliminated  APCO and                                                            
transferred its  duties to the Lieutenant Governor's  Office and the                                                            
Attorney General.  He informed that the Conference  Committee of the                                                            
FY 04 operating budget  has restored some funding for administration                                                            
expenses, and he expressed  intent that the remaining $100,000 would                                                            
be reflected  in an  updated fiscal  note to  reflect the  increased                                                            
lobbyist fees.                                                                                                                  
                                                                                                                                
Co-Chair  Wilken  asked  if  the  provisions  in  Section  21  would                                                            
generate  the $100,000.  This section  on page 16  of the  committee                                                            
substitute Version "Q" reads as follows.                                                                                        
                                                                                                                                
     Sec. 21. AS 24.45.041(g) is amended to read:                                                                               
          (g) An application for registration as a lobbyist under                                                               
     (a) of this section  or for renewal of a registration under (f)                                                            
     of  this  section is  subject  to a  fee  of $250  [$100].  The                                                          
     commission  may not accept an  application for registration  or                                                            
     renew  a registration  until the fee  is paid. This  subsection                                                            
     does not apply to  a volunteer lobbyist under AS 24.45.161 or a                                                            
     representational lobbyist  under regulations of the commission.                                                            
                                                                                                                                
Ms. Miles estimated  this provision would raise $50,000  or half the                                                            
amount necessary. She explained  this is due to the passage of other                                                            
legislation that  would exempt some parties currently  lobbying from                                                            
disclosure requirements and the registration fees.                                                                              
                                                                                                                                
Co-Chair  Wilken  calculated  the  additional  $150  per  registered                                                            
lobbyist would generate $50,000.                                                                                                
                                                                                                                                
Ms.  Miles listed  70  professional  lobbyists  who would  still  be                                                            
subject  to the disclosure  and registration  requirements,  and 114                                                            
part time lobbyists, of whom 75 would likely be exempt.                                                                         
                                                                                                                                
Senator  Hoffman  suggested  levying  the  registration  fees  on  a                                                            
percentage basis to offset the increased expenses.                                                                              
                                                                                                                                
Mr. Balash  informed that the viability  of imposing a fee  based on                                                            
the percentage  of a contract was  researched; however, it  would be                                                            
difficult  to  ascertain  which  portion   of  the  contract  covers                                                            
lobbying activities versus consulting.                                                                                          
                                                                                                                                
Co-Chair Wilken pointed  out that if the fee were increased to $400,                                                            
APOC operations would become revenue neutral.                                                                                   
                                                                                                                                
Ms. Miles affirmed.                                                                                                             
                                                                                                                                
Senator Bunde questioned the use of "domestic partner".                                                                         
                                                                                                                                
Ms. Miles relayed that  the Senate State Affairs Committee preferred                                                            
this terminology to, "spousal equivalent".                                                                                      
                                                                                                                                
Senator Taylor asked about  a prohibition of full time lobbyists who                                                            
are also married to or the domestic partner of a legislator.                                                                    
                                                                                                                                
Ms.  Miles  replied  that  this  practice   is  reportable  but  not                                                            
prohibited.                                                                                                                     
                                                                                                                                
Without objection  CS SB 119, 23-GS1090\Q  was ADOPTED as  a working                                                            
draft.                                                                                                                          
                                                                                                                                
Senator  Hoffman  questioned language  in  Section  34, amending  AS                                                            
39.50.030(b),  on  page  20 lines  22  through  27, which  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
                (2) the identity, by name and address, of each                                                                  
     business  in which the person, the person's spouse  or domestic                                                          
     partner [SPOUSAL  EQUIVALENT], or the person's  dependent child                                                        
     has an interest or  was a stockholder, owner officer, director,                                                          
     partner, proprietor,  or employee during the preceding calendar                                                            
     year, except that  an interest of less than $5,000 in the stock                                                          
      of a publicly traded corporation need not be included;                                                                  
                                                                                                                                
     New Text Underlined [DELETED TEXT BRACKETED]                                                                             
                                                                                                                                
Ms. Miles explained  the language  relating to stocks was  added due                                                            
to situations  in  which filers  hold portfolios  including  various                                                            
stocks valued  at less than  $5,000 and the  current requirement  to                                                            
delineate each company in which stocks are held.                                                                                
                                                                                                                                
Senator Hoffman asked whether $5,000 is an adequate amount.                                                                     
                                                                                                                                
Ms. Miles noted  that the Commission  originally suggested  $10,000.                                                            
                                                                                                                                
Senator Taylor  clarified that any  businesses in which a  dependent                                                            
child is involved must be reported.                                                                                             
                                                                                                                                
Ms. Miles affirmed  that the filer  must name any business  in which                                                            
an interest  is held by that party  his or her spouse and  dependent                                                            
children.  She noted this  applies to all  businesses regardless  of                                                            
income generated to the filer, spouse or child.                                                                                 
                                                                                                                                
Senator  Taylor commented  that  filers  are allowed  to  repeatedly                                                            
amend  their  disclosures   if  the  information  is   not  original                                                            
declared.                                                                                                                       
                                                                                                                                
Ms. Miles affirmed.                                                                                                             
                                                                                                                                
Senator  Olson   asked  how  this   legislation  relates   to  other                                                            
legislation that changed the definition of lobbyist.                                                                            
                                                                                                                                
Ms.  Miles  stated   that  some  parties  currently  registered   as                                                            
lobbyists  would not  longer  be required  to register  as such  and                                                            
subsequently  would  not  be restricted  as  lobbyists  from  making                                                            
campaign contributions.                                                                                                         
                                                                                                                                
Co-Chair Wilken  asked the impact  of this legislation on  municipal                                                            
elections.                                                                                                                      
                                                                                                                                
Ms. Miles answered  that the committee  substitute makes  no changes                                                            
relating to municipal elections.                                                                                                
                                                                                                                                
STEVEN CONN,  Alaska Public Interest  Research Group, testified  via                                                            
teleconference from Seward  to note this bill originally intended to                                                            
eliminate  APOC, and then  was amended to  change the definition  of                                                            
lobbyist  to allow many to  contribute to  campaigns outside  of the                                                            
election district in which they reside.                                                                                         
                                                                                                                                
                                                                                                                                
SFC 03 # 95, Side A 11:16 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Mr. Conn requested the  bill be held until the following legislative                                                            
session  to await the  outcome of  other legislation  relating  to a                                                            
sales tax and  how lobbyists impact that legislation  in determining                                                            
which parties are exempt from a sales tax.                                                                                      
                                                                                                                                
DAVID  FINKELSTEIN  testified  via  teleconference  from  an  offnet                                                            
location  to ask whether  municipal government  would be allowed  to                                                            
"opt out" of the provisions of this bill.                                                                                       
                                                                                                                                
Ms. Miles reiterated that  the provisions relating to APOC governing                                                            
of municipal elections would be unchanged by this bill.                                                                         
                                                                                                                                
Mr. Finkelstein  referenced written  testimony submitted  to a prior                                                            
version  of the  bill [copy  not provided]  and  indicated he  would                                                            
direct his comments  to items included in the committee  substitute.                                                            
                                                                                                                                
Mr. Finkelstein  objected  to the  increased  contribution  amounts,                                                            
noting  the individual  contribution  amount would  increase to  the                                                            
amount  allowed   prior  to  a  ballot  initiative  and   subsequent                                                            
legislation intended  to limit the influence of parties  outside the                                                            
State  on elections.  He  reported  that  the number  of  individual                                                            
contributions from Alaskan  residents has increased and he requested                                                            
the current language remain unchanged.                                                                                          
                                                                                                                                
Mr. Finkelstein  requested the contribution limits  of groups remain                                                            
the  unchanged.  He  also  opposed   the  changes  to  the  lobbyist                                                            
definition  pointing  out  that  prior   to the  1995  legislation,                                                             
lobbyist  contributions   constituted  a  considerable   portion  of                                                            
campaign  funding  and  was suspected  to  be  a "pass  through"  of                                                            
funding from lobbyists' clients.                                                                                                
                                                                                                                                
ANDREE MCLEOD testified  via teleconference from Anchorage from "the                                                            
people's  point of view".  She read her written  testimony  into the                                                            
record as follows.                                                                                                              
                                                                                                                                
     By  raising  the contribution  limits,  you're  impacting  what                                                            
     economists call the  limit price. It's usually done in order to                                                            
     bar others  from entering a market. Increasing  the limit price                                                            
     discourages competition.                                                                                                   
                                                                                                                                
     By increasing  the contribution limits, you increase  the price                                                            
     of campaigns,  and decreasing competition for  the seats up for                                                            
     election, and barring others from entering races.                                                                          
                                                                                                                                
     Why the need for the  increase? I just ran a race. I had enough                                                            
     to buy  signs, flyers  and I walked door  to door every  night.                                                            
     More  money only buys  more TV and Radio  and newspapers.  That                                                            
     space   is  finite.   Let's   face  it,   any  more   political                                                            
     advertisement   and  you get  what  economists   call  negative                                                            
     externalities.  Seeing  and hearing  your  voice will  actually                                                            
     discourage  people from voting  for you or anyone else.  People                                                            
     are already turned  off by politicians, raising the limits will                                                            
     only   increase  the  negative   feelings  they  hold   towards                                                            
     politics.                                                                                                                  
                                                                                                                                
     If contributors  have this compelling need to  give more money,                                                            
     there are enough charities  in the world to satisfy their urge.                                                            
                                        st                                                                                      
     If  they want  to exercise  their 1   amendment  right of  free                                                            
     speech  by  handing out  more  money, let  them  satisfy it  by                                                            
     giving it to the general fund, in your name.                                                                               
                                                                                                                                
     Also,  what  you  are doing  is  barring  others  from  running                                                            
     against  you  and,  I  have  to say,  that  is  a  conflict  of                                                            
     interest.                                                                                                                  
                                                                                                                                
     Now  to  the   subject  of  redefining  what   a  lobbyist  is.                                                            
     Increasing  the numbers of hours  to 16 will allow lobbyist  to                                                            
     speak  to you  64 times,  at 15 minutes  at a  time. Does  that                                                            
     really  satisfy  the purpose  of  the lobbying  statute,  which                                                            
     you've  sworn to  protect  for us. NO  it does  not. Does  that                                                            
     really  protect our rights to  know who's influencing  you when                                                            
      it comes to formulating public policy? No it does not.                                                                    
                                                                                                                                
     What about state administrators?  They have a need to also know                                                            
     who lobbyists are  and if they're dealing with someone that has                                                            
     only their  clients interest in mind. With a  list of lobbyists                                                            
     kept at  APOC, that information  is but a few clicks  away. And                                                            
      that makes for an efficient and accountable government.                                                                   
                                                                                                                                
     There are  many compelling reasons to keep the  number of hours                                                            
     low. But  the most compelling is that increasing  the number of                                                            
     hours allows  lobbyist to participate in campaigns.  And having                                                            
     the  public not know  who the people  are that have one  pocket                                                            
     full  of money  and the  other full  of chits  will lead  us to                                                            
     corruption of the  system. Is that what you want? I don't think                                                            
     so. Fix APOC if that's  your intent, but please, for gods sake,                                                            
     don't gut lobbying laws in the process.                                                                                    
                                                                                                                                
     Add   both  the   increased   contribution   limits  with   the                                                            
     redifinition   of lobbyists   and you  end  up  with  one  huge                                                            
     negative  externality.  That  is  a  legislature  peopled  with                                                            
     officials elected  from the same pools of money, resulting in a                                                            
     decreased  number  of  legislators  coming  from  varied  human                                                            
     experiences.  End  result,  mob  mentality  and  no  innovative                                                            
     thinking.  If that's where you  want Alaska to go, then  by all                                                            
     means,  vote to  increase the  limits, shove  lobbyists in  the                                                            
     dark caverns  of the political  process, and bar the  ordinary,                                                            
     average  Alaskan  from  entering  any  race  from here  on  in.                                                            
     Leaving  that kind  legacy is not  something  to be par  of, or                                                            
     proud of.                                                                                                                  
                                                                                                                                
Senator Bunde  referenced the saying,  "Beauty is in the  eye of the                                                            
beholder" and  asserted that he could  not be "bought" for  $1000 or                                                            
$5000 and that not all campaigns are lost because of money.                                                                     
                                                                                                                                
Senator  Taylor  noted  the  witness'  comments  were  submitted  in                                                            
written format [copy on file].                                                                                                  
                                                                                                                                
Co-Chair   Green  commented   that   arbitrarily   established   low                                                            
contribution  amounts is  "insurance" for  incumbents. She  surmised                                                            
that increased  contribution allowances  would allow challengers  to                                                            
wage  more  competitive  campaigns.  She opined  that  the  proposed                                                            
adjustments are reasonable.                                                                                                     
                                                                                                                                
Mr. Balash  spoke to Mr. Finkelstein's  comments, pointing  out that                                                            
over $2.5 million raised  by candidates during the previous election                                                            
was not reported because  it consisted of contributions of less than                                                            
$100.                                                                                                                           
                                                                                                                                
Senator B.  Stevens clarified that  currently contributions  of less                                                            
than $100 must be reported  although the name of the contributor did                                                            
not.                                                                                                                            
                                                                                                                                
Ms. Miles affirmed.                                                                                                             
                                                                                                                                
Senator  B. Stevens  asked  if  current statute  stipulates  that  a                                                            
candidate  is limited  to  the total  amount of  cash contributions                                                             
received.                                                                                                                       
                                                                                                                                
Ms. Miles  replied  that a  candidate is  not limited  in the  total                                                            
amount of contributions  of less than  $100 that could be  received.                                                            
She specified  that  a candidate could  not receive  more than  $100                                                            
from  one contributor  in  a calendar  year without  reporting  that                                                            
contributor.                                                                                                                    
                                                                                                                                
Senator Hoffman  asked if  the allowable  contribution that  a group                                                            
that is not  political party could  make to a political party  would                                                            
increase from $1,000 to $4,000.                                                                                                 
                                                                                                                                
Ms. Miles affirmed.                                                                                                             
                                                                                                                                
Senator Hoffman  asked whether this would be the largest  percentage                                                            
increase of allowable contributions.                                                                                            
                                                                                                                                
Ms. Miles again affirmed.                                                                                                       
                                                                                                                                
Senator Taylor  spoke to  the concern over  the small contributions                                                             
and questioned  the cost benefit of  requiring candidates  to report                                                            
each contributor.  He suggested  the only  benefit of the  reporting                                                            
requirements has been to  allow opponents to ascertain the amount of                                                            
funds raised to allow them  to counter their fundraising efforts. He                                                            
opined  that this  legislation  is not  adequate  in addressing  the                                                            
situation,  characterizing the system  as "terribly unbalanced."  He                                                            
explained  that wealthy  candidates  could contribute  an  unlimited                                                            
amount, while  "unwealthy candidates"  are restricted in  the amount                                                            
of funds they could receive.                                                                                                    
                                                                                                                                
Amendment  #1:  This  amendment  lowers   the  amount  of  allowable                                                            
contribution  from  a group  that  is not  a  political  party to  a                                                            
political  party  from  $4,000  to  $2,000.  The  amendment  changes                                                            
language  in AS 15.13.070(c)(3)  in Section 9  on page 6 line  28 of                                                            
the committee substitute.                                                                                                       
                                                                                                                                
Senator Hoffman moved for adoption.                                                                                             
                                                                                                                                
Co-Chair Wilken objected.                                                                                                       
                                                                                                                                
Senator  Hoffman noted  this amendment  would allow  an increase  of                                                            
twice  the  current  amount,  rather than  a  fourfold  increase  as                                                            
proposed in the committee substitute.                                                                                           
                                                                                                                                
Senator Bunde asked for a response from APOC.                                                                                   
                                                                                                                                
Ms. Miles stated  larger increase was proposed in  "deference to the                                                            
political parties  themselves and what they stand  for and what they                                                            
try to accomplish".                                                                                                             
                                                                                                                                
Senator Hoffman  commented on the  options of groups that  are not a                                                            
political  party to contribute  to a candidate,  another group  or a                                                            
political party.                                                                                                                
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED:  Senator Taylor,  Senator  Bunde, Senator  B. Stevens,  Co-                                                            
Chair Green and Co-Chair Wilken                                                                                                 
                                                                                                                                
The motion FAILED (2-5)                                                                                                         
                                                                                                                                
The amendment FAILED to be adopted.                                                                                             
                                                                                                                                
Amendment  #2: This  amendment  increases  the allowable  amount  of                                                            
interest in the  stock of a publicly traded corporation  exempt from                                                            
reporting  requirements  by  a public  official  or  candidate  from                                                            
$5,000  to  $10,000.   The  amended  language  of   Section  34.  AS                                                            
39.50.030(b)(2) on page 20 lines 22 - 27 reads as follows.                                                                      
                                                                                                                                
                (2) the identity, by name and address, of each                                                                  
     business  in  which the  person's  spouse or  domestic  partner                                                          
     [SPOUSAL  EQUIVALENT], or the  person's dependent child  has an                                                        
     interest  or  was  a stockholder,   owner,  officer,  director,                                                          
     partner, proprietor,  or employee during the preceding calendar                                                            
     year,  except that  an interest  of  less than  $10,000 in  the                                                          
     stock  of a publicly traded corporation  need not be  included;                                                          
                                                                                                                                
     New Text Underlined [DELETED TEXT BRACKETED]                                                                             
                                                                                                                                
Senator Hoffman moved for adoption noting this is the amount                                                                    
originally requested by APOC.                                                                                                   
                                                                                                                                
Co-Chair Wilken objected.                                                                                                       
                                                                                                                                
Senator B.  Stevens asked when the  increase was reduced  to $5,000.                                                            
                                                                                                                                
Mr. Balash  replied that  the current amount  is $1,000, the  Senate                                                            
State Affairs  Committee increased  then amount to $10,000  and that                                                            
the  draft  committee substitute   reduced each  $10,000  amount  to                                                            
$5,000  in this  legislation.  He explained  this was  done "for  no                                                            
particular reason" beyond "being uniform across the board."                                                                     
                                                                                                                                
Co-Chair  Wilken  removed  his  objection  to the  adoption  of  the                                                            
amendment.                                                                                                                      
                                                                                                                                
Senator Taylor  offered a motion to  amend the amendment  to replace                                                            
"$5,000"  with  "$10,000"  wherever  it  appears  in  the  committee                                                            
substitute.                                                                                                                     
                                                                                                                                
Co-Chair  Wilken objected,  stating preference  for addressing  each                                                            
item individually.                                                                                                              
                                                                                                                                
Senator B.  Stevens pointed out the  amendment applies to  financial                                                            
disclosures  by legislators  and public  officials  and asked  for a                                                            
detailing of what the amendment to the amendment would affect.                                                                  
                                                                                                                                
Mr. Balash  explained the  amendment to the  amendment would  change                                                            
limits   pertaining    to   loans,   loan   guarantees,    fiduciary                                                            
relationships, as well as income reporting requirements.                                                                        
                                                                                                                                
Senator Taylor  WITHDREW his motion  to amend the amendment  without                                                            
objection.                                                                                                                      
                                                                                                                                
The amendment was ADOPTED without objection.                                                                                    
                                                                                                                                
Amendment #3: This amendment  increases the amount of certain income                                                            
that  must  be  reported  by  legislators,  public  members  of  the                                                            
committee,  and  legislative  directors  to APOC,  from  $5,000,  as                                                            
proposed  in  the committee  substitute,  to  $10,000.  The  amended                                                            
language  of Sec.  30. AS 24.60.200  (2) on  page 19  lines 18  - 24                                                            
reads as follows.                                                                                                               
                                                                                                                                
                (2) as to income in excess of $10,000 [$1,000]                                                                
     received  as compensation for  personal services, the  name and                                                            
     address   of  the  source  of  the  income,  and   a  statement                                                            
     describing the nature  of the services performed; if the source                                                            
     of  income is known  or reasonably  should be  known to  have a                                                            
     substantial   interest  in  legislative,   administrative,   or                                                            
     political   action  and  the  recipient  of  the  income  is  a                                                            
     legislator  or a  legislative  director, the  amount of  income                                                            
     received from the source shall be disclosed;                                                                               
                                                                                                                                
The amended language of  Sec. 34. AS 39.50.030(b)(1), (4) and (5) on                                                            
page 20, lines 17 - 21,  and page 21, lines 5 - 20 reads as follows.                                                            
                                                                                                                                
                (1)The source of all income over $10,000 [$1,000]                                                             
     during  the  preceding  calendar year,  including  taxable  and                                                            
     nontaxable capital  gains, received by the person, the person's                                                            
     spouse  or  domestic  partner  [SPOUSAL   EQUIVALENT],  or  the                                                          
     person's  dependent child, except that a source  of income that                                                          
     is a  gift must be included  if the value  of the gift  exceeds                                                            
     $250;                                                                                                                      
                                                                                                                                
     …                                                                                                                          
                                                                                                                                
                (4)[5] the identity of each trust or other fiduciary                                                            
     relation  in which the person, the person's spouse  or domestic                                                          
     partner [SPOUSAL  EQUIVALENT], or the person's  dependent child                                                        
     held a  beneficial interest exceeding  $10,000 [$1,000]  during                                                            
     the preceding  calendar year, a description and  identification                                                            
     of the  property contained  in the each  trust or relation,  an                                                            
      the nature and extent of the beneficial interest in it;                                                                   
                (5)[6] any loan or loan guarantee of more than                                                                  
     $10,000  [$1,000] made  to the person,  the person's spouse  or                                                            
     domestic   partner  [SPOUSAL   EQUIVALENT],  or  the   person's                                                          
     dependent  child, and the identity of the maker  of the loan or                                                          
     loan guarantor  and the identity  of each creditor to  whom the                                                            
     person,  the  person's  spouse  or  domestic  partner  [SPOUSAL                                                          
     EQUIVALENT],  or the  person's dependent  child owed more  than                                                          
     $10,000  [$1,000];  this  paragraph  requires disclosure  of  a                                                            
     loan,  loan guarantee,  or  indebtedness  only if  the loan  or                                                            
     guarantee  was made,  of the  amount still  owing on the  loan,                                                            
     loan guarantee, or  indebtedness was more than $10,000 [$1,000]                                                            
     at any time during the preceding calendar year.                                                                            
                                                                                                                                
     New Text Underlined [DELETED TEXT BRACKETED]                                                                             
                                                                                                                                
Ms. Miles briefly explained the components of the amendment.                                                                    
                                                                                                                                
Senator Hoffman clarified that each component of the amendment                                                                  
would increase the amount to that recommended by APOC.                                                                          
                                                                                                                                
Ms. Miles affirmed.                                                                                                             
                                                                                                                                
Senator Taylor moved for adoption.                                                                                              
                                                                                                                                
There was no objection and the amendment was ADOPTED.                                                                           
                                                                                                                                
Senator Taylor asked if other provisions in the committee                                                                       
substitute reduce the proposed increase from $10,000 to $5,000, as                                                              
contained in the original bill.                                                                                                 
                                                                                                                                
Mr. Balash responded that other references to dollar amounts relate                                                             
to  campaign contributions   rather than  financial  disclosures  of                                                            
candidates and public officials.                                                                                                
                                                                                                                                
Senator Olson  asked the total amount of all contributions  reported                                                            
from the previous  election to compare with the $250  million amount                                                            
of total contributions of less than $100.                                                                                       
                                                                                                                                
Mr.  Balash   stated   that  some   campaigns   received  a   higher                                                            
concentration of the smaller contributions.                                                                                     
                                                                                                                                
Ms.  Miles listed  $11,370,000  as  the amount  contributed  to  all                                                            
campaigns in the 2002 general election.                                                                                         
                                                                                                                                
Co-Chair Green asked whether  the committee substitute would require                                                            
reporting  of the  name, address  and employer  of all contributors                                                             
regardless of the donation amount.                                                                                              
                                                                                                                                
Ms. Miles  responded that  the name and address  would be  required.                                                            
She noted  this  change would  be enacted  through  the deletion  of                                                            
current statutory language.                                                                                                     
                                                                                                                                
Co-Chair  Green  commented  that  many  people  wish  to  contribute                                                            
smaller amounts  to campaigns but do not want their  name associated                                                            
with  political   activities.  She  questioned   the  need  for  the                                                            
provision requiring that all contributors' names be reported.                                                                   
                                                                                                                                
Ms.  Miles responded  that  currently,  candidates  are required  to                                                            
maintain a  record of the names of  all contributors, regardless  of                                                            
the amount  of a contribution.  She stated  this information  is not                                                            
required  in the disclosure  report, but must  be made available  to                                                            
APOC in the event  of a requested audit. She explained  the proposed                                                            
change to include  this information  in the disclosure report  is an                                                            
attempt to "rein  in" the number of audit requests  as well as to be                                                            
compatible   with  electronic   campaign   software  programs.   She                                                            
qualified  that the names  of contributors  giving less than  $50 at                                                            
"high volume low cost fundraising  events" would not be made public.                                                            
                                                                                                                                
Senator  Bunde  understood  the  desire  of  contributors  of  small                                                            
amounts to  be exempt from the reporting  requirements; however,  he                                                            
pointed  to the significant  percentage of  the total contributions                                                             
that  are less  than $100  each. He  opined that  the "greater  good                                                            
would outweigh the concern of the individual for privacy."                                                                      
                                                                                                                                
Senator  B. Stevens  asked if the  $11.3 million  raised during  the                                                            
previous campaign  included statewide elections or  only legislative                                                            
elections.                                                                                                                      
                                                                                                                                
Ms. Miles replied this amount includes statewide elections.                                                                     
                                                                                                                                
Senator B. Stevens  asked the amount raised for statewide  elections                                                            
and the amount raised for legislative elections.                                                                                
                                                                                                                                
Ms. Miles did not have the information.                                                                                         
                                                                                                                                
Senator B.  Stevens surmised  the significant  portion of the  total                                                            
funding  was related  to the three  statewide seats  decided  in the                                                            
previous election.                                                                                                              
                                                                                                                                
Ms. Miles  agreed and approximated  that  the "main" candidates  for                                                            
these seats expended $1.5 million each.                                                                                         
                                                                                                                                
Senator  B.  Stevens  favored  full  disclosure.  He  asserted  that                                                            
candidates  are aware  of the  names of  each contributor,  as  they                                                            
write  thank  you  notes  to  every  person  who  donates  to  their                                                            
campaign. Therefore, he  stated reporting this information would not                                                            
be an added burden.                                                                                                             
                                                                                                                                
Senator  Hoffman agreed  with  Co-Chair Green  that  the purpose  of                                                            
disclosure  is to identify large contributors  and perhaps  show who                                                            
could be "buying  influence". He reiterated  that many contributors                                                             
do not wish  to be affiliated with  any campaign and predicted  that                                                            
the  number of  smaller  donations could  "dramatically"  reduce  if                                                            
individuals knew their names would be made public.                                                                              
                                                                                                                                
Senator  Bunde  remarked that  ten  employees  of one  company  each                                                            
contributing  $99 equals  almost  $1,000 and  is  therefore a  large                                                            
contributor.  He suggested that people  not wishing to be  "counted"                                                            
could  instead  "provide  sweat  equity"   such  as  posting  signs,                                                            
distributing flyers, etc.                                                                                                       
                                                                                                                                
Senator Olson  opined that if the goal is to support  participation,                                                            
the  process   should   provide  encouragement   for  contributors.                                                             
Otherwise,  he  cautioned  that  only the  "big  players"  would  be                                                            
involved.                                                                                                                       
                                                                                                                                
Senator Taylor  exampled inviting  the community  to a "hot  dog and                                                            
chili feed"  with a basket  set out to  accept contributions,  which                                                            
would be received  in checks or cash. He asked how  candidates would                                                            
be expected  to account  for cash  received at  these functions.  He                                                            
also  expressed concern  about  accounting  for sales  of $1  raffle                                                            
tickets. He  warned that failure to  accurately account for  each of                                                            
these  contributions   would  result   in  a  candidate's   opponent                                                            
"vilifying"  them in the  media and insinuating  that the  candidate                                                            
was accepting $50,000 in "some back room".                                                                                      
                                                                                                                                
Amendment #4: This amendment  restores and amends statutory language                                                            
removed  by  this  legislation  thereby  increasing  from  $100  the                                                            
required  contribution   amount  each  candidate  must  report.  The                                                            
amended language in Section  2. AS 15.13.040(a)(1)(C) and Section 3.                                                            
AS 15.13.040(b)(3)  on page 3, lines  11 - 15 and lines 26  - 31 and                                                            
page 4, lines 1 and 2 reads as follows.                                                                                         
                                                                                                                                
                     (C) and for all contributions in excess of $999                                                            
          in  the aggregate  a year, the  name, address,  [PRINCIPAL                                                            
          OCCUPATION,  AND  EMPLOYER  OF  THE CONTRIBUTOR  AND  THE]                                                            
          date, and amount contributed by each contributor; and                                                             
                                                                                                                                
     …                                                                                                                          
                                                                                                                                
                (3) and for all contributions in excess of $999 in                                                              
     the aggregate a gear,  the name, address [PRINCIPAL OCCUPATION,                                                            
     AND  EMPLOYER OF  THE CONTRIBUTOR,  AND THE]  date, and  amount                                                          
     contributed  by  each  contributor  and, for  contributions  in                                                          
     excess of  $250 in the aggregate during the calendar  year, the                                                          
     principal  occupation and  employer of  the contributor  [; FOR                                                          
     THE PURPOSES  OF THIS PARAGRAPH,  "CONTRIBUTOR" MEANS  THE TRUE                                                            
     SOURCE OF THE FUNDS,  PROPERTY, OR SERVICES BEING CONTRIBUTED];                                                            
     and                                                                                                                        
                                                                                                                                
     New Text Underlined [DELETED TEXT BRACKETED]                                                                             
                                                                                                                                
Senator Taylor moved for adoption.                                                                                              
                                                                                                                                
Co-Chair  Wilken clarified  the intent  is to  restore the  existing                                                            
provisions in statute.                                                                                                          
                                                                                                                                
                                                                                                                                
SFC 03 # 95, Side B 12:03 PM                                                                                                    
                                                                                                                                
                                                                                                                                
Mr. Balash  offered suggestions as  to how the low cost fundraising                                                             
activities  could   be  exempt  from  the  individual  contribution                                                             
reporting requirements.                                                                                                         
                                                                                                                                
Co-Chair Green questioned  the deletion of "principal occupation and                                                            
employer of the contributor."                                                                                                   
                                                                                                                                
Without objection,  Senator Taylor WITHDREW his motion  to adopt the                                                            
amendment.                                                                                                                      
                                                                                                                                
Amendment #5: This amendment  restores statutory language removed by                                                            
this legislation relating  to the required contribution amounts each                                                            
candidate  must  report.  The  amended  language  in Section  2.  AS                                                            
15.13.040(a)(1)(C)  and  Section 3.  AS 15.13.040(b)(3)  on page  3,                                                            
lines 11 - 15  and lines 26 - 31 and page 4, lines  1 and 2 reads as                                                            
follows.                                                                                                                        
                                                                                                                                
                     (C) and for all contributions in excess of $100                                                            
          in  the aggregate  a year, the  name, address,  [PRINCIPAL                                                            
          OCCUPATION,  AND  EMPLOYER  OF  THE CONTRIBUTOR  AND  THE]                                                            
          date, and amount contributed by each contributor; and                                                             
                                                                                                                                
     …                                                                                                                          
                                                                                                                                
                (3) and for all contributions in excess of $100 in                                                              
     the aggregate a gear,  the name, address [PRINCIPAL OCCUPATION,                                                            
     AND  EMPLOYER OF  THE CONTRIBUTOR,  AND THE]  date, and  amount                                                          
     contributed  by  each  contributor  and, for  contributions  in                                                          
     excess of  $250 in the aggregate during the calendar  year, the                                                          
     principal  occupation and  employer of  the contributor  [; FOR                                                          
     THE PURPOSES  OF THIS PARAGRAPH,  "CONTRIBUTOR" MEANS  THE TRUE                                                            
     SOURCE OF THE FUNDS,  PROPERTY, OR SERVICES BEING CONTRIBUTED];                                                            
     and                                                                                                                        
                                                                                                                                
     New Text Underlined [DELETED TEXT BRACKETED]                                                                             
                                                                                                                                
                                                                                                                                
Senator Taylor moved for adoption.                                                                                              
                                                                                                                                
Senator  Taylor explained  that  a contribution  of  less than  $100                                                            
could be received  without the candidate  reporting the name  of the                                                            
contributor.  However, he  noted the candidate  must keep record  of                                                            
the name of  that contributor in the  event that person contributed                                                             
additional  funds, which would  raise the  total contribution  to an                                                            
amount in which the name must be reported.                                                                                      
                                                                                                                                
Co-Chair Wilken asked if this reflects current practice.                                                                        
                                                                                                                                
Ms. Miles affirmed.                                                                                                             
                                                                                                                                
Co-Chair Green  referenced Section 2. AS 15.13.040(a)(1)(D)  on page                                                            
3, lines 15-17, which reads as follows.                                                                                         
                                                                                                                                
                     (D) for contributions in excess of $250 in the                                                           
          aggregate during a calendar year, the principal                                                                     
          occupation and employer of the contributor; and                                                                     
                                                                                                                                
     New Text Underlined                                                                                                      
                                                                                                                                
Co-Chair  Green   questioned  why  the  name  and   address  of  the                                                            
contributor  and  the  date  the contribution  is  received  is  not                                                            
included in this language.                                                                                                      
                                                                                                                                
Ms. Miles detailed that  if this amendment were adopted, a candidate                                                            
receiving  a contribution  of  $100  or less  would  be required  to                                                            
report the amount  of the funds received and record  the name of the                                                            
contributor.   She   continued   that  a   candidate   receiving   a                                                            
contribution  of between $100.01 and  $250 must report the  name and                                                            
address of  the contributor.  Contributions  of more than $250,  she                                                            
furthered,  would  require  the  reporting  of  the  name,  address,                                                            
occupation and employer of the contributor.                                                                                     
                                                                                                                                
Senator Bunde objected to the adoption of the amendment.                                                                        
                                                                                                                                
Senator Taylor pointed  out this amendment would increase the amount                                                            
of  an  allowable   contribution   requiring  the  reporting   of  a                                                            
contributor's  occupation and employer from over $100  to over $250.                                                            
                                                                                                                                
Ms. Miles restated  her interpretation  of the amendment  at Senator                                                            
Hoffman's request.                                                                                                              
                                                                                                                                
Senator  Bunde spoke to  his objection.  He understood individuals'                                                             
concern  for  privacy,  but  asserted that  to  participate  in  the                                                            
political  process, people  must be willing  to "acknowledge"  their                                                            
involvement.  He questioned  the reason for  exempting one-fifth  of                                                            
the total campaign contributions.  He also noted this information is                                                            
available  to the  public if  an audit  is requested  and  therefore                                                            
contributors are "given a false illusion of privacy."                                                                           
                                                                                                                                
Senator Olson  stressed that most  rural residents do not  have bank                                                            
accounts  and operate  on a "cash  economy" and  that the  reporting                                                            
requirements would be cumbersome.                                                                                               
                                                                                                                                
Senator  Taylor   agreed  with  the  arguments  in   favor  of  full                                                            
disclosure;  however, remarked that  the "most zealot advocates"  of                                                            
disclosure realize  the "diminimous" returns on some  contributions.                                                            
                                                                                                                                
Senator B.  Stevens stated he objected  to the amendment  because it                                                            
would  provide  no limitation  to  the amount  an  individual  could                                                            
contribute to a campaign.                                                                                                       
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator  Hoffman, Senator Olson, Senator  Taylor, Co-Chair                                                            
Green and Co-Chair Wilken                                                                                                       
                                                                                                                                
OPPOSED: Senator Bunde and Senator B. Stevens                                                                                   
                                                                                                                                
The motion PASSED (5-2)                                                                                                         
                                                                                                                                
The amendment was ADOPTED.                                                                                                      
                                                                                                                                
Senator Taylor offered  a motion to report the committee substitute,                                                            
as amended  from Committee with individual  recommendations  and new                                                            
fiscal note.                                                                                                                    
                                                                                                                                
Without objection  CS SB 119 (FIN) MOVED from Committee  with fiscal                                                            
note   dated  5/14/03   for   $100,000   from  the   Department   of                                                            
Administration.                                                                                                                 
                                                                                                                                

Document Name Date/Time Subjects