Legislature(2001 - 2002)
04/30/2001 06:00 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 177-CAMPAIGN FINANCE: GROUPS & DISCLOSURE CHAIRMAN THERRIAULT noted the proposed committee substitute (CS) for HB 177. He asked the bill drafter to come forward and explain the new sections encompassed in the CS because it takes the bill in a different direction. KATHRYN KURTZ, attorney with Legislative Legal and Research Services and bill drafter, explained the changes in the R version of HB 177. Sections 1 and 2 are unchanged. Section 3 is quite different. Previous drafts made an addition to the definition of group and the R version does not do this. It takes the same language from the Alaska Civil Liberties Union (ACLU) court case and uses it to define the term non-group entity. This is a new term for the Alaska statutes but one the court discussed in the ACLU case where they said those entities couldn't be barred from making contributions and independent expenditures the way you can bar a business corporation or union. It's now in the definition section. There is the definition of non-group entity and the term "person" has been amended to include non-group entities. "Person" can refer to a corporation, a union or any kind of multi-member item as well as a natural individual. This bill would give non-group entities specific authority to make campaign contributions and expenditures. This is done in AS 15.13.074 and 15.13.135 which are the specific sections addressed in the ACLU decision. It also makes changes to AS 15.13.065(a) on page 2, section 4, and 15.13.067 to make corresponding changes to allow these entities to make contributions and independent expenditures. Currently, groups and individuals have the authority to do those things and this adds non-group entities to that list. This draft also requires non-group entities to disclose the source of contributions made to them of $100 or more for the purpose of influencing candidate nominations or elections. Buckley v. Valeo and the Veco International v. APOC case both upheld disclosure requirements on the theory that there is a value to having an informed electorate that knows where information comes from. Draft R specifically creates a new subsection 15.13.040(j), which requires reporting contributions over $100 and changes a number of sections to require non-group entities to report the contributions and expenditures made for the purpose of influencing nomination or election of candidates. Sections 15.13.072, 15.13.082(b), 15.13.084, 15.13.090(a) and 15.13.110(a,b&f) fall under the disclosure category. The Alaska District Court Jacobus decision No. A97-0272-CV discussed limits on contributions to political parties on pages 10 & 11 and concluded they could be limited for purposes of influencing the nomination or election of candidates but not necessarily for other purposes. Language in this draft comes from that case. CHAIRMAN THERRIAULT asked Ms. Kurtz to speak to the Jacobus decision and the potential problems it held for the House version of the legislation. MS. KURTZ said the House version would have applied all of the existing statutes relating to groups to non-group entities. Specifically, that case held the existing statute limiting contributions to political parties to $5,000 was over broad. It attempted to regulate more than could be justified under the First Amendment because there needs to be a compelling interest and the statute must be narrowly tailored to serve the compelling interest. The compelling interest would be avoiding corruption or the appearance of corruption, which is fairly specific to candidates. The court in Jacobus did not see a real threat in educational efforts, get out to vote efforts and other political party efforts and said the existing statute needed to be narrowed. The previous draft could be susceptible to the same type of over-breadth argument by regulating all contributions to and by non-group entities. Also limited are contributions by non-resident individuals and groups for the purpose of the influence or election of candidates. The limit is 10 percent of the contributions a non-group entity can take within a year, which is similar to an existing statute relating to political parties that was handled in the ACLU case. The court held there was a sufficiently compelling state interest for having that type of restraint on contributions. Finally, this draft places a $500 limit on the amount of contributions by non-group entities. That type of limit is discussed in Buckley and ACLU and, to a certain extent, in the Jacobus decision. 15.13.070 and 15.13.114(a) are being adjusted because they relate to contribution limits. The new draft attempts to address the over breadth concern by speaking in terms of influencing candidate nominations or elections. It also goes into specific sections and enables these groups to make the independent expenditures and contributions the ACLU Court said they must be able to make while putting the same disclosure requirements on them that groups and individuals who now participate are subject to. CHAIRMAN THERRIAULT asked for questions. He then encapsulated saying we have statutes that deal with groups and with individuals. The House bill proposed non-group entities be swept into the definition of groups. Because of the Jacobus decision there are potential problems with this due to over breadth. There is written testimony from the Conservation Voters saying they enjoy rights more along the lines of individuals. However, this didn't work well because if the non-group entities were swept into the definition of individuals, there would be no disclosure on the source of funds because an individual giving a contribution does not have to reveal the source of the funds so long as they are not acting as a conduit. Therefore, a new category was created that has some of the limitations that are applicable to groups and some that are applicable to individuals. The new category has disclosure of source of funds and places restrictions along individual lines as to the quantity of those disclosed funds that may be passed along to individual candidates. There is no specific discussion about the right to make other general contributions or expenditures in campaigns such as education of voters and soft money types of expenditures. MS. KURTZ said he was correct. There are several sections that are specifically limited to influencing candidate nominations or elections in an effort to tailor it to the over breadth concern from the Jacobus decision. CHAIRMAN THERRIAULT said we are barred from placing many restrictions on soft money contributions. MS. KURTZ said that is strongly suggested by the Jacobus decision and since it is an Alaska court making that decision, federal precedent would be binding. CHAIRMAN THERRIAULT said a careful line has been walked between the court decisions and the Conservation Voters legal opinion. The Conservation Voters attorney testified at the previous meeting and said the state did have a right to put some restrictions on expenditures but they saw legal problems with the House version. This version attempts to incorporate the most recent court decision and is a fairly radical departure from the original bill. It departs to a sufficient extent to require a title change. Different groups around the state have been notified but have not responded. He wanted committee members to have until the next meeting to review the changes if need be. SENATOR PHILLIPS asked whether Representative Kott agreed with the changes and he received a nod in reply. CHAIRMAN THERRIAULT asked Brooke Miles from Alaska Public Offices Commission (APOC) if she had any comments. BROOKE MILES, Assistant Director with the Public Offices Commission, testified via teleconference that she had no comments beyond those given during the April 26, 2001 meeting. She did note that this approach would result in some administrative costs to the commission but the existing fiscal note would probably cover them. CHAIRMAN THERRIAULT said that would be covered when the bill moved to the finance committee. He asked whether she saw any technical problems with the bill. MS. MILES said at first blush she saw none. It appeared that the Jacobus decision was incorporated when soft money for political parties was addressed and that non-group entities would have the limit of an individual. CHAIRMAN THERRIAULT asked whether anyone else was online or in Juneau that wanted to testify. There was no response. SENATOR PEARCE moved adoption of the R version by Ms. Kurtz as the working document. There was no objection. CHAIRMAN THERRIAULT asked for proposed amendments. There were none. He asked for the will of the committee. SENATOR PEARCE moved CS SCSHB 177(STA) and accompanying fiscal note from committee with individual recommendations. There were no objections. He noted the concurrent resolution for the title change would be sent directly to the Senate Secretary.