Legislature(2001 - 2002)
04/10/2001 02:00 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 10, 2001
2:00 PM
TAPE HFC 01 - 79, Side A
TAPE HFC 01 - 79, Side B
TAPE HFC 01 - 80, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 2:00 PM.
MEMBERS PRESENT
Representative Bill Williams, Co-Chair
Representative Eldon Mulder, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
Representative Jim Whitaker
MEMBERS ABSENT
Representative Carl Moses
Representative Richard Foster
ALSO PRESENT
Representative Fred Dyson; Representative Gretchen Guess;
Wess Keller, Staff, Representative Fred Dyson; Bruce
Johnson, Deputy Commissioner, Department of Education and
Early Development; Eddy Jeans, Manger, School Finance and
Facilities Section, Department of Education and Early
Development; Sarah Felix, Deputy Attorney General,
Department of Law; Joe Balash, Staff, Senate State Affairs
Committee.
PRESENT VIA TELECONFERENCE
Brooke Miles, Alaska Public Officers Commission, Anchorage;
Susie Barnett, Administrator, Select Committee on
Legislative Ethics, Anchorage; Debbie Ossiander, Anchorage
School Board, Anchorage; Darroll Hargraves, Alaska Council
of School Administrators; Larry Semmens, Aurora Borealis
School, Kenai; Pat Hickey, Kenai Peninsula School District,
Kenai; Avrum Gross, Juneau;
SUMMARY
HB 101 "An Act relating to charter schools; and providing
for an effective date."
HB 101 was heard and HELD in Committee for further
consideration.
HB 193 "An Act relating to the primary election; and
providing for an effective date."
HB 193 was heard and HELD in Committee for further
consideration.
HB 203 "An Act making an appropriation to the Legislative
Council for a study of school district cost
factors; and providing for an effective date."
CSHB 203 (FIN) was REPORTED out of Committee with
a "do pass" recommendation.
CSSB 103(FIN)
"An Act relating to election campaigns and
legislative ethics."
CSSB 103(FIN) was heard and HELD in Committee for
further consideration.
HOUSE BILL NO. 101
"An Act relating to charter schools; and providing for
an effective date."
REPRESENTATIVE FRED DYSON, SPONSOR, testified in support of
HB 101. He noted that the legislation is nearly identical to
a bill, which nearly made it through the legislation in the
past year. He maintained that state of Alaska's charter
school law is among the weakest in the nation.
Representative Dyson discussed changes to the existing
charter school law in HB 101. He observed that the bill
eliminates the 2005 sunset clause. It also extends the
allowable contract length from 5 to 10 years and eliminates
the geographic distribution requirements. The legislation
clarifies that charter schools are not exempt from
competency testing.
Representative Dyson observed that the previous legislation
mandated that school districts provide an accounting
statement for student allotment and local contributions.
This has been eliminated. The new legislation also abandons
the attempt to mandate distribution of a pro-rated share of
local contributions to charter schools.
Representative Dyson explained that the legislation would
allow charter schools to be counted as a separate school if
the ADM is over 150 (AS 14.17.905). He emphasized that
charter schools tend to be small and that this would allow
them to receive the same funds as other schools in the
district per student. The legislation also provides a one-
time 'start-up" grant of $500 dollars per person and allows
for charter school use of safe public buildings with
district superintendent approval.
Vice-Chair Bunde observed that charter schools funds come
from the district's total state support. The legislation
would free funds for the district.
Representative Croft questioned if the legislation is a cost
shifting measure. Representative Dyson acknowledged that the
fiscal note would provide an additional $2 million dollars
to education.
REPRESESNTATIVE GRETCHEN GUESS emphasized that the
legislation would provide additional funds; funds would not
be shifted from one district to another.
Co-Chair Williams observed that the sunset would be in the
year 2005. He questioned if charters have to be for 5 years.
WESS KELLER, STAFF, REPRESENTATIVE FRED DYSON, explained
that current contracts could not exceed 2005. New contracts
would not exceed the sunset date.
Vice-Chair Bunde asked if the money would only go to
districts that have charter schools.
Representative Guess replied that the fiscal note has two
parts: the startup grant and a change to the foundation
formula. The funds would go to the school district. School
districts without a charter school would not receive funds.
Vice-Chair Bunde pointed out that a school district would
not be legally bond to provide the additional funds to the
charter school, but acknowledged the moral obligation.
Representative Dyson maintained that the State Board of
Education and Department of Education and Early Development
would track the funding. Vice-Chair Bunde observed that
accountability would come through parent feedback.
Representative Dyson acknowledged that there is no specific
report to the legislature, but emphasized parent
involvement.
Representative John Davies asked what the fiscal impact
would be if the number for full funding eligibility was
dropped from 150 to 100 students. Representative Dyson
understood that there would be three more schools added
under the change to 150 students. He estimated that this
would be increased by a multiple of 2 or 3. Representative
Guess interjected that it would result in a decrease in the
foundation formula.
Representative John Davies assumed that if the fiscal note
were approved, there would not be an objection to lowering
the number. Representative Dyson stated that he would not
object if the charter school legislation were not adversely
affected.
Representative Lancaster asked if there were a need to
double the number of charter schools to 60. Representative
Dyson maintained that the change is needed. He estimated
that there would be 45 or 50 schools in the next two years
if the legislation is passed. He observed that the
University of Alaska would like to start three schools to be
used as laboratory schools. He reviewed a number of
proposals with different emphasis such as preserving local
languages and addressing deaf students.
Representative Hudson referenced correspondence schools. He
asked if the legislation would affect correspondence
schools. Representative Dyson stated that there is concern
that students not "double dip".
Co-Chair Mulder referenced SB 36 and noted that the hard
count provides a name with a number, which makes it more
difficult to cheat.
Co-Chair Williams observed that charter schools have closed.
Representative Dyson noted that his daughter worked in the
Anchorage charter school, which recently closed. He
maintained that the school would have been successful with a
lower student count. Funding killed the school.
BRUCE JOHNSON, DEPUTY COMMISSIONER, DEPARTMENT OF EDUCATION
AND EARLY DEVELOPMENT, observed that the State Board
supports the mission of charter schools in assisting in the
general improvement of education. The Board supports efforts
to assure that charter schools receive a fair share of
funding, including reasonable startup funding and urges that
the startup funding be new money. The Board supports the
elimination of geographical restrictions and the designated
number of charter schools in urban communities. The Board
observed that it has taken 5 years to reach the current
number of 17 schools and does not believe that the number
needs to be expanded at this time. The Board noted that the
number could be expanded at a future time.
Vice-Chair Bunde referred to the fiscal note.
EDDY JEANS, MANGER, SCHOOL FINANCE AND FACILITIES SECTION,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, affirmed that
funding would go directly to the school district. Each
charter school negotiates a contract with the school
district for administrative overhead. The Department
calculates basic need for each charter school based on the
number students.
Vice-Chair Bunde clarified that a school district without a
charter school would not receive funding from the
legislation.
Representative John Davies agreed, but pointed out that
school districts would receive the same amount of funds per
student. Mr. Jeans pointed out that some of these students
would be home schooled without a charter school option.
Home-schooled students do not generate money for the school
district through the foundation formula. Funding depends on
school size. If a student were enrolled in a charter school
the funding would go to the district. The district and the
charter school would negotiate a contract to distribute the
funds. The statute, as it is currently written, allows the
school district to take indirect costs for administrative
expenses from the funding generated by the charter school.
Through the negotiation of the contract, the charter school
may elect to give the district additional money for services
such as special education and library services.
Representative John Davies questioned the fiscal cost
associated with a school size change of 100 students. Mr.
Jeans emphasized that he could only make a rough guess and
replied that the cost for the additional four schools
identified would be $2 - $2.7 million dollars. He explained
that the students are already in the charter school, but
because they are under the 200-student threshold they are
being counted in the largest school in the district, which
is the high school, which generates the least amount of
money. Below 100, the adjustment would be substantial.
Representative Hudson asked the positive and negative impact
of the charter schools. He observed that the funding flows
to the school district. He asked if the school district
would have responsibility for oversight to make certain the
educational program is qualified and performing as it
should. Mr. Jeans emphasized that the charter schools are
still public schools and school districts have juristic
diction over those schools. He added that the same students
would generate less money if they were added to the larger
school where they receive less per student. Charter schools
can generate more money per student if they meet the 200-
student level.
Mr. Johnson stressed that children are better educated when
their parents are involved in their education. There are
distinct educational advantages to having a choice.
Representative Hudson questioned if there is any requirement
for additional parental economic involvement in charter
schools. Mr. Johnson emphasized that charter schools are
still public schools and all students are entitled to a free
public education. Charter school students are not currently
provided with transportation through the state
transportation system. The State Board believes that
transportation should be provided so that the option is
available to every family regardless of their capacity to
get their child to the charter school. The lack of
transportation may result in a more select population.
In response to a question by Co-Chair Williams, Mr. Johnson
observed that parents are choosing charter school
opportunities for an entire host of reasons, such as school
size or special needs. All of the schools are "starved" for
money. He observed that the "dreamers" that start the school
become weary because they cannot buy relief from the seven
day a week commitment that they were willing to make for the
first three years. As the founders leave and others take
over the schools go into crisis if they do not have adequate
financial resources to buy services.
Co-Chair Williams noted the cost of providing charter
schools with a $500 dollar per person start up grant. Mr.
Jeans replied that startup cost would be $1.2 million
dollars for one-time grants. Grants could be used for rent,
books, desks and other costs. Mr. Johnson interjected that
some school districts can afford to assist with startup
costs and others cannot. The intent is to assist schools
with basic needs. Mr. Jeans clarified that every school
would be entitled to the one-time startup funds, including
those that are currently operating.
DEBBIE OSSINANDER, ANCHORAGE SCHOOL BOARD, ANCHORAGE, spoke
in support for the proposed legislation. Charter schools are
an important new direction that allows greater choice to
families and helps facilitate parent directed education. She
noted that charter schools have many challenges. She stated
that the bill would bring greater flexibility for housing
children. She stressed the challenges in providing starting
up costs. She noted that it is the Anchorage School Board's
intent to financially support charter schools.
DARROLL HARGRAVES, ALASKA COUNCIL OF SCHOOL ADMINISTRATORS,
testified that superintendents do not oppose the bill. He
spoke in support of the extension to 60 schools statewide.
Charter schools would be subject to the same competency test
as the rest of the public school system. He testified in
support of the charter extension and noted that the original
five-year deadline was about up. The five-year sunset was
originally put in place to judge the success of the schools.
LARRY SEMMENS, AURORA BOREALIS SCHOOL, KENAI testified via
teleconference in support of the legislation. He noted that
their students perform well on tests. There is a 200-student
waiting list. The school plan is to expand to 200-students,
but classroom space is not immediately available. He noted
support for the contract term extension, elimination of the
sunset date and additional funding per student. He spoke
against the penalty for schools under 200 students. The 200-
student penalty adversely affects district funding; it costs
the Kenai Peninsula Borough School District up to $7,000
dollars a student. He maintained that parent involvement
results in success in education and that charter schools can
make a difference for education in Alaska.
Representative Lancaster referred to pupil transportation.
Mr. Semmens noted that parents transport their students,
some at great distances.
HB 101 was heard and HELD in Committee for further
consideration.
HOUSE BILL NO. 203
"An Act making an appropriation to the Legislative
Council for a study of school district cost factors;
and providing for an effective date."
REPRESENTATIVE PEGGY WILSON, SPONSOR testified in support of
the legislation. She explained that the legislation sets
aside $350.0 thousand dollars for a class differential study
on school district cost factors. The state of Alaska has a
constitutional obligation to provide for a full education
for all students.
TAPE CHANGE, HFC 01 - 79, SIDE B
Representative Wilson observed that the economic status of
different areas of the state have changed since 1986. School
district cost factors were last changed in 1986. She
maintained that the current formula, while well intentioned,
has unintentional consequences. A design error, which
tracked expenses as opposed to actual costs of doing
business in each school district, has resulted in flawed
district cost factors. Failure to precisely measure
differential costs across the state has resulted in
inequitable funding.
Representative Wilson noted that many questions remain
unanswered such as: What is the cost of providing an
education in each school district as it relates to Anchorage
as a base? What are the exact costs of electronic
communications in Yakutat? What is the specific cost of fuel
in Dillingham? What are the property insurance rates in Tok?
What does it cost to get a school fire code inspector to
Angoon?
Representative Wilson maintained that HB 203 would provide
factual answers to these questions. HB 203 proposes an
independent study of school cost differentials. She stressed
the need to assess actual costs in each school district.
Vice-Chair Bunde expressed support for the study, but
questioned the difference between the costs of doing
business and the cost of providing education.
Representative Wilson noted that the cost of doing business
differs from school district to school district depending on
the access to services.
Vice-Chair Bunde suggested that section 1 be changed to the
"cost of providing an education in each school district" as
opposed to the "cost of doing business."
Representative Wilson suggested the addition of "it shall be
completed by contract" on page 2, line 5. She did not want
the study to be left to the Department of Education and
Early Development or a committee.
Representative John Davies suggested the substitution of
"operating a school" for "doing business" on lines 9 and 12.
Representative Wilson did not object to the recommendation.
Representative Davies MOVED to insert "operating a school"
and delete "doing business" on lines 9 and 12.
Representative Croft argued in support of the use of
"providing an education". He pointed out that it would be
possible to operate a school without doing a good job of
providing education. He added that it would be necessary to
operate a school in order to provide education.
Representative John Davies pointed out that operating a
school includes hiring faculty.
Vice-Chair Bunde summarized that the intent is to
distinguish between the cost of running a business and the
cost of education. Co-Chair Williams agreed that the
question is the actual cost of the school.
Representative Whitaker questioned if the intent is to
distinguish the cost of operating a school in terms of
maintenance and operation of a school facility or the cost
of providing an education. He emphasized that that intent is
to determine the cost of providing an education. He
suggested that "operating a school" may be too restrictive.
Representative Davies MOVED to AMEND Amendment 1 to insert
"providing an education" on line 9. "Operating a school"
would be retained on line 12 and insert "actual" at the end
of line 11. There being NO OBJECTION, the amendment to
Amendment 1 was adopted:
The study
(1) should be based on the cost of providing an
education in each school district;
(2) should consider the cost of living, including the
cost of food, housing, utilities, transportation,
medical expenses, property values, or other costs that
contribute to the actual cost of operating a school.
There being NO OBJECTION, Amendment 1 as was adopted as
amended.
Representative Croft MOVED to ADOPT Amendment 2: On page 2,
line 3 insert "shall" and delete "may"; and on page 1, line
5 delete "prepare or." He explained that the amendment would
take out the option of doing the study by any manner other
than a contract.
Representative Wilson questioned if the date should also be
changed to allow more time for the study to be completed.
Representative Hudson argued in support of retaining the
date and pointed out that the following year would be the
second year of the legislature.
Vice-Chair Bunde agreed with the intent of having the
Legislative Council contract for the study. He pointed out
that there may be some expense involved to assure that there
are appropriate guidelines for a contract.
Representative John Davies MOVED to AMEND Amendment 2:
delete "or" and insert "and" (to prepare and contract for
the preparation of a study). There being NO OBJECTION, the
amendment was adopted. There being NO OBJECTION, Amendment
2 was adopted as amended.
Representative Whitaker questioned if the review would be
done on a periodic and regular basis. Representative Wilson
observed that SB 36 required a two-year review.
Representative Wilson referred to a study by the McDowell
Group, which was compiled in relationship to SB 36. The
study recommended that the current district cost factors be
maintained and that the department's effort be placed in
reexamining the methodology. She emphasized that the intent
of HB 203 is to make sure that the guidelines are different
and the actual cost to educate a child in each district is
ascertained, so that the differences can be reviewed. She
added that the Department of Education and Early Development
and the Education's Foundation Task Force recommended a
similar study.
Representative John Davies expressed concern with page 1
line 6. He MOVED to ADOPT Amendment 3: delete "the
preparation of a study of the district cost factors used as
a component" and insert "preparation of a study recommending
district cost factors to be used as a component". The change
would clarify that the intent is not just a study of
existing factors, but that there should be recommendations
for how it should be fixed. There being NO OBJECTION, it was
so ordered.
PAT HICKEY, KENAI PENINSULA SCHOOL DISTRICT, KENAI testified
via teleconference. He noted that the Kenai Peninsula
Borough contains urban and rural areas. He encouraged the
contractors to take into full account the differences by
attendance areas and not just consider the district as a
whole. He noted that the cost of providing an education in
some small communities have already been compensated for by
economy of scale factors by size, but tend to be diffused by
a district wide application of an area cost factor.
DARROLL HARGRAVES, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF
SCHOOL ADMINISTRATORS testified via teleconference. He spoke
in support of the legislation. He pointed out that cost
differential studies have been done in a true attempt to
determine the cost of doing business in different
geographical areas of the state. The audits of school
districts were used in SB 36 in an attempt to assess what
school districts were actually spending. He pointed out that
a school district, which held tough on salaries though
negotiation would be disadvantaged. The cost differentials
were based on what "is" not on the "true" costs of doing
business. He recounted a gift from an oil company of
computers. He tried to ship the computers to one community
and found that they could only be shipped strapped into the
passenger seats at the full price of a passenger transport.
Another school district was able to pick up the computers at
no cost. He concluded that there are true costs of doing
business from one community to another. He emphasized that
the cost differentials must reflect true costs. He
maintained that cost differentials in SB 36 were in error.
EDDY JEANS, MANGER, SCHOOL FINANCE AND FACILITIES SECTION,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT spoke in
support of the legislation. The department would like to be
involved in the development of the RFP to assure that all
the cost factors are looked at and considered. The
department would also like to assure that a methodology
results in a tool that can be used on an ongoing basis to
update the cost differentials as required by statute. The
Department of Education and Early Development was not
involved in the last selection. The Legislative Budget and
Audit Committee contracted the last selection.
Representative Hudson noted that nothing would preclude
consultation with the Department of Education and Early
Development on the RFP. He did not think that (consultation
with the department) needed to be in the legislation but
expressed a desire that the contractor confer with the
department in determining what elements should be brought
forward in the contract.
Representative Croft observed that the Department of
Education and Early Development was not consulted last time
and pointed out that serious mistakes were made. He felt
that it should be in the intent language.
Representative Whitaker maintained that the intent is to
strike a balance and determine a basis for the equitability
of the formula. If the project becomes too vast and
"potentially politically involved" then it would be a
disservice. He added that it would also be a disservice if
the study does not provide for input that is meaningful. He
suggested that the intent should be carefully worded.
Representative Hudson MOVED to ADOPT Amendment 4: add a new
subsection: (6) Shall confer with the Department of
Education and Early Development in preparation of the RFP
for this study.
Representative Guess pointed out that a new subsection would
refer back to the study. She suggested that the language
would be in the wrong place.
Representative John Davies suggested an amendment to
Amendment 4, to add the language on page 1, line 5: insert
after "Council" "in consultation with the Department of
Education and Early Development".
Representative Hudson WITHDREW Amendment 4. Representative
Davies MOVED to ADOPT amended Amendment 4, by Representative
Hudson: insert after "Council" "in consultation with the
Department of Education and Early Development". There being
NO OBJECTION, it was so ordered.
Representative Guess noted that five states have cost
differentials, each with different methodologies. There is
no agreement on the best way to determine an education price
index. New research shows that an expenditure-based model is
the worst way. She discouraged the use of an expenditure-
based model. She acknowledged the difficulty of producing an
unbiased model but emphasized the creation of a clear model.
She spoke in support of a cost differential that is
updateable with data outside of the department.
Representative Hudson MOVED to report CSHB (FIN) out of
Committee.
CSHB 203 (FIN) was REPORTED out of Committee with a "do
pass" recommendation.
#hb193
HOUSE BILL NO. 193
"An Act relating to the primary election; and providing
for an effective date."
AVRUM GROSS, JUNEAU, stated that he was a member of a task
force appointed by the Lieutenant Governor to address the
fact that the state's primary election law ceased to exist,
after the last primary, due to a decision of the United
States Supreme Court (California Democratic Pary et al. v.
Jones, Secretary of State et. Al.. (530 U.S. 567, 2000). He
added that emergency regulations, which responded to the
decision, expired.
Mr. Gross explained that the Court ruled that, while states
with blanket primaries could continue, political parties had
the right to change the rules to limit participation. Alaska
has operated under blanket primary law. The task force was
established to deal with the fact that parties have to have
input into who would participate in the selection of their
candidates. He reviewed the makeup of the task force and
concluded that it was nonpartisan.
The Task Force's intent was to make the minimal change
necessary to existing law. Public testimony was taken from
all parties and the Department of Law. The recommendation of
the Task Force was that all voters be allowed to vote in a
party's primary unless the party notified the lieutenant
governor, by September 1, that the primary would be closed.
To the extent that party registration was an issue, the
registration would have to be established 30 days before the
election, which is the deadline for voter registration. He
indicated that the proposal received support from the major
parties. A blanket primary was chosen because it was
traditional in Alaska and it would allow the maximum number
of people to participate in the primary. The state would
stand for maximum participation subject to a party's right
to close. The original bill [based on the Task Force's
recommendations] was changed in the House State Affairs
Committee and the process reversed. Under the House State
Affairs version, all primaries would be closed (only
Republicans could vote in republican primaries and only
Democrats could vote in democratic primaries) unless their
party opened the primary.
The House Judiciary Committee further amended the
legislation to state that independents could also vote in a
party's primary.
Representative John Davies observed that the HJUD version
partially opened the primary and questioned if a political
party could chose to close their primary to independent
voters. Mr. Gross affirmed that they could close their
primary to independents. He summarized that the HJUD version
allows parties to close or open their primaries as they see
fit. The original bill opened primaries and required action
by a party to close them.
In response to a question by Representative Lancaster, Mr.
Gross clarified that once a change occurs it remains in
force until the party changes it. Changes must occur by
September of the proceeding year. This provision was also
contained in the original task force bill.
TAPE CHANGE, HFC 01 - 80, SIDE A
In response to a question by Representative Hudson, Mr.
Gross clarified that a [candidate] could not chose to allow
all voters if their party restricted the ballot.
Mr. Gross observed that the more a primary is narrowed the
"purer" the candidates become, but emphasized that "at the
same time the less chance they have to win a general
election because they don't have support from a large number
of people."
Representative Whitaker clarified that a party's ballot
would be open to nonpartisan and undeclared voters unless
the party closes it. Mr. Gross agreed and interjected that
it would not be open to any other registered party members.
Co-Chair Mulder noted that the Court decision requires
action by the Legislature.
Representative John Davies observed that Court's action was
in response to requests by the Republican and Democratic
parties in Alaska and other states. Mr. Gross observed that
an initiative in California began the [court's involvement
in] blanket primary law.
SARAH FELIX, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW
provided information on the legislation. She explained that
a question arose during deliberations in the House Judiciary
Committee regarding "no party" petition candidates on
primary election ballots. Under current law, unaffiliated
candidates overlooked must appear on the primary ballot. The
House Judiciary Committee decided that they would not appear
on the primary election ballot. Unaffiliated candidates
would only appear on the general election ballot. She noted
that an amendment to AS 15,25,150, the filing deadline, is
needed. The filing deadline was left at June 1. If "no
party" candidates do not appear on the primary ballot the
deadline would not be June 1. The filing deadline should be
the date of the primary election. Legal opinions have
indicated that "no party" candidates could be held to a
earlier filing date.
Co-Chair Mulder stated his intention to entertain an
amendment to address the issue.
Ms. Felix explained that "no party" candidates are those
that do not belong to a recognized political party. Some may
belong to a political group, which is an organization of
people of a political affiliation that has not achieved the
status of a recognized political party and some may not be
representing any group. Alaska has six recognized political
parties. Discussion ensued regarding the qualifications of
recognized parties.
Co-Chair Mulder observed that under the amendment
certification would be required by the primary election date
in order to be eligible for the November election.
Representative John Davies MOVED to ADOPT a conceptual
amendment to move the date in AS 15.25.150 to be consistent
with the primary election date for filing for "no party"
candidates. There being NO OBJECTION, it was so ordered.
HB 193 was heard and HELD in Committee for further
consideration.
CS FOR SENATE BILL NO. 103(FIN)
"An Act relating to election campaigns and legislative
ethics."
JOE BALASH, STAFF, SENATE STATE AFFAIRS COMMITTEE testified
in support of the legislation. He observed that Senate Bill
103 is largely a clean-up bill to address conflicts and
concerns that have arisen in the campaign finance and
legislative ethics statutes. It also incorporates
administrative rulings made by the Alaska Public Offices
Commission (APOC) and informal advice given by the
Legislative Ethics Committee. He noted that the legislation
includes provisions to:
Require a single form for public disclosures.
Treat multiple groups controlled by a single candidate
as a single group for purposes of the contribution
limit.
Eliminate the public office expense term accounts
(POET) reserve mechanism, so that there is a single
POET account for legislators and successful candidates.
Expand the amount of personal property that can be
carried forward after an election and to include
photographs and seasonal greeting cards.
Define contributions to exclude certain services such
as attorney and accounting services, mass mailings by
parties and newsletters to constituents.
Mr. Balash added that changes were made to the use of public
assets and resources for non-legislative purposes, such as:
preparing seasonal greeting cards, transporting personnel
computers, photographs, solicitation and acceptance of
donations for non political charities, writing newsletters,
use of offices before and after session. The legislation
also clarifies the prohibition on the use of public assets
and resources by legislators and legislative employees for
nonlegislative purposes and certain previously prohibited
public political uses. The legislation allows legislators to
give and receive the gift of transportation from one
another.
Co-Chair Mulder observed that there is a focus on advocacy
for constitutional amendments. He maintained that the people
who are the most knowledgeable [legislators] could dissemble
information but would not be able to use their office to
solicit funds. Mr. Balash clarified that they would not be
able to use their office to solicit or accept campaign
contributions, use their phones to call up potential donors,
or use staff to send out [campaign or election] mailings.
They could prepare speeches and ask groups to support the
amendment along with them.
Co-Chair Mulder clarified that legislators could ask support
for constitutional amendments. The legislation only limits
the use of their staff and office [to elicit support for a
constitutional amendment].
Representative John Davies referred to the POET Reserve
Account. Mr. Balash noted that the POET Reserve Account was
created in response to concerns regarding tax implications.
He noted that with the limitations [contained in the
legislation] the POET Account is considered a business
expense, just like any other business expense, for tax
purposes. If the full amount in the POET Account were
carried forward it would not count against the legislator on
their personal income tax. The POET Reserve Account was
removed since there is no threat of taxation.
Representative John Davies questioned if tax status changes
are being made. Mr. Balash explained that there was never a
tax liability on the money. Representative John Davies noted
that the APOC had advised legislators that there were tax
implications.
Mr. Balash noted that changes to the existing POET Account
limitations were made on page 4, lines 24 - 27. The POET
Reserve Account was appealed on page 12, line 24.
Representative Davies referred to page 7 line 10:
communication in form of a newsletter. He observed that he
does not send newsletters in an election year later than
early July. He expressed concern with the allowance of
newsletters in an election year and felt that it would allow
abuse. He recommended limiting the time that newsletters are
allowed when a legislator is up for election and questioned
if the sponsor would support a July 15th deadline. Mr.
Balash observed that many state issues come to the forefront
of voters' minds in the months preceding an election, which
are not present at other times.
Co-Chair Mulder summarized that a newsletter from a
legislator to their constituents would not be a
contribution.
Representative John Davies felt that it would be
inappropriate to use office accounts to send newsletters
close to an election. He maintained that any time a picture
is sent it is a campaign device. He acknowledged that the
legislation might not be the appropriate place to address
his concerns. He suggested that July 15, would be the
appropriate cutoff date.
Co-Chair Mulder stated that he did not disagree with the
point made by Representative Davies.
Representative Davies suggested that there could be
confusion relating to a newsletter as a contribution to the
campaign. He added that there would be ethics questions
regarding campaign related use of the office account. He
felt that the issue should be clarified. Co-Chair Mulder
suggested that Representative Davies work on an amendment.
Representative John Davies provided members with Amendment 1
(copy on file). Amendment 1 would address campaign
contribution reports and allow the campaign to file reports
on behalf of the contributor. The contributor would retain
responsibility to assure that the report has been filed. The
filing would follow the same time lines. Co-Chair Mulder did
not object to the amendment.
Representative Hudson agreed and pointed out that the intent
is disclosure.
Co-Chair Mulder agreed and noted that contributors could be
informed that the report was filed on their behalf when
legislators send their thank you notes.
BROOK MILES, EXECUTIVE DIRECTOR, ALASKA PUBLIC OFFICERS
COMMISSION testified via teleconference. She noted that
while many of the provisions of SB 103 can fairly be
considered, "clean-up" other sections do not fall within
that description, but rather constitute a significant change
to the campaign disclosure law.
Ms. Miles identified areas that will result in
administrative costs, loss of public information, and
confusion to both filers and members of the public.
Section 1 contains a legislative mandate that the Commission
develop only one form to be used for financial disclosure
filing. Ms. Miles noted that AS 24.60 requires Legislative
Financial Disclosure statements from all 60 legislators, the
5 public members of the legislative ethics committee and
three legislative directors; AS 39.50 requires Public
Official Financial Disclosure reports from over 2000
executive branch and municipal officials, and candidates for
state and municipal office.
Ms. Miles observed that these statutes are not exactly
alike. They differ in three significant ways. Legislators
are required to disclose dollar amounts for sources of
income and loans that have a substantial interest in
legislative, administrative, or political action. No such
requirement exists under AS 39.50. State officials are not
permitted to have outside employment of that nature. Under
AS 39.50, filers must report all gifts of more than $250
except gifts from family. Legislators, legislative
directors, and the legislative ethics committee members file
gift disclosure under AS 24.60.
This section mandates the Commission to mix apples and
oranges to provide one form to cover filing under two
separate laws. The result of this mandate is likely to
cause substantial confusion to the over 2000 filers under AS
39.50.
In Section 5 (page 6, line 6) the bill amends the campaign
disclosure law to conform with an amendment to legislative
ethics in section 7 (p. 10, line 31). Ms. Miles concluded
that the effect of this amendment to the campaign disclosure
law will permit legislators and legislative employees to use
public resources in campaign activities to support of or
oppose ballot questions concerning constitutional
amendments.
Under current law, public officials are currently permitted
to communicate on ballot questions when the communications
are made in the usual and customary performance of the
official's duties. Ms. Miles explained that this means that
a legislator has the right to advocate for a ballot
question, particularly one concerning a constitutional
amendment. Legislators could appear before the chamber of
commerce, state their position in mailings to their
constituents.
Ms. Miles maintained that legislative use of public
resources to conduct constitutional amendment ballot
questions campaigns is likely to attract public inquiries
and complaints. Persons on the opposing side of
constitutional amendment ballot questions will probably have
concerns regarding this issue and may even pursue public
funds for equal treatment. Ms. Miles stated that if this
language [were removed] from the campaign disclosure law,
but retained under the legislative ethics law, then "it is
our opinion that we would all be on the same page".
Ms. Miles noted that section 6 (page 7, line 6) removes
polls that are limited to issues and do not name a candidate
unless the poll was designed primarily to benefit or was
requested by a candidate. Campaigns pay for polls that they
issue. If someone else issues a poll and provides it to the
candidate in order to influence the outcome of that
candidate it would be considered a contribution. This
provision will permit currently prohibited entities (other
than lobbyists) to provide polls to individual candidates.
Administrative costs will result as the Commission will be
put in the position of determining the source and the
"intent" of polls when members of the public or opposing
candidates make inquiries or file complaints.
Ms. Miles discussed section 7 (page 8, line 1), which
provides an exemption from the definition of expenditures
for "communications with a value of $500 or less a year on
any subject made by a corporation." She observed that the
Commission is confused regarding current administrative
regulation [AAC 50.25], which provides that a business,
corporation, trade association, labor union or other
organization that are not organized primarily to influence
elections may communicate directly with its members,
employees or their families, on any subject, if the
communication is of the same format used by the organization
when communicating on non-political subject. She observed
that telephone trees, newsletters and email may be used. As
long as the communication does not solicit contribution or
any action other than voting for or against a candidate or
ballot question it would not considered to be regulated by
the campaign disclosure law. The language on page 8 changes
this provision. These communications would now be an
expenditure and would be limited to $500 dollars a year. She
questioned if the intent is to override the regulation.
SUZI BARNETT, ADMINISTRATOR, SELECT COMMITTEE ON LEGISLATIVE
ETHICS, ANCHORAGE testified via teleconference. She pointed
out that language regarding the issuance of newsletters
appears on page 7 and 9. There are provisions in the Ethic
Code that reference campaign periods. One is a campaign
period of 45 days prior to an election. The other provides a
90-day period for mass mailings from other than office
accounts. She explained that the use of a specific day, such
as July 15 could be problematic when there are special
elections. The Ethic Code references the number of days
prior to an election. Mass mailings that talk about a
candidate and use funds other than office allowances, such
as leadership, council, finance funds are restricted to 90
days prior to an election.
Representative John Davies explained that he wanted to
restrict the use of office accounts for newsletters prior to
an election that a person running for office would be
standing in without restricting the use of newsletters prior
to a special election or a ballot issue. He felt that the
use of a newsletter prior to special elections on issues
would be appropriate as long as it is in the same format
normally used to communicate with constitutions and one
outcome was not advocated over another. Ms. Barnett agreed
that there would not be a concern if the legislator was not
a candidate in the election.
SB 103 was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 4:25 p.m.
| Document Name | Date/Time | Subjects |
|---|