Legislature(1995 - 1996)

02/29/1996 08:08 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                       February 29, 1996                                       
                           8:08 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Jeannette James, Chair                                         
 Representative Joe Green                                                      
 Representative Ivan Ivan                                                      
 Representative Brian Porter                                                   
 Representative Caren Robinson                                                 
 Representative Ed Willis                                                      
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Scott Ogan, Vice Chair                                         
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE BILL NO. 368                                                            
 "An Act relating to election campaigns, election campaign                     
 financing, the oversight and regulation of election campaigns by              
 the Alaska Public Offices Commission, the activities of lobbyists             
 that relate to election campaigns, and the definitions of offenses            
 of campaign misconduct; and providing for an effective date."                 
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 HOUSE BILL NO. 317                                                            
 "An Act relating to election campaigns, election campaign                     
 financing, the oversight and regulation of election campaigns by              
 the Alaska Public Offices Commission, the activities of lobbyists             
 that relate to election campaigns, and the definitions of offenses            
 of campaign misconduct; and providing for an effective date."                 
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 368                                                               
 SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM                                 
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
                                                                               
 JRN-DATE      JRN-PG            ACTION                                        
 12/29/95      2362    (H)   PREFILE RELEASED                                  
 01/08/96      2362    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/08/96      2362    (H)   STA, JUDICIARY, FINANCE                           
 01/25/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/25/96              (H)   MINUTE(STA)                                       
 01/30/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/30/96              (H)   MINUTE(STA)                                       
 02/01/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 02/01/96              (H)   MINUTE(STA)                                       
 02/29/96              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 317                                                               
 SHORT TITLE: ELECTION CAMPAIGN FINANCE REFORM                                 
 SPONSOR(S): REPRESENTATIVE(S) FINKELSTEIN                                     
                                                                               
 JRN-DATE      JRN-PG            ACTION                                        
 04/21/95      1427    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/21/95      1427    (H)   STATE AFFAIRS, JUDICIARY, FINANCE                 
 01/08/96      2358    (H)   SPONSOR SUBSTITUTE INTRODUCED-REFERRALS           
 01/08/96      2358    (H)   STATE AFFAIRS, JUDICIARY, FINANCE                 
 01/25/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/25/96              (H)   MINUTE(STA)                                       
 01/30/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 01/30/96              (H)   MINUTE(STA)                                       
 02/01/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 02/01/96              (H)   MINUTE(STA)                                       
 02/29/96              (H)   STA AT  8:00 AM CAPITOL 102                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 REPRESENTATIVE DAVID FINKELSTEIN                                              
 Alaska State Legislature                                                      
 State Capitol, Room 424                                                       
 Juneau, Alaska 99801-1182                                                     
 Telephone:  (907) 465-2435                                                    
  POSITION STATEMENT:   Provided testimony on HB 317 and HB 368.               
                                                                               
 MIKE FRANK, Chair                                                             
 Campaign Finance Reform Now                                                   
 2224 Turnagain Parkway                                                        
 Anchorage, Alaska 99517                                                       
 Telephone:  (907) 248-5078                                                    
  POSITION STATEMENT:   Provided testimony on HB 317 and HB 368.               
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-25, SIDE A                                                            
 Number 0034                                                                   
                                                                               
 The House State Affairs Committee was called to order by Chair                
 Jeannette James at 8:08 a.m.  Members present at the call to order            
 were Representatives Ivan, Porter, Willis and James.  Members                 
 absent were Representatives Ogan, Green and Robinson.                         
 HB 368 - ELECTION CAMPAIGN FINANCE REFORM                                    
 HB 317 - ELECTION CAMPAIGN FINANCE REFORM                                     
                                                                              
 The first order of business to come before the House State Affairs            
 Committee was HB 368 and HB 317.                                              
                                                                               
 CHAIR JEANNETTE JAMES called on Representative David Finkelstein to           
 discuss the sections in HB 368 and HB 317.                                    
                                                                               
 Number 0062                                                                   
                                                                               
 REPRESENTATIVE DAVID FINKELSTEIN explained Section 9, "LIMITATIONS            
 ON AMOUNT OF POLITICAL CONTRIBUTIONS," included the various                   
 contribution limitations.  He cited the existing law was reduced              
 from $1,000 to $500 as a maximum contribution from individuals to             
 candidates, or from groups to candidates.  He further cited the               
 contribution maximum to groups was $250 with the exception of                 
 parties which was $5,000.  The maximum from a group that was a                
 party was $50,000 statewide or if the governor and lieutenant                 
 governor teamed up it was $100,000.                                           
                                                                               
 Number 0253                                                                   
                                                                               
 REPRESENTATIVE BRIAN PORTER asked if Section 9 cut in-half the                
 existing provisions in law?                                                   
                                                                               
 Number 0255                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "no."  The section also                   
 established new provisions as well.  He cited currently there were            
 no limits to groups or to parties, or from parties.                           
                                                                               
 Number 0277                                                                   
                                                                               
 CHAIR JAMES responded there was a $5,000 contribution limit applied           
 to groups giving to candidates.                                               
                                                                               
 Number 0294                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied right now the $1,000 limit                 
 applied to groups giving to candidates.                                       
                                                                               
 CHAIR JAMES reiterated there was not a limit to a party giving to             
 a candidate right now, and there was not a limit to giving to a               
 party either.                                                                 
                                                                               
 Number 0310                                                                   
                                                                               
 REPRESENTATIVE PORTER wondered if the contribution was limited to             
 the party the candidate was registered with, or a subgroup of the             
 party.  He questioned if each of the subgroups could give $5,000 to           
 a candidate, or if, collectively, a candidate could accumulate a              
 total of $5,000?                                                              
 Number 0371                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied the intent was cumulative.  The            
 definition of a party in both HB 368 and HB 317 was in statute                
 which required 3 percent of the total votes for a governor in an              
 election.  The group that received 3 percent was the umbrella                 
 group.  That, he explained, was the only way to distinguish between           
 a group and a party.  The Libertarian Party complained according to           
 the definition because they had not reached the 3 percent threshold           
 in many years.                                                                
                                                                               
 The record reflected the arrival of Representative Caren Robinson             
 at 8:10 a.m.                                                                  
                                                                               
 Number 0457                                                                   
                                                                               
 REPRESENTATIVE PORTER said, if it was left alone, it would be left            
 to speculation, and wondered if it should be clarified.                       
                                                                               
 Number 0471                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN commented he thought it was clear.                 
                                                                               
 Number 0485                                                                   
                                                                               
 REPRESENTATIVE PORTER asked if "it" referred to the bill or the               
 initiative?                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied the definition was tied to the             
 political party definition.  He reiterated he thought it was clear.           
 He suggested asking Mike Frank, Chair, Campaign Finance Reform Now,           
 the opinion of the initiative group.                                          
                                                                               
 Number 0558                                                                   
                                                                               
 REPRESENTATIVE PORTER said, according to the Legislative Legal                
 Department, it was a question open to debate.                                 
                                                                               
 Number 0578                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN referred the committee members to page             
 8 of the initiative and read, "a political party has a meaning                
 given in AS 15.16.010.20."                                                    
                                                                               
 Number 0590                                                                   
                                                                               
 REPRESENTATIVE PORTER explained there was not an answer to the                
 question, if all subgroups could contribute in total or up to                 
 $5,000.                                                                       
                                                                               
 Number 0600                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said he thought he could convince the              
 Legislative Legal Department according to the definition that the             
 entities receiving 3 percent of the total votes should receive the            
 higher maximum contributions.                                                 
                                                                               
 Number 0643                                                                   
                                                                               
 CHAIR JAMES asked if a subgroup could qualify as a group and give             
 another $500?                                                                 
                                                                               
 Number 0654                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied that was an interesting                    
 question.  There was a provision that said subdivisions were part             
 of the group.  He said a subdivision would probably be disinclined            
 to separate from the group because it would then face the lower               
 maximum donation contributions to itself.                                     
                                                                               
 Number 0695                                                                   
                                                                               
 CHAIR JAMES did not agree with Representative Finkelstein because             
 the main party could give $5,000 and a subgroup could give $500.              
 She did not see the disadvantage.                                             
                                                                               
 CHAIR JAMES called on the first witness via teleconference in                 
 Anchorage, Mike Frank, to respond.                                            
                                                                               
 Number 0715                                                                   
                                                                               
 MIKE FRANK, Chair, Campaign Finance Reform Now, explained according           
 to the initiative, a political party was allowed to give $5,000 to            
 a candidate, and the other subdivisions were allowed to give $500             
 to a candidate, if they were not legally part of the party.  If the           
 subdivision was closely tied to the party, a contribution was an              
 accounting transfer, and it would count against the $5,000 limit              
 because it was not an independent group.  He said the Legislative             
 Legal Department was correct in the fact that there was a "gray               
 area" involved.  The gray area was whether or not a subdivision was           
 closely tied to the party.                                                    
                                                                               
 Number 0809                                                                   
                                                                               
 CHAIR JAMES said based on her experience subgroups gave money to              
 the party and seldom did the party give money to the subgroups.               
 She said the subgroups raised and spent their own money, and were             
 only part of the party in name and affiliation.                               
                                                                               
 Number 0849                                                                   
                                                                               
 MR. FRANK stated based on the explanation by Chair James, the group           
 would be subject to the $500 contribution limit.                              
                                                                               
 Number 860                                                                    
                                                                               
 CHAIR JAMES agreed with Mr. Frank, because it acted separately and            
 qualified as a group and did not decrease the $5,000 that the party           
 could give to a candidate.                                                    
                                                                               
 Number 0902                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward explained Section 10,               
 "RESTRICTIONS ON SOLICITATION AND ACCEPTANCE OF CONTRIBUTIONS,"               
 restricted contributions from nonresidents and out of district                
 contributions from lobbyists.  He cited the cash limit was reduced            
 to $25 in HB 368, whereas in HB 317 it remained as stated in                  
 current statute.  Section 10 also addressed time limits, he                   
 explained.  House Bill 368 allowed the collection of money 11                 
 months before an election and up to 30 days after an election.  The           
 section also banned honorariums.  The section also addressed family           
 member loans.  House Bill 368 included the family member loan while           
 HB 317 did not.  He called it an exception to the out-of-state                
 rule.                                                                         
                                                                               
 CHAIR JAMES asked for clarification.  She wondered if a family                
 member loan was included in the initiative.                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "yes," it was in the                      
 initiative.                                                                   
                                                                               
 CHAIR JAMES responded, therefore, because it was in the initiative            
 it was allowed in HB 368.                                                     
                                                                               
 Number 1040                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN explained there were limits for the                
 first time in HB 368 and HB 317 for candidates recovering loans               
 that exceed $10,000 for a House or Senate race, $25,000 for a                 
 governor or lieutenant governor race, and $5,000 for other races.             
                                                                               
 Number 1101                                                                   
                                                                               
 REPRESENTATIVE PORTER asked if Section 10 precluded the acceptance            
 of money in non-election years also?                                          
                                                                               
 Number 1113                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "that's correct."  It set the             
 time limits for the first time of starting and ending points in a             
 campaign.                                                                     
                                                                               
 Number 1119                                                                   
                                                                               
 CHAIR JAMES asked if it was 11 months before any election?                    
                                                                               
 Number 1150                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "that's correct."  He said the            
 Alaska Public Offices Commission (APOC) recommended a shorter                 
 period up front and a longer period after the election.                       
                                                                               
 Number 1166                                                                   
                                                                               
 CHAIR JAMES said the subcommittee recommended shortening the time             
 limit to allow contributions during the legislative session for               
 legislators.  Currently, a legislator could not receive                       
 contributions, but a challenger could during the legislative                  
 session.  The idea was to level the playing field between the                 
 challenger and the incumbent.  She believed, however, there never             
 would be a level playing field for the incumbent, and cited name              
 recognition, contacts and constituent satisfaction as advantages              
 for an incumbent over a challenger.  She said this gave the                   
 incumbent an edge and should not be legislated.                               
                                                                               
 Number 1245                                                                   
                                                                               
 REPRESENTATIVE PORTER replied, "conversely, if you've never had to            
 push the buttons, you can say just about anything."                           
                                                                               
 Number 1249                                                                   
                                                                               
 CHAIR JAMES further replied a candidate could make promises and               
 commitments unknowingly.                                                      
                                                                               
 REPRESENTATIVE CAREN ROBINSON said, "we all learned."                         
                                                                               
 Number 1259                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said the citizens of Alaska liked short            
 campaigns and was concerned about constitutional protections,                 
 because short campaigns could restrict the right of free speech.              
 Therefore, there was a balance issue as well.                                 
                                                                               
                                                                               
 Number 1291                                                                   
                                                                               
 CHAIR JAMES replied, if the time was to be shortened for                      
 contributions, the people would be "hammered" by the candidates.              
 She agreed with Representative Finkelstein a constitutional                   
 challenge would be made based on the right of free speech because             
 it would be inhibited, however.                                               
                                                                               
 Number 1339                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward explained Section 11,               
 "STATEMENT BY CONTRIBUTOR," was an interpretation problem.  He                
 cited a copy of the $250 filing statement needed to be given to the           
 candidate as well as APOC.  He called it an "odd provision" in the            
 law.  The reports were not enforced and generally not given to the            
 candidates.                                                                   
                                                                               
 CHAIR JAMES asked if Section 11 did not require a report filed to             
 the candidate but only with APOC?                                             
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "that's correct."                         
                                                                               
 Number 1447                                                                   
                                                                               
 REPRESENTATIVE PORTER asked if that was in the initiative?                    
                                                                               
 Number 1451                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN asked Mr. Frank if that provision was in           
 the initiative?                                                               
                                                                               
 Number 1460                                                                   
                                                                               
 MR. FRANK said he did not remember, and wondered if it was                    
 suggested by APOC.                                                            
                                                                               
 Number 1468                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied the extra requirement was taken            
 out in HB 317 but remained in the initiative.  The law remained               
 unchanged, he explained, a copy of the report was still required to           
 be given to the candidate.                                                    
                                                                               
 Number 1498                                                                   
                                                                               
 REPRESENTATIVE ROBINSON asked why an individual was required to               
 give a copy of a report to a candidate when a candidate already               
 filed it on his report?                                                       
                                                                               
 Number 1535                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied it was a relatively inexpensive            
 way for APOC to receive information from a non-group.  It was a               
 double check because it was reported by the candidate who received            
 the money and by the group who gave the money.  He further said the           
 initiative added a provision that required individuals to give a              
 copy of the report to the candidates towards the end of a campaign.           
                                                                               
 Number 1612                                                                   
                                                                               
 REPRESENTATIVE ROBINSON wondered what was gained.  She asked if it            
 was a check and balance?                                                      
                                                                               
 Number 1646                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said one of the problems with campaign             
 finance reform was that no one was privy to the information.                  
 Therefore, enforcement was difficult, and this was one provision              
 that could be used to check if a transaction occurred.  He said in            
 practice many people did not file, however.  He cited one-half did            
 not turn the forms in.  He said he was describing the goal, and it            
 would be useful information in an investigation.                              
                                                                               
 Number 1717                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN said he spent a good 50 percent of his               
 time trying to comply with the APOC reporting requirements as a               
 first time candidate.  He said he understood the intent, however.             
                                                                               
 Number 1760                                                                   
                                                                               
 CHAIR JAMES said she discovered a gap before the final report, a              
 contribution of over $250 did not have to be reported.  She                   
 wondered if the gap had been closed?                                          
                                                                               
 REPRESENTATIVE FINKELSTEIN replied a bill closed the gap in a                 
 previous legislative session.                                                 
                                                                               
 Number 1798                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said the initiative actually removed               
 reporting requirements.  He cited the removal of the over $250                
 contributor report and groups at the low end that were exempted               
 from filing a report.  The initiative increased the filing                    
 requirements to $1,000, and HB 317 removed the 24 hour expenditure            
 reporting requirements.                                                       
                                                                               
 Number 1857                                                                   
                                                                               
 CHAIR JAMES said the APOC reporting requirements were difficult,              
 and suggested a computerized filing system.  The information would            
 also be available for everyone to see as an example or for general            
 public information.                                                           
                                                                               
                                                                               
 REPRESENTATIVE PORTER asked if that was going to happen?                      
                                                                               
 Number 1915                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said there was money in the APOC budget,           
 but compatibility problems needed to be solved before proceeding.             
 He said most candidates would probably still file their reports on            
 paper so a transition system was needed.  He reiterated the money             
 was there, but there were more problems than originally believed              
 and it was taking longer than expected.                                       
                                                                               
 Number 1965                                                                   
 CHAIR JAMES said it would help computer users to produce reports.             
                                                                               
 REPRESENTATIVE FINKELSTEIN said the key was to make the computer              
 screen look like the current form used.                                       
                                                                               
 CHAIR JAMES said the biggest problem was that there was not enough            
 space to write-in on the reports.                                             
                                                                               
 REPRESENTATIVE FINKELSTEIN responded a computerized system would              
 solve that problem.                                                           
                                                                               
 REPRESENTATIVE ED WILLIS said he was still trying to determine how            
 to find books in the library.                                                 
                                                                               
 Number 2038                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward explained Section 15,               
 "USES OF CAMPAIGN CONTRIBUTIONS HELD BY CANDIDATE OR GROUP," was              
 the next section with any content to discuss.  He explained Section           
 15 described the use of campaign contributions held by a candidate            
 or group.  He said the provision of personal use was eliminated.              
 He further explained contributions could be used to pay a civil               
 fine if the candidate did not cause or participate in an activity             
 that lead to a violation.                                                     
                                                                               
 Number 2111                                                                   
                                                                               
 CHAIR JAMES asked Representative Finkelstein to list the places               
 where a candidate could not use the contributions.                            
                                                                               
 Number 2116                                                                   
                                                                               
 REPRESENTATIVE PORTER commented personal campaign money could not             
 be given to another candidate or group, but it could be given to a            
 party.                                                                        
                                                                               
 Number 2130                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied that was correct.  He explained            
 it was a new restriction.                                                     
                                                                               
 CHAIR JAMES asked which was a new restriction?                                
                                                                               
 REPRESENTATIVE FINKELSTEIN replied the theory was that the                    
 individual giving might not support the third party.                          
                                                                               
 Number 2138                                                                   
                                                                               
 CHAIR JAMES read the following provisions from HB 368, page 13,               
 Sec. 15.13.112, "loaned to a person, knowing used to pay more than            
 the fair market value for goods or services purchased for the                 
 campaign, used to pay a criminal fine, used to pay civil penalties;           
 however, campaign contributions held by a candidate or group may be           
 used to pay a civil penalty assessed under this chapter if                    
 authorized by the commission after it first determines that a                 
 candidate did not cause or participate in the violation, and/or               
 that the candidate cooperated in the revelation of the violation,             
 and cannot be used to make a contribution to another candidate or             
 group."  She explained that would be only if political parties were           
 parties, and that subdivisions of political parties were groups.              
 Therefore, money would not be given to the subdivision.                       
                                                                               
 Number 2192                                                                   
 REPRESENTATIVE PORTER commented the assumption that what the                  
 committee members decided was not always true for everyone.                   
                                                                               
 Number 2199                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied the committee members needed to            
 consider the use of surplus campaign funds, which did allow                   
 unlimited amounts to be given to a party.  Taken literally, this              
 read, a group included a party.  Thus contributions could be made             
 from a candidate to a group.  This area could be open to different            
 approaches, however.                                                          
                                                                               
 CHAIR JAMES suggested addressing the surplus provisions in the                
 bills.                                                                        
                                                                               
 Number 2225                                                                   
                                                                               
 REPRESENTATIVE PORTER reiterated campaign contributions held by a             
 candidate or group could not be used to make contributions to                 
 another candidate or a group.                                                 
                                                                               
 Number 2330                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "right."  The next section,               
 Sec. 15.13.116, "DISBURSEMENT OF CAMPAIGN ASSETS AFTER ELECTION,"             
 said surplus campaign money could be given to a political party.              
                                                                               
 Number 2249                                                                   
                                                                               
 CHAIR JAMES responded there was a contradiction.                              
                                                                               
 Number 2241                                                                   
                                                                               
 REPRESENTATIVE PORTER agreed with Chair James.  He said, "you can't           
 have it both ways."  He asserted either the subgroups were part of            
 the party and limited to a total of $5,000 and could not give                 
 another $500 as a group, or not.                                              
                                                                               
 Number 2256                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied a group could choose another               
 approach.  The section said, prior to the election, contributions             
 could not be made with campaign funds.  After the election, the               
 funds could be given to a party or a charity, for example.                    
                                                                               
 REPRESENTATIVE PORTER said a consistent definition was needed for             
 a party.  He cited the District 20 Republicans did not fall under             
 the category of a party, therefore, it was classified as a group.             
 According to Section 15, he could not contribute funds to it from             
 his campaign, but he could to the party.                                      
                                                                               
 REPRESENTATIVE FINKELSTEIN asked if Representative Porter was                 
 referring to Sec. 15.13.116?                                                  
                                                                               
 REPRESENTATIVE PORTER replied, according to Sec. 15.13.116, he                
 could make donations without conditions to a political party.  He             
 explained that did not mean the District 20 Republicans.                      
                                                                               
 Number 2308                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN agreed the subdivision issue was                   
 confusing.  He said the subdivision had options, however.  If a               
 subdivision chose to be a group, it could only give a certain                 
 amount under current law and under the initiative.  If it chose to            
 be part of the party, it could give higher amounts, however.                  
                                                                               
 Number 2343                                                                   
                                                                               
 CHAIR JAMES asked how that was possible?  Where was the benefit to            
 remain as part of the party, if the maximum contribution limit was            
 $5,000?                                                                       
                                                                               
 Number 2352                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied it could also "receive" a larger           
 amount from a contributor as a party.  There was the possibility a            
 subdivision could organize as a non-party group because it allowed            
 an additional $500 contribution limit.  He said Mr. Frank                     
 acknowledged that as a possibility.  He explained the subdivision             
 could chose to remain as part of the party to allow the $5,000                
 contribution limit from anyone.  He said that level was rarely                
 reached by most contributors, however.                                        
                                                                               
 Number 2377                                                                   
                                                                               
 CHAIR JAMES replied the money would not be useful if it could not             
 be given to a campaign.                                                       
                                                                               
 Number 2380                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN responded there were plenty of campaigns           
 and campaign activities for the common good of all a party's                  
 candidates to contribute to and cited polling as an example.                  
                                                                               
 Number 2389                                                                   
                                                                               
 CHAIR JAMES commented if it was part of the party, then the                   
 contributions could be given to the party and the party could give            
 it to all the subdivisions.                                                   
                                                                               
 Number 2400                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "up to a cumulative maximum of            
 $5,000."  He reiterated the maximum was rarely reached, however.              
                                                                               
 Number 2403                                                                   
                                                                               
 CHAIR JAMES said it would not be advantageous for a subgroup to be            
 part of the party because the $5,000 was tallied up with the other            
 money the party could contribute.                                             
                                                                               
 Number 2435                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN commented it depended if the candidates            
 already received the maximum amount.  He reiterated there was still           
 the option for a subdivision to be a non-party group.  However, he            
 believed most subdivision would continue to be party subdivisions.            
                                                                               
 Number 2449                                                                   
                                                                               
 CHAIR JAMES replied the advantage for a subdivision would be the              
 ability to select the candidate to contribute money to rather than            
 the state party deciding.                                                     
                                                                               
 Number 2467                                                                   
                                                                               
 REPRESENTATIVE PORTER stated this issue needed to be clarified.  He           
 explained the District 20 Republicans could be a group, and the               
 District 21 Republicans could be a party subdivision.  In this                
 explanation two similar entities fell under different rules.  He              
 reiterated, this issued needed to be clarified.                               
                                                                               
 TAPE 96-25, SIDE B                                                            
 Number 0027                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "it is a good point."  He said            
 he had not thought about this issue to any great degree.  He                  
 explained under current laws the entities had the same choice.  He            
 called it a simple choice because there were not any restricts on             
 parties and most chose to be a subdivision of the party.  He                  
 reiterated, he believed, most entities would remain as part of the            
 party.  The contribution limit difference was enough incentive to             
 remain part of the party, he cited.                                           
                                                                               
 Number 0058                                                                   
                                                                               
 REPRESENTATIVE PORTER asserted there was not language that                    
 mentioned the cumulative contribution limit.  He said it was                  
 assumed.                                                                      
                                                                               
 Number 0065                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN reiterated, if a party was defined as an           
 entity that received 3 percent of the total votes in the last                 
 election for governor, that party could spread out the                        
 opportunities to the subdivisions.                                            
                                                                               
 Number 0086                                                                   
                                                                               
 CHAIR JAMES replied that did not give a subdivision an advantage to           
 remain part of the party.  The advantage would be to be a group to            
 maintain the decision making advantages.  She said the issue was              
 not clear and suggested looking at various scenarios for                      
 clarification.                                                                
                                                                               
 CHAIR JAMES explained the reason she filed HB 368 was to encourage            
 discussion among the legislators and the public.  She stated if HB
 317 and HB 368 were not filed, the initiative would not be                    
 discussed here in Juneau.  She commented she did not want to change           
 the initiative, but discuss the problems and fix them.  She said              
 the underlying question was whether or not a bill was necessary.              
 There were a lot of people who wanted the initiative to go directly           
 to the ballot.  She asserted she was not trying to usurp the                  
 authority of the initiative movement, but was trying to create an             
 environment for further discussion.  She asked Representative                 
 Finkelstein to respond.                                                       
                                                                               
 Number 0216                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said Chair James described the situation           
 well.  He said all the concerns were legitimate concerns, and an              
 adjustment or a change might be in the best interest of the public.           
 He stated no one claimed the one and only answer.  He explained his           
 preference was for campaign public financing with voluntary limits.           
 He said he would toss HB 317 in a second if there was an amendment            
 proposed for public financing.  He said this was a subject where              
 reasonable people could disagree.                                             
                                                                               
 Number 264                                                                    
                                                                               
 CHAIR JAMES asked Mr. Frank to respond to her comments also.                  
                                                                               
 Number 0268                                                                   
                                                                               
 MR. FRANK said Chair James should not feel defensive about the                
 committee's approach.  He called it a positive and problem solving            
 approach.  He further said he was very encouraged when he heard               
 that bills were being introduced to contribute to the initiative.             
 He agreed with Representative Finkelstein that there were many                
 approaches.  He said he also preferred campaign public financing,             
 but it could not be done by an initiative.  He said the issue of              
 subdivisions was debated while drafting the initiative.  It was               
 decided the initiative group did not want to dictate to local party           
 committees.  He called it a gray area, and several approaches were            
 possible.                                                                     
                                                                               
 Number 0264                                                                   
                                                                               
 CHAIR JAMES thanked Mr. Frank, and commented she was feeling                  
 frustrated and wanted to reiterate the goal of the exercise today.            
                                                                               
 Number 0343                                                                   
                                                                               
 REPRESENTATIVE PORTER commented, if HB 317 and HB 368 did not make            
 it through the system, and the initiative was enacted, he asked how           
 the gray issue would be resolved?  He wondered if it would be                 
 resolved by APOC or by a court case, for example.                             
                                                                               
 Number 0371                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied APOC would issue regulations on            
 anything put forward.  He said there was not a prohibition on                 
 regulations.  Moreover, if someone was unhappy they could sue.                
                                                                               
 Number 0384                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN further stated there were two points               
 involved regarding the subdivision issue.  He cited a bill could              
 not stop an entity from deciding whether it could be a group or a             
 subdivision.  It could simply reorganize under a new name, for                
 example.  He also cited this issue would probably not be a big                
 issue in practice because the maximums would not be reached, based            
 on past contribution records.                                                 
                                                                               
 Number 0455                                                                   
                                                                               
 REPRESENTATIVE PORTER said some apparent subdivisions did not even            
 know the address of the main party.  He wondered if any entity                
 could be a subdivision of a party without its knowledge.                      
                                                                               
 Number 0468                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, that was an interesting                   
 question.  He wondered if a party could reject a group.  Currently,           
 a group could reject a party, but again wondered if a party could             
 reject a subdivision.  He said the Commission recognized a central            
 party and the rules emanated from there.  He said the initiative              
 confirmed that because it referenced the 3 percent definition.  He            
 said a party did not have to take a subdivision just because it               
 wanted to sign-up.                                                            
                                                                               
 Number 0513                                                                   
                                                                               
 REPRESENTATIVE PORTER said it was necessary to forget about logic             
 sometimes.  He agreed with Representative Finkelstein, logically,             
 and was concerned about someone else interpreting it differently.             
                                                                               
 REPRESENTATIVE FINKELSTEIN replied he needed to look at the issue             
 again.                                                                        
                                                                               
 Number 0531                                                                   
                                                                               
 CHAIR JAMES said there were many different groups and cited the               
 College Republicans as an example.  She said it was affiliated with           
 the party, but not part of the party.  She explained subdivisions             
 were generally managed by the elected officials of the party.  It             
 was clear in that case the subdivision was part of the party.                 
 However, the affiliated groups such as the College Republicans were           
 not managed by the party.                                                     
                                                                               
 Number 0580                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said it was confusing.  He cited                   
 approval was needed from the Democratic Party to be a subdivision             
 as well as donate a certain percentage of money raised to the main            
 party.  There was a straight forward tie otherwise it did not                 
 exist.                                                                        
                                                                               
 CHAIR JAMES said this was a good discussion and suggested moving              
 forward.                                                                      
                                                                               
 Number 0605                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward referred the committee              
 members to page 14, Sec. 15.13.116, "DISBURSEMENT OF CAMPAIGN                 
 ASSETS AFTER ELECTION."  The subsection explained what could be               
 done with the money after a campaign.  He stated in the initiative            
 and in HB 368, 60 days were given, while in HB 317, 90 days were              
 given.  A legislator, however, was given until February 15 because            
 it was the reporting date.  He explained the distribution could be            
 made to pay bills, hold a party, make donations to a political                
 party, charity or to the state of Alaska, repay loans, establish a            
 fund for legal fees, and pass forward property up to $2,500 for               
 future campaigns, such as computers.  If failed to distribute the             
 funds as described in the subsection, the disbursements went to the           
 general fund.                                                                 
                                                                               
 Number 0662                                                                   
                                                                               
 CHAIR JAMES asked what of value went onto the computers?                      
 Number 0667                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN explained in the cases of "in kind"                
 contributions, such as the donation of a computer, the candidate              
 did not have to use the purchase price but rather an assessment.              
 He called it the fair market value.  He said it would be up to APOC           
 to issue a regulation to make this area more specific.                        
                                                                               
 Number 0703                                                                   
                                                                               
 CHAIR JAMES asked about campaign materials such as signs and                  
 buttons, for example?  She commented they did not have any value              
 except to the candidate.                                                      
                                                                               
 Number 0713                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied campaign materials had nominal             
 value.  He said it was hard to get into that level of detail and              
 reiterated the APOC would need to issue regulations to make it more           
 specific.                                                                     
                                                                               
 Number 0725                                                                   
                                                                               
 CHAIR JAMES reiterated campaign materials did not have any value,             
 unless the candidate turned out to be someone famous.                         
                                                                               
 CHAIR JAMES announced she had a problem with relying on regulations           
 because the statutes were not written clear enough.  She said this            
 was true in every area of the government.  The legislature wrote              
 things very vague so that the Administration had to decide how to             
 implement it creating an interpretation problem.  In effect, this             
 created a situation where the Administration was making the law               
 when it should be making the application of the law.                          
                                                                               
 Number 0813                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said he agreed with Chair James, but in            
 this area of the law it was difficult to "jam" all the details into           
 a bill.  The initiative group already complained the bill was too             
 long.  He said there were other areas that her comment applied to,            
 but in this area the fair market value concept would probably not             
 be misinterpreted.                                                            
                                                                               
 Number 0840                                                                   
                                                                               
 REPRESENTATIVE PORTER asked what the carry over value was again to            
 a non-election year?                                                          
                                                                               
 Number 0858                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, it was zero.  He said it was              
 reasonable to allow some funds carried forward.  He said it was an            
 area for discussion, however.                                                 
                                                                               
 Number  0873                                                                  
                                                                               
 REPRESENTATIVE PORTER wondered about returning contributions to the           
 original donors.                                                              
                                                                               
 Number 0892                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said that provision was included in HB
 317, and not HB 368.  It was addressed in HB 317 on a pro-rata                
 basis, whereby an approximation would be calculated.                          
                                                                               
 Number 0911                                                                   
                                                                               
 CHAIR JAMES replied that would be difficult because she received $2           
 and $5 contributions, for example.                                            
                                                                               
 Number 0919                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN responded it was an approximation.  He             
 said contributions could be eliminated below a certain level.  The            
 intent was to eliminate the return of funds to a friend, for                  
 example.                                                                      
                                                                               
                                                                               
 Number 0928                                                                   
                                                                               
 REPRESENTATIVE ROBINSON explained when she left the City and                  
 Borough of Juneau Assembly she had a campaign account of which                
 either a check was made to the donator or to a candidate of their             
 choice.  The leftover amount was given to the Police Department for           
 the Teddy Bear Program.  She asked if she would be able to do that            
 according to HB 368 and HB 317?                                               
                                                                               
 Number 0954                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "no."  He explained she could             
 give the money back to the donor, give it to a party of their                 
 choice, or give it back to the donor so he could give it to a                 
 candidate of his choice.                                                      
                                                                               
 Number 0965                                                                   
                                                                               
 REPRESENTATIVE ROBINSON said it was double paperwork.  She said it            
 was just as easy for her to write the check and let it be known               
 where the money came from.                                                    
                                                                               
 REPRESENTATIVE FINKELSTEIN replied it could be done if it was a               
 charity case.                                                                 
                                                                               
 Number 0986                                                                   
 CHAIR JAMES commented the approach was different in HB 317 and HB
 368.                                                                          
                                                                               
 REPRESENTATIVE FINKELSTEIN said Chair James was correct.                      
                                                                               
 CHAIR JAMES said the contributions could be returned to the                   
 donators in HB 317, but not in the initiative and not in HB 368.              
                                                                               
 Number 1014                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN explained he had been focusing his                 
 comments on the initiative.                                                   
                                                                               
 CHAIR JAMES replied it was important to note the changes in HB 317            
 because it indicated second thoughts and a clean-up on your part.             
 She agreed it was also important to focus on the initiative as it             
 might become law of the land.                                                 
                                                                               
 Number 1082                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward referred the committee              
 members to Sec. 15.13.125, "CIVIL PENALTIES."  He explained in HB
 368 there was an alternative for a citizen suit.  He said there               
 were higher penalties imposed for administrative decisions.  He               
 cited in HB 368 a new set of standards was also included.  They               
 were:  knowing violations, negligent violations, and aggravating              
 and mitigating factors.  He cited in HB 317 a more simple approach            
 was taken which increased the penalties incurred.  He further said            
 in the event a citizen chose to go to court, the court was                    
 authorized to fine at a level three times higher than what the                
 penalty would have been.  The winner of the case could win                    
 reasonable attorney fees and cost from the loser.  Furthermore, the           
 winner could receive one-half of the amount of the penalty                    
 according to HB 368.  He cited in HB 317 the violations were at a             
 lower level.  He said in the initiative and HB 368 the violations             
 called for a class C felony for an intentional violation, whereas             
 in HB 317 the violations called for a class A misdemeanor for the             
 worst penalty.                                                                
                                                                               
 Number 1229                                                                   
                                                                               
 REPRESENTATIVE PORTER asked what the violation was for a class C              
 felony in the initiative?                                                     
                                                                               
                                                                               
 Number 1238                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "an intentional violation."  He           
 called on Mr. Frank to further address the question.                          
                                                                               
 Number 1246                                                                   
                                                                               
 MR. FRANK said all the intentional violations were subject to a               
 class C felony.  He explained under current law, the violations               
 were classified as an unclassified misdemeanor.  The initiative               
 tried to tie the violations to the existing criminal codes with a             
 graduated step-down approach to a class C felony for intentional              
 violations and so forth.  The idea was to treat the matter                    
 seriously, if a someone tried to cheat the voter.  He further said            
 a lower contribution level was included as a possible deterrent to            
 violate the laws.                                                             
                                                                               
 The record reflected the arrival of Representative Joe Green at               
 9:20 a.m.                                                                     
                                                                               
 Number 1325                                                                   
                                                                               
 REPRESENTATIVE PORTER wondered if it was a knowingly intentional              
 violation of a provision rather than an intentional act that                  
 violated a provision.  He cited, if he accepted a check, for                  
 example, then discovered it was improper, did he committed a                  
 felony?                                                                       
                                                                               
 Number 1359                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied the language in the bill called            
 for an "intentional" violation of a provision.  Therefore,                    
 Representative Porter's interpretation was correct.  He said a                
 candidate did not have to intentionally act in a way that violated            
 a provision, but intentionally violate it.                                    
                                                                               
 Number 1370                                                                   
                                                                               
 MR. FRANK replied a candidate needed to cognitively violate the               
 law.  He said the act of accepting the check in Representative                
 Porter's example was not in violation.                                        
                                                                               
 Number 1390                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said he had received more complaints and           
 concerns about this section compared to any other section from                
 legislators.  He cited the problems expressed were potential abuse            
 of citizen suits before an election.  Furthermore, it was believed            
 that the system now worked and wondered why a new one was                     
 necessary.                                                                    
                                                                               
 CHAIR JAMES announced for the record that Representative Joe Green            
 was present.                                                                  
                                                                               
 CHAIR JAMES further announced Representatives Robinson and Willis             
 need to leave shortly.                                                        
                                                                               
 Number 1474                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN referred the committee members to                  
 subsection 15.13.135, "INDEPENDENT EXPENDITURES FOR OR AGAINST                
 CANDIDATES."  He explained based on the Buckley v. Valeo decision,          
 an independent expenditure could not be limited.  He stated an                
 individual could give an unlimited amount, however.  A requirement            
 was added to HB 317 and HB 368 based on a suggestion by APOC to               
 include the following disclaimer statement to a piece of                      
 communication.                                                                
                                                                               
 "This NOTICE TO VOTERS is required by Alaska law.  (I/we) certify             
 that this (mailing/literature/advertisement) is not authorized,               
 paid for, or approved by the candidate."                                      
                                                                               
 REPRESENTATIVE FINKELSTEIN explained the disclaimer was needed to             
 make it clear it was an independent expenditure.                              
                                                                               
 Number 1518                                                                   
                                                                               
 CHAIR JAMES stated an individual could not be denied to place an              
 add in the paper of which the candidate had nothing to do with it.            
                                                                               
 Number 1530                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN further stated a group or a party could            
 place an add in the paper of which the candidate had nothing to do            
 with it.                                                                      
                                                                               
 Number 1538                                                                   
                                                                               
 CHAIR JAMES commented a disclaimer would have to be present on the            
 notice that it was not authorized by the candidate.                           
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "exactly."                                
                                                                               
 Number 1550                                                                   
                                                                               
 REPRESENTATIVE PORTER wondered if an independent expenditure could            
 be the financing of a television spot for a candidate the last two            
 weeks of its exposure, for example.                                           
                                                                               
 Number 1563                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied only if it was not done in                 
 concert with the campaign.  He said it was highly unlikely,                   
 however, and no one had tried something that blatant before.                  
                                                                               
                                                                               
 Number 1579                                                                   
                                                                               
 CHAIR JAMES further commented there was nothing stopping an                   
 independent expenditure from placing an ad against a candidate.               
 She wondered if the disclaimer would apply to that scenario as                
 well.                                                                         
                                                                               
 Number 1599                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said the suggestion from APOC was to add           
 the language "all candidates" which would address the scenario                
 Chair James presented.                                                        
                                                                               
 REPRESENTATIVE PORTER wondered if it said that in the initiative.             
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, the initiative read, "...is not           
 authorized, paid for, or approved by "the" candidate."  Leaving the           
 question of who was the candidate unanswered.                                 
                                                                               
 Number 1634                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward referred the committee              
 members to Sec. 15.13.145, "MONEY OF THE STATE AND ITS POLITICAL              
 SUBDIVISION."  He explained the approach was to allow money spent             
 by a government entity on ballot propositions based on the approval           
 of the local government body.  He cited a civic concern was a                 
 possible issue, however.  The subsection banned contributions from            
 government entities to candidates.  He explained there was a case             
 where a local government body gave a contribution to a candidate.             
 He explained most felt it was inappropriate.                                  
                                                                               
 REPRESENTATIVE ROBINSON announced she was sorry, but she needed to            
 leave the meeting.                                                            
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward referred the committee              
 members to Sec. 15.13.150, "ELECTION EDUCATIONAL ACTIVITIES NOT               
 PROHIBITED."  The subsection described the activities not                     
 prohibited, and cited the publication of the date and location of             
 an election, educating the public, and sponsoring forums, as                  
 examples.  He explained that included get-out-the-vote and voter              
 registration as well.                                                         
                                                                               
 Number 1751                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward referred the committee              
 members to Sec. 15.13.400, "DEFINITIONS."  He explained the                   
 subsection addressed the area of honorarium.  He cited HB 317                 
 incorporated the existing honorarium approach that the legislature            
 followed which differentiated an honorarium speech based on subject           
 content.  He further explained the subsection clarified the words             
 "individual" which meant a natural person and "person" which meant            
 the same as in AS 01.10.060 and labor union.  He called it a                  
 technical issue.                                                              
                                                                               
 Number 1870                                                                   
                                                                               
 REPRESENTATIVE JOE GREEN wondered if a speech made at a luncheon              
 was in violation of the honorarium provisions in the initiative.              
                                                                               
 Number 1930                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN reiterated HB 317 was in compliance with           
 the ethics code.  He said Representative Green's concern could be             
 a problem according to HB 368, however.  He said it needed to be              
 clarified further and remain consistent with the ethics code.                 
                                                                               
 Number 2093                                                                   
                                                                               
 REPRESENTATIVE PORTER wondered if the key chain he received from              
 the State Chamber of Commerce which was something of value was in             
 violation?                                                                    
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "I suppose."  He said it was a            
 good point and the intention was to exempt a gift such as a key               
 chain, however.                                                               
                                                                               
 Number 2122                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward referred the committee              
 members to Sec. 15.56.012, 15.56.014, and 15.56.016, "CAMPAIGN                
 MISCONDUCT IN THE FIRST, SECOND AND THIRD DEGREE." He said these              
 sections were discussed and mentioned earlier.                                
                                                                               
 Number 2147                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward referred the committee              
 members to Section 21 addressing lobbyists.  He explained the                 
 section allowed contributions from lobbyists who lived in the                 
 candidates own district, statewide candidates, and parties.                   
                                                                               
 Number 2194                                                                   
                                                                               
 CHAIR JAMES wondered about the spouse of a lobbyist.                          
                                                                               
 Number 2202                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied the spouse of a lobbyist could             
 make contributions using their own money.  He said it was a                   
 potential problem, and when the ethics code was passed in 1992 that           
 banned lobbyists from holding fund raisers everyone assumed the               
 spouse would host the fund raiser instead.  The reason it did not             
 turn out that way was because the lobbyist had an image to                    
 preserve.  The Alaska State Constitution said "we shall regulate              
 lobbying," and not the spouses.  He said there was a direct                   
 connection between the behavior of a lobbyist and the Alaska State            
 Constitution.                                                                 
                                                                               
 Number 2364                                                                   
                                                                               
 CHAIR JAMES said she was pleased to hear that lobbyists were                  
 concerned about following the law, because that was not the                   
 perception of the public.  She said lobbyists were careful about              
 what they could and could not do according to her experiences.                
                                                                               
 REPRESENTATIVE FINKELSTEIN said after the 1992 ethics code was                
 passed, the lobbyists were very concerned about what was allowed              
 and not allowed.  He said HB 368 said a lobbyist could not                    
 "directly or indirectly collect contributions for, or deliver                 
 contributions to, a candidate."  He explained that was the                    
 interpretation of APOC and it was added to HB 368 for                         
 clarification.                                                                
                                                                               
 TAPE 96-26, SIDE A                                                            
 Number 0000                                                                   
                                                                               
 REPRESENTATIVE PORTER explained, according to the initiative, the             
 penalties also applied to the members of the public.  Therefore, if           
 an illegal donation was made, the individual was subject to                   
 prosecution.                                                                  
                                                                               
 Number 0037                                                                   
                                                                               
 CHAIR JAMES replied, "it's pretty scary."                                     
                                                                               
 REPRESENTATIVE GREEN replied, "It's very scary."                              
                                                                               
 Number 0046                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN moving forward referred the committee              
 members to Section 26, "This Act takes effect immediately under AS            
 01.10.070(c)."  He explained the initiative was governed by the               
 Alaska State Constitution.  He stated the logical effective date              
 would be January 1 which was also recommended by APOC.                        
                                                                               
 Number 0105                                                                   
                                                                               
 CHAIR JAMES said HB 368 read, "This Act takes effect immediately              
 under AS 01.10.070(c)."                                                       
                                                                               
 REPRESENTATIVE FINKELSTEIN replied it was the best the bill drafter           
 could do to match the initiative.  He agreed it was not be logical            
 to use any other date than January 1.                                         
                                                                               
 Number 0142                                                                   
                                                                               
 CHAIR JAMES said it would be unfair to restrict or make these                 
 changes in an election year.                                                  
                                                                               
 REPRESENTATIVE GREEN said there was already a conflict because this           
 was an election year.                                                         
                                                                               
 Number 0183                                                                   
                                                                               
 REPRESENTATIVE PORTER wondered if the provisions would be                     
 retroactive.                                                                  
                                                                               
 Number 0199                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied the issue of surplus addressed             
 about $1.5 million to $2.0 million, a big amount of money prior to            
 the 1996 fund raising season.  He explained the current law would             
 apply until the effective date of the new law.  Therefore,                    
 candidates could quit and take their surplus, or give it away, for            
 example.  However, if money was retained until the effective date             
 of the new law it would be subject to those provisions.                       
                                                                               
 Number 0281                                                                   
                                                                               
 CHAIR JAMES said, if the effective date was January 1, the surplus            
 would need to be eliminated by December 31.                                   
                                                                               
 Number 0295                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "right."  He cited the federal            
 government addressed this same issue and incorporated a phase-out             
 period of which one-third of the candidates quit and took the                 
 money, while two-thirds remained.                                             
                                                                               
 Number 0356                                                                   
                                                                               
 REPRESENTATIVE PORTER asked what the effective date would be if the           
 initiative passed?                                                            
                                                                               
 REPRESENTATIVE FINKELSTEIN replied approximately March.  He                   
 explained the date was directly related to the election                       
 certification process.                                                        
                                                                               
 Number 0391                                                                   
                                                                               
 CHAIR JAMES said there would be a period of time before the                   
 initiative went into effect to collect contributions in the first             
 part of January because it would be a non-election year.                      
                                                                               
 Number 0426                                                                   
                                                                               
 REPRESENTATIVE PORTER said the money would be available for lawful            
 expenditure until December 31.                                                
                                                                               
 CHAIR JAMES replied, "that's correct," and the expenditures could             
 only be campaign related.                                                     
                                                                               
 REPRESENTATIVE PORTER replied, "or legislative related."                      
                                                                               
 CHAIR JAMES replied she was not sure if it said legislative                   
 related.                                                                      
                                                                               
 REPRESENTATIVE FINKELSTEIN replied it would require an amendment to           
 allow a transfer to an office account.                                        
                                                                               
 CHAIR JAMES cited an example whereby there was a fund raiser in the           
 first part of January.  She explained the money could not be spent            
 in a non-election year.                                                       
                                                                               
 Number 0479                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN explained the bills did not restrict               
 spending, it only restricted fund raising.  He said the funds could           
 be expended at any time in the scenario Chair James presented.                
                                                                               
 Number 0492                                                                   
                                                                               
 CHAIR JAMES said there was a specific list that detailed the                  
 spending prohibitions.                                                        
                                                                               
 Number 0529                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN answered, he thought Chair James was               
 referring to campaign activities.                                             
                                                                               
 Number 0556                                                                   
                                                                               
 CHAIR JAMES referred to the prohibition against spending funds for            
 personal benefit.  She said it would include legislative expenses.            
                                                                               
 Number 0560                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN replied he did not completely agree with           
 Chair James.  He said the best way was to transfer the funds was to           
 an office account to separate the expenditures.                               
                                                                               
 Number 0568                                                                   
                                                                               
 CHAIR JAMES asked Representative Finkelstein if he agreed the                 
 initiative did not allow surplus funds to be spent until campaign             
 time?                                                                         
                                                                               
 REPRESENTATIVE FINKELSTEIN replied, "no."  The initiative allowed             
 spending on campaign related activities at any time.                          
                                                                               
 CHAIR JAMES asked if she could buy signs and campaign buttons for             
 example?                                                                      
                                                                               
 REPRESENTATIVE FINKELSTEIN reiterated the only limitations were on            
 the fund raising periods.  Furthermore, a candidate could always              
 spend his own money.                                                          
 Number 0587                                                                   
                                                                               
 CHAIR JAMES asked if a newsletter could be sent, for example?                 
                                                                               
 Number 0593                                                                   
                                                                               
 REPRESENTATIVE FINKELSTEIN said a newsletter was in the gray area.            
 He explained, if the disclaimer was included, it was appropriate.             
                                                                               
 Number 0659                                                                   
                                                                               
 MR. FRANK said the effective date was controlled by the Alaska                
 State Constitution.  He said legislation, however, could be used to           
 affect the transition period.  In conclusion, he thanked the                  
 committee members for the discussion today.                                   
                                                                               
 CHAIR JAMES announced HB 317 and HB 368 were scheduled again for              
 Saturday, March 9, 1996.  She commented a comparison of the                   
 provisions would be helpful for further analysis.  She stated she             
 would like to work on the bills further and offer a possible                  
 committee substitute.                                                         
                                                                               
 Number 0798                                                                   
                                                                               
 REPRESENTATIVE GREEN said he was concerned about the potential                
 consequences of such a bill.                                                  
                                                                               
 Number 0835                                                                   
                                                                               
 CHAIR JAMES replied there was nothing in HB 317 or HB 368 that                
 could not be amended before passing it to the floor.  She                     
 reiterated there still was the possibility the initiative would               
 move forward.  There was also the possibility of the initiative               
 moving forward along with a bill of which would create conflicts              
 and confusion.  Therefore, it was important to include all the                
 parties involved.                                                             
 Number 1014                                                                   
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 CHAIR JAMES adjourned the House State Affairs Committee meeting               
 at 9:55 a.m.                                                                  
                                                                               
                                                                               

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