SB 116-CAMPAIGN FINANCE, CONTRIBUTION LIMITS  4:17:37 PM CHAIR KAWASAKI reconvened the meeting and announced the consideration of SENATE BILL NO. 116 "An Act amending campaign contribution limits for state and local office; directing the Alaska Public Offices Commission to adjust campaign contribution limits for state and local office once each decade beginning in 2031; and relating to campaign contribution reporting requirements." 4:18:10 PM JOE HAYES, Staff, Senator Scott Kawasaki, Alaska State Legislature, Juneau, Alaska, introduced SB 116 on behalf of the Senate State Affairs Standing Committee, Senator Kawasaki, Chair: [Original punctuation provided.] Sponsor Statement  "An Act amending campaign contribution limits for state and local office; directing the Alaska Public Offices Commission to adjust campaign contribution limits for state and local office once each decade beginning in 2031; and relating to campaign contribution reporting requirements." Alaska has historically touted some of the strongest, most effective campaign finance laws in the nation which served to promote better accountability and trust in our elections and elected officials. In recent years, Alaskans have shown their support for fair and reasonable contribution limits, including a 2006 ballot initiative that passed overwhelmingly with 73 percent support. But, in 2021, the Ninth Circuit Court of Appeals struck down Alaska's statutory campaign contribution limits, opening our state and local elections to the threat of unlimited political contributions directly to candidates from anyone, anywhere in the country. 4:19:22 PM MR. HAYES continued with the sponsor statement: In 2024, Alaska 23RCF2 [ballot initiative] was certified after a grassroots effort that gathered signatures from nearly 30,000 registered Alaskan voters and met the 7 percent threshold in 32 out of Alaska's 40 house districts. SB 116 mirrors 23RCF2 [ballot initiative]. SB 116 reinstates fair, reasonable, and constitutional campaign contribution limits adjusted based on Alaska's consumer price index rates moving forward, ensuring these limits remain constitutional. To accomplish this, SB 116 does the following: • Moves Alaska's campaign contributions to a "per election cycle" basis. • Increases the statutory individual-to-candidate limit from $500 per year to $2,000 per election cycle and the group-to-candidate limit from $1,000 per year to $4,000 per election cycle. • Directs the Alaska Public Offices Commission to adjust contribution limits for inflation. These changes address the concerns laid out by the Ninth Circuit Court of Appeals and United States Supreme Court precedent while upholding the expressed desire of Alaskan voters for fair and reasonable contribution limits and transparency in our elections. 4:21:16 PM SENATOR YUNDT asked if the committee has in-house legal opinions on SB 116 and stated the Ninth Circuit and the Supreme Court have both ruled on different portions of campaign contribution limits in the past. 4:21:28 PM CHAIR KAWASAKI answered yes and that he would invite legislative legal staff to discuss the limits with the committee at the next hearing of the bill. He referenced a past memo that seemed to indicate adjusting for inflation would meet legal standards but said he would share an official memo on SB 116 with the committee once he receives it. 4:22:17 PM CHAIR KAWASAKI [announced invited testimony] and opened public testimony on SB 116. 4:22:50 PM PAT RACE, representing self, Citizens Against Money in Politics (CAMP), Juneau, Alaska, testified by invitation on SB 116 and stated that Alaska's campaign donation limits have bounced between $500 and $1,000 over the years. He said there was a lawsuit in 2015 where the courts ultimately said the $500 cap was too low. The U.S. Supreme Court has ruled that limits are legal to prevent corruption, but if set too low, they unfairly protect incumbents and make it harder for challengers to compete. He said the goal now is to find a fair middle ground high enough to allow real competition but low enough to prevent million-dollar donations from overwhelming local elections. 4:26:26 PM SENATOR YUNDT asked whether this cap is money someone could give to an independent expenditure or a Political Action Committee (PAC). 4:26:38 PM MR. RACE replied that, because of the Citizens United Supreme Court decision, independent political expenditures may be unlimited if they are not coordinated with a campaign. This ruling has led to anonymous spending through outside groups. He said states can still regulate direct individual donations to candidates. Raising limits in a balanced way would at least ensure that large contributions go through super PACswhich cannot legally coordinate with campaignsrather than directly influencing candidates. 4:27:47 PM SENATOR YUNDT expressed concern that even if candidates don't receive large direct donations, outside groups and PACs will still spend heavily supporting their preferred candidates. Unlike candidates, who usually promote their vision positively, these groups often run negative or misleading campaigns. He said without limits on independent expenditures, he fears elections will only become nastier and more dominated by outside money. 4:29:03 PM SENATOR WIELECHOWSKI stated that it is his belief that unlimited campaign contributions are damaging to Alaska's political system and said that Citizens United was one of the worst decisions of his lifetime. He asked how similar this was to the ballot initiative. 4:29:27 PM MR. RACE replied that if the legislature doesn't pass similar legislation, the unlimited campaign limits will appear in the 2026 ballot. He said advocates would rather avoid running another campaign since Alaskans have already shown strong support. Passing the legislation now would ensure reasonable campaign limits are in place before the 2026 election. 4:30:15 PM SENATOR WIELECHOWSKI asked if this legislation is the same as the ballot initiative. 4:30:28 PM MR. RACE responded it is his belief that this legislation is the same. He said the proposal raises individual contribution limits from $500 to $2,000 and group contributions from $1,000 to $4,000, with adjustments for inflation. 4:30:57 PM CHAIR KAWASAKI asked why it's necessary to have limits on individual campaign donations, whether from the donor's perspective or the candidate receiving them. 4:31:19 PM MR. RACE replied that large campaign donations can create the appearance of impropriety, especially in a state with past corruption scandals like VECO in 2006. He said reasonable limits on individual contributions help maintain public trust. In 2022, staff of Alaska's Public Offices Commission (APOC) recommended new limits, though they weren't formally adopted, and urged the legislature to revisit campaign finance laws. 4:33:41 PM SHARMAN HALEY, Activist, Alaska Move to Amend, Anchorage, Alaska, testified by invitation on SB 116. She paraphrased her written testimony: [Original punctuation provided.] Today we are talking about SB 116. This bill should not be controversial. It is unassailable legally and has solid support among your constituents across the political spectrum. The bill contains the same language as the Citizen's Initiative that will appear on the 2026 ballot. But we hope that the Legislature will pass it this session and save us all the trouble. 4:35:14 PM MS. HALEY continued with her testimony: This legislation is legally unassailable because it was carefully crafted to conform to the five criteria dictated by the 9th Circuit Court that struck down our old law. Any grey area that might be grounds for legal challenge has been eliminated. It is politically solid because time and again, Alaskans have expressed their support for strong campaign finance laws. Alaska's old campaign finance law, which began as a citizen's initiative, was enacted by the legislature in 1996. It was one of the strictest in the country, with contributions limits of $500. The legislature revisited the issue in 2003, raising the limit to $1000. But voters stepped up again in 2006 with another initiative reducing the limit back to $500. It passed with 73 percent approval. This week I went down to the state archives and found that it passed by a wide margin in every single district of the state. We are saying we want the law to be strict: it protects our balance of power as voters and constituents. It limits the disproportionate influence and corrupting power of big money in our elections. In 2020, polling showed that 71 percent of Alaskans would support a US constitutional amendment restoring our full authority to set reasonable limits on political spending in elections, including independent expenditures. The support is strong across both political parties and independents. SB116 will set the limit for an individual contribution to an individual candidate at $2000. While I myself might have set the limit at $1000, I accept the political judgement of the sponsors that $2000 is more politically viable. The two big improvements in this bill over the old law are that it automatically adjusts the limits for inflation once every ten years, and the limit is per election cycle, not just per year. I and my fellow Alaskans--your constituents--support this bill and call on you to support it too. 4:38:53 PM CHAIR KAWASAKI asked what she will say to the people if Alaska limits individual donations but outside groups can still spend unlimited money against candidates. 4:39:23 PM MS. HALEY replied that independent expenditures are a major structural problem but noted progress toward a constitutional amendment that could restore Alaska's authority to regulate them. She said while contributions to these groups are unlimited, the groups must be reported, allowing analysis of who the major donors are and whether the donors are in- or out-of- state. 4:41:02 PM CAROLINE STORM, representing self, Anchorage, Alaska, testified in support of SB 116 and stated that this bill would reduce the time candidates spend fundraising, likely lower overall campaign spending, and keep more money circulating in Alaska. 4:42:45 PM CHAIR KAWASAKI held SB 116 in committee.