HB 413 - INITIATIVE PETITION COMPENSATION Number 0337 CHAIR JAMES stated that the next order of business would be HB 413, "An Act relating to disclosure of compensation paid to sponsors of initiative petitions; placing limitations on the compensation that may be paid to sponsors of initiative petitions; and prohibiting payments to persons who sign or refrain from signing initiative petitions." She stated that there is a committee substitute and asked sponsor, Representative to Elton talk to the changes. Number 0350 REPRESENTATIVE KIM ELTON stated that the committee substitute has a new Section 2 and 3, and then the other sections are renumbered accordingly. He explained that Section 2 provides that a group, that sponsors an initiative or other groups that are formed to either support or oppose the initiative must report within 30 days after filing with the Lieutenant Governor's office and shall report also with 30 days after solicitation or acceptance of an contribution has occurred. He stated that after the initial reporting, they must report within 10 calendar days after the end of each calendar year quarter. Number 0353 REPRESENTATIVE ELTON stated that Section 3 redefines "group", the reason this section is in the bill is because under the Alaska Public Officers Commission's (APOC) statutes there is a requirement for groups to report. He stated that the requirement has been in statute since 1977, but because the definition of group has been somewhat vague, they had to redefine it. He stated that the only other change in the bill is a change in Section 4, page 3, the words "and disclosure" have been added. CHAIR JAMES asked where in Section 2, is it outlined when the reports are due, is that a requirement for any group or is it going to have a separate reporting schedule. REPRESENTATIVE ELTON replied that it would be for any group that sponsors an initiative petition or any other group that forms in support of that initiative or in opposition to that initiative. CHAIR JAMES stated that there are groups that are recognized as groups who are currently on a reporting system. She asked if this reporting system is different from theirs. REPRESENTATIVE ELTON replied that this bill adopts fairly closely a provision that has been in statute since 1977, that has never been enforced due to confusion of the definition of groups. CHAIR JAMES asked Brooke Miles to come up. She stated that the reason she is asking this question is because now there is a new group that is going to be reporting that has not been reporting. She stated that her concern is whether or not that group should comply at the same reporting dates as other groups for simplicity, as opposed to setting separate reporting times. Number 0414 BROOKE MILES, Alaska Public Officers Commission, stated that currently what APOC requires from initiative groups is that they file a registration as a group within 30 days of having their petition certified by the Division of Elections, subsequent to that they are filing reports within 10 days after each calendar quarter, so they are already under this separate reporting requirement. In part it is because of how initiative groups form and report. Once the regular election report for other groups kick in they then go to that pattern. She stated that the quarterly requirement on groups is just preliminary. CHAIR JAMES asked if it was true that if there was a Political Action Committee (PAC) that was recognized as a group, that PAC would only have to report during the election cycle, the rest of the year they wouldn't have to report. MS. MILES replied that was correct. PAC report on the same schedule as candidates. This bill would require fuller disclosure by these initiative groups. She stated that under current law it has been the commission's staff advice to filers that they are not required to file their financial disclosure reports concerning their contributions and expenditures until after the signature gathering process. This bill would require disclosure of their contributions and expenditures during the... CHAIR JAMES stated that her concern is how that schedule fit into the existing schedule as far as workloads. Number 0449 REPRESENTATIVE ETHAN BERKOWITZ stated that he just looked at the changes and stated that he would like to have a minimal amount for the expenditures in Section 2. For example, if he and Representative James decided to oppose a referendum, and made a long distant phone call to another legislator, that phone call would be considered an expenditure. He stated that this places an unfair burden on the citizen who is trying to get involved in the process. He stated that the requirement now is that one has to make a report after there is an expenditure and a group is defined as two or more people acting together to sponsor or oppose an initiative. He stated that if two people decided they did not like an initiative, wanted to do something about it, felt a third person was needed and an expenditure was made to contact that person, they would therefore, come within the reach of that statute. He stated that he did not believe that was the intent of the definition of group. He thought that the definition's intent was to apply to folks that are truly organized and have made more than a minimal expenditure. Number 0476 CHAIR JAMES stated that what she visualized this to be, is that the report is not just based on the making of an expenditure but the solicitation or acceptance of a contribution. She explained that if one was in a group and the group had not taken any contributions and he made a call to a third person that would be his personal expense and would not trigger a report. She stated that if he did take in some money and an account was established that would trigger compliance. She stated that you can't make an expenditure when there isn't a contribution. Number 0487 REPRESENTATIVE BERKOWITZ stated that part of the problem is with the word "or" on line 8, page 2. He stated that once the expenditure is made it has nothing to do with the solicitation. He stated that if "or the making of an expenditure" was removed that would be fine. REPRESENTATIVE HODGINS stated that it was his understanding that this bill was to come forward similar to the APOC reporting for candidates. He asked if it was true that there is a report that one fills out if less then $1,000 is spent and would that work with groups. CHAIR JAMES stated that her sense of what needs to be done is that the people need to register when they form and if they are not going to be spending more than $1000, maybe they do not need to report. She stated that an initiative is just as much a political issue as any other ballot measure. You can't make an expenditure without having a contribution. She stated that most likely if an expenditure was made a contribution would then be received. Number 0515 REPRESENTATIVE ELTON stated that is only the period of time that the initiative group is out there soliciting signatures. He stated that this would apply to groups that were trying to effect the gathering of signatures. He stated that he did not think that they were creating a problem with the "or the making of an expenditure", if indeed the group that applies to the initiative petition signature gathering phase is the same definition of group that they apply to any other campaign. MS. MILES stated that the nature of groups that support a ballot proposition is different from other groups and they have a different kind of constitutional protection. Therefore, there has never been a limit on what individuals can contribute to those groups. Number 0537 CHAIR JAMES asked if she was comfortable with the groups not filing if they are not making any expenditures or taking any contributions. MS. MILES replied that they would still have to register and in fact they would have to file a report. CHAIR JAMES asked if it says that in the bill because she did not see that and asked if this currently is being done. MS. MILES replied that it is being done after the initial petition is certified by the Division of Elections to go forward, within 30 days of that date the commission requires registration. CHAIR JAMES asked but they can not get that petition done for free. MS. MILES responded that she did not know what the cost of that is. Number 0555 REPRESENTATIVE IVAN IVAN stated that he understood Representative Berkowitz's question. There is a void between starting up and being formed. In the processing of forming one starts by registering and then accounts for all the contributions or expenditures. REPRESENTATIVE VEZEY asked how he envisioned this being applied if there is a referendum and a newspaper runs an editorial for signatures, the commercial value being $500 a day. REPRESENTATIVE ELTON replied that it would have a value and therefore be a reportable expense. Number 0579 MS. MILES stated that editorials published in newspapers are not subject to campaign disclosure law. REPRESENTATIVE ELTON asked what if the newspaper did the ad space. MS. MILES replied that if a newspaper did the ad on its own behalf, then that would be subject to disclosure, if it was an editorial it would not. REPRESENTATIVE ELTON asked Ms. Miles about the scenario that Representative Berkowitz gave. MS. MILES replied that the commission would not view it as an expenditure under the statute. However, she has two suggestions that would help with that: change the word "or" to "and" and that expenditures that meet certain criteria and were less then $250 not be subject to campaign disclosure. REPRESENTATIVE VEZEY asked what is the difference between an editorial and an advertisement. Number 0603 REPRESENTATIVE ELTON stated that an editorial is always placed on one page and should always be labeled either as part of an opinion page or the individual editorial itself being labeled as opinion. He stated that as far as the type of speech; the editorial persuasive speech has always been viewed as being non-commercial and the advertising persuasive speech has always been tagged as being commercial. REPRESENTATIVE VEZEY stated that he would assume that it is an editorial on a page other than the front page. REPRESENTATIVE ELTON stated that mostly it is, there are some publications that will have an opinion on a front page but it does not happen very often with general circulation newspapers. Number 0627 REPRESENTATIVE VEZEY asked if a newspaper could then put an editorial an any page that they want and if they call it an editorial, it's an editorial and if they call it an advertisement, it's an advertisement. REPRESENTATIVE ELTON replied that if they do move an editorial to the front page, it would be labeled "editorial" or "opinion". He stated that generally a page is either labeled the editorial page or the opinion page. CHAIR JAMES stated that when it is on the front page it might be questionable whether it is opinion or news. She stated that sometimes journalists do take licenses to put opinions in news. She stated that she did not think that would be considered to be paid advertising. REPRESENTATIVE VEZEY asked how would someone tell the difference on a radio broadcast between an editorial, a news report and an advertisement. REPRESENTATIVE ELTON stated he would not want this to be taken as a definitive answer, but the superstation often orally labels the broadcast to be opinion or whatever. In the broadcast media he believed, that if it is advertising, who paid for the ad needs to be stated. Number 0660 REPRESENTATIVE DYSON made a motion to move proposed CSHB 413, 0- LS1298\B, Glover, 3/4/98. CHAIR JAMES asked if there was an objection. Hearing none, CSHB 413 is before the committee. Number 0670 REPRESENTATIVE DYSON made a motion to change "or" on page 2, line 7, to "and". CHAIR JAMES stated that she wanted to speak to that because she could visualize having solicitation and no expenses until they received a lot of money. She questioned if amending it to "and" is the answer. She stated that if a group makes an expenditure, that means that money would be coming in to cover the expenditure, a small expenditure such as a phone call would probably not be applicable. She stated that she preferred the standing language, and does not see the problem. She asserted that she is speaking in opposition to the amendment. REPRESENTATIVE BERKOWITZ stated that he understood what she was saying but had to disagree. He stated that with the scenario of a long distance phone call, he would not have asked for any money, nor received any money. CHAIR JAMES stated that he would then not be acting as a group. REPRESENTATIVE BERKOWITZ stated that if two people decide that they are going to oppose something then that is the formation of a group. If they then make a phone call that is then the expenditure. A group is just two or more people that come together, acting jointly to support or oppose a referendum. Number 0708 CHAIR JAMES stated that once a group is formed and an expenditure is then made to go forward, then the group in essence must comply. TAPE 98-30, SIDE B Number 0001 REPRESENTATIVE HODGINS stated that the only thing that bothers him is that an unlimited amount of money can be put by a single individual or a single group if there is an initiative or a referendum. He stated that he could see that as a "get out to vote type scenario." For example it would behoove the Native groups to put out a lot of money to be able to get the people out to vote on the subsistence issue. Number 0022 CHAIR JAMES stated that she was surprised at that too, but her attitude towards campaign finance is to let anybody contribute as much as they want but just make it reportable. REPRESENTATIVE IVAN stated that his basic feeling is that we are impinging on democracy. He stated that people will be afraid to say anything. He stated that this is too restrictive as far as he is concerned. REPRESENTATIVE VEZEY stated that the question was brought up about "get out the votes". He asked if they are making the attempt to draw the line between referendum and public service messages. CHAIR JAMES asked how are the people dealt with who are neutral on issues and are just getting the information out. MS. MILES replied that generally that is not subject to the campaign disclosure law when it is neutral information, concerning a ballot proposition. She stated often a municipality will send out a brochure saying this is why the proposition is on the ballet and it will explain what it means. She stated the groups that conform to support or oppose that proposition are subject to the statute. REPRESENTATIVE ELTON stated that the scenarios that they are hearing about what groups can and can't do come into play at any other election and do not apply to groups that are formed on just initiatives. He stated that maybe we are trying to micro-manage a situation that APOC has been dealing with on every other election. Number 0116 REPRESENTATIVE DYSON stated that what the bill is doing is to incorporate the initiative process under the same rules in the same sort of disclosure. He stated that he would withdraw his amendment. CHAIR JAMES asked if there was any objections. Hearing none, it was so ordered. REPRESENTATIVE DYSON stated that he agreed with Representative Ivan and agreed that what is really needed is to just make sure everything is disclosed. The bill does a couple of things that helps that. He stated that the people that are signing petitions need to know if the petition signers are doing it for money or because they are true believers. He stated that many petitions drives are for ulterior motives or at least for one or more motive. Number 0170 REPRESENTATIVE DYSON made a motion to move CSHB 413(STA),0- LS1298\B, Glover, 3\4\98, with individual recommendations. CHAIR JAMES asked if adding the reporting procedure to the bill would give it a fiscal note. UNIDENTIFIED MALE SPEAKER stated that the fiscal note is zero. CHAIR JAMES asked if there was an objection. REPRESENTATIVE VEZEY objected. He stated that there are some onerous provisions in the bill that would not stand up to the lightest scrutiny of review regarding meeting the requirements free speech. He stated that he did not think that the bill was addressing the public's right to know, instead it is trying to squelch free speech. CHAIR JAMES replied that she understood and certainly did not want to do any squelching of free speech but she reads the bill differently. REPRESENTATIVE BERKOWITZ stated that the bill encourages free speech, because it encourages the disclosure and then there is an informed public. An informed public is what is necessary for the best type of speech. Number 0207 REPRESENTATIVE ELTON stated that he felt the bill that came into the committee is not quite as good as the one that is going out. He stated that he appreciated the efforts of the chair. CHAIR JAMES asked for a roll call vote. Representatives Berkowitz, Elton, Ivan, Dyson, Hodgins and James voted in favor of the bill. Representative Vezey voted against it. Therefore, CSHB 413(STA) was moved from the House State Affairs Standing Committee.