HB 407-APOC; CAMPAIGN CONTRIBUTIONS/REPORTING  4:40:57 PM CHAIR KREISS-TOMKINS announced that the next order of business would be HOUSE BILL NO. 407, "An Act relating to the duties of the Alaska Public Offices Commission; clarifying the limits on making, accepting, and reporting certain cash campaign contributions; relating to campaign finance reporting by certain groups; relating to the identification of certain campaign communications; increasing the time the Alaska Public Offices Commission has to respond to a request for an advisory opinion; repealing a reporting requirement for certain contributions; relating to propositions and initiative proposals; and providing for an effective date." 4:40:30 PM REPRESENTATIVE KREISS-TOMKINS related that this was a committee bill that was previously discussed. He asked his staff to present an overview of the bill. He reminded members that the bill contained statute changes resulting from the House Finance Subcommittee process. 4:40:44 PM CATHY SCHLINGHEYDE, Staff, Representative Jonathan Kreiss- Tomkins, Alaska State Legislature, reiterated that the bill contained recommendations by the Department of Administration Finance subcommittee. MS. SCHLINGHEYDE paraphrased the sponsor statement for HB 407, which read as follows [original punctuation provided]: The Alaska Public Offices Commission (APOC) has seen a 42.4% reduction in UGF since the FY15 management plan, resulting in the loss of six positions. HB 407 would streamline reporting requirements to allow APOC to operate more efficiently within the current budgetary restraints. HB 407 increases APOC efficiency by also easing the auditing requirements, allowing APOC to exercise discretion when reviewing reports and statements, eliminating duplicative reporting, extending response times for advisory opinions, and extending small campaign reporting exemptions to groups. In addition to the streamlining measures, HB 407 provides needed clarification by specifying the requirements of "paid for" lines on campaign communications and defining a calendar year for cash contribution limits. APOC provides an important public service ensuring the enforcement of campaign finance ethics requirements. HB 407 allows APOC to complete their mission more efficiently and cost effectively. 4:40:58 PM MS. SCHLINGHEYDE reviewed the section-by-section analysis for HB 407, titled "HB 407 - APOC; Campaign Contributions/Reporting, Sectional Analysis, which read as follows [original punctuation provided]: Section 1: This section eases the report auditing requirements by removing the word all. The change allows APOC to strategically select reports and statements to audit. Section 2: This section inserts calendar to clarify confusion on the definition of year in regards to reporting contributions. Section 3: This section extends the small campaign reporting exemptions to groups in addition to individuals. The minimum threshold for groups to report would be raising or expending $2,500 in a calendar year. Section 4: This section renumbers the statute to accommodate the changes in Section 3. Section 5: This section inserts calendar to clarify confusion on the definition of year in regards to the cap on candidate's acceptance cash contributions. Section 6: This section inserts calendar to clarify confusion on the definition of year in regards to the cap on donating cash contributions. Section 7: This section provides standardized rules to ensure the readability of paid for lines in campaign communications. Section 8: This section extends by three days the time allowed for APOC to provide an advisory opinion. Section 9: This section eliminates duplicative reporting of contributions to ballot initiatives by removing the requirement that donors self-report in addition to the campaign's report. Section 10: This section sets an effective date of January 1, 2019, after the conclusion of the current election cycle. 4:41:00 PM MS. SCHLINGHEYDE said that Section 1 allowed the APOC to have the discretion in report auditing to review specific documents, not necessarily every document that is submitted. Sections 2, 5, and 6 all insert the word calendar to clarify the definition of year, which has been disputed. Section 3, small campaigns for individuals, have a minimum reporting threshold and this allows groups to have a minimum reporting threshold as well. The minimum threshold for groups to report would be raising or expending $2,500 in a calendar year. 4:41:25 PM MS. SCHLINGHEYDE related that Section 4 was statutory cleanup to renumber based on Section 3. Section 7 specified the requirement for paid for lines in campaign communications. Section 8 would extend by three days the time allowed for APOC to issue an advisory opinion due to their decreased staffing capacity. MS. SCHLINGHEYDE related that Section 9 states that ballot initiative donors do not have to submit duplicative reports when the campaigns were already reporting those contributions, which means APOC only needs to process them once and not twice. Section 10 would set an effective date of January 1, 2019, after the conclusion of the current election cycle. 4:42:00 PM REPRESENTATIVE TUCK asked for further clarification on Section 9. MS. SCHLINGHEYDE responded that for ballot initiatives, the campaign must report donors who contribute above $500; however, the donors must also fill out a form, form 15-5, and if they do not the donors are subject to fines. Concern has been expressed that APOC must process the reporting twice and must "track down" people who are not aware of the reporting requirement. She said this tended to create excess paperwork with no additional reports. 4:42:45 PM REPRESENTATIVE TUCK expressed concern on how one would know someone was reporting unless it was checked on both sides. He also had the same concern that donors might not know the need to do so. He suggested that perhaps there should be a disclosure printed on the donation envelopes, so people would be informed. MS. SCHLINGHEYDE clarified that this only applied to ballot initiatives and not to other campaign donations. 4:43:32 PM REPRESENTATIVE LEDOUX recalled that years ago both candidates and donors had to report; however, most donors did not know they needed to report these donations, so it was ultimately changed. She offered her belief that this was in keeping with regular political campaigns. In fact, she was surprised it had not been changed already. In response to Representative Tuck's earlier concern, she stated that the same logic would apply to regular political campaigns. REPRESENTATIVE TUCK agreed but otherwise it was by faith. He offered his belief that the reason for a public process was to provide transparency. 4:44:46 PM REPRESENTATIVE BIRCH offered he had personal experience with a contributor to a campaign in which the donation was reported and the contributor did not report separately. The information was complete, but it was not reported in duplicate, he said. He offered his belief that it was reasonable to update this. 4:45:12 PM REPRESENTATIVE KNOPP referred to Section 8. He said it would not necessarily extend by three days the advisory opinion. He offered his belief that it would double the time by changing the language from 7 days to 10 business days would actually amount to 14 total days. He asked for further clarification as to the reasonableness of the length of time and how time sensitive the opinion would be. 4:46:05 PM HEATHER HEBDON, Executive Director, Alaska Public Offices Commission (APOC), Department of Administration, responded that was correct. She said this would extend the requirement for issuing draft advisory opinions by allowing an additional five days. While the APOC understood it could be critical to the requestor, it would reduce unnecessary overtime at the APOC office. She pointed out that the APOC drafts were also reviewed by the Department of Law (DOL) prior to issuance. She said this change would allow APOC to reduce overtime costs. 4:46:56 PM REPRESENTATIVE KNOPP asked for further clarification on whether it would be critical from the individual or organization's perspective that requests an advisory opinion and if any of the advisory opinions would be time-sensitive. MS. HEBDON answered that it was difficult to answer without specific facts. She said that APOC receives simple and straight-forward questions. The majority of times, the requestor has already contacted staff and has a general idea of which direction the agency was going. This would formalize it and get APOC's approval. 4:47:56 PM REPRESENTATIVE KNOPP asked whether it was fair to say that if APOC realized some urgency in the advisory opinion, it would be prioritized. MS. HEBDON answered absolutely; that just because the bill extended the time to 10 days would not mean the commission could not complete the advisory opinion and have it reviewed by DOL sooner. 4:48:43 PM REPRESENTATIVE TUCK referred to Section 3 but decided he did not have a question. 4:49:00 PM CHAIR KREISS-TOMKINS announced HB 407 would be held over.