SB 284-CAMPAIGN EXPENDITURES  2:06:40 PM CHAIR FRENCH announced the consideration of SB 284 and asked for a motion to adopt the proposed committee substitute (CS). It incorporates the amendments that were made to version A during the 3/12/10 hearing. SENATOR MCGUIRE moved to adopt the judiciary work draft CS for SB 284, labeled 26-LS1448\R, as the working document. There being no objection, version R was before the committee. CHAIR FRENCH noted that Mr. Bullard sent a memo pointing out that the provisions on page 6, lines 5-7, and on page 7, lines 28-30, are redundant. He suggested the committee consider removing the redundancy. CHAIR FRENCH moved to adopt Amendment 1. AMENDMENT 1 OFFERED IN THE SENATE TO: CSSB 284(JUD), Draft Version "R" Page 6: Delete lines 5, 6, and 7 SENATOR WIELECHOWSKI objected for discussion purposes. CHAIR FRENCH explained version R adds the requirement in Sec. 15.13.090(a)(2)(E) that the communication must clearly state that it is not authorized, paid for, or approved by the candidate. The existing AS 15.13.135(b)(2), on page 7, lines 28- 30, already provides that requirement. SENATOR WIELECHOWSKI removed his objection to Amendment 1. CHAIR FRENCH found no further objection and announced that Amendment 1 is adopted. He noted that the second point in Mr. Bullard's memo addressed in an amendment proposed by Senator Coghill. CHAIR FRENCH moved Amendment 2, labeled 26-LS1448\R.2, and objected for discussion purposes. AMENDMENT 2    OFFERED IN THE SENATE BY SENATOR COGHILL TO: CSSB 284(JUD), Draft Version "R" Page 7, following line 30: Insert a new bill section to read:  "* Sec. 16. AS 15.56.014(a) is amended to read: (a) A person commits the crime of campaign misconduct in the second degree if the person (1) knowingly circulates or has written, printed or circulated a letter, circular, or publication relating to an election, to a candidate at an election, or an election proposition or question without the name and address of the author appearing on its face; (2) except as provided by AS 15.13.090(b), knowingly prints or publishes an advertisement, billboard, placard, poster, handbill, paid-for television or radio announcement, or communication, as that term is defined in AS 15.13.400, intended to influence the election of a candidate or outcome of a ballot proposition or question without the words "paid for by" followed by the name and address of the person [CANDIDATE, GROUP, OR INDIVIDUAL] paying for the advertising or communication and, if a candidate or group, with the name of the campaign chair; (3) knowingly makes a communication, as that term is defined in AS 15.13.400, (A) containing false factual information relating to a candidate for an election; (B) that the person knows to be false; and (C) that would provoke a reasonable person under the circumstances to a breach of the peace or that a reasonable person would construe as damaging to the candidate's reputation for honesty or integrity, or to the candidate's qualifications to serve if elected to office." Renumber the following bill sections accordingly. SENATOR COGHILL said the amendment is based on Mr. Bullard's legal analysis that the phrase "candidate, group, or individual" should be amended to "person" to correspond to the changes the bill made to AS 15.13.090. 2:11:14 PM ALPHEUS BULLARD, Attorney, Legislative Legal and Research Services, explained that the bill amends AS 15.13.135(b) on page 7, line 20, by replacing "individual, group, or nongroup entity" with "person" to correspond with the U.S. Supreme Court holding in Citizens United to capture that universe of people who are now allowed to make communications. The purpose of the amendment is to make a similar replacement in AS 15.56.014(a)(2) for campaign misconduct. CHAIR FRENCH observed that the only change Amendment 2 makes is to replace the phrase "candidate, group, or individual" with the word "person" on page 1, line 15. SENATOR COGHILL said the amendment conforms bill Section 15 to AS 15.56.014(a). MR. BULLARD said that's correct. CHAIR FRENCH asked if the crime of campaign misconduct in the second degree is a class B misdemeanor. MR. BULLARD agreed that it is a class B misdemeanor. CHAIR FRENCH removed his objection to Amendment 2. Finding no further objection, he announced that Amendment 2 is adopted. 2:14:21 PM CHAIR FRENCH moved to adopt Amendment 3, labeled 26-LS1448\R.1, and objected for discussion purposes. AMENDMENT 3  OFFERED IN THE SENATE BY SENATOR COGHILL TO: CSSB 284(JUD), Draft Version "R Page 5, line 18, through page 6, line 7: Delete all material and insert: "Sec. 15.13.090. Identification of communication.  (a) All communications shall be clearly identified by the words "paid for by" followed by the name and address of the person [CANDIDATE, GROUP, NONGROUP ENTITY, OR INDIVIDUAL] paying for the communication. In addition, a person shall clearly (1) provide the person's address, or the  address of the person's principal place of business;  (2) for a person other than an individual  or candidate, include  (A) the name and title of the person's  principal officer;  (B) a statement from the principal  officer approving the communication; and  (C) the name and city and state of  residence or principal place of business, as  applicable, of each of the person's three largest  contributors under AS 15.13.040(e)(5), if any, during  the 12-month period before the date of the  communication; and  (3) for a candidate, include  (A) the name of the candidate; and  (B) a statement from the candidate  approving the communication [CANDIDATES AND GROUPS MAY IDENTIFY THE NAME OF THEIR CAMPAIGN CHAIRPERSON]." Page 6, lines 19 - 20: Delete "(a)(2)(C) of this section and, if applicable, (a)(2)(D)" Insert "(a)(1) and (a)(2)(C)" Page 6, line 29: Delete "AS 15.13.090(a)(2)(D)" Insert "AS 15.13.090(a)(2)(C)" SENATOR COGHILL said the amendment deletes and rewrites much of Section 11, basically making three changes. First, it requires identification in all circumstances; second, it deletes the redundant subparagraph (E) on page 6, which was already accomplished with the adoption of Amendment 2; and third, it changes the requirement to identify the top five contributors to require identification of the top three contributors. SENATOR COGHILL said that he supports full disclosure but he objects if that's all that people will hear during a campaign advertisement. All these campaign finance contributions will have to be reported in the aggregate of over $100 in the campaign finance disclosure anyway so this requirement is onerous, he said. Thus, reducing the number to three is appropriate. 2:17:30 PM CHAIR FRENCH referred to lines 17-19 of the amendment and asked if the idea is that in every normal campaign advertisement a candidate would be required to state their name and that they approve the message SENATOR COGHILL said yes and version R on page 5, lines 18-22, basically says that. SENATOR MCGUIRE offered the view that the amendment attempts to replace subparagraph (E) on page 6 by putting it in the affirmative and said she would argue that doing so makes it unduly burdensome and possibly an interference. 2:19:53 PM CHAIR FRENCH called a point of order; lines 9-16 of the amendment describe the disclosure requirements for a corporation, union, or group. SENATOR COGHILL agreed. SENATOR MCGUIRE said she understood. CHAIR FRENCH noted that version R requires that those disclosures be audible in radio or television advertisements. He asked Senator Coghill if he envisions lines 9-16 of the amendment to be text on a screen or audible. SENATOR COGHILL replied he believes that a different section of the statute requires disclosures to be audible for radio. CHAIR FRENCH agreed; Section 12 of the current draft modifies AS 15.13.090 adding a new subsection to jibe with (a)(2)(C). CHAIR FRENCH said his understanding is that the amendment requires identification of the three largest contributors instead of the top five tracked over a 12 month period and it adds a requirement that the candidate approve his or her own campaign advertisements. He asked Mr. Bullard if he agrees. 2:23:35 PM MR. BULLARD replied it also shifts the disclosure. First, the amendment drops the provision that the candidate or group may identify the campaign chair. It requires that all persons are required to provide the identifying information. In the current draft it was only a person other than a candidate, individual, or political party who was required to do that. Then it tracks in a similar, but not exact, fashion all the requirements of the bill except the top five contributors are narrowed to the top three. The 12 month period is the same in both the amendment and the bill. The requirement that candidates name themselves and provide a statement approving the communication is new. CHAIR FRENCH commented that he likes the idea that everybody provides the person's address or principle place of business, but not much else. SENATOR WIELECHOWSKI said he could support the amendment with some modifications, but not as currently written. CHAIR FRENCH suggested the committee vote on the amendment and depending on the outcome the bill might need further amending before it is passed along to the next committee. 2:26:38 PM SENATOR COGHILL said he's willing to withdraw the amendment, but he would like an opportunity to try to establish what should be a requirement for both a candidate and a corporation because he foresees a legal entanglement involving unequal treatment if there is no similarity between the requirements. CHAIR FRENCH asked if he is withdrawing the amendment. SENATOR COGHILL withdrew Amendment 3. 2:28:53 PM SENATOR WIELECHOWSKI said he'd like to hear from legislative legal about whether or not there is an equal protection argument for having different requirements for candidates versus corporations. MR. BULLARD responded he wasn't prepared to offer an off-the- cuff legal response, but he would have an answer on Wednesday. 2:29:44 PM CHAIR FRENCH asked if the committee had additional concerns or suggestions. SENATOR WIELECHOWSKI asked if Mr. Bullard could comment on whether or not they could restrict campaign activities of corporations or unions that have foreign shareholders. MR. BULLARD explained that federal law already prohibits foreign nationals from involving themselves in federal, state, and local elections. In some cases this extends to American corporations or American subsidies of foreign corporations where foreign nationals are directing decisions regarding how they involve themselves in the U.S. electoral processes. There are possible federal preemption arguments if the state were to involve itself in attempting to regulate or govern American corporations with foreign ownership or some portion of foreign ownership in this same field. There is no immediate and clear answer to the question, he concluded. 2:31:29 PM SENATOR WIELECHOWSKI said his concern is that a foreign government or foreign corporation could set up in Alaska and attempt to influence elections in the state. He asked if he's saying that there's nothing the Legislature can do about that. MR. BULLARD replied that situation is already prohibited by federal law. An American subsidiary of a foreign corporation has to use proceeds from its American operations to fund any sort of involvement in an American election. If the American subsidiary receives direction on how to proceed from overseas or if it is being reimbursed by the foreign parent corporation, electioneering involvement would be prohibited. This is a new issue in Alaska since corporations were previously prohibited absolutely. I don't know if we can prohibit this as a state, I'm just alerting the committee to the possible preemption argument, he said. 2:33:22 PM CHAIR FRENCH asked about the possibility of restricting corporate involvement in Alaska elections only to those U.S. corporations that are domiciled in Alaska. MR. BULLARD offered to provide an opinion on the topic. CHAIR FRENCH asked him to do that and to look into some of the concerns Senator Wielechowski expressed. I share those concerns, he said. We have a right to be concerned about a shell corporation trying to manipulate voters and if we need state statutes to deal with that, then now is the time to do it, he said. 2:34:48 PM SENATOR WIELECHOWSKI said he'd like to go a step further and to the extent possible prohibit corporations that have foreign shareholders that hold X percentage or X dollars of stock. For years the federal government has had a policy of not allowing foreign nationals to participate in elections and now this Supreme Court case has opened the backdoor to allowing foreign nationals to participate in and influence elections. "I would be very interested in trying to pursue methods [so] that we can prevent that sort of thing," he said. CHAIR FRENCH said he shares the sentiment but the clock is ticking toward adjournment and he doesn't want to miss the opportunity of passing a bill that solves a large portion of the problem. CHAIR FRENCH found no comments from Holly Hill and Jason Brandeis with APOC or John Ptacin with DOL. He announced that the committee would continue to work on SB 284. 2:36:32 PM There being no further business to come before the committee, Chair French adjourned the meeting at 2:36 p.m.