HB 157-APOC; REPORT REFERENDA/RECALL CONTRIBUTOR  1:35:30 PM CHAIR HOLLAND announced the consideration of HB 157 CS FOR HOUSE BILL NO. 157(FIN) "An Act requiring the disclosure of the identity of certain persons, groups, and nongroup entities that expend money in support of or in opposition to an application filed for a state referendum or recall election; relating to the location of offices for the Alaska Public Offices Commission and the locations at which certain statements and reports filed with the commission are made available; 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; 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 contribution limits and recall campaigns; and providing for an effective date." [CSHB 157(Fin) was before the committee.] [HB 157 was previously heard on 3/28/22. 1:35:49 PM SENATOR SHOWER moved to adopt the [Senate] committee substitute (CS) for HB 157, work order 32-LS0669\G, as the working document. CHAIR HOLLAND objected for discussion purposes. 1:36:12 PM ED KING, Staff, Senator Roger Holland, Alaska State Legislature, Juneau, Alaska, explained the changes in the committee substitute for HB 157 from Version B to Version G. [Original punctuation provided.] SUMMARY OF CHANGES (VERSION B TO VERSION G) Change 1: Changed "a central office" to "offices" (Page 2, line 17) Change 2: Section 3 of version B was deleted Change 3: Adds an extension for sitting legislators to file their end-of-year reports until after session ends but requires declaration of any contributions over $500 within 7-days (page 5, line 28 through page 6, line 3). Section 8 of version I is a conforming change to this addition (page 4, line 12 through page 5, line 4). Change 4: Shortens the time to file a complaint from five years to two years (page 6, line 12) Change 5: Updates the effective date clause (page 10, line 20) 1:37:05 PM CHAIR HOLLAND removed his objection; he found no further objection, and Version G was adopted. 1:37:16 PM At ease 1:39:03 PM CHAIR HOLLAND reconvened the meeting. 1:39:25 PM SENATOR SHOWER noted that during the at ease he verified that the amendments were incorporated into Version G. 1:40:03 PM CHAIR HOLLAND opened public testimony on HB 157, finding none; he closed public testimony. 1:41:00 PM SENATOR SHOWER related that he worked with the sponsor to consider whether any reporting requirements were missing, which resulted in one suggested amendment. He offered his view that the committee had done an excellent job capturing the flow of money, which is important to all Alaskans. 1:41:42 PM SENATOR HUGHES commented that she previously introduced a bill that related to the ballot initiative that would require the details of the actual contributors to candidates from a political action group (PAC), including their names, addresses, and amounts. This bill would take the statute regarding initiatives, bringing the recall elections and referendums, although it doesn't go into the fine detail her bill did. This would provide detailed information on candidates but not for initiatives, referendums, or recalls. She said the language adds "individual" instead of "person." Section 7 requires the report to include the name, address, principal occupation, and employer of the individual. She asked whether the goal was to bring the referendum and recall elections in line with the existing statute on initiatives. 1:43:52 PM CRYSTAL KOENEMAN, Staff, Representative Sara Rasmussen, Alaska State Legislature, Juneau, Alaska, answered that the main point would highlight the lack of reporting contributions and expenditures for collecting signatures during the ballot initiative process. Reporting contributions and expenditures wouldn't be available until the lieutenant governor certified the signatures and the ballot initiative was placed on the ballot. The sponsor wanted to capture that period of time for contributions and expenditures coming into Alaska without reporting. 1:44:51 PM SENATOR HUGHES observed that HB 157 was an improvement, but it still would not provide the level of detail called for in the ballot initiative. She surmised that reporting would have shown significant funds for the [ranked choice voting] ballot initiative was coming from outside Alaska. She said she did not want to give the public the false impression that this would balance things. She offered her view that it would provide an extra level of detail for candidates but not for initiatives, referendums, or recall elections. 1:46:00 PM CHAIR HOLLAND asked whether this proposal would extend the filing deadline for legislators. MS. KOENEMAN answered yes, for Alaska Public Offices Commission (APOC) financial disclosures. 1:46:33 PM At ease 1:47:28 PM CHAIR HOLLAND reconvened the meeting. 1:47:50 PM MR. KING noted that there was discussion about the extension for legislators because they are busy doing the work of the state, and preparing financial disclosures was burdensome and would take away from the state's business. The idea was to extend the end-of-year campaign report beyond the legislative session. He noted some discussion was held about moving the financial disclosure requirements, but it created complications, so it is not in the bill. The end-of-year campaign filing deadline was extended to 15 days after the legislature adjourns. Another provision would require candidates to disclose contributions of $500 or more received after the election within 7 days. 1:49:11 PM CHAIR HOLLAND disclosed that APOC fined him $10 for missing a deadline. 1:49:19 PM SENATOR HUGHES agreed that legislators were busy conducting the business of the state during the legislative session. Further, it would not be appropriate for legislators or staff to use state equipment for campaign purposes. Many legislators retain that paperwork in their home districts, so it made sense to adjust the campaign reporting timeframe to allow legislators to return home to handle the reports. CHAIR HOLLAND began the amendment process. 1:50:40 PM SENATOR KIEHL moved to adopt Amendment 1, work order 32- LS0669\G.1. 32-LS0669\G.1 Bullard 4/5/22 AMENDMENT 1 OFFERED IN THE SENATE BY SENATOR KIEHL TO: SCS CSHB 157(JUD), Draft Version "G" Page 1, line 11, following "campaigns;": Insert "relating to the reporting of financial  and business interests by municipal officers, former  municipal officers, and candidates for municipal  office;" Page 9, following line 29: Insert a new bill section to read:  "* Sec. 18. AS 39.50.020(b) is amended to read: (b) A public official, [OR] former public official, or candidate for municipal office [OTHER THAN AN ELECTED OR APPOINTED MUNICIPAL OFFICER] shall file the statement with the Alaska Public Offices Commission. Candidates for the office of governor and lieutenant governor and, if the candidate is not subject to AS 24.60, the legislature shall file the statement under AS 15.25.030. The Alaska Public  Offices Commission shall provide copies of the  statements filed by municipal [MUNICIPAL] officers, former municipal officers, and candidates for elective municipal office to [SHALL FILE WITH] the applicable municipal clerk or other municipal official designated to receive the statements [THEIR FILING FOR OFFICE]. All statements required to be filed under this chapter are public records." Renumber the following bill sections accordingly. 1:50:52 PM CHAIR HOLLAND objected for discussion purposes. 1:50:56 PM SENATOR KIEHL explained that Amendment 1 would eliminate the requirement for municipal officials to double-file financial disclosures. The current statute requires municipal officials to file financial disclosures with the city clerk. Since Alaska Public Offices Commission (APOC) provides these forms, municipal officials must fill out the financial disclosure form on the APOC website, file it, print it, and submit it to the municipal clerk's office. Amendment 1 would require municipal officials to file their disclosures with APOC, who would forward the filing to the municipal clerk to ensure that the public has access to the filings. 1:52:07 PM At ease 1:52:18 PM CHAIR HOLLAND reconvened the meeting. 1:52:46 PM SENATOR HUGHES wondered how this change would work for APOC. 1:53:00 PM HEATHER HEBDON, Executive Director, Alaska Public Offices Commission, Anchorage, Alaska, agreed Senator Kiehl made a good point that municipal officers and candidates use APOC's online system to file their financial disclosure forms (POFDs). Only six municipalities and boroughs with a population of more than 15,000 are required to submit their forms electronically. She estimated an additional 15-20 municipalities statewide are allowed to file paper financial disclosure forms. APOC regularly provides these POFD forms to the clerk's office to disseminate to their filers. She did not anticipate any issues if municipal filers used APOC's online system to file their POFDs. Municipal filers or APOC staff could subsequently submit these filings to municipal clerk offices. 1:54:32 PM SENATOR HUGHES said streamlining the process may encourage more people to run for municipal positions, so it was a good amendment. 1:55:03 PM CHAIR HOLLAND removed his objection; he found no further objection, and Amendment 1 was adopted. 1:55:15 PM SENATOR KIEHL moved to adopt Amendment 2, work order 32- LS0669\G.2. 32-LS0669\G.2 Bullard 4/5/22 AMENDMENT 2 OFFERED IN THE SENATE BY SENATOR KIEHL TO: SCS CSHB 157(JUD), Draft Version "G" Page 9, lines 17 - 20: Delete "central office and on the commission's  Internet website [, THE OFFICE OF THE LIEUTENANT GOVERNOR, THE LEGISLATIVE REFERENCE LIBRARY OF THE LEGISLATIVE AFFAIRS AGENCY, AND AT THE COMMISSION'S DISTRICT OFFICES PRESCRIBED IN AS 15.13.020(j)]" Insert "offices and on the commission's Internet  website [CENTRAL OFFICE, THE OFFICE OF THE LIEUTENANT GOVERNOR, THE LEGISLATIVE REFERENCE LIBRARY OF THE LEGISLATIVE AFFAIRS AGENCY, AND AT THE COMMISSION'S DISTRICT OFFICES PRESCRIBED IN AS 15.13.020(j)]" Page 9, lines 27 - 29: Delete "the commission's central [AN] office and  be made available on the commission's Internet website [ESTABLISHED BY THE COMMISSION IN THE STATE CAPITAL OR IN THE OFFICE OF THE LIEUTENANT GOVERNOR]" Insert "the commission's offices and be made  available on the commission's Internet website [AN OFFICE ESTABLISHED BY THE COMMISSION IN THE STATE CAPITAL OR IN THE OFFICE OF THE LIEUTENANT GOVERNOR]" CHAIR HOLLAND objected for discussion purposes. 1:55:33 PM SENATOR KIEHL explained that Amendment 2 would allow APOC to maintain paper files in their offices and have them available on their internet website. Version G requires the commission to transfer paper files to the central office. 1:56:09 PM CHAIR HOLLAND removed his objection; he found no further objection, and Amendment 2 was adopted. 1:56:16 PM SENATOR SHOWER objected for discussion purposes. SENATOR SHOWER said he imagines this was a positive change, but he would like Ms. Hebron to comment. 1:56:36 PM MS. HEBDON agreed this would avoid unnecessary shuttling of paper to the Anchorage office. The majority of their files are already posted to APOC's website related to lobbying activities. 1:57:21 PM SENATOR SHOWER removed his objection. CHAIR HOLLAND found no further objection, and Amendment 2 was adopted. 1:57:36 PM SENATOR SHOWER moved to adopt Amendment 3, work order 32- LS0669\G.3. 32-LS0669\G.3 Bullard 4/7/22 AMENDMENT 3 OFFERED IN THE SENATE BY SENATOR SHOWER TO: SCS CSHB 157(JUD), Draft Version "G" Page 1, line 9, following "opinion;": Insert "relating to penalties assessed for  campaign finance violations;" Page 6, following line 14: Insert new bill sections to read:  "* Sec. 13. AS 15.13.390(a) is amended to read: (a) Subject to (g) of this section, a [A] person who (1) fails to register when required by AS 15.13.050(a) or who fails to file a properly completed and certified report within the time required by AS 15.13.040, 15.13.060(b) - (d), 15.13.110(a)(1), (3), or (4), (e), or (f) is subject to a civil penalty of not more than $50 a day for each day the delinquency continues as determined by the commission subject to right of appeal to the superior court. A person who fails to file a properly completed and certified report within the time required by AS 15.13.110(a)(2) or 15.13.110(b) is subject to a civil penalty of not more than $500 a day for each day the delinquency continues as determined by the commission subject to right of appeal to the superior court; (2) whether as a contributor or intermediary, delays in reporting a contribution as required by AS 15.13.040(r) is subject to a civil penalty of not more than $1,000 a day for each day the delinquency continues as determined by the commission subject to right of appeal to the superior court; (3) whether as a contributor or intermediary, misreports or fails to disclose the true source of a contribution in violation of AS 15.13.040(r) or 15.13.074(b) is subject to a civil penalty of not more than the amount of the contribution that is the subject of the misreporting or failure to disclose; upon a showing that the violation was intentional, a civil penalty of not more than three times the amount of the contribution in violation may be imposed; these penalties as determined by the commission are subject to right of appeal to the superior court; (4) violates a provision of this chapter, except as otherwise specified in this section, is subject to a civil penalty of not more than $50 a day for each day the violation continues as determined by the commission, subject to right of appeal to the superior court; and (5) is assessed a civil penalty may submit to the commission an affidavit stating facts in mitigation; however, the imposition of the penalties prescribed in this section or in AS 15.13.380 does not excuse that person from registering or filing reports required by this chapter.  * Sec. 14. AS 15.13.390(d) is amended to read: (d) When an action has been filed in the superior court under AS 15.13.380, upon proof of the violation, the court shall enter a judgment in the amount of the civil penalty authorized to be collected under (a) and (g) [BY (a)] of this section.  * Sec. 15. AS 15.13.390 is amended by adding a new subsection to read: (g) The amount of a civil penalty assessed on a daily basis under (a)(1), (2), or (4) of this section shall be determined as follows for each day the delinquency or violation continues: (1) during the first six months, the full daily penalty provided by (a) of this section; (2) during months seven to 11, 75 percent of the daily penalty provided by (a) of this section; (3) during months 12 to 18, 50 percent of the daily penalty provided by (a) of this section; and (4) after 18 months, 25 percent of the daily penalty provided by (a) of this section." Renumber the following bill sections accordingly. 1:57:46 PM CHAIR HOLLAND objected for discussion purposes. 1:58:01 PM SCOTT OGAN, Staff, Senator Mike Shower, Alaska State Legislature, explained that Amendment 3 related to penalties for campaign finance violations. A candidate could pay $91,250 in fines for a clerical error on their APOC report. Amendment 3 would establish a tiered system for penalties [as shown on page 2, lines 18-28], ranging from a full penalty for the first six months to 25 percent of the daily penalty after 18 months. He noted that on day 180 if something came to the attention of APOC, a candidate would be liable for $9,000 in fines. He believed that Amendment 3 would establish reasonable amounts and a reasonable statute of limitations. 2:01:07 PM SENATOR HUGHES asked if APOC fines were the same for clerical errors as for something more egregious, such as a person purposely hiding information. MR. OGAN said he was unsure. 2:02:37 PM SENATOR HUGHES restated her question. MS. HEBDON answered that the maximum penalty is for any violation, and the degree of violation was not contemplated. However, under their penalty assessment procedure by regulation, the commission has some leeway to consider a filer's history, and certain aggravating factors are used for assessing maximum penalties. Penalties are regularly reduced from the initial assessment, and filers can appeal APOC decisions. APOC encourages people to appeal fines. Although Mr. Ogan based his maximum penalty figure on a five-year statute of limitations, Version G reduces it from five years to 2 years. Using the $50 per day maximum penalty would result in $18,250 if nothing was done during that time. She noted that the penalties would also apply to sophisticated filers engaged in independent expenditure activities, large political parties, and Political Action Committees (PACS). The fines might seem shocking to a candidate, but $18,250 could be considered the cost of doing business by the larger groups. 2:05:17 PM SENATOR SHOWER wondered if fines for individual candidates should be handled separately from larger groups. 2:05:54 PM SENATOR HUGHES referred to page 6, line 9, to Section 12 of HB 157, Version G, and Section 13 of Amendment 3. She asked if that language includes political parties and PACS or solely pertains to candidates. 2:07:16 PM At ease 2:10:11 PM CHAIR HOLLAND reconvened the meeting. 2:10:14 PM CHAIR HOLLAND asked Senator Hughes to pose her question. 2:10:25 PM SENATOR HUGHES asked whether the word "person" in Section 12 of Version G and the word "person" in Section 13 in Amendment 3 relate to a candidate or a group. MS. KOENEMAN responded that AS 15.13.400 provides definitions for person, candidate, and group. She stated that Amendment 3 would expand the scope to more than the sponsor intended. 2:11:16 PM SENATOR HUGHES asked for the definition of "person." MS. KOENEMAN read AS 15.13.400 [(16)], which read: "'person' has the meaning given in AS 01.10.060 and includes a labor union, nongroup entity, and a group." 2:11:47 PM SENATOR SHOWER stated the intent of Amendment 3 was to limit onerous APOC fines for unintentional clerical errors by individual candidates but not make it easy for larger groups to be malicious since they could absorb the fines. 2:12:36 PM SENATOR KIEHL asked if this language covers candidates making innocent mistakes and candidates with which APOC has had ongoing issues. He further asked whether there were specific APOC statutes or regulations that could help distinguish between innocent and willful acts. MS. HEBDON responded that she was unaware that willful was contemplated in APOC statutes for campaign disclosure. She suggested that there might be a prohibition under financial disclosure laws. She reiterated that when assessing penalties, APOC considers the filer's history and whether they are uncooperative, allowing APOC to impose the maximum amount. She anticipated that staff would provide this information and their recommendations for the commission's consideration on any appeal. 2:14:44 PM SENATOR KIEHL related his understanding that the commission has a definition of "cooperative." 2:15:00 PM MS. KOENEMAN directed attention to AS 15.13.390, relating to civil penalty and late filing of required reports. She said nothing mentions willful, and the language is vague about APOC's ability. She noted that APOC regulations provide more leeway. The statutes establish a civil penalty of not more than $50 a day for failure to file a properly completed and certified report timely or a civil penalty of not more than $500 a day for each day the delinquency continues as determined by the commission subject to a right of appeal to the superior court. 2:16:15 PM SENATOR MYERS said he almost ran afoul of APOC with the year-end filing when he inadvertently reported a $100 check as a $500 check. However, he did not receive notification until two months after the filing deadline. Fortunately, he could provide proof, so he was not in violation, and APOC waived the fine. However, it illustrates how easy it would be to acquire delinquent fees. 2:17:51 PM SENATOR SHOWER asked whether APOC considers whether the violation is by a PAC versus an individual. MS. HEBDON answered no. She stated that the commission has discretion when issuing a final determination. She said she did not think the final penalties assessed on candidates had been overly egregious. She offered her view that there has been a substantial reason for more significant penalties. 2:20:01 PM CHAIR HOLLAND removed his objection. 2:20:12 PM SENATOR SHOWER withdrew Amendment 3. CHAIR HOLLAND offered his view that the concept for Amendment 3 was valid, but it would need further work to meet the sponsor's goal. 2:20:55 PM CHAIR HOLLAND held HB 157 in committee.