HB 234-POLITICAL CONTRIBUTION LIMITS  4:15:44 PM VICE CHAIR REINBOLD announced the consideration of CS FOR HOUSE BILL NO. 234(STA) am(efd fld) "An Act relating to political contributions; 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." 4:16:15 PM ERIK GUNDERSON, Staff, Representative Calvin Schrage, Alaska State Legislature, presented HB 234 on behalf of the sponsor, by reading the following sponsor statement into the record: House Bill 234 reinstates fair, reasonable, and constitutional political contribution limits, requires the Alaska Public Offices Commission to increase these limits every ten years based on Alaska's consumer inflation rates, and limits out-of-state donations in state and local campaigns. Alaska has long touted strong and effective campaign finance laws which have helped to reduce the perception and acts of quid pro quo and corruption in our political process. These laws have served to promote better accountability and trust in our elections and elected officials. Last year, the Ninth Circuit Court of Appeals struck down the statutory campaign contribution limits, implemented by Alaskan voters in 2006 with 73% support, in the Thompson v Hebdon decision. This ruling, and the Alaska Public Offices Commission's decision not to implement the new limits advised by commission staff, has created legal uncertainty and opened our state and local elections to the threat of unlimited funds from anywhere in the country. HB 234 creates new campaign contribution limit laws that are in compliance with the ruling of the Ninth Circuit Court of Appeals and Supreme Court precedent, while ensuring limits remain constitutional moving forward. To accomplish this, HB 234 moves Alaska's campaign contributions to a "per campaign period" basis, increases the individual-to-candidate limit from $500 per year to $2,000 per campaign period and the group- to-candidate limit from $1,000 per year to $4,000 per campaign period, and directs the Alaska Public Office Commission to adjust contribution limits for inflation every 10 years. These changes address the concerns laid out by the Ninth Circuit in their decision as well as Supreme Court precedent while upholding the expressed desire of Alaskan voters for fair and reasonable contribution limits in our elections. 4:18:54 PM VICE CHAIR REINBOLD asked Ms. Hebdon if she wanted to comment on the Thompson v Hebdon decision. HEATHER HEBDON, Executive Director, Alaska Public Offices Commission, Department of Administration (DOA), said she believes the record speaks for itself. VICE CHAIR REINBOLD asked her to provide a summary of the decision. 4:20:10 PM MS. HEBDON explained that the case was remanded to the 9th Circuit Court of Appeals where a three judge panel struck down the individual candidate limit. The out-of-state limit was already struck and that wasn't challenged. A third limit was also struck down but she didn't recall the specifics. VICE CHAIR REINBOLD asked if the result was that there is no limit on [out-of-state contributions]. MS. HEBDON replied that is correct. VICE CHAIR REINBOLD said she didn't realize that. She asked Mr. Gunderson if he had anything to add. 4:21:13 PM MR. GUNDERSON advised that the forthcoming presentation adds depth to Ms. Hebdon's summary of the case. 4:21:57 PM MR. GUNDERSON read the following sectional analysis for HB 234: Section 1  Amends AS 15.13.020(j) directing the Alaska Public Offices Commission to establish a central office that maintains copies of reports filed with the commission available to the public. Removes language requiring the commission to establish a regional office in each senate district. Section 2  Amends AS 15.13.070(b) to change the limit an individual may contribute to a candidate, a write-in candidate, or to a non-group entity from $500 per year to $2,000 per campaign period. Changes the amount an individual may contribute to a group to $5,000 a year. Section 3  Amends AS 15.13.070(c) to change the limit a group that is not a political party may contribute per year to a candidate or write-in candidate from $1,000 per year to $4,000 per campaign period. Changes the amount a group that is not a political party may contribute to another group, nongroup entity, or political party to $5,000 per year. 4:23:15 PM Section 4  Amends AS 15.13.070(f) to change the limit a nongroup entity may contribute to a candidate, write-in candidate, or another nongroup entity from $1,000 per year to $4,000 per campaign period. Changes the amount a nongroup entity may contribute to another group or political party to $5,000 per year. Section 5  Amends AS 15.13.070(g) to change the limit an individual may contribute to a joint campaign for governor and lieutenant governor from $1,000 per year to $4,000 per campaign period. Changes the limit a group may contribute to a joint campaign for governor and lieutenant governor from $2,000 per year to $8,000 per campaign period. Section 6  Amends AS 15.13.070 to include a new subsection (h) that states contribution limits provided under (b)(1), (c)(2), and (f) of this section do not apply to individuals, groups, or non-group entities contributing to a group or nongroup entity that makes solely independent expenditures. Amends AS 15.13.070 to include a new subsection (i) directing the Alaska Public Offices Commission to update contribution limits every ten years, beginning the first quarter of 2031, based on consumer inflation rates for Anchorage, Alaska. These increases are rounded to the nearest $50 increment. 4:24:53 PM Section 7  Amends AS 15.13.072(e) stating that a candidate may not solicit or accept contributions from an individual who is not an Alaska resident if the amount would exceed 25% of the total contributions made to the candidate during the campaign. Section 8  Amends AS 15.13.110(i) prohibiting the Alaska Public Offices Commission from changing the manner or format in which a candidate must file a report during the campaign period. Section 9  Amends AS.15.13.400 to include a new paragraph (20) defining "campaign period" as the period beginning on the date a candidate becomes eligible to receive campaign contribution and ending on the date that candidate must file a final report. 4:26:00 PM Section 10  Amends AS 24.45.091 to require that reports and statements filed with the commission must be made publicly accessible on their website. Section 11  Amends 24.45.111(b) to require that copies of all statements and reports filed with the commission be preserved for a period of six years. Copies must be maintained at the commission's central location and be made available on the commission's internet website. Section 12  Adds a new section stating that the retroactive language in Section 13 does not apply to campaign contributions made to influence the outcome of an election that occurred on or before this bill's effective date. Section 13  Adds an effective date of March 3, 2022 to AS 15.13.070 (b), (c), (f), (g), (h) as amended in Sections 2, 3, 4, 5, 6, and 9 (respectively). 4:27:07 PM VICE CHAIR REINBOLD asked if March 3, 2022 was a retroactive date. MR. GUNDERSON answered yes. SENATOR HOLLAND asked why the [individual] contribution limit was set at $2,000. MR. GUNDERSON replied that is the inflation adjusted amount of the current $500 individual contribution for the next 10 years, and it also reflects the change from per year to each campaign period. SENATOR HOLLAND referenced Sections 12 and 13 and asked if there was a chance that existing donations might be affected because some people may have already exceeded the proposed $2,000 individual limit for each campaign period. For example, somebody might already have given the maximum $1,500 prior to December 31 and the maximum $1,500 after that date. MR. GUNDERSON said Ms. Hebdon might have additional insight, but his understanding in that example was that none of the donation would need to be returned as long as the two donations were in compliance with the APOC staff's initial advisory opinion. VICE CHAIR REINBOLD asked Ms. Hebdon to comment. 4:29:43 PM MS. HEBDON summarized her understanding of the question, which was whether the division would seek to have any contributions returned if they were made post March 3 and were over the limit in the bill. SENATOR HOLLAND said he was also wondering about the effect on contributions made pre March 3. He added that he understood the desire to address the current election, but it would be more straight-forward if it were to become effective for the next election cycle. MS. HEBDON responded that APOC would not seek the return of contributions in excess of $1,500 from anybody who was following APOC staff guidance under the draft opinion up until March 3. If the bill were to pass with the effective date, she said it's likely that APOC staff would bring post March 3 excess contributions to the commission's attention, but it was hard to imagine "getting those funds back in the bottle, particularly in a hectic election cycle. SENATOR HOLLAND asked if candidates who received donations after January 1, 2022 would have to take any $1,500 donations from the previous year into account when calculating the $2,000 limit. MS. HEBDON responded that based to the effective date and the change from per year to each campaign period, contributions in both calendar years would be considered. 4:33:01 PM SENATOR HOLLAND asked if the provision that limits individual contributions from nonresident doners to 25 percent of the total contributions came from other states. MR. GUNDERSON replied it was a floor amendment that originally established the out-of-state contribution limit at 50 percent of all contributions, which was in line with Ballot Measure 2. The body amended the limit to 25 percent of all contributions. VICE CHAIR REINBOLD stated that she interpreted Thompson v Hebdon as a directive for the legislature to look at the political contribution limits. VICE CHAIR REINBOLD apologized that the slide presentation would have to be held until the next hearing because there were technical difficulties today. MR. GUNDERSON thanked the committee for considering the bill. 4:36:02 PM VICE CHAIR REINBOLD held HB 234 in committee for future consideration.