HB 234-POLITICAL CONTRIBUTION LIMITS  4:52:52 PM CHAIR SHOWER 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." [This is the third hearing and public testimony is closed.] 4:53:39 PM REPRESENTATIVE CALVIN SCHRAGE, Alaska State Legislature, Juneau, Alaska, sponsor of HB 234, reminded the committee that this legislation fixes the hole in campaign finance that came about after the court struck down Alaska's individual to candidate contribution limits. After the ruling, the Alaska Public Offices Commission (APOC) issued temporary advisory limits. APOC recently abandoned those limits, which effectively leaves no individual to candidate campaign contribution limits. The courts also struck down the limits on out-of-state contributions, which effectively leaves the state open to unlimited campaign contributions from out-of-state doners. REPRESENTATIVE SCHRAGE relayed that Alaska voters overwhelmingly supported two separate ballot initiatives for robust campaign contribution limits. Polling today still shows about 70 plus percent of Alaskans support robust contribution limits. He acknowledged the concern voiced in the previous committee that this limits speech. However, it's a limitation that the people want to ensure that there is no undue influence in elections. 4:56:32 PM SENATOR REINBOLD stated that she supports campaign limits and was working with the members to address their concerns. SENATOR COSTELLO asked if he could share the polling data that he mentioned. REPRESENTATIVE SCHRAGE agreed to provide some information. CHAIR SHOWER asked what the legislature might do to prevent the court from striking down the contribution limits in SB 234 because it limits free speech, just as it did on the two previous ballot measures. REPRESENTATIVE SCHRAGE said the Supreme Court identified three concerns with Alaska's individual to candidate limits: 1) Alaska's $500 limit was substantially lower than the limits the court had previously upheld; 2) Alaska's individual to candidate limit was substantially lower than comparable limits in other states; and 3) Alaska's limit was not adjusted for inflation. To address those concerns HB 234 first reduced the limitations on challengers. The court looked at whether challengers were able to effectively fund raise like incumbents. The bill moved the limits to a campaign cycle to alleviate the disparity between the amounts of money an incumbent can raise versus a challenger. To addresses the concern about adjusting for inflation, HB 234 requires APOC to adjust the contribution limits every 10 years, based on Alaska's consumer inflation rates. Finally, there is no need to justify the limit because the bill increases the limit above what is found in other states and the court has upheld. He recapped that the limit is higher, it is per campaign, and the limits are inflation adjusted every 10 years. These changes address the concerns of both the Supreme Court and the Ninth Circuit Court of Appeals. 5:01:11 PM CHAIR SHOWER questioned whether the bill wasn't still vulnerable to the argument that it restricted speech. He also asked if the risk of a court challenge would be lessened if the bill were to adopt the federal contribution limits. REPRESENTATIVE SCHRAGE responded to the first question by pointing to Citizens United where the U.S. Supreme Court acknowledged that fighting corruption was a legitimate state interest worthy of justifying a restriction of free speech. To the question about defending the contribution limits, he pointed out that the contribution limits in HB 234 are higher than the limits the court previously upheld as constitutionally valid. It is also above the limits in many other state. SENATOR HOLLAND asked for the reason for the March 3, 2022 retroactive date. REPRESENTATIVE SCHRAGE explained that campaigns were following the APOC staff guidance on contribution limits up to March 3, 2022. That is when APOC rejected the staff's proposed $1,500 limit, which threw the door open to unlimited contributions. CHAIR SHOWER asked him to talk about the perception if not reality that the field is not level when an individual candidate is competing against a candidate who has strong support from either an independent expenditure (IE) group or a union. REPRESENTATIVE SCHRAGE said he'd heard those concerns, but his belief was that there was broad support from both sides of the aisle for contribution limits as a means of fighting corruption in elections. He opined that it did not match the Alaskan identity to support unlimited money coming into the state for Alaskan elections. CHAIR SHOWER commented on the importance of there being a sense of fair play, which might include restricting groups on all sides from offering paid time off to campaign or requiring that it be reported against the contribution limit. REPRESENTATIVE SCHRAGE agreed with the notion of a fair playing field and said he'd like to fix all the problems with elections. However, that was outside the scope of the bill, and his focus and the intent of HB 234 was to fix the gaping hole in out-of- state contributions and individual to candidate contributions. Specifically to the comment about union members receiving paid time off to campaign, he offered his understanding those activities were split into a separate arm. 5:12:18 PM CHAIR SHOWER commented on the inability of individuals to match the money, power, and influence of a large union like the IBEW or somebody's brother with a large IE group who might come in from out of state to support a candidate. REPRESENTATIVE SCHRAGE agreed that some people have used the process very effectively. He noted that in addition to unions, there are some significant business PACS. He also noted that IE groups may be able to raise millions of dollars, but they're frequently charged substantially more for things like advertising. He said it doesn't balance the playing field, but it is important context. CHAIR SHOWER commented that he was tainted because his union never supports him due to the R" attached to his name. 5:15:09 PM ERIC GUNDERSON, Staff, Representative Calvin Schrage, Alaska State Legislature, Juneau, Alaska, highlighted that in the last election cycle, the independent expenditure amounts going to each campaign was relatively even. He acknowledged that it depended on where the money was coming from, but the amount that the groups can give to a candidate was limited under HB 234. He acknowledged that what they're giving to IE groups themselves wasn't something that the legislature could do much about. CHAIR SHOWER said that's part of the dark money he'd like to get rid of. CHAIR SHOWER asked Tom Lucas if he had anything to add or correct. 5:16:41 PM TOM LUCAS, Attorney, Alaska Public Offices Commission, Department of Administration (DOA), Anchorage, Alaska, referenced the comment about union members using paid time to engage in campaign activities and explained that doing that for a regular PAC or candidate would be unlawful. It would be a non- monetary contribution from the business or labor organization, which is prohibited. However, if it was being done for an independent expenditure (IE) group, there is no limitation. An IE group can receive unlimited amounts from almost anybody except a foreign national. 5:18:37 PM REPRESENTATIVE SCHRAGE thanked the committee for its attention and expressed hope that HB 234 could be passed into law this session. CHAIR SHOWER held HB 234 in committee for future consideration.