HOUSE STATE AFFAIRS STANDING COMMITTEE April 25, 2000 5:05 p.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Joe Green Representative Jim Whitaker Representative Bill Hudson Representative Scott Ogan MEMBERS ABSENT Representative Beth Kerttula Representative Hal Smalley COMMITTEE CALENDAR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 179 "An Act eliminating the Alaska Public Offices Commission and all campaign contribution and expenditure limits; transferring the administration of lobbying, conflict of interest, and financial disclosure statutes from the Alaska Public Offices Commission to the division of elections; relating to reporting of campaign contributions and expenditures; defining 'full disclosure,' 'purposely,' 'recklessly,' and 'resident'; amending the definition of 'contribution,' 'group,' and 'political party'; changing the residency requirements for candidates for public offices; and providing for criminal penalties for violation of these provisions." - MOVED CSSSHB 179(STA) OUT OF COMMITTEE PREVIOUS ACTION BILL: HB 179 SHORT TITLE: APOC REPEAL: CAMPAIGN/DISCLOSURE/LOBBYIST SPONSOR(S): REPRESENTATIVES(S) COGHILL, Sanders Jrn-Date Jrn-Page Action 4/07/99 671 (H) READ THE FIRST TIME - REFERRAL(S) 4/07/99 671 (H) STA, JUD, FIN 4/15/99 (H) STA AT 8:00 AM CAPITOL 102 4/15/99 (H) 4/19/99 866 (H) SPONSOR SUBSTITUTE INTRODUCED 4/19/99 866 (H) READ THE FIRST TIME - REFERRAL(S) 4/19/99 866 (H) STA, JUD, FIN 4/22/99 (H) STA AT 8:00 AM CAPITOL 102 4/22/99 (H) HEARD AND HELD 4/22/99 (H) MINUTE(STA) 4/27/99 (H) STA AT 8:00 AM CAPITOL 102 4/27/99 (H) BILL CANCELED 4/29/99 (H) STA AT 8:00 AM CAPITOL 102 4/29/99 (H) HEARD AND HELD 4/29/99 (H) MINUTE(STA) 5/06/99 (H) STA AT 8:00 AM CAPITOL 102 5/06/99 (H) HEARD AND HELD 5/06/99 (H) MINUTE(STA) 4/25/00 (H) STA AT 2:00 PM CAPITOL 102 WITNESS REGISTER BROOKE MILES, Regulation of Lobbying Alaska Public Offices Commission (APOC) Department of Administration PO Box 110222 Juneau, Alaska 99811-0222 POSITION STATEMENT: Testified on Version I of SSHB 179 and offered two amendments. ACTION NARRATIVE TAPE 00-36, SIDE A Number 0001 CHAIR JEANNETTE JAMES called the House State Affairs Standing Committee meeting to order at 5:05 p.m. Members present at the call to order were Representatives James, Green, Whitaker and Hudson. Representative Ogan arrived as the meeting was in progress. HB 179-APOC REPEAL: CAMPAIGN/DISCLOSURE/LOBBYIST CHAIR JAMES announced that the only order of business today is SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 179, "An Act eliminating the Alaska Public Offices Commission and all campaign contribution and expenditure limits; transferring the administration of lobbying, conflict of interest, and financial disclosure statutes from the Alaska Public Offices Commission to the division of elections; relating to reporting of campaign contributions and expenditures; defining 'full disclosure,' 'purposely,' 'recklessly,' and 'resident'; amending the definition of 'contribution,' 'group,' and 'political party'; changing the residency requirements for candidates for public offices; and providing for criminal penalties for violation of these provisions." REPRESENTATIVE GREEN made a motion to adopt the proposed committee substitute (CS), Version I (1-LS0401\I, Kurtz, 4/25/00), as the working draft. There being no objection, it was so ordered and Version I was before the committee. Number 0089 REPRESENTATIVE COGHILL, speaking as the sponsor of SSHB 179, pointed out that Version I is significantly different from the original bill. The bill includes four sections in which three things are accomplished. First, page 1, line 10, inserts the word "exceeds". Currently, if someone gives a contribution of $499.50, that person is required to send in a reporting form. With the language "exceeds", the burden of reporting [for an amount under $500] is switched to the person/group doing the campaigning. On page 2, line 25, AS 15.13.080, which is being repealed, is actually the section in statute that requires that the individual fill out the reporting form. REPRESENTATIVE COGHILL turned to Section 2, a new amendment to AS 15.13.090 to exempt telephone calls from some of the reporting requirements. In some cases, he explained, APOC had been saying that a telephone call soliciting money for a fund raiser should have a disclaimer. However, he understood the statutes reference to "other communications" to refer to the use of computer technology. He related his belief that it is probably an attempt to get at the polling problem. Therefore, this amendment clarifies the statute. Number 0363 REPRESENTATIVE COGHILL addressed Section 3. He directed the committee to page 2, line 10, which eliminates the reference to AS 15.13.080(c), which he read as follows: "The contributor's statement shall be filed with the commission by the contributor no later than 30 days after the contribution that requires the contributor to report under AS 15.13.040(d) is made." CHAIR JAMES related her understanding that the change in Section 3 is the second part of the aforementioned change in Section 1(A). REPRESENTATIVE COGHILL pointed out that [the contribution] would still be a cumulative amount. REPRESENTATIVE GREEN noted that this version would repeal all of [AS 15.13].080. He asked if that would impact anything other than reporting [amounts that exceed $500], such as having to report in excess of $100 in the last few days before the election. REPRESENTATIVE COGHILL replied no; he specified that it refers to the individual at the $500 level. He read from AS 15.13.080(a) as follows: "An individual who contributes $500, or goods or services with a value of $500, to a candidate shall file a contributor's statement as required by this section." Therefore, he said, the burden is placed on the campaign rather than the contributor. Number 0683 BROOKE MILES, Regulation of Lobbying, Alaska Public Offices Commission (APOC), Department of Administration, remarked that since this [version] just came about, staff has done its best to understand it. With respect to eliminating the contributor reports for candidates and groups, this would mean that there would be nothing available during certain reporting periods. If HB 225 passes and governors are running for four years, for three of those four years there will be no data available that would have been required to be filed by the maximum contributors under current law until the year end report date, February 15 of each year. Therefore, the public will not have that information available. MS. MILES related her understanding of the new CS in that people who contribute money to a candidate will never be required to file a report because they can only contribute $500, which also applies to a political action committee (PAC). However, a person who contributes substantial amounts to a party would be required to file a disclosure report. She did note that the portion of the law requiring the reporting of independent expenditures remains intact. MS. MILES turned to the issue of telephone calls. She said APOC staff have never told people to say that the telephone call is paid for by "Joe Blow for candidate." Staff have instructed folks to identify by name who the caller is. She pointed out that when computers perform the calling, one can't even ask who is calling. For example, there was a [computer] call [without any identification] that reminded folks to come to a fund raiser, and staff recommended mentioning the campaign on whose behalf the call was being placed. To that end, staff did develop some alternative language; there are two choices. Ms. Miles informed the committee that the only problem that staff could determine in regard to the language in the CS is that if it were a negative computer call performed in the closing days of the campaign, it could be extremely dangerous and difficult to determine the origin of such a call. Number 1003 CHAIR JAMES remarked that she has always felt that the responsibility of reporting these funds would be the responsibility of the person receiving the funds. However, she understands [Ms. Miles] to be saying that the people contributing the funds should report them so that people know. Therefore, she asked what problem would exist with full disclosure that doesn't currently exist. She related her belief that full disclosure seems more important than any of the other things included. She asked how often would one be required to report contributions without causing extra time and effort to APOC. MS. MILES responded that more disclosure by the candidate is an excellent idea, and with electronic filing that could be [an appropriate decision]. She acknowledged that many other legislators share Chair James' concern in regard to the burden being on the contributor. CHAIR JAMES asked if there are any statistics in regard to the number of people who failed to [file their campaign contributions] and what has been done to those people. MS. MILES replied, "The commission has held harmless, in moratorium, anyone who files late, although we do request that they file when we catch up with the paperwork." She said she doesn't believe that civil penalties have been assessed for delinquent filing on contributor reports. The commission shared some of the aforementioned concerns regarding the burden being on the person who already contributed. She noted that it was never subject to a fine before campaign finance reform occurred. However, the requirement was different before campaign finance reform: as APOC staff caught up the two databases, the contributor would be notified that he/she had not filed and there was a request to do so. Still, civil penalties were not part of the statute for late filing or for not filing. CHAIR JAMES commented that those giving large contributions are probably more astute about the rules and regulations. However, other contributors may not understand the need to file, which has bothered her. She related her belief that the reporting requirements should be the [candidate's] responsibility, not the contributor's responsibility; therefore, she agreed with this change, which perhaps would also make disclosure easier to accomplish next year. Chair James remarked that she has always been interested in disclosure, which she felt would keep candidates up on reporting. Number 1343 REPRESENTATIVE HUDSON related his understanding of Ms. Miles' testimony that adoption of this CS with the language "exceeds [contributions of] $500" would mean that there would be no reports because individuals cannot contribute more than $500. However, he pointed out, such contributions would be reported in the candidate's APOC 30-day report. MS. MILES indicated agreement and specified [that such contributions would be reported in the] 30-day, 7-day and 10-day reports. She further agreed that the public can obtain copies of those reports, but that information would not be available between January 1 of the calendar year and late July of that year when the first report is filed. REPRESENTATIVE HUDSON understood, then, that prior to the 30-day report no information would be available. However, he supposed that under the current situation one could request [such information] from APOC. MS. MILES agreed and remarked that people can search the database. Number 1450 CHAIR JAMES pointed out that there is an amendment, 1-LS0401\I.1, Kurtz, 4/25/00, which changes the $100 to $200. She explained that currently, those who make contributions in an amount less than $100 don't have to list their name. The $100 amount has been there since 1975, and thus she felt that an increase to $200 would be appropriate. She noted that factoring in inflation would place that at $209. REPRESENTATIVE GREEN moved that the committee adopt Amendment 1, labeled 1-LS0401\I.1, Kurtz, 4/25/00, which read as follows: Page 1, following line 3: Insert new bill sections to read: "* Section 1. AS 15.13.040(a) is amended to read: (a) Except as provided in (g) of this section, each candidate shall make a full report, upon a form prescribed by the commission, listing the date and amount of all expenditures made by the candidate, the total amount of all contributions, including all funds contributed by the candidate, and for all contributions in excess of $200 [$100] in the aggregate a year, the name, address, principal occupation, and employer of the contributor and the date and amount contributed by each contributor. The report shall be filed in accordance with AS 15.13.110 and shall be certified correct by the candidate or campaign treasurer. * Sec. 2. AS 15.13.040(b) is amended to read: (b) Each group shall make a full report upon a form prescribed by the commission, listing (1) the name and address of each officer and director; (2) the aggregate amount of all contributions made to it; and, for all contributions in excess of $200 [$100] in the aggregate a year, the name, address, principal occupation, and employer of the contributor, and the date and amount contributed by each contributor; and (3) the date and amount of all contributions made by it and all expenditures made, incurred or authorized by it." Page 1, line 4: Delete "Section 1" Insert "Sec. 3" Renumber the following bill sections accordingly. [End of Amendment 1] MS. MILES commented that from a public policy standpoint, there will be fewer names available to the public. REPRESENTATIVE HUDSON remarked that simple inflation [would support this increase to $200]. REPRESENTATIVE GREEN asked if the people that come in and look at these reports are the public or people working on campaigns. MS. MILES specified that it is an online searchable database and thus the commission doesn't know. People who come into the office sometimes are in the campaign business, sometimes may be considering running for office, and sometimes they merely want to know this information. CHAIR JAMES asked if there was any objection to the adoption of Amendment 1. There being no objection, Amendment 1 was adopted. CHAIR JAMES pointed out that there are two amendments offered by Ms. Miles. Number 1740 REPRESENTATIVE WHITAKER related his belief that the concern lies with polling telephone communications. Therefore, he felt it would be appropriate to consider a conceptual amendment that deals with that. He acknowledged that it is annoying to receive a call in the middle of the night; he expressed the need for the public to know who is behind such a poll. CHAIR JAMES informed the committee that the sponsor of SSHB 179 liked Ms. Miles' [first] amendment, which read as follows: [Page 2, line 6, delete (c); insert] "(c) Telephone communications need only be identified by the name of the candidate, group or individual paying for the communication." MS. MILES explained that under the current law, polls are not subject to [AS 15.13].090 because the purpose of polls is to gather information rather than to influence the outcome of an election. She noted that APOC has received more calls regarding polls than unidentified campaign calls. Ms. Miles said she believes that it needs a broader scope of amendment within AS 15.13[.090]. CHAIR JAMES commented that she has surmised that "we" are moving in the direction of trying to manage by polls, which she believes are persuasive and suggestive. People being polled may take a position that they never had taken before the question was asked. Therefore, she is totally opposed to such polls. In her last newsletter she had noted that any polls she conducted would request narrative responses. She agreed that polling has gotten out of hand, but she didn't know how that could be remedied in SSHB 179. Number 1947 REPRESENTATIVE WHITAKER agreed that this is probably not the appropriate bill in which to address this. Therefore, he withdrew the notion of a conceptual amendment. CHAIR JAMES restated the first amendment offered by Ms. Miles [see above]. REPRESENTATIVE WHITAKER remarked that the language begs the question in regard to what is a communication. CHAIR JAMES read AS 15.13.090(a): (a) All advertisements, billboards, handbills, paid-for television and radio announcements and other communications intended to influence the election of a candidate or outcome of a ballot proposition or question shall be clearly identified by the words "paid for by" followed by the name and address of the candidate, group or individual paying for the advertising. In addition, candidates and groups must identify the name of their campaign chairman. CHAIR JAMES then read the new subsection (c) created by this proposed CS [Version I], as follows: (c) The provisions of (a) of this section do not apply to a telephone call. She reread the first amendment [see above] offered by Ms. Miles. CHAIR JAMES informed the committee that the second amendment offered by Ms. Miles read as follows: [Page 2, line 6] (c) The provisions in (a) requiring disclosure of the address and campaign chairman of the candidate or group do not apply to telephone communications. REPRESENTATIVE HUDSON remarked that he liked the first amendment [see above]. REPRESENTATIVE COGHILL indicated he also preferred it because it is explicit as to what is required for telemarketing. However, if someone is calling someone soliciting contributions, that is (indisc.- faint) factor, which is not always true for telemarketing. CHAIR JAMES asked whether members were thinking that the language in subsection (c) of the proposed CS [Version I] is appropriate. She said she read the [second] amendment offered by Ms. Miles to merely insert the language that subsection (a) includes. Therefore, she doesn't believe this amendment does anything different. REPRESENTATIVE HUDSON disagreed. If the current language of subsection (c) in the proposed CS is used, he said, then no name or identification has to be used in a telephone call. However, the amendment specifies what [one must say], and that is the only requirement. He agreed with Ms. Miles' first amendment. CHAIR JAMES noted Representative Ogan's presence and recapped what the committee had done thus far. Number 2295 REPRESENTATIVE HUDSON moved that the committee adopt Amendment 2, [Ms. Miles' first proposed amendment], which read as follows: Page 2, line 6, Delete subsection (c) Insert "(c) Telephone communications need only be identified by the name of the candidate, group or individual paying for the communication." There being no objection, Amendment 2 was adopted. CHAIR JAMES, in response to a query, noted that the next committee of referral is the House Judiciary Committee. REPRESENTATIVE OGAN asked, "If no one is paying for the call, if I'm calling people up, do I have to say that I paid for this call?" MS. MILES explained that generally a person making calls for a campaign will identify the candidate on whose behalf he/she is calling. She acknowledged that every individual has the right to pick up a phone to call whomever and say whatever. REPRESENTATIVE OGAN announced that since the committee has already discussed this, he would accept the committee's judgment. Number 2432 REPRESENTATIVE HUDSON made a motion to move CSSSHB 179, version 1-LS0401\I, Kurtz, 4/25/00, as amended, out of committee with individual recommendations and the accompanying zero fiscal note. He requested unanimous consent. There being no objection, it was so ordered and CSSSHB 179(STA) was moved from the House State Affairs Standing Committee. ADJOURNMENT There being no further business before the committee, the House State Affairs Standing Committee meeting was adjourned at 5:40 p.m.