ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 1, 2022
3:06 p.m.
MEMBERS PRESENT
Representative Jonathan Kreiss-Tomkins, Chair
Representative Matt Claman, Vice Chair
Representative Geran Tarr
Representative Andi Story
Representative Sarah Vance
Representative James Kaufman
Representative David Eastman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE JOINT RESOLUTION NO. 29
Urging the United States Congress to pass the Postal Service
Reform Act of 2021; urging the United States Congress to pass
the Postal Banking Act; and urging the United States Postal
Service to continue delivering mail six days a week under
historic delivery standards.
- HEARD & HELD
CS FOR SENATE BILL NO. 71(FIN)
"An Act relating to special request registration plates
celebrating the arts; relating to artwork in public buildings
and facilities; relating to the management of artwork under the
art in public places fund; relating to the powers and duties of
the Alaska State Council on the Arts; establishing the Alaska
arts and cultural investment fund; and providing for an
effective date."
- HEARD & HELD
HOUSE BILL NO. 234
"An Act relating to political contributions; and providing for
an effective date."
- MOVED CSHB 234(STA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HJR 29
SHORT TITLE: SUPPORT UNITED STATES POSTAL SERVICE
SPONSOR(s): REPRESENTATIVE(s) RAUSCHER
02/11/22 (H) READ THE FIRST TIME - REFERRALS
02/11/22 (H) STA
03/01/22 (H) STA AT 3:00 PM GRUENBERG 120
BILL: SB 71
SHORT TITLE: COUNCIL ON ARTS: PLATES & MANAGE ART
SPONSOR(s): SENATOR(s) STEVENS
02/05/21 (S) READ THE FIRST TIME - REFERRALS
02/05/21 (S) STA, FIN
03/09/21 (S) STA AT 3:30 PM BUTROVICH 205
03/09/21 (S) Heard & Held
03/09/21 (S) MINUTE(STA)
03/23/21 (S) STA AT 3:30 PM BUTROVICH 205
03/23/21 (S) Moved SB 71 Out of Committee
03/23/21 (S) MINUTE(STA)
03/24/21 (S) STA RPT 1DP 4NR
03/24/21 (S) NR: SHOWER, COSTELLO, KAWASAKI,
REINBOLD
03/24/21 (S) DP: HOLLAND
04/06/21 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/06/21 (S) Heard & Held
04/06/21 (S) MINUTE(FIN)
04/19/21 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/19/21 (S) Heard & Held
04/19/21 (S) MINUTE(FIN)
04/21/21 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/21/21 (S) Moved CSSB 71(FIN) Out of Committee
04/21/21 (S) MINUTE(FIN)
04/23/21 (S) FIN RPT CS 5DP 2NR NEW TITLE
04/23/21 (S) DP: STEDMAN, BISHOP, HOFFMAN,
WIELECHOWSKI, VON IMHOF
04/23/21 (S) NR: WILSON, OLSON
05/05/21 (S) TRANSMITTED TO (H)
05/05/21 (S) VERSION: CSSB 71(FIN)
05/06/21 (H) READ THE FIRST TIME - REFERRALS
05/06/21 (H) STA, FIN
05/13/21 (H) STA AT 3:00 PM GRUENBERG 120
05/13/21 (H) <Bill Hearing Postponed to 5/15/21>
05/15/21 (H) STA AT 10:00 AM GRUENBERG 120
05/15/21 (H) -- Testimony <Invitation Only> --
05/17/21 (H) STA AT 9:00 AM GRUENBERG 120
05/17/21 (H) -- MEETING CANCELED --
05/18/21 (H) FIN AT 9:00 AM ADAMS 519
05/18/21 (H) <Bill Hearing Canceled>
03/01/22 (H) STA AT 3:00 PM GRUENBERG 120
BILL: HB 234
SHORT TITLE: POLITICAL CONTRIBUTION LIMITS
SPONSOR(s): REPRESENTATIVE(s) SCHRAGE
01/18/22 (H) PREFILE RELEASED 1/7/22
01/18/22 (H) READ THE FIRST TIME - REFERRALS
01/18/22 (H) STA
02/01/22 (H) STA AT 3:00 PM GRUENBERG 120
02/01/22 (H) Heard & Held
02/01/22 (H) MINUTE(STA)
02/10/22 (H) STA AT 3:00 PM GRUENBERG 120
02/10/22 (H) Heard & Held
02/10/22 (H) MINUTE(STA)
02/15/22 (H) STA AT 3:00 PM GRUENBERG 120
02/15/22 (H) Heard & Held
02/15/22 (H) MINUTE(STA)
03/01/22 (H) STA AT 3:00 PM GRUENBERG 120
WITNESS REGISTER
REPRESENTATIVE GEORGE RAUSCHER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HJR 29, as the prime sponsor.
RYAN MCKEE, Staff
Representative George Rauscher
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
HJR 29, on behalf of Representative Rauscher, prime sponsor.
ALAN SORUM, Mayor Pro Tem
City of Valdez
Valdez, Alaska
POSITION STATEMENT: Provided invited testimony during the
hearing on HJR 29.
SENATOR GARY STEVENS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided an overview of SB 71, as the prime
sponsor.
TIM LAMKIN, Staff
Senator Gary Stevens
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
71, on behalf of Senator Stevens, prime sponsor.
BENJAMIN BROWN, Chair
Alaska State Council on the Arts
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
71.
KELLY O'SULLIVAN, Fiscal Analyst
Legislative Finance Division
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
71.
REPRESENTATIVE CALVIN SCHRAGE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
234, as the prime sponsor.
ERIK GUNDERSON, Staff
Representative Calvin Schrage
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced an amendment to HB 234, on
behalf of Representative Schrage, prime sponsor.
TOM LUCAS
Alaska Public Offices Commission
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
234.
ACTION NARRATIVE
3:06:41 PM
CHAIR JONATHAN KREISS-TOMKINS called the House State Affairs
Standing Committee meeting to order at 3:06 p.m.
Representatives Tarr, Kaufman, Story, Vance, Claman, and Kreiss-
Tomkins were present at the call to order. Representative
Eastman arrived as the meeting was in progress.
HJR 29-SUPPORT UNITED STATES POSTAL SERVICE
3:08:27 PM
CHAIR KREISS-TOMKINS announced that the first order of business
would be HOUSE JOINT RESOLUTION NO. 29, Urging the United States
Congress to pass the Postal Service Reform Act of 2021; urging
the United States Congress to pass the Postal Banking Act; and
urging the United States Postal Service to continue delivering
mail six days a week under historic delivery standards.
3:08:49 PM
REPRESENTATIVE GEORGE RAUSCHER, Alaska State Legislature,
introduced HJR 29, as the prime sponsor. He paraphrased the
sponsor statement [included in the committee packet], which read
in its entirety as follows:
HJR 29 recognizes that the United States Postal
Service plays a crucial role in communities across
Alaska, especially in areas of Alaska accessible only
by air or water.
We have seen over the years that prices have be
rising, while at the same time delivery of mail has
been slowed. The Postal Service has also lost $69
billion over the past 11 fiscal years, in addition to
unfunded liabilities that are twice the amount of
their annual revenue.
This is noticeable in rural Alaska, where the Federal
Government's failure to recognize the need for
adequate staffing has hit those communities especially
hard.
This resolution would send a formal request from the
Alaska State Legislature, to Congress, asking them to
pass Senate Bill 1720, the Postal Service Reform Act
of 2021.
And finally, would request that the United States
Congress pass Senate Bill 4616, the Postal Banking Act
of 2020.
Time is of the essence and action is required to
preserve the United States Postal Service and the
services it provides for the residents of Alaska
3:11:18 PM
RYAN MCKEE, Staff, Representative George Rauscher, Alaska State
Legislature, on behalf of Representative Rauscher, prime
sponsor, indicated that a forthcoming change would replace "S.
1720" [the Postal Service Reform Act of 2021] with "HR 3076" in
the bill language to ensure that the proper federal legislation
was being cited. He said Representative Rauscher's office would
work through the chair to draft the amendment.
3:12:21 PM
REPRESENTATIVE CLAMAN inquired about the sponsors of the
corresponding federal legislation.
MR. MCKEE offered to follow up with the requested information.
3:12:43 PM
REPRESENTATIVE STORY asked for a summary of the federal
legislation.
MR. MCKEE explained that HR 3076, the Postal Service Reform Act
of 2022, would require the Office of Personnel Management to
create the postal service health benefits program for postal
employees and retirees, and repeal the requirement that the
United States Postal Service (USPS) pre-fund future retiree
health benefits. He relayed that the USPS would be required to
deliver mail six days per week and create an online dashboard
with service performance data at the national and local level.
HR 3076 would allow USPS to form strategic partnerships with
state, local, and tribal governments to provide non-postal and
noncommercial services. Additionally, S. 4619, the Postal
Banking Act of 2020, would create a pilot program aimed at
providing for low interest loans to low-income communities and
establish an alternative to predatory loans.
3:14:36 PM
CHAIR KREISS-TOMKINS welcomed invited testimony.
3:14:50 PM
ALAN SORUM, Mayor Pro Tem, City of Valdez, urged passage of the
proposed resolution. He opined that USPS worked well when
properly supported, acknowledging its vitality to the state of
Alaska and its rural residents. He highlighted existing
disruptions, such as staffing issues and personnel shortages, at
the local postal office in Valdez and other communities.
Nationally, USPS was experiencing problems with the cost of
service. He understood that Alaska's federal delegation was
working to resolve some of these issues, recognizing the
importance of USPS to the state. He indicated that HJR 29 was
intended to support the federal delegation in its efforts to
pass legislation addressing postal service reform. In response
to the question from Representative Claman, he reported that The
Postal Service Reform Act of 2021 was co-sponsored by U.S.
Senators Lisa Murkowski and Dan Sullivan. Its companion bill,
HR 3076, was co-sponsored by Congressman Don Young.
3:19:01 PM
REPRESENTATIVE EASTMAN asked why the postal service no longer
offered banking services.
MR. SORUM shared his understanding that in 1910, banks were
struggling, which created the need for an alternative location
where people could access their savings and basic banking
services.
3:19:53 PM
REPRESENTATIVE CLAMAN inquired about the provisions in the
federal bills related to unfunded liabilities for pension
payments and the requirement to pre-pay the pensions. He asked
whether the proposed legislation would maintain the pension
obligations while removing the pre-funding requirement.
MR. SORUM answered yes, explaining that the legislation would
establish an organization to oversee that.
3:21:03 PM
CHAIR KREISS-TOMKINS invited additional questions from the
committee for the bill sponsor.
3:21:10 PM
REPRESENTATIVE EASTMAN turned attention to page 2 of the
resolution, which cited a loss of $69 billion over the last 11
years. He asked whether that figure was accurate.
MR. MCKEE answered yes.
REPRESENTATIVE EASTMAN highlighted USPS's unsustainable unfunded
liabilities that were twice annual revenues in addition to the
loss of $69 billion. He sought to confirm that the proposed fix
was for the postal service, which was going bankrupt, to get
into banking.
MR. MCKEE answered yes, through the pilot program, which could
raise an estimated $9 billion annually through low interest
loans and banking services.
REPRESENTATIVE EASTMAN asked how they would fund the low
interest loans.
MR. MCKEE offered to follow up with the requested information.
3:22:50 PM
REPRESENTATIVE KAUFMAN requested additional information on the
underlying federal legislation, which would clarify unanswered
questions.
REPRESENTATIVE EASTMAN requested sectional analyses of the
underlying federal legislation.
MR. MCKEE offered to follow up with the requested information
for HR 3076, as it was a current bill in Congress.
REPRESENTATIVE EASTMAN sought to confirm that HJR 29 referenced
a second piece of federal legislation.
MR. MCKEE clarified that [S.4614] the Postal Banking Act of 2020
died in the last session of Congress; however, he understood
that parts of it could be added to existing legislation.
REPRESENTATIVE EASTMAN asked which parts were being recommended
in HJR 29 and whether sectional analyses could be provided for
those "parts."
MR. MCKEE clarified that HJR 29 was urging Congress to pass HR
3076, the Postal Service Reform Act of 2022, and reintroduce and
pass S. 4614, the Postal Banking Act of 2020.
3:25:53 PM
CHAIR KREISS-TOMKINS announced that HJR 29 was held over.
SB 71-COUNCIL ON ARTS: PLATES & MANAGE ART
3:27:05 PM
CHAIR KREISS-TOMKINS announced that the next order of business
would be CS FOR SENATE BILL NO. 71(FIN), "An Act relating to
special request registration plates celebrating the arts;
relating to artwork in public buildings and facilities; relating
to the management of artwork under the art in public places
fund; relating to the powers and duties of the Alaska State
Council on the Arts; establishing the Alaska arts and cultural
investment fund; and providing for an effective date."
3:28:05 PM
SENATOR GARY STEVENS, Alaska State Legislature, prime sponsor,
introduced SB 71. He paraphrased the sponsor statement
[included in the committee packet], which read as follows
[original punctuation provided]:
Senate Bill 71 was introduced at the request of the
Alaska State Council on the Arts (ASCA).
ASCA is the state arts agency for Alaska, and exists
to promote the creation, enjoyment, and practice of
the arts by all Alaskans.
ASCA was founded in 1966 by passage of its enabling
legislation by the 4th Alaska State Legislature. In
2017 the 30th State Legislature passed House Bill 137
which re-designated ASCA as a public corporation and
governmental instrumentality of the State of Alaska
and restructured the agency. In 2019 ASCA was shut
down for several months following the veto of all its
funding in late June. The Legislature restored funding
in July, and the funds remained in the budget signed
into law in August 2019.
When ASCA re-opened following the period of time in
which the agency was not in operation, its Board of
Trustees sought out ways in which operations could be
improved. Some of the possible changes they identified
require statutory changes. SB 71 contains four
discrete provisions which are meant to allow for more
stable operations of the ASCA.
First, SB 71 would attach a surcharge to the highly
successful Alaska Artistic License Plate Program
launched with the passage of SB 154 by the 29th State
Legislature (2016), and modified by the passage of SB
204 in the 30th Legislature (2018). The bill would
allow ASCA to set the amount of the surcharge in an
amount not to exceed $50 as a means of generating
income to help support ASCA's operations.
Second, this legislation clarifies ASCA's management
responsibility for public artwork created through its
programs, to include the management of the relocation,
disposition, or exchange of such artwork.
Third, this legislation would codify the existing
practice of the Department of Law serving as legal
counsel for ASCA. This comports with normal operating
procedures for agencies of the State of Alaska.
Fourth, SB 71 provides ASCA with the means to maintain
and strengthen its partnerships with non-profit
foundation supporters, which have been very successful
in recent years, and which now result in over half of
ASCA's operating budget coming from non-governmental
sources. The statutory changes proposed in SB 71 would
hold harmless, ASCA's private-sector fund raising
efforts in the state budget process.
Thank you for your consideration of this important
piece of legislation.
3:29:31 PM
REPRESENTATIVE EASTMAN inquired about the legal counsel referred
to in Section 5 of the bill.
3:29:50 PM
TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State
Legislature, on behalf of Senator Stevens, prime sponsor of SB
71, explained that the addition in Section 5 was in response to
processes that occurred during the budget cycle, which required
representation that put the Department of Law (DOL) in conflict
with the Alaska State Council on the Arts (ASCA). He deferred
to Mr. Brown for a more thorough explanation.
3:30:43 PM
BENJAMIN BROWN, Chair, Alaska State Council on the Arts,
recalled that the governor vetoed ASCA funding in 2019, which
created challenges for the council. He said in response to
those vetoes, he reached out to the assistant attorney general
(AG) at DOL for legal advice regarding the agency shut down.
The assistant AG also represents the Department of Education &
Early Development (DEED), he noted. He reported that per the
Alaska Rules of Professional Conduct, an attorney cannot
represent two clients with adverse interests; therefore, DOL
could not represent both ASCA and DEED. He said he didn't want
to see the assistant AG put in that difficult position, so he
wanted to create a provision in the enabling statute for ASCA
that would allow a different attorney than the one representing
DEED to be assigned.
3:34:14 PM
REPRESENTATIVE EASTMAN wondered whether Section 5 would be
effectively telling the assistant AG that he/she could not help
the administration implement that policy agenda.
3:35:28 PM
REPRESENTATIVE TARR contextualized the situation previously
described by Mr. Brown.
3:36:15 PM
REPRESENTATIVE STORY asked whether the Alaska arts and cultural
investment fund was "sweepable."
MR. LAMKIN referenced AS 37.05.142 pertaining to program
receipts. He explained that as a public corporation, ASCA dealt
with public and private moneys simultaneously. He indicated
that the proposed legislation provided that money gathered from
private donors would be held harmless in the event of a vetoed
budget.
3:37:58 PM
MR. BROWN, in response to Representative Story, believed that
the funds would be sweepable. He explained that the bill
delineated that the Alaska arts and cultural investment fund was
composed of private foundation funds invested by partners, such
as the Rasmuson Foundation, in the work done as a public
corporation of the state. He added that the bill illustrated
that the funds were different than designated and undesignated
general funds. He shared his understanding that it wouldn't
make a practical difference in terms of "sweepability."
3:39:36 PM
REPRESENTATIVE STORY reiterated her interest in learning whether
the fund was sweepable.
3:39:52 PM
The committee took a brief at-ease.
3:40:02 PM
CHAIR KREISS-TOMKINS said he would prefer if the fund was "non-
sweepable."
3:40:16 PM
REPRESENTATIVE CLAMAN expressed his interest in seeing a written
response from the AG on the "sweepability" of these funds to
gain clarity on the issue.
CHAIR KREISS-TOMKINS agreed.
3:41:39 PM
REPRESENTATIVE EASTMAN asked which provision in the bill
pertained to holding the funds harmless.
MR. LAMKIN said he would need a moment to review the bill.
3:41:53 PM
REPRESENTATIVE CLAMAN shared his understanding that it was
Section 6 of the bill.
3:42:12 PM
MR. LAMKIN noted that AS 44.27.059 was outside of the Executive
Budget Act and therefore, the receipt authority would not be
subject to an outright veto. He deferred to Mr. Brown.
MR. BROWN agreed with Representative Claman that a position from
the AG on the fund's "sweepability" would be welcome.
3:43:57 PM
REPRESENTATIVE EASTMAN asked whether the bill would curtail the
legislature or the governor's ability to limit or veto receipt
authority.
3:44:46 PM
MR. BROWN stated his understanding that Representative Eastman
was asking whether the bill would diminish legislative
appropriation authority or the governor's veto authority, adding
that the answer was no. He explained that the legislature would
still have to give ASCA the ability to receive statutorily
designated program receipts that would go into a fund, which was
different than the current structure. He noted that in the
event that the council were vetoed "out of existence" again, the
process for accounting for or returning those funds would be
clearer. He added that the primary intent was to ensure that
the funds were in a specific place, so investing entities had a
degree of confidence as to where they were.
3:46:38 PM
REPRESENTATIVE CLAMAN contended that the question for the
committee was whether funds donated to the ASCA by nonstate
government entities or money appropriated by the legislature to
the ASCA should be sweepable. He said he had "no confidence"
that 35.06. answered that question in the current environment,
opining that clarity needed to be determined and clearly
provided in the legislation. He reiterated his belief that
prospective counsel should weigh in, as they would be
responsible for litigating any future lawsuit on "sweepability."
3:48:36 PM
CHAIR KREISS-TOMKINS asked Ms. O'Sullivan to speak to the
"sweepability" of the fund being established under SB 71 and
funds like it.
3:49:23 PM
KELLY O'SULLIVAN, Fiscal Analyst, Legislative Finance Division,
shared her understanding that the fund would not be sweepable
because money appropriated to the fund could be spent without
further appropriation.
CHAIR KREISS-TOMKINS asked whether Ms. O'Sullivan could assess
how the administration might perceive the fund's "sweepability."
MS. O'SULLIVAN suspected that the administration would determine
the fund as non-sweepable.
3:50:42 PM
MS. O'SULLIVAN, in response to a question from Representative
Tarr, shared her understanding that the significant language was
"to carry out the purposes of this chapter" on page 3, lines 27-
28; however, she noted that she was not an attorney.
REPRESENTATIVE TARR asked where "sweepability" was addressed in
the bill.
MS. O'SULLIVAN said in general, if a fund was established that
could be spent without further appropriation, it was subject to
the sweep.
REPRESENTATIVE TARR offered to follow up with Legislative Legal
Services.
3:52:52 PM
REPRESENTATIVE VANCE directed attention to Section 6 and asked
what would happen with donations received by ASCA if the
legislature did not make an annual appropriation to the fund.
MS. O'SULLIVAN stated that typically, the money would stay in
the fund.
REPRESENTATIVE VANCE turned to page 3, lines 24-25 and sought to
clarify whether donations would lapse.
MS. O'SULLIVAN replied "Typically, donations do not lapse."
3:54:41 PM
REPRESENTATIVE CLAMAN referencing page 3, lines 22-24, provided
a scenario in which $100 was contributed to ASCA. He asked
whether that $100 would be a contribution to the general fund
(GF), which would then be appropriated by the legislature to the
Alaska arts and cultural investment fund. He asked whether that
was accurate.
MS. O'SULLIVAN said generally, all money appropriated to the
fund, including donations and GF program receipts, were included
in the appropriation.
REPRESENTATIVE CLAMAN restated his question, seeking to confirm
whether a donation was effectually a contribution to the GF that
was then appropriated by the legislature to the ASCA.
MS. O'SULLIVAN believed that was true, as typically, moving
money into a fund required an appropriation. She suggested
following up with Legislative Legal Services.
3:56:49 PM
REPRESENTATIVE EASTMAN restated his prior question, asking
whether Section 5 created an impediment to the AG carrying out
the administration's policy decision regarding ASCA.
MR. BROWN shared a personal anecdote. He said ultimately, it
would not impede the governor from carrying out his policy
objective, it would just provide adequate legal representation
to both entities as those policy decisions unfolded.
3:59:29 PM
REPRESENTATIVE EASTMAN asked whether the council would be
opposed to distinguishing between counsel in an advisory
capacity versus counsel in a representative capacity to avoid a
scenario in which the state was suing itself.
MR. BROWN believed that was not a necessary step, as it would
not comport with the way law was practiced in Alaska and the
U.S.
4:01:07 PM
REPRESENTATIVE CLAMAN requested hearing from the AG at the next
bill hearing to gain perspective on the conflict-of-interest
issue.
MR. LAMKIN noted that the issue was covered quite a bit in the
Senate, which led to an amendment that added the language on
page 3, lines 17-18.
4:02:19 PM
MR. BROWN pointed out that ASCA had endeavored to work with
Governor Dunleavy and the administration on this legislation.
He believed that the governor was ready to sign the bill into
law if passed by the House.
CHAIR KREISS-TOMKINS said with all respect to the work done in
the Senate, the committee would still like to hear from DOL.
4:03:17 PM
REPRESENTATIVE KAUFMAN inquired about the council's funding
structure.
4:04:14 PM
CHAIR KREISS-TOMKINS held that line of questioning for the next
bill hearing. He announced that SB 71 was held over.
HB 234-POLITICAL CONTRIBUTION LIMITS
4:05:05 PM
CHAIR KREISS-TOMKINS announced that the final order of business
would be HOUSE BILL NO. 234, "An Act relating to political
contributions; and providing for an effective date." [Before
the committee was Version I, adopted as the working draft on
2/1/22.]
4:06:19 PM
REPRESENTATIVE CLAMAN announced that Amendment 1 and Amendment 2
would not be offered.
4:06:54 PM
REPRESENTATIVE EASTMAN moved to adopt Amendment 3, [labeled 32-
LS1197\I.9, Bullard, 2/14/22], which read as follows:
Page 2, lines 18 - 19:
Delete "Beginning in the first quarter of
calendar year 2032 and every 10 years thereafter"
Insert "In the first quarter of each year"
Page 2, line 21:
Delete "10-year period "
Insert "year"
Page 2, line 22, following "increment.":
Insert "The adjustment takes effect May 1 of each
year."
REPRESENTATIVE KREISS-TOMKINS objected for the purpose of
discussion.
4:07:04 PM
REPRESENTATIVE EASTMAN remarked:
I value the discussion and conversation that we did on
a previous bill, which had this same amendment, and I
thought the work compromise that we came to together
on that was probably more preferable than the language
here but as this was offered some time ago, there
hasn't been an opportunity to adjust the language
there, but certainly wouldn't oppose doing that.
4:07:33 PM
REPRESENTATIVE CALVIN SCHRAGE, Alaska State Legislature, opined
that adjusting the contribution limits annually could cause
additional confusion and artificially inflate the contribution
limit. He expressed his opposition to Amendment 3.
REPRESENTATIVE CLAMAN agreed with the bill sponsor. He believed
that the public would be better served by adjusting the
contribution limits at the same time as redistricting so that
changes occurred simultaneously. He stated his opposition to
Amendment 3.
4:09:54 PM
REPRESENTATIVE EASTMAN opined that without Amendment 3, the bill
would effectively lack inflation proofing. He believed that if
the 10-year timeframe was maintained, a future legislature would
find itself in the same predicament.
CHAIR KREISS-TOMKINS shared his conflicting feelings. He
explained that as a "policy vacuum," he preferred annual
inflation adjustment; however, from a systems management
perspective, he was compelled by the argument that adjusting
contribution limits was a large recurring change that should
coincide with the redistricting cycle for consistency on a
decadal basis.
4:13:03 PM
REPRESENTATIVE KAUFMAN spoke of natural cycles that occur on a
two-year, four-year, and ten-year basis. He suggested selecting
a cycle with a shorter cadence than ten years to negate some of
the concerns.
REPRESENTATIVE VANCE pointed out that if the legislature chose
not to limit freedom of speech by means of political
contribution, inflation wouldn't be an issue in regard to this
matter.
CHAIR KREISS-TOMKINS said, "Sounds like that's an endorsement of
no contribution limits at all."
4:14:29 PM
REPRESENTATIVE TARR reflected on increasing the minimum wage,
which included a CPI adjustment. She pointed out that the high
inflation at present was an unusual circumstance related to the
pandemic and the supply chain disruption, which was causing the
high demand.
REPRESENTATIVE STORY pointed out that some people felt their
speech was limited by their income, as they could not donate as
much as a wealthy person.
4:16:07 PM
REPRESENTATIVE EASTMAN opined that the days of low inflation
were done unless the U.S. decided to overhaul its entire
financial system. He stated that without inflation adjustments,
the contribution limits would decrease over time, which would
eventually lead to intervention by the courts.
4:17:48 PM
A roll call vote was taken. Representatives Vance, Kaufman, and
Eastman voted in favor of the adoption of Amendment 3.
Representatives Tarr, Story, Claman, and Kreiss-Tomkins voted
against it. Therefore, Amendment 3 failed by a vote of 3-4.
4:18:21 PM
CHAIR KREISS-TOMKINS moved to adopt Amendment 4, [labeled 32-
LS1197\I.10, Bullard, 2/21/22], which read:
Page 1, line 6:
Delete "$1,000 [$500] per year"
Insert "$2,000 each campaign period [$500 PER
YEAR]"
Page 1, line 7, following the second occurrence of
"candidate,":
Insert "or"
Page 1, lines 8 - 9:
Delete ", or to a group that is not a political
party"
Insert "[, OR TO A GROUP THAT IS NOT A POLITICAL
PARTY]"
Page 1, line 10, following "party":
Insert "or other group"
Page 1, lines 13 - 14:
Delete "$2,000 [$1,000] per year
(1)"
Insert "(1) $4,000 each campaign period [$1,000
PER YEAR
(1)]"
Page 2, line 1, following "(2)":
Insert "$5,000 each year"
Page 2, line 4:
Delete "$2,000 [$1,000] a year"
Insert "(1) $4,000 each campaign period [$1,000
A YEAR]"
Page 2, line 5, following the second occurrence of
"candidate,":
Insert "or"
Page 2, line 6, following "candidate":
Delete ", to a group,"
Insert ";
(2) $5,000 each year [,] to a group [,]"
Page 2, lines 11 - 12:
Delete "$2,000 [$1,000] per year"
Insert "$4,000 each campaign period [$1,000 PER
YEAR]"
Page 2, line 13:
Delete "$4,000 [$2,000] per year"
Insert "$8,000 each campaign period [$2,000 PER
YEAR]"
Page 2, line 18:
Delete "2032"
Insert "2031"
Page 2, following line 22:
Insert new bill sections to read:
"* Sec. 6. AS 15.13.110(i) is amended to read:
(i) During a campaign period, the commission may
not change the manner or format in which reports
required of a candidate under this chapter must be
filed. [IN THIS SUBSECTION, "CAMPAIGN PERIOD" MEANS
THE PERIOD BEGINNING ON THE DATE THAT A CANDIDATE
BECOMES ELIGIBLE TO RECEIVE CAMPAIGN CONTRIBUTIONS
UNDER THIS CHAPTER AND ENDING ON THE DATE THAT A FINAL
REPORT FOR THAT SAME CAMPAIGN MUST BE FILED.]
* Sec. 7. AS 15.13.400 is amended by adding a new
paragraph to read:
(20) "campaign period" means the period
beginning on the date that a candidate becomes
eligible to receive campaign contributions under this
chapter and ending on the date that a final report for
that same campaign must be filed."
Renumber the following bill section accordingly.
REPRESENTATIVE EASTMAN objected.
REPRESENTATIVE CLAMAN objected for the purpose of discussion.
4:18:52 PM
ERIK GUNDERSON, Staff, Representative Calvin Schrage, Alaska
State Legislature, explained that Amendment 4 would increase the
contribution limit and implement per-campaign period limits, as
opposed to annual limits. The amendment would also change the
inflation adjustment date to begin 2031 and every 10 years
thereafter. Additionally, Amendment 4 defined "campaign period"
and noted that the Alaska Political Offices Commission (APOC)
may not change the manner or format in which reports were
required of candidates during the campaign cycle.
4:21:02 PM
REPRESENTATIVE EASTMAN inquired about the impact on future
campaign account provisions.
MR. GUNDERSON said the changes in Amendment 4 would not impact
the current status of future campaign accounts.
REPRESENTATIVE EASTMAN inquired about the benefits of redefining
a "campaign period."
MR. GUNDERSON recalled the courts highlighting a barrier to
entry for challengers that run for office, as most challengers
file during an election year whereas incumbents typically
fundraise year-round. He believed that a per-campaign cycle
would place challengers and incumbents on the same playing field
with the same limits regardless of when they enter the race.
REPRESENTATIVE EASTMAN asked how APOC would interpret the
proposed language on Page 3, lines 5-7, of Amendment 4.
4:23:54 PM
REPRESENTATIVE SCHRAGE deferred to APOC.
4:25:05 PM
TOM LUCAS, Alaska Public Offices Commission, asked
Representative Eastman to restate the question.
4:25:17 PM
REPRESENTATIVE EASTMAN restated the question, asking whether the
language on page 3, lines 5-7, of Amendment 3 would interfere
with the uniformity of campaign periods.
MR. LUCAS understood that the campaign period could be different
for each candidate, as the campaign period would begin on the
date a letter of intent was filed. Regardless of the number of
days in each individual candidate's campaign period, the
contribution limit would be the same.
4:27:34 PM
The committee took a brief at-ease.
4:28:04 PM
REPRESENTATIVE CLAMAN sought to confirm that under current
statute, there was a limited period of time within which the
candidate was allowed to collect contributions.
MR. LUCAS confirmed.
REPRESENTATIVE CLAMAN asked what that period of time was.
MR. LUCAS answered 18 months prior to the election.
REPRESENTATIVE CLAMAN remarked:
It doesn't increase the amount of contributions
available it just gets to the period of time within
which I can accept contributions and that actually
isn't just driven by when I file my letter of intent,
it's also by the statute that limits the period within
which I can collect contributions.
MR. LUCAS confirmed.
REPRESENTATIVE CLAMAN sought to confirm that the window for
collecting contributions was 18 months before the election,
which was somewhat further limited by when the candidate filed a
letter of intent. He reiterated that in no event could that
period be longer than 18 months. He asked if that was correct.
MR. LUCAS confirmed.
REPRESENTATIVE CLAMAN said it didn't get much clearer: the
campaign period was the 18-month period limited by the filing
date. He believed that the purpose of defining "campaign
period" was to provide that clarity.
4:30:30 PM
REPRESENTATIVE EASTMAN suggested changing the language on page
3, line 6, of Amendment 4 from "a candidate becomes eligible to
receive campaign contributions" to "a candidate becomes eligible
to file for office" to clarify the intent.
REPRESENTATIVE TARR believed that the suggested language would
be problematic because fundraising was allowed prior to filing.
She opined that the existing language in Amendment 4 was clear
and should not be confused by trying to incorporate a reference
to filing for office with the Division of Elections (DOE).
4:32:16 PM
REPRESENTATIVE EASTMAN believed that the statement made by
Representative Tarr further proved his point. He shared his
understanding that candidates could fundraise before filing for
office but not before they were eligible to file, which
initiated the 18-month window. He opined that if the campaign
period, by definition, were to begin when a candidate filed for
office, it would be uniform for all candidates in the election
cycle.
4:33:10 PM
REPRESENTATIVE CLAMAN read a lengthy statement regarding the
U.S. Supreme Court's decision in Citizens United v. Federal
Election Commission in 2010, as well as McCutcheon v. Federal
Election Commission in 2014. He concluded that the alignment
between the average dividend amount for a two-year period and
the proposed $2,000 campaign period limit on an individual
contribution was a significant factor that should be considered
in looking at the proposed amendment. For that reason, he said
he was in support of Amendment 4 and instituting a $2,000
individual limit.
4:39:47 PM
REPRESENTATIVE EASTMAN acknowledged that changing the campaign
period would provide clarity for the public's understanding;
however, he believed it didn't relate to future campaign account
provisions. He pointed out that if a candidate wanted to take
money from a future campaign account, the $4,000 limit wouldn't
apply.
4:41:13 PM
REPRESENTATIVE CLAMAN withdrew his objection.
REPRESENTATIVE EASTMAN withdrew his objection. There being no
further objection, Amendment 4 was adopted.
CHAIR KREISS-TOMKINS invited comments on the bill, as amended.
4:41:46 PM
REPRESENTATIVE TARR asked whether a different effective date
should be considered.
REPRESENTATIVE SCHRAGE deferred to Mr. Gunderson.
4:43:10 PM
MR. GUNDERSON conveyed that with the effective date occurring
after APOC's advisory opinion was implemented, candidates would
not be statutorily required to repay any money they had raised;
however, they couldn't raise any additional funds. He provided
an example in which a candidate raised an aggregate of $2,501
over the past two years, noting that the candidate could not
raise beyond the $2,000 limit, per CSHB 234, Version I, as
amended.
4:43:58 PM
REPRESENTATIVE TARR asked whether the $501 would need to be
reported and returned.
REPRESENTATIVE SCHRAGE shared his understanding that as long as
contributions received to date were in line with APOC's advisory
decision, no donations would need to be returned to donors. He
reiterated that a candidate who received more than $2,000 could
retain those donations, as they were presumably gathered before
the proposed legislation went into effect. He noted that the
candidate in question would not be allowed to receive any
additional funds from those donors.
4:45:22 PM
REPRESENTATIVE EASTMAN believed that the explanation provided by
the bill sponsor put a different view on the underlying
legislation, opining that it would effectively benefit incumbent
candidates. He recommended solving the disparity by making the
bill go into effect at the end of the current campaign period.
4:46:27 PM
REPRESENTATIVE SCHRAGE conceded that the bill would retain a
temporary advantage for incumbents. However, he noted that the
incumbent advantage already existed to a greater degree under
the current system. He pointed out that if the effective date
were to begin at the next campaign period, all candidates would
be subject to APOC's advisory opinion until that time, which was
perceived to lack any true authority by some.
4:48:21 PM
REPRESENTATIVE CLAMAN shared his understanding that the majority
of the public supported campaign contribution limits and did not
pay attention to the incremental progress on those issues. He
opined that reinstituting reasonable limits would show the
public that the legislature was responding to their concerns.
4:49:08 PM
REPRESENTATIVE CLAMAN moved to report CSHB 234, Version 32-
LS1197\I, Bullard, 1/22/22, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 234(STA) was moved from the House
State Affairs Standing Committee.
4:50:05 PM
CHAIR KREISS-TOMKINS made a motion to authorize the chair of the
House State Affairs Standing Committee to introduce a committee
bill relating to the Alaska Permanent Fund Corporation's
investment and divestment in assets relating to Russia.
REPRESENTATIVE EASTMAN objected for the purpose of discussion.
4:50:24 PM
CHAIR KREISS-TOMKINS discussed the committee process regarding
committee sponsored legislation and his general intention for
the motion.
4:51:47 PM
REPRESENTATIVE EASTMAN referenced a bill he had sponsored
relating to divestment. He expressed his hope that the bill
would not be urging Alaska Permanent Fund Corporation (APFC) to
"ditch" investments immediately. He asked Chair Kreiss-Tomkins
how that would work.
CHAIR KREISS-TOMKINS answered, "TBD [to be decided]." He said
he would be happy to share a copy of the draft legislation with
the committee and incorporate feedback.
REPRESENTATIVE VANCE found it "interesting" that this discussion
was happening now, as opposed when Russia embargoed Alaska
seafood in 2013. She encouraged the committee to act with
prudency.
REPRESENTATIVE TARR expressed her support for the motion.
REPRESENTATIVE STORY believed that time was of the essence to
send a clear message regarding Ukraine.
4:55:31 PM
REPRESENTATIVE EASTMAN asked how much was currently invested in
Russian assets; further, he sought further clarification on the
asset classes that would be divested from.
CHAIR KREISS-TOMKINS, referencing an Anchorage Daily News (ADN)
article, reported that APFC had circa $200 million invested in
Russian assets. He shared his understanding that most were
equities in Russian companies, such as oil and gas companies and
banks. He said this was the type of question to "thoroughly
probe" during the committee process with APFC.
REPRESENTATIVE EASTMAN indicated his opposition to investing in
entities that were attempting to eliminate another country's
sovereignty; however, from an economic perspective, he suspected
that Russian assets would be significantly depressed in value.
He recommended waiting before divesting, as making such a swift
political statement could be costly.
CHAIR KREISS-TOMKINS agreed that such a decision should be fully
vetted before taking action on it.
5:00:06 PM
REPRESENTATIVE EASTMAN maintained his objection.
5:00:47 PM
A roll call vote was taken. Representatives Tarr, Story,
Claman, and Kreiss-Tomkins voted in favor of the motion.
Representatives Eastman, Vance, and Kaufman voted against it.
Therefore, the motion passed by a vote of 4-3.
5:01:51 PM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 5:01
p.m.