Legislature(2009 - 2010)CAPITOL 106

02/03/2009 08:00 AM STATE AFFAIRS


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08:08:15 AM Start
08:09:12 AM HB42
09:49:52 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 42 LEG STUDY GROUP:ONLINE CAMPAIGN REPORTING TELECONFERENCED
Heard & Held
HB  42-LEG STUDY GROUP:ONLINE CAMPAIGN REPORTING                                                                              
                                                                                                                                
CHAIR LYNN  announced that the  only order of business  was HOUSE                                                               
BILL NO. 42, "An Act  establishing the Legislative Study Group on                                                               
the  Establishment  of  an Immediate  Online  Political  Campaign                                                               
Reporting  System; and  directing the  study group  to prepare  a                                                               
report on the possibility of  creating an immediate, online state                                                               
political campaign reporting system."                                                                                           
                                                                                                                                
8:09:35 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN explained that there  is a committee substitute in the                                                               
committee  packet which  would make  a  single change  to HB  42,                                                               
which  is to  specify that  the  chair of  the study  group be  a                                                               
legislative member.                                                                                                             
                                                                                                                                
8:09:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WILSON moved  to adopt  the committee  substitute                                                               
(CS) for HB  42, Version 26-LS0226\E, Bullard, 2/2/09,  as a work                                                               
draft.   There  being  no  objection, Version  E  was before  the                                                               
committee.                                                                                                                      
                                                                                                                                
8:10:10 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  introduced HB  42 as  prime sponsor.   He said  HB 42                                                               
would  establish   a  study  group   that  would   determine  the                                                               
feasibility  of  establishing  an  online  campaign  banking  and                                                               
reporting   system    that   would   instantly    make   campaign                                                               
contributions  and  expenditures  visible   to  the  world.    He                                                               
credited the  idea for the bill  to the late Father  Tom Moffatt,                                                               
his first  chief of staff.   He said he has  informally discussed                                                               
the idea  with the  Alaska Public  Offices Commission  (APOC) and                                                               
others,  beginning  with his  first  involvement  with the  House                                                               
State  Affairs Standing  Committee  in 2003,  and  now, with  the                                                               
advances  in   Internet  technology  and  banking   software,  he                                                               
believes the  gap between  the vision and  the reality  of making                                                               
instant reporting possible has narrowed significantly.                                                                          
                                                                                                                                
CHAIR  LYNN  said  current reporting  only  presents  a  campaign                                                               
disclosure "snapshot," which is only  accurate on the date of the                                                               
report, and  dishonest candidates  are able to  hide information.                                                               
He explained  that contributions  from "controversial  people" or                                                               
political action  committees (PACs) can be  deposited right after                                                               
a  report due  date to  delay political  repercussions until  the                                                               
next report.  Furthermore, candidates  can delay large media buys                                                               
until immediately after a due  date, thereby keeping opponents in                                                               
the  dark  about an  "upcoming  television  onslaught."   Another                                                               
tactic is to scribble handwritten  campaign reports and mail them                                                               
to the  state before midnight  on the  due date, which  makes the                                                               
report  on time  but delays  transcription of  the report  to the                                                               
Internet.   Such  tactics can  hinder Alaskans  from getting  the                                                               
campaign  transparency they  deserve  in a  timely manner,  Chair                                                               
Lynn said,  which defeats the  purpose of a  campaign disclosure.                                                               
The  advent of  "early  voting" amplifies  the  need for  instant                                                               
reporting, he remarked.                                                                                                         
                                                                                                                                
8:13:45 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN said the online  reporting system that the study group                                                               
would consider  would be similar  to the system currently  in use                                                               
by individuals  with their  own accounts,  accept that  anyone in                                                               
the  world   could  see  the  information   without  a  password.                                                               
Campaign contributions would show  up immediately when deposited,                                                               
while campaign  expenditures would  be displayed on  the Internet                                                               
as soon as  the vendor cashed the campaign  expenditure check, he                                                               
said.   Instant,  online campaign  banking  could be  implemented                                                               
through a  bid process from  Alaska banks to perform  the service                                                               
for  a fee  to be  paid  by the  state, the  candidate, or  both.                                                               
Another option,  he suggested, could  be for software to  be made                                                               
available to  an Alaska  bank of the  candidate's choosing.   Yet                                                               
another choice could be for  banks to develop their own software,                                                               
modified from the online banking software currently in use.                                                                     
                                                                                                                                
CHAIR  LYNN said  in order  to conform  to current  requirements,                                                               
instant,   online  reporting   would  need   to  display   names,                                                               
addresses, occupations,  and employers of  campaign contributors,                                                               
and  would  need   to  show  "who  receives   what"  in  campaign                                                               
expenditures.                                                                                                                   
                                                                                                                                
CHAIR LYNN  asked the committee  not to overcomplicate  the bill.                                                               
He reminded  committee members  that there is  no need  to figure                                                               
out how everything  would work, because the  study group proposed                                                               
by the  bill would do that.   The major questions  to be answered                                                               
by the study group proposed by HB 42 are there, he said.                                                                        
                                                                                                                                
CHAIR LYNN said  there are three questions to be  posed by HB 42:                                                               
Would  instant campaign  reporting  be good  public  policy?   Is                                                               
instant  campaign reporting  technically  feasible?   Is  Instant                                                               
campaign  disclosure  financially  feasible?   The  task  of  the                                                               
committee is  to decide  whether it  is a good  idea for  a study                                                               
group  to consider  those  questions.   Chair  Lynn concluded  by                                                               
noting that  Alaska would  be the  first state  in the  nation to                                                               
adopt instant, online reporting.   He encouraged the committee to                                                               
"let Alaska lead the way for the rest of the country."                                                                          
                                                                                                                                
8:16:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON   stated  his  support  of   the  instant                                                               
reporting  of income,  but  said  there are  too  many ways  that                                                               
instant  reporting  of  expenses   could  be  problematic.    For                                                               
example, he  noted that the print  shop he used for  his campaign                                                               
did not  submit its bill  until the day  after the election.   He                                                               
indicated that  it is  his business to  strategize how  he spends                                                               
his campaign  money, but the  public has a  right to know  who is                                                               
financing his campaign.  He offered a further example.                                                                          
                                                                                                                                
8:20:11 AM                                                                                                                    
                                                                                                                                
PATTY  WARE,  Regulation  of   Lobbying,  Alaska  Public  Offices                                                               
Commission  (APOC), Juneau,  Alaska, in  response to  Chair Lynn,                                                               
said under  the current system,  a candidate reports the  name of                                                               
the  person or  entity  whom he/she  paid.   For  example, if  an                                                               
expenditure  is paid  out  to  a television  station  or a  large                                                               
public media "buy," that is what  would be listed on the campaign                                                               
report.   In response  to a follow-up  question from  Chair Lynn,                                                               
she confirmed that the reporting  is not broken down further than                                                               
that.                                                                                                                           
                                                                                                                                
REPRESENTATIVE   JOHNSON  responded,   "If   we   have  to   make                                                               
advertising agencies report to APOC  every penny they spend on an                                                               
ad, you're  going to probably  find an  opponent to this  type of                                                               
legislation."                                                                                                                   
                                                                                                                                
CHAIR LYNN said the bill  does not entertain that requirement; it                                                               
simply proposes  that a  study group form  to decide  what should                                                               
and should not be included in instant reporting.                                                                                
                                                                                                                                
REPRESENTATIVE JOHNSON  opined that  if [instant reporting]  is a                                                               
good policy, then  the legislature should make  it happen through                                                               
the committee process; a study group is not necessary.                                                                          
                                                                                                                                
MICHAEL  SICA,  Staff,  Representative  Bob  Lynn,  Alaska  State                                                               
Legislature, testifying  on behalf of Representative  Lynn, prime                                                               
sponsor,  said  he  understands what  Representative  Johnson  is                                                               
saying.  He said  he thinks the intent of the  sponsor is for the                                                               
proposed  study  group to  bring  back  a recommendation  to  the                                                               
legislature,  at which  point, the  legislature would  go through                                                               
its critical process of decision making.                                                                                        
                                                                                                                                
8:24:51 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON said most legislators  are on the road most                                                               
of the time;  therefore, campaign checks mailed to  the home base                                                               
may not  be deposited for three  weeks.  She said  the bill would                                                               
create a  situation in which  only those legislators who  can get                                                               
home  each  night  would be  reporting  contributions  instantly.                                                               
Furthermore,  she noted  that in  Wrangell there  is no  printing                                                               
service, so she cannot even order signs locally.                                                                                
                                                                                                                                
CHAIR  LYNN remarked  that with  or without  this legislation,  a                                                               
campaign check has to be deposited as soon as possible.                                                                         
                                                                                                                                
REPRESENTATIVE WILSON  reiterated her concern about  the issue of                                                               
fairness and how  the bill may end up affecting  those who cannot                                                               
get home each night versus those who can.                                                                                       
                                                                                                                                
CHAIR LYNN  said, "It would still  be more rapid than  the way we                                                               
do it today on paper."                                                                                                          
                                                                                                                                
8:29:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN  said  he sees  Representative  Wilson's                                                               
point.   He said if  the requirement  is made to  report campaign                                                               
finance instantly  and a  candidate is  in remote  Alaska, he/she                                                               
may be forced to hire a  treasurer to ensure the reports are made                                                               
[instantly], and that would make campaigns more expensive.                                                                      
                                                                                                                                
CHAIR  LYNN said  he thinks  this legislation  could "lessen  the                                                               
hurdle," because  the candidate  or his/her volunteer  could just                                                               
go to the bank  and make a deposit and the  deposit would show up                                                               
on an online banking account for the public's viewing.                                                                          
                                                                                                                                
REPRESENTATIVE PETERSEN  asked Chair Lynn  to confirm that  he is                                                               
proposing  a program  that  would have  access  to a  candidate's                                                               
campaign banking  account number  so that as  soon as  a campaign                                                               
deposit  is  made   at  the  bank,  that   information  would  be                                                               
immediately listed online.                                                                                                      
                                                                                                                                
CHAIR LYNN indicated  that is his intent.  He  clarified that the                                                               
public  would not  be able  to  make changes  online because  the                                                               
information would be "read only."                                                                                               
                                                                                                                                
REPRESENTATIVE  PETERSEN  said  it  would be  tempting  for  some                                                               
people who are computer savvy to hack into the information.                                                                     
                                                                                                                                
8:33:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG   recollected  that   past  legislation                                                               
designed to set  up study groups was introduced in  the form of a                                                               
concurrent resolution.                                                                                                          
                                                                                                                                
REPRESENTATIVE JOHNSON indicated that that is his understanding.                                                                
                                                                                                                                
CHAIR LYNN cautioned against overcomplicating the process.                                                                      
                                                                                                                                
8:35:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON  said she does not  think [full disclosure]                                                               
will occur simply by instantly  reporting a bank deposit, because                                                               
a  deposit does  not specify  how many  checks are  in it  or the                                                               
source of  those checks.   She said online banking  and reporting                                                               
are two different things.                                                                                                       
                                                                                                                                
CHAIR LYNN  related that  when he gets  five campaign  checks, he                                                               
makes five deposits.                                                                                                            
                                                                                                                                
REPRESENTATIVE WILSON  responded, "I would  go crazy if I  had to                                                               
do that."                                                                                                                       
                                                                                                                                
MR. SICA  clarified that the  idea of the  sponsor is not  that a                                                               
check  must  be   instantly  deposited,  but  that   once  it  is                                                               
deposited, it would be instantly reported to the public.                                                                        
                                                                                                                                
REPRESENTATIVE JOHNSON  said he  includes multiple checks  in one                                                               
deposit, and  there is nowhere in  a bank account where  a person                                                               
has copies of the checks he/she deposited.                                                                                      
                                                                                                                                
CHAIR LYNN said he makes copies of his checks.                                                                                  
                                                                                                                                
REPRESENTATIVE JOHNSON  said he  does also,  but noted  that that                                                               
copy would  not be available to  the public online.   In response                                                               
to  Chair Lynn,  he  said in  theory, the  bank  runs each  check                                                               
through a machine.                                                                                                              
                                                                                                                                
CHAIR LYNN  said that is  the type of  thing a study  group could                                                               
figure out.  He added his  wish to have a representative from the                                                               
banking community serve on the proposed study group.                                                                            
                                                                                                                                
REPRESENTATIVE JOHNSON remarked, "I  would certainly like to hear                                                               
from someone from the bank, because  I think we're asking them to                                                               
change the way  they do business."  He added  that he thinks that                                                               
would be expensive.                                                                                                             
                                                                                                                                
MR. SICA  suggested that  Ms. Ware explain  to the  committee how                                                               
checks are currently handled.                                                                                                   
                                                                                                                                
8:38:41 AM                                                                                                                    
                                                                                                                                
MS. WARE  revealed to the committee  that APOC is already  in the                                                               
midst of  development of an online,  electronic reporting system.                                                               
The online,  electronic reporting for lobbyists  and employers of                                                               
lobbyists  was  deployed  in  February  of  2008.    The  current                                                               
contractor is also responsible for  building online reporting for                                                               
public  official financial  disclosure, as  well as  for campaign                                                               
disclosure, she  noted.  The  latter disclosure, she  relayed, is                                                               
not slated to be deployed until  sometime in 2010.  Regarding the                                                               
detailed  and complex  questions  the committee  has regarding  a                                                               
deposit  slip comprising  multiple  text, for  example, she  said                                                               
were the  bill to pass and  the study group tackle  some of these                                                               
issues, that  group may  wish to  consider the  interface between                                                               
any kind  of online  banking system and  the existing  forms that                                                               
"you all" are all ready required to fill out by APOC.                                                                           
                                                                                                                                
MS.  WARE said  APOC  appreciates that  the proposed  legislation                                                               
designates that an  APOC representative would be a  member of the                                                               
study group;  however, she  said APOC would  want to  ensure that                                                               
the  study  group  learned  from the  lessons  APOC  has  learned                                                               
through  its  experience  thus  far in  regard  to  the  lobbyist                                                               
reporting system.   She stated that APOC is  committed to working                                                               
with the legislature if HB 42 is passed.                                                                                        
                                                                                                                                
REPRESENTATIVE  WILSON  commented  that she  already  gives  APOC                                                               
information on  each check deposited,  including the name  on the                                                               
check and who  the person's employer is; therefore,  she said she                                                               
does not know if this bill is necessary.                                                                                        
                                                                                                                                
8:42:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN said he can  see how having more and more                                                               
reporting  done  electronically  would be  convenient  for  APOC,                                                               
because reading long  hand can be a nightmare.   However, he said                                                               
at this point he still needs some questions answered.                                                                           
                                                                                                                                
8:43:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG asked Ms.  Ware, "Is this something that                                                               
APOC could undertake without legislation?"                                                                                      
                                                                                                                                
MS. WARE  responded by  reiterating that APOC  is already  in the                                                               
midst  of  working  toward  online reporting.    She  noted  that                                                               
currently,  the  electronic  filing   system  for  lobbyists  and                                                               
employers is not available to the  public.  She said APOC has not                                                               
yet reached  Chair Lynn's dream  of immediate  accessibility, but                                                               
is working toward it.                                                                                                           
                                                                                                                                
8:45:06 AM                                                                                                                    
                                                                                                                                
CRAIG FISHER, CEO,  PangoMedia, Inc., told the  committee that he                                                               
became  involved in  software  engineering  for approximately  15                                                               
years.   He addressed the  three key questions outlined  by Chair                                                               
Lynn during  his presentation of  the bill.  Regarding  the first                                                               
question, whether [instant  reporting] is good for  the state, he                                                               
said  as  a  citizen  he   supports  increased  transparency  [in                                                               
politics].   Furthermore, he said  more rapid response,  in terms                                                               
of who  is financing what,  seems even  more important in  an age                                                               
when early voting is become more popular.                                                                                       
                                                                                                                                
MR.  FISHER,  regarding  whether  instant,  online  reporting  is                                                               
technically feasible, said  he is fairly certain that it  is.  To                                                               
the question  of whether  or not it  is financially  feasible, he                                                               
said that is  a more difficult question to answer.   He said part                                                               
of his work involves figuring out  how much money it will take to                                                               
do a project early on in  that project, and he said "this doesn't                                                               
seem like  an incredibly  complicated project."   He  agreed that                                                               
there would be a challenge regarding  security, and he said it is                                                               
wise  to  include  bank representatives  in  the  proposed  study                                                               
group.                                                                                                                          
                                                                                                                                
MR.  FISHER,  in  response  to  a  question  from  Representative                                                               
Wilson, said  it would be  incredibly difficult at this  point to                                                               
give even a  rough estimate of what the  necessary software would                                                               
cost  the  state.   In  response  to  a follow-up  question  from                                                               
Representative Wilson, he said he does  not need to know how much                                                               
someone has available to spend in  order to tell him/her how much                                                               
something will cost.  He offered an example.                                                                                    
                                                                                                                                
8:53:07 AM                                                                                                                    
                                                                                                                                
ANDY  ROGERS,  President/CEO,  PangoMedia,   Inc.,  read  from  a                                                               
prepared statement as follows:                                                                                                  
                                                                                                                                
     Immediate, online availability of campaign finance                                                                         
     information will be a fantastic resource for voters.                                                                       
     It will provide what I see as a necessary level of                                                                         
     transparency into the electoral process that is sorely                                                                     
     missing today.  As a born and raised Alaskan father,                                                                       
     husband, employer, and voter, I am excited that our                                                                        
     state's legislators would consider leading the country                                                                     
     in this effort.                                                                                                            
                                                                                                                                
     ... As a software professional, I am well-qualified to                                                                     
     speak to the probable success and the likely pitfalls                                                                      
     associated with this initiative.  I can plainly say                                                                        
     that the technology does exist to make this a reality.                                                                     
     We need only to align the interests of policy makers,                                                                      
     potential candidates, banking institutions, voters,                                                                        
     and current regulatory bodies.  ... That may seem like                                                                     
     no small task and it's probably not; however, the                                                                          
     common threads of campaign ethics [and] contribution                                                                       
     transparency must drive the interests of all ...                                                                           
     stakeholders toward a simple, universal system that                                                                        
     provides immediate and complete access to all Alaskan                                                                      
     voters.                                                                                                                    
                                                                                                                                
     What then remains is to let talented professionals                                                                         
     define the security and the technical measures                                                                             
     necessary to protect sensitive account information,                                                                        
     ... [and] to identify the appropriate steward of the                                                                       
     system, be it the state, one or more of the banking                                                                        
     institutions, or perhaps even another third-party                                                                          
     vendor.                                                                                                                    
                                                                                                                                
     ... It seems almost nonsensical to ask, "Should we do                                                                      
     this?" The only real question is, "How should we do                                                                        
     this?"  ... More importantly, the potential                                                                                
     constituencies of all candidates will have a necessary                                                                     
     insight into detailed, complete contribution                                                                               
     information, without an increase in load and burden on                                                                     
     the candidates themselves, and they will have it                                                                           
     before they enter a voting booth.                                                                                          
                                                                                                                                
MR.  ROGERS  thanked Chair  Lynn  for  championing the  cause  of                                                               
increased  transparency in  government.   He said  as a  voter he                                                               
likes to see that kind of interest in his elected officials.                                                                    
                                                                                                                                
MR.  ROGERS,  in  response to  Representative  Wilson,  said  one                                                               
question to ask is,  "Should we do this?"  He  said he thinks the                                                               
answer is  a resounding yes.   Two other questions relate  to how                                                               
this is done and how much it will  cost.  Mr. Rogers said he does                                                               
not think  a single answer  can be found without  identifying the                                                               
options available.   He stated that banks  already employ similar                                                               
technology for reporting, and they  do it through a narrow window                                                               
-  they make  the information  available to  the account  holder.                                                               
The bank  itself has the  ability to access the  account holder's                                                               
information.   He said  it seems conceivable  that a  more public                                                               
view  could be  provided without  revealing certain  information.                                                               
He  suggested  that   the  state  would  need   to  leverage  the                                                               
technology  and   information  that  banks  have   spent  decades                                                               
developing and base its budgeting from that.                                                                                    
                                                                                                                                
MR. ROGERS suggested that another  opportunity may be to access a                                                               
vendor such as  Quicken, or some other  personal finance manager.                                                               
He said, "This may be a  market opportunity for them to provide a                                                               
campaign disclosure sweep of software."   Some of the costs could                                                               
be  transferred to  that company,  in terms  of developing  a new                                                               
product, and the company could  market the product to all states;                                                               
therefore, the absolutely  cost of the project may  slide one way                                                               
or the other, but would not be borne entirely by the state.                                                                     
                                                                                                                                
8:59:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN  asked  if   a  university  class  could                                                               
develop  software like  this as  a project  and then  sell it  to                                                               
other  states  and  make  money  on it,  rather  than  the  state                                                               
spending money to develop the program through a private company.                                                                
                                                                                                                                
MR. ROGERS responded that that is  the kind of idea he would like                                                               
to  see considered  by the  proposed study  group.   He said  his                                                               
company works closely  with the University of  Alaska - Anchorage                                                               
(UAA).  He talked about the good  work of interns from UAA at his                                                               
company, but suggested that the  level of experience necessary to                                                               
do a  project quickly and  provide project management may  not be                                                               
found at the university level,  but perhaps through a partnership                                                               
between university students and a vendor.                                                                                       
                                                                                                                                
REPRESENTATIVE PETERSEN talked about the need for a copyright.                                                                  
                                                                                                                                
9:03:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  said when he served  in the legislature                                                               
in  the  1980s there  was  a  special committee  that  considered                                                               
technology.  He  said this proposed bill is a  "foot in the door"                                                               
to  the state's  taking advantage  of and  developing the  latest                                                               
technological  concepts, and  he suggested  it might  behoove the                                                               
legislature to form a special committee on technology once more.                                                                
                                                                                                                                
CHAIR LYNN said that is an  excellent idea, but outside the scope                                                               
of the bill.                                                                                                                    
                                                                                                                                
9:05:38 AM                                                                                                                    
                                                                                                                                
MS. WARE, in response to  a question from Representative  Wilson,                                                               
said  she hopes  that the  aforementioned  work of  APOC will  be                                                               
completed  by  the  time  the proposed  study  group  sunsets  on                                                               
February 8,  2011.   She spoke again  about the  various modules:                                                               
lobbyist,  public official,  and  campaign disclosure  reporting.                                                               
She said  the reason the campaign  module is last on  the list is                                                               
because  it  is  the  most complicated;  there  are  more  forms,                                                               
multiple deadlines,  and the campaign  disclosure law  covers not                                                               
only state legislative campaigns,  but also municipal candidates.                                                               
Ms. Ware stated that there  are a number of complexities involved                                                               
in the process that APOC has  been undertaking in the last couple                                                               
of years as it has started on the road to electronic reporting.                                                                 
                                                                                                                                
REPRESENTATIVE  WILSON  asked  if  the  money  has  already  been                                                               
allocated.                                                                                                                      
                                                                                                                                
MS. WARE  responded that APOC  has funding  for phase two  of the                                                               
lobbyist module.   She said  APOC has some funding  available for                                                               
fiscal  year  2010   (FY  10),  but  she  said   it  is  probably                                                               
insufficient to complete everything on the list.                                                                                
                                                                                                                                
REPRESENTATIVE WILSON  said she  cannot imagine that  the banking                                                               
system in  its current makeup  would be willing to  "do something                                                               
like  this."   She asked,  "So, you're  able to  do this  without                                                               
having to go through a bank?"                                                                                                   
                                                                                                                                
MS.  WARE  answered that  is  correct.    In terms  of  immediate                                                               
accessibility to  the public,  the plan  is to  have a  number of                                                               
reporting capabilities  so that  the public  can "press  a button                                                               
and  see various  pieces of  information."   She said  that is  a                                                               
critical  part of  the system  in regarding  to transparency  and                                                               
disclosure to the public.                                                                                                       
                                                                                                                                
REPRESENTATIVE  WILSON related  that currently  she does  all her                                                               
[reporting] electronically.   She asked  if what she does  now is                                                               
what APOC would soon require of everyone.                                                                                       
                                                                                                                                
MS. WARE clarified  that when Representative   Wilson talks about                                                               
reporting  "electronically"  she  is talking  about  using  Excel                                                               
spreadsheets.  She explained that  that system would no longer be                                                               
used.   She said  the candidates  would fill  out forms  in their                                                               
accounts,  which would  be immediately  available  for their  own                                                               
review, and the forms would be certified and legally signed.                                                                    
                                                                                                                                
9:10:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON questioned  what  kind  of liability  the                                                               
state would  have if it  forced banks  to "take this  system" and                                                               
"open their doors to us"  and someone [hacked] into [the system].                                                               
He expressed  concern that the  state may be liable  for millions                                                               
of dollars  if that happened.   Because of that concern,  he said                                                               
he thinks the  proposed legislation should be heard  by the House                                                               
Judiciary Standing Committee.                                                                                                   
                                                                                                                                
CHAIR LYNN responded  that there is nothing in  the proposed bill                                                               
that contemplates forcing a bank to do anything.                                                                                
                                                                                                                                
REPRESENTATIVE  JOHNSON asked  if he  would be  forced to  change                                                               
banks  if  the  bank  he  currently goes  to  does  not  want  to                                                               
accommodate a new system.                                                                                                       
                                                                                                                                
CHAIR  LYNN said,  "Well, I  would  suppose, but  it's just  more                                                               
business for the bank.   Right now we choose the  bank we want to                                                               
go to."                                                                                                                         
                                                                                                                                
REPRESENTATIVE  JOHNSON observed  that the  bill does  direct the                                                               
study group  to consider  the technology of  specific banks.   He                                                               
said, "If we  pass this law, we  would be forcing the  bank to do                                                               
it, or forcing every  candidate to go to the one  bank."  He said                                                               
Representative  Wilson, for  example, may  not have  the required                                                               
bank branch in Wrangell, Alaska.                                                                                                
                                                                                                                                
CHAIR  LYNN said  that is  the type  of question  that the  study                                                               
group would need to solve.                                                                                                      
                                                                                                                                
9:15:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON directed  attention  to  the language  on                                                               
page 3, lines  1-2, which proposes that [the  study group prepare                                                               
a  report]  that  "reviews  how   the  technologies  employed  in                                                               
existing online banking systems that  are used by individuals and                                                               
businesses  to  monitor financial  transactions".    He said  the                                                               
language  is very  specifically instructing  the study  of online                                                               
banking and  does not explore  other options.  He  suggested that                                                               
if there is going  to be a study group, it  should not be limited                                                               
in  what  it  considers.     He  mentioned  NetFile,  an  instant                                                               
reporting company,  as an example  of another option  that should                                                               
not be excluded.                                                                                                                
                                                                                                                                
CHAIR  LYNN said  he  would not  be opposed  to  an amendment  to                                                               
include "or other entity."                                                                                                      
                                                                                                                                
REPRESENTATIVE   JOHNSON  responded   that  rather   than  adding                                                               
language, he  would suggest striking the  aforementioned language                                                               
to encourage all options.                                                                                                       
                                                                                                                                
9:17:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG mentioned  Title 6,  regarding banking,                                                               
and highly regulated federal banking  laws, and he said he thinks                                                               
that if some  entity is "charged with doing  this," it definitely                                                               
needs to work with those resources.   He suggested that the House                                                               
State Affairs Standing  Committee is equipped to  deal with these                                                               
issues.                                                                                                                         
                                                                                                                                
9:20:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN, regarding banks,  surmised that if there                                                               
would be  any additional  expense the bank  incurred in  order to                                                               
accept  campaign accounts,  it would  start charging  larger bank                                                               
fees to  political candidates.   He posited that that  would just                                                               
be another hurdle  that a candidate would have to  clear in order                                                               
to  keep his/her  campaign in  motion.   He said  he thinks  some                                                               
banks  may be  hesitant  to allow  candidates  to open  political                                                               
accounts  if  they  had  to   buy  additional  software  or  face                                                               
additional administrative costs.                                                                                                
                                                                                                                                
CHAIR  LYNN said  [costs] could  be  paid by  the candidate,  the                                                               
state,  the bank,  or "by  some combination  of the  three."   He                                                               
reiterated that it would be a business opportunity for the bank.                                                                
                                                                                                                                
REPRESENTATIVE PETERSEN  responded, "Right,  but it's  a business                                                               
opportunity that they would be charging fees for."                                                                              
                                                                                                                                
CHAIR LYNN commented that banks currently charge fees.                                                                          
                                                                                                                                
9:22:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON reiterated  that she likes the  end goal of                                                               
the bill,  but wants to check  to see if this  legislation should                                                               
be proposed  as a  resolution.  Furthermore,  she opined  that if                                                               
possible  to  do  another  way,  the banks  should  not  even  be                                                               
involved.  She  clarified that banks are not  involved in current                                                               
campaign disclosures  other than in holding  a candidate's money.                                                               
Candidates  report to  APOC currently,  which has  nothing to  do                                                               
with  the bank.   Representative  Wilson added,  "And I  think we                                                               
should keep it  that way."  She indicated that  she would like to                                                               
know if  what APOC has  "in the  works" accomplishes the  goal of                                                               
the bill  or not.   When those  questions are answered,  the bill                                                               
could be brought back to the  committee; it is not ready now, she                                                               
stated.                                                                                                                         
                                                                                                                                
CHAIR LYNN reiterated  that his concept is to have  a study group                                                               
work this out with APOC and other entities.                                                                                     
                                                                                                                                
9:24:39 AM                                                                                                                    
                                                                                                                                
MR. SICA relayed that he thinks  that not limiting this to online                                                               
banking  technology is  a good  idea.   He said  he loves  APOC's                                                               
confidence  regarding its  related  project;  however, he  thinks                                                               
things don't work  out always as planned.  He  suggested that the                                                               
committee should  not discount  online banking.   Mr.  Sica noted                                                               
that a bank executive with whom  he spoke seemed excited over the                                                               
idea of merging online banking  technology into online reporting;                                                               
Alaska could lead the way in this  regard.  He said banks are not                                                               
just in the  business of making money, but also  into bringing in                                                               
more  customers.   He  concluded,  "As  long  as we're  just  not                                                               
totally redundant with  what APOC's already doing,  a study group                                                               
with a fiscal note of $4,000 is not a waste of money."                                                                          
                                                                                                                                
9:26:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN said  he did not realize  the fiscal note                                                               
is $4,000.                                                                                                                      
                                                                                                                                
MR.  SICA,   in  response  to  a   question  from  Representative                                                               
Peterson, said  the bill  would provide two  years for  the study                                                               
group.   After  one  year,  there would  be  an interim  progress                                                               
report.  After the second year, recommendations would be made.                                                                  
                                                                                                                                
9:27:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  noted  that   one  way  campaigns  are                                                               
changing  is  through the  increasing  use  of credit  cards  for                                                               
contributions.    He  questioned  how  "this  concept"  would  be                                                               
affected through the use of credit cards.                                                                                       
                                                                                                                                
REPRESENTATIVE WILSON said  she uses a credit card.   She offered                                                               
her understanding  that within  24 hours, she  has to  "write the                                                               
check to cover that for the credit card company."                                                                               
                                                                                                                                
REPRESENTATIVE  GRUENBERG said  Representative Wilson  is talking                                                               
about credit card expenditure, while  he was talking about credit                                                               
cards used for  contribution.  He asked which  legislators in the                                                               
room have [been  given contribution via credit cards].   He noted                                                               
that Representatives Johnson and Petersen raised their hands.                                                                   
                                                                                                                                
9:28:58 AM                                                                                                                    
                                                                                                                                
MS.  WARE  said  she  cannot  answer  Representative  Gruenberg's                                                               
concern specifically, but she noted  that the lobbying electronic                                                               
filing  system has  a credit  card component,  in the  sense that                                                               
lobbyists have to  pay a registration fee, and most  of them want                                                               
to do so electronically.                                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG talked about  being careful with privacy                                                               
issues, and  he spoke of  the threat  from hackers.   He directed                                                               
attention to the language on page  3, and said he hopes the study                                                               
group would  be particularly sensitive to  protecting the privacy                                                               
not only of the candidates, but  also of the contributors and the                                                               
vendors  to  whom they  pay.    In  response  to Chair  Lynn,  he                                                               
clarified   that  currently   a  candidate   does  not   transmit                                                               
information electronically  that reveals the bank  account number                                                               
- just  the check  number.   He said  he does  not know  how this                                                               
would work, but is concerned about the issue of privacy.                                                                        
                                                                                                                                
CHAIR LYNN  said it is  nobody's business what his  campaign bank                                                               
account number is.                                                                                                              
                                                                                                                                
REPRESENTATIVE GRUENBERG offered his  understanding that if Chair                                                               
Lynn were  to make an  electronic deposit,  he would have  to let                                                               
the bank know the routing and checking account numbers.                                                                         
                                                                                                                                
CHAIR  LYNN said  a campaign  contribution check  would still  be                                                               
deposited as it is today; that is not done electronically.                                                                      
                                                                                                                                
9:36:08 AM                                                                                                                    
                                                                                                                                
CHRISTINA  ELLINGSON, Assistant  Director, APOC,  in response  to                                                               
Representative Wilson,  said currently there is  a 30-day, 7-day,                                                               
and 24-hour  reporting cycle designed around  the election cycle,                                                               
but  there  is  nothing  that   would  prohibit  reporting  in  a                                                               
different time period so that  the information would be available                                                               
instantaneously during that cycle.                                                                                              
                                                                                                                                
9:37:14 AM                                                                                                                    
                                                                                                                                
HOLLY HILL, Executive  Director, APOC, in response  to a question                                                               
from Representative  Wilson regarding APOC's  financial position,                                                               
said the agency currently has  a request in the governor's budget                                                               
for an appropriation of $175,000  to finish its electronic filing                                                               
project.   Currently, she  said, the project  is in  the lobbyist                                                               
phase,  and scheduled  for  2010  is the  remaining  work on  the                                                               
public official  financial disclosure, the  legislative financial                                                               
disclosure,  and  the campaign  disclosure.    In response  to  a                                                               
follow-up  question,  she  offered  her  understanding  that  the                                                               
request  for the  funds has  already been  made, and  it will  be                                                               
heard by the legislative body.                                                                                                  
                                                                                                                                
REPRESENTATIVE WILSON asked  for confirmation that "it  is in the                                                               
governor's budget."                                                                                                             
                                                                                                                                
[MS. WARE nodded.]                                                                                                              
                                                                                                                                
REPRESENTATIVE  GRUENBERG   noted  that  he   and  Representative                                                               
Johnson  serve  on  the House  Finance  Committee's  subcommittee                                                               
dealing with  the Department of Administration,  and he expressed                                                               
his wish  that APOC report  to that  subcommittee so that  it can                                                               
"follow up what's happening here."                                                                                              
                                                                                                                                
9:39:00 AM                                                                                                                    
                                                                                                                                
MS.  ELLINGSON, in  response to  a  question from  Representative                                                               
Petersen,  said the  only way  the aforementioned  30-day, 7-day,                                                               
and   24-hour  deadlines   would  disappear   would  be   if  the                                                               
legislature  changed   the  law,  because  currently   those  are                                                               
statutory requirements.                                                                                                         
                                                                                                                                
CHAIR LYNN  confirmed that's correct.   He added that  that would                                                               
be something  for the Twenty-Seventh Alaska  State Legislature to                                                               
consider.                                                                                                                       
                                                                                                                                
9:40:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  indicated that another option  that would                                                               
be as  unpalatable as involving a  bank would be to  require each                                                               
contributor to file that contribution with APOC.                                                                                
                                                                                                                                
CHAIR  LYNN asked  the committee  to think  about questions  they                                                               
would like addressed before the next hearing on the bill.                                                                       
                                                                                                                                
9:42:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON   reiterated  his  desire  to   have  the                                                               
language at  the top of  page 3 of  Version E replaced  with less                                                               
restrictive language.                                                                                                           
                                                                                                                                
9:43:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN said  he applauds  the basic  premise of                                                               
proposed legislation.                                                                                                           
                                                                                                                                
9:44:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON said she finds  it difficult to support the                                                               
formation  of a  study group,  when [APOC]  is already  doing the                                                               
work.                                                                                                                           
                                                                                                                                
9:44:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  referred back  to the topic  of whether                                                               
or not  the bill should be  a resolution.  He  cited Uniform Rule                                                               
49, subsection (a), paragraph (3), which read as follows:                                                                       
                                                                                                                                
                                                                                                                                
     (3) A concurrent resolution is similar to the simple                                                                       
     resolution but reflects the will, wish, view or                                                                            
     decision of both houses speaking concurrently. It is                                                                       
     used particularly to handle the internal business of                                                                       
     the legislature, e.g., adjournment of the legislature,                                                                     
     suspension and amendment of the Uniform Rules,                                                                             
     requesting action of executive agencies and interim                                                                        
     committees, and fixing the time and place for joint                                                                        
     assemblies. This resolution is also used for                                                                               
     establishing joint committees. This resolution does                                                                        
     not require committee referral, three readings, or                                                                         
     anything other than approval of a majority vote of the                                                                     
     full membership of each house unless otherwise                                                                             
     required by the rules.                                                                                                     
                                                                                                                                
                                                                                                                                
CHAIR LYNN said  his staff will investigate that  before the next                                                               
hearing on the bill.                                                                                                            
                                                                                                                                
9:46:07 AM                                                                                                                    
                                                                                                                                
[HB 42 was held over.]                                                                                                          
                                                                                                                                
9:46:23 AM                                                                                                                    
                                                                                                                                
[Following is  a discussion regarding  the upcoming  calendar and                                                               
the subject of addressing legislation with subcommittees.]                                                                      
                                                                                                                                
9:49:52 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
State Affairs Standing Committee meeting was adjourned at 9:49                                                                  
a.m.                                                                                                                            

Document Name Date/Time Subjects
HSTA - CS for HB42 Version E.pdf HSTA 2/3/2009 8:00:00 AM
HB 42
HSTA - HB 42 APOC Campaign Forms.pdf HSTA 2/3/2009 8:00:00 AM
HB 42
HSTA - HB 42 News Reports, Artilces for STA.PDF HSTA 2/3/2009 8:00:00 AM
HB 42
HSTA - HB 42 Research, Background for STA.PDF HSTA 2/3/2009 8:00:00 AM
HB 42
HSTA - HB42-LEG-COU-2-2-09.pdf HSTA 2/3/2009 8:00:00 AM
HB 42