Legislature(1995 - 1996)

01/25/1996 03:30 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 SSTA - 1/25/96                                                                
           SB 191 ELECTION CAMPAIGN FINANCE REFORM                           
 Number 001                                                                    
 CHAIRMAN SHARP called the Senate State Affairs Committee to order             
 at 3:30 p.m. and introduced  SB 191  as the first order of business           
 before the committee.  Chairman Sharp informed everyone that this             
 was a listen-only teleconference in order to receive an overview of           
 the initiative and a comparison to SB 191 from the sponsor of the             
 initiative.  There will be full public participation at future                
 meetings.  The chairman called the first witness.                             
 Number 050                                                                    
 MIKE FRANK, Campaign Finance Reform Now (CFRN) testifying from                
 Anchorage, informed the committee that SB 191 basically duplicated            
 the initiative.  There are a few stylistic and technical                      
 differences which are of no great significance.  He noted that                
 Representative James has a bill in the House which is practically             
 the same as the initiative.  Representative Finkelstein's version             
 is a little different in that his version incorporates some changes           
 suggested during an Alaskan Public Offices Commission(APOC) meeting           
 this Fall.                                                                    
 Mr. Frank recounted the history of the campaign finance reform                
 initiative.  In the 1980s, Governor Cooper introduced legislation             
 which would have restricted contributions to only individuals.                
 Over the years, other legislators have introduced campaign finance            
 reform measures.  He noted that there has been litigation regarding           
 across district contributions.  In 1993, an initiative banning                
 across district contributions was unsuccessful.  He mentioned the             
 continued controversy surrounding the issue of charitable gaming              
 monies being used to finance political activity.                              
 Number 090                                                                    
 Mr. Frank said that CFRN began in 1993 by researching this issue.             
 The group discovered that Representative Finkelstein had some bills           
 pending regarding campaign finance reform.  The group contacted               
 Representative Finkelstein who allowed them to utilize a mailing              
 list of persons interested in this issue.  The initial initiative             
 was filled in 1994.  During the period between the filing of the              
 initiative and its certification for circulation, the group                   
 received comments from the APOC staff.  The group then tinkered               
 with their initial draft in order to respond to the questions and             
 concerns of APOC.  In 1995, CFRN refiled the initiative and they              
 received circulation certification in April of that year.  The book           
 was published in May of 1995.  The group had over 400 volunteer               
 sponsors from a wide range of backgrounds with petition booklets.             
 CFRN began with a goal of 25,000 signatures which was raised to               
 28,000 signatures due to the incredible response.  They received              
 over 32,000 signatures of which 31,500 were submitted in December             
 of 1995; petition booklets continued to come in after that time.              
 Lieutenant Governor Ulmer certified the initiative on January 17,             
 1996.  The initiative is scheduled for the ballot in November of              
 1996.  Mr. Frank acknowledged that the legislature has a                      
 constitutionally-designated role and CFRN intends to cooperate.               
 Number 150                                                                    
 Mr. Frank believed that CFRN's volunteers as well as others                   
 supporting campaign finance reform are bound by the following                 
 beliefs:  the electoral process is a captive of the undue influence           
 of the money interest and that elected officials should be regarded           
 as the village elders of the state and local governments, however             
 the case is quite the opposite.  Campaign finance supporters                  
 realize that corruption is a direct consequence of an electoral               
 system which places incumbents and challengers on an expensive,               
 time-consuming fund raising treadmill.                                        
 Mr. Frank explained that the initiative attempts to refocus the               
 electoral system back to the Alaska voter and increase the public's           
 faith in the system and the elected officials.  The initiative                
 attempts to change the current system of election financing by                
 eliminating large contributions of private money, creating a level            
 playing field, and breaking the hold of powerful money interests              
 over the electoral and legislative processes of government.  Mr.              
 Frank stated that only these changes would restore the faith of               
 Alaskans in their government.                                                 
 Number 192                                                                    
 SENATOR RANDY PHILLIPS supported SB 191 and felt that this would              
 resolve the public's concern.  He expressed concern with Section              
 page 14, line 18.  Senator Randy Phillips recounted an experience             
 in which one of his constituents gave him $40 and a couple of                 
 blocks later he met a single mother with three children whom he               
 gave that $40.  However, under SB 191 Senator Randy Phillips would            
 not have been able to give this excess money for charitable causes            
 unless provided for under 26 U.S.C. 501(c)(3) which is a nonprofit            
 organization.  He asked if there had been any discussion regarding            
 placing excess funds in the expense allowances in the legislature.            
 Senator Randy Phillips stated that almost all the legislators spend           
 more on their constituents or community for public purpose than the           
 $6,000 allowance.                                                             
 MIKE FRANK explained that the initiative is designed to level the             
 playing field between incumbents and challengers.  The excess funds           
 provision are intended to prevent the carry over of unnecessary               
 surpluses while giving incumbents with surpluses options to spend             
 the money.                                                                    
 SENATOR RANDY PHILLIPS felt that legislation could be crafted with            
 specific criteria for the spending of excess funds for legislative            
 purposes, not campaign purposes.  MIKE FRANK explained that the               
 initiative provides for excess funds to be donated without                    
 condition to Alaska's General Fund.  The legislature could                    
 reappropriate that money to the office account which would be                 
 considered state funds.  Mr. Frank indicated that this problem may            
 not be resolved under the campaign finance reform; office holders             
 are not given comparable expense accounts.  That may be subject to            
 majority rule such that the minority is given less money to run               
 their office.  Mr. Frank stated that excess campaign contributions            
 should not be a manner in which to adjust such inequities, they               
 should be a matter of tax and revenue policy.                                 
 Number 255                                                                    
 SENATOR RANDY PHILLIPS pointed out that if office expenses were               
 raised from $6,000 to $8,000 there would be public outcry that                
 legislators are increasing their pay which is not really the case.            
 MIKE FRANK reiterated that the initiative is intended to level the            
 playing field and to place restrictions on how surpluses can be               
 dispersed.  This all is an attempt to eliminate the potential of              
 campaign contributions being used as a quid pro quo for anything              
 after an election.  Mr. Frank expressed willingness to review                 
 adjustments making it easier for legislators to deal with surplus             
 funds if those adjustments are reasonable from a public policy and            
 fair election standpoint.  Mr. Frank said that he understood the              
 problem, but was unsure if it could have been addressed in this               
 SENATOR RANDY PHILLIPS suggested that this could be addressed by              
 placing another restriction under Section 15.13.116 and there could           
 even be a dollar limit stated.  He informed everyone of the                   
 questionnaires that he sends to his constituents which cost more              
 than $6,000.  Senator Randy Phillips identified the political                 
 problem as being that an increase in the expense allowance would              
 create uproar in the media; the media would portray it as a pay               
 increase rather than an office allowance increase.  How could the             
 previously mentioned incident regarding the $40 be handled?                   
 MIKE FRANK stated that a private contribution of campaign funds to            
 a constituent in need would not be allowed under the initiative.              
 Number 304                                                                    
 CHAIRMAN SHARP noted that there is much reference in the initiative           
 about to whom and how much lobbyists can contribute, when inquiring           
 about restrictions on contributions from a lobbyist's spouse.  MIKE           
 FRANK said that there are no express restrictions on spouses of               
 lobbyists.  The restriction is narrowly tailored to refer to                  
 lobbyists making a living lobbying; the restriction does not apply            
 to representational lobbyists.  There are no restrictions on                  
 lobbyists to make independent expenditures or to give money to                
 political action committees or political parties.  Spouses of                 
 lobbyists would be allowed to contribute just as any other                    
 CHAIRMAN SHARP communicated that representational lobbyists are               
 governmental, bureaucratic lobbyists for departments and nonprofits           
 or employees lobbying for their company or organization for which             
 they are not paid.  Chairman Sharp indicated that the level playing           
 field may not be as such because some districts have large numbers            
 of registered lobbyists.  He did not have a problem with                      
 restrictions on lobbyists, but it did seem to slant it to a certain           
 SENATOR RANDY PHILLIPS said that a lobbyist's spouse contributing             
 money is a trap door.  MIKE FRANK pointed out that the trap door is           
 caused by the First Amendment.  The trap door is utilized in many             
 other contexts as well.  It is difficult to regulate this.                    
 CHAIRMAN SHARP reiterated that the teleconference was listen only,            
 no testimony would be taken today.                                            
 KAREN BOORMAN, Director of Alaska Public Offices Commission,                  
 informed the committee that the commission was preparing written              
 comments and an approved fiscal note which should be ready next               
 week.  She mentioned that Burke Miles from the Juneau office would            
 be attending the hearing.  She also offered to be available to                
 provide information or assistance.                                            
 Number 370                                                                    
 CHAIRMAN SHARP announced that his objective was to avoid as many              
 legal challenges to the initiative or the statute as possible.  He            
 indicated that he did not want an effective date during a campaign            
 or a municipal election.                                                      
 SENATOR KELLY, Prime Sponsor of SB 191, thanked Jack Chenowith who            
 had drafted the initiative petition into legislation.  He asked Mr.           
 Frank if SB 191 was an accurate portrayal of the initiative                   
 petition.  MIKE FRANK thanked Senator Kelly and Senator Randy                 
 Phillips for the introduction of the bill.  Mr. Frank reiterated              
 that SB 191 and the bill by Representative James are functionally             
 identical to the initiative.  Mr. Frank praised Jack Chenowith's              
 work on this legislation.                                                     
 SENATOR KELLY asked when the effective date would be if the                   
 legislature did not pass similar legislation and the initiative               
 passed at the November vote.  JACK CHENOWITH said that it would               
 become effective around March 1st; the initiative provision of the            
 constitution states that initiatives become effective 90 days after           
 certification.  Mr. Chenowith expected certification of the                   
 initiative about 30 days after the November election which would be           
 early December.  SENATOR KELLY summarized that the earliest that              
 the initiative petition would be in effect would be March 1, 1996.            
 Number 411                                                                    
 SENATOR LEMAN suggested that a substantial change as encompassed in           
 this initiative would be more appropriate to go into effect after             
 the campaign cycle rather than in the middle.                                 
 JAMES BALDWIN, Assistant Attorney General, offered his assistance             
 to the committee.                                                             
 CHAIRMAN SHARP asked if anyone from the Division of Elections was             
 present.  He noted that the committee would be working with the               
 division and he encouraged them to offer suggestions.  He pointed             
 out that Ms. Boorman had referred to a change in the fiscal note;             
 the current fiscal note indicates that SB 191 would be referred to            
 the Finance Committee.  He informed everyone that this would be               
 scheduled again and public testimony would be taken.  With the                
 amendments offered, a committee substitute would be created in                
 order to keep this moving to the Judiciary Committee.                         
 SENATOR LEMAN suggested that when APOC reviews the fiscal note,               
 they should review how that would change the effective date in the            
 fiscal year 1997.                                                             
 CHAIRMAN SHARP agreed to inquire with APOC on this matter as well             
 as with the Division of Elections.  There being no further business           
 before the committee, the meeting was adjourned at 4:05 p.m.                  

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