Requested by: , Gordon Evans, Attorney
On behalf of: Totem Ocean Trailer Express, Inc. (TOTE)
Prepared by: Jenifer Kohout, Assistant Director
Subject: Residency considerations for TOTE PAC (Alaska) and its contributors and can TOTE provide administrative assistance needed to comply with the requirements of the campaign disclosure law.
On November 5, 1997, the Commission approved the following advisory opinion by a vote of 5-0.
You asked the Alaska Public Offices Commission (Commission) for an advisory opinion regarding the formation of a group by the Alaska-based employees of Totem Ocean Trailer Express, Inc. (TOTE). In your request, you asked if TOTE may provide the group with the assistance needed to comply with the legal and accounting requirements of the campaign disclosure law and administer a payroll withholding plan.
The Commissions answer is yes. The Alaska based employees of TOTE may form a group in order to make contributions to Alaska state and municipal candidates and political parties. TOTE may assist the group by providing the bookkeeping services and legal advice needed to comply with reporting requirements of the campaign disclosure law. TOTE may also provide the services needed to administer a payroll withholding plan.
Totem Ocean Trailer Express, Inc. (TOTE) is an Alaska shipping company which operates cargo ships exclusively in the Alaska trade between the ports of Tacoma, Washington, and Anchorage, Alaska
Although TOTEs headquarters are in Seattle, it is an Alaska domestic corporation. In addition to the Alaska division headquarters at the Port of Anchorage, TOTE also has terminals in Fairbanks, Kenai, Cordova, Whittier, Seward and Homer. Currently, TOTE has 157 employees company wide, of which 38 are on the companys Alaska payroll. While the companys accounting and payroll functions are handled through the Seattle office, payroll amounts attributable to Alaska operations are easily ascertainable.
The Existing Statute and Regulations
AS 15.13.400 (5)
Definitions - "group"
A group is any combination of two or more individuals acting jointly who organize for the principal purpose to influence the outcome of one or more elections and who take action the major purpose of which is to influence the outcome of an election. . . .
AS 15.13.400 (3)(A)
Definitions - "contribution"
A contribution includes a payment that is made for the purpose of influencing the nomination or election of a candidate.
AS 15.13.400 (B)(ii)
Definitions - "contribution/accounting services"
A contribution does not include the services provided by an accountant or other person to prepare reports and statements required by this chapter.
2 AAC 50.313(g)
Definition of Contribution "legal services"
The provision of the legal services necessary to complete a campaign disclosure report is not a campaign contribution
Restrictions on solicitation and acceptance of contributions
A candidate may not accept a contribution from a group organized under the laws of another state, resident in another state, or whose participants are not residents of this state at the time the contribution is made.
Restrictions on solicitation and acceptance of contributions
A group may solicit contributions from individuals who are not residents of Alaska, but the amounts accepted from non-residents may not exceed 10% of the total contribution made to the group during the year in which the contributions are received.
AS 15.13.072(a)(3) bans contributions to candidates by groups organized under the laws of another state, resident in another state, or whose participants are not residents of this state at the time the contribution. As a result, a company-wide PAC would be prohibited from making contributions to Alaska candidates because it would not satisfy these requirements. Because TOTE PAC (Alaska) is an entity distinct from TOTE, neither the fact that TOTE has headquarters which are based outside Alaska nor the fact that TOTE is a domestic Alaska corporation are relevant to determining the residency of the group.
A group may be said to be resident in Alaska for the purposes of campaign disclosure law if it has an Alaska mailing address, if no more than 10% of the total contributions received by the group are from non-resident individuals, and if the decisions as to how its funds are raised and spent are made by Alaskan residents. As a result, TOTE PAC (Alaska) may register and function as an Alaskan group for the purposes of the Campaign Disclosure law if it meets these criteria.
AS 15.13.072(f) states that Alaskan groups may not receive more than 10% of their total contributions from non-resident individuals. TOTE PAC (Alaska) plans to limit its fundraising to only those TOTE employees who are residents of Alaska and thus will be in compliance with this provision. Nothing in this advisory opinion precludes TOTE-PAC (Alaska) from accepting up to 10% of its contributions from non-residents, including TOTE employees who are non-residents.
Finally, AS 15.13.074(f) prohibits contributions by a corporation or association to a candidate or a group. TOTE, in relation to TOTE PAC (Alaska), is in compliance with this provision as long as it provides neither monetary or non-monetary assistance to TOTE PAC (Alaska). To make it clear that TOTE PAC(Alaska) has not received contributions from TOTE, the PAC should consider adding "employees" to its official name and registering as TOTE Employees PAC (Alaska).
Despite the prohibition on corporate contributions, TOTE may provide TOTE PAC (Alaska) with the administrative assistance necessary to comply with the legal and accounting requirements of the Campaign Disclosure law. The Commission has determined that this assistance includes processing employee payroll deductions, bookkeeping services and legal advice. Under AS 15.13.400(B)(ii) and 2 AAC 50.313(g), these kinds of services are not reportable. TOTE, in providing these services, must exercise no control over the use of TOTE PAC Alaskas funds and must not pay the costs of soliciting funds for the PAC. TOTE may provide only those administrative services truly necessary to provide for a payroll withholding plan.
TOTE PACs described fundraising procedure is in compliance with AS 15.13. TOTE PAC is advised to notify individuals of their individual reporting requirements under the new law; the new law provides for civil penalties in the event contributors file late statements. Because of the time it takes to process contributions under a payroll withholding plan, the notice should be made at the time the contribution is anticipated.
This advise in this opinion applies only to the specific activity for which the advice was requested.
A copy of the original letter requesting the above advisory opinion is available upon request at the Alaska Public Offices Commission. (907) 276-4176.