Report Title:

Campaign Expenditures and Contributions

 

Description:

Prohibits corporations, financial institutions, and labor organizations from making contributions in connection with nominations for election or election of a candidate, candidate committee, or noncandidate committee. Prohibits corporations and labor organizations from soliciting contributions.

THE SENATE

S.B. NO.

2257

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to election campaign FINANCING.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 11, Hawaii Revised Statutes, is amended by adding a new section to part XII, subpart B, to be appropriately designated and to read as follows:

"§11- Campaign contributions by financial institutions, corporations, and labor organizations; solicitation of contributions; prohibitions. (a) As used in this section, "financial institution" means a "federal financial institution" or "Hawaii financial institution", as those terms are defined in section 412:1-109.

(b) No corporation, financial institution, or labor organization may make a contribution in connection with any nomination for election or election of a candidate, candidate committee, or noncandidate committee. No officer or director of any corporation, financial institution, or labor organization shall consent to any contribution by the corporation, financial institution, or labor organization. No person shall accept or receive any contribution prohibited by this section.

(c) For the purposes of this section, contributions do not include the establishment, administration, and solicitation of contributions to a separate segregated fund to be used for political purposes by a corporation, labor organization, membership organization, cooperative, or corporation without capital stock.

(d) It shall be unlawful to use contributions from a separate segregated fund that are obtained by:

(1) The use of physical force, job discrimination, financial reprisal;

(2) The threat of force, job discrimination, or financial reprisal; or

(3) The imposition of dues, fees, or other moneys required as a condition of membership in a labor organization or as a condition of employment or by moneys obtained in any commercial transaction.

(e) Any person soliciting an employee for a contribution to a separate segregated fund shall inform the employee, at the time of such a solicitation, of the employee's right to refuse to contribute without any reprisal.

(f) It shall be unlawful for:

(1) A corporation, or a separate segregated fund established by a corporation, to solicit contributions to the fund from any person other than its stockholders and their families and its executive or administrative personnel and their families; or

(2) A labor organization or a separate segregated fund established by a labor organization, to solicit contributions to such a fund from any person other than its members and their families.

(g) No funds for a separate segregated fund established by a corporation may be derived from dividends, bonuses, or any form of payment to stockholders and their families and its executive or administrative personnel and their families, paid solely for making a contribution to that fund.

(h) Nothing in this section shall prevent a membership organization, cooperative, trade association, or corporation without capital stock, or a separate segregated fund established by a membership organization, cooperative trade organization, or a corporation without capital stock from soliciting contributions to a separate segregated fund from members of the organization, cooperative, trade association, or corporation without capital stock."

SECTION 2. Section 11-199, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Each candidate, committee, or party shall establish and maintain an itemized record showing:

(1) The amount of each monetary contribution;

(2) The description and value of each nonmonetary contribution; [and]

(3) The name and address of each donor making a contribution of more than $25 in value[.]; and

(4) The name and address of the donor's employer whenever a donation is made by an individual in excess of $200."

SECTION 3. Section 11-204, Hawaii Revised Statutes, is amended to read as follows:

"§11-204 Campaign contributions; limits as to persons.

(a) (1)  No person or any other entity shall make contributions to:

(A) A candidate seeking nomination or election to a two-year office or to the candidate's committee in an aggregate amount greater than [$2,000] $1,000 during an election period;

(B) A candidate seeking nomination or election to a four-year statewide office or to the candidate's committee in an aggregate amount greater than [$6,000] $3,000 during an election period; and

(C) A candidate seeking nomination or election to a four-year nonstatewide office or to the candidate's committee in an aggregate amount greater than [$4,000] $2,000 during an election period.

These limits shall not apply to a loan made to a candidate by a financial institution in the ordinary course of business.

(2) For purposes of this section, the length of term of an office shall be the usual length of term of the office as unaffected by reapportionment, a special election to fill a vacancy, or any other factor causing the term of the office the candidate is seeking to be less than the usual length of term of that office.

(b) No person or any other entity shall make contributions to a noncandidate committee, in an aggregate amount greater than [$1,000] $500 in an election[; except that in the case of a corporation or company using funds from its own treasury, there shall be no limit on contributions or expenditures to the corporation or company noncandidate committee].

(c) A candidate's immediate family, in making contributions to the candidate's campaign, shall be exempt from the above limitation, but shall be limited in the aggregate to $50,000 in any election period. The aggregate amount of $50,000 shall include any loans made for campaign purposes to the candidate from the candidate's immediate family.

(d) A contribution by a dependent minor shall be reported in the name of the minor but shall be counted against the contribution of the minor's parent or guardian.

(e) Any candidate, candidate's committee, or committee that receives in the aggregate more than the applicable limits set forth in this section in any primary, initial special, special, or general election from a person, shall be required to do one of the following:

(1) Regardless of whether the excess donation was inadvertently made, to transfer an amount equal to any excess over the limits established in this section to the Hawaii election campaign fund within thirty days of receipt of the contribution, and in any event, no later than thirty days upon the receipt by a candidate, candidate's committee, or committee, of notification from the commission; or

(2) If the excess donation was inadvertently made, to return to the donor any excess over the limits established in this section and to notify the commission within thirty days of receipt of the contribution.

A candidate, candidate's committee, or committee who complies with this subsection prior to the initiation of prosecution shall not be subject to any penalty under section 11-228.

(f) All payments made by a person or political party whose contributions or expenditure activity is financed, maintained, or controlled by any [corporation, labor organization,] association, political party[,] or any other person or committee, including any parent, subsidiary, branch, division, department, or local unit of the [corporation, labor organization,] association, political party, political committees established and maintained by a national political party, or any other person, or by any group of those persons shall be considered to be made by a single person or political party.

[(g) A contribution made by two or more corporations shall be treated as one person when such corporations:

(1) Share the majority of members of their boards of directors;

(2) Share two or more corporate officers;

(3) Are owned or controlled by the same majority shareholder or shareholders; or

(4) Are in a parent-subsidiary relationship.]

[(h)] (g) An individual and any general partnership in which the individual is a partner[, or an individual and any corporation in which the individual owns a controlling interest,] shall be treated as one person.

[(i)] (h) No committee which supports or opposes a candidate for public office shall have as officers individuals who serve as officers on any other committee which supports or opposes the same candidate. No such committee shall act in concert with, or solicit or make contributions on behalf of, any other committee.

[(j)] (i) No contributions or expenditures shall be made to or on behalf of a candidate or committee by a foreign national or foreign corporation, including a domestic subsidiary of a foreign corporation, a domestic corporation that is owned by a foreign national, or a local subsidiary where administrative control is retained by the foreign corporation, and in the same manner prohibited under 2 United States Code section 441e and 11 Code of Federal Regulations 110.4(a) and 110.9(a), as amended. No foreign-owned domestic corporation shall make contributions where:

(1) Foreign national individuals participate in election-related activities such as decisions concerning the making of contributions or the administration of a political committee; or

(2) The contribution funds are not domestically-derived.

[(k)] (j) No person or any other entity other than political committees established and maintained by a national political party shall make contributions to a political party in an aggregate amount greater than $25,000 in any two-year election period. No political committee established and maintained by a national political party, shall make contributions to a political party in an aggregate amount greater than $50,000 in any two-year election period.

[(l)] (k) Except for subsection [(j),] (i), this section shall not apply to ballot issue committees."

SECTION 4. Section 11-205.5, Hawaii Revised Statutes, is amended to read as follows:

"§11-205.5 Campaign contributions by state and county contractors. (a) Any person making a contribution to any candidate, committee, or political party, and who has received, in any calendar year, $50,000 or more through contracts from the State[,] or county shall register and report that fact to the commission within thirty days of the date of the contribution or within thirty days of the date of the contract, whichever occurs later; provided that this section shall not apply to a person who has received $50,000 or more through a grant, subsidy, or purchase of service agreement under chapter 42F or 103F.

(b) The commission shall prescribe forms and procedures for the reporting required in subsection (a) which, at a minimum, shall require the following information:

(1) The name and address of the person making the contribution;

(2) The name of the candidate, committee, or political party receiving the contribution;

(3) The amount of money received from the State or county, the dates, and information identifying each contract and describing the service performed or goods provided; and

(4) If an entity is making the contribution, the names and business addresses of the principals, including officers and directors.

(c) The commission shall maintain a list of such reports for public inspection both at the commission's office and [through the state FYI electronic bulletin board.] on the commission's Internet website.

(d) It shall be unlawful for any person to enter into any contract or agreement with the State or a county, either for the rendition of personal services, the furnishing of any material, supplies, or equipment to the State or a county, or for selling any land or building to the State or a county, if:

(1) Payment for the performance of that contract or agreement or payment for material, supplies, equipment, land, or buildings is to be made in whole or in part from funds appropriated by the legislature or county councils, from one year between the notice of the availability of the contract or agreement, or the commencement of the negotiations for the contract or agreement, whichever is earlier; and

(2) The completion of performance of the contract or agreement includes the making of contributions of money or other things of value, directly or indirectly, or to promise or imply the making of any contribution to any political party, committee, candidate for public office, or any person responsible for entering into any contract or agreement with the State or a county, either for the rendition of personal services, the furnishing of any material, supplies, or equipment.

No person shall solicit, accept, or receive any contribution prohibited by this section.

(e) Nothing in this section shall prohibit or make unlawful any contribution not exceeding $1,000 that is made by an individual to a noncandidate committee that is not associated in any manner with a State or county contractor as provided in this section.

(f) For the purposes of this section, "person" includes individuals, partnerships, and corporations, including the immediate family and household members of each."

SECTION 5. Section 11-207, Hawaii Revised Statutes, is amended to read as follows:

"§11-207 Other contributions and expenditures. (a) Expenditures, or disbursements for electioneering communications as defined in section 11-207.6, made by any person or political party for the benefit of a candidate in cooperation, consultation, or concert with, or at the request or suggestion of, a candidate, a candidate's political committee, or their agents, shall be considered to be a contribution to such candidate and expenditure by such candidate.

The financing by any person or political party of the dissemination, distribution, or republication, in whole or in part, of any broadcast or any written or other campaign materials prepared by the candidate, the candidate's political committee or committees, or agents shall be considered to be a contribution to such candidate.

This subsection shall not apply to candidates for governor or lieutenant governor supporting a co-candidate in the general election.

(b) No funds shall be withdrawn or paid from a campaign depository except upon the written authorization of the campaign treasurer[.] or the treasurer's designee.

(c) No expenditure for a candidate shall be made or incurred by any committee controlled by a candidate without specific written authorization of the candidate or the candidate's authorized representative. Every expenditure so authorized and made or incurred shall be attributed to the candidate with whom the committee is directly associated for the purpose of imposing the expenditure limitations set forth in section 11-209.

(d) For the purposes of this subpart, an expenditure shall be deemed to be made or incurred when [the]:

(1) The services are rendered or the product is delivered. Services rendered or products delivered for use during a reporting period covered by this subpart shall be deemed delivered or rendered during the period or periods of use; provided that these expenditures shall be reasonably allocated between periods in accordance with the time the services or products are actually used[.]; or

(2) A commitment is made to receive the services or product; provided that these expenditures shall be reasonably allocated between periods in accordance with the time the services or products are actually used.

(e) A political party that makes an expenditure in support of an identifiable candidate shall file a report, within two business days of making the expenditure, with the commission or appropriate county clerk’s office on forms provided by the commission. The report shall include the name and address of the political party, the name of the candidate who was supported by the expenditure, and the amount of the expenditure."

SECTION 6. Section 11-210, Hawaii Revised Statutes, is amended to read as follows:

"§11-210 Study and recommendation. At least one year prior to a primary, special primary, or general election, the commission shall submit to the legislature:

(1) A study and recommendation of reasonable campaign expenditure and contribution limits and the factors which may be relevant in their establishment; [and]

(2) A report concerning the status of the Hawaii election campaign fund, and shall request an appropriation if the total amount of revenues comprising the fund is insufficient to partially finance all candidates for a particular primary, special primary, or general election as set forth in section 11-218[.]; and

(3) An analysis of data in each race including:

(A) The total amount spent;

(B) The source of contributions by sector and by amount; and

(C) The ratio of spending of successful to unsuccessful races."

SECTION 7. Section 11-215, Hawaii Revised Statutes, is amended to read as follows:

"§11-215 Advertising. (a) All advertisements shall contain the name and address of the candidate, committee, party, or person paying for the advertisement. If an advertisement is not authorized by a candidate or a candidate's committee, the advertisement shall contain the name and address of the person paying for the advertisement. The information required by this subsection shall be presented in a clear, audible or legible, and prominent manner throughout the advertisement.

(b) In addition to subsection (a), no candidate [or], committee, or party shall cause or submit any advertisement in support of a candidate, against a candidate's opponent, or with regard to a ballot issue to be published, broadcast, televised, or otherwise circulated and distributed except under the following conditions:

(1) The advertisement shall contain a notice in a prominent location that the literature or advertisement is published, broadcast, televised, or circulated with the approval and authority of the candidate, provided that in the event that the literature or advertisement is paid for by a candidate, committee directly associated with a candidate, or ballot issue committee, the notice of approval and authority need not be included; or

(2) The advertisement shall contain a notice in a prominent location that the literature or advertisement is published, broadcast, televised, or circulated without the approval and authority of the candidate.

(c) The penalty for violating this section shall be a fine not to exceed [$25] $2,500 for each advertisement used that lacks the required disclaimer and no more than [$5,000] $10,000 aggregate[.]; provided that the penalty shall not exceed $20,000 where a false disclaimer is used on an advertisement."

SECTION 8. Section 235-102.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Any individual whose state income tax liability for any taxable year is [$2] $5 or more may designate [$2] $5 of the liability to be paid over to the Hawaii election campaign fund, any other law to the contrary notwithstanding, when submitting a state income tax return to the department of taxation. In the case of a joint return of a husband and wife having a state income tax liability of [$4] $10 or more, each spouse may designate that [$2] $5 be paid to the fund. The director of taxation shall revise the individual state income tax form to allow the designation of contributions to the fund on the face of the tax return and immediately above the signature lines. An explanation shall be included which clearly states that the check-off does not constitute an additional tax liability. If no designation was made on the original tax return when filed, a designation may be made by the individual on an amended return filed within twenty months and ten days after the due date for the original return for such taxable year. A designation once made whether by an original or amended return may not be revoked."

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2002; provided that section 8 of this Act shall apply to taxable years beginning after December 31, 2001.

INTRODUCED BY:

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