Report Title:

Campaign Spending Reports

Description:

Establishes reporting conditions and penalties for failure to file or correct reports. Exempts accounting services by treasurer and deputy treasurer from definitions of "contributions" and "expenditures". Adds aggregate contribution limit of $25,000 by any one person to any number of candidates. Includes loans in definition of "contributions." Removes exemption of immediate family from contribution limit. Requires advertisements to include name and address of payor on advertisements and envelopes. Deletes prohibition of solicitation of contributions by contractors. Establishes conditions under which 2 or more corporations are treated as 1 person for the purposes of campaign contribution limits. (HB3101 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

3101

TWENTY-THIRD LEGISLATURE, 2006

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to campaign spending.

 

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 subpart B of part XII to be appropriately designated and to read as follows:

"§11-   Failure to file reports; substantially defective reports. (a) When any candidate, committee, or party has failed to file a report required by this subpart or has filed a substantially defective or deficient report, the commission shall notify these persons by first class mail that their failure to file or filing of a substantially defective or deficient report must be corrected and explained. The correction and explanation shall be submitted in writing to the commission not later than 4:30 p.m. on the fifth day after notification of the failure to file or the deficiency has been mailed to these persons.

(b) The commission shall publish in the newspaper, and on its website, the names of all candidates, committees, and parties who have failed to file a report to correct their deficiency within the time allowed by the commission.

(c) Failure to file or correct a report when due, as required by this subpart, shall result in a penalty of $50.

(d) Failure to respond after a newspaper notification or website publication shall result in an additional penalty of $50 for each day a report remains overdue or uncorrected.

(e) All penalties collected under this section shall be deposited in the Hawaii election campaign fund."

SECTION 2. Section 11-191, Hawaii Revised Statutes, is amended as follows:

1. By amending the definitions of "contribution", "expenditure", "matching payment period", and "qualifying campaign contribution" to read:

""Contribution" means:

(1) A gift, subscription, deposit of money, loan of any type from any person, or anything of value, or cancellation of a debt or legal obligation and includes the purchase of tickets to fundraisers and legal and accounting services, except for accounting services provided by the campaign treasurer and deputy campaign treasurers, for the purpose of:

(A) Influencing the nomination for election, or election, of any person to office;

(B) Influencing the outcome of any question or issue that appears or is reasonably certain to appear on the ballot at the next applicable election described in subparagraph (A); or

(C) Use by any party or committee for the purposes set out in subparagraph (A) or (B);

(2) The payment, by any person, political party, or any other entity other than a candidate or committee, of compensation for the personal services or services of another person, including legal and accounting services, except for accounting services provided by the campaign treasurer and deputy campaign treasurer, that are rendered to the candidate or committee without charge or at an unreasonably low charge for the purposes set out in paragraph (1)(A), (1)(B), or (1)(C);

(3) A contract, promise, or agreement to make a contribution; provided that notwithstanding this paragraph and paragraphs (1) and (2), the term "contributions" shall not include services or portions thereof voluntarily provided without reasonable compensation by individuals to or in behalf of a candidate or committee; provided that "contributions" include legal and accounting services, except for accounting services provided by the campaign treasurer or deputy campaign treasurers; or

(4) Notwithstanding paragraphs (1), (2), and (3), a candidate's expenditure of the candidate's own funds [or the making of a loan or advance in the pursuit of the candidate's campaign] shall not be a contribution for the purpose of this subpart but shall nevertheless be reportable as a campaign receipt.

"Expenditure" means:

(1) Any purchase or transfer of money or anything of value, or promise or agreement to purchase or transfer money or anything of value, or payment incurred or made, or the use or consumption of a nonmonetary contribution for the purpose of:

(A) Influencing the nomination for election, or election, of any person seeking nomination for election, or election, to office whether or not the person has filed the person's nomination paper;

(B) Influencing the outcome of any question or issue that has been certified to appear on the ballot at the next applicable election; or

(C) Use by any party or committee for the purposes set out in subparagraph (A) or (B);

(2) The payment, by any person other than a candidate or committee, of compensation for the personal services of another person that are rendered to the candidate or committee for any of the purposes mentioned in paragraph (1); or

(3) The expenditure by a candidate of the candidate's own funds for the purposes set out in paragraph (1).

[(4) The term does] "Expenditure" shall not include volunteer [personal services and voter]:

(A) Personal services, except for legal and accounting services; provided that accounting services by a campaign treasurer or deputy campaign treasurers shall be included within the meaning of volunteer personal services; and

(B) Voter registration efforts that are not partisan.

"Matching payment period" means:

(1) For a primary election, from January 1 of the year of a general election through the day of the primary election[, or nine months prior to a special election through the day of a special election]; and

(2) For a general election, from January 1 of the year of a general election through the day of the general election.

"Qualifying campaign contribution" means an aggregate monetary contribution of $100 or less, by [any person] an individual resident of Hawaii during any matching payment period. Qualifying contributions do not include loans or in-kind contributions."

SECTION 3. Section 11-193, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The duties of the commission under this subpart are:

(1) To develop and adopt reporting forms required by this subpart;

(2) To adopt and publish a manual for all candidates and committees, describing the requirements of this subpart, including uniform and simple methods of recordkeeping;

(3) To preserve all reports required by this subpart for at least ten years from the date of receipt;

(4) To permit the inspection, copying, or duplicating of any report required by this subpart pursuant to rules adopted by the commission; provided that no information or copies from the reports shall be sold or used by any person for the purpose of soliciting contributions or for any commercial purpose;

(5) To ascertain whether any candidate, committee, or party has failed to file a report required by this subpart or has filed a substantially defective or deficient report[, and to notify these persons by first class mail that their failure to file or filing of a substantially defective or deficient report must be corrected and explained. The correction or explanation shall be submitted in writing to the commission not later than 4:30 p.m. on the fifth day after notification of the failure to file or deficiency has been mailed to these persons. The commission shall publish in the newspaper, and on its website, the names of all candidates, committees, and parties who have failed to file a report or to correct their deficiency within the time allowed by the commission. Failure to file or correct a report when due, as required by this subpart, shall result in a penalty of $50. Failure to respond after a newspaper notification or website publication shall result in an additional penalty of $50 for each day a report remains overdue or uncorrected. All penalties collected under this section shall be deposited in the Hawaii election campaign fund];

(6) To hold public hearings;

(7) To investigate and hold hearings for receiving evidence of any violations;

(8) To adopt a code of fair campaign practices as a part of its rules;

(9) To establish rules pursuant to chapter 91;

(10) To request the initiation of prosecution for the violation of this subpart pursuant to section 11-229;

(11) To administer and monitor the distribution of public funds under this subpart;

(12) To suggest accounting methods for candidates, parties, and committees, as the commission may deem advisable, in connection with reports and records required by this subpart;

(13) To employ or contract, without regard to chapters 76 and 89 and section 28-8.3, and, at pleasure, to dismiss persons it finds necessary for the performance of its functions, including a full-time executive director, and to fix their compensation;

(14) To do random audits, field investigations, as necessary;

(15) To file for injunctive relief when indicated; and

(16) To render advisory opinions upon the request of any candidate, candidate committee, noncandidate committee, or other person or entity subject to this chapter, as to whether the facts and circumstances of a particular case constitute or will constitute a violation of the campaign spending laws. If no advisory opinion is rendered within ninety days after all information necessary to issue an opinion has been obtained, it shall be deemed that an advisory opinion was rendered and that the facts and circumstances of that particular case do not constitute a violation of the campaign spending laws. The opinion rendered or deemed rendered, until amended or revoked, shall be binding on the commission in any subsequent charges concerning the candidate, candidate committee, noncandidate committee, or other person or entity subject to this chapter, who sought the opinion and acted in reliance on it in good faith, unless material facts were omitted or misstated by the persons in the request for an advisory opinion."

SECTION 4. Section 11-194, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Each candidate [who files nomination papers for office with the chief election officer or county clerk] shall file an organizational report within ten days of:

(1) Filing the nomination papers for office; or

(2) The date the candidate or candidate's committee receives contributions or makes expenditures that amount to more than $100 in the aggregate during the applicable election period[.], whichever occurs first."

SECTION 5. 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 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 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 during an election period[.]; and

(D) Any number of candidates in an aggregate amount greater than $25,000 during an election period

[These limits shall not apply to a loan made by a financial institution in the ordinary course of business];

and

(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 in an election.

[(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)] (c) 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)] (d) 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 return any excess contribution to the original donor within thirty days of receipt of the excess contribution. Any excess contribution not returned to the original donor within thirty days shall escheat to the Hawaii election campaign fund. 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)] (e) 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)] (f) 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.

[(h)] (g) No committee that supports or opposes a candidate for public office shall have as officers individuals who serve as officers on any other committee [which] that 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.

[(i)] (h) 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 110.20, 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.

[(j)] (i) 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.

[(k)] (j) The contribution limits under this section shall apply for the office sought by the candidate. This section shall not apply to ballot issue committees.

(k) A contribution made by two or more corporations shall be treated as made by one person when the 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."

SECTION 6. Section 11-204.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§11-204.5[]] Limit on contributions from nonresident individuals and persons. Total contributions from any [individual] and all individuals or any [person] and all persons as defined in section 11-191, except for a member of the candidate's immediate family, who is not a resident of the State at the time the contributions are made, including a noncandidate committee organized under the laws of another state and whose participants are not residents of the State, shall not exceed twenty per cent of the total contributions received by a candidate or candidate's committee for each reporting period."

SECTION 7. Section 11-205.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) It shall be unlawful for the person who enters into any contract with the State, any of its counties, or any department or agency thereof either for the rendition of personal services, the buying of property, or furnishing any material, supplies, or equipment to the State, any of its counties, department or agency thereof, or for selling any land or building to the State, any of its counties, or any department or agency thereof, if payment for the performance of the contract or payment for material, supplies, equipment, land, property, or building is to be made in whole or in part from funds appropriated by the legislative body, at any time between the execution of the contract through the completion of the contract, to[:

(1) Directly] directly or indirectly make any contribution or to promise expressly or impliedly to make any contribution to any political party, committee, or candidate or to any person for any political purpose or use[; or

(2) Knowingly solicit any contribution from any person for any purpose during any period]."

SECTION 8. Section 11-205.6, Hawaii Revised Statutes, is amended to read as follows:

"§11-205.6 Campaign contributions; loans. (a) Any loan to a candidate or candidate's committee in excess of $100 shall be documented and disclosed as to lender, including the lender's name, address, employer, and occupation and purpose of the loan in the subsequent report to the commission. A copy of the executed loan document shall accompany the report. The document shall contain the terms of the loan, including the interest and repayment schedule. Failure to document the loan or to disclose the loan to the commission shall cause the loan to be treated as a campaign contribution, subject to all relevant provisions of this chapter.

(b) A candidate or candidate's committee may receive and accept loans in an aggregate amount not to exceed $10,000 during an election period, provided that if the $10,000 limit is reached, the candidate or candidate's committee shall be prohibited from receiving or accepting any other loans until the $10,000 is repaid in full by the candidate or candidate's committee.

(c) If any loan made to a candidate is not repaid within one year of the date that the loan is made, the candidate and candidate's committee shall be prohibited from accepting any other loans, and all subsequent contributions received and any surplus retained shall only be expended toward the repayment of the outstanding loan, until the loan is repaid in full by the candidate or candidate's committee.

(d) No loan may be accepted or made by noncandidate committees.

[(e) Any loan by a financial institution regulated by the State or a federally chartered depository institution and made in accordance with applicable law in the ordinary course of business, or a loan by a candidate of the candidate's own funds, or a loan from immediate family members of a candidate using their own funds to the candidate's committee shall not be deemed a contribution and not subject to the contribution limits provided in section 11-204 or the loan limit and repayment provisions of subsection (b) and (c); provided that loans from the immediate family members of the candidate shall remain subject to the provisions in section 11-204(c).]"

SECTION 9. Section 11-207.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each candidate, candidate's committee, or committee, that within the period of [fifteen] fourteen calendar days through four calendar days prior to a primary, special primary, general, or special general election, makes contributions aggregating more than $500, or receives contributions from any person or entity aggregating more than $500, shall file a report with the commission or appropriate county clerk's office on forms provided by the commission, no later than 4:30 p.m., three calendar days prior to the election."

SECTION 10. Section 11-209, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) From January 1 of the year of any primary, special, or general election, the total expenditures for each election for candidates who voluntarily agree to limit their campaign expenditures, inclusive of all expenditures made or authorized by the candidate alone and all campaign treasurers and committees in the candidate's behalf, shall not exceed the following amounts expressed respectively multiplied by the number of voters in the last preceding general election registered to vote in each respective voting district:

(1) For the office of governor--$2.50;

(2) For the office of lieutenant governor--$1.40;

(3) For the office of mayor--$2.00;

(4) For the offices of state senator, state representative, [and] county council member, and prosecuting attorney--$1.40; and

(5) For the offices of the board of education and all other offices--20 cents."

SECTION 11. Section 11-215, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"§11-215 Advertising. (a) All advertisements shall contain the name and address of the candidate, committee, party, or person to whom the advertisement relates and 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 and the envelope that contains the advertisement, if any, shall contain the name and address of the person paying for the advertisement[.] and shall clearly state on the advertisement and envelope, if any, that the advertisement is, or the envelope contains, campaign material.

(b) In addition to subsection (a), no candidate, person, or committee 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[;], if applicable; 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[.], if applicable.

(c) The penalty for violating this section shall be a fine not to exceed $25 for each advertisement that lacks the required disclaimer and no more than $5,000 aggregate."

SECTION 12. Section 11-216, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Upon hearing the response of the person cited, if the person elects to respond to the complaint, and upon completion of any investigation, the commission may make a prompt preliminary determination as to whether probable cause exists that a violation of this subpart has been committed. [In lieu of an administrative determination that a violation of this section has been committed, the] The commission may refer the complaint [to the attorney general or county prosecutor] for criminal prosecution pursuant to section 11-229 at any time it believes that the person cited may have intentionally, knowingly, or recklessly committed a violation. A referral of a complaint for criminal prosecution does not preclude any administrative proceeding by the commission at any time."

SECTION 13. Section 11-219, Hawaii Revised Statutes, is amended to read as follows:

"§11-219 Qualifying campaign contributions; amounts. As a condition of receiving public funds for a primary or general election, a candidate shall not be unopposed in any election for which public funds are sought, shall have filed an affidavit with the commission pursuant to section 11-208 to voluntarily limit the candidate's campaign expenditures, and shall be in receipt of the following sum of qualifying campaign contributions for the election period from individual residents of Hawaii:

(1) For the office of governor--qualifying contributions that in the aggregate, exceed $100,000;

(2) For the office of lieutenant governor--qualifying contributions that in the aggregate, exceed $50,000;

(3) For the office of mayor for each respective county:

(A) County of Honolulu--qualifying contributions that in the aggregate, exceed $50,000;

(B) County of Hawaii--qualifying contributions that in the aggregate, exceed $15,000;

(C) County of Maui--qualifying contributions that in the aggregate, exceed $10,000; and

(D) County of Kauai--qualifying contributions that in the aggregate, exceed $5,000; and

(4) For the office of prosecuting attorney for each respective county:

(A) County of Honolulu--qualifying contributions that in the aggregate, exceed $30,000;

(B) County of Hawaii--qualifying contributions that in the aggregate, exceed $10,000; and

(C) County of Kauai--qualifying contributions that in the aggregate, exceed $5,000;

(5) For the office of county council--for each respective county:

(A) County of Honolulu--qualifying contributions that in the aggregate, exceed $5,000;

(B) County of Hawaii--qualifying contributions that in the aggregate, exceed $1,500;

(C) County of Maui--qualifying contributions that in the aggregate, exceed $5,000; and

(D) County of Kauai--qualifying contributions that in the aggregate, exceed $3,000;

(6) For the office of state senator--qualifying contributions that, in the aggregate, exceed $2,500;

(7) For the office of state representative--qualifying contributions that, in the aggregate, exceed $1,500;

(8) For the office of Hawaiian affairs--qualifying contributions that, in the aggregate, exceed $1,500; and

(9) For all other offices, qualifying contributions that, in the aggregate, exceed $500."

SECTION 14. Section 11-220, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) To be eligible to receive payments pursuant to section 11-217, a candidate shall certify to the commission that:

(1) The candidate and [all committees authorized by the candidate] the candidate's committee shall not incur campaign expenses in excess of the expenditure limitations imposed by section 11-209;

(2) The candidate has qualified to be on the election ballot in a primary or general election;

(3) The candidate has filed a statement of intent to seek qualifying contributions. A contribution received before the filing of a statement of intent to seek public funds shall not be considered a qualifying contribution;

(4) The candidate or committee authorized by the candidate has received the qualifying sum of private contributions for the office sought by the candidate as set forth in section 11-219; and

(5) The aggregate of contributions certified with respect to any person under paragraph (4) does not exceed $100.

(c) Each candidate and candidate's committee in receipt of qualifying campaign contributions which may be taken into account for purposes of public funding shall maintain, on a form prescribed by the commission, records which show the date and amount of each qualifying campaign contribution and the full name and mailing address of the person making the contribution. The candidate and [all committees authorized by the candidate] the candidate's committee shall transmit to the commission all reports with respect to these contributions that the commission may require."

SECTION 15. Section 11-223, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Public campaign funds provided under this subpart shall only be used to:

(1) Defray campaign expenses incurred by and paid for an eligible candidate or [all committees authorized by such candidate;] the candidate's committee; and

(2) Repay loans, the proceeds of which were used to defray campaign expenses."

SECTION 16. Section 11-226, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The affidavit shall remain effective until the termination of the [central committee of the candidate] candidate's committee or the opening of filing for the next succeeding election for the office held or sought at the time of filing of the affidavit, whichever occurs first. An affidavit filed under this section may not be rescinded."

SECTION 17. Section 11-197, Hawaii Revised Statutes, is repealed.

["§11-197 Designated central committee. Each candidate for a statewide or county office who is supported by more than one committee shall designate a central committee which shall be responsible for aggregating the total contributions and expenditures of all committees directly associated with the candidate and for filing composite reports indicating this information pursuant to sections 11-212 and 11-213."]

SECTION 18. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 19. This Act shall take effect on January 1, 2096.