REPORT TITLE: 
Clean Elections Pilot Program


DESCRIPTION:
Establishes a pilot program for the city and county of Honolulu
council elections of 2002 providing for matching public funding
for candidates who voluntarily abide by specified contribution
and expenditure limits.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1879
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO ELECTIONS.



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

 1      SECTION 1.  The legislature finds that:
 
 2      (1)  There is a growing sense of cynicism and frustration
 
 3           among the voting public because of the practices of
 
 4           soliciting, raising, and spending large private
 
 5           campaign contributions by candidates and elected
 
 6           officials;
 
 7      (2)  Such practices create the perception of undue influence
 
 8           by moneyed private interests; 
 
 9      (3)  The reliance on  private contributions makes it
 
10           difficult for individuals without access to such
 
11           contributions to meaningfully participate in the
 
12           electoral process; and
 
13      (4)  An alternative to the existing system of private
 
14           fundraising is the use of public moneys in a program
 
15           whereby candidates who agree to voluntarily abide by
 
16           set expenditure limits and limit the receipt of private
 
17           contributions are provided significant matching public
 
18           funds.
 
19      The purpose of this Act is to establish a public-funded
 
20 elections pilot program for the city and county of Honolulu
 

 
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 1 council elections of 2002 to be known as the clean elections
 
 2 pilot program. 
 
 3      SECTION 2.  Clean elections pilot program.  There is
 
 4 established the clean elections pilot program for the city and
 
 5 county of Honolulu council elections of 2002 to be placed with
 
 6 the campaign spending commission for administrative purposes.
 
 7 The commission shall have such duties and powers, as provided
 
 8 under section 11-193, Hawaii Revised Statutes, as are necessary
 
 9 to administer and enforce all requirements under this Act.
 
10      SECTION 3.  Requirements for candidates; special election;
 
11 special runoff election.(a)  A candidate shall qualify as a
 
12 clean elections candidate for the special election campaign
 
13 period if the candidate:
 
14      (1)  Files a declaration with the commission that the
 
15           candidate has complied and will comply with all of the
 
16           requirements of this Act, as applicable;
 
17      (2)  Before the close of the clean elections qualifying
 
18           period, collects clean elections qualifying
 
19           contributions from at least one per cent of the total
 
20           number of voters who registered to vote during the
 
21           preceding general election in the district out of which
 
22           the candidate is running; and
 

 
 
 
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 1      (3)  Accepts only the following private contributions
 
 2           between January 1, 2002, and the date that the
 
 3           candidate qualifies as a clean elections candidate:
 
 4           (A)  Seed money contributions; and
 
 5           (B)  Clean elections qualifying contributions.
 
 6      (b) A candidate shall qualify as a clean elections candidate
 
 7 for the special runoff election campaign period if the candidate:
 
 8      (1)  Has met all of the applicable requirements and filed a
 
 9           declaration with the commission that the candidate has
 
10           fulfilled and will fulfill all requirements applicable
 
11           to a clean elections candidate under this Act; 
 
12      (2)  Qualified as a clean elections candidate during the
 
13           special election campaign period; and
 
14      (3)  Received a sufficient number of votes to appear on the
 
15           ballot in the special runoff election.
 
16      SECTION 4.  Seed money contributions.(a)  Seed money
 
17 contributions from any single individual contributor shall not
 
18 exceed $100.  The aggregate amount of seed money that may be
 
19 retained and expended for seed money purposes by a candidate
 
20 seeking to become eligible for public funding shall not exceed
 
21 $2,000.
 
22      (b)  Seed money shall be spent only during the clean
 
23 elections qualifying period.  Seed money expenditures shall be
 

 
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 1 limited to those necessary for campaign start-up purposes, and
 
 2 may be used to purchase office supplies, rent equipment, and
 
 3 finance public rallies.  Seed money shall not be spent to pay for
 
 4 the solicitation or collection of clean elections qualifying
 
 5 contributions, or for broadcast advertising or mass mailings.
 
 6      (c)  Candidates shall provide seed money contributors with a
 
 7 receipt and shall not accept contributions unless information
 
 8 that shall be included on the receipt under this subsection is
 
 9 disclosed by the contributor.  A receipt for a seed money
 
10 contribution under $25 shall include the contributor's signature,
 
11 printed name, and address.  A receipt for a seed money
 
12 contribution of $25 or more shall include the contributor's
 
13 signature, printed name, street address and zip code, telephone
 
14 number, occupation, and name of employer.
 
15      (d)  Within forty-eight hours after the close of the clean
 
16 elections qualifying period, candidates seeking to become
 
17 eligible for public funding shall:
 
18      (1)  Fully disclose all seed money contributions and
 
19           expenditures to the commission; and
 
20      (2)  Return to the commission for deposit in the Hawaii
 
21           elections campaign fund established under section 11-
 
22           217, Hawaii Revised Statutes, any seed money the person
 
23           has raised during the designated seed money period that
 
24           exceeds the aggregate seed money limit.
 

 
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 1      (e)  No clean elections candidate shall knowingly accept a
 
 2 seed money contribution made by a contributor in the name of
 
 3 another, and who is not the person identified on the seed money
 
 4 receipt.  Candidates violating this subsection shall be fined
 
 5 five times the amount of the contribution in addition to any
 
 6 other penalties that may be assessed by the commission under this
 
 7 Act.  All penalties collected under this subsection shall be
 
 8 deposited in the Hawaii election campaign fund established under
 
 9 section 11-217, Hawaii Revised Statutes.
 
10      SECTION 5.  Qualifying contributions.(a)  Each clean
 
11 elections qualifying contribution shall meet the requirements of
 
12 this section.  To be counted as a clean elections qualifying
 
13 contribution:
 
14      (1)  Contributors shall be registered voters who reside
 
15           within the candidate's district;
 
16      (2)  Contributions shall be:
 
17           (A)  In the amount of $5;
 
18           (B)  Made in cash, or by check or money order;
 
19           (C)  Acknowledged by a receipt meeting the requirements
 
20                in subsection (b); and
 
21           (D)  Gathered by candidates themselves, or by
 
22                volunteers who receive no compensation.
 

 
 
 
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 1      (b)  Receipts for contributions shall indicate, by the
 
 2 contributor's signature, that the contributor understands that
 
 3 the purpose of the contribution is to help the candidate qualify
 
 4 for public campaign funding.  The receipt shall include:
 
 5      (1)  The contributor's signature, printed name, home
 
 6           address, and telephone number; and
 
 7      (2)  The name of the candidate on whose behalf the
 
 8           contribution is made.
 
 9      The original receipt shall be given to the contributor.  A
 
10 copy shall be kept by the candidate and a copy shall be submitted
 
11 to the commission according to a schedule and procedure to be
 
12 determined by the commission.  A contribution submitted as a
 
13 clean elections qualifying contribution that does not include a
 
14 signed and completed receipt will not be counted as a clean
 
15 elections qualifying contribution.
 
16      (c)  Each contribution shall be deposited in an escrow
 
17 account until the commission determines that the candidate has
 
18 fulfilled the requirements for public funding and may be
 
19 certified as a clean elections candidate.
 
20      SECTION 6.  Use of personal funds.  Personal funds of the
 
21 candidate or of adult members of the candidate's immediate family
 
22 may be used as seed money.  Personal funds may not be used to
 
23 meet the clean elections qualifying contribution requirement;
 

 
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 1 provided that the candidate and any member of the candidate's
 
 2 immediate family who is a registered voter in the state of Hawaii
 
 3 may each make a $5 clean elections qualifying contribution.
 
 4      SECTION 7.   Certification of qualification for public
 
 5 funds.(a)  The commission shall determine whether a candidate
 
 6 is qualified for public campaign funding for the special and
 
 7 special runoff elections.  Candidates that qualify shall be
 
 8 certified by the commission as clean elections candidates.
 
 9      (b)  The number of candidates certified by the commission
 
10 shall be limited to 27 persons, on a first-come, first-served
 
11 basis.  A candidate's application for certification shall be made
 
12 on forms to be prescribed by the commission.  The application
 
13 shall be signed by the candidate and the candidate's campaign
 
14 treasurer under penalty of perjury.  The commission shall issue
 
15 its decision to certify or deny certification within twenty
 
16 business days of receipt of a candidate's complete, initial
 
17 application for certification for the special election, and,
 
18 within five business days of receipt of a candidate's complete
 
19 application for certification for the special runoff election.
 
20 The commission's decision shall be subject to examination and
 
21 audit and to prompt judicial review.
 
22      (c)  Certification may be revoked if a clean elections
 
23 candidate violates the applicable requirements of this Act.  Upon
 

 
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 1 revocation of certification, the candidate shall repay all public
 
 2 campaign funds.
 
 3      SECTION 8.  Clean elections candidates; contributions and
 
 4 expenditures.  A candidate who has been certified as a clean
 
 5 elections candidate and thereby found eligible for clean
 
 6 elections campaign funding, shall comply with the following
 
 7 restrictions on contributions and expenditures:
 
 8      (1)  During the special and special runoff election campaign
 
 9           periods, a clean elections candidate shall not accept:
 
10           (A)  Private contributions from any source other than
 
11                in-kind contributions of less than $100; and
 
12           (B)  Loans from any source;
 
13      (2)  During the special and special runoff election campaign
 
14           periods, a clean elections candidate shall not expend:
 
15           (A)  Seed money contributions;
 
16           (B)  Public funds for purposes other than those
 
17                specified in this Act;
 
18           (C)  Public funds outside of the particular campaign
 
19                period for which the funding is allocated; and
 
20           (D)  Public funds in excess of one hundred five per
 
21                cent of public funds allocated to the candidate,
 
22                or incur an obligation or obligations to spend
 
23                public funds in excess of this amount;
 

 
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 1      (3)  During the special and special runoff election campaign
 
 2           periods, a clean elections candidate shall pay all
 
 3           campaign expenditures, except petty cash expenditures,
 
 4           by means of the commission's clean elections debit
 
 5           card; and
 
 6      (4)  Clean elections candidates may not accept any monetary
 
 7           or nonmonetary contributions from political parties.
 
 8      SECTION 9.  Clean elections candidates; reporting.(a)
 
 9 Clean elections candidates shall furnish complete campaign
 
10 records, including all records of in-kind contributions, matching
 
11 contributions, and clean elections qualifying contributions to
 
12 the commission at regular filing times set by part XII, subpart B
 
13 of chapter 11, Hawaii Revised Statutes, or as requested by the
 
14 commission.  Clean elections candidates shall fully cooperate
 
15 with any audit or examination by the commission.
 
16      (b)  In addition to any other reports required by law, clean
 
17 elections candidates shall maintain records of the following
 
18 expenditures, which shall be reported or made available to the
 
19 commission as required by the commission:
 
20      (1)  Expenditures such as those for utility bills, involving
 
21           a debt incurred, but not paid immediately, shall be
 
22           reported at the time that the debt is incurred; and
 
23      (2)  All petty cash expenditures.
 

 
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 1      SECTION 10.  Clean elections candidates; continuing
 
 2 obligation.  A clean elections candidate who accepts any public
 
 3 funds during the special election campaign period shall comply
 
 4 with all requirements applicable to a clean elections candidate
 
 5 under this Act.  This obligation shall continue through the
 
 6 special runoff election campaign period regardless of whether
 
 7 that person continues to accept, or maintains eligibility for
 
 8 public funds. 
 
 9      SECTION 11.  Public funding; disbursement.(a)  Candidates
 
10 certified as a qualified clean elections candidate for the
 
11 special election shall on the date that certification is issued
 
12 by the commission, receive authorization to expend public funding
 
13 for the special election.  Candidates certified as a qualified
 
14 clean elections candidate for the special runoff election shall
 
15 on the date that certification is issued by the commission,
 
16 receive authorization to expend public funding for the special
 
17 runoff election.
 
18      (b)  Clean elections candidates in contested elections shall
 
19 be authorized to expend $30,000 in public funds for the special
 
20 election, and $15,000 in public funds for the runoff election.
 
21 These amounts shall be adjusted according to the voting
 
22 population of each clean elections candidate's district.  Clean
 
23 elections candidates shall be authorized to expend equalizing
 

 
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 1 funds in the amount of an additional $5,000 in public funds for
 
 2 the special election, if a non-participating candidate spends
 
 3 more than $40,000 in that special election, and in the amount of
 
 4 $5,000 in public funds for the special runoff election, if a non-
 
 5 participating candidate spends more than $25,000 in that runoff
 
 6 election.  The amount of equalizing funds authorized shall be
 
 7 adjusted according to the voting population of each clean
 
 8 elections candidate's district.
 
 9      (c)  A clean elections candidate may request that the
 
10 commission certify excess expenditures and release equalizing
 
11 funds if a non-participating candidate opposing the clean
 
12 elections candidate discloses in any report required under
 
13 chapter 11 of the Hawaii Revised Statutes, total expenditures in
 
14 excess of $40,000 in the special election, or $25,000 in the
 
15 special runoff election.  Upon certification of excess
 
16 expenditures under this section, the commission shall immediately
 
17 release equalizing clean elections funding to opposing clean
 
18 elections candidates to the extent authorized by law.
 
19      SECTION 12.  Public funding; clean elections account; clean
 
20 elections debit card.(a)  The commission shall establish an
 
21 account to be used for purposes of the clean elections pilot
 
22 program and that shall be designated the clean elections account.
 
23 The commission may deposit up to $1,200,000 in funds from the
 

 
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 1 Hawaii election campaign fund into the clean elections account.
 
 2 Where the amount of funds required for distribution under the
 
 3 clean elections pilot program exceeds $1,200,000, the commission
 
 4 shall disburse funds based upon the order of application for
 
 5 funds by clean elections candidates.
 
 6      (b)  Clean elections candidates shall be authorized to
 
 7 expend public funds by being issued a clean elections debit card.
 
 8 The clean elections debit card shall be a line of debit entitling
 
 9 the candidate and authorized members of the candidate's staff to
 
10 draw public funds from the clean elections account up to the
 
11 amount allocated to the candidate by the commission for the
 
12 applicable special or special runoff election period.
 
13      (c)  Clean elections candidates shall utilize the debit card
 
14 to pay all campaign expenses.  Clean elections candidates shall
 
15 not pay campaign expenses by cash, check, money order, loan, or
 
16 any other means, except as otherwise provided by law; provided
 
17 that petty cash expenditures of no more than $25 each, may be
 
18 paid in cash that has been drawn in amounts of $100 or less per
 
19 week from the clean elections account by means of the clean
 
20 elections debit card.
 
21      (d)  Expenditures such as those for utility bills, involving
 
22 a debt incurred, but not paid immediately, shall be reported as
 
23 provided under section 9 and paid within forty-five days after
 

 
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 1 the day of the special election, special runoff election, or the
 
 2 day that the candidate ceases to be a clean elections candidate,
 
 3 whichever occurs first after the debt is incurred.
 
 4      SECTION 13.  Public funding; expenditure limits.  A clean
 
 5 elections candidate shall not spend or incur an obligation to
 
 6 spend more than one hundred five per cent of the public funds
 
 7 that have been allocated to the candidate.  If a clean elections
 
 8 candidate spends or incurs an obligation to spend more than one
 
 9 hundred five per cent of the public funds allocated, the
 
10 candidate shall repay to the Hawaii elections campaign fund an
 
11 amount equal to ten times the total excess expenditure.
 
12      SECTION 14.  Public funding; permitted uses.  The public
 
13 funds received by a clean elections candidate shall be used only
 
14 for the purpose of defraying that candidate's direct campaign-
 
15 related expenses, including but not limited to, the purchase or
 
16 development of campaign literature, campaign signs, development
 
17 and purchase of media space or time, mailings, general office
 
18 supplies, telephones, rental of campaign equipment and
 
19 headquarters, and utility costs associated with the campaign
 
20 headquarters during the election campaign period for which the
 
21 public funds were allotted.  Expenditures shall not be made:
 
22      (1)  In violation of the law;
 

 
 
 
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 1      (2)  To pay any personal, family, or business expenses,
 
 2           loans, or debts; or 
 
 3      (3)  For any noncampaign-related expenses, or for indirect
 
 4           campaign-related expenses.
 
 5      SECTION 15.  Deposit of public funds.(a)  All public funds
 
 6 received by clean elections candidates shall be deposited
 
 7 directly into a financial depository as provided under section
 
 8 11-199, Hawaii Revised Statutes.
 
 9      (b)  All reports required by chapter 11, Hawaii Revised
 
10 Statutes, for financial disclosure shall include the most recent
 
11 bank statement from the financial depository.
 
12      SECTION 16.  Deposit of moneys into the Hawaii election
 
13 campaign fund.  The following moneys shall be deposited into the
 
14 Hawaii election campaign fund established under section 11-217,
 
15 Hawaii Revised Statutes:
 
16      (1)  Excess seed money contributions as provided in this
 
17           Act;
 
18      (2)  Clean elections qualifying contributions, including any
 
19           excess clean elections qualifying contributions;
 
20      (3)  Unspent public funds distributed to any clean elections
 
21           candidate who does not remain a candidate until the
 
22           primary, general, or special election for which they
 
23           were distributed, or such funds that remain unspent by
 

 
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 1           a clean elections candidate following the date of the
 
 2           primary, general, or special election for which they
 
 3           were distributed;
 
 4      (4)  Fines levied by the commission against candidates for
 
 5           violation of election laws; and
 
 6      (5)  Voluntary donations made directly to the clean
 
 7           elections pilot program.
 
 8      SECTION 17.  Suspension of partial public funding program.
 
 9 For the purposes of the clean elections pilot program, the
 
10 partial public funding program provided under chapter 11, Hawaii
 
11 Revised Statutes, shall be temporarily suspended during the
 
12 elections period applicable to city and county of Honolulu
 
13 council offices in 2002.
 
14      SECTION 18.  Definitions.  For the purposes of this Act:
 
15      "Candidate" shall have the same meaning as provided in
 
16 section section 11-191, Hawaii Revised Statutes.
 
17      "Candidate's committee" shall have the same meaning as
 
18 provided in section 11-191, Hawaii Revised Statutes.
 
19      "Clean elections candidate" or "qualified candidate" means a
 
20 candidate who is certified by the commission as qualifying for
 
21 public funding during the Honolulu city council special election
 
22 or special election campaign periods in 2002, and agrees to abide
 
23 by clean elections contribution and expenditure limitations.
 

 
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 1      "Clean elections campaign funding" means public funds to be
 
 2 provided to clean elections candidates during the 2002 Honolulu
 
 3 city council special and special runoff election campaign
 
 4 periods.
 
 5      "Clean elections fund" means the account established by the
 
 6 commission into which clean elections pilot program funds shall
 
 7 be deposited for withdrawal by candidates by means of a clean
 
 8 elections debit card.
 
 9      "Clean elections qualifying contribution" means a $5
 
10 contribution made to a candidate during the clean elections
 
11 qualifying period by a registered voter residing within the
 
12 candidate's district, that is included within the total number of
 
13 contributions that must be received by the candidate to qualify
 
14 for public funding.
 
15      "Clean elections qualifying period" means the period during
 
16 which candidates may collect qualifying contributions to qualify
 
17 for public funding, beginning January 1, 2002, and ending April
 
18 30, 2002.
 
19      "Commission" shall have the same meaning as provided in
 
20 section 11-191, Hawaii Revised Statutes.
 
21      "Contribution" shall have the same meaning as provided in
 
22 section 11-191, Hawaii Revised Statutes.
 

 
 
 
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 1      "Excess expenditure" means the amount of money spent or
 
 2 obligated to be spent by a non-participating candidate in excess
 
 3 of one hundred five per cent of the clean elections funding the
 
 4 candidate is allocated.
 
 5      "In-kind contribution" means a contribution other than of
 
 6 money, that may include goods or services.
 
 7      "Noncandidate committee" has the same meaning as provided in
 
 8 section 11-191, Hawaii Revised Statutes.
 
 9      "Petty cash expenditure" means an expenditure of no more
 
10 than $25, paid in cash that has been drawn in amounts of $100 or
 
11 less per week from the Hawaii election campaign fund by means of
 
12 a clean elections debit card.
 
13      "Public funding" or "public funds" means clean elections
 
14 campaign funds.
 
15      "Seed money" means contributions made during the clean
 
16 elections qualifying period that may be expended solely for
 
17 campaign start-up purposes.
 
18      "Special election campaign period" means the period
 
19 beginning ninety days before the primary election and ending two
 
20 weeks after the primary election.
 
21      "Special runoff election campaign period" means the period
 
22 beginning the day after the special election and ending two weeks
 
23 after the special runoff election.
 

 
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 1      SECTION 19.  The commission, in cooperation with other
 
 2 relevant stakeholders, shall evaluate the effectiveness of the
 
 3 clean elections pilot project and draft a report to the
 
 4 legislature that shall include:
 
 5      (1)  A detailed summary of all seed money contributions,
 
 6           qualifying contributions, public funds disbursements,
 
 7           and clean elections candidate expenditures;
 
 8      (2)  A comparative study examining clean elections projects
 
 9           and legislation in other states;
 
10      (3)  A summary and evaluation of the commission's activities
 
11           as well as the commission's recommendations relating to
 
12           the implementation, administration, and enforcement of
 
13           Act 254, Session Laws of Hawaii 1998; and
 
14      (4)  A detailed clean elections plan for the 2004 election.
 
15 The commission shall submit its report to the legislature no
 
16 later than twenty days prior to the regular session of 2003.
 
17      SECTION 20.  If any provision of this Act, or the
 
18 application thereof to any person or circumstance is held
 
19 invalid, the invalidity does not affect other provisions or
 
20 applications of the Act which can be given effect without the
 
21 invalid provision or application, and to this end the provisions
 
22 of this Act are severable.
 

 
 
 
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 1      SECTION 21.  This Act shall take effect upon its approval.
 
 2 
 
 3                        INTRODUCED BY: ___________________________
 
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 1 ___________________________           ___________________________
 
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