Report Title:

Campaign Spending

Description:

Strengthens and clarifies campaign spending law. Prohibits fundraising on state or county property. Limits contributions of out-of-state residents. Restricts certain contributions from banks, corporations, and labor organizations. Includes recorded telephone messages within definition of "advertising". Reduces time period that a county clerk must preserve campaign spending reports from 10 to 4 years. Allows campaign committees without a computer to file reports nonelectronically. Prohibits candidates from contributing campaign funds to charitable and other organizations. Limits noncandidate committees' contributions. Removes $50,000 public contract amount threshold to be prohibited from campaign contributions. Requires campaign loans to be repaid in one year.

THE SENATE

S.B. NO.

440

TWENTY-THIRD LEGISLATURE, 2005

 

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. The legislature finds that the campaign spending law must be amended to restore the public's confidence in the integrity of the election process. This Act, therefore, amends the law to ensure that the public has a fair and equal opportunity to participate in the election process, provide more transparency so the public can see the sources of campaign contributions and who is receiving campaign contributions, reduce the influence and reliance on campaign contributions, and make more effective use of public matching funds for candidates.

SECTION 2. Chapter 11, Hawaii Revised Statutes, is amended by adding three new sections to subpart B of part XII to be appropriately designated and to read as follows:

"§11-A Prohibition of fundraising on state or county property. (a) Except as provided in subsection (b), it shall be unlawful for any person to solicit a donation of money or other thing of value in connection with an election campaign in a government facility that is used for the discharge of official duties by an officer or employee of the State or county.

(b) Subsection (a) shall not apply to any government facility that permits use by nongovernmental organizations for a fee or with reservations; provided the governmental facility's use regulations do not prohibit political activities on the premises. Government facilities that permit use for political activities shall be available to a candidate or committee for fundraising activities pursuant to the same terms and conditions that would otherwise apply to use by nongovernmental organizations.

(c) A person who violates subsection (a) shall be guilty of a misdemeanor.

§11-B Limit on contributions from nonresident individuals and persons. Contributions from individuals who are not a resident of the State at the time the contributions are made or from any person, including a noncandidate committee, organized under the laws of another state, resident in another state, or whose participants are not residents at the time the contributions are made shall not exceed thirty per cent of the total contributions received by a candidate or candidate's committee during the election period.

§11-C Contributions or expenditures by banks, corporations, or labor organizations prohibited. (a) No state or national bank, corporation, or labor organization, shall make a contribution or expenditure in connection with any candidate or candidate committee except as provided in this section.

(b) No officer or director of any corporation or any state or national bank or any officer of any labor organization shall consent to any contribution by the corporation, state or national bank, or labor organization, directly to a candidate committee, as the case may be. No person shall accept or receive any contribution prohibited by this section.

(c) This section shall not prohibit the use of funds for the establishment or administration of, or the solicitation of contributions to, any separate segregated fund by a state or national bank, corporation, or labor organization for the purpose of influencing the nomination for election, or election, of any person to political office.

(d) It shall be unlawful for the separate segregated fund to use contributions secured by physical force, job discrimination, financial reprisals, or the threat of force, job discrimination, or financial reprisal; or by 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 such a fund shall inform the employee at the time of the solicitation of the employee's right to refuse to contribute without any reprisal.

(f) It shall be unlawful for:

(1) A state or national bank, or a separate segregated fund established by a state or national bank, 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;

(2) 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; and

(3) 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 state or national bank, corporation, or labor organization may be from dividends, bonuses, or any form of payment to stockholders and their families and its executives or administrative personnel and their families, paid solely for making a contribution to the fund."

SECTION 3. Section 11-191, Hawaii Revised Statutes, is amended as follows:

1. By adding five new definitions to be appropriately inserted and to read:

""Clearly identified" means:

(1) The name of the candidate involved appears;

(2) A photograph or drawing of the candidate appears; or

(3) The identity of the candidate is apparent by unambiguous reference.

"Independent expenditure" means an expenditure by a person expressly advocating the election or defeat of a clearly identified candidate and that is not made in concert or cooperation with or at the request or suggestion of such candidate, the candidate's committee, a party, or their agents.

"Residual funds" means unspent money from contributions received by an individual who fails to file for nomination or candidate who withdraws or otherwise ceases to be a candidate or contributions received by a committee or party that discontinues activities covered under this subpart.

"Separate segregated fund" means an account set up by a noncandidate committee that is used for the purpose of making contributions or expenditures to influence the nomination for election or the election of any candidate to political office or for an issue on the ballot.

"Surplus funds" means unspent money from contributions held by a candidate or committee after a general or special election and after all campaign expenditures have been paid for the election period."

2. By amending the definition of "advertisement" to read:

""Advertisement" means:

(1) Any communication, including a telephone call featuring a recorded message, exclusive of bumper stickers or other sundry items, that:

(A) Identifies a candidate either directly or by direct implication;

(B) Advocates or supports the nomination for election of the candidate;

(C) Advocates or supports the election of the candidate; or

(D) Advocates or supports the candidate's defeat.

(2) Any communication, including a telephone call featuring a recorded message, exclusive of bumper stickers or other sundry items, that:

(A) Identifies an issue or question that will appear on the ballot at the next applicable election; or

(B) Advocates or supports the passage or defeat of the question or issue."

3. By amending the definition of "candidate's committee" to read:

""Candidate's committee" means a committee as defined in this section which makes an expenditure or accepts a contribution in behalf of a candidate with the candidate's authorization. A candidate shall have only one authorized candidate's committee."

4. By amending the definition of "noncandidate committee" to read:

""Noncandidate committee" means a committee as defined in this section [and] that has the purpose of making contributions or expenditures to influence the nomination for election, or election of any candidate to political office or for an issue on the ballot, but does not include a candidate's committee."

SECTION 4. Section 11-194, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Each candidate, committee, or party shall file an organizational report as set forth in section 11-196, or section 11-196.5 as applicable, within ten days from the date a candidate or candidate committee receives any contributions or makes any expenditures, the aggregate amount of which is more than $100, or, within ten days from the date a noncandidate committee receives any contributions or makes any expenditures, the aggregate amount of which is more than $1,000[.] in a two-year election period.

(b) Committees that form within ten days of an election and expend in the aggregate more than $1,000 for the election shall register and fully disclose the expenditure by 4:30 p.m. on the last calendar day prior to the expenditure."

SECTION 5. Section 11-195, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (d) to read:

"(d) All reports filed with the county clerk's office shall be preserved by that office for [ten] four years[.] from the date of receipt."

2. By amending subsection (f) to read:

"(f) For purposes of this subpart, whenever a report is required to be filed with the commission, "filed" means received in the office of the commission or county clerk, whichever is applicable, by the date and time specified for the filing of the report; except that a candidate or the committee of a candidate who is seeking election to the office of:

(1) Governor;

(2) Lieutenant governor;

(3) Mayor;

(4) Prosecuting attorney; [or]

(5) County council;

(6) Senate;

(7) House of representatives; or

(8) Office of Hawaiian affairs;

shall file by electronic means in the manner prescribed by the commission. Candidates for the offices named in this subsection with contributions or expenditures of less than $5,000 need not file by electronic means. A candidate or committee without access to a computer or the Internet may request a waiver from electronic filing from the commission."

SECTION 6. Section 11-200, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Any provision of law to the contrary notwithstanding, a candidate, campaign treasurer, or candidate's committee, as a contribution:

(1) May purchase from its campaign fund not more than two tickets for each event held by another candidate, committee, or party whether or not the event constitutes a fundraiser as defined in section 11-203; and

(2) May use campaign funds for any ordinary and necessary expenses incurred in connection with the candidate's duties as a holder of an elected state or county office, as the term is used in section 11-206(c)[; and

(3) May make contributions from its campaign fund to any community service, educational, youth, recreational, charitable, scientific, or literary organization, provided that in any election cycle, the total amount of all contributions from campaign funds and surplus funds shall be no more than the maximum amount that one person or other entity may contribute to that candidate pursuant to section 11-204(a)]."

SECTION 7. 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.

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

(2) These contribution limits shall apply for the office sought by the candidate;

(3) No person or any other entity shall make contributions in an aggregate amount greater than $25,000 to any number of candidates in an election period. This limit shall not apply to a loan made to a candidate by a financial institution in the ordinary course of business; and

[(2)] (4) 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[; 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 noncandidate committee's contribution limits to a candidate shall be the same as those for a person or any other entity.

[(c)] (d) 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)] (e) 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)] (f) 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.]

return any excess contribution to the original donor within thirty days from 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)] (g) 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)] (h) 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)] (i) 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)] (j) No committee [which] that 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)] (k) 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),] 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.

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

SECTION 8. 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.]

It shall be unlawful for any person:

(1) 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 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, or building is to be made in whole or in part from funds appropriated by the legislative body, at any time between the commencement of negotiations through the later of the completion of performance under or the termination of negotiations for, the contract or furnishing of material, supplies, equipment, land, or buildings, directly or indirectly to 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 to solicit any contribution from any person for any purpose during any period.

(b) This section does not prohibit or make unlawful the establishment or administration of, or the solicitation of contributions to, any separate segregated fund by any state or national bank, corporation, or labor organization for the purpose of influencing the nomination for election, or election, of any person to office, unless the provisions of section 11-C make unlawful the establishment or administration of, or the solicitation of contributions to, the fund. Each specific prohibition, allowance, and duty applicable to a state or national bank, corporation, or labor organization or separate segregated fund under section 11-C applies to a state or national bank, corporation, labor organization, or separate segregated fund to which this section applies."

SECTION 9. Section 11-205.6, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(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 relevant repayment obligations under this section.] 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. Any loan, other than a loan from the candidate or a loan from immediate family members, that is not repaid within one calendar year from the date of the loan shall be deemed a contribution, subject to all relevant provisions of this chapter."

SECTION 10. Section 11-206, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) Campaign contributions shall not be used for personal expenses or to qualify for public funding in any subsequent election, and shall not be transferred to another candidate as prohibited in section 11-200. Contributions shall be used for the office sought by the candidate and shall not be used by the candidate in an election for another state, county, or federal office.

Where such contributions are used for the purchase or lease of consumer goods, vehicles, equipment, and services that provide a mixed benefit to the candidate, they shall be reported to the commission pursuant to sections 11-212 and 11-213.

(c) [Such contributions] Surplus funds may be used after a general or special election for [any fundraising activity, for]:

(1) Any fundraising activity;

(2) Any other politically related activity sponsored by the candidate;

[(2)] (3) Any ordinary and necessary expenses incurred in connection with the candidate's duties as a holder of an elected state or county office; or

[(3)] (4) Any contribution to any community service, educational, youth, recreational, charitable, scientific, or literary organization, provided that in any election cycle, the total amount of all contributions from campaign funds and surplus funds shall be no more than the maximum amount that one person or other entity may contribute to that candidate pursuant to section 11-204(a)[.]; provided that any such contributions may be made only within ninety days after the general election."

SECTION 11. Section 11-207, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Expenditures, or disbursements for electioneering communications as defined in section 11-207.6, or any other coordinated activity 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] the candidate and expenditure by [such] the 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] the 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.] "Coordinated activity" means:

(1) The payment by any person in cooperation, consultation, or concert with, at the request of, or pursuant to any general or particular understanding with a candidate, committee, the political party of a candidate, or an agent of a candidate, committee, or the political party of a candidate;

(2) The payment by any person for the production, dissemination, distribution, or republication, in whole or in part, of any broadcast or any written, graphic, or other form of campaign material prepared by a candidate, committee, or an agent of a candidate or committee or a communication that expressly advocates for or against a candidate; or

(3) The payment by any person or contract to make any payment for any electioneering communication, as defined in section 11-207.6; and the payment is coordinated with a candidate, committee, the political party of the candidate, or an agent of a candidate, committee, or the political party of a candidate."

SECTION 12. Section 11-207.6, Hawaii Revised Statutes, is amended to read as follows:

"[[]§11-207.6[]] Electioneering communications. (a) Every person who makes a disbursement for electioneering communications in an aggregate amount of $2,000 during any calendar year shall, within twenty-four hours of each disclosure date provided in this section, file with the commission a statement of information described in subsection (b).

(b) Each statement required to be filed under this section shall contain the following information:

(1) The identification of the person making the disbursement, any entity sharing or exercising discretion or control over such person, and the custodian of the books and accounts of the person making the disbursement;

(2) The state of incorporation and principal place of business or, for an individual, the address of the person making the disbursement;

(3) The amount of each disbursement during the period covered by the statement and the identification of the person to whom the disbursement was made;

(4) The elections to which the electioneering communications pertain and the names, if known, of the candidates identified or to be identified;

(5) If the disbursements were made by a committee, the names and addresses of all persons who contributed to the committee for the purpose of publishing or broadcasting the electioneering communications;

(6) If the disbursements were made by an organization other than a committee, the names and addresses of all persons who contributed to the organization for the purpose of publishing or broadcasting the electioneering communications; and

(7) Whether or not any electioneering communication is made in coordination, cooperation, or concert with or at the request or suggestion of any candidate, candidate committee, political party or agent of any candidate, candidate committee or political party and, if so, the identification of the candidate, candidate committee, political party, or agent involved.

(c) For the purposes of this section:

"Disclosure date" means, for every calendar year, the first date by which a person has made disbursements during that same year of more than $2,000, in the aggregate, for electioneering communications, and the date of any subsequent disbursements by that person for electioneering communications.

"Electioneering communication" means any [paid] advertising [broadcast]:

(1) (A) Broadcast from a cable, satellite, television, or radio broadcast station[, or published];

(B) Published in any periodical or newspaper[, or sent]; or

(C) Sent by mail at a bulk rate[, which];

(2) That refers to a clearly identifiable candidate; and [is]

(3) Is made, or scheduled to be made, either within thirty days prior to a primary or initial special election or within sixty days prior to a general or special election.

"Electioneering communication" shall not include communications in a news story or editorial[,] distributed through the facilities of any broadcast station, unless the facilities are owned or controlled by any political party, political committee, or candidate, communications [which] that constitute expenditures by the disbursing organization, [or] communications in house bulletins[.], or communications that constitute a candidate debate or forum, or that solely promotes such a debate or forum and is made by or on behalf of the person sponsoring the debate or forum.

(d) For purposes of this section, a person shall be treated as having made a disbursement if the person has executed a contract to make the disbursement."

SECTION 13. Section 11-212, Hawaii Revised Statutes, is amended to read as follows:

"§11-212 Preliminary reports.

(a)(1) The candidate committee of each candidate whose name will appear on the ballot in the immediately succeeding election shall file a preliminary report with the commission or appropriate county clerk's office. Preliminary reports shall be filed on forms provided by the commission no later than 4:30 p.m. on the following dates:

(A) July thirtieth of the year of the primary election;

(B) Ten calendar days prior to each primary and initial special election; and

(C) Ten calendar days prior to a special or general election.

(2) Each report shall be certified pursuant to section 11-195 and shall contain the following information which shall be current through the thirtieth calendar day prior to the filing of the report filed on the thirtieth of July and fifth calendar day prior to the filing of other preliminary reports:

(A) The aggregate sum of all contributions and other campaign receipts received;

(B) The amount and date of deposit of the contribution and the name and address of each donor who contributes an aggregate of more than $100 during an election period, which has not previously been reported; provided that if all the information is not on file, the contribution shall not be deposited;

(C) The amount and date of deposit of each contribution and the name, address, employer, and occupation of each donor who contributes an aggregate of $1,000 or more during an election period, which has not previously been reported; provided that if all the information is not on file, the contribution shall not be deposited;

(D) All expenditures made, incurred, or authorized by or for a candidate, including the name and address of each payee and the amount, date, and purpose of each expenditure; and

(E) A current statement of the balance on hand or deficit.

(b) Each noncandidate committee shall file a preliminary report with the commission, on forms provided by the commission, no later than 4:30 p.m. on the tenth calendar day prior to each primary election and the tenth calendar day prior to a special or general election. Each report shall be certified pursuant to section 11-195 and shall contain the following information, which shall be current through the fifth calendar day prior to the filing of a preliminary report:

(1) The aggregate sum of all contributions and other campaign receipts received;

(2) The amount and date of deposit of the contribution and the name, address, employer, and occupation of each donor who contributes an aggregate of $100 or more during an election period, which has not previously been reported; provided that if all the information is not on file, the contribution shall not be deposited;

(3) The amount and date of each disbursement or contribution made to a candidate, party, organization, or committee, including the name and address of each payee, which has not previously been reported;

(4) The amount and date of each expenditure made or incurred by the committee for or against any candidate, ballot issue, or on behalf of another committee, which has not previously been reported; and

(5) A current statement of the balance on hand.

(c) The candidate committee and noncandidate committee shall itemize disbursements to consultants, advertising agencies and similar firms, credit card payments, salaries, and candidate reimbursements to permit a reasonable person to determine the ultimate intended recipient of the expenditure and its purpose.

[(c)] (d) A candidate, party, or committee whose aggregate contributions and aggregate expenditures for the reporting period each total $2,000 or less may file a short form report with the commission or appropriate county clerk's office in lieu of the reports required by this section and section 11-213.

[(d)] (e) Notwithstanding this section and section 11-213, a candidate, party, or committee whose aggregate contributions and aggregate expenditures for the election period total $1,000 or less, need not file a preliminary and final primary report, a preliminary and final general report, or a special election report, but shall file only a final election period report."

SECTION 14. Section 11-213, Hawaii Revised Statutes, is amended to read as follows:

"§11-213 Final and supplemental reports. (a) Primary and initial special election. Each candidate whether or not successful in a primary or initial special election, authorized person in the case of a party, or campaign treasurer in the case of a committee, shall file a final primary report certified pursuant to section 11-195 with the commission on forms provided by the commission no later than 4:30 p.m. on the twentieth calendar day after a primary or initial special election. The report shall include the following information which shall be current through the day of the primary election:

(1) A statement of the total contributions and campaign receipts received;

(2) The amount and date of deposit of each contribution and the name and address of each donor who contributes an aggregate of more than $100 during an election period, which has not previously been reported; provided that if all the information is not on file, the contribution shall not be deposited;

(3) The amount and date of deposit of each contribution and the name, address, employer, and occupation of each donor who contributes an aggregate of $1,000 or more during an election period, which has not previously been reported; provided that if all the information is not on file, the contribution shall not be deposited;

(4) A statement of all expenditures made, incurred, or authorized by or for a candidate including the name and address of each payee and the amount, date, and purpose of each expenditure; and

(5) The cash balance and a statement of surplus or deficit.

(b) Each noncandidate committee shall file a final primary report, certified pursuant to section 11-195, with the commission on forms provided by the commission no later than 4:30 p.m. on the twentieth calendar day after a primary election. The report shall include the following information, which shall be current through the day of the primary election:

(1) A statement of the total contributions and campaign receipts received;

(2) The amount and date of deposit of each contribution and the name, address, employer, and occupation of each donor who contributes an aggregate of more than $100 during an election, which has not previously been reported;

(3) The amount and date of each disbursement or contribution made to a candidate, party, organization, or committee, including the name and address of each payee, which has not previously been reported;

(4) The amount and date of each expenditure made or incurred by the committee for or against any candidate, ballot issue, or on behalf of another committee, which has not previously been reported; and

(5) A current statement of the balance on hand.

(c) The candidate committee and noncandidate committee shall itemize disbursements to consultants, advertising agencies and similar firms, credit card payments, salaries, and candidate reimbursements to permit a reasonable person to determine the ultimate intended recipient of the expenditure and its purpose.

[(c)] (d) General, special general, special election or election period. Each candidate, authorized person in the case of a party, or campaign treasurer in the case of a committee shall file a final election period general report with the commission on forms provided by the commission no later than 4:30 p.m. on the thirtieth calendar day after a general, special general, or special election. The final election period report shall be certified pursuant to section 11-195, shall report all items prescribed in subsection (a) or (b) for noncandidate committees, and shall be current through the day of the general election. A candidate who is unsuccessful in a primary or special primary election shall file a final election period report.

[(d)] (e) Termination. A candidate, party, or committee may terminate registration with the commission with no surplus or no deficit. A termination report approved by the commission shall include information on the disposition of any funds, which has not previously been reported.

[(e)] (f) Deficit. In the event of a deficit the candidate, authorized person in the case of a party, or campaign treasurer in the case of a committee shall, every six months until the deficit is eliminated, file supplemental reports covering all items prescribed in subsection (a) or subsection (b) in the case of noncandidate committees. The first report shall be due no later than 4:30 p.m. on the thirtieth day after the last day of the election year.

[(f)] (g) Surplus. In the event of a surplus the candidate, authorized person in the case of a party, or campaign treasurer in the case of a committee, shall:

(1) Maintain the cash surplus in a financial depository; and

(2) Every six months, until the candidate files to be on the ballot with the state office of elections, or in the case of a party or committee until they participate in an election again, file supplemental reports detailing all items prescribed in subsection (a) or in the case of a noncandidate committee until they participate in an election again, or file supplemental reports detailing all items prescribed in subsection (b).

The first report shall be due not later than 4:30 p.m. on the thirtieth calendar day after the last day of the election year.

[(g)] (h) All supplemental reports required by this section shall be filed until a candidate files to be on the ballot with the state elections office. Each party or noncandidate committee shall file a supplemental report for the respective reporting period during a nonelection year. In an election year, each party and noncandidate committee shall file reports as prescribed in this section and section 11-212 for the primary and general election."

SECTION 15. Section 11-214, Hawaii Revised Statutes, is amended to read as follows:

"§11-214 Disposition of funds. (a) [All candidates who withdraw or cease to be candidates, or committees directly associated with such candidates, individuals who receive contributions but fail to file for nomination, or committees or parties which discontinue their activities covered in this subpart, shall return all residual private contributions to the donors of such contributions within four years if their identities are known, provided that if the identity of any donor is not known, or the donor cannot be found, such contribution shall escheat to the Hawaii election campaign fund or may be donated to a nonprofit organization of the candidate's choice. In the event of a death of a candidate, the candidate's committee, if any, shall return all residual private contributions to the donors of such contributions, provided that any residual contributions not returned to the donors within sixty days of the candidate's death shall escheat to the Hawaii election campaign fund or may be donated to a nonprofit organization of the candidate's choice.

(b) All residual public funds shall be returned to the Hawaii election campaign fund.

(c) Upon disposition of all residual funds, the candidate or campaign treasurer shall file a report with the commission, reporting the amounts distributed under this section and the manner of disposition.

(d) This section shall not apply to:

(1) Elected officials;

(2) Candidates who failed to be nominated or elected yet who become a candidate for nomination or election to office within four years thereafter;

(3) Elected officials who resign their office before the end of their term yet who file to become a candidate for reelection within four years after the end of the term from which they resigned; or

(4) Elected officials who do not seek reelection yet who file to become a candidate for election within four years after the end of the term from which they did not seek reelection.]

Candidates, committees, and individuals that receive contributions for an election but fail to file a nomination for that election shall return all contributions to the donors no later than the final date to file for a nomination for that election. Contributions may not be expended for any purpose. Contributions not returned to the donors shall escheat to the Hawaii election campaign fund.

(b) Candidates, committees, and individuals that withdraw or cease to be candidates or committees because of death, term limits, disqualification, resignation, or other personal reasons shall return all residual funds to the donors no later than ninety days after the candidate or committee ceases to be a candidate or committee. Residual funds not returned to the donors shall escheat to the Hawaii election campaign fund. Contributions shall only be used for expenditures directly related to the candidate's or committee's activities to influence the outcome of the nomination for election or election.

(c) Candidates or committees directly associated with candidates, who:

(1) Are elected to office, may expend surplus funds pursuant to section 11-206 but under no circumstances shall expenditures be made from funds after four years from the date of the election for which the contributions are received; or

(2) Fail to be nominated or elected to office, may expend surplus funds pursuant to section 11-206 but under no circumstances shall expenditures be made from funds after one year from the date of the election for which the contributions are received.

Contributions not returned to the donors shall escheat to the Hawaii election campaign fund.

(d) Surplus funds may be expended by a candidate for the next subsequent election upon registration for the election pursuant to section 11-194.

(e) Candidates or committees that dispose of funds pursuant to this section shall terminate registration with the commission as provided in section 11-213."

SECTION 16. Section 11-218, Hawaii Revised Statutes, is amended to read as follows:

"§11-218 Candidate funding; amounts available. (a) The maximum amount of public funds available to a candidate for the office of governor, lieutenant governor, or mayor in any election shall not exceed ten per cent of the total expenditure limit as determined under section 11-209 for each election [as established] for each office listed in this subsection [pursuant to section 11-209].

(b) For the office of state senator, state representative, county council member, and prosecuting attorney, the maximum amount of public funds available to a candidate in any election shall be fifteen per cent of the total expenditure limit as determined under section 11-209 for each election [as established] for each office listed in this subsection [pursuant to section 11-209].

(c) For the office of Hawaiian affairs, the maximum amount of public funds available to a candidate shall not exceed $1,500 in any election year.

[(c)] (d) For the board of education [and all other offices,], the maximum amount of public funds available to a candidate shall not exceed $100 in any election year.

[(d)] (e) Each candidate who qualified for the maximum amount of public funding in any primary [or special primary] election and who is a candidate for a subsequent general election shall apply with the commission to be qualified to receive the maximum amount of public funds as provided in this section for the respective election. For purposes of this section qualified means meeting the qualifying campaign contribution requirements of section 11-219."

SECTION 17. 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, special primary, or general election, a candidate shall not be unopposed in any election for which public funds are sought, and 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 from individual residents of Hawaii [for the candidate's respective office for each election]:

(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; [and]

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

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

SECTION 18. Section 11-220, Hawaii Revised Statutes, is amended to read as follows:

"§11-220 Eligibility for payments. (a) To be eligible to receive payments under section 11-217, a candidate shall in writing:

(1) Agree to obtain and furnish to the commission any evidence of the campaign expenses of such candidate which the commission may request;

(2) Agree to keep and furnish records, books, and other information which the commission may request; and

(3) Agree to an audit and examination by the commission under section 11-225 and to pay any amounts required to be paid pursuant to [such] that section.

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

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

(2) [Such] The candidate has qualified to be on the election ballot in a primary[, special primary,] or general election;

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

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

(c) Each candidate and all committees authorized by [such] that candidate 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 [such] 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 shall transmit to the commission all reports with respect to [such] these contributions [which] that the commission may require.

(d) Candidates qualified to be on the election ballot for a special election shall not be eligible to receive payments under section 11-217."

SECTION 19. Section 11-221, Hawaii Revised Statutes, is amended to read as follows:

"§11-221 Entitlement to payments. [Every candidate who is eligible to receive public funds pursuant to section 11-220 is entitled to payments pursuant to section 11-217 in an amount equal to each qualifying contribution received by that candidate or candidate committee during the matching payment period involved. A qualifying contribution shall be attributed to a primary, special or general election.

A candidate eligible to receive public funds must obtain a minimum amount of qualifying campaign contributions as set forth in section 11-219 in order to be entitled to receive any matching public funds in an election.] (a) If the candidate obtains a minimum amount of qualifying campaign contributions as set forth in section 11-219, the candidate is entitled to receive for each election that the candidate's name appears on the ballot:

(1) The minimum amount of qualifying campaign contributions; and

(2) Payments of $2 for each $1 of qualifying contributions in excess of the minimum amount of qualifying contributions,

but in no case shall the candidate receive more than the maximum amount of public funds available to a candidate pursuant to section 11-218.

(b) A qualifying contribution shall be attributed to a primary or general election.

(c) [For the purpose of this section, a] A candidate must have at least one other qualified candidate as an opponent for the primary[, special,] or general election to receive public funds for that election."

SECTION 20. Section 11-222, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Each candidate in receipt of the qualifying sum of contributions established for the candidate's office may apply to the commission for public funding after the candidate has become a candidate in a primary[, special primary, special,] or general election."

SECTION 21. Section 11-223, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) Each candidate, on the deadline for filing of a final report for any primary[, special primary, special,] or general election, shall return all unexpended public funds to the Hawaii election campaign fund."

SECTION 22. Section 11-224, Hawaii Revised Statutes, is amended to read as follows:

"§11-224 Public funds; report required; return of funds. The campaign treasurer of the candidate shall produce evidence to the commission no later than twenty days after a primary [or special primary] election; and no later than thirty days after a [special or] general election that all public funds paid to the candidate have been utilized as required by this subpart.

Should the commission determine that any part of the public funds have been used for noncampaign or improper expenses, it shall report such finding to the attorney general and shall order the candidate to return all or part of the [total] funds paid to that candidate for a primary[, special primary, special,] or general election. When [such] public funds are returned, they shall be deposited in the Hawaii election campaign fund."

SECTION 23. Section 11-229, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Any person who knowingly, intentionally, or recklessly violates any provision of this subpart shall be guilty of a misdemeanor. Any person who knowingly or intentionally falsifies any report required by this subpart with the intent to circumvent the law or deceive the commission or who violates section 11-201 or 11-202 shall be guilty of a class C felony. A person charged with a class C felony shall not be eligible for a deferred acceptance of guilty plea or nolo contendere plea under chapter 853. A person who is convicted under this section shall be disqualified from holding elective public office for a period of four years from the date of conviction."

SECTION 24. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 25. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 26. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 27. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 28. This Act shall take effect on January 1, 2006, and shall not apply retroactively to any contributions made prior to its effective date.

INTRODUCED BY:

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