Campaign Contributions; Reports

Adds to campaign spending law new sections regarding reports for
late contributions, limitations on contributions during
legislative sessions, and limitations on contributions by
corporations, trade organizations or labor organizations.

THE SENATE                              S.B. NO.           630
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Chapter 11, Hawaii Revised Statutes, is amended
 2 by adding four new sections to be appropriately designated and to
 3 read as follows:
 4      "11-A  Late contributions; reports.  (a)  Each candidate
 5 committee or committee that makes or receives a contribution of
 6 more than $500 within fifteen days of a primary, special primary,
 7 general or special general election shall report the late
 8 contribution to the commission.
 9      (b)  The report shall include the name, address, occupation
10 and employer of the contributor, the name of the candidate or
11 noncandidate committee receiving the contribution, the amount of
12 the contribution, the contributor's aggregate contributions to
13 the candidate or noncandidate committee, and the purpose, if any,
14 to which the contribution will be applied.
15      (c)  A late contribution shall be reported by facsimile
16 transmission, guaranteed overnight mail, or personal delivery
17 within twenty-four hours of the time it is made or received.  A
18 late contribution shall be reported on subsequent required
19 reports without regard to reports filed pursuant to this section.

Page 2                                                     
                                     S.B. NO.           630

 1      (d)  A late contribution need not be reported pursuant to
 2 this section if it is returned to the contributor within twenty-
 3 four hours of its receipt.
 4      (e)  A report filed pursuant to this section shall be in
 5 addition to any other campaign report required to be filed by
 6 this subpart.
 7      11-B  Limitations on contributions; during legislative
 8 sessions.  During any session of the state legislature, no
 9 candidate, candidate committee, elected official, or political
10 party shall solicit or accept any contribution, or promise to
11 make a contribution, from a registered lobbyist, or employer or
12 sponsor of a registered lobbyist.
13      11-C  Limitations on contributions; by corporations, trade
14 organizations, or labor organizations.  (a)  No corporation,
15 trade organization, or labor organization may make a contribution
16 or expenditure in connection with any election.
17      (b)  For the purposes of this section, the term
18 "contribution or expenditure" shall not include:
19      (1)  Communications by a corporation, or trade association
20           to its stockholders, members, partners, and executive
21           or administrative personnel;
22      (2)  Communications by a labor organization to its
23           employees, members, and their families;

Page 3                                                     
                                     S.B. NO.           630

 1      (3)  Nonpartisan registration campaigns, get-out-the-vote
 2           campaigns, and the provision of meeting places to any
 3           political committee, party, or candidate on a non-
 4           discriminatory and non-preferential basis; or
 5      (4)  The establishment, administration, and solicitation of
 6           contributions to a separate segregated fund to be
 7           utilized for political purposes by a corporation,
 8           commercial partnership, trade organization, or labor
 9           organization; provided that:
10           (A)  No corporation, or trade organization, or separate
11                segregated fund established by any such
12                organization, may solicit contributions to that
13                fund from any person other than its stockholders,
14                partners, association members, and its executive
15                and administrative personnel and their families;
16                and
17           (B)  No labor organization or separate segregated fund
18                established by any such organization, may solicit
19                contributions to that fund from any person other
20                than its employees, members, and their families.
21      (c)  For the purposes of this section, the term "executive
22 or administrative personnel" means individuals employed by a
23 corporation who are paid on a salary, rather than hourly, basis

Page 4                                                     
                                     S.B. NO.           630

 1 and who have policymaking, managerial, professional, or
 2 supervisory responsibility.
 3      11-D  Campaign contribution; restrictions as to surplus.
 4 (a)  For the purpose of this section, "surplus contributions"
 5 means contributions held by a candidate or candidate committee
 6 after all expenses have been paid, and loans repaid, for the
 7 candidate's election period.
 8      (b)  A candidate committee shall dispose of all surplus
 9 contributions within ninety days after an election period in
10 which the candidate's name last appeared on the ballot.
11      (c)  Surplus contributions shall be disposed of as follows:
12      (1)  To return contributions to donors;
13      (2)  For expenses associated with closing down the campaign,
14           for fundraising expenses and any other politically
15           related activity sponsored by the candidate;
16      (3)  For any contribution to any community service,
17           educational, youth, recreational, charitable,
18           scientific, or literary organization within the
19           district for which the candidate sought election;
20      (4)  To establish a fund to pay for any ordinary and
21           necessary expenses incurred in connection with the
22           candidate's duties as a holder of an elected state or
23           county office; provided that the amount transferred to

Page 5                                                     
                                     S.B. NO.           630

 1           any such fund shall not exceed:
 2           (A)  $20,000 for the offices of governor and lieutenant
 3                governor;
 4           (B)  $10,000 for the office of mayor;
 5           (C)  $4,000 for the office of state senator or county
 6                office other than mayor;
 7           (D)  $2,000 for the office of state representative; or
 8           (E)  $1,000 for any other office.
 9           Any such fund shall be registered with the commission
10           and expenditures from any such fund shall be limited to
11           expenditures permitted for funds appropriated pursuant
12           to section 24-1, Hawaii Revised Statutes; or
13      (5)  To the candidate's new or continuing political
14           committee; provided that, the amount transferred to any
15           such committee shall not exceed:
16           (A)  $50,000 if the candidacy is for the office of
17                governor, lieutenant governor, or mayor;
18           (B)  $10,000 if the candidacy is for the office of
19                state senator or county office other than mayor;
20           (C)  $5,000 if the candidacy is for the office of state
21                representative; or
22           (D)  $1,000 if the candidacy is for any other office.
23      (d)  All surplus contributions, other than those retained

Page 6                                                     
                                     S.B. NO.           630

 1 pursuant to this section, remaining in a candidate's account
 2 ninety days after the conclusion of an election period shall
 3 escheat to the Hawaii election campaign fund."
 4      SECTION 2.  Section 11-195, Hawaii Revised Statutes, is
 5 amended by amending subsection (f) to read as follows:
 6      "(f)  For purposes of this subpart, whenever a report is
 7 required to be filed with the commission, "filed" means received
 8 in the office of the commission or county clerk, whichever is
 9 applicable, and filed by electronic means in a manner prescribed
10 by the commission, by the date and time specified for the filing
11 of the report[; except that a candidate or the committee of a
12 candidate who is seeking election to the office of:
13      (1)  Governor;
14      (2)  Lieutenant governor;
15      (3)  Mayor;
16      (4)  Prosecuting attorney; or
17      (5)  County council;
18 shall file by electronic means in the manner prescribed by the
19 commission.  Candidates for the offices named in this
20 subsection]; provided that candidate committees and committees
21 with contributions [or] and expenditures of less than $5,000 for
22 the election period need not file by electronic means."
23      SECTION 3.  Section 11-204, Hawaii Revised Statutes, is

Page 7                                                     
                                     S.B. NO.           630

 1 amended to read as follows:
 2      "11-204  Campaign contributions; limits as to persons.(a)
 3 No person or any other entity shall make contributions to:
 4      (1)  A candidate seeking nomination or election to [a two-
 5           year office] the house of representatives or to the
 6           candidate's committee in an aggregate amount greater
 7           than [$2,000] $1,000 during an election period; and
 8      (2)  A candidate seeking nomination or election to [a four-
 9           year statewide office] governor or lieutenant governor
10           or to the candidate's committee in an aggregate amount
11           greater than [$6,000] $3,000 during an election period;
12           [and] provided that contributions made in a general
13           election to a candidate shall, for the purposes of this
14           section, be treated as a contribution to the
15           candidate's cocandidate for governor;
16      (3)  A candidate seeking nomination or election to [a four-
17           year nonstatewide office] the senate, mayor, county
18           prosecutor, or county council for a four-year term, or
19           to the candidate's committee in an aggregate amount
20           greater than [$4,000] $2,000 during an election
21           period[.]; and
22      (4)  A candidate seeking nomination or election to any other
23           office or to the candidate's committee in an aggregate

Page 8                                                     
                                     S.B. NO.           630

 1           amount greater than $1,000 for the election period.
 2      These limits shall not apply to a loan made to a candidate
 3 by a financial institution in the ordinary course of business.
 4      (b)  No person or any other entity shall make contributions
 5 to a noncandidate committee, in an aggregate amount greater than
 6 $1,000 in an election[; except that in the case of a corporation
 7 or company using funds from its own treasury, there shall be no
 8 limit on contributions or expenditures to the corporation or
 9 company noncandidate committee].
10      (c)  A candidate in making a contribution to the candidate's
11 campaign shall be exempt from the above limitation[, but shall be
12 limited in the aggregate to $50,000 in any election period.  The
13 aggregate amount of $50,000 shall include any loans made for
14 campaign purposes to the candidate from the candidate's immediate
15 family].
16      (d)  A contribution by a dependent minor shall be reported
17 in the name of the minor but shall be counted against the
18 contribution of the minor's parent or guardian.
19      (e)  Any candidate or candidate's committee who receives in
20 the aggregate more than the applicable limits set forth in this
21 section in any primary, initial special, special, or general
22 election from a person, shall be required to transfer an amount
23 equal to any excess over the limits established in this section

Page 9                                                     
                                     S.B. NO.           630

 1 to the Hawaii election campaign fund within thirty days of
 2 receipt by a candidate or candidate's committee, and in any
 3 event, no later than thirty days upon the receipt by a candidate
 4 or candidate's committee of notification from the commission.  A
 5 candidate or candidate's committee who complies with this
 6 subsection prior to the initiation of prosecution shall not be
 7 subject to any penalty under section 11-228.
 8      (f)  All payments made by a person whose contributions or
 9 expenditure activity is financed, maintained, or controlled by
10 any corporation, labor organization, association, political
11 party, or any other person or committee, including any parent,
12 subsidiary, branch, division, department, or local unit of the
13 corporation, labor organization, association, political party, or
14 any other person, or by any group of those persons shall be
15 considered to be made by a single person.
16      (g)  A contribution made by two or more [corporations]
17 separate segregated funds shall be treated as one person when
18 [such corporations:] separate segregated funds' sponsoring
19 organizations:
20      (1)  Share [the majority of] two or more members of their
21           boards of directors;
22      (2)  Share two or more corporate officers;
23      (3)  Are owned or controlled by the same majority

Page 10                                                    
                                     S.B. NO.           630

 1           shareholder or shareholders; or
 2      (4)  Are in a parent-subsidiary relationship.
 3      (h)  An individual and any general partnership in which the
 4 individual is a partner, or an individual and any corporation in
 5 which the individual owns a controlling interest, shall be
 6 treated as one person.
 7      (i)  No committee which supports or opposes a candidate for
 8 public office shall have as officers individuals who serve as
 9 officers on any other committee which supports or opposes the
10 same candidate.  No such committee shall act in concert with, or
11 solicit or make contributions on behalf of, any other committee.
12      [(j)  No contributions may be made to a noncandidate
13 committee from a corporation or other organization unless the
14 noncandidate committee has been in existence continuously, as
15 shown on the records of the campaign spending commission, for at
16 least twelve months prior to the next primary election.
17      (k)] (j)  No contributions or expenditures shall be made to
18 or on behalf of a candidate or committee by a foreign national or
19 foreign corporation, including a domestic subsidiary of a foreign
20 corporation, a domestic corporation that is owned by a foreign
21 national, or a local subsidiary where administrative control is
22 retained by the foreign corporation, and in the same manner
23 prohibited under 2 United States Code section 441e and 11 Code of

Page 11                                                    
                                     S.B. NO.           630

 1 Federal Regulations 110.4(a) and 110.9(a), as amended.  No
 2 foreign-owned domestic corporation shall make contributions
 3 where:
 4      (1)  Foreign national individuals participate in election-
 5           related activities such as decisions concerning the
 6           making of contributions or the administration of a
 7           political committee; or
 8      (2)  The contribution funds are not domestically-derived.
 9      [(l)] (k)  No person or any other entity shall make
10 contributions to a political party in an aggregate amount greater
11 than $50,000 in any two-year election period.
12      (l)  Contributions by a candidate's immediate family shall
13 be limited in the aggregate to $50,000 which shall include any
14 loans made for campaign purposes to the candidate by the
15 candidate's immediate family.
16      (m)  No person, other than a political party, shall make
17 contributions aggregating more than $25,000 in any calendar year.
18 For the purposes of this subsection, any contribution made to a
19 candidate in a year other than the calendar year in which the
20 election is held with respect to which such contribution is made,
21 is considered to be made during the calendar year in which such
22 election is held."
23      SECTION 4.  Section 11-205, Hawaii Revised Statutes, is

Page 12                                                    
                                     S.B. NO.           630

 1 amended by amending subsection (a) to read as follows:
 2      "(a)  No political party shall make contributions to a
 3 candidate in any calendar year in an aggregate amount greater
 4 than the following amounts for each respective office:
 5      (1)  For the office of governor--[$50,000;] $25,000;
 6      (2)  For the office of lieutenant governor--[$40,000;]
 7           $20,000;
 8      (3)  For the [partisan] offices of mayor and prosecuting
 9           attorney--[$25,000;] $12,500;
10      (4)  For the offices of state senator and [partisan] county
11           council member--[$20,000;] $10,000; and
12      (5)  For the office of state representative--[$15,000.]
13           $7,500."
14      SECTION 5.  Section 11-205.5, Hawaii Revised Statutes, is
15 amended to read as follows:
16      "11-205.5  Campaign contributions by state contractors.
17 [(a)  Any person making a contribution to any candidate,
18 committee, or political party, and who has received, in any
19 calendar year, $50,000 or more through contracts from the
20 State[,] or county shall register and report that fact to the
21 commission within thirty days of the date of the contribution or
22 within thirty days of the date of the contract, whichever occurs
23 later; provided that this section shall not apply to a person who

Page 13                                                    
                                     S.B. NO.           630

 1 has received $50,000 or more through a grant, subsidy, or
 2 purchase of service agreement under chapter 42F or 103F.
 3      (b)  The commission shall prescribe forms and procedures for
 4 the reporting required in subsection (a) which, at a minimum,
 5 shall require the following information:
 6      (1)  The name and address of the person making the
 7           contribution;
 8      (2)  The name of the candidate, committee, or political
 9           party receiving the contribution;
10      (3)  The amount of money received from the State or county,
11           the dates, and information identifying each contract
12           and describing the service performed or goods provided;
13           and
14      (4)  If an entity is making the contribution, the names and
15           business addresses of the principals, including
16           officers and directors.
17      (c)  The commission shall maintain a list of such reports
18 for public inspection both at the commission's office and through
19 the [state] Hawaii FYI electronic bulletin board.] (a)  It shall
20 be unlawful for any person:
21      (1)  Who enters into a contract with the State or any
22           department or political subdivision thereof either for
23           the rendition of personal services or furnishing of any

Page 14                                                    
                                     S.B. NO.           630

 1           material supplies, or equipment to the State or any
 2           department or political subdivision thereof or for
 3           selling land or building to the State or any department
 4           or political subdivision thereof, if payment for the
 5           performance of such contract or payment for such
 6           material, supplies, equipment, land, or building is to
 7           be made in whole or in part from funds appropriated by
 8           the State or any political subdivision thereof, at any
 9           time between the commencement of negotiations for, and
10           the latter of completion of performance or the
11           termination of negotiations, to directly or indirectly
12           make any contribution, or to promise expressly or
13           impliedly to make any contribution to any candidate,
14           candidate committee or committee or to any person for
15           any political purpose or use; or
16      (2)  To knowingly solicit any such contribution from any
17           such persons for any such purpose during any such
18           period.
19      (b)  This section shall not prohibit or make unlawful the
20 establishment or administration of any separate segregated fund
21 by any corporation, partnership, or labor organization."
22      SECTION 6.  Section 11-206, Hawaii Revised Statutes, is
23 amended to read as follows:

Page 15                                                    
                                     S.B. NO.           630

 1      "11-206  Campaign contributions; restrictions as to
 2 [surplus.] use.  [(a)  Every candidate in a primary, special
 3 primary, special, or general election who has voluntarily agreed
 4 to abide by spending limits and who subsequently receives
 5 campaign contributions in an amount greater than the expenditure
 6 limit set for the candidate's respective office shall reserve use
 7 of these contributions until after a general or special election.
 8      (b)]  Campaign contributions shall not be used for personal
 9 expenses or to qualify for public funding in any subsequent
10 election, and shall not be transferred to another candidate as
11 prohibited in section 11-200.
12      Where such contributions are used for the purchase or lease
13 of consumer goods, vehicles, equipment, and services that provide
14 a mixed benefit to the candidate, they shall be reported to the
15 commission pursuant to sections 11-212 and 11-213.
16      [(c)  Such contributions may be used after a general or
17 special election for any fundraising activity, for any other
18 politically related activity sponsored by the candidate, for any
19 ordinary and necessary expenses incurred in connection with the
20 candidate's duties as a holder of an elected state or county
21 office, or for any contribution to any community service,
22 educational, youth, recreational, charitable, scientific, or
23 literary organization, or any other organization which the

Page 16                                                    
                                     S.B. NO.           630

 1 commission, by rules adopted pursuant to chapter 91, deems
 2 appropriate.
 3      (d)  All contributions collected pursuant to this section
 4 shall be reportable under section 11-213.]"
 5      SECTION 7.  Act 27, Special Session Laws of Hawaii 1995, is
 6 amended by amending section 15 to read as follows:
 7      "SECTION 15.  This Act shall take effect on July 1, 1995;
 8 provided that [on]:
 9      (1)  On June 30, 1999, this Act shall be repealed and
10           sections 11-1, 11-2, 11-5, 11-191, 11-194, 11-195,
11           11-216, 12-8, and 26-1, Hawaii Revised Statutes, shall
12           be reenacted in the form in which they read on the day
13           before the effective date of this Act[.]; and
14      (2)  The amendments made by this S.B. No.      , Session
15           Laws of Hawaii 1999, shall not be repealed when the
16           provisions in paragraph (1) are reenacted."
17      SECTION 8.  In codifying the new sections added by section
18 1, and referred to in section 1 of this Act, the revisor of
19 statutes shall substitute appropriate section numbers for the
20 letters used in designating the new sections in this Act.
21      SECTION 9.  Statutory material to be repealed is bracketed.
22 New statutory material is underscored.
23      SECTION 10.  In printing this Act, the revisor of statutes

Page 17                                                    
                                     S.B. NO.           630

 1 shall substitute in section 7, the number of this Act for the
 2 bill identified therein.
 3      SECTION 11.  This Act shall take effect on June 29, 1999;
 4 provided that section 11-D, Hawaii Revised Statutes, in section 1
 5 of this Act shall take effect on the day after the general
 6 election of 2002; and provided further that section 2 of this Act
 7 shall take effect upon approval only with regard to those
 8 candidates who will appear on the ballot in the year 2002 and
 9 then to all candidates and committees in subsequent election
10 periods.
12                              INTRODUCED BY:______________________