REPORT TITLE: 
Public Financing Pilot Program


DESCRIPTION:
Establishes a pilot program for the city and county of Honolulu
council elections of 2002 providing for public funding for
candidates who voluntarily abide by specified contribution and
expenditure limits. (HB1879 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1879
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
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 purpose of this Act is to establish a
 
 2 public-funded elections pilot program for the city and county of
 
 3 Honolulu council elections of 2002 to be known as the public
 
 4 financing elections pilot program. 
 
 5      SECTION 2.  Public financing elections pilot program.  There
 
 6 is established the public financing elections pilot program for
 
 7 the city and county of Honolulu council elections of 2002 to be
 
 8 placed with the campaign spending commission for administrative
 
 9 purposes.  The commission shall have such duties and powers, as
 
10 provided under section 11-193, Hawaii Revised Statutes, as are
 
11 necessary to administer and enforce all requirements under this
 
12 Act.
 
13      SECTION 3.  Requirements for participating candidates; first
 
14 special election; second special election.(a)  A candidate
 
15 shall qualify as a public financed candidate for the first
 
16 special election campaign period if the candidate:
 
17      (1)  Files a declaration with the commission that the
 
18           candidate has complied and will comply with all of the
 
19           requirements of this Act, as applicable;
 

 
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 1      (2)  Before the close of the public financing elections
 
 2           qualifying period, collects public financing elections
 
 3           qualifying contributions from at least one per cent of
 
 4           the total number of voters who registered to vote
 
 5           during the preceding general election in the district
 
 6           out of which the candidate is running; and
 
 7      (3)  Accepts only the following private contributions
 
 8           between February 1, 2002, and the date that the
 
 9           candidate qualifies as a public financed candidate:
 
10           (A)  Seed money contributions; and
 
11           (B)  Public financing elections qualifying
 
12                contributions.
 
13      (b) A candidate shall qualify as a public financed candidate
 
14 for the second special election campaign period if the candidate:
 
15      (1)  Qualified as a public financed candidate during the
 
16           first special election campaign period; and
 
17      (2)  Received a sufficient number of votes to appear on the
 
18           ballot in the second special election.
 
19      SECTION 4.  Seed money contributions.(a)  Seed money
 
20 contributions from any single individual contributor shall not
 
21 exceed $100.  The aggregate amount of seed money that may be
 
22 retained and expended for seed money purposes by a candidate
 
23 seeking to become eligible for public funding shall not exceed
 
24 $2,000.
 

 
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 1      (b)  Seed money shall be spent only during the public
 
 2 financing elections qualifying period.  Seed money expenditures
 
 3 shall be limited to those necessary for campaign start-up
 
 4 purposes, and may be used to purchase office supplies, rent
 
 5 equipment, and finance public rallies.  Seed money shall not be
 
 6 spent to pay for the solicitation or collection of public
 
 7 financing elections qualifying contributions, or for broadcast
 
 8 advertising or mass mailings.
 
 9      (c)  Candidates shall provide seed money contributors with a
 
10 receipt and shall not accept contributions unless information
 
11 that shall be included on the receipt under this subsection is
 
12 disclosed by the contributor.  A receipt for a seed money
 
13 contribution shall include the contributor's signature, printed
 
14 name, street address and zip code, and telephone number.
 
15      (d)  Within forty-eight hours after the close of the public
 
16 financing elections qualifying period, candidates seeking to
 
17 become 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 public financed candidate shall knowingly accept a
 
 2 seed money contribution made by a contributor in the name of
 
 3 another, 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 public
 
11 financing elections qualifying contribution shall meet the
 
12 requirements of this section.  To be counted as a public
 
13 financing elections qualifying 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 $10;
 
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 retained by the candidate and a copy shall be
 
11 submitted to the commission according to a schedule and procedure
 
12 to be determined by the commission.  A contribution submitted as
 
13 a public financing elections qualifying contribution that does
 
14 not include a signed and completed receipt shall not be counted
 
15 as a public financing 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 public financed candidate.
 
20      SECTION 6.  Use of personal funds.  Personal funds of the
 
21 candidate seeking to become eligible as a public financed
 
22 candidate may be used as seed money.  Personal funds may not be
 
23 used to meet the public financing elections qualifying
 

 
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 1 contribution requirement; provided that the candidate and any
 
 2 member of the candidate's immediate family who is a registered
 
 3 voter in the state of Hawaii may each make a $10 public financing
 
 4 elections qualifying contribution.
 
 5      SECTION 7.   Certification of qualification for public
 
 6 funds.(a)  The commission shall determine whether a candidate
 
 7 is qualified for public campaign funding for the first special
 
 8 and second special elections.  Candidates that qualify shall be
 
 9 certified by the commission as public financed candidates.
 
10      (b)  The number of candidates certified by the commission
 
11 shall be limited to three persons in each district, on a first-
 
12 come, first-served basis.  A candidate's application for
 
13 certification shall be made on forms to be prescribed by the
 
14 commission.  The application shall be signed by the candidate and
 
15 the candidate's campaign treasurer under penalty of perjury.  The
 
16 commission shall issue its decision to certify or deny
 
17 certification within ten business days of receipt of a
 
18 candidate's complete, initial application for certification for
 
19 the first special election, and, within five business days of
 
20 receipt of a candidate's complete application for certification
 
21 for the second special election.
 
22      (c)  Certification may be revoked if a public financed
 
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.  Public financed candidates; contributions and
 
 4 expenditures.  A candidate who has been certified as a public
 
 5 financed candidate and thereby found eligible for public
 
 6 financing elections campaign funding, shall comply with the
 
 7 following restrictions on contributions and expenditures:
 
 8      (1)  During the first special and second special election
 
 9           campaign periods, a public financed candidate shall not
 
10           accept:
 
11           (A)  Private contributions from any source other than
 
12                nonmonetary contributions of less than $100; and
 
13           (B)  Loans from any source;
 
14      (2)  During the first special and second special election
 
15           campaign periods, a public financed candidate shall not
 
16           expend:
 
17           (A)  Seed money contributions;
 
18           (B)  Public funds for purposes other than those
 
19                specified in this Act;
 
20           (C)  Public funds outside of the particular campaign
 
21                period for which the funding is allocated; and
 
22           (D)  Public funds in excess of the public funds
 
23                allocated to the candidate, or incur an obligation
 

 
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 1                or obligations to spend public funds in excess of
 
 2                this amount;
 
 3      (3)  Public financed candidates may not accept any monetary
 
 4           or nonmonetary contributions from political parties;
 
 5      (4)  Public financed candidates, once elected, may not
 
 6           accept private contributions or contributions from
 
 7           political parties for three years after the election.
 
 8      SECTION 9.  Public financed candidates; reporting.(a)
 
 9 Public financed candidates shall furnish complete campaign
 
10 records, including all records of nonmonetary contributions, seed
 
11 money contributions, and public financing elections qualifying
 
12 contributions to the commission at regular filing times set by
 
13 part XII, subpart B of chapter 11, Hawaii Revised Statutes, or as
 
14 requested by the commission.  Public financed candidates shall
 
15 fully cooperate with any audit or examination by the commission.
 
16      (b)  In addition to any other reports required by law,
 
17 public financed candidates shall maintain records of the
 
18 following expenditures, which shall be reported to the commission
 
19 as required by the commission:
 
20      (1)  Expenditures such as those for utility bills, involving
 
21           a debt incurred, but not paid immediately, which shall
 
22           be reported at the time that the debt is incurred; and
 
23      (2)  All petty cash expenditures.
 

 
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 1      SECTION 10.  Public financed candidates; continuing
 
 2 obligation.  A public financed candidate who accepts any public
 
 3 funds during the first special election campaign period shall
 
 4 comply with all requirements applicable to a public financed
 
 5 candidate under this Act.  This obligation shall continue through
 
 6 the second special 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 public financed candidate for the first
 
11 special election shall on the date that certification is issued
 
12 by the commission, receive authorization to expend public funding
 
13 for the first special election.  Candidates certified as a
 
14 qualified public financed candidate for the second special
 
15 election shall on the date that certification is issued by the
 
16 commission, receive authorization to expend public funding for
 
17 the second special election.
 
18      (b)  Public financed candidates in contested elections shall
 
19 be authorized to expend $30,000 in public funds for the first
 
20 special election, and $15,000 in public funds for the second
 
21 special election.  Public financed candidates shall be authorized
 
22 to expend equalizing funds in the amount of an additional $5,000
 
23 in public funds for the first special election, if a non-
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 participating candidate spends more than $40,000 in that first
 
 2 special election, and in the amount of $5,000 in public funds for
 
 3 the second special election, if a non-participating candidate
 
 4 spends more than $25,000 in that second special election.
 
 5      (c)  A public financed candidate may request that the
 
 6 commission certify excess expenditures and release equalizing
 
 7 funds if a non-participating candidate opposing the public
 
 8 financed candidate discloses in any report required under chapter
 
 9 11 of the Hawaii Revised Statutes, total expenditures in excess
 
10 of $40,000 in the first special election, or $25,000 in the
 
11 second special election.  Upon certification of excess
 
12 expenditures under this section, the commission shall release
 
13 equalizing public financing elections funding to opposing public
 
14 financed candidates to the extent authorized by law.
 
15      SECTION 12.  Public funding.  The commission is authorized
 
16 to expend up to $     in funds from the Hawaii election campaign
 
17 fund for the purpose of this act to distribute to candidates who
 
18 qualify under this act.
 
19      SECTION 13.  Public funding; expenditure limits.  A public
 
20 financed candidate shall not spend or incur an obligation to
 
21 spend more than one hundred per cent of the public funds that
 
22 have been allocated to the candidate.  If a public financed
 
23 candidate spends or incurs an obligation to spend more than one
 

 
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 1 hundred per cent of the public funds allocated, the candidate
 
 2 shall repay to the Hawaii elections campaign fund an amount equal
 
 3 to ten times the total excess expenditure.
 
 4      SECTION 14.  Public funding; permitted uses.  The public
 
 5 funds received by a public financed candidate shall be used only
 
 6 for the purpose of defraying that candidate's direct campaign-
 
 7 related expenses, including but not limited to, the purchase or
 
 8 development of campaign literature, campaign signs, development
 
 9 and purchase of media space or time, mailings, general office
 
10 supplies, telephones, rental of campaign equipment and
 
11 headquarters, and utility costs associated with the campaign
 
12 headquarters during the election campaign period for which the
 
13 public funds were allotted.  Expenditures shall not be made:
 
14      (1)  In violation of the law;
 
15      (2)  To pay any personal, family, or business expenses,
 
16           loans, or debts; or 
 
17      (3)  For any noncampaign-related expenses, or for indirect
 
18           campaign-related expenses.
 
19      SECTION 15.  Deposit of public funds.(a)  All public funds
 
20 received by public financed candidates shall be deposited
 
21 directly into a financial depository as provided under section
 
22 11-199, Hawaii Revised Statutes.
 

 
 
 
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 1      (b)  All reports required by chapter 11, Hawaii Revised
 
 2 Statutes, for financial disclosure shall include the most recent
 
 3 bank statement from the financial depository.
 
 4      SECTION 16.  Deposit of moneys into the Hawaii election
 
 5 campaign fund.  The following moneys shall be deposited into the
 
 6 Hawaii election campaign fund established under section 11-217,
 
 7 Hawaii Revised Statutes:
 
 8      (1)  Excess seed money contributions as provided in this
 
 9           Act;
 
10      (2)  Public financing elections qualifying contributions,
 
11           including any excess public financing elections
 
12           qualifying contributions;
 
13      (3)  Unspent public funds distributed to any public financed
 
14           candidate who does not remain a candidate until the
 
15           special election for which they were distributed, or
 
16           such funds that remain unspent by a public financed
 
17           candidate following the date of the special election
 
18           for which they were distributed;
 
19      (4)  Fines levied by the commission against candidates for
 
20           violation of election laws; and
 
21      (5)  Voluntary donations made directly to the public
 
22           financing elections pilot program.
 

 
 
 
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 1      SECTION 17.  Suspension of partial public funding program.
 
 2 For the purposes of the public financing elections pilot program,
 
 3 the partial public funding program provided under chapter 11,
 
 4 Hawaii Revised Statutes, shall be temporarily suspended during
 
 5 the elections period applicable to city and county of Honolulu
 
 6 council offices in 2002.  This section shall apply only to city
 
 7 and county of Honolulu council races.
 
 8      SECTION 18.  Definitions.  For the purposes of this Act:
 
 9      "Candidate" shall have the same meaning as provided in
 
10 section section 11-191, Hawaii Revised Statutes.
 
11      "Candidate's committee" shall have the same meaning as
 
12 provided in section 11-191, Hawaii Revised Statutes.
 
13      "Commission" shall have the same meaning as provided in
 
14 section 11-191, Hawaii Revised Statutes.
 
15      "Contribution" shall have the same meaning as provided in
 
16 section 11-191, Hawaii Revised Statutes.
 
17      "Excess expenditure" means the amount of money spent or
 
18 obligated to be spent by a non-participating candidate in excess
 
19 of one hundred per cent of the public financing elections funding
 
20 the candidate is allocated.
 
21      "First special election campaign period" means the period
 
22 beginning ninety days before the primary election and ending two
 
23 weeks after the primary election.
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      "Noncandidate committee" has the same meaning as provided in
 
 2 section 11-191, Hawaii Revised Statutes.
 
 3      "Nonmonetary contribution" means a contribution other than
 
 4 of money, that may include goods or services.
 
 5      "Petty cash expenditure" means an expenditure of no more
 
 6 than $25, paid in cash in amounts of $100 or less per week.
 
 7      "Public financed candidate" or "qualified candidate" means a
 
 8 candidate who is certified by the commission as qualifying for
 
 9 public funding during the Honolulu city council special election
 
10 or special election campaign periods in 2002, and agrees to abide
 
11 by public financing elections contribution and expenditure
 
12 limitations.
 
13      "Public financing elections campaign funding" means public
 
14 funds to be provided to public financed candidates during the
 
15 2002 Honolulu city council first special and second special
 
16 election campaign periods.
 
17      "Public financing elections qualifying contribution" means a
 
18 $10 contribution made to a candidate during the public financing
 
19 qualifying period by a registered voter residing within the
 
20 candidate's district, that is included within the total number of
 
21 contributions that must be received by the candidate to qualify
 
22 for public funding.
 

 
 
 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      "Public financing qualifying period" means the period during
 
 2 which candidates may collect qualifying contributions to qualify
 
 3 for public funding, beginning February 1, 2002, and ending April
 
 4 30, 2002.
 
 5      "Public funding" or "public funds" means public financing
 
 6 elections campaign funds.
 
 7      "Second special election campaign period" means the period
 
 8 beginning the day after the first special election and ending two
 
 9 weeks after the second special election.
 
10      "Seed money" means contributions made during the public
 
11 financing elections qualifying period that may be expended solely
 
12 for campaign start-up purposes.
 
13      SECTION 19.  The commission, in cooperation with other
 
14 relevant stakeholders, shall evaluate the effectiveness of the
 
15 public financing elections pilot project and draft a report to
 
16 the legislature that shall include:
 
17      (1)  A detailed summary of all seed money contributions,
 
18           qualifying contributions, public funds disbursements,
 
19           and public financed candidate expenditures;
 
20      (2)  A comparative study examining public financing
 
21           elections projects and legislation in other states;
 
22      (3)  A summary and evaluation of the commission's activities
 
23           as well as the commission's recommendations relating to
 

 
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                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           the implementation, administration, and enforcement of
 
 2           Act 254, Session Laws of Hawaii 1998; and
 
 3      (4)  A detailed public financing elections plan for the 2004
 
 4           election.
 
 5 The commission shall submit its report to the legislature no
 
 6 later than twenty days prior to the regular session of 2003.
 
 7      SECTION 20.  If any provision of this Act, or the
 
 8 application thereof to any person or circumstance is held
 
 9 invalid, the invalidity does not affect other provisions or
 
10 applications of the Act which can be given effect without the
 
11 invalid provision or application, and to this end the provisions
 
12 of this Act are severable.
 
13      SECTION 21.  This Act shall take effect on July 1, 2005.