Report Title:

Campaign Spending; Contribution Limits; Contractors and Labor Organizations; PACS

 

Description:

Limits aggregate contributions by any person or entity to not more than $25,000 in any calendar year; repeals limits on number of fundraisers; limits family and personal funds contribution in the aggregate to $25,000; Disallows contributions made by contractors to candidates for executive office; Disallows contributions made directly to candidates from labor organizations; Allows contributions through separate segregated funds for greater accountability; Increases penalties for falsification of campaign contribution report by more than $50,000. (SD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

2844

TWENTY-FIRST LEGISLATURE, 2002

H.D. 1

STATE OF HAWAII

S.D. 1


 

A BILL FOR AN ACT

 

relating to campaign spending.

 

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

SECTION 1. Section 11-193, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

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

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

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

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

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

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

(6) To hold public hearings;

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

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

(9)] (8) To establish rules pursuant to chapter 91;

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

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

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

[(13)] (12) To employ or contract, without regard to [chapters] chapter 76 [and 77] and section 28-8.3, and, at pleasure, to dismiss persons it finds necessary for the performance of its functions, including a full-time executive director, and to fix their compensation;

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

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

[(16) To censure any candidate who fails to comply with the code of fair campaign practices; and

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

SECTION 2. 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[.];

(D) No person or any other entity shall make contributions aggregating more than $25,000 in any calendar year. For purposes of this subparagraph, any contribution made to a candidate in a year other than the calendar year in which the election is held, with respect to which that contribution is made, shall be considered to be made during the calendar year in which the election is held; and

(E) These limits shall not apply to a loan made to a candidate by a financial institution in the ordinary course of business.

(2) For purposes of this section, the length of term of an office shall be the usual length of term of the office as unaffected by reapportionment, a special election to fill a vacancy, or any other factor causing the term of the office the candidate is seeking to be less than the usual length of term of that office.

(b) No person or any other entity shall make contributions to a noncandidate committee, in an aggregate amount greater than $1,000 in an election; 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 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) 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) 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.]

(1) Any excess contribution may be returned to the original donor within thirty days from receipt of the excess contribution or submitted to the Hawaii election campaign fund.

(2) After thirty days from receipt, all excess contributions not returned to original donors 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) 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) 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) 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) 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) 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), 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) 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] (1) This section shall not apply to ballot issue committees.

(m) Notwithstanding any other provision of law, no state or national bank, nor any labor organization may make a contribution in connection with any nomination for election, or election of a candidate, candidate committee, or noncandidate committee. No officer or director of any national or state bank or any officer of any labor organization may consent to any contribution by the national or state bank or labor organization, as the case may be. No person may accept or receive any contribution prohibited by this section.

(n) For purposes of this section, contributions shall not include the establishment, administration, and solicitation of contributions to a separate segregated fund to be used for political purposes by a labor organization, state or national bank, membership organization, cooperative, or corporation without capital stock. It shall be unlawful to use contributions from that separate segregated fund 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.

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. 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; or

(2) 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.

No funds for a separate segregated fund established by a corporation 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.

(o) This section shall not prevent a membership organization, cooperative, trade association, or corporation without capital stock, or a separate segregated fund established by a membership organization, cooperative, trade association, or corporation without capital stock, from soliciting contributions to such a fund from members of that organization, cooperative, trade association, or corporation without capital stock."

SECTION 3. 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.] (a) It shall be unlawful for any person who enters into any contract or agreement with the State, any of its counties, any department, agency, or entity thereof either for the rendition of personal services or furnishing any material, supplies, or equipment to the State, any of its counties, any department, agency, or entity thereof or for selling any land or building to the State, any of its counties, any department, agency, or entity thereof, if payment for the performance of the contract or payment for the material, supplies, equipment, land, or building is to be made in whole or in part from funds appropriated by the legislature or county councils, for the period of twelve months prior to the notice of the availability of the contract or agreement, or the commencement of the negotiations for the contract or agreement, whichever is earlier, and twelve months after the completion of performance or termination of the contract or agreement, to make contributions of money or other things of value, directly or indirectly, or to promise or imply to make such contribution to any political party, committee, or candidate for executive office or any other office responsible for entering into any contract or agreement for the State, any of its counties, any department, agency, or entity thereof either for the rendition of personal services or furnishing any material, supplies, or equipment.

(b) It shall be unlawful to solicit any such contribution from any such person for any such purpose during any such period.

(c) The prohibition of contributions by state and county contractors as described in this section shall not apply to any political party, committee, or candidate not a party to the contract or agreement.

(d) This section does not prohibit or make unlawful contributions of $1,000 or less by individuals to a noncandidate committee.

(e) For purposes of this section, "person" means an individual, a partnership and its partners, or a company and its owners, and the immediate family and household members of each of these individuals."

SECTION 4. 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 all other offices, qualifying contributions that, in the aggregate, exceed $500."

SECTION 5. 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 section.

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

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

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

(3) Such 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 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 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 contributions which 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 6. 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. For the purpose of this section, 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 7. 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 8. 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 9. 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 funds are returned, they shall be deposited in the Hawaii election campaign fund."

SECTION 10. 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 and intentionally falsifies any report required by this part by an amount greater than $50,000 with the intent to circumvent the law or deceive the commission shall be guilty of a class C felony. 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 11. Section 11-203, Hawaii Revised Statutes, is repealed.

["11-203 Fundraisers and fundraising activities. (a) As used in this section, "fundraiser" means any function held for the benefit of a person that is intended or designed, directly or indirectly, to raise funds for political purposes for which the price or suggested contribution for attending the function is more than $25 per person.

(b) There shall be no more than two fundraisers held for a person prior to a general or special election in which that person is either elected or defeated.

(c) No fundraiser or fundraising activity shall be held unless a notice of intent to hold the function is filed by the person in charge of the function with the commission prior to the date of the function setting forth the name and address of the person in charge, the price per person, the date, hour, and place of the affair and the method thereof.

(d) Fundraisers sponsored by a candidate for a statewide office are exempt from the $25 limit of subsection (a) and the restrictions of subsection (b), and fundraisers sponsored by a party for a political purpose for the general benefit of the party are exempt from the restrictions of subsection (b)."]

SECTION 12. 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 13. Statutory material to be repealed is bracketed

and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect on July 1, 2050.