Report Title:

Campaign Finance and Elections Reform

Description:

Improves the campaign spending laws by: Prohibiting campaign solicitation and contribution on government property; prohibiting campaign workers from using information obtained while working at a polling place for partisan purposes; prohibiting use of campaign contributions for personal use; limiting campaign contributions per donor to $100 for each year of the term of the office for which the candidate is running; requiring donors who contribute $200 or more in-kind to a campaign to report the contribution to the campaign spending commission; prohibiting corporations and labor organizations from making campaign contributions; forbidding any contractor from contributing to any candidate or committee from 1 year prior to notice of availability of the contract to 2 years after completion of the contract; increasing the spending limits for the voluntary spending limit; making it a class C felony to falsify any campaign expenditure report with the intent to deceive the commission, make an anonymous contribution, or use a false name to make a contribution.

HOUSE OF REPRESENTATIVES

H.B. NO.

1352

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO ELECTIONS.

 

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

SECTION 1. The legislature finds that reforms are needed to reduce candidates' reliance upon large contributions and excessive campaign expenditures and restore the public's confidence in the integrity of the electoral process.

Accordingly, this Act amends Hawaii's campaign spending laws to:

(1) Prohibit fundraising in buildings being used for state or county purposes;

(2) Prohibit expenditures for personal use;

(3) Limit individual campaign contributions to $100 for all candidates for each year of the term of office sought;

(4) Require donors of in-kind contributions of over $200 to report the contributions to the campaign spending committee;

(5) Provide that excess contributions may be returned to the donor or the Hawaii election campaign fund within thirty days of the contribution, otherwise it will escheat to the Hawaii election campaign fund;

(6) Define the controlling interest of a corporation as thirty-three per cent or more of the stock or financial assets for purposes of campaign contribution limits;

(7) Prohibit contributions by corporations, unions, banks, membership organizations or cooperatives while allowing the establishment of separate segregated funds to solicit contributions;

(8) Prohibit contributions by government contractors;

(9) Clarify that certain communications expenditures are not considered to be electioneering communications that are required to be filed with the campaign spending commission;

(10) Exclude candidates for the board of education or Office of Hawaiian Affairs from the voluntary campaign expenditure limitation law;

(11) Raise the maximum amount of public funds available to a candidate in any election to twenty per cent of the total expenditure limit for each election as established for each office; and

(12) Make falsifying reports with the intent to circumvent the law or deceive the election spending commission; contributing anonymously; or contributing under a false name, a class C felony.

The public matching funds program is also amended to encourage the adoption of voluntary expenditure limits and support a wider range of candidates. Voluntary expenditure limits are raised to more realistic levels and the maximum amount that can be matched by the Hawaii election campaign fund has been raised.

Finally, this Act improves confidence in the elections process by extending the prohibition against electioneering within two hundred feet of a polling place, to include election officials or election observers that use any information obtained at a polling place in the course of their duties, for partisan purposes.

SECTION 2. Part XII, subpart B of chapter 11, Hawaii Revised Statutes, is amended by adding one new section to be appropriately designated and to read as follows:

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

(b) The provisions of subsection (a) shall not apply to any government facility which is available for use as a rental or with a reservation to nongovernmental organizations. These government facilities may be used by any candidate or committee for fundraising activities pursuant to the same terms and conditions which would otherwise apply to nongovernmental organizations.

(c) A person who violates this section shall be fined not more than $5,000, or imprisoned for not more than three years, or both."

SECTION 3. Section 11-132, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The precinct officials shall post in a conspicuous place, prior to the opening of the polls, a map designating an area of two hundred feet from the perimeter of the polling place and its appurtenances. Any person who remains or loiters within an area of two hundred feet from the perimeter of the polling place and its appurtenances for the purpose of campaigning, or any election official or election observer who uses or transmits on the day of the election, for partisan purposes, any information obtained in the course of performing their responsibilities as an election official or election observer shall be guilty of a misdemeanor. For the purposes of this section, a polling place and its appurtenances shall include:

(1) The building in which the polling place is located;

(2) Any parking lot adjacent to the building and routinely used for parking at that building;

(3) The routes of access between the building and any parking lot; and

(4) Any route of access between any public thoroughfare (right of way) and the polling place to ensure an open and accessible ingress and egress to and from the polling place for voters."

SECTION 4. Section 11-200, Hawaii Revised Statutes, is amended to read as follows:

"§11-200 Campaign contributions; restrictions against transfer. (a) A candidate, campaign treasurer, or candidate's committee shall not receive any contributions or receive or make any transfer of money or anything of value:

(1) For any purpose other than that directly related:

(A) In the case of the candidate, to the candidate's own campaign; or

(B) In the case of a campaign treasurer or candidate's committee, to the campaign of the candidate, question, or issue with which they are directly associated; [or]

(2) To support the campaigns of candidates other than the candidate for whom the funds were collected or with whom the campaign treasurer or candidate's committee is directly associated; or

(3) To campaign against any other candidate not directly opposing the candidate for whom the funds were collected or with whom the campaign treasurer or candidate's committee is directly associated.

(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;

(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).

(c) A contribution shall not be converted by any person to personal use. For the purposes of this subsection, a contribution or amount shall be considered to be converted to personal use if the contribution or amount is used to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate's election campaign or individual duties as an officeholder, including:

(1) A home mortgage, rent, or utility payment;

(2) A noncampaign-related clothing purchase;

(3) A noncampaign-related automobile expense;

(4) A country club membership;

(5) A vacation or other noncampaign-related trip;

(6) A household food item;

(7) A tuition payment;

(8) Admission to a sporting event, concert, theater, or other form of entertainment not associated with an election campaign; and

(9) Dues, fees, or other payments to a health club or recreational facility.

[(c)](d) This section shall not be construed to prohibit a party from supporting more than one candidate.

[(d)](e) This section shall not be construed to prohibit a candidate for the office of governor or lieutenant governor from supporting a co-candidate in the general election.

[(e)](f) This section shall not be construed to prohibit a candidate from making contributions to the candidate's party so long as that contribution is not earmarked for another candidate."

SECTION 5. 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] 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.] $100 for all candidates for each year of the term of the office for which the candidate is seeking nomination or election.

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) Every donor of in-kind contributions over $200 in the aggregate to a candidate for nomination or election shall report each such contribution to the campaign spending commission.

[(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 or submit the excess contribution to the Hawaii election campaign fund.

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)](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 a contribution from 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. For the purposes of this subsection, an individual owns a controlling interest in a corporation if the person owns more than thirty-three per cent of the stock or financial assets of the corporation.

[(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), 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.

(m) No state or national bank, corporation, labor organization, membership organization, cooperative, or corporation without capital stock organized by authority of any law of the United States Congress or of any state shall make a contribution or expenditure in connection with the nomination for election or election of any person to political office, or in connection with any candidate committee or noncandidate committee. 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, as the case may be. No person shall accept or receive any contribution prohibited by this subsection.

This subsection 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, labor organization, membership organization, cooperative, or corporation without capital stock for the purpose of influencing the nomination for election, or election, of any person to political office. It shall be unlawful for the separate segregated fund to use contributions secured by:

(1) Physical force, job discrimination, financial reprisals, or the threat of force, job discrimination, or financial reprisal;

(2) Dues, fees, or other moneys required as a condition of membership in a labor organization or as a condition of employment; or

(3) 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 such solicitation of the employee's right to refuse to contribute without any reprisal. It shall be unlawful for:

(1) 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; 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 such fund.

This subsection 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 such organization, cooperative, trade association, or corporation without capital stock.

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

SECTION 6. 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 twenty-four 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 that such contribution will be made to any political party, committee, candidate for public office, or any person responsible for entering 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.

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

(c) This section does not prohibit contributions to a separate segregated fund established by an organization.

(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 who have at least twenty-five per cent interest, or a company and its owners who have at least a twenty-five per cent ownership interest, and the dependent household members of each of these individuals."

SECTION 7. Section 11-207.6, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(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) Broadcast from a television or radio broadcast station[, or published];

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

(3) Sent by mail at a bulk rate,

which refers to a clearly identifiable candidate and 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, communications which constitute expenditures required by this chapter to be reported by the disbursing organization, or communications in house bulletins."

SECTION 8. Section 11-208, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Any candidate other than candidates for the board of education or Office of Hawaiian Affairs may voluntarily agree to limit the candidate's campaign expenditures and those of the candidate's committee or committees and the candidate's party in the candidate's behalf by filing an affidavit with the campaign spending commission."

SECTION 9. Section 11-209, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) From January 1 of the year of any primary, special, or general election, the total expenditures for each election for candidates who voluntarily agree to limit their campaign expenditures, inclusive of all expenditures made or authorized by the candidate alone and all campaign treasurers and committees in the candidate's behalf, shall not exceed [the following amounts expressed respectively] $2.50 multiplied by the number of voters in the last preceding general election registered to vote in each respective voting district[:

(1) For the office of governor--$2.50;

(2) For the office of lieutenant governor--$1.40;

(3) For the office of mayor--$2.00;

(4) For the offices of state senator, state representative, county council member, and prosecuting attorney--$1.40; and

(5) For the offices of the board of education and all other offices--20 cents.]; provided that if a

candidate who receives public funds in a primary election is a candidate for the subsequent general election, the candidate's expenditure limit for the general election shall be increased by the difference between the primary election expenditure limit and the candidate's actual expenditures in the primary election."

SECTION 10. 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] twenty per cent of the total expenditure limit 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 for each election as established for each office listed in this subsection pursuant to section 11-209.

(c) 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)](b) 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 11. 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 part 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 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 12. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect upon its approval.

INTRODUCED BY:

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