Report Title:

Electoral Process; Campaign Spending

Description:

Clarifies provisions relating to the filing cycle of candidate organizational and expenditure reports. Revises provisions relating to the disposition of excess contributions.

HOUSE OF REPRESENTATIVES

H.B. NO.

2353

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO CAMPAIGN SPENDING

 

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

SECTION 1. 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) To establish rules pursuant to chapter 91;

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

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

(12) 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) To employ or contract, without regard to chapters 76 and [77] 89 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) To do random audits, field investigations, as necessary;

(15) To file for injunctive relief when indicated;

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

(17) 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 11-194, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

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

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

SECTION 3. Section 11-204, Hawaii Revised Statutes, is amended to read as follows:

"§11-204 Campaign contributions; limits as to persons.

(a) (1) No person or any other entity shall make contributions to:

(A) A candidate seeking nomination or election to a two-year office or to the candidate's committee in an aggregate amount greater than $2,000 during an election period;

(B) A candidate seeking nomination or election to a four-year statewide office or to the candidate's committee in an aggregate amount greater than $6,000 during an election period; and

(C) A candidate seeking nomination or election to a four-year nonstatewide office, or to the candidate's committee in an aggregate amount greater than $4,000 during an election period. These limits shall not apply to a loan made to a candidate by a financial institution in the ordinary course of business[.];

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

[(2)] (3) 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] and 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 the 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.]

(h) No committee which 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.

(i) 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.

(j) 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 (i), this section shall not apply to ballot issue committees."

SECTION 4. Section 11-214, Hawaii Revised Statutes, is amended by amending subsection (a) and (d) to read as follows:

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

(c) This section shall not apply to candidates or elected officials:

[(1) Elected officials;

(2) Candidates w] (1) Who failed to be nominated or elected yet who become a candidate for nomination or election to office within four years thereafter;

[(3) Elected officials w] (2) Who resign their office before the end of their term yet who file to become a

candidate for reelection within four years after the end of the term from which they resigned; or

[(4) Elected officials w] (3) Who do not seek reelection yet who file to become a candidate for election within four years after the end of the term from which they did not seek reelection."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

BY REQUEST