Report Title:

Campaign Spending

Description:

Restores integrity in elections by prohibiting a person from soliciting or receiving campaign donations on government property; prohibiting a government contractor with contracts in excess of $25,000 in the aggregate from making a contribution; prohibiting the use of campaign contributions for personal expenses; revising the amounts of campaign contributions; defining the ownership interest in a corporation or partnership as 25% for purposes of campaign contribution limits by individuals; amending registration requirements for candidates seeking reelection and specifying when committees are required to register; clarifying that excess contributions must be returned within 30 days or they will escheat to the Hawaii election campaign fund; making falsifying reports or contributing under a false name or anonymously with intent to circumvent the law or deceive the commission a class C felony; eliminating public funding for candidates in special elections; repealing the fundraiser limitations; and requiring the campaign spending commission to establish a schedule of administrative fines for violations that shall be deposited into the general fund.

HOUSE OF REPRESENTATIVES

H.B. NO.

2845

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. The legislature finds that reforms are needed to restore the public's confidence in the integrity of the election process by reducing the influence of reliance on campaign contributions.

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

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

(2) Prohibit contributions by government contractors selected through a nonbid process, who seek contracts valued in excess of $25,000 or hold contracts in excess of $25,000;

(3) Prohibit campaign contributions from corporations, labor organizations, member organizations, cooperatives or corporations without capital stock, except through separate segregated funds for contributions in excess of $6,000 in the aggregate;

(4) Amend the registration requirements for candidates seeking reelection;

(5) Conform to a court's decision invalidating the campaign spending commission's code of fair campaign practices and ability to censure candidates who fail to comply with the code;

(6) Limit campaign contributions for non-resident organizations having no nexus to the State;

(7) Clarify that excess contributions must be returned within thirty days or they will escheat to the Hawaii election campaign fund;

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

(9) Clarify that a person who is prosecuted and convicted of campaign violations is not subject to administrative enforcement;

(10) Amend the public funding provisions to require qualifying contributions from residents of Hawaii only and to eliminate the ability of candidates to obtain public funding for special elections;

(11) Require the commission on campaign spending to adopt a schedule of administrative fines for categories of violations and direct that all administrative fines collected shall be deposited into the general fund; and

(12) Add definitions and clarify other terms for consistency of application.

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

"§11- Campaign contributions; prohibited by corporations, labor organizations, member organizations, cooperatives or corporations without capital stock. (a) It shall be unlawful for any corporation, labor organization, membership organization, cooperative, or corporation without capital stock to make a contribution to or expenditure on behalf of any candidate, candidate's committee, or noncandidate committee, except as provided in this section. No officer or director of any corporation, labor organization, member organization, cooperative, or corporation without capital stock shall consent to or authorize any contribution. This subsection shall not apply to any corporation, labor organization, membership organization, cooperative or corporation without capital stock making contributions aggregating less than $6,000 in an election period.

(b) No candidate, candidate's committee, or person shall knowingly accept or receive contributions prohibited by this section.

(c) This section 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 corporation, labor organization, membership organization, cooperative, or corporation without capital stock for the purpose of influencing the nomination for election, or election, of any candidate to political office. Contributions made to or by a separate segregated fund are subject to the limitations in section 11-204.

(d) It shall be unlawful for the separate segregated fund to:

(1) Make contributions or expenditures from funds secured by:

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

(B) Dues, fees, or other moneys required as a condition of membership in a labor organization without providing members the right to refuse to contribute without any reprisal or as a condition of employment; or

(C) Moneys obtained in any commercial transaction;

and

(2) Solicit an employee for a contribution to such a fund without informing the employee at the time of that solicitation of the political purposes of the fund and of the employee's right to refuse to contribute without any reprisal.

(e) It shall be unlawful for:

(1) A corporation, membership organization, cooperative, or corporation without capital stock or a separate segregated fund established by a corporation, membership organization, cooperative, or corporation without capital stock to solicit contributions to the fund from any person other than its stockholders, members, employees, and their families;

(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; or

(3) Contributions to a separate segregated fund established by a corporation be made 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.

(f) This section does not prohibit a corporation, labor organization, membership organization, cooperative, or corporation without capital stock from using its funds to pay for fundraising or solicitation activities for the separate segregated fund; provided that:

(1) The separate segregated fund complies with all reporting requirements for a noncandidate committee under this subpart;

(2) The corporation, membership organization, cooperative, or corporation without capital stock complies with the reporting requirements for a reporting corporation and electioneering communication, as applicable, under this subpart; and

(3) The labor organization complies with the reporting requirements for a noncandidate committee and electioneering communication, as applicable, under this subpart.

(g) Notwithstanding subsection (a), a state or national bank, corporation, partnership, or labor organization may make a contribution of $6000 in an election from its own treasury to its own separate segregated fund."

SECTION 3. Section 11-191, Hawaii Revised Statutes, is amended as follows:

1. By adding five new definitions to be appropriately inserted and to read:

""Bundle" means contributions received from an individual that was obtained because a person required the individual to contribute to a candidate or candidate's committee and the contribution is directly or indirectly traceable to the person directing the contribution.

"Corporation" means any corporation for profit, including a professional corporation or a limited liability partnership or company.

"Independent expenditure" means a cost incurred by a person or noncandidate committee, other than a candidate or candidate's committee, for a communication that is disseminated during thirty calendar days before a primary election or sixty days before a general election that expressly advocates for the election or defeat of a candidate and is made without the participation, cooperation, or coordination of a candidate or candidate's committee, or their authorized agents.

"Labor organization" means any organization or employee representation committee, in which employees participate and which exists for the purpose, in whole or in part, of collective bargaining or dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

"Separate segregated fund" means an entity set up by any corporation, labor organization, membership organization, cooperative, or corporation without capital stock for the purpose of establishing a fund from which contributions or expenditures are made to influence the nomination for election, or election of any candidate."

2. By amending the definition of "candidate's committee" to read:

""Candidate's committee" means a committee [as defined in this section] which makes an expenditure or accepts a contribution in behalf of a candidate with the candidate's authorization. A candidate shall have only one authorized candidate's committee."

3. By amending the definition of "committee" to read:

""Committee" means:

(1) Any individual, organization, corporation, party, association, or [individual] separate segregated fund that accepts or makes a contribution or makes an expenditure for or against any:

(A) Candidate;

(B) Individual who files for nomination at a later date and becomes a candidate; or

(C) Party;

with or without the authorization of the candidate, individual, or party. In addition, the term "committee" means any organization, corporation, party, association, or individual who accepts or makes a contribution or makes an expenditure for or against any question or issue appearing on the ballot at the next applicable election; or

(2) Any organization, corporation, party, association, or individual that raises or holds money or anything of value for a political purpose, with or without the consent or knowledge of any:

(A) Candidate;

(B) Individual who files for nomination at a later date and becomes a candidate; or

(C) Party; and

subsequently contributes money or anything of value to, or makes expenditures on behalf of, the candidate, individual, or party.

Notwithstanding any of the foregoing, the term "committee" shall not include any individual making a contribution or expenditure of the individual's own funds or anything of value that the individual originally acquired for the individual's own use and not for the purpose of evading any provision of this subpart, or any organization, which raises or expends funds for the sole purpose of the production and dissemination of informational or educational advertising."

4. By amending the definitions of "election period" and "expenditure" to read:

""Election period" means the two-year period between general election days [if a candidate is seeking nomination or election to a two-year office and the four-year time period between general election days if a candidate is seeking nomination or election to a four-year office].

"Expenditure" [means:] includes:

(1) Any purchase or transfer of money or anything of value, or promise or agreement to purchase or transfer money or anything of value, or payment incurred or made, or the use or consumption of a nonmonetary contribution for the purpose of:

(A) Influencing the nomination for election, or election, of any person seeking nomination for election, or election, to office whether or not the person has filed the person's nomination paper;

(B) Influencing the outcome of any question or issue that has been certified to appear on the ballot at the next applicable election; or

(C) Use by any party or committee for the purposes set out in subparagraph (A) or (B);

(2) The payment, by any person other than a candidate or committee, of compensation for the personal services of another person that are rendered to the candidate or committee for any of the purposes mentioned in paragraph (1); [or]

(3) The expenditure by a candidate of the candidate's own funds for the purposes set out in paragraph (1)[.]; and

(4) Any payment made from a candidate or a candidate's committee to any community service, educational, youth, recreational, charitable, scientific, or literary organization that states the purpose of the payment is to influence the nomination and election of the donor candidate. Payments shall be made with the following designation: "This donation is made to influence the nomination and election of the donor (candidate's name).

[(4)] The term does not include volunteer personal services and voter registration efforts that are not partisan."

5. By amending the definition of "noncandidate committee to read:

"Noncandidate committee" means a committee [as defined in this section] and includes any separate segregated fund, but does not include a candidate's committee."

SECTION 4. 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;] To establish and adopt a schedule of administrative fines by categories for specific violations of this subpart, incorporating the penalties that are specifically provided by statute;

(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 chapter 76 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)] (16) 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 5. Section 11-194, Hawaii Revised Statutes, is amended to read as follows:

"§11-194 Registration. (a) Each candidate, committee, or party shall [file] register with the commission by filing 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 any 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].

(b) A candidate shall file an organizational report within ten days of:

(1) Filing nomination papers for office with the chief election officer or county clerk; or

(2) The date the candidate or candidate's committee receives any contributions or makes any expenditures, the aggregate amount of which is more than $100,

whichever occurs first. This requirement shall not apply to a candidate seeking election to the same office in successive elections; provided the candidate has not sought election to any other office during the term of office.

[(c) Each candidate who files nomination papers for office with the chief election officer or county clerk shall file an organizational report within ten days of filing.]

(c) A candidate's committee shall file an organizational report within ten days from receipt of contributions or within ten days of making any expenditure, the aggregate amount of which is more than $100.

(d) A noncandidate committee shall file an organizational report within ten days from receipt of contributions or within ten days of making any expenditure, the aggregate amount of which is more than $100.

[(b)] (e) Committees that form within ten days of [an] a primary or general election and expend in the aggregate more than [$1,000] $100 shall register and fully disclose the [expenditure] contributions and expenditures by 4:30 p.m. on the last calendar day prior to the [expenditure.] election."

SECTION 6. 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) 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.] $2,000 in any election period.

(c) Noncandidate committee contribution limits shall be the same as those for persons.

(d) No individual shall make contributions aggregating more than $25,000 in any election period.

[(c)] (e) 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.] for the election in which the candidate seeks office. The aggregate amount of $50,000 shall include any loans made for campaign purposes to the candidate from the candidate's immediate family.

[(d)] (f) 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)] (g) 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)] (h) All [payments] contributions 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)] (i) 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)] (j) 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)] (k) 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)] (l) 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.

(m) Notwithstanding any other provision of this section:

(1) No corporation or business entity not doing business in this State;

(2) No labor union with fewer than ten members who reside in this State; and

(3) No political committee that has not received contributions of $10 or more from at least ten persons registered to vote in this State during the preceding one hundred eight days,

may make contributions reportable under this chapter to a candidate, noncandidate committee, or separate segregated fund. This subsection does not apply to loans made in the ordinary course of business.

[(k)] (n) 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.

(o) For purposes of this section, a candidate and the candidate's committee shall be considered a single entity for purposes of campaign contribution limits.

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

SECTION 7. Section 11-205.5, Hawaii Revised Statutes, is amended to read as follows:

"§11-205.5 Campaign contributions by [state] government 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 government contractor to make a contribution to any candidate or candidate's committee at any time commencing with any procurement activity conducted by a purchasing agency or notice of appropriation and ending with twenty-four months after the termination of procurement activity or completion of any government contract.

(b) It shall be unlawful for any business against which debarment or suspension proceedings are commenced pursuant to section 103D-702 to make a contribution to any candidate or candidate's committee at any time during the course of the proceedings, an administrative or judicial action brought under sections 103D-709 and 103D-710, and the period of debarment or suspension.

(c) It shall be unlawful for any person to knowingly solicit any contribution from any government contractor or business prohibited from making contributions under this section.

(d) This section does not prohibit or make unlawful contributions from:

(1) Any individual who does not have a controlling interest of the outstanding shares of a business that is a government contractor; provided that the contribution is from the individual's personal funds; and

(2) Any business that seeks or has any government contract obtained through low bid price.

(e) Notwithstanding subsection (a), no government contractor is prohibited from contributing to a candidate or candidate's committee if the candidate holds or is seeking a public office that does not have the authority or discretion to enter into, approve, or ratify the government contract sought or held by the government contractor.

(f) As used in this section, the following definitions apply unless the context clearly requires otherwise:

"Appropriation" means any act by a legislative body of the State or counties to authorize the expenditure of funds for capital improvement projects, public works projects, or any specific project for which government contracts are awarded.

"Business" means any corporation, partnership, individual, sole proprietorship, joint stock company, joint venture, or any other private legal entity.

"Completion of the contract" means that the parties to the government contract have either terminated the contract prior to completion of performance or fully performed the duties and obligations under the contract and no disputes relating to performance and payment remain under the contract. This term also means that all disputed claims have been adjudicated and are final.

"Construction" shall have the same meaning as set forth in section 103D-104.

"Contract" means all types of agreements, regardless of what they may be called, for the procurement or disposal of goods or services, for construction, or for the purchase or sale of real property.

"Goods" shall have the same meaning as set forth in section 103D-104.

"Government contract" means any contract for goods, services, or construction not excluded from the application of chapter 103D, and a contract for the purchase or sale of real property.

"Government contractor" means any business that seeks a nonbid government contract valued in excess of $25,000 or has one or more nonbid government contracts with a governmental body that exceed $25,000 in the aggregate.

"Governmental body" means any department, commission, council, board, bureau, authority, committee, institution, legislative body, agency, government corporation, or other establishment or office of the executive, legislative, or judicial branch of the State, including the office of Hawaiian affairs and the several counties of the State.

"Nonbid" means a procurement process where selection of the contractor is based on factors including price, but not based exclusively on low bid price.

"Procurement" means buying, purchasing, renting, leasing, or otherwise acquiring any goods, service, construction, or real property. The term also includes all functions that pertain to the obtaining of any goods, service, or construction including description of requirements, selection and solicitation of sources, preparation and award of contracts, and all phases of contract administration.

"Purchasing agency" means any governmental body, which is authorized by chapter 103D or by way of delegation, to enter into contracts for the procurement of goods, services, construction, or real property.

"Services" includes "professional services" and both terms shall have the same meaning as set forth in section 103D-104.

"Termination of procurement activity" means the cessation of any discussion or negotiations relating to a selection for any government contract in which the business is not selected for the contract, and no dispute remains on the selection of the government contractor.

(g) This section shall become operative on November 6, 2004, but shall not apply to bar the award of any contract based on any contribution made prior to November 6, 2004."

SECTION 8. Section 11-206, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Such contributions may be used after a general or special election for any fundraising activity, for:

(1) Any other politically related activity sponsored by the candidate;

(2) Any ordinary and necessary expenses incurred in connection with the candidate's duties as a holder of an elected state or county office; or

(3) Any [contribution] payment to any community service, educational, youth, recreational, charitable, scientific, or literary organization, provided that [in any election cycle,] the total amount of all [contributions] payments 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)."

SECTION 9. Section 11-207, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Expenditures, or disbursements for electioneering communications as defined in section 11-207.6, or any other coordinated activity, made by any person or political party for the benefit of a candidate in cooperation, consultation, or concert with, or at the request or suggestion of, a candidate, a candidate's political committee, or their agents, shall be considered to be a contribution to [such] that candidate and expenditure by [such] that candidate.

The financing by any person or political party of the dissemination, distribution, or republication, in whole or in part, of any broadcast or any written or other campaign materials prepared by the candidate, the candidate's political committee or committees, or agents shall be considered to be a contribution to [such] that candidate.

This subsection shall not apply to candidates for governor or lieutenant governor supporting a co-candidate in the general election.

(b) [No funds shall be withdrawn or paid from a campaign depository except upon the written authorization of the campaign treasurer.] "Coordinated activity" means any activity including anything of value provided by a person in connection with a candidate's nomination or election who is actively engaged in coordination with that candidate or agent of that candidate on any campaign activity in connection with an election in which the candidate seeks nomination or election to office and includes:

(1) A payment made by a person: in cooperation, consultation, or concert with; at the request of; or pursuant to any general or particular understanding with a candidate, the candidate's authorized committee, the political party of the candidate, or an agent acting on behalf of the candidate, authorized committee, or the political party of the candidate;

(2) A payment made by a person for the production, dissemination, distribution, or republication, in whole or in part, of any broadcast or any written, graphic, or other form of campaign material prepared by a candidate, a candidate's authorized committee, or an agent of a candidate or authorized committee or a communication that expressly advocates for or against a candidate; except that this paragraph shall not apply with respect to materials published on a candidate's website and republished at a cost of less then $1,000.

(3) A payment is made by a person if, in the same election cycle, the person making the payment:

(A) Is serving or has previously served as an employee, fundraiser, or agent of the candidate or the candidate's authorized committee in any capacity;

(B) Has previously participated in discussions with the candidate, an agent of the candidate's authorized committee, or a committee of a political party that is coordinating with the candidate regarding the candidate's campaign strategy, including advertising, allocation of resources, fundraising, or campaign operations; or

(C) Has retained the professional services of any person that has provided or is providing those services in the same election cycle to a candidate or committee in connection with the candidate's pursuit of nomination for election or election to office."

SECTION 10. 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 11. 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 12. 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] The 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] The candidate has qualified to be on the election ballot in a primary[, special primary,] or general election;

(3) [Such] The 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] The 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 13. 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 14. 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 15. 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 16. 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 17. Section 11-228, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) In the performance of its required duties, the commission may render a decision or issue an order affecting any person violating any provision of this subpart or section 281-22 that shall provide for the assessment of an administrative fine in accordance with the schedule of administrative fines for each category of violation of this subpart, in the manner prescribed as follows:

(1) If a natural person, a corporation, organization, association, or labor union, an amount not to exceed $1,000 for each occurrence, and for an unlawful contribution or expenditure, [or] an amount equivalent to three times the amount of an unlawful contribution or expenditure[, whichever is greater; or]

[(2) If a corporation, organization, association, or labor union, it shall be punished by a fine not exceeding $1,000 for each occurrence;] and;

[(3)] (2) Whenever a corporation, organization, association, or labor union violates this subpart, the [violation shall be deemed to be also that of] commission shall also assess an administrative fine in accordance with the schedule of administrative fines against the individual directors, officers, or agents of the corporation, organization, association, or labor union, who have knowingly authorized, ordered, or done any of the acts constituting the violation."

2. By amending subsection (f) to read:

"(f) The provisions of this section shall not be construed to prohibit prosecution under any appropriate provision of the Hawaii Penal Code or section 11-229[.]; provided that prosecution and conviction under section 11-229 shall prohibit subsequent administrative enforcement under this section."

SECTION 18. 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 violates section 11-201 or 11-202 or falsifies any report required by this part, 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 19. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 20. 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 21. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 22. This Act shall take effect upon its approval and shall not be applied retroactively to any contributions made prior to its effect.

INTRODUCED BY:

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