Report Title:

Hawaii Clean Elections Act

Description:

Amends campaign spending laws to provide alternative public funding for state house of representatives candidates who voluntarily abide by certain contribution and expenditure limits. Appropriates $150,000 to the campaign spending commission for additional clean elections support staff.

THE SENATE

S.B. NO.

1451

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 purpose of this Act is to provide full public funding for state house of representatives candidates who voluntarily agree to abide by campaign contribution and expenditure limits, and meet other criteria spelled out in the Act.

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

"CLEAN ELECTIONS PUBLICLY FUNDED STATE

HOUSE OF REPRESENTATIVES ELECTIONS

§11-A Definitions. As used in this subpart, unless the context clearly requires otherwise:

"Candidate" shall be as defined in section 11-191, and includes any clean elections candidate.

"Candidate's committee" shall be as defined in section 11-191.

"Clean elections candidate" means a candidate who is certified by the commission as qualifying for public funding during a primary or runoff election campaign period, and agrees to abide by clean elections rules, qualifying contribution and expenditure limitations.

"Clean elections qualifying contribution" means a $3 contribution made to a candidate during the clean elections qualifying period by a registered voter residing within the candidate's district at the time the contribution is made, that is included within the total number of contributions that must be received by the candidate to qualify for clean elections public funds.

"Clean elections qualifying period" means the period during which candidates may collect clean elections qualifying contributions to qualify for the public funding set forth by this subpart, beginning January 1 in the year of the general election and ending June 30 in the year of the general election, whenever there is a minimum of $3,000,000 in the Hawaii election campaign fund on September 1 of an odd-numbered year.

"Commission" shall be as defined in section 11-191.

"Committee" shall be as defined in section 11-191.

"Contribution" shall be as defined in section 11-191.

"Election period" shall be as defined in section 11-191.

"Equalizing funds" means additional funds made available to a clean elections candidate when a privately-funded candidate spends or obligates, or has a noncandidate committee spend on the privately-funded candidate's behalf, fifty per cent or more than the public funds allotted to the clean elections candidate from the Hawaii election campaign fund.

"Excess expenditure" means the amount of money spent or obligated to be spent by a clean elections candidate in excess of one hundred per cent of the public funding the clean elections candidate is allocated.

"Expenditure" shall be as defined in section 11-191.

"Immediate family" shall be as defined in section 11-191.

"Independent expenditure":

(1) Means an expenditure made by a person or group other than a candidate or candidate's committee that expressly advocates the election or defeat of a candidate, and is made without the participation, cooperation or coordination of a candidate or candidate's committee. Expenditures that "expressly advocate the election or defeat of a candidate" include all costs of designing, producing, or disseminating a communication that contains phrases such as "vote for", "re-elect", "support", "cast your ballot for", "(name of candidate) for (name of office)", "(name of candidate) in (year)", "vote against", "defeat", "reject", or contains campaign slogans or individual words that in context can have no reasonable meaning other than to recommend the election or defeat of one or more clearly identifiable candidates, such as posters, bumper stickers, advertisements in any media that use a candidate's name in a promotional manner.

(2) Does not include:

(A) Any news story, commentary, or editorial by a broadcasting station, newspaper, magazine, or other publication, provided that the publishing entity is not owned by or affiliated with any candidate or candidate's committee; or

(B) Any newsletter or other communication whose circulation is limited to an organization's members, employees, shareholders, other affiliated individuals and those who request or purchase the internal publication.

(3) As used in this definitions, the term "coordination" refers to a payment made for a communication or anything of value that is for the purpose of influencing the outcome of a state election and that is made:

(A) By a person in cooperation, consultation, or concert with, at the request or suggestion of, or pursuant to a particular understanding with a candidate, a candidate's committee, or an agent acting on behalf of a candidate or candidate's committee;

(B) By a person for the 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 committee, or an agent of a candidate or candidate's committee;

(C) Based on specific information about the candidate's plans, projects, or needs provided to the person making the payment by the candidate or the candidate's agent who provides the information with a view toward having the payment made;

(D) By a person if, in the same election period in which the payment is made, the person making the payment is serving or has served as a member, employee, fundraiser, or agent of the candidate's committee in an executive or policymaking position;

(E) By a person if the person making the payment has served in any formal policy or advisory position with the candidate's campaign or has participated in strategic or policymaking discussions with the candidate's campaign relating to the candidate's pursuit of nomination for election, or election, to a federal or state office, in the same election period as the election period in which the payment is made; and

(F) By a person if the person making the payment retains the professional services of an individual or person who, in a non-ministerial capacity, has provided or is providing campaign-related services in the same election period to a candidate who is pursuing the same nomination or election as any of the candidates to whom the communication refers.

The term "professional services" includes services in support of a candidate's pursuit of nomination for election, or election, to office such as polling, media advice, direct mail, fundraising, or campaign research.

"Individual" shall be as defined in section 11-191.

"Loan" shall be as defined in section 11-191.

"Noncandidate committee" shall be as defined in section 11-191.

"Nonmonetary contribution" means a contribution other than of money that may include goods or services.

"Office" shall be as defined in section 11-191.

"Party" shall be as defined in section 11-191.

"Person" shall be as defined in section 11-191.

"Petty cash expenditure" means an expenditure of not more than $25 paid in cash in amounts of $100 or less in any seven consecutive calendar days.

"Primary election campaign period" means the period beginning January 1 in the year of the primary election and ending two weeks after the primary election.

"Private contribution" shall be as defined in section 11-191.

"Public funding" or "public funds" means campaign funds from the Hawaii election campaign fund.

"Runoff election campaign period" means the period beginning the day after the primary election and ending two weeks after a runoff election.

"Seed money" means contributions made leading up to and during the clean elections qualifying period that may be expended solely for determining campaign viability purposes. Seed money shall not be collected or spent once the candidate is certified by the commission as a clean elections candidate.

"State house of representatives" or "state house" means the Hawaii state house of representatives.

§11-B Clean elections publicly funded state house elections; requirements for participating candidates. (a) A candidate shall qualify as a clean elections candidate for the primary election campaign period if the candidate:

(1) Is a registered voter and is living in the district from which the person is to be elected as of January 1 of the year in which the general election will take place;

(2) Files a declaration with the commission that the candidate has complied and will comply with all of the requirements of this subpart, as applicable;

(3) Before the close of the clean elections qualifying period, collects $3 clean elections qualifying contributions from at least one per cent of the number of voters who last voted in the candidate's district during a regular general election; and

(4) Accepts only the following contributions between January 1 of the year in which the general election will take place, and the date that the candidate is certified as a clean elections candidate:

(A) Seed money contributions; and

(B) Clean elections qualifying contributions.

(b) A candidate shall be a clean elections candidate for the runoff election campaign period if the candidate:

(1) Was certified as a clean elections candidate during the primary election campaign period; and

(2) Received a sufficient number of votes to appear on the ballot in the runoff election.

§11-C Seed money contributions. (a) Seed money contributions from any single individual contributor shall not exceed $250, including in kind contributions. The aggregate amount of seed money that may be retained and expended for seed money purposes by a candidate seeking to become eligible for public funding shall not exceed $3,000.

(b) Seed money shall be spent only prior to and during the qualifying periods, and shall not be collected or spent after the candidate is certified by the commission as a clean elections candidate. Seed money expenditures shall be limited to those expenditures necessary to determine whether sufficient support exists to run for office, and may be used to purchase office supplies, rent equipment, send a mailing to district residents, and hold gatherings. Seed money shall not be spent for any salaries, rental of premises, or to pay any person to solicit or collect qualifying contributions.

(c) Candidates shall provide seed money contributors with a receipt and shall not accept contributions unless the information that shall be included on the receipt under this subsection is disclosed by the contributor. A receipt for a seed money contribution shall include the contributor's:

(1) Signature;

(2) Printed name;

(3) Home address;

(4) Zip code;

(5) Telephone number; and

(6) Donation amount or value.

(d) Within forty-eight hours after the close of the clean elections qualifying period, candidates seeking to become eligible for clean elections public financing shall:

(1) Fully disclose all seed money contributions and expenditures to the commission; and

(2) Return to the commission for deposit in the Hawaii election campaign fund any seed money the person has raised during the designated seed money period that exceeds the aggregate seed money limit.

(e) No candidate seeking to qualify as a clean elections candidate shall accept a seed money contribution made by a contributor in the name of another, who is not the person identified on the seed money receipt. Any candidate who violates this subsection shall be fined five times the amount of the contribution, in addition to any other penalties that may be assessed by the commission under this subpart. All penalties collected under this subsection shall be deposited in the Hawaii election campaign fund.

§11-D Clean elections qualifying contributions. (a) Each clean elections qualifying contribution shall meet the requirements of this section. To be counted as a clean elections qualifying contribution:

(1) Any contributor shall be a registered voter who resides within the candidate's district;

(2) Any contribution shall be:

(A) In the amount of $3;

(B) Made in cash, or by check or money order;

(C) Acknowledged by a receipt meeting the requirements in subsection (b); and

(D) Collected by the candidates themselves, or by volunteers who receive no compensation.

No clean elections qualifying contributions shall be collected prior to a candidate's filing of a declaration of intent to seek certification as a clean elections candidate with the commission.

(b) Any receipt for a clean elections qualifying contribution shall indicate, by the contributor's signature, that the contributor understands that the purpose of the contribution is to help the candidate qualify for public funding. The receipt shall include:

(1) The contributor's signature printed name, home address, zip code, and telephone number;

(2) The name of the candidate on whose behalf the contribution is made; and

(3) An affirmation by the contributor that the contributor received nothing of value for the signature and the contribution.

The original receipt shall be given to the contributor. A copy shall be retained by the candidate and a copy shall be submitted to the commission according to a schedule and procedure to be determined by the commission. A contribution submitted as a clean elections qualifying contribution that does not include a signed and completed receipt shall not be counted as a clean elections qualifying contribution. No candidate seeking to qualify as a clean elections candidate shall accept money made by the contributor in the name of another, who is not the person identified on the receipt.

(c) Each contribution shall be deposited in an escrow account maintained by the commission until the commission determines that the candidate has fulfilled the requirements for clean elections public funding and may be certified as a clean elections candidate.

§11-E Use of personal funds. Personal funds of the candidate seeking to qualify as a clean elections candidate may be used as seed money up to the $3,000 limit as provided in section 11-C(a).

§11-F Certification of qualification for public funds. (a) Candidates seeking certification as clean election candidates shall submit to the commission an application for certification, which shall include:

(1) An affidavit from the office of elections certifying that the candidate's qualifying contributors:

(A) Are registered voters from the candidate's district; or

(B) Were registered voters in the candidate's district at the time the clean elections qualifying contributions were made; and

(2) An authenticated and alphabetized list of all clean elections qualifying contributions and contributors.

The commission shall issue a decision to certify or deny certification of a candidate as a clean elections candidate within three business days following receipt of the candidate's completed application.

(b) The number of clean elections candidates certified by the commission initially shall be limited to three persons in each district, on a first-come, first-served basis. When sufficient funding exists, more candidates shall be allowed. A candidate's application for certification shall be made on forms to be prescribed by the commission. The application shall be signed by the candidate and the candidate's campaign treasurer under penalty of perjury.

(c) Certification may be revoked if a clean elections candidate violates the applicable requirements of this subpart. Upon revocation of certification, the candidate shall repay all public funds within ten business days.

§11-G Clean elections candidates; contributions and expenditures. A candidate who has been certified as a clean elections candidate and thereby found eligible for public funding shall comply with the following restrictions on contributions and expenditures:

(1) During the primary and runoff election campaign periods, a clean elections candidate shall not accept:

(A) Private contributions from any source, other than in kind contributions aggregating less than $100 from any one source; and

(B) Loans from any source;

(2) During the primary and runoff election campaign periods, a clean elections candidate shall not expend:

(A) Seed money contributions;

(B) Public funds for purposes other than those specified in this subpart;

(C) Public funds outside the applicable campaign period for which the funding is allocated; and

(D) Public funds in excess of the public funds allocated to the candidate, or incur an obligation or obligations to spend public funds in excess of this amount;

(3) Clean elections candidates may not accept any monetary or nonmonetary contributions from political parties; and

(4) Clean elections candidates, once elected, may not accept private contributions or contributions from political parties prior to January 1 in the year that the candidate next seeks election.

§11-H Clean elections candidates; reporting. (a) Clean elections candidates shall furnish complete campaign records, including all records of nonmonetary contributions, seed money contributions, and clean elections qualifying contributions to the commission at such times as may be required by the commission. Clean elections candidates shall fully cooperate with any audit or examination by the commission.

(b) In addition to any other reports required by law, clean elections candidates shall maintain records of the following expenditures, which shall be reported to the commission as required by the commission:

(1) Expenditures involving a debt incurred, but not paid immediately, such as those for utility bills, which shall be reported at the time that the debt is incurred; and

(2) All petty cash expenditures.

§11-I Clean elections candidates; continuing obligation. A clean elections candidate who accepts any public funds during the primary election campaign period shall comply with all requirements applicable to a clean elections candidate under this subpart. This obligation shall continue through the runoff election campaign period regardless of whether that person continues to accept or maintains eligibility for clean elections public funds.

§11-J Clean elections; disbursements. (a) A candidate certified as a clean elections candidate for the primary election shall receive authorization to expend public funding for the primary election on the date that certification is issued by the commission. A candidate certified as a clean elections candidate for a runoff election shall receive authorization to expend public funds for the runoff election on the date that certification is issued by the commission. Public funds shall be disbursed to the candidate by check, dated as of and available on the date of the certification.

(b) The amount of initial public funding for a qualified clean elections candidate shall be set as seventy-five per cent of the median amount spent by winning candidates for state house of representatives office, as the case may be, in all contested elections statewide, during the previous two election periods, but not including special elections. This initial amount shall be divided equally between primary and general elections.

(c) The public funding amount for an eligible candidate in an uncontested general election shall be twenty-five per cent of the amount provided in a contested election.

(d) Funds not spent in the primary election may be used in the general election by the successful primary candidate. Money not spent by the losing clean elections candidate shall be returned to the Hawaii campaign election fund.

§11-K Equalizing funds. (a) Equalizing funds shall be made available to a candidate when a privately-funded candidate spends or obligates, or has a noncandidate committee spend on the privately-funded candidate's behalf, fifty per cent or more than the public funds allotted to the clean elections candidate from the Hawaii election campaign fund. This trigger amount to pay out additional funds equals fifty per cent of the initial disbursement set for that election contest.

(b) Checks shall be pre-cut and available within five working days of the filing of any report required under this chapter with the commission.

(c) Disbursements of the full amount of the equalizing funds to clean elections candidates shall be automatic if a nonparticipating candidate does not report expenditures to the commission in the prescribed timetable set by the law in this chapter.

§11-L Computation and distribution of equalizing funds. (a) The commission shall determine a certified clean elections candidate's allocation of equalizing funds, if any, based on information disclosed in any report required under this chapter, in the manner provided in subsections (b) and (c).

(b) The commission shall add:

(1) The sum of an opposing candidate's expenditures and obligations, or funds raised and borrowed, whichever is greater, including surplus or unspent funds carried forward from a previous primary, general, or special election to the current election; and

(2) The sum of the independent expenditures made expressly advocating the defeat of the certified candidate or the election of the same opposing candidate. The amount that a noncandidate committee expends on supporting or opposing multiple candidates will be pro-rated by the commission and applied to this candidate contest.

(c) From the total determined in subsection (b), the commission shall then subtract:

(1) The sum of the independent expenditures made expressly advocating the defeat of the same opposing candidate; and

(2) The sum of the independent expenditures made expressly advocating the election of the certified candidate. The amount that a noncandidate committee expends on supporting or opposing multiple candidates will be pro-rated by the commission and applied to this candidate contest; and

(3) The sum of any seed money raised in computing fund eligibility for a primary, general, or special election, as applicable or any surplus or unspent funds carried forward from a previous primary election to the subsequent general election in computing equalizing fund eligibility for a general election.

(d) If the final computed amount is greater than the applicable initial distribution amount for the clean elections candidate, and exceeds the fifty per cent trigger amount, then the commission shall immediately authorize the distribution of an equalizing allocation to the clean elections candidate, up to initial distribution amount.

(e) The commission shall make computations promptly upon the filing of campaign finance reports and independent expenditure reports.

(f) To prevent the abuse of the equalizing fund provision, the commission shall not base any calculation on independent expenditures that, although containing words of express advocacy, also contain other words or phrases that have no other reasonable meaning other than to contradict the expressed advocacy.

§11-M Equalizing fund cap. Clean elections candidates shall not be entitled to cumulative equalizing funds for multiple opponents.

§11-N Independent expenditures. Costs incurred in designing, producing, or disseminating a communication shall be presumed to expressly advocate the election or defeat of a candidate if the communication names or depicts one or more clearly identifiable candidates, is disseminated during the forty-five calendar days before a primary election or during the sixty calendar days before a general election.

§11-O Disclosure of independent expenditures. (a) Any person who makes or obligates to makes any independent expenditure during a primary, general, or runoff election campaign period which, in the aggregate, exceeds $1,000 shall:

(1) Register with the commission as a noncandidate committee;

(2) Report to the commission the names of any candidates that the committee supports or opposes; and

(3) Conform to all applicable laws.

(b) The report to the commission shall include a signed statement by the person or persons making the independent expenditure identifying the candidate or candidates whom the independent expenditure is intended to help elect or defeat, and affirming that the expenditure is totally independent and involves no cooperation or coordination with a candidate or a political party.

(c) An individual or organization may file a complaint with the commission if the individual or the organization believes that such a statement is false. The commission shall make a prompt determination about such a complaint.

(d) Any individual or organization that fails to file the required report to the commission or provides materially false information in that report may be fined up to three times the amount of the independent expenditure.

§11-P Public funding. The commission shall expend up to $           in funds from the Hawaii election campaign fund for the purposes of this subpart to distribute to candidates who qualify under this subpart.

§11-Q Clean elections; expenditure limits. A clean elections candidate shall not spend or incur an obligation to spend more than one hundred per cent of the public funds that have been allocated to the candidate. If a clean elections candidate spends or incurs an obligation to spend more than one hundred per cent of the public funds allocated, the candidate shall repay the Hawaii elections campaign fund an amount equal to three times the excess expenditure.

§11-R Public funding; permitted uses. (a) The public funds received by clean elections candidates shall be used only for the purpose of defraying expenses that are directly related to the candidate's campaign during the election campaign period for which the public funds are allocated, including:

(1) The purchase and development of campaign literature and campaign signs;

(2) The development and purchase of media space and time;

(3) Mailings;

(4) Telephones and telecommunications;

(5) General office supplies;

(6) The rental of campaign equipment;

(7) Utility costs associated with the campaign; and

(8) Campaign headquarters rental, salaries, and independent contractors, that in the aggregate do not exceed twenty per cent of the allocated public funds.

(b) Expenditures shall not be made:

(1) In violation of any law;

(2) To pay any personal, family, or business expenses, loans, or debts;

(3) For any noncampaign-related expenses, or for indirect campaign-related expenses; or

(4) To immediate family members.

§11-S Deposit of public funds. (a) All public funds received by clean elections candidates shall be deposited directly into a depository institution as provided under section 11-199(a).

(b) All reports required under this subpart for financial disclosure shall include the most recent bank statement from the financial depository.

§11-T Deposit of moneys into the Hawaii election campaign fund. The following moneys shall be deposited into the Hawaii election campaign fund:

(1) Excess seed money contributions as provided in this subpart;

(2) Clean elections qualifying contributions, including any excess publicly funded elections qualifying contributions;

(3) Unspent public funds distributed to any clean elections candidate who does not remain a candidate until the election for which they were distributed, or such funds that remain unspent by a clean elections candidate following the date of the election for which they were distributed;

(4) Fines levied by the commission against candidates for violation of election laws; and

(5) Voluntary donations.

§11-U Rules. The commission shall adopt rules pursuant to chapter 91 as may be necessary to implement this subpart.

§11-V Sufficiency of funding for elections. On September 1 of each odd-numbered year, the commission shall determine:

(1) The amount of funding required to finance the clean elections public funding of all of the contests for the state house of representatives; and

(2) Whether there is sufficient funding to finance the public funding of all state house of representatives contests. If there is sufficient funding to finance the public funding of all house of representatives contests, then section 2 of this Act shall become operative and apply to candidates for state house of representatives during the next election period in which the primary election is at least six months away. If there is not sufficient funding to finance the public funding of all house of representatives contests, then section 2 of this Act shall become inoperative until September 1 of the next odd-numbered year."

SECTION 3. There is appropriated out of the Hawaii election campaign fund the sum of $150,000, or so much thereof as may be necessary for fiscal year 2003-2004, and the same sum, or so much thereof as may be necessary for fiscal year 2004-2005, for the campaign spending commission to provide staff positions to support clean elections publicly funded state house of representatives elections as follows:

(1) Two staff positions for computer analysis of campaign contributions; and

(2) One staff position for auditing and monitoring.

SECTION 4. The sum appropriated shall be expended by the campaign spending commission for the purposes of this Act.

SECTION 5. In codifying the new sections added by section 2 of this Act, the reviser of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 6. In addition to the reports required by section 11-210, Hawaii Revised Statutes, the campaign spending commission, in cooperation with the League of Women Voters, Common Cause Hawaii, and other relevant stakeholders, shall conduct a comprehensive study of the campaign financing system in Hawaii following the first election under this Act, and shall report to the legislature, no later than twenty days before the convening of the regular session of the year following the year of the study, with the following information:

(1) A detailed summary of all seed money contributions, qualifying contributions, public funds disbursements, and public-financed candidate expenditures, spent in the election;

(2) Suggested amendments to this Act that would improve the equalizing of clean elections funding to match independent expenditures and any excess expenditures of publicly funded and non-participating candidates;

(3) Suggested amendments to this Act that will extend clean elections campaigns to other state and county elections; and

(4) A summary and evaluation of the commission's activities, and recommendations to enhance the effective and timely administration and enforcement of this Act.

The legislative reference bureau shall assist the campaign spending commission in drafting any proposed amendments to this Act recommended by the campaign spending commission.

SECTION 7. 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 8. This Act shall take effect on July 1, 2003.

INTRODUCED BY:

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