Campaign Spending Reform
Prohibits corporations, labor organizations, and banks from making campaign contributions directly from corporate, labor organization, or bank treasuries; allows the campaign spending commission to communicate directly with the legislature and the governor and to make all personnel decisions without the approval of the department head; requires establishment of separate segregated fund through which employees can make contributions; provides that intentional and knowing violations of the campaign spending law shall be a class C felony. (SD1)
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 11-191, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:
""Separate segregated fund" means an account set up by any state or national bank, corporation, partnership, labor organization, membership organization, trade association, cooperative, or corporation without capital stock, for the purpose of making contributions to influence the nomination for election, or election, of any person to political purpose or for an issue on the ballot."
SECTION 2. Chapter 11, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§11- Banks, corporations, and labor organizations. (a) No state or national bank, corporation, partnership, labor organization, membership organization, cooperative, or corporation without capital stock organized by authority of any law of the United States Congress or of any state shall make a contribution or expenditure in connection with the nomination for election or election of any person to political office, or in connection with any candidate committee or noncandidate committee.
(b) No officer or director of any corporation of any state or national bank or any officer of any labor organization shall consent to any contribution by the corporation, state or national bank, or labor organization. No person shall accept or receive any contribution prohibited by this subsection.
(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 state or national bank, corporation, partnership, labor organization, membership organization, cooperative, or corporation without capital stock for the purpose of influencing the nomination for election, or election, of any person to political office.
(d) It shall be unlawful for the separate segregated fund to use contributions secured by physical force, job discrimination, financial reprisals, or the threat of force, job discrimination, or financial reprisal; or by dues, fees, or other moneys required as a condition of membership in a labor organization or as a condition of employment, or by moneys obtained in any commercial transaction.
(e) Any person soliciting an employee for a contribution to such a fund shall inform the employee, in writing, at the time of such solicitation of the employee's right to refuse to contribute without any reprisal.
It shall be unlawful for:
(1) A corporation, or a separate segregated fund established by a corporation, to solicit contributions to the fund from any person other than its stockholders and their families and its executive or administrative personnel and their families; or
(2) A labor organization, or a separate segregated fund established by a labor organization, to solicit contributions to such a fund from any person other than its members and their families.
(f) No funds for a separate segregated fund established by a corporation may be from dividends, bonuses, or any form of payment to stockholders and their families and its executives or administrative personnel and their families, paid solely for making a contribution to such fund.
(g) This section shall not prevent a membership organization, cooperative, trade association, or corporation without capital stock, or a separate segregated fund established by a membership organization, cooperative, trade association, or corporation without capital stock, from soliciting contributions to such a fund from members of such organization, cooperative, trade association, or corporation without capital stock."
SECTION 3. Section 11-191, Hawaii Revised Statutes, is amended by amending the definition of "noncandidate committee" to read as follows:
""Noncandidate committee" means a committee as defined in this section [
SECTION 4. Section 11-193, Hawaii Revised Statutes, is amended to read as follows:
"§11-193 Duties of the commission. (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 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) 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.
(b) In performing the functions and duties under this subpart, the commission may subpoena witnesses, examine them under oath, and require the production of books, papers, documents, or objects, to the commission office at any place in the State whether or not the subpoena is in connection with any hearing; provided that the person or documents subpoenaed shall be relevant to a matter under study or investigation by the commission. The books, papers, documents, or objects may be retained by the commission for a reasonable period of time for the purpose of examination, audit, copying, testing, and photographing. The subpoena power shall be exercised by the chairperson of the commission, or such other person as the chairperson may designate. Upon application of the commission, obedience to the subpoena shall be enforced by the circuit court in the county where the person subpoenaed resides or is found in the same manner as a subpoena issued by a circuit court.
(c) The commission shall be exempt from section 26-35(1) and (4) and shall:
(1) Make direct communications with the governor and legislature; and
(2) Make all decisions regarding employment, appointment, promotion, transfer, demotion, discharge, and job descriptions of all officers and employees of or under the jurisdiction of the commission without the approval of the head of the department.
The commission shall follow all applicable personnel laws."
SECTION 5. Section 11-204, Hawaii Revised Statutes, is amended to read as follows:
"§11-204 Campaign contributions; limits as to persons.
(a) (1) No person or any other entity shall make contributions to:
(A) A 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[
(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.
A candidate, candidate's committee, or committee who complies with this subsection prior to the initiation of prosecution shall not be subject to any penalty under section 11-228.
(f) All payments made by a person or political party whose contributions or expenditure activity is financed, maintained, or controlled by any corporation, labor organization, association, political party, or any other person or committee, including any parent, subsidiary, branch, division, department, or local unit of the corporation, labor organization, association, political party, political committees established and maintained by a national political party, or any other person, or by any group of those persons shall be considered to be made by a single person or political party.
(g) A contribution made by two or more corporations shall be treated as one person when such corporations:
(1) Share the majority of members of their boards of directors;
(2) Share two or more corporate officers;
(3) Are owned or controlled by the same majority shareholder or shareholders; or
(4) Are in a parent-subsidiary relationship.
(h) An individual and any general partnership in which the individual is a partner, or an individual and any corporation in which the individual owns a controlling interest, shall be treated as one person.]
(i)] (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.
(j)] (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.
(k)] (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)] (k) Except for subsection [ (j)] (i), this section shall not apply to ballot issue committees."
SECTION 6. Section 11-229, Hawaii Revised Statutes, is amended to read as follows:
"§11-229 Criminal prosecution. (a) Any person who knowingly, intentionally, or recklessly violates any provision of this subpart shall be guilty of a misdemeanor. 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.
(b) Any person, officer, or director of any corporation or any officer of any labor organization, or officer or director of a state or national bank who knowingly, willingly, or intentionally falsifies any report required by this subsection with the intent to circumvent the law or deceive the commission shall be guilty of a class C felony.
(c) Any person who violates section 11-201 or 11-202 shall be guilty of a class C felony.
(b)] (d) For purposes of prosecution for violation of this subpart, the offices of the attorney general and the prosecuting attorney of the respective counties shall be deemed to have concurrent jurisdiction to be exercised as follows:
(1) Prosecution shall commence with a written request from the commission or upon the issuance of an order of the court; provided that prosecution may commence prior to any proceeding initiated by the commission or final determination;
(2) In the case of state offices, parties, or issues, the attorney general or the prosecuting attorney for the city and county of Honolulu shall prosecute any violation; and
(3) In the case of all other offices, parties, or issues, the attorney general or the prosecuting attorney for the respective county shall prosecute any violation.
In the commission's choice of prosecuting agency, it shall be guided by whether there will be any conflicting interest between the agency and its appointive authority.
(c)] (e) The court shall give priority to the expeditious processing of suits under this section.
(d)] (f) Prosecution for violation of any provision of this subpart shall not be commenced after five years have elapsed from the date of the violation or date of filing of the report covering the period in which the violation occurred, whichever is later.
(e)] (g) The provisions of this section shall not apply to any person who, prior to the commencement of proceedings under this section, has paid or agreed to pay the penalties prescribed by sections 11-193(a)(5) and 11-215(c)."
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 does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.
SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect upon approval.