Report Title:

Campaign Spending Reform

Description:

Prohibits a person from soliciting or receiving campaign donations on government property; prohibits government contractors with total contracts over $25,000 from making contributions; prohibits use of contributions for personal expenses; amends registration requirements; clarifies that excess contributions must be returned within 30 days; makes false reports or illegal contributions a class C felony; eliminates public funding for candidates in special elections; repeals the fundraiser limitations.

 

THE SENATE

S.B. NO.

2451

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 use of campaign contributions for personal expenditures;

(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) Amend the campaign contributions limits to $4,000 for candidates seeking offices of four-year terms, $2,000 for candidates seeking offices of two-year terms, $2,000 for noncandidate committees in a two-year election period, $25,000 per year for a party, and a maximum limit of $25,000 in the aggregate for all contributions from an individual in a two-year election period;

(7) Define the ownership interest in a corporation or partnership as twenty-five per cent for purposes of campaign contribution limits by individuals;

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

(9) 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;

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

(11) 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;

(12) Increase the amount of charitable and community donations;

(13) Repeal the law relating to limitations on fundraising activities;

(14) 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

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

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

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

(b) Subsection (a) shall not apply to any government facility that permits use by nongovernmental organizations for a fee or with reservations; provided that the governmental facility's use regulations does not prohibit political activities on the premises. Government facilities that permit use for political activities shall be available to a candidate or committee for fundraising activities pursuant to the same terms and conditions that would otherwise apply to nongovernmental organizations.

(c) A person who violates subsection (a) shall be guilty of a misdemeanor."

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 professional corporation and 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. Such 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 one 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.] 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 11-200, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) A candidate, campaign treasurer, or candidate's committee shall not receive any contributions or receive or make any transfer of money or anything of value:

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

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

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

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

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

(b) Any provision of law to the contrary notwithstanding, a candidate, campaign treasurer, or candidate's committee, as a contribution:

(1) May purchase from its campaign fund not more than two tickets for each event held by another candidate, committee, or party whether or not the event constitutes a fundraiser as defined in section 11-203;

(2) May use campaign funds for any ordinary and necessary expenses incurred in connection with the candidate's duties as a holder of an elected state or county office, as the term is used in section 11-206(c); and

(3) May make [contributions] payments from its campaign fund to any community service, educational, youth, recreational, charitable, scientific, or literary organization[,]; provided that [in any election cycle,] the total amount of all [contributions] 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).]:

(A) $8,000 in a four-year period prior to the election in which the candidate is seeking nomination or election to a four-year term of office; or

(B) $4,000 in a two-year period prior to the election in which the candidate is seeking nomination or election to a two-year term of office.

For purposes of the payment limits in this subsection, payments made from surplus funds after an election shall be applied to the two- or four-year period prior to the election, as applicable."

SECTION 7. 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) 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.]

(B) A candidate seeking nomination or election to a four-year term of a nonstatewide office, or the candidate's committee, of an amount greater than $4,000 in the aggregate, for that election in which the candidate seeks office; or

(C) A candidate seeking nomination or election to a two-year term of office, or the candidate's committee, of an amount greater than $2,000 in the aggregate, for that election in which the candidate seeks office.

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] for the election in which the candidate seeks office [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)] (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] who owns more than twenty-five per cent of the outstanding shares of a corporation or interest in a partnership shall be treated as one person with the corporation or partnership.

[(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.]

[(k)] (m) 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.

(n) For purposes of this section:

(1) A candidate and the candidate's committee shall be considered a single entity for purposes of campaign contribution limits;

(2) Expenditures made by any person in cooperation, consultation, or concert with, or at the suggestion of, a candidate or the candidate's committee, or their authorized agents, shall be a contribution to the candidate; and

(3) Contributions by a person to a noncandidate committee or party that are earmarked for a specific candidate shall be treated as contributions from the person to the candidate.

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

SECTION 8. 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 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 any individual who owns twenty-five per cent of the outstanding shares of a business that is a government contractor; provided that the contribution is from the individual's personal funds.

(e) 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 the Hawaii public procurement code, 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."

SECTION 9. 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).] in accordance with the limits set forth in section 11-200(b)(3)."

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 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 candidate has qualified to be on the election ballot in a primary[, special primary,] or general election;

(3) Such 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 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]; 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 (d) to read:

"(d) Any administrative fine collected by the commission shall be deposited in the [Hawaii election campaign fund.] general fund."

3. 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. Section 11-203, Hawaii Revised Statutes, is repealed.

["11-203 Fundraisers and fundraising activities. (a) As used in this section, "fundraiser" means any function held for the benefit of a person that is intended or designed, directly or indirectly, to raise funds for political purposes for which the price or suggested contribution for attending the function is more than $25 per person.

(b) There shall be no more than two fundraisers held for a person prior to a general or special election in which that person is either elected or defeated.

(c) No fundraiser or fundraising activity shall be held unless a notice of intent to hold the function is filed by the person in charge of the function with the commission prior to the date of the function setting forth the name and address of the person in charge, the price per person, the date, hour, and place of the affair and the method thereof.

(d) Fundraisers sponsored by a candidate for a statewide office are exempt from the $25 limit of subsection (a) and the restrictions of subsection (b), and fundraisers sponsored by a party for a political purpose for the general benefit of the party are exempt from the restrictions of subsection (b)."]

SECTION 20. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 21. 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 22. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 23. This Act shall take effect upon its approval and shall not be applied retroactively to any contributions made prior to its effective date.

INTRODUCED BY:

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