Report Title:

Elections; Comprehensive Public Funding

Description:

Establishes a comprehensive public funding program for state house of representatives candidates who agree to abide by campaign contribution and expenditure limits and meet other criteria. (SD2)

THE SENATE

S.B. NO.

3104

TWENTY-SECOND LEGISLATURE, 2004

S.D. 2

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 legislature finds that there is consensus regarding the need for the reform of funding public elections in Hawaii. Many citizens agree that:

(1) There is a growing sense of cynicism and frustration among the voting public because of the practices of soliciting, raising, and spending large private campaign contributions by candidates and elected officials;

(2) Such practices create the perception of undue influence on candidates or elected officials by moneyed private interests;

(3) Reliance on private contributions makes it difficult for individuals without access to large private contributions to participate meaningfully in the electoral process; and

(4) There are a number of "loopholes" in Hawaii's current campaign spending laws that may exacerbate the perception or reality of undue influence that large private contributors have on certain candidates or elected officials.

The purpose of this Act is to provide comprehensive public funding for candidates seeking election to office in the state house of representatives who voluntarily agree to abide by campaign contribution and campaign 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 C to part XII to read as follows:

"C. Comprehensive Public Funding for

House of Representatives Elections

11-A Purpose. (a) The purpose of this subpart is to provide a comprehensive public funding program for candidates seeking election to office in the state house of representatives who voluntarily agree to abide by campaign contribution and campaign expenditure limits and meet other criteria in this subpart.

(b) The provisions of this subpart are effective when:

(1) There is a minimum of $3,000,000 in the Hawaii election campaign fund on September 1 of an odd-numbered year;

(2) The commission has determined pursuant to section 11-C that sufficient funds exist for comprehensive public funding under this subpart; and

(3) The commission has published a statewide public notice stating that this subpart shall become effective on the next January 1 following the publication of public notice by the commissioner.

11-B Definitions. When used in this subpart, unless the context clearly requires otherwise:

"Candidate" means an individual who seeks nomination for election or seeks election to the state house of representatives and who meets the criteria of section 11-191, and includes any candidate who receives comprehensive public funding under this subpart.

"Candidate's committee" means a committee, as defined in this section, that makes an expenditure or accepts a contribution on behalf of a candidate for nomination for election, or re-election, to the state house of representatives with the candidate's authorization.

"Certification for comprehensive public funding" means the acceptance by the commission of a list of voters from the district that has been verified by the office of elections as comprised of at least one and one-half per cent of district voters from the previous election who made a $3 district qualifying campaign contribution to a person who has filed an intention to run for office.

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

"Committee" shall be as defined in section 11-191, except that the meaning applies only to candidates who seek nomination for election, or re-election, to the state house of representatives.

"Comprehensive publicly funded candidate" means a candidate who is certified by the commission as qualifying for comprehensive public funding under this subpart for a primary election, general election, or both, and who agrees to abide by the comprehensive public funding rules.

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

"District qualifying campaign contribution" or "qualifying campaign contribution" means a $3 monetary contribution made to an intended comprehensive publicly funded candidate during the qualifying period by a contributor who meets the criteria of section 11-G, that is included within the total number of contributions required to qualify for comprehensive public funding under this subpart. District qualifying contributions do not include loans or in-kind contributions.

"Election period" means the two-year period between general election days for a candidate seeking nomination or election to the state house of representatives.

"Equalizing funds" means additional public funds released by the commission to a comprehensive publicly funded candidate to allow the candidate to stay financially competitive with a privately funded opponent.

"Excess expenditure" means the amount of comprehensive public funds spent or obligated to be spent by a comprehensive publicly funded candidate in excess of one hundred per cent of the allocated funds for a primary election, general election, or both.

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

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

"Hawaii election campaign fund" shall be as defined in section 11-217.

"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, or 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; and

(3) As used in this definition, 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 house of representatives 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 the state house of representatives, 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.

"Partial public funding" means public funds received by a candidate as defined in section 11-191 who is eligible to receive partial public funding, pursuant to section 11-220.

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

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

"Petty cash expenditure" means a single item expense of not more than $25 paid in cash by a comprehensive publicly funded candidate or the candidate's committee.

"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.

"Privately funded candidate" means any candidate for a state house of representatives office who does not qualify for or receive public funding during an election period.

"Public funding" or "public funds" means campaign funds from the Hawaii election campaign fund received by an eligible candidate pursuant to subpart B or this subpart.

"Qualifying period" means the period beginning January 1 and ending on the deadline for filing candidate nomination papers to run in the primary election of a general election year during which a candidate may collect qualifying campaign contributions to qualify for comprehensive public funding under this subpart; provided the commission has determined that the Hawaii election campaign fund has sufficient funds to make payments to comprehensive publicly funded candidates during the election period.

"Seed money" means contributions made to an intended comprehensive publicly funded candidate from any source before or during the qualifying period and that may be expended solely for determining campaign viability purposes.

"Surplus campaign funds" means, for a comprehensive publicly funded candidate, any money given to a candidate that was not spent during the election period for which the contributions were made.

Except for terms that are specifically defined in this subpart, terms that are defined under subpart B shall apply to this subpart.

11-C Sufficiency of funding for comprehensive public funding for state house of representatives elections. On September 1 of each odd-numbered year before a general election year, the commission shall determine whether there are sufficient funds in the Hawaii election campaign fund to finance the comprehensive public funding of at least two state house of representatives contests per representative district statewide.

If the commission determines that there is sufficient funding, then within five business days, the commission shall publish notice statewide, pursuant to section 1-28.5, that the provisions of the comprehensive public funding for state house of representatives elections shall become effective on the next January 1 following the statewide public notice by the commissioner. If there is not sufficient funding, then this subpart shall be inoperative until the commission's determination and public notice on September 1 of the next odd-numbered year.

If this subpart is inoperative, then candidates seeking election to the state house of representatives may seek public funding under the partial funding program under subpart B.

11-D Qualifications for comprehensive public funding. (a) A candidate seeking nomination or election to the state house of representatives may seek comprehensive public funding for the primary election campaign period if the candidate:

(1) Resides in the district from which election is sought as of date of the filing of nomination papers for the primary election in the general election year in which the candidate seeks to be nominated or elected;

(2) Is a registered voter in the district from which election is sought;

(3) Files a declaration of intent to seek comprehensive public funding with the commission between January 1 of the election year and the closing date to run for office that states the office and district in which the candidate intends to seek election;

(4) Collects $3 district qualifying campaign contributions from at least one and one half per cent of the number of registered voters in the candidate's state house of representatives district during the previous regular general election; and

(5) Accepts only the following contributions during the qualifying period of the general election year in which the candidate seeks election:

(A) Seed money contributions until the candidate files a declaration of intention to run as a comprehensive publicly funded candidate;

(B) District qualifying campaign contributions; and

(C) Comprehensive public funding funds after certification as a comprehensive publicly funded candidate.

(6) Files the appropriate application for certification for comprehensive public funding with the commission and a declaration that the candidate has complied and will comply with all of the requirements of this subpart, as applicable, no later than ten business days before the primary election.

(b) A candidate is qualified to seek comprehensive public funding for the general election campaign period if the candidate:

(1) Was certified as a comprehensive publicly funded candidate during the primary election campaign period; and

(2) Received a sufficient number of votes to appear on the ballot in the general election or did not have a contested primary election.

11-E Seed money contributions; limitations on use of seed money; penalties. (a) The use of seed money shall be limited to 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 with district residents. Seed money shall not be spent for any salaries, rental of premises, or to pay any person to solicit or collect qualifying contributions.

(b) The amount of seed money retained, expended, or both, by a candidate seeking to become eligible for comprehensive public funding shall not exceed a total of $3,000.

(c) Contributions of seed money from any single source shall not exceed $250, including in-kind contributions.

(d) A candidate may use personal funds or surplus campaign funds for seed money purposes, all of which shall be subject to the $3,000 limit in subsection (b).

(e) Seed money shall only be spent prior to and during the qualifying period and shall not be collected or spent after the candidate has filed the declaration to run and is certified by the commission as a comprehensive publicly funded candidate.

(f) A candidate shall not accept seed money from any contributor unless the candidate obtains in writing from that contributor and issues a receipt to the contributor confirming the following information:

(1) Signature;

(2) Printed name;

(3) Home address;

(4) Zip code;

(5) Telephone number;

(6) Contribution amount or value; and

(7) Date.

(g) Within forty-eight hours after certification as a qualified comprehensive publicly funded candidate or the close of the qualifying period, whichever occurs first, candidates seeking comprehensive public funding 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:

(A) Any seed money the candidate has collected that exceeds the seed money expenditure limit; and

(B) Unspent seed money, not otherwise legally obligated.

(h) No comprehensive publicly funded candidate shall accept seed money from a contributor who makes the contribution under the name of another person. Any comprehensive publicly funded candidate who knowingly 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 or that may be provided by any other law. All penalties collected under this subsection shall be deposited in the Hawaii election campaign fund. Any action to impose or collect the fine shall be a civil action.

11-F Restriction on use of surplus campaign funds. Except as provided in section 11-E(d), a comprehensive publicly funded candidate who has surplus campaign funds from a previous election is prohibited from using those funds upon filing the declaration of intent to seek comprehensive public funding under this subpart. The surplus campaign funds shall be frozen and maintained in a separate depository account from that established for the comprehensive public funds under section 11-T. The comprehensive publicly funded candidate shall continue to file reports on the surplus campaign funds in accordance with subpart B or otherwise as may be required by the commission.

11-G District qualifying campaign contributions. (a) Each qualifying campaign contribution shall meet the requirements of this section. To be counted as a qualifying campaign contribution:

(1) Any contributor shall be a registered voter who resides within the house of representative district to which the candidate seeks nomination or election at the time the contribution is given;

(2) A 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 subsections (c) and (d); and

(D) Collected by the candidate in person or by volunteers on behalf of the candidate who receive no compensation.

(b) No qualifying contribution shall be collected prior to a candidate's filing of a declaration of intent to seek certification as a comprehensive publicly funded candidate with the commission.

(c) Any receipt for a qualifying campaign 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 comprehensive public funding. The receipt shall indicate that it is prepared by the Campaign Spending Commission, and 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 qualifying campaign contribution is made;

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

(4) Date the contribution is made.

(d) 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 qualifying campaign contribution that does not include a signed and completed receipt shall not be counted as a qualifying contribution.

(e) No candidate seeking to qualify as a comprehensive publicly funded candidate shall accept a qualifying campaign contribution or seed money made by the contributor in the name of another, who is not the person identified on the receipt. Knowing violation of this subsection shall disqualify the candidate from comprehensive public funding for that election period and may subject the candidate to other fines and prosecution pursuant to sections 11-228 and 11-229.

(f) A candidate's qualifying campaign contributions shall be deposited in an escrow account maintained by the commission until the commission determines that the candidate has fulfilled the requirements for comprehensive public funding and may be certified as a comprehensive publicly funded candidate. Upon certification, the candidate's qualifying campaign contributions shall be deposited into the Hawaii election campaign fund.

(g) Qualifying campaign contributions collected by candidates who do not receive certification for comprehensive public funding shall be deposited into the Hawaii election campaign fund.

11-H Certification of qualification for comprehensive public funds. (a) Candidates seeking certification as a comprehensive publicly funded candidate shall submit to the commission an application for certification no later than five days prior to the primary election, signed by the candidate and the candidate's campaign treasurer under penalty of perjury, that shall include:

(1) An affidavit from the office of elections certifying and authenticating that the candidate's qualifying campaign contributors are all registered voters from the candidate's district; and

(2) An authenticated and alphabetized list of all qualifying campaign contributions and contributors and copies of receipts given to contributors;

The application form shall be prescribed by the commission.

(b) The commission shall issue a decision to certify or deny certification of a candidate as a comprehensive publicly funded candidate within five business days following receipt of the candidate's completed application for certification for comprehensive public funds.

(c) The number of comprehensive publicly funded candidates certified by the commission shall be limited to not more than three persons in each house of representatives district, on a first-come, first-served basis, based on date of certification.

(d) After a candidate is certified as a comprehensive publicly funded candidate, the candidate's certification shall apply to the both primary and the general election, even if the candidate is unopposed in the primary election.

(e) Candidates who are not certified for comprehensive public funding under this subpart may seek partial public funding under the partial public funding program in subpart B.

(f) Certification may be revoked if a comprehensive publicly funded candidate or the candidate's committee violates the applicable requirements of this subpart. Upon revocation of certification, the candidate shall repay all public funds within ten business days. A candidate who intentionally or knowingly violates the qualifying and expenditure requirements of this subpart may be subject to fines, criminal prosecution pursuant to sections 11-228 and 11-229, or both.

11-I Comprehensive publicly funded candidates; contributions and expenditures. A candidate who has been certified as eligible for comprehensive public funding shall comply with the following restrictions on contributions and expenditures:

(1) Upon certification for comprehensive public funding and until the end of the general election period, a comprehensive publicly funded candidate shall not accept for use in the campaign:

(A) Contributions from any source; provided that the candidate may accept in-kind contributions aggregating less than $100 from any single source; and

(B) Loans from any source;

(2) Upon certification for comprehensive public funding and until the end of the general election period, a comprehensive publicly funded candidate shall not expend for campaign purposes:

(A) Any money except public funds issued by the commission;

(B) Seed money contributions;

(C) Public funds for purposes other than those permitted in this subpart;

(D) Public funds outside the applicable campaign period for which the funding is allocated, except for proper campaign debts incurred but not paid;

(E) Public funds in excess of the comprehensive public funds allocated to the candidate, including equalizing funds, or incur an obligation or obligations to spend public funds in excess of this amount; and

(F) Petty cash expenditures in excess of $100 in any seven consecutive day period.

(3) Comprehensive publicly funded candidates may not accept any monetary or nonmonetary contributions from political parties; and

(4) Comprehensive publicly funded candidates, once elected, may not accept private contributions or contributions from political parties prior to September 1 of the odd-numbered year before the year that the candidate next seeks election or when the commission determines there are insufficient funds under section 11-C. This section does not prohibit seed money contributions to an intended comprehensive publicly funded candidate.

11-J Comprehensive publicly funded candidates; reporting. (a) Comprehensive publicly funded candidates shall furnish complete campaign records, including all records of non-monetary contributions, seed money contributions, qualifying campaign contributions to the commission, and expenditures. Candidates shall fully cooperate with any audit or examination by the commission.

(b) Comprehensive publicly funded candidates shall comply with the reporting requirements of sections 11-194, 11-195, and 11-196 in subpart B in addition to those required under this subpart. Comprehensive publicly funded candidates shall also include petty cash expenditures in any expenditure report required under subpart B.

11-K Comprehensive publicly funded candidates; continuing obligation. (a) A candidate who accepts any comprehensive publicly funded program funds during the primary election campaign period shall comply with all requirements applicable to a comprehensive publicly funded candidate under this subpart. This obligation shall continue through the general election campaign period regardless of whether that person continues to maintain eligibility for comprehensive public funding.

(b) A winning comprehensive publicly funded candidate's obligation not to accept private contributions shall continue during the term of office until September 1 of the next odd-numbered year before the next election.

(c) If a comprehensive publicly funded candidate ceases to run for office, all unused funds shall be returned to the Hawaii election campaign fund.

(d) If a comprehensive publicly funded candidate who violates their comprehensive public funding agreement by accepting private funds or other contributions shall be subject to a fine equal to three times the allotment for that race.

11-L Comprehensive publicly funded candidates; disbursements. (a) The commission shall disburse funds by check within two business days after certification of the candidate's eligibility.

(b) A candidate certified as a comprehensive publicly funded candidate for the primary election may expend comprehensive public funding funds for the primary election on the date that certification for comprehensive public funding is issued by the commission; provided that the candidate has filed the appropriate nomination papers to run for office. A candidate certified as a comprehensive publicly funded candidate for a general election may expend comprehensive public funding funds for the general election on the date that certification is issued by the commission.

(c) The amount of public funding for a certified comprehensive publicly funded candidate shall be set at one hundred and fifty per cent of the voluntary expenditure limit for the office of state representative pursuant to section 11-209. This amount shall be allotted to the candidate for each contested primary and general election.

(d) The comprehensive public funding amount for an eligible candidate in an uncontested primary election shall be thirty per cent of the amount provided in a contested election.

(e) Comprehensive public funds not spent in the primary election may be used in the general election by the successful primary candidate. Comprehensive public funds not spent by the losing comprehensive publicly funded candidate shall be returned to the Hawaii campaign election fund.

11-M Equalizing funds. (a) Equalizing funds are supplemental public funds released by the commission to comprehensive publicly funded candidates to allow them to stay financially competitive with opposing privately funded candidates during a campaign. This allocation shall be released when the reported cumulative amount spent and obligated by a privately funded candidate and supporting noncandidate committee exceeds the initial amount allocated to the comprehensive publicly funded candidate by fifty per cent or more in that election contest. These equalizing public funds shall be released by the commission when the cumulative amount spent and obligated by a comprehensive publicly funded candidate's opponent and the opponent's supporting noncandidate committee exceeds the initial amount allocated to the comprehensive publicly funded candidate by fifty per cent or more in that primary or general election contest.

(b) Equalizing payment checks shall be available within five working days of the filing with the commission of any report required under this chapter.

(c) If a nonparticipating candidate does not report expenditures and legal obligations to the commission in the prescribed timetable established in section 11-212, the commission shall automatically disburse a full equalizing payment increment to the comprehensive publicly funded candidate.

11-N Computation and distribution of equalizing funds. (a) The commission shall determine a certified comprehensive publicly funded candidate's allocation of equalizing funds, if any, based on information disclosed by an opponent of a comprehensive publicly funded candidate in any expenditure 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 or general election to the current election; and

(2) The sum of the independent expenditures made expressly advocating the defeat of the certified comprehensive publicly funded candidate or the election of the same opposing candidate. The amount that a noncandidate committee expends on supporting or opposing multiple candidates shall 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 for the purpose of expressly advocating the defeat of the same opposing candidate; and

(2) The sum of the independent expenditures made for the purpose of expressly advocating the election of the certified comprehensive publicly funded candidate. The amount that a noncandidate committee expends on supporting or opposing multiple candidates shall 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 or general election, as applicable, or any surplus or unspent funds carried forward from the primary election to the subsequent general election of the same year 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 comprehensive publicly funded candidate and exceeds the fifty per cent trigger amount, then the commission shall immediately authorize the distribution of an equalizing allocation to the comprehensive publicly funded 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) All candidates, candidate's committees, and noncandidate committees shall submit a report to the commission within forty-eight hours of any encumbrance, obligation, or expenditure to secure, contract, or purchase any goods or services defined as an independent expenditure under section 11-B if the aggregate total by the candidate, candidate's committee, or noncandidate committee, during that forty-eight hour reporting period exceeds $1,000. The report shall include a listing of all encumbrances, obligations, or actual expenditures made and incurred during the forty-eight hour period. An electronic version of each report required by this subsection shall be posted by the campaign spending commission not later than one business day after the report has been filed or received.

The campaign spending commission shall adopt rules under chapter 91 to specify a standard format for use in preparing and filing reports required by this subsection, and criteria for determining whether and if so when an obligation to make campaign expenditures has been incurred.

For purposes of this subsection:

(1) Campaign expenditures actually made during a reporting period that have been reported during a previous reporting period as an obligation incurred need not be:

(A) Reported as expenditures actually made; and

(B) Included in any computation to determine whether the $1,000 reporting threshold has been reached;

provided that if the expenditure actually made exceeds the amount reported as incurred, then the amount of the excess shall be included in both the computation of the threshold as well as the report of actual expenditures if required; and

(2) Any obligation to make campaign expenditures that is incurred during a reporting period but rescinded during the same reporting period need not be included in any report required by this subsection.

(g) If the campaign spending commission determines that a privately funded candidate or the candidate's committee for a privately funded candidate has failed to file a report required by subsection (f) or has filed a false report, then the campaign spending commission shall release equalizing funds to the comprehensive publicly funded candidate to the full extent authorized by this subpart.

(h) Any person required to file reports under subsection (f) who either fails to file a required report or who files a false report shall be guilty of a misdemeanor; provided that upon conviction, the court shall impose a fine equal to amount of equalizing funds released or authorized to be released by the campaign spending commission to the comprehensive publicly funded candidate. The court shall order that the fine be paid to the Hawaii election campaign fund.

(i) 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-O Equalizing fund cap. Comprehensive publicly funded candidates shall not be entitled to cumulative equalizing funds for multiple opponents that would exceed one hundred per cent of the initial distribution of funds.

11-P Disclosure of independent expenditures. (a) Any individual or organization that makes or obligates to make any independent expenditure during a primary or general election campaign period that, 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 with respect to the complaint.

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

11-Q Distribution from Hawaii election campaign fund. The commission shall expend funds from the Hawaii election campaign fund for the purposes of this subpart to distribute to candidates who qualify under this subpart.

11-R Penalty for excess expenditures. A comprehensive publicly funded 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 comprehensive publicly funded 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-S Comprehensive public funding; permitted uses. (a) The comprehensive public funds 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 comprehensive 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 comprehensive 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 non-campaign-related expenses or for indirect campaign-related expenses; or

(4) To immediate family members, except as reimbursement for proper expenses incurred under this section.

11-T Deposit of and access to comprehensive public funds. (a) All public funds received by comprehensive publicly funded candidates shall be deposited directly into a depository institution as provided under section 11-199(a) and accessed through use of credit cards, debit cards, and bank checks.

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

11-U Deposit of moneys into the Hawaii election campaign fund. In addition to the funds collected by the commission and pursuant to section 11-217, the following moneys shall be deposited into the Hawaii election campaign fund:

(1) Excess seed money contributions;

(2) Qualifying contributions, including any excess qualifying campaign contributions of candidates who were certified to receive comprehensive public funding;

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

(4) Fines levied by the commission against a comprehensive publicly funded candidate for violation of election laws; and

(5) Voluntary donations.

11-V Comprehensive public funding application. Application forms for comprehensive public funding shall be adopted by the commission and shall provide for a sworn statement by the candidate that the candidate is qualified to seek comprehensive public funding under section 11-D, and certified to receive payments under section 11-H.

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

SECTION 3. Section 11-191, Hawaii Revised Statutes, is amended by amending the definition of "qualifying campaign contribution" to read as follows:

"["Qualifying] "District qualifying campaign contribution" means an aggregate monetary contribution of $100 or less, by any person during any matching payment period[.] for purposes of entitlement to payments under the partial public funding program pursuant to section 11-221. Qualifying contributions do not include loans or in-kind contributions."

SECTION 4. Section 11-217, Hawaii Revised Statutes, is amended to read as follows:

"11-217 Hawaii election campaign fund; creation. The Hawaii election campaign fund is created as a trust fund within the state treasury. The fund shall consist of all moneys collected from persons who have designated a portion of their income tax liability to the fund as provided in section 235-102.5, any general fund revenues appropriated, as well as all other moneys collected pursuant to [this subpart.] subparts B and C. The Hawaii election campaign fund shall fund eligible candidates pursuant to subpart B, commencing with section 11-218, referred to as the "partial public funding program", and subpart C, commencing with section 11-A referred to as the "comprehensive public funding for state house of representatives offices elections." Payment to [each candidate] eligible candidates from the fund shall be by the comptroller [in the manner prescribed in section 11-222]. Moneys from this fund may also be used for the operating expenses of the commission, including staff salaries and fringe benefits."

SECTION 5. Section 11-218, Hawaii Revised Statutes, is amended to read as follows:

"11-218 [Candidate funding; amounts available.] Partial public funding program; maximum allowed. (a) Public funds from the Hawaii election campaign fund are available to fund eligible candidates who qualify for either the partial public funding program or the comprehensive public funding program.

[(a)] (b) The maximum amount of partial public funds available to a candidate for the office of governor, lieutenant governor, or mayor in any election shall not exceed ten per cent of the total expenditure limit for each election as established for each office listed in this subsection pursuant to section 11-209.

[(b)] (c) For the office of state senator, state representative, county council member, and prosecuting attorney, the maximum amount of partial public funds available to a candidate in any election shall be fifteen per cent of the total expenditure limit for each election as established for each office listed in this subsection pursuant to section 11-209.

[(c)] (d) For the board of education and all other offices, the maximum amount of partial public funds available to a candidate shall not exceed $100 in any election year.

[(d)] (e) Each candidate who qualified for the maximum amount of partial public funding in any primary or special primary election and who is a candidate for a subsequent general election shall apply with the commission to be qualified to receive the maximum amount of partial public funds as provided in this section for the respective election. For purposes of this section [qualified], "qualified" means meeting the qualifying campaign contribution requirements of section 11-219."

SECTION 6. Section 11-219, Hawaii Revised Statutes, is amended to read as follows:

"11-219 Qualifying campaign contributions[;] for partial public funding program; amounts. As a condition of receiving partial public funds for a primary, special primary, or general election, a candidate shall not be unopposed in any election for which partial 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 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 7. Section 11-220, Hawaii Revised Statutes, is amended to read as follows:

"11-220 Eligibility for payments[.] under the partial public funding program. (a) To be eligible to receive [payments under section 11-217,] partial public funding from the Hawaii election campaign fund in under section 11-221, 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,] partial public funding from the Hawaii election campaign fund in accordance with section 11-221, 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 candidate in receipt of qualifying campaign contributions which may be taken into account for purposes of partial 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) No candidate certified for comprehensive public funding under subpart C shall be eligible for partial public funding under this subpart in a given election period."

SECTION 8. Section 11-221, Hawaii Revised Statutes, is amended to read as follows:

"11-221 Entitlement to [payments.] partial public funding. Every candidate who is eligible to receive partial 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 partial 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 partial public funds for that election."

SECTION 9. Section 11-222, Hawaii Revised Statutes, is amended to read as follows:

"11-222 Candidate funding; application. (a) Application forms for partial public funds shall be adopted by the commission and shall provide for a sworn statement by the candidate that the candidate has established eligibility under section 11-220 to receive payments under section 11-217. Each application shall be accompanied by a qualifying campaign contribution statement or statements, and shall be filed with the commission no later than thirty days after the general election. Upon approval by the commission of the application and qualifying contribution statement, the commission shall direct the comptroller to distribute matching public funds up to the maximum of the amount of public funds to which the candidate is entitled.

Public funds shall be distributed by the comptroller to each eligible candidate within twenty days from the date of the candidate's initial application with the commission.

(b) Each candidate in receipt of the qualifying sum of contributions established for the candidate's office may apply to the commission for partial public funding after the candidate has become a candidate in a primary, special primary, special, or general election.

(c) The commission shall make additional certifications within two weeks after receiving an application and supplemental contribution statement from an eligible candidate who requests additional partial public funding pursuant to section 11-221.

(d) Initial certification by the commission under subsection (a) and all determinations made by the commission under this section are final and conclusive, except to the extent they are subject to examination and audit by the commission under section 11-225."

SECTION 10. Section 11-223, Hawaii Revised Statutes, is amended to read as follows:

"11-223 Candidate funding; restrictions. (a) Each candidate who accepts partial public campaign funds under this subpart shall be required to abide by the campaign spending limits for the candidate's respective office as set forth in section 11-209. Any candidate who exceeds the spending limits for the candidate's respective office as set forth in section 11-209 shall immediately return all of the partial public campaign funds the candidate has received to the Hawaii election campaign fund.

(b) [Public] Partial public campaign funds provided under this subpart shall only be used to:

(1) Defray campaign expenses incurred by and paid for an eligible candidate or all committees authorized by such candidate; and

(2) Repay loans, the proceeds of which were used to defray campaign expenses.

(c) No candidate or committee authorized by a candidate shall be entitled to receive any partial public funds under this subpart unless the candidate has qualified to have the candidate's name on the election ballot in the election for which funds are sought.

(d) In no event shall any candidate or campaign treasurer in receipt of partial public campaign funds transfer any portion of such funds to another candidate for any primary, special primary, special, or general election campaign.

(e) All partial public funds received under this subpart shall be deposited in a financial institution designated to do business in the State. No expenditures of any public funds received under this subpart shall be made except by checks drawn on such checking account. The commission may require such reports relating to the expenditure of such funds as it considers appropriate.

(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 partial public funds to the Hawaii election campaign fund."

SECTION 11. 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 2004-2005, for the campaign spending commission to provide three additional staff positions to support publicly funded elections for the state legislature as follows:

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

(2) One staff position to administer the comprehensive public funding program.

SECTION 12. The sum appropriated shall be expended by the campaign spending commission for the purposes of this Act.

SECTION 13. The campaign spending commission shall write and publish all forms and receipts required as well as a candidates' guide to the comprehensive public funding program that shall include an explanation of rules and procedures applicable to candidates. 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 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, district qualifying campaign contributions, public funds disbursements, and public-financed candidate expenditures spent in the election and the balance remaining in the Hawaii election campaign fund;

(2) Suggested amendments to this Act that may address the need to improve equalizing public funding to match independent expenditures and any excess expenditures of publicly funded and nonparticipating candidates;

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

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

(5) Examine mechanisms for increasing revenues of the Hawaii election campaign fund, including methods used in other states.

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

SECTION 15. 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 16. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 17. This Act shall take effect on July 1, 2040.