Report Title:

Campaign Spending Reform

Description:

Restores integrity in elections by prohibiting a person from soliciting or receiving campaign donations on government property; prohibits a government contractor with contracts in excess of $25,000 in the aggregate from making a contribution; prohibits the use of campaign contributions for personal expenses; amends registration requirements for candidates seeking reelection and specifying when committees are required to register; clarifies that excess contributions must be returned within thirty days or they will escheat to the Hawaii election campaign fund; eliminates public funding for candidates in special elections; reduces the retention period of reports by county clerk's offices to four years; permits a candidate to dispose of residual funds by contributing such funds to a political party; prohibits contributions from out of state corporations, noncandidate committees, and unions. (CD1)

THE SENATE

S.B. NO.

459

TWENTY-SECOND LEGISLATURE, 2004

S.D. 1

STATE OF HAWAII

H.D. 1


C.D. 2

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

(6) Restrict out of state contributions from corporations, unions, and noncandidate committees that have little relationship to residents of the State;

(7) Amend 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;

(8) Amend penalties for unions, corporations, organizations and their officers and directors; and

(9) 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 the governmental facility's use regulations do 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 use by 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 six 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 or a limited liability partnership or company.

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

"Residual funds" means unspent money from contributions received by an individual who fails to file for nomination or candidate who withdraws or otherwise ceases to be a candidate or contributions received by a committee or party that discontinues activities covered under this subpart.

"Separate segregated fund" means an account set up by any corporation, partnership, labor organization, membership organization, trade association, cooperative, or corporation without capital stock that is used for the purpose of making contributions or expenditures to influence the nomination for election, or election of any candidate to political office or for an issue on the ballot.

"Surplus funds" means unspent money from contributions held by a candidate or committee after a general or special election and after all campaign expenditures have been paid for the election period."

2. By amending the definitions of "candidate's committee", "committee" and "noncandidate 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.

"Committee" means:

(1) Any individual, organization, corporation, party, association, or [individual] a 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 individual, organization, corporation, party, association, or [individual] separate segregated fund [who] that 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 individual, organization, corporation, party, association, or [individual] separate segregated fund 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.

"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 11-194, 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 either receives contributions or makes expenditures that amount to more than $100, in the aggregate,

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

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

(c) A candidate's committee shall file an organizational report within ten days from either receiving contributions or making expenditures that amount to more than $100, in the aggregate.

(d) A noncandidate committee shall file an organizational report within ten days from either receiving contributions or making expenditures that amount to more than $1000, in the aggregate, in a two-year election period.

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

SECTION 5. Section 11-195, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) All reports filed with the county clerk's office shall be preserved by that office for [ten] four years[.] from the date of receipt."

SECTION 6. Section 11-200, Hawaii Revised Statutes, is amended to read as follows:

"11-200 Campaign contributions; restrictions against transfer. (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 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 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).

(c) A candidate, candidate's committee, or campaign treasurer shall not convert any campaign contribution for the personal benefit of any person. For the purposes of this subsection, a contribution shall be considered to be converted to the personal benefit of any person if the contribution is used to fulfill any commitment, obligation, or expense of a person, the primary purpose of which is noncampaign related and such expense exists without regard to the candidate's campaign or an elected official's duties as an officeholder, including:

(1) A home mortgage, rent, or utility payment;

(2) A noncampaign-related clothing purchase;

(3) A noncampaign-related automobile expense;

(4) A country club membership;

(5) A vacation or other noncampaign-related trip;

(6) A household item;

(7) A tuition payment;

(8) Admission to a sporting event, concert, theater, or other form of entertainment not associated with an election campaign; and

(9) Dues, fees, or other payments to a health club or recreational facility.

[(c)] (d) This section shall not be construed to prohibit a party from supporting more than one candidate.

[(d)] (e) This section shall not be construed to prohibit a candidate for the office of governor or lieutenant governor from supporting a co-candidate in the general election.

[(e)] (f) This section shall not be construed to prohibit a candidate from making contributions to the candidate's party so long as that contribution is not earmarked for another candidate."

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 candidate seeking nomination or election to a four-year statewide office or to the candidate's committee in an aggregate amount greater than $6,000 during an election period; and

(C) A candidate seeking nomination or election to a four-year nonstatewide office or to the candidate's committee in an aggregate amount greater than $4,000 during an election period.

These limits shall not apply to a loan made to a candidate by a financial institution in the ordinary course of business.

(2) For purposes of this section, the length of term of an office shall be the usual length of term of the office as unaffected by reapportionment, a special election to fill a vacancy, or any other factor causing the term of the office the candidate is seeking to be less than the usual length of term of that office.

(b) No person or any other entity shall make contributions to a noncandidate committee, in an aggregate amount greater than $1,000 in an election; except that in the case of a corporation or company using funds from its own treasury, there shall be no limit on contributions or expenditures to the corporation or company noncandidate committee.

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

[(c)] (d) A candidate's immediate family, in making contributions to the candidate's campaign, shall be exempt from the above limitation, but shall be limited in the aggregate to $50,000 in any election period. The aggregate amount of $50,000 shall include any loans made for campaign purposes to the candidate from the candidate's immediate family.

[(d)] (e) 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)] (f) 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. All excess contributions not returned to original donors within thirty days of receipt 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)] (g) 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)] (h) 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)] (i) An individual and any general partnership in which the individual is a partner, or an individual and any corporation in which the individual owns a controlling interest, shall be treated as one person.

[(i)] (j) 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)] (k) 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)] 110.20, 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)] (l) 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.

(m) Notwithstanding any other provision of this section, no contributions shall be made to a candidate, candidate's committee, noncandidate committee or separate segregated fund from the following:

(1) A corporation or business entity not doing business in this State;

(2) A labor union with fewer than ten members who reside in this State; or

(3) A noncandidate committee that has received contributions of $10 or more from ten or more individuals registered to vote in this State during the one hundred and eighty days prior to an election,

provided that this subsection does not apply to loans made in the ordinary course of business.

(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),] (k), 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 with either of the following:

(1) Twenty four months after the termination of the procurement activity and the government contractor is not offered or declines the government contract related to the procurement activity; or

(2) Twenty four months after completion of the government contract if the procurement activity results in acceptance of a government contract by the government contractor.

(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, during an administrative or judicial action brought under sections 103D-709 and 103D-710, and, if suspended or disbarred, though the period of debarment or suspension.

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

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

(1) Any individual who is employed by a government contractor provided that the contribution is from the individual's personal funds; except that an individual who is an officer or director of the business shall be subject to the same prohibitions as the business; or

(2) Any business that has any government contract awarded pursuant to sections 103D-303 and 103D-305.

(e) Nothwithstanding subsection (a), no government contractor is prohibited from contributing to a candidate or candidate's committee if the candidate holds or is seeking a public office that does not have the:

(1) Authority or discretion to enter into, approve, or ratify the government contract sought or held by the government contractor; or

(2) Authority to terminate the employment of an employee who has the authority or discretion to enter into, approve, or ratify the government contract sought or held by the government contractor.

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

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

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

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

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

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

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

"Government contract" means any contract for goods, services or construction not excluded from the application of 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 all of the counties of the State.

"Nonbid" means the contractor is selected based on any procurement process other than pursuant to section 103D-303 and 103D-305.

"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] Surplus campaign contributions may be used after a general or special election for: [any fundraising activity, for:]

(1) Any fundraising activity or 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 to any community service, educational, youth, recreational, charitable, scientific, or literary organization, provided that in any election cycle, the total amount of all contributions 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)[.]; or

(4) Any contribution to any political party, provided the contribution is not earmarked for a specific candidate."

SECTION 10. Section 11-207, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

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

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

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

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

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

(2) A payment made by a person for the production, dissemination, distribution, or republication, in whole or in part, of any broadcast or any written, graphic, or other form of campaign material prepared by a candidate, a candidate's authorized committee, or an agent of a candidate or authorized committee or a communication that expressly advocates for or against a candidate; or

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

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

(B) Has previously participated in discussions with the candidate, an agent of the candidate's authorized committee, or a committee of a political party which is coordinating with the candidate regarding the candidate's campaign strategy, including, but not limited to advertising, allocation of resources, fundraising, or campaign operations; or

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

SECTION 11. 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 12. Section 11-214, Hawaii Revised Statutes, is amended by amending the title and subsection (a) to read as follows:

"11-214 Disposition of residual funds. (a) All candidates who withdraw or cease to be candidates, [or] committees directly associated with such candidates, or individuals who receive contributions but fail to file for nomination, [or committees or parties which discontinue their activities covered in this subpart, shall] within one year, shall dispose of residual funds from private campaign contributions through any of the following methods: return [all residual] private contributions to the donors of [such] the contributions [within four years] if their identities are known[,]; donate contributions to nonprofit organizations of the candidate's choice; or donate contributions to any political party. [provided that if the identity of any donor is not known, or the donor cannot be found, such contribution] Committees or parties that discontinue their activities covered in this subpart shall dispose of residual funds within one year by returning private contributions to the donor if the donor's identity is known. [shall escheat to the Hawaii election campaign fund or may be donated to a nonprofit organization of the candidate's choice.] In the event of a death of a candidate, the candidate's committee, if any, shall return within sixty days of the candidate's death, all residual private contributions to the donor[s] of [such] the contributions, if the donor's identity is known; provided that any residual contributions not returned to the donor[s] [within sixty days of the candidate's death] may be donated to any nonprofit organization or to any political party. Any residual funds that are not disposed of in accordance with this section shall escheat to the Hawaii election campaign fund [or may be donated to a nonprofit organization of the candidate's choice]."

SECTION 13. 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 14. 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 15. 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 16. 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 17. 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 18. 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 19. Section 11-228, Hawaii Revised Statutes, is amended to read as follows:

1. By amending subsection (a) as follows:

"(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 the manner prescribed as follows:

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

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

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

2. By amending subsection (f) to read:

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

SECTION 20. 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 falsifies any report required by this subpart with the intent to circumvent the law or deceive the commission or who violates section 11-201 or 11-202 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 21. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 22. 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 23. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 24. This Act shall take effect on January 1, 2005 and shall not be applied retroactively to any contributions made prior to its effective date.