HOUSE OF REPRESENTATIVES

 

AMENDMENT TO:

Senate Bill No. 459 Senate Draft 1, House Draft 1

 

OFFERED BY:

Representative Galen Fox

 

DATE:

April 4th, 2003

 

SECTION 1. Senate Bill No. 459, Senate Draft 1, House Draft 1, is amended by amending Section 1 to read as follows:

"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 with contracts over $25,000;

 

 

 

 

 

 

(3) Prohibit use of campaign contributions for personal expenditures;

(4) Amend the registration requirements for candidates seeking reelection;

(5) Conform to a court's decision invalidating the Campaign Spending Commission's code of fair campaign practices and ability to censure candidates who fail to comply with the code;

(6) Amend the campaign contributions limits to $4,000 for candidates seeking offices of four-year terms, $2,000 for candidates seeking offices of two-year terms, $2,000 for noncandidate committees in a two-year election period, $5,000 per year for a party, and a maximum limit of $25,000 in the aggregate for all contributions from an individual in a two-year election period;

(7) Prohibit campaign contributions, in excess of $6,000 in the aggregate, from corporations, labor organizations, member organizations, cooperatives or corporations without capital stock, except through separate segregated funds;

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

(9) Make falsifying reports with intent to circumvent the law or deceive the commission a class C felony;

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

(11) Amend the public funding provisions to require qualifying contributions from residents of Hawaii only and to eliminate the ability of candidates to obtain public funding for special elections;

(12) Repeal section on limitations on fundraising activities;

(13) Require the commission on campaign spending to adopt a schedule of administrative fines for categories of violations; and

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

SECTION 2. Senate Bill No. 459, Senate Draft 1, House Draft 1, is amended by amending Section 3 to read as follows:

"SECTION 3. Section 11-191, Hawaii Revised Statutes, is amended as follows:

1. By adding four new definitions to be appropriately inserted and to read:

"Corporation" means any corporation for profit, including professional corporation and limited liability partnership or company.

"Independent expenditure" means a cost incurred by a person or noncandidate committee other than a candidate or candidate's committee for a communication that is disseminated during thirty calendar days before a primary election or sixty days before a general election that expressly advocates for the election or defeat of a candidate and is made without the participation, cooperation, or coordination of a candidate or candidate's committee, or their authorized agents.

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

"Separate segregated fund" means an entity set up by any corporation, labor organization, membership organization, cooperative, or corporation without capital stock for the purpose of establishing a fund from which contributions or expenditures are made to influence the nomination for election, or election of any candidate."

2. By amending the definitions of "candidate's committee", "committee", "contribution", "election period", "expenditure", 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, association, or [individual] separate segregated fund that accepts or makes a contribution or makes an expenditure for or against any:

(A) Candidate;

(B) Individual who files for nomination at a later date and becomes a candidate; or

(C) Party;

with or without the authorization of the candidate, individual, or party. In addition, the term "committee" means any organization, corporation, association, or individual who accepts or makes a contribution or makes an expenditure for or against any question or issue appearing on the ballot at the next applicable election; or

(2) Any organization, corporation, association, or individual that raises or holds money or anything of value for a political purpose, with or without the consent or knowledge of any:

(A) Candidate;

(B) Individual who files for nomination at a later date and becomes a candidate; or

(C) Party; and

subsequently contributes money or anything of value to, or makes expenditures on behalf of, the candidate, individual, or party.

Notwithstanding any of the foregoing, the term "committee" shall not include any individual making a contribution or expenditure of the individual's own funds or anything of value that the individual originally acquired for the individual's own use and not for the purpose of evading any provision of this subpart, or any organization, which raises or expends funds for the sole purpose of the production and dissemination of informational or educational advertising.

"Contribution" [means:] includes:

(1) A gift, subscription, deposits of money or anything of value, or cancellation of a debt or legal obligation and includes the purchase of tickets to fundraisers for the purpose of:

(A) Influencing the nomination for election, or election, of any person to office;

(B) Influencing the outcome of any question or issue that appears or is reasonably certain to appear on the ballot at the next applicable election described in subparagraph (A); or

(C) Use by any party or committee for the purposes set out in subparagraph (A) or (B);

(2) The payment, by any person, political party, or any other entity other than a candidate or committee, of compensation for the personal services or services of another person that are rendered to the candidate or committee without charge or at an unreasonably low charge for the purposes set out in paragraph (1)(A), (1)(B), or (1)(C); or

(3) A contract, promise, or agreement to make a contribution; [provided that notwithstanding this paragraph and paragraphs (1) and (2), the term "contributions" shall not include services or portions thereof voluntarily provided without reasonable compensation by individuals to or in behalf of a candidate or committee; or].

[(4)] Notwithstanding paragraphs (1), (2), and (3), a candidate's expenditure of the candidate's own funds or the making of a loan or advance in the pursuit of the candidate's campaign shall not be a contribution for the purpose of this subpart but shall nevertheless be reportable as a campaign receipt.

"Election period" means the two-year period between general election days [if a candidate is seeking nomination or election to a two-year office and the four-year time period between general election days if a candidate is seeking nomination or election to a four-year office].

"Expenditure" [means:] includes:

(1) Any purchase or transfer of money or anything of value, or promise or agreement to purchase or transfer money or anything of value, or payment incurred or made, or the use or consumption of a nonmonetary contribution for the purpose of:

(A) Influencing the nomination for election, or election, of any person seeking nomination for election, or election, to office whether or not the person has filed the person's nomination paper;

(B) Influencing the outcome of any question or issue that has been certified to appear on the ballot at the next applicable election; or

(C) Use by any party or committee for the purposes set out in subparagraph (A) or (B);

(2) The payment, by any person other than a candidate or committee, of compensation for the personal services of another person that are rendered to the candidate or committee for any of the purposes mentioned in paragraph (1); [or]

(3) The expenditure by a candidate of the candidate's own funds for the purposes set out in paragraph (1)[.]; and

(4) Any payment made from a candidate or a candidate's committee to any community service, educational, youth, recreational, charitable, scientific, or literary organization.

[(4)] The term does not include volunteer personal services and voter registration efforts that are not partisan.

"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 3. Senate Bill No. 459, Senate Draft 1, House Draft 1, is amended by amending Section 7 to read as follows:

"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.]

(A) A candidate seeking nomination or election to a four-year term of office, or the candidate's committee, of an amount greater than $4000 in the aggregate, for that election in which the candidate seeks office; or

(B) A candidate seeking nomination or election to a two-year term of office, or the candidate's committee, of an amount greater than $2000 in the aggregate, for that election in which the candidate seeks office.

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

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

(b) No person [or any other entity] shall make contributions to a noncandidate committee, in an aggregate amount greater than [$1,000 in an election; except that in the case of a corporation or company using funds from its own treasury, there shall be no limit on contributions or expenditures to the corporation or company noncandidate committee.] $2,000 in any election period.

(c) No person shall make contributions to a party, which in the aggregate, exceed $5,000 in any calendar year.

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

(e) No individual shall make contributions aggregating more than $25,000 in any election period.

[(c)] (f) 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] an 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)] (g) 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)](h) Any candidate, candidate's committee, or committee that receives in the aggregate more than the applicable limits set forth in this section [in any primary, initial special, special, or general election from a person,] shall be required to [do one of the following:

(1) Regardless of whether the excess donation was inadvertently made, to transfer an amount equal to any excess over the limits established in this section to the Hawaii election campaign fund within thirty days of receipt of the contribution, and in any event, no later than thirty days upon the receipt by a candidate, candidate's committee, or committee, of notification from the commission; or

(2) If the excess donation was inadvertently made, to return to the donor any excess over the limits established in this section and to notify the commission within thirty days of receipt of the contribution.]

return any excess contribution to the original donor within thirty days from receipt of the excess contribution or submit the excess contribution to the Hawaii election campaign fund.

After thirty days from receipt, all excess contributions not returned to original donors shall escheat to the Hawaii election campaign fund. A candidate, candidate's committee, or committee who complies with this subsection prior to the initiation of prosecution shall not be subject to any penalty under section 11-228.

[(f)](i) 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)] (j) 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)] (k) 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)] (l) 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)] (m) No contributions or expenditures shall be made to or on behalf of a candidate or committee by a foreign national [or foreign corporation, including a domestic subsidiary of a foreign corporation, a domestic corporation that is owned by a foreign national, or a local subsidiary where administrative control is retained by the foreign corporation, and] in the same manner prohibited under 2 United States Code section 441e and 11 Code of Federal Regulations 110.4(a) and 110.9(a), as amended. [No foreign-owned domestic corporation shall make contributions where:

(1) Foreign national individuals participate in election-related activities such as decisions concerning the making of contributions or the administration of a political committee; or

(2) The contribution funds are not domestically-derived.]

[(k)](n) 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.

(o) 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;

(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; and

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

SECTION 4. Senate Bill No. 459, Senate Draft 1, House Draft 1, is amended by amending Section 8 to read as follows:

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 for a period of time, commencing with any procurement activity conducted by a purchasing agency or notice of appropriation and ending with twenty-four months after the termination of procurement activity or completion of any government contract.

(b) It shall be unlawful for any business against which debarment or suspension proceedings are commenced pursuant to section 103D-702 to make a contribution to any candidate or candidate's committee at any time during the course of the proceedings, an administrative or judicial action brought under sections 103D-709 and 103D-710, and the period of debarment or suspension.

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

(d) This section does not prohibit the establishment or administration of, or the solicitation of contributions to any separate segregated fund pursuant to section 11-B.

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

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

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

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

"Construction" shall be as defined 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 be as defined in section 103D-104.

"Government contract" means any procurement contract for goods, services or construction covered by the Hawaii public procurement code, chapter 103D, and a contract for the purchase or sale of real property.

"Government contractor" means any business that is seeking one or more government contracts or has one or more government contracts with a governmental body that exceed $25,000 in the aggregate.

"Governmental body" means any department, commission, council, board, bureau, authority, committee, institution, legislative body, agency, government corporation, or other establishment or office of the executive, legislative, or judicial branch of the State, including the office of Hawaiian affairs, and the several counties of the State.

"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 be as defined 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 5. Senate Bill No. 459, Senate Draft 1, House Draft 1, is amended by deleting Section 19 of the bill, and renumbering the sections accordingly.