Report Title:

Campaign Spending Reform

Description:

Makes permanent the attachment of the campaign spending commission to the lieutenant governor's office; prohibits banks, corporations, labor organizations, and other entities organized under the authority of federal or state laws from making campaign contributions; prohibits the State and counties from entering into contracts with any person who makes contributions within a specified time before, during, and after performance of the contract; decreases the contribution limit for persons to $2,000 within an election period, which is defined as the two-year period between general election days; limits contributions to any number of candidates to an aggregate amount of $25,000 in a two-year election period; specifies coordinated campaign activities that constitute contributions; clarifies disposition of contributions that exceed the contribution limit; provides that intentional and knowing violations of the campaign spending law shall be a class C felony.

THE SENATE

S.B. NO.

629

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to campaign spending.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 11-191, Hawaii Revised Statutes, is amended by adding five new definitions to be appropriately inserted and to read as follows:

""Coordinated activity" means any activity including anything of value provided by a person in connection with a candidate's election who is acting in coordination with that candidate or an agent of that candidate on any campaign activity in connection with the candidate's nomination or election to office regardless of whether the value provided is in the form of a communication which expressly advocates a vote for or against any candidate.

"Corporation" means any entity incorporated under the laws of the United States.

"Professional services" means any service in support of a candidate's pursuit of nomination for election or election to office, including but not limited to polling, advertising, photography, videography, multi-media, fundraising, campaign research, legal services, and direct mail services.

"Resident" shall have the same meaning as defined in section 235-1.

"Separate segregated fund" means an account set up by any state or national bank, corporation, partnership, labor organization, membership organization, trade association, cooperation, or corporation without capital stock, for the purpose of making contributions to influence the nomination for election, or election, of any person to political office or for an issue on the ballot."

SECTION 2. Section 11-191, Hawaii Revised Statutes, is amended by amending the definition of "contribution" to read as follows:

""Contribution" means:

(1) A gift, subscription, deposit 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);

(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), services voluntarily provided by individuals to or on behalf of a candidate or committee shall not be a contribution for purposes of this subpart; or

[(4)] (5) 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."

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

""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]."

SECTION 4. Section 11-191, Hawaii Revised Statutes, is amended by amending the definition of "noncandidate committee" to read:

""Noncandidate committee" means a committee as defined in this section [and] including any separate segregated fund used for a political purpose by a corporation, partnership, labor organization, membership organization, cooperative, trade association, or corporation without capital stock, but does not include a candidate's committee."

SECTION 5. Section 11-192, Hawaii Revised Statutes, is amended to read as follows:

"11-192 Campaign spending commission. There is established a campaign spending commission. The commission shall consist of five members of the general public, appointed by the governor from a list of ten nominees submitted by the judicial council. The judicial council may solicit applications for the list of nominees through community organizations and advertisements in any newspaper of general circulation. Any vacancies in the commission shall be filled by the governor with a member from the list of nominees or by reappointment of a commissioner whose term has expired, subject to the limit on length of service imposed by section 26-34.

The judicial council shall meet and expeditiously select additional persons for the list of nominees whenever the number of the eligible nominees falls below five.

Notwithstanding section 26-34, these appointments shall not be subject to senatorial confirmation. The term of the commissioners shall be four years, except that the terms of the initial commissioners shall be two years for two commissioners, three years for two other commissioners and four years for the chairperson, as determined by the governor.

The commissioners shall serve without compensation but they shall be reimbursed for reasonable expenses, including travel expenses, incurred in the discharge of their duties. For special purposes, the commission shall temporarily be administratively attached to the office of the lieutenant governor [until June 30, 2003]."

SECTION 6. Section 11-193, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The duties of the commission under this subpart are:

(1) To develop and adopt reporting forms required by this subpart;

(2) To adopt and publish a manual for all candidates and committees, describing the requirements of this subpart, including uniform and simple methods of recordkeeping;

(3) To preserve all reports required by this subpart for at least ten years from the date of receipt;

(4) To permit the inspection, copying, or duplicating of any report required by this subpart pursuant to rules adopted by the commission; provided that no information or copies from the reports shall be sold or used by any person for the purpose of soliciting contributions or for any commercial purpose;

(5) To ascertain whether any candidate, committee, or party has failed to file a report required by this subpart or has filed a substantially defective or deficient report, and to notify these persons by first class mail that their failure to file or filing of a substantially defective or deficient report must be corrected and explained. The correction or explanation shall be submitted in writing to the commission not later than 4:30 p.m. on the fifth day after notification of the failure to file or deficiency has been mailed to these persons. The commission shall publish in the newspaper, and on its website, the names of all candidates, committees, and parties who have failed to file a report or to correct their deficiency within the time allowed by the commission. Failure to file or correct a report when due, as required by this subpart, shall result in a penalty of $50. Failure to respond after a newspaper notification or website publication shall result in an additional penalty of $50 for each day a report remains overdue or uncorrected. All penalties collected under this section shall be deposited in the Hawaii election campaign fund;

(6) To hold public hearings;

(7) To investigate and hold hearings for receiving evidence of any violations;

(8) To adopt a code of fair campaign practices as a part of its rules;

(9) To establish rules pursuant to chapter 91;

(10) To request the initiation of prosecution for the violation of this subpart pursuant to section 11-229;

(11) To administer and monitor the distribution of public funds under this subpart;

(12) To suggest accounting methods for candidates, parties, and committees, as the commission may deem advisable, in connection with reports and records required by this subpart;

(13) To employ or contract, without regard to [chapters] chapter 76 [and 77] and section 28-8.3, and, at pleasure, to dismiss persons it finds necessary for the performance of its functions, including a full-time executive director, and to fix their compensation;

(14) To do random audits, field investigations, as necessary;

(15) To file for injunctive relief when indicated; and

[(16) To censure any candidate who fails to comply with the code of fair campaign practices; and

(17)] (16) To render advisory opinions upon the request of any candidate, candidate committee, noncandidate committee, or other person or entity subject to this chapter, as to whether the facts and circumstances of a particular case constitute or will constitute a violation of the campaign spending laws. If no advisory opinion is rendered within ninety days after all information necessary to issue an opinion has been obtained, it shall be deemed that an advisory opinion was rendered and that the facts and circumstances of that particular case do not constitute a violation of the campaign spending laws. The opinion rendered or deemed rendered, until amended or revoked, shall be binding on the commission in any subsequent charges concerning the candidate, candidate committee, noncandidate committee, or other person or entity subject to this chapter, who sought the opinion and acted in reliance on it in good faith, unless material facts were omitted or misstated by the persons in the request for an advisory opinion."

SECTION 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.]

(1) No person or any other entity shall make contributions to a candidate or candidate's committee in an aggregate amount exceeding $2,000 in an election period. [These limits] This limit shall not apply to a loan made to a candidate by a financial institution in the ordinary course of business[.];

(2) No person or any other entity shall make contributions in the aggregate amount greater than $25,000 to any number of candidates in an election period. This limit shall not apply to a loan made to a candidate by a financial institution in the ordinary course of business; and

[(2)] (3) 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 within an election period.

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

(d) A contribution by a dependent minor shall be reported in the name of the minor but shall be counted against the contribution of the minor's parent or guardian.

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

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

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

(1) Any contribution exceeding the contribution limits provided by this subpart may be returned to the original donor within thirty days from receipt of the excess contribution or submitted to the Hawaii election campaign fund.

(2) After thirty days from receipt, all contributions exceeding the contribution limits provided by this subpart which are 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) All payments made by a person or political party whose contributions or expenditure activity is financed, maintained, or controlled by any corporation, labor organization, association, political party, or any other person or committee, including any parent, subsidiary, branch, division, department, or local unit of the corporation, labor organization, association, political party, political committees established and maintained by a national political party, or any other person, or by any group of those persons shall be considered to be made by a single person or political party.

(g) A contribution made by two or more corporations shall be treated as one person when such corporations:

(1) Share the majority of members of their boards of directors;

(2) Share two or more corporate officers;

(3) Are owned or controlled by the same majority shareholder or shareholders; or

(4) Are in a parent-subsidiary relationship.

(h) An individual and any general partnership in which the individual is a partner or an individual and any corporation in which the individual [owns] has a controlling interest, shall be treated as one person.

(i) 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) 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) 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] an election period. [No political committee established and maintained by a national political party, shall make contributions to a political party in an aggregate amount greater than $50,000 in any two-year election period.]

(l) No state or national bank, corporation, labor organization, membership organization, cooperative, or corporation without capital stock organized by authority of any law of the United States Congress or of any state shall make a contribution or expenditure in connection with the nomination for election or election of any person to political office, or in connection with any candidate committee or noncandidate committee.

(m) No officer or director of any corporation or any state or national bank or any officer of any labor organization shall consent to any contribution by the corporation, state or national bank, or labor organization, as the case may be. No person shall accept or receive any contribution prohibited by this subsection.

(n) This subsection shall not prohibit the establishment or administration of, or the solicitation of contributions to, any separate segregated fund by a state or national bank, corporation, labor organization, membership organization, cooperative, or corporation without capital stock for the purpose of influencing the nomination for election, or election, of any person to political office.

(o) It shall be unlawful for the separate segregated fund to use contributions secured by physical force, job discrimination, financial reprisals, or the threat of force, job discrimination, or financial reprisal; or by dues, fees, or other moneys required as a condition of membership in a labor organization or as a condition of employment, or by moneys obtained in any commercial transaction.

(p) Any person soliciting an employee for a contribution to such a fund shall inform the employee at the time of such solicitation of the employee's right to refuse to contribute without any reprisal. It shall be unlawful for:

(1) A corporation, or a separate segregated fund established by a corporation, to solicit contributions to the fund from any person other than its stockholders and their families and its executive or administrative personnel and their families; or

(2) A labor organization, or a separate segregated fund established by a labor organization, to solicit contributions to such a fund from any person other than its members and their families.

(q) No funds for a separate segregated fund established by a corporation may be from dividends, bonuses, or any form of payment to stockholders and their families, its executive or administrative personnel and their families, and its employees and their families paid solely for making a contribution to such fund.

(r) This subsection shall not prevent a membership organization, cooperative, trade association, or corporation without capital stock, or a separate segregated fund established by a membership organization, cooperative, trade association, or corporation without capital stock, from soliciting contributions to such a fund from members of such organization, cooperative, trade association, or corporation without capital stock.

(s) For purposes of this section, the term "executive or administrative personnel" means individuals employed by a corporation who are paid on a salary, rather than hourly, basis and who have policymaking managerial, professional, or supervisory responsibilities.

(t) For purposes of this section, the term "labor organization" means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages rates of pay, hours of employment, or conditions of work.

[(l)] (u) [Except for subsection (j), this] 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 and county 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 the State, any of its counties, any department, agency, or entity thereof, to enter into any contract or agreement, including but not limited to those contracts or agreements for the rendition of professional or personal services, for furnishing any material, supplies, or equipment to the State, any of its counties, and any department, agency, or entity thereof, or for selling any land or building to the State, any of its counties, and any department, agency, or entity thereof, with any person or entity which has made contributions to any candidate or candidate's committee, two years prior to the notice of availability of the contract or agreement, or the commencement of negotiations for the contract or agreement, whichever is earlier.

(b) It shall be unlawful for the State, any of its counties, any department, agency, or entity thereof, to enter into any contract or agreement, including but not limited to those contracts or agreements for the rendition of professional or personal services, for furnishing any material, supplies, or equipment to the State, any of its counties, and any department, agency, or entity thereof, or for selling any land or building to the State, any of its counties, and any department, agency, or entity thereof, with any person or entity which has made contributions to a separate segregated fund, two years prior to the notice of the availability of the contract or agreement, or the commencement of the negotiations for the contract or agreement, whichever is earlier.

(c) Notwithstanding subsection (b), no contract or agreement with any person or entity shall be barred based on a contribution to a separate segregated fund, if such separate segregated fund did not use any contributions for the purpose of influencing the nomination for election or the election of any person to a public office.

(d) It shall be unlawful for any person or entity which has entered into any contract or agreement with the State, any of its counties, any department, agency, or entity thereof, including but not limited to those contracts or agreements for the rendition of professional or personal services, for furnishing any material, supplies, or equipment to the State, any of its counties, and any department, agency, or entity thereof, or for selling any land or building to the State, any of its counties, and any department, agency, or entity thereof, during the term of the contract or agreement, and within one year following the completion of performance, termination of the contract or agreement, or final payment, whichever is later, to make any contribution to a candidate for public office or to that candidate's committee.

(e) It shall be unlawful for any person or entity which has entered into any contract or agreement with the State, any of its counties, any department, agency, or entity thereof, including but not limited to those contracts or agreements for the rendition of professional or personal services, for furnishing any material, supplies, or equipment to the State, any of its counties, and any department, agency, or entity thereof, or for selling any land or building to the State, any of its counties, and any department, agency, or entity thereof, with any person or entity which has made contributions to a separate segregated fund, if such separate segregated fund used any contributions for the purpose of influencing the nomination for election or election of any person to public office.

(f) For the purposes of subsections (a) to (e), "person" and "entity" mean an individual, a partnership and its partners, or a company, including but not limited to a corporation or bank, and its owners, and the dependent household members of each of the individuals listed in this subsection.

(g) Notwithstanding any other provision of law, it shall be unlawful for the State, any of its counties, any department, agency, or entity thereof, to enter into any contract or agreement, including but not limited to those contracts or agreements for the rendition of professional or personal services, for furnishing any material, supplies, or equipment to the State, any of its counties, and any department, agency, or entity thereof, or for selling any land or building to the State, any of its counties, and any department, agency, or entity thereof, without first obtaining from the person or entity entering into such contract or agreement, a statement under oath that the person or entity has not made any contributions in violation of this section."

SECTION 9. Section 11-205.6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) A candidate or candidate's committee may receive and accept loans in an aggregate amount not to exceed $10,000 during an election period, provided that if the $10,000 limit is reached, the candidate or candidate's committee shall be prohibited from receiving or accepting any other loans until the $10,000 is repaid in full by the candidate or candidate's committee. Any loan amount that is not repaid within one calendar year from the date of the loan shall be deemed a contribution, subject to this chapter."

SECTION 10. Section 11-207, Hawaii Revised Statutes, is amended to read as follows:

"11-207 Other contributions and expenditures. (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 candidate and expenditure by such 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 candidate.

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

For purposes of this subsection, coordinated activity shall be as provided in section 11-191, and shall include, but not be limited to, the following:

(1) A payment made by a person in cooperation, consultation, or concert with, at the request or suggestion of, or pursuant to any general or particular understanding with a candidate, the candidate's committee, the political party of the candidate, or an agent acting on behalf of the candidate, candidate's 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 committee, or an agent of a candidate or candidate's committee, or a communication that expressly advocates a candidate's defeat; provided that this paragraph shall not apply with respect to materials published on a candidate's website and republished at a cost of less than $1,000;

(3) A payment made by a person if, in the same election cycle in which the payment is made, 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 committee in an executive or policymaking capacity; or

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

(4) A payment made by a person if, in the same election cycle, the person making the payment retains the professional services of any person that has provided or is providing those services in the same election cycle to a candidate (including services provided through a political committee of the candidate's political party), in connection with the candidate's pursuit of nomination for election, or election, to office, including services relating to the candidate's decision to seek office, and the person retained is retained to work on activities relating to that candidate's campaign.

[(b)] (c) No funds shall be withdrawn or paid from a campaign depository except upon the written authorization of the campaign treasurer.

[(c)] (d) No expenditure for a candidate shall be made or incurred by any committee controlled by a candidate without specific written authorization of the candidate or the candidate's authorized representative. Every expenditure so authorized and made or incurred shall be attributed to the candidate with whom the committee is directly associated for the purpose of imposing the expenditure limitations set forth in section 11-209.

[(d)] (e) For the purposes of this subpart, an expenditure shall be deemed to be made or incurred when the services are rendered or the product is delivered. Services rendered or products delivered for use during a reporting period covered by this subpart shall be deemed delivered or rendered during the period or periods of use; provided that these expenditures shall be reasonably allocated between periods in accordance with the time the services or products are actually used."

SECTION 11. Section 11-214, Hawaii Revised Statutes, is amended to read as follows:

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

[(b) All residual public funds shall be returned to the Hawaii election campaign fund.

(c)] (b) Upon disposition of all residual funds, the candidate or campaign treasurer shall file a report with the commission, reporting the amounts distributed under this section and the manner of disposition.

[(d) This section shall not apply to:

(1) Elected officials;

(2) Candidates who failed to be nominated or elected yet who become a candidate for nomination or election to office within four years thereafter;

(3) Elected officials who resign their office before the end of their term yet who file to become a candidate for reelection within four years after the end of the term from which they resigned; or

(4) Elected officials who do not seek reelection yet who file to become a candidate for election within four years after the end of the term from which they did not seek reelection.]

(c) Disposition of all residual contributions shall occur in the manner provided in subsection (a) within one year from the date that:

(1) Elected officials, who do not seek reelection, fail to file to become a candidate for an election within four years after the end of the term from which they did not seek reelection;

(2) Elected officials, who resign their office before the end of their term, fail to file to become a candidate for reelection within four years after the end of the term from which they resigned; or

(3) Candidates, who failed to be nominated or elected, fail to become a candidate for nomination for election within four years."

SECTION 12. Section 11-218, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) Each candidate who qualified for the maximum amount of 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 public funds as provided in this section for the respective election. For purposes of this section qualified means meeting the qualifying campaign contribution requirements of section 11-219."

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, telephone number, 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. This provision shall not apply to those special elections held in conjunction with primary and general elections of the applicable year."

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] used as required by this subpart.

Should the commission determine that any part of the public funds [have] has 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 11-229, Hawaii Revised Statutes, is amended to read as follows:

"11-229 Criminal prosecution. (a) Any person who knowingly, intentionally, or recklessly violates any provision of this subpart shall be guilty of a misdemeanor. A person who is convicted under this section shall be disqualified from holding elective public office for a period of four years from the date of conviction.

(b) Any person who knowingly or intentionally falsifies any report required by this subpart with the intent to circumvent the law or deceive the commission shall be guilty of a class C felony.

(c) Any person who knowingly or intentionally violates section 11-200 of this subpart shall be guilty of a class C felony.

(d) Any person who violates section 11-201 or 11-202 of this subpart shall be guilty of a class C felony.

(e) A person who is convicted under this section shall be disqualified from holding elective public office for a period of four years following the date of conviction.

[(b)] (f) For purposes of prosecution for violation of this subpart, the offices of the attorney general and the prosecuting attorney of the respective counties shall be deemed to have concurrent jurisdiction to be exercised as follows:

(1) Prosecution shall commence with a written request from the commission or upon the issuance of an order of the court; provided that prosecution may commence prior to any proceeding initiated by the commission or final determination;

(2) In the case of state offices, parties, or issues, the attorney general or the prosecuting attorney for the city and county of Honolulu shall prosecute any violation; and

(3) In the case of all other offices, parties, or issues, the attorney general or the prosecuting attorney for the respective county shall prosecute any violation.

In the commission's choice of prosecuting agency, it shall be guided by whether there will be any conflicting interest between the agency and its appointive authority.

[(c)] (g) The court shall give priority to the expeditious processing of suits under this section.

[(d)] (h) Prosecution for violation of any provision of this subpart shall not be commenced after five years have elapsed from the date of the violation or date of filing of the report covering the period in which the violation occurred, whichever is later.

[(e)] (i) The provisions of this section shall not apply to any person who, prior to the commencement of proceedings under this section, has paid or agreed to pay the penalties prescribed by sections 11-193(a)(5) and 11-215(c)."

SECTION 20. 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 21. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 22. This Act shall take effect on June 30, 2003; provided that the amendments to section 11-205.5, Hawaii Revised Statutes, contained in section 8 of this Act shall not apply to bar the award of any contract based on any contribution made prior to June 30, 2003.

INTRODUCED BY:

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