Report Title:

Campaign Spending; Public Funding; House of Representatives

 

Description:

Creates comprehensive public funding for elections to the state house of representatives; establishes qualifications, limitations on funding and use of funds, reporting requirements, amends chapter 11, part XII to reflect changes.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

661

TWENTY-FOURTH LEGISLATURE, 2007

 

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to campaign spending.

 

 

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

 


     SECTION 1.  The legislature finds and declares that:

     (1)  The pervasive and expanding influence of private contributions and expenditures on public elections in the State of Hawaii undermines democracy and the rights of all Hawaii citizens to vote for the candidate of their choice and to enjoy equal and meaningful participation in the democratic process, rights that are guaranteed by the First and Fourteenth Amendments to the United States Constitution as well as sections 1, 2, 4, and 8 of article I of the state constitution;

     (2)  Candidates for statewide office who lack access to personal wealth or wealthy donors are precluded from running a competitive campaign, because their voices are drowned out by those who can afford to saturate their constituents with television, radio, and other expensive mass-media communications, the indispensable instruments of effective political speech in the modern age;

     (3)  In recent years, private contributions to statewide campaigns and independent expenditures made to influence statewide campaigns have increased greatly.  This dramatic influx of private money, coupled with recent high-profile law enforcement investigations and prosecutions of campaign finance abuses have undermined the public's confidence in the political process and fueled the public perception of corruption in Hawaii state politics;

     (4)  The dominance of private funding in state elections also burdens candidates and elected officials with the incessant rigors of fundraising and decreases the time available to carry out their public responsibilities.  Further, private funding creates a danger of actual corruption by compelling elected officials to accept money from private interests that are directly affected by governmental actions; and

     (5)  The State's existing system of partial public funding for campaigns has not created a viable alternative to private sources of funding.  Only nine per cent of candidates statewide participated in the partial public funding system in the 2004 election, in part, because the available partial public funding is insufficient to run a competitive campaign.

     The State has compelling interests in preserving the integrity of its democratic system, promoting an open and robust debate on public issues, and protecting the constitutional rights of its citizens.  To serve these compelling interests, the legislature finds and declares that it is essential to provide comprehensive public funding to candidates seeking election to the state house of representatives who voluntarily agree to abide by campaign contribution and expenditure limits and meet other criteria.

     It is the purpose of this Act to create a comprehensive public funding system that will offer a viable and competitive alternative to private funding sources, thereby substantially reducing or eliminating the deleterious effects of private financing.

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


"   .  Comprehensive Public Funding for Elections to the

House of Representatives

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

     "Candidate" means an individual who seeks nomination for election or seeks election to the state house of representatives, and who meets the criteria of section 11-C.

     "Candidate's committee" means a committee, as defined in section 11-191, that makes an expenditure or accepts a contribution on behalf of a candidate for nomination for election, or reelection, to the state house of representatives, with the candidate's authorization.

     "Certification for comprehensive public funding" means the decision by the commission that a candidate is certified to receive public funding in accordance with this subpart.

     "Certified candidate" or "comprehensive publicly funded candidate" means a participating candidate who is certified by the commission as eligible for comprehensive public funding under this subpart and who agrees to abide by the requirements of this subpart.

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

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

     "Contested election" means, in a primary election, the certified candidate is opposed by one or more candidates for the nomination; and, in a general election, the certified candidate is opposed by one or more candidates for election to the office.

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

     "Declaration of intent to seek comprehensive public funding" means the form completed by a participating candidate and the filing of which triggers the participating candidate's ability to begin collecting qualifying contributions.

     "District" means a state house of representatives district, as established in accordance with article III, section 3, of the Constitution of the State of Hawaii.

     "Election period" shall be as defined in section 11-191.

     "Equalizing funds" means additional public funds released by the commission to a comprehensive publicly funded candidate to allow the publicly funded candidate to stay financially competitive with a nonparticipating candidate in a contested election.

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

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

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

     "General election year" means the period commencing January 1 of an even-numbered year in which a general election is held and ending two weeks after the general election.

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

     "Immediate family" shall be as defined in section 11-191.

     "Independent expenditure" means an expenditure by a noncandidate committee, party, or any other person for a communication that expressly advocates the nomination, election, or defeat of a clearly identified certified candidate or nonparticipating candidate and that is not made in concert or cooperation with or as part of any coordinated activity or at the request or suggestion of the certified candidate or nonparticipating candidate, a candidate's committee, or their agents.  For the purposes of this definition, "clearly identified" means that the name, likeness, photograph, or drawing of the certified candidate or nonparticipating candidate is used, or the identity of the certified candidate or nonparticipating candidate is apparent by unambiguous reference.

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

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

     "Noncandidate committee" shall be as defined in section 11‑191.

     "Nonmonetary contribution" means a contribution other than of money that may include goods or services.

     "Nonparticipating candidate" means a candidate who does not qualify for or receive public funding during an election period and is involved in a contested election with a certified participating candidate.

     "Participating candidate" means a candidate who is seeking certification for comprehensive public funding under this subpart.

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

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

     "Primary election campaign period" means the period in a primary election year beginning with the certification for comprehensive public funding under this subpart and ending two weeks after the primary election.

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

     "Qualifying contribution" means a $           monetary contribution made to a participating candidate for purposes of meeting the criteria of section 11-G.

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

     "Seed money" means contributions made to a participating candidate by a person in accordance with section 11-D that shall be expended for the purpose of determining campaign viability.

     "Surplus campaign funds" means any campaign contributions not spent during a prior election period by a participating candidate who previously sought election as a privately funded candidate.

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

     §11-B  Sufficiency of funding for comprehensive public funding.  On September 1 of each odd-numbered year before a general election year, the commission shall determine whether there is a minimum of $6,000,000 in the Hawaii election campaign fund to certify participating candidates during the next election and provide funding for comprehensive public funding for elections under this subpart.

     If the commission determines that there is sufficient funding, then within five business days, the commission shall publish notice statewide, pursuant to section 1-28.5, that the comprehensive public funding program shall become effective on January 1 of the following year.  If there is insufficient funding, then this subpart shall be inoperative.

     If this subpart is inoperative, candidates may seek public funding as provided under subpart B.

     §11-C  Qualifications for comprehensive public funding.  (a)  A candidate may seek comprehensive public funding for the primary election campaign period if the candidate:

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

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

     (3)  Files a declaration of intent to seek comprehensive public funding with the commission between January 1 of the election year and thirty days before the closing date to file nomination papers to run for office for which the candidate intends to seek election;

     (4)  Collects a $           district qualifying contribution in accordance with section 11-F;

     (5)  Accepts only the following contributions prior to applying for certification as a comprehensive publicly funded candidate:

         (A)  Seed money contributions until the candidate files a declaration of intent to seek comprehensive public funding; and

         (B)  Qualifying contributions that may be accepted only after filing the declaration of intent to seek comprehensive public funding; and

     (6)  Files an application for certification for comprehensive public funding with the commission and a declaration that the candidate has complied and will comply with all of the requirements of this subpart, as applicable.

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

     (1)  Was certified as a comprehensive publicly funded candidate during the primary election campaign period immediately preceding the general election in which the funds under this subpart are provided; and

     (2)  Received a sufficient number of votes to appear on the ballot in the general election or is otherwise certified by the office of elections to be placed on the ballot in the general election.

     §11-D  Seed money contributions; limitations on use of seed money; penalties.  (a)  The use of seed money shall be limited to expenditures necessary to determine whether sufficient support exists for a participating candidate to run for office as a comprehensive publicly funded candidate.

     (b)  The amount of seed money retained or expended, or both, by a candidate seeking eligibility for comprehensive public funding for the state house of representatives shall not exceed $3,000.

     (c)  A participating candidate shall not accept contributions of seed money from any person whose contributions are prohibited under subpart B.  All contributors whose seed money has been accepted shall be issued a receipt by the participating candidate.

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

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

     (f)  Any unspent seed money shall be deducted from the initial primary election distribution of a participating comprehensive publicly funded candidate if the candidate becomes a certified comprehensive publicly funded candidate and does not donate excess seed money to the Hawaii election campaign fund.

     §11-E  Restriction on use of surplus campaign funds.  A comprehensive publicly funded candidate who has surplus campaign funds from a previous election is prohibited from using those funds for anything other than in-office constituent communications.  The surplus campaign funds shall be frozen and maintained in a separate depository account from that established for the comprehensive public funds under section 11‑N.  The comprehensive publicly funded candidate shall continue to file reports on the surplus campaign funds in accordance with subpart B or as otherwise may be required by the commission.

     §11-F  Qualifying campaign contributions.  (a)  Each qualifying campaign contribution shall meet the requirements of this section.  To be counted as a qualifying campaign contribution, a contributor to a candidate for the state house of representatives shall be a registered voter who resides within the state house of representative district to which the candidate seeks nomination or election at the time the contribution is given.  A contribution shall be made in an amount and in a form that may be prescribed by the commission.

     (b)  No qualifying contribution shall be collected prior to a candidate filing a declaration of intent to seek comprehensive public funding with the commission.

     (c)  Any receipt for a qualifying campaign contribution shall be made in a form that may be prescribed by the commission.

     (d)  All qualifying campaign contributions collected by candidates, whether or not the candidate is certified, shall be deposited into the Hawaii election campaign fund.

     §11-G  Certification of qualification for comprehensive public funds.  (a)  Candidates seeking certification as a comprehensive publicly funded candidate shall submit to the commission an application for certification that contains at least two hundred fifty signatures and contributions for election to office in the state house of representatives from registered voters in the district for which the candidate seeks office no later than thirty days prior to the primary election, signed by the participating candidate and the participating candidate's campaign treasurer under penalty of perjury.

     (b)  The application shall also include any information deemed necessary and appropriate by the commission.

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

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

     (e)  A candidate who is not certified for comprehensive public funding under this subpart may seek public funding under the public funding program in subpart B.

     §11-H  Comprehensive publicly funded candidates; contributions and expenditures; penalties.  (a)  Except as authorized under section 11-K, a certified candidate shall comply with the following restrictions on contributions and expenditures:

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

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

         (B)  Loans from any person, including a certified candidate;

         (C)  Contributions from political parties; and

         (D)  Any campaign material purchased or held from a date prior to the declaration of intent to run for office as a comprehensive publicly funded candidate; and

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

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

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

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

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

     (b)  A certified candidate who accepts contributions in violation of this section shall be subject to a fine equal to three times the public funding received, in addition to any other action, fines, or prosecution under section 11-P.

     (c)  A certified candidate who spends or incurs an obligation to spend more than one hundred per cent of the public funds allocated to the candidate under this subpart shall repay to the Hawaii election campaign fund an amount equal to three times the excess expenditures.

     §11-I  Comprehensive publicly funded candidate; reporting.  (a)  A comprehensive publicly funded candidate and the certified candidate's committee shall furnish complete campaign records, including all records of nonmonetary contributions, seed money contributions, qualifying campaign contributions to the commission, and expenditures to the commissioner.  A candidate shall fully cooperate with any audit or examination by the commission.

     (b)  A comprehensive publicly funded candidate shall comply with the reporting requirements of sections 11-194, 11-195, 11‑196, 11-212, 11-213, and 11-224 in addition to those required under this subpart or that may be required by the commission.

     (c)  The commission shall require that all certified candidates file the reports required under this subpart in a digital, electronic format specified by rules adopted by the commission under chapter 91.

     §11-J  Comprehensive publicly funded candidate; continuing obligation.  (a)  A certified candidate shall comply with all requirements under this subpart through the general election campaign period regardless of whether the certified candidate maintains eligibility for comprehensive public funding in the general election campaign period.

     (b)  A certified comprehensive publicly funded candidate who wins office will be allowed to fundraise no more then $6,000 per year with individual contributions of no greater then $500.

     (c)  Any surplus of funds for a successful certified comprehensive publicly funded candidate up to $12,000 may be carried over to cover in-office constituent communications not to exceed $6,000 annual allotment or $12,000 for a two-year term.

     (d)  If the total surplus from a publicly funded campaign falls under $12,000 the certified comprehensive publicly funded office holder will be allowed to raise the difference pursuant to subpart (b) while in office.

     (e)  Except for seed money contributions, qualifying contributions, and in-office constituent communications, a certified candidate who is elected to the office sought shall not accept private contributions from any person, political party, or political action committee until either September 1 of the next odd-numbered year following the general election in which the candidate was last elected, or the date when the commission determines there are insufficient funds under section 11-B, whichever occurs earlier.

     (f)  If a certified candidate withdraws from seeking the nomination for or from the election, or has unspent public funds after an election, all unencumbered funds received by the candidate under this subpart shall be returned to the Hawaii election campaign fund within ten days after the general election.

     §11-K  Amount of base public funding; disbursements; sufficiency of public funding.  (a)  For primary elections subject to this subpart, the base amount of comprehensive public funding shall be set at an average of the amount spent by the winning candidates in the previous two state house of representatives primary elections, statewide, reduced by ten per cent.

     (b)  For general elections subject to this subpart, the base amount of comprehensive public funding shall be set at an average of the amount spent by the winning candidates in the previous two state house of representatives general elections, statewide, reduced by ten per cent.

     (c)  The base amount of public funding for an uncontested primary election shall be thirty per cent of the amount provided in a contested election as determined under subsection (a).  No funding shall be allocated in an uncontested general election.

     (d)  The commission shall disburse public funds by check or electronic transfer.

     (e)  If the winning primary candidate has residual funds from the primary election, those funds may be carried over to the general election.  A certified candidate who is not successful in the primary election shall return all unspent and unencumbered public funds to the Hawaii campaign election fund within ten days after the primary election.

     (f)  The commission shall not distribute comprehensive public funding to certified candidates that exceeds the total amount of $           for all candidates subject to this subpart in any given election year in which this subpart is operative.

     (g)  Commencing January 1 of a general election year and ending with the deadline to submit applications for certification, the commission shall post on its website a monthly report stating, by district, the number of declarations of intent to seek comprehensive public funding received, the number of applications for certification received, the number of candidates who have been certified for comprehensive public funding, the base amount committed to certified candidates, and the amount available for additional certified candidates.

     Notwithstanding any other provisions in this subpart, if the commission determines that the revenues are insufficient to meet distributions to certified candidates under this section, the commission shall either permit certified candidates to accept and spend contributions, subject to the campaign contribution limitations set forth in section 11-204, up to the applicable amounts, including equalizing funds the certified candidate would have received from comprehensive public funding.

     §11-L  Equalizing funds, sufficiency of funds.  (a)  The commission shall disburse equalizing funds to a certified candidate in a contested election whenever any campaign report filed pursuant to subpart B shows that the sum of an opposing nonparticipating candidate and the nonparticipating candidate's committee's expenditures and obligations, or campaign contributions received or borrowed, whichever is greater, added to any independent expenditures made in support of that nonparticipating candidate or against the opposing certified candidate reported by any noncandidate's committee, party, or any other person exceeds one hundred per cent of the amount of comprehensive public funding previously allotted and distributed to the opposing certified candidate in a contested election, including any equalizing funds previously distributed.

     (b)  Equalizing funds shall be limited to two hundred per cent of the base amount of comprehensive public funding allotted to the certified candidate in a contested election.

     (c)  In an uncontested primary election where a comprehensive publicly funded candidate has a private funding opponent from another party or an independent who spends above the base allotment, the certified candidate shall receive equalizing funds limited to two hundred per cent of the base amount allotted.

     (d)  If the election will be decided in the primary election, equalizing funds shall be limited to a maximum of two hundred per cent of the base amount of comprehensive public funding allotted to a certified candidate in a contested election.

     (e)  The commission shall electronically transfer equalizing funds to a certified candidate within twenty-four hours of the filing with the commission of the report indicating the certified candidate's entitlement to equalizing funds.

     (f)  At any reporting period, if the privately funded candidate spends more then the entire comprehensive public fund original allotment, the comprehensive publicly funded candidate shall receive an amount equal to but not to exceed two times the original allotment.

     (g)  Reporting obligations under this section for nonparticipating candidates and their candidate's committees, noncandidate committees, parties, or any other persons making independent expenditures shall be in addition to the reporting requirements under this chapter whenever a certified candidate is opposed in a contested election by a nonparticipating candidate as follows:

     (1)  Commencing forty-five days before the primary election day, nonparticipating candidates and their candidate's committees shall file an initial excess report with the commission within twenty-four hours after cumulative contributions are received, or expenditures are made or committed to be made, including verbal commitments, in an election period that exceeds one hundred one per cent of the base amount of comprehensive public funding allotted to an opposing certified candidate in a contested election.  Nonparticipating candidates and the candidate's committees shall file supplemental excess reports within twenty-four hours after any encumbrances or expenditures that exceed $           in aggregate; and

     (2)  Commencing forty-five days before the general election day, noncandidate committees, parties, and any other persons that incur independent expenditures that expressly advocate the nomination, election, or defeat of a certified candidate shall file an independent expenditure report with the commission within twenty‑four hours when expenditures exceed $           in aggregate in an election period.  Thereafter, noncandidate committees, parties, and any other persons that incur independent expenditures, including verbal expenditure commitments, shall file supplemental independent expenditure reports within twenty-four hours whenever the aggregate expenditures exceed $100.  The independent expenditure reports shall identify the nonparticipating candidate or certified candidate for whom the independent expenditure is intended to influence the nomination, election, or defeat.

     (h)  If a nonparticipating candidate and the candidate's committee fails to file or files a false excess report or supplemental excess reports as required under subsection (g), the commission, within twenty-four hours of verifying the failure or falsity, shall automatically disburse equalizing funds to any opposing certified candidate up to the maximum authorized under subsections (b) and (c).

     (i)  Any nonparticipating candidate and the candidate's committee, noncandidate committee, party, or any other person that makes independent expenditures in a contested election involving a certified candidate who fails to file a report as required under this subpart or files a false report shall be:

     (1)  Guilty of a misdemeanor;

     (2)  Subject to a fine of up to three times the amount of equalizing funds paid to the certified candidate; and

     (3)  Subject to any other fine or penalty pursuant to sections 11-228 and 11-229.

     (j)  Upon certification of all comprehensive publicly funded candidates, if the commission determines there are insufficient funds to meet the potential need for equalizing funds for all certified candidates, the commission shall permit each certified candidate to accept and spend private contributions, subject to the campaign contribution limitations set forth in section 11-204, up to the equalizing funds the certified candidate would have received from comprehensive public funding.

     (k)  The commission shall adopt rules under chapter 91 to compute the amount of equalizing funds allotted to a certified candidate that takes into consideration the contributions and expenditures of the nonparticipating candidate and the candidate's committee, and any independent expenditures incurred to influence the nomination, election, or defeat of the certified candidate.  To prevent the abuse of equalizing funds, the commission shall not base any calculation on independent expenditures that, although containing words of express advocacy, also contain other words or phrases that have no other reasonable meaning other than to contradict the expressed advocacy.

     §11-M  Comprehensive public funding; permitted uses.  (a)  Comprehensive public funds shall be used only for the purpose of defraying expenses that are directly related to the certified candidate's campaign during the election campaign period for which the comprehensive public funds are allocated.

     (b)  A candidate receiving funds under this subpart or the candidate's campaign treasurer shall not transfer any portion of the funds provided under this subpart to any other candidate for another campaign.

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

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

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

     (1)  Appropriations from the legislature;

     (2)  Excess seed money contributions;

     (3)  Qualifying contributions, including any excess4qualifying contributions of certified candidates;

     (4)  Unspent public funds distributed to any certified candidate;

     (5)  Fines levied by the commission for violation of this subpart;

     (6)  Voluntary donations; and

     (7)  An appropriation from the unclaimed property trust fund of no less than $2,500,000 annually.

     §11-P  Violations; penalties.  Any candidate who knowingly seeks or receives public funding in order to fraudulently qualify for or receive public funding shall:

     (1)  Have the candidate's certification for comprehensive public funding revoked.  Upon revocation of certification, the certified candidate shall repay all public funds received within ten business days; and

     (2)  Be subject to fines and penalties as specifically provided in this subpart and other fines or penalties pursuant to sections 11-228 and 11-229.

     §11-Q  Rules.  The commission shall adopt forms and rules pursuant to chapter 91 as may be necessary to implement this subpart, including reporting requirements of section 11-L and any restrictions on petty cash expenditures by the certified candidate."

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

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

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

     "§11-217  Hawaii election campaign fund; creation.  (a)  The Hawaii election campaign fund is created as a trust fund within the state treasury.  The fund shall consist of [all]:

     (1)  All moneys collected from persons who have designated a portion of their income tax liability to the fund as provided in section 235-102.5[, any];

     (2)  Any general fund revenues appropriated[, as well as all];

     (3)  A $2,500,000 annual appropriation from the unclaimed property trust fund; and

     (4)  All other moneys collected pursuant to this subpart.

     (b)  Payment to each candidate from the fund shall be by the comptroller in the manner prescribed in section 11-222[.] or section 11-K, as appropriate.

     (c)  Moneys from this fund may also be used for the operating expenses of the commission, including staff salaries and fringe benefits."

     SECTION 5.  Section 11-217.5, Hawaii Revised Statutes, is amended to read as follows:

     "§11-217.5  Depletion of fund.  (a)  The Hawaii election campaign fund shall be under no obligation to provide moneys to [qualified] eligible candidates [in the event that] if in the partial public funding program or comprehensive public funding for elections to the state house of representatives moneys in that fund have been depleted.

     (b)  [In the event that] For purposes of the partial funding program, if the Hawaii election campaign fund is close to depletion, as determined by the commission, the commission shall determine the amounts available to [qualified] eligible candidates based on their order of eligibility in qualifying for partial public funds, as determined by the date of filing of an application for public funds with the commission pursuant to section 11-222; provided that the application has been accepted by the commission.

     (c)  For the purposes of the comprehensive public funding for elections to the state house of representatives, if the Hawaii election campaign fund is close to depletion, the commission shall determine whether that program shall be operative in accordance with subpart    ."

     SECTION 6.  Section 11-218, Hawaii Revised Statutes, is amended to read as follows:

     "§11-218  [Candidate funding; amounts available.] Partial public funding program: maximum allowed.  (a)  Public funds from the Hawaii election campaign fund are available to fund eligible candidates who qualify for the partial public funding program in the amounts set forth in this section.

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

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

     [(c)] (d)  For the office of Hawaiian affairs, the maximum amount of partial public funds available to a candidate shall not exceed $1,500 in any election year.

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

     [(e)] (f)  Each candidate who qualified for the maximum amount of partial public funding in any 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 7.  Section 11-219, Hawaii Revised Statutes, is amended to read as follows:

     "§11-219  Qualifying campaign contributions[;] for partial public funding program; amounts.  As a condition of receiving public funds for a primary or general election, a candidate shall not be unopposed in any election for which partial public funds are sought, 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:

     (1)  For the office of governor--qualifying campaign contributions that in the aggregate, exceed $100,000;

     (2)  For the office of lieutenant governor--qualifying campaign contributions that in the aggregate, exceed $50,000;

     (3)  For the office of mayor for each respective county:

         (A)  County of Honolulu--qualifying campaign contributions that in the aggregate, exceed $50,000;

         (B)  County of Hawaii--qualifying campaign contributions that in the aggregate, exceed $15,000;

         (C)  County of Maui--qualifying campaign contributions that in the aggregate, exceed $10,000; and

         (D)  County of Kauai--qualifying campaign 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 campaign contributions that in the aggregate, exceed $30,000;

         (B)  County of Hawaii--qualifying campaign contributions that in the aggregate, exceed $10,000; and

         (C)  County of Kauai--qualifying campaign contributions that in the aggregate, exceed $5,000;

     (5)  For the office of county council--for each respective county:

         (A)  County of Honolulu--qualifying campaign contributions that in the aggregate, exceed $5,000;

         (B)  County of Hawaii--qualifying campaign contributions that in the aggregate, exceed $1,500;

         (C)  County of Maui--qualifying campaign contributions that in the aggregate, exceed $5,000; and

         (D)  County of Kauai--qualifying campaign contributions that in the aggregate, exceed $3,000;

     (6)  For the office of state senator--qualifying campaign contributions that, in the aggregate, exceed $2,500;

     (7)  For the office of state representative--qualifying campaign contributions that, in the aggregate, exceed $1,500;

     (8)  For the office of Hawaiian affairs--qualifying campaign contributions that, in the aggregate, exceed $1,500; and

     (9)  For all other offices, qualifying campaign contributions that, in the aggregate, exceed $500."

     SECTION 8.  Section 11-220, Hawaii Revised Statutes, is amended to read as follows:

     "§11-220  Eligibility for payments[.] under the partial public funding program.  (a)  To be eligible to receive [payments under section 11-217,] partial public funding from the Hawaii election campaign fund under section 11-221, a candidate shall in writing:

     (1)  Agree to obtain and furnish to the commission any evidence of the campaign expenses of [such] the candidate [which] that the commission may request;

     (2)  Agree to keep and furnish records, books, and other information [which] that 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 that section.

     (b)  To be eligible to receive [payments pursuant to section 11-217,] partial public funding from the Hawaii election campaign fund under section 11-221, a candidate shall certify to the commission that:

     (1)  The candidate and all committees authorized by the candidate shall not incur campaign expenses in excess of the expenditure limitations imposed by section 11‑209;

     (2)  The candidate has qualified to be on the election ballot in a primary or general election;

     (3)  The candidate has filed a statement of intent to seek qualifying campaign contributions.  A contribution received before the filing of a statement of intent to seek partial public funds shall not be considered a qualifying campaign contribution;

     (4)  The candidate or committee authorized by the candidate has received the qualifying sum of private contributions for the office sought by the candidate as set forth in section 11-219; and

     (5)  The aggregate of contributions certified with respect to any person under paragraph (4) does not exceed $100.

     (c)  Each candidate and candidate's committee in receipt of qualifying campaign contributions [which] that may be taken into account for purposes of partial public funding shall maintain, on a form prescribed by the commission, records [which] that show the date and amount of each qualifying campaign 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 these contributions that the commission may require.

     (d)  No candidate certified for comprehensive public funding under subpart     shall be eligible for partial public funding under this subpart in a given election period."

     SECTION 9.  Section 11-221, Hawaii Revised Statutes, is amended to read as follows:

     "§11-221  Entitlement to payments[.] partial payment funding.  (a)  A candidate shall obtain the minimum amount of qualifying campaign contributions set forth in section 11-219, once for the election period.  After the candidate obtains the minimum amount of qualifying campaign contributions, the candidate shall be entitled to receive for each election that the candidate's name appears on the ballot:

     (1)  The minimum payment in an amount equal to the qualifying campaign contributions; and

     (2)  Payments of $1 for each $1 of qualifying contributions in excess of the minimum amount of qualifying contributions;

provided that the candidate shall not receive more than the maximum amount of partial public funds available to a candidate pursuant to section 11-218; provided further that the candidate shall not receive partial public funds for a primary election if the candidate does not obtain the minimum amount of qualifying contributions before the date of the primary election.

     (b)  A candidate shall have at least one other qualified candidate as an opponent for the primary or general election to receive partial public funds for that election."

     SECTION 10.  Section 11-222, Hawaii Revised Statutes, is amended by amending the title and subsections (a) to (c) to read as follows:

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

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

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

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

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

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

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

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

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

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

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

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

     (f)  Each candidate, on the deadline for filing of a final report for any primary or general election, shall return all unexpended partial public funds to the Hawaii election campaign fund."

     SECTION 12.  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] any candidate who receives public funds under either the partial public funding program or the comprehensive public funding for elections to the state house of representatives shall produce evidence to the commission no later than twenty days after a primary election and no later than thirty days after a general election that all public funds paid to the candidate have been used as required by this subpart.

     Should the commission determine that any part of the partial public funds have been used for noncampaign or improper expenses, it shall report [such] its finding to the attorney general and shall order the candidate to return all or part of the funds paid to that candidate for a primary or general election.  When partial public funds are returned, [they] the funds shall be deposited in the Hawaii election campaign fund."

     SECTION 13.  Section 11-225, Hawaii Revised Statutes, is amended as follows:

     1.  By amending the title and subsection (a) to read:

     "§11-225  Public funds; examination and audit; payments[.]; penalties.  (a)  Within sixty days after each general election, the commission shall conduct an examination and audit of all public funds received by [the] any candidate [and of] who received public funds under either the partial public funding program or the comprehensive public funding for elections to the state house of representatives, including the campaign contributions used for purposes of qualifying for public funding under [this subpart] subparts B and    , and the campaign expenses incurred by all candidates who received [payments] public funding pursuant to [section 11-217.] subparts B and    ."

     2.  By amending subsections (c), (d), (e), and (f) to read:

     "(c)  Should the commission determine that any partial payment of public funds made to an eligible candidate pursuant to section 11-221 was in excess of the aggregate amount of payments to which [such] the candidate was entitled, the commission shall notify [such] the candidate and [such] the candidate shall pay to the Hawaii election campaign fund a sum equal to the amount of excess payment.

     (d)  If the commission determines that any amount of any partial public funds made to a candidate under section 11-217 was used for any improper purpose, the commission shall so notify the candidate, and the candidate shall pay to the fund an amount equal to three hundred per cent of such amount.

     (e)  Any candidate who has received partial public funds under section 11-217 and who is convicted of violating any provision of this subpart shall, upon notification by the commission, pay to the Hawaii election campaign fund the full amount of public funds received by [such] the candidate.

     (f)  No notification shall be made by the commission under subsection (c) with respect to the payment of excess partial public funds more than two years after the payment of [such] the funds."

     SECTION 14.  Section 11-228, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  In the performance of its required duties, the commission may render a decision or issue an order affecting any person violating [any provision of this] subpart B or     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, an amount not to exceed $1,000 for each occurrence 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)  Whenever a corporation, organization, association, or labor union violates [this subpart,] subpart B or    , the violation shall be deemed to be also that of 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 (e) to read:

     "(e)  Any person or the commission may sue for injunctive relief to compel compliance with [this subpart.] subparts B and    ."

     SECTION 15.  Section 11-229, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsections (a) and (b) to read:

     "(a)  Any person who knowingly, intentionally, or recklessly violates [any provision of this subpart] subpart B or     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 charged with a class C felony shall not be eligible for a deferred acceptance of guilty plea or nolo contendere plea under chapter 853.  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)  For the purposes of prosecution for violation of [this subpart,] subpart B or    , 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."

     2.  By amending subsection (d) to read:

     "(d)  Prosecution for violation of [any provision of this] subpart B or     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."

     SECTION 16.  Section 523A-23.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Moneys in the unclaimed property trust fund shall be used for the payment of the following:

     (1)  Claims for the return of abandoned property to their rightful owners;

     (2)  Payment to other states' unclaimed property programs for owners whose last known address was in that other state;

     (3)  Any costs incurred in connection with the sale of abandoned property;

     (4)  Costs of mailing and publication in connection with any abandoned property;

     (5)  Reasonable service charges;

     (6)  Costs incurred in examining the records of holders of property and in collecting such property from those holders; [and]

     (7)  An annual appropriation of $2,500,000 to the Hawaii election campaign fund under section 11-217; and

    [(7)] (8)  Any other charges, costs, or expenses incurred in the operation, administration, and enforcement of this chapter."

     SECTION 17.  There is appropriated out of the unclaimed property trust fund established under section 523-A-23.5, Hawaii Revised Statutes, the sum of $2,500,000, or so much thereof as maybe necessary for fiscal year 2007-2008, for deposit into the Hawaii election campaign fund established under section 11-217, Hawaii Revised Statutes.

     SECTION 18.  There is appropriated out of the Hawaii election campaign fund the sum of $200,000, or so much thereof as may be necessary for fiscal year 2006-2007, for the campaign spending commission to provide three additional staff positions and other assistance to support comprehensive publicly funded elections for the state house of representatives as follows:

     (1)  Two staff positions for computer analysis of campaign contributions for auditing and monitoring and the creation of an online digital filing system for campaign spending reports for all candidates running for state house of representatives;

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

     (3)  Funding for the office of elections, or its designate, to verify the qualifying contributions from registered voters in a candidate's district.

     The sum appropriated shall be expended by the department of accounting and general services for the purposes of this Act.

     SECTION 19.  The campaign spending commission shall create and publish all forms and receipts required as well as a candidates' guide to the comprehensive public funding program that shall include an explanation of rules and procedures applicable to candidates.  In addition to the reports required by section 11-210, Hawaii Revised Statutes, the campaign spending commission shall establish and provide administrative and staff support to an independent, nonpartisan review committee to undertake a substantive review of the functioning of the comprehensive public funding program established under this Act following each election in which the comprehensive public funding option is used.  The review committee shall report to the legislature no later than twenty days prior to the convening of the next regular session following each election when the comprehensive public funding option is made available:

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

     (2)  Suggesting amendments to this Act that will extend publicly funded campaigns to other state and county elections;

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

     (4)  Providing an examination of mechanisms for increasing revenues of the Hawaii election campaign fund, including methods used in other states.

     The legislative reference bureau shall assist the campaign spending commission in drafting any proposed amendments to this Act.

     SECTION 20.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

     SECTION 21.  If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

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

     SECTION 23.  This Act shall take effect on July 1, 2007.

 

INTRODUCED BY:

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