HOUSE OF REPRESENTATIVES

H.B. NO.

2552

TWENTY-EIGHTH LEGISLATURE, 2016

 

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. Chapter 11, Hawaii Revised Statutes, is amended by adding a new subpart to part XIII to be appropriately designated and to read as follows:

"   . COMPREHENSIVE PUBLIC FUNDING FOR ELECTIONS TO THE

HAWAII HOUSE OF REPRESENTATIVES

11-A Definitions. Except for terms that are specifically defined in this subpart, terms that are defined under section 11-302 shall apply to this subpart. 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.

"Candidate's committee" means a candidate committee, as defined in section 11-302, that makes an expenditure or accepts a contribution on behalf of a candidate for nomination for election to the state house of representatives with the candidate's authorization.

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

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

"District" means the respective representative district from which the candidate seeks election.

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

"General election campaign period" means the period beginning the day after the primary election and ending on general election day.

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

"Primary election campaign period" means the period in a primary election year beginning with the certification for public funding under this subpart and ending on the primary election day.

"Public funding" or "public funds" means campaign funds from the Hawaii election campaign fund under section 11-421, received by an eligible candidate pursuant to this subpart.

"Qualifying contribution" means a monetary contribution made in the form of a check or a money order accompanied by a signed receipt that confirms that the contributor purchased the money order, payable to the Hawaii election campaign fund for purposes of meeting the criteria of section 11-E.

"Seed money" means contributions made to a candidate by an individual in accordance with section 11-D and expended for the purpose of determining campaign viability.

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

11-B Applicability. There is established a public funding program under this subpart for all elections to the state house of representatives, beginning with the 2018 elections.

11-C Qualifications for public funding for candidates for state representative. (a) A candidate may seek 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 public funding with the commission between December 1 of the year prior to the election year and thirty days before the closing date to file nomination papers to run for the office for which the candidate intends to seek election;

(4) Collects qualifying names and contributions in accordance with section 11-E;

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

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

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

(6) Files an application for certification for public funding with the commission.

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

(1) Was certified as a 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 county clerk 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 candidate to run for office as a publicly-funded candidate; provided that no candidate shall be eligible to receive public funds under this subpart unless the candidate has received or expended at least $         in seed money.

(b) The amount of seed money received, expended, or both, by a candidate seeking eligibility for public funding shall not exceed $3,000, which shall include any personal funds, surplus campaign funds, or contributions received from individuals in an aggregate amount no greater than $250 each that the candidate may choose to use.

(c) A candidate seeking eligibility for public funding shall not accept contributions of seed money from any individual whose contributions are prohibited under subpart E or for which the information required to be reported pursuant to section 11-I(h) is not available. The candidate or candidate's committee shall record all information required for reporting under section 11-I(h). If this information has not been recorded by the thirtieth day after the contribution was received, the contribution shall be returned to the contributor. All contributors whose seed money has been accepted shall be issued a receipt by the candidate.

(d) Seed money shall not be collected after the candidate has filed the declaration of intent to seek public funding, which shall be filed no later than thirty days prior to the closing date to file nomination papers to run for the office for which the candidate intends to seek election. The candidate shall spend seed money only until the candidate is certified by the commission as a publicly-funded candidate or the closing date to file nomination papers to run for the office for which the candidate intends to seek election, whichever occurs first.

(e) Any unspent seed money shall be deducted from the amount of public funding provided to the certified candidate if the certified candidate does not donate the unspent seed money to the Hawaii election campaign fund.

(f) A certified candidate who has surplus campaign funds from a previous election is prohibited from using those funds for anything other than seed money pursuant to this section and in-office constituent communications pursuant to section 11-J. The surplus campaign funds shall be frozen and maintained in a separate depository account from that established for the public funds under section 11-L. The candidate shall continue to file reports on the surplus campaign funds in accordance with subpart E, or as otherwise may be required by the commission.

11-E Application for public funds; qualifying names; qualifying contributions. (a) Candidates seeking certification for public funding shall submit an application for certification that contains at least two hundred fifty printed qualifying names with addresses and signatures, of which at least two hundred shall be accompanied by a qualifying contribution of $5, in the same name. Nothing of value shall be given to the individual in exchange for the qualifying contribution.

(b) To be counted as a qualifying name, with or without accompanying qualifying contribution, the name shall be that of an individual who is a registered voter and who resides within the respective district from which the candidate seeks nomination or election at the time the contribution is given.

(c) No candidate shall collect any qualifying name, with or without accompanying qualifying contribution, prior to filing a declaration of intent to seek public funding with the commission.

(d) A receipt in a form prescribed by the commission pursuant to section 11-O shall be issued to the contributor for each qualifying contribution.

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

(f) The application for certification shall be submitted to the commission no later than thirty days prior to the primary election and shall be signed by the candidate and the candidate's campaign treasurer under penalty of perjury. The application shall contain any other information deemed necessary and appropriate by the commission.

11-F Certification of qualification for public funds. (a) The commission, in coordination with the relevant country clerk for the district from which election is sought, shall verify that the candidate received at least the minimum required qualifying names and qualifying contributions as specified in section 11-E, that the candidate resides in the district from which election is sought as of the date of the filing of nomination papers, and that the candidate is a registered voter in the district from which election is sought. The county clerk shall provide all information required to verify qualifying names and contributions and the candidate's residency and voter registration status, including the names, addresses, and signatures of registered voters in that district.

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

(c) After a candidate is certified, the candidate's certification shall apply to both the primary and the general elections.

(d) Initial certification and all determinations by the commission under this section shall be final and conclusive, except to the extent that they are subject to examination and audit by the commission under section 11-434.

11-G Public funds to be distributed to certified candidate. (a) Except as provided in subsection (b), each certified candidate shall receive the amount calculated pursuant to paragraph (1) divided by the number calculated pursuant to paragraph (2):

(1) The total amount of expenditures of winners statewide for the office of state representative in the previous election period, less the sum of:

(A) The expenditures of the three winners statewide for the office of state representative with the highest amounts of expenditures; and

(B) The expenditures of the three winners statewide for the office of state representative with the lowest amounts of expenditures,

in the respective election in the previous election period; and

(2) The total number of persons who won statewide for the office of state representative in the respective election in the previous election period, less six persons.

(b) There shall be a total amount of $500,000 available for distribution to all certified candidates statewide in each election year. If the total amount of funds to be distributed in any election year to all certified candidates, as calculated pursuant to subsection (a), exceeds $500,000, the commission shall divide $500,000 by the total number of certified candidates statewide to determine the amount that each certified candidate shall receive.

(c) Upon the commission's certification of the candidate, the commission shall direct the comptroller to distribute the public funds allowed by this section from the Hawaii election campaign fund by check or, when possible, by an automatic transfer of funds. Public funds shall be distributed to the candidate within twenty days from the date that the candidate was certified.

(d) The commission shall be under no obligation to provide moneys to a candidate if moneys in the Hawaii election campaign fund are near depletion.

11-H Contributions and expenditures; penalties. (a) A certified candidate shall comply with the following restrictions on contributions and expenditures:

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

(A) Contributions from any person;

(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 filing the declaration of intent to seek public funds; and

(2) Upon certification for public funding and until the end of the general election campaign period, a 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; and

(C) Public funds outside the applicable campaign period.

(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-N and subpart I, or any provision of the Hawaii penal code.

(c) A certified candidate who makes expenditures of more than one hundred per cent of the public funds allocated to the candidate shall repay to the Hawaii election campaign fund an amount equal to three times the excess expenditures.

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

(b) The reporting requirements for certified candidates under this subpart or that may be required by the commission shall be in addition to any other reporting requirement under this part.

(c) An individual who uses seed money to determine whether sufficient support exists to run for office as a publicly-funded candidate who is not already registered with the commission shall register as a candidate by filing the organizational report required by section 11-321, within ten days of receiving more than $100 in seed money, either from contributions or personal funds.

(d) All reports required by subpart D, seed money reports, and post-election reports shall be filed with the commission.

(e) Seed money reports shall be filed with the commission no later than:

(1) January 31 of an election year;

(2) April 30 of an election year; and

(3) Twenty days prior to the primary election.

(f) Each report shall be current through:

(1) The six-month period ending on December 31 for the report filed on January 31;

(2) The three-month period ending on March 31 for the report filed on April 30; and

(3) Thirty days prior to the primary election for the report filed twenty days prior to the primary election.

(g) The seed money reports shall include:

(1) The candidate committee's name and address;

(2) The amount of cash on hand at the beginning of the reporting period;

(3) The reporting period and aggregate total for each of the following categories:

(A) Contributions;

(B) Expenditures; and

(C) Other receipts; and

(4) The cash on hand at the end of the reporting period.

(h) Schedules filed with the seed money reports shall also include:

(1) The amount and date of deposit of each contribution and the name and address of each contributor who makes contributions aggregating more than $100 in an election period;

(2) All expenditures made, including the name and address of each payee and the amount, date, and purpose of each expenditure. Expenditures for consultants, advertising agencies and similar firms, credit card payments, salaries, and candidate reimbursements shall be itemized to permit a reasonable person to determine the ultimate intended recipient of the expenditure and its purpose; and

(3) The amount, date of deposit, and description of other receipts and the name and address of the source of each of the other receipts.

(i) Post-election reports shall be submitted to the commission no later than twenty days after a primary election and no later than thirty days after a general election certifying that all public funds paid to the certified candidate have been used as required by this subpart. The reports shall include information regarding all expenditures made, including the name and address of each payee and the amount, date, and purpose of each expenditure. Expenditures for consultants, advertising agencies and similar firms, credit card payments, salaries, and candidate reimbursements shall be itemized to permit a reasonable person to determine the ultimate intended recipient of the expenditure and its purpose.

(j) All certified candidates shall file the reports required under this subpart by electronic means in the manner prescribed by the commission.

11-J Publicly-funded candidate; continuing obligation. (a) A certified candidate shall comply with all requirements under this subpart through the general election campaign period, except as provided in subsection (d), regardless of whether the certified candidate maintains eligibility for public funding in the general election campaign period.

(b) Any surplus campaign funds up to $4,000 for a certified candidate elected to the office sought may be carried over to pay for in-office constituent communications. Expenditures for these communications shall not exceed $2,000 per year or $4,000 for a two-year term.

(c) If the total surplus for a certified candidate who is elected to office falls under $4,000, subsection (d) notwithstanding, the office holder shall be allowed to raise the difference with private contributions pursuant to subpart E in an aggregate amount of $2,000 per year; provided that the contributions are received from an individual and each individual shall be limited to contributing $250 for the election period.

(d) Except for seed money contributions and qualifying contributions, a certified candidate who is elected to office shall not accept private contributions from any person 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-P, whichever occurs earlier.

(e) If a certified candidate withdraws from seeking the nomination for or from the election, all unexpended public funds received by the candidate under this subpart shall be returned to the Hawaii election campaign fund within thirty days after withdrawal.

(f) A certified candidate who is successful in the primary election may carry over any unexpended public funds to the general election; provided that the certified candidate has an opponent in the general election. If the certified candidate does not have an opponent in the general election, the certified candidate shall return all unexpended public funds received by the certified candidate under this subpart to the Hawaii election campaign fund within thirty days after the primary election.

(g) A certified candidate who is not successful in the primary or general election shall return all unexpended public funds received by the certified candidate under this subpart to the Hawaii election campaign fund within thirty days after the election in which the candidate was not successful.

11-K Public funding; permitted uses. (a) Public funds shall be used only for the purpose of defraying expenses directly related to the certified candidate's campaign during the election campaign period for which the 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-L Deposit of, and access to, public funds. (a) All public funds and seed money received by a certified candidate shall be deposited directly into a depository institution as provided under section 11-351(a) and accessed through the use of debit cards and bank checks. No expenditure of public funds received under this subpart shall be made except by debit cards or checks drawn on the account.

(b) All reports for financial disclosure required under subpart D and this subpart shall include the most recent, available bank statement from the financial depository holding the public funds, as attested to by the candidate's committee.

11-M Deposit of money into the Hawaii election campaign fund. The following moneys shall be deposited into the Hawaii election campaign fund established under section 11-421:

(1) Appropriations made by the legislature for the purposes of this subpart;

(2) Excess seed money contributions;

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

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

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

(6) Voluntary donations made for the purposes of this subpart.

11-N Violations; penalties. Any candidate who knowingly seeks or receives contributions, attempts to take any action, or takes any action to fraudulently qualify for or receive public funding shall:

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

(2) Be subject to fines and penalties as specifically provided in this subpart and other fines or penalties pursuant to sections 11-410 and 11-412 and the Hawaii penal code.

11-O Forms; receipts; candidate guide. The campaign spending commission shall create and publish all forms and receipts required, as well as a candidates' guide to the public funding program that shall include an explanation of rules and procedures applicable to candidates.

11-P 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 $3,500,000 in the Hawaii election campaign fund established under section 11-421, so that the commission has sufficient funds available to certify candidates during the next election and provide up to $500,000 total funding for the comprehensive public funding for elections authorized under this subpart as well as to provide sufficient funding for the partial public financing of elections pursuant to subpart J.

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, this subpart shall be inoperative."

SECTION 2. Chapter 11, Hawaii Revised Statutes, is amended by adding a new section to subpart J of part XIII to be appropriately designated and to read as follows:

"11-   Applicability to elections for state representative. No provision of this subpart shall apply to any election to the state house of representatives, except as expressly provided in subpart    ."

SECTION 3. Section 11-421, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) The fund shall consist of:

(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(a);

(2) Any general fund appropriations; [and]

(3) All moneys designated for deposit into the fund pursuant to section 11-M; and

[(3)] (4) Other moneys collected pursuant to this part.

(c) Moneys in the fund shall be paid to candidates by the comptroller as prescribed in [section] sections 11-431 and 11-G(c) and may be used for the commission's operating expenses, including staff salaries and fringe benefits."

SECTION 4. Section 11-423, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) From January 1 of the year of any primary, special, or general election, the aggregate expenditures for each election by a candidate who voluntarily agrees to limit campaign expenditures, inclusive of all expenditures made or authorized by the candidate alone, all treasurers, the candidate committee, and noncandidate committees on the candidate's behalf, shall not exceed the following amounts expressed, respectively multiplied by the number of voters in the last preceding general election registered to vote in each respective voting district:

(1) For the office of governor $2.50;

(2) For the office of lieutenant governor $1.40;

(3) For the office of mayor $2.00;

(4) For the offices of state senator, [state representative,] county council member, and prosecuting attorney $1.40; and

(5) For all other offices, except the office of state representative 20 cents."

SECTION 5. Section 11-425, Hawaii Revised Statutes, is amended follows:

1. By amending subsection (b) to read:

"(b) The maximum amount of public funds available in each election to a candidate for the office of state senator, [state representative,] county council member[, and] or prosecuting attorney shall not exceed fifteen per cent of the expenditure limit established in section 11-423(d) for each election."

2. By amending subsection (d) to read:

"(d) For all other offices, excluding the office of state representative, the maximum amount of public funds available to a candidate shall not exceed $100 in any election year."

SECTION 6. Section 11-429, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) As a condition of receiving public funds for a primary or general election, a candidate shall not be unopposed in any election for which public funds are sought, shall have filed an affidavit with the commission pursuant to section 11-423 to voluntarily limit the candidate's campaign expenditures, and shall be in receipt of the following sum of qualifying contributions from individual residents of Hawaii:

(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) City and 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;

(4) For the office of prosecuting attorney for each respective county:

(A) City and 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) City and 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;

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

[(9)] (8) For all other offices, except the office of state representative, qualifying contributions that, in the aggregate, exceed $500."

SECTION 7. Section 11-431, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Upon the commission's approval of the application and statement of qualifying contributions, the commission shall direct the comptroller to distribute matching public funds up to the maximum amount of public funds allowed by section 11-425[.] by check or, when possible, by an automatic transfer of funds. Public funds shall be distributed to the candidate within twenty days from the date that the candidate's initial application and qualifying contribution statement is approved by the commission."

SECTION 8. The campaign spending commission shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature not later than twenty days prior to the convening of the regular session of 2016 on further statutory amendments to facilitate the implementation of this Act.

SECTION 9. There is appropriated out of the general revenues of the State of Hawaii the sum of $         or so much thereof as may be necessary for fiscal year 2016-2017 for deposit into the Hawaii election campaign fund under section 11-421, Hawaii Revised Statutes.

The sum appropriated shall be disbursed by the campaign spending commission consistent with chapter 11, part XIII, subpart    , Hawaii Revised Statutes, and the purposes of this Act.

SECTION 10. There is appropriated out of the Hawaii election campaign fund under section 11-421, Hawaii Revised Statutes, the sum of $         or so much thereof as may be necessary for fiscal year 2016-2017 to prepare for the public funding of candidates in elections taking place in 2018, including     full-time (  FTE), temporary positions.

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

SECTION 11. In codifying the new sections added by section 1 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 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 13. This Act shall take effect on July 1, 2016.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Campaign Finance; Publicly Funded Elections; Legislature

 

Description:

Creates a comprehensive public funding program for candidates for election to the state House of Representatives. Repeals those candidates' eligibility for partial public funding under the existing partial public funding program. Appropriates funds to the Campaign Spending Commission.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.