Establishes a pilot program for the city & county of Honolulu council elections of 2002 that provides public funding for candidates who voluntarily abide by specified contribution and expenditure limits.

A BILL FOR AN ACT

SECTION 1. The purpose of this Act is to establish a public-funded elections pilot program for the city and county of Honolulu council elections of 2002 to be known as the public financing elections pilot program.

SECTION 2. Public financing elections pilot program. There is established the public financing elections pilot program for the city and county of Honolulu council elections of 2002 to be placed with the campaign spending commission for administrative purposes. The commission shall have such duties and powers, as provided under section 11-193, Hawaii Revised Statutes, as are necessary to administer and enforce all requirements under this Act.

SECTION 3. Requirements for participating candidates; first special election; second special election. (a) A candidate shall qualify as a public financed candidate for the first special election campaign period if the candidate:

(b) A candidate shall qualify as a public financed candidate for the second special election campaign period if the candidate:

SECTION 4. Seed money contributions. (a) Seed money contributions from any single individual contributor shall not exceed $100. The aggregate amount of seed money that may be retained and expended for seed money purposes by a candidate seeking to become eligible for public funding shall not exceed $2,000.

(b) Seed money shall be spent only during the public financing elections qualifying period. Seed money expenditures shall be limited to those necessary for campaign start-up purposes, and may be used to purchase office supplies, rent equipment, and finance public rallies. Seed money shall not be spent to pay for the solicitation or collection of public financing elections qualifying contributions, or for broadcast advertising or mass mailings.

(c) Candidates shall provide seed money contributors with a receipt and shall not accept contributions unless information that shall be included on the receipt under this subsection is disclosed by the contributor. A receipt for a seed money contribution shall include the contributor's signature, printed name, street address and zip code, and telephone number.

(d) Within forty-eight hours after the close of the public financing elections qualifying period, candidates seeking to become eligible for public funding shall:

(e) No public financed candidate shall knowingly accept a seed money contribution made by a contributor in the name of another, who is not the person identified on the seed money receipt. Candidates violating this subsection shall be fined five times the amount of the contribution in addition to any other penalties that may be assessed by the commission under this Act. All penalties collected under this subsection shall be deposited in the Hawaii election campaign fund established under section 11-217, Hawaii Revised Statutes.

SECTION 5. Qualifying contributions. (a) Each public financing elections qualifying contribution shall meet the requirements of this section. To be counted as a public financing elections qualifying contribution:

(b) Receipts for contributions shall indicate, by the contributor's signature, that the contributor understands that the purpose of the contribution is to help the candidate qualify for public campaign funding. The receipt shall include:

The original receipt shall be given to the contributor. A copy shall be retained by the candidate and a copy shall be submitted to the commission according to a schedule and procedure to be determined by the commission. A contribution submitted as a public financing elections qualifying contribution that does not include a signed and completed receipt shall not be counted as a public financing elections qualifying contribution.

(c) Each contribution shall be deposited in an escrow account until the commission determines that the candidate has fulfilled the requirements for public funding and may be certified as a public financed candidate.

SECTION 6. Use of personal funds. Personal funds of the candidate seeking to become eligible as a public financed candidate may be used as seed money. Personal funds may not be used to meet the public financing elections qualifying contribution requirement; provided that the candidate and any member of the candidate's immediate family who is a registered voter in the state of Hawaii may each make a $10 public financing elections qualifying contribution.

SECTION 7. Certification of qualification for public funds. (a) The commission shall determine whether a candidate is qualified for public campaign funding for the first special and second special elections. Candidates that qualify shall be certified by the commission as public financed candidates.

(b) The number of candidates certified by the commission shall be limited to three persons in each district, on a first-come, first-served basis. A candidate's application for certification shall be made on forms to be prescribed by the commission. The application shall be signed by the candidate and the candidate's campaign treasurer under penalty of perjury. The commission shall issue its decision to certify or deny certification within ten business days of receipt of a candidate's complete, initial application for certification for the first special election, and, within five business days of receipt of a candidate's complete application for certification for the second special election.

(c) Certification may be revoked if a public financed candidate violates the applicable requirements of this Act. Upon revocation of certification, the candidate shall repay all public campaign funds.

SECTION 8. Public financed candidates; contributions and expenditures. A candidate who has been certified as a public financed candidate and thereby found eligible for public financing elections campaign funding, shall comply with the following restrictions on contributions and expenditures:

SECTION 9. Public financed candidates; reporting. (a) Public financed candidates shall furnish complete campaign records, including all records of nonmonetary contributions, seed money contributions, and public financing elections qualifying contributions to the commission at regular filing times set by part XII, subpart B of chapter 11, Hawaii Revised Statutes, or as requested by the commission. Public financed candidates shall fully cooperate with any audit or examination by the commission.

(b) In addition to any other reports required by law, public financed candidates shall maintain records of the following expenditures, which shall be reported to the commission as required by the commission:

SECTION 10. Public financed candidates; continuing obligation. A public financed candidate who accepts any public funds during the first special election campaign period shall comply with all requirements applicable to a public financed candidate under this Act. This obligation shall continue through the second special election campaign period regardless of whether that person continues to accept, or maintains eligibility for public funds.

SECTION 11. Public funding; disbursement. (a) Candidates certified as a qualified public financed candidate for the first special election shall on the date that certification is issued by the commission, receive authorization to expend public funding for the first special election. Candidates certified as a qualified public financed candidate for the second special election shall on the date that certification is issued by the commission, receive authorization to expend public funding for the second special election.

(b) Public financed candidates in contested elections shall be authorized to expend $30,000 in public funds for the first special election, and $15,000 in public funds for the second special election. Public financed candidates shall be authorized to expend equalizing funds in the amount of an additional $5,000 in public funds for the first special election, if a non-participating candidate spends more than $40,000 in that first special election, and in the amount of $5,000 in public funds for the second special election, if a non-participating candidate spends more than $25,000 in that second special election.

(c) A public financed candidate may request that the commission certify excess expenditures and release equalizing funds if a non-participating candidate opposing the public financed candidate discloses in any report required under chapter 11 of the Hawaii Revised Statutes, total expenditures in excess of $40,000 in the first special election, or $25,000 in the second special election. Upon certification of excess expenditures under this section, the commission shall release equalizing public financing elections funding to opposing public financed candidates to the extent authorized by law.

SECTION 12. Public funding. The commission is authorized to expend up to $ in funds from the Hawaii election campaign fund for the purpose of this act to distribute to candidates who qualify under this act.

SECTION 13. Public funding; expenditure limits. A public financed candidate shall not spend or incur an obligation to spend more than one hundred per cent of the public funds that have been allocated to the candidate. If a public financed candidate spends or incurs an obligation to spend more than one hundred per cent of the public funds allocated, the candidate shall repay to the Hawaii elections campaign fund an amount equal to ten times the total excess expenditure.

SECTION 14. Public funding; permitted uses. The public funds received by a public financed candidate shall be used only for the purpose of defraying that candidate's direct campaign-related expenses, including but not limited to, the purchase or development of campaign literature, campaign signs, development and purchase of media space or time, mailings, general office supplies, telephones, rental of campaign equipment and headquarters, and utility costs associated with the campaign headquarters during the election campaign period for which the public funds were allotted. Expenditures shall not be made:

SECTION 15. Deposit of public funds. (a) All public funds received by public financed candidates shall be deposited directly into a financial depository as provided under section 11-199, Hawaii Revised Statutes.

(b) All reports required by chapter 11, Hawaii Revised Statutes, for financial disclosure shall include the most recent bank statement from the financial depository.

SECTION 16. Deposit of moneys into the Hawaii election campaign fund. The following moneys shall be deposited into the Hawaii election campaign fund established under section 11-217, Hawaii Revised Statutes:

SECTION 17. Suspension of partial public funding program. For the purposes of the public financing elections pilot program, the partial public funding program provided under chapter 11, Hawaii Revised Statutes, shall be temporarily suspended during the elections period applicable to city and county of Honolulu council offices in 2002. This section shall apply only to city and county of Honolulu council races.

SECTION 18. Definitions. For the purposes of this Act:

"Candidate" shall have the same meaning as provided in section section 11-191, Hawaii Revised Statutes.

"Candidate's committee" shall have the same meaning as provided in section 11-191, Hawaii Revised Statutes.

"Commission" shall have the same meaning as provided in section 11-191, Hawaii Revised Statutes.

"Contribution" shall have the same meaning as provided in section 11-191, Hawaii Revised Statutes.

"Excess expenditure" means the amount of money spent or obligated to be spent by a non-participating candidate in excess of one hundred per cent of the public financing elections funding the candidate is allocated.

"First special election campaign period" means the period beginning ninety days before the primary election and ending two weeks after the primary election.

"Noncandidate committee" has the same meaning as provided in section 11-191, Hawaii Revised Statutes.

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

"Petty cash expenditure" means an expenditure of no more than $25, paid in cash in amounts of $100 or less per week.

"Public financed candidate" or "qualified candidate" means a candidate who is certified by the commission as qualifying for public funding during the Honolulu city council special election or special election campaign periods in 2002, and agrees to abide by public financing elections contribution and expenditure limitations.

"Public financing elections campaign funding" means public funds to be provided to public financed candidates during the 2002 Honolulu city council first special and second special election campaign periods.

"Public financing elections qualifying contribution" means a $10 contribution made to a candidate during the public financing qualifying period by a registered voter residing within the candidate's district, that is included within the total number of contributions that must be received by the candidate to qualify for public funding.

"Public financing qualifying period" means the period during which candidates may collect qualifying contributions to qualify for public funding, beginning February 1, 2002, and ending April 30, 2002.

"Public funding" or "public funds" means public financing elections campaign funds.

"Second special election campaign period" means the period beginning the day after the first special election and ending two weeks after the second special election.

"Seed money" means contributions made during the public financing elections qualifying period that may be expended solely for campaign start-up purposes.

SECTION 19. The commission, in cooperation with other relevant stakeholders, shall evaluate the effectiveness of the public financing elections pilot project and draft a report to the legislature that shall include:

The commission shall submit its report to the legislature no later than twenty days prior to the regular session of 2003.

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. This Act shall take effect on approval.