Establishes a pilot program for the city and county of Honolulu council election of 2002 providing for public funding for candidates who voluntarily abide by specific contribution and expenditure limits; and appropriating $150,000 to the campaign spending commission to provide support staff for the program. (HB169 HD1)

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-funded elections pilot program.

SECTION 2. Definitions. For the purposes of this Act:

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

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

"Commission" means the campaign spending commission.

"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 public-funded candidate in excess of one hundred per cent of the public funding the candidate is allocated.

"First special election" means the primary election for the city and county of Honolulu council elections of 2002.

"First special election campaign period" means the period beginning January first and ending two weeks after the first special 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-funded candidate", "publicly-funded candidate" or "qualified candidate" means a candidate who is certified by the commission as qualifying for public funding during the city and county of Honolulu city council special election or special election campaign periods in 2002, and agrees to abide by public-funded elections qualifying contribution and expenditure limitations.

"Public-funded elections qualifying contribution" means a $2 contribution made to a candidate during the public-funded 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-funded qualifying period" means the period during which candidates may collect qualifying contributions to qualify for public funding, beginning January 1, 2002, and ending upon the candidate's certification as a public-funded candidate or June 30, 2002, whichever occurs first.

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

"Second special election" means the runoff election following the first special election.

"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-funding elections qualifying period that may be expended solely for campaign start-up purposes.

SECTION 3. Public-funded elections pilot program. There is established the public-funded elections pilot program for the city and county of Honolulu council elections of 2002 to be placed within 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 4. Requirements for participating candidates; first special election; second special election. (a) A candidate shall qualify as a public-funded candidate for the first special election campaign period if the candidate:

(1) Is a registered voter and is living in the district

from which the person is to be elected, as of January 1,

2002;

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

SECTION 5. Seed money contributions. (a) Seed money contributions from any single individual contributor shall not exceed $250, including in kind contributions. 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 $5,000.

(b) Seed money shall be spent only during the public-funded qualifying period. Seed money expenditures shall be limited to those expenditures necessary to determine whether sufficient support exists to run for office, and may be used to purchase office supplies, rent equipment, and hold gatherings. Seed money shall not be spent for any salaries, rental of premises, or to pay any person to solicit or collect qualifying contributions.

(c) Candidates shall provide seed money contributors with a receipt and shall not accept contributions unless the following information is included on the receipt and disclosed by the contributor:

(1) The contributor's signature;

(2) The contributor's printed name;

(3) The contributor's home address;

(4) The contributor's zip code;

(5) The contributor's telephone number; and

(6) The donation amount or value.

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

(e) No public-funded 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. Any candidate 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 6. Public-funded qualifying contributions. (a) Each public-funded elections qualifying contribution shall meet the requirements of this section. To be counted as a public-funded elections qualifying contribution:

(b) Any receipt for a public-funded elections qualifying contribution 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 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-funded elections qualifying contribution that does not include a signed and completed receipt shall not be counted as a public-funded 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-funded candidate.

SECTION 7. Use of personal funds. Personal funds of the candidate seeking to become eligible as a public-funded candidate may be used as seed money up to the $5,000 limit as provided in section 5(a). Personal funds may not be used to meet the public-funded 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 may each make a $2 public-funded elections qualifying contribution.

SECTION 8. Certification of qualification for public funds. (a) The commission shall determine whether a candidate is qualified for public funding. Candidates who qualify shall be certified by the commission as public-funded candidates within ten business days, as provided in subsection (b). Candidates who submit an affidavit from the office of the city clerk certifying that their qualifying contributors are registered voters from the district from which they are running shall be certified within three days.

(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 completed, initial application for certification.

(c) Certification may be revoked if a public-funded candidate violates the applicable requirements of this Act. Upon revocation of certification, the candidate shall repay all public funds within ten business days.

SECTION 9. Public-funded candidates; contributions and expenditures. A candidate who has been certified as a public-funded candidate and found eligible for public funding shall comply with the following restrictions on contributions and expenditures:

SECTION 10. Public-funded candidates; reporting. (a) Public-funded candidates shall furnish complete campaign records, including all records of nonmonetary contributions, seed money contributions, and public-funding 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-funded candidates shall fully cooperate with any audit or examination by the commission.

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

SECTION 11. Public-funded candidates; continuing obligation. A public-funded candidate who accepts any public funds during the first special election campaign period shall comply with all requirements applicable to a public-funded 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 12. Public funding; disbursement. (a) A candidate certified as a public-funded 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. A candidate certified as a public-funded 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. The public funds shall be disbursed to the public-funded candidate by way of check that shall be dated as of and available on the date of the certification.

(b) A public-funded candidate in contested elections may be authorized to expend $40,000 in public funds for the first

SECTION 13. Public funding. The commission may expend up to $ in funds from the Hawaii election campaign fund for the purposes of this Act to distribute to candidates who qualify under this Act.

SECTION 14. Public funding; expenditure limits. A public-funded 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-funded candidate spends or incurs an obligation to spend more than one hundred and three per cent of the public funds allocated, the candidate shall repay the Hawaii elections campaign fund an amount equal to three times the total excess expenditure.

SECTION 15. Public funding; permitted uses. (a) The public funds received by a public-funded candidate shall be used only for the purpose of defraying expenses that are directly related to the candidate's campaign during the election campaign period for which the public funds were allocated, including:

(2) The development and purchase of media space and time;

(3) Mailings;

(4) Telephones;

(5) General office supplies;

(6) The rental of campaign equipment and headquarters; and (7) Utility costs associated with the campaign.

(b) Expenditures shall not be made:

SECTION 16. Deposit of public funds. (a) All public funds received by public-funded candidates shall be deposited directly into a financial depository in accordance with 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 17. 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 18. Suspension of partial public funding program. For the purposes of the public-funded elections pilot program, the partial public funding program provided under chapter 11, Hawaii Revised Statutes, shall be temporarily suspended during the election period applicable to the city and county of Honolulu council offices in 2002. This section shall apply only to the city and county of Honolulu council races.

SECTION 19. The commission, in cooperation with other relevant stakeholders, shall evaluate the effectiveness of the public-funded elections pilot project and submit 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. There is appropriated out of the general revenues of the State of Hawaii the sum of $150,000 or so much thereof as may be necessary for fiscal year 2001-2002 for the campaign spending commission to provide the following staff positions to support the public-funded elections pilot program:

(1) Two staff positions for computer analysis of campaign

contributions; and

(2) One staff position for auditing and monitoring the

pilot program.

The sum appropriated shall be expended by the campaign spending commission for purposes of 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. This Act shall take effect on July 1, 2001.