STAND. COM. REP. NO. 1010-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 3104

S.D. 2

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 3104, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO ELECTIONS,"

begs leave to report as follows:

The purpose of this bill is to provide a comprehensive public funding program from candidates seeking election to the State House of Representatives. Among other things, this bill would provide public funding for candidates under the following conditions:

(1) Candidates must collect $3 qualifying contributions from one and one half percent of the number of voters in the district in which office is sought who were registered for the previous regular general election;

(2) The base amount of public funding is computed on 150 percent of the voluntary expenditure limits set forth in existing statute for State House of Representatives candidates;

(3) Publicly funded candidates may receive equalizing funds up to double the amount of base public funding;

(4) Publicly funded candidates must agree to abide by the spending and contributions restrictions; and

(5) The comprehensive public funding program is triggered when there are sufficient funds in the Hawaii Election Campaign Fund to support public funding for two candidates from each district.

This bill also amends numerous statutes in order to distinguish between the existing partial public funding program and the new comprehensive public funding program for State House of Representatives candidates.

Hawaii Clean Elections Coalition, Green Party of Hawaii, The League of Women Voters, the First Unitarian Church, Advocates for Consumer Rights, Hawaii Coalition for Good Government, Kokua Council, Parents and Children Together, Sestak Rehabilitation Services, Hawaii State Commission on the Status of Women, Life of the Land, a Council member from the Hawaii County Council, and numerous concerned individuals testified in support of this bill. Campaign Spending Commission (Commission) testified in opposition and offered comments. The Office of Elections offered comments.

Your Committee finds that it is necessary to restore voter confidence in our political system, which has been damaged by the revelations that numerous individuals and businesses violated the campaign contribution laws. In recent years, it has become costly for candidates to deliver their message to potential voters. As the cost of running for public office increases, so does the need to raise funds to meet these expenses.

Public funding is an effective countermeasure to the escalating costs of campaigning, as well as the perception that candidates are forced to rely on private funding sources that may expect a return on their investment in a candidate. Widespread use of public funding programs will permit more candidates to run for office, provide the voters with choices on election day, and eliminate the perception that a candidate is influenced by the special interest groups that contributed to the candidate.

Initially, your Committee expressed concerns regarding the ability of the Commission to determine on a timely basis whether a candidate is entitled to receive equalizing funds to be a financially viable candidate. We reviewed the Maine clean elections laws to better understand how the equalizing funding provisions work in that state. Our research indicates that the non publicly funded candidate (nonparticipating candidate) is required to submit special reports when opposing a publicly funded candidate and that the trigger for equalizing funds is based on either expenditures made or campaign contributions amassed by the nonparticipating candidate. Nonparticipating candidates, noncandidate committees, and political parties are required to file reports within 48 hours when they spend in excess of a specified amount. Maine also permits an advance of equalizing funds if it appears likely that equalizing funds would be needed by the publicly funded candidate to remain financially competitive, subject to restrictions on when the funds may be expended. We have incorporated these provisions in this bill as a means of addressing these concerns.

Your Committee is also concerned about the State's ability to fund a viable public funding program. The proponents of the measure have consulted with Campaign Spending Commission and reached agreement that the program would be operational if $3.5 million exists in the Hawaii election campaign fund. However, your Committee has revised the bill to cap the amount spent in this program at $3.5 million. We are also inserting a provision similar to the Maine law that allows the campaign spending commission to permit the publicly funded candidate to use private funds up to the amount the candidate would have received in public funds in the event that the public funds are depleted. Your Committee has carefully reviewed the language in this bill to balance between a fiscally responsible program and one which will encourage individuals to become candidates through public funding.

Your Committee has retained the defective effective date to continue the discussion on this bill.

Your Committee removed sections 1 and 2 of the bill, inserted sections 1 and 2 of H.B. No. 2070, H.D. 1, and further amended this bill by making substantial structural, substantive, and technical changes, including:

(1) Adding definitions for the terms "certified candidate," "participating candidate," "nonparticipating candidate," and "contested election;"

(2) Deleting all references to petty cash, and permitting the commission to regulate that expenditure in its rules;

(3) Clarifying the definition of "qualifying period;"

(4) Revising the definition of "independent expenditure" to create a presumption that any communication disseminated within 30 days of a primary election and 60 days of a general election is an independent expenditure for reporting purposes;

(5) Amending the sufficiency of funding provision by specifying that if the Hawaii election campaign fund has $3.5 million, the comprehensive public funding program becomes operable and capped the amount to be distributed under the program to $3.5 million;

(6) Amending the time period to file the declaration of intent to seek comprehensive public funding to the period beginning January 1 and ending 30 days before the deadline to file nomination papers for the primary election;

(7) Clarifying that surplus campaign funds may not be spent after a declaration of intent to seek comprehensive public funding is filed and until the end of the general election campaign period;

(8) Adding the requirement that qualifying contributions should be returned to the contributors within 60 days if the candidate is not certified as a comprehensive publicly funded candidate;

(9) Amending the deadline to file the application for comprehensive public funding to 30 business days before the primary election;

(10) Amending the provisions on "first come, first served" to designate the methods that applications for certification for comprehensive public funding may be filed to select the three candidates per district that may be certified;

(11) Specifying the time frames for which the commission must distribute public funds for the general election;

(12) Specifying the funding priorities for the commission in the event that there are insufficient funds for all certified candidates to receive the base amount and equalizing funds and allowing the certified candidates to accept and spend private contributions up to the amount they would have received in public funding;

(13) Deleting sections on the computation of equalizing funds and permitting the commission to establish the formula by rule;

(14) Reducing the amount required to trigger eligibility for equalizing funds from 50 percent to 25 percent in excess of the base amount of public funding;

(15) Adding the requirement to report contributions, as well as expenditures by the nonparticipating candidates to trigger eligibility for equalizing funds for the certified candidate;

(16) Requiring nonparticipating candidates and their candidate's committees to file reports on expenditures within 48 hours when expenditures exceed $1,000 in the aggregate and made similar requirements for reporting independent expenditures by noncandidate committees, parties, and other persons;

(17) Permitting the commission to advance equalizing funds when reports indicate that the nonparticipating candidates campaign contributions or surplus campaign funds exceed the base amount of public funding by 100 percent;

(18) Clarifying that qualifying contributors shall be registered voters in the district within which the candidate seeks nomination on the date the contribution is given;

(19) Clarifying that the Commission shall establish the number of qualifying contributions required for certification based on the number of registered voters in the district in the previous regular general election;

(20) Specifying that a participating candidate may not accept seed money from any contributor whose contribution is prohibited by law;

(21) Clarifying that a candidate is subject to penalty for violations of the comprehensive public funding program when violations are made with intent to fraudulently receive public funding;

(22) Specifying that a qualifying contributor must include the last four digits of the social security number to verify voter registration;

(23) Requiring the candidate to submit a list of qualified contributors to the Office of Election for verification, and the Office of Elections to provide an affidavit of verification within three weeks;

(23) Amending sections 11-224, 11-225, 11-228, and 11-229, Hawaii Revised Statutes, to conform the language to the distinction between the partial public funding program and the comprehensive public funding for State House of Representatives; and

(24) Making numerous technical, nonsubstantive amendments for style, consistency, and clarity.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3104, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3104, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

 

____________________________

ERIC G. HAMAKAWA, Chair