SB1173

SECTION 1. The legislature finds that independent expenditures made by noncandidate committees significantly influence the electoral process in the State. These expenditures often dwarf the spending of individual candidates and voters, leading to concerns about equity and transparency in elections.

In Citizens United v. Federal Election Commission, the United States Supreme Court affirmed that political expenditures are a form of protected speech under the First Amendment of the United States Constitution. However, that holding did not exempt these expenditures from being subject to the State's authority to impose charges and fees.

The Hawaii election campaign fund and the campaign spending commission are critical in maintaining transparency, ensuring equitable access to resources for all candidates, and supporting public confidence in the electoral process.

The purpose of this Act is to impose a fee on the total amount of independent expenditures made by a noncandidate committee during an election. This fee does not prohibit or restrict free speech but ensures that those engaging in independent political spending contribute to the public good.

Revenues generated under this Act shall be allocated to the Hawaii election campaign fund, which provides public financing for qualified candidates and reduces reliance on private funding. The legislature finds that these revenues could also provide the campaign spending commission with sufficient funding to enable the hiring of additional inspectors, attorneys, and administrative staff, and to upgrade technological infrastructure for oversight and enforcement.

By enacting this legislation, the State aims to enhance fairness and transparency in its electoral system, while safeguarding the constitutional rights of all citizens.

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

" . INDEPENDENT EXPENDITURES MADE BY NONCANDIDATE COMMITTEES

§11-A Independent expenditures made by a noncandidate committee; fee. (a) There is imposed a fee on all independent expenditures made by a noncandidate committee regarding an election within the State.

(b) The amount of the fee shall be equal to five per cent of the total amount of independent expenditures made by the noncandidate committee during an election period.

(c) The commission shall assess the amount owed by each noncandidate committee based on reports submitted to the commission pursuant to sections 11-335 and 11-338.

(d) Payment of the fee shall be made to the commission within sixty days of the issuance of an assessment under subsection (c).

(e) The commission shall be responsible for the administration, collection, and enforcement of the fee imposed under this section.

The commission shall establish procedures for electronic payment of fees, ensuring transparency and ease of compliance for all noncandidate committees.

(f) This section shall not be construed to prohibit or limit the speech of any person or entity, but rather to serve as a fee under the State's authority to impose charges and fees for the purpose of promoting transparency and equity in elections.

§11-B Failure to make payment of fees. Failure of a noncandidate committee to make payment of a fee assessed under section 11-A within the required period shall result in penalties, including:

(1) A fine not to exceed $10,000 per assessment unpaid;

(2) Accrual of interest on unpaid fees at the rate of ten per cent per annum; and

(3) Suspension of the noncandidate committee's ability to conduct independent expenditures in the State until all assessments and penalties are paid in full.

§11-C Disposition of revenues. All revenues generated from the fee imposed under this subpart, including penalties and interest, shall be deposited into the Hawaii election campaign fund established under section 11-421 and allocated as follows:

(1) Seventy-five per cent shall be used for public campaign financing programs; and

(2) Twenty-five per cent shall be used by the commission for the purposes of hiring additional inspectors, attorneys, and staff, as well as upgrading administrative and technological systems for campaign oversight.

§11-D Rules. The commission shall adopt rules under chapter 91 and establish administrative procedures required for the implementation of this subpart no later than January 1, 2027. This includes but is not limited to:

(1) Developing electronic systems for payment of fees;

(2) Conducting public education and outreach to inform noncandidate committees of their obligations under this subpart; and

(3) Training staff and hiring additional personnel required for enforcement and administration."

SECTION 3. 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 4. 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 that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 5. This Act shall take effect upon its approval; provided that section 2 shall apply to all elections held on or after January 1, 2028.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1173
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII