HOUSE OF REPRESENTATIVES	H.B. NO.	2416
THIRTY-FIRST LEGISLATURE, 2022
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. The legislature finds that in the seminal case on campaign finance law, Buckley v. Valeo, 424 U.S. 1 (1976), the United States Supreme Court acknowledged the sufficiently important government interest to ensuring that voters are fully informed through campaign spending disclosure requirements. The Court also acknowledged that campaign spending disclosure requirements directly serve the sufficiently important government interests in deterring corruption and the appearance of corruption, as well as in gathering the data necessary to detect campaign spending violations.

The legislature further finds that the State has a sufficiently important government interest in an informed electorate, deterring corruption and the appearance of corruption, and gathering data necessary to detect campaign spending violations. Campaign disclosure requirements directly serve these sufficiently important government interests.

The legislature further finds that the State's existing campaign finance laws fail to reveal the true source of dark money campaign spending. Dark money campaign spending occurs when an organization, such as a 501(c)(4) nonprofit organization, raises funds through donations, then uses the donations on campaign expenditures in an attempt to influence elections. It is dark money because the organization is not required, under existing law, to disclose the identity of the donors making the donations. As a result, there is a lack of transparency that fails to inform the public on who is trying to influence an election.

The purpose of this Act is to enhance existing campaign spending disclosure requirements to ensure that the true source of campaign spending is disclosed to the electorate. This Act also enhances existing disclosure requirements to deter corruption or the appearance of corruption and to enable the gathering of data necessary to detect violations of campaign finance laws. Organizations that meet campaign spending thresholds are currently required to disclosure the identities of its contributors. Under the enhanced disclosure requirements contained in this Act, organizations that meet campaign spending thresholds will also be required to disclose the identities of its donors.

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

"§11-    Separate campaign-related account. (a) A person may make disbursements for electioneering communications, independent expenditures, or contributions using amounts from a bank account established and controlled by the person to be known as the separate campaign-related account, which shall be maintained separately from all other accounts of the person and which shall consist exclusively of funds that were paid directly to the separate campaign-related account by one or more person other than the person that controls the separate campaign-related account. A person shall not make transfers from its general treasury into a separate campaign-related account established under this section that the person controls.

(b) If a person establishes a separate campaign-related account under this section, the person may not make disbursements for electioneering communications, independent expenditures, or contributions from any source other than from the separate campaign-related account.

(c) Amounts in the separate campaign-related account shall be used exclusively for disbursements by the person for electioneering communications, independent expenditures, or contributions. After disbursements are made, information with respect to deposits made to the separate campaign-related account shall be disclosed in accordance with this chapter."

SECTION 3. Section 11-302, Hawaii Revised Statutes, is amended by adding four new definitions to be appropriately inserted and to read as follows:

""Donation" means all transfers of money, credit or debit card transactions, on-line payments, payments made through a third party, paid personal services, or transfers of any other thing of value to or by a person.

"Donor" means a person that makes a donation.

"Electioneering communication" means any advertisement that is broadcast from a cable, satellite, television, or radio broadcast station; published in any periodical or newspaper or by electronic means; or sent by mail, and that:

(1) Refers to a clearly identifiable candidate;

(2) Is made, or scheduled to be made, either within thirty days before a primary or initial special election or within sixty days before a general or special election; and

(3) Is not susceptible to any reasonable interpretation other than as an appeal to vote for or against a specific candidate.

"Electioneering communication" shall not include communications:

(1) In a news story or editorial disseminated by any broadcast station or publisher of periodicals or newspapers, unless the facilities are owned or controlled by a candidate, candidate committee, or noncandidate committee;

(2) In-house bulletins; or

(3) That constitute a candidate debate or forum, or solely promote a debate or forum and are made by or on behalf of the person sponsoring the debate or forum.

"Last in, first out" means an accounting method by which donations are attributed to donors in reverse chronological order beginning with the most recent donor."

SECTION43. Section 11-335, Hawaii Revised Statutes, is amended to read as follows:

"§11-335 Noncandidate committee reports. (a) The authorized person in the case of a party, or treasurer in the case of a noncandidate committee that is not a party, shall file preliminary, final, and supplemental reports that disclose the following information:

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

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

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

(A) Contributions received;

(B) Contributions made;

(C) Expenditures; and

(D) Other receipts;

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

(5) The surplus or deficit at the end of the reporting period.

(b) Schedules filed with the reports shall include the following additional information:

(1) The amount and date of deposit of each contribution received and the name, address, occupation, and employer of each contributor making a contribution aggregating more than $100 during an election period, which was not previously reported[;] pursuant to this section; provided that if:

(A) All the information is not on file, the contribution shall be returned to the contributor within thirty days of deposit; and

(B) A noncandidate committee making only independent expenditures receives a contribution of more than $10,000 in the aggregate in an election period from an entity other than an individual, for-profit business entity, or labor union, then the schedule shall include:

(i) The internet address where the contributing entity's disclosure report can be publicly accessed, if the contributing entity is subject to state or federal disclosure reporting requirements regarding the source of the contributing entity's funds;

(ii) The name, address, occupation, and employer of each funding source that contributed $100 or more in the aggregate in an election period to that contributing entity; or

(iii) An acknowledgment that the contributing entity is not subject to any state or federal disclosure reporting requirements regarding the source of the contributing entity's funds;

(2) The amount and date of each contribution made and the name and address of the candidate, candidate committee, or noncandidate committee to which the contribution was made;

(3) All expenditures, including the name and address of each payee and the amount, date, and purpose of each expenditure; provided that:

(A) Expenditures for advertisements or electioneering communications shall include the names of the candidates supported, opposed, or clearly identified;

(B) Expenditures for consultants, advertising agencies and similar firms, credit card payments, and salaries shall be itemized to permit a reasonable person to determine the ultimate intended recipient of the expenditure and its purpose;

(C) Independent expenditures shall include the name of any candidate supported, opposed, or clearly identified; and

(D) The purpose of an independent expenditure shall include the name of the candidate who is supported or opposed by the expenditure, and whether the expenditure supports or opposes the candidate;

(4) For noncandidate committees making only independent expenditures, certification that no expenditures have been coordinated with a candidate, candidate committee, or any agent of a candidate or candidate committee;

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

(6) A description of each durable asset, the date of acquisition, value at the time of acquisition, and the name and address of the vendor or contributor of the asset; [and]

(7) The date of disposition of a durable asset, value at the time of disposition, method of disposition, and name and address of the person receiving the asset[.]; and

(8) The amount and date of deposit of each donation received and the name and address of each donor making a donation aggregating more than $100 during an election period, which was not previously reported pursuant to this section; provided that:

(A) If a noncandidate committee establishes a separate campaign-related account, only the names and addresses of donors of an aggregate of $100 or more to the separate campaign-related account shall be reported on the schedule; and

(B) A schedule filed pursuant to this section shall not include a donor's name or address if the noncandidate committee and the donor mutually agree that the donation shall not be used for electioneering communications, independent expenditures, or contributions; and no later than thirty days after receipt of the donation the noncandidate committee transmits to the donor a written confirmation by the noncandidate committee's highest ranking official that the donation will not be used for electioneering communications, independent expenditures, or contributions; and the name and address of the donor will not appear in the schedule filed by the noncandidate committee.

(c) No loan may be made or received by a noncandidate committee.

(d) The authorized person in the case of a party, or treasurer in the case of a noncandidate committee that is not a party, shall file a late contribution report as provided in section 11-338 if the committee receives late contributions from any person aggregating more than $500 or makes late contributions aggregating more than $500.

[(e) For purposes of this section, "electioneering communication" means the same as defined in section 11-341.]"

SECTION 5. Section 11-338, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The late contribution report shall include the following information:

(1) Name, address, occupation, and employer of the contributor;

(2) Name of the candidate, candidate committee, or noncandidate committee making or receiving the contribution; provided that, for noncandidate committees making only independent expenditures, if a late contribution greater than $5,000 in the aggregate is received from an entity other than an individual, for-profit business entity, or labor union, then the report shall include:

(A) The internet address where the contributing entity's disclosure report can be publicly accessed, if the contributing entity is subject to any state or federal disclosure reporting requirements regarding the source of the contributing entity's funds;

(B) The name, address, occupation, and employer of each funding source of more than $100 in the aggregate to that contributing entity; or

(C) An acknowledgment that the contributing entity is not subject to any state or federal disclosure reporting requirements regarding the source of the contributing entity's funds;

(3) The amount of the contribution received;

(4) The amount of the contribution made;

(5) The contributor's aggregate contributions to the candidate, candidate committee, or noncandidate committee; [and]

(6) The purpose, if any, to which the contribution will be applied, including, for contributions to a noncandidate committee, the name of any candidate supported, opposed, or clearly identified[.]; and

(7) The name and address of each donor making a donation aggregating more than $100 up to the amount of the contribution made, using the last in, first out accounting method; provided that, if the contribution is made from a non-candidate committee's separate campaign-related account, only the names and addresses of donors of an aggregate of $100 or more to the noncandidate committee’s separate campaign-related account, up to the amount of the contribution made using the last in, first out accounting method, shall be reported in the late contribution report; provided further that, a late contribution report shall not include a donor's name or address if the noncandidate committee and the donor mutually agree that the donation shall not be used for contributions or independent expenditures and no later than thirty days after receipt of the donation the noncandidate committee transmits to the donor a written confirmation by the noncandidate committee's highest ranking official that:

(A) The donation will not be used for contributions or independent expenditures; and

(B) The name and address of the donor will not appear in the late contribution report filed by the noncandidate committee."

SECTION 6. Section 11-341, Hawaii Revised Statutes, is amended to read as follows:

1. By amending subsection (b) to read:

"(b) Each statement of information shall contain the following:

(1) The name of the person making the expenditure, name of any person or entity sharing or exercising discretion or control over the person, and the custodian of the books and accounts of the person making the expenditure;

(2) The names and titles of the executives or board of directors who authorized the expenditure, if the expenditure was made by a noncandidate committee, business entity, or an organization;

(3) The state of incorporation or formation and principal address of the noncandidate committee, business entity, or organization or for an individual, the name, address, occupation, and employer of the individual making the expenditure;

(4) The amount of each expenditure during the period covered by the statement of information and the identification of the person to whom the expenditure was made;

(5) The elections to which the electioneering communications pertain and the names of any clearly identifiable candidates and whether those candidates are supported or opposed;

(6) [If the expenditures were made by a noncandidate committee, the] The names and addresses of [all persons who contributed to the noncandidate committee for the purpose of publishing or broadcasting the electioneering communications;] the top five contributors contributing an aggregate of more than $100 using the last in, first out accounting method from the disclosure date;

(7) [If the expenditures were made by an organization other than a noncandidate committee, the names and addresses of all persons who contributed to the organization for the purpose of publishing or broadcasting the electioneering communications;] The names and addresses of the top five donors donating an aggregate of more than $100 using the last in, first out accounting method from the disclosure date; provided that, if a person establishes a separate campaign-related account, only the names and addresses of donors of an aggregate of $100 or more to the person's separate campaign-related account shall be reported in the statement of information; provided further that, a statement of information shall not include a donor’s name or address if the person and the donor mutually agree that the donation shall not be used for electioneering communications and no later than thirty days after receipt of the donation the person transmits to the donor a written certification by the person's highest ranking official that:

(A) The donation will not be used for electioneering communications; and

(B) The name and address of the donor will not appear in the statement of information;

(8) Whether any electioneering communication is made in coordination, cooperation, or concert with or at the request or suggestion of any candidate, candidate committee, or noncandidate committee, or agent of any candidate if any, and if so, the identification of the candidate, candidate committee, or noncandidate committee, or agent involved; and

(9) The three top contributors as required under section 11-393, if applicable."

2. By amending subsection (d) to read:

"(d) For purposes of this section:

"Disclosure date" means, for every calendar year, the first date [by which a person has made expenditures during that same year of more than $1,000 in the aggregate for electioneering communications.] electioneering communications of an aggregate of more than $1,000 is publicly distributed, and the date on which subsequent electioneering communications of an aggregate of $500 is publicly distributed.

["Electioneering communication" means any advertisement that is broadcast from a cable, satellite, television, or radio broadcast station; published in any periodical or newspaper or by electronic means; or sent by mail, and that:

(1) Refers to a clearly identifiable candidate;

(2) Is made, or scheduled to be made, either within thirty days before a primary or initial special election or within sixty days before a general or special election; and

(3) Is not susceptible to any reasonable interpretation other than as an appeal to vote for or against a specific candidate.

"Electioneering communication" shall not include communications:

(1) In a news story or editorial disseminated by any broadcast station or publisher of periodicals or newspapers, unless the facilities are owned or controlled by a candidate, candidate committee, or noncandidate committee;

(2) That constitute actual expenditures by the expending organization;

(3) In house bulletins; or

(4) That constitute a candidate debate or forum, or solely promote a debate or forum and are made by or on behalf of the person sponsoring the debate or forum.]

"Person" shall not include a candidate or candidate committee."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Campaign Spending; Electioneering Communication; Disclosures

Description:

Informs the public of the true sources of dark money contributions by requiring "persons," which includes 501(c)(4) organizations, to disclose the name and address of donors who donate an aggregate of more than $100, with certain exceptions. Adds definitions.

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