STAND. COM. REP. NO. 3799

Honolulu, Hawaii

RE: H.B. No. 1519

H.D. 1

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 1519, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CAMPAIGN CONTRIBUTIONS,"

begs leave to report as follows:

The purpose and intent of this measure is to impose new restrictions on political campaign contributions.

More specifically, the measure:

(1) Requires that names of compensated officers of state and county contractors and grantees be disclosed to the campaign spending commission;

(2) Prohibits the compensated officers of state and county contractors and grantees from making, promising, or soliciting certain campaign contributions for the duration of the contract or grant;

(3) Requires unlawful campaign contributions to be returned to the contributor within thirty calendar days of receipt or escheat to the Hawaii election campaign fund; and

(4) Appropriates unspecified moneys from the general fund to:

(A) The State Procurement Office for system updates, training, and administrative support; and

(B) The Campaign Spending Commission to establish a password-protected filing system, and to provide updates, training, and administrative support.

Your Committee received written comments in support of this measure from the Campaign Spending Commission, Imua Alliance, and numerous individuals.

Your Committee received written comments on this measure from the State Procurement Office.

Your Committee recognizes that the existing state campaign finance law that prohibits state and county contractors from making political campaign contributions does not extend to the compensated officers of the contractors. Your Committee also recognizes that recipients of government grants currently are not prohibited from making campaign contributions. Your Committee finds that this measure will reduce the potential for campaign contributions to unduly influence policymaking and the awarding of public contracts.

Your Committee has amended this measure by:

(1) Placing the compensated officer disclosure requirements for state and county grantees within part XIII, subpart E of chapter 11, Hawaii Revised Statutes, which relates to campaign contributions and related matters, rather than within chapter 42F, Hawaii Revised Statutes;

(2) Expanding the scope of the prohibition against political campaign contributions by state and county contractors by making the prohibition applicable to contracts for any rendition of services, rather than only personal services;

(3) Amending the prohibition on campaign contributions by a compensated officer by:

(A) Applying the prohibition only if the corresponding contract amount exceeds the small purchase threshold described in section 103D-305(a), Hawaii Revised Statutes; and

(B) Narrowing the scope of a prohibition on a direct or indirect contribution, or an express or implied promise to make a contribution, to apply only if the contribution would be made to a candidate committee of a candidate who is a member of, or seeking election to, the same branch of government that exercises authority over the awarding or administration of that specific contract;

(4) Prohibiting campaign contributions by grantees and their compensated officers only if the amount of the corresponding grant exceeds $250,000;

(5) Clarifying that the measure's prohibitions on contributions shall not prohibit or make it unlawful for any person other than a state or county contractor, a state or county grantee, or any officer of a state or county contractor or grantee to establish or administer any noncandidate committee, or solicit contributions to any noncandidate committee, for the purpose of influencing the nomination for election, or the election, of any person to office;

(6) Changing the definition of "officer" to mean "an individual who is listed as an officer of a contractor or grantee on the department of commerce and consumer affairs business registration database";

(7) Deleting the appropriation to the State Procurement Office;

(8) Amending the appropriation to the Campaign Spending Commission by:

(A) Changing the source of funding from the general fund to the Hawaii election campaign fund; and

(B) Changing the appropriation amount to $420,000 and allocating it as follows:

(i) $250,000 to build a password-protected section in its electronic filing system and to provide training and administrative support;

(ii) $150,000 for one full-time equivalent (1.0 FTE) information technology specialist; and

(iii) $20,000 for equipment, supplies, software, and licenses to implement this part; and

(9) Making the measure effective on July 1, 2026.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1519, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1519, H.D. 1, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair