STAND. COM. REP. NO. 100-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 1519

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Judiciary & Hawaiian Affairs, to which was referred H.B. No. 1519 entitled:

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

begs leave to report as follows:

The purpose of this measure is to reduce the potential for campaign contributions to unduly influence policymaking, maintain public trust in government decision-making, and improve actual and perceived standards of conduct by:

(1) Requiring disclosure of the names of compensated officers, and their immediate family members, of state or county contractors and grantees with contracts or grants exceeding $250,000;

(2) Prohibiting compensated officers of state or county contractors, and their immediate family members, for the duration of their contracts exceeding $250,000, from:

(A) Making, or promising to make, contributions to the candidate committee of a candidate who is a member of, or seeking election to, the same branch of the state or county government that exercises authority over the awarding or administration of the contract; or

(B) Soliciting any contribution from any person for any purpose;

(3) Expanding the prohibition on campaign contributions by state or county contractors to include contributions from state or county grantees that receive grants exceeding $250,000, as well as from the compensated officers of those grantees and the compensated officers' immediate family members;

(4) Requiring unlawful contributions to be returned to the contributor or they will escheat to the Hawaii Election Campaign Fund; and

(5) Clarifying that the prohibitions do not apply to the establishment or administration of, or the solicitation of contributions to, a noncandidate committee formed for the purpose of influencing the outcome of a question or issue on a ballot.

Your Committee received testimony in support of this measure from the Campaign Spending Commission; League of Women Voters of Hawaii; Imua Alliance; Hawaiʻi Alliance for Progressive Action; Indivisible Hawaiʻi; Kaʻu Voices; and numerous individuals. Your Committee received comments on this measure from the State Procurement Office and Hawaiʻi Alliance of Nonprofit Organizations.

Your Committee finds that under existing campaign finance law, only a state or county contractor is prohibited from making campaign contributions. The law does not prohibit the officers or family members of the contractor from making contributions. Nor does the law prohibit state grantees from making campaign contributions even though these entities receive funds appropriated by the Legislature, similar to state or county contractors.

Your Committee recognizes that the provisions of this measure may result in additional administrative and implementation costs for the counties. Your Committee believes that narrowing the scope initially to state grantees and the compensated officers of state contractors and grantees, and their immediate family members, will allow the Legislature to take a measured first step in evaluating the effectiveness and impacts of restricting these contributions before considering whether similar restrictions should be extended to the counties in the future.

Your Committee has amended this measure by:

(1) Narrowing the scope of the prohibitions established under this measure to state grantees and the compensated officers of state contractors and state grantees, and their immediate family members;

(2) Amending the scope of the prohibition applicable to compensated officers of contractors and their immediate family members to apply to state contracts exceeding the small purchase threshold established under the Hawaii Public Procurement Code, rather than to contracts exceeding $250,000, with the small purchase threshold defined as procurements of less than $100,000 for goods or services and less than $250,000 for construction;

(3) Requiring state contractors and grantees to provide a list of the names of compensated officers and immediate family members within thirty calendar days of fully executing a state contract or state grant;

(4) Requiring the Campaign Spending Commission to prescribe a standard disclosure form and require the contractor or grantee to certify the accuracy of the form;

(5) Requiring contractors and grantees to update disclosures within thirty calendar days of any change in the officers or immediate family members;

(6) Requiring the contracting or expending state agency to provide the disclosures to the Campaign Spending Commission within thirty calendar days of fully executing the contract, while clarifying that the agency's role is limited to receiving and transmitting the information and that the agency has no obligation to verify the accuracy, completeness, or correctness of the information provided;

(7) Establishing penalties for failure of a contractor or grantee to submit the information required;

(8) Removing language that clarified that the prohibitions do not apply to the establishment or administration of, or the solicitation of contributions to, a noncandidate committee formed for the purpose of influencing the outcome of a question or issue on a ballot;

(9) Amending the definition of "immediate family member" to include dependents and the spouse or reciprocal beneficiary of a dependent;

(10) Inserting an appropriation to the State Procurement Office for system updates, training, and administrative support, effective July 1, 2026;

(11) Changing the effective date to July 1, 3000, to encourage further discussion; and

(12) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

Your Committee notes that the Campaign Spending Commission testified that its staff is in discussions with the vendor developing the Commission's upgraded electronic filing system to determine the amount of additional funding needed to build a password-protected section that would allow candidate committees and noncandidate committees to access the names of compensated officers and immediate family members of state contractors and grantees.

As affirmed by the record of votes of the members of your Committee on Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1519, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1519, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,

____________________________

DAVID A. TARNAS, Chair