Hawaii 2022 Regular Session

Hawaii Senate Bill SB3217 Compare Versions

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11 THE SENATE S.B. NO. 3217 THIRTY-FIRST LEGISLATURE, 2022 STATE OF HAWAII A BILL FOR AN ACT RELATING TO CAMPAIGN FINANCE. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3737 RELATING TO CAMPAIGN FINANCE.
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4747 SECTION 1. The legislature finds that the founders of the United States added the First Amendment to the federal Constitution to ensure that "we the people" have the information necessary to engage in robust debate when choosing elected representatives and to hold those representatives' integrity intact once they are in office. To ensure that our democracy lives up to the promise of self-government, voters must have the information they need to evaluate candidates for public office and to keep them accountable after they are elected. Voters must also have the information they need to evaluate campaigns for and against local ballot measures, for which the voters themselves are acting as legislators. The legislature recognizes, however, that when wealthy special interests amplify their voices with their vast resources to elect the candidates of their choice and hide their campaign activities behind shell corporations and other organizations, they muffle the voices of everyday people, and the promise of the First Amendment is gone. Unfortunately, ever since the Supreme Court of the United States issued its 2010 decision in Citizens United v. Federal Election Commission, the door to unlimited corporate campaign spending has remained wide open and the use of "dark money" to pay for campaign advertisements has increased dramatically, leaving the public without critical information about who is spending enormous sums of money to influence their votes. The legislature notes that under existing law, when honest people or corporations purchase campaign advertising, they must insert their own name on their advertisements. However, when wealthy special interests transfer their money to other entities that purchase the advertisements, those special interests can usually avoid disclosing their activities and deprive the public of knowledge regarding who is actually attempting to influence their votes. The legislature therefore finds that it is necessary to stop these deceptive practices. Although the State may not impose limits on how much parties may spend on independent campaign efforts, the State does have the authority to require disclosures that facilitate transparency, strengthen enforcement efforts to ensure compliance with campaign finance laws, and give voters information they need to make informed choices. Accordingly, the purpose of this Act is to: (1) Require certain covered persons to maintain transfer records of identity of the persons who directly or indirectly contributed or transferred original funds used for independent campaign spending, the amounts of those contributions or transfers, and how those funds are disbursed; (2) Require certain covered persons to: (A) Disclose to contributors that contributions may be used or transferred for independent campaign spending; and (B) Provide contributors the option of excluding contributed funds from any use or transfer for independent campaign spending; (3) Require major contributors to certain covered persons to: (A) Disclose to the covered persons the identities of certain other contributors; and (B) Maintain relevant records that may be accessed by the campaign spending commission; (4) Require certain covered persons to file with the campaign spending commission disclosure reports of certain levels of campaign-related spending and contributions; (5) Facilitate the identification of certain top contributors of funds for certain political advertisements; and (6) Prohibit transactions that are structured to evade the foregoing requirements. 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: " . Disclosures in Independent Campaign Spending §11-A Definitions. As used in this subpart, unless the context requires otherwise: "Business income" means: (1) Funds received by a person in commercial transactions in the ordinary course of the person's regular trade, business, or investments; or (2) Membership or union dues to the extent that they do not exceed $5,000 from any person in a calendar year. "Covered person" means any person that spends at least $10,000 in any two-year election period on independent campaign spending, or that accepts at least $10,000 in any two-year election period in in-kind contributions to enable independent campaign spending. "Covered person" does not include: (1) Any individual who spends only the individual's own personal funds for independent campaign spending; (2) Any person that spends only the person's own business income for independent campaign spending; and (3) Any: (A) Candidate; (B) Candidate committee; or (C) Noncandidate committee that receives no more than $2,000 in contributions from any one person in any calendar year. "Donate" means to make a donation. "Donation" means a monetary gift that is given without receiving or expecting to receive anything of equal value in return. "Donation" does not include a contribution as defined in section 11-302. "Donor" means a person who has donated to another person. "General treasury" means any funds that are not traceable funds. "Identity" means: (1) In the case of an individual, the name, mailing address, occupation, and employer of the individual; or (2) In the case of a person other than an individual, the full name; address; federal tax status; and state in which the person is registered as a partnership, incorporated, or organized as a limited liability company, if applicable. "Independent campaign spending" means: (1) Any independent expenditure for a public communication; or (2) Any disbursement of funds to finance the following, without any express or implied agreement with, or any general or particular understanding with, or pursuant to any request by or communication with a candidate or candidate committee: (A) Any public communication that: (i) Promotes, supports, attacks, or opposes a candidate, regardless of whether the communication expressly advocates the election or defeat of the candidate; (ii) Refers to a clearly identified candidate at any time beginning one hundred twenty days before a primary or initial special election through the general or special election, and is disseminated in the jurisdiction where the candidate's election is taking place, regardless of whether the communication expressly advocates the election or defeat of the candidate; (iii) Promotes, supports, attacks, or opposes the placement of, or approval of, a ballot question, initiative, or measure before the voters of any local jurisdiction, regardless of whether the communication expressly advocates for or against the placement or approval; (B) Any partisan voter activity, partisan voter registration, partisan get-out-the-vote activity, or other partisan campaign-related activity; or (C) Research, design, production, polling, data analytics, mailing or social media list acquisition, or other actions or activities conducted in preparation for or conjunction with activities described in this definition. "Independent campaign spending" does not include any disbursement of funds to finance coordinated activity as defined in section 11-363. "Original funds" means the business income of a person or the personal funds of an individual. "Personal funds" means: (1) Any asset over which an individual had legal control and rightful title at the time the individual engaged in independent campaign spending or transferred funds to another person for that spending; (2) Income received by an individual, including: (A) Any salary or other earned income from bona fide employment; (B) Dividends and proceeds from the individual's personal investments; and (C) Bequests to the individual, including income from trusts established by bequests; and (3) Of the assets that are jointly owned by the individual and the individual's spouse, the portion that is: (A) Equal to the individual's share of the asset under the instrument of conveyance or ownership; or (B) The value of one-half of the property, if no specific share is indicated by an instrument of conveyance or ownership. "Personal funds" does not include any asset or income received from any person for the purpose of influencing any election. "Public communication" means any communication to the general public through broadcast, cable, satellite, the internet or other digital means, a newspaper, a magazine, an outdoor advertising facility, mass mailing, telephones, or any other form of general public political advertising or marketing, regardless of medium. "Traceable funds" means funds that: (1) Have been contributed to a covered person and over which the contributor has not exercised the option under section 11-D to exclude from the use or transfer of funds for independent campaign spending; or (2) Are used to finance in-kind contributions to a covered person to enable independent campaign spending. "Transfer record" means a written record of identity of the persons who directly or indirectly contributed or transferred original funds used for independent campaign spending, the amounts of those contributions or transfers, and how those funds are disbursed. §11-B Independent campaign spending; entities under a person's control. A person's independent campaign spending includes independent campaign spending made by entities established, financed, maintained, or controlled by the person. §11-C Transfer records. A covered person shall maintain transfer records if the person spends at least $10,000 in a two‑year election period on independent campaign spending, or accepts at least $10,000 in a two-year election period of in‑kind contributions to enable independent campaign spending. §11-D Donors; consent. Before a covered person may use or transfer a donor's funds for independent campaign spending, the covered person shall provide the contributor with a written notice that: (1) Shall inform the contributor that the donated funds may be used for independent campaign spending within the State and that the covered person may need to report information about the donor to the commission for disclosure to the public; (2) Shall inform the donor that the donor may exclude the donated funds from the intended use or transfer for independent campaign spending in the State by providing the covered person with a written request within twenty-one days after the donor's receipt of the notice; and (3) May be provided to the donor before, after, or at the same time the covered person receives the donation; provided that the donated funds shall not be used or transferred for independent campaign spending until the twenty-second day after the donor receives the notice or provides written consent for the intended use or transfer, whichever occurs first. §11-E Major contributors. (a) Any person that contributes at least $10,000 in the aggregate in traceable funds in a two-year election period to a covered person shall inform the covered person, within ten days of receiving a written request from the covered person, of the identities of persons that directly or indirectly contributed at least $1,000 in original funds transferred, the amounts of the persons' original funds transferred, and any persons that have previously transferred the original funds. If more than one transfer has previously occurred, the contributor shall disclose all the previous transfers and intermediaries. The contributor shall maintain these records for at least five years and shall provide them to the commission upon request. (b) Any person that makes an in-kind contribution to a covered person of at least $10,000 in a two-year election period for the purpose of enabling independent campaign spending shall inform the covered person, at the time the in-kind contribution is made or promised to be made, of the identities of persons that directly or indirectly contributed or provided at least $1,000 in original funds to finance the in-kind contribution, the amounts of funds used from each persons' original funds, and any persons who had previously transferred the original funds. If more than one transfer previously occurred, the in-kind contributor shall disclose all the previous transfers and intermediaries. The in-kind contributor shall maintain these records for at least five years and shall provide them to the commission upon request. §11-F Disclosure reports. (a) Within ten days of a covered person's initial disbursement of $10,000 in the aggregate in funds on independent campaign spending during a two-year election period, or a covered person's acceptance of at least $10,000 of in-kind contributions in the aggregate to enable independent campaign spending during a two-year election period, the covered person shall electronically file with the commission an initial report that discloses: (1) The identity of any person that owns or controls any traceable funds, as applicable; (2) The identity of any affiliated person that maintains its own transfer records and that person's relationship to the covered person; (3) The name, address, and position of the individual who is the custodian of the transfer records; (4) The name, address, and position of at least one individual authorized to directly or indirectly control how the traceable funds are disbursed; (5) The total amount of traceable funds owned or controlled by the covered person on the date of the report; (6) Each contributor of original funds that has directly or indirectly contributed more than $5,000 of traceable funds or in-kind contributions during the two-year election period to the covered person, and the date and amount of each of the contributor's contributions; (7) The identity of each person that acted as an intermediary and that transferred traceable funds in whole or part from an original source to the covered person, and the date, amount, and original and intermediate sources, of the transferred funds; (8) The identity of each person who received from the covered person disbursements of at least $1,000 in the aggregate of traceable funds during the two-year election period and the date and purpose of each disbursement, including the full name and office sought of any candidate that was supported, opposed, or referenced in a public communication that was financed, in whole or part, with the disbursement; and (9) The identity of any person that was the contributor of the majority of the traceable funds in the covered person's custody at the beginning of the two-year election period. (b) Within ten days after a covered person has disbursed an additional $10,000 in the aggregate in funds on independent campaign spending during the two-year election period described in subsection (a), or receives an additional $10,000 of in-kind contributions in the aggregate to enable independent campaign spending during the two-year election period described in subsection (a), the covered person shall electronically file with the commission a subsequent report. Each subsequent report shall disclose what, if any, information has changed from the initial report. (c) If information reported pursuant to subsection (a)(1) to (4) is changed but has not yet been reported pursuant to subsection (b), the covered person, within twenty days after the change is made, shall electronically file with the commission a report that includes the updated information; provided that the covered person shall not be required to report any changes that occur more than two years after the filing of the most recent report required by this section. (d) Except as provided in subsection (e), a noncandidate committee that is also a covered person may satisfy the timing requirements for reports required by this section by filing reports required by section 11-336 that also include the information required by this section. (e) If a noncandidate committee is a covered person that is required to file a report under this section, and the deadline for the filing of the report based on the requirements of subsection (a) or (b) is within fourteen days before an election, the noncandidate committee shall instead file the report within the three days after the applicable aggregate monetary amount as described in subsection (a) or (b) is met. §11-G Identification of certain top contributors. (a) Except as otherwise provided by this section, any public communication funded by independent campaign spending by a covered person or created through any in-kind contribution received by a covered person shall include a notice that includes: (1) Any information required by section 11-391; and (2) The words: "The three top contributors who helped pay for this message are", followed by the names of the three top contributors as determined pursuant to subsection (c). (b) If the public communication: (1) Has a visual component, a notice required by this section shall be displayed in clear and conspicuous text; (2) Has an audio component, a notice required by this section shall be stated by an audible voice in a clear and conspicuous manner; or (3) Is disseminated on the internet or by other digital means and: (A) As a text or graphic communication, a notice required by this section shall appear: (i) In letters that are at least large as the majority of the text in the communication; (ii) In a box to set the notice apart from the other contents of the communication; and (iii) In text in a color that has a reasonable degree of contrast with the color of the background behind the text; (B) As an audio communication, a notice required by this section shall be spoken in a clearly audible and intelligible voice that is heard over a four‑second or longer period at the beginning or end of the communication; (C) As a communication that includes both a video and an audio component, a notice required by this section: (i) Shall be displayed in a manner that complies with subparagraph (A) and shall be displayed at the same time any notice is spoken pursuant to clause (ii); and (ii) Shall be spoken in a manner that complies with subparagraph (B); provided that if the communication is less than ten seconds long, the audio version of the notice may be excluded; (D) In a format other than the formats described in subparagraphs (A) to (C), a notice required by this section shall be included in the communication as described in subparagraph (A), (B), or (C) to the extent possible for the format; provided that the notice is clear and conspicuous; (E) In a manner or format that makes it technologically impossible to include the notice described subsection (a) in the communication, the notice described in subsection (a) may be excluded from the public communication; provided that the communication shall include an alternative notice that shall: (i) State the name of the person that paid for the public communication; and (ii) Provide means for a recipient of the public communication to immediately obtain the information described in subsection (a) with minimal effort and without requiring the recipient to receive or view any additional material, other than the information described in subsection (a); and (F) Is not in compliance with this section if the required notice would be difficult to read, difficult to hear, or if its placement would likely be overlooked by a recipient of the communication. (c) For the purposes of determining the persons that are to be top three contributors as described in subsection (a)(2): (1) The top three contributors shall be determined by calculating the three contributors of traceable funds that have directly or indirectly contributed to the covered person the highest amounts of original funds during the two-year election period; (2) Contributions of traceable funds made in prior two‑year election periods shall be considered to have been contributed in the current two-year election period if the contributor's aggregate contributions of original funds to the covered person constituted the majority of the covered person's traceable funds at the beginning of the two-year election period; (3) If multiple contributors have contributed identical amounts to a covered person so that there is no difference in the amounts contributed by the third‑highest contributor and the fourth-highest or lower-level contributor, the contributor that most recently contributed to the covered person shall be deemed a top three contributor; (4) No contributor of traceable funds shall be deemed a top three contributor if the aggregate amount of the contributor's contributions of original funds to the covered person during the two-year election period is less than $10,000; and (5) To the extent that fewer than three contributors meet the $10,000 threshold in paragraph (4), an intermediary that directly or indirectly transferred, at least $10,000 in traceable funds to the covered person during the two-year election period shall be treated as the original source of funds for the purposes of the notice required by this section. §11-H Structured transactions; prohibited. No person may structure or assist in structuring, or attempt to structure or assist in structuring, any solicitation, contribution, expenditure, disbursement, or other transaction to evade the reporting requirements of this subpart. §11-I Penalties. Any person who violates this subpart or any rule adopted by the commission pursuant to this subpart shall be fined an amount not less than the amount contributed or spent in violation of this subpart, nor more than twice the amount contributed or spent in violation of this subpart. Any action taken to impose or collect the penalty provided for in this section shall be considered a civil action. §11-J Rules. The commission shall adopt rules, pursuant to chapter 91, necessary for the purposes of this subpart." SECTION 3. Section 11-341, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows: "(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 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 names and addresses of all persons who contributed to the noncandidate committee for the purpose of publishing or broadcasting the electioneering communications; (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; (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,] 11-G, if applicable." SECTION 4. Section 11-393, Hawaii Revised Statutes, is repealed. ["[§11-393] Identification of certain top contributors to noncandidate committees making only independent expenditures. (a) An advertisement shall contain an additional notice in a prominent location immediately after or below the notices required by section 11-391, if the advertisement is broadcast, televised, circulated, or published, including by electronic means, and is paid for by a noncandidate committee that certifies to the commission that it makes only independent expenditures. This additional notice shall start with the words, "The three top contributors for this advertisement are", followed by the names of the three top contributors, as defined in subsection (e), who made the highest aggregate contributions to the noncandidate committee for the purpose of funding the advertisement; provided that: (1) If a noncandidate committee is only able to identify two top contributors who made contributions for the purpose of funding the advertisement, the additional notice shall start with the words, "The two top contributors for this advertisement are", followed by the names of the two top contributors; (2) If a noncandidate committee is able to identify only one top contributor who made contributions for the purpose of funding the advertisement, the additional notice shall start with the words, "The top contributor for this advertisement is", followed by the name of the top contributor; (3) If a noncandidate committee is unable to identify any top contributors who made contributions for the purpose of funding the advertisement, the additional notice shall start with the words, "The three top contributors for this noncandidate committee are", followed by the names of the three top contributors who made the highest aggregate contributions to the noncandidate committee; and (4) If there are no top contributors to the noncandidate committee, the noncandidate committee shall not be subject to this section. In no case shall a noncandidate committee be required to identify more than three top contributors pursuant to this section. (b) If a noncandidate committee has more than three top contributors who contributed in equal amounts, the noncandidate committee may select which of the top contributors to identify in the advertisement; provided that the top contributors not identified in the advertisement did not make a higher aggregate contribution than those top contributors who are identified in the advertisement. The additional notice required for noncandidate committees described under this subsection shall start with the words "Three of the top contributors for this advertisement are" or "Three of the top contributors to this noncandidate committee are", as appropriate, followed by the names of the three top contributors. (c) This section shall not apply to advertisements broadcast by radio or television of such short duration that including a list of top contributors in the advertisement would constitute a hardship to the noncandidate committee paying for the advertisement. A noncandidate committee shall be subject to all other requirements under this part regardless of whether a hardship exists pursuant to this subsection. The commission shall adopt rules pursuant to chapter 91 to establish criteria to determine when including a list of top contributors in an advertisement of short duration constitutes a hardship to a noncandidate committee under this subsection. (d) Any noncandidate committee that violates this section shall be subject to a fine under section 11-410. (e) For purposes of this part, "top contributor" means a contributor who has contributed an aggregate amount of $10,000 or more to a noncandidate committee within a twelve-month period prior to the purchase of an advertisement."] SECTION 5. 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 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 7. 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 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 9. This Act shall take effect upon its approval. INTRODUCED BY: _____________________________
4848
4949 SECTION 1. The legislature finds that the founders of the United States added the First Amendment to the federal Constitution to ensure that "we the people" have the information necessary to engage in robust debate when choosing elected representatives and to hold those representatives' integrity intact once they are in office. To ensure that our democracy lives up to the promise of self-government, voters must have the information they need to evaluate candidates for public office and to keep them accountable after they are elected. Voters must also have the information they need to evaluate campaigns for and against local ballot measures, for which the voters themselves are acting as legislators.
5050
5151 The legislature recognizes, however, that when wealthy special interests amplify their voices with their vast resources to elect the candidates of their choice and hide their campaign activities behind shell corporations and other organizations, they muffle the voices of everyday people, and the promise of the First Amendment is gone. Unfortunately, ever since the Supreme Court of the United States issued its 2010 decision in Citizens United v. Federal Election Commission, the door to unlimited corporate campaign spending has remained wide open and the use of "dark money" to pay for campaign advertisements has increased dramatically, leaving the public without critical information about who is spending enormous sums of money to influence their votes.
5252
5353 The legislature notes that under existing law, when honest people or corporations purchase campaign advertising, they must insert their own name on their advertisements. However, when wealthy special interests transfer their money to other entities that purchase the advertisements, those special interests can usually avoid disclosing their activities and deprive the public of knowledge regarding who is actually attempting to influence their votes. The legislature therefore finds that it is necessary to stop these deceptive practices. Although the State may not impose limits on how much parties may spend on independent campaign efforts, the State does have the authority to require disclosures that facilitate transparency, strengthen enforcement efforts to ensure compliance with campaign finance laws, and give voters information they need to make informed choices.
5454
5555 Accordingly, the purpose of this Act is to:
5656
5757 (1) Require certain covered persons to maintain transfer records of identity of the persons who directly or indirectly contributed or transferred original funds used for independent campaign spending, the amounts of those contributions or transfers, and how those funds are disbursed;
5858
5959 (2) Require certain covered persons to:
6060
6161 (A) Disclose to contributors that contributions may be used or transferred for independent campaign spending; and
6262
6363 (B) Provide contributors the option of excluding contributed funds from any use or transfer for independent campaign spending;
6464
6565 (3) Require major contributors to certain covered persons to:
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6767 (A) Disclose to the covered persons the identities of certain other contributors; and
6868
6969 (B) Maintain relevant records that may be accessed by the campaign spending commission;
7070
7171 (4) Require certain covered persons to file with the campaign spending commission disclosure reports of certain levels of campaign-related spending and contributions;
7272
7373 (5) Facilitate the identification of certain top contributors of funds for certain political advertisements; and
7474
7575 (6) Prohibit transactions that are structured to evade the foregoing requirements.
7676
7777 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:
7878
7979 " . Disclosures in Independent Campaign Spending
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8181 §11-A Definitions. As used in this subpart, unless the context requires otherwise:
8282
8383 "Business income" means:
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8585 (1) Funds received by a person in commercial transactions in the ordinary course of the person's regular trade, business, or investments; or
8686
8787 (2) Membership or union dues to the extent that they do not exceed $5,000 from any person in a calendar year.
8888
8989 "Covered person" means any person that spends at least $10,000 in any two-year election period on independent campaign spending, or that accepts at least $10,000 in any two-year election period in in-kind contributions to enable independent campaign spending.
9090
9191 "Covered person" does not include:
9292
9393 (1) Any individual who spends only the individual's own personal funds for independent campaign spending;
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9595 (2) Any person that spends only the person's own business income for independent campaign spending; and
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9797 (3) Any:
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9999 (A) Candidate;
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101101 (B) Candidate committee; or
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103103 (C) Noncandidate committee that receives no more than $2,000 in contributions from any one person in any calendar year.
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105105 "Donate" means to make a donation.
106106
107107 "Donation" means a monetary gift that is given without receiving or expecting to receive anything of equal value in return.
108108
109109 "Donation" does not include a contribution as defined in section 11-302.
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111111 "Donor" means a person who has donated to another person.
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113113 "General treasury" means any funds that are not traceable funds.
114114
115115 "Identity" means:
116116
117117 (1) In the case of an individual, the name, mailing address, occupation, and employer of the individual; or
118118
119119 (2) In the case of a person other than an individual, the full name; address; federal tax status; and state in which the person is registered as a partnership, incorporated, or organized as a limited liability company, if applicable.
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121121 "Independent campaign spending" means:
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123123 (1) Any independent expenditure for a public communication; or
124124
125125 (2) Any disbursement of funds to finance the following, without any express or implied agreement with, or any general or particular understanding with, or pursuant to any request by or communication with a candidate or candidate committee:
126126
127127 (A) Any public communication that:
128128
129129 (i) Promotes, supports, attacks, or opposes a candidate, regardless of whether the communication expressly advocates the election or defeat of the candidate;
130130
131131 (ii) Refers to a clearly identified candidate at any time beginning one hundred twenty days before a primary or initial special election through the general or special election, and is disseminated in the jurisdiction where the candidate's election is taking place, regardless of whether the communication expressly advocates the election or defeat of the candidate;
132132
133133 (iii) Promotes, supports, attacks, or opposes the placement of, or approval of, a ballot question, initiative, or measure before the voters of any local jurisdiction, regardless of whether the communication expressly advocates for or against the placement or approval;
134134
135135 (B) Any partisan voter activity, partisan voter registration, partisan get-out-the-vote activity, or other partisan campaign-related activity; or
136136
137137 (C) Research, design, production, polling, data analytics, mailing or social media list acquisition, or other actions or activities conducted in preparation for or conjunction with activities described in this definition.
138138
139139 "Independent campaign spending" does not include any disbursement of funds to finance coordinated activity as defined in section 11-363.
140140
141141 "Original funds" means the business income of a person or the personal funds of an individual.
142142
143143 "Personal funds" means:
144144
145145 (1) Any asset over which an individual had legal control and rightful title at the time the individual engaged in independent campaign spending or transferred funds to another person for that spending;
146146
147147 (2) Income received by an individual, including:
148148
149149 (A) Any salary or other earned income from bona fide employment;
150150
151151 (B) Dividends and proceeds from the individual's personal investments; and
152152
153153 (C) Bequests to the individual, including income from trusts established by bequests; and
154154
155155 (3) Of the assets that are jointly owned by the individual and the individual's spouse, the portion that is:
156156
157157 (A) Equal to the individual's share of the asset under the instrument of conveyance or ownership; or
158158
159159 (B) The value of one-half of the property, if no specific share is indicated by an instrument of conveyance or ownership.
160160
161161 "Personal funds" does not include any asset or income received from any person for the purpose of influencing any election.
162162
163163 "Public communication" means any communication to the general public through broadcast, cable, satellite, the internet or other digital means, a newspaper, a magazine, an outdoor advertising facility, mass mailing, telephones, or any other form of general public political advertising or marketing, regardless of medium.
164164
165165 "Traceable funds" means funds that:
166166
167167 (1) Have been contributed to a covered person and over which the contributor has not exercised the option under section 11-D to exclude from the use or transfer of funds for independent campaign spending; or
168168
169169 (2) Are used to finance in-kind contributions to a covered person to enable independent campaign spending.
170170
171171 "Transfer record" means a written record of identity of the persons who directly or indirectly contributed or transferred original funds used for independent campaign spending, the amounts of those contributions or transfers, and how those funds are disbursed.
172172
173173 §11-B Independent campaign spending; entities under a person's control. A person's independent campaign spending includes independent campaign spending made by entities established, financed, maintained, or controlled by the person.
174174
175175 §11-C Transfer records. A covered person shall maintain transfer records if the person spends at least $10,000 in a two‑year election period on independent campaign spending, or accepts at least $10,000 in a two-year election period of in‑kind contributions to enable independent campaign spending.
176176
177177 §11-D Donors; consent. Before a covered person may use or transfer a donor's funds for independent campaign spending, the covered person shall provide the contributor with a written notice that:
178178
179179 (1) Shall inform the contributor that the donated funds may be used for independent campaign spending within the State and that the covered person may need to report information about the donor to the commission for disclosure to the public;
180180
181181 (2) Shall inform the donor that the donor may exclude the donated funds from the intended use or transfer for independent campaign spending in the State by providing the covered person with a written request within twenty-one days after the donor's receipt of the notice; and
182182
183183 (3) May be provided to the donor before, after, or at the same time the covered person receives the donation; provided that the donated funds shall not be used or transferred for independent campaign spending until the twenty-second day after the donor receives the notice or provides written consent for the intended use or transfer, whichever occurs first.
184184
185185 §11-E Major contributors. (a) Any person that contributes at least $10,000 in the aggregate in traceable funds in a two-year election period to a covered person shall inform the covered person, within ten days of receiving a written request from the covered person, of the identities of persons that directly or indirectly contributed at least $1,000 in original funds transferred, the amounts of the persons' original funds transferred, and any persons that have previously transferred the original funds. If more than one transfer has previously occurred, the contributor shall disclose all the previous transfers and intermediaries. The contributor shall maintain these records for at least five years and shall provide them to the commission upon request.
186186
187187 (b) Any person that makes an in-kind contribution to a covered person of at least $10,000 in a two-year election period for the purpose of enabling independent campaign spending shall inform the covered person, at the time the in-kind contribution is made or promised to be made, of the identities of persons that directly or indirectly contributed or provided at least $1,000 in original funds to finance the in-kind contribution, the amounts of funds used from each persons' original funds, and any persons who had previously transferred the original funds. If more than one transfer previously occurred, the in-kind contributor shall disclose all the previous transfers and intermediaries. The in-kind contributor shall maintain these records for at least five years and shall provide them to the commission upon request.
188188
189189 §11-F Disclosure reports. (a) Within ten days of a covered person's initial disbursement of $10,000 in the aggregate in funds on independent campaign spending during a two-year election period, or a covered person's acceptance of at least $10,000 of in-kind contributions in the aggregate to enable independent campaign spending during a two-year election period, the covered person shall electronically file with the commission an initial report that discloses:
190190
191191 (1) The identity of any person that owns or controls any traceable funds, as applicable;
192192
193193 (2) The identity of any affiliated person that maintains its own transfer records and that person's relationship to the covered person;
194194
195195 (3) The name, address, and position of the individual who is the custodian of the transfer records;
196196
197197 (4) The name, address, and position of at least one individual authorized to directly or indirectly control how the traceable funds are disbursed;
198198
199199 (5) The total amount of traceable funds owned or controlled by the covered person on the date of the report;
200200
201201 (6) Each contributor of original funds that has directly or indirectly contributed more than $5,000 of traceable funds or in-kind contributions during the two-year election period to the covered person, and the date and amount of each of the contributor's contributions;
202202
203203 (7) The identity of each person that acted as an intermediary and that transferred traceable funds in whole or part from an original source to the covered person, and the date, amount, and original and intermediate sources, of the transferred funds;
204204
205205 (8) The identity of each person who received from the covered person disbursements of at least $1,000 in the aggregate of traceable funds during the two-year election period and the date and purpose of each disbursement, including the full name and office sought of any candidate that was supported, opposed, or referenced in a public communication that was financed, in whole or part, with the disbursement; and
206206
207207 (9) The identity of any person that was the contributor of the majority of the traceable funds in the covered person's custody at the beginning of the two-year election period.
208208
209209 (b) Within ten days after a covered person has disbursed an additional $10,000 in the aggregate in funds on independent campaign spending during the two-year election period described in subsection (a), or receives an additional $10,000 of in-kind contributions in the aggregate to enable independent campaign spending during the two-year election period described in subsection (a), the covered person shall electronically file with the commission a subsequent report. Each subsequent report shall disclose what, if any, information has changed from the initial report.
210210
211211 (c) If information reported pursuant to subsection (a)(1) to (4) is changed but has not yet been reported pursuant to subsection (b), the covered person, within twenty days after the change is made, shall electronically file with the commission a report that includes the updated information; provided that the covered person shall not be required to report any changes that occur more than two years after the filing of the most recent report required by this section.
212212
213213 (d) Except as provided in subsection (e), a noncandidate committee that is also a covered person may satisfy the timing requirements for reports required by this section by filing reports required by section 11-336 that also include the information required by this section.
214214
215215 (e) If a noncandidate committee is a covered person that is required to file a report under this section, and the deadline for the filing of the report based on the requirements of subsection (a) or (b) is within fourteen days before an election, the noncandidate committee shall instead file the report within the three days after the applicable aggregate monetary amount as described in subsection (a) or (b) is met.
216216
217217 §11-G Identification of certain top contributors. (a) Except as otherwise provided by this section, any public communication funded by independent campaign spending by a covered person or created through any in-kind contribution received by a covered person shall include a notice that includes:
218218
219219 (1) Any information required by section 11-391; and
220220
221221 (2) The words: "The three top contributors who helped pay for this message are", followed by the names of the three top contributors as determined pursuant to subsection (c).
222222
223223 (b) If the public communication:
224224
225225 (1) Has a visual component, a notice required by this section shall be displayed in clear and conspicuous text;
226226
227227 (2) Has an audio component, a notice required by this section shall be stated by an audible voice in a clear and conspicuous manner; or
228228
229229 (3) Is disseminated on the internet or by other digital means and:
230230
231231 (A) As a text or graphic communication, a notice required by this section shall appear:
232232
233233 (i) In letters that are at least large as the majority of the text in the communication;
234234
235235 (ii) In a box to set the notice apart from the other contents of the communication; and
236236
237237 (iii) In text in a color that has a reasonable degree of contrast with the color of the background behind the text;
238238
239239 (B) As an audio communication, a notice required by this section shall be spoken in a clearly audible and intelligible voice that is heard over a four‑second or longer period at the beginning or end of the communication;
240240
241241 (C) As a communication that includes both a video and an audio component, a notice required by this section:
242242
243243 (i) Shall be displayed in a manner that complies with subparagraph (A) and shall be displayed at the same time any notice is spoken pursuant to clause (ii); and
244244
245245 (ii) Shall be spoken in a manner that complies with subparagraph (B); provided that if the communication is less than ten seconds long, the audio version of the notice may be excluded;
246246
247247 (D) In a format other than the formats described in subparagraphs (A) to (C), a notice required by this section shall be included in the communication as described in subparagraph (A), (B), or (C) to the extent possible for the format; provided that the notice is clear and conspicuous;
248248
249249 (E) In a manner or format that makes it technologically impossible to include the notice described subsection (a) in the communication, the notice described in subsection (a) may be excluded from the public communication; provided that the communication shall include an alternative notice that shall:
250250
251251 (i) State the name of the person that paid for the public communication; and
252252
253253 (ii) Provide means for a recipient of the public communication to immediately obtain the information described in subsection (a) with minimal effort and without requiring the recipient to receive or view any additional material, other than the information described in subsection (a); and
254254
255255 (F) Is not in compliance with this section if the required notice would be difficult to read, difficult to hear, or if its placement would likely be overlooked by a recipient of the communication.
256256
257257 (c) For the purposes of determining the persons that are to be top three contributors as described in subsection (a)(2):
258258
259259 (1) The top three contributors shall be determined by calculating the three contributors of traceable funds that have directly or indirectly contributed to the covered person the highest amounts of original funds during the two-year election period;
260260
261261 (2) Contributions of traceable funds made in prior two‑year election periods shall be considered to have been contributed in the current two-year election period if the contributor's aggregate contributions of original funds to the covered person constituted the majority of the covered person's traceable funds at the beginning of the two-year election period;
262262
263263 (3) If multiple contributors have contributed identical amounts to a covered person so that there is no difference in the amounts contributed by the third‑highest contributor and the fourth-highest or lower-level contributor, the contributor that most recently contributed to the covered person shall be deemed a top three contributor;
264264
265265 (4) No contributor of traceable funds shall be deemed a top three contributor if the aggregate amount of the contributor's contributions of original funds to the covered person during the two-year election period is less than $10,000; and
266266
267267 (5) To the extent that fewer than three contributors meet the $10,000 threshold in paragraph (4), an intermediary that directly or indirectly transferred, at least $10,000 in traceable funds to the covered person during the two-year election period shall be treated as the original source of funds for the purposes of the notice required by this section.
268268
269269 §11-H Structured transactions; prohibited. No person may structure or assist in structuring, or attempt to structure or assist in structuring, any solicitation, contribution, expenditure, disbursement, or other transaction to evade the reporting requirements of this subpart.
270270
271271 §11-I Penalties. Any person who violates this subpart or any rule adopted by the commission pursuant to this subpart shall be fined an amount not less than the amount contributed or spent in violation of this subpart, nor more than twice the amount contributed or spent in violation of this subpart. Any action taken to impose or collect the penalty provided for in this section shall be considered a civil action.
272272
273273 §11-J Rules. The commission shall adopt rules, pursuant to chapter 91, necessary for the purposes of this subpart."
274274
275275 SECTION 3. Section 11-341, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
276276
277277 "(b) Each statement of information shall contain the following:
278278
279279 (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;
280280
281281 (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;
282282
283283 (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;
284284
285285 (4) The amount of each expenditure during the period covered by the statement and the identification of the person to whom the expenditure was made;
286286
287287 (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;
288288
289289 (6) If the expenditures were made by a noncandidate committee, the names and addresses of all persons who contributed to the noncandidate committee for the purpose of publishing or broadcasting the electioneering communications;
290290
291291 (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;
292292
293293 (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
294294
295295 (9) The three top contributors as required under section [11-393,] 11-G, if applicable."
296296
297297 SECTION 4. Section 11-393, Hawaii Revised Statutes, is repealed.
298298
299299 ["[§11-393] Identification of certain top contributors to noncandidate committees making only independent expenditures. (a) An advertisement shall contain an additional notice in a prominent location immediately after or below the notices required by section 11-391, if the advertisement is broadcast, televised, circulated, or published, including by electronic means, and is paid for by a noncandidate committee that certifies to the commission that it makes only independent expenditures. This additional notice shall start with the words, "The three top contributors for this advertisement are", followed by the names of the three top contributors, as defined in subsection (e), who made the highest aggregate contributions to the noncandidate committee for the purpose of funding the advertisement; provided that:
300300
301301 (1) If a noncandidate committee is only able to identify two top contributors who made contributions for the purpose of funding the advertisement, the additional notice shall start with the words, "The two top contributors for this advertisement are", followed by the names of the two top contributors;
302302
303303 (2) If a noncandidate committee is able to identify only one top contributor who made contributions for the purpose of funding the advertisement, the additional notice shall start with the words, "The top contributor for this advertisement is", followed by the name of the top contributor;
304304
305305 (3) If a noncandidate committee is unable to identify any top contributors who made contributions for the purpose of funding the advertisement, the additional notice shall start with the words, "The three top contributors for this noncandidate committee are", followed by the names of the three top contributors who made the highest aggregate contributions to the noncandidate committee; and
306306
307307 (4) If there are no top contributors to the noncandidate committee, the noncandidate committee shall not be subject to this section.
308308
309309 In no case shall a noncandidate committee be required to identify more than three top contributors pursuant to this section.
310310
311311 (b) If a noncandidate committee has more than three top contributors who contributed in equal amounts, the noncandidate committee may select which of the top contributors to identify in the advertisement; provided that the top contributors not identified in the advertisement did not make a higher aggregate contribution than those top contributors who are identified in the advertisement. The additional notice required for noncandidate committees described under this subsection shall start with the words "Three of the top contributors for this advertisement are" or "Three of the top contributors to this noncandidate committee are", as appropriate, followed by the names of the three top contributors.
312312
313313 (c) This section shall not apply to advertisements broadcast by radio or television of such short duration that including a list of top contributors in the advertisement would constitute a hardship to the noncandidate committee paying for the advertisement. A noncandidate committee shall be subject to all other requirements under this part regardless of whether a hardship exists pursuant to this subsection. The commission shall adopt rules pursuant to chapter 91 to establish criteria to determine when including a list of top contributors in an advertisement of short duration constitutes a hardship to a noncandidate committee under this subsection.
314314
315315 (d) Any noncandidate committee that violates this section shall be subject to a fine under section 11-410.
316316
317317 (e) For purposes of this part, "top contributor" means a contributor who has contributed an aggregate amount of $10,000 or more to a noncandidate committee within a twelve-month period prior to the purchase of an advertisement."]
318318
319319 SECTION 5. 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.
320320
321321 SECTION 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
322322
323323 SECTION 7. 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.
324324
325325 SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
326326
327327 SECTION 9. This Act shall take effect upon its approval.
328328
329329
330330
331331 INTRODUCED BY: _____________________________
332332
333333 INTRODUCED BY:
334334
335335 _____________________________
336336
337337
338338
339339
340340
341341 Report Title: Campaign Spending Commission; Independent Campaign Spending Description: Requires the maintenance of transfer records relating to certain campaign contributions and transfers. Requires certain covered persons to seek permission from donors to use or transfer contributed funds for independent campaign spending. Requires certain major contributors to disclose and maintain relevant records relating to the identities of other contributors. Requires certain covered persons to file disclosure reports with the Campaign Spending Commission. Facilitates the identification of certain top contributors of funds for certain political advertisements. Prohibits structured transactions. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
342342
343343
344344
345345
346346
347347 Report Title:
348348
349349 Campaign Spending Commission; Independent Campaign Spending
350350
351351
352352
353353 Description:
354354
355355 Requires the maintenance of transfer records relating to certain campaign contributions and transfers. Requires certain covered persons to seek permission from donors to use or transfer contributed funds for independent campaign spending. Requires certain major contributors to disclose and maintain relevant records relating to the identities of other contributors. Requires certain covered persons to file disclosure reports with the Campaign Spending Commission. Facilitates the identification of certain top contributors of funds for certain political advertisements. Prohibits structured transactions.
356356
357357
358358
359359
360360
361361
362362
363363 The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.