SB 809: RELATING TO CAMPAIGN CONTRIBUTIONS.

A BILL FOR AN ACT

RELATING TO CAMPAIGN CONTRIBUTIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the State's existing campaign finance law prohibits companies who receive state and county contracts from making campaign contributions.  The prohibition against state and county contractors does not extend to any owners, officers, or family members of the contractor, meaning that those individuals can still make contributions to election campaigns.

     The legislature also finds that there are no campaign contribution prohibitions on organizations that receive grants from the State or counties.  These grantees receive public funds appropriated by a legislative body, similar to state or county contractors.

     Accordingly, the purpose of this Act is to reduce the potential for donations to unduly influence policy-making and to improve actual and perceived standards of conduct by expanding the prohibition against contributions to candidate and noncandidate committees to include contributions from state and county grantees and the officers and immediate family members of a state or county contractor or grantee.

     SECTION 2.  Section 11-355, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§11-355[]]  Contributions [by state and county contractors]; state or county contractors; state or county grantees; officers and immediate family members of state or county contractors or grantees; prohibited.  (a)  It shall be unlawful for any person who enters into any contract with the State, any of the counties, or any department or agency thereof either for the rendition of personal services, the buying of property, or furnishing of any material, supplies, or equipment to the State, any of the counties, any department or agency thereof, or for selling any land or building to the State, any of the counties, or any department or agency thereof, if payment for the performance of the contract or payment for material, supplies, equipment, land, property, or building is to be made in whole or in part from funds appropriated by the legislative body, at any time between the execution of the contract through the completion of the contract, to:

     (1)  Directly or indirectly make any contribution, or promise expressly or impliedly to make any contribution to any candidate committee or noncandidate committee, or to any candidate or to any person for any political purpose or use; or

     (2)  Knowingly solicit any contribution from any person for any purpose during any period.

     (b)  It shall be unlawful for the owners, officers, and any immediate family member of any state or county contractor under subsection (a), at any time between the execution of the contract through the completion of the contract pursuant to subsection (a), to directly or indirectly make any contribution to any candidate committee or noncandidate committee.

     (c)  It shall be unlawful for any person who receives a grant or subsidy from the State pursuant to chapter 42F, or from a county pursuant to a county charter or code, at any time between the execution of the contract through the completion of the contract for the grant or subsidy to:

     (1)  Directly or indirectly make any contribution, or promise expressly or impliedly to make any contribution to any candidate committee or noncandidate committee, or to any candidate or to any person for any political purpose or use; or

     (2)  Knowingly solicit any contribution from any person for any purpose during any period.

     (d)  It shall be unlawful for the owners, officers, and any immediate family member of a state or county grantee under subsection (c), at any time between the execution of the contract through the completion of the contract for the grant or subsidy pursuant to subsection (c), to directly or indirectly make any contribution to any candidate committee or noncandidate committee.

     (e)  Any candidate, candidate committee, or noncandidate committee receiving a contribution made unlawful by this section shall return the unlawful contribution to the contributor within thirty calendar days of receipt.  If any unlawful contribution is not returned to the contributor within thirty calendar days of receipt, the unlawful contribution shall escheat to the Hawaii election campaign fund.

     (f)  At the time of the execution of a contract subject to this section, the state or county contractor or grantee shall provide to the state or county office executing the contract a list of the names of any owners, officers, and immediate family members of the state or county contractor or grantee.  For the purposes of assessing compliance with this section, the state or county office shall make the reported information available electronically to the commission, which shall then make the information available to candidate and noncandidate committees on a password-protected section of the commission's website; provided that the state or county office shall not be required to make the reported information available for procurements of less than $100,000 for goods or services or $250,000 for construction.

     [(b)] (g)  Except as provided in [subsection] subsections (a), (b), (c), and (d), this section does not prohibit or make unlawful the establishment or administration of, or the solicitation of contributions to, any noncandidate committee by any person other than the state or county contractor, the state or county grantee, or the owners, officers, and immediate family members of a state or county contractor or grantee, for the purpose of influencing the nomination for election, or the election of any person to office.

     [(c)] (h)  For purposes of this section[, "completion]:

     "Completion of the contract" means that the parties to the government contract have either terminated the contract prior to completion of performance or fully performed the duties and obligations under the contract, no disputes relating to the performance and payment remain under the contract, and all disputed claims have been adjudicated and are final.

     "Owner" means a person with at least a five per cent interest in the contractor or grantee."

     SECTION 3.  Section 11-364, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Any candidate, candidate committee, or noncandidate committee that receives in the aggregate more than the applicable contribution limit in section 11-357, 11-358, 11-359, or 11-360 shall return any excess contribution to the contributor within thirty calendar days of receipt of the excess contribution.  Any candidate, candidate committee, or noncandidate committee that receives in the aggregate more than the applicable contribution limit in section 11-362 shall return any excess contribution to the contributor within thirty calendar days of the end of the election period; provided that the candidate, candidate committee, or noncandidate committee may choose which contributions to return.  Any excess contribution not returned to the contributor within thirty calendar days shall escheat to the Hawaii election campaign fund."

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

Campaign Spending Commission Package; State or County Contractors; State or County Grantees; Officers; Immediate Family Members; Prohibited Contributions; Disclosures

Description:

Prohibits state or county grantees, officers and immediate family members of state or county contractors, and officers and immediate family members of state or county grantees, from contributing to candidate committees and noncandidate committees for the duration of the contract.  Prohibits state or county grantees from knowingly soliciting any contributions.  Requires candidates, candidate committees, and noncandidate committees to return any unlawful contribution to the contributor within thirty calendar days of receipt.  Provides that an unlawful contribution shall escheat to the Hawaii Election Campaign Fund if it is not returned to the contributor within thirty calendar days.  Requires disclosures of the names of any owners, officers and immediate family members of a state or county contractor or grantee for contracts exceeding a certain amount.  (SD1)

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

A BILL FOR AN ACT

RELATING TO CAMPAIGN CONTRIBUTIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that Hawaiʻi's existing campaign finance law prohibits companies who receive state and county contracts from making campaign contributions.  The prohibition against state and county contractors does not extend to any owners, officers, or family members of the contractor, meaning that those individuals can still make contributions to election campaigns.

     The legislature also finds that there are no campaign contribution prohibitions on organizations that receive grants from the State or counties.  These grantees receive public funds appropriated by a legislative body, similar to state or county contractors.

     Accordingly, the purpose of this Act is to reduce the potential for donations to unduly influence policy-making and to improve actual and perceived standards of conduct by expanding the prohibition against contributions to candidate and noncandidate committees to include contributions from state and county grantees and the officers and immediate family members of a state or county contractor or grantee.

     SECTION 2.  Section 11-355, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§11-355[]]  Contributions [by state and county contractors]; state or county contractors; state or county grantees; officers and immediate family members of state or county contractors or grantees; prohibited.  (a)  It shall be unlawful for any person who enters into any contract with the State, any of the counties, or any department or agency thereof either for the rendition of personal services, the buying of property, or furnishing of any material, supplies, or equipment to the State, any of the counties, any department or agency thereof, or for selling any land or building to the State, any of the counties, or any department or agency thereof, if payment for the performance of the contract or payment for material, supplies, equipment, land, property, or building is to be made in whole or in part from funds appropriated by the legislative body, at any time between the execution of the contract through the completion of the contract, to:

     (1)  Directly or indirectly make any contribution, or promise expressly or impliedly to make any contribution to any candidate committee or noncandidate committee, or to any candidate or to any person for any political purpose or use; or

     (2)  Knowingly solicit any contribution from any person for any purpose during any period.

     (b)  It shall be unlawful for the owners, officers, and any immediate family member of any state or county contractor under subsection (a), at any time between the execution of the contract through the completion of the contract pursuant to subsection (a), to directly or indirectly make any contribution to any candidate committee or noncandidate committee.

     (c)  It shall be unlawful for any person who receives a grant or subsidy from the State pursuant to chapter 42F, or from a county pursuant to a county charter or code, at any time between the execution of the contract through the completion of the contract for the grant or subsidy to:

     (1)  Directly or indirectly make any contribution, or promise expressly or impliedly to make any contribution to any candidate committee or noncandidate committee, or to any candidate or to any person for any political purpose or use; or

     (2)  Knowingly solicit any contribution from any person for any purpose during any period.

     (d)  It shall be unlawful for the owners, officers, and any immediate family member of a state or county grantee under subsection (c), at any time between the execution of the contract through the completion of the contract for the grant or subsidy pursuant to subsection (c), to directly or indirectly make any contribution to any candidate committee or noncandidate committee.

     (e)  Any candidate, candidate committee, or noncandidate committee receiving a contribution made unlawful by this section shall return the unlawful contribution to the contributor within thirty calendar days of receipt.  If any unlawful contribution is not returned to the contributor within thirty calendar days of receipt, the unlawful contribution shall escheat to the Hawaii election campaign fund.

     (f)  At the time of the execution of a contract subject to this section, the state or county contractor or grantee shall provide to the state or county office executing the contract a list of the names of any owners, officers, and immediate family members of the state or county contractor or grantee.  For the purposes of assessing compliance with this section, the state or county office shall make the reported information available electronically to the commission, which shall then make the information available to candidate and noncandidate committees on a password-protected section of the commission's website.

     [(b)] (g)  Except as provided in [subsection] subsections (a), (b), (c), and (d), this section does not prohibit or make unlawful the establishment or administration of, or the solicitation of contributions to, any noncandidate committee by any person other than the state or county contractor, the state or county grantee, or the owners, officers, and immediate family members of a state or county contractor or grantee, for the purpose of influencing the nomination for election, or the election of any person to office.

     [(c)] (h)  For purposes of this section, "completion of the contract" means that the parties to the government contract have either terminated the contract prior to completion of performance or fully performed the duties and obligations under the contract, no disputes relating to the performance and payment remain under the contract, and all disputed claims have been adjudicated and are final."

     SECTION 3.  Section 11-364, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Any candidate, candidate committee, or noncandidate committee that receives in the aggregate more than the applicable contribution limit in section 11-357, 11-358, 11-359, or 11-360 shall return any excess contribution to the contributor within thirty calendar days of receipt of the excess contribution.  Any candidate, candidate committee, or noncandidate committee that receives in the aggregate more than the applicable contribution limit in section 11-362 shall return any excess contribution to the contributor within thirty calendar days of the end of the election period; provided that the candidate, candidate committee, or noncandidate committee may choose which contributions to return.  Any excess contribution not returned to the contributor within thirty calendar days shall escheat to the Hawaii election campaign fund."

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

Report Title:

Campaign Spending Commission Package; State or County Contractors; State or County Grantees; Officers; Immediate Family Members; Prohibited Contributions; Disclosures

Description:

Prohibits state or county grantees, officers and immediate family members of state or county contractors, and officers and immediate family members of state or county grantees, from contributing to candidate committees and noncandidate committees for the duration of the contract.  Prohibits state or county grantees from knowingly soliciting any contributions.  Requires candidates, candidate committees, and noncandidate committees to return any unlawful contribution to the contributor within 30 calendar days of receipt.  Provides that an unlawful contribution shall escheat to the Hawaii Election Campaign Fund if it is not returned to the contributor within 30 calendar days.  Requires disclosures of the names of any owners, officers and immediate family members of a state or county contractor or grantee.

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

STAND. COM. REP. NO. 155

Honolulu, Hawaii

RE:    S.B. No. 809

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Judiciary, to which was referred S.B. No. 809 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 reduce the potential for donations to unduly influence policy-making and to improve actual and perceived standards of conduct by expanding the prohibition against contributions to candidate and noncandidate committees to include contributions from state and county grantees and the officers and immediate family members of a state or county contractor or grantee.

     Your Committee received testimony in support of this measure from the Campaign Spending Commission, League of Women Voters of Hawaii, Education Caucus of the Democratic Party of Hawaiʻi, Our Hawaiʻi, and fifty-one individuals.

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

     Your Committee finds that the State's existing campaign finance law prohibits companies who receive state and county contracts from making campaign contributions.  However, the prohibition does not extend to any owners, officers, or family members of the contractor, meaning that those individuals can still make contributions to election campaigns.  Your Committee also finds that there are no campaign prohibitions on organizations that receive grants from the State or counties.  These grantees receive public funds appropriated by a legislative body, similar to state or county contractors.

     Your Committee notes that according to testimony on this measure, as written, it may have the potential to reach owners of a very small interest in the contractor.  Your Committee also notes that it is unclear whether this measure would apply certain reporting requirements to all contracts, regardless of the dollar value or method of procurement, and that requiring agencies to submit a report for every single contract will be an administrative burden.

     Accordingly, your Committee has amended this measure by:

     (1)  Exempting contracts under the small purchase threshold of $100,000 for goods or services or $250,000 for construction from the mandatory disclosure requirement;

     (2)  Defining "owner" to mean a person with at least a five percent interest in the contractor or grantee; and

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

     As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 809, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 809, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary,