Campaign Spending Commission

November 10, 2014

MEMORANDUM

TO:     2014 Candidates That Were Unsuccessful In The General Election

FROM:     Kristin E. Izumi-Nitao, Executive Director, Campaign Spending Commission

SUBJECT:     Important Information and Reminders

The Hawaii Campaign Spending Commission (“Commission”) would like to recognize your efforts in the 2014 general election to serve the State of Hawaii and/or its counties.  The following guidance is to assist you with understanding what your next steps are as a candidate.

I.  REPORTING REQUIREMENTS

The next report is the Final Election Period Report which is due no later than 11:59 p.m. Hawaii standard time on Thursday, December 4, 2014.  The report will cover the period from October 21, 2014 through November 4, 2014.  For candidates whose aggregate contributions and aggregate expenditures for the election period totaled $1,000 or less, the Final Election Period Report represents your first disclosure report and will cover the period from January 1, 2014 through November 4, 2014.  For partial public funding candidates, you must also file the Expenditures of Public Funds Report by Thursday, December 4, 2014.  Failure to timely file these reports will likely result in fines.

If your committee has a surplus or deficit, you must continue to file reports on the candidate filing system until the surplus has been disbursed (see Part II) or the deficit has been cleared and a request to terminate has been approved by Commission staff (see Part IV).  Please contact the Commission to obtain the applicable reporting schedule or visit our website after the November 4, 2014 general election to obtain the applicable reporting schedule for reports due beyond the December 4, 2014 deadline.

If you currently have no surplus or deficit and would like to terminate your registration with the Commission, you can file the Final Election Period Report (and the Expenditures of Public Funds Report for partial public funding candidates) early and follow the steps in Part IV for terminating your registration.

II.  USE OF CAMPAIGN FUNDS IF YOU HAVE A SURPLUS

With the exception of partial public funding candidates who must return any and all unused public funds to the Commission by December 4, 2014, any surplus funds remaining in your campaign account after the November 4, 2014 general election (after paying all outstanding expenditures and repaying loans) must be expended by November 4, 2015 unless a new Organizational Report is filed on or before November 4, 2015.  Filing a new Organizational Report typically means that you intend to run in the next subsequent election (see Part III for more information).  Campaign funds may also be used as provided in Hawaii Revised Statutes (“HRS”) §11-381 or returned to contributors until one (1) year from the date of the election for which the campaign funds were received.  Funds that are not used or returned to contributors shall escheat to the Hawaii Election Campaign Fund (“HECF”).  See, HRS §11-384(d).

Based upon the foregoing provisions and our Hawaii Administrative Rules (“HAR”), you may therefore use your surplus campaign funds to run in the next subsequent election or spend it on any of the following by November 4, 2015:

• Return contributions to contributors (see, HRS §11-384(d))[1] or paying back loans;
• Donate to any community service, educational, youth, recreational, charitable, scientific, or literary organization up to no more than twice the maximum amount that one person may contribute to your office but the donation cannot occur until after the November 4, 2014 general election (see, HRS  §11-381(a)(3));
• Donate to any public school or public library up to no more than twice the maximum amount that one person may contribute to your office (see, HRS §11-381(a)(4));
• Award scholarships to full-time students attending an institution of higher education or a vocational education school in a program leading to a degree, certificate, or other recognized educational credential up to no more than twice the maximum amount that one person may contribute to your office but the award cannot occur until after the November 4, 2014 general election (see, HRS §11-381(a)(5));
• Purchase two tickets for each event including a fundraiser held by another candidate or committee (see, HRS §11-381(a)(6));
• Contribute not more than $25,000 in aggregate to your political party so long as the contributions are not earmarked for another candidate (see, HRS §11-381(a)(7));
• Make reasonable expenditures for a “Mahalo Party” shortly after the general election and newsletters to supporters as well as gifts “for one or more campaign employees or volunteers . . . of not more than an aggregate of $500 for a two-year office, $1,000 for a four-year non-statewide office, or $1,500 for a four-year statewide office” (see, HAR §3-160-43); and/or
• Escheat funds to the HECF (see, HRS §11-384(d)).

Regardless of how you choose to spend your surplus, please be mindful that any expenditure of campaign funds must be reported in the appropriate disclosure report and electronically filed with the Commission.

III.  FILING A NEW ORGANIZATIONAL REPORT

If you intend to run for office in the next election and want to carry over your campaign funds, you must file a new Organizational Report on or before November 4, 2015.  HRS §11-384(f) provides that “campaign funds may be used for the candidate’s next subsequent election as provided in section 11-381 upon registration for the election pursuant to section 11-321.”  Of course, if there are any changes at any time to your Organizational Report (e.g., new chairperson, treasurer, address, phone number, bank information, etc.), you are required under HRS §11-322 to file an amended Organizational Report within ten (10) days of the change via the candidate filing system.

IV.  TERMINATION OF REGISTRATION

Upon approval by the Commission’s staff of the “Request for Termination of Registration” form, your committee will no longer have to file disclosure reports.  The following steps need to be followed:

• File a final report showing no surplus or deficit.
• Complete and submit your “Request for Termination of Registration” form when you do not have a surplus or deficit.[2]
• Attach a copy of the closing bank statement for the campaign account to verify that the account has been closed.
• If you acquired durable assets, you must dispose of the assets[3] and report the disposition in the candidate filing system.
• All fines and penalties owed to the Commission must be paid.

If you have any questions, please do not hesitate to contact us at (808) 586-0285.  Thank you for your kokua and interest in public service.

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[1]  If you decide to return contributions to your contributors, it is your choice as to the order of the return of contributions (e.g., last in, last out; first in, first out; pro rata; etc.).

[2]  Part II discusses the disposition of surplus campaign funds.  If a candidate has a deficit resulting from outstanding loans, it may be possible to terminate the committee’s registration if the loans are forgiven but keep in mind that loans from other than the candidate which are forgiven are considered contributions subject to the candidate’s contribution limits.  Please contact the Commission for more information.

[3]  You can sell the assets at the commercially reasonable rate and deposit the money with your committee, then disburse the funds as specified in Part II, or you can donate the assets to community organizations as specified in HRS §11-381, subject to the donation limits of your office and after the general election.