Campaign Spending Commission

     A term-limited elected official and a retiring elected official ask the Campaign Spending Commission (“Commission”) whether Hawaii Revised Statutes (“HRS”) section 11-214 (b) or section 11-214 (c) (1) applies to the disposition of their surplus funds.

     In brief, the Commission responds that HRS section 11-214 (c) (1) applies.

     In 1995, the legislature amended the campaign financing statutes to address candidates that keep campaign accounts open long after they have been defeated or left office, and yet take no steps toward actively seeking office.  The issue of surplus funds was addressed again in HRS section 11-214 which was recently amended by Act 203, Session Laws of Hawaii 2005, effective January 1, 2006.

     HRS section 11-214, Disposition of Funds, provides in relevant part as follows:

(b) Candidates, committees, and individuals who withdraw or cease to be candidates or committees because of death, term limits, disqualification, resignation, or other personal reasons shall return all residual funds to the donors no later than ninety days after the candidate or committee ceases to be a candidate or committee. Residual funds not returned to the donors shall escheat to the Hawaii election campaign fund. Contributions shall only be used for expenditures directly related to the candidate’s or committee’s activities to influence the outcome of the election or nomination for election. (Emphases added.)

(c) Candidates, and the committees of a candidate who:

(1) Are elected to office, may expend surplus funds pursuant to section 11-206, but under no circumstances shall expenditures be made from funds after four years from the date of the election for which the contributions were received; (Emphases added.)

     HRS section 11-214 contemplates four types of candidates, (1) candidates who fail to file nomination papers1; (2) candidates who file nomination papers, but then for various reasons withdraw or cease to run; (3) candidates who run for election and lose2; and (4) candidates who are elected.  HRS section 11-214 then assigns deadlines for disposition of surplus funds to each type of candidate and specifies how the surplus funds may be used.

     HRS section 11-214 (b), therefore, requires candidates who file nomination papers but withdraw or cease to be candidates for various reasons to return residual funds within ninety days.  The terms “death, term limits, disqualification, resignation, or other personal reasons” do not describe a particular category of candidate, but rather lists potential reasons for a candidate to withdraw or to cease being a candidate.

     On the other hand, elected officials, whether term-limited or retiring, are subject to HRS section 11-214 (c) (1), in which they have four years from the date of the election for which the contributions were received to expend surplus funds.

     In addition, HRS section 11-214 (d) provides that “surplus funds may be expended by a candidate for the next subsequent election upon registration for the election pursuant to section 11-194.”  Therefore, if a term-limited elected official affirmatively files a new Organizational Report withinthe four year window, the surplus funds may be carried forward to the next election, even if this election is past the four year window in HRS section 11-214 (c) (1).

     This Advisory Opinion is provided by the Commission as a means of stating its current interpretation of the Hawaii Election Campaign Contributions and Expenditures laws provided under Hawaii Revised Statutes, section 11-191, et seq. and the administrative rules of the Commission provided in chapter 2-14.1, Hawaii Administrative Rules. The Commission may adopt, revise or revoke this Advisory Opinion upon the enactment of amendments to the Hawaii Revised Statutes or the adoption of administrative rules by the Commission.

Dated: Honolulu, Hawaii, May 9, 2007.

CAMPAIGN SPENDING COMMISSION

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Paul Kuramoto
Chairperson

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Steven E. Olbrich
Vice Chairperson

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Gino Gabrio
Commissioner

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Dean Robb
Commissioner

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Michael E. Weaver
Commissioner

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1 HRS section11-214 Disposition of funds, provides in relevant part: (a) Candidates, committees, and individuals who receive contributions for an election but fail to file a nomination for that election shall return all residual funds to the donors no later than ninety days after the date on which nominations for that election must be filed. Contributions not returned to the donors shall escheat to the Hawaii election campaign fund.

2 HRS section11-214 Disposition of funds, provides in pertinent part as follows:
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(c) Candidates, and the committees of a candidate who:
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(2) Fail to be nominated or elected to office, may expend surplus funds pursuant to section 11-206 but under no circumstances shall expenditures be made from funds after one year from the date of the election for which the contributions were received.
Contributions not returned to the donors shall escheat to the Hawaii election campaign fund.