CSC Newsletter – January 2020, Vol. 26, No. 1Posted in Newsletter
REMINDER TO ALL COMMITTEES TO FILE THE SUPPLEMENTAL REPORT
The next report for all registered candidate and noncandidate committees is the Supplemental Report covering the period July 1, 2019 to December 31, 2019. This report must be electronically filed on your respective filing systems (i.e., Candidate Filing System (CFS) or Noncandidate Committee Filing System (NCFS)) no later than 11:59 p.m. Hawaiian standard time on Friday, January 31, 2020.
Failure to file your report by the January 31st deadline will result in a fine and the posting of your committee’s name on the Commission website under “Candidate Committees That Failed to File or Correct a Report” or “Noncandidate Committees That Failed to File or Correct a Report.” Moreover, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting. Therefore, we encourage all committees to timely file their reports.
As a reminder, the reporting period for the Supplemental Report ended on December 31st so the report can be filed as early as January 1st, but no later than January 31st. Committees do not have to wait until the January 31st deadline to file this report.
NEW REPORTS FOR CANDIDATE COMMITTEES RUNNING IN THE 2020 ELECTION
Unless you are a candidate who has declared that you do not intend to receive or spend more than $1,000 for the 2020 election, the number of PRIMARY ELECTION reports you will be required to file will depend on whether you file nomination papers before or after April 25, 2020.
- If you file nomination papers by April 25, 2020, at a minimum, you will be required to file these reports no later than 11:59 p.m. Hawaiian standard time on the following dates:
- 1st Preliminary Primary Report covering the period January 1, 2020 to April 25, 2020 (due on April 30, 2020);
- 2nd Preliminary Primary Report covering the period April 26, 2020 to June 30, 2020 (due on July 9, 2020);
- 3rd Preliminary Primary Report covering the period July 1, 2020 to July 24, 2020 (due on July 29, 2020); and
- Final Primary Report covering the period July 25, 2020 to August 8, 2020 (due on August 28, 2020).
- If you file nomination papers after April 25, 2020, at a minimum, you will be required to file these reports no later than 11:59 p.m. Hawaiian standard time on the following dates:
- 2nd Preliminary Primary Report covering the period January 1, 2020 to June 30, 2020 (due on July 9, 2020);
- 3rd Preliminary Primary Report covering the period July 1, 2020 to July 24, 2020 (due on July 29, 2020); and
- Final Primary Report covering the period July 25, 2020 to August 8, 2020 (due on August 28, 2020).
With respect to GENERAL ELECTION reports, all candidates running in the 2020 election (regardless of when you filed nomination papers) will be required to file, at a minimum, these reports no later than 11:59 p.m. Hawaiian standard time on the following dates:
- 1st Preliminary General Report covering the period August 9, 2020 to September 26, 2020 (or January 1, 2020 to September 26, 2020 for candidates whose names did not appear on the Primary Election ballot but will appear on the General Election ballot) (due on October 1, 2020);
- 2nd Preliminary General Report covering the period September 27, 2020 to October 19, 2020 (due on October 26, 2020); and
- Final Election Period Report covering the period October 20, 2020 to November 3, 2020 (due on December 3, 2020 unless you will be sworn in prior to this date – i.e., Kauai County officials then the due date is on November 27, 2020).
View an easy-to-use illustration of the 2020 election year reporting tracks which can be used to track the reports that you are required to file.
Failure to file these reports by the deadline will result in a fine and the posting of your committee’s name on the Commission website under “Candidate Committees That Failed to File or Correct a Report”. Moreover, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting. Therefore, we encourage all committees to timely file their reports.
NEW – $1,000 OR LESS AGGREGATE CONTRIBUTIONS AND EXPENDITURES
If you are a candidate committee whose aggregate contributions and aggregate expenditures for the 2020 election period will total $1,000 or less, you are required by June 30, 2020 to check off the box on your Organizational Report to notify the Commission of this intention. See, Hawaii Revised Statutes (HRS) §11-339(b).
If you are a noncandidate committee whose aggregate contributions and aggregate expenditures for the 2020 election period will total $1,000 or less, you are required by July 24, 2020 to check off the box on your Organizational Report to notify the Commission of this intention. See, HRS §11-339(c).
In doing so, you will need only electronically file the Final Election Period Report due no later than 11:59 p.m. Hawaiian standard time on December 3, 2020, and subsequent Supplemental Reports after the election if you do not terminate your committee registration with the Commission. If you exceed the $1,000 limit, you will then be required to electronically file all the other required reports from the period in which the $1,000 limit was exceeded. See, HRS §11-339(a).
NEW – REPORTING SCHEDULES
New reporting schedules have been posted on our website and are provided via the link below for your convenience to track upcoming reporting deadlines. The reporting schedules are also available in the Commission’s downloadable calendar and can be downloaded to your digital calendar on your computer or mobile device.
The Commission will add the necessary reports to your reporting schedule in your respective electronic filing system (CFS and NCFS). These reports must be electronically filed no later than 11:59 p.m. Hawaiian standard time on the day of the deadline. You may also want to consider filing the reports early to avoid penalties because the reporting deadline is always a few days or weeks after the reporting period has closed.
Failure to file any report by the deadline will result in a fine and the name of your committee will be posted on the Commission’s website under “Candidate Committees That Failed to File or Correct a Report” or “Noncandidate Committees That Failed to File or Correct a Report.” Further, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting. Therefore, we encourage all committees to timely file their reports and pay any fines.
Lastly, please remember that when you electronically file your reports with the Commission, candidates, treasurers, and chairpersons (for noncandidate committees) are certifying that the information contained in the filed reports are true, complete, and accurate. Therefore, it is strongly advised that you verify and validate your reports before you file them since the Commission will rely on the electronically filed information which could generate an inquiry/investigation if inaccurate.
DOWNLOADABLE CALENDAR AVAILABLE ON THE COMMISSION’S WEBSITE
An updated and downloadable calendar of events including (but not limited to) the candidate committee and noncandidate committee reporting schedules, the Commission’s monthly meeting schedule, and the State holidays can be downloaded by individuals into their Apple, Google, Microsoft, Outlook, and Yahoo calendars as well as many other calendar programs that use the standard iCal format, from the Commission’s website. View the Commission’s Downloadable Calendar.
PROPOSED LEGISLATION FOR THE 2020 LEGISLATIVE SESSION
For the 2020 legislative session, the Commission has submitted six (6) measures to the Senate President and the House Speaker for introduction.
Proposal CSC-01 (20), RELATING TO ELECTIONEERING COMMUNICATIONS.
This measure was introduced last session (H.B. 164/S.B. 139) but did not pass. It amends HRS §11-341 by changing “disclosure date” to when the electioneering communication is publicly distributed rather than when the contract for the electioneering communication is executed. Also, it re-tolls the $2,000 expenditure aggregate amount before the filing of additional statements of information are required and includes advertisements sent by mail at any rate in the definition of electioneering communication by deleting “bulk rate.” Lastly, it deletes “communications that constitute expenditures by the expending organization” from the exceptions to the definition of “electioneering communications” to make it clear that candidate and noncandidate committees are required to file statements of information.
Proposal CSC-02 (20), RELATING TO VIOLATIONS OF CAMPAIGN FINANCE LAW.
This measure was introduced last session (H.B. 162/S.B. 137) but did not pass. It amends HRS §11-410 by raising the amount of fine that can be assessed against a Super PAC (that has received at least one contribution of more than $10,000 or spent more than $10,000 aggregate in an election period) from $1,000 to $5,000 and to permit the fine to be up to three times the amount of the unlawful contribution or expenditure. Also, it allows the Commission to order that the payment of the fine assessed against a noncandidate committee, or any portion, be paid from the personal funds of an officer of the noncandidate committee.
Proposal CSC-03 (20), RELATING TO CAMPAIGN CONTRIBUTIONS.
This measure was introduced last session (S.B. 643) but did not pass. It amends HRS §11-364 by requiring nonresident contributions exceeding 30% of the total contributions received by a candidate committee for each election period to escheat to the Hawaii election campaign fund if not returned to the contributor within thirty days.
Proposal CSC-04 (20), RELATING TO CAMPAIGN FINANCE REPORTS.
This measure amends HRS §11-340(c) to make clear that the increased fine (not to exceed $300 per day) for the late-filing of preliminary reports only applies to the reports due ten days before a primary, general, or special election. This measure is necessary due to the additional preliminary reports mandated by the Legislature last session.
Proposal CSC-05 (20), RELATING TO ORDERS OF THE CAMPAIGN SPENDING COMMISSION.
This measure amends HRS §11-410 by (1) amending subsection (b) to provide that a person waives the right to a contested case hearing if the person fails to request a contested case hearing within twenty days of receipt of the Commission’s preliminary determination, and (2) amending subsection (d) to provide that a final order of the Commission may be filed in the First Circuit Court for confirmation as a civil judgment, enforceable and collectible as any other judgment issued in the circuit courts.
Proposal CSC-06 (20), RELATING TO REPORTS OF CANDIDATE COMMITTEES.
This measure amends HRS §11-333(b) by amending paragraph (3) by adding “committee reimbursements to the candidate or other individuals” to the list of expenditures that need to be itemized. As currently written, only candidate reimbursements need to be itemized. In many instances, individuals other than the candidate are being reimbursed for campaign costs advanced by those individuals. Those reimbursements to other individuals should also be itemized.
TERM LIMITED CANDIDATES
If you are a candidate who is term limited for the office for which you presently occupy, contributions may be sought only if the committee has no surplus and has debt, unpaid expenses, or unpaid loans. See, Hawaii Administrative Rules (HAR) §3-160-31(b)(2). If this does not apply and you intend to seek contributions to run for elective office in the next subsequent election, then you must amend your Organizational Report to notify the Commission and the public of the office you intend to run for within 10 days of receiving contributions or making or incurring expenditures of more than $100 in the aggregate for that office. The contribution limits of the 2022 or 2024 election period will apply to these contributors.
RESTORATION OF OPERATIONS TO STATE GENERAL FUNDS AND REMINDER TO CHECK OFF THE $3 BOX ON YOUR 2020 TAX RETURN
Although the Commission was successful in restoring operations to general funds in the 2017 legislative session (Act 49, SLH 2017), we still urge you to continue to check off the $3 “yes” box on your 2020 tax return which permits $3 from state funds (or $6 if married and filing a joint return) to be allocated to the Hawaii Election Campaign Fund. The health and sustainability of public funding depends on greater participation of Hawaii taxpayers in checking off the $3 box. Checking off this box does not increase your tax or reduce your refund.
|What You Need to Know about the Hawaii Election Campaign Fund
By marking the $3 “Yes” checkbox for the Hawaii Election Campaign Fund, you support the work of the Hawaii Campaign Spending Commission. The Commission serves Hawaii citizens by helping to ensure that:
-Campaign contributions and expenditures are lawful and transparent
-Qualified candidates have an opportunity to run for office and receive funding for their campaigns
Choose “Yes” on your tax return
It does NOT reduce the amount of your refund or increase the amount of your tax payment.
TERMINATION OF COMMITTEE REGISTRATION WITH THE COMMISSION
If you are a candidate who does not anticipate running in a future State or county election, or you are a noncandidate committee that does not intend to participate in future State or county elections, and your committee has no surplus or deficit in campaign funds, you may want to consider terminating your registration with the Commission. If so, you will need to complete and submit the following documents: (1) A “Request for Termination of Registration” form for candidate committees or “Request for Termination of Registration” form for noncandidate committees; and (2) A closing bank statement verifying that your committee’s bank account has been closed. Further, you must not have any outstanding fines or unresolved matters with the Commission. Assuming everything is in order, the Commission will approve your termination request and you will no longer be required to electronically file reports with the Commission.
UPDATING ORGANIZATIONAL REPORTS
As of January 10, 2020, candidate committees that login to the Candidate Filing System (CFS) and noncandidate committees that login to the Noncandidate Committee Filing System (NCFS) will be presented with their Organizational Report. Please take the time to review your Organizational Report and make any needed changes.
HRS §§11-322(b) and 11-323(b) provides that any change in information previously reported in the organizational report shall be electronically filed with the commission within 10 days of the change being brought to the attention of the committee chairperson or treasurer. Failure to do so may result in a fine as well as prevent the Commission from communicating with you.
CONSIDERATIONS IF YOU ARE A CANDIDATE PLANNING ON RUNNING IN THE 2020 ELECTION
We offer the following reminders and tips to candidates and their committees who are planning their campaign for election or reelection in 2020. This is not a conclusive list so for more information please call us at (808) 586-0285, stop by our office at 235 S. Beretania Street, Room 300, or visit our website.
- If you are a new candidate, consider downloading and printing committee guidebooks, manuals, and reporting schedules as well as viewing our cyber-learning videos on the Commission’s website. Registration for training sessions will be announced in 2020.
- Make sure you have advertisement disclaimers (i.e., name and address of person paying for the advertisement) on all of your advertisements including your signs, banners and advertisements distributed by electronic means. This may also be a good chance to take inventory of your past or older signs to make sure they have the necessary disclaimers.
- Review and update all information on your Organizational Report – oftentimes, phone numbers and addresses have changed.
- If you are entering into contracts for electioneering communications, make sure you file your Statement of Information for Electioneering Communications within 24 hours with the Commission to avoid any fines.
- Consider doing some campaign research of past elections or of opponent data by using the Commission’s data visualization tool and viewing the campaign finance statistics page.
- Take a look at the 2020 expenditure limits and maximum available public funding amounts to see if participating in the voluntary partial public funding program is a viable option for your campaign. If so, then you must file the Affidavit to voluntarily agree to the expenditure limit for the office you are seeking in 2020 and the Statement of Intent to start collecting qualifying campaign contributions to be matched with public funds.
- If you plan on having a fundraiser for which the amount of the ticket is more than $25 per person, remember to file a Notice of Intent to Hold a Fundraiser with the Commission prior to the fundraiser’s start time and before the Commission’s office closes for the day at 4:30 p.m., Hawaiian standard time. Failure to comply with this requirement will result in a fine.
- If your committee is using a debit card, keep detailed records that will allow you to timely and accurately report all expenditures on the committee’s disclosure reports.
- If your committee would like to make charitable donations or award scholarships to full-time students attending an institution of higher learning or vocational education school, now is a good time before you file nomination papers or by the nomination paper deadline, to make these expenditures as long as you do not exceed two times your contribution limit (i.e., $2,000, $4,000, or $6,000).
- From the date a candidate files nomination papers to the date of the general election on November 3, 2020, candidate committees are prohibited from making charitable donations with campaign funds unless you are declared duly and legally elected to the office prior to the general election or are unsuccessful in the primary or special primary election.
- From the nomination paper deadline on June 2, 2020 to the general election on November 3, 2020, candidate committees are prohibited from using campaign funds to award scholarships to full-time students attending an institution of higher learning or a vocational education school unless you are declared duly and legally elected to the office prior to the general election or are unsuccessful in the primary or special primary election.
- If a Super PAC approaches your candidate committee, it is important to remember that its support of your nomination or election to office must be “independent” and that you and your agents such as committee officers are not “coordinating” campaign activities with them. If either of these circumstances occur, then the spending done by the Super PAC on your behalf will be deemed to be a contribution to your campaign subject to your contribution limit and the Super PAC will lose its status as a Super PAC, and thus, may subject them to the $1,000 per election contribution limit of noncandidate committees.
- A Super PAC’s use of your campaign material, without your knowledge or consent, in the Super PAC’s “independent” advertising on your behalf, will be considered a contribution to your campaign. This will likely result in an excess contribution on the part of the Super PAC for which a fine will be assessed by the Commission against the Super PAC.
- Be aware that expenditures or any other “coordinated activity” made by any person including an individual, party, corporation, business entity or labor union for the benefit of a candidate in cooperation, consultation, or concert with, or at the request or suggestion of, a candidate, candidate committee, or their agents, shall be considered to be a contribution to the candidate and expenditure by the candidate.
If you need assistance and the Commission’s office is closed, please visit our website to review the various tools available (i.e., cyber videos, guidebooks, and manuals) that will assist you, answer any questions, and/or help you to file reports in the electronic filing system.
ADVERTISEMENT DISCLAIMERS AND ADMINISTRATIVE FINES FOR VIOLATIONS
Advertisement disclaimers must be on all committees’ signs and banners because these items are no longer considered sundry items. Under HRS §11-391(a), “any advertisement that is broadcast, televised, circulated, published, distributed, or otherwise communicated, including by electronic means, shall:
(1) Contain the name and address of the candidate, candidate committee, noncandidate committee, or other person paying for the advertisement;
(2) Contain a notice in a prominent location stating either that:
(A) The advertisement has the approval and authority of the candidate; provided that an advertisement paid for by a candidate, candidate committee, or ballot issue committee does not need to include the notice; or
(B) The advertisement has not been approved by the candidate; and
(3) Not contain false information about the time, date, place, or means of voting.”
Failure to have the advertisement disclaimer will result in a fine pursuant to HRS §11-391(b) which provides that “[t]he fine for violation of this section, if assessed by the commission, shall not exceed $25 for each advertisement that lacks the information required by this section or provides prohibited information, and shall not exceed an aggregate amount of $5,000.”
The Commission has adopted a Schedule of Fines pursuant to HAR §3-160-73(a). For advertisements missing a disclaimer, the fine schedule provides for a fine of $25 per advertisement for the 1st violation, a fine of $100 per advertisement for the 2nd violation, and a fine of $500 per advertisement for the 3rd violation. Fines for further violations shall be determined by the Commission via a complaint, but shall not exceed an aggregate amount of $5,000.
If this is your first or second advertisement disclaimer violation, and the fine exceeds $25, a Conciliation Agreement which will result in a lower fine amount may be discussed with Commission staff subject to approval by the Commission at a public meeting conducted pursuant to HRS chapter 92.
The Commission is taking these matters very seriously. If you receive a notification from the Commission, we strongly recommend that you review all of your pending advertisements to see that they have the proper disclaimers, and if not, take the necessary measures to rectify them before the advertisements are made public.
An electioneering communication means any advertisement that is broadcast from a cable, satellite, television, or radio broadcast station; published in any periodical or newspaper or by electronic means; or sent by mail at a bulk rate, and that: (1) Refers to a clearly identifiable candidate; (2) Is made, or scheduled to be made, either within 30 days prior to a primary or initial special election (i.e., July 9, 2020) or within 60 days prior to a general or special election (i.e., September 4, 2020); and (3) Is not susceptible to any reasonable interpretation other than as an appeal to vote for or against a specific candidate.
Persons, which include an individual, a partnership, a candidate committee or noncandidate committee, a party, an association, a corporation, a business entity, an organization, or a labor union and its auxiliary committees, who make electioneering communications in an aggregate amount of more than $2,000 during any calendar year, are statutorily required to file a Statement of Information for Electioneering Communications within 24 hours of executing a contract relating to an electioneering communication advertisement.
Once you have filed a Statement of Information, you will need to continue to file Statements of Information for all future electioneering communications even if the amount is under $2,000 because your committee met this threshold with the previous filing.
The Statement of Information is available on the Commission’s website and it must contain information set forth in HRS §11-341 and HRS §11-393. It can be submitted by eSign or by printing and signing a writeable/printable PDF. Persons who fail to submit this form timely will be in violation of the campaign finance laws.
Notably, the Statement of Information must be filed in addition to the filing of any other required report.
GUIDANCE ON CANDIDATE COMMITTEE CONTRIBUTIONS TO CHARITABLE/COMMUNITY OR NON-PROFIT ORGANIZATIONS
Under HRS §11-381(a)(3), candidate committees may make donations to any community service, educational, youth, recreational, charitable, scientific, or literary organization as long as the total amount of all donations is no more than twice the maximum amount that one person may contribute to that candidate pursuant to HRS §11-357 and the donations cannot be made from the date the candidate files nomination papers to the date of the general election.
The Commission has been aware of candidate committees’ donations to charitable/community or non-profit organizations being reported as advertising that is directly related to the candidate’s campaign under HRS §11-381(a)(1). In these instances, the candidate committee is characterizing its donation as advertising because the candidate committee is being recognized as a sponsor in the charitable/community or non-profit organization’s program or acknowledgment materials. Given these circumstances, the Commission is likely to inquire further since HRS §11-381(a)(3) has amount and time limitations for donations to charitable or community organizations, while advertising directly related to a candidate’s campaign provision (i.e., HRS §11-381(a)(1)) has no limitations. Generally, if the nonprofit organization reports the expenditure by the candidate committee as a tax-exempt donation to the IRS or records the expenditure as a gift on its books, the Commission will treat the expenditure likewise, and thus, the statutory amount and time limitations will apply. However, if the nonprofit organization reports the expenditure as income to the IRS, or otherwise treats the expenditure as income on its books, the Commission will consider whether the expenditure is permissible as being directly related to the candidate’s campaign. If the person soliciting the expenditure does not know if the organization will be treating the expenditure as a donation or income, the Commission advises that the candidate committee not make the payment to the nonprofit organization from campaign funds. Of course, a candidate is always allowed to make an expenditure to these organizations from personal funds.
RESULTS OF THE COMMISSION’S 2019 ONLINE SURVEY
Mahalo to everyone who responded to our 2019 Online Survey. View the 2019 Survey Results and the Report on 2019 Annual Online Survey in the minutes of the Commission’s monthly meeting held on October 23, 2019.
2020 MEETING SCHEDULE
Commission meetings for 2020 are generally scheduled for the 2nd Wednesday of each month at 10:00 a.m. in Conference Room 204, Leiopapa A Kamehameha Building, 235 S. Beretania Street, Honolulu, Hawaii 96813. View the 2020 Meeting Schedule. Meeting location, dates and times are subject to change so please check the “2020 Meeting Schedule” page prior to attending a meeting.
2020 STANDARD MILEAGE RATE ANNOUNCED BY INTERNAL REVENUE SERVICE (IRS)
For those committees that seek reimbursement from campaign funds for the campaign related use of a personal vehicle, the federal standard mileage rate for 2020 is 57.5 cents per mile (which is .5 cents less than last year after increasing from 54.5 cents per mile in 2018). See IRS Notice 2020-05. The Commission reminds these committees that a daily mileage log noting the campaign use and personal use of the personal vehicle satisfies recordkeeping requirements of HAR §3-160-23. See, HAR §3-160-45(b)(1)(B).
The Commission is composed of five volunteers representing the general public who are appointed by the governor from a list of ten nominees submitted by the judicial council. Recently, Neal Herbert was selected to serve on the Commission to replace Commissioner Russell Tsuji who resigned on October 24, 2019. Commissioner Herbert’s term expires on June 30, 2023.
Neal is a U.S. Coast Guard Academy graduate and served for 28 years, including a tour as Commanding Officer, CG Base Honolulu, before retiring as Captain. Now residing in Hilo, his subsequent activities involve several national, state and Hawaii County organizations such as the U.S. Navy League, Society of Professional Engineers (currently a registered civil engineer in Hawaii), Big Island Retired Military Association and Paukaa Community Association, serving as officer/director in each. Neal worked with SSFM International, Inc, as a project engineer in their Hilo office. He is a former campaign treasurer, served on the Hawaii County Transportation Commission for four years, and was a nominee for the 2014 Big Island Outstanding Older American Award.