Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs, and Government Operations, to which was referred S.B. No. 1606 entitled:

begs leave to report as follows:

The purpose of this measure is to:

Your Committee received testimony in support of this measure from the Hawaii State Ethics Commission (Commission), Hawaii Pro Democracy Initiative, the League of Women Voters of Hawaii, and a concerned citizen.

With regard to disclosure of fundraisers held thirty days prior to and during the legislative session, your Committee finds that current law only requires disclosure of fundraisers with tickets costing more than $25. Therefore, a majority of fundraisers need not be disclosed, and this measure will allow the public and the Campaign Spending Commission to monitor a legislator's fundraising activity during the time the legislator is actively considering legislation that may have an impact on his or her contributors.

Your Committee also supports the codification of legislative ethics committees to advise on conflict of interest issues, as well as a statutory prohibition on legislators voting on matters affecting their direct financial interests.

Finally, your Committee also supports the disclosure of all income received by a legislator that equals $25,000 or 25 per cent of the legislator's income (other than legislative salary). Again, the public has a right to know how their elected officials make their money.

Despite generally supporting this measure, however, many committee members were concerned that its provisions may go too far and force legislators to recuse themselves routinely from voting on measures that affect the public generally.

Therefore, your Committee amended this measure to define "direct financial interest" so that it is clear that that term only applies to legislation that specifically targets a legislator's business, property, or other financial interest. A legislator should not be recused if the legislation only affects a class of people generally. For example, if a legislator is a contractor, that legislator may vote on legislation that affects the contracting industry generally, unless it specifically benefits the legislator's own business directly.

Second, your Committee amended this measure to give the legislative ethics committees established pursuant to this measure, and not the Commission, the power to enforce the requirement that legislators recuse themselves from voting on measures that affect their direct financial interests. Your Committee is aware that the State Constitution specifies that legislators are not answerable to outside tribunals when performing legislative functions, and so this amendment is prudent.

Your Committee also amended this measure to include codification of the legislative ethics committees as a new part in chapter 84, Hawaii Revised Statutes (HRS), rather than as a separate chapter. Chapter 84, HRS, deals with standards of conduct for public officials, and your Committee believes that chapter to be the most appropriate location for all of the legislative ethics laws.

Finally, your Committee made several technical nonsubstantive amendments for purposes of clarity, accuracy, and preferred drafting style.

Your Committee finds that this measure will increase transparency within the Legislature, and as a result, public confidence in the legislative process will be enhanced.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs, and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1606, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1606, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.