Report Title:

Legislative Ethics

Description:

Establishes a legislative ethics committee in each legislative house; enacts new conflict of interest provisions subject to enforcement by the respective legislative ethics committee; prohibits fundraising activities by legislators during all legislative sessions; broadens scope of financial disclosure.

THE SENATE

S.B. NO.

623

TWENTY-THIRD LEGISLATURE, 2005

  

STATE OF HAWAII

  

 

A BILL FOR AN ACT

 

relating to legislative ethics.

 

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

SECTION 1. The legislature finds that public perception of the legislature and its members is greatly influenced by the level of trust and confidence held by the people of the State for its legislature. Significant factors affecting this perception are the avoidance of conflicts of interests by legislators and the degree to which legislators have clarity of purpose in voting for the public's interest.

The legislature further finds that its members should not vote on legislation that directly affects their personal financial interests unless they are part of an affected class of people. Further, legislators should also be required to disclose information on potential conflicts and a legislative committee should review conflict situations and recommend whether a legislator should refrain from voting.

The legislature further believes that full disclosure of the financial interests of legislators should include single sources of income that constitutes a significant amount or portion of a legislator's total income. Additionally, a prohibition against campaign fundraising while the legislature is in session will help to eliminate concerns about the integrity of the political process.

The purpose of this Act is to establish provisions in statute that relate to legislative ethics, including:

(1) Establishing an ethics committee for each house of the legislature;

(2) Adopting a conflict of interest rule for legislators that requires the disclosure of information on potential conflicts of interest related to family members and financial interests;

(3) Broadening the scope of financial disclosures by legislators to include single sources of income over $25,000 or twenty-five per cent of a legislator's total income; and

(4) Prohibiting all fundraisers by legislators thirty days before the convening of the legislature and while the legislature is in session.

SECTION 2. Chapter 84, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART   . LEGISLATIVE ETHICS

§84-   Purpose. The purpose of this part is to establish ethics committees of the senate and the house of representatives, outline the respective duties of the committees, and require disclosures related to potential conflicts of interest. Nothing in this part shall limit the jurisdiction of the state ethics commission in enforcing standards of conduct applicable to legislators.

§84-   Legislative ethics committees; members; convening. The senate and the house of representatives shall each establish by rule an ethics committee composed of a presiding officer, the majority leader, and the minority leader of each house, or their designees. If a member of an ethics committee is subject to committee review or action, that person shall be replaced by a method adopted by legislative rule.

§84-   Duties of legislative ethics committees. The ethics committees established in the senate and house of representatives, respectively, shall:

(1) Develop policy, procedures, and rules to address situations involving conflict of interest issues and related ethical situations involving the members of their respective body;

(2) Receive, review, and consider complaints concerning alleged conflict of interest violations involving voting on legislation by any legislator; and

(3) Receive requests from legislators for a conflict of interest review on pending legislation and issue recommendations on whether a conflict of interest exists.

In responding to a complaint or request to determine whether a conflict of interest exists, each committee shall review the relevant facts and circumstances for each case and submit a report to their respective house with a recommendation on whether the legislator should be permitted to vote on the legislation.

§84-   Legislators; disclosure. When a legislator believes that the legislator's personal or financial interests and obligations are in, or may reasonably be perceived to be in, potential conflict with pending legislation, the legislator shall disclose the relevant facts and circumstances to the applicable legislative ethics committee, including:

(1) Bill number or identity of the legislation;

(2) Relationship of the person, organization, or business financially affected by the legislation;

(3) Relationship of an affected family member; and

(4) A description of financial interests known to the legislator of the affected family member, person, organization, or business.

§84-   Conflicts of interests, legislators. (a) No legislator shall vote on any legislation that directly affects the direct financial interest of the legislator, unless the legislator is member of a class of people affected by the official action based upon the legislator's profession, trade, or business in general. For purposes of this section, "direct financial interest" means that the legislation specifically affects the legislator's business, property, or other financial interest.

(b) This section shall only be enforced by the ethics committees established by the senate and the house of representatives, respectively."

SECTION 3. Section 11-203, Hawaii Revised Statutes, is amended to read as follows:

"§11-203 Fundraisers and fundraising activities. (a) As used in this section, "fundraiser" means any function held for the benefit of a person that is intended or designed, directly or indirectly, to raise funds for political purposes for which the price or suggested contribution for attending the function is more than $25 per person.

(b) There shall be no more than two fundraisers held for a person prior to a general or special election in which that person is either elected or defeated.

(c) No legislator shall hold a fundraiser thirty days prior to the convening of or during a regular or special legislative session.

[(c)] (d) No fundraiser or fundraising activity shall be held unless a notice of intent to hold the function is filed by the person in charge of the function with the commission prior to the date of the function setting forth the name and address of the person in charge, the price per person, the date, hour, and place of the affair and the method thereof.

[(d)] (e) Fundraisers sponsored by a candidate for a statewide office are exempt from the $25 limit of subsection (a) and the restrictions of subsection (b), and fundraisers sponsored by a party for a political purpose for the general benefit of the party are exempt from the restrictions of subsection (b)."

SECTION 4. Section 84-14, Hawaii Revised Statutes, is amended by amending its title to read as follows:

"§84-14 Conflicts of interests[.]; employees."

SECTION 5. Section 84-17, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) Candidates for state elective offices, including candidates for election to the constitutional convention, shall only be required to disclose their own financial interests. The disclosures of financial interests of all other persons designated in subsection (c) shall state, in addition to the financial interests of the person disclosing, the financial interests of the person's spouse and dependent children. All disclosures shall include:

(1) The source and amount of all income of $1,000 or more received, for services rendered, by the person in the person's own name or by any other person for the person's use or benefit during the preceding calendar year and the nature of the services rendered; provided that information that may be privileged by law [or individual items of compensation that constitute a portion of the gross income of the business or profession from which the person derives income] need not be disclosed; provided further that individual items of compensation that constitute a portion of the gross income of the business or profession from which the person derives income need not be disclosed, except that a legislator shall disclose the source and amount of any annual income in excess of $25,000 from a single source or the source and amount of annual income that represents twenty-five per cent or more of the legislator's annual income from sources other than the legislator's legislative salary;

(2) The amount and identity of every ownership or beneficial interest held during the disclosure period in any business incorporated, regulated, or licensed to carry on business in the State having a value of $5,000 or more or equal to ten per cent of the ownership of the business and, if the interest was transferred during the disclosure period, the date of the transfer; provided that an interest in the form of an account in a federal or state regulated financial institution, an interest in the form of a policy in a mutual insurance company, or individual items in a mutual fund or a blind trust, if the mutual fund or blind trust has been disclosed pursuant to this paragraph, need not be disclosed;

(3) Every officership, directorship, trusteeship, or other fiduciary relationship held in a business during the disclosure period, the term of office, and the annual compensation;

(4) The name of each creditor to whom the value of $3,000 or more was owed during the disclosure period and the original amount and amount outstanding; provided that debts arising out of retail installment transactions for the purchase of consumer goods need not be disclosed;

(5) The tax map key number and street address, if any, and the value of any real property in the State in which the person holds an interest whose value is $10,000 or more, and, if the interest was transferred or obtained during the disclosure period, a statement of the amount and nature of the consideration received or paid in exchange for such interest, and the name of the person furnishing or receiving the consideration;

(6) The names of clients personally represented before state agencies, except in ministerial matters, for a fee or compensation during the disclosure period and the names of the state agencies involved; and

(7) The amount and identity of every creditor interest in an insolvent business held during the disclosure period having a value of $5,000 or more."

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval.

INTRODUCED BY:

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