STAND. COM. REP. NO. 2671

Honolulu, Hawaii

RE:    S.B. No. 2600

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 2600 entitled:

"A BILL FOR AN ACT RELATING TO ETHICS,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Repeal the standards that:

          (A)  Require a liberal interpretation of the State Ethics Code; and

          (B)  Allow the determinations of gift law violations under the State Ethics Code to be based upon an inference of impropriety, to instead require a finding of actual intent to influence the recipient of the gift;

     (2)  Require State Ethics Commission advisory opinions to be approved and signed by a majority of the commission members; and

     (3)  Require that two of the five members of the State Ethics Commission be appointed by the Legislature, with each house appointing one member.

     Your Committee received testimony in support of this measure from the Department of Education, Hawaii State Teachers Association, and IMUAlliance.  Your Committee received testimony in opposition to this measure from the Hawaii State Ethics Commission, Common Cause Hawaii, League of Women Voters of Hawaii, Open Law Alliance, and eight individuals.

     Your Committee finds that the State Ethics Commission, upon request, issues advisory opinions on whether the facts and circumstances of a particular case constitute or will constitute a violation of the State Ethics Code.  In Advisory Opinion No. 2015‑1, the Commission found ethical violations in the longstanding practice of public school teachers receiving free travel and other benefits from tour companies when chaperoning students on out-of-state educational trips.  The Commission determined that the dual role as teacher and tour company representative places public school teachers in a conflict of interest under the State Ethics Code and also raises concerns under the gifts law and the fair treatment law.  Some believe that this advisory opinion may have an unintended effect of depriving students of valuable learning opportunities outside of the classroom, by making it difficult for teachers to afford activities that are largely contingent upon their participation and may be based on a subjective and overly broad application of the State Ethics Code.  This measure creates a more narrow interpretation and application of the State Ethics Code and gifts law.

     Your Committee notes the concerns raised by the State Ethics Commission that this measure will significantly lower the minimum standards of conduct required of state employees and will erode public confidence in state government.  The Commission stated in its written testimony that its advisory opinion was intended to help teachers and the Department of Education understand how the State Ethics Code applied to a school's Spring Break trip and the Commission's concerns were based on the way the trips were structured.  The Commission has explained that the issues with the State Ethics Code under its advisory opinion can be addressed if the trips are organized differently, such as if the teachers are not directly involved in selecting the company and soliciting the student and their parents.  While noting that changing the ways school trips are organized may add extra time and work for teachers and schools, the Executive Director of the State Ethics Commission testified that public confidence in government will be upheld because the established process will be followed without the appearance of impropriety.

     Accordingly, your Committee has amended this measure by:

     (1)  Deleting the purpose section;

     (2)  Deleting language that would have amended the laws relating to gifts, the composition and appointing authorities of the members of the State Ethics Commission, and the interpretation of the State Ethics Code;

     (3)  Inserting an effective date of January 7, 2059, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2600, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2600, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

________________________________

GILBERT S.C. KEITH-AGARAN, Chair