STAND. COM. REP. NO. 676

Honolulu, Hawaii

RE:    S.B. No. 451

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 451 entitled:

"A BILL FOR AN ACT RELATING TO CONFLICTS OF INTEREST,"

begs leave to report as follows:

     The purpose and intent of this measure is to prohibit state employees who are subject to the State Ethics Code from taking any official action directly affecting a business or other undertaking in which a parent, sibling, or emancipated child has a substantial financial interest.

     Your Committee received testimony in support of this measure from the State Ethics Commission, Common Cause Hawaii, League of Women Voters of Hawaii, and one individual.

     Your Committee finds that under existing law, a state employee must abstain from taking official action affecting a business in which the employee, the employee's spouse, or a dependent child of the employee has a financial interest.  However, a state employee is not required under existing law to abstain from taking official action affecting a business in which a parent, sibling, or an adult child of the state employee holds financial interest.  This measure reduces the appearance of a conflict of interest.

     Your Committee has amended this measure by:

     (1)  Inserting clarifying language proposed by the Hawaii State Ethics Commission to indicate that a "financial interest" for the purpose of this new limitation does not further apply to a spouse or minor child of the specified persons despite the definition of "financial interest" in section 84-3, Hawaii Revised Statutes (HRS);

     (2)  Adopting clarifying language suggested by the State Ethics Commission, which applies to only paragraph (1) of section 84-14(a), HRS, the prohibition of a board or commission member with a particular qualification from taking official action that directly or specifically affects a business in which the board or commission member has a substantial interest only if the substantial interest is related to the board or commission member's particular qualification;

     (3)  Changing the reference to "emancipated child" to "adult child" to conform with more precise family law terminology; and

     (4)  Inserting an effective date of January 7, 2059, to encourage further discussion.

     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. 451, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 451, 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