HB2748 HD1

SECTION 1. The legislature finds that the people of Hawaii expect and deserve a government that will work in their best interest, free from corruption or undue influence. Unfortunately, from time to time in democracies around the world, some government leaders and employees in positions of trust are found to have made decisions in their own best interest, rather than in those of the people they serve.

Few countries have dealt with corruption as well as Singapore, where the government once faced significant corruption and scandal. Singapore has since adopted strict penalties for corruption and strong incentives to prevent it. Those found guilty of corruption in Singapore can now face fines, forfeiture of benefits, and time in prison. To deter bribery and corruption, Singapore pays government employees competitive salaries, some of which are directly benchmarked to sixty per cent of the median income of the top salary earners in Singapore. These competitive benefits are designed to deter the need for underpaid workers to succumb to bribery, and to attract talented leaders to public service who would otherwise earn significantly more by remaining in the private sector, resulting in better leadership benefitting the people of Singapore.

Strong penalties and competitive benefits have resulted in the recruitment of talented leaders less likely to succumb to bribery or corruption. These reforms have catapulted Singapore forward and today the country is consistently rated among the least corrupt nations in the world.

The legislature further finds that in Hawaii, instances of corruption cannot be tolerated by government leaders or employees. Recent cases of corruption demonstrate that significant and meaningful reforms are necessary to prevent corruption or bribery to protect the public interest in the future. These include stronger penalties, including the loss of pension benefits, for government leaders and employees found guilty of corruption, and competitive salaries to attract talented workers to public service that would otherwise earn more by remaining in the private sector.

The purpose of this Act is to authorize the forfeiture of certain employees' retirement system benefits, pursuant to court order, for state or county employees and designated beneficiaries who are convicted of an employment-related felony.

SECTION 2. Chapter 88, Hawaii Revised Statutes, is amended by adding a new section to subpart C of part II to be appropriately designated and to read as follows:

"§88- Forfeiture of benefits; felony convictions. (a) If a member, former member, or retirant is convicted of a felony and the court finds that, by a preponderance of the evidence, the felony is related to the employment of the member, former member, or retirant by the State or any county, the court may decree a civil penalty, pursuant to section 706-605(8), of forfeiture by the member, former member, or retirant of all or a portion of any:

(1) Interest;

(2) Hypothetical account balance in excess of the amount representing any employee contributions made by or on behalf of the member, former member, or retirant;

(3) Pension;

(4) Annuity; or

(5) Retirement allowance,

to which the member, former member, or retirant may otherwise be entitled under this chapter; provided that upon the death of the member, former member, or retirant, the designated beneficiary of the member, former member, or retirant may receive benefits to which that beneficiary would otherwise be entitled under this chapter; provided further that the designated beneficiary was not also convicted of a felony based on the same set of circumstances as the member, former member, or retirant penalized under this section.

(b) Upon receipt of a certified copy of the order decreeing forfeiture, the system shall comply with the order and shall reduce, suspend, or deny payment to the member, former member, retirant, or designated beneficiary, if applicable, as provided in the order until such time as the system receives a certified order to:

(1) Increase, resume, or make payments to the member, former member, retirant, or designated beneficiary; or

(2) Quash or reverse the decree of forfeiture.

The system shall not be required to make inquiry into the propriety of the order decreeing forfeiture or recoup any payments made to the member, former member, retirant, or designated beneficiary prior to receipt by the system of the order decreeing forfeiture.

(c) For the purposes of this section, a felony is "related to the employment" of an employee of the State or a county if the employee uses or attempts to use the employee's official position to commit the felony, including:

(1) Felonies in which state or county time, equipment, or other facilities are used in the commission of the felony;

(2) Bribery;

(3) Embezzlement, theft, or other unlawful taking, receiving, retaining, or failing to account properly for, any property or funds that belong to the State or any county or any department, bureau, board, or other agency thereof; or

(4) A felony committed against a person over whom the employee, in the course of the employee's duties, exercises custody or supervision.

(d) This section shall not impair or diminish benefits accrued prior to the effective date of Act , Session Laws of Hawaii 2020. This section shall not apply to felonies committed prior to the effective date of Act , Session Laws of Hawaii 2020.

(e) This section shall not apply to accrued retirement benefits that are non-forfeitable pursuant to sections 88-73(f), 88-281(g), and 88-331(f)."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on January 1, 2050; provided that section 2 of this Act shall take effect on January 1, 2050, and the ratification of a constitutional amendment requiring a court to order the board of trustees of the employees' retirement system to withhold all or a portion of a public employee's benefits when that court sentences that public employee for a felony offense relating to that public employee's duties.

HOUSE OF REPRESENTATIVES	H.B. NO.	2748
THIRTIETH LEGISLATURE, 2020		H.D. 1
STATE OF HAWAII