STAND. COM. REP. NO. 1050-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2672
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Labor and Public Employment, to which was
referred S.B. No. 2672 entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to prohibit public employees
from taking official action that directly affects a business or
undertaking in which a family member has a substantial financial
interest.

     The Hawaii State Ethics Commission and Common Cause Hawaii
testified in support of this bill.

     Your Committee finds that this bill expands existing law to
encompass familial relationships of a state employee with regard
to potential conflicts of interest.  In doing so, this bill will
preserve the public's confidence in government decision-making.

     Your Committee has amended the bill by:

     (1)  Limiting the prohibited act of an employee to those
          where the employee state of mind is "knows" rather than
          "has reason to know" that a familial member is
          involved;

     (2)  Removing "household member" from the list of familial
          relationships that the employee shall not take direct
          official action upon; and

 
 
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     (3)  Making technical nonsubstantive changes.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 2672, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 2672, H.D.
1, and be referred to the Committee on Judiciary and Hawaiian
Affairs.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public
                                   Employment,



                                   ______________________________
                                   TERRY NUI YOSHINAGA, Chair