Report Title:

Ethics; Ethics Commission; Financial Disclosures

Description:

Requires all individuals subject to senate confirmation to file financial disclosure; provides that all disclosures are public documents.

HOUSE OF REPRESENTATIVES

H.B. NO.

1767

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to ethics.

 

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

SECTION 1. Section 84-3, Hawaii Revised Statutes, is amended by amending the definition "financial interest" to read as follows:

""Financial interest" means an interest held by an individual[,] or the individual's spouse[,] or dependent [children which is:] child that:

(1) [An] Is an ownership or investment interest in a business[.];

(2) [A] Is a creditor interest in an insolvent business[.];

(3) [An] Provides a source of income, including employment, or prospective employment for which negotiations have begun[.];

(4) [An] Is an ownership or investment interest in real or personal property[.];

(5) [A] Is a loan or other debtor interest[.], except loans from a commercial lending institution made in the regular course of business on terms available to the public without regard to the individual's official status; or

(6) [A directorship or officership in a business.] Is a business entity in which the individual or the individual's spouse or dependent child is a director, officer, partner, employee, or holds a management position.

An official act directly affecting a financial interest means that it is reasonably foreseeable that the act will have a material financial effect, distinguishable from its effect on the public generally, on the individual, or a member of the individual's immediate family."

SECTION 2. Section 84-14, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) No employee shall take any official action directly affecting:

(1) A business or other undertaking in which [he] the employee has a [substantial] financial interest; [or]

(2) A private undertaking in which [he] the employee is engaged as legal counsel, advisor, consultant, representative, or other agency capacity[.]; or

(3) A business or undertaking in which the employee knows or has reason to know that the employee's brother, sister, parent, emancipated child, or household member has a financial interest.

A department head who is unable to disqualify [himself] the department head's self on any matter described in [items] paragraph (1) [and], (2) [above will], or (3) shall not be in violation of this subsection if [he] the department head has complied with the disclosure requirements of section 84-17[; and]. A person whose position on a board, commission, or committee is mandated by statute, resolution, or executive order to have particular qualifications shall only be prohibited from taking official action that directly and specifically affects a business or undertaking in which [he] the person has a [substantial] financial interest[; provided that the substantial financial interest is related to the member's particular qualifications]."

SECTION 3. Section 84-17, Hawaii Revised Statutes, is amended by:

1. Amending subsection (c) to read:

"(c) The following persons shall file annually with the state ethics commission a disclosure of financial interests:

(1) The governor, the lieutenant governor, the members of the legislature, and delegates to the constitutional convention; provided that delegates to the constitutional convention shall only be required to file initial disclosures;

(2) The directors and their deputies, the division chiefs, the executive directors and the executive secretaries and their deputies, the purchasing agents and the fiscal officers, regardless of the titles by which the foregoing persons are designated, of every state agency and department;

(3) The permanent employees of the legislature and its service agencies, other than persons employed in clerical, secretarial, or similar positions;

(4) The administrative director of the State, and the assistants in the office of the governor and the lieutenant governor, other than persons employed in clerical, secretarial, or similar positions;

(5) The hearings officers of every state agency and department;

(6) The president, the vice presidents, assistant vice presidents, the chancellors, and the provosts of the University of Hawaii and its community colleges;

(7) The superintendent, the deputy superintendent, the assistant superintendents, the complex area superintendents, the state librarian, and the deputy state librarian of the department of education;

(8) The administrative director and the deputy director of the courts;

(9) The members of every state board or commission whose original terms of office are for periods exceeding one year and whose functions are not solely advisory; provided that the governor's special advisory council for technology development established pursuant to section 27-42 not otherwise subject to this subsection shall be exempt from this subsection;

(10) Candidates for state elective offices, including candidates for election to the constitutional convention, provided that candidates shall only be required to file initial disclosures; [and]

(11) The administrator and assistant administrator of the office of Hawaiian affairs[.]; and

(12) Any individual whose position requires the consent of the senate.

2. By amending subsection (d) to read:

"(d) The financial disclosure statements of [the following persons] any person who is required to file a financial disclosure statement shall be public records and available for inspection and duplication[:

(1) The governor, the lieutenant governor, the members of the legislature, candidates for and delegates to the constitutional convention, the members of the board of education, the trustees of the office of Hawaiian affairs, and candidates for state elective offices;

(2) The directors of the state departments and their deputies, regardless of the titles by which the foregoing persons are designated; provided that with respect to the department of the attorney general, the foregoing shall apply only to the attorney general and the first deputy attorney general;

(3) The administrative director of the State;

(4) The president, the vice presidents, the assistant vice presidents, the chancellors, and the provosts of the University of Hawaii;

(5) The superintendent, the deputy superintendent, the state librarian, and the deputy state librarian of the department of education;

(6) The administrative director and the deputy director of the courts; and

(7) The administrator and the assistant administrator of the office of Hawaiian affairs]."

3. By amending subsection (f) to read:

"(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;

(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, if available, the tax map key number, 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 4. Section 84-21, Hawaii Revised Statutes, is repealed.

["§84-21 State ethics commission established; composition. (a) There is established within the office of the auditor for administrative purposes only a commission to be known as the state ethics commission. The commission shall consist of five members appointed by the governor from a panel of ten persons nominated by the judicial council. Each member of the commission shall be a citizen of the United States and a resident of the State. Members of the commission shall hold no other public office.

(b) The chairperson of the commission shall be elected by the majority of the members of the commission. The term of each member of the commission shall be for four years. No person shall be appointed consecutively to more than two terms as a member of the commission. A vacancy on the commission shall be filled for the remainder of the unexpired term in the same manner as the original appointment, except that the judicial council shall nominate for gubernatorial appointment two persons for a vacancy.

(c) No member of the commission shall hold office for more than one hundred and twenty days after the expiration of the member's term. If the governor fails to appoint a person to a vacant office within sixty days after receipt of the list of nominees from the judicial council, council shall select a person from its list of nominees to fill the vacant office, notwithstanding subsection (b) and section 26-34 to the contrary.

(d) The governor may remove or suspend any member of the commission upon the filing of a written finding with the commission, and upon service of a copy of the written finding on the member to be removed or suspended."]

SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

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:

_____________________________