Public Officers and Employees; Conflicts of Interest; Family
Prohibits a public employee from taking official action directly affecting a brother, sister, parent, emancipated child, or household member. Prohibits state board or commission members from doing business with their board. Requires disclosure of financial interests for additional state board members, including the Board of Regents. Amends the requirements for the commission to publish notice of its findings when a charge is unsubstantiated. Modifies definition of financial interest. (HB865 HD2)
HOUSE OF REPRESENTATIVES
TWENTY-SECOND LEGISLATURE, 2003
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO CONFLICTS OF INTERESTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. 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 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 2. 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:
An] Is an ownership or investment interest in a business[ .];
A] Is a creditor interest in an insolvent business[ .];
An] Provides a source of income, including employment, or prospective employment for which negotiations have begun[ .];
An] Is an ownership or investment interest in real or personal property[ .];
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
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 3. Section 84-17, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (d) to read:
"(d) The financial disclosure statements of the following persons 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 members of the board of regents, 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; [
(7) The administrator and the assistant administrator of the office of Hawaiian affairs[
(8) The members of the board of land and natural resources, the board of agriculture, the Hawaiian homes commission, the stadium authority, the Hawaii community development authority, the Hawaii tourism authority, the natural energy laboratory of Hawaii authority, and the Hawaii paroling authority."
2. 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 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."
3. By amending subsection (g) to read:
"(g) Where an amount is required to be reported, the person disclosing may indicate whether the amount is at least $1,000 but less than $10,000; at least $10,000 but less than $25,000; at least $25,000 but less than $50,000; at least $50,000 but less than $100,000; at least $100,000 but less than $150,000; at least $150,000 but less than $250,000; at least $250,000 but less than $500,000; at least $500,000 but less than $750,000; at least $750,000 but less than $1,000,000; or $1,000,000 or more. An amount of stock may be reported by number of shares.
Members of the board of regents, the board of land and natural resources, the board of agriculture, and the Hawaiian homes commission who file public financial disclosure statements need not report, where an amount is required to be reported, the actual dollar value of the financial interest or the dollar range of value."
SECTION 4. Section 84-31, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) If after twenty days following service of the charge and further statement of alleged violation in accordance with this section, a majority of the members of the commission conclude that there is probable cause to believe that a violation of this chapter or of the code of ethics adopted by the constitutional convention has been committed, then the commission shall set a time and place for a hearing, giving notice to the complainant and the alleged violator. If a majority of the members of the commission conclude that there is no probable cause to believe that a violation of this chapter or the code of ethics adopted by the constitutional convention has been committed, then the commission shall publish statewide a notice of the commission's finding that the charge was unsubstantiated and that a probable cause finding has not been made, at which point the unsubstantiated charge and related documents shall become public records. Upon the commission's issuance of a notice of hearing, the charge and further statement of alleged violation and the alleged violator's written response thereto shall become public records. The hearing shall be held within ninety days of the commission's issuance of a notice of hearing. If the hearing is not held within that ninety-day period, the charge and further statement of alleged violation shall be dismissed; provided that any delay that is at the request of, or caused by, the alleged violator shall not be counted against the ninety-day period. All parties shall have an opportunity to:
to be] Be heard[ ,];
to subpoena] Subpoena witnesses and require the production of any books or papers relative to the proceedings[ ,];
to be] Be represented by counsel; and
to have] Have the right of cross-examination.
All hearings shall be in accordance with chapter 91. All witnesses shall testify under oath and the hearings shall be open to the public. The commission shall not be bound by the strict rules of evidence but the commission's findings must be based upon competent and substantial evidence. All testimony and other evidence taken at the hearing shall be recorded. Copies of transcripts of such record shall be available only to the complainant and the alleged violator at their own expense, and the fees therefor shall be deposited in the State's general fund."
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.