Report Title:

Legislative Ethics


Establishes conflict-of-interest violation for legislators; establishes legislative ethics committee in each house; expands financial disclosure requirements for legislators; and requires disclosures of fundraising activity by legislators thirty days prior to and during all legislative sessions.


S.B. NO.









relating to legislative ethics.



SECTION 1. Findings and purpose. The legislature finds that public perceptions of the political integrity of the legislature and its members greatly influence the level of trust and confidence held by the people of the State for the Hawaii legislature. Significant factors of these perceptions is the avoidance of conflicts of interests by legislators and the degree to which legislators have clarity of purpose in voting for the public's interest.

The legislature further finds that its members should not vote on legislation that directly affects their personal financial interests unless they are part of an affected class of people, that legislators should disclose information on potential conflicts, and that a legislative committee should review conflict situations and recommend whether a legislator should refrain from voting.

The legislature further believes that full disclosure of the financial interests of legislators should include single sources of income that are of a significant amount or portion of a legislator's total income. A prohibition against campaign fundraising while legislation is being considered for action might eliminate concerns about their close connection; however, the legislature believes a more reasonable approach is to require disclosures of such fundraising activities.

The purpose of this Act is to establish provisions in statute that relate to legislative ethics, including adopting of a conflict of interest rule for legislators, requiring disclosures of information on potential conflicts of interest related to family members and financial interests, establishment of an ethics committee for each house of the legislature, requiring financial disclosures of single sources of legislators' income over $25,000 or twenty-five per cent of total income, and disclosure of fundraising solicitations made thirty days prior to and during all sessions of the legislature.

SECTION 2. Chapter 11, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"11-A Fundraising solicitation of legislators. A legislator shall disclose to the commission all fundraising solicitations by mail of any amount that may include attendance at a function or event when the fundraising solicitation is:

(1) Mailed thirty days prior to the convening of or during a regular or special legislative session; and

(2) Mailed to twenty-five or more people.

The fundraising solicitation disclosure shall include the date, hour, and place of the event, the dollar amount of the solicitation requested, the mailing dates of the fundraising solicitation, and the number of mailings."

SECTION 3. Section 84-14, Hawaii Revised Statutes, is amended by amending its title to read as follows:

"84-14 Conflicts of interests[.], employees."

SECTION 4. Chapter 84, Hawaii Revised Statutes, is amended by adding a new section to read as follows:

"84-A Conflicts of interests, legislators. No legislator shall vote on any legislation that directly affects the direct financial interest of the legislator, unless the legislator is member of a class of people affected by the official action based upon the legislator's profession, trade, or business in general."

SECTION 5. Section 84-17, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(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; provided further that 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, except that a legislator shall disclose the source and amount of any annual income in excess of $25,000 from a single source or the source and amount of annual income that represents twenty-five per cent or more of the legislator's annual income from sources other than the legislator's legislative salary;

(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."

SECTION 6. The Hawaii Revised Statutes is amended by adding a new chapter to read as follows:



-1 Purpose. The purpose of this chapter is to establish an ethics committee of the house of representatives and the senate, outline the duties of the committees, and require disclosures related to potential conflicts of interest. Nothing in this chapter shall limit the jurisdiction of the state ethics commission in enforcing standards of conduct applicable to legislators.

-2 Legislative ethics committees; members; convening. The house of representatives and the senate shall each establish by rule an ethics committee composed of the presiding office, the majority leader, and the minority leader of each house, or their designees. If a member of an ethics committee is subject to committee review or action, that person shall be replaced by a method adopted by legislative rule.

-3 Duties of legislative ethics committees. The ethics committee established in the house of representatives and senate, respectively, shall:

(1) Develop policy, procedures, and rules to address situations involving conflict of interest issues and related ethical situations involving the members of their respective body;

(2) Receive, review, and consider complaints concerning alleged conflict of interest violations involving voting on legislation by any legislator; and

(3) Receive requests from legislators for a conflict of interest review on pending legislation and issue recommendations on whether a conflict of interest exists.

In responding to complaint or request to determine whether a conflict of interest exists to prevent a legislator's vote on any pending legislation, each committee shall review the relevant facts and circumstances for each case and submit a report to their respective houses with a recommendation on whether the legislator should be permitted to vote on the legislation.

-4 Legislators; disclosure. When a legislator believes that the legislator's personal or financial interests and obligations are in, or may reasonably be perceived to be in, potential conflict with pending legislation, the legislator shall disclose the relevant facts and circumstances to the applicable legislative ethics committee, including:

(1) Bill number or identity of the legislation;

(2) Relationship of the person, organization, or business financially affected by the legislation;

(3) Relationship of an affected family member; and

(4) A description of financial interests known to the legislator of the affected family member, person, organization, or business."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2003.