HB711 HD1

SECTION 1. The legislature finds that the house of representatives adopted House Resolution No. 9, Regular Session of 2022, to establish the commission to improve standards of conduct. The resolution requests that the commission ensure state laws and rules relating to standards of conduct of public officers and employees contain clear standards, enforcement, and penalties and provide recommendations to increase awareness of, compliance with, and deterrent effects of the code of ethics, lobbying laws, campaign finance laws, and other relevant laws and rules.

Pursuant to House Resolution No. 9, the commission to improve standards of conduct convened regularly throughout 2022 to diligently review, discuss, and consider the issues presented; submit an interim report to the house of representatives outlining areas of immediate and long-term focus; receive input from the public and invited individuals and agencies; and issue a final report with various recommendations and accompanying proposed legislation.

The legislature also finds that the strength and stability of our democratic government rely upon the public's trust in government institutions, including the expectation that officers act ethically with prudence, integrity, and sound judgement. Therefore, an essential goal of the commission was to provide recommendations that would help restore public trust in state government and increase the level of transparency in its operations and accountability of individuals.

Accordingly, the purpose of this Act is to implement recommendations of the commission to improve standards of conduct relating to combatting fraud by establishing a general fraud statute that is intended to cover schemes or artifices to defraud or to obtain money or property by means of false or fraudulent pretenses, representations, or promises. This Act also disqualifies a person convicted of fraud from receiving public financing for elections for a period of ten years. The Act is modeled after the following federal general fraud statutes:

(1) Title 18 United States Code section 1341 (mail fraud);

(2) Title 18 United States Code section 1343 (wire fraud);

(3) Title 18 United States Code section 1344 (bank fraud); and

(4) Title 18 United States Code section 1346 (definition of "scheme or artifice to defraud").

Therefore, in application of this Act, State courts and counsel should look to federal case law and precedent for direction. It should be noted that the references in the federal statutes to "mail" and "wire" are merely the jurisdictional "hooks" for federal jurisdiction.

SECTION 2. Chapter 708, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows:

"§708- Fraud. (1) A person commits the offense of fraud if, with the intent to defraud, the person executes or attempts to execute any scheme or artifice to defraud or to obtain money or property by means of false or fraudulent pretenses, representations, or promises.

(2) Application of this section shall be based on title 18 United States Code sections 1341, 1343, 1344, and 1346, and any relevant federal case law and precedent.

(3) For the purposes of this section, "scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right of honest services.

(4) Fraud is a class B felony. A person charged under this section shall be eligible for a deferred acceptance of guilty plea or nolo contendere plea under chapter 853. A person who is convicted under this section shall be disqualified from receiving public financing under part XIII, subpart J of chapter 11 for a period of ten years from the date of conviction."

SECTION 3. Section 11-428, Hawaii Revised Statutes, is amended to read as follows:

"[[]§11-428[]] Eligibility requirements for public funds. (a) In order to be eligible to receive public funds for an election, a candidate shall certify that the candidate will meet all the following requirements:

(1) The candidate and any candidate committee authorized by the candidate shall not incur campaign expenses in excess of the expenditure limitations imposed by section 11-423;

(2) The candidate has qualified to be on the election ballot in a primary or general election;

(3) The candidate has filed a statement of intent to seek qualifying contributions. A contribution received before the filing of a statement of intent to seek public funds shall not be considered a qualifying contribution;

(4) The candidate or candidate committee authorized by the candidate has received the minimum qualifying contribution amounts for the office sought by the candidate as set forth in section 11-429;

(5) The aggregate of contributions certified with respect to any person under paragraph (4) does not exceed $100;

(6) The candidate agrees to obtain and furnish any evidence relating to expenditures that the commission may request;

(7) The candidate agrees to keep and furnish records, books, and other information that the commission may request;

(8) The candidate agrees to an audit and examination by the commission pursuant to section 11-434 and to pay any amounts required to be paid pursuant to that section; and

(9) Each candidate and candidate committee in receipt of qualifying contributions that may be taken into account for purposes of public funding shall maintain, on a form prescribed by the commission, records that show the date and amount of each qualifying contribution and the full name and mailing address of the person making the contribution. The candidate and the candidate committee authorized by the candidate shall transmit to the commission all reports with respect to these contributions that the commission may require.

(b) A person who is convicted for fraud under section 708- shall be disqualified from receiving public financing under this subpart for a period of ten years from the date of conviction."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

HOUSE OF REPRESENTATIVES	H.B. NO.	711
THIRTY-SECOND LEGISLATURE, 2023		H.D. 1
STATE OF HAWAII