STAND. COM. REP. NO. 2315

Honolulu, Hawaii

RE: S.B. No. 2778

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Labor and Technology, to which was referred S.B. No. 2778 entitled:

"A BILL FOR AN ACT RELATING TO ETHICS,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Require a Governor, Lieutenant Governor, member of the Legislature, department heads and their deputies, and any spouse or dependent child of a Governor, Lieutenant Governor, member of the Legislature, or department head and their deputies to place certain financial interests in a blind trust; and

(2) Prohibit a Governor, Lieutenant Governor, member of the Legislature, department head and their deputies, and any spouse or dependent child of a Governor, Lieutenant Governor, member of the Legislature, or department head and their deputies from acquiring certain financial interests during their term of service.

Your Committee received testimony in support of this measure from the League of Women Voters of Hawaii and four individuals.

Your Committee received comments on this measure from the Hawai'i State Ethics Commission.

Your Committee finds that this measure is modeled after federal legislation known as the "Ban Congressional Stock Trading Act," which requires Members of Congress and their families to place covered investments into qualified blind trusts. Your Committee further finds that requiring certain state officials to place covered investments in blind trusts would strengthen public confidence in government decision-making and reduce the risk of actual or perceived self-dealing. This measure will promote transparency, integrity, and public trust in state government by creating a clearer separation between personal financial interests and official duties, while recognizing the need for careful implementation and coordination with existing ethics laws.

Your Committee has amended this measure by:

(1) Inserting an effective date of January 1, 2077, to encourage further discussion; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Labor and Technology that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2778, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2778, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Labor and Technology,

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BRANDON J.C. ELEFANTE, Chair