Questions and Answers on the Gifts Disclosure Law

Posted on Jun 10, 2009 in Gifts, Guidelines

HAWAII STATE ETHICS COMMISSION

Questions and Answers on the Gifts Disclosure Law

 

The Gifts Disclosure Law is found in Hawaii Revised Statutes (“HRS”) section 84-11.5. This section of the State Ethics Code, HRS Chapter 84, requires state legislators and state employees to file a gifts disclosure statement with the Hawaii State Ethics Commission on June 30 of each year if all of the following conditions are met:

  1. The legislator or employee, or spouse or dependent child of a legislator or employee, received directly or indirectly from one source any gift or gifts valued singly or in the aggregate in excess of $200, whether the gift is in the form of money, service, goods, or in other form;
  2. The source of the gift or gifts has interests that may be affected by official action or lack of action by the legislator or employee; and
  3. The gift does not fall into an exception to the reporting requirement.

The exceptions to the reporting requirement are as follows:

  1. Gifts received by will or intestate succession;
  2. Gifts received by way of distribution of any inter vivos or testamentary trust established by a spouse or ancestor;
  3. Gifts from a spouse, fiancé, fiancée, any relative within four degrees of consanguinity or the spouse, fiancé, or fiancée of such a relative. A gift from any such person is a reportable gift if the person is acting as an agent or intermediary for any person not covered by this paragraph;
  4. Political campaign contributions that comply with state law;
  5. Anything available to or distributed to the public generally without regard to the official status of the recipient;
  6. Gifts that, within thirty days after receipt, are returned to the giver or delivered to a public body or to a bona fide educational or charitable organization without the donation being claimed as a charitable contribution for tax purposes;
  7. Exchanges of approximately equal value on holidays, birthdays, or special occasions.

Important: The Gifts Disclosure Law (HRS section 84-11.5) should not be interpreted to automatically allow any or all gifts. The Gifts Law (HRS section 84-11) prohibits a state legislator, or a state employee (including members of boards or commissions) from accepting any gift under circumstances in which it can reasonably be inferred that the gift is intended to influence or reward official action. Under many circumstances, the Gifts Law may prohibit a state employee or legislator from accepting a gift of even a relatively small value. Prior to accepting a particular gift, legislators and employees should check with the Hawaii State Ethics Commission as to whether acceptance of the gift would violate the Gifts Law.

Legislators and employees should not hesitate to contact the Hawaii State Ethics Commission for advice regarding the Gifts Disclosure Law, the Gifts Law, and other provisions of the State Ethics Code.

To assist legislators and employees in determining the requirements of the Gifts Disclosure Law, the Hawaii State Ethics Commission offers some sample questions and answers below.

Questions and Answers

1. “Employee” defined.
Question: What is an “employee”? Is an uncompensated member of a board or commission a state employee?
Answer: HRS Chapter 84 defines an “employee” as any nominated, appointed, or elected officer or employee of the State, including members of boards and commissions, and committees, and employees under contract to the State or of the constitutional convention, but excluding legislators, delegates to the constitutional convention, justices and judges. The Gifts Disclosure Law applies to all state employees and all state legislators.
2. “Official action;” “interests that may be affected.”
One of the conditions of the Gifts Disclosure Law is that the source of the gift or gifts has “interests that may be affected” by “official action” or lack of action by the legislator or employee.
a. Question: What is “official action”?
Answer: “Official action” as defined in HRS Chapter 84, means a decision, recommendation, approval, disapproval, or other action, including inaction, which involves the use of discretionary authority.
b. Question: Must the recipient of a gift anticipate the possibility of taking action in the future that affects the interests of the donor of the gift?
Answer: To an extent, legislators and employees must anticipate whether they will take official action that may affect the donor’s interests. If, at the time the gift is given, the legislator or employee has reason to believe that he or she will take action that may affect the donor’s interests at any time in the future, then this requirement is met. If a legislator or employee is unsure as to what constitutes an “interest that may be affected,” then he or she should contact the Hawaii State Ethics Commission for advice.
3. Gifts of travel.
Question: If a legislator or employee takes official action that may affect the interests of a business and that business offers to pay the legislator’s or employee’s travel costs for a state trip, must the travel costs be reported?
Answer: Legislators and employees whose expenses for state travel are not being paid for by their state agency should first contact the Hawaii State Ethics Commission for advice as to whether the trip is a “gift of travel,” and if so, whether the gift of travel can be accepted. If acceptance is permitted, the gift of travel must be reported if its value exceeds the $200 threshold amount. Gifts of travel must be reported even if the travel serves a state purpose.
4. Consolidated reports by immediate family members.
Question: Must a legislator or employee file a “consolidated” report that includes all gifts received by the legislator or employee, his or her spouse, and his or her dependent children, or must the legislator or employee, his or her spouse, and his or her dependent children each file a separate report?
Answer: The legislator or employee must file a report that includes all reportable gifts received by the legislator or employee, his or her spouse, and his or her dependent children. The legislator’s or employee’s spouse and dependent children are not required to file separate reports.
5. Computing $200 threshold amount for family units.
Question: Does the $200 threshold amount apply to the family unit consisting of the legislator or employee, his or her spouse, and his or her dependent children, or does a separate $200 threshold apply to each member of the family unit?
Answer: The $200 threshold amount applies to the family unit. If a legislator or employee receives a gift worth $100 and his or her spouse receives a gift worth $101 from the same source, then the threshold requirement is met.
6. Gifts of meals.
Question: Do gifts include lunches and dinners that are not evenly exchanged?
Answer: Yes. It is important to first check with the Hawaii State Ethics Commission as to whether a gift of a meal can be accepted. If acceptance is allowed, the gift must be reported if: (1) the value of the gift exceeds the $200 threshold amount; (2) the recipient takes official action that may affect the donor of the gift; and (3) the gift is not covered by an exception to the reporting requirement. Gifts from one source that are valued in the aggregate of over $200 must be reported. For example, if, within the disclosure period, a legislator or employee is allowed to accept four meals from a donor, and the aggregate value of these meals exceeded $200, then the meals must be reported.
7. Special occasion gifts.
Question: Do gifts include baby shower, wedding, “get well,” or sympathy gifts that are not evenly exchanged?
Answer: Yes. And, the gift must be reported if: (1) the value of the gift exceeds the $200 threshold amount; (2) the recipient takes official action that may affect the donor of the gift; and (3) the gift is not covered by an exception to the reporting requirement. The exception in the Gifts Reporting Law for exchanges of equal value given on holidays or special occasions covers only reciprocal gift-giving within the reporting period.
8. Personal service gifts.
Question: Do gifts include assistance in moving, babysitting services, and other personal services?
Answer: Yes. The law states that gifts may take the form of services. The Hawaii State Ethics Commission should first be consulted as to whether the gift can be accepted. If acceptance is allowed, and if the gift of service meets the threshold requirements, then it must be reported. The value of the service is determined by a good faith estimate of the market value of the service.
9. Discounts earned through spouse’s private employment.
Question: Are extensions of reduced rates or discounts to a legislator or employee from the private employer of the legislator’s or employee’s spouse reportable gifts?
Answer: Reduced rates, discounts, or other benefits earned by a legislator’s or employee’s spouse may not be considered gifts when extended to include the legislator or employee if such benefits are part of the compensation package of the privately employed spouse. Otherwise, such gifts may be reportable. In these cases, the Hawaii State Ethics Commission should be contacted for advice.
10. Donations to a state agency for agency use.
Question: If a private business donates money or goods or services to a state agency for the use of the agency for an official state purpose, and not for any benefit of a particular employee, must this be reported as a gift?
Answer: No. A donation to a state agency for the benefit of the agency is not a reportable gift. For example, a donation of books to a public school from a private publishing company is not a reportable gift.
11. Aggregate value of gifts exceeding $200.
Question: An employee takes official action affecting the interests of a company. On four occasions during the reporting period the company gives gifts to the employee. The value of each gift is $60. Must the employee report these gifts?
Answer: The employee should first check with the Hawaii State Ethics Commission as to whether acceptance of each of these gifts is permissible. If acceptance is permissible, the employee must report these gifts, because during the disclosure period the aggregate value of the gifts exceeded $200. Employees should keep track of the gifts that they receive within the disclosure period in order to determine when the value of these gifts exceeds $200. The disclosure period runs from June 1 of the preceding year to June 1 of the current year. Once the disclosure period has ended, the value of gifts received within that period are not carried forward into the next period.
12. Gifts from family members and relatives.
Question: An employee receives a $300 wedding gift from her first cousin. The employee takes official action affecting the first cousin. Must the employee report the gift?
Answer: No. First cousins are within four degrees of consanguinity and therefore fall under an exception to the Gifts Disclosure Law.
13. Campaign contributions.
Question: A legislator running for re-election receives a $500 campaign contribution and reports this as required by the campaign spending laws. Is he or she also required to disclose it as a gift?
Answer: No. Campaign contributions that comply with state law are exempt from the Gifts Disclosure Law.
14. Gifts shared by individuals in the office.
Question: A person brings a gift of food to a state office, valued in excess of $200. The staff of the office takes official action that may affect the donor of the gift. The gift is shared among the individual staff members of the office. Must this gift be disclosed?
Answer: First, the Hawaii State Ethics Commission should be consulted as to whether acceptance of the gift is permissible. If acceptance is permissible, the gift is reportable. If the gift is clearly marked as a gift to one of the staff members, and the staff member shares it with other individuals in the office, the staff member must report the gifts. When a gift is clearly directed to one person, that person is considered the recipient of the gift and is responsible for complying with the Gifts Disclosure Law. The recipient may choose to share the gift, but this will not relieve the recipient of the responsibility of complying with the Gifts Disclosure Law. If the gift is marked as a gift for the entire staff of the office, then the head of the office is responsible for reporting the gift.

Legislators and employees who need advice about the Gifts Disclosure Law, the Gifts Law, or any other provision of the State Ethics Code should not hesitate to contact the Hawaii State Ethics Commission for advice.

Hawaii State Ethics Commission

American Savings Bank Tower

1001 Bishop Street, Suite 970

Honolulu, Hawaii 96813

or

Hawaii State Ethics Commission

P.O. Box 616

Honolulu, Hawaii 96809

Telephone: (808) 587-0460

FAX: (808) 587-0470