STAND. COM. REP. NO. 364

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1313
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committees on Education and Technology and Judiciary,
to which was referred S.B. No. 1313 entitled: 

     "A BILL FOR AN ACT RELATING TO CLAIMS AGAINST THE GOVERNMENT
     BASED ON YEAR 2000 ERRORS BY COMPUTER-BASED SYSTEMS,"

beg leave to report as follows:

     The purpose of this bill, as received by your Committees, is
to clarify provisions within existing law that provide immunity
to government entities for claims arising out of, or relating to,
year 2000 errors generated by a government computer system.

     Your Committees find that year 2000 errors occur when a
computer-based system inaccurately processes or stores data into,
or between, the years 1999 and 2000 and beyond.  Hawaii law
presently limits the State's immunity from tort liability for
year 2000 errors to errors that occurred prior to June 30, 1999.
However, due to the interdependence of most government services
upon computer-based technology, your Committees agree that the
State's immunity for claims resulting from year 2000 errors
should be extended for a limited period to allow the State and
other government entities sufficient time to correct the
problems.  Your Committees further believe that this immunity
should not be extended for errors resulting from gross negligence
on the part of the defendant government entity, provided that a
good faith effort was made by the government entity to correct
the problem which caused the year 2000 error.


 
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     Testimony in support of this measure was submitted by the
Attorney General, the Department of Accounting and General
Services, the Department of Transportation, the University of
Hawaii, Hawaii Health Systems Corporation, Hawaii Credit Union
League, Hawaii Medical Service Association, and the Queen's
Health Systems.  Testimony in opposition to the measure was
submitted by Small Business Hawaii. 

     Upon further consideration, your Committees have amended
this measure by:

     (1)  Inserting a provision that immunity shall be extended
          unless the error results from gross negligence on the
          part of the defendant government entity;

     (2)  Inserting a provision that failure to fix an error
          after a good faith effort shall not constitute gross
          negligence;

     (3)  Clarifying that an individual's immunity shall be based
          solely upon government errors; 

     (4)  Changing the repeal date of this Act to January 1,
          2003; and

     (5)  Making technical, nonsubstantive changes for the
          purposes of clarity and style.

     As affirmed by the records of votes of the members of your
Committees on Education and Technology and Judiciary that are
attached to this report, your Committees are in accord with the
intent and purpose of S.B. No. 1313, as amended herein, and
recommend that it pass Second Reading in the form attached hereto
as S.B. No. 1313, S.D. 1, and be referred to the Committee on
Ways and Means.


 
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                                   STAND. COM. REP. NO. 364
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Education and
                                   Technology and Judiciary,



____________________________       ______________________________
Avery B. Chumbley, Co-Chair        David Ige, Chair



____________________________
Matthew M. Matsunaga, Co-Chair

 
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