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HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE UNIVERSITY OF HAWAII.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Act 115, Session Laws of Hawaii 1998, authorized
 
 2 the University of Hawaii to appoint its own attorneys.  Based on
 
 3 this authorization, the university has established the Office of
 
 4 the Senior Vice President for Legal Affairs and University
 
 5 General Counsel.  The purpose of this bill is threefold: (1) as a
 
 6 housekeeping measure, amend those sections of the Hawaii Revised
 
 7 Statutes that require legal services to be performed by the
 
 8 attorney general to clarify that legal services to the university
 
 9 shall be provided by the university general counsel; (2)
 
10 establish a new provision relating to service of process on the
 
11 university; and (3) amend sections 304-6 and 304-6.5, Hawaii
 
12 Revised Statutes, to ensure the preservation of sovereign
 
13 immunity to the university.
 
14      SECTION 2.  Chapter 304, Hawaii Revised Statutes, is amended
 
15 by adding a new section to be appropriately designated and to
 
16 read as follows:
 
17      "304-    Service of process.  (a)  Service of process upon
 
18 the University of Hawaii shall be made by delivering a filed and
 
19 certified copy of the summons and of the complaint to the
 

 
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 1 university general counsel or to any attorney in the office of
 
 2 the university general council.
 
 3      (b)  Service of process upon an officer or employee of the
 
 4 University of Hawaii shall be made by serving the University of
 
 5 Hawaii and by delivering a copy of the summons and of the
 
 6 complaint to such officer or employee."
 
 7      SECTION 3.  Section 26-35.5, Hawaii Revised Statutes, is
 
 8 amended by amending subsections (e) and (f) to read as follows:
 
 9      "(e)  The attorney general, or in the case of the board of
 
10 regents of the University of Hawaii, its university general
 
11 counsel, shall represent and defend a member in any civil action
 
12 for which immunity is conferred under subsection (b), or when the
 
13 attorney general, or, if the action involves a member of the
 
14 board of regents, the university general counsel, determines that
 
15 indemnification is available to the member under subsection (c),
 
16 and the member against whom the action is brought has submitted a
 
17 written request for representation and has provided the attorney
 
18 general, or the university general counsel in the case of an
 
19 action involving a member of the board of regents, with all
 
20 process or complaint served upon the member within a reasonable
 
21 period of time, but not more than five days after being served
 
22 with the process or complaint.  The attorney general, or the
 

 
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 1 university general counsel, may terminate the representation and
 
 2 defense of the member at any time if, after representation and
 
 3 defense is accepted, the attorney general, or the university
 
 4 general counsel, determines that indemnification would not be
 
 5 available to the member under subsection (c).
 
 6      (f)  A member may retain counsel of the member's own choice
 
 7 at the member's own expense.  If the member chooses to retain
 
 8 counsel at the member's own expense, the State shall not
 
 9 indemnify the member even though the member would have been
 
10 entitled to indemnification under subsection (c).  The attorney
 
11 general, or the university general counsel in the case of a
 
12 member of the board of regents, may enter an appearance in any
 
13 action in which the member is represented by counsel of the
 
14 member's own choice, even though no request for the appearance
 
15 has been made by the member."
 
16      SECTION 4.  Section 26-35.5, Hawaii Revised Statutes, is
 
17 amended by amending subsections (h) and (i) to read as follows:
 
18      "(h)  If the attorney general, or the university general
 
19 counsel in the case of a member of the board of regents, denies
 
20 representation to the member under subsection (e) and the member
 
21 proceeds to judgment in the action for which representation was
 
22 denied, the member may commence an action against the State or
 

 
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 1 the University of Hawaii in the case of a member of the board of
 
 2 regents, in the circuit court to recover reasonable costs and
 
 3 fees incurred by the member in defending against that action,
 
 4 including attorney's fees, court costs, investigative costs, and
 
 5 expert witness fees.  The State or the University of Hawaii in
 
 6 the case of a member of the board of regents, shall pay the
 
 7 judgment or reimburse the member if the member has satisfied the
 
 8 judgment in an action for which representation was denied;
 
 9 provided that the member was found not liable in that action or
 
10 the member establishes by a preponderance of the evidence that
 
11 the member is entitled to indemnification under subsection (c).
 
12 A finding of negligence against the member in the civil action
 
13 for which representation was denied shall not be binding upon the
 
14 circuit court in any action brought under this subsection.  The
 
15 member shall commence any action under this subsection no later
 
16 than two years after entry of judgment in the action for which
 
17 the member was denied representation if no appeal is filed, or
 
18 two years after the conclusion of the final appeal from that
 
19 judgment if an appeal is filed.
 
20      (i)  If the attorney general, or the university general
 
21 counsel in the case of a member of the board of regents, denies
 
22 representation to the member under subsection (e) and the member
 

 
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 1 negotiates a compromise or settlement without an entry of
 
 2 judgment in the action for which representation was denied, the
 
 3 member may seek to introduce a bill in the legislature to secure
 
 4 an appropriation to reimburse the member for the amount of the
 
 5 settlement or that portion which constitutes a reasonable
 
 6 settlement, and for reasonable costs and fees incurred by the
 
 7 member in defending against that action, including attorney's
 
 8 fees, court costs, investigative costs, and expert witness fees."
 
 9      SECTION 5.  Section 40-82, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "40-82  Uncollectible accounts.(a)  The directors,
 
12 boards, or executive heads of executive departments may from time
 
13 to time prepare and submit for the review of the attorney general
 
14 a list of all uncollectible accounts in their departments.  Such
 
15 accounts as the attorney general finds to be uncollectible shall
 
16 be entered in a special record and be deleted from the accounts
 
17 receivable records of the departments, which shall thereupon be
 
18 relieved from any further accountability for their collection;
 
19 provided that no account shall be so deleted until it shall have
 
20 been delinquent for at least two consecutive years.  Any account
 
21 entered in the special record shall be transferred back to the
 
22 current accounts receivable if the attorney general finds that
 

 
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 1 the facts as alleged and presented to the attorney general were
 
 2 not true, or that the account has become collectible.
 
 3      As used in this section, "uncollectible account" means an
 
 4 account with regard to which:
 
 5      (1)  The debtor or party causing damage to property
 
 6           belonging to the State is no longer within the
 
 7           jurisdiction of the State;
 
 8      (2)  The debtor or party causing damage to property
 
 9           belonging to the State cannot be located;
 
10      (3)  The party causing damage to property belonging to the
 
11           State is unknown or cannot be identified;
 
12      (4)  The debtor has filed bankruptcy and has listed the
 
13           State as a creditor; or
 
14      (5)  Any other account as may be deemed by the attorney
 
15           general to be uneconomical or impractical to collect.
 
16      (b)  The judiciary may from time to time prepare lists of
 
17 all delinquent fines and restitution, which in its judgment are
 
18 uncollectible.  The fines or restitution that the judiciary finds
 
19 to be uncollectible shall be entered in a special record and be
 
20 deleted from the other books kept by the judiciary, and the
 
21 judiciary shall thereupon be released from any further
 
22 accountability for their collection; provided that no account
 

 
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 1 shall be so deleted until it shall have been delinquent for at
 
 2 least two years.  Any fines or restitution so written off may be
 
 3 transferred back to the judiciary's accounts receivable if the
 
 4 judiciary finds that the alleged facts as previously presented to
 
 5 it were not true, or that the fines or restitution are in fact
 
 6 collectible, or that the fines or restitution have become
 
 7 collectible.  Nothing in this section shall preclude a person to
 
 8 whom restitution is owed from pursuing collection of the debt.
 
 9      (c)  The judiciary shall submit an annual report to the
 
10 legislature, no later than twenty days prior to the convening of
 
11 each regular session, which shall summarize the types and amounts
 
12 of uncollectible delinquent fines and restitution that either
 
13 were:
 
14      (1)  Entered in a special record and deleted from the
 
15           judiciary's other books; or
 
16      (2)  Transferred back to the judiciary's accounts
 
17      receivable.
 
18      (d)  The University of Hawaii may from time to time prepare
 
19 for the review of the university general counsel a list of all
 
20 uncollectible accounts.  Such accounts as the university general
 
21 counsel finds to be uncollectible shall be entered into a special
 
22 record and be deleted from the accounts receivable records of the
 

 
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 1 university, which shall thereupon be relieved from any further
 
 2 accountability for their collection; provided that no account
 
 3 shall be so deleted until it shall have been delinquent for at
 
 4 least two consecutive years.  Any account entered in the special
 
 5 record shall be transferred back to the current accounts
 
 6 receivable if the university general counsel finds that the
 
 7 account has become collectible."
 
 8      SECTION 6.  Section 107-10, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "107-10  Acquiring of real property; prior approval.  No
 
11 real property or any right, title, or interest therein shall be
 
12 acquired by agreement, purchase, gift, devise, eminent domain, or
 
13 otherwise, for any purpose, by the State or any department,
 
14 agency, board, commission, or officer thereof, without the prior
 
15 approval of the attorney general as to form, exceptions, and
 
16 reservations.  This section shall not apply to the University of
 
17 Hawaii."
 
18      SECTION 7.  Section 304-6, Hawaii Revised Statutes, is
 
19 amended by amending subsection (b) to read as follows:
 
20      "(b)  The board of regents, upon the advice of its attorney,
 
21 may arbitrate, compromise, or settle any claim, action, or suit
 
22 brought against the university pursuant to this section.  Any
 

 
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 1 claim compromised or settled under this subsection shall be
 
 2 payable [solely] from the moneys [and property of the university
 
 3 and shall not constitute a general obligation of the State, or be
 
 4 secured directly or indirectly by the full faith and credit of
 
 5 the State or the general credit of the State, or by any revenue
 
 6 or taxes of the State.  Nothing in this subsection precludes the]
 
 7 appropriated by the legislature.  The board of regents [from
 
 8 requesting and securing] may request and secure legislative
 
 9 appropriations to fund the settlement of any such claim or
 
10 judgment against the university, its regents, officers,
 
11 employees, or agents."
 
12      SECTION 8.  Section 304-6.5, Hawaii Revised Statutes, is
 
13 amended by amending subsection (c) to read as follows:
 
14      "(c)  Indemnification claims authorized by this section
 
15 shall be payable [solely] from [the] moneys [and property of the
 
16 university, and shall not constitute a general obligation of the
 
17 State, or be secured directly or indirectly by the full faith and
 
18 credit of the State or the general credit of the State, or by any
 
19 revenues or taxes of the State.  The board of regents may obtain
 
20 loss insurance to cover the liability of the university that may
 
21 arise under this section; provided that loss insurance for the
 
22 university shall be at the university's expense.] appropriated by
 

 
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 1 the legislature."
 
 2 SECTION 9.  Statutory material to be repealed is bracketed.  New
 
 3 statutory material is underscored.
 
 4 SECTION 10.  This Act shall take effect upon its approval.
 
 5 
 
 6                           INTRODUCED BY:_________________________
 

 
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