STAND. COM. REP. 2820

Honolulu, Hawaii

, 2004

RE: S.B. No. 2835

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2835 entitled:

"A BILL FOR AN ACT RELATING TO THE DEPARTMENT OF THE ATTORNEY GENERAL,"

begs leave to report as follows:

The purpose of this measure is to provide the Attorney General with the authority to administer the Litigation Deposits Trust Fund in a more efficient manner.

The bill also gives the Attorney General the financial means by which to more expeditiously execute civil actions on behalf of the State.

Specifically, the measure amends the scope and management of the Fund by:

(1) Removing the $100,000 threshold that triggered the deposit of funds received as a civil action award or settlement into the Fund;

(2) Establishing that all proceeds received as an award or settlement for civil actions initiated or filed by the Attorney General shall be deposited into the Fund, unless a court order or settlement agreement requires otherwise;

(3) Deleting the requirement that the Attorney General disburse residual general and nongeneral funds related to a closed civil action to the respective funds within thirty days after closure;

(4) Excluding recoveries on behalf of the Antitrust Trust Fund, Tobacco Enforcement Special Fund, Medicaid Investigations Special Fund, Hawaii Tobacco Settlement Special Fund, and Criminal Forfeiture Fund from being deposited into the Fund;

(5) Specifying that when the Attorney General receives a civil action award or settlement that is subject to the Fund:

(A) Thirty-three per cent of any recovered funds shall be retained by the Fund to support the Attorney General's investigation and prosecution efforts;

(B) The remaining balance may be used to reimburse the source of the funds (general fund, special fund, revolving or other fund or account) recovered in an amount equal to the funds lost; and

(C) If any funds remain, then the remainder shall become part of the Fund;

(6) Allowing the Attorney General to invest the moneys contained in the Fund in investment instruments other than securities;

(7) Requiring that all moneys in excess of $1,000,000 remaining in the Fund at the end of each fiscal year lapse into the general fund;

(8) Exempting the deposit of any moneys into the Fund that would be in violation of federal law; and

(9) Establishing that all recoveries made under the State's False Claims Act be deposited into the Fund.

Your Committee finds that, currently, the Fund is used primarily to defend actions against the State. Major civil actions initiated by the Attorney General usually require a supplemental request for funds or the retention of a special deputy to handle the litigation on a contingent fee basis. This hurdle in obtaining the funding necessary to prosecute a case delays its initiation since, without funding, it is impossible to hire the requisite staff to investigate the case.

Your Committee has amended the measure by making technical nonsubstantive amendments for the purposes of style and clarity and by changing the effective date from July 1, 2004, to July 1, 2040, to facilitate further discussion on this issue.

Your Committee believes that this measure will result in the more efficient administration of the Fund, thereby facilitating the Attorney General's ability to better fulfill the Attorney General's mandated responsibilities.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2835, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2835, S.D. 1.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

BRIAN T. TANIGUCHI, Chair