REPORT TITLE:



DESCRIPTION:


 
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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 PUBLIC ASSISTANCE.



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

 1      SECTION 1.  In 1999, the legislature amended section 346-37,
 
 2 Hawaii Revised Statutes, to require the department of human
 
 3 services to contribute to a claimant's attorney's fees and costs
 
 4 under certain limited circumstances.  To avoid the contribution
 
 5 requirement of section 346-37(h), the department must prosecute
 
 6 its own claims, or intervene or join in any action, or actively
 
 7 participate with a claimant or a claimant's attorney in the
 
 8 prosecution of claims if it has been given timely written notice
 
 9 of any claim or action.  However, the law is unclear as to
 
10 whether or not the department is entitled to also recover its
 
11 attorney's fees and costs when it prosecutes its own claims, or
 
12 intervenes or joins in any action, or actively participates with
 
13 a claimant or a claimant's attorney in the prosecution of claims.
 
14 The purpose of this Act is to specify that when the department
 
15 prosecutes its own claims, or intervenes or joins in any action,
 
16 or actively participates with a claimant or a claimant's attorney
 
17 in the prosecution of claims, it shall be allowed to recover its
 
18 attorney's fees and costs in addition to its reimbursement
 
19 rights, claims, or liens.
 

 
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 1      SECTION 2.  Section 346-37, Hawaii Revised Statutes, is
 
 2 amended as follows:
 
 3      (1)  By amending subsection (h) to read as follows:
 
 4      "(h)  The lien shall attach as provided by subsection (g).
 
 5 If a notice of lien is properly served upon the attorney
 
 6 representing the claimant as provided in subsection (g), that
 
 7 attorney shall pay the full amount of the lien, prior to
 
 8 disbursing any of the proceeds of the suit or settlement to the
 
 9 attorney's client.  If a notice of lien is properly served upon
 
10 the third person, the third person's agent or attorney, or the
 
11 third person's insurance company, as provided in subsection (g),
 
12 it shall be the responsibility of the person receiving the
 
13 notices to pay the full amount of the lien prior to disbursing
 
14 any of the proceeds to the claimant's attorney,
 
15      If, after having received timely written notice of any claim
 
16 or action under subsection (e), the department did not intervene
 
17 or join in the action or prosecute its own claims or actively
 
18 participate with the claimant or the claimant's attorney in the
 
19 prosecution of claims, or a distribution agreement was not
 
20 entered into between the parties, then the department shall
 
21 determine its fair contribution toward [attorney] attorney's fees
 
22 and costs incurred in the action that shall be a reasonable
 
23 amount based solely upon legitimate costs and services rendered
 

 
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 1 by the claimant or claimant's attorney in recovering the lien
 
 2 amount.  Any dispute regarding the department's determination of
 
 3 its contribution to fees and costs may be submitted to
 
 4 administrative hearing under subsection (i) or a court of
 
 5 competent jurisdiction.  [The value of services contributed by
 
 6 the claimant and department may be considered in fairly
 
 7 allocating fees and costs between the claimant and department
 
 8 where both contribute to recovering the lien amount.]"
 
 9      (2)  By amending subsection (j) to read as follows:
 
10      "(j)  Upon the recovery of any claim as provided in this
 
11 section, the amount recovered shall be paid into the treasury of
 
12 the State, and if the amount for which claim was paid was in part
 
13 from federal funds, the proper portion thereof shall be paid by
 
14 the director of finance into the treasury of the United States,
 
15 and the director of finance shall report the payment to the
 
16 department.  If the department prosecutes its own claims, or
 
17 intervenes or joins in any action, or actively participates with
 
18 a claimant or a claimant's attorney in the prosecution of claims,
 
19 then, in addition to any reimbursement rights, claims, or liens
 
20 provided in this section, the department shall also be entitled
 
21 to recover its attorney's fees and costs which shall be used to
 
22 reimburse the department for such attorney's fees and costs
 
23 incurred by it."
 

 
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 1      SECTION 3.  Statutory material to be repealed is bracketed.
 
 2 New statutory material is underscored,
 
 3      SECTION 4.  This Act shall take effect upon its approval. 
 
 4 
 
 5                       INTRODUCED BY:  ___________________________
 

 
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