STAND. COM. REP. NO. 38-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2061
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Higher Education, to which was referred
H.B. No. 2061 entitled: 

     "A BILL FOR AN ACT RELATING TO THE UNIVERSITY OF HAWAII,"

begs leave to report as follows:

     The purpose of this bill is to facilitate the work of the
Office of the Senior Vice President for Legal Affairs and
University General Counsel, while protecting the assets of the
University of Hawaii (UH), by:

     (1)  Requiring that settlements and judgments against UH be
          paid from legislative appropriations;

     (2)  Creating procedures for service of process upon UH; and

     (3)  Clarifying that legal services to UH are to be provided
          by the University General Counsel.

     The UH and the University of Hawaii Professional Assembly
testified in support of this bill.  The Research Corporation of
UH offered comments on this bill, suggesting amendments.

     Act 115, Session Laws of Hawaii 1998, provided a great deal
of flexibility to the UH to manage its resources in a manner that
would allow it to fully achieve its mission of teaching,
conducting research, and providing community services.  In
providing this autonomy to the UH, it was not the intent of the
Legislature to carve the UH out of the State government system.

 
 
                                 STAND. COM. REP. NO. 38-00
                                 Page 2

 
The UH is an integral part of the State government.  However, the
UH testified that part of Act 115, making UH responsible for
paying settlements and judgments from its own assets and allowing
the Board of Regents to request legislative appropriations for
these payments, may jeopardize UH's claim of immunity.
Currently, the federal courts look at whether judgments are
payable from State funds as part of a five-prong test to
determine whether an entity is an arm of the State for purposes
of immunity.  The proposed language in this bill requiring that
settlements and judgements be paid from legislative
appropriations is needed to strengthen UH's claim of immunity
from suits in federal court under the Eleventh Amendment to the
United States Constitution.

     Upon further consideration, your Committee has amended this
measure to make the procedures for serving process less
restrictive than originally drafted.  As amended, this bill will
allow summons and complaint to be delivered to any attorney in
the Office of the University General Counsel.  Technical,
nonsubstantive amendments were also made.

     As affirmed by the record of votes of the members of your
Committee on Higher Education that is attached to this report,
your Committee is in accord with the intent and purpose of H.B.
No. 2061, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 2061, H.D. 1, and
be referred to the Committee on Judiciary and Hawaiian Affairs.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Higher Education,



                                   ______________________________
                                   DAVID MORIHARA, Chair