STAND. COM. REP. NO. 1331

Honolulu, Hawaii

RE:    H.B. No. 1150

       H.D. 1

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred H.B. No. 1150, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CONTRACTS,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Exempt an owner's agreement with an attorney to file a claim as to identified property or contest the administrator's denial of a claim from the application of section 523A-25, Hawaii Revised Statutes; provided that an owner's agreement with an attorney that provides for compensation shall not exceed twenty-five percent of the total value of the property; and

     (2)  Provide an exception to the twenty-five percent limit for an owner's agreement with an attorney to maintain an action in circuit court upon approval of the court.

     Your Committee received testimony in support of this measure from the Collections Law Section of the Hawaii State Bar Association.

     Your Committee finds that Act 229, Session Laws of Hawaii 2012, limited compensation for the recovery of property presumed abandoned to ten percent of the total value of the property.  Your Committee further finds that the majority of property held by the Department of Budget and Finance is valued at less than $5,000.  If any difficulties are encountered when attempting to release property from the Department of Budget and Finance, the cost for the claimant to hire an attorney in the majority of unclaimed property cases will increase beyond the ten percent limit rather quickly.  The ten percent limit on compensation for recovery therefore creates a barrier for members of the public who wish to hire an attorney to assist with the recovery of unclaimed funds or property.  By increasing the limit on compensation for attorneys to twenty-five percent of the total value of the property, this measure ensures that members of the public are still able to retain attorneys to handle the claims process, while also ensuring that attorneys' fees for this process remain at reasonable levels.

     Your Committee has amended this measure by changing the effective date from July 1, 2050, to July 1, 2013.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1150, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1150, H.D. 1, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

____________________________

CLAYTON HEE, Chair