SB589 CD1

PART I

SECTION 1. The legislature finds that the University of Hawaii cancer center reduces the burden of cancer through research, education, patient care, and community outreach. The University of Hawaii cancer center is the only National Cancer Institute-designated cancer center in Hawaii and the Pacific region. The University of Hawaii cancer center is a member of the Hawaii Cancer Consortium, which includes five hospital groups and the University of Hawaii John A. Burns school of medicine.

The University of Hawaii John A. Burns school of medicine educates and trains health care professionals, including physicians, biomedical scientists, and allied health workers. The University of Hawaii John A. Burns school of medicine also conducts fundamental medical research and translates discoveries into delivery practices. Because the University of Hawaii John A. Burns school of medicine is a community-based medical school without its own university hospital, it partners with private hospitals in the community to achieve its educational mission.

The legislature further finds that public funds and other resources the State has made available to the University of Hawaii John A. Burns school of medicine and University of Hawaii cancer center have been substantial. The magnitude of state funds and other resources provided to the University of Hawaii, the distinction of the University being the sole public institution of higher education in the State, and the University of Hawaii cancer center being the only National Cancer Institute-designated cancer center in Hawaii underscore the importance of establishing complementary strategic priorities and coordinating the management and deployment of state resources appropriated to the University of Hawaii John A. Burns school of medicine and University of Hawaii cancer center.

It is in the public's interest that State resources be efficiently and effectively managed to optimize the public benefits. Just as co-locating the physical facilities for the University of Hawaii John A. Burns school of medicine and University of Hawaii cancer center on adjoining sites in Kakaako promotes synergistic efforts, the legislature determines that it is a statewide concern to ensure that the management of public resources provided to the University of Hawaii John A. Burns school of medicine and University of Hawaii cancer center be integrated, coordinated, and focused on common priorities to avoid unnecessary duplication of administrative expenses or conflicting priorities. Maximized efficiencies will benefit the University of Hawaii cancer center, University of Hawaii John A. Burns school of medicine, University of Hawaii at Manoa, and the State by reducing or eliminating unnecessary expenditures and optimizing operations.

The director of the University of Hawaii cancer center and dean of the University of Hawaii John A. Burns school of medicine shall report and be accountable to the provost of the University of Hawaii at Manoa, who shall have authority to direct and achieve efficiencies at the Kakaako campus that comprises the John A. Burns school of medicine and University of Hawaii cancer center; and shall coordinate with the president of the University of Hawaii.

Accordingly, the purpose of this part is to:

(1) Establish the University of Hawaii cancer center in statute as the cancer research center of Hawaii;

(2) Require the director of the cancer research center of Hawaii to be appointed by University of Hawaii's board of regents upon recommendation from the provost of the University of Hawaii at Manoa and with the concurrence of the president of the University of Hawaii;

(3) Require the cancer research center of Hawaii to be administratively affiliated with the University of Hawaii John A. Burns school of medicine, and that the administrative services and infrastructure teams of both entities be merged to offer efficiency;

(4) Require the director of the cancer research center of Hawaii and dean of the University of Hawaii John A. Burns school of medicine to report to the provost of the University of Hawaii at Manoa and coordinate with the president of the University;

(5) Require funds expended from or originating from the University of Hawaii tuition and fees special fund for the University of Hawaii John A. Burns school of medicine or cancer research center of Hawaii to be used for educational purposes only; and

(6) Require funds expended from or originating from the research and training revolving fund for the University of Hawaii John A. Burns school of medicine or cancer research center of Hawaii to be used for research and research-related purposes only.

SECTION 2. Chapter 304A, part IV, Hawaii Revised Statutes, is amended by adding a new subpart to be appropriately designated and to read as follows:

" . Cancer Research Center of Hawaii

§304A- Cancer research center of Hawaii. (a) There is established an organized research unit, hereinafter known as the cancer research center of Hawaii, to conduct cancer research. The cancer research center of Hawaii shall be administered by a director to be appointed by the board of regents upon recommendation by the provost of the University of Hawaii at Manoa with concurrence by the president of the University of Hawaii.

(b) The cancer research center of Hawaii shall be administratively affiliated with the University of Hawaii John A. Burns school of medicine. The administrative services and infrastructure teams of the cancer research center of Hawaii and the University of Hawaii John A. Burns school of medicine shall be merged for efficiency purposes.

(c) The director of the cancer research center of Hawaii and dean of the University of Hawaii John A. Burns school of medicine shall:

(1) Report and be accountable to the provost of the University of Hawaii at Manoa; and

(2) Coordinate with the president of the University of Hawaii.

(d) The provost of the University of Hawaii shall have authority to direct and achieve efficiencies at the University of Hawaii John A. Burns school of medicine and cancer research center of Hawaii.

(e) The programs of the University of Hawaii John A. Burns school of medicine and cancer research center of Hawaii, and the University of Hawaii at Manoa shall identify opportunities to:

(1) Capitalize on collaboration between the programs; and

(2) Maximize operational efficiencies between the University of Hawaii John A. Burns school of medicine and cancer research center of Hawaii,

including but not limited to shared services and personnel whenever feasible and utilization of centralized services available through the University of Hawaii at Manoa whenever appropriate.

(f) The cancer research center of Hawaii's research agenda shall focus on research, education, patient care, and community outreach and reflect an understanding of the ethnic, cultural, and environmental characteristics of the State and the Pacific region.

(g) The cancer research center of Hawaii may:

(1) Engage in international research collaborations;

(2) Undertake research studies and clinical trials; and

(3) Participate in projects and programs of the National Cancer Institute."

SECTION 3. Section 304A-2153, Hawaii Revised Statutes, is amended to read as follows:

"§304A-2153 University of Hawaii tuition and fees special fund. (a) There is established the University of Hawaii tuition and fees special fund into which shall be deposited all revenue collected by the university for regular, summer, and continuing education credit tuition, tuition-related course and fee charges, and any other charges to students, except as provided by law. Moneys deposited into the fund shall be expended to maintain or improve the university's programs and operations and shall not be:

(1) Used as a justification for reducing any budget request or allotment to the university unless the university requests such a reduction;

(2) Transferred unless otherwise authorized by the legislature; and

(3) Restricted by the governor or the director of finance without the prior approval of the legislature.

Any rule, policy, or action of any agency or individual in contravention of this subsection shall be void as against public policy.

(b) Any law to the contrary notwithstanding, the board of regents may authorize expenditures of up to $3,000,000 annually, excluding in-kind services, from this fund for the purposes of promoting alumni relations and generating private donations for deposit into the University of Hawaii Foundation for the purposes of the university. Any expenditure authorized pursuant to this subsection shall be for a public purpose and shall not be subject to chapters 42F, 103, 103D, and 103F. The university shall submit a comprehensive report to the legislature detailing the use of any funds authorized by the board under this subsection no later than twenty days prior to the convening of each regular session.

The report shall:

(1) Identify each department of the University of Hawaii Foundation supported by moneys from the fund;

(2) Describe the purposes and activities of each department identified in paragraph (1) and how it participates in fundraising activities and benefits the university;

(3) Provide the total expenditures of each department identified in paragraph (1) by primary expense categories;

(4) Identify all moneys from the fund transferred to any fund of the university and provide a justification of how these moneys are used to benefit the university;

(5) Provide a financial summary of the operating activities of the University of Hawaii Foundation, including revenues and expenditures by major reporting categories; and

(6) Identify amounts and purposes of all expenditures from the University of Hawaii support fund.

(c) Any law to the contrary notwithstanding, the university may transfer funds from the University of Hawaii tuition and fees special fund into the scholarship and assistance special fund established pursuant to section 304A‑2159.

(d) In estimating its quarterly budget requirements, each campus of the University of Hawaii shall prepare a plan for the fiscal year for the operation of each of the programs that it is responsible for administering. The operations plan shall be:

(1) In such form and content as the vice president for budget and finance and chief financial officer of the University of Hawaii may prescribe; and

(2) Submitted, together with the estimated quarterly budget requirements, to the vice president for budget and finance and chief financial officer on [~~such~~] a date [as] that the vice president for budget and finance and chief financial officer may prescribe.

(e) The president and vice president for budget and finance and chief financial officer of the University of Hawaii:

(1) Shall review the operations plan for each campus to determine if:

(A) It is consistent with the policy decisions of the board of regents and appropriations by the legislature;

(B) It reflects proper planning and efficient management methods; and

(2) Shall approve the operations plan for each campus if they determine that the operations plan meets the requirements of paragraph (1); and

(3) May modify or withhold the planned expenditures of any campus at any time during the appropriations period.

(f) At the end of each fiscal year, the moneys in the University of Hawaii tuition and fees special fund for each campus shall lapse to the credit of program identification number UOH900 (University of Hawaii, system wide support).

(g) Notwithstanding any other law to the contrary, funds expended from or originating from the University of Hawaii tuition and fees fund for the University of Hawaii John A. Burns school of medicine or the cancer research center of Hawaii shall be used by the John A. Burns school of medicine or the cancer research center of Hawaii for educational purposes only."

SECTION 4. Section 304A-2253, Hawaii Revised Statutes, is amended to read as follows:

"§304A-2253 Research and training revolving fund. (a) There is established a University of Hawaii research and training revolving fund into which shall be deposited one hundred per cent of the total amount of indirect overhead revenues generated by the university from research and training programs. The board of regents is authorized to expend one hundred per cent of the revenues deposited in the fund for:

(1) Research and training purposes that may result in additional research and training grants and contracts;

(2) Facilitating research and training at the university; and

(3) Further deposit into the discoveries and inventions special fund.

(b) The annual report required to be made for this revolving fund shall include but not be limited to a breakdown of travel expenses.

(c) Notwithstanding section 304A-107 to the contrary, the board of regents, or its designee, may establish a separate account within the research and training revolving fund for the purpose of providing advance funding to meet reimbursable costs incurred in connection with federally financed research and training projects. Any reimbursement received as a result of providing advance funding shall be deposited into the research and training revolving fund to be used for the purpose of meeting reimbursable costs incurred in connection with federally financed projects.

(d) Revenues deposited into the fund shall not be used as a basis for reducing any current or future budget request or allotment to the university unless the university requests such a reduction.

(e) Notwithstanding any other law to the contrary, funds expended from or originating from the research and training revolving fund for the University of Hawaii John A. Burns school of medicine or the cancer research center of Hawaii shall be used by the University of Hawaii John A. Burns school of medicine or the cancer research center of Hawaii for research and research-related purposes only."

PART II

SECTION 5. The purpose of this part is to further efforts to ensure the efficient and effective management of public resources provided to the University of Hawaii John A. Burns school of medicine and cancer research center of Hawaii to optimize public benefits.

SECTION 6. (a) The University of Hawaii shall develop and implement a plan for the University of Hawaii John A. Burns school of medicine and cancer research center of Hawaii to achieve greater operational efficiencies, reduce duplication of services, and share administrative functions to the maximum extent practicable.

(b) The president of the University of Hawaii shall submit a report on the progress of the development and implementation of the plan as provided under this part to the legislature no later than twenty days prior to the convening of the regular session of 2023.

PART III

SECTION 7. The purpose of this part is to allow the University of Hawaii to continue its contribution to research commercialization and economic development by extending the sunset date of Act 38, Session Laws of Hawaii 2017, for two years, until June 30, 2024, while promoting accountability and transparency.

SECTION 8. Section 84-10, Hawaii Revised Statutes, is amended to read as follows:

"[[]§84-10[]] University of Hawaii; technology transfer activities; exemption. (a) Sections 84-12, 84-13, 84-14 to 84‑16, and 84-18 shall not apply to technology transfer activities sponsored by the University of Hawaii; provided that the technology transfer activities comply with the regulatory framework and research compliance program and policies approved by the board of regents of the University of Hawaii [~~board of regents~~].

(b) Notwithstanding subsection (a), the University of Hawaii shall not sponsor, enter into, or continue to engage in technology transfer activities with a private person in which an employee of the University of Hawaii has a conflict of interest as provided in section 84-14, including a financial interest, irrespective of whether the State benefits from the technology transfer activities; provided that the prohibition under this subsection shall not apply if:

(1) The technology transfer activities with the private person promote the timely and efficient commercialization of intellectual property created by basic and applied research at the University of Hawaii;

(2) The State stands to benefit from the technology transfer activities with the private person;

(3) The technology transfer activities with the private person is the only means by which the specific scientific findings by the University of Hawaii or intellectual property created by the University of Hawaii may be commercialized;

(4) The technology transfer activities with the private person comply with the regulatory framework and research compliance program and policies approved by the board of regents of the University of Hawaii;

(5) The employee's conflict of interest is disclosed at the time of the proposal, and the proposals and binding agreements for each of the technology transfer activities with the private person are reviewed and approved by the state ethics commission to assure compliance with ethics laws;

(6) Any changes to the terms and conditions of the technology transfer activities are reported to and approved by the state ethics commission;

(7) The employee with the conflict of interest does not:

(A) Take official action affecting the technology transfer activities with the private person; or

(B) Directly or indirectly supervise an employee who takes official action affecting the technology transfer activities with the private person; and

(8) During the term of the technology transfer activities with the private person, the following employees file annually with the state ethics commission a disclosure of financial interests pursuant to section 84-17:

(A) Employees who have a conflict of interest as provided in section 84-14, including a financial interest, in the private person;

(B) Employees who take official action affecting the technology transfer activities with the private person; and

(C) Employees who directly or indirectly supervise an employee who takes official action affecting the technology transfer activities with the private person.

(c) Notwithstanding subsection (a), any technology transfer activities sponsored by, entered into, or engaged in by the University of Hawaii in violation of subsection (b) is voidable under section 84‑16.

(d) The University of Hawaii shall file annually with the state ethic commission a disclosure, including its conflict of interest management plan, of any conflict of interest of any employee relating to its technology transfer activities.

[~~(b)~~] (e) As used in this section, [~~"technology~~]

"Person" means any individual, firm, association, organization, sole proprietorship, partnership, company, corporation, joint venture, trust, or any other form of business or legal entity or group of individuals.

"Technology transfer activities" means the process of transferring scientific findings from the public sector to the private sector for the purpose of commercial development and application for personal or financial gain. "Technology transfer activities" may include creating joint ventures, limited partnerships, or other corporate forms; allocating equity shares, partnership interests, or other forms of participation; identifying new technologies; protecting technologies through patents and copyrights; forming development and commercialization strategies, arrangements, or projects; and other related activities."

SECTION 9. Section 304A-121, Hawaii Revised Statutes, is amended to read as follows:

"[[]§304A-121[]] Technology transfer; reporting. The board of regents of the University of Hawaii shall submit a written report to the legislature no later than twenty days prior to the convening of each regular session regarding:

(1) The development [~~and~~], implementation, and enforcement of its regulatory framework and research compliance program to reflect ethical research principles and technology transfer regulations used by the federal government; [~~and~~]

(2) The technology transfer activities of the University of Hawaii, as defined in section 84-10, and the status of such activities[.]; and

(3) A disclosure, including the University of Hawaii's conflict of interest management plan, of any conflict of interest of any employee of the University of Hawaii relating to its technology transfer activities."

SECTION 10. Act 38, Session Laws of Hawaii 2017, is amended by amending section 5 to read as follows:

"SECTION 5. This Act shall take effect upon its approval; provided that this Act shall be repealed on June 30, [~~2022.~~] 2024."

PART IV

SECTION 11. The purpose of this part is to allow the University of Hawaii to continue its innovation and commercialization initiative program by extending the sunset date of Act 39, Session Laws of Hawaii 2017, for three years, until June 30, 2024, while promoting accountability and transparency.

SECTION 12. Section 304A-1958, Hawaii Revised Statutes, is amended to read as follows:

"[[]§304A-1958[]] Construction of subpart. (a) Other state laws, including without limitation the state code of ethics, shall be applied and construed on balance in recognition of the public benefits created and state interests advanced by the activities conducted by the University of Hawaii pursuant to this subpart.

(b) Notwithstanding subsection (a), the University of Hawaii shall not sponsor, enter into, or continue to engage in activities conducted pursuant to this subpart with a private person in which an employee of the University of Hawaii has a conflict of interest as provided in section 84-14, including a financial interest, irrespective of whether the State benefits from the activities; provided that the prohibition under this subsection shall not apply if:

(1) The activities with the private person transform the products of the University of Hawaii's research and instructional activities into viable economic enterprises;

(2) The State stands to benefit from the activities with the private person;

(3) The activities with the private person are the only means by which the specific products of the University of Hawaii's research and instructional activities may be transformed into viable economic enterprises;

(4) The activities with the private person comply with the regulatory framework and research compliance program and policies approved by the board of regents of the University of Hawaii;

(5) The employee's conflict of interest is disclosed at the time of the proposal, and the proposals and binding agreements for each of the activities with the private person are reviewed and approved by the state ethics commission to assure compliance with ethics laws;

(6) Any changes to the terms and conditions of the activities are reported to and approved by the state ethics commission;

(7) The employee with the conflict of interest does not:

(A) Take official action affecting the activities with the private person; or

(B) Directly or indirectly supervise an employee who takes official action affecting the activities with the private person; and

(8) During the term of the activities with the private person, the following employees file annually with the state ethics commission a disclosure of financial interests pursuant to section 84-17:

(A) Employees who have a conflict of interest as provided in section 84-14, including a financial interest, in the private person;

(B) Employees who takes official action affecting the activities with the private person; and

(C) Employees who directly or indirectly supervise an employee who takes official action affecting the activities with the private person.

(c) Notwithstanding subsection (a), any activities conducted by the University of Hawaii pursuant to this subpart in violation of subsection (b) is voidable under section 84‑16.

(e) As used in this section, "person" means any individual, firm, association, organization, sole proprietorship, partnership, company, corporation, joint venture, trust, or any other form of business or legal entity or group of individuals."

SECTION 13. Section 304A-1959, Hawaii Revised Statutes, is amended to read as follows:

"§304A-1959 Biennial report. No later than twenty days prior to the convening of the regular session of each odd-numbered year, the University of Hawaii shall submit a report to the legislature concerning:

(1) All funds deposited into the university innovation and commercialization initiative special fund and a detailed description of the use of those funds; [~~and~~]

(2) Coordinated efforts between the innovation and commercialization initiative program and other state agencies, including the Hawaii technology development corporation, the Hawaii strategic development corporation, and the Hawaii state energy office, to move the State's innovation goals forward, and to more efficiently and effectively utilize resources to achieve these outcomes[.]; and

(3) A disclosure, including its conflict of interest management plan, of all conflicts of interest of any employee relating to its activities conducted pursuant to part IV, subpart P."

SECTION 14. Act 39, Session Laws of Hawaii 2017, is amended by amending section 3 to read as follows:

"SECTION 3. This Act shall take effect on July 1, 2017, and shall be repealed on June 30, [~~2021.~~] 2024."

PART V

SECTION 15. The purpose of this part is to extend for three years, the authority of the president of the University of Hawaii to act as the University of Hawaii's chief procurement officer for all procurement contracts under chapter 103D, Hawaii Revised Statutes.

SECTION 16. Act 42, Session Laws of Hawaii 2018, is amended by amending section 6 to read as follows:

"SECTION 6. This Act shall take effect upon its approval; provided that on June 30, [~~2021,~~] 2024, this Act shall be repealed and sections 103D-203(a) and 304A-2672, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day prior to the effective date of this Act."

PART VI

SECTION 17. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 18. This Act shall take effect upon its approval; provided that sections 8, 9, 12, and 13 of this Act shall be repealed on June 30, 2024; provided further that:

(1) Section 84-10, Hawaii Revised Statutes, shall be reenacted in the form in which it read on June 18, 2017; and

(2) Sections 304A‑121, 304A-1958, and 304A-1959, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day before the effective date of this Act.

THE SENATE	S.B. NO.	589
THIRTY-FIRST LEGISLATURE, 2021		S.D. 2
STATE OF HAWAII		H.D. 2
		C.D. 1