STAND. COM. REP. NO. 2438

Honolulu, Hawaii

RE: S.B. No. 2311

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 2311 entitled:

"A BILL FOR AN ACT RELATING TO CLAIMS AGAINST THE STATE,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Prohibit claims for refunds, reimbursements, or other payments, authorization for which is sought from the Legislature that exceed the time limitation of section 40-68, Hawaii Revised Statutes, from being claimed;

(2) Require the Attorney General to include in the Attorney General's annual legislative bill of claims recommended for approval a total dollar amount of possible judgments against the State that have not yet settled;

(3) Require the Attorney General's report to the Legislature describing the claims against the State to include additional information; and

(4) Require the Attorney General to submit a report every five years to the legislature containing further incidents that occurred in an agency that led to a claim.

Your Committee received comments on this measure from the Department of the Attorney General.

Your Committee finds that the legislature is required to address two types of claims for relief against the State: judgments or settlements in cases that have been brought in courts and claims for payment of outstanding or uncashed checks. Your Committee further finds that outstanding or uncashed checks are presumed paid within a one-year period after issuance. However, if the check is not submitted for payment, the claimant has an additional window in which the check is required to be paid. Your Committee also finds that in some instances, the administrative process for this category of payments involves payment from a capped trust fund, and if a large check is presented for payment, the fund may be depleted. Your Committee additionally finds that, in these instances, it is recommended that the claimant present the claim through the legislative relief process to ensure that adequate funds are available in the trust fund to pay out on other claims. Your Committee finds that when a claimant is referred to the Legislature for relief, the claimant is given another opportunity to claim payment from the State despite not having submitted the check in a timely fashion twice before. This measure will provide the Legislature with additional, necessary information about cases involving judgments and settlements to better understand the depth of the potential liability of the State and the challenges facing agencies in implementing remedial measures.

Your Committee notes the concern raised by the Department of the Attorney General that the Department cannot accurately determine the total value dollar of judgments against the State that have not yet been settled. Your Committee further notes the concern raised by the Department of the Attorney General that even if it were possible for the Department to determine which cases and claims it believes are likely to settle or be reduced to a judgment, such a list should not be made publicly available as the list may be interpreted or viewed as a list of cases that the Department believes are likely to have unfavorable outcomes, significantly compromising the Department's ability to obtain favorable settlements and defend the State in those cases.

Accordingly, Your Committee has amended this measure by:

(1) Deleting language that would have required the Department of the Attorney General to include a total dollar value of possible judgments in the legislative bill of claims;

(2) Requiring the Attorney General to transmit to the Speaker of the House of Representatives, President of the Senate, and Chairs of the House and Senate Judiciary Committees a confidential report that provides a good faith estimate of each possible judgment against the State that has not yet settled;

(3) Changing the deadline of the Attorney General's report describing the claims and the attendant circumstances and advice for corrective action rendered to the agencies from twenty days prior to the convening of each Regular Session to forty days;

(4) Changing the deadline of the Attorney General's report containing further incidents that occurred in an agency that led to a claim from twenty days to forty days prior to the convening of the Regular Session and each regular session every five years thereafter; and

(5) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2311, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2311, S.D. 1, and be referred to your Committee on Ways and Means.

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

________________________________

KARL RHOADS, Chair