REPORT TITLE:



DESCRIPTION:


 
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THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO HAWAIIAN HOME LANDS TRUST INDIVIDUAL CLAIMS.



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

 1      SECTION 1.  Chapter 674, Hawaii Revised Statutes, was
 
 2 enacted to establish a process under which individual
 
 3 beneficiaries under the Hawaiian home lands trust may resolve
 
 4 claims for actual damages arising out of or resulting from a
 
 5 breach of trust, which occurred between August 21, 1959, and
 
 6 June 30, 1988, and was caused by an act or omission of an
 
 7 employee of the State in the management and disposition of trust
 
 8 resources.
 
 9      While the Hawaiian Home Lands Trust Individual Claims Review
 
10 Panel ("Panel") has done a substantial amount of work in
 
11 processing the individual claims, uncertainty still remains with
 
12 respect to the validity of the review process.  When Panel
 
13 members are also claimants, it calls into question the fairness
 
14 and objectivity of the Panel's recommendations.  Act 382, 1997
 
15 Haw. Sess. Laws 1208, which required the attorney general, the
 
16 director of finance, the chairperson of the Hawaiian homes
 
17 commission, and the chairperson of the Panel, to discuss and
 
18 formulate an appropriate formula and any criteria necessary to
 
19 qualify and resolve all claims made under chapter 674, was
 

 
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 1 challenged in court still pending and in litigation, this only
 
 2 adds to the uncertainty as to what formula and criteria should be
 
 3 applied by the Panel when processing these claims.
 
 4      The process to settle individual claims for breaches under
 
 5 the Hawaiian home lands trust needs to be clarified quickly and
 
 6 definitively so that these clarifications can be applied
 
 7 retroactively and immediately to all claims with the intent of
 
 8 resolving these claims in one fair, consistent, expeditious and
 
 9 conclusive manner.
 
10      The purpose of this Act is to establish and approve the
 
11 formula and criteria to be applied by the Panel to all claims
 
12 properly made under chapter 674, Hawaii Revised Statutes.
 
13      SECTION 2.  The Hawaiian home lands trust individual claims
 
14 review panel established pursuant to chapter 674, Hawaii Revised
 
15 Statutes, shall utilize the formula and criteria established and
 
16 approved under section 4 of this Act to review all properly
 
17 submitted claims.
 
18      SECTION 3.  Section 674-1, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "674-1  Purpose.  The purpose of this chapter is to
 
21 establish a process under which individual beneficiaries under
 
22 the Hawaiian home lands trust may resolve claims for actual
 

 
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 1 damages arising out of or resulting from a breach of trust, which
 
 2 occurred between August 21, 1959, and June 30, 1988, and was
 
 3 caused by an act or omission of an employer of the State in the
 
 4 management and disposition of trust resources:
 
 5      (1)  By establishing a Hawaiian home lands trust individual
 
 6 claims review panel which shall:
 
 7           (A)  Receive, review, and evaluate the merits of an
 
 8 individual beneficiary's claim[;] pursuant to the formula and
 
 9 criteria established under section 674-15;
 
10           (B)  Render findings and issue an advisory opinion
 
11 regarding the merits of each claim filed with the panel,
 
12 including an estimate of the probable award of actual damages or
 
13 recommended corrective action that may be implemented to resolve
 
14 each claim;
 
15           (C)  Prepare and transmit a report to the governor and
 
16 legislature, at least twenty days prior to the convening of each
 
17 regular legislative session, and a final report, at least twenty
 
18 days prior to the convening of the 1997 regular legislative
 
19 session, on the activities of the panel including a summary of
 
20 each claim brought before the panel, the panel's findings and
 
21 advisory opinion regarding the merits of each claim, and an
 
22 estimate of the probable compensation or any recommended
 
23 corrective action for legislative action;
 

 
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 1           (D)  Disburse any compensation awarded by the
 
 2 legislature in regular session or undertake other actions as
 
 3 provided by law which are acceptable to a claimant; and
 
 4      (2)  By providing an individual beneficiary claimant the
 
 5 right to bring an action to recover actual damages for a breach
 
 6 of trust, in the circuit courts of the State of Hawaii, if the
 
 7 action by the legislature in regular session on each claim
 
 8 brought before the panel is not acceptable to an individual
 
 9 beneficiary claimant."
 
10      SECTION 4.  Section 674-15, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "674-15  Limitations upon award of compensation or
 
13 corrective action.  (a) No claim shall be made under this chapter
 
14 for which a remedy was or is provided elsewhere under the laws of
 
15 this State, which is or was the subject of pending or prior
 
16 litigation, or which is predicated, in whole or in part, on an
 
17 act or omission which occurred prior to August 21, 1959.
 
18      (b)  To qualify as a proper claim the following criteria
 
19 shall be applied:
 
20      (1)  Claims involving the award of homesteads with no
 
21 infrastructure or "accelerated awards" claims, are excluded under
 
22 chapter 674;
 
23      (2)  Claims involving "construction" of homestead residences
 

 
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 1 or improvements are excluded under chapter 674;
 
 2      (3)  Claims involving "challenges to the validity of
 
 3 Department of Hawaiian Home Lands or Hawaiian Homes Commission
 
 4 rules, policies, or general management decisions" are excluded;
 
 5 however, claims involving the individual application of rules are
 
 6 included under chapter 674;
 
 7      (4)  Claims involving "evictions" are excluded under chapter
 
 8 674;
 
 9      (5)  Claims involving the "failure to give information or
 
10 providing incorrect information" are included under chapter 674;
 
11      (6)  Claims involving "general leases and licenses" are
 
12 excluded under chapter 674;
 
13      (7)  Claims involving "infrastructure" and which are unique
 
14 to an individual and are not subject to another cause of action
 
15 or alternative remedy, are included under chapter 674, and claims
 
16 for all others, are excluded;
 
17      (8)  Claims involving "leases" are included under chapter
 
18 674;
 
19      (9)  Claims involving "incorrect loan information, delays in
 
20 processing loans, failure to process loans, and charging lower
 
21 interest rates" are included under chapter 674;
 
22      (10) Claims involving "loan delinquencies" are excluded
 
23 under chapter 674;
 

 
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 1      (11) Claims involving "lost applications" are included under
 
 2 chapter 674;
 
 3      (12) Claims involving the "mishandling of applications" are
 
 4 included under chapter 674;
 
 5      (13) Claims involving challenges to the validity of the
 
 6 "priority system" are excluded under chapter 674;
 
 7      (14) Claims involving "successorship" are excluded under
 
 8 chapter 674;
 
 9      (15) Claims involving the length of time it takes to receive
 
10 a developed homestead or "waiting list" claims, are excluded
 
11 under chapter 674.
 
12      (c)  In formulating actual damages, the following criteria
 
13 shall be applied:
 
14      (1)  The Panel shall not apply a consumer price/inflation
 
15 index to damages;
 
16      (2)  The Panel shall require claimants to bear the burden of
 
17 proof to show that he or she was financially qualified to receive
 
18 a homestead in the calculation of actual damages under chapter
 
19 674;
 
20      (3)  August 31, 1995 shall be the cut-off date for the
 
21 calculation of "actual damages" under chapter 674;
 
22      (4)  Neither subsequent acquisition of a fee interest in
 
23 leasehold property acquired or used as a substitute for a
 

 
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 1 homestead nor any subsequent refinancing of a claimant's mortgage
 
 2 shall be a basis for increasing actual damages under chapter 674;
 
 3 and
 
 4      (5)  Tax consequences for mortgage interest and property
 
 5 taxes shall offset actual damages."
 
 6      SECTION 5.  Section 674-16, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "674-16  Waiver of immunity. (a) The State waives its
 
 9 immunity from liability for actual damages suffered by an
 
10 individual beneficiary arising out of or resulting from a breach
 
11 of trust or fiduciary duty, which occurred between August 21,
 
12 1959, to June 30, 1988, and was caused by an act or omission of
 
13 an employee of the State in the management and disposition of
 
14 trust resources.
 
15      (b)  This waiver shall not apply to the following:
 
16      (1)  Any claim for which a remedy was or is provided
 
17 elsewhere in or under the laws of the State;
 
18      (2)  Any claim which was or is the subject of prior or
 
19 pending litigation; [or]
 
20      (3)  Any claim predicated, in whole or in part, upon any act
 
21 or omission which occurred prior to August 21, 1959[.]; or
 
22      (4)  Any claim deemed to be excluded under section 674-15."
 
23      SECTION 6.  Statutory material to be repealed is bracketed.
 

 
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 1 New statutory material is underscored.
 
 2      SECTION 7.  This Act shall take effect upon its approval.
 
 3 
 
 4                           INTRODUCED BY:  _______________________
 

 
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