STAND. COM. REP. NO. 579________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1111
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Judiciary and Hawaiian Affairs, to which
was referred H.B. No. 1111 entitled: 


begs leave to report as follows:

     The purpose of this bill is to provide protections for
persons who undertake commercially reasonable efforts to
investigate and solve potential Year 2000 computer problems, and
to provide a more expedient and less expensive procedure for the
resolution of legal claims arising from Year 2000 errors.

     Your Committee received testimony in support of this bill
from the Judiciary, Department of the Attorney General,
Department of Accounting and General Services, Bank of Hawaii,
Kaiser Permanente, the Queens Health Systems, Hawaii Long Term
Care Association, Hawaii Credit Union League and Hawaii Medical
Service Association.  Testimony in opposition to the bill was
received from the Consumer Lawyers of Hawaii.

     Your Committee finds that in passing Act 213, Session Laws
of Hawaii 1998, the Legislature recommended that the public and
private sectors of the community meet to develop and propose a
comprehensive legislative solution to legal claims arising from
the Year 2000 computer errors.

                                 STAND. COM. REP. NO. 579________
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     In response, an informal study group consisting of numerous
volunteers from Hawaii's government and private sectors was
formed and met over the course of six months to:

     (1)  Explore the impact of Year 2000 problems;

     (2)  Develop ways to encourage people to address these
          problems; and

     (3)  Insure that resources are focused on solving technical
          problems rather than on litigation.

The study group discussed many issues at length, and this bill is
based upon their findings and recommendations.

     Your Committee finds that the potential costs of litigating
legal claims arising from Year 2000 errors remains a significant
concern of Hawaii's business community.  These potential
litigation costs could divert resources away from finding and
fixing Year 2000 problems and from productive use in other areas
of the State's economy.

     This bill encourages businesses to exercise commercially
reasonable efforts to identify and solve potential Year 2000
problems by limiting damage awards against businesses that
undertake such efforts.  This bill also establishes a fair,
practical and efficient process for resolving Year 2000 disputes
among private sector parties which will not unnecessarily burden
the courts and the State's economy.

     Your Committee has amended this bill by:

     (1)  Adding language allowing the mediation of disputes as
          an additional alternative to arbitration or court
          action; and

     (2)  Making technical, nonsubstantive changes for purposes
          of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your
Committee on Judiciary and Hawaiian Affairs that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 1111, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1111, H.D. 1, and be referred to the Committee on Finance.

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                                 Page 3

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Judiciary &
                                   Hawaiian Affairs,

                                   PAUL T. OSHIRO, Chair