Report Title:

Boards and Commissions; Liability to State; for Gross Negligence

Description:

Provides that members of state boards and commissions are liable to the State for damages resulting from gross negligence in authorizing or overseeing the expenditure of state or federal moneys that results in a substantial financial loss to the State.

THE SENATE

S.B. NO.

1456

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO BOARDS AND COMMISSIONS.

 

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

SECTION 1. This Act is an outgrowth of the senate informational briefing held on December 16, 2003, concerning the housing and community development corporation of Hawaii (HCDCH). The HCDCH came under criticism from the U.S. Department of Housing and Urban Development (HUD) for mismanagement of housing projects involving federal funds. According to testimony of HCDCH, those deficiencies were being addressed and a corrective action plan is to be forwarded to HUD.

The legislature finds that many of the criticisms of mismanagement can be remedied by statutory amendments, including amendments to the law on liability of members of state boards and commissions.

The purpose of this Act is to provide that members of state boards and commissions are liable to the State for damages arising from gross negligence in authorizing or overseeing the expenditure of state or federal moneys.

SECTION 2. Section 26-35.5, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) Notwithstanding any law to the contrary, no member shall be liable in any civil action founded upon a statute or the case law of this State, for damage, injury, or loss caused by or resulting from the member's performing or failing to perform any duty which is required or authorized to be performed by a person holding the position to which the member was appointed, unless the member acted in a grossly negligent manner in authorizing or overseeing the expenditures of, or disbursement of, federal, State, or county moneys, or with a malicious or improper purpose, except when the plaintiff in a civil action is the State.

(c) Except as provided in subsections (d) and (f), the State shall indemnify a member from liability by paying any judgment in, or settlement or compromise of, any civil action arising under federal law, the law of another state, or the law of a foreign jurisdiction, including fees and costs incurred, unless the loss, injury, or damage for which the judgment or settlement amount is required to be paid:

(1) Is fully covered by a policy of insurance for civil liability purchased by the State;

(2) Is caused by or is the result of the member's performing an act authorized or required to be performed by a person holding the position to which the member was appointed, in a grossly negligent manner with regard to the authorizing or overseeing the expenditure of, or disbursement of, federal, State, or county moneys, so as to effect a malicious or improper purpose;

(3) Is caused by or is the result of the member's failure to perform an act required or authorized to be performed by a person holding the position to which the member was appointed, in a grossly negligent manner with regard to the authorizing or overseeing the expenditures of, or disbursement of, federal, State, or county moneys, or so as to effect a malicious or improper purpose."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________