H.B. NO.



H.D. 1
















     SECTION 1.  The University of Hawaii is the only public institution of higher education in the state.  With its array of graduate programs and professional schools, the university engages in research that is often supported by federal research grants or cooperative agreements.  University research activities often take place in state-supported public facilities, such as university research laboratories, centers, or classrooms.  These public facilities are often constructed with proceeds from state or university public financing bonds.

     The university significantly contributes to the economic diversification and health of the state by "transferring" the fruits of its research activities to the private sector through activities such as obtaining patents on inventions by university faculty, licensing the use of innovations, creating new business ventures, incubating startup companies, providing administrative support to research faculty, and so forth.

     The board of regents of the university has established a regulatory framework and compliance program to balance the unique benefits and ethical issues specific to university research and technology transfer and to assure compliance with applicable external regulations.  The university framework and compliance program incorporates long-standing ethical research principles and technology transfer regulations currently used by the federal government.  The board periodically updates its policies and procedures to reflect the best practices currently in place at several of the university's peer institutions.  In this manner, the university strives to remain competitive for external research funding and to continue to attract innovative faculty.

     The legislature finds that it is a matter of statewide concern to support the contributions by the University of Hawaii to the economic health and diversification of the State.  The legislature further finds that the timely and efficient commercialization of intellectual property created by basic and applied research at the university benefits the public.  Efficient and effective technology transfer, however, may be hampered by overly broad interpretation of general conflict of interest, fair treatment, and employment restrictions contained in the state ethics code.

     Because the university has subject matter expertise in the area of technology transfer, sponsored research, and regulatory compliance, the legislature finds it appropriate that the state ethics commission consider unique aspects of technology transfer when applying the ethics code to university-supported technology transfer activities and arrangements.

     Where public resources are used to produce benefits to the public and promote economic development and diversification for the State, but where such technology transfer activity may simultaneously benefit collaborating commercial organizations or may also create personal benefits to individuals employed by the university, such arrangements should be permitted under the ethics code so long as the State and the public receive specific and significant benefits that would not otherwise be created, and so long as the university has established an internal regulatory compliance program and policies to assure compliance with applicable federal regulations or public financing covenants.

     The purpose of this Act is to clarify the application of the state ethics code to allow technology transfer activities sponsored by the University of Hawaii so long as the activities are likely to create specific benefits to the State or the public, notwithstanding the simultaneous creation of commercial benefit or individual personal benefit.

     SECTION 2.  Section 84-31, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

    "(a)  The ethics commission shall have the following powers and duties:

     (1)  It shall prescribe forms for the disclosures required by article XIV of the Hawaii constitution and section 84-17 and the gifts disclosure statements required by section 84-11.5 and shall establish orderly procedures for implementing the requirements of those provisions;

     (2)  It shall render advisory opinions upon the request of any legislator, employee, or delegate to the constitutional convention, or person formerly holding such office or employment as to whether the facts and circumstances of a particular case constitute or will constitute a violation of the code of ethics.  In rendering advisory opinions concerning technology transfer activities conducted by the University of Hawaii, the ethics commission shall consider the research compliance program of the University and may permit technology transfer arrangements so long as the technology transfer arrangements are likely to create specific benefits to the State or the public.  If no advisory opinion is rendered within thirty days after the request is filed with the commission, it shall be deemed that an advisory opinion was rendered and that the facts and circumstances of that particular case do not constitute a violation of the code of ethics.  The opinion rendered or deemed rendered, until amended or revoked, shall be binding on the commission in any subsequent charges concerning the legislator, employee, or delegate to the constitutional convention, or person formerly holding such office or employment, who sought the opinion and acted in reliance on it in good faith, unless material facts were omitted or misstated by such persons in the request for an advisory opinion;

     (3)  It shall initiate, receive, and consider charges concerning alleged violation of this chapter, initiate or make investigation, and hold hearings;

     (4)  It may subpoena witnesses, administer oaths, and take testimony relating to matters before the commission and require the production for examination of any books or papers relative to any matter under investigation or in question before the commission.  Before the commission shall exercise any of the powers authorized in this section with respect to any investigation or hearings it shall by formal resolution, supported by a vote of three or more members of the commission, define the nature and scope of its inquiry;

     (5)  It may, from time to time adopt, amend, and repeal any rules, not inconsistent with this chapter, that in the judgment of the commission seem appropriate for the carrying out of this chapter and for the efficient administration thereof, including every matter or thing required to be done or which may be done with the approval or consent or by order or under the direction or supervision of or as prescribed by the commission.  The rules, when adopted as provided in chapter 91, shall have the force and effect of law;

     (6)  It shall have jurisdiction for purposes of investigation and taking appropriate action on alleged violations of this chapter in all proceedings commenced within six years of an alleged violation of this chapter by a legislator or employee or former legislator or employee.  A proceeding shall be deemed commenced by the filing of a charge with the commission or by the signing of a charge by three or more members of the commission.  Nothing herein shall bar proceedings against a person who by fraud or other device, prevents discovery of a violation of this chapter;

     (7)  It shall distribute its publications without cost to the public and shall initiate and maintain programs with the purpose of educating the citizenry and all legislators, delegates to the constitutional convention, and employees on matters of ethics in government employment; and

     (8)  It shall administer any code of ethics adopted by a state constitutional convention, subject to the procedural requirements of this part and any rules adopted thereunder."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2525.



Report Title:

State Ethics Code; University of Hawaii



Clarifies application of State Ethics Code to technology transfer arrangements supported by the University of Hawaii. (HB975 HD1)




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