REPORT TITLE:
Regulatory Process; Approval


DESCRIPTION:
Amends the automatic permit approval process established by Act
164, Session Laws of Hawaii 1998.  Adds more specific
requirements regarding the completeness of applications and
additional exemptions to extend time limits, and provides for an
expedited appeals process for the timely resolution of disputes.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            1349        
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO REGULATORY PROCESSES.



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

 1      SECTION 1.  The legislature finds that there is a need to
 
 2 amend the automatic permit approval provisions of Act 164,
 
 3 Session Laws of Hawaii 1998, to avoid unnecessary delay in
 
 4 processing permit applications, and to provide additional
 
 5 guidance in addressing quorums as dictated by the nineteenth
 
 6 legislature.
 
 7      Act 164 was enacted to implement the regulatory process
 
 8 recommendations of the economic revitalization task force which
 
 9 was convened by the governor, the president of the senate, and
 
10 the speaker of the house of representatives.  That Act required
 
11 the establishment of maximum time periods for the review and
 
12 approval of all business and development-related permit approvals
 
13 and licenses.  Issuing agencies would be required to review
 
14 applications for completeness in a timely manner and then to act
 
15 upon the applications within an established time frame, or
 
16 application approval would be automatic.
 
17      In enacting that Act, the legislature recognized the need to
 
18 take constructive steps to improve Hawaii's business climate and
 
19 send a strong signal to the business community of the State's
 

 
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 1 intent to improve the overall regulatory climate.  The intent of
 
 2 that Act, as stated in section 1 of Act 164, was that requiring
 
 3 maximum review and approval time periods would serve to provide
 
 4 all parties with a greater level of certainty of the time
 
 5 required for review and final determination by an agency on any
 
 6 application for a business or development-related permit,
 
 7 license, or approval.
 
 8      The legislature finds, however, that Act 164 may lead to
 
 9 unintended consequences in certain cases.  For example, a default
 
10 judgment in favor of approval of an application can be forced
 
11 under Act 164 if a board member comes to a board meeting to
 
12 establish a quorum, but later either leaves before the permit is
 
13 voted on or declares a conflict of interest.  At that point there
 
14 is no longer a quorum, and the permit is automatically approved.
 
15 Approving controversial projects without adequate review may
 
16 leave the community with development that is inappropriate or
 
17 irresponsible.
 
18      The legislature further finds that while amending Act 164 by
 
19 adding certain time extensions may first appear to lengthen the
 
20 permit application process, this cautious approach will in effect
 
21 increase streamlining of development projects.  For example,
 
22 adding an extension for contested case hearings may delay permit
 
23 approval until after completion of the administrative and
 

 
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 1 judicial processes.  However, failure to allow an extension for
 
 2 contested cases may result in the automatic approval of a permit
 
 3 in violation of due process rights, which may lead to a law suit
 
 4 in addition to a subsequent contested case hearing.  The added
 
 5 time delays, increased complexity, and substantial costs
 
 6 associated with additional litigation will substantially decrease
 
 7 streamlining in the long run.
 
 8      Accordingly, the purpose of this Act is to amend the
 
 9 automatic permit approval law established in Act 164 by adding
 
10 more specific requirements regarding the completeness of
 
11 applications, adding additional exemptions to extend time limits,
 
12 and providing for an expedited appeals process for the timely
 
13 resolution of disputes arising out of that Act in order to
 
14 provide greater flexibility in the permitting process.
 
15      SECTION 2.  Section 91-13.5, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "[[]§91-13.5[]]  Maximum time period for business or
 
18 development-related permits, licenses, or approvals; automatic
 
19 approval; extensions.(a)  Unless otherwise provided by law, an
 
20 agency shall adopt rules that specify [a]:
 
21      (1)  A maximum time period dating from the receipt of a
 
22           permit application within which the agency must either
 
23           inform the applicant, in writing, that the application
 

 
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 1           is complete and accepted for filing, or that the
 
 2           application is deficient and what specific information
 
 3           is necessary to make the application complete; and
 
 4      (2)  A maximum time period dating from the filing of a
 
 5           completed application within which the agency must
 
 6           reach a permit decision to grant or deny a business or
 
 7           development-related permit, license, or approval;
 
 8 provided that the application is not subject to state
 
 9 administered permit programs delegated, authorized, or approved
 
10 under federal law.
 
11      (b)  All such issuing agencies shall clearly articulate
 
12 informational requirements for applications and review
 
13 applications for completeness in a timely manner.  An application
 
14 is deemed to be complete for purposes of this section:
 
15      (1)  When it meets the procedural submission requirements of
 
16           the issuing agency and is sufficient for continued
 
17           processing even though additional information may be
 
18           required or project modifications may be undertaken
 
19           subsequently.  The determination of completeness shall
 
20           not preclude the issuing agency from requesting
 
21           additional information or studies either at the time of
 
22           the notice of completeness or subsequently if new
 
23           information is required or substantial changes in the
 

 
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 1           proposed action occur; or
 
 2      (2)  If the issuing agency does not provide a written
 
 3           determination to the applicant that the application is
 
 4           incomplete within the time period specified in
 
 5           subsection (a)(1).
 
 6      (c)  [All] Except as provided in subsection (d), all such
 
 7 issuing agencies shall take action to grant or deny any
 
 8 application that has been completed to the satisfaction of the
 
 9 agency for a business or development-related permit, license, or
 
10 approval within the established maximum period of time, or the
 
11 application shall be deemed approved.
 
12      (d)  [The] Notwithstanding any law to the contrary, the
 
13 maximum period of time established pursuant to this section shall
 
14 be extended [in] for a reasonable time period:
 
15      (1)  In the event of a national disaster, state emergency,
 
16           or union strike, which would prevent the applicant, the
 
17           agency, or the department from fulfilling application
 
18           or review requirements[.];
 
19      (2)  For multiple permits being considered as part of a
 
20           state or county consolidated permit review process.
 
21           Nothing in this section shall prohibit the State, the
 
22           county, or both, from establishing by ordinance or rule
 
23           a consolidated permit review process that may provide
 

 
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 1           for different procedures and time limits for different
 
 2           categories of permits;
 
 3      (3)  For any period during which the applicant has been
 
 4           requested by the agency to correct plans, perform
 
 5           required studies, or provide other additional required
 
 6           information.  If the agency determines that the
 
 7           information submitted by the applicant is insufficient,
 
 8           it shall notify the applicant of the deficiencies and
 
 9           the period shall be further extended until all required
 
10           information has been provided by the applicant;
 
11      (4)  For any period during which:
 
12           (A)  An environmental impact statement is being
 
13                prepared following a determination that the
 
14                proposed action may have a significant effect on
 
15                the environment pursuant to section 343-5(b) or
 
16                (c);
 
17           (B)  If the government of the county, by ordinance or
 
18                resolution, has established time periods for
 
19                completion of environmental impact statements; or
 
20           (C)  If the agency and applicant agree in writing to a
 
21                time period for completion of an environmental
 
22                impact statement;
 
23      (5)  When a contested case hearing is requested pursuant to
 

 
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 1           chapter 91, and for any other period for administrative
 
 2           or judicial appeals and review;
 
 3      (6)  For any period of time mutually agreed upon by the
 
 4           applicant and the issuing agency.  Nothing in this
 
 5           section shall prohibit an applicant and an agency from
 
 6           mutually agreeing to an extension of any time limit
 
 7           required by this section or rules adopted pursuant to
 
 8           this section;
 
 9      (7)  For any period of time in which any agency is unable to
 
10           maintain a quorum for any reason, if that agency is
 
11           required to maintain a quorum before making any
 
12           official decisions, including approving or denying a
 
13           business or development-related permit, license, or
 
14           approval;
 
15      (8)  If the agency has good cause for exceeding the maximum
 
16           period of time under either of the following
 
17           circumstances:
 
18           (A)  The number of permits to be processed exceeds by
 
19                fifteen per cent the number processed in the same
 
20                calendar quarter the preceding year; or
 
21           (B)  The permit-issuing agency must rely on another
 
22                public or private entity for all or part of the
 
23                processing and the delay is caused by that other
 

 
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 1                entity; or
 
 2      (9)  If any other compelling circumstances justify
 
 3           additional time and the project applicant consents to
 
 4           that extension.
 
 5      (e)  The director or other head of each agency shall adopt
 
 6 rules pursuant to this chapter to establish an expedited appeal
 
 7 process by which an applicant may appeal directly to the director
 
 8 or other agency head for a timely resolution of any dispute
 
 9 arising from a violation of the time periods required by this
 
10 section.  The rules shall provide for the full reimbursement of
 
11 all filing fees paid by a permit applicant whose application was
 
12 not processed within the time limits adopted by an agency
 
13 pursuant to this section, and whose appeal was decided in the
 
14 applicant's favor.  The appeal shall be decided in the
 
15 applicant's favor if the agency has exceeded its established time
 
16 period for issuance or denial of the permit and the agency has
 
17 failed to establish good cause for exceeding the time period
 
18 pursuant to subsection (d)(8).  Information regarding the appeal
 
19 process shall be included in permit application forms issued by
 
20 the agency.
 
21      (f)  Each director or other agency head shall submit annual
 
22 reports, on or before January 31 of each year, to the governor
 
23 and the legislature, which shall include the following:
 

 
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 1      (1)  The time periods required by this section for each
 
 2           permit issued by their agency, specifying any
 
 3           modifications or additions;
 
 4      (2)  The median, minimum, and maximum times for processing
 
 5           permits, from receipt of the initial application to the
 
 6           final permit decision, for each permit issued by their
 
 7           agency;
 
 8      (3)  A description of the appeal process required by
 
 9           subsection (e) and a summary of the number and
 
10           disposition of appeals received by the agency during
 
11           the preceding calendar year; and
 
12      (4)  Any recommendations, including proposed administrative
 
13           solutions or legislation, if applicable, to improve the
 
14           functioning of this law that would assist in
 
15           streamlining the permit application process, including
 
16           reducing the time needed to process applications and
 
17           removing duplicative paperwork.
 
18      [(e)] (g)  For the purposes of this section[, "application
 
19 for a business]:
 
20      "Business or development-related permit, license, or
 
21 approval" means any state or county application, petition,
 
22 permit, license, certificate, or any other form of a request for
 
23 approval required by law to be obtained prior to the formation,
 

 
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 1 operation, or expansion of a commercial or industrial enterprise,
 
 2 or for any permit, license, certificate, or any form of approval
 
 3 required under sections 46-4, 46-4.2, 46-4.5, 46-5, and chapters
 
 4 183C, 205, 205A, 340A, 340B, 340E, 340F, 342B, 342C, 342D, 342E,
 
 5 342F, 342G, 342H, 342I, 342J, 342L, and 342P.
 
 6      "Decision" includes any timely vote by the agency to approve
 
 7 or deny a permit, whether or not effective under other applicable
 
 8 law to constitute an action of the agency."
 
 9      SECTION 3.  It is the intent of this Act not to jeopardize
 
10 the receipt of any federal aid nor to impair the obligation of
 
11 the State or any agency thereof to the holders of any bond issued
 
12 by the State or by any such agency, and to the extent, and only
 
13 to the extent, necessary to effectuate this intent, the governor
 
14 may modify the strict provisions of this Act, but shall promptly
 
15 report any such modification with reasons therefor to the
 
16 legislature at its next session thereafter for review by the
 
17 legislature.
 
18      SECTION 4.  If any provision of this Act, or the application
 
19 thereof to any person or circumstance is held invalid, the
 
20 invalidity does not affect other provisions or applications of
 
21 the Act which can be given effect without the invalid provision
 
22 or application, and to this end the provisions of this Act are
 
23 severable.
 

 
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 1      SECTION 5.  Statutory material to be repealed is bracketed.
 
 2 New statutory material is underscored.
 
 3      SECTION 6.  This Act shall take effect on July 1, 1999.
 
 4 
 
 5                              INTRODUCED BY:______________________