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.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           792
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   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, in order to provide greater
 
 4 flexibility in the permitting process.
 
 5      Act 164 was enacted to implement the regulatory process
 
 6 recommendations of the economic revitalization task force which
 
 7 was convened by the governor, the president of the senate, and
 
 8 the speaker of the house of representatives.  That Act required
 
 9 the establishment of maximum time periods for the review and
 
10 approval of all business and development-related permit approvals
 
11 and licenses.  Issuing agencies would be required to review
 
12 applications for completeness in a timely manner and then to act
 
13 upon the applications within an established time frame, or
 
14 application approval would be automatic.
 
15      In enacting that Act, the legislature recognized the need to
 
16 take constructive steps to improve Hawaii's business climate and
 
17 streamline the often lengthy and duplicative nature of the
 
18 State's permitting process, and send a strong signal to the
 
19 business community of the State's intent to improve the overall
 

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

 
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 1 an extension for contested cases may result in the automatic
 
 2 approval of a permit in violation of an applicant's due process
 
 3 rights, which may lead to a law suit in addition to a subsequent
 
 4 contested case hearing.  The added time delays, increased
 
 5 complexity, and substantial costs associated with additional
 
 6 litigation will substantially decrease streamlining in the long
 
 7 run.
 
 8      In addition, the legislature finds that certain automatic
 
 9 permit approval provisions in existing law are problematic for
 
10 similar reasons.  In particular, the department of land and
 
11 natural resources, which regulates land use in the conservation
 
12 district by the issuance of permits, is required to render a
 
13 decision on a completed application for a permit within one
 
14 hundred eighty days of its acceptance by the department.  If
 
15 within that time period the department fails to give notice, hold
 
16 a hearing, and render a decision, the owner may automatically put
 
17 the owner's land to the use or uses requested in the owner's
 
18 application.  Similarly, although the land use commission is
 
19 required to approve or disapprove a district boundary change
 
20 within forty-five days after the housing and community
 
21 development corporation has submitted a petition to the
 
22 commission as provided in section 205-4, Hawaii Revised Statutes,
 
23 if on the forty-sixth day the petition is not disapproved, it is
 

 
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 1 deemed approved by the commission.  The legislature finds that
 
 2 these automatic acceptance provisions may lead to unintended
 
 3 consequences and should be amended to make them subject to the
 
 4 time extensions added to the automatic permit approval law by
 
 5 this Act.
 
 6      Accordingly, the purpose of this Act is to amend the
 
 7 automatic permit approval law established in Act 164 by adding
 
 8 more specific requirements regarding the completeness of
 
 9 applications, adding additional exemptions to extend time limits,
 
10 and providing for an expedited appeals process for the timely
 
11 resolution of disputes arising out of that Act in order to
 
12 provide greater flexibility in the permitting process.
 
13      SECTION 2.  Section 91-13.5, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "[[]§91-13.5[]]  Maximum time period for business or
 
16 development-related permits, licenses, or approvals; automatic
 
17 approval; extensions.(a)  Unless otherwise provided by law, an
 
18 agency shall adopt rules that specify [a]:
 
19      (1)  A maximum time period dating from the receipt of a
 
20           permit application within which the agency must either
 
21           inform the applicant, in writing, that the application
 
22           is complete and accepted for filing, or that the
 
23           application is deficient and what specific information
 

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

 
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 1           determination to the applicant that the application is
 
 2           incomplete within the time period specified in
 
 3           subsection (a)(1).
 
 4      (c)  [All] Except as provided in subsection (d), all such
 
 5 issuing agencies shall take action to grant or deny any
 
 6 application that has been completed to the satisfaction of the
 
 7 agency for a business or development-related permit, license, or
 
 8 approval within the established maximum period of time, or the
 
 9 application shall be deemed approved.
 
10      (d)  [The] Notwithstanding any law to the contrary, the
 
11 maximum period of time established pursuant to this section shall
 
12 be extended [in] for a reasonable time period:
 
13      (1)  In the event of a national disaster, state emergency,
 
14           or union strike, which would prevent the applicant, the
 
15           agency, or the department from fulfilling application
 
16           or review requirements[.];
 
17      (2)  For multiple permits being considered as part of a
 
18           state or county consolidated permit review process.
 
19           Nothing in this section shall prohibit the State, the
 
20           county, or both, from establishing by ordinance or rule
 
21           a consolidated permit review process that may provide
 
22           for different procedures and time limits for different
 
23           categories of permits;
 

 
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 1      (3)  For any period during which the applicant has been
 
 2           requested by the agency to correct plans, perform
 
 3           required studies, or provide other additional required
 
 4           information.  If the agency determines that the
 
 5           information submitted by the applicant is insufficient,
 
 6           it shall notify the applicant of the deficiencies and
 
 7           the period shall be further extended until all required
 
 8           information has been provided by the applicant;
 
 9      (4)  For any period during which:
 
10           (A)  An environmental impact statement is being
 
11                prepared following a determination that the
 
12                proposed action may have a significant effect on
 
13                the environment pursuant to section 343-5(b) or
 
14                (c);
 
15           (B)  If the government of the county, by ordinance or
 
16                resolution, has established time periods for
 
17                completion of environmental impact statements; or
 
18           (C)  If the agency and applicant agree in writing to a
 
19                time period for completion of an environmental
 
20                impact statement;
 
21      (5)  When a contested case hearing is requested pursuant to
 
22           chapter 91, and for any other period for administrative
 
23           or judicial appeals and review;
 

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

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

 
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 1           modifications or additions;
 
 2      (2)  The median, minimum, and maximum times for processing
 
 3           permits, from receipt of the initial application to the
 
 4           final permit decision, for each permit issued by their
 
 5           agency;
 
 6      (3)  A description of the appeal process required by
 
 7           subsection (e) and a summary of the number and
 
 8           disposition of appeals received by the agency during
 
 9           the preceding calendar year; and
 
10      (4)  Any recommendations, including proposed administrative
 
11           solutions or legislation, if applicable, to improve the
 
12           functioning of this law that would assist in
 
13           streamlining the permit application process, including
 
14           reducing the time needed to process applications and
 
15           removing duplicative paperwork.
 
16      [(e)] (g)  For the purposes of this section, ["application
 
17 for a] "business or development-related permit, license, or
 
18 approval" means any state or county application, petition,
 
19 permit, license, certificate, or any other form of a request for
 
20 approval required by law to be obtained prior to the formation,
 
21 operation, or expansion of a commercial or industrial enterprise,
 
22 or for any permit, license, certificate, or any form of approval
 
23 required under sections 46-4, 46-4.2, 46-4.5, 46-5, and chapters
 

 
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 1 183C, 205, 205A, 340A, 340B, 340E, 340F, 342B, 342C, 342D, 342E,
 
 2 342F, 342G, 342H, 342I, 342J, 342L, and 342P."
 
 3      SECTION 3.  Section 183C-6, Hawaii Revised Statutes, is
 
 4 amended by amending subsection (b) to read as follows:
 
 5      "(b)  The department shall render a decision on a completed
 
 6 application for a permit within one-hundred-eighty days of its
 
 7 acceptance by the department.  [If] Subject to an extension of
 
 8 time pursuant to section 91-13.5(d), if within one-hundred-eighty
 
 9 days after acceptance of a completed application for a permit,
 
10 the department shall fail to give notice, hold a hearing, and
 
11 render a decision, the owner may automatically put the owner's
 
12 land to the use or uses requested in the owner's application.
 
13 When an environmental impact statement is required pursuant to
 
14 chapter 343, or when a contested case hearing is requested
 
15 pursuant to chapter 91, the one-hundred-eighty days may be
 
16 extended an additional ninety days at the request of the
 
17 applicant.  Any request for additional extensions shall be
 
18 subject to the approval of the board."
 
19      SECTION 4.  Section 201G-118, Hawaii Revised Statutes, is
 
20 amended by amending subsection (a) to read as follows:
 
21      "(a)  The corporation may develop, on behalf of the State or
 
22 with an eligible developer, or may assist under a government
 
23 assistance program in the development of, housing projects which
 

 
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 1 shall be exempt from all statutes, ordinances, charter
 
 2 provisions, and rules of any governmental agency relating to
 
 3 planning, zoning, construction standards for subdivisions,
 
 4 development and improvement of land, and the construction of
 
 5 units thereon; provided that:
 
 6      (1)  The corporation finds the project is consistent with
 
 7           the purpose and intent of this chapter, and meets
 
 8           minimum requirements of health and safety;
 
 9      (2)  The development of the proposed project does not
 
10           contravene any safety standards, tariffs, or rates and
 
11           fees approved by the public utilities commission for
 
12           public utilities or the various boards of water supply
 
13           authorized under chapter 54; and
 
14      (3)  The legislative body of the county in which the project
 
15           is to be situated shall have approved the project.
 
16           (A)  The legislative body shall approve or disapprove
 
17                the project by resolution within forty-five days
 
18                after the corporation has submitted the
 
19                preliminary plans and specifications for the
 
20                project to the legislative body.  If on the forty-
 
21                sixth day a project is not disapproved, it shall
 
22                be deemed approved by the legislative body;
 
23           (B)  No action shall be prosecuted or maintained
 

 
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 1                against any county, its officials, or employees on
 
 2                account of actions taken by them in reviewing,
 
 3                approving, or disapproving the plans and
 
 4                specifications; and
 
 5           (C)  The final plans and specifications for the project
 
 6                shall be deemed approved by the legislative body
 
 7                if the final plans and specifications do not
 
 8                substantially deviate from the preliminary plans
 
 9                and specifications.  The final plans and
 
10                specifications for the project shall constitute
 
11                the zoning, building, construction, and
 
12                subdivision standards for that project.  For
 
13                purposes of sections 501-85 and 502-17, the
 
14                executive director of the corporation, or the
 
15                responsible county official may certify maps and
 
16                plans of lands connected with the project as
 
17                having complied with applicable laws and
 
18                ordinances relating to consolidation and
 
19                subdivision of lands, and the maps and plans shall
 
20                be accepted for registration or recordation by the
 
21                land court and registrar; and
 
22      (4)  The land use commission shall approve or disapprove a
 
23           boundary change within forty-five days after the
 

 
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 1           corporation has submitted a petition to the commission
 
 2           as provided in section 205-4.  [If] Subject to an
 
 3           extension of time pursuant to section 91-13.5(d), if on
 
 4           the forty-sixth day the petition is not disapproved, it
 
 5           shall be deemed approved by the commission."
 
 6      SECTION 5.  It is the intent of this Act not to jeopardize
 
 7 the receipt of any federal aid nor to impair the obligation of
 
 8 the State or any agency thereof to the holders of any bond issued
 
 9 by the State or by any such agency, and to the extent, and only
 
10 to the extent, necessary to effectuate this intent, the governor
 
11 may modify the strict provisions of this Act, but shall promptly
 
12 report any such modification with reasons therefor to the
 
13 legislature at its next session thereafter for review by the
 
14 legislature.
 
15      SECTION 6.  If any provision of this Act, or the application
 
16 thereof to any person or circumstance is held invalid, the
 
17 invalidity does not affect other provisions or applications of
 
18 the Act which can be given effect without the invalid provision
 
19 or application, and to this end the provisions of this Act are
 
20 severable.
 
21      SECTION 7.  Statutory material to be repealed is bracketed.
 
22 New statutory material is underscored.
 
23      SECTION 8.  This Act shall take effect upon its approval.
 
24 
 
25                              INTRODUCED BY:______________________
 

 
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