STAND. COM. REP. NO. 352-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2187
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Economic Development and Business
Concerns, to which was referred H.B. No. 2187 entitled: 

     "A BILL FOR AN ACT RELATING TO ADMINISTRATIVE RULES,"

begs leave to report as follows:

     The purpose of this bill is to have rules, that are required
by federal laws, impose the minimum regulatory requirements
necessary to be in compliance.  In addition, the bill provides
that excess requirements be justified in writing and submitted to
the Governor, Mayor, and the Legislature.

     The Big Island Business Council, General Contractors
Association of Hawaii, The Hawaii Business League, Land Use
Foundation of Hawaii, Construction Industry Legislative
Organization, Inc., and the National Federation of Independent
Business submitted testimony in support of the bill.  The
Department of the Attorney General submitted testimony in support
of the over-all concept with concerns regarding the
implementation of the bill.  The Chamber of Commerce of Hawaii
submitted testimony supporting the intent of the bill.  The
Hawaii Hotel Association submitted testimony supporting the idea
presented in the bill.  The Department of Health and the Sierra
Club submitted testimony in opposition to the bill.

     Your Committee finds that the language of the standards and
guidelines in some federal laws make it difficult to determine
whether the rules are, in fact, the minimum regulatory
requirements for compliance, and in other cases, it may be to the

 
 
                                 STAND. COM. REP. NO. 352-00
                                 Page 2

 
benefit of Hawaii to adopt rules which exceed the minimum
requirements of the federal law.

     Upon careful consideration, your Committee has amended the
bill by deleting its substance and adding new language that
inserts a Joint Legislative Management Committee (Joint
Committee) procedure to review the rules.  Any person directly,
substantially, or adversely affected by an agency's rules may
submit an application for review to the Committee, or the
Committee may review the rules on its own motion.  By a majority
vote, the Committee will review the rules according to certain
criteria, may hold a public hearing, request an opinion of the
Attorney General, investigate, and obtain information from the
agency.

     This measure also clarifies the scope of an agency's
rulemaking authority by declaring that:

     (1)  The agency in adopting substantive rules is limited to
          the authority delegated by the Legislature;

     (2)  Rulemaking may only be exercised within the framework
          of the enabling statute;

     (3)  The agency shall strive to implement the legislative
          intent of the statute conferring the rulemaking
          authority; 

     (4)  Rules that conflict with the scope of the law they were
          devised to implement are invalid; and 
     
     (5)  An agency cannot exceed the scope of its statutory
          authority to adopt rules.

     Upon a determination by the Joint Committee that the rule is
inappropriate or unnecessary, the Joint Committee will notify the
applicant and either seek a remedy at the agency or legislative
level.  This bill also prohibits the Joint Committee from
reviewing rules relating to debt obligations of the State, its
instrumentalities, or political subdivisions.

     As affirmed by the record of votes of the members of your
Committee on Economic Development and Business Concerns that is
attached to this report, your Committee is in accord with the
intent and purpose of H.B. No. 2187, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 2187, H.D. 1, and be referred to the Committee
on Consumer Protection and Commerce.


 
                                 STAND. COM. REP. NO. 352-00
                                 Page 3

 
                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic
                                   Development and Business
                                   Concerns,



                                   ______________________________
                                   ROBERT N. HERKES, Chair