STAND. COM. REP. NO. 1035-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2711
                                     S.D. 1
                                     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 S.B. No. 2711, S.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Provide that any administrative rule that has been
          adopted pursuant to statute or ordinance that has been
          repealed, shall be repealed within six months, without
          regard to the notification requirements of the
          Administrative Procedure Law under chapter 91, Hawaii
          Revised Statutes; and

     (2)  Exempt from such requirement, any administrative rule
          that has been adopted pursuant to a federal statute or
          regulation.

     The Housing and Community Development Corporation of Hawaii
and an individual testified in support of the measure.  The
Chamber of Commerce of Hawaii testified in support of the intent
of the measure.

     Your Committee has amended this bill by deleting its
contents and inserting the substantive provisions of:


 
 
 
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     (1)  H.B. No. 1863, H.D. 2, which requires that state or
          county agencies adopting rules in response to federal
          provisions impose only the minimum regulatory
          requirements necessary for compliance, except that
          stricter requirements may be adopted if the agency:

          (a)  Includes a justification document for the excess
               regulatory requirements, when submitting the rules
               to the Governor or mayor of the county for
               approval; and

          (b)  Subsequently makes the rules and the justification
               document available for review by the Governor, the
               Legislature, or the mayor of the county;

     (2)  H.B. No. 1864, H.D. 1, which:

          (a)  Automatically repeals without regard to the
               requirements of the Administrative Procedures Law:

                (i) Any administrative rule that has been adopted
                    pursuant to a statute or ordinance that has
                    been subsequently repealed prior to the
                    effective date of the bill; and

               (ii) Upon the repeal of a statute or ordinance,
                    any administrative rule that has been adopted
                    pursuant to the repealed statute or
                    ordinance; and

          (b)  Specifies that the provisions shall not apply to
               an administrative rule adopted pursuant to a
               subsequently repealed statute or ordinance that is
               readopted by operation of law as a part of a
               transfer of functions from one department or
               agency to another department or agency;

     (3)  H.B. No. 2187, H.D. 2, which:

          (a)  Provides for the review of administrative agency
               rules by the Joint Legislative Management
               Committee; and

          (b)  Prohibits agencies from exceeding the scope of
               substantive statutory authority conferring the
               power to adopt rules;

          and


 
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                                 Page 3

 
     (4)  H.B. No. 2188, H.D. 2, which:

          (a)  Requires that whenever an administrative rule is
               adopted, amended, or repealed, the rule conforms
               to the related statutes;

          (b)  Specifies that after a public hearing has been
               held on any administrative rule as required by
               law, the proposed rules shall not be adopted
               unless the head of the agency affected by the
               administrative rules concurs that the proposed
               rule conforms and has a rational nexus to the
               related statutes; and

          (c)  Extends the sunset date of Act 168, Session Laws
               of 1998, which established the Hawaii Small
               Business Regulatory Flexibility Act.
   
     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 S.B. No. 2711, S.D. 1, as amended herein,
and recommends that it pass Second Reading in the form attached
hereto as S.B. No. 2711, S.D. 1, H.D. 1, and be referred to the
Committee on Consumer Protection and Commerce.

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



                                   ______________________________
                                   ROBERT N. HERKES, Chair