Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 2468, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the hiring of consultants to assist the Department of Commerce and Consumer Affairs (DCCA) in reviewing cemetery and pre-need funeral authority license applications and in other regulatory matters.

Testimony in support of this measure was received from the DCCA, Dodo Mortuary, Inc., and Hawaii Funeral Directors Association.

The cemetery and pre-need funeral industry once mostly involved family-owned businesses, but over the years has grown to include multi-million dollar corporate operations. As the industry has expanded and become more complex, it has become necessary for regulatory authorities to have certain expertise and skills to provide effective industry oversight.

While the DCCA is authorized to contract with private consultants, this authority is limited to hiring a consultant to conduct a post-licensing audit of a cemetery or pre-need funeral authority's trust funds. Your Committee finds that the department may require additional expertise in pre-licensing and other post-licensing matters in order to adequately protect the interests of consumers. Therefore, this measure establishes the department's authority to retain private consultants, including attorneys, auditors, accountants, investigators, and examiners, and provides that the costs of hiring a consultant shall be paid by the licensee whose application or activities required the retention of the consultant.

Your Committee has amended this measure by changing the effective date to July 1, 2050, to continue the discussion. It is your Committee's understanding that the interested parties are trying to come to a consensus on the language.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2468, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2468, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.