STAND

STAND. COM. REP. NO. 340-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2192

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred H.B. No. 2192 entitled:

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

begs leave to report as follows:

The purpose of this bill is to improve government efficiency by:

(1) Requiring that whenever an administrative rule is adopted, amended, or repealed, the action conforms to the letter, spirit, and intent of the related statute;

(2) Giving the head of an agency affected by administrative rules more accountability for the compliance and conformity of the agency's rules to the statutes;

(3) Providing for the automatic repeal of administrative rules 180 days after repeal of their authorizing statute or ordinance, except for rules readopted as part of a departmental transfer of functions by operation of law; and

(4) Expanding the scope of the evaluation report conducted by the Small Business Regulatory Review Board.

The Land Use Research Foundation of Hawaii submitted testimony in support of this measure. The Department of Commerce and Consumer Affairs and Department of Human Resources of the City and County of Honolulu opposed this measure. The Department of Business, Economic Development, and Tourism offered comments.

Your Committee finds that administrative rules adopted by the state agencies can have an unduly burdensome impact on the growth and vitality of Hawaii's businesses, especially small businesses. In establishing Act 168, Session Laws of Hawaii, 1998, the Legislature recognized the disproportionate impact administrative rules may have on Hawaii's businesses and established the Hawaii Small Business Regulatory Flexibility Act and the Small Business Defender to help ease burdensome regulatory requirements.

This bill continues that effort to ensure that any rules that are in effect conform to the intent of the related statute and do not impose additional burdens.

Recognizing that concerns were expressed in the Governor's veto message regarding a similar measure (H.B. No. 285, H.D. 1, S.D. 2) passed during the Regular Session of 2003, your Committee is willing to work with the Administration to address these concerns. Your Committee believes that this bill is necessary to improve government efficiency by ensuring a rational nexus between the rule and the enabling statute.

Your Committee has amended this bill by:

(1) Removing provisions to allow expansion of the scope of the evaluation report conducted by the Small Business Regulatory Review Board; and

(2) Making technical, nonsubstantive amendments for clarity, consistency, and style.

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. 2192, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2192, H.D. 1, and be referred to the Committee on Judiciary.

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

		____________________________ BRIAN SCHATZ, Chair