Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor & Public Employment, to which was referred H.B. No. 1773 entitled:

begs leave to report as follows:

The purpose of this bill is to protect workers' rights by:

The Department of Human Resources Development, Hawaii State AFL-CIO, ILWU, Local 142, Hawaii Government Employees Association, Hawaii Rehabilitation Counseling Association, Sestak Rehabilitation Services, Rehabilitation Association of Hawaii, Hawaii Chapter American Physical Therapy Association, and numerous concerned individuals testified in support of the bill. The Department of Labor and Industrial (DLIR) Relations, The Society of Human Resource Management – Hawaii Chapter, Outrigger Hotels, and Hawaii Employer's Mutual Insurance Company, Inc., opposed the measure. The Employers' Chamber of Commerce provided comments on the bill.

The purpose of this bill is twofold. First, this bill seeks to codify the existing Hawaii Administrative Rules, Sections 12-10-1 et. seq., 12-14-1 et. seq. and 12-15-1 et. seq., pertaining to workers’ compensation, in Chapter 386 of the Hawaii Revised Statutes ("HRS"), also pertaining to workers’ compensation. The purpose of such codification is to preserve the existing administrative rules relating to workers’ compensation as they are currently written.

Second, this bill also seeks to provide necessary protection for the Separation of Powers doctrine, which guarantees the citizens of Hawaii, as well as the United States of America, that no branch of government will arrogate to itself those functions and powers vested in other branches by the Constitution. Under the Separation of Powers doctrine, the Legislative, Executive and Judicial branches of government are all granted exclusive powers, and no branch of government may exercise the powers vested in another branch of government.

Further, your committee finds that the Constitution of the State of Hawaii outlines the Separation of Powers doctrine as follows: (1) Article III – Section I provides the Legislative branch, consisting of the Senate and the House of Representatives, with the power to create laws; (2) Article V – Section I of the Constitution provides the Executive branch, including the Governor and the various administrative directors, with the power to execute the law; and (3) Article VI – Section I of the Constitution provides the Judicial branch with the power to interpret and construe the law.

Similarly, as Chief Justice John Marshall of the United States Supreme Court stated in the landmark case of Marbury v. Madison, "[t]he difference between the departments of government undoubtedly is that the Legislature makes, the executive executes and the judiciary construes, the law."

In addition, as noted above, the Separation of Powers doctrine under the Constitution grants exclusive power to the Legislative, Executive and Judicial branches of government. Therefore, one branch of government is not permitted to encroach upon the powers granted to the other branches of government. This is the basic tenet of the "separate" powers. Accordingly, when one branch of government intrudes upon the powers of another branch of government, enforcement of the Separation of Doctrine is required to prevent such abuse of power.

As Justice Antonin Scalia of the United States Supreme Court stated in Plaut v. Spendthrift Farm, the framers of the United States Constitution created the Separation of Powers doctrine as a "structural safeguard" against such abuses, "establishing high walls and clear distinctions because low walls and vague distinctions will not be judicially defensible in the heat of interbranch conflict." Therefore, this bill seeks to prevent the Department of Labor and Industrial Relations from violating the Separation of Powers doctrine by creating new laws through the administrative rulemaking process.

This is necessary because the Director of Labor and Industrial Relations has recently attempted to create legislation through administrative rule making. For example, HB 699, which was introduced on behalf of the Executive Branch, (1) sought to define the term "attending physician;" (2) preclude self-employment as a goal of vocational rehabilitation; (3) disallow stress claims by defining "disciplinary action" taken in good faith; (4) requiring approval of vocational rehabilitation plans by the Director of Labor and Industrial Relations, as well as the employer; (5) and set a time limit of 104 weeks on treatment plans. The Director of Labor and Industrial Relations has also proposed similar changes to the Hawaii Administrative Rules regarding workers' compensation. This validates the conclusion that such administrative rulemaking constitute attempted legislation and confirms the fact that the Executive branch has attempted to encroach upon the Legislature's powers by legislating through rule making.

Finally, your committee notes that this measure, as it is currently written, may raise some concerns about unintended consequences. While there may not be any problems with the measure, some potential areas for problems may include: (1) it may be unclear whether preventing the Director of Labor and Industrial Relations from adopting or amending any administrative rules regarding workers compensation would also prevent the Director from modifying the medical fee schedule or (2) a concern that all written reports would be given to the Director.

While these concerns may raise issues that need to be addressed before this measure can pass through full Legislative scrutiny, we feel that the bill currently provides numerous advantages and protections related to workers’ compensation law. Further, any such concerns can be addressed at a later hearing during this 2005 Legislative session.

Similarly, the codification of the current administrative rules relating to workers’ compensation should also provide the Legislature with an opportunity to resolve any issues relating to workers’ compensation law in the upcoming years.

As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1773 and recommends that it pass Second Reading and be referred to the Committee on Finance.