Report Title:

Government

Description:

Requires the state agency to specify its authority to adopt rules, comply with additional procedural requirements, and provide a copy to the office of the auditor. Requires the office of the auditor to determine whether the rule is adopted within the rulemaking authority of the agency and report to the legislature. Requires the governor to send a copy of all executive orders to the legislature. Establishes an administrative process for challenging the validity of a rule. Awards fees and costs to a petitioner who prevails on an action for declaratory judgment. (HB1529 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1529

TWENTY-THIRD LEGISLATURE, 2005

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO government.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 26, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§26- Executive orders. The governor may issue executive orders to carry out the executive powers of office, consistent with the Constitution of the State of Hawaii and laws. A copy of all executive orders shall be transmitted to the president of the senate and speaker of the house of representatives within five business days of execution by the governor."

SECTION 2. Section 91-1, Hawaii Revised Statutes, is amended to read as follows:

"§91-1 Definitions. For the purpose of this chapter:

[(1)] "Agency" means each state or county board, commission, department, or officer authorized by law to make rules or to adjudicate contested cases, except those in the legislative or judicial branches.

[(2) "Persons" includes individuals, partnerships, corporations, associations, or public or private organizations of any character other than agencies.

(3) "Party" means each person or agency named or admitted as a party, or properly seeking and entitled as of right to be admitted as a party, in any court or agency proceeding.

(4) "Rule" means each agency statement of general or particular applicability and future effect that implements, interprets, or prescribes law or policy, or describes the organization, procedure, or practice requirements of any agency. The term does not include regulations concerning only the internal management of an agency and not affecting private rights of or procedures available to the public, nor does the term include declaratory rulings issued pursuant to section 91-8, nor intra-agency memoranda.

(5) "Contested case" means a proceeding in which the legal rights, duties, or privileges of specific parties are required by law to be determined after an opportunity for agency hearing.

(6) "Agency hearing" refers only to such hearing held by an agency immediately prior to a judicial review of a contested case as provided in section 91-14.]

"Agency hearing" refers only to the hearing held by an agency immediately prior to a judicial review of a contested case as provided in section 91-14.

"Contested case" means a proceeding in which the legal rights, duties, or privileges of specific parties are required by law to be determined after an opportunity for agency hearing.

"Party" means each person or agency named or admitted as a party, or properly seeking and entitled as of right to be admitted as a party, in any court or agency proceeding.

"Persons" includes individuals, partnerships, corporations, associations, or public or private organizations of any character other than agencies.

"Rule" means each agency statement of general or particular applicability and future effect that implements, interprets, or prescribes law or policy, or describes the organization, procedure, or practice requirements of any agency. The term does not include regulations concerning only the internal management of an agency and not affecting private rights of or procedures available to the public, nor does the term include declaratory rulings issued pursuant to section 91-8, nor intra-agency memoranda.

"Rulemaking authority" means the agency's power to adopt, amend, or repeal rules, that is granted by, within the scope of, and consistent with the authority granted by the state constitution, state statute, or county ordinance."

SECTION 3. Section 91-3, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a) and (b) to read:

"(a) Except as provided in subsection (f), prior to the adoption of any rule authorized by law, or the amendment or repeal thereof, the adopting agency shall:

(1) File a "Notice of Intent to Adopt Rules" with the office of the auditor at least five business days prior to issuing a notice of public hearing. This notice shall include:

(A) A copy of the proposed rule, amendment, or repeal;

(B) A statement citing the source of the agency’s rulemaking authority; and

(C) A statement, signed by the attorney general, affirming the agency’s rulemaking authority;

[(1)] (2) Give at least thirty days['] notice [for a] of public hearing. The notice shall include:

(A) A citation to the rulemaking authority;

[(A)] (B) A statement of the topic of the proposed rule adoption, amendment, or repeal or a general description of the subjects involved; [and]

[(B)] (C) A statement that a copy of the proposed rule to be adopted, the proposed rule amendment, or the rule proposed to be repealed will be mailed to any interested person who requests a copy, pays the required fees for the copy and the postage, if any, together with a description of where and how the requests may be made;

[(C)] (D) A statement of when, where, and during what times the proposed rule to be adopted, the proposed rule amendment, or the rule proposed to be repealed may be reviewed in person; and

[(D)] (E) The date, time, and place where the public hearing will be held and where interested persons may be heard on the proposed rule adoption, amendment, or repeal.

The notice shall be mailed to all persons who have made a timely written request of the agency for advance notice of its rulemaking proceedings, given at least once statewide for state agencies and in the county for county agencies. [Proposed] At least thirty days before the public hearing, the proposed state agency rules shall also be posted on the Internet as provided in section 91-2.6[;] and transmitted to the office of the auditor; and

[(2)] (3) Afford all interested persons opportunity to submit data, views, or arguments, orally or in writing. The agency shall fully consider all written and oral submissions respecting the proposed rule. The agency may [make its decision at the public hearing or] conduct further public hearings, announce [then the date when it intends to make its decision. Upon adoption, amendment, or repeal of a rule, the agency, if requested to do so by an interested person, shall issue] its decision during the public hearing, or take the matter under advisement for decision-making at a subsequent public hearing. All decisions to recommend the adoption, amendment, or repeal of a rule shall be in writing and shall include a concise statement of the principal reasons for and against its determination.

(b) Notwithstanding the foregoing, if an agency finds that an imminent peril to the public health, safety, or morals, or to livestock and poultry health, requires adoption, amendment, or repeal of a rule upon less than thirty days['] notice of hearing, and states in writing its reasons for [such] the finding, it may proceed without prior notice or hearing [or upon such abbreviated notice and hearing, including posting the abbreviated notice and hearing on the Internet as provided in section 91-2.6, as it finds practicable to adopt an emergency rule to]; provided that a public hearing is held within thirty days of the action and notification is made pursuant to subsection (a). Any rulemaking action under this subsection shall be effective for a period of not longer than one hundred twenty days without renewal."

2. By amending subsections (d), (e), and (f) to read:

"(d) The requirements of subsection (a) may be waived by the governor in the case of the State, or by the mayor in the case of a county, whenever a state or county agency is required by federal provisions to adopt rules as a condition [to] of receiving federal funds and the agency is allowed no discretion in interpreting the federal provisions as to the rules required to be adopted; provided that the agency shall make the adoption, amendment, or repeal known to the public by:

(1) Giving public notice of the substance of the proposed rule at least once statewide prior to the waiver of the governor or the mayor; [and]

(2) Posting the full text of the proposed rulemaking action on the Internet as provided in section 91-2.6[.] and transmitting the proposed rulemaking action to the office of the auditor; and

(3) Citing the federal law that provides the agency with rulemaking authority.

(e) No adoption, amendment, or repeal of any rule shall be invalidated solely because of:

(1) The inadvertent failure to mail an advance notice of rulemaking proceedings;

(2) The inadvertent failure to mail or the nonreceipt of requested copies of the proposed rule to be adopted, the proposed rule amendment, or the rule proposed to be repealed; or

(3) The inadvertent failure on the part of a state agency to post on the website of the office of the lieutenant governor all proposed rulemaking actions of the agency and the full text of the agency's proposed rules as provided in section 91-2.6.

Any person may challenge [to] the validity of the adoption, amendment, or repeal of an administrative rule on the ground of noncompliance with statutory procedural requirements [shall be forever barred unless the challenge is made in a proceeding or action], including an action pursuant to section 91-7, [that is begun] by commencing a challenge within three years after the effective date of the adoption, amendment, or repeal of the rule.

(f) Whenever an agency seeks only to repeal one or more sections, chapters, or subchapters of the agency's rules because the rules are either null and void or unnecessary, and not adopt, amend, or compile any other rules:

(1) The agency shall give thirty days['] public notice at least once statewide of the proposed date of repeal and of:

(A) A list of the sections, chapters, or subchapters, as applicable, being repealed; [and]

(B) A statement of when, where, and during what times the sections, chapters, or subchapters proposed to be repealed may be reviewed in person; and

(C) A citation to the rulemaking authority;

(2) The agency shall post the full text of the proposed sections, chapters, or subchapters to be repealed on the Internet as provided in section 91-2.6[;] and transmit a copy of the posting to the office of the auditor; and

(3) Any interested person may petition the agency regarding the sections, chapters, or subchapters proposed to be repealed, pursuant to section 91-6.

This subsection does not apply to the repeal of one or more subsections, paragraphs, subparagraphs, clauses, words, phrases, or other material within a section that does not constitute the entire section to be repealed."

SECTION 4. Section 91-4.1, Hawaii Revised Statutes, is amended to read as follows:

"§91-4.1 Rulemaking actions; copies in Ramseyer format. (a) Each state agency adopting, amending, or repealing a rule shall prepare a certified copy of the rule changes according to the Ramseyer format. Each state agency shall maintain a file of the copies in the Ramseyer format and shall make the file available for public inspection and copying at a cost as specified in section 91-2.5.

(b) Except for matters where the ombudsman has issued a written determination pursuant to section 91-7, the office of the auditor shall review each new rule, amendment, or repealed rule submitted by a state agency under this chapter to determine whether the new rule, amendment, or repealed rule has been proposed within the agency's rulemaking authority. The office shall submit a report to the legislature no later than ninety calendar days after the effective date of the new rule, amendment, or repealed rule, indicating whether the new rule, amendment, or repealed rule is authorized or exceeds the rulemaking authority of the agency."

SECTION 5. Section 91-7, Hawaii Revised Statutes, is amended to read as follows:

"§91-7 Declaratory judgment on validity of rules. (a) Any interested person [may obtain a judicial declaration as to the validity of an agency rule as provided in subsection (b) herein by bringing an action against the agency in the circuit court of the county in which petitioner resides or has its principal place of business. The action may be maintained whether or not petitioner has first requested the agency to pass upon the validity of the rule in question.] may challenge an agency's adoption, amendment, or repeal of a rule on the grounds that the rule is invalid because the rulemaking action exceeds the rulemaking authority of the agency or the rule was adopted without compliance with this chapter. A petitioner may challenge the validity of the rule through the administrative process or declaratory judgment process, or both.

[(b) The court shall declare the rule invalid if it finds that it violates constitutional or statutory provisions, or exceeds the statutory authority of the agency, or was adopted without compliance with statutory rulemaking procedures.]

(b) The administrative process for challenging the validity of a rule shall be as follows:

(1) A petitioner may bring an oral or written challenge with the agency adopting the rule. The oral challenge shall be stated clearly and with enough specificity to enable agency response;

(2) The agency shall have five business days from the date the challenge is received to respond to the challenge. If the agency concludes that the rule is invalid, it shall immediately cease and desist all action to enforce the rule and shall repeal the rule. If the agency denies that the rule is invalid, the agency within five business days of the date the challenge is received shall render its decision in writing and transmit its decision to the petitioner and the office of the ombudsman; and

(3) The office of the ombudsman shall investigate the matter in accordance with chapter 96 and may resolve the dispute between the petitioner and agency. If the ombudsman concludes that the challenge has merit, the ombudsman shall issue a written determination upon which the agency shall immediately cease and desist all action to enforce the rule and shall repeal the rule.

(c) Any person may seek declaratory judgment as to the validity of an agency rule by bringing an action against the agency in the circuit court of the county in which the petitioner resides or has its principal place of business. The court shall declare the rule invalid if it finds that it:

(1) Violates constitutional or statutory provisions;

(2) Exceeds the statutory authority of the agency; or

(3) Was adopted without compliance with statutory rulemaking procedures.

If the court finds that the rule is invalid, the court shall award the petitioner $500 and reasonable attorneys' fees and costs. In addition, if the petitioner exhausted the administrative process before bringing the action for declaratory judgment, the court shall award the petitioner $1,000 and any reasonable attorneys' fees and costs relating to the administrative process."

SECTION 6. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2005.