THE SENATE                           S.C.R. NO.            96
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
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                    SENATE  CONCURRENT
                        RESOLUTION

  REQUESTING THE ESTABLISHMENT OF A PILOT PROGRAM WITHIN THE
    DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS TO EVALUATE
    THE FEASIBILITY OF CREATING A PERMANENT CENTRAL PANEL OF
    HEARINGS OFFICERS.



 1        WHEREAS, in 1990, the Legislature adopted Senate
 2   Concurrent Resolution No. 169, S.D. 1, requesting the Auditor
 3   to conduct a study regarding the administrative adjudication
 4   processes used by state agencies; and
 5   
 6        WHEREAS, the Auditor issued its "Study of Administrative
 7   Adjudication in Hawaii" in February, 1991, recommending, among
 8   other things, the establishment of a central panel of state
 9   hearings officers; and
10   
11        WHEREAS, that same year, the Legislature considered the
12   Auditor's recommendations and adopted resolutions, including
13   S.C.R. No. 200, S.D. 1 and H.C.R. No. 331, requesting the
14   establishment of a task force of representatives from executive
15   agencies to examine the feasibility of creating a central panel
16   of hearings officers independent of the respective state
17   agencies that are involved in disputes; and
18   
19        WHEREAS, the Governor's Task Force on Administrative
20   Adjudication subsequently submitted a report to the Legislature
21   in December, 1991, detailing the ongoing activities of the task
22   force, including the drafting of a model code of conduct for
23   hearings officers and the initiation of a central panel pilot
24   program within the Office of Administrative Hearings in the
25   Department of Commerce and Consumer Affairs, commencing on
26   January 1, 1992, and terminating on December 31, 1993; and
27   
28        WHEREAS, the task force indicated that it would submit
29   semi-annual reports to the Governor regarding the utilization
30   of the pilot program and recommendations for changes.  Under
31   that pilot program:
32   

 
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 1        (1)  All state agencies responsible for conducting
 2             administrative adjudications that did not have
 3             hearings officers on their respective staffs could
 4             arrange with the pilot program to have appropriate
 5             cases heard by the pilot central panel;
 6   
 7        (2)  State agencies that did employ or contract with
 8             hearings officers could also elect to send
 9             appropriate cases to the program, subject to
10             availability of program hearings officers; and
11   
12        (3)  Those agencies referring cases to the program were
13             also responsible for providing their respective
14             procedural and substantive rules to the program
15             before the pilot central panel heard any cases from
16             those agencies, and were required to provide any
17             necessary training required for pilot central panel
18             hearings officers regarding the substantive and
19             procedural rules of the respective agencies;
20   
21   and
22   
23        WHEREAS, despite these efforts on the part of the
24   Department of Commerce and Consumer Affairs and other state
25   agencies, it is not clear whether the Governor's Task Force on
26   Administrative Adjudication found the pilot program to be
27   successful or not.  Nevertheless, no state law was ever enacted
28   that would make the pilot program permanent; and
29   
30        WHEREAS, absent conclusive findings and recommendations on
31   this issue, there is a need to revisit this issue to ascertain
32   the feasibility of establishing such a central panel of
33   hearings officers; and
34   
35        WHEREAS, in particular, although the hearings officers who
36   perform the difficult tasks of administrative adjudication in
37   this State generally hold to the highest standards of
38   integrity, there is a need to prevent even the appearance of
39   impropriety in the adjudication and enforcement of the law; and
40   
41        WHEREAS, however, in view of the fact that agency hearings
42   officers are employed or contracted for by the agency that is a
43   party to the dispute, they potentially may have, or may be

 
 
 
 
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 1   perceived to have an interest in the outcome of that dispute.
 2   The substantive findings and decisions of hearings officers may
 3   also be influenced by executive officials within the agency;
 4   and
 5   
 6        WHEREAS, there is a need to establish a pilot program
 7   within the Department of Commerce and Consumer Affairs to
 8   evaluate the feasibility of creating a permanent central panel
 9   of hearings officers, in order to prevent any actual or
10   perceived unfairness or impartiality in the conduct or outcome
11   of agency hearings; now, therefore,
12   
13        BE IT RESOLVED by the Senate of the Twentieth Legislature
14   of the State of Hawaii, Regular Session of 1999, the House of
15   Representatives concurring, that the Director of Commerce and
16   Consumer Affairs is requested to establish a pilot program
17   within the Department of Commerce and Consumer Affairs, Office
18   of Administrative Hearings, to evaluate the feasibility of
19   creating a permanent central panel of hearings officers; and
20   
21        BE IT FURTHER RESOLVED that the pilot program is requested
22   to include the following objectives:
23   
24        (1)  Determine whether centralizing hearings officers and
25             associated resources will improve the overall
26             fairness and independence of the administrative
27             adjudication process;
28   
29        (2)  Determine whether centralizing hearings officers and
30             associated resources will result in increased
31             efficiency and cost-effectiveness;
32   
33        (3)  Provide administrative and adjudicative support for
34             all state agencies that are responsible for
35             conducting administrative hearings under chapters 91
36             and 92, Hawaii Revised Statutes, that do not
37             presently have hearings officers on staff; and
38   
39        (4)  Provide additional training for hearings officers
40             participating in the pilot program;
41   
42   and
43   

 
 
 
 
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                                     S.C.R. NO.96
                                                        
                                                        

 
 1        BE IT FURTHER RESOLVED that the pilot program is requested
 2   to be implemented by the Director of Commerce and Consumer
 3   Affairs with the assistance of the Department of the Attorney
 4   general and hearings officers and other personnel in other
 5   executive agencies as may be necessary; and
 6   
 7        BE IT FURTHER RESOLVED that the Director of Commerce and
 8   Consumer Affairs is requested to evaluate the feasibility of
 9   establishing a permanent central panel of hearings officers and
10   study related issues, including the following:
11   
12        (1)  Which kinds of contested case hearings could be
13             conducted by a central panel, with a minimum of
14             disruption to the persons served by the agencies, as
15             well as to the respective agencies themselves;
16   
17        (2)  Which kinds of cases and which agencies should not be
18             considered for inclusion in a central panel;
19   
20        (3)  The relative difficulty in transferring personnel,
21             budgetary appropriations, and physical inventory, to
22             a central panel;
23   
24        (4)  The fiscal, personnel, and logistical requirements of
25             setting up a central panel; and
26   
27        (5)  What revisions or amendments to state laws should be
28             made, including the procedural and substantive
29             requirements applicable to hearings conducted by each
30             state agency, and chapter 91, Hawaii Revised
31             Statutes, to ensure:
32   
33             (A)  The impartiality and competence of hearings
34                  officers;
35   
36             (B)  The reasonableness of costs associated with
37                  contested case hearings;
38   
39             (C)  That ex parte communications are restricted; and
40   
41             (D)  Provisions are made for pre-hearing conferences;
42   
43   and
44   

 
 
 
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 1        BE IT FURTHER RESOLVED that, to the extent authorized by
 2   law, all state agencies that are responsible for conducting
 3   administrative adjudications that do not presently have
 4   hearings officers on their respective staffs are requested to
 5   arrange with the pilot program to have appropriate cases heard
 6   by the pilot central panel as deemed appropriate by that panel.
 7   The agencies in this category are requested to have priority
 8   with the pilot program in terms of having cases processed by
 9   the pilot central panel; and
10   
11        BE IT FURTHER RESOLVED that state agencies that presently
12   employ or utilize staff or contract hearings officers are
13   requested to arrange to submit appropriate cases to the pilot
14   program for hearing purposes, subject to the availability of
15   the pilot central panel hearings officers; and
16   
17        BE IT FURTHER RESOLVED that all state agencies referring
18   cases to the pilot program are requested to be responsible for
19   providing all of their respective procedural and substantive
20   rules to the pilot program before the pilot central panel hears
21   any cases from the agencies, and that the referring agencies
22   are further requested to be responsible for providing any
23   training that may be required for the pilot central panel
24   hearings officers regarding the substantive and procedural
25   rules of the respective agencies; and
26   
27        BE IT FURTHER RESOLVED that the Director of Commerce and
28   Consumer Affairs is requested to make findings and
29   recommendations in the following areas:
30   
31        (1)  The total number and disposition of all cases
32             submitted to the pilot program for hearing purposes,
33             within the reporting period;
34   
35        (2)  The utilization of personnel and appropriations of
36             the pilot program, as well as any significant
37             developments in the pilot program;
38   
39        (3)  Any recommendations for revisions to chapter 91,
40             Hawaii Revised Statutes, and any rules governing
41             adjudicatory hearings;
42   

 
 
 
 
 
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 1        (4)  Any recommendations for the exclusion of hearing
 2             matters which are not suitable for disposition by the
 3             pilot program;
 4   
 5        (5)  Any recommendations for the inclusion of additional
 6             hearing matters which may be suitable for disposition
 7             by the pilot program; and
 8   
 9        (6)  The feasibility of providing for each of the
10             following:
11   
12             (A)  Centralization of all administrative
13                  adjudication functions;
14   
15             (B)  Standardized qualifications of hearings
16                  officers;
17   
18             (C)  A model code of conduct for hearings officers;
19   
20             (D)  Standardized contested case procedures;
21   
22             (E)  Standardized hiring and retention policies; and
23   
24             (F)  Any other areas necessary to effectively
25                  implement the pilot program;
26   
27   and
28   
29        BE IT FURTHER RESOLVED that the Director of Commerce and
30   Consumer Affairs is further requested to 
31   
32        (1)  Establish benchmarks for determining whether the
33             pilot program is successful, and evaluate whether the
34             pilot program meets or exceeds those benchmarks;
35   
36        (2)  Submit proposed legislation for the creation of
37             permanent central panel hearings office within the
38             department of the attorney general or another
39             appropriate department of state government; and
40   
41        (3)  Report findings and recommendations, including a
42             finding of whether the pilot program met or exceeded
43             the benchmarks provided under paragraph (1) and any

 
 
 
 
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                                     S.C.R. NO.96
                                                        
                                                        

 
 1             proposed implementing legislation, to the Legislature
 2             no later than twenty days before the convening of the
 3             Regular Sessions of 2002 and 2003, and a final report
 4             to the Legislature no later than twenty days before
 5             the convening of the regular session of 2004; and
 6   
 7        BE IT FURTHER RESOLVED that certified copies of this
 8   Concurrent Resolution be transmitted to the Governor, the
 9   Director of Commerce and Consumer Affairs, and the Attorney
10   General.
11 
12 
13 
14                           OFFERED BY: ___________________________