REPORT TITLE:
Boards & Commissions Sunset


DESCRIPTION:
Makes the terms board and commission members subject to
evaluation by the auditor upon passage of a concurrent resolution
requesting the auditor to conduct a study to determine whether
the continued maintenance of the board or commission is
consistent with the policy of the Hawaii regulatory licensing
reform act and criteria by the auditor.  Requires the auditor to
submit a report of its findings and recommendations to the
legislature, governor, director, and board or commission
evaluated with the time specified by the concurrent resolution.
Gives the board or commission at least thirty days to review and
comment on the study.  Terminates the terms of the members of the
board or commission thirty days after adjournment sine die of the
legislature to which the report was submitted based on the
auditor's report to abolish the board or commission, subject to
gubernatorial and legislative action.   Establishes criteria for
the auditor in determining that a board or commission be
abolished.  Specifies conditions under which professional and
vocation regulation shall not be imposed or shall be eliminated.
(HB1865 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1865
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO BOARDS AND COMMISSIONS.



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

 1      SECTION 1.  The Hawaii Regulatory Licensing Reform Act, Act
 
 2 70, Session Laws of Hawaii 1977, was enacted in response to
 
 3 growing concern over the rapid proliferation of professional and
 
 4 vocational licensing boards and commissions, and the perception
 
 5 that these served the interests of the regulated industry, rather
 
 6 than the interests of the consumer.  Act 70 sets forth criteria
 
 7 to be used to evaluate and determine whether existing regulatory
 
 8 programs should be modified or discontinued.  The criteria were
 
 9 codified in section 26H-2, Hawaii Revised Statutes.
 
10      Under Act 70, each chapter regulating a profession or
 
11 vocation was scheduled for repeal.  The statutorily-created board
 
12 or commission of the regulated profession or vocation was
 
13 required to assess whether its statutory program complied with
 
14 the section 26H-2 criteria, and to submit a report to the
 
15 legislature one year prior to the applicable repeal date.  New
 
16 legislation was required to continue regulatory programs reviewed
 
17 under Act 70.  
 
18      In 1979, the review component of this automatic review and
 
19 repeal law was amended to require that assessments be performed
 
20 by the legislative auditor.  This amendment was made to "better
 

 
Page 2                                                     1865
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 provide for consumer interests. . . [and] a more objective
 
 2 viewpoint in assessing the value of the particular regulation
 
 3 under review."  Recognizing that automatic review of every
 
 4 existing professional or vocational regulatory program consumed a
 
 5 disproportionate amount of the auditor's limited resources, in
 
 6 1994, the legislature restricted automatic review and repeal to
 
 7 professional or vocational regulatory programs enacted after July
 
 8 1, 1994.  The legislature further limited this procedure in 1996
 
 9 to regulatory programs actually listed in section 26H-4, Hawaii
 
10 Revised Statutes.
 
11      The legislature finds that existing policies and procedures
 
12 amplify the influence of special interests and should be re-
 
13 examined to more fairly represent the interest of the general
 
14 public.  In addition, the legislature finds that the question of
 
15 whether the activities of a board or commission further the
 
16 policies that have been identified by the legislature as
 
17 justifying regulation, is a question best resolved through an
 
18 assessment performed by an objective and informed agency like the
 
19 legislative auditor.  Once the question is resolved, state
 
20 maintenance of the board or commission may not be justified and
 
21 should be discontinued without delay.
 

 
 
 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      The purpose of this Act is to provide a mechanism for the
 
 2 expeditious removal of unnecessary vocational and professional
 
 3 regulatory boards and commissions that serve the interests of the
 
 4 regulated industry, rather than the interests of the consumer.
 
 5      SECTION 2.  Chapter 26H, Hawaii Revised Statutes, is amended
 
 6 by adding a new section to be appropriately designated and to
 
 7 read as follows:
 
 8      "§26H-     Boards and commissions; auditor's evaluation.
 
 9 (a)  The term of members of any board or commission of a
 
10 professional or vocational regulatory program not listed in
 
11 section 26H-4 may be reduced and subsequent appointments to the
 
12 board or commission shall be prohibited as provided by this
 
13 section.
 
14      (b)  The auditor shall evaluate a professional or vocational
 
15 regulatory board or commission upon passage of a concurrent
 
16 resolution requesting the auditor to conduct a study determining
 
17 whether the continued maintenance of the board or commission is
 
18 consistent with the general policies of section 26H-2 and any of
 
19 the criteria set forth in subsection (f).  The auditor shall
 
20 submit a report of the findings and recommendations to the
 
21 legislature, governor, director, and board or commission
 
22 evaluated, within the time specified by the concurrent
 
23 resolution.
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (c)  Each board or commission shall assist the auditor in
 
 2 collecting and reporting data, as the auditor may require, to
 
 3 conduct the study.
 
 4      (d)  The auditor shall provide the board or commission not
 
 5 less than thirty days to review and comment on the study.  The
 
 6 auditor shall append any written comments received from the board
 
 7 or commission to each copy of the report that is submitted to the
 
 8 legislature.
 
 9      (e)  Where the auditor's report recommends that a board or
 
10 commission should be abolished, the terms of the members of the
 
11 board or commission shall expire thirty days after the
 
12 adjournment sine die of the legislature to which the report was
 
13 submitted; provided that the terms of the members shall not be
 
14 reduced under this section if the auditor's recommendation is:
 
15      (1)  Disapproved by message transmitted by the governor to
 
16           both houses of the legislature and no action is taken
 
17           by both houses of the legislature;
 
18      (2)  Disapproved by message transmitted by the governor to
 
19           both houses of the legislature and by concurrent
 
20           resolution passed by the senate and the house of
 
21           representatives; or
 

 
 
 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (3)  Disapproved by concurrent resolution passed by the
 
 2           senate and the house of representatives.
 
 3 If a message of disapproval is transmitted by the governor to
 
 4 both houses of the legislature and the house and senate disagree
 
 5 by concurrent resolution, then the recommendations of the auditor
 
 6 stand.
 
 7      (f)  In making its determination that a board or commission
 
 8 should be abolished, the auditor may consider any of the
 
 9 following criteria:
 
10      (1)  The extent to which the board or commission uses state
 
11           resources including staffing requirements along with
 
12           other costs of operation;
 
13      (2)  Whether changes in business, technology, government,
 
14           societal perspectives or statutory or judicial mandates
 
15           have decreased the usefulness of the board or
 
16           commission to such a degree that the cost of
 
17           maintaining the board or commission outweighs its
 
18           usefulness;
 
19      (3)  Irrespective of costs, whether the board or commission
 
20           has become ineffectual, or whether the duties or
 
21           functions of the board can be delegated to another
 
22           department within the state or other branch of
 
23           government, or whether a private entity can, will, or
 
24           has taken on those duties or functions;
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (4)  Irrespective of cost, whether a private entity or
 
 2           government entity other than the board or commission is
 
 3           performing similar duties or functions so as to reduce
 
 4           the need for the board or commission; or
 
 5      (5)  Whether the duties, functions, or protections sought by
 
 6           the board or commission are adequately provided for by
 
 7           the industry, other state or federal agencies, or any
 
 8           other private entity.
 
 9      Upon adjournment sine die of the legislature that received
 
10 the report and if the governor and the legislature has not
 
11 disapproved the auditor's recommendation to abolish the board or
 
12 commission, no further appointments shall be made to the board or
 
13 commission except as subsequently authorized by statute.  The
 
14 director shall reassign responsibilities of any board or
 
15 commission administered by the director and terminated under this
 
16 section if the report finds that those responsibilities further
 
17 the policies identified under section 26H-2 and may be cost-
 
18 effectively reassigned within the department of commerce and
 
19 consumer affairs."
 
20      SECTION 3.  Section 26H-2, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "§26H-2 Policy.  The legislature hereby adopts the
 
23 following policies regarding the regulation of certain
 
24 professions and vocations:
 

 
Page 7                                                     1865
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  The regulation and licensing of professions and
 
 2           vocations shall be undertaken only where reasonably
 
 3           necessary to protect the health, safety, or welfare of
 
 4           consumers of the services; the purpose of regulation
 
 5           shall be the protection of the public welfare and not
 
 6           that of the regulated profession or vocation;
 
 7      (2)  Regulation in the form of full licensure or other
 
 8           restrictions on certain professions or vocations shall
 
 9           be retained or adopted when the health, safety, or
 
10           welfare of the consumer may be jeopardized by the
 
11           nature of the service offered by the provider;
 
12      (3)  Evidence of abuses by providers of the service shall be
 
13           accorded great weight in determining whether regulation
 
14           is desirable;
 
15      (4)  Professional and vocational regulations [which] that
 
16           artificially increase the costs of goods and services
 
17           to the consumer shall be avoided except in those cases
 
18           where the legislature determines that this cost is
 
19           exceeded by the potential danger to the consumer;
 
20      (5)  Professional and vocational regulations shall be
 
21           eliminated when [the legislature determines that] they
 
22           [have no further benefits to] no longer benefit
 
23           consumers;
 

 
Page 8                                                     1865
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (6)  Regulation shall not unreasonably restrict entry into
 
 2           professions and vocations by all qualified persons;
 
 3           [and]
 
 4      (7)  Fees for regulation and licensure shall be imposed for
 
 5           all vocations and professions subject to regulation;
 
 6           provided that the aggregate of the fees for any given
 
 7           regulatory program shall not be less than the full cost
 
 8           of administering that program[.]; and
 
 9      (8)  Professional and vocational regulation shall not be
 
10           imposed or shall be eliminated if:
 
11           (A)  Other private or public agencies provide adequate
 
12                protections;
 
13           (B)  Regulatory objectives may be cost-effectively
 
14                reassigned within the department of commerce and
 
15                consumer affairs; or
 
16           (C)  Regulatory objectives may be undertaken by the
 
17                industry to be regulated and governmental
 
18                participation is not necessary to protect the
 
19                public health, safety, or welfare."
 
20      SECTION 4.  Statutory material to be repealed is bracketed.
 
21 New statutory material is underscored.
 
22      SECTION 5.  This Act shall take effect upon its approval.