Regulatory Process; Approval

Establishes a separate automatic permit approval process for
proposed Waikiki development projects.  Adds more specific
requirements regarding the completeness of applications and
additional exemptions to extend time limits, and provides for an
expedited appeals process for the timely resolution of disputes.

THE SENATE                              S.B. NO.           88
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that there is a need to
 2 amend Act 164, Session Laws of Hawaii 1998, as it applies to
 3 proposed developments in Waikiki for long-term streamlining
 4 purposes.
 5      Act 164 was enacted to implement the regulatory process
 6 recommendations of the Economic Revitalization Task Force which
 7 was convened by the governor, the president of the senate, and
 8 the speaker of the house of representatives.  That Act required
 9 the establishment of maximum time periods for the review and
10 approval of all business and development-related permit approvals
11 and licenses.  Issuing agencies would be required to review
12 applications for completeness in a timely manner and then to act
13 upon the applications within an established time frame, or
14 application approval would be automatic.
15      In enacting that Act, the legislature recognized the need to
16 take constructive steps to improve Hawaii's business climate and
17 streamline the often lengthy and duplicative nature of the
18 State's permitting process, and send a strong signal to the
19 business community of the State's intent to improve the overall

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 1 regulatory climate.  The intent of that Act, as stated in section
 2 1 of Act 164, was that requiring maximum review and approval time
 3 periods would serve to provide all parties with a greater level
 4 of certainty of the time required for review and final
 5 determination by an agency on any application for a business or
 6 development-related permit, license, or approval.
 7      The legislature finds that Act 164 may lead to unintended
 8 consequences in certain cases.  For example, a default judgment
 9 if favor of approval of an application can be forced under Act
10 164 if a board member comes to a board meeting to establish a
11 quorum, but later either leaves before the permit is voted on or
12 declares a conflict of interest.  At that point there is no
13 longer a quorum, and the permit is automatically approved.
14 Approving controversial projects without adequate review may
15 leave the community "stuck" with an unwanted development for
16 years to come.
17      The legislature further finds that while adding certain time
18 extensions to the automatic approval provisions for Waikiki may
19 have the overall short-term effect of decreasing streamlining for
20 Waikiki, the long-term effect will be increased streamlining for
21 that district.  For example, adding an extension for contested
22 case hearings may delay permit approval until after completion of
23 the administrative and judicial processes.  However, failure to

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 1 allow an extension for contested cases may result in the
 2 automatic approval of a permit in violation of an applicant's due
 3 process rights, which may lead to a law suit in addition to a
 4 subsequent contested case hearing.  The added time delays,
 5 increased complexity, and substantial costs associated with
 6 additional litigation will substantially decrease streamlining in
 7 the long run.
 8      Accordingly, the purpose of this Act is to establish a
 9 modified automatic permit approval provision that is applicable
10 only to Waikiki.  While this Act retains Act 164's automatic
11 permit approval provisions, it seeks to provide greater
12 flexibility in the permitting process by adding more specific
13 requirements regarding the completeness of applications, adding
14 additional exemptions to extend time limits, and providing for an
15 expedited appeals process for the timely resolution of disputes
16 arising out of this Act.
17      SECTION 2.  Chapter 91, Hawaii Revised Statutes, is amended
18 by adding a new section to be appropriately designated and to
19 read as follows:
20      "91-    Maximum time period for business or development-
21 related permits, licenses, or approvals for proposed development
22 projects located in Waikiki; automatic approval; extensions.  (a)
23 As used in this section, unless the context clearly requires

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 1 otherwise:
 2      "Application for a business or development-related permit,
 3 license, or approval" means any state or county application,
 4 petition, permit, license, certificate, or any other form of a
 5 request for approval required by law to be obtained prior to the
 6 formation, operation, or expansion of a commercial or industrial
 7 enterprise, or for any permit, license, certificate, or any form
 8 of approval required under sections 46-4, 46-4.2, 46-4.5, 46-5,
 9 and chapters 183C, 205, 205A, 340A, 340B, 340E, 340F, 342B, 342C,
10 342D, 342E, 342F, 342G, 342H, 342I, 342J, 342L, and 342P.
11      "City and county" means the city and county of Honolulu.
12      "Waikiki" means the area of Oahu whose boundaries are
13 delineated in the city and county of Honolulu land use ordinance
14 establishing the Waikiki Special District.
15      (b)  This section shall apply only to proposed development
16 projects located in Waikiki initiated after July 1, 1999.
17 Section 91-13.5 shall not apply to development projects in
18 Waikiki initiated after that date.
19      (c)  Unless otherwise provided by law, an agency shall adopt
20 rules that specify:
21      (1)  A maximum time period dating from the receipt of a
22           permit application within which the agency must either
23           inform the applicant, in writing, that the application

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 1           is complete and accepted for filing, or that the
 2           application is deficient and what specific information
 3           is necessary to make the application complete; and
 4      (2)  A maximum time period dating from the filing of a
 5           completed application within which the agency must
 6           reach a permit decision to grant or deny a business or
 7           development-related permit, license, or approval;
 8 provided that the application is not subject to state
 9 administered permit programs delegated, authorized, or approved
10 under federal law.
11      (d) All issuing agencies shall clearly articulate
12 informational requirements for applications and review
13 applications for completeness in a timely manner.  An application
14 is deemed to be complete for purposes of this section:
15      (1)  When it meets the procedural submission requirements of
16           the issuing agency and is sufficient for continued
17           processing even though additional information may be
18           required or project modifications may be undertaken
19           subsequently.  The determination of completeness shall
20           not preclude the issuing agency from requesting
21           additional information or studies either at the time of
22           the notice of completeness or subsequently if new
23           information is required or substantial changes in the

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 1           proposed action occur; or
 2      (2)  If the issuing agency does not provide a written
 3           determination to the applicant that the application is
 4           incomplete within the time period specified in
 5           subsection (c)(1).
 6      (d)  Except as provided in subsection (e), all issuing
 7 agencies shall take action to grant or deny any application that
 8 has been completed to the satisfaction of the agency for a
 9 business or development-related permit, license, or approval with
10 respect to a development project located in Waikiki within the
11 established maximum period of time, or the application shall be
12 deemed approved.
13      (e)  Notwithstanding any law to the contrary, the maximum
14 period of time established pursuant to this section shall be
15 extended for a reasonable time period:
16      (1)  In the event of a national disaster, state emergency,
17           or union strike, which would prevent the applicant, the
18           agency, or the department from fulfilling application
19           or review requirements;
20      (2)  For multiple permits being considered as part of a
21           state or city and county consolidated permit review
22           process.  Nothing in this section shall prohibit the
23           State, the city and county, or both, from establishing

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 1           by ordinance or rule a consolidated permit review
 2           process that may provide for different procedures and
 3           time limits for different categories of permits;
 4      (3)  For any period during which the applicant has been
 5           requested by the agency to correct plans, perform
 6           required studies, or provide other additional required
 7           information.  If the agency determines that the
 8           information submitted by the applicant is insufficient,
 9           it shall notify the applicant of the deficiencies and
10           the period shall be further extended until all required
11           information has been provided by the applicant;
12      (4)  For any period during which:
13           (A)  An environmental impact statement is being
14                prepared following a determination that the
15                proposed action in Waikiki may have a significant
16                effect on the environment pursuant to section
17                343-5(b) or (c);
18           (B)  If the government of the city and county, by
19                ordinance or resolution, has established time
20                periods for completion of environmental impact
21                statements; or
22           (C)  If the agency and applicant agree in writing to a
23                time period for completion of an environmental

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 1                impact statement;
 2      (5)  When a contested case hearing is requested pursuant to
 3           chapter 91, and for any other period for administrative
 4           or judicial appeals and review;
 5      (6)  For any period of time mutually agreed upon by the
 6           applicant and the issuing agency.  Nothing in this
 7           section shall prohibit an applicant and an agency from
 8           mutually agreeing to an extension of any time limit
 9           required by this section or rules adopted pursuant to
10           this section;
11      (7)  For any period of time in which any agency is unable to
12           maintain a quorum for any reason, if that agency is
13           required to maintain a quorum before making any
14           official decisions, including approving or denying a
15           business or development-related permit, license, or
16           approval;
17      (8)  If the agency has good cause for exceeding the maximum
18           period of time under either of the following
19           circumstances:
20           (A)  The number of permits to be processed exceeds by
21                fifteen per cent the number processed in the same
22                calendar quarter the preceding year; or
23           (B)  The permit-issuing agency must rely on another

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 1                public or private entity for all or part of the
 2                processing and the delay is caused by that other
 3                entity; or
 4      (9)  If any other compelling circumstances justify
 5           additional time and the project applicant consents to
 6           that extension.
 7      (f)  The director or other head of each agency shall adopt
 8 rules pursuant to this chapter to establish an expedited appeal
 9 process by which an applicant may appeal directly to the director
10 or other agency head for a timely resolution of any dispute
11 arising from a violation of the time periods required by this
12 section.  The rules shall provide for the full reimbursement of
13 all filing fees paid by a permit applicant whose application was
14 not processed within the time limits adopted by an agency
15 pursuant to this section, and whose appeal was decided in the
16 applicant's favor.  The appeal shall be decided in the
17 applicant's favor if the agency has exceeded its established time
18 period for issuance or denial of the permit and the agency has
19 failed to establish good cause for exceeding the time period
20 pursuant to subsection (e)(7).  Information regarding the appeal
21 process shall be included in permit application forms issued by
22 the agency.
23      (g)  Each director or other agency head shall submit annual

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 1 reports, on or before January 31 of each year, to the governor
 2 and the legislature, which shall include the following:
 3      (1)  The time periods required by this section for each
 4           permit issued by their agency, specifying any
 5           modifications or additions;
 6      (2)  The median, minimum, and maximum times for processing
 7           permits, from receipt of the initial application to the
 8           final permit decision, for each permit issued by their
 9           agency;
10      (3)  A description of the appeal process required by
11           subsection (f) and a summary of the number and
12           disposition of appeals received by the agency during
13           the preceding calendar year; and
14      (4)  Any recommendations, including proposed administrative
15           solutions or legislation, if applicable, to improve the
16           functioning of this law that would assist in
17           streamlining the permit application process, including
18           reducing the time needed to process applications and
19           removing duplicative paperwork."
20      SECTION 3.  It is the intent of this Act not to jeopardize
21 the receipt of any federal aid nor to impair the obligation of
22 the State or any agency thereof to the holders of any bond issued
23 by the State or by any such agency, and to the extent, and only

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 1 to the extent, necessary to effectuate this intent, the governor
 2 may modify the strict provisions of this Act, but shall promptly
 3 report any such modification with reasons therefor to the
 4 legislature at its next session thereafter for review by the
 5 legislature.
 6      SECTION 4.  If any provision of this Act, or the application
 7 thereof to any person or circumstance is held invalid, the
 8 invalidity does not affect other provisions or applications of
 9 the Act which can be given effect without the invalid provision
10 or application, and to this end the provisions of this Act are
11 severable.
12      SECTION 5.  New statutory material is underscored.
13      SECTION 6.  This Act shall take effect on July 1, 1999.
15                              INTRODUCED BY:______________________