THE SENATE                           S.R. NO.              39
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                    SENATE  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   
33        (1)  All state agencies responsible for conducting
34             administrative adjudications that did not have
35             hearings officers on their respective staffs could
36             arrange with the pilot program to have appropriate
37             cases heard by the pilot central panel;
38   

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

 
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                                     S.R. NO.           39
                                                        
                                                        

 
 1   perceived unfairness or impartiality in the conduct or outcome
 2   of agency hearings; now, therefore,
 3   
 4        BE IT RESOLVED by the Senate of the Twentieth Legislature
 5   of the State of Hawaii, Regular Session of 1999, that the
 6   Director of Commerce and Consumer Affairs is requested to
 7   establish a pilot program within the Department of Commerce and
 8   Consumer Affairs, Office of Administrative Hearings, to
 9   evaluate the feasibility of creating a permanent central panel
10   of hearings officers; and
11   
12        BE IT FURTHER RESOLVED that the pilot program is requested
13   to include the following objectives:
14   
15        (1)  Determine whether centralizing hearings officers and
16             associated resources will improve the overall
17             fairness and independence of the administrative
18             adjudication process;
19   
20        (2)  Determine whether centralizing hearings officers and
21             associated resources will result in increased
22             efficiency and cost-effectiveness;
23   
24        (3)  Provide administrative and adjudicative support for
25             all state agencies that are responsible for
26             conducting administrative hearings under chapters 91
27             and 92, Hawaii Revised Statutes, that do not
28             presently have hearings officers on staff; and
29   
30        (4)  Provide additional training for hearings officers
31             participating in the pilot program;
32   
33   and
34   
35        BE IT FURTHER RESOLVED that the pilot program is requested
36   to be implemented by the Director of Commerce and Consumer
37   Affairs with the assistance of the Department of the Attorney
38   general and hearings officers and other personnel in other
39   executive agencies as may be necessary; and
40   
41        BE IT FURTHER RESOLVED that the Director of Commerce and
42   Consumer Affairs is requested to evaluate the feasibility of
43   establishing a permanent central panel of hearings officers and
44   study related issues, including the following:
45   

 
 
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                                     S.R. NO.           39
                                                        
                                                        

 
 1        (1)  Which kinds of contested case hearings could be
 2             conducted by a central panel, with a minimum of
 3             disruption to the persons served by the agencies, as
 4             well as to the respective agencies themselves;
 5   
 6        (2)  Which kinds of cases and which agencies should not be
 7             considered for inclusion in a central panel;
 8   
 9        (3)  The relative difficulty in transferring personnel,
10             budgetary appropriations, and physical inventory, to
11             a central panel;
12   
13        (4)  The fiscal, personnel, and logistical requirements of
14             setting up a central panel; and
15   
16        (5)  What revisions or amendments to state laws should be
17             made, including the procedural and substantive
18             requirements applicable to hearings conducted by each
19             state agency, and chapter 91, Hawaii Revised
20             Statutes, to ensure:
21   
22             (A)  The impartiality and competence of hearings
23                  officers;
24   
25             (B)  The reasonableness of costs associated with
26                  contested case hearings;
27   
28             (C)  That ex parte communications are restricted; and
29   
30             (D)  Provisions are made for pre-hearing conferences;
31   
32   and
33   
34        BE IT FURTHER RESOLVED that, to the extent authorized by
35   law, all state agencies that are responsible for conducting
36   administrative adjudications that do not presently have
37   hearings officers on their respective staffs are requested to
38   arrange with the pilot program to have appropriate cases heard
39   by the pilot central panel as deemed appropriate by that panel.
40   The agencies in this category are requested to have priority
41   with the pilot program in terms of having cases processed by
42   the pilot central panel; and
43   
44        BE IT FURTHER RESOLVED that state agencies that presently
45   employ or utilize staff or contract hearings officers are

 
 
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                                     S.R. NO.           39
                                                        
                                                        

 
 1   requested to arrange to submit appropriate cases to the pilot
 2   program for hearing purposes, subject to the availability of
 3   the pilot central panel hearings officers; and
 4   
 5        BE IT FURTHER RESOLVED that all state agencies referring
 6   cases to the pilot program are requested to be responsible for
 7   providing all of their respective procedural and substantive
 8   rules to the pilot program before the pilot central panel hears
 9   any cases from the agencies, and that the referring agencies
10   are further requested to be responsible for providing any
11   training that may be required for the pilot central panel
12   hearings officers regarding the substantive and procedural
13   rules of the respective agencies; and
14   
15        BE IT FURTHER RESOLVED that the Director of Commerce and
16   Consumer Affairs is requested to make findings and
17   recommendations in the following areas:
18   
19        (1)  The total number and disposition of all cases
20             submitted to the pilot program for hearing purposes,
21             within the reporting period;
22   
23        (2)  The utilization of personnel and appropriations of
24             the pilot program, as well as any significant
25             developments in the pilot program;
26   
27        (3)  Any recommendations for revisions to chapter 91,
28             Hawaii Revised Statutes, and any rules governing
29             adjudicatory hearings;
30   
31        (4)  Any recommendations for the exclusion of hearing
32             matters which are not suitable for disposition by the
33             pilot program;
34   
35        (5)  Any recommendations for the inclusion of additional
36             hearing matters which may be suitable for disposition
37             by the pilot program; and
38   
39        (6)  The feasibility of providing for each of the
40             following:
41   
42             (A)  Centralization of all administrative
43                  adjudication functions;
44   
45             (B)  Standardized qualifications of hearings
46                  officers;
47   

 
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                                     S.R. NO.           39
                                                        
                                                        

 
 1             (C)  A model code of conduct for hearings officers;
 2   
 3             (D)  Standardized contested case procedures;
 4   
 5             (E)  Standardized hiring and retention policies; and
 6   
 7             (F)  Any other areas necessary to effectively
 8                  implement the pilot program;
 9   
10   and
11   
12        BE IT FURTHER RESOLVED that the Director of Commerce and
13   Consumer Affairs is further requested to 
14   
15        (1)  Establish benchmarks for determining whether the
16             pilot program is successful, and evaluate whether the
17             pilot program meets or exceeds those benchmarks;
18   
19        (2)  Submit proposed legislation for the creation of
20             permanent central panel hearings office within the
21             department of the attorney general or another
22             appropriate department of state government; and
23   
24        (3)  Report findings and recommendations, including a
25             finding of whether the pilot program met or exceeded
26             the benchmarks provided under paragraph (1) and any
27             proposed implementing legislation, to the Legislature
28             no later than twenty days before the convening of the
29             Regular Sessions of 2002 and 2003, and a final report
30             to the Legislature no later than twenty days before
31             the convening of the regular session of 2004; and
32   
33        BE IT FURTHER RESOLVED that certified copies of this
34   Resolution be transmitted to the Governor, the Director of
35   Commerce and Consumer Affairs, and the Attorney General.
36 
37 
38 
39                           OFFERED BY: ___________________________