Report Title:

Boards and Commissions Sunset

Description:

Sunsets a professional or vocational board or commission after the Auditor finds it should be abolished as inconsistent with the Hawaii Regulatory Licensing Reform Act, unless the finding is disapproved by concurrent resolution or governor's message. Establishes additional criteria for the Auditor to consider. Effective date July 1, 2099. (HB217 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

217

TWENTY-THIRD LEGISLATURE, 2005

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE HAWAII REGULATORY LICENSING REFORM ACT.

 

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

SECTION 1. The Hawaii Regulatory Licensing Reform Act, Act 70, Session Laws of Hawaii 1977, (Act 70) was enacted in response to growing concern over the rapid proliferation of professional and vocational licensing boards and commissions, and the perception that these served the interests of the regulated industry, rather than the interests of the consumer. Act 70 sets forth criteria to be used to evaluate and determine whether existing regulatory programs should be modified or discontinued. The criteria were codified as policies in section 26H-2, Hawaii Revised Statutes (HRS).

Under Act 70, each chapter regulating a profession or vocation was scheduled for repeal. The statutorily-created board or commission of the regulated profession or vocation was required to assess whether its statutory program complied with the section 26H-2 criteria, and to submit a report to the legislature one year prior to the applicable repeal date. New legislation was required to continue regulatory programs reviewed under Act 70.

In 1979, the review component of this automatic review and repeal law was amended to require that assessments be performed by the auditor. This amendment was made to "better provide for consumer interests. . . [and] a more objective viewpoint in assessing the value of the particular regulation under review." Recognizing that automatic review of every existing professional or vocational regulatory program consumed a disproportionate amount of the auditor's limited resources, in 1994, the legislature restricted automatic review and repeal to professional or vocational regulatory programs enacted after July 1, 1994. The legislature further limited this procedure in 1996 to regulatory programs actually listed in section 26H-4, HRS.

The legislature finds that existing policies and procedures amplify the influence of special interests and should be re-examined to more fairly represent the interest of the general public. In addition, the legislature finds that the question of whether the activities of a board or commission further the policies that have been identified by the legislature as justifying regulation, is a question best resolved through an assessment performed by an objective and informed agency like the auditor. Once the question is resolved, state maintenance of the board or commission may not be justified and should be discontinued without delay.

The purpose of this Act is to provide a mechanism for the expeditious removal of unnecessary vocational and professional regulatory boards and commissions that serve the interests of the regulated industry rather than the interests of the consumer.

SECTION 2. Chapter 26H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§26H- Boards and commissions; auditor's evaluation. (a) The term of members of any board or commission of a professional or vocational regulatory program not listed in section 26H-4 may be reduced and subsequent appointments to the board or commission shall be prohibited as provided by this section.

(b) Upon adoption of a concurrent resolution requesting the auditor to conduct a study determining whether the continued maintenance of the board or commission is consistent with the general policies of section 26H-2 and any of the criteria set forth in subsection (c), the auditor shall evaluate a professional or vocational regulatory board or commission. The auditor shall report findings and recommendations to the legislature, governor, director, and board or commission evaluated, within the time specified by the concurrent resolution.

(c) In determining whether a board or commission should be abolished, the auditor may consider any of the following criteria:

(1) The extent to which the board or commission uses state resources, including staffing requirements and other costs of operation;

(2) Whether changes in business, technology, government, societal perspectives, or statutory or judicial mandates have decreased the usefulness of the board or commission to such a degree that the cost of maintaining the board or commission outweighs its usefulness;

(3) Irrespective of costs, whether the board or commission has become ineffective, or whether the duties or functions of the board can be delegated to another department within the state or other branch of government, or whether a private entity can, will, or has taken on those duties or functions;

(4) Irrespective of cost, whether a private entity or government entity other than the board or commission is performing similar duties or functions so as to reduce the need for the board or commission; or

(5) Whether the duties, functions, or protections sought by the board or commission are adequately provided for by the industry, other state or federal agencies, or any other private entity.

(d) Each board or commission shall assist the auditor in collecting and reporting data, as the auditor may require, to conduct the study. The auditor shall provide the board or commission not less than thirty days to review and comment on the study. The auditor shall append any written comments received from the board or commission to each copy of the report submitted pursuant to subsection (b).

(e) Where the auditor's report recommends that a board or commission should be abolished, the board or commission shall be abolished and the terms of the members of the board or commission shall expire thirty days after adjournment sine die of the legislature to which the report was submitted; provided that the board or commission shall not be abolished and the terms of the members shall not be reduced under this section if the auditor's recommendation is:

(1) Disapproved by message transmitted by the governor to both houses of the legislature and no action is taken by both houses of the legislature;

(2) Disapproved by message transmitted by the governor to both houses of the legislature and by concurrent resolution adopted by the senate and the house of representatives; or

(3) Disapproved by concurrent resolution adopted by the senate and the house of representatives.

(f) Upon adjournment sine die of the legislature that received the report and if the governor and the legislature has not disapproved the auditor's recommendation to abolish the board or commission, the board or commission shall be abolished and no further appointments shall be made to the board or commission except as subsequently authorized by statute. The director shall reassign responsibilities of any board or commission administered by the director and terminated under this section if the report finds that those responsibilities further the policies identified under section 26H-2 and may be cost-effectively reassigned within the department of commerce and consumer affairs."

SECTION 3. Section 26H-2, Hawaii Revised Statutes, is amended to read as follows:

"§26H-2 Policy. The legislature hereby adopts the following policies regarding the regulation of certain professions and vocations:

(1) The regulation and licensing of professions and vocations shall be undertaken only where reasonably necessary to protect the health, safety, or welfare of consumers of the services; the purpose of regulation shall be the protection of the public welfare and not that of the regulated profession or vocation;

(2) Regulation in the form of full licensure or other restrictions on certain professions or vocations shall be retained or adopted when the health, safety, or welfare of the consumer may be jeopardized by the nature of the service offered by the provider;

(3) Evidence of abuses by providers of the service shall be accorded great weight in determining whether regulation is desirable;

(4) Professional and vocational regulations [which] that artificially increase the costs of goods and services to the consumer shall be avoided except in those cases where the legislature determines that this cost is exceeded by the potential danger to the consumer;

(5) Professional and vocational regulations shall be eliminated when [the legislature determines that] they [have no further benefits to] no longer benefit consumers;

(6) Regulation shall not unreasonably restrict entry into professions and vocations by all qualified persons; [and]

(7) Fees for regulation and licensure shall be imposed for all vocations and professions subject to regulation; provided that the aggregate of the fees for any given regulatory program shall not be less than the full cost of administering that program[.]; and

(8) Professional and vocational regulation shall not be imposed or shall be eliminated if:

(A) Other private or public agencies provide adequate protections;

(B) Regulatory objectives may be cost-effectively reassigned within the department of commerce and consumer affairs; or

(C) Regulatory objectives may be pursued by the industry to be regulated and governmental participation is not necessary to protect the public health, safety, or welfare."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2099.