Hawaii lawmakers face a new test in the weeks ahead as they wrap up this year’s session: Can they get their business done and go home without surprising the public with entirely new proposals or dramatic, last-minute amendments to the bills they have been debating since January?

If so, that might be a first.

The state Supreme Court last year banned the much-criticized practice known as “gut and replace,” in which lawmakers would strip content from a bill and replace it with unrelated material just before the measure was put to final votes in the House and Senate.

But the reality is the court ruling and a subsequent opinion from the state Attorney General’s Office gave lawmakers much leeway to continue to make drastic changes to bills.

House adjourns the special session at the legislature.
Hawaii lawmakers are still learning to navigate a court ruling that banned the practice of stripping bills of their original contents and replacing them with entirely different provisions. Observers are raising concerns that the practice is still alive. Cory Lum/Civil Beat/2021

That long-standing gut-and-replace practice was often bitterly criticized by frustrated advocates and activists who would follow legislation all year, only to see bills transformed into something entirely new and different at the last minute.

Common Cause Hawaii was so dead set against gut and replace that it went so far as to create a special “Rusty Scalpel Award” in 2014 to help draw attention to the practice, but that attempt at public shaming appeared to do nothing to curb the practice.

Then on Nov. 4 the Hawaii Supreme Court issued its 3-2 decision that declared a law to be unconstitutional because it was amended during session using the gut-and-replace tactic.

The court noted the Hawaii Constitution requires that each bill be voted on three times on separate days in both the House and the Senate, a requirement intended to ensure lawmakers give proper consideration to each bill, and to allow for a full debate. It is also supposed to give the public proper notice and an opportunity to comment on each bill, the opinion said.

When lawmakers strip out the contents of a bill and insert entirely new “non-germane” material, the court ruled that the requirement for three floor votes in both the House and Senate starts over. Requiring that additional voting effectively slows the legislative process, and gives the public more time to weigh in before the bills become law.

What Is Germane?

Lawmakers consulted with the state Attorney General’s office before the session began this year to determine what changes the ruling requires them to make, and received an opinion that proposed a two-step test to determine if an amendment is germane.

Lawmakers should ask themselves two questions, Deputy Attorney General Nicholas McLean wrote: Does an amendment fall outside the scope of its bill title? And does an amendment fundamentally alter a bill’s “general purpose?”

Most measures clearly pass the first step. Bills with titles like “Relating to Taxes” tend to remain bills having to do with taxes.

The second step is harder to answer. McLean wrote that bills can be changed, sometimes even substantially, as long as the bill’s original purpose is kept.

“We believe the Hawaii Supreme Court’s decision in League of Women Voters teaches that an amendment is germane if it leaves a bill’s subject and general purpose intact – even if the amendment significantly extends or limits the scope of the bill or changes the specific means by which the bill’s general purpose is achieved,” McLean wrote.

Brian Black, executive director of the Civil Beat Law Center for the Public Interest and the lawyer who argued the gut-and-replace court challenge on behalf of Common Cause and the League of Women Voters, said that since the decision last year he hasn’t seen the sort of “blatant and egregious” use of gut and replace.

But the true test will be in conference committee meetings over the next two weeks, which is when many bills traditionally have undergone complete transformations, and much political mischief happens.

Arguing In Circles

The Legislature has drawn complaints from observers who cite radical, late-session amendments to measures such as Senate Bill 775 and House Bill 510, which have been so dramatically changed that they are almost unrecognizable. Apart from their bill numbers and titles, nothing about those measures is the same as when they were introduced in late January.

HB 510, initially addressing vehicle registration fees, would now provide a tax credit that could put money back in the pockets of working families that need it the most. SB 775, originally adjusting hotel room taxes, would kick tourism tax dollars toward environmental efforts, among other provisions.

Both measures cruised through the House and Senate this week, with little to no opposition. After all, who would argue against more money for the environment? Or helping working families?

“Saying something is gut and replace does not mean its intent is bad,” Malia Hill, policy director for the Grassroot Institute of Hawaii, said. “You could have a bill that is doing something good, but it could still be a gut-and-replace bill.”

Hawaii State Supreme Court Chief Justice Mark Recktenwald flanked by associate justices enter court to hear oral arguments on a reapportionment case.
Some advocates feel that the Legislature’s current practices still run afoul of the Hawaii Supreme Court’s ruling on gut and replace. Cory Lum/Civil Beat/2022

In Hill’s view, the AG’s logic circles back to the very argument the courts rejected. “You’re really coming right back to the point of the gut and replace decision,” Hill said.

Others question whether measures such as HB 510 fit within the findings in the Supreme Court decision.

That bill began the session in January as a measure to create a tax credit to offset the cost of state vehicle registration fees on lower-income residents. But on April 7, the Senate Ways and Means Committee stripped those contents from the bill, and transformed it into a measure to create a refundable earned income tax credit for low-income families.

Sen. Laura Acasio worried those dramatic amendments to HB 510 were not “germane.” On the Senate floor on Tuesday, Acasio voted in favor of the bill “with reservations,” saying she had concerns about the constitutional integrity of the measure. In a follow up interview, she said amendments need proper vetting by lawmakers.

She said she supports extending the earned income tax credit and making it refundable, and worried that any non-germane amendments to the bill could spell doom for extension of those credits.

When asked about the Supreme Court decision and the changes made to HB 510, Senate President Ron Kouchi said, “I’m not the attorney.” However, the Senate’s attorneys apparently have given the amendments a thumbs-up.

“Our attorneys have advised us that it’s so far, so good about what we’re doing in the Senate,” Kouchi said.

Senate Bill 775 has raised similar questions. It started the session as a bill to adjust the state hotel room tax upward or downward depending on the number of tourists who visited Hawaii the previous year.

Senate President Ron Kouchi speaks during floor sesssion held at the Capitol.
Senate President Ron Kouchi said legislative attorneys have not found constitutional issues with bills this session. Cory Lum/Civil Beat/2022

But on April 5 lawmakers deleted the original contents of the bill and inserted new language to create a commission to distribute $30 million in grants that would be funded by hotel room tax revenues. The grants are to protect natural resources, help cope with climate change, upgrade public parks and offset the impact on natural resources by residents and visitors.

The latest draft of Senate Bill 775 would also provide $60 million a year to the Hawaii Tourism Authority, which is responsible for marketing Hawaii as a destination.

House Labor and Tourism Committee Chairman Richard Onishi said lawmakers had to swap out the contents of the bill because there was no other “vehicle” available with an appropriate title that could be used to advance the new proposal for distributing hotel room tax revenue.

“We feel it is germane to the original bill, and that’s why we used this vehicle, because we didn’t have other vehicles that addressed this same issue,” Onishi said.

When asked why lawmakers don’t simply introduce measures at the start of the session that more clearly signal their intentions — such as their plans for distributing hotel room taxes — Onishi replied that “bills change all the time.”
“At the beginning of session, you don’t necessarily know what are the important issues that would be moved through the session,” he said.

Testing The Limits?

A certain amount of tinkering and amending of bills is expected or even required during session, but some say lawmakers appear to be testing the limits of the Supreme Court decision in this first session after the ruling.

Tom Yamachika, president of the Tax Foundation of Hawaii, said he’s not sure that either HB 510 or SB 775 “crosses the line.”

“We don’t know what the boundaries are,” Yamachika said. The bills are “pushing it, that’s for sure.”

The Tax Foundation and Grassroot Institute both filed court motions in support of the efforts by Common Cause and the League of Women Voters to overturn gut-and-replace legislation.

But Yamachika said the public may still be able to sniff out instances of gut and replace as they arise.

“It’s like pornography. You don’t really know how to define it, but once you see it, you’re pretty sure you know what it is,” Yamachika said.

For Hill, the issue is about the public’s ability to track legislation as it moves through the session. Someone very interested in vehicle registration fees may be confused as to why those provisions are gone from HB 510.

On the flip side, someone who supports the earned income tax credit might not know that crucial language creating that credit has now been added to the bill.

Indeed, few paid attention to HB 510 until it was transformed with the new language earlier this month. Then it suddenly became important, and on Monday a gathering of House lawmakers, progressive tax advocates and low-wage workers called a press conference to draw attention to the bill and urge its passage.

Could More Bills Face Court Challenges?

The state constitution sets very specific boundaries for how the Legislature enacts laws, but lawmakers have a great deal of discretion within those limits to do as they please.

One restriction is that the title of each bill must match the contents of the measure. Lawmakers have navigated that requirement at times by introducing bills with fantastically broad titles such as “Relating to State Government.”

Another requirement is that each bill “shall embrace but one subject,” according to Article III of the state constitution. Black said that means that when lawmakers add new material to a bill in mid-session, the original contents of the bill and the new material must be “closely related to one another.”

That constitutional provision raises a potential challenge to what are known as “Christmas tree bills,” or measures in which lawmakers suddenly slap together material from a number of unrelated bills near the close of a session.

A classic example would be Act 1 of the 2021 special session, which gave each of the counties the authority to levy their own hotel room tax.

Apart from authorizing the controversial county hotel room tax, that bill also eliminated special funding for the Hawaii Tourism Authority, reduced funding for the Hawaii Convention Center and repealed the HTA’s procurement exemption.

It also transferred the Pacific International Space Center for Exploration Systems from the state Department of Business, Economic Development and Tourism to the University of Hawaii Hilo.

It also abolished the Office of Aerospace Development, the Aerospace Advisory Committee, and the Unmanned Aerial Systems Test Site Advisory Board within DBEDT, and transferred the Challenger Center Program and its funds to the Department of Education.

It may seem obvious those scattershot provisions are not really about “one subject,” but Gov. David Ige decided not to argue the point. Ige cited an array of other problems with various provisions of the bill when he vetoed the measure last year, but he did not claim it was unconstitutional.

The Legislature then overrode Ige’s veto, and the bill became law.

The state constitution also requires the House and Senate to each set deadlines during session for the introduction of bills, which gives the public a chance to review them all. But that bill introduction deadline no longer serves its original purpose if  lawmakers suddenly transform bills into entirely new measures midway through the session, Black said.

Black said there has never been a court challenge on that basis, so no one knows how the court would decide such a case.

The grounds for potential challenges to the actions of the Legislature may sound simple, but they aren’t. Any challenge to the constitutionality of a measure must overcome the deference courts give to acts of a Legislature that they are presumed constitutional.

That means that “there are certain things that are questionable from a public perspective, but may not be unconstitutional,” Black said.

The Civil Beat Law Center for the Public Interest is an independent organization created with funding from Pierre Omidyar, who is also CEO and publisher of Civil Beat. Civil Beat Editor Patti Epler sits on its board of directors.

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