Critics say a last-minute push by state lawmakers to shore up nonprofits in the face of looming federal budget cuts may be unconstitutional.

The new law creating a unique committee to pass out up to $50 million in extra aid to Hawaiʻi nonprofit organizations this year has triggered a warning letter from a public interest law firm saying the plan would be vulnerable to legal challenges.

The letter from the Public First Law Center cites “procedural defects” in the passage of Senate Bill 933 this spring.

The problem is the text of the measure was added to a “short-form” bill too late in the legislative session, and the law center’s executive director Brian Black said in an interview it missed a key deadline for bill introduction set out in the state constitution.

“Because of this defect, the law may be challenged as unconstitutional and nullified, jeopardizing any grants made by the committee,” the letter states.

The letter to House Speaker Nadine Nakamura and Senate President Ron Kouchi instead urges lawmakers to meet in a special session if necessary to award money to nonprofits. That approach would avoid “the uncertainty and risk of receiving potentially revocable public funds,” the letter states.

Gov. Josh Green on Wednesday signed SB 933 into law as Act 310, saying “this bill is about urgency.” He remarked before signing it that lawmakers “couldn’t possibly” distribute the $50 million in a special session later this year.

“Sometimes you just have to take action,” Green said. “Everyone’s going to know where these grants go, and it’s going to be to the really best-intended organizations in our state.”

It is standard practice for the state Attorney General’s Office to review all bills passed by the Legislature to ensure they comply with the constitution before the governor signs them, but it is unclear what legal guidance Green received on SB 933.

Toni Schwartz, public information officer for the attorney general, said the office “cannot make statements about possible legal opinions or advisement given to clients.”

New Process Causes Alarm

Black’s letter is the latest in a series of concerns raised about SB 933, which earmarks up to $50 million for nonprofit organizations to fund social services such as child care, subsidized housing and help for the homeless.

Normally that money would be distributed by lawmakers through a routine public grants-in-aid process during the legislative session. But this year lawmakers were worried that nonprofits that rely on federal funding might be slammed by unanticipated budget cuts or funding freezes while the Legislature is not in session.

SB 933 will create a four-member panel of lawmakers — two from the Senate and two from the House — to award the grants.

The bill specifically exempts the panel of lawmakers from the state open meetings law, prompting concerns from the League of Women Voters of Hawaiʻi.

Judith Wong, president of the league, said in an interview her organization is “very pleased” the state wants to help the nonprofits, but wants assurances the panel of lawmakers who make the awards will meet publicly and allow public participation in the process.

“It would just be best to have it be a very open and clean process, and that’s where we are with that,” she said. “We want to see transparency going forward on this.”

Gary Hooser, a former Senate majority leader, and House Public Safety Committee Chair Della Au Belatti both say they also support providing extra aid to nonprofits, but believe the plan lawmakers devised is a bad idea.

“Having four politicians make the decisions on who to give $50 million to is not just crazy, but it’s inviting abuse,” Hooser said in an interview Thursday. He was Senate majority leader from 2006 to 2010 and now writes a blog about government reform.

He predicted lawmakers will be biased in favor of nonprofits that operate in their own districts, and will be lobbied by their colleagues to help other favored nonprofits. Hooser also argued the process lawmakers used to approve the bill was constitutionally flawed.

“It’s just a recipe for abuse, intended or unintended,” Hooser said. “It should be a thoughtful process based on clear criteria — you have a formula, you score these people.”

“It’s just stunning to me that we’re going to normalize a process where a committee of four without public input can make these really broad decisions.”

Rep. Della Au Belatti

Hooser also argued the awards should be made in a special session with more lawmakers involved and more public participation.

Belatti said the panel making the awards “is authorized to act in secret,” which seems to contradict language in the constitution that requires that all legislative committees meet in public.

She said the proposal for a four-person award panel emerged during the conference committee period at the session’s end without any public comment.

“It’s just stunning to me that we’re going to normalize a process where a committee of four without public input can make these really broad decisions, these really important decisions,” Belatti said.

A Sharp Retort

Green aimed a sharp reply at critics of the bill before he signed it into law on Wednesday, suggesting they were engaging in “cynical, ugly behavior.”

“I’m pretty darn tired of the haters out there — for example Mr. Hooser — who send out emails bashing the good work of senators and representatives when they’re really trying to help the people,” Green said.

He said the critics “suggest that it’s a constitutional question, when in reality its just because they aren’t getting their own time in the sunlight, when these good people are trying to actually bring $50 million to the organizations that struggle year in and year out,” Green said.

House Finance Committee Chair Chris Todd said many of the specifics of how the four-member committee will operate are not spelled out in the bill, and will have to be worked out between the House, the Senate and the administration. That includes whether the new committee will meet publicly, he said.

Todd said the Legislature does not have the administrative resources to vet the applications during a special session.

“What I would encourage people to do is just be patient as this gets worked out, and try not to assume the worst, but I do understand the scrutiny,” he said. “Everyone’s coming together to try and do a good thing, and that process hasn’t been worked out yet.”

“The immediacy of this federal budget situation requires that we cannot do business as usual,” Todd said.

Read the Public First Law Center letter: