RELATING TO DUE PROCESS.

SB2744

THE SENATE

S.B. NO.

2744

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to due process
.

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

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SECTION 1.
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The legislature finds that article I, section
5, of the Hawaii State Constitution and the Fourteenth Amendment of the United
States Constitution provide that no person shall be deprived of life, liberty,
or property without due process of law.
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These guarantees apply fully to the administrative actions of state
agencies when the actions materially affect protected liberty, property, or
livelihood interests.

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The legislature further finds that state
executive departments exercise substantial authority over matters including
agricultural land tenure, natural resource management, biosecurity enforcement,
public assistance eligibility, child welfare, professional licensure,
unemployment benefits, educational services, environmental permitting, and
infrastructure development.
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Actions
taken in these domains can impose significant economic, legal, and personal
consequences on affected individuals and entities.

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The legislature recognizes that judicial
decisions, legislative audits, investigative reporting, and sworn testimony
have identified recurring procedural due process deficiencies across multiple
state departments.
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These deficiencies
include inadequate or untimely notice, denial of contested case hearings, lack
of impartial adjudication, opaque decision-making, and the implementation of
adverse actions while appeals remain pending.
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Collectively, these practices have resulted in avoidable financial harm
to affected parties, including lost income, disrupted operations, civil
penalties, fines, and litigation costs.

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The legislature additionally finds that,
under existing law, the financial consequences of unconstitutional or
procedurally deficient agency actions are frequently borne by affected persons
or by the State's general fund, rather than by the department whose conduct
caused the violation.
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This structure,
which does not subject the responsible department to fiscal consequences,
weakens institutional incentives for compliance, diffuses accountability, and
allows recurring procedural failures.

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Accordingly, the purpose of this Act is to:

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(1)
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Require
state agencies to provide an affected person with written notice containing
certain information before taking final administrative actions that materially
and adversely affect the person's protected liberty or property interest;

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(2)
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Prohibit a state agency from
implementing
a final adverse action until the completion of any timely requested contested
case proceeding unless the state agency makes certain written findings;

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(3)
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Require
state agencies to take certain steps to ensure impartial decision-making;

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(4)
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Require
each state agency to submit an annual report to the legislature and make the
report available on the agency's website;

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(5)
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Require
a claim against the State for a violation of a procedural due process
requirement to be satisfied from the operating budget of the state agency whose
action or omission gave rise to the violation and not from the general fund;
and

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(6)
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Clarify
that reporting of due process rights violations is protected under the State's
Whistleblowers' Protection Act.

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SECTION
2.
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Chapter 91, Hawaii Revised Statutes,
is amended by adding three new sections to be appropriately designated and to
read as follows:

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�91-A
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Procedural due process; minimum
requirements for state agencies.
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(a)
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Before taking any final administrative action
that materially and adversely affects a protected liberty or property interest,
a state agency shall provide the affected person with written notice that
includes:

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(1)
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A clear description of the proposed
action and the factual basis supporting the action;

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(2)
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Citation to any statute, rule, or
formally adopted policy the state agency relied on to take the proposed action;

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(3)
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Notice of the person's right to
request a contested case hearing or administrative appeal, whichever is
applicable; and

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(4)
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A clear statement of the deadlines
and procedures for exercising the rights listed in paragraph (3).

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(b)
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Where a contested case hearing is timely
requested in response to a proposed state agency action implicating a protected
liberty or property interest, the state agency shall not implement the final
adverse action until completion of the contested case proceeding unless the state
agency makes written findings that immediate action is necessary to prevent
imminent harm to public health, safety, or the environment.

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(c)
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Each state agency shall, to the extent
practicable, maintain functional separation between investigative,
prosecutorial, and adjudicatory roles to ensure impartial decision-making.

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(d)
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Nothing in this section shall be construed to
expand or diminish any substantive right but shall be interpreted to ensure the
meaningful availability of due process protections guaranteed by the United
States Constitution and Hawaii State Constitution.

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(e)
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For the purposes of this section, "state
agency" means any board, commission, department, office, bureau, agency,
or other establishment or institution of the state government, and any officer,
employee, or member thereof, authorized by law to adopt rules, adjudicate
contested cases, or otherwise take final administrative actions that may
materially or adversely affect the liberty or property interest of a person
protected under the due process clause of the United States Constitution and
Hawaii State Constitution except those in the legislative or judicial branches.

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�91-B
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Procedural due process; state agency
reporting requirements.
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(a)
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Each state agency
shall submit
an annual report to the legislature no later than twenty days prior to the
convening of each regular session detailing:

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(1)
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The number of contested case
hearings and administrative appeals requested;

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(2)
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The number of contested case hearing and
administrative appeal requests granted, denied, or withdrawn;

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(3)
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The
average time each contested case hearing or administrative appeal took to
resolve; and

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(4)
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The
number of state agency decisions reversed, remanded, or modified after
administrative or judicial review.

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(b)
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Each state agency shall make the report required pursuant to subsection
(a) available on the agency's publicly accessible website.

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(c)
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For the purposes of this section, "state agency" has the same
meaning as defined in section 91-A.

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�91-C
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Procedural due process violations;
fiscal accountability.
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(a)
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Where a court of competent jurisdiction or a
final administrative or appellate decision determines that a state agency has
violated procedural due process requirements under the United States
Constitution, Hawaii State Constitution, or this chapter, and the violation
results in:

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(1)
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Monetary
damages, fines, penalties, restitution, or settlements;

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(2)
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Attorneys'
fees or costs awarded against the State; or

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(3)
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Documented
financial harm requiring compensation or remedial payment,

the
financial obligation shall be satisfied, to the extent permitted by law, from
the operating budget of the state agency whose action or omission gave rise to
the violation, and not from the general fund.

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(b)
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The department of budget and finance shall, upon notice of a
determination satisfying the requirements of subsection (a), adjust
departmental allotments or impose internal accounting transfers as necessary to
effectuate subsection (a); provided that no adjustment shall impair any
constitutionally or federally mandated service.

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(c)
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Nothing in this section shall be construed to:

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(1)
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Waive
sovereign immunity beyond any existing law;

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(2)
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Create
a private right of action; or

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(3)
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Limit
the authority of the legislature to appropriate funds.

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(d)
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Each state agency shall include in the state agency's annual budget
submission a summary of:

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(1)
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Any
expenditures made or determinations satisfying the requirements of subsection
(a); and

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(2)
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The
nature of the violation resulting in the expenditure or determination and any
corrective measures the state agency has implemented to prevent repetition of
similar violations.

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(e)
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For the purposes of this section, "state agency" has the same
meaning as defined in section 91-A.
"

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SECTION
3
.
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Section 378-62, Hawaii Revised Statutes, is
amended to read as follows:

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"
�378-62
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Discharge of,
threats to, or discrimination against employee for reporting violations of law.
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An employer shall not discharge, threaten, or
otherwise discriminate against an employee regarding the employee's
compensation, terms, conditions, location, or privileges of employment because:

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(1)
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The employee, or a person acting on behalf of
the employee, reports or is about to report to the employer, or reports or is
about to report to a public body, verbally or in writing, a violation or a
suspected violation of:

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(A)
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A law, rule, ordinance, or regulation, adopted
pursuant to law of this State, a political subdivision of this State, or the
United States[
; or
]
, including any procedural due process right or
requirement of chapter 91, such as improper denial of a right to a hearing or abuse
of discretion; or

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(B)
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A contract executed by the State, a political
subdivision of the State, or the United States, unless the employee knows that
the report is false; or

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(2)
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An employee is requested by a public body to
participate in an investigation, hearing, or inquiry held by that public body,
or a court action.
"

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SECTION 4.
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This Act does not affect rights and duties that matured, penalties that
were incurred, and proceedings that were begun before its effective date.

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SECTION 5.
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In codifying the new sections added by section 2 of this Act, the
revisor of statutes shall substitute appropriate section numbers for the
letters used in designating the new sections in this Act.

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SECTION 6.
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Statutory material to be repealed is bracketed and stricken.
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New statutory material is underscored.

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SECTION 7.
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This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Due
Process; State Agencies; Public Proceedings; Minimum Requirements; Fiscal
Accountability; Reports; Whistleblowers' Protection Act

Description:

Requires
state agencies to provide an affected person with written notice containing
certain information before taking final administrative actions that materially
and adversely affect the person's protected liberty or property interest.
�
Prohibits a state agency from
implementing
a final adverse action until the completion of any timely requested contested
case proceeding unless the state agency makes certain written findings.
�
Requires state agencies to take certain steps
to ensure impartial decision-making.
�

Requires each state agency to submit an annual report to the Legislature
and make the report available on the agency's website.
�
Requires a claim against the State for a
violation of a procedural due process requirement to be satisfied from the
operating budget of the state agency whose action or omission gave rise to the
violation and not from the general fund.
�

Clarifies that reporting of due process rights violations is protected
under the State's Whistleblowers' Protection Act.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.