In my role with the Tax Foundation of Hawaii and in private practice as a lawyer, I often have occasion to visit the Capitol website, capitol.hawaii.gov, to do research. The more I have gotten to know the site, the more I understand that it has a great deal of resources to do legislative research.
In my role with the Tax Foundation of Hawaii and in private practice as a lawyer, I often have occasion to visit the Capitol website, capitol.hawaii.gov, to do research. The more I have gotten to know the site, the more I understand that it has a great deal of resources to do legislative research.
Legislative history and research can be very important. When bills go through the legislature on their way to becoming law, much is written about the bill contents. Committees that hear the bill write reports about it. People testify before those committees and leave written testimony. Sometimes the bill is debated on the floor of the House or Senate. All of these writings can give some indication of what the legislators were thinking when they passed the bill.
The Hawaii Legislative Reference Bureau has put together a comprehensive, and somewhat intense, guide to many of these legislative writings and how you find them. I wish I had read it a long time ago. Researching legislative history can turn up valuable information, and the way to do it is different in every jurisdiction.
Nevertheless, legislative history has limits to its usefulness. I remember some time ago a colleague called me and asked me about a certain kind of distribution. I said I didn’t think it was subject to tax. My colleague agreed but said that a tax auditor she was working with was convinced otherwise, and was holding up a legislative committee report as evidence. The committee report did indeed say what the auditor was asserting, but I noticed that the committee report was written for Senate Draft 2. I looked up that draft and it contained a subsection stating that the kind of distribution was subject to tax. The bill that passed the Legislature and was signed into law, however, didn’t have that subsection. The bill went to the House after the Senate was through with it, and the House took it out. The tax auditor apparently got worked up over a provision that did not get enacted into law. Too bad for him.
Another fallacy that sometimes comes up is a “negative legislative history” argument. For example, suppose the legislature considers a bill to exempt the sale of widgets from the GET. The bill doesn’t pass. In a later lawsuit over whether the sale of widgets is taxable under the GET, the Department points to the bill that got scrapped and says that the shelving of the bill shows that the legislature intended to make the sale of widgets taxable, otherwise they would have passed the bill.
Fortunately, the Supreme Court of Hawaii torpedoed the negative legislative history argument in a 2007 case called Tax Appeal of Medical Underwriters of California (115 Hawaii 180). The court observed that it was possible that failure of a bill to pass indicates legislative intent, but did not give it much weight because there are many different reasons why a bill might not pass. In our legislature, that observation is certainly accurate. Thousands of bills get introduced each year; there simply isn’t enough time to consider and debate all of them in a 60-day legislative session. Moreover, because of our committee chairs’ power to kill legislation simply by not scheduling it for a hearing, the death of a bill may be due to only one legislator’s wishes while passage of it needs to reflect the majority sentiment of both the House and the Senate.
In just a few short months, another year’s legislative session will be upon us. For those of you who follow the Legislature’s progress, you might want to take some time to acquaint yourself with the Capitol website and the various tools it offers.
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Tom Yamachika is president of the Tax Foundation of Hawai‘i.
