No 27840 (December 18, 2008)
OPINION OF THE COURT BY LEVINSON, J.
We accepted the application for a writ of certiorari filed by the defendants-appellants-petitioners Linda Lingle,Governor, State of Hawai'i, Georgina K. Kawamura, Director of Finance, Department of Budget and Finance (DBF), Lawrence M. Reifurth, Director, Department of Commerce and Consumer Affairs (DCCA), and J.P. Schmidt, Insurance Commissioner, Insurance Division, DCCA (collectively, the State) in order to review the published opinion of the Intermediate Court of Appeals (ICA) in Hawaii Insurers Council v. Lingle, 117 Hawai'i 454, 184 P.3d 769 (2008). The ICA affirmed the final judgment of the first circuit court, the Honorable Karen S.S. Ahn presiding, in favor of the plaintiff-appellee-respondent Hawaii Insurers Council (HIC) and against the State. Id. at 463, 184 P.3d at 778. In its application, the State asks whether the ICA erred in concluding that the regulatory assessments imposed by the insurance commissioner pursuant to Hawai'i Revised Statutes (HRS) § 431:2-215 (Supp. 1999) were unconstitutional taxes and whether the circuit court had subject-matter jurisdiction over this matter.
For the reasons that follow, we hold that the insurance commissioner's assessments were not unconstitutional when they were initially imposed, see infra sections III.A and B, but that the legislature's transfer of $3,500,000.00 of those funds into the general fund was unconstitutional under the separation of powers doctrine, see infra section III.A. We further hold that the circuit court had subject-matter jurisdiction over this case. See infra section III.C. We therefore affirm the ICA's May 5, 2008 judgment in part, reverse it in part, and remand this matter to the circuit court for further proceedings consistent with this opinion.