House Republicans oppose proposed GET increase

September 11, 2012

Honolulu – Today, House Republicans presented a letter to the Tax Review Commission opposing the commission’s proposal to increase the GET and other taxes. In the letter, Republicans argue that increasing taxes would hurt Hawaii’s most vulnerable citizens and negatively impact Hawaii’s economic recovery.

The letter reads as follows:

“Dear Chair Iwase and Members:

The House Minority Caucus would like to express its appreciation to The PFM Group for their work in developing their report titled Study of the Hawai‘i Tax System: Final Report, dated August 28, 2012.  We would like to note that the report contains a number of recommendations we agree with and support including the elimination of the .5 percent GET and Use Tax rate on business-to-business transactions, the elimination of the individual income tax on the first $20,000 of adjusted gross income, the increase of refundable food/excise tax income tax credits, and improvements in tax administration.  These recommendations would improve system efficiency and reduce taxes on low-income individuals.

Unfortunately, the report also contains a number of recommendations that we vehemently oppose.  The most egregious of these recommendations are the increase of the GET rate from 4.0 percent to 4.5 percent (which is actually an increase to 5 percent for the majority of people of Hawai‘i), the implementation of income tax on pension income, the elimination of the income tax deduction for property taxes paid, and the increase of the corporate income tax rate.  We find these recommendations, as well as others in the report, disappointing and disagreeable as they increase taxes on individuals and businesses placing a greater burden upon them.

This is especially problematic given the state of Hawai‘i’s economy and the significant cost of living faced by residents of the state.  An increase in taxes would be a detriment to individuals and businesses at this most inopportune of times.  Rather than exploring ways to increase revenue, we believe government spending should be curtailed and be done in a smarter and more efficient manner.

Furthermore, we feel the business climate should be improved in the state through improved regulatory procedures and greater government efficiency.  A more business-friendly environment would help companies conduct business thereby growing the economy and helping the people of Hawai‘i.”

HMIN_Letter_10_11_2012

Gil Gets it Done – Kahuku High and Friends of the Waialua Library

Representative Gil Riviere speaks with Uila Vendiola faculty member for the Kahuku High’s Avid program; and with Pam Goodman Kilmer, Secretary of Friends of the Waialua Library.

Contact: repriviere@capitol.hawaii.gov

Request to Veto – Re: S.B. No. 2424 — Professional Employer Organizations

June 12, 2012

The Honorable Neil Abercrombie
Governor of Hawai’i Executive Chambers,
Hawai’i State Capitol
Honolulu, Hawai’i 96813

Re: S.B. No. 2424 — Professional Employer Organizations

Dear Governor Abercrombie:

A total of 19 representatives voted against S.B. No. 2424 on final reading including all Republican representatives. This bill would have catastrophic consequences for many professional employee organizations (PEOs), also known as employee leasing companies. Many small PEOs were not aware of this measure until very late in the legislative session. Otherwise they would have opposed the bill much earlier.

If enacted, it would be difficult, perhaps impossible, for these small businesses to comply with the bonding and registration requirements. Any PEO company that handles 100 employees must purchase a minimum $500,000 bond, and it is questionable whether these bonds are obtainable.

Registration fees run from $2,500/biennium for PEOs that handle only 100 of their clients’ employees. Fees are $10,000 for 500 employees. These fees are far in excess of what other states charge for registration which is around $100 according to testimony. $100 would be a more rational fee to do business in Hawai’i.

Please veto this measure. Thank you for your attention to this matter.

Sincerely,

Bipartisan support in addressing SB 2424 – Bond Requirements

Conf. Comm. Rep. No. 156-12 S.B. No. 2424, S.D. 2, H.D. 2, C.D. 1
RELATING TO PROFESSIONAL EMPLOYER ORGANIZATIONS.
(Professional Employer Organizations; Fees and Expenses; Bond Requirements; Appropriation) AS AMENDED, PASS FINAL READING.
Description
The purpose of this bill is to strengthen existing professional employer organization (PEO) law. The bill adds 10 new sections to the HRS chapter on PEOs (§§373L-A through 373L-J). It also creates some NEW FEES. Some highlights of the bill:
• Adds powers and duties to the director of labor and industrial relations regarding the registration and regulation of professional employer organizations.
• Establishes new unspecified fees of (application fee, tiered biennial renewal fee, restoration fee). The director is authorized to establish other fees, and amend any existing fees, via administrative rulemaking (i.e. no legislative oversight required).
• Repeals HRS chapter 373K relating to PEOs, but moves the general excise tax exemption provisions to chapter 373L, HRS.
• Establishes the PEO special fund, composed of fees and fines collected under new sections created by this bill.
• Requires a PEO to report sanctions and judgments against the PEO to the DLIR within 30 days and to inform DLIR of its address information; authorizes various penalties for noncompliance.
• Allows DLIR’s director to deny, suspend, revoke, or deny renewal of registration of any PEO under certain circumstances; allows for hearings when DLIR’s director refuses to issue or renew a PEO registration.
• States that the agreement between a PEO and its client company shall state that the PEO shall be deemed the employer for purposes of unemployment insurance, workers’ comp, TDI, and prepaid health care coverage.
• Provides for a minimum $1000 fine if a PEO fails to comply with any provision in chapter 373L or any rule or final order of the director.
• Provides for judicial review of the director’s final decision and order in a contested case.
• Provides for a payroll cost exemption (exempts payments from a client for wages, salaries, payroll taxes, insurance premiums, etc. from the GET, with some exceptions).
The bill also makes some housekeeping and other changes to current law, such as:
• States that failure to renew registration is a forfeiture of registration.
• Requires the director to accept electronic filings, to the extent practicable.
• Amends definitions and bond level requirements (e.g., bond of at least $500,000 is required for PEOs with 100 or more employees).
The bill also appropriates funds to DLIR (amount left blank).
The bill passed out of FIN unamended.
The current HD2 draft adopts numerous amendments recommended by DLIR, many of which deal with bonding requirements and DLIR bringing actions on the bonds to recover damages caused by a PEO’s noncompliance. It also changes the defective date to July 1, 3000.
The previous SD2 draft essentially accomplished the same purpose, but had different fee amounts, was in need of technical amendments, and a July 1, 2050 effective date.

Contact repthielen@capitol.hawaii.gov Excerpt from Capitol TV

Reps. Riviere and Thielen addresses SB 2873 – Environmental Impact Statements

S.B. No. 2873, S.D. 1, H.D. 3, C.D. 2 RELATING TO ENVIRONMENTAL IMPACT STATEMENTS.(Environmental Impact Statements; Exemption) (FA #8) AS AMENDED, PASS FINAL READING
Per Sierra Club: DOT projects are one of largest causes of invasive species; DOT should be held to higher environmental standard, not lower.
The bill is not necessary.
OEQC, while supporting the bill’s intent, “Encourages all agencies whenever possible to utilize the existing process which involves review and concurrence by the Environmental Council (EC).
There is currently no backlog in the process and EC presently reaching out to all agencies and offering support and assistance in updating exemption lists.”

Contact: repthielen@hawaii.capitol.gov Excerpt from Capitol TV

Rep. Riviere Addresses HB 1875 – Mortgage Foreclosures

Conf. Comm. Rep. No. 63-12 H.B. No. 1875, H.D. 2, S.D. 2, C.D. 1
RELATING TO FORECLOSURES. (Mortgage Foreclosures; Homeowner Association Liens and Assessments) AS AMENDED, PASS FINAL READING

Legal Aid Society of Hawaii: They oppose HD1 because it would repeal HRS §667-60 which states that any violation of the mortgage foreclosure laws an automatic UDAP violation. This waters down protections for consumers; they prefer the original version.
Hawaii Bankers’ Association (HBA): Repeal of HRS §667-60 should be permament, not temporary; allowing filing of an action to void the foreclosure sale, up to 6 months after the sale is recorded, will chill the real estate market; the provision requiring lenders to hold 2 open houses is unrealistic, as the lender does not have any legal right to take possession of the property and could be liable for trying to do so.
Requesting amendments (1) during nonjudicial foreclosure process, we are required to do 2 open houses—please strike this. (2) planned community association. The documents suggested that they have priority over everyone else . We’ve come up with wording to address this.
Community Associations Institute Legislative Action Committee: Condominium associations perform quasi-governmental services. It would be detrimental to prohibit foreclosure based on nonpayment of association fees; associations need money to maintain their level of services to homeowners. Paying homeowners would need to pay more, to make up for the delinquent homeowners’ share.

Contact: repriviere@capitol.hawaii.gov Excerpt from Capitol TV

Reps. Thielen, Ward and Riviere deliver an amendment relating to SB280 – agriculture

Measure Title: RELATING TO AGRICULTURE.
Report Title: Agriculture; Hawaii-grown Coffee; Penal Code
Description: Makes the offense of false labeling as to the geographic origin of Hawaii-grown coffee a class C felony. Authorizes the department of agriculture to adopt administrative rules relating to the inspection and documentation of the geographic origin of Hawaii-grown green coffee beans. Removes the requirement that all Hawaii-grown green coffee beans shall be inspected and certified by the Department of Agriculture unless otherwise specified by rules of the Department. Requires that no Hawaii-grown coffee beans shall be shipped outside the area of their geographic origin unless they have been marked with or contain documentation of geographic origin approved by the department of agriculture. (HB280 CD1)

Description
The purpose of this bill is to repeal requirement that all Hawaii-grown green coffee beans be inspected and certified by DOA for grade and origin and related prohibition on shipping uninspected green coffee beans outside area of geographic origin.
Version HD1 of this bill removes requirement that DOA inspect and certify all Hawaii-grown green coffee beans unless otherwise specified by DOA rules; removes prohibition on shipping Hawaii-grown green coffee beans outside area of geographic origin unless they have been inspected by DOA.
Cuts bureaucratic red tape by eliminating lengthy delays caused by necessity of DOA inspections. Also allows green coffee beans to be shipped out of their district much faster, thus simplifying business operations and alleviating storage problems for coffee growers.

Supporters
Kona Coffee Council, Hawaii Coffee Company, Hawaii Coffee Association, Rural Kona Mill and Museum, Greenwell Farms, Hawaii Coffee Growers Association, Dole Food Company, Captain Cook Coffee Company, McDonalds of Hawaii, numerous individuals.

Contact: repthielen@capitol.hawaii.gov Excerpt from Capitol TV

CYBER CRIME PACKAGE PASSES STATE LEGISLATURE

The State Legislature has passed three groundbreaking bills to curb the growing cyber crime trend in Hawaii. The bills were the result of the cyber crime informational briefing co-chaired by Representatives Kymberly Marcos Pine and George Fontaine.

Under these bills, law enforcement and prosecutors will have increased ability to charge cyber criminals with new or increased penalties.

“The cyber crime package gives new hope to victims that their perpetrators will be prosecuted,” said Rep. Pine. “My hope is that Hawaii will soon be one the toughest states in the nation to be a cyber criminal.”

HB 1777 authorizes district and circuit court judges in Hawaii to order the production of records held by entities located outside of the state in all criminal cases. The intent is to help prosecutors to obtain electronic evidence that is often stored by mainland organizations. The Honolulu Prosecutor’s Office advocated for the bill, testifying that it was the most important action Hawaii could take to aid in the prosecution of cybercriminals.

“Supporting law enforcement is key,” said Rep. Fontaine. “Members of our caucus worked extensively with the Prosecutor’s Office to introduce an identical bill this session. I’m proud of my colleagues for equipping law enforcement with this critical tool to protect residents from computer crimes.”

HB 1788, a cybercrime omnibus bill, toughens computer crime laws by modeling language after existing identity theft laws defining computer fraud as an aggravated form of theft. It also imposes harsher penalties by raising each existing crime one grade higher. Most notably, the bill creates a new offense of Computer Fraud in the Third Degree, a class C felony. The crime would involve knowingly accessing a computer, computer system, or computer network, with intent to commit theft in the third or fourth degree.

HB 2295 expands the existing offense of Use of a Computer in the Commission of a Separate Crime to include situations where a perpetrator knowingly uses a computer to perform certain acts against a victim or intended victim of Harassment under HRS 711-1106 or Harassment by Stalking under HRS 711‑1106.5. The bill clarifies that the offense is also committed when the perpetrator knowingly uses a computer to pursue, surveil, contact, harass, annoy, or alarm a victim or intended victim.

Why SB 755 is Terrible Policy

Thursday,

April 26th, 2012 |

BY REP. GIL RIVIERE, R-NORTH SHORE  Senate Bill 755 SD2 HD2 is terrible policy for the State of Hawaii.  This omnibus bill includes several bad ideas that personify an unprecedented assault on Hawaii’s environmental protection laws by the 2012 Hawaii State Legislature.

SB755 exempts airports and other state lands from SMA permits and shoreline setbacks, exempts harbors from any permit and site plan review, and allows the Governor to exempt state projects from Hawaii’s environmental review process.  Many variations of these measures passed out of the House, only to die in the Senate.

Proponents of this bill claim that billions of dollars in construction projects are held up because of cumbersome environmental laws, but specifics on where projects are held up, i.e., planning, design or construction phases, have not been forthcoming.  Proponents of this bill have referred to Kahului Airport as an example, but they offer no specifics on what is the hold up.  I did some research.

Taking from six to nine months to complete, four Special Management Area (SMA) Permits were approved for Kahului Airport in 2009.  Exemptions from Environmental Assessments were granted.  The value of the work is approximately $34 million and nothing has been built.

The SMA process for a fuel storage tank revealed that it was going to be built in the Tsunami Inundation Zone, so the permit requires the tank to be built outside of this zone and appropriate spill mitigation measures to be installed to keep fuel out of the storm drains and ocean.

In other words, environmental laws are not holding up any current projects at Kahului Airport and the SMA Permit process improved the design of the fuel storage facility.  Yet, three years later, nothing has been built.

Proponents of this bill argue that the Governor could only exempt projects that are not likely to have significant environmental impacts.  However, SB755 would allow him to do so without approval of the Environmental Council, compliance with the Council’s procedures or rules of the Office of Environmental Quality Control, and exempt from any legal challenge afforded in the Hawaii Administrative Procedures.  Why the Governor would be better at making these decisions than the experts, and why his decisions should be beyond appeal, remains a mystery.

Special Management Area Permits and environmental reviews allow public participation.  Early community involvement is essential to successful implementation.  Who understands impacts and design elements better, the residents in the affected area, or government employees in downtown Honolulu?

An environmental exemption process already exists and the Office of Environmental Quality Control has no backlog of exemption list requests.  Throughout this session, in numerous hearings, I have seen no detailed evidence of how particular state laws are tying up any projects or how many people might be put to work with this new law.  “Trust us, the state would do not harm” is not reassuring to me, nor to most everyone I know.

Public participation, early disclosure and review of potential impacts make projects better and avoid costly mistakes.  Somebody needs to take a look before any exemption is granted.  Giving the state automatic exemptions for SMA permits and the Governor exemption list authority through SB755 is terrible policy!

Representative Gil Riviere, R-House District 46, North Shore, Oahu

http://www.hawaiireporter.com/why-sb-755-is-terrible-policy/123

Gil Get It Done – Miss Hawaii and Mrs. America

Host: Representative Gil Riviere
Host 1: Lauren Kealohilani Cheape, Miss Hawaii
Host 2: Lara Leimana Fonoimoana, Mrs. America

Contact: repriviere@capitol.hawaii.gov