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
(Professional Employer Organizations; Fees and Expenses; Bond Requirements; Appropriation) AS AMENDED, PASS FINAL READING.
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 Excerpt from Capitol TV

Rep. Thielen addresses HB 2424 – Bond Requirements

Conf. Comm. Rep. No. 156-12 S.B. No. 2424, S.D. 2, H.D. 2, C.D. 1
(Professional Employer Organizations; Fees and Expenses; Bond Requirements; Appropriation) AS AMENDED, PASS FINAL READING.
The bill creates new fees and allows the director of DLIR to create additional fees and raise existing fees by administrative rule.
The bill creates a special fund, which BUF generally opposes. In testimony on the SD2 draft, the Tax Foundation of Hawaii remarked that “DLIR special funds that earmark general fund revenues cannot be justified as they restrict budget flexibility, create inefficiencies, and lessen accountability.”
Per ProService Hawaii, a PEO servicing over 1000 small businesses in Hawaii, the bill’s language in §373L-F is problematic. It states that the PEO “shall be deemed the employer for purposes of unemployment insurance, workers’ compensation, temporary disability insurance, and prepaid health care coverage.” It appears to allow companies to contract out their liabilities and responsibilities as an employer for the above purposes. The PEO cannot assume the sole responsibilities for such items unless the client company has remitted all of its hours and wages to the PEO, along with the associated payroll taxes, premiums, and other funds. The statute does not match the way other state and federal agencies treat the co-employment relationship: holding the client or worksite employer responsible for conduct at the workplace, and limiting the PEOs responsibility to the scope of services provided by contract to the client. Thus, it is bad public policy.

Contact: 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: Excerpt from Capitol TV


Hawai‘i State Representative Cynthia Thielen (R, 50th District: Kailua, Kaneohe Bay) submitted a memo today to Mayor Peter Carlisle stating that the Ameron Hawaii Quarry in Kailua should be not be on the City & County of Honolulu’s new landfill site list. The memo is a legal analysis which outlines five reasons why the Ameron Hawaii Quarry should be removed from the landfill list, citing Federal law and the impact on area residents and the construction industry.

“Installing a new Oahu municipal solid waste landfill site at Ameron Hawaii Quarry in Kailua would negatively impact the water quality in Kailua’s watershed and marsh lands, interfere with the U.S. Endangered Species Act’s purpose, threaten the health and safety of Kailua residents, and irreparably damage the construction industry,” stated Thielen.

The memo details the detrimental impact that a landfill would have on the Kawainui and Hamakua Marsh Complex, a designated Wetland of International Importance under the Ramsar Convention which recognized the Marsh as a core wetland habitat for endemic and endangered birds and containing significant cultural and environmental resources. Citing the U.S. Endangered Species Act and the high quantity of rainfall in the area, Representative Thielen points out the negative impact that runoff and leaching from a landfill would have on this significant wetland. Thielen also notes the proximity of five schools, a hospital, and numerous residences, all within one mile of the proposed landfill site.

“The best way to ensure that the environment and residential areas surrounding the Ameron Hawaii Quarry are protected from health and safety concerns is to avoid building a landfill at the Ameron site,” Thielen reiterated.

Representative Thielen observed that placing a landfill at the Ameron Hawaii Quarry site would have a significant impact on Hawaii’s construction industry. “Without Ameron Hawaii Quarry in Kailua we would not have enough Grade A rock to meet the local demand. This lack of material would have a significant impact on much-needed infrastructure upgrades and material costs.”

Currently, Ameron Hawaii Quarry is in the top 5 on the list of potential new landfill sites for Oahu. Thielen’s memo is a pointed, evidentiary statement that the quarry should not be on the list at all.

RepThielen Memo to Mayor re Landfill 5 7 12