Justice Reinvestment

Rep. George Fontaine (R HD-11), Kihei, Wailea, Makena , The Maui Weekly   July 12, 2012

This month, I want to discuss two bills that passed this year and became law last month. Much of the driving force behind SB 2776 and HB 2515 comes from the Justice Reinvestment Initiative (JRI), which is part of the Council of State Governments – Justice Center.

Initially, there was some misinformation about what these bills were addressing and how the criminal justice system in Hawai’i would be affected. Some people feared that these bills would cause early release for prisoners. Others thought these bills were just about bringing more prisoners back from incarceration on the Mainland.

The reality is that these new laws, known as Act 139 and Act 140, are much more comprehensive than this. The goal is to enhance public safety, reduce recidivism (percentage of criminals that commit another crime after serving a sentence), and to scale the justice system to become more cost effective. It was for these reasons that I supported this legislation. I voted for HB 2515 in conference committee and I also voted in favor of SB 2776 in the House Judiciary Committee.

The three-part objective of Justice Reinvestment is to first analyze data and develop policy options; second, adopt new policies and put reinvestment strategies into place; and finally, measure performance.

Justice Reinvestment has had success in states such as Arizona and Texas. In Arizona, the legislature passed the Safe Communities Act in 2008. As a result, “the number of probationers who were convicted for another felony crime while on supervision also declined from 3,174 to 2,188, a decline of 31 percent” (justicereinvestment.org). In 2006, Texas passed legislation based on Justice Reinvestment research. As a result, “between 1997 and 2006, the number of probation revocations to prison increased 18 percent, despite a three percent decline in the total number of persons under community supervision” (justicereinvestment.org).

Act 139 and Act 140 will allow the State of Hawai’i to provide a variety of opportunities for prisoners to rehabilitate. Research has shown that it is more effective to provide a variety of programs and opportunities for prisoners to rehabilitate; this approach is a more scalable-solution than more rigid one-size-fits-all solutions.

Here are some more benefits of these new laws:

Increases the amount of restitution paid to victims from 10 percent to 25 percent of any deposit made to an inmate’s account.

Savings are estimated at $9 million by the end of FY 2013 up to $26 million by FY 2015.

Increase capacity for victim services.

Approximately $1 million will be invested to enhance community-based treatment programs.

Pre-trial delays for risk assessment will be eliminated.

The data analysis portion of this plan is extremely important. Justice Reinvestment means that Hawai’i will be able to move in the direction of putting in place a sophisticated projection model for forecasting the growth of the state’s prison population. Up until this time, Hawai’i did not have this forecasting ability. Now the Department of Public Safety and lawmakers will have new analysis tools to help plan for the future.

If you need to contact me with any issues or concerns regarding Justice Reinvestment, please call my office at (808) 586-8525 or email repfontaine@capitol.hawaii.gov.

To receive an electronic version of our newsletter, visit www.repfontaine.com.  If you need to contact me with any issues or concerns regarding South Maui, please call my office at (808) 586-8525 or email repfontaine@capitol.hawaii.gov.  To receive an electronic version of our newsletter, visit www.repfontaine.com.

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.


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 repthielen@capitol.hawaii.gov Excerpt from Capitol TV


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.