Small Business Hawaii | Volume 24 | March - April 1999
Thursday, February 11, 1999
1999 LEGISLATIVE PACKAGE
Representative David Stegmaier
Workers' Comp | Corporate Income Tax Reduction | Privatization Reinventing Government | Tort Reform | Signees
1999 Bipartisan Small Business Legislative Hawaii's small businesses are the backbone of Hawaii's past, present and future economy. Nearly 98% of all businesses in Hawaii are classified as "small" business. Hawaii's economic survival and growth depend on healthy small businesses. Political and public policy has affected the ability to operate a profitable small business, and for many small business men and women, basic survival continues to be a daily struggle. The Bi-Partisan Small Business Legislative Caucus believes in, and is committed to helping the small business owner, employer, and employees by endorsing legislation which will lower the gamut of costs, and reduces the risks of owning and operating a business in Hawaii. If Hawaii wants to turn its economy around, like the rest of the Nation, we must alter our public policy to help rather than hinder. The Bi-Partisan Small Business Legislative Caucus endorses the following 1999 legislation which addresses these strategic areas of longstanding concern to businesses: General Excise Tax Pyramiding; Workers Compensation; Corporate Income Tax Reduction; Privatization, and Reinventing Government, and Tort Reform. Small business men and women need the support of the Hawaii State Legislature to regain hope and confidence in our current and future economy.
I. General Excise Tax Pyramiding Hawaii's General Excise Tax is applied to every transaction for sales and services in our economy. The effect is that it discourages small business activity by adding cost, and in addition export service providers are at a distinct disadvantage when competing with those of other states and countries. HB188: Exempts from general excise tax: (1) goods and services exported out of state; and (2) amounts prohibited from state taxation by the Constitution of the United States or federal law. Rep. Goodenow EDB FIN HB232: Establishes a general excise tax structure for services similar to that of goods. The new structure retains the four per cent tax on the final service provided and lowers the tax on intermediary services to half a per cent, the same as applied to the sale of wholesale goods. Rep. Case EDB FIN HB1305: Exempts from the general excise tax all services sold out of state. Rep. Marumoto EDB FIN HB1306: Expands the definition of "wholesaler" to include wholesale services to alleviate the pyramiding of general excise taxes. Rep. Fox EDB FIN HB1336: Exempts from the general excise tax all professional services exported out of state. Rep. Suzuki EDB FIN SB16: Eliminates intermediaries general excise tax application and substitutes resale of services at one-half per cent. Sen. Inouye WAM SB501: Eliminates intermediaries general excise tax application and substitutes resale of services at one-half per cent. Sen. Iwase/Sakamoto WAM SB638: Expands the definitions of "wholesaler" to include wholesale services to alleviate the pyramiding of general excise taxes. Sen. Ihara WAM SB728: Expands the definition of wholesaler to include intermediary services. Sen. Sakamoto WAM SB1202: Classifies sales of goods and services from business to business as wholesale sales. Sen. Sakamoto WAM
II. Workers' Compensation While the reforms that have been enacted have helped to reduce workers' compensation rates, a glaring omission that needs to be dealt with is that, currently, workers' compensation benefits are provided for "stress" claims of employees for personnel actions taken in good faith, such as: job performance reviews, disciplinary action, demotion, promotion, job or time relocation, etc. HB134: Disallows compensation for physical or mental injury resulting from a disciplinary or other personnel action taken in good faith by the employer. Rep. Say LAB JHA SB720: Clarifies the types of instances in which workers' compensation is not allowed. Sen. Sakamoto LRE WAM SB721: Excludes from workers' compensation coverage psychological or stress-related injuries resulting from good faith personnel actions and removes reference to just cause or other exceptions to the good faith standard in current statute. Sen. Sakamoto LRE WAM
III. Corporate Income Tax Reduction The reduction of our corporate tax rate would signal a more business friendly environment. HB977: Reduces state corporate income tax rates by fifty per cent. Rep. Hiraki EDB FIN HB1406: Reduces corporate income tax by 50%. Rep. Moses EDB FIN SB639: Provides corporate tax relief to corporations, regulated investment companies, real estate investment trusts, and franchise taxpayers. Sen. Ihara JDC WAM SB727: Provides corporate tax relief to corporations, regulated investment companies, real estate investment trusts, and franchise taxpayers. Sen. Sakamoto WAM
IV. Privatization Privatization while not a panacea, is a useful fiscal and management tool providing options to state and local government. HB143: Permits state or county officials to contract with private entities to provide goods, services, or construction to be financed by public funds when they can be provided at lower costs and in equivalent or better quality than that which could be provided by a government entity. Rep. Say LAB FIN HB144: Extends dropdead date for Act 230, SLH 1998, which deals with the privatization of State government functions. Rep. Say LAB FIN HB1309: Permits state or county officials to contract with private entities to provide goods, services, or construction to be financed by public funds when they can be provided at lower costs and in equivalent or better quality than that which could be provided by a government entity. Rep. Marumoto LAB FIN SB725: Permits state or county officials to contract with private entities to provide goods, services, or construction to be financed by public funds when they can be provided at lower costs and in equivalent or better quality than that which could be provided by a government entity. Sen. Sakamoto LRE/GOH WAM
V. Reinventing Government We recognize the need to reduce the size of state government and to make it more efficient and accountable. We believe that state employees should be integrally involved in this reinventing of government process. HB444: Establishes an omnibus approach to improving government efficiency by requiring zero based budgeting, amending the State Plan to adopt competition in government as a State policy, and requiring the Hawaii Revised Statutes to be published using competitive contracting. Rep. Pendleton LAB FIN HB747: Requires the 3 executive departments selected pursuant to section 4 of Act 230 (1998) to begin the development of outcome measures to facilitate the transformation of the State's accounting system and the budgeting system to a performance-based budgeting system. Defines "outcome measures". Rep. Kawakami LAB FIN HB1311: Implements performance based budgeting. Rep. Marumoto LAB FIN HB1645: Amends Act 230, Session Laws of Hawaii 1998, relating to the implementation of performance-based budgeting and public-private competition, by deleting its savings clause and repeal date. Rep. Chang LAB FIN SB105: Establishes a 6-member advisory commission on government restructuring to assist in reducing the size and bureaucracy of state government and increasing government efficiency and effectiveness. Sen. Tam GOH WAM SB450: Amends Act 230, SLH 1998, to require the special committee to transform the State's accounting systems to report to the legislature before each session; requires the managed process committee to also monitor and review the process and requires reporting to the legislature before each session; deletes contracts prior to July 1, 2001, as being subject to review by the managed process; deletes contracts extending beyond June 30, 2001, as not being subject to review by managed process; repeals sunset date. Sen. Chun GOH WAM
VI. Tort Reform The cost impact of lawsuits falls disproportionately on small business and there is a need to address these inequities. Tort reform will make Hawaii more attractive as a magnet for the investment of local and international capital. HB66: Changes the degree of negligence for which a joint tortfeasor will become subject to the imposition of joint and several liability. Rep. P. Oshiro JHA HB67: Limits recovery for all non-economic damages in tort actions to $500,000. Codifies court rule relating to offers of judgment. Requires payment of reasonable attorneys' fees and court costs to encourage pre-trial settlements. Limits punitive damages awards. Rep. P. Oshiro JHA HB160: Extends the sunset date for state and county immunity from liability at public beach parks. Rep. Say JHA HB455: Lowers limit on pain and suffering damages from $375,000 to $275,000. Rep. Meyer JHA SB500: Repeals certain exceptions to the abolition of joint and several liability. Limits recovery for all noneconomic damages in tort actions to $500,000. Codifies court rule relating to offers of judgment. Allows evidence of collateral source payments to be admitted at trial. Limits punitive damages awards. Sen. Iwase JDC/CPN SB739: Abolishes joint and several liability except in cases of death or devastating bodily injury. Limits recovery for noneconomic damages in tort actions to $350,000. Amends law on frivolous claims in civil actions. Allows evidence of collateral source payments to be admitted at trial. Limits punitive damages. Sen. Sakamoto/Matsuura JDC/CPN
WE THE UNDERSIGNED MEMBERS OF THE HAWAII STATE LEGISLATURE ENDORSE THE SAID BILLS AS THE1999 SMALL BUSINESS LEGISLATIVE PACKAGE.
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| Updated April 5, 1999 Senators (of 25 total)
Whitney Anderson Representatives (Of 51 Total)
Felipe Abinsay, Jr. | spacing |
Representatives (continued)
Eric G. Hamakawa (w/r) (w/r) = with reservations
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