CAPITAL AVAILABILITY

1. Employee Retirement System

The 8% cap on return on investment of the State Employees Retirement System (ERS) funds discourages venture capital investments. The legislature shall:

a. Encourage the ERS to adopt a venture capital investment strategy that would allow allocation of up to 5% of its assets in venture capital investments in Hawaii small businesses.

b. Remove the 8% cap on returns from venture capital investments by the ERS.

COMMUNITY DEVELOPMENT

2. Restructuring State Department: The Governor and the Legislature should re-engineer the State government in cooperation with the county governments to be non-redundant within counties and communities, deferring functions to the lowest possible level. State government should take the role of:

* Research
* Inter-county coordination
* Facilitator of community, business, and economic development
* Resource redevelopment
* Conduit to the federal government and federal resources including, but not limited to:

* Water policies
* Land use policies
* Housing policies

Counties should have the primary role in determining:

a. Water Policies:

County Departments of Water Supply should have authority over allocation of water resources and the State Water Commission should provide research assistance and source development.

b. Land Use Policies:

Land Use Commission and State Office of Planning should be consolidated; reduced role of advising County Planning Departments and providing research materials.

c. Housing Policies:

i. HFDC and HHA should be reconsolidated.
ii. Mandated affordable housing requirements should be eliminated.

d. DLNR:

i. Should administer State lands only.
ii. Privately owned conservation (zoned) lands should be administered by the Counties.

3. EDUCATION

skilled, disciplined work force to meet the needs of the business community. Employee candidates are ill-equipped to meet the requirements in the areas of communication, quantitative and analytical skills and standards of behavior.

Action "A" - Simplify and decentralize governance of the public school system:

1. Support and accelerate School Community Based Management (SCBM). Empower School Community Based Funding (SCBF) by implementing SCBF which is the provision of a line item budget based on per student funding for each school.

2. Establish independent assessment and accountability among school management, teachers, students, parents, business and other community members to meet the statewide performance standards.

3. We recommend that the findings of the task force on governance be adopted wherein, the Governor appoints the members of the Board of Education and the superintendent to achieve straight line accountability.

Action "B" - School to Work Programs:

The legislature should promote School to Work Programs by providing tax credits, insurance subsidies (workers' comp), and exemption to labor laws (child/age) that will encourage small business to provide the mentoring and training needed by Hawaii's future work force -- its youth.

INSURANCE

4. Reform Workers' Comp
The legislature should reform workers' comp to include:
* Change the standard of review in the presumption clause to adopt a preponderance of evidence standard.
* Support open rating for workers compensation.
* Legislature to repeal Act 67.
* Support Haku Alliance workers' compensation reform.

5. Oppose Pay at the Pump/Support Pure No Fault
Oppose the Governor's proposal or any legislation supportive of pay at the pump and urge the Legislature to adopt pure no-fault insurance, keeping medical costs within the system and not transferring medical to the employer.

6. Civil Justice Reform
Urge the Governor and the Legislature to enact civil justice reform as it relates to all forms of insurance.
* Eliminate joint and several liability
* Cap non-economic damages
* Establish fair and equitable standards for determining when and in what amounts, punitive damages should be assessed.
* Adopt British rule of "loser pays" or equivalent.
* Product liability.

INTERNATIONAL TRADE

7. Maximize International Trade
To sustain long-term vitality and expansion of the Hawaii State economy, the Legislature shall enact legislation to maximize the dollar volume of all Hawaii business with non-U.S. markets, and promote a long-term collaborative effort between private sector and government to actively promote international trade and export of Hawaii's products and services; and to do this by:

1) forming an international trade association (private/public) through using the State's World Trade Center license (membership), and

2) promoting Hawaii as a shopping and business destination.

LABOR

8.Control of Mandated Benefits

* Restrict any further State mandated benefits by State government.
* Require employees to pay 50% of the cost of all mandated benefits.

9. Unemployment Insurance
Department of Labor and Industrial Relations and Legislature should:

* Enforce the fraud laws.
* Sunset the Employee Training Fund.
* Eliminate unemployment insurance benefits to strikers.
* Provide access to unemployment records to current and prospective employers.
* Provide incentives for individuals who are unemployed to become employed (i.e. scaled phase out of benefits over time).

10. Workfare
Enact legislation to require:

* Work and/or work training of able bodied welfare recipients as a condition of eligibility for welfare benefits.
* Integrate welfare benefits with work to promote work opportunities for welfare recipients.

PRIVATIZATION

11. Best Value
The legislature shall enact legislation to deliver all government services at best value through modernization, privatization, and use of competitive market scenarios. To enact this process the legislature shall:

(1) Contract with an experienced architect of privatization to evaluate, direct, and implement competitive reforms immediately;

(2) Create an oversight review commission to evaluate progress toward implementing full-cost accounting, competitive service delivery, and privatization opportunities.

12. Cost of Government Service
No one knows the true cost of government services. The 1996 legislature shall enact legislation to determine and disclose the true and total costs of government services.

REGULATIONS

13. Reduce Paperwork
Reduce paperwork burden systematically. The Legislature shall access the potential paperwork impact of all new laws it enacts, require that each agency of the State reduce its total paperwork burden by at least (5) percent each year for the next (4) years, and develop simplified forms (i.e., eliminate or reduce duplication of federal and state tax information).

14. Sunset Provisions
Legislature shall require all agencies to sunset and reevaluate with the participation from the affected parties all programs and regulations every 5 years and conduct regulatory impact analysis, including cost-benefit analysis or risk assessment, including recommendations proposed by the state auditor.

15. Limited Liability
Legislation shall enact laws that allow establishment of limited liability partnerships and companies.

16. HIOSH - Common Sense
The Governor shall direct HIOSH to change from an adversarial to a partnership stance in seeking input from the regulated community to identify how HIOSH can proactively assist employers in achieving compliance. Clarify the respective responsibilities of employers, employees, and the state under HIOSH law.

TAXATION

17. General Excise Tax Issues
The Legislature shall enact legislation concerning general excise tax which shall:

* Eliminate pyramiding in all cases by enacting a true sales tax.
* Reduce GET late penalties to 2% per month for a maximum of 5 months.
* Allow appeal process prior to payment of disputed tax, presuming innocence to tax payer.
* Better enforcement of applicable tax laws to out-of-state and temporary entities doing business in Hawaii.
* Exempt services provided to the federal government.
* Reduce tax on business to business services, commissions, and lease/sub- lease arrangements to 1/2%.
* Streamline bulk filing requirements by automation.

18. Full Deduction of Business Expenses: The Legislature shall enact legislation concerning full deductibility of business expenses which shall include but not limited to:
* Business meals.
* Mandated employee benefits for employee/owner.
* Club dues to organizations that are non-discriminatory.
* Self-employed medical insurance.

19. Income Tax Reductions
The Legislature shall enact legislation concerning the reduction of income taxes which shall:
* Increase personal exemptions to equal federal levels.
* Broaden brackets and reduce top rates.
* Reduce the maximum personal income tax rate to 7.25% beginning at $45,000 (single) and $90,000 (joint) of taxable income.

20. Tax Incentives
The Legislature shall enact legislation which shall:
* Provide for no new tax increases.
* Restore all 1994 tax credits without any allowances for expiration dates.
* Eliminate all taxes on capital gains.