STAND. COM. REP. 1225

Honolulu, Hawaii

, 2003

RE: S.B. No. 678

S.D. 1

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred S.B. No. 678, S.D. 1, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

The purpose of this bill is to exclude from the definition of "employment" under the workers' compensation law:

(1) Service performed by a sole proprietor or a partner of a partnership, as defined in the partnership law, if the partner is an individual; and

(2) Service performed by a member of an Limited Liability Company if the member is an individual and has a distributional interest, as defined under the Uniform Limited Liability Company Act, of at least 50 percent in the company.

Testimony in support of this measure was submitted by the Department of Labor and Industrial Relations, Hawaii Association of Realtors, National Federation of Independent Business, and a concerned individual. The Chamber of Commerce of Hawaii supported the measure and offered an amendment.

Your Committee learned that this measure is a priority for small business because the exemption of certain individuals from workers' compensation coverage based on the structure of their business entity, alone, is not consistent or fair. This measure creates equity among Hawaii's business entities by allowing certain owners to join the group that may opt out of mandatory workers' compensation coverage. Your Committee finds that businesses are protected under workers' compensation from injured workers' lawsuits, but that this protection provides no benefit to business owners who are injured on the job.

Your Committee believes that this measure is consistent with the intent of workers' compensation laws and would help Hawaii businesses, regardless of their legal structure, by removing unnecessary workers' compensation costs.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 678, S.D. 1, H.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection and Commerce,

 

____________________________

KENNETH T. HIRAKI, Chair