STAND. COM. REP. NO. 356-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2360
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Economic Development and Business
Concerns and Consumer Protection and Commerce, to which was
referred H.B. No. 2360 entitled: 

     "A BILL FOR AN ACT RELATING TO SMALL BUSINESSES,"

beg leave to report as follows:

     The purpose of this bill is to prohibit state and county
regulatory agencies from imposing civil fines, charges, or fees
on small businesses without first seeking to resolve the matter
with the small business owner or other representative through
mediation, arbitration, or other alternative dispute resolution
method, except when:

     (1)  Federal law requires the immediate imposition of
          citations or fines; or

     (2)  The agency determines that the small business has acted
          in bad faith in its dealings with the agency or in
          failing to comply with applicable laws.

     The Chamber of Commerce of Hawaii, the National Federation
of Independent Business, the Hawaii Business League, the Hawaii
Restaurant Association, the Small Business Regulatory Review
Board, and an individual testified in support of this measure.
The Department of Labor and Industrial Relations, the Public
Utilities Commission, and the Department of Planning and
Permitting of the City and County of Honolulu testified in
opposition to this measure.  Comments were submitted by the

 
 
                                 STAND. COM. REP. NO. 356-00
                                 Page 2

 
Department of Business, Economic Development, and Tourism, the
Regulated Industries Complaints Office, the Office of Consumer
Protection, the Kona-Kohala Chamber of Commerce, the Department
of Liquor Control of the County of Hawaii, and the Big Island
Business Council.

     Your Committees recognize that alternative dispute
resolution is an effective enforcement tool in resolving matters
of dispute between businesses and government agencies.  However,
your Committees also recognize that there are instances when
regulatory agencies must rely on other means of enforcement are
more appropriate to minimize consumer harm in a more expeditious
manner.

     Upon consideration, your Committees have amended this bill
by allowing, rather than requiring, state and county regulatory
agencies to resolve problems with small businesses through
mediation, arbitration, or other alternative dispute method
before imposing civil fines, charges, or fees on the small
business, except under certain circumstances.

     As affirmed by the records of votes of the members of your
Committees on Economic Development and Business Concerns and
Consumer Protection and Commerce that are attached to this
report, your Committees are in accord with the intent and purpose
of H.B. No. 2360, as amended herein, and recommend that it pass
Second Reading in the form attached hereto as H.B. No. 2360, H.D.
1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Economic
                                   Development and Business
                                   Concerns and Consumer
                                   Protection and Commerce,

                                   
                                   
                                   
                                   
______________________________     ______________________________
RON MENOR, Chair                   ROBERT N. HERKES, Chair