STAND. COM. REP. NO.852
Honolulu, Hawaii
, 2001
RE: H.B. No. 502
H.D. 2
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committee on Finance, to which was referred H.B. No. 502, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO PROFESSIONAL EMPLOYMENT ORGANIZATIONS,"
begs leave to report as follows:
The purpose of this bill is to exempt amounts paid to a professional employment organization on behalf of employees hired by a client company.
R.D. Bridges Renovations, Vuich Environmental Consultants, Inc., Lokelani Construction, Inc., Kilakila Employment Service, Hawaii Health Foundation, Yamamoto & Associates, JS Services, Inc., Scientific Consultant Services, Inc., Courier Corporation of Hawaii, C. Tomita Painting and Wallcovering, Maui School of Therapeutic Massage, Island Pool & Spa Supply, Equipment Team Hawaii, Inn at Schofield Barracks, Honolulu Landscape Maintenance, Action Rehab, Closet Systems, Furukawa Custom Builders, The Willows, Land-N-Sea Welding Inc, Leeward Petroleum, Inc., Proservice Hawaii, McClain Auctions, Environmental Biotech, Security One, Inc., Can Clean Hawaii, Interior Designs Maui Recycling Service, Inc., Insurance Factors, Law Offices of Mark T. Shklov, GMB Vinyl, Inc., Niho Mano, High Class, AmeriSpec Inspection Service, Royal Food Brokers, Pacific Medical Administrative Group, Allstate Insurance, Auto Recyclers, Inc., Hawaiian Parcel Services, Spectrum Engineering Hawaii, Clean-N-Rooter, Kamaaina Metals, Altres, Inc., Molly's Smokehouse, Carats & Karats, MacMurray Construction, Inc., Travel Hawaii, Plastow and Associates, Hawaii Transit Services, Inc., Geo Metrician, Ridge Way Motors, Squeaky Clean, Singer Sewing Center, Hinchcliff Janitorial Service, Austin Island Maintenance, Waiakapu Corporation, Wind, Sail and Surf, Pacific Appraisal Services, Inc., Nature Adventures & Outfitters, Office Furniture Solutions of Hawaii, Akamai Employment Agency, Pitzer Build Construction, Café 808, Four Star Mortgage, Hawaiian Repair and remodeling, Inc., A-Cut Above Roofing, JMP Services, and Maikai Loa Exterior Remodeling, and a concerned citizen testified in support of this bill.
Hawaii Electricians Market Enhancement Program Fund and ILWU Local 142 opposed this bill. The Department of Taxation (DOTAX) and Tax Foundation of Hawaii commented on this bill.
Your Committee has amended this bill by:
(1) Adding language ensuring the rights of persons employed by a client company through a professional employment organization;
(2) Stipulating that the client company shall be deemed to have satisfied obligations for workers' compensation and employee insurance coverage if satisfied by the professional employment organization;
(3) Stipulating that the GET exemption shall not apply if any employee rights are abrogated through contract between the client company and the professional employment organization;
(4) Accepting written notification of any violation of the new section to DOTAX from the Department of Labor and Industrial Relations or any union as enough to require DOTAX to rescind the exemption; and
(5) Rescinding the exemption upon failure of the professional employment organization to pay any withholding taxes for employees or any federal or states taxes.
As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 502, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 502, H.D. 2.
Respectfully submitted on behalf of the members of the Committee on Finance,
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____________________________ DWIGHT Y. TAKAMINE, Chair |
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