STAND. COM. REP. NO. 910

Honolulu, Hawaii

RE:    H.B. No. 519

       H.D. 1

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Judiciary and Labor, to which was referred H.B. No. 519, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to amend the workers' compensation law by excluding from the definition of "employment" certain services performed by:

     (1)  A member of a limited liability company who is an individual with a distributional interest of at least fifty percent in the company;

     (2)  A partner of a partnership who is an individual;

     (3)  A partner of a limited liability partnership who is an individual and has a transferable interest in the partnership of at least fifty percent; and

     (4)  A sole proprietorship.

     Your Committee received testimony in support of this measure from The Chamber of Commerce of Hawaii; The Hawaii Business League; Integrated Economic Solutions, LLC; National Federation of Independent Business; Retail Merchants of Hawaii; and Hawaii Independent Insurance Agents Association. 

     Your Committee finds that this measure will allow limited liability companies, limited liability partnerships, partnerships, and sole proprietors the option to purchase workers' compensation insurance for individual members, partners, and sole proprietors rather than mandating coverage for these individuals under chapter 386, Hawaii Revised Statutes.

     Your Committee has amended this measure by:

     (1)  Inserting an effective date of July 1, 2050, to allow for further discussion; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 519, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 519, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

____________________________

CLAYTON HEE, Chair