STAND. COM. REP. NO. 1172

Honolulu, Hawaii

RE:    H.B. No. 519

       H.D. 1

       S.D. 2

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B. No. 519, H.D. 1, S.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 exclude certain individuals from coverage under the State's workers' compensation law.

Specifically, the measure changes the definition of "employment" under the workers' compensation law to exclude services performed by the following individuals:

     (1)  A member of a limited liability company who has a distributional interest in the company of not less than fifty per cent;

     (2)  A partner of a limited liability partnership who has a transferable interest in the partnership of not less than fifty per cent;

     (3)  A partner of a partnership; and

     (4)  A sole proprietor.

     Your Committee received comments in support of this measure from The Chamber of Commerce of Hawaii; Melissa Pavlicek, National Federation of Independent Business; and Carol Pregill, President, Retail Merchants of Hawaii.

     Your Committee finds that measure will help small business employers reduce overhead costs by eliminating mandated coverage for these individuals under chapter 386, Hawaii Revised Statutes.

     Your Committee has amended this measure by:

     (1)  Changing the effective date to upon approval; and

     (2)  Making a technical, nonsubstantive amendment to accurately reflect existing statutory provisions.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 519, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 519, H.D. 1, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair