Summer 2018

2018 Session Comes to a Close

Wow, what a year! This year may have been the most challenging year for business yet at the Hawaii State Legislature. Many issues were dragged out until the last moment of the conference committee. Outcomes this session were dramatically improved by our members’ emails and phone calls to legislators. Thank you for your engagement – you made a difference!

A number of the Hawaii Technology Development Corporation funding bills that HFIA supported throughout session have passed!

On a positive note, a number of the Hawaii Technology Development Corporation funding bills that HFIA supported throughout session passed including HB 1958 for the Small Business Innovative Research program, HB 2610 for the Manufacturing Grant Program, and SB 3000 to establish the Research and Development Program.

The Manufacturing Grant Program was funded to the tune of $1 million. Many of our members have been able to benefit from this program and we hope that many more will benefit in the future.

We were finally able to see some legislation pass to address our members concerns about fake service animals. SB 2461, which establishes civil penalties for misrepresentation of a service animal, passed. HFIA supported this measure because of the very common practice of attempting to fraudulently claim a pet as a service animal. We believe that having this clear legal distinction in place will allow for better service and improved accessibility for customers with legitimate service animals.

There were six different bills requiring some form of paid sick leave and or paid family leave that received hearings this session. Three of these made it all the way to Conference. HFIA testified at each hearing for all bills and reached out to legislators in other ways to make sure that they understood the negative economic impact of increasing labor costs, the lack of any sort of actuarial information on the programs that were proposed in the bills, the potential cost of administration and tech infrastructure needed to run some of the concepts being proposed, and the need for real input from the business community when creating a leave program. During Conference, these efforts paid off and two of the worst versions of the leave bills did not pass, while the third SB 2990 was amended to be a study on establishing paid family leave. We hope to see a thorough actuarial projection of what will be covered, how much it will cost, and who will pay for it.

SB 2351, named the equal pay bill, prohibiting employers from asking about a potential employee’s salary history during the hiring process, and prohibiting enforced wage secrecy, was also passed. HFIA submitted comments on this bill but did not oppose it.  This bill takes effect on January 1, 2019. This bill does not disallow employees from sharing their past wage history voluntarily.

Other labor-related bills included two that would have mandated advance notice for employee schedules. Both bills were heard but not passed and HFIA testified in opposition to both, explaining that for many reasons, including unavoidable things like employee sickness, creating firm advance schedules is simply not possible in our businesses.

An attempt to raise the minimum wage to $15 by 2020 was heard but did not pass. HFIA’s opposition testimony cautioned against passing this kind of measure that would force companies to eliminate jobs and further disadvantage brick and mortar stores against online-only companies.

Three different versions of the sunblock ban received hearings. There was a large amount of popular support for this bill, which did end up passing. HFIA testified in opposition to the ban citing lack of credible science that sunscreen was a significant cause of coral death compared with other known causes like runoff, overfishing, and ocean warming. Our testimony also noted the concern that limiting sunblock options would make it harder for people to protect themselves against skin cancer and advised that companies needed more time to develop alternative formulations of their products without the chemicals in question. The version that passed, SB 2571, bans the sale of sunblocks that contain oxybenzone or octinoxate without a prescription. The bill exempts cosmetics. The effective date was changed from the original date of January 2019; it now takes effect January 1, 2021.

Another bill would have banned a huge range of products containing “volatile organic compounds.” HFIA testified in opposition to this and it was deferred at its first hearing. The polystyrene ban this year passed several committees but did not end up making a necessary deadline. HFIA’s opposition testimony explained that the bill, as drafted, violated the interstate commerce clause and that there is no post-consumer food waste composting facilities to accept the more expensive products being mandated under the bill, rendering it useless. The plastic straw ban also failed to pass, and HFIA’s testimony noted that there was yet to be any cost-effective functional alternative for plastic straws. Both of these bans have backing from well-funded groups and we do anticipate them coming up again next year.

A state menu-labeling bill was introduced this year. It had some similar elements but different specific requirements to the national menu-labeling bill which is currently going into effect. HFIA’s opposition testimony explained the many issues with having conflicting menu labeling requirements and the bill language was deleted and it was replaced with an unrelated measure.

One of the bottle bills this year ended up being very problematic. It was gutted and replaced halfway through the session to automatically double the deposit fee to 10 cents if the redemption rate fell below 85 percent for two years. HFIA’s opposition testimony discussed the ongoing problems with the deposit beverage program and advised that these issues be addressed before increasing fees. That bill failed to advance. Another bottle bill that HFIA tracked, SB 2519 did pass. It authorizes the Agribusiness Development Corporation to work with private businesses to remove glass and other select waste for alternate uses such as construction. We have been advocating for a long time for common sense alternatives to paying to ship glass back to the mainland for recycling and we hope this is a first step in that direction.

Several liquor-related bills passed this session. HB 2410 allows minors accompanied by an adult into brewpubs. HB 2414 requires the county liquor commissions to streamline procedures to provide one-day temporary licenses for fundraising events by NGOs. SB 2613 authorizes the county liquor commissions to issue new class 2 restaurant licenses before restaurants commence operation. SB 2945 ends the requirement that an applicant for a liquor license, or renewal or transfer, produce an IRS tax clearance certificate. Two bills were introduced this year that would have prohibited the sale of tobacco near certain places including schools, parks, playgrounds, and public housing. Mapping out the places covered by the bills showed that this would have been a de facto tobacco ban in most of Waikiki, downtown Honolulu, and basically any other dense commercial district in the state. HFIA’s testimony in opposition explained that this was unfair to responsible retailers, and the measures did not advance.

Two additional bills that HIFA tracked also passed. HB 1621 prohibits merchants from having a warranty policy that requires customers to pay any additional fee for repairs, replacements, or refunds. It was amended late in the session to include a second part that requires high turnover restaurant franchisees to disclose their non-participation in national advertising campaigns offering discounts or promotions. HB 2182 makes the Carbon Farming Task Force permanent and renames it the Greenhouse Gas Sequestration Task Force. The bill also aligns the State’s clean energy and carbon sequestration efforts with climate initiative goals and establishes a zero-greenhouse gas emissions target for the State.

A few days after Conference ended, HFIA was once again at the Honolulu City Council. This time, we were there to oppose a bill that would have dramatically increased the price of rent for many of our members in large commercial areas. Bill 11 would have changed the property tax assessment method for properties valued over $100 million and could have led to drastic property tax increases, and significant added expense for businesses that operate on these properties as well. That bill was deferred.

Overall, we were able to achieve beneficial results on many bills in 2018. This session a large number of bills went down to the wire after passing out of all committees. HFIA’s strategy of continuous, multipronged communication with our legislators was essential in making sure that economic and business concerns were factored into the decisions on these bills. Thank you for helping us represent you: the valued employers who feed our state!



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