Small-Business Agenda

Hawaii Business asked four Hawaii small-business advocates: What is your top small-business issue for the 2005 session of the Hawaii state Legislature? What would constitute a “win” for you and how do you plan to achive this?

February, 2005

Jeanne Schultz 
Title: Business Advocate
Organization: The Chamber of Commerce of Hawaii
Number of Members: 1,100 members – 75 percent are small businesses


The Chamber of Commerce of Hawaii, through the input of its members, has established the four key business issues the chamber will concentrate on this legislative session and throughout 2005.

The main legislative issue is workers’ compensation. The increasing cost to businesses has been an ongoing challenge and, because it is so important to the small-business community, the chamber has been seeking ways of achieving meaningful change. Our goal is to have proposed legislation for this session and move forward in the areas of directed care and reduction of fraud. This year we have taken a different approach. The chamber’s strategy is to work with other organizations and labor to forge some areas of mutual agreement and create a larger and stronger support group. In addition, the chamber will concentrate on:

  • Education – supporting the implementation of Act 51
  • Small Business – expanding technical training for small businesses to include establishment or support of a Procurement Technical Assistance Center (PTAC)
  • Additionally, the chamber will take a more vocal role in promoting the improvement and expansion of the essential Honolulu Harbor

It is evident that not all of these issues are legislative in nature. Some require legislative action, while others require administrative or regulatory attention. Therefore, the chamber will focus on creating positive results during this legislative session as well as continue working with government organizations, other business organizations, unions and our members to address these issues.


Beverly Wolff Harbin 
Title: President and Chief Executive Officer
Organization: Employers’ Chamber of Commerce
Number of Members: No membership required or offered

The Employers’ Chamber will specifically be addressing health-care reform.

Mutual Benefit Societies (MBSs) – notably HMSA, HMAA and UHA – hold a unique position in our economy and in our business community. Management of an MBS does not have to answer to members. They provide a mandated benefit to our small-business owners. There are no shareholders, because MBSs are non-profit organizations. Their members (our small businesses and their employees) cannot effectively hold any power, nor can members impact the makeup of the board of directors. MBS management is not accountable to anyone except the state insurance commissioner, an outside regulator who can address problems only after they have reached the point of crisis.

We favor legislation that would require MBS bylaws to provide for open elections of categories of board members. At least two-thirds of the board members should be small-business owners and physicians who provide services to members. Boards of directors are supposed to be the first line of defense against poor or illegal management decisions. Regulators become the second line. In Hawaii, there is no first line.

MBSs do not pay premium, property or any taxes in Hawaii and should not be allowed to own or control for-profit entities in either the health-insurance industry or the health care industry.

A win for small-business owners would be a legislatively mandated requirement that MBS bylaws provide for open elections with candidates from the membership. That would provide employers, employees and physicians with a degree of governance in the organization and insert some transparency into the organization’s operation.


Bette Tatum 
Title: State Director
Organization: National Federation of Independent Business (NFIB)
Number of Members: 600,000 nationwide, over 4,000 of whom reside in Hawaii

NFIB’s top small business issues for the 2005 session of the Hawaii state Legislature include taxes, workers’ compensation, health care costs and tort reform.

Getting through the 2005 legislative session without passage of new taxes or tax increases would constitute a win not only for small-business owners, but also for all Hawaii taxpayers. Without employers there are no employees and, since small businesses are the job creators, ensuring that small businesses are healthy, including holding the line on taxes, is necessary to help the state’s economy continue to rebound. Common-sense reasoning by all lawmakers – newly elected and incumbents – will help achieve our goal of NO NEW TAXES.

I am a born optimist, and always feel there is a chance for needed change to come about, but labor-law changes are tough to achieve in Hawaii, since some key lawmakers continue to embrace their long-held, hard-line union stance that any change takes away legitimate benefits from workers. But change doesn’t mean taking away – it just means change in helping make the process more efficient and less costly, thus helping to create a fairer workers’ comp system. NFIB encourages members to contact their lawmakers. I’ve learned throughout my 24 years of fighting for fairness for small business at the state Capitol that, when key leaders are open-minded on an issue, recognizing change can be a good thing for the entire state, positive change can be achieved. Times have changed and laws must change with the times.

Fairness is the name of the game for all small-business issues.


Sam Slom
Title: President and Executive Director
Organization: Small Business Hawaii (SBH)
Number of Members: 2,000+

The No. 1 issue for all businesses in Hawaii is reform of workers’ compensation.

Five main areas need to be addressed: (1) a law with teeth in it to combat costly workers’ comp fraud, whether committed by an employee, a doctor, a private institution or an insurance company. All business pays for fraud; (2) elimination of “stress” as a compensatable “injury.” There should be no collection for “stress” as has been the case, including “stress” created when bad work performance receives a bad evaluation; (3) modification or elimination of the presumption clause. This clause makes it virtually impossible for a business or insurance company to judicially rebut a claim for injury, even if there is overwhelming evidence that the injury did not occur at the workplace site. (4) there needs to be adjustment in the classification procedure, which too often over-classifies employees, thus yielding a higher category premium; (5) there needs to be more competition in the workers’ compensation insurance market, so that small companies with no previous risk don’t automatically get dumped into HEMIC where previous premiums may go up three to five times.

A win for SBH would be a change in the law, by mobilizing the business community and getting the issues to the public.

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