The Chamber View: Legislators move ‘anti-business,’ ‘anti-investment’ bill forward

Despite our state’s long-standing reputation as one of the most difficult states in the union to do business in, lawmakers are moving HB 634 forward to make things worse.

HB634 is a bill “Relating to Employment.” It passed from the House to the Senate and just passed third reading there. Now amended, HB634 HD1 SD2 “Establishes job security requirements for certain employees upon the divestiture of a covered establishment if, among other things, the covered establishment employs one hundred or more persons. Effective 07/01/50. (SD2).”

While that may sound benign, it is not.

Basically, this law requires that any purchaser of a business of 100 or more employees to retain all incumbent nonsupervisory employees. It is bad for business and investment that will hamper a new owner’s/investor’s ability to restructure their operation.

We and many other industry groups oppose this bill as it will:

* Make it far more difficult for Hawaii businesses to sell their business. New buyers need the ability to evaluate a business and make needed changes to survive. Tying their hands by requiring them to keep all existing nonsupervisory employees will make purchasing a Hawaii business less attractive.

* Lower the value of businesses here. If a buyer can be found, the stipulation to keep all existing employees is a challenge and cost factor that will likely reduce sales prices.

* Force some nonprofitable businesses into bankruptcy. If no new buyer can be found given this law, businesses may have to file bankruptcy.

* Infringe on the free enterprise and a business’s ability to manage its operations.

* Fuel the “anti-business” sentiment about Hawaii and make Hawaii the first state in the nation to include such a law.

* Reduce investment in Hawaii.

* Create negative impacts that will ripple out to affect all businesses and our overall economic health.

Maui legislators supported this bill as follows:

Rep. Kyle Yamashita introduced it and continued to vote in favor of it, along with Rep. Kaniela Ing. Sens. Roz Baker and Gil Keith-Agaran also supported it, with Sen. J. Kalani English supporting it with reservations.

It comes at a time when the “2013 Small Business Friendliness Survey: Methodology & Analysis” was released.

This survey shares what small businesses nationwide believe constitutes a healthy political and regulatory climate by having them rate how it is to do business in their specific location.

They evaluated particular city’s and state’s appeal to business based on the 11 criteria shown below. A score was provided for each of the graded metrics with 1 being the best and 41 being the worst. This was then equated to a letter grade, ranging from A-plus to F.

Here’s how Hawaii ranked in the graded metrics:

1. Overall small business friendliness – 39, F.

2. Ease of starting a small business – 40, F.

3. Ease of hiring a new employee – 39, F.

4. Overall regulatory friendliness – 41, F.

5. Friendliness of health and safety regulations – 41, F.

6. Friendliness of employment, labor, and hiring regulations – 41, F.

7. Friendliness of tax code – 41, F.

8. Friendliness of licensing regulations – 40, F.

9. Friendliness of environmental regulations – 38, D.

10. Friendliness of zoning regulations – 39, F.

11. Availability of helpful training or networking programs – 38, D.

We must stop the insanity and call for a business-friendly environment. Please take a moment to contact legislators and ask them to support local businesses and investment in Hawaii by opposing bills that negatively impact all businesses, including HB634 HD1 SD2. Mahalo for your help.

* Pamela Tumpap is president of the Maui Chamber of Commerce.