2017-02-21 Mayor Harry Kim's Testimony re HB 377

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tY Oi WilOkabe i Managing Director Harry Kim .� � '/r:*1: Mayor Barbara J.Kossow • . r.°.%0.- Deputy Managing Director • OFM O1tiuxtfU. of Hatinat`t ®fft1Vr of the Atagor 25 Aupuni Street,Suite 2603 • Hilo,Hawaii 96720 • (808)961-8211 • Fax(808)961-6553 KONA: 74-5044 Ane Keohokalole Hwy.,Bldg.C • Kailua-Kona,Hawaii 96740 (808)323-4444 • Fax(808)323-4440 February 21, 2017 Representative Sylvia Luke Finance Committee Hawaii State Capitol Honolulu, HI 96813 Dear Chair Luke and members: RE: HB 377 Thank you for this opportunity to testify against HB 377. HB 377 would require, as a condition for the issuance of a building permit, that the County receive a signed declaration under penalty of perjury that the building permit applicants and their subcontractors have workers' compensation coverage/insurance, or an exemption from coverage. The legislation would also require coordinated communication between county permitting agencies and the Director of Labor and Industrial Relations, to ensure compliance. "Communication" means a county would submit the signed declarations to the State within three business days of their receipt. Then, if notified by the State that a • permit applicant's insurance has been canceled or suspended, the County would have to suspend the building permit until the applicant obtains insurance coverage. This legislation would be a unilateral imposition on the counties to assume what clearly is a state function/responsibility. The legislation adds accounting, reporting, and compliance requirements without any monetary compensation to the counties for the increased workload. The legislation would add cost and time delays to an already burdensome building permitting process, at a time when the Governor and the county mayors are trying to create more affordable housing construction opportunities. Workers' comp insurance is a complex issue based on the nature of the work being performed and risk/danger posed to the worker. The counties do not have the expertise to determine if the applicants' insurance coverage/signed declaration is appropriate for the various types of work being performed under the building permit. HB 377 seems to recognize that it must be the State that makes the determination whether County of Hawai`i is an Equal Opportunity Provider and Employer.