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HomeMy WebLinkAbout2017-03-13 Letter to Clarence Nishihara re HB 377, HD1 Relating to Worker's CompensationHarry Kim Mayor Wil Okabe Managing Dtrector Barbara J. Kussow Deputy Marwging Director ltaunfv of PAUZ 'l (offrt of thrffinVor 25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 (808) 961-8211 • Fax (808) 961-6553 KONA 74-5044 Ane Keohokalole Hwy, Bldg C . Kadua-Kona Havon'i 96740 (808)323-4444 . Fax(808)323-4440 March 13, 2017 Senator Clarence Nishihara Public Safety, Intergovernmental and Military Affairs Hawai'i State Capitol Honolulu, HI 96813 Dear Chair Nishihara and members: RE: HS 577, HD 1 Relating to Worker's Compensation Thank you for this opportunity to testify against HB 377, HD1. HB 377, HD1 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 coverageirnsurance, 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. County of Hawaii is an Equal Opportunity Provider and Employer Mike Gabbard March 13, 2017 Page 2 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, HD1 seems to recognize that it must be the State that makes the determination whether proper insurance is in place, but at some point will the State require the counties to become experts in workers' comp insurance? Although HB 377, HD1 would seem to impose only a minor burden on the counties, we are concerned about the timeliness of the verification process by the DLIR that could have a significant effect on a county's building permit process. It could result in a suspension of a building permit once work has commenced, and could be cause for much aggravation and confusion that the county will ultimately have to deal with. This could include a stoppage of work that leaves site conditions in an unsafe manner, or improvements that will be damaged as a result of exposure to the elements. Who will be liable should public/worker safety be compromised, or damaged personal property occur because a stop -work order is issued as a result of lack of proper insurance coverage? At a minimum, HB 377, HD1 should be amended to provide explicitly that the counties will not be liable for injury or damages resulting from suspending a permit based on DLIR's directive. Thank you for considering our testimony and the concerns that we have expressed. submitted, U \ Harry Kim Mayor County of Hawaf i is an Equal Opportunity Provider and Employer