Employee stock programs

Promotes expanded employee ownership and participation in Hawaii

HOUSE OF REPRESENTATIVES                H.B. NO.1357       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

xFO=102>              A  BILL  FOR  AN  ACT



 1      SECTION 1.  In Act 315, Session Laws of Hawaii 1986, the
 2 legislature provided State support for employee ownership and
 3 participation in Hawaii business.  That Act became chapter 213E,
 4 Hawaii Revised Statutes, and would have expired on June 30, 1988.
 5 However, in 1988, the legislature extended the Act's repeal date
 6 to June 30, 1993, and passed no subsequent legislation extending
 7 the sunset provision.  Thus, chapter 213E was repealed as of June
 8 30, 1993.
 9      The legislature recognizes the continued need for an
10 economic development project like the one in chapter 213E, which
11 will serve to strengthen and expand the state's economy and at
12 the same time benefit and educate employees in this state.
13 Therefore, it is the intent of this Act to re-enact the program
14 in chapter 213E as a new project of the department of business,
15 economic development and tourism.
16      SECTION 2.  Chapter 201, Hawaii Revised Statutes, is amended
17 by adding a new part to be appropriately designated and to read
18 as follows:

Page 2                                                     
                                     H.B. NO.1357       

 2          -1  Policy.  It is the policy of the State to actively
 3 promote and support expanded ownership and participation in
 4 Hawaii businesses.
 5          -2  Definitions.  As used in this part, unless the
 6 context clearly indicates otherwise:
 7      "Employee-ownership" means a form of business organization
 8 which is either:
 9      (1)  A workers cooperative, within the meaning of subchapter
10           T (sections 1381 to 1388) (with respect to cooperatives
11           and their patrons) of Chapter 1 of the federal Internal
12           Revenue Code of 1954, as amended; or
13      (2)  A corporation in which the employees own stock of the
14           corporation through an employee ownership and
15           participation plan or other benefit plan which is
16           qualified by section 401 (with respect to qualified
17           pension profit-sharing, and stock bonus plans) of
18           Chapter 1 of the federal Internal Revenue Code of 1954,
19           as amended.
20      "Employee ownership and participation plan" means an
21 employee benefit plan which is qualified by the Internal Revenue
22 Service pursuant to section 401(a) of the federal Internal
23 Revenue Code of 1954, as amended, and which is intended to invest

Page 3                                                     
                                     H.B. NO.1357       

 1 primarily in employer securities, as defined by section 407(d)(1)
 2 of the Employee Retirement Income Security Act of 1974, as
 3 amended (P.L. 93-406).
 4         -3  Employee ownership and participation project.
 5      The department shall establish a project to support and
 6 encourage expanded opportunities for employee ownership and
 7 participation in Hawaii businesses.
 8         -4  Annual report.  Each state agency involved in
 9 economic development and regulatory activities shall annually
10 report to the legislature on steps taken to encourage employee
11 ownership and participation.  If no action has been taken,
12 explanation shall be made of the reasons therefor.
13         -5  Powers and duties of department.(a)  The
14 department shall assist owners and employees of Hawaii businesses
15 to encourage and increase employee ownership and participation by
16 providing technical assistance, information, or access to sources
17 of financing.
18      (b)  The department shall cooperate with state and federal
19 agencies and commercial lenders to assist Hawaii companies to
20 obtain loans for the purpose of increasing employee ownership and
21 participation.
22      (c)  The department shall:

Page 4                                                     
                                     H.B. NO.1357       

 1      (1)  Appoint an advisory committee on employee ownership and
 2           participation to assist the department in all matters
 3           relating to employee ownership, including education,
 4           technical assistance, research, promotion, and outreach
 5           efforts;
 6      (2)  Establish a promotional outreach program to publicize
 7           the opportunities inherent in employee ownership and
 8           participation and encourage and facilitate the
 9           participation of academicians and members of the
10           business and labor communities in the outreach program;
11      (3)  Initiate studies and secure statistical data or other
12           information, as necessary, and arrange for the exchange
13           of information among public agencies, private groups,
14           and individuals;
15      (4)  Provide educational and technical assistance to
16           businesses and individuals desiring to increase the
17           level of employee participation and ownership in Hawaii
18           businesses; and
19      (5)  Review state agency reports on efforts to encourage
20           employee ownership and participation, advise state
21           agencies on ways to further improve their efforts, and
22           coordinate agency employee ownership and participation
23           programs.

Page 5                                                     
                                     H.B. NO.1357       

 1      (d)  The department may:
 2      (1)  Without regard to chapters 76 and 77, employ, at
 3           pleasure dismiss, and fix the compensation for such
 4           persons as it finds necessary for the performance of
 5           its functions, whose duties shall include the arranging
 6           of conference, workshops, seminars, and other
 7           educational and outreach activities;
 8      (2)  Secure information from any executive agency of the
 9           State it deems necessary to carry out its functions;
10           and
11      (3)  Administer funds allocated for its work and accept,
12           disburse, and allocate funds which may become available
13           from other governmental and private sources; provided
14           that all the funds shall be disbursed or allocated in
15           compliance with this chapter and any other applicable
16           laws.
17         -6  Rules.  The department may adopt rules pursuant to
18 chapter 91 to implement this chapter.
19      SECTION 3.  If any provision of this Act or the application
20 thereof to any person or circumstance is held to be invalid, the
21 invalidity shall not affect other provisions or applications of

Page 6                                                     
                                     H.B. NO.1357       

 1 this Act which can be given effect without the invalid provisions
 2 or applications, and to this end the provisions of this Act are
 3 severable.
 4      SECTION 4.  This Act shall take effect upon its approval.
 6                           INTRODUCED BY:  _______________________