Workers' Comp Commission

Establishes a permanent Workers' Compensation Commission to
oversee the workers' compensation system.

THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                     A BILL FOR AN ACT



 1      SECTION 1.  The legislature finds that Hawaii's workers'
 2 compensation law is one of the basic laws intended to provide
 3 income and medical benefits for persons who suffer work-related
 4 injuries.  The legislature finds that Hawaii's law, much like
 5 laws in other states, embraces several basic objectives as
 6 follows:
 7      (1)  Broad coverage of employees' work-related injuries and
 8           diseases;
 9      (2)  Substantial protection against interruption of income;
10      (3)  Provision of medical coverage and rehabilitation
11           services;
12      (4)  Emphasis upon job safety and prevention of accidents;
13           and
14      (5)  An efficient, effective, and equitable system for the
15           financing of the program and the delivery of those
16           benefits mandated by law.
17      The legislature finds that despite the seemingly simple and
18 straightforward objectives of the workers' compensation program,
19 the program has stirred considerable debate and controversy in a

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 1 number of areas.  Areas at issue include the rate-making
 2 mechanism and the nature and levels of benefits which are
 3 compensable by type of injury.  The legislature finds that issues
 4 associated with the workers' compensation program are likely to
 5 heighten in the months and years ahead, due among other
 6 considerations to the increasing costs associated with the
 7 operation and administration of the workers' compensation
 8 program.  The legislature finds that the workers' compensation
 9 program in Hawaii is a multi-million dollar program involving
10 thousands of persons.  For example, according to data reported in
11 "Work Injury Statistics 1996", a publication of the Hawaii state
12 department of labor and industrial relations, in 1996, 55,550
13 workers' compensation cases were processed in Hawaii with costs
14 totalling over $288,000,000.
15      The legislature further finds that workers' compensation has
16 gained an increasingly prominent place on the agenda of various
17 state legislatures.
18      The legislature finds and concludes that a comprehensive
19 review of Hawaii's workers' compensation law by a specially
20 designated study group is a prudent action and one which is
21 clearly in the general public interest.
22      The purpose of this Act is to establish a commission to
23 carefully and comprehensively review Hawaii's law and to prepare

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 1 a report of findings and recommendations in consonance with the
 2 basic objectives of workers' compensation laws and with a special
 3 emphasis upon ways to further reduce or stabilize costs while at
 4 the same time maintaining benefits at existing levels, or
 5 ideally, providing increased benefits at reduced employer cost.
 6      SECTION 2.  Chapter 386, Hawaii Revised Statutes, is amended
 7 by adding a new part to be appropriately designated and to read
 8 as follows:
10      386-  Workers' compensation advisory commission;
11 established.  There is established a workers' compensation
12 advisory commission, placed in the department for administrative
13 purposes, which shall annually study, report, and make
14 recommendations on the state workers' compensation program.  The
15 commission shall analyze information made available to it, assess
16 the existing and future needs of the workers' compensation
17 system, and make recommendations to the director on necessary
18 amendments to the workers' compensation system.
19      386-   Workers' compensation advisory commission;
20 membership.(a)  The commission shall consist of nine voting
21 members appointed by the governor in the following manner:
22      (1)  The director or the director's designee, shall serve as
23           chairperson of the commission;

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 1      (2)  The president of the senate shall submit a list of at
 2           least eight names which shall include at least one name
 3           of a person who shall represent each of the following:
 4           one representing big business (a private sector
 5           employer who meets the requirements of state law to be
 6           self-insured and who is self-insured); one representing
 7           small business (employers in the private sector who
 8           provide insurance coverage through third party
 9           arrangement); one representing the construction trade
10           unions; and one representing the public sector, white
11           collar workers; and
12      (3)  The speaker of the house of representatives shall
13           submit a list of at least eight names which shall
14           include at least one name of a person who shall
15           represent each of the following:  one representing big
16           business (a private sector employer who meets the
17           requirements of state law to be self-insured but is not
18           self-insured); one representing small business
19           (employers in the private sector who provide insurance
20           coverage through third party arrangement); one
21           representing the general trade unions; and one
22           representing the public sector, blue collar workers.
23      The governor shall appoint one person per category for each

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 1 of the categories listed in paragraph (2), and one person per
 2 category for each of the categories listed in paragraph (3).  The
 3 insurance commissioner shall serve as an ex-officio, nonvoting
 4 member of the commission. 
 5      (b)  Any vacancy in the commission shall not affect its
 6 powers and shall be filled by a person who is a representative of
 7 the same category as the person causing the vacancy.  A majority
 8 of the members of the commission shall constitute a quorum.
 9 Members shall be initially appointed to four-year terms.  Upon
10 the expiration of the initial appointments, reappointments shall
11 be made in the manner provided in this subsection and section
12 26-34 to replace the members whose terms have expired.
13      (c)  Members of the commission shall serve without
14 compensation, but shall be reimbursed for travel, subsistence,
15 and other necessary expenses incurred by them in the performance
16 of their duties.
17      386-   Technical support.  The department shall provide
18 the commission with any staff assistance and technical support
19 that it may require and all departments and agencies of the
20 executive branch shall furnish the commission with any
21 information deemed necessary by the commission.  The commission,
22 subject to available legislative appropriations, may hire
23 consultants with technical expertise not otherwise available in

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 1 state government or obtain volunteers from the private sector.
 2      386-   Powers and duties.(a)  The commission shall meet
 3 at least four times a year to hold hearings and make
 4 investigations as necessary to carry out its duties under this
 5 part.  The commission may issue subpoenas compelling the
 6 attendance of witnesses to secure information necessary to carry
 7 out the purposes of this chapter.  Subpoenas shall be signed by
 8 the chairperson of the commission and may be served by any person
 9 designated by the chairperson.  Any member of the commission may
10 administer oaths or affirmations to any person called before the
11 commission.  Any person subpoenaed to appear before the
12 commission shall be entitled to receive fees and travel expenses
13 as are allowed witnesses in civil actions in the circuit courts
14 of the State.
15      (b)  The commission may examine all government records and
16 secure directly from any state or county agency, information,
17 suggestions, estimates, and statistics which are necessary to
18 carry out the purposes of this chapter.  Each agency shall make
19 its records available and shall furnish information, suggestions,
20 estimates, and statistics directly to the commission, upon
21 written request of the chairperson or vice-chairperson.
22      386-   Report. The commission shall annually submit a
23 report of its findings, recommendations, and any draft

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 1 legislation necessary to effectuate its recommendations to the
 2 governor and the legislature."
 3      SECTION 3.  Notwithstanding the meeting and report
 4 requirements in section 2 of this Act, during the first two years
 5 after its establishment, the commission shall meet as often as
 6 necessary to fulfill the purpose of reforming the workers'
 7 compensation system.  Prior to the convening of the 2000 regular
 8 session, the commission shall submit a preliminary report on its
 9 progress towards developing a comprehensive proposal to reform
10 the State's workers' compensation system.  Prior to the convening
11 of the 2001 regular session, the commission shall submit to the
12 legislature a report containing its comprehensive recommendations
13 and any necessary draft legislation to effectuate the
14 recommendations for the legislature's approval.
15      SECTION 4.  There is appropriated out of the general
16 revenues of the State of Hawaii the sum of $          , or so
17 much thereof as may be necessary for fiscal year 1999-2000, to
18 carry out the purposes of this Act.  
19      The sum appropriated shall be expended by the department of
20 labor and industrial relations for the purposes of this Act.
21      SECTION 5.  This Act shall take effect upon its approval;
22 except that section 4 shall take effect on July 1, 1999.
24                           INTRODUCED BY:  _______________________