Bill Text: HI HB1166 | 2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Employment; Worker Retention

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-12-01 - Carried over to 2012 Regular Session. [HB1166 Detail]

Download: Hawaii-2012-HB1166-Amended.html


H.B. NO.



H.D. 1
















     SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-     Worker Retention tax credit(a)  There shall be allowed to each qualified taxpayer subject to the taxes imposed by this chapter, a tax credit for retaining all incumbent nonsupervisory and nonconfidential employees for at least one year upon the divestiture of a covered establishment pursuant to section 394B-   .  The credit shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.  The amount of the tax credit determined under this section for the taxable year shall be $      .

     (b)  If the credit under this section exceeds the taxpayer's income tax liability, the excess of credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     (c)  In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for every qualifying covered establishment.  The cost upon which the tax credit is computed shall be determined at the entity level.  Distribution and share of credit shall be determined pursuant to section 235-110.7(a).

     (d)  The director of taxation:

(1)  Shall prepare any forms that may be necessary to claim a credit under this section;

(2)  May require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section; and

(3)  May adopt rules pursuant to chapter 91 to effectuate this section.

     (e)  Every claim, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

     (f)  As used in this section:

     "Covered establishment" means any industrial, commercial, or other business entity that employed one hundred or more persons at any time in the preceding twelve-month period.

     "Divestiture" means the same as defined in section 394B-2.

     "Nonsupervisory and nonconfidential employee" means any individual not having authority in the interest of the employer, to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward, or discipline other employees, or the responsibility to assign work to and direct them, or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment."

     SECTION 2.  Chapter 394B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§394B-     Worker retention in the event of a divestiture.  (a)  In the event of a divestiture of a covered establishment, the successor employer:

     (1)  Shall hire all incumbent nonsupervisory and nonconfidential employees, unless otherwise provided in this section;

     (2)  May receive a tax credit pursuant to section 235-  ;

     (3)  Shall not require incumbent employees to file employment applications with the successor employer to be considered for hire unless existing employee files are incomplete;

     (4)  May conduct pre-hire screening of the incumbent employees not prohibited by law, including criminal history record checks executed in accordance with section 378-2.5 and drug screening executed in accordance with chapter 329B; and

     (5)  May retain less than one hundred per cent of incumbent employees if:

         (A)  The business of the successor employer is substantially dissimilar to the former employer's business; or

         (B)  The human resource needs of the successor employer are reduced, resulting in the reduction of employees needed;

          provided that the number of employees to be dislocated shall be in direct proportion to the reduction in the total human resource needs of the successor employer.

     For the purposes of this subsection, "covered establishment" means any industrial, commercial, or other business entity that employed one hundred or more persons at any time in the preceding twelve-month period.

     (b)  This section shall not be construed to abrogate an employer's right to manage the employer's employees.

     (c)  An employer found in violation of this section shall pay to compensate the dislocated worker for the difference between the employee's salary or wages earned under the employee's former employer and the dislocated employee's unemployment insurance benefits received for the covered period.

     (d)  The director shall adopt rules in accordance with chapter 91 to carry out the purposes of this section."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2011, and shall apply to taxable year beginning after December 31, 2010.


Report Title:

Employment; Worker Retention



Establishes job security requirements upon the divestiture of a covered establishment if the covered establishment employs one hundred or more persons.  Creates a worker retention tax credit.  Effective July 1, 2011.  (HB1166 HD1)




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