Legislative updates

By Lauren Zirbel

Posted Spring, 2014

Despite the fact that this is an election year for the entire Hawaii State House of Representatives, 2014 is one of the most controversial legislative sessions I have ever seen. There are a plethora of bills that would hurt the food industry in Hawaii, increase the price of food, decrease the availability of food products, and generally increase the cost of doing business in Hawaii. Some of these bills have passed out of committee and are still moving forward, while others have died.

As I am writing this, we have just passed first lateral deadline, which means that all bills must be referred to their final committee in their house of origin. Any bills which are not referred to the final committee in their originating house are considered dead. For these “dead” bills there is still the possibility that they can be re-referred or that the language from one can be placed into a bill which is still alive as an amendment, but overall the field has narrowed and we are now focusing considerable efforts on getting the best outcomes for our members on the bills which are still alive and moving through the legislature.

In this article I will review some of the bills HFIA has testified on this session, on behalf of our members.

GMO LABELING

SB 2736 and SB 2521, which would require labeling of foods that have been genetically engineered, were both heard by the Senate Committee on Health. The Department of Health testified that they are not able to enforce the bill because there is no way for them to tell which products are GMO and which are not and also because they do not have the authority to interfere with interstate commerce. HFIA testified that international and national supplies would not label products specifically for Hawaii. HFIA also testified that it is unfair and unreasonable to place liability on distributors and retailers in Hawaii for not labeling products. They have no way of knowing which products contain GMO ingredients considering the products were not labeled as such by the manufacturer.  The Senate Committee on Health passed both of these bills out of committee; however, the bills have not been scheduled in their next committee and we are hopeful that the other committee chairs will recognize the economic reality that multinational food manufactures will not label products for our population of 1.3 million.

MINIMUM WAGE

Two of the worst possible outcome minimum wage bills have passed out of Labor Committees in the House and the Senate.  Hundreds of testimonies were heard on February 11, 2014 for several minimum wage increase bills. Of the six bills, the House Labor Committee passed HB 2580.  HB 2580 annually increases the minimum wage from 1/1/15-1/1/17 by 75 cents per year and thereafter requires DLIR to adjust the minimum hourly wage in accordance with the Honolulu region consumer price index. It also deletes the tip credit, which would hurt the restaurant industry. The bill will now move to the House Finance Committee. The Senate Committee on Judiciary and Labor passed out SB2609, which increases minimum wage rate to $8.20 per hour beginning on 01/01/15, $9.15 per hour beginning on 01/01/16, and $10.10 per hour beginning on 01/01/17. This measure also repeals the tip credit. This bill authorizes the department of labor and industrial relations to adjust the minimum hourly wage to the nearest 5 cents based on the Honolulu region consumer price index beginning on 09/30/17 and on September 30 of each year thereafter.

Given the variability of the consumer price index, which can fluctuate year to year by around 3%, it would be very difficult for retailers who operate on margins of about 1% to budget for these fluctuations in labor costs. HFIA’s testimony expressed the problem of budgeting for large and variable increases in labor cost in our testimony. We expressed that small increases over 3 or 4 years would be preferable to large dramatic increases and tying the minimum wage to the CPI. We expect to see the minimum wage make it to conference again this year and likely to pass out in some form. We will work with legislators to convey the best way to implement this measure.

Polystyrene Mandates

A bill which would have mandated that food establishments to provide consumers with the option of using compostable or reusable disposable food service containers was deferred in committee. I had the chance to be interviewed by Hawaii Public Radio about why this bill makes no sense for Hawaii.  Hawaii has no commercial composting facilities.  Compostable products will meet the same end as polystyrene and cost considerably more. The house committee on energy and environment deferred this bill.

Pre-Paid Surcharge

A bill that eliminates the enhanced 911 surcharge exemption for prepaid connections is moving forward in the Senate but was deferred in the House. HFIA has submitted testimony in opposition to both of these bills stating that it would be a financial and administrative burden for retailers, and that we already have an overly complex fee and surcharge system. This bill was introduced by pubic safety representatives because they need more funding for enhanced 911 services. The retailers on our Government Relations Committee stated that it would be difficult for them to implement this fee, as most fees of this nature, such as the HI5 fee, are remitted at the wholesale level. There is also a reason to be concerned about the effect of this bill on low-income individuals who utilize pre-paid services because they can’t afford a monthly plan.  A surcharge of 66 cents per transaction may have an unintended consequence of hurting individuals who can barely afford their access to technology.

Aspartame Warning Labels

The Senate Committee on Health passed SB 2570 which would require a warning label for all food products containing aspartame that are offered for sale or distribution in the State. HFIA submitted and presented testimony in opposition.   Our testimony noted that some claims made in the bill are false and cites safety confirmation from the EU Food Safety Authority, FDA, and American Cancer Society. We are hopeful that this bill will not get a hearing in Consumer Protection Committee.

Sanitation Fine Increases

SB 2859 and HB 2309 increases from $1,000 per day to a maximum of $10,000 per day fines levied for violations of sanitation laws and rules for establishments required to undergo sanitation inspections by the Department of Health. The DOH testified that this bill’s increase in sanitation penalties establishes parity with existing food adulteration penalties. However, this bill is much too broad in its reach.  HFIA testified in opposition to this measure because the increased amount was not specified and because the scope of this bill was extremely far reaching and includes a wide range of businesses from manufacturers and suppliers to restaurants. After talking with the Acting Director of DOH, we have learned that this bill came about because of some high profile cases where restaurants refused to get a permit and opted to pay the $1,000 a day fine. They told us that the fines do not go to their department but instead go to the general fund so they have no reason to want to fine businesses. They said they have only done it twice in the past few years and it is highly unusual. The members of our Government Relations committee wanted HFIA to oppose this bill because it is too broad in scope and could have devastating impact on small business if it were to be enforced aggressively or inappropriately in the future.  A $10,000 a day fine for minor violation could put some small businesses under. We think the fine should be lowered.

Tax Credits and GET exemptions

There are a number of good bills introduced this year that HFIA supports. SB3082 and HB 2626 establish an income tax credit for taxpayers who incur certain expenses for manufacturing products in Hawaii. HB 1260 adds milk, poultry eggs, poultry carcass, poultry meat, beef, beef carcasses, goat meat, goat carcasses, lamb meat, lamb carcasses and aquaculture and aquaponic products to be consumed in the State to GET exemption for the loading, transporting, or unloading of agricultural commodities shipped into the State. SB 2169 provides an exemption for food and medical services from the general excise tax. HB 2371 creates a refundable food/excise tax credit for low-income individuals. HFIA testified in support of all of these bills.

Tobacco and E Cig Issues/ License Fee Theft

As usual there are a lot of tobacco bills up this year. SB 2495, requires persons engaged as wholesalers and dealers of electronic smoking devices and retailers of electronic smoking devices to obtain a license from the department of health. This bill limits the retail sale of electronic smoking devices to those retailers who also hold a retail tobacco permit and specifies that the revenue from electronic smoking device license fees shall be used to support smoking cessation programs in the State. The bill amends Hawaii's anti-smoking statute to prohibit the use of electronic smoking devices in places open to the public and places of employment and clarifies that the sale, distribution, or display of electronic smoking devices is restricted in the same manner as cigarettes and other tobacco products. HFIA testified that it is not fair for our license fees to be stolen and used for cessation programs when these programs are already funded by the tobacco settlement funds. Who knows how high our fees will be increased it they tie them to smoking cessation. The fees should be used to regulate the licensing program. This bill passed out of Health Committee and HFIA’s amendments were granted to not tie our fees to tobacco cessation. There is a similar bill, SB 2497, which would increase the license fee for persons engaged as a wholesaler or dealer of cigarettes or tobacco products and increases the retail tobacco permit fee for retailers engaged in the retail sale of cigarettes and other tobacco products. This bill also specifies that revenue from the license and permit fees shall be used to support smoking cessation programs in the State. HFIA opposes this bill for the reasons stated above. SB 2222 prohibits the sale, offering for sale, or distribution of any flavored tobacco product. HFIA opposes this bill.

Bottles and Glass

SB 2931 amends the advance disposal fee for glass containers to a tiered structure based on the interior volume of the glass container and HB 1550 requires large businesses that sell deposit beverage containers to serve as redemption sites for the deposit beverage container program. SB 2931 passed out of its first committee; however we are working with stakeholder to develop a resolution that would address the underlying issues with glass, namely that the State pays recyclers to ship a nearly worthless material to the mainland for a huge net loss. We need to develop a way to use the recycled glass on island. Some states have developed programs which achieve this goal. Chair Chris Lee deferred HB 1550 which would have turned retailers into redemption sites. We are grateful, because there are ample recycling opportunities in Hawaii, retailers don’t need to be mandated to get involved in redemption.

Gift Cards

HB 2108 requires an issuer of a gift card to hold in trust the moneys received in payment for the card. HFIA testified against this bill as it would be nearly impossible to implement and places and incredible administrative burden on retailers.

These are just a few of the bills being discussed this session. Please stay tuned for our “Action Alert” emails which utilize our new Voter Voice platform. This platform allows HFIA members to communicate with the legislature with only a few clicks of a mouse! Thank you for all of your support, your voice matters!

laurenzirbel@hawaiifood.com

By Lauren Zirbel

Posted Novemeber, 2013

Per the direction of the County Directors Panel at the 2013 Conference of
Hawaii State Liquor Commissions and Industry Representatives, HFIA's Retail
Liquor Dealers Association (RLDA) met to come up with a list of actionable
solutions to improve, streamline, and standardize liquor regulation in all counties.

The RLDA agreed upon the following list of eight top recommendations. The highest priority items are listed first.

1.) The RLDA recommends that all counties have a uniform application available online. HFIA looks forward to working with the counties on a form that they can post online. HFIA can also post it on its website. Having a uniform application available online and fillable via computer will be a huge improvement over the current paper system which is different in each county and in some cases must be picked up each time at the department. This leads to unnecessary duplication of information and is extremely time consuming with little upside for liquor regulators.

2.) The RLDA recommends that all counties standardize and centralize fingerprinting, crime checks, and background affidavits so licensees don't have to do repetitive work for each county. HFIA's RLDA members agree that it would be a tremendous improvement if the counties would allow fingerprinting, crime checks, and so on verified in one county to be used as verification in all counties. If the counties could require fingerprinting for only new officers or directors and not all of the existing officers and directors (who have already been fingerprinted), it would improve our system at no determent to the Liquor Commission's information system. For example, if an officer submits a personal history affidavit, fingerprinting, and criminal background check in one county, the other counties should be able to pull that information and register the officer in their county without the need to have them re-fingerprinted and background checked. In the past, the Honolulu Liquor Commission was willing to fingerprint the director and officers on the fingerprint cards provided by the Commission, but recently is no longer allowing licensees to fingerprint for other counties. As a result, licensees must now have their director and officers set up fingerprinting appointments at the Hawaii Criminal Justice Data Center. Foreign, out-ofstate directors with no oversight of the company's liquor operations should be waived from these requirements.

3.) The RLDA recommends that all counties use the Honolulu form for inventory balancing (liquor transfers between common ownership premises).

4.) The RLDA recommends that counties increase the fine amount instead of prohibiting liquor sales for a period of time. We would also recommend that all counties standardize rules and penalties so retailers are not confused by so many different rules.

5.) The RLDA recommends that all counties have gross liquor sales reports available to complete online. Currently, only Oahu and Hawaii Island allows this; Maui and Kauai do not.

6.) The RLDA recommends that all counties publish and share the formula used to calculate the annual liquor fee submission. Ideally, the formula would be the same for all counties. Oahu licensees submit payment with a predetermined calculation. However, Kauai and Maui licensees submit sales and a determination is made by each commission as to what is owed based upon their calculations.

7.) The RLDA recommends that all counties adopt the same remodeling rules, ideally using the Honolulu Liquor Commission's process as they have the most licensees. Honolulu Liquor Commission requires the applicant to submit a scaled plan of the space on an 8-1/2" x 11" sheet of paper and to draw a red line around the retail and storage area of the store, along with a full size blueprint. The area within the red line will be registered as the licensed premises. This allows the retailer to move or organize its liquor department anywhere within the store without having to submit a request to the commission for permission. The only time a request would be submitted is when a cashier station is moved from its originally licensed area. The other counties require the applicant to submit a scaled plan of the space on 8-1/2" x 11" paper and to draw a red line around the "liquor department" in the retail space, along with a full size blueprint. After the Liquor Commission approves the plan, whenever the retailer needs to rearrange or move the "liquor department," they need to request approval.

8.) RLDA recommends that all counties allow tastings, including Maui, using the same process as Oahu.

We look forward to working with the all of the county liquor directors and administrators to make these goals a reality. Achieving these goals will make it easier for liquor retailers to comply with the law and run their businesses.

laurenzirbel@hawaiifood.com

By Lauren Zirbel

Posted September, 2013

Now that the Hawaii State legislative session is finished, HFIA can focus on changes coming down on the federal level, closely monitor implementation of state laws, and watch political trends at the county level. One big federal-level change has to do with Country of Origin Labeling (COOL) for meat. HFIA held an educational seminar for retailers and suppliers which was hosted by the Hawaii Department of Agriculture. The DOA shared with our members insight into how to comply with the new law when it begins to be enforced. You can download the DOA presentation at www.hawaiifood.com. The USDA called HFIA to inform us that HFIA members should expect delays in the implementation of this rule. The USDA issued a statement that the law will not be implemented until six months after the effective date of May 23, 2013 inorder to educate retailers and suppliers.

The USDA estimates that the total adjustment cost of the new rule may cost the industry $192 million. The cost of implementing these requirements will be incurred by intermediaries (primarily packers and processors of muscle cut covered commodities) and retailers subject to the requirements of mandatory COOL.

The new rule follows a recent World Trade Organization (WTO) ruling, and drastically expands the current COOL regulations for the label to include each production step for muscle cuts of beef, pork, lamb, and chicken and eliminates any allowed comingling of muscle cuts of covered commodities of different origins. As one example, the rule nearly doubles the amount of text grocers must put on COOL labels from the current "Product of the U.S." and changes it to "Born, Raised, and Slaughtered in the U.S."

Most independent retail grocers have well established meat service departments with an on-premise butcher who provides variety, savings, and enhanced service to customers. This new rule will inhibit the ability of service meat departments, as well as limit the assortment of meats available for sale.

The National Grocers Association (NGA) called upon Congress to take action now and create a legislative fix. NGA also urged the USDA to delay the effective date of the final rule until WTO considered its next challenge. This did not happen.

The USDA states that retailers may continue to use old labels; however, more specific information via signage must be used. This creates a tremendous burden on retailers who must change signage daily when product supplies change.

On the state level, HFIA was asked to participate in a working group to help develop new legal signage requirements for e-cigarettes. Retailers must now have signage that states they do not sell e-cigarettes to minors in addition to the signage that they already have stating that they do not sell cigarettes to minors. HFIA was asked by the Department of Health to help develop an educational campaign to promote awareness of this new law. These changes are a result of HB 672, signed into law by Governor Neil Abercrombie on June 26. The new law states that retailers must furnish signs using the statement, "The sale of tobacco products or electronic smoking devices to persons under eighteen is prohibited." These signs must be posted near any vending machine or point-of-sale where tobacco products or electronic smoking devices are sold in type at least one-half inch high. This law also states that all tobacco sales must be made only in a direct, face-toface exchange. Signage rules go into effect immediately; however, the face-to-face cigar sales rule goes into effect July 1, 2014. The Hawaii Department of Health will create signs that retailers can download from the Internet and use in stores. HFIA will email you the new approved signage and post it on our website.

On the county council level, the GMO issue has heated up on both Kauai and the Big Island. Both county councils are debating bills that would influence Hawaii's agribusiness and farming industries after state legislation requiring labels on imported GMO foods failed to pass this session. Legislation on the Big Island would prevent agribusiness companies from taking root on the Big Island and ban new GMO crops. The bill would exempt papaya. Legislation on Kauai, introduced by Gary Hooser, would freeze biotech growth until the county does a thorough assessment of the industry's potential environmental impact. It would also require the county to regulate pesticide use and require farmers to disclose whether they are growing GMO crops. Stay tuned to your HFIA e-blasts for more information on federal, state, and county issues!

laurenzirbel@hawaiifood.com

By Lauren Zirbel

Posted May 24, 2013

Thanks goodness, the 2013 legislative session is finally over! Luckily, the food industry has emerged largely unscathed by the process. Despite an extraordinary number of frightening bills being introduced at the start of session, things quickly calmed down. Many of the bills did not receive hearings or pass out of their primary set of referred committees, thus "expiring" before legislative deadlines. Some bills, such as the "worker retention" bill, made it to the very end of session, causing anxiety for our membership. However, they died at the very end of conference with the 6 pm deadline. This article will provide a quick rundown of some of the bills HFIA was involved in this year.

Consumers' Right to Choose

Bills that address a consumers' right to choose their pharmacy, which HFIA has spent years advocating for, finally prevailed this session! We are so grateful to the legislature for having the foresight to protect the patients' right to choose their pharmacy!

HB 62 was enrolled to the Governor and prohibits pharmacy benefit managers from using patients' medical health information to market or advertise to that patient the services of a preferred pharmacy network that is owned by the pharmacy benefits manager, without the express consent of the patients.

HB 65 was enrolled to the Governor and specifies that a qualified retail community pharmacy that requests to enter into a contractual retail pharmacy network agreement shall be considered part of a pharmacy benefit manager's retail pharmacy network for purposes of a beneficiary's right to choose where to purchase covered prescription drugs. The bill requires specified entities to permit beneficiaries to fill any covered prescription that may be obtained by mail order at any pharmacy of the beneficiary's choice within the pharmacy benefit manager's retail pharmacy network.

Paid Sick Leave Bills

These bills would have required employers to provide a minimum amount of paid sick and safe leave to employees to be used to care for themselves or a family member who is ill, needs medical care, or is a victim of domestic violence, sexual assault, or stalking. The business community was concerned about these bills due to the lack of documentation and proof of illness needed from employees as well as the likely hardship this bill would impose on small businesses with few employees. Labor Committee Chair Mark Nakashima deferred these bills. It was a real pleasure to work with Chair Nakashima this year, he made a great effort to listen to the business communities concerns.

Labeling Genetically Engineered Organisms

Many bills aiming to label and ban GMO products were introduced during the 2013 legislative session. These bills were all defeated. One bill, which would have required labeling of all imported GMO produce, was deferred in the Senate after passing out of the House. HFIA opposes these bills because of they amount to a significant cost increase for consumers, as demonstrated by studies in California. HFIA also opposes these bills because it would be nearly impossible to implement a statewide labeling system when no other State in the USA requires producers to label GMO products. Hawaii imports over 80% of our food. National and international producers will not label products specifically for Hawaii. Our market is too small.

Minimum Wage

A bill that would have increased the hourly minimum wage to $7.75 on January 1, 2014, $8.25 on January 1, 2015, $8.75 on January 1, 2016, and $9.00 on January 1, 2017 died in conference at the 6:00 pm deadline. This bill was expected to pass; however, the Senate and House could not agree on the tip credit issue. We expect this issue to return next year. The worst versions of this bill would have tied the minimum wage to CPI, which would mean that employers would not be able to budget their labor costs until after the CPI was known. It would also mean an automatic pay increase every year for all employees earning the minimum wage. HFIA opposed this bill and asked for the increases to be lower and spread out over more time. We are strongly opposed to tying the minimum wage to CPI.

Worker Retention

A bill that would have established a job security requirement for employees upon the divestiture of a covered establishment made it until the final days of conference but was not passed out by the 6:00 pm deadline. HFIA strongly opposed this bill as it would have solidified Hawaii's reputation as the worst place to do business in the USA.

Single Use Bag Fees

A bill died in the House that would have established a single-use checkout bag program and fee and directed 9 out of 10 of the cents collected per bag to the environmental response revolving fund and the natural area fund. The problem with this bill is that plastic bags will soon be banned on all of Hawaii's counties. Paper bags have nothing to do with watershed problems. Therefore; this bill is just a money grab by the State. If the fees collected were allowed to go back to the consumers via lower food prices allowed by off-setting the increased costs associated with stores being forced to purchase paper bags which cost 10 cents as opposed to plastic bags with cost 1 cent, then we would be able to support this bill.

Soda Tax

A few bills that would have established a tax on sugar-sweetened beverages, syrup, and powder did not pass out of the Senate. Some versions of the bill would have had the revenues generated deposited into the community health centers special fund and the trauma system special fund. This bill is just another money grab by the State to fund programs that should be funded via the general fund. Establishing a soda tax will do nothing to curb obesity, it is simply a ploy to raise taxes on consumers in the most regressive manner imaginable.

Liquor Tax

Bills that would have increased the liquor tax also failed to pass. A bill that would have lowered taxes for local brewpubs died in conference.

Pseudoephedrine

Bills that would have made Pseudoephedrine prescription only did not pass. These bills are introduced every year in a misguided attempt to curb meth use. We know that almost all of the meth in the state of Hawaii is imported, as there has not been a single meth lab bust in Hawaii in over six years! The only outcome of banning Pseudoephedrine will be to prohibit law abiding allergy sufferers from obtaining needed medication. HFIA supported and passed a bill last year, which allows up to the second tracking of all Pseudoephedrine sales in the State and prevents purchases over the legal limit. Law enforcement officials have testified to the efficacy of this legislation in preventing abuse of Pseudoephedrine products.

Aspartame

A bill that would have required a warning label for all food products containing aspartame was defeated in the Senate this year. The National Cancer Institute released the results of its own study involving more than 500,000 people and showing no adverse health results arising from the use of aspartame. There is no reason to place a warning label on the over 6,000 products which contain aspartame.

Styrofoam

Bills that would have banned Styrofoam, put a fee on Styrofoam, and mandated compostable options at no additional cost to consumers did not pass the Senate. These measures ignore the fact that despite burdening ALL food establishments in the State with a 30% increase in cost, these biodegradable products, under our current system of waste disposal will meet the same end as polystyrene. Both compostable and polystyrene options incinerate. Both compostable and polystyrene options will not biodegrade in modern landfills. Landfills are designed to protect the environment from the liquids and gases produced by reducing the exposure of garbage to air, water and sunlight – conditions essential for degradation. Without an investment in commercial composting facilities, this increased cost for food establishments and consumers will result in negligible environmental benefits.

Advanced Disposal Fee (ADF) Increase

Bills that would have increased the ADF from 1.5 cents to 6 cents did not pass this year. HFIA strongly opposed these bills.

Theft in the Second Degree

Bills that would have increased the threshold value of property or services from $300 to $750 under the offense of theft in the second degree did not pass. HFIA opposes increasing the property theft valuation due to the fact that there is evidence that individuals routinely steal just below the property theft valuation limit.

ID Cards and Preventing Underage Drinking

A bill passed that allows a business to scan an individual's driver's license or Hawaii identification card to verify age when providing age-restricted goods or services if the business has a reasonable doubt of the individual having reached the minimum age required for purchasing the age-restricted goods or services. HFIA supported this bill in order to allow retailers to utilize technology to prevent under age liquor sales.

Tobacco Sales

A bill passed that requires retailers to sell tobacco only in a direct face-to-face exchange between the retailer and consumer, except for in-bond concessions (duty-free retail), retail tobacco stores, bars, or establishments where the minimum age for admission is eighteen.

laurenzirbel@hawaiifood.com

By Lauren Zirbel

The 2013 Hawaii State Legislature's legislative session is off to a red-hot start. One thousand four hundred eighty four bills were introduced in the State House of Representatives. One thousand three hundred eighty eight bills were introduced in the State Senate. Hundreds of these bills affect the food industry.

As I write this article we have just passed one of the major hurdles of the legislative session, first lateral! This means that it is the last day for bills to move to their final committee in their house of origin, be it the House of Representatives or the Senate. For example, most bills are referred to more than one committee, so if a bill is introduced in the House of Representatives and referred to Health and Consumer Protection Committees, then the bill must be passed out of the House Health Committee by the first lateral deadline or it is considered "dead" (unless the bill is re-referred). Due to the shear mass of bills introduced, this deadline marks the "death" of many bills because not all bills can be heard in time to stay "alive."

At this point in the session, many bills have been deferred by committees due to persuasive testimony that led the members of the committee hearing the bill to have second thoughts about the need to pass the bill. Likewise, many bills have passed out of committees and remain alive because the members of the committee hearing the bill feel that the bill deserves more discussion and consideration.

Here is an overview of some of the bills HFIA has testified on:

ADF/Deposit Beverage Bills

  • • HB 1062: Increases the maximum size of containers covered by the Glass Advance Disposal Fee (ADF) and Deposit Beverage Container (DBC) programs. The bill would result in wine, spirits, and milk being included in the DBC. It was deferred in House Energy and Environment Committee. The DOH opposed the bill because it would alter the program too much and they are trying to address the concerns of the audit, which showed that the DOH handled the funds of the DBC program without sufficient safeguards and oversight.

  • • HB 900: Increases the ADF on glass containers from one and a half cents to three cents for containers containing less that 12 ounces and increases the ADF to 6 cents for containers containing greater than twelve ounces. The bill, which the DOH supports, was deferred in the House Energy Committee. The senate passed out the companion to this bill, SB 1131. This bill goes to Ways and Means next.

  • HFIA testified in opposition to these bills because we feel that the DOH should have to answer to the numerous concerns outlined in their audit before they request more funds from consumers.

    Minimum Wage Bills

  • • SB 331: Increases the minimum wage to $8.75 starting 7/1/14, and to $9.25 starting 7/1/15 and ending 6/30/16. The bill authorizes the Department of Labor and Industrial Relations to adjust the minimum hourly wage with CPI. The Senate Committee on Judiciary passed the bill out. The bill goes to Ways and Means next.

  • • HB 916: Increases the minimum wage to $8.75 and ties it to CPI. The bill passed out of the House Committees on Labor and Economic Development. HB 916 goes to Finance next. HB 1028, a bill which would increase the hourly minimum wage to $7.75 on 1/1/14, $8.25 on 1/1/15, and $8.75 on 1/1/16, also passed out of these committees and goes to Finance Committee next.

  • HFIA testified in opposition to these bills. We are particularly opposed to tying the minimum wage to CPI, as that could cause a 30- to 40-cent increase in the minimum wage every year, regardless of the labor market.

    Bag Fee Bill

  • • HB 357: Requires businesses to collect a 10-cent fee for each single-use checkout bag provided to customers. The bill allows businesses to retain a specified portion of fees, subject to income and general excise taxes. Businesses keep 20% of the fee for the first year and 10% going forward. HB 357 exempts participants in federally-approved nutrition assistance programs from the bag fee. The bill passed out of the House Committees on Environment and Consumer Protection and must go to Finance next.

  • • HFIA testified with comments on this bill. If the purpose of this bill is to rectify the increase in grocery prices cause by the counties mandating a bag that cost 10 times that of what retailers were using prior to the bans, then a substantial amount of the funds assessed to consumers for forgetting to bring their reusable bags should go back to the grocers. Then grocers can recoup their lost costs and lower the price of groceries. This bill takes almost all of the money assessed to consumers and gives it to government for a purpose that has very little, if anything, to do with paper bags.

  • Pharmacy Bills

  • • HB 62: Prohibits a pharmacy benefits manager from using a patent's prescription drug benefits claim information to market to that patient the services of a preferred pharmacy network that is owned by the pharmacy benefits manager. This bill passed out of House Health Committee and must go to Consumer Protection Committee next.

  • • HB 65: Allows beneficiaries of prescription drug benefits providers to opt out of the requirement to purchase prescription drugs from a mail-order pharmacy and alternatively allows them to purchase prescription drugs from a retail pharmacy. This bill passed out of the Health Committee and must go to Consumer Protection/Judiciary next.

  • • SB 667: Requires a pharmacy benefits management company contracting with an auditing entity to submit an annual report to each group health plan consisting of specified types of information relating to providing prescription drug coverage. The bill requires a pharmacy benefits management company to provide pharmacies information regarding reimbursement methodology, calculation, and payment. SB 667 passed out of the Senate Committee on Health and must go to Judiciary next.

  • HFIA testified in support of these bills because consumers should have a right to choose their pharmacy.

    Theft Bill

  • • SB 570: Would increase the threshold value of property or services from $300 to $750 under the offenses of theft in the second degree. The bill was held by the Judiciary Committee!

  • Soda Tax

  • • The House Version of the Soda Tax did not get a hearing, so it is dead unless it is re-referred.

  • • The Senate version of Soda Tax, SB 1085, was passed out of the Senate Health Committee and must go to Ways and Means next. The text reads as follows:

    Every distributor selling sugar-sweetened beverages in the State shall pay a fee that is hereby imposed at the following rates: (1) $1.28 per gallon of bottled sugar-sweetened beverages sold or offered for sale to a retailer for sale in the State to a consumer; and (2) $1.28 per gallon of sugar-sweetened beverage produced from syrup or powder sold or offered for sale to a retailer for sale in the State to a consumer, either as syrup or powder or as a sugar-sweetened beverage derived from that syrup or powder. The volume of sugar-sweetened beverage produced from syrup or powder shall be the largest volume resulting from use of the syrup or powder according to the manufacturer's instructions. (b) Any retailer that sells bottled sugar-sweetened beverages, syrup, or powder in the State to a consumer, on which the fee imposed by this section has not been paid by a distributor, shall be liable for the fee imposed in subsection (a) at the time of sale to the consumer.

    HFIA testified in opposition to this bill because it is unfair to blame obesity on the soda and sugary beverage industry. This bill will put companies out of business in Hawaii and increase unemployment.

    Liquor Tax

  • • SB 645: Increases liquor taxes and designates a percentage of funds from liquor taxes to go toward community health centers. The bill passed the Senate Health Committee and goes to Ways and Means next. The amount of the increase is blanked out.

  • HFIA testified in opposition to this bill. Hawaii already has some of the highest liquor taxes in the nation.

    Pseudoephedrine (PSE)

  • • SB 639: Would have made PSE prescription-only. The bill was deferred in the Senate Heath Committee.

  • HFIA testified in opposition to this bill because we just implemented electronic tracking of PSE sales in January, and even law enforcement officials testified that this program is working very well to prevent illegal sales of PSE.

    Aspartame

  • • SB 637: This bill would mandate a warning label be placed on all aspartame products. The bill passed the Senate Health Committee, and must pass the Consumer Protection Committee next.

  • HFIA testified in opposition to this bill because the FDA, numerous foreign and international regulatory agencies, and the National Cancer Institute have found that aspartame is not harmful.

    Liquor License Fees

  • • HB 230: Authorizes the liquor commission to conduct and fund state and county alcohol abuse treatment and prevention activities, and allows liquor license fees to be used for those activities. The bill was deferred in the House Consumer Protection Committee.

  • • SB 442: The same as HB 230. The bill passed Public Safety and must go to Ways and Means now.

  • HFIA testified in opposition to this bill. This legislation would result in increased liquor license fees. Liquor license fees should only be used for purposes with a direct nexus to the fee.

    Paid Sick Leave

  • • HB 6 and HB 406 would have required employers to provide a minimum amount of paid sick and safe leave to employees to care for themselves or a family member who is ill, needs medical care, or is a victim of domestic violence or stalking. Both bills were deferred in the House Committee on Labor and Public Employment.

  • HFIA testified in opposition to these bills because they prohibits employers from requiring reasonable documentation from their employees.

    GMO Labeling

  • • SB 615: Mandatory labeling of all GMO fish and whole foods. The bill passed out of the Senate Environment Committee and must go to Ways and Means next.

  • • HB 174 HD 2: Imposes labeling requirements and import restrictions on imported genetically-engineered produce, but exempts Hawaii-grown produce. The bill passed out of the House Agriculture and Consumer Protection committees and must go to the Finance Committee next.

  • HFIA testified in opposition to these bills because this issue must be handled at the federal level. Hawaii's food demands are not large enough to force domestic and foreign food suppliers to meet these labeling requirements. As such, the cost will be borne by Hawaii's consumers.

    Food Service Containers

  • • SB 620, SD1: Requires food services businesses to provide customers with an option to use compostable or reusable food containers provided by the restaurant for food. A Sierra Club/ Surfrider Foundation priority, this bill requires signs to be posted informing customers that compostable food containers are available at no extra cost and requires violators to pay a fine for repeated violations. The bill passed the Senate Environment and Consumer Protection Committees and must go to Ways and Means next.
  • HFIA opposed these bills because there is no reason to make food service businesses provide a much more costly item when the State of Hawaii has no composting facilities where these products can be composed. The items will be sent to H-power just the same as polystyrene.

    Email Notifications

  • • SB 493: Requires businesses with customer card programs to notify customers in the event of a class 1 food, product, or merchandise recall, and makes a violation an unfair or deceptive act or practice issue. The Senate Committee on Consumer Protection deferred the measure until 2-26-13.

  • HFIA testified in opposition to this bill. Proponents do not understand that although retailers may have a loyalty card, it does not mean that they track purchasing information by customer. This would require a very sophisticated and costly technology upgrade. It is also an invasion of privacy for retailers to email their card members without consent. Many customers have multiple loyalty card memberships and will end up being spam mailed by all of them.

laurenzirbel@hawaiifood.com

By Lauren Zirbel

A whirl of policy issues directly affecting the food and beverage industry is sweeping the U.S. at county, state, and federal levels. At the county level, HFIA has been invited to work with the County of Hawaii to provide input as they draft the rules and regulations for the Big Island single use bag legislation set to go into effect on January 17, 2013. On the state level, the Hawaii Department of Health decided to increase the deposit beverage container administrative fee by half of a cent per beverage. On the national level, HFIA and our federal counterparts worked to introduce legislation to block new regulations on grocers related to menu labeling.

Big Island Plastic Bag Ban Rules & Regulations Drafting

As you already know, Big Island Mayor Billy Kenoi signed into law Bill 17, Draft 2 on January 17, 2012. The bill is set to go into effect one year after approval. This means that there are only a handful of months left for the City and County to draft the rules and regulations for Bill 17 before it goes into effect on January 17, 2013. You may remember that this bill was unique for several reasons. There were absolutely no guidelines in the bill relating to enforcement. Education, enforcement, and administrative rules—including Honolulu News Now and the Hawaii Tribune Herald recently quoted HFIA regarding the DOH's decision to increase the beverage fee. HFIA has long held the position that the beverage fee should not be increased unless changes are made to ensure that the fund is not spending more than it takes in. HFIA has also asked that the mandatory biannual audits of the Deposit Beverage Container Special Fund be released. When HFIA met Big Island Plastic Bag Ban Rules & Regulations Drafting defining permissible bags and establishing penalties—are completely up to the director of the Department of Environmental Management. The bill states that businesses shall not provide plastic checkout bags to their customers. The bill defines plastic checkout bags as a carryout bag that is provided by a business to a customer for the purpose of transporting groceries or other retail goods, and one that is made from non-compostable or compostable plastic and not specifically designed and manufactured for multiple reuse. Another unusual feature of the bill is that under exemptions, it states that businesses may make plastic checkout bags available for purchase for one calendar year after the effective date of the ordinance.

HFIA met with the Big Island administration about the rules and regulations of Bill 17 at the beginning of August. We were able to gain clarification on three important features of the rules. The first is that we agreed to only outline what would NOT be allowed under the law as opposed to what WILL be allowed. This reduced the administrative headache for retailers because they do not have to worry about specifications such as print font size, which can be difficult to comply with. The second is that we discussed the possibility of adding a specific exemption for wet foods, although exemptions that may cover this issue were already drafted. The third is that we had a productive discussion about allowing a substantial warning and rebuttal period for retailers cited as non-compliant. HFIA sends a big MAHALO to Barry Taniguchi for making this meeting possible! If you have any questions about the Big Island Bag Ban rules and regulations, please feel free to email me at laurenzirbel@hawaiifood.com.

The closing of the 2012 legislative session was especially hectic, with the last month of the Hawaii State Legislature's session happening at the same time as the Honolulu City Council's push for a plastic bag ban. Things were heated but HFIA made time to meet with the council members and help develop a bill that is more palatable to retailers and consumers than most bag ban legislation that passed across the United States. Honolulu County's bill has a delayed implementation date and allows for less costly bag options for retailers and consumers.

Thanks to our many thoughtful state legislators all bills that HFIA opposed at the Hawaii State Legislature died. These bills included but were not limited to:

  • • Taxes on sugar-sweetened beverages, syrup, and powder.

  • • Liquor taxes.

  • • Increases in the minimum wage.

  • • Removing the exemption for dietary supplements from the deposit beverage container program.

  • • Establishing labeling requirements for Hawaii-grown tea.

  • • Classifying pseudoephedrine as prescription only.

  • • Requirements that cigarettes be placed at least ten feet away from candy and snacks.

  • • Requirements that employers provide a minimum amount of paid sick and safe leave.

  • • Requirements that employers provide meal beaks for employees who work more than a total of five hours a day.

  • • Part of a bill that would have increased the threshold amount from $300 to $750 for theft in the second degree.

  • • Mandatory labeling of "aspartame" products with a caution statement.

  • • Prohibiting retailers from displaying or storing tobacco products through self-service display.

  • On the positive side, HFIA was successful in passing a few bills that will help our industry. One of these bills is HB 2096, the Unemployment Insurance Bill, which sets the employer contribution rate at schedule F. This bill keeps rates constant for one more year, avoiding an increase in Unemployment Insurance for employers. Without this bill the scheduled rate would have increased costs by about $550 per employee. This one-year mitigation extension will contribute $107 million in direct savings for Hawaii's businesses. Another positive bill that passed is SB 2228, the Pseudoephedrine Tracking Bill, which will allow retailers to have free access to an up to the second tracking program that can be utilized by any device with an internet connection. This bill will prevent "smurfing" and production of methamphetamines. This bill will also continue to allow individuals with legitimate allergy problems to access the medications that they need without a prescription. Beginning January 1, 2013, before completing a sale of an over-the-counter product containing pseudoephedrine, a pharmacy or retailer shall electronically submit the information required pursuant to the National Precursor Log Exchange administered by the National Association of Drug Diversion Investigators; provided that the National Precursor Log Exchange is available to pharmacies or retailers in the State without a charge for accessing the system.

    On April 25th the Honolulu City Council passed a bill to ban all non-biodegradable plastic bags on Oahu during a council meeting in Kapolei. The bill still allows for biodegradable plastic and paper bags to be distributed. Biodegradable plastic bags run about three cents a bag which is a big improvement from the bags mandated in other counties. Local suppliers can produce these biodegradable bags.

    The bill will not take effect until July 1, 2015 which will give retailers three years to use up their current supply and plan for new bags. The bill was set to be a tax on plastic bag usage, which HFIA supported, however it was later determined that such a bill would be challenged in court because the council is only authorized to levy property taxes.

    HFIA will continue to keep you updated on legislation that affects your business. Mahalo nui loa to all of you who wrote in to your legislators in response to HFIA's legislative alerts. Your voice was heard load and clear at the legislature!

    By Lauren Zirbel

    This legislative session has been filled with a spirit of "Kumbaya" in comparison to last year. Many of the issues industry expected to come to a head this year have simply dissolved into nothing… for now! This is likely because every single state elected official is up for re-election and no one wants to increase taxes.

    But that doesn't mean HFIA hasn't been hard at work protecting your business' interests! HFIA has testified on and tracked many bills that directly affect the food industry. There are both good and bad bills still moving along at the State Capitol.

    On the bad end of the spectrum the House is still considering a bill that would require employers to provide meal breaks for employees who work more than a total of five hours a day. This bill, HB1699, imposes penalties for failure to provide meal breaks. The bill was passed by the House Judiciary committee but must still be scheduled and passed by House Finance committee in order to cross-over to the Senate. A bill increasing the minimum wage was also heard and passed out of its first committee in the House but has not been scheduled in its next committee to this date. Thankfully, Representative McKelvey chose to defer a measure in House Economic Revitalization and Business Committee which would have required employers to provide a minimum amount of paid sick and safe leave to employees.

    HFIA opposes labeling mandates across the board and as such opposed a bill which received a hearing this year, which would have established labeling requirements for Hawaii-grown tea. Thankfully Senator Baker deferred this bill in her committee. HFIA also opposed bills which received a hearing this year that would have increased the tax on sugar and mandated a warning label for all products containing aspartame. Senator Green deferred both of these bills.

    One of the major positive bills HFIA is pushing this year is the fee assessment on all single use bags. This bill will help retailers on the neighbor islands deal with the ten fold increase in cost they are seeing due to plastic bag bans. Honolulu County is threatening to follow the neighbor islands down the path of plastic bag bans so it is imperative that the legislature pass a fee bill this year to create some uniformity between counties. Without a fee bill consumers will not decrease their use of single use bags but instead shift to using an equal amount of paper bags at increased cost to retailers and ultimately consumer food prices. This not only does nothing to help the environment, it unfairly impacts consumers pocketbooks - increasing all peoples most basic cost of living - food. Single use bag fee legislation has had overwhelming amounts of supportive testimony at the state legislature this year. Retailers, businesses, environmental groups, Department of Land and Natural Resources, and consumers have voiced strong support for this legislation.

    HFIA is supporting a bill that serves as an alternative to harmful legislation introduced and deferred this year that would have made pseudoephedrine (PSE) prescription only. This bill brings Hawaii into a network that is used across the United States and is completely free called NPLEx. NPLEx can be accessed on any computer with access to the Internet and it allows up to the minute tracking of PSE sales. This tool has helped law enforcement control individuals who are not using PSE for its intended purpose. The House committee on judiciary has moved the bill forward as has the Senate Committee on Health.

    HFIA is in strong support of the efforts made by the legislature in addressing the unemployment insurance tax increase with HB 2069. This bill sets the maximum weekly benefit amount at seventy-five per cent of the average weekly wage from April 1, 2012 to December 31, 2012. The bill also sets, for calendar year 2012, the employer contribution rate at schedule F. HFIA supports keeping the employer contribution rate at schedule F for two years because businesses are still trying to recover for the recession and can not afford increases in their UI tax.

    HFIA will continue to keep you up to date on hearings and opportunities for you to submit testimony on bills that affect your business. We greatly appreciate your support of our legislative advocacy!

    Government relations

    Hawaii Food Industry Associations primary function is to project YOUR voice in Government. You must join HFIA to receive our email action alerts on legislation.