 This is Think Tech Hawaii, Community Matters here. And welcome to Business in Hawaii with Reg Baker. We broadcast live every Thursday from 2 to 2.30 from the Think Tech studios in beautiful downtown Hololulu on the Pioneer Plaza. This is a special edition of Business in Hawaii. The legislature is in session and we have a small business regulatory review board chairman that's going to be here talking to us a little bit about what they're up to during this session and some of the different, I guess, regulations and rules that they are going to be taking a look at or have looked at in the past. So I'd like to welcome Tony Borsch. He's the chairman of the Hawaii Small Business Regulatory Review Board. So glad you can make it here today. Thank you, Reg. Glad to be here. All right. Now you're going to be pretty busy. I guess, tell me a little bit about the board. What does the board do? When did it start? What's the background? Well, the board actually was, the statute became about in 1998, so the board's about 20 years old. Congratulations. Thank you. You know, the intent of the board is to really look after the interests of small business as far as rules and rigs that would affect or does affect small businesses. And it's made up of, currently, it's made up of 11 board members. And it's pretty much where the board members are appointed, three by the governor, three by the president of the Senate, three by the speaker of the House. It started all that way in 1990, 1998, 2000. And then somewhere along the line, they made a change in the statute and they went down to nine board members. And the problem that we were having with just having nine board members, one is having enough board members at the meetings for a quorum and the other one is a voting quorum. So, you know, we went back to the legislature and requested that we increase the board members up to 11. And we were able to do that, I believe, a year ago. And so we look forward to having a full slate of 11 board members. And knock on wood, you know, it's going to happen. Right. And I guess for full disclosure purposes, I'm also a member of the board. The governor just recently appointed me to the board. So I've been to a few of the board meetings. So on the newbie on the board, still learning all the different, I guess, protocols, how things work. But part of what I think is worth mentioning is that we have representations from all the different islands. Yeah, very true. We have a representative, well, right now we don't have one from Kauai, but we have one from each of the counties. And, you know, we haven't had one from Kauai for over a year. I think it's been, yeah, over a year. So we're finally looking at having a board member join us from Kauai. And more importantly, we do have a good cross-section from the counties, but also across the different industries. And that's the intent, is to have a good cross-section representative of the businesses that's out there. And you know, small businesses make up the majority of the, I guess, the workforce in Hawaii. Employers, 90%. Well, they employ, I guess, on an employee, labor force basis, about 55, 60% of all the employees in the state are working for small business. But just in total number, they represent about 97. something percent of all the businesses in Hawaii. And that's true. Most people don't realize that. They think it's the big companies that really, it's the small businesses cumulative that really have contributed to the state's economy and growth and continue to do that. That's why it's important that for us as a small business regulatory view board, I know that's a whole lot to chew on. But basically, it's looking at rules and rigs, existing newly promulgated stuff or stuff that's being looked at by the different agencies to put forth. And we get to look at it and chime in as far as the impact it will have on small business. And besides that, not only the existing or rather the new stuff or the existing, if there's a small business out there that is having a suffering of financial impact or economic impact from a rule and rig, we need to know about that. That's something that we need to look at. Because if it's affecting a small, I know it's affecting more than one. And the thing is with small businesses, it's very small. And they're running their businesses. It's not something that after eight hours, you just can forget about it. You're always doing something to make that business run efficiently and obviously to make a profit. So if we can help by looking at the rules or providing advice and working at resolving the problem with a rule and rig, benefits all small businesses. The board is looking for those challenges that might be out there for an existing rule and regulation or maybe even something that's being proposed. And the more the board is aware of this, the more the board can get engaged and try to take some steps to advise the governor on maybe a course of action to make things a little bit better. And that's a good point, Rich, is that we're an advisory board to the governor and the legislature. We also look at county rules that also affect small business and we also chime in on that. But it's really an advisory board. And first and foremost, I believe that all the governor, the mayor, and pretty much the legislature, they're very interested and concerned with small business. So this is something that is not, we're not up there as just a front. We're there to actually take in, take heed of what's happening to small business if there's rules and rigs. That is prohibiting them from really flourishing because that's the idea. The better the small businesses do, the better the state's economy, more taxes for the capital here and for the state as a whole. The state's got to pay its bills. So what's interesting and another point that I think is worth mentioning is that most employment, the increases, the hires that happen every year is through the small businesses. We've got some big businesses here and that's great. We need them. But most of the new jobs are being created by the small businesses and the constant creativity that people have when they start a business. And I judge, I'm involved in judging some of the awards that take place for the small business administration. And I can tell you one of the criteria is how many employees have you added over the last three years. And there's some impressive numbers that I've seen where they'll increase, they'll double or triple the number of employees every year because they're growing so quickly. And that's a good source of payroll taxes, income taxes, sales taxes, all of that that the small business generates and turns over to the state. You can't let that get sick. But if it gets a flu, everybody gets a little sick. You say that, that's perfectly correct. I'm with you 100% on that. And the small business regulatory view board, as you well know, the board members are pretty much, we don't get paid. It's, we volunteer, nobody told you that. But it's something you feel good about, right? If we can really help out fellow small businesses, I think it's a win-win. And that's why, personally, I devote my time. And I don't think it's being wasted. There's a lot to do. One of the things we need to do is get the word out about the small business regulatory view board. Small businesses have a portal that they can voice their concerns if they're affected with a rule of rig that's out there. You know, and maybe this is a good time to kind of walk us through, Tony, a little bit on how that process works. I mean, if there was a business out there right now that's listening to this show, and they go, you know, there is this regulation that I've been having a real challenge with, and it just doesn't make any sense. How can they bring that to the board's attention? And what's the process? How does it flow through the system? Okay. Well, the first thing they can do, and one of the things that we've done recently is on our, we do have a website. And on the website, you'll be able to go on there. And that website's on the screen? It's on the screen. Anybody that wants to see it? And so I won't mention the web address there, but you look under the tab, regulation review card. Regulation review card. It's very self-explanatory. You go ahead and fill that out. And, you know, it's easy to go through. Fill it out. It's a simple one-page, two-page type thing. Yeah. And so it's sending, submit it to the Small Business Regulatory Review Board. We'll look at it, what agency is involved, you know, and then we'll get back to you as far as, you know, probably getting more information. And what we, what we'll follow up from there is, need be, we would have a post-it habit on a future hearing. Normally, the Small Business Regulatory Review Board meets monthly. It's usually the, what is that, the third Wednesday, the third Wednesday of the month. And so, you know, we'll post it on the agenda, part of the Sunshine Law. We got to, you know, abide by that. So we'll have it on there, and we'll have the agency come forward and, you know, pretty much kind of go through the question-and-answer process. They fill out an impact statement, first of all. If there's something that we put forth and ask them about and ask them to come in to, you know, provide input on, they have a questionnaire that they're going to fill out. If it's an existing rule, they'll fill out, according to that, as far as how they perceive that as affecting small business. If it's something that a small business is saying that is affecting them, they won't necessarily fill out that, that impact form, or the agency won't fill that out. But they'll come in and, you know, hopefully we can get some dialogue going, finding out more, get questions answered as far as, you know, if a small business is affected by this rule, I mean, you know, what, what, what is being done? Is there any other small business that's, you know, kind of chimed in on it? Or, you know, it's more of a fact finding. But it's all pretty much of the process. It's an open public process. And the idea is to, you know, see if it does impact small business. And we get answers from the agencies and as well as from input from the small business. And the people that are coming in and providing, I'll use the word testimony, they're coming in and making the remarks in their comments about either in support of or against the bill. They also make recommendations on maybe what needs to be done to fix it or make it better. And then once all this background, this information gathering is complete, then there's a recommendation that we pass this on to the governor. Yes. That would go to the governor. And from there the governor would, you know, pretty much review it. And if it's with the agency, you know, take it up with the agency as far as the, if it's a rule that's, it's a two step process where with the governor, if it's a new rule being proposed, it has to go to public hearing. The governor has to agree to put it to public hearing. So if we basically say, yeah, we agree, there's, we don't see any impact to small business. It should go to their preliminary public hearing. The governor will review it. If he agrees, it'll go to public hearing. He decides. And then by the same token, once the public hearings are held, the agency would come back to the board once again and ask the governor or rather ask us for a, after public hearing review where we get to review the feedbacks from the hearing and see if there's any, you know, additional information feedback from the public or small businesses that there is an impact or if there's anything that would impact small business in a negative way. And that's what we look for. Then we advise the governor once again, you know, they went to public hearing. It's, you know, if there's a concern for small business, we'll put it in the report back to the governor and the governor will make his decision. You know, small business regulatory review board is an advisory board. We advise, we don't have enforcement powers or anything. It's just providing our advice as far as, you know, how it impacts small business. Right. And we're going to have to take a quick break, but as soon as we come back, I want to kind of put closure to that piece of the conversation and then get into some specifics. This is business in Hawaii with Reg Baker. We're here this week talking with Tony Borge, who's the chairman of the small business regulatory review board for the state of Hawaii. We're going to take a short 60 second break and we'll be right back. We have this crazy thing going on today. I was just walking by and all these DJs and producers are set up all around the city. I just walked by and I said, what's happening guys? They told me they were making music. Welcome back. This is business in Hawaii with Reg Baker. We're here this week talking with the small business regulatory review board for the state of Hawaii. Tony Borge, who is the chairman of the board, is here sharing with us a little bit on the history of the board and how the board works. One of the, I guess, messages that I'm picking up here is that we really need to get more engagement from the small business community. And I guess that's defined as any business with less than a hundred employees. Correct. And so we need to get, as a board, more input and more awareness of some of the issues out there so that we can plug them into the system and start addressing these. Is that a fair statement? No, that's correcto mundo. I mean, you hit it right on there. For a new board member, I got to say, we need more people like you. But that's exactly it. We need to get more input, more feedback from small businesses throughout the state. I know there's rules and rigs out there that hinder small business. We need to know. And it's easy to bring it to our attention. You don't need to do anything really formal. A letter coming in stating if you know the rule and rig, I know you might have to find the numbers for it or whatever. But if you don't, if you just have an idea, hopefully we can find that rule and rig that you're affecting your business. But it doesn't take a formal statement as far as going to attorney or we just want to hear from you. And that would be the biggest thing is getting more input from small businesses. We've got a good cross section of board members on the board from different industries. But really, we want the information from, I hate to say the horse's mob, or from the people who are really affected. And we also want the information as to why that rule should be either revised or rescinded or change whatever. And we need that input as far as the financial impact or economic impact on the individual's business as well as if it's affecting him, it's affecting the others. But you're right, Reggie. It's getting the input from small businesses. It doesn't take much time. I've done it personally back in 2009. So it's a worthwhile effort. It is. And it allows you to get engaged. It allows you to become active in the process. So many people are frustrated because they feel that they don't have any influence on what goes on. And although we can't guarantee results, we can at least say that they've been heard and they can come in. And they don't have to stay for the whole meeting. They can just come in and provide their remarks for just their part of it. So it's not like it's an all day affair. Sometimes given testimony down at the legislature requires you to be there almost all day long. This board operates a little differently. Yeah, if we get to the point where that, hopefully, it's not going to be as cumbersome as the legislature. But we do have once in a while, we have to put limitations on testimony, two to three minutes public testimony. For the most part, we welcome testimony that's sent in over through the website or submitted written testimony or just come down. Our meeting started at 10 o'clock, the third Wednesday of every month, down at Capital One. In the D-bed building. In the D-bed building, fourth floor. It's a nice conference room. But they're welcome to join. It's open to the public. But I know with small businesses, everybody is concerned and hands on working on their business. And for the most part, we all do that. But if you can just let us know, if there's something that affects you, rule and rake existing or is something that's new, that's coming out, you heard about, let us know because the agencies are more than cooperative to come to our board meetings and provide the reason why, the rationale of what they're doing. It's not like, you know, so we can get some, you know, answers and hopefully it's beneficial, you know, for a small business in the long run. Exactly. Now, you know, can we spend just a couple of minutes talking about some of the examples, some of the successes that you've had. Now, I've only been there for a few months, but you've been there for a lot longer than I have. So what are some of the success stories that you've had? What are some of the issues that you've addressed? Well, you know, we've had a couple of instances where the, I guess with the Department of Agriculture, they were looking at the measure to prohibit, I guess, circus animals, you know, into the state. And that came before the board because one of the things was the outright ban on having circus animals coming into the state. And I know that went back and forth. The Department of Agriculture came before us to go to public hearing. They did that. They took about a year, a year and a half before they came back after public hearing with public comments. And a lot of it from the public, you know, it was, you know, they wanted to see a regulation on circus animals coming in, as well as, you know, from the other side, you know, from a business standpoint, you know, if you don't have live animals in a circus act, I mean, it's not much of a circus. It's not a circus, right. And, you know, especially you kind of depriving the youth and the kids from, you know, something that you can see these animals up, you know, live versus, you know, virtual reality on photos, whatever. But anyway, so what happened on that? And that was pretty one of the more, I guess, vocal meetings that we had and a lot of attendees. And the board actually advised, we advised the governor that the economic impact to small businesses, you know, directly, indirectly was significant. But it would be significant. I mean, we can, you know, we understand, you know, the other side of the picture, but when you look at the economic consequences, you know, it just didn't make sense. And, you know, our advice to the governor was, you know, we can understand the move by the Department of Ag, but we had reservations with that aspect of it. So, you know, that... Well, that was a good success. And although I wasn't on the board at the time, I'm also on the Small Business Administration's Regulatory View Board in D.C., and so I would come as guest. And I remember one time I was there and we heard testimony and some challenges from the Liquor Commission. Right, the Honolulu Liquor Commission. You're right. And that was on the tax clearance. Apparently, absolutely right, Rich. You're stimulating my memory here, but there was a problem with the tax clearance on the federal side for the renewal of liquor licenses and that's important because we have a lot of small businesses, you know, retail stores, on-premise type establishment, restaurants and whatnot. And if you don't get your tax clearance federal and state, you don't get your license renewed. And you're not going to be able to sell liquor. And that's a big part of their business. So that was a good... I know you were able to help out with getting that clarified and Honolulu Liquor Commission really... I believe they really appreciated the assistance there. It's one of those success stories because there's 1,700 licensees around the state. And, you know, it's all the different islands. It's actually four liquor commissions, one on each island. And all of those licensees had to renew in the same 60-day window. And it was creating some real backlog and bottlenecks for the IRS to issue tax clearances for all of them in such a short period of time, particularly when they've been reducing their workforce and they've had budget restraints. And we made some calls. We put some of the word out. It went back to DC. DC contacted the IRS commissioner. They pulled some strings. They got a conference call out here. And we got that resolved by allowing them to piggyback on another software package to allow them to get those tax clearances right online. So there was no involvement from the IRS anymore. There was no bottleneck. It was all corrected. And that all triggered from having, you know, the liquor commissions coming into the Hawaii small business regulatory board and bringing some issues up. And we were able to fix it. No, that's great. And you're right. Back then you're actually just serving the public, sitting there listening in on the board meeting. And that was a very good outcome. And, you know, I'm glad you're there. Now you're part of the board so we can see more and more of that happening. But the thing is, too, the counties are a big part of this. The counties, most for the most part, do bring forward the rules and rules that they're looking at either amending or proposing. And it does come, you know, in front of our board. And of course, the Honolulu liquor commission is one of the ones here that constantly always brings stuff forward if it's going to be the fee increases or whatever. And in this case, it was something that was just, you know, a passing point. But we kind of, you were there. And we were able. My attention. Yeah. And that was great. So it's a win-win for small business. One message that I think makes sense for people to understand, and I know you know this, but I've had a lot of interaction with some of the elected officials over the year. You know, I've had a lot of conversation about small business issues with Senator Josh Green recently. And there's a lot of interest. And he shares a settlement of a lot of his colleagues. There's a lot of interest in trying to find ways to support small business. They're just not sure exactly what they can do to make it easier. And part of, I think, what the small business community and our board can do is to make sure that people understand that, you know, or make recommendations on maybe how things can be made better. And if we're hearing from the small business community, about these issues and some suggestions for improvement, we pass this along to the governor. It's a way of educating people on how important these issues are and how easy it is to maybe make a fix. That's true. That's true. And, you know, I think the best thing for small business, in this case, less is better than more. You know, from a small business standpoint, there's only limited the amount of time you can do things. When you've got to wear multiple hats, if you have an employee, you have the HR issues, the labor and the department issues. If you have a vehicle, you have transportation, you know, regulations you got to deal with, and, you know, insurance. It goes on and on. You're touching almost every agency within the state and some of the federal. Not even to mention Department of Taxation. Of course. Of course. You know, I mean, that's a huge expense item. And sometimes they're not always consistent, you know. And so there's, we just need to be aware of these situations. And we can be the voice. I mean, we can be, you know, we can carry the football, so to speak, you know, for the small business. Remember, we're an advisory board only, but, you know, we have a chance. And what we need is more input. We need to hear from small businesses. Very good. Well, they go to the website. They can communicate and create awareness that way. And we're going to be doing maybe a little bit more outreach in the years ahead, you know, trying to get out and spread the word a little bit more. But we are out of time. And we're going to have to wrap up, but I appreciate you taking time to come over and speak with us today, Tony. Thank you, Rex. And I think maybe going forward, we need to do this on a more regular basis, make sure that people are aware and following the progress of what the board is doing. I'm with you on that. Thank you very much. This is Business in Hawaii with Reg Baker. We broadcast live every Thursday from 2 to 2.30. And we focus on business topics, successful businesses or organizations that help support small businesses to make them successful in Hawaii. We just talked with the Small Business Regulatory Review Board here in Hawaii. It was a great conversation with Tony Borge, the chairman. And we're looking to see you next week. Until then, aloha.