STAND. COM. REP. NO. 1483

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1035
                                        H.D. 1
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 1035, H.D. 1, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT
     SYSTEM,"

begs leave to report as follows:

     The purpose of this bill is to require the Board of Trustees
of the Employees' Retirement System to appoint an assistant
administrator and a chief investment officer not subject to civil
service laws, and to allow the system to retain its own legal
counsel.

     Your Committee finds that investments made by the Board of
Trustees under section 88-119, Hawaii Revised Statutes, which
provides funding needed to cover retirement benefits for all
public employees of the State and the counties, can also be used
to provide venture capital to Hawaii businesses and thereby
assist Hawaii's struggling economy.

     Accordingly, your Committee encourages the Board of Trustees
of the Employees' Retirement System to invest in Hawaii venture
capital opportunities as may be permitted by law, and further
encourages the Board to evaluate the performance of these
companies if their performance is not as expected.


 
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                                   STAND. COM. REP. NO. 1483
                                   Page 2


     Upon further consideration, your Committee has deleted the
contents of this bill and replaced it with language similar to
S.B. No. 1281, S.D. 2, which, among other things, requires the
Board of Trustees to appoint a chief investment officer not
subject to civil service laws.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1035, H.D. 1, S.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as H.B. No. 1035,
H.D. 1, S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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