STAND. COM. REP. NO. 1122

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 499
                                        H.D. 2
                                        S.D. 1




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

Sir:

     Your Committees on Commerce and Consumer Protection and
Water, Land, and Hawaiian Affairs, to which was referred H.B.
No. 499, H.D. 2, entitled: 

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

beg leave to report as follows:

     The purpose of this measure is to provide conservation and
resources law enforcement officers with the same retirement
benefits as police officers and firefighters.

     Specifically, the measure:

     (1)  Converts Conservation and Resources Law Enforcement
          Officers of the Department of Land and Natural
          Resources from Class C, noncontributory members to
          Class A, contributory members of the Employees'
          Retirement System (ERS);

     (2)  Allows Conservation and Resources Law Enforcement
          Officers with at least twenty-five years of creditable
          service to retire irrespective of age without having
          their pension actuarily reduced; provided that their
          last five years of credited service were earned as a
          Conservation and Resources Law Enforcement Officer;


 
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     (3)  Provides Conservation and Resources Law Enforcement
          Officers with a two and one-half percent pension
          accrual rate; and

     (4)  Requires that Conservation and Resources Law
          Enforcement Officers pay twelve and two-tenths percent
          of their compensation to the ERS for enhanced
          retirement benefits.

     The Department of Land and Natural Resources, the Hawaii
Government Employees Association, and two Conservation and
Resources Law Enforcement Officers of the Department of Land and
Natural Resources testified in support of the measure.  The
Department of Budget and Finance opposed passage of the measure.
The Employees' Retirement System commented on the bill.

     Your Committees have amended the measure by:

     (1)  Deleting the majority of the amendments of the measure
          that convert the ERS membership status of Conservation
          and Resources Law Enforcement Officers from Class C,
          noncontributory to Class A, contributory but retaining
          the provisions that allow Conservation and Resources
          Law Enforcement Officers to retire after twenty-five
          years of service irrespective of age;

     (2)  Adding provisions that establish the Trustees of the
          Office of Hawaiian Affairs as Class A, contributory
          members of the ERS; and

     (3)  Changing the effective date of the measure from upon
          approval to July, 1, 1999.

     During its deliberations on similar retirement bills, your
Committees found that conflicting views were presented as to
whether Class C noncontributory members actually wanted to
convert their Employees Retirement System membership over to
Class A contributory membership, since converting would in
essence, reduce their net monthly "take home" pay.

     To alleviate any dispute over this issue, your Committees
therefore decided to amend the measure by deleting the majority
of the proposed amendments and retaining only the amendment that
allows Conservation and Resources Law Enforcement Officers to
retire without penalty after twenty-five years of service in that
capacity.

     Your Committees recognize that the proposal may not be the
ideal solution to the issue.  However, your Committees understand

 
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that there are other options currently under consideration by the
Legislature and has therefore crafted the amended measure to keep
the issue alive for further discussion.

     As affirmed by the records of votes of the members of your
Committees on Commerce and Consumer Protection and Water, Land,
and Hawaiian Affairs that are attached to this report, your
Committees are in accord with the intent and purpose of H.B.
No. 499, H.D. 2, as amended herein, and recommend that it pass
Second Reading in the form attached hereto as H.B. No. 499,
H.D. 2, S.D. 1, and be referred to the Committee on Ways and
Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Commerce and
                                   Consumer Protection and Water,
                                   Land, and Hawaiian Affairs,



____________________________       ______________________________
COLLEEN HANABUSA, Chair            BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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