STAND. COM. REP. NO. 594

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1282
                                        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 S.B.
No. 1282, S.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to authorize the Employees'
Retirement System to invest in real estate through limited
liability companies.

     Your Committee finds that limited liability companies
provide advantages to an investor because of their elimination of
federal and state tax, centralized management, and limited
liability for its owners.  Allowing the Employees' Retirement
System to invest in this type of entity can provide it with
different avenues for investment while also limiting the
Employees' Retirement System's liability from personal injury and
property damage lawsuits.

     Your Committee has amended this bill by deleting the phrase
on page 8:  "similar entities that would protect the system's
interests,".  Other amendments are of a technical, nonsubstantive
nature.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your

 
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                                   STAND. COM. REP. NO. 594
                                   Page 2


Committee is in accord with the intent and purpose of S.B. No.
1282, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 1282, 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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