STAND. COM. REP. NO. 2968

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2448
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Commerce and Consumer Protection and
Transportation and Intergovernmental Affairs, to which was
referred H.B. No. 2448 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 clarify the law relating
to the collection of delinquent pension contributions from the
counties by:

     (1)  Specifying the amount and when each county's share of
          the Employees' Retirement System (ERS) is due;

     (2)  Allowing the State to withhold certain funds if the
          required amounts are not paid by the prescribed dates;
          and

     (3)  Enabling ERS to charge interest on delinquent rates.

     The Department of Budget and Finance and the Employees'
Retirement System testified in favor of the measure.  Testimony
in opposition to the measure was received from the City and
County of Honolulu.

     Your Committees find that considerable concerns were
expressed by the City and County of Honolulu over the timing and
appropriateness of this measure, particularly in view of the City

 
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and County of Honolulu's law suit against the Employees'
Retirement System.  The law suit is over the interpretation of
Act 100, Session Laws of Hawaii 1999, the application of the
excess investment earnings, and how it affects the contribution
payments of all the employer jurisdictions.  This measure does
not allow the court to make a determination on the pending
lawsuit.

     Your Committees have amended the measure by inserting a
flawed effective date to not only ensure further discussion on
the issues, but also to consider deferring any action until a
decision has been reached by the court.

     As affirmed by the records of votes of the members of your
Committees on Commerce and Consumer Protection and Transportation
and Intergovernmental Affairs that are attached to this report,
your Committees are in accord with the intent and purpose of
H.B. No. 2448, as amended herein, and recommend that it pass
Second Reading in the form attached hereto as H.B. No. 2448,
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
                                   Transportation and
                                   Intergovernmental Affairs,



____________________________       ______________________________
CAL KAWAMOTO, Chair                BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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