STAND. COM. REP. NO. 477-00
                                 Page 1

 
                                 STAND. COM. REP. NO. 477-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2519
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 2519 entitled: 

     "A BILL FOR AN ACT RELATING TO FLEXIBLE SPENDING ACCOUNTS,"

begs leave to report as follows:

     The purpose of this bill is to enable the State to offer a
new employee benefit plan by:

     (1)  Requiring that all Flexible Spending Accounts (FSAs)
          participant contributions, interest earned, and
          forfeited participant balances be held in trust outside
          the state treasury so that assets of FSAs are not
          subject to the general creditors of the State; and

     (2)  Requiring that the interest earned on the contributions
          and forfeited participant balances be used to defray
          monthly participant fees and other administrative costs
          of the FSA plan as determined by the department or
          agency charged with the administration of the plan.

     The Department of Human Resources Development, the
University of Hawaii, Hawaii Government Employees Association,
and the United Public Workers testified in support of the bill.
The Hawaii State Teachers Association support the intent of this
bill.  Comprehensive Financial Planning, Inc. offered comments.


 
                                 STAND. COM. REP. NO. 477-00
                                 Page 2

 
     Your Committee has amended this bill by making technical,
nonsubstantive amendments for purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 2519, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 2519, H.D.
1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public
                                   Employment,



                                   ______________________________
                                   TERRY NUI YOSHINAGA, Chair