STAND. COM. REP. NO. 228

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1281
                                        S.D. 1




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

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 1281 entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to amend the Employees'
Retirement System's (ERS) ability to hire personnel.

     Specifically, the measure enables the ERS to hire an
assistant administrator and a chief investment officer.  The
measure also deletes the ERS's ability to hire its own legal
counsel.

     Your Committee received testimony in support of the measure
from the Hawaii State Teachers Association.  The ERS submitted
comments on the measure.

     Your Committee finds that enabling the ERS's Board of
Trustees to hire its own assistant administrator and chief
investment officer would provide the ERS with more flexibility in
managing its personnel and investments.  With regard to the
deletion of the ERS's authority to hire its own legal counsel,
your Committee finds that since the repeal of that authority in
Chapter 103, Hawaii Revised Statutes, relating to procurement
practices, and the subsequent enactment of the State's Uniform
Procurement Code in 1995, which disallowed the hiring of outside
counsel, the ERS has not been able to hire its own attorney.

 
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                                   STAND. COM. REP. NO. 228
                                   Page 2


Therefore, the deletion is housekeeping in nature and was
included to conform Section 88-29, Hawaii Revised Statutes, with
the intent of Chapter 103D, Hawaii Revised Statutes.

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

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 1281, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 1281, S.D. 1, and be referred to the Committee on Ways and
Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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