Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 1145 entitled:

begs leave to report as follows:

The purpose of this measure is to conform state unemployment insurance laws to federal law.

Testimony in support of the measure was received from the Department of Labor and Industrial Relations.

Your Committee finds that the measure provides a special transfer of funds to Hawaii for federal fiscal years 2000, 2001, and 2002, in accordance with the Balanced Budget Act of 1997. These fund transfers, called Reed Act distributions, are made to all states whenever the federal Unemployment Trust Fund accounts exceed their statutory ceilings. In order for the State to qualify for the receipt of future Reed Act disbursements, the State must amend its unemployment insurance laws to ensure that the funds received under the Reed Act distributions are only used for expenses associated with unemployment insurance administration costs.

Your Committee believes that the measure will ensure that the State continues to receive future Reed Act distributions and will protect against the loss of any future federal moneys in this area.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1145 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.