Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 2459 entitled:

begs leave to report as follows:

The purpose of this bill is to enable the State to meet its statutory obligations to cover the employer's share of contributions for Social Security/Medicare costs.

Your Committee has received a message from the Governor dated February 5, 2002:

The Department of Budget and Finance (B&F) testified in support of this measure.

According to B&F, because a Convention Center Enterprise Special Fund was not established to provide the necessary funds to operate the Hawaii Convention Center (Center), there was concern that the Center would not be able to meet its operations and events costs. To offset this anticipated shortfall, section 5 of Act 259, Session Laws of Hawaii 2001, authorized the Governor to transfer up to $15,000,000 from any general fund savings in the General Appropriations Act of 2001 to assist the Hawaii Convention Center. The sum of $10,125,000 that had been earmarked for the payment of Social Security and Medicare expenses was diverted for this purpose. Because the fund balances for Social Security/Medicare costs may not be sufficient to cover the costs for the remainder of fiscal year 2001-2002, this emergency appropriation has been requested by the Governor to reimburse the State Retirement Program.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2459 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.