Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 3025 entitled:

begs leave to report as follows:

The purpose of this measure is to enable, for a limited time, a successor employer who acquires all or a substantial portion of a business to assume the previous employer's unemployment insurance experience rating; provided that certain requirements are met.

Testimony in support of the measure was received from BEI Hawaii. The Department of Labor and Industrial Relations supported the passage of the measure with amendments.

Your Committee finds that this assumption of a previous employer's unemployment insurance experience rating was previously allowed under statute between December 31, 1988, to December 31, 1992.

Your Committee believes that enabling a successor employer who carries on the business of a former employer and who employs the same employees as the former employer should be allowed to assume the former employer's experience rating if the successor employer so chooses. The benefit of allowing such an assumption of experience would be lower start-up costs for the successor employer, thereby increasing the chances of the business' success.

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. 3025 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.