Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Labor, to which was referred H.B. No. 1157 entitled:

begs leave to report as follows:

The purpose of this measure is to minimize the administrative processing of refunding contributions for the employees mandatorily excluded from the Social Security coverage.

The Employees' Retirement System submitted testimony in support of this measure.

Your Committee finds that under existing law, nonresident aliens holding F-1, J-1, M-1, or Q-1 visas are excluded from Social Security coverage. These individuals are classified as Class B members who are not assessed FICA or Medicare taxes, unlike other members who are enrolled as Class A or Class C members. Also classified as Class B members are those individuals who elected not to participate in Social Security and police officers and firefighters hired on or prior to March 1, 1986.

Your Committee determines that classifying employees hired after June 30, 1984, and not covered by Social Security, as Class C members will minimize the processing of payroll adjustments and refunds currently necessary once a nonresident alien obtains a green card or otherwise becomes covered by Social Security.

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

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 H.B. No. 1157, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1157, S.D. 1, and be referred to the Committee on Ways and Means.