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.C.R. No. 109 entitled:

begs leave to report as follows:

The purpose of this measure is to request the Employees' Retirement System to examine its investments to determine whether any of its investments are in companies that inadvertently support terrorist activities through their business dealings with countries sponsoring terrorism.

The Employees' Retirement System (ERS) submitted comments on this measure.

Your Committee finds that in the aftermath of September 11, 2001, this country has seen a heightened sense of awareness regarding terrorists and those who support terrorism. One method of assuring that society does not inadvertently support terrorism is to practice Socially Responsible Investment. This involves balancing the investor's financial aims and needs with an investment's impact on society by the operation of the company in which the investor is investing. Your Committee also finds that while ERS has taken steps to ensure that the investment portfolio is in compliance with all applicable laws and regulations, continued discussions with and guidance from other public pensions systems and federal agencies are needed to determine what qualifies a company as a supporter of terrorism. Therefore, your Committee supports the adoption of this measure.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 109 and recommends its adoption.