STAND. COM. REP. NO. 1267-04
Honolulu, Hawaii
, 2004
RE: S.B. No. 2878
S.D. 2
H.D. 2
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-Second State Legislature
Regular Session of 2004
State of Hawaii
Sir:
Your Committee on Finance, to which was referred S.B. No. 2878, S.D. 2, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO THE FEDERAL TAX LIMIT ON COMPENSATION APPLICABLE TO THE EMPLOYEES' RETIREMENT SYSTEM,"
begs leave to report as follows:
The purpose of this bill is to preserve the tax-qualified status of the state Employees Retirement System (ERS) by conforming state law to the provisions of Section 401(a)(17) of the Internal Revenue Code.
Specifically, this bill:
(1) Applies the federal tax limits on pension compensation effective July 1, 1996; and
(2) Adds a nontax-qualified arrangement to protect benefits accrued in excess of the federal tax limits for the period July 1, 1996, through June 30, 2004.
ERS supported the bill and provided suggested amendments. The Department of Budget and Finance supported the intent of this bill.
Accordingly, your Committee has amended this bill by, among other things:
(1) Clarifying the nontax-qualified benefits;
(2) Clarifying the payment of nontax-qualified benefits;
(3) Specifying the source of funding; and
(4) Making other technical, nonsubstantive amendments for clarity and style.
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 S.B. No. 2878, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2878, S.D. 2, H.D. 2.
Respectfully submitted on behalf of the members of the Committee on Finance,
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____________________________ DWIGHT Y. TAKAMINE, Chair |
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