Appropriates $10 million in Reed Act funds to improve the services of the unemployment insurance and workforce development divisions through information technology upgrades. Allows funds to be used for capital expenditures for unemployment and employment service programs.

A BILL FOR AN ACT

RELATING TO MONEYS CREDITED TO THE STATE'S ACCOUNT IN THE UNEMPLOYMENT TRUST FUND PURSUANT TO SECTION 903 OF THE SOCIAL SECURITY ACT.

SECTION 1. This Act is aimed at workforce development. This Act shall be known as "The Workforce Development Act of 2006." In the twenty-first century economy, small and rapid growing businesses have powered Hawaii's job growth and helped sustain the lowest unemployment rate in the nation. The legislature recognizes that the challenges and opportunities for Hawaii are one and the same: that Hawaii's workforce must be competitive to grow the economy, and the economy needs a skilled workforce to grow.

The intent of the legislature is to utilize Hawaii's portion of Federal Reed Act moneys to improve the administration and infrastructure of Hawaii's employee and employer services provided by the department of labor and industrial relations and its partners in the four county governments. The use of these funds will assist in creating a comprehensive and coordinated workforce system that enables and sustains economic development, self sufficiency, and global competitiveness.

The purpose of this Act is to appropriate Federal Reed Act moneys to the department of labor and industrial relations for the following initiatives:

Further, this Act is also intended to conform to the provisions of P.L. 107-147, Temporary Extended Unemployment Compensation Act of 2002 signed by the President of the United States of America on March 9, 2002. This amendment is needed because the requirements for the Reed Act funds distributed in 2002 differ from the prior special Reed Act distribution made in 2002 under the Balanced Budget Act of 1997. Under the Balanced Budget Act of 1997, Reed Act moneys were restricted to unemployment insurance administration purposes only. Section 383-123, Hawaii Revised Statutes, must be amended to conform to the Temporary Extended Unemployment Compensation Act of 2002 Reed Act amendments before Hawaii can use the distribution of $31,000,000.

SECTION 2. Section 383-123, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) Administrative use. Moneys credited to the account of this State in the unemployment trust fund by the Secretary of the Treasury of the United States pursuant to section 903 of the Social Security Act, as amended, may be requisitioned and used for the payment of benefits and for the payment of expenses incurred for the administration of this State's unemployment compensation law and public employment offices pursuant to a specific appropriation of the legislature; provided that the expenses are incurred and the money is requisitioned after the enactment of an appropriation law which: (1) specifies the purposes for which the moneys are appropriated and the amounts appropriated therefor, (2) limits the period within which the moneys may be obligated to a period ending not more than two years after the date of the enactment of the appropriation law, and (3) limits the amount which may be obligated [during a twelve-month period beginning on July 1 and ending on the next June 30] to an amount which does not exceed the amount by which (A) the aggregate of the amounts credited to the account of this State pursuant to section 903 of the Social Security Act, as amended, [during the same twelve-month period and the thirty-four preceding twelve-month periods] exceeds (B) the aggregate of the amounts obligated pursuant to this subsection and charged against the amounts credited to the account of this State [during such thirty-five twelve-month periods. For the purposes of this subsection, amounts which are obligated for administration or paid out for benefits shall be charged against equivalent amounts which were first credited and which are not already so charged; except that no amount obligated for administration during a twelve-month period specified herein may be charged against any amount credited during such twelve-month period earlier than the thirty-fourth preceding such period].

Moneys credited to the account of this State pursuant to section 903 of the Social Security Act, as amended, may not be withdrawn or used except for the payment of benefits and for the payment of expenses for the administration of this chapter pursuant to this subsection.

The appropriation, obligation, and expenditure or other disposition of [money] moneys appropriated under this subsection shall be accounted for in accordance with standards established by the United States Secretary of Labor. Moneys appropriated for the payment of expenses of administration pursuant to this subsection shall be requisitioned as needed for the payment of obligations incurred under the law appropriating the moneys and, upon requisition, shall be deposited in the employment security administration fund from which such payments shall be made. Moneys so deposited [shall], until expended, shall remain a part of the unemployment compensation fund and, if it will not be expended within one week after it is withdrawn from the unemployment trust fund, shall be returned at the earliest practical date to the Secretary of the Treasury of the United States for credit to this State's account in the unemployment trust fund.

(c) Notwithstanding subsection (b), moneys credited to the State's account in federal fiscal years ending in 2000, 2001, and 2002 shall be used solely for the administration of the unemployment compensation program and are not subject to the specific appropriation requirements of subsection (b)[.]; except that moneys credited in calendar year 2002 with respect to P.L. 107-147 shall not be subject to the conditions of this subsection or the two-year limitation requirement specified in subsection (b)."

SECTION 3. There is appropriated out of the unemployment trust fund from moneys deposited pursuant to section 383-123(b), Hawaii Revised Stautes, the sum of $10,000,000, or so much thereof as may be necessary for fiscal year 2006-2007, for the purposes specified in this Act; provided that of the $10,000,000 appropriated for the 2006-2007 fiscal year:

to improve employer outreach and services, labor force pool expansion, and capacity building and to fund some shared costs for the operations of the one-stop career centers within each county. Additionally, these appropriated funds may be used to provide capital expenditures for unemployment and employment services programs and other Reed Act allowable costs as defined by the United States department of labor and agreed upon by both the department of labor and industrial relations and the four local workforce investment boards; and

(2) The sum of $1,452,225 shall be allocated to the department of labor and industrial relations for improvement of computer systems. Additionally, these appropriated funds may be used to provide capital expenditures for unemployment and employment services programs and other Reed Act allowable costs as defined by the United States Department of Labor and agreed upon by both the department of labor and industrial relations and the four local workforce investment boards.

The sum appropriated shall be expended by the department of labor and industrial relations for the purposes of this Act.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take July 1, 2006.