Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Labor & Public Employment, to which was referred H.B. No. 1797 entitled:

begs leave to report as follows:

The purpose of this bill is to:

The Department of Labor and Industrial Relations testified in support of lowering the maximum taxable wage base and commented on removing the maximum age restriction. The ILWU Local 142 testified in opposition to this measure.

Currently, the unemployment trust fund contains approximately $457 million. Your Committee notes that with a surging economy and one of the lowest unemployment rates in the nation, payment of unemployment claims has had a minimal impact upon the current balance of the unemployment trust fund. By lowering the maximum taxable wage base for contributions to the unemployment insurance fund, your Committee believes that businesses, especially small businesses, will receive tax relief that will allow further stimulation of the economy as these businesses use their cost savings for expanded growth without jeopardizing the stability of the fund.

Your Committee also finds that many children, particularly those working in family-owned businesses, continue to work in the employ of their parents after reaching the age of 21. Removing the maximum age restriction on the unemployment insurance contribution exemption for children who are employed by a parent will further assist these businesses.

Your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1797, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1797, H.D. 1, and be referred to the Committee on Finance.