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. 3089 entitled:

begs leave to report as follows:

The purpose of this bill is to address costs of other post employment benefits other than pensions, such as health care costs, that under the new standards established by the Government Accounting Standards Board (GASB) Statements 43 and 45, need to be included in employer financial statements.

Specifically, this bill:

(2) Appropriates monies to the PETF; and

The Department of Accounting and General Services opposed this bill. The Department of Budget and Finance, Hawaii Employer-Union Health Benefits Trust Fund, and Hawaii Government Employees Association submitted comments.

The state's audited financial report must meet standards set forth by GASB. Your Committee finds that new standards established by GASB Statements 43 and 45 will have a profound effect on the State's financial statements.

However, while the PETF is meant to address the costs of other post employment benefits that will soon be necessary to include in an employer's financial statement, your Committee has been informed that the PETF may not meet the standards established by GASB. However, the importance of this issue warrants further discussion.

Accordingly, your Committee has amended this measure by changing its effective date to July 1, 2050, to encourage further discussion.

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. 3089, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 3089, H.D. 1, and be referred to the Committee on Finance.