Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor & Public Employment, to which was referred H.B. No. 704 entitled:

begs leave to report as follows:

The purpose of this bill is to assist unemployed individuals and to support efforts to develop a skilled workforce by:

DLIR, Mayor of the County of Hawaii, Mayor of the County of Kauai, the Office of Economic Development of the County of Maui, the Office of Economic Development of the County of Kauai, Kaua'i Economic Development Board, Maui Electric Company, Hawaii Business League, ILWU Local 142, and several concerned individuals testified in support of this measure.

As a result of the Balance Budget Act of 1997, $31,000,000 was deposited into the unemployment insurance trust fund account. However, these funds were not available for workforce development because federal restrictions require that these funds be strictly used for UI benefit payments. Recent amendments to federal law have expanded the means by which these funds can now be used to include programs geared toward workforce development.

Your Committee finds that efforts to improve the skills of Hawaii's workforce are ongoing and that the additional resources provided through the use of Reed Act funds will go a long way toward developing and maintaining a highly skilled workforce.

However, your Committee is concerned with the open-ended fiscal plan for the use of these funds that DLIR presented in its testimony. Your Committee emphasizes that a majority of the funding should be used to assist the counties in developing their workforce programs and that greater fiscal accountability needs to be established in the plan proposed by DLIR.

Accordingly, your Committee has amended this measure by changing the appropriation to $1 to promote further discussion and respectfully urges the Committee on Finance to review the plan submitted by DLIR and determine the best options for the use of these funds. Technical, nonsubstantive amendments were also made for clarity, consistency, and style.

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. 704, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 704, H.D. 1, and be referred to the Committee on Finance.