Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Labor and Education and Military Affairs, to which was referred S.B. No. 1640 entitled:

beg leave to report as follows:

The purpose of this measure is to limit the State's ability to recover moneys from a public school teacher, due to an overpayment error of the Department of Education (DOE), to two years from the date of the overpayment.

Testimony in support of this measure was submitted by the Hawaii State Teachers Association and the Hawaii Government Employees Association. Testimony in opposition to this measure was submitted by the DOE and the Department of Accounting and General Services.

Your Committees find that overpayments may occur within the DOE for a number of different reasons, including reclassification errors, incorrect payment of shortage differentials, payment after the employee has terminated service, or duplicative payments when a teacher transfers between school systems. Your Committees further find that these errors may not always be readily detectable. Thus, if the DOE does not detect the error, then the teacher will most likely not detect the error as well. As a result, the repayment of an overpayment by a teacher can cause an unexpected financial burden, particularly in light of the current economic climate. Therefore, your Committees determine that a reasonable limit on the time within which the DOE can recover overpayment moneys should be imposed in order to balance the interests of both the DOE and the teachers.

As affirmed by the records of votes of the members of your Committees on Labor and Education and Military Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1640 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.