Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 809 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the use of available funds for automation purposes for the administration of benefits.

This measure also appropriates $5 million dollars from the special fund for disability benefits for automation of the disability compensation division for the processing of workers' compensation claims.

Testimony in support of this measure was submitted by the Department of Labor and Industrial Relations (DLIR) and the Employers' Chamber of Commerce. Testimony in opposition to this measure was submitted by the ILWU Local 142.

Your Committee finds that under the current law, the special fund for disability benefits is utilized primarily for the payment of claims filed by unemployed disabled individuals and by disabled employees of noncomplying or bankrupt employers in accordance with section 392-65, Hawaii Revised Statutes. Your Committee further finds that there is a great need to upgrade the computer systems and software that is used by the Disability Compensation Division in order to enhance the efficiency of processing workers' compensation claims and to ensure that injured employees will receive their compensation benefits on a timely basis. DLIR has indicated that the fund currently carries a balance in excess of $8,200,000; however, average expenses paid out of the fund only equal approximately $156,000 per year. Additionally, DLIR has represented that the Auditor has expressed concern regarding the unnecessary surplus contained within the special fund. Therefore, your Committee determines that purpose of the special fund should be expanded to finance improved automation efforts within the Disability Compensation Division.

Your Committee has amended this measure by changing the effective date of the Act to July 1, 2050 to facilitate further discussion on the matter.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 809, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 809, S.D. 1, and be referred to the Committee on Ways and Means.