STAND. COM. REP. NO.  149

Honolulu, Hawaii

                , 2011

RE:   H.B. No. 1077

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committees on Labor & Public Employment and Economic Revitalization & Business, to which was referred H.B. No. 1077 entitled:

"A BILL FOR AN ACT RELATING TO EMPLOYMENT SECURITY LAW,"

beg leave to report as follows:

     The purpose of this bill is to authorize the payment of interest for advances made under Title XII, Section 1202(b) of the Social Security Act, as amended, from the Employment and Training Fund.  In addition, the measure authorizes the Director of Labor and Industrial Relations to raise funds for such payments by increasing the Employment and Training Fund assessment in increments of .01 percent retroactive to January 1, 2011.

     Department of Labor and Industrial Relations testified in support of the bill.  The Chamber of Commerce of Hawaii commented on the measure.   

     Your Committees note that the insolvency of the Unemployment Trust Fund in December 2010, required the State to borrow money from the federal government under Title XII, Section 1202(b) of the Social Security Act, as amended.

     Under Act 2, Session Laws of Hawaii 2010, the Director of Labor and Industrial Relations is authorized to assess employers in amounts sufficient to pay the principal and interest of the loan.  However, your Committees also find the assessment was required to be distributed in a fair and equitable manner.   

     This bill establishes an appropriate mechanism to collect the authorized assessments in a fair and equitable manner and its passage is necessary to repay the interest due on the federal funds on September 30, 2011.  

     Your Committees have amended this bill to allow the employers subject to the Employment and Training Fund assessment to be refunded the increased rate amount paid if payment of the interest on Title XII advances is waived by federal law.

     As affirmed by the records of votes of the members of your Committees on Labor & Public Employment and Economic Revitalization & Business that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1077, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1077, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Labor & Public Employment and Economic Revitalization & Business,

____________________________ ANGUS L.K. MCKELVEY, Chair

____________________________ KARL RHOADS, Chair