STAND. COM. REP. NO. 508

Honolulu, Hawaii

RE:    S.B. No. 675

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committees on Education and Commerce and Consumer Protection, to which was referred S.B. No. 675 entitled:

"A BILL FOR AN ACT RELATING TO STUDENT LOAN FUNDS,"

beg leave to report as follows:

     The purpose and intent of this measure is to repeal section 309-1.5, Hawaii Revised Statutes, which establishes a not-for-profit corporation to acquire certain educational loan notes.

     Your Committees received testimony in support of this measure from USA Funds, the parent company of Secondary Market Services Corp. — Hawaii; American Savings Bank; the Travel Institute of the Pacific; and Hawaii Pacific University.

     Your Committees find that the purpose for which Secondary Market Services Corp. — Hawaii was created under section 309-1.5, Hawaii Revised Statutes, expired with the enactment of the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152).  As such, the need for a student loan secondary market in Hawaii has been eliminated.  Your Committees further find that repealing section 309-1.5, Hawaii Revised Statutes, will permit Secondary Market Services Corp. — Hawaii to use its financial assets to continue to support higher education through educational and charitable activities, such as providing scholarship and grants.

     Your Committees have amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Education and Commerce and Consumer Protection that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 675, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 675, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committees on Education and Commerce and Consumer Protection,

____________________________ ROSALYN H. BAKER, Chair

____________________________ JILL TOKUDA, Chair