STAND. COM. REP. NO. 2309

Honolulu, Hawaii

RE:    S.B. No. 2592

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committee on Human Services, to which was referred S.B. No. 2592 entitled:

"A BILL FOR AN ACT RELATING TO UNIVERSAL CHILDREN'S SAVINGS ACCOUNTS,"

begs leave to report as follows:

     The purpose and intent of this measure is to create a universal children's savings account program under the Department of Budget and Finance.

     Your Committee received testimony in support of this measure from the Hawai‘i Alliance for Community-Based Economic Development, Kewalo Hawaiian Homestead Community Association, and Sovereign Councils of the Hawaiian Homelands Assembly.  Your Committee received comments on this measure from the Department of Budget and Finance.

     Your Committee finds that universal children's savings accounts are part of a broader asset building agenda that seeks to foster financial independence and self-sufficiency for Hawaii's youth and families.  It provides individuals with tangible incentives to save and helps individuals gain financial success.

     Your Committee notes that according to the Department of Budget and Finance's testimony, this measure, as it is currently drafted, raises concerns including the following:

     (1)  The future liability to the State to fund the program as a permanent recurring expense;

     (2)  The Department of Budget and Finance's ability to embark on a program of this magnitude without additional resources in staffing and costs for the initial establishment and ongoing operation of a program; and

     (3)  The potential difficulty in attracting a third-party administrator for a Hawaii resident-based program due to the limited group of potential participants.

     Your Committee has therefore amended this measure by:

     (1)  Extending the effective date to July 1, 2014, to provide additional time so that a universal children's savings account program can be properly developed; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2592, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2592, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Human Services,

____________________________

SUZANNE CHUN OAKLAND, Chair