STAND. COM. REP. NO. 3400

Honolulu, Hawaii

RE:    H.B. No. 2264

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred H.B. No. 2264 entitled:

"A BILL FOR AN ACT RELATING TO INVESTMENT AUTHORITY OF THE EMPLOYEES' RETIREMENT SYSTEM,"

begs leave to report as follows:

     The purpose and intent of this measure is to authorize the Employees' Retirement System to dispose of real property acquired through foreclosure, enforcement of security, or satisfaction of debt in the same manner as other investments in real property acquired through other means.

     Your Committee received written comments in support of this measure from the Department of Budget and Finance and the Employees' Retirement System.

     Your Committee finds that the provisions requiring the disposition of certain real property investments within five years of acquisition were enacted when the Employees' Retirement System was prohibited from directly investing in real estate.  Your Committee believes that because the Employees' Retirement System is now authorized to directly invest in real estate, the distinction regarding how the real property was acquired is no longer relevant.  Repealing the restrictions on how long the Employees' Retirement System may hold certain real estate investments will eliminate an unnecessary interference with the prudent management of the investment portfolio.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2264, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair