STAND. COM. REP. NO. 2707

Honolulu, Hawaii

RE:    S.B. No. 2813

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 S.B. No. 2813 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 allow the Employees' Retirement System to retain or dispose of real estate that it acquires by foreclosure, in enforcement of security, or in satisfaction of debts in the same manner as its other investments in interest in real property.

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

     Your Committee finds that, under current law, the Board of Trustees of the Employees' Retirement System is required to sell all real estate, other than leasehold interests, that is acquired by foreclosure, in enforcement of security, or in satisfaction of debts within five years after acquisition unless extended by the Governor.  With regard to leasehold interests acquired by foreclosure, in enforcement of security, or in satisfaction of debts, the Board is required to sell those interests within one year after acquisition unless extended by the Governor.  Your Committee also finds that there are no similar requirements imposed on the Employees' Retirement System's other real estate investments.  Your Committee believes that this measure will enable the Board to make long-term plans for affected properties that are necessary for the prudent management of the Employees' Retirement System's real estate 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 S.B. No. 2813 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