STAND. COM. REP. NO.  69-16

Honolulu, Hawaii

                , 2016

RE:   H.B. No. 1511

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Energy & Environmental Protection, to which was referred H.B. No. 1511 entitled:

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

begs leave to report as follows:

The purpose of this measure in the form in which it was received by your Committee is to prohibit the Employees' Retirement System from investing in fossil fuel companies and to require divestiture of direct holdings in fossil fuel companies.

     For purposes of a public hearing, your Committee circulated and published notice of a proposed draft of this measure which deleted all content of the original measure and replaced it with new language requiring the Employees' Retirement System to work in conjunction with a reputable firm of investment consultants with experience managing fossil fuel-free portfolios to produce a report to the Legislature on:

     (1)  The impact on the Employees' Retirement System portfolio, including losses and gains realized, of investments in companies in the coal and consumable fuels, integrated oil and gas, and oil and gas exploration and production sectors; and

     (2)  An assessment of the future of fossil fuel investments and the potential effects on the Employees' Retirement System of fossil fuel divestment.

Your Committee received the following testimony on the proposed draft of this measure. 

     The Sierra Club of Hawaii, Sierra Club of Oahu, 350Hawaii.org, and many individuals supported this measure.  The Employees' Retirement System, Hawaii Government Employees Association, and one individual opposed this measure.  One individual submitted comments.

     After deliberation, your Committee has voted to accept the proposed draft of this measure and to amend it further by inserting a new statutory section prohibiting the Employees' Retirement System from investing in any coal company.

     Technical, nonsubstantive amendments were also made for clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Energy & Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1511, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1511, H.D. 1, and be referred to your Committee on Labor & Public Employment.

Respectfully submitted on behalf of the members of the Committee on Energy & Environmental Protection,

____________________________

CHRIS LEE, Chair