STAND. COM. REP. NO. 2356

Honolulu, Hawaii

RE: S.B. No. 2357

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 2357 entitled:

"A BILL FOR AN ACT RELATING TO STATE FUNDS,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Deposit funds into the emergency and budget reserve fund;

(2) Appropriate funds for pre-payment of the State's unfunded accrued pension liability for state employees; and

(3) Appropriate funds for pre-payment of the State's annual required contribution to cover its other post-employment benefit liability under the Hawaii Employer-Union Health Benefits Trust Fund.

Your Committee received comments on this measure from the Department of Budget and Finance.

Your Committee finds that whenever the state general fund balance at the close of each of two successive fiscal years exceeds five percent of the general fund revenues for each of the two fiscal years, article VII, section 6, of the Hawaii State Constitution mandates the Legislature to take certain action regarding the use of the excess general fund revenues. Under the constitutional amendment of Senate Bill No. 2554 passed during the 2016 Regular Session and approved by the voters on November 8, 2016, the Legislature may, among other options, appropriate excess general fund revenues for the pre-payment of the State's pension or other post-employment benefit liability. Senate Bill No. 2554 also retains the option to deposit excess general fund revenues into the emergency and budget reserve fund. This measure utilizes the options provided by Hawaii voters.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2357 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Labor,

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JILL N. TOKUDA, Chair