STAND. COM. REP. NO. 408

Honolulu, Hawaii

RE: S.B. No. 1118

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Labor, Culture and the Arts, to which was referred S.B. No. 1118 entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Authorize the Employees' Retirement System to recover overpaid benefit payments;

(2) Require the Employees' Retirement System to adopt rules to effectuate the maximum recovery of overpayments; and

(3) Allow the Board of Trustees or the Executive Director of the Employees' Retirement System to waive the recovery of an overpayment in cases of bona fide hardship or where the costs of recovery would exceed the amount expected to be recovered.

Your Committee received comments on this measure from the Employees' Retirement System.

Your Committee finds that existing law is not clear regarding the Employees' Retirement System's ability to recover overpaid benefit payments. This measure will strengthen the Employees' Retirement System's ability to recover overpaid benefit payments by declaring overpayments to be debts due and owing to the Employees' Retirement System and clarifying that overpayments are legally collectable. This measure will facilitate rulemaking for maximum recovery, the filing of legal collection actions and liens against real property of overpaid recipients, and the filing of claims against the estate of deceased recipients.

Your Committee has amended this measure by:

(1) Inserting language proposed by the Employees' Retirement System to clarify that in addition to the remedies prescribed elsewhere in chapter 88, Hawaii Revised Statutes, for the recovery of benefits, recovery of an overpayment shall be made in accordance with applicable state law as well as federal regulations;

(2) Inserting language proposed by the Employees' Retirement System to clarify that the Employees' Retirement System need only adopt rules pursuant to chapter 91, Hawaii Revised Statutes, as may be necessary to effectuate the maximum recovery of retirement benefit overpayments;

(3) Inserting an effective date of January 1, 2051, to encourage further discussion; and

(4) 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 Labor, Culture and the Arts that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1118, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1118, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Labor, Culture and the Arts,

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BRIAN T. TANIGUCHI, Chair