STAND. COM. REP. NO. 721

Honolulu, Hawaii

RE: S.B. No. 503

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 503, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO SALARY OVERPAYMENTS,"

begs leave to report as follows:

The purpose and intent of this measure is to increase government accountability by addressing the ongoing issue of salary or wage overpayments.

Specifically, this measure:

(1) Requires each department to deduct the department's total salary or wage overpayment from the department's budget request for the following fiscal biennium;

(2) Requires employees who exhaust their sick or vacation leave to be placed on a manual accounting system; and

(3) Removes the two-year statute of limitations on the determination and notice of salary or wage overpayment.

Your Committee received written comments in support of this measure from the Department of Accounting and General Services and Department of Transportation.

Your Committee received written comments on this measure from the Department of Education, Department of Budget and Finance, and University of Hawaii.

Your Committee finds that from November 2016 to October 2017, state departments and agencies overpaid salaries in an amount exceeding $415,000 each month. Your Committee believes that holding state departments and agencies accountable for salary overpayments will decrease overpayment waste and increase state efficiency.

Your Committee has amended this measure by:

(1) Exempting the University of Hawaii from the requirement to place employees who exhaust sick or vacation leave on a manual accounting system; and

(2) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

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. 503, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 503, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair