STAND. COM. REP. NO. 326-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2553
                                     




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 2553 entitled: 

     "A BILL FOR AN ACT RELATING TO EMPLOYMENT SECURITY,"

begs leave to report as follows:

     The purpose of this bill is to provide a special transfer of
funds to Hawaii for federal fiscal years ending 2000, 2001, and
2002, in accordance with the federal Balanced Budget Act (BBA) of
1997.

     These fund transfers, called "Reed Act" distributions, are
made whenever the federal Unemployment Trust Fund accounts exceed
their statutory ceilings.  The BBA also specified that these
excess funds be used exclusively for administrative expenses,
deleted provisions requiring states to enact a state
appropriation law to address the use of the funds, and limited
the period within which the funds must be obligated.

     Your Committee finds that this bill will ensure that the
State will receive its share of Reed Act funding for unemployment
insurance administrative expenses.  Hawaii's share of the Reed
Act transfer for federal fiscal year 2000 was $614,065.  For each
of fiscal years 2001 and 2002, Hawaii's portion of the
distribution is estimated at $997,618.


 
 
 
 
 
                                 STAND. COM. REP. NO. 326-00
                                 Page 2

 
     The Department of Labor and Industrial Relations testified
in support of this measure, noting that it intends to use the
Reed Act funding to support the Unemployment Insurance Division's
ongoing efforts to implement an interactive voice response
system.  This would enable claimants to file claims and weekly
certifications by telephone.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 2553 and recommends that it pass Second Reading and
be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public
                                   Employment,



                                   ______________________________
                                   TERRY NUI YOSHINAGA, Chair