STAND. COM. REP. NO. 293-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2404

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.B. No. 2404 entitled:

"A BILL FOR AN ACT RELATING TO FEDERAL TAX QUALIFICATION OF THE EMPLOYEES' RETIREMENT SYSTEM,"

begs leave to report as follows:

The purpose of this bill is to preserve the tax qualified status of the State Employees' Retirement System (ERS) by:

(1) Conforming state law relating to public pension plans to certain provisions of the Internal Revenue Code (Code); and

(2) Defining "compensation" to satisfy Code requirements that a member's benefit be "definitely determinable" since it is a key component in determining a member's pension benefits.

This bill also grants the ERS Board of Trustees (Board) expedited rulemaking authority to adopt administrative rules to comply with the changing requirements of Section 401(a) of the Code on a timely basis. Under this bill, these rules would be exempt from the public notice, public hearing, and gubernatorial approval requirements of chapter 91, Hawaii Revised Statutes.

 

The ERS and the Department of Budget and Finance testified in support of this measure.

Your Committee finds that Section 401(a) of the Code permits the Board little discretion as to the rules that must be adopted to meet the federal requirements. Your Committee further finds that the public interest will not be served by subjecting the rules to all of the rulemaking requirements of chapter 91.

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. 2404 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,

 

____________________________

MARCUS R. OSHIRO, Chair