1126
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO FLEXIBLE SPENDING ACCOUNTS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 78, Hawaii Revised Statutes, is amended
 
 2 by adding to part II a new section to be appropriately designated
 
 3 and to read as follows:
 
 4           "78-   Flexible spending accounts.  (a)  As used in
 
 5 this section:
 
 6      (1)  "Flexible spending accounts" and the "plan" mean a
 
 7           flexible spending accounts plan authorized by section
 
 8           125 of the Internal Revenue Code of 1986, as amended,
 
 9           and established in accordance with this part; and
 
10      (2)  "Contributions" means the employee pretax compensation
 
11           reductions contributed to the plan.
 
12      (b)  In addition to any other powers and duties authorized
 
13 by law, the department or agency charged with administration of
 
14 the flexible spending accounts may enter into all contracts
 
15 necessary to establish, administer, or maintain the plan.
 
16      (c)  The contributions, interest earned, and forfeited
 
17 participant balances shall be held in trust for the exclusive
 
18 benefit of the participants and the plan.  The department or
 
19 agency charged with administration of the plan shall have the
 

 
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 1 authority to hold these funds in trust outside the state
 
 2 treasury.
 
 3      (d)  The interest earned and forfeited participant balances
 
 4 shall be used to defray participant fees and other administrative
 
 5 costs as determined by the department or agency charged with
 
 6 administration of the plan.
 
 7      (e)  The contributions, interest earned, and forfeited
 
 8 participant balances shall not be subject to the general
 
 9 creditors of the State."
 
10      SECTION 2.  New statutory material is underscored.
 
11      SECTION 3.  This Act shall take effect upon its approval.
 
12 
 
13                           INTRODUCED BY:  _______________________
 

 
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