STAND. COM. REP. NO.368-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2805

H.D. 1




Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committee on Labor and Public Employment, to which was referred H.B. No. 2805 entitled:


begs leave to report as follows:

The purpose of this bill, as received, is to provide for the regulation of privatization contracts to:

(1) Provide for a review of contract costs;

(2) Monitor and enforce privatization services;

(3) Provide public access to information; and

(4) Provide for annual reporting of the efficiency and effectiveness of the services provided by the private contractor.

The United Public Workers, Office of Information Practices, and Hawaii Government Employees Association testified in support of this measure. The Department of Taxation submitted comments.

Although your Committee is concerned about the regulation of privatization contracts, your Committee feels that the needs of retired workers and economically troubled employers are more pressing during these troubled economic times. Accordingly, your Committee has amended this measure by replacing the entire contents of this bill. Specifically, this bill was amended to:

(1) Provide special compensation annually to qualified pensioners beginning July 1, 2002;

(2) Establish an Employers' Worker Retention Special Fund (Fund) to provide assistance to employers facing economic hardship; and

(3) Transfer an unspecified amount from the Premium Supplementation Fund to be deposited into the Fund.

Your Committee designed the Fund to facilitate further discussion of ways to offset health care and other costs faced by employers without violating the Employee Retirement Income Security Act exemption of the Hawaii Prepaid Health Care Act.

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. 2805, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2805, H.D. 1, and be referred to the Committee on Finance.

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