THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII
A BILL FOR AN ACT
RELATING to Individual housing accounts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
individual housing accounts savings program
§ -1 Definitions. As used in this chapter:
"Board" means the individual housing accounts savings board.
"Employee" means a person who is eligible to participate in the program as established in section -4.
"Employer" includes any individual, partnership, association, joint-stock company, trust, corporation, the personal representative of the estate of a deceased individual or the receiver, trustee, or successor of any of the same, employing any person, but shall not include the State or any political subdivision thereof or the United States.
"Program" means the individual housing accounts savings program.
§ -2 Individual housing accounts savings board. (a) There is established within the department of budget and finance for administrative purposes the individual housing accounts savings board.
(b) The board shall consist of eight members as follows:
(1) The director of finance or the director's designee, who shall serve as chairperson of the board;
(2) The director of human services or the director's designee;
(3) The director of commerce and consumer affairs or the director's designee;
(4) A representative of employers, to be appointed by the governor;
(5) A representative with experience in the field of investments, to be appointed by the governor;
(6) A representative of an association representing employees, to be appointed by the governor;
(7) A member of the senate, to be appointed by the president of the senate as a nonvoting advisory member of the board; and
(8) A member of the house of representatives, to be appointed by the speaker of the house of representatives as a nonvoting advisory member of the board.
(c) Members of the board appointed by the governor shall be subject to the advice and consent of the senate.
(d) The term of office of each member of the board appointed by the governor shall be four years, but the members shall serve at the pleasure of the governor. A member shall be eligible for reappointment. If there is a vacancy for any cause, the governor shall make an appointment to become immediately effective for the unexpired term. The senate member shall serve at the pleasure of the president of the senate. The member of the house of representatives shall serve at the pleasure of the speaker of the house of representatives. All other members shall serve in an ex officio capacity.
(e) A majority of the voting members of the board shall constitute a quorum for the transaction of business.
(f) The members of the board shall serve without compensation but shall be reimbursed for travel and other necessary expenses in the performance of their official duties.
(g) The board may employ, without regard to chapter 76, staff necessary for the performance of its functions and fix their compensation.
§ -3 Duties of the board. (a) The board shall:
(1) Establish, implement, and maintain the individual housing accounts savings program pursuant to section -4;
(2) Adopt rules pursuant to chapter 91 for the general administration of the program as provided in section -5;
(3) Direct the investment of the funds contributed to accounts in the plan consistent with the investment restrictions established by the board. The investment restrictions shall be consistent with the objectives of the plan, and the board shall exercise the judgment and care then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs with due regard to the probable income and level of risk from certain types of investments of money, in accordance with the policies established by the board;
(4) Collect application, account, or administrative fees to defray the costs of administering the plan;
(5) Make and enter into contracts, agreements, or arrangements, and retain, employ, and contract for any of the following considered necessary or desirable for carrying out the purposes of this chapter:
(A) Services of private and public financial institutions, depositories, consultants, investment advisers, investment administrators, and third-party plan administrators;
(B) Research, technical, and other services; and
(C) Services of other state agencies to assist the board in its duties;
(6) Evaluate the need for, and procure as needed, pooled private insurance of the plan; and
(7) Develop and implement an outreach plan to gain input and disseminate information regarding the plan and individual housing account savings in general.
§ -4 Establishment of the individual housing accounts savings program. (a) There is established the individual housing accounts savings program to be administered by the board. The program shall:
(1) Allow employees for compensation in the State to contribute to an account established under the program through payroll deduction;
(2) Require an employer to offer its employees the opportunity to contribute to an account in the program through payroll deductions;
(3) Provide for automatic enrollment of employees and allow employees to opt out of the program;
(4) Offer a default contribution rate set by the board;
(5) Offer default escalation of contribution levels that can be increased or decreased within the limits established by the board;
(6) Provide for contributions to accounts in the program to be deposited directly with the investment administrator for the program;
(7) Whenever possible, use existing employer and public infrastructure to facilitate contributions to the program, recordkeeping, and outreach;
(8) Allow no employer contributions to employee accounts;
(9) Have its records and its program accounts maintained and accounted for separately;
(10) Provide reports on the status of program accounts to program participants at least annually;
(11) Allow account owners to both maintain an account regardless of their place of employment and to roll over funds into other savings accounts;
(12) Pool accounts established under the program for investment;
(13) Be professionally managed;
(14) Provide that the State and employers that participate in the program have no proprietary interest in the contributions to or earnings on amounts contributed to accounts established under the program;
(15) Provide that the investment administrator for the program shall be the trustee of all contributions and earnings on amounts contributed to accounts established under the program;
(16) Not impose on employers any duties that are otherwise prohibited under state or federal law;
(17) Keep administration fees in the program low; and
(18) Allow the use of private sector partnerships to administer and invest the contributions to the program under the supervision and guidance of the board.
(b) The program, board, each board member, and State shall not guarantee any rate of return or any interest rate on any contribution; provided that the program, board, each board member, and State shall not be liable for any loss incurred by any person as a result of participating in the program.
§ -5 Rules. The board shall adopt rules, pursuant to chapter 91, necessary for the purposes of this chapter.
§ -6 Confidentiality. Individual housing account information for accounts under this program, including but not limited to names, addresses, telephone numbers, personal identification information, amounts contributed, and earnings on amounts contributed, shall be confidential and shall be maintained as confidential:
(1) Except to the extent necessary to administer the program in a manner consistent with this chapter, the tax laws of the State, and the Internal Revenue Code of 1986, as amended; or
(2) Unless the person who provides the information or is the subject of the information expressly agrees in writing that the information may be disclosed.
§ -7 Individual housing accounts savings program administrative fund. (a) There is established in the state treasury a special fund to be known as the individual housing accounts savings program administrative fund, into which shall be deposited:
(1) All interest collected under this chapter on and after the establishment of the program;
(2) Appropriations made by the legislature to the fund;
(3) All fees collected as provided in section -3; and
(4) Moneys transferred to the fund from the federal government, other state agencies, or local governments.
(b) The director of finance shall be the treasurer and custodian of the administrative fund.
(c) Moneys in the individual housing accounts savings program administrative fund shall be used to pay the administrative costs and expenses of the board and program and for any other purpose described in this chapter.
§ -8 Annual report. The board shall prepare an annual report detailing the board's activities for the previous fiscal year. The annual report shall be submitted to the governor and legislature no later than twenty days prior to the convening of each regular session."
SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 to be deposited into the individual housing accounts savings program administrative fund.
SECTION 3. There is appropriated out of the individual housing accounts savings program administrative fund the sum of $ or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 for administrative and operating expenses of the individual housing accounts savings board.
The sums appropriated shall be expended by the department of budget and finance for the purposes of this Act.
SECTION 4. This Act shall take effect on July 1, 2019.
Individual Housing Accounts Savings Program; Individual Housing Accounts Savings Board; Appropriation
Establishes the Individual Housing Accounts Savings Board to administer the Individual Housing Accounts Savings Program and Individual Housing Accounts Savings Program administrative fund. Requires the board to annually report to the governor and legislature. Makes an appropriation.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.