Honolulu, Hawaii



RE:    S.B. No. 431

       S.D. 1




Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii




     Your Committee on Labor, Culture and the Arts, to which was referred S.B. No. 431 entitled:




begs leave to report as follows:


     The purpose and intent of this measure is to extend the deadline by which the State and counties are required to furnish payroll and personnel transaction information to the Employees' Retirement System (ERS) in an electronic format.


     Your Committee received testimony in support of this measure from the City and County of Honolulu Department of Budget and Fiscal Services, City and County of Honolulu Department of Human Resources, City and County of Honolulu Department of Information Technology, County of Kauai Department of Human Resources, and County of Maui Department of Personnel Services.  Your Committee received comments on this measure from the ERS.


     Your Committee finds that Act 87, Session Laws of Hawaii 2015 (Act 87), amended section 88-103.7, Hawaii Revised Statutes, effective July 1, 2020, to require the State and counties to furnish the ERS with necessary information in a format required under the system's new reporting standards.  Under the Act, departments and agencies who fail to comply with this requirement during any fiscal year, are required to pay the ERS an entire year's worth of additional employer contributions on the first day of the following fiscal year.  Act 87 also required the ERS to submit annual progress reports to the Legislature from 2016 through 2020.


     Your Committee finds that the state and county departments and agencies have been working diligently and cooperatively with the ERS towards compliance since the enactment of Act 87 and have made substantial progress.  However, the ERS reports that the parties continue to face significant challenges to resolve the issues of non-compliance and proposes that the effective date of Act 87 be extended until 2024.  Your Committee believes that more time is needed for both the ERS and public employers to work together to address the complex issues relating to employer reporting of the required information.


     Your Committee notes that S.B. No. 2142, S.D. 1 (Regular Session of 2020), is a substantially similar measure that extended the effective date of Act 87 to July 1, 2023.  S.B. No. 2142, S.D. 2 (Regular Session of 2020), which extended that date to July 1, 2050, to facilitate further discussion, was passed by the Senate; however, further consideration was terminated due to the disruptions caused by the coronavirus disease 2019 (COVID-19) pandemic.


     Your Committee has amended this measure by:


     (1)  Extending the effective date of Act 87 to July 1, 2024;


     (2)  Requiring the ERS to continue submitting annual progress reports until 2024; and


     (3)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.


     As affirmed by the record of votes of the members of your Committee on Labor, Culture and the Arts that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 431, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 431, S.D. 1, and be referred to your Committee on Ways and Means.


Respectfully submitted on behalf of the members of the Committee on Labor, Culture and the Arts,