STAND. COM. REP. NO. 846-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 564
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
564, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE EMPLOYEES' RETIREMENT
     SYSTEM,"

begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Establish a rate of one and one-fourth percent for each
          year of credited membership service for qualifying
          members of the Employees' Retirement System (ERS),
          whether contributory or noncontributory, to receive
          military service credit at no cost;

     (2)  Allow ERS members to receive a refund for lump sum
          payments or additional deductions from their
          compensation to obtain membership service credit for
          active military service; and

     (3)  Allow qualifying ERS members to purchase additional
          service credits at specified rates.

     The United Public Workers, employees of the Real Property
Division of the County of Hawaii, and two individuals testified
in support of this measure.  The Office of Veterans Services
testified in support of the intent of this measure.  The ERS
submitted comments on this measure.


 
 
                                 STAND. COM. REP. NO. 846-00
                                 Page 2

 
     Your Committee has concerns about the cost impact of the
buy-back provision, which would allow qualifying ERS members to
purchase additional service credits at specified rates.

     However, for purposes of continued discussion, your
Committee has amended this bill by:

     (1)  Making technical amendments to make the bill applicable
          to the current fiscal year in the appropriation
          section;

     (2)  Changing the effective date to July 1, 2005; and

     (3)  Making technical, nonsubstantive amendment for clarity
          and style.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
564, H.D. 1, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 564, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair