STAND. COM. REP. NO. 2896

Honolulu, Hawaii

RE: S.B. No. 3128

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 3128, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE ADEQUATE RESERVE FUND,"

begs leave to report as follows:

The purpose and intent of this measure is to allow the State's employers to replenish the unemployment compensation trust fund without being burdened by high unemployment tax rates.

Specifically, this measure amends the definition of "adequate reserve fund" for purposes of the Hawaii employment security law to exclude the benefit cost rate from June 2020 to August 2021, for calendar years 2023 through 2030.

Your Committee received written comments in support of this measure from the Department of Labor and Industrial Relations.

Your Committee received written comments on this measure from the Tax Foundation of Hawaii.

Your Committee finds that this measure will prevent the most expensive state unemployment insurance tax rate schedule from going into effect, thus providing much-needed relief to Hawaii's employers who are still recovering from the devastating economic effects of the coronavirus disease 2019 (COVID-19) pandemic. Your Committee further finds that providing this relief will ensure that employers can afford to keep Hawaii workers employed and replenish the unemployment compensation trust fund, which was depleted due to the unprecedented high rates of unemployment caused by the COVID-19 pandemic.

Your Committee has amended this measure by:

(1) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

(2) Making a technical nonsubstantive edit for the purpose of clarity.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3128, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3128, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair