STAND. COM. REP. NO. 282-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 1656

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Labor, to which was referred H.B. No. 1656 entitled:

"A BILL FOR AN ACT RELATING TO INDEBTEDNESS TO THE STATE,"

begs leave to report as follows:

The purpose of this measure is to amend the amount that a disbursing officer may deduct from an employee's salary, wage, or compensation based on the employee's gross income.

Your Committee received testimony in support of this measure from the Hawaiʻi State Public Library System; University of Hawaii Professional Assembly; United Public Workers, AFSCME Local 646, AFL-CIO; and Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO. Your Committee received comments on this measure from the Department of Accounting and General Services and Department of Budget and Fiscal Services of the City and County of Honolulu.

Your Committee finds that existing law permits relatively large automatic payroll deductions when recovering salary or wage overpayments, which may create financial hardship for affected employees. Your Committee further finds that there is limited advance notice before deductions begin, reducing an employee's ability to plan for the financial impact. Your Committee believes that limiting deductions and requiring at least thirty days' written notice before deductions provides a more reasonable and transparent repayment process that balances the State's need for recovery with employee financial stability.

Your Committee has amended this measure by:

(1) Changing the effective date to July 1, 3000, to encourage further discussion; and

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

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1656, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1656, H.D. 1, and be referred to your Committee on Finance.

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

____________________________

JACKSON D. SAYAMA, Chair