STAND. COM. REP. NO. 2316

Honolulu, Hawaii

RE: S.B. No. 2672

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Labor and Technology, to which was referred S.B. No. 2672 entitled:

"A BILL FOR AN ACT RELATING TO RETIRANTS,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish a five-year pilot program allowing retirants to be rehired for exempt service for one-year terms under certain circumstances;

(2) Provide that retirants employed under the program are excluded from the Hawaii Employer-Union Health Benefits Trust Fund and will not experience an interruption of pension benefits;

(3) Require an employer of a retirant under the program to contribute to the Employees' Retirement System; and

(4) Require the Department of Human Resources Development to submit a report to the Legislature.

Your Committee received testimony in support of this measure from the State Fire Council and Office of the Mayor of the County of Maui.

Your Committee received comments on this measure from the Department of the Attorney General and Employees' Retirement System.

Your Committee finds that there is a labor shortage in the State that makes it difficult to fill certain positions in the public sector. Your Committee also finds that hiring retirants who are qualified and trained for these positions allows vacancies to be filled more efficiently. This measure facilitates the rehiring of retirants in positions identified as labor shortage or hard-to-staff.

Your Committee acknowledges the concerns raised in testimony by the Department of the Attorney General that language in the measure limiting the purposes of a rehired retirant's inclusion in the appropriate bargaining unit to the payment of dues and grievance protections and language authorizing the Superintendent of the Department of Education to set a salary schedule for positions filled by rehired retirants in the Department of Education without regard to the standard collective bargaining agreement salary step placement, would conflict with state law governing collective bargaining in public employment. Your Committee also notes the request by the Employees' Retirement System to extend the break in service required for retirants to be rehired under this measure from six calendar months to twelve calendar months to match the conditions for other rehired retirants. Therefore, amendments to this measure are necessary to address these concerns and request.

Accordingly, your Committee has amended this measure by:

(1) Inserting language to include assistant state fire marshals in the Office of the State Fire Marshal in the list of positions exempt from chapter 76, Hawaii Revised Statutes (HRS) under section 76-16, HRS;

(2) Clarifying the definition of "employee-beneficiary" excludes retirants employed under section 88-9(d)(6), HRS for the duration of the retirant's employment under that section for employee-beneficiaries hired after June 30, 2026;

(3) Changing the required break in service for a retirant to be rehired, from six calendar months to twelve calendar months;

(4) Deleting language that would have limited the purposes of a rehired retirant's inclusion in the appropriate bargaining unit under section 89-6, HRS, to the payment of dues and grievance protections;

(5) Deleting language that would have authorized the Superintendent of the Department of Education to set a salary schedule for positions filled by rehired retirants in the Department of Education without regard to the standard collective bargaining agreement salary step placement;

(6) Inserting a savings clause;

(7) Inserting an effective date of January 1, 2077, to encourage further discussion; and

(8) 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 and Technology that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2672, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2672, 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 and Technology,

________________________________

BRANDON J.C. ELEFANTE, Chair