CONFERENCE COMMITTEE REP. NO. 143

Honolulu, Hawaii

                 , 2007

RE:    H.B. No. 1292

       H.D. 1

       S.D. 2

       C.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir and Madam:

     Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 1292, H.D. 1, S.D. 2, entitled:

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

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this bill is to enable the Employees' Retirement System (ERS) to maintain its status as a tax-qualified retirement plan by complying with the Internal Revenue Code.  Among other things, this bill:

     (1)  Prohibits elective officers and judges from terminating their ERS membership upon reaching the statutory cap on retirement benefits even though they remain in office and delay receipt of the benefits until a future separation date;

     (2)  Prohibits elective officers from joining the ERS at any time during their term of office; and

     (3)  Requires elective officers to exercise a one-time, irrevocable option to join the ERS when they are elected.

     Your Committee on Conference finds that this is an important measure that protects the ERS' tax-qualified status, ensuring the favorable tax treatment of employee contributions made on a pre-tax basis.

     Your Committee on Conference has amended this measure by:

     (1)  Allowing a member who has served in the Legislature for at least five years and who attains the age of 65 to retire and receive a service retirement allowance; and

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

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 1292, H.D. 1, S.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 1292, H.D. 1, S.D. 2, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE SENATE

ON THE PART OF THE HOUSE

____________________________ CLAYTON HEE, Chair	____________________________ ALEX M. SONSON, Co-Chair
____________________________ ROSALYN H. BAKER, Co-Chair	____________________________ BOB NAKASONE, Co-Chair