STAND. COM. REP. NO. 777________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1338
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
1338 entitled: 

     "A BILL FOR AN ACT RELATING TO PUBLIC CONTRACTS,"

begs leave to report as follows:

     The purpose of this bill is to promote equity among the
State and the construction industries by providing that:

     (1)  The amount that a contractor retains from a
          subcontractor cannot exceed five percent of the
          subcontractor's contract price; and

     (2)  This provision shall also apply to a subcontractor who
          subcontracts work to other subcontractors.

     Alaka'i Mechanical Corporation, the Plumbing and Mechanical
Contractors Association of Hawaii, and the Subcontractors
Association of Hawaii testified in support of this measure.  The
General Contractors Association of Hawaii submitted comments on
this measure.

     Your Committee has amended this measure by making technical,
nonsubstantive amendments for purposes of 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.

 
 
 
                                 STAND. COM. REP. NO. 777________
                                 Page 2

 
1338, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 1338, H.D. 1.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair