STAND. COM. REP. NO. 754-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2878
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
2878, H.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to ensure prompt payment on
state projects by contractors to subcontractors, by:

     (1)  Specifying that subcontractors provide evidence to
          contractors of a current trust fund contribution bond,
          a performance and payment bond, any other bond, or
          another mutually agreeable form of collateral;

     (2)  Imposing penalties on contractors for failing to
          property pay amounts owed to subcontractors; and

     (3)  Requiring the Procurement Policy Board to adopt rules
          on prompt payment and retainage.

     The Construction Industry Legislative Organization, the
Plumbing & Mechanical Contractors Association of Hawaii, the
General Contractors Association of Hawaii, the Sheet Metal
Contractors Association, the Hawaii Construction Industry
Association, the Building Industry Association of Hawaii, Hidano
Construction, and the Hawaii Surety Association testified in
support of this measure.  The Subcontractors Association of
Hawaii also testified in support of this measure but with a

 
 
                                 STAND. COM. REP. NO. 754-00
                                 Page 2

 
suggested amendment.  The Department of Accounting and General
Services testified in support of the intent of the measure.
Comments were submitted by the State Procurement Office.

     Your Committee has amended this bill by making technical,
nonsubstantive amendments for 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.
2878, H.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 2878, H.D.
2.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair