STAND. COM. REP. NO. 1419-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2988
                                     S.D. 2
                                     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 S.B. No.
2988, S.D. 2, 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 by
contractors to subcontractors working on state projects by:

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

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

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

     The Building Industry Association of Hawaii, the Hawaii
Construction Industry Association, the Plumbing & Mechanical
Contractors Association of Hawaii, the Subcontractors'
Association of Hawaii, the Construction Industry Legislative
Organization, Inc., and the General Contractors Association of
Hawaii supported the bill.


 
 
                                 STAND. COM. REP. NO. 1419-00
                                 Page 2

 
     The Department of Accounting and General Services testified
in support of the intent of the bill.

     The State Procurement Office commented on the bill.

     Your Committee has amended this bill by making technical,
nonsubstantive amendments for purposes of style and clarity.

     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 S.B. No.
2988, S.D. 2, H.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 2988,
S.D. 2, H.D. 2.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair