STAND. COM. REP. NO.422-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 1823

H.D. 1

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1823 entitled:

"A BILL FOR AN ACT RELATING TO GOVERNMENT SERVICES,"

begs leave to report as follows:

The purpose of this bill is to reduce state spending by:

(1) Exempting from the general excise tax (GET) the sale of goods or services made by the State;

(2) Increasing the amount deducted from special funds to seven percent for the purpose of defraying the prorated estimate of central service expenses; and

(3) Repealing all central service fee exemptions.

The High Technology Development Corporation and the Natural Energy Laboratory of Hawaii Authority supported the intent of this bill.

The Department of Taxation, Department of Commerce and Consumer Affairs, Department of Health, the Judiciary, Department of Land and Natural Resources, Public Utilities Commission, Housing and Community Development Corporation of Hawaii, Hawaii Hurricane Relief Fund, Hawaii Tourism Authority, Hawaii Community Development Authority, and the Aloha Tower Development Corporation opposed this measure.

The Department of Budget and Finance, Tax Foundation of Hawaii, and Hawaii Health Systems Corporation offered comments.

Your Committee has amended this measure by:

(1) Clarifying that the GET exemption includes contracting by the State;

(2) Deleting the seven percent deduction from special funds for central services expenses in section 36-27, Hawaii Revised Statutes (HRS), and inserting an unspecified percentage;

(3) Amending Act 142, Session Laws of Hawaii 1998, to preempt the repeal and enactment of section 36-27, HRS, on July 31, 2003; and

(4) 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 H.B. No. 1823, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1823, H.D. 1, and be placed on the calendar for Third Reading.

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

 

____________________________

DWIGHT Y. TAKAMINE, Chair