STAND. COM. REP. NO.357

Honolulu, Hawaii

, 2003

RE: S.B. No. 686

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs, and Government Operations, to which was referred S.B. No. 686 entitled:

"A BILL FOR AN ACT RELATING TO PROCUREMENT,"

begs leave to report as follows:

The purpose of this measure is to specify that for government procurements for less than $25,000, the inclusion of general excise tax and applicable use tax in an offer or bid shall not be considered by the purchasing agency as part of the overall cost aspect of the bid or offer.

Your Committee received testimony in support of this measure from the Chamber of Commerce of Hawaii, the General Contractors Association of Hawaii, and a concerned citizen. The State Procurement Office submitted comments on this measure.

Your Committee finds that local companies are sometimes disadvantaged when mainland vendors and contractors do not include general excise tax and use tax in their bids; consequently, mainland vendors and contractors can submit bids that are lower than local companies, which must include all applicable taxes.

Therefore, your Committee supports this measure as one means to support local companies, and to rectify the inequity when local vendors compete against mainland companies.

Your Committee amended this measure to specify that its provisions apply to state resident contractors and vendors only, defined as companies that comply with all applicable state laws and whose workforce consists of at least 75% state residents. Your Committee is steadfastly committed to supporting local residents, and therefore believes that this amendment is prudent.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs, and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 686, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 686, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Transportation, Military Affairs, and Government Operations,

____________________________

CAL KAWAMOTO, Chair