STAND. COM. REP. NO. 1602

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 140
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 140, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO PUBLIC-PRIVATE INFRASTRUCTURE
     PARTNERSHIPS,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Provide for the efficient and expeditious development
          and construction of public infrastructure projects by
          allowing any department of the State or any county to
          enter into agreements with private entities to develop,
          construct, and maintain public infrastructure systems
          and facilities;

     (2)  Authorize the use of and establish criteria for project
          labor agreements that are intended to ensure the
          efficiency, stability, and quality of federal
          construction projects and state public works projects
          over $10,000,000;

     (3)  Create a construction industry brand under the research
          and economic analysis division of the Department of
          Business, Economic Development, and Tourism;

     (4)  Establish definitions for "state contractor", "state
          subcontractor", and "state resident" to provide federal
          and state contracting officers with clear definitions

 
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          for purposes of the employment and bid preferences
          provided in federal and state law;

     (5)  Provide that the bid preference shall be given to state
          contractors as defined by this measure, rather than
          bidders who filed state tax returns for two successive
          years prior to submitting the bid;

     (6)  Increase the bid preference in favor of state
          contractors from seven to fifteen per cent on state
          public works projects for $30,000,000 or less;

     (7)  Set out the requirements needed to be satisfied by a
          state contractor in order to receive the bid
          preference; and

     (8)  Require review of the bid preference law by June 30,
          2005.

     Your Committee finds that this measure will aid in
delivering government services efficiently and at lower costs.
In addition, this measure will help revitalize and stabilize
Hawaii's construction industry.

     Your Committee distributed a proposed Senate Draft of this
measure that:

     (1)  Deletes from the measure as received the provisions of
          the public-private infrastructure partnerships that
          require the terms of an agreement to provide:

          (A)  Private ownership of a project during the
               construction period;

          (B)  Subsequent transfer of ownership of a project
               after completion from the private entity to a
               public entity and lease to the private entity; and

          (C)  That a public entity may assist a private entity
               and facilitate a project by exercising its
               governmental authority including its power of
               eminent domain, granting of development rights and
               opportunities, granting of necessary easements,
               rights of access, and permits, and other actions
               within the authority of the public entity; and

     (2)  Redefines "state contractor" and "state subcontractor"
          for purposes of the employment and bid preferences
          provided in federal and state law by:

 
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          (A)  Requiring an individual to have paid all of the
               amounts owing on a tax return filed in the
               preceding year;

          (B)  Requiring a business entity to be a domestic
               corporation, partnership, or business organized or
               formed under the laws of the State;

          (C)  Deleting the requirement that a business entity
               maintain a place of business within the State
               staffed by the bidder or an employee of the bidder
               for a period of six months immediately preceding
               the date of the bid;

          (D)  Requiring a business entity to maintain its
               principal place of business within the State for
               at least two-hundred consecutive days prior to the
               submission of a bid;

          (E)  Requiring a business entity to have filed a Hawaii
               resident income tax and all other applicable tax
               returns for the preceding tax year and have paid
               all amounts owing on those tax returns;

          (F)  Requiring a business entity to have complied with
               all applicable Hawaii employment, insurance, and
               worker's compensation laws;

          (G)  Deleting the provisions that require a minimum
               percentage of state residents as owners,
               principals, partners, and employees depending on
               the form of the business entity;

          (H)  Requiring an employer with one or more employees
               to have one-hundred per cent of those employees
               qualify as "state residents"; and

          (I)  Requiring a business entity that is a joint
               venture be composed entirely of entities that
               qualify as "state residents"; and

     (3)  Clarifies the intent of the bid preference for state
          contractors and subcontractors; and

     (4)  Increases the bid preference in favor of state
          contractors from seven to fifteen per cent on state
          public works projects for $8,000,000 or less rather
          than $30,000,000.


 
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     Your Committee has amended this measure by replacing its
contents with the proposed Senate Draft.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B.
No. 140, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 140,
S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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