STAND. COM. REP. NO. 382

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 756
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 756 entitled: 

     "A BILL FOR AN ACT RELATING TO PUBLIC UTILITIES COMMISSION,"

begs leave to report as follows:

     The purpose of this bill is to establish the universal
service fund as a special fund outside of the state treasury, and
to appropriate moneys from that fund to implement the policies
and goals of universal telecommunications service.  The bill
provides that any unexpected or unencumbered balance of the
appropriation will lapse into the universal service fund.  

     The Public Utilities Commission (PUC) presented testimony
supporting the bill, pointing out that establishing the special
fund outside the State treasury will not remove the fund from
legislative oversight.  The PUC also recommended an amendment to
allow the PUC temporarily to borrow funds from the public
utilities special fund to start the universal service fund, with
repayment to be made when sufficient funds are collected in the
universal service fund. 

     Testimony supporting this bill was also presented by the
Department of Commerce and Consumer Affairs, AT&T, GTE,
TelHawaii, Inc., Oceanic Communications, GST Telecom Hawaii,
Inc., and AARP.

     Your Committee recognizes the importance of establishing the
separate special fund in order to assure that universal telephone

 
 
                                 STAND. COM. REP. NO. 382
                                 Page 2

 
service remains affordable, particularly for rural, high-cost,
and under-served areas of this State.  Your Committee concurs
with the PUC's recommendation and has amended the bill
accordingly. 

      Your Committee has also made technical and nonsubstantive
amendments, including deleting sections 5 and 6 of the bill since
these sections are provided for under sections 40-89 and 1-23,
Hawaii Revised Statutes.  Your Committee has also amended the
"drop dead" clauses pertinent to sections 36-27 and 36-30, Hawaii
Revised Statutes, to assure that the amendments made by this bill
survive the repeal and reenactment of those sections.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 756, as amended herein, and recommends that
it be referred to the Committee on Finance, in the form attached
hereto as H.B. No. 756, H.D. 1.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair