STAND. COM. REP. NO. 756________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1061
                                     H.D. 2

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


     Your Committee on Finance, to which was referred H.B. No.
1061, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Require contracts for grants and subsidies to include
          provisions for the recovery of the grant or subsidy if
          the recipient is unable or no longer willing to provide
          the service for which the grant or subsidy was
          appropriated; and

     (2)  Apply this requirement to both operating and capital
          improvement projects.

     The Department of Budget and Finance testified in support of
this measure.  The Department of the Attorney General submitted
comments on this measure.

     Your Committee has amended this measure by:

     (1)  Authorizing the expending agency to not only recover
          but to also withhold the remaining balance of the grant
          or subsidy if the recipient is unable or no longer
          willing to provide the services;

                                 STAND. COM. REP. NO. 756________
                                 Page 2

     (2)  Extending the requirements of capital improvement
          projects to the acquisition of personal property,
          equipment, or vehicles;

     (3)  Stating that the expending agency is further authorized
          to attach and perfect its contractual remedies; and

     (4)  Making technical, nonsubstantive amendments to conform
          to correct drafting style.

     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.
1061, H.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 1061, H.D.

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

                                   DWIGHT Y. TAKAMINE, Chair