Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1083
                                     H.D. 1

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


     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 1083 entitled: 


begs leave to report as follows:

     The purpose of this bill is to allow the Department of
Commerce and Consumer Affairs (DCCA) to become fiscally self-
sufficient by combining most of the DCCA's special and revolving
trust funds into the DCCA compliance resolution fund (CRF).  The
CRF would be managed by DCCA to fund DCCA operations, and the CRF
would not be subject to central service and departmental
administrative expense reimbursement deductions or other
reversions to the general fund.  This measure:

     (1)  Provides that moneys deposited into the CRF shall, in
          addition to fees and fines collected by DCCA, include:

          (A)  As of June 30, 1999, unencumbered balances in the
               Cable Television Fund (CTF), Division of Consumer
               Advocacy Fund (DCAF), Financial Institution
               Examiners' Revolving Fund (FIERF), and Special
               Handling Fund (SHF); and

          (B)  As of July 1, 1999, moneys that under existing law
               are paid into the CTF, DCAF, FIERF, and SHF;

                                 STAND. COM. REP. NO. 443
                                 Page 2

     (2)  As of July 1, 1999, specifically repeals the FIERF and
          SHF by deleting statutory references to these funds,
          and repeals the CTF by removing the requirement that
          fees collected from cable operators not exceed DCCA
          expenditures for cable operator regulation;

     (3)  Removes the restriction that DCCA fees for
          registration, certification, licensure, and any other
          administrative process bear a reasonable relation to
          the cost or value of services rendered, while retaining
          statutory limits on the specific amounts of these fees;

     (4)  Authorizes the DCCA, pursuant to chapter 91, to
          establish, increase, decrease, or repeal fees paid by
          financial institutions subject to examination or
          affected by emergency orders, and to adjust fees paid
          by cable operators;

     (5)  Repeals the requirement that fees collected by the
          Professional and Vocational Licensing and Business
          Registration Divisions be used to defray administrative
          and personnel costs of these divisions;

     (6)  Broadens the scope of permissible DCCA use of CRF
          moneys to include DCCA operations and costs, including
          costs of financial institution examinations and
          emergency orders, and excluding those costs related to
          the Hawaii Public Broadcasting Authority; and

     (7)  Expands the definition of "compliance resolution" as
          used with reference to the CRF, to include work
          involved in or supporting existing compliance
          resolution activities, licensing or registration,
          consumer protection, and other DCCA activities.

     DCCA submitted testimony strongly supporting this bill,
stating that in order to meet its mandated responsibilities DCCA
had been moving steadily towards self-sufficiency because over
the last four years general fund support for DCCA's programs had
declined significantly.  DCCA testified that the 19th Legislature
approved moving a large portion of the DCCA budget off the
general fund and that this bill would further assist DCCA by
consolidating most of its special and revolving trust funds, and
providing DCCA with the flexibility required for self-funded,
department-wide management of its operations.  DCCA testified
that it would continue to account for all sources of funding
separately to track the relationship between the expenses and
revenues of DCCA's various divisions and programs.

                                 STAND. COM. REP. NO. 443
                                 Page 3

     Upon consideration of the bill and testimony submitted, your
Committee has made technical amendments:

     (1)  Necessary to exempt the CRF from sections 36-27 and 36-
          30, HRS;

     (2)  To conform the bill to standard drafting conventions;

     (3)  For purposes of style, clarity, and accuracy.

     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. 1083, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1083, H.D. 1, and be referred to the Committee on Finance.

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

                                   RON MENOR, Chair