STAND. COM. REP. NO. 1512

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1198
                                        H.D. 1
                                        S.D. 1




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. 1198, H.D. 1, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE INTEGRATED TAX
     INFORMATION MANAGEMENT SYSTEMS ACQUISITION BY THE DEPARTMENT
     OF TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to create the Integrated Tax
Information Management Systems Special Fund for the operation,
maintenance, monitoring, and improvement of related automated tax
systems.

     The contract for the integrated tax information management
system specifies that the vendor will not get paid unless there
is an increase in revenue collection and/or a cost saving
realized from and attributable to the implementation of the
automated tax system.  Because of this provision in the contract,
your Committee believes that the establishment of a special fund
used solely as a means of paying the vendor is necessary and will
facilitate timely payments to the vendor, thus minimizing
interest costs to the State.  

     Your Committee finds that because this measure states that
the Department of Taxation is only able to deposit and transfer
general excise tax revenues necessary to meet the obligations of
the contract into the special fund, the Department of Taxation is

 
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                                   STAND. COM. REP. NO. 1512
                                   Page 2


prevented from depositing excess moneys into this special fund
account and using the moneys for other purposes.

     Because this measure sets a July 1, 2004 sunset date on the
special fund, your Committee further finds that this measure
ensures the timely and accurate implementation of the integrated
tax information management system.

     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. 1198, H.D. 1, S.D. 1, and recommends that it pass Third
Reading.

                                 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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