Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 1144
                                     S.D. 1
                                     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 S.B. No.
1144, S.D. 1, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to provide the Division of
Financial Institutions (DFI) with the flexibility to regulate and
deal with the constantly changing and complex financial
institution industry environment without being constrained by
fluctuations in the General Fund.  Specifically, this bill
allocates 40 percent of all revenues and amounts collected under
the Franchise Tax Law into the Finance Institution Examiners'
Revolving Fund instead of the General Fund.  Currently, DFI
relies on the General Fund to support its programs.

     The Department of Commerce and Consumer Affairs and the
Hawaii Bankers Association testified in support of this measure.
The Tax Foundation of Hawaii commented on the bill.

     Your Committee has amended this bill by:

     (1)  Deleting the percentage amount to be deposited into the
          revolving fund; and

     (2)  Making technical, nonsubstantive revisions to correct
          drafting errors.

                                 STAND. COM. REP. NO. 1726
                                 Page 2

     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 S.B. No.
1144, S.D. 1, H.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 1144,
S.D. 1, H.D. 2.

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

                                   DWIGHT Y. TAKAMINE, Chair