STAND. COM. REP. NO. 408

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1145
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 1145 entitled: 

     "A BILL FOR AN ACT RELATING TO THE DEPARTMENT OF COMMERCE
     AND CONSUMER AFFAIRS,"

begs leave to report as follows:

     The purpose of this measure is to allow the Department of
Commerce and Consumer Affairs (DCCA) greater flexibility in the
management of its funds in order to support its goal of fiscal
self-sufficiency.

     DCCA presented testimony in support of this measure.

     Over the last four years, general fund support for DCCA's
programs has declined significantly and the department has moved
steadily towards fiscal self-sufficiency.  This measure continues
that trend by combining moneys from the Cable Television Fund,
Division of Consumer Advocacy Fund, Financial Institution
Examiners' Revolving Fund, Special Handling Fund Special Fund,
and revenues, fees, and fines collected by the business
registration and professional and vocational licensing divisions
into the Compliance Resolution Fund (CRF).  

     The consolidation of the abovementioned funds will provide
DCCA with the flexibility it requires to be self-supporting.  The
department will continue to account for all sources of funding
separately in order to track each division's revenues against its
expenses.

 
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     Additionally, this measure:

     (1)  Removes a reference to the Director of DCCA as the
          Commissioner of Securities since the law authorizes the
          Director to appoint the Commissioner;

     (2)  Eliminates the requirement that the fees for the CRF
          bear a reasonable relationship between the fee revenues
          and the cost or value of services rendered since
          limitations on fees will be maintained in the statutory
          provisions authorizing the various revenues being
          combined into the CRF; 

     (3)  Amends the definition of "compliance resolution" to
          clarify the CRF's purpose as a department-wide funding
          source and to allow for greater flexibility in the use
          of CRF funds;   

     (4)  Exempts the department's special funds from
          administrative assessments; and

     (5)  Clarifies that any special or revolving fund
          established by any Act of the 1999 Regular Session
          should not be included in the CRF.

     Your Committee has made technical, nonsubstantive amendments
to this measure and conformed it to preferred drafting style.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 1145, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 1145, S.D. 1, and be referred to the Committee on Ways and
Means.


 
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                                   STAND. COM. REP. NO. 408
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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