FLOOR AMENDMENT NO. 6                    DATE: March 9, 1999     

TO:  S.B. No. 392, S.D. 1

     SECTION 1.  Senate Bill No. 392, S.D. 1, is amended by
deleting its contents in their entirety and replacing them with
the following language:

     "SECTION 1.  The legislature finds that private development
of harbor facilities on state lands should be encouraged to save
taxpayers the burden of funding costly construction of
improvement.  The legislature further finds that private
development would more likely result in project being completed
on time.
     The purpose of this Act is to allow the harbors division to
enter into cost-reimbursement contracts with marine operators or
tenants for public improvements of harbor facilities.

     SECTION 2.  Chapter 266, Hawaii Revised Statutes, is amended
by adding a new section to part I to be appropriately designated
and to read as follows:
     "266-    Private financing of harbor improvements.  (a)
Notwithstanding any law to the contrary, the department of
transportation may enter into a cost-reimbursement contract with
a maritime operator or tenant for any public improvement to or
construction of a state harbor, commercial harbor, roadstead, or
other waterfront improvement belonging to or controlled by the
State, if the director of transportation determines that a cost-
reimbursement contract promotes the best interest of the State by
a finding that:
     (1)  Private development is likely to be less costly than
          any other type of contract;
     (2)  Private development provides needed public improvements
          in a significant timely basis; or
     (3)  Public financing for public improvements is not
          available on a timely basis.
     (b)  A cost-reimbursement contract under subsection (a) may
be financed by an offset from the marine operator's or tenant's
future rental or tariff payments to the State; provided that the
terms of the contract shall ensure that the State benefits
financially from the arrangement and that public use of the
facility is maintained.  Projects financed by the cost-
reimbursement method shall not in any way obligate the State for
repayment by a legislative appropriation.
     (c)  A cost-reimbursement contract under subsection (a)
shall be subject to the applicable requirements of chapters 103
and 103D and subject to the approval of the administrator of the
state procurement office, established under section 103D-204(a);

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provided that all related transactions shall be subject to state
     (d)  Prior to entering into a cost-reimbursement contract
under subsection (a) for more than $500,000 the department of
transportation shall obtain prior approval from the legislature."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval."

Offered by:_____________________       (    ) Carried

                                       (    ) Failed to Carry

                                       (    ) Withdrawn