STAND. COM. REP. NO. 1408_______

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 450
                                     S.D. 1
                                     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 Labor and Public Employment, to which was
referred S.B. No. 450, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to continue the ongoing work to:

     (1)  Transform the State's accounting system and budgeting
          system to a performance-based budgeting system, and

     (2)  Develop a managed process that enables state and county
          governments to implement public-private compensation
          for government services.

     The County of Kauai Office of the County Attorney, the
National Federation of Independent Business, Hawaii Pacific
Engineers, the Building Industry Association of Hawaii, Fewell
Geotechnical Engineering, the American Society of Civil
Engineers, Consulting Structural Hawaii, Consulting Engineers
Council of Hawaii, the Hawaii State Council of the American
Institute of Architects, PLA Incorporated, the Small-Business
Economic Revival Force, and a Kauai County Councilmember
testified in support of this measure.  The City and County of
Honolulu, Department of the Corporation Counsel testified in
support of the intent of this measure.  The United Public Workers
testified in opposition to this measure.  The Department of
Budget and Finance submitted comments.

                                 STAND. COM. REP. NO. 1408_______
                                 Page 2


     Your Committee notes that it does not want to second guess,
nor stifle, the special committee discussions mandated by Act
230, Session Laws of Hawaii (SLH) 1998, by dictating the
substance and content of the discussions.

     Your Committee has amended this measure by:

     (1)  Changing the effective date to August 15, 2001;

     (2)  Deleting the sunset dates relating to parts III and IV
          of Act 230, SLH 1998 (relating to managed process); and

     (3)  Making technical, nonsubstantive amendments for clarity
          and style.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 450, S.D. 1, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B. No.
450, S.D. 1, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public

                                   TERRY NUI YOSHINAGA, Chair