STAND. COM. REP. NO. 529-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2409
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
2409 entitled: 

     "A BILL FOR AN ACT MAKING AN EMERGENCY APPROPRIATION FOR THE
     DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES, INFORMATION
     AND COMMUNICATION SERVICES DIVISION,"

begs leave to report as follows:

     The purpose of this bill is to ensure that the State's
Information Processing Services Program (Program) avoids a
payroll deficit during the current fiscal year by approving
$800,000 in emergency appropriations.

     Your Committee received a letter from the Governor dated
February 3, 2000:

     (1)  Stating that supplementary appropriations are needed by
          April 1, 2000, for the operating expenses of the
          Department of Accounting and General Services' (DAGS)
          Information and Communication Services Division; and

     (2)  Requesting the timely passage of this measure.

     The DAGS testified in support of this measure.

     Due to an error in computing billing rates, the State
overcharged the federal government in fiscal years 1996-1997 and
1997-1998, for information technology services relating to
federal-funded programs.  To address this discrepancy, the State

 
 
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has agreed not to charge the federal government the full cost of
federal reimbursements in fiscal years 1999-2000 and 2000-2001.
However, since most of the federal reimbursements are used to
fund the Program's payroll costs, the Program faces a shortfall
during the current fiscal year.

     Your Committee has amended this bill to correct technical
drafting errors.

     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 H.B. No.
2409, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 2409, H.D. 1, and
be placed on the calendar for Third Reading.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair