STAND. COM. REP. NO. 1149-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2750
                                     S.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 S.B. No.
2750, S.D. 1, 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.

     The Department of Accounting and General Services (DAGS)
testified in support of this bill.

     DAGS explained that 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 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.

 
 
 
 
 
 
                                 STAND. COM. REP. NO. 1149-00
                                 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.
2750, S.D. 1, and recommends that it pass Second Reading 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