STAND. COM. REP. NO. 566

 

Honolulu, Hawaii

                   

 

RE:     S.B. No. 397

        S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

 

Sir:

 

     Your Committee on Public Safety, Intergovernmental, and Military Affairs, to which was referred S.B. No. 397 entitled:

 

"A BILL FOR AN ACT RELATING TO CONTRACTING,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to require contractors and subcontractors to submit tax clearances as a condition of obtaining building permits for private developments exceeding a certain value and submit additional tax clearances before assignment of a contract for private developments exceeding a certain value.

 

     Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

 

     Your Committee finds that a tax clearance is verification that an entity has paid all of its tax liability on the matter in question.  Your Committee additionally finds that, pursuant to section 103-53, Hawaii Revised Statutes, tax clearances are required for all state and county contracts unless an exception applies.  Additionally, every two years, the Contractors State License Board requires contractors to renew their contractor's license, and one of the requirements to renew the license is to submit a tax clearance certificate.

 

     Furthermore, your Committee finds that submitting applications electronically to the Department of Taxation for tax clearances is not currently required.  Your Committee further finds that giving the Department of Taxation the authority to require that tax clearance applications be submitted electronically is in the best interests of the State.

 

     Your Committee has amended this measure by authorizing the Department of Taxation to require that tax clearance applications be submitted electronically.

 

     Your Committee notes that the term "most recent tax clearances" is not defined in this measure and request that your Committee on Ways and Means consider defining this term with a specific time period, similar to the way the specific period is specified in section 103-53, Hawaii Revised Statutes.

 

     As affirmed by the record of votes of the members of your Committee on Public Safety, Intergovernmental, and Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 397, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 397, S.D. 1, and be referred to your Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Public Safety, Intergovernmental, and Military Affairs,

 

 

 

________________________________

CLARENCE K. NISHIHARA, Chair