STAND. COM. REP. NO. 1011

 

Honolulu, Hawaii

                

 

RE:    S.B. No. 1206

       S.D. 2

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

 

Sir:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 1206, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO DEPOSITS OF PUBLIC FUNDS,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to encourage the development of housing projects in the State.

 

     More specifically, this measure authorizes the Director of Finance to exempt a depository from the requirement to pay all deposits of public funds upon demand, under the condition that the depository has provided loans with below-market interest rates and longer terms for housing projects where all dwelling units are exclusively reserved for owner-occupants who own no other real property and are residents of the State.

 

     Your Committee received written comments on this measure from the Department of Budget and Finance and Department of Commerce and Consumer Affairs.

 

     Your Committee notes the concerns expressed by the Department of Budget and Finance that the measure has the potential to cause substantial portions of the state treasury to become illiquid, which would hinder the State's ability to pay its obligations.  The Department of Budget and Finance further stated that the measure could allow financial institutions to withhold the State's cash on deposit and possibly prevent the payment of state checks, should the Director of Finance grant them an exemption.

 

     Your Committee has amended this measure by making technical nonsubstantive amendments for purposes of clarity, consistency, and style.

 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1206, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1206, S.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

 

 

 

________________________________

DONOVAN M. DELA CRUZ, Chair