STAND. COM. REP. NO. 693________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1568
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Human Services and Housing, to which was
referred H.B. No. 1568 entitled: 

     "A BILL FOR AN ACT RELATING TO CHILD PLACING ORGANIZATIONS,"

begs leave to report as follows:

     The purpose of this bill is to exempt nonprofit child-
placing organizations with gross annual revenues of less than
$50,000 from financial audits that may be required for licensure
by the Department of Human Services (DHS).

     Crown Child Placement International and numerous adopting
parents submitted testimony in support of this measure.  The
Department of Human Services submitted testimony in opposition to
this measure while expressing sympathy for financial difficulties
faced by small business.

     Supporting testimony showed that requiring an audit of
smaller organizations would raise the cost of adoptive services
to families by at 15 to 25 percent.  The DHS expressed concern
about removing any child placement agency from administrative
oversight.  Allowing a financial review by the Department of
Commerce and Consumer Affairs rather than requiring an audit by
the DHS addresses both the cost concerns of adoptive families and
administrative concerns.

     Your Committee has amended this measure by:


 
 
 
                                 STAND. COM. REP. NO. 693________
                                 Page 2

 
     (1)  Allowing the DHS to require a financial review by the
          DCCA of the nonprofit organization; and

     (2)  Making technical, nonsubstantive amendments for the
          purpose of style.

     As affirmed by the record of votes of the members of your
Committee on Human Services and Housing that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 1568, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 1568, H.D.
1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Human Services
                                   and Housing,



                                   ______________________________
                                   DENNIS A. ARAKAKI, Chair