STAND. COM. REP. NO. 615

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1005
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 1005, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO PUBLIC CONTRACTS,"

begs leave to report as follows:

     The purpose of this bill is to impose penalties upon public
works contractors who do not make prompt payments to
subcontractors.

     This measure imposes graduated fines of $5,000, $10,000, and
$25,000, for the first, second, and third offenses respectively
on contractors who fail to disperse funds to subcontractors
within ten days of receiving payments on state contracts. 

     Your Committee finds that imposing these penalties will
provide an incentive for prompt payments to subcontractors.
Encouraging a system of prompt payments on government
construction contracts will provide economic stability for those
subcontractors.

     Your Committee has amended this measure by making technical
nonsubstantive changes.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your

 
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                                   STAND. COM. REP. NO. 615
                                   Page 2


Committee is in accord with the intent and purpose of S.B. No.
1005, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 1005, S.D.
2.

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



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
a                                                     SB1005 SD2