STAND. COM. REP. NO. 696________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1061
                                     H.D. 1




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

Sir:

     Your Committees on Human Services and Housing and Health, to
which was referred H.B. No. 1061, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO GRANTS AND SUBSIDIES,"

beg leave to report as follows:

     The purpose of this bill is to:

     (1)  Require contracts for grants and subsidies to include
          provisions for the recovery of the grant or subsidy if
          the recipient is unable or no longer willing to provide
          the service for which the grant or subsidy was
          appropriated; and

     (2)  Apply this requirement to both operating and capital
          improvement project appropriations.

     The Department of Budget and Finance submitted testimony in
support of this measure.

     This measure will clarify that the State can recover funds
appropriated as grants or subsidies should the recipient become
unwilling or unable to provide the services for which the funds
were appropriated.

     Your Committees find that requirements could have been
adopted via rule.  However, Chapter 42F, Hawaii Revised Statutes,
does not provide for the adoption of administrative rules.
Therefore, although departments have been including language

 
 
                                 STAND. COM. REP. NO. 696________
                                 Page 2

 
relating to recoveries in their contracts for grants and
subsidies, there is no specific statutory authorization which
requires the departments to do so.

     As affirmed by the records of votes of the members of your
Committees on Human Services and Housing and Health that are
attached to this report, your Committees are in accord with the
intent and purpose of H.B. No. 1061, H.D. 1, and recommend that
it pass Second Reading and be referred to the Committee on
Finance.

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

                                   
                                   
                                   
                                   
______________________________     ______________________________
ALEXANDER C. SANTIAGO, Chair       DENNIS ARAKAKI, Chair