CONFERENCE COMMITTEE REPORT NO. 142

                            Honolulu, Hawaii
                                            , 2000

                            RE:   H.B. No. 139
                                  H.D. 1
                                  S.D. 2
                                  C.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Conference on the disagreeing vote of the
House of Representatives to the amendments proposed by the Senate
in H.B. No. 139, H.D. 1, S.D. 2, entitled:

    "A BILL FOR AN ACT RELATING TO FEDERAL CONSTRUCTION,"

having met, and after full and free discussion, has agreed to
recommend and does recommend to the respective Houses the final
passage of this bill in an amended form.

     The purpose of this bill is to revitalize Hawaii's
construction industry by:

     (1) Establishing a definition of "state resident" that can
         be used by federal contracting officers in enforcing
         employment preferences for state residents that are
         provided in federal law;

     (2) Exempting from the general excise tax (GET), all of the
         gross income or gross proceeds arising from federal
         construction contracts and received by state
         subcontractors;

 
 
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     (3) Clarifying that contractors, including out-of-state
         contractors, working on federal construction contracts
         in the State are subject to the licensing and other
         provisions of chapter 444, Hawaii Revised Statutes, to
         the extent allowed under federal law; and

     (4) Authorizing the use of, and establishing criteria for,
         project labor agreements, which are intended to ensure
         the efficiency, stability, and quality of federal
         construction projects.

     Your Committee on Conference has amended this bill by:

     (1) Deleting the provisions:

         (a)  Authorizing the use of, and establishing criteria
              for, project labor agreements; and

         (b)  Exempting from the GET, all of the gross income or
              gross proceeds arising from federal construction
              contracts and received by state subcontractors;

     (2) For purposes of employment preference provided in
         federal law in favor of state residents where the "state
         resident" is:

         (A)  A business entity, by reducing the percentage of
              employees that are required to be state residents
              from one hundred percent to eighty-five percent for
              a business entity to qualify as a state resident;
              or

         (B)  A joint venture, by requiring that a majority of
              the business entities that compose a joint venture
              be state residents and eighty-five percent of the
              employees of the joint venture be state residents
              for the joint venture to qualify as a state
              resident; 

         and

     (3) Changing the effective date to July 1, 2000; 

     As affirmed by the record of votes of the managers of your
Committee on Conference that is attached to this report, your
Committee on Conference is in accord with the intent and purpose
of H.B. No. 139, H.D. 1, S.D. 2, as amended herein, and
recommends that it pass Final Reading in the form attached hereto
as H.B. No. 139, H.D. 1, S.D. 2, C.D. 1.

 
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                                   Respectfully submitted on
                                   behalf of the managers:        

ON THE PART OF THE SENATE          ON THE PART OF THE HOUSE



_______________________________    _______________________________
CAL KAWAMOTO, Co-Chair             ROBERT N. HERKES, Co-Chair



_______________________________    _______________________________
CAROL FUKUNAGA, Co-Chair           TERRY NUI YOSHINAGA, Co-Chair



_______________________________    _______________________________
ANDREW LEVIN, Co-Chair             BRIAN Y. YAMANE, Co-Chair