STAND. COM. REP. NO. 1415-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2536
                                     S.D. 1
                                     H.D. 2




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

Sir:

     Your Committee on Finance, to which was referred S.B. No.
2536, S.D. 1, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE UNIFORM PRINCIPAL AND
     INCOME ACT,"

begs leave to report as follows:

     The purpose of this bill is to facilitate modern portfolio
theory of investing as it applies to trusts and estates by:

     (1)  Repealing the existing Uniform Principal and Income
          Act, chapter 557, Hawaii Revised Statutes (HRS); and

     (2)  Adopting in its place the revised Uniform Principal and
          Income Act.

     Pacific Century Trust, Central Pacific Bank, Hawaii's
Commission to Promote Uniform Legislation, and the Hawaii Society
of Certified Public Accountants testified in support of this
measure.

     Your Committee has amended this measure by:

     (1)  Providing that a trustee may not make an adjustment
          from any amount that is permanently set aside for
          charitable purposes under a will or the terms of a
          trust, unless the trustee is holding institutional

 
 
 
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                                 Page 2

 
          funds exclusively for the benefit of a community
          foundation, and section 517D-4, HRS, applies; and

     (2)  Making technical, nonsubstantive amendments for
          purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
2536, S.D. 1, H.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 2536,
S.D. 1, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair