CONFERENCE COMMITTEE REPORT NO.94

                            Honolulu, Hawaii
                                            , 2000

                            RE:   S.B. No. 2988
                                  S.D. 2
                                  H.D. 2
                                  C.D. 1




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

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

Sir:

     Your Committee on Conference on the disagreeing vote of the
Senate to the amendments proposed by the House of Representatives
in S.B. No. 2988, S.D. 2, H.D. 2, entitled:  

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

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 measure is to ensure prompt payment by
contractors to subcontractors working on state contracts.  This
measure imposes a penalty on contractors who improperly withhold
payment from subcontractors where the subcontractor has provided
evidence to the contractor of:

     (1)  A valid union trust fund contribution bond acceptable
          to the contractor in an amount not less than three
          months of the subcontractor's trust fund contribution;


 
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     (2)  A performance and payment bond executed by a surety
          company authorized to do business in the State;

     (3)  Any other bond acceptable to the contractor; or

     (4)  Any other form of mutually acceptable collateral.

     This measure also requires contractors who violate these
provisions three or more times within two years from the first
violation to be referred to the contractor license board by the
procurement agency for action under section 444-17(14), Hawaii
Revised Statutes, and requires the policy board to adopt rules
relating to prompt payment and retainage.

     Upon further consideration, your Committee has amended this
measure by:

     (1)  Deleting the provision that would have required the
          Procurement Policy Board to adopt rules requiring
          contract clauses providing appropriate remedies with
          respect to prompt payment and retainage; and

     (2)  Removing the statutory requirement that the Procurement
          Policy Board adopt rules requiring contract clauses
          providing for prompt payment and retainage by deleting
          subsection (c) of section 103D-501, Hawaii Revised
          Statutes and making conforming technical amendments.

     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 S.B. No. 2988, S.D. 2, H.D. 2, as amended herein, and
recommends that it pass Final Reading in the form attached hereto
as S.B. No. 2988, S.D. 2, H.D. 2, C.D. 1.


 
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                                   Respectfully submitted on
                                   behalf of the managers:

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




_____________________________     _______________________________
Rep. ROBERT N. HERKES             Sen. ROD TAM
Co-Chair                          Co-Chair



_____________________________     _______________________________
Rep. TERRY NUI YOSHINAGA          Sen. CAROL FUKUNAGA
Co-Chair                          Co-Chair



_____________________________
Rep. EZRA R. KANOHO
Co-Chair

 
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