Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 715 entitled:

begs leave to report as follows:

The purpose of this measure is to appropriate funds for the Department of Taxation to meet the obligations of its integrated tax information management systems performance-based contract.

Your Committee finds that Act 155, Session Laws of Hawaii 1999, created the integrated tax information management systems special fund to enable the Director of Taxation to pay for the integrated tax information management systems performance-based contracts authorized by Act 273, Session Laws of Hawaii 1996. The performance-based contracts authorized under Act 273 are for the acquisition of automated tax systems for the administration of taxes. Act 273 specifies that the payments must be paid from the increase in the amount of taxes, interest, and penalties collected and attributable to the implementation of the automated tax systems.

However, your Committee further finds that in order for the Department to make those payments from the increased revenues attributable to the automated tax system, the Department needs to have funds appropriated in advance of the realization of the actual increased revenues. Having funds available in advance will minimize the interest penalties owed to the contractor if payment is not made in a timely manner.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 715 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.