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 S.B. No. 1054, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to establish a centralized master lease financing program for state agencies.

In particular, the program is intended to provide state agencies with a favorable tax exempt financing option for purchases of real or personal property, including computers, copy machines, telecommunications, energy retrofits, motor vehicles, and other essential equipment, to be spread over the estimated useful life of the property.

Your Committee finds that this bill will allow the State to aggregate several agency purchases into fewer larger ones to negotiate more favorable terms than each agency could negotiate separately. In addition, your Committee finds that this bill will provide state agencies with the means to finance a wider range of assets at tax exempt rates than is currently possible. Rather than paying cash up front, this bill allows state agencies to finance equipment purchases over the useful life of the equipment, thereby allowing agencies to pay only for their annual use of the equipment.

Upon further consideration, your Committee has amended this bill by making technical nonsubstantive changes.

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 S.B. No. 1054, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1054, S.D. 2.