STAND

STAND. COM. REP. NO.3104

Honolulu, Hawaii

, 2002

RE: S.C.R. No. 103

S.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committees on Labor and Transportation, Military Affairs and Government Operations, to which was referred S.C.R. No. 103 entitled:

"SENATE CONCURRENT RESOLUTION REQUESTING THE AUDITOR TO REVIEW PRIVATIZATION CONTRACTS ENTERED INTO BY CERTAIN STATE AND COUNTY AGENCIES,"

beg leave to report as follows:

The purpose of this measure is to request that the State Auditor review certain contracts entered into between a government agency and a private party pursuant to Act 90, Session Laws of Hawaii 2001 ("Act 90").

Testimony in support of this measure was submitted by HGEA-AFSCME, the Save Ala Wai Coalition, and thirteen citizens. One private individual provided comments.

Your Committees find that under Act 90, a groundbreaking measure in this State, many contracts have been executed between state agencies and private entities. Since these contracts involve public funds, your Committees find that it is appropriate to have the Auditor review the contracts to see if the goals of Act 90 have been met. Therefore your Committees support this measure.

Upon careful consideration, your Committees have amended this measure as follows:

(1) To include contracts executed by the Department of Health and the Department of Transportation within the purview of the Auditor's review;

(2) To request the Auditor to report on the total direct and indirect costs of each contract under review, in addition to the other aspects for review outlined in this measure;

(3) To request the Auditor to review similar legislation from other jurisdictions to determine whether another privatization approach is appropriate for Hawaii;

(4) To urge the Administration to review each public/private contract to determine whether the goals of Act 90 have been met, and to urge the Administration to hold public hearings prior to executing any future public/private contract;

(5) To ask the Auditor to recommend criteria for privatization contacts; and

(6) To make a technical, nonsubstantive amendment and to make nonsubstantive amendments required due to the substantive amendments outline above.

As affirmed by the records of votes of the members of your Committees on Labor and Transportation, Military Affairs and Government Operations that are attached to this report, your Committees concur with the intent and purpose of S.C.R. No. 103, as amended herein, recommend that it be referred to the Committee on Ways and Means, in the form attached hereto as S.C.R. No. 103, S.D. 1.

Respectfully submitted on behalf of the members of the Committees on Labor and Transportation, Military Affairs and Government Operations,

____________________________ CAL KAWAMOTO, Chair		____________________________ BOB NAKATA, Chair