Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 2749 entitled:

begs leave to report as follows:

The purpose of this measure is to update a section of the Hawaii Revised Statutes relating to the transfer of moneys from special funds for central service expenses.

Specifically, this measure deletes an obsolete date (July 1, 1995) referring to the effective date of transfers for central services expenses under section 36-31, Hawaii Revised Statutes.

Upon further consideration, your Committee has amended this measure by deleting its contents and replacing it with a provision to remove the cap on the interest payable to vendors by state and county governments for late payment for goods and services purchased under section 103-10(a), Hawaii Revised Statutes.

At present, interest on the late, unpaid principal payable to a vendor is equal to the prime rate for the calendar quarter plus two per cent, but capped at a maximum of twelve per cent a year. This measure removes the twelve per cent cap.

Your Committee finds that the removal of this cap is fair, will provide an incentive to public agencies to pay their bills on time, and will simplify the calculation and application of interest payments to vendors.

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. 2749, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2749, S.D. 1, and be placed on the calendar for Third Reading.