Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

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. 2525, H.D. 1, entitled:

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 repeal the compliance resolution fund and redirect fees to the general fund.

Furthermore, this measure requires the Department of Commerce and Consumer Affairs (Department) to return or discount its fees if the fees collected in the prior year exceed one hundred ten per cent of the attributable costs to the Department. On the other hand, this measure requires the Department to increase its fees to eliminate the shortfall if the fees drop below ninety per cent of the attributable costs to the Department.

Your Committee finds that the special fund known as the compliance resolution fund is a major source of funding for the Department. Eliminating the special fund and having instead general funds be a major source of the Department's funding is necessary to streamline government operations and increase the Department's public accountability.

However, your Committee also finds that ensuring the financial self-sufficiency of the Department will be logistically difficult without a dedicated funding source. As a compromise, your Committee finds that that portion of the compliance resolution fund that is funded through professional and vocational licensing fees can be set aside and retained as a new special fund. Fees unrelated to professional and vocational licensing will continue to be redirected as planned to the general fund.

Your Committee has amended this measure by creating a compliance and regulatory education special fund to be administered by the Director of Commerce and Consumer Affairs. The fund will be financed through professional and vocational licensing fees and related revenues, and will be used for activities related to licensing compliance and regulatory education. Accordingly, your Committee has also amended this measure by:

Your Committee has further amended this measure by appropriating general funds of $4,200,000 to the compliance and regulatory education special fund for the professional and vocational licensing program. Finally, your Committee has also specified that the unencumbered balance remaining in the compliance resolution fund on June 30, 2004 will revert to the general fund.

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. 2525, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 2525, H.D. 1, C.D. 1.