STAND. COM. REP. NO.  1652

Honolulu, Hawaii

                , 2007

RE:   H.R. No. 41

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir:

     Your Committees on Labor & Public Employment and Economic Development & Business Concerns, to which was referred H.R. No. 41 entitled:

"HOUSE RESOLUTION REQUESTING A STUDY ON PUBLIC CONTRACTS,"

beg leave to report as follows:

     The purpose of this measure is to request that the Attorney General and the Insurance Commissioner conduct a study on whether state and county government contracts are being awarded to out-of-state contractors to the detriment of Hawaii local contractors.

     The Hawaii Ironworkers Stabilization Fund, International Union of Painters and Allied Trades, and the Subcontractors Association of Hawaii testified in support of this measure.  The Department of Commerce and Consumer Affairs testified in opposition.

     Your committee finds that local contractors have difficulty competing with out-of-state contractors due to various cost drivers in Hawaii that cause local contactor bids to be higher than those of out-of-state contractors.  As such, your committee has amended this measure by expanding the scope of the requested study to include an examination of various factors that negatively impact the competitiveness of local contractors such as workers' compensation costs, general excise tax requirements, and unemployment insurance premiums. In addition, your committee finds that the Department of Accounting and General Services is a more appropriate body to conduct the study than the Insurance commissioner, and has amended this measure accordingly.   

     As affirmed by the records of votes of the members of your Committees on Labor & Public Employment and Economic Development & Business Concerns that are attached to this report, your Committees concur with the intent and purpose of H.R. No. 41, as amended herein, and recommend that it be referred to the Committee on Finance, in the form attached hereto as H.R. No. 41, H.D. 1.

Respectfully submitted on behalf of the members of the Committees on Labor & Public Employment and Economic Development & Business Concerns,

____________________________ KYLE T. YAMASHITA, Chair

____________________________ ALEX M. SONSON, Chair