STAND. COM. REP. NO. 645

Honolulu, Hawaii

RE:    S.B. No. 1523

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1523 entitled:

"A BILL FOR AN ACT RELATING TO DISHONORED PAYMENTS,"

begs leave to report as follows:

     The purpose of this measure is to streamline the collection of service charges for dishonored payments to the State.

This bill increases the service charge to a uniform flat fee for all dishonored payments made to the State, and authorizes collection agencies, in addition to the Attorney General, to collect the dishonored payment and service charge on behalf of the State.  The bill also eliminates interest charges on the service charge for dishonored payments to the State.

     Your Committee received testimony in support of this Judiciary package bill from the Judiciary.

     Your Committee finds that an increased service charge has now become necessary to defray the increased costs of processing a dishonored payment and recollecting payment for the original amount owed and the service charge.  Furthermore, standardization of the service charge for all dishonored payments will ease the administrative burdens of determining what form of payment was made and which service charge amount is applicable, as is being currently done.  Also, deletion of the interest charge is desirable because the benefits of obtaining the relatively small interest amount is more than outweighed by the costs of monitoring, computing, and collecting that interest amount.  Lastly, authorizing collection through a collection agency will provide an additional method of collection.

     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. 1523 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

ROSALYN H. BAKER, Chair