SB2023

Report Title:

State Financial Administration; Automated Clearinghouse System

Description:

Establishes the automated clearinghouse system as primary electronic funds transfer system for state transactions and employee benefits.

THE SENATE	S.B. NO.	2023
TWENTY-THIRD LEGISLATURE, 2006
STATE OF HAWAII

A BILL FOR AN ACT

 

RELATING TO STATE FINANCIAL ADMINISTRATION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that there is a rise in popularity, accessibility and convenience of online banking. The legislature further finds that state government employees, contractors, retirees, beneficiaries and all others doing financial business with the State of Hawaii should be afforded every opportunity to conduct their financial affairs at the institutions of their choice. The automated clearinghouse system offers the following key benefits:

(1) Payments may be initiated through a browser-based system or via direct transmissions from a mainframe, personal computer, or third-party processor;

(2) Transactions are secured through encryption software requiring password access;

(3) Time and resources are maximized with the online execution of repetitive payments;

(4) Next-day payment is possible;

(5) Fund availability is accelerated;

(6) Risk of fraudulent transfers is reduced; and

(7) Transaction costs are minimized.

The purpose of this Act is to require all branches, departments, and agencies of state government to transition to the automated clearinghouse system as the primary electronic funds transfer system used by the State. In addition, this Act requires all branches, departments, agencies, state employees, retirees and beneficiaries to establish direct deposit for salary, retirement, medical, reimbursement and per diem payments.

SECTION 2. Chapter 36, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§36-   Automated clearinghouse system. (a) No later than July 1, 2007, the State shall implement the automated clearinghouse system as the primary electronic funds transfer system for all state transactions, including but not limited to:

(1) All salary, retirement, medical, employee reimbursements and per diem payments; and

(2) All payments to private contractors doing financial business with the State.

(b) To facilitate the automated clearinghouse processing of all state transactions, the State shall establish direct deposit for all its employees, retirees, beneficiaries and private contractors doing financial business with the State."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________