STAND. COM. REP. NO. 2458

Honolulu, Hawaii

RE:    S.B. No. 2410

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2410 entitled:

"A BILL FOR AN ACT RELATING TO CAPITAL IMPROVEMENT PROJECTS,"

begs leave to report as follows:

     The purpose and intent of this measure is to require each agency that submits a capital improvement project proposal to furnish the Department of Budget and Finance with an estimate of the operational costs for the proposed capital improvement project.

     The measure also requires the Department of Budget and Finance to report to the Governor an estimate of the operational costs for each proposed capital improvement project.

     The Department of Budget and Finance provided comments on this measure.

     Your Committee finds that agencies that submit a proposal for a capital improvement project are currently not required to include an estimate of operational costs relating to the maintenance and continued operation of a facility or project.  However, operational costs are often significant and at times are even more than the cost of development and construction.  Your Committee believes that by requiring agencies to submit an estimate of operational costs, this measure will permit the State to make more fiscally sound decisions and better prioritize spending on capital improvement projects.

     Your Committee has amended this measure by making technical nonsubstantive amendments for the purposes of clarity and consistency.

     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. 2410, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2410, S.D. 1, and be placed on the calendar for Third Reading.

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

____________________________

DAVID Y. IGE, Chair