STAND. COM. REP. NO. 2303

Honolulu, Hawaii

RE: S.B. No. 2026

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection and Housing, to which was referred S.B. No. 2026 entitled:

"A BILL FOR AN ACT RELATING TO DEPOSITS OF PUBLIC FUNDS,"

beg leave to report as follows:

The purpose and intent of this measure is to require the Director of Finance to consider, before the selection of a depository for the state treasury, the beneficial effects to the State of using depositories within the State, including but not limited to lending at favorable terms for the creation of certain affordable housing units.

Your Committees received testimony in support of this measure from two individuals.

Your Committees received comments on this measure from the Department of Commerce and Consumer Affairs, Department of Budget and Finance, and Hawaii Bankers Association.

Your Committees find that the moneys collected by the State are held in trust for the benefit of the public and thus decisions related to where and how to invest the public treasury concern matters of public policy. Your Committees further find that the Director of Finance is granted the discretion to invest the public treasury with certain depositaries, subject to the approval of the Governor and certain statutory requirements. Your Committees find that because the State is experiencing a housing crisis, depositaries that have issued loans with favorable terms to housing developers for the benefit of residents of Hawaii are considered to have benefitted the State. Therefore, this measure will require the Director of Finance to consider the amount of loans with favorable terms that a depository has issued to developers of housing for Hawaii residents when evaluating the beneficial effects to the State of using that depository, in addition to the existing requirements to consider factors such as safety, liquidity, and yield offered on deposits.

Your Committees have amended this measure by:

(1) Inserting an effective date of July 1, 2030, to encourage further discussion; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2026, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2026, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Housing,

________________________________ STANLEY CHANG, Chair

________________________________ JARRETT KEOHOKALOLE, Chair