REPORT TITLE:
Budget Restriction Limitation


DESCRIPTION:
Limits the governor's ability to restrict departmental and agency
budget allocations to 1% of the total state budget.  Requires
that a public hearing be conducted prior to the execution of any
restriction.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           2400
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE STATE BUDGET.



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

 1      SECTION 1.  The legislature finds that in order for state
 
 2 agencies to operate efficiently, moneys authorized by the
 
 3 legislature for these state agencies must be fully released and
 
 4 at the disposal of the agencies in a timely manner.  The
 
 5 administration's practice of withholding funds contained in the
 
 6 executive budget from state agencies severely curtails an
 
 7 agency's ability to meet its goals and objectives.  Therefore,
 
 8 the legislature believes that it is inappropriate for the
 
 9 governor to restrict moneys contained in the executive budget.
 
10 Restricting such funds presumes that the budget was ill-prepared
 
11 by the legislature.
 
12      The purpose of this Act is to minimize the governor's
 
13 ability to restrict moneys authorized by the legislature for
 
14 state agency use.
 
15      SECTION 2.  Section 37-36, Hawaii Revised Statutes, is
 
16 amended by amending subsection (b) to read as follows:
 
17      "(b)  Prior to the implementation of any modification in
 
18 allotment proposed by the director of finance pursuant to
 
19 subsection (a), [in which the sum of the modifications exceed 2.5
 

 
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 1 per cent of the total general fund appropriation made by the
 
 2 legislature in any fiscal year,] the director shall notify the
 
 3 president of the senate, the speaker of the house of
 
 4 representatives, and the chairpersons of the senate committee on
 
 5 ways and means and the house of representatives committee on
 
 6 finance, respectively, of the director's intent[.], and hold a
 
 7 public hearing subject to chapter 92 on the proposed
 
 8 restriction."
 
 9      SECTION 3.  Section 37-37, Hawaii Revised Statutes, is
 
10 amended as follows:
 
11      1.   By amending subsection (a) to read:
 
12      "(a)  Except as provided in subsection (b), when the
 
13 director of finance determines at any time that the probable
 
14 receipts from taxes or any other sources for any appropriation
 
15 will be less than was anticipated, and that consequently the
 
16 amount available for the remainder of the term of the
 
17 appropriation or for any allotment period will be less than the
 
18 amount estimated or allotted therefor, the director shall, with
 
19 the approval of the governor and after notice to the department
 
20 or establishment concerned, reduce the amount allotted or to be
 
21 allotted; provided that no reduction reduces any allotted amount
 
22 below the amount required to meet valid obligations or
 
23 commitments previously incurred against the allotted funds[.];
 

 
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 1 and provided further that the sum of reductions for a fiscal year
 
 2 shall not exceed one per cent of the total general fund
 
 3 appropriation authorized by the legislature for that fiscal
 
 4 year's state executive operating budget."
 
 5      2.  By amending subsection (c) to read:
 
 6      "(c)  Prior to the implementation of any reduction in
 
 7 allotment proposed by the director of finance or the governor
 
 8 pursuant to subsection (a) or (b), [in which the sum of the
 
 9 reductions exceed 2.5 per cent of the total general fund
 
10 appropriation made by the legislature in any fiscal year,] the
 
11 director of finance shall notify the president of the senate, the
 
12 speaker of the house of representatives, and the chairpersons of
 
13 the senate committee on ways and means and the house of
 
14 representatives committee on finance, respectively, of the
 
15 director's intent[.], and hold a public hearing subject to
 
16 chapter 92 on the proposed restriction."
 
17      SECTION 4.  Section 37-65, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "[[]§37-65[]]  Responsibilities of the governor.  The
 
20 governor shall direct the preparation and administration of state
 
21 programs, program and financial plans, and budget.  The governor
 
22 shall evaluate the long-range program plans, requested budgets
 
23 and alternatives to state objectives and programs; and formulate
 

 
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 1 and recommend for consideration by the legislature the State's
 
 2 long-range plans, a proposed six-year state program and financial
 
 3 plan and a proposed state budget.  Notwithstanding any law to the
 
 4 contrary, the governor's ability to restrict funds approved by
 
 5 the legislature for executive departments and agencies contained
 
 6 in the state budget shall be restricted to not more than one per
 
 7 cent of the total general fund appropriation approved by the
 
 8 legislature for that year's state executive operating budget."
 
 9      SECTION 5.  Section 37-74, Hawaii Revised Statutes, is
 
10 amended by amending subsection (c) to read as follows:
 
11      "(c)  The department of budget and finance shall:
 
12      (1)  Review each operations plan to determine:
 
13           (A)  That it is consistent with the policy decisions of
 
14                the governor and appropriations by the
 
15                legislature;
 
16           (B)  That it reflects proper planning and efficient
 
17                management methods; and
 
18           (C)  That appropriations have been made for the planned
 
19                purpose and will not be exhausted before the end
 
20                of the fiscal year;
 
21           provided that the department of budget and finance
 
22           shall review the operations plan submitted by the
 
23           University of Hawaii solely for consistency with the
 

 
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 1           allotment ceilings established by the governor under
 
 2           section 37-34, appropriations by the legislature, the
 
 3           requirements of chapter 37D, and the status of revenues
 
 4           to support operations plans for all state programs;
 
 5      (2)  Approve the operations plan if satisfied that it meets
 
 6           the requirements under paragraph (1).  Otherwise, the
 
 7           department of budget and finance shall require revision
 
 8           of the operations plan in whole or in part; and
 
 9      (3)  Modify or withhold the planned expenditures at any time
 
10           during the appropriation period if the department of
 
11           budget and finance finds that the expenditures are
 
12           greater than those necessary to execute the programs at
 
13           the level authorized by the governor and the
 
14           legislature, or that state receipts and surpluses will
 
15           be insufficient to meet the authorized expenditure
 
16           levels; provided that the planned expenditures for the
 
17           University of Hawaii may be modified or withheld only
 
18           in accordance with sections 37-36 and 37-37[.]; and
 
19           provided further that the total amount withheld from by
 
20           the department of budget and finance shall not exceed
 
21           one per cent of the total general fund appropriation
 
22           approved by the legislature for that year's state
 
23           executive operating budget and shall not be executed
 

 
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 1           until after the department has held a public hearing
 
 2           subject to chapter 92 on the proposed withholding."
 
 3      SECTION 6.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 7.  This Act shall take effect upon its approval.
 
 6 
 
 7                           INTRODUCED BY:  _______________________