STAND. COM. REP. NO. 2703

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2474
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 2474, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO FEDERAL AID,"

begs leave to report as follows:

     The purpose of this bill is to prohibit federal impact aid
received by the Department of Education from being returned to
the general fund.

     In addition, this bill specifies that the Governor must:

     (1)  Allow the Department of Education to increase the
          federal fund expenditure ceiling for EDN 100, school-
          based budgeting, by the amount that the federal impact
          aid received by the department exceeds the authorized
          appropriation in the General Appropriations Act or the
          Supplemental Appropriations Act; and

     (2)  Allow the Department of Education to retain the full
          amount of the general fund offset created by increased
          impact aid receipts to further carry out the purposes
          of EDN 100, school-based budgeting.

     To ensure that the Department of Education does not commit
the State to new or larger programs, or both, without the
approval of the Legislature, this bill prohibits the Department

 
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                                   STAND. COM. REP. NO. 2703
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of Education from using the general fund offset to create new
programs or expand existing programs.

     Your Committee finds that budget cuts must be imposed on the
Department of Education on those occasions when the amount of
federal impact aid received by the department is less than the
authorized appropriation in the General Appropriations Act or the
Supplemental Appropriations Act.  Consequently, your Committee
believes that budget increases should be granted to the
Department of Education on those occasions when the amount of
federal impact aid received by the department is greater than the
authorized appropriation in the General Appropriations Act or the
Supplemental Appropriations Act.

     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.
2474, S.D. 1, and recommends that it pass Third Reading.

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



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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