STAND. COM. REP. NO. 996-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2544
                                     S.D. 1
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Legislative Management, to which was
referred S.B. No. 2544, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE LEGISLATIVE ANALYST,"

begs leave to report as follows:

     The purpose of this bill is to establish the Office of the
Legislative Analyst as a legislative service agency and repeal
the Joint Legislative Budget Committee.

     This bill also requires the Legislative Analyst to prepare
and distribute fiscal impact statements for all legislative
measures, and specifies the requirements for those statements.

     Your Committee agrees that there is an immediate need for a
Legislative Analyst to assist the Legislature in performing an
independent analysis of executive or other agency budgets,
revenues and expenditures, economic conditions, and tax policies.

     In the past, the Legislature was able to borrow fiscal
analysts from state and county agencies or the private sector
more readily.  However, your Committee finds that economic,
fiscal, and tax issues today are far more complex, requiring the
work of analysts who have long-term expertise and are better
capable of conducting in-depth analyses of these issues on a
regular basis.


 
 
 
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                                 Page 2

 
     Your Committee further finds that the Legislative Analyst's
Office in the State of California, for example, plays a key role
in that State's Legislature by assisting legislators in doing in-
depth evaluations of state programs and conducting analyses on
fiscal, economic, and tax policy issues.  The California
Legislative Analyst's Office has been providing fiscal and policy
advice to the Legislature for more than fifty-five years and is
well known for its fiscal and programmatic expertise and
nonpartisan analyses of that state's budget.  The office serves
as the "eyes and ears" for the California Legislature to ensure
that the executive branch is implementing legislative policy in a
cost efficient and effective manner.  The office carries out this
legislative oversight function by reviewing and analyzing the
operations and finances of state government.

     Historically, one of the most important responsibilities of
the California Legislative Analyst's Office has been to analyze
the annual Governor's budget and publish a detailed review at the
end of February.  This document, the Analysis of the Budget Bill,
includes individual department reviews and recommendations for
legislative action.  A companion document, Perspectives and
Issues, provides an overview of the state's fiscal picture and
identifies some of the major policy issues confronting the
Legislature.  These documents help set the agenda for the work of
the Legislature's fiscal committees in developing a state budget.
Staff of the office work with these committees throughout the
budget process and provide public testimony on the office's
recommendations.

     Given the size and expertise of budget and fiscal analysis
staff in the executive branch as compared to the significantly
smaller size of the legislative branch staff, your Committee
finds that it is incumbent upon the Legislature to develop its
own independent capacity to conduct fiscal, economic, and tax
analysis.

     Upon careful consideration, your Committee has amended this
bill by:

     (1)  Transferring responsibility for analyzing new special,
          revolving, or trust funds, and trust accounts, from the
          Auditor to the Legislative Analyst;

     (2)  Deleting the requirement for fiscal impact statements
          on all measures introduced with direct or indirect
          fiscal implications, but in its place requiring the
          Legislative Analyst, as may be requested by the House
          Committee on Finance or Senate Committee on Ways and

 
                                 STAND. COM. REP. NO. 996-00
                                 Page 3

 
          Means, to assist in determining fiscal impacts of bills
          under consideration; and

     (4)  Making other technical, nonsubstantive amendments for
          clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Legislative Management that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 2544, S.D. 1, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B. No.
2544, S.D. 1, H.D. 1, and be referred to the Committee on
Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Legislative
                                   Management,



                                   ______________________________
                                   EZRA KANOHO, Chair