Report Title:

Emergency and Budget Reserve Fund

 

Description:

Proposes a constitutional amendment to establish an Emergency and Budget Reserve Fund.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1428

TWENTY-FIRST LEGISLATURE, 2001

  

STATE OF HAWAII

  

 

A BILL FOR AN ACT

 

proposing amendment of article vii of the hawaii constitution to establish an emergency and budget reserve fund.

 

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

SECTION 1. The purpose of this Act is to propose an amendment to article VII, sections 6 and 9, of the Constitution of the State of Hawaii to establish a mechanism for the State to build a financial reserve to be used when there is an emergency or economic downturn, or when there is an unforeseen reduction in revenues.

The proposal would:

(1) Change the distribution of excess state general fund revenues as follows:

(A) Half to taxpayers in the form of a tax refund or credit; and

(B) Half to an emergency and budget reserve fund to be established by law;

and

(2) Clarify when the general fund expenditure ceiling shall apply to certain appropriations of State funds.

SECTION 2. Article VII, section 6, of the Constitution of the State of Hawaii is amended to read as follows:

"DISPOSITION OF EXCESS REVENUES

Section 6. There shall be established by law an emergency and budget reserve fund. Whenever the state general fund balance at the close of each of two successive fiscal years exceeds five percent of general fund revenues for each of the two fiscal years, the legislature in the next regular session shall [provide]:

(1) Deposit no more than fifty per cent of the balance into the emergency and budget reserve fund; and

(2) Provide for a tax refund or tax credit to the taxpayers of the State, as provided by law.

The legislature may also deposit funds from other sources to the emergency and budget reserve fund.

Expenditures from the emergency and budget reserve fund shall be a temporary supplemental source of funding during times of emergency, economic downturn or unforeseen reduction in revenues. No expenditures shall be made from the emergency and budget reserve fund except pursuant to appropriations approved by a three-fourths vote of the members of each house of the legislature."

SECTION 3. Article VII, section 9, of the Constitution of the State of Hawaii is amended to read as follows:

"LEGISLATIVE APPROPRIATIONS; PROCEDURES;

EXPENDITURE CEILING

Section 9. In each regular session in an odd-numbered year, the legislature shall transmit to the governor an appropriation bill or bills providing for the anticipated total expenditures of the State for the ensuing fiscal biennium. In such session, no appropriation bill, except bills recommended by the governor for immediate passage, or to cover the expenses of the legislature, shall be passed on final reading until the bill authorizing operating expenditures for the ensuing fiscal biennium, to be known as the general appropriations bill, shall have been transmitted to the governor.

In each regular session in an even-numbered year, at such time as may be provided by law, the governor may submit to the legislature a bill to amend any appropriation for operating expenditures of the current fiscal biennium, to be known as the supplemental appropriations bill, and bills to amend any appropriations for capital expenditures of the current fiscal biennium, and at the same time the governor shall submit a bill or bills to provide for any added revenues or borrowings that such amendments may require. In each regular session in an even- numbered year, bills may be introduced in the legislature to amend any appropriation act or bond authorization act of the current fiscal biennium or prior fiscal periods. In any such session in which the legislature submits to the governor a supplemental appropriations bill, no other appropriation bill, except bills recommended by the governor for immediate passage, or to cover the expenses of the legislature, shall be passed on final reading until such supplemental appropriations bill shall have been transmitted to the governor.

GENERAL FUND EXPENDITURE CEILING

Notwithstanding any other provision to the contrary, the legislature shall establish a general fund expenditure ceiling which shall limit the rate of growth of general fund appropriations, excluding appropriations to the emergency and budget reserve fund and federal funds received by the general fund, to the estimated rate of growth of the State's economy as provided by law. No appropriations in excess of such ceiling shall be authorized during any legislative session unless the legislature shall, by a two-thirds vote of the members to which each house of the legislature is entitled, set forth the dollar amount and the rate by which the ceiling will be exceeded and the reasons therefor.

The general fund expenditure ceiling shall also apply to expenditures authorized from the emergency and budget reserve fund."

SECTION 4. The question to be printed on the ballot shall be as follows:

"Should the State Constitution be amended so that:

(1) The distribution of excess state general fund revenues be changed so that:

(a) Half goes to an emergency and budget reserve fund, which would enable the State to build a financial reserve to be used during times of emergency, economic downturn, or unforeseen reduction in revenues; and

(b) The remainder may be returned to taxpayers in the form of a tax refund or credit;

and

(2) The general fund expenditure ceiling will also apply to expenditures authorized from the emergency and budget reserve fund?"

SECTION 5. Constitutional material to be repealed is bracketed and stricken. New constitutional material is underscored.

SECTION 6. This Act shall take effect upon compliance with article XVII, section 3, of the Constitution of the State of Hawaii.

INTRODUCED BY:

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