STAND. COM. REP. NO.632-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2827

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 2827 entitled:

"A BILL FOR AN ACT RELATING TO THE STATE FINANCES,"

begs leave to report as follows:

The purpose of this bill is to:

(1) Establish the Litigation Deposits Trust Fund under the control of the Attorney General for the purpose of receiving all moneys received through civil action in which the State is a party, and where the settlement amount is $100,000 or higher, except for those departments able to procure their own legal services, and where there is a statute specifically providing for the deposit of these moneys;

(2) Establish criteria for the establishment of new special and revolving funds by the Legislature, and require the use of the same criteria when reviewing existing special and revolving funds to determine their continuance;

(3) Require the Department of Budget & Finance to audit each special and revolving fund prior to the end of the fiscal year to determine if there are excess moneys and include a listing of all excess amounts in the executive budget request;

(4) Require all general funds encumbered but not expended within one fiscal year to be lapsed back into the general fund;

(5) Repeal the exemption from central services expenses for all special funds except:

(a) Special out-of-school time instructional program fund;

(b) School cafeteria special funds of the DOE;

(c) Special of the University of Hawaii;

(d) State educational facilities improvement special fund;

(e) Funds of the ERS;

(f) Unemployment compensation fund; and

(g) Public schools special fees and charges fund;

(6) Allow appropriations from the Emergency and Budget Reserve Fund to maintain programs essential to education;

(7) Abolish 42 different special and revolving funds which do not meet minimum qualifications according to the Auditor's updated report on said funds;

(8) Require all unencumbered moneys in the abolished special and revolving funds to be lapsed into the general fund;

(9) Transfer excess moneys from 33 special and revolving funds into the general fund; and

(10) Appropriate $800,000 from the works of art special fund for ancillary improvements for the state art museum.

The Judiciary, Department of Accounting and General Services, Department of Budget and Finance, Department of Taxation, Department of Business, Economic Development, and Tourism, Department of Education, Department of Human Services, Department of the Attorney General, Department of Health, Department of Transportation, Department of Labor and Industrial Relations, Department of Land and Natural Resources, Department of Agriculture, Department of Hawaiian Home Lands, Insurance Division of the Department of Commerce and Consumer Affairs (DCCA), University of Hawaii, Public Utilities Commission, Hawaii State Public Library System, Department of the Prosecuting Attorney of the City and County of Honolulu, Office of the Prosecuting Attorney of the County of Hawaii, Honolulu Police Department, Hawaii County Police Department, Kauai County Police Department, State of Hawaii Organization of Police Officers, Hawaii Tourism Authority, Hawaii Hurricane Relief Fund, Housing and Community Development Corporation of Hawaii, Hawaii Community Development Authority, Special Assistant to the Governor for Housing, Kaiser Foundation Health Plan, Agribusiness Development Corporation, Natural Energy Laboratory of Hawaii Authority, State Committee of Blind Vendors, Hawaii Association of the Blind, Crime Victim Compensation Commission, Aloha Tower Development Corporation, High Technology Development Corporation, Hawaii Leeward Planning Conference, Hawaii Health Systems Corporation, Hawaii Association of Realtors, Hawaii Forest Industry Association, Nature Conservancy of Hawaii, Earthjustice, Hawaii Medical Service Association, Maui Pineapple Company, and a concerned individual opposed the measure. DCCA submitted comments on the bill.

Your Committee believes that the role of public education in Hawaii is:

(1) To ensure that the people of Hawaii have access to affordable, quality education; and

(2) To attract and develop innovative academic pursuits that will benefit our economy and our community.

Providing for higher education is an issue of strong statewide concern. At the same time, the State's university system is unlike any other state program. Given the unique nature of academics and the fiscal demands of such an institution, the university requires a level of autonomy not shared by any other executive agency. This unparalleled autonomy, however, also requires an equal measure of accountability. The University of Hawaii system must take responsibility for its financial welfare.

Upon review of the State's non-general fund coffers, it appears the university has considerable financial resources available. Although the Legislature does not wish to interfere with the financial operations of the university, your Committee does respectfully request that the university improve the management and utilization of all its financial resources.

Your Committee has amended this measure by:

(1) Deleting the language removing central service fee exemptions;

(2) Deleting and adding language repealing certain special and revolving funds. As amended, only the following are repealed:

(a) Downpayment Loan Program Revolving Fund;

(b) Housing Alteration Revolving Loan Fund for Persons with Physical Disabilities;

(c) Hawaii Strategic Development Corporation Revolving Fund;

(d) Department of Education Storeroom Revolving Fund;

(e) Health Care Revolving Fund.

(f) Hawaii Development Revolving Fund; and

(g) Special funds for reserved housing loan programs financed from the proceeds of revenue bonds pursuant to section 39-62, Hawaii Revised Statutes.

(3) Deleting and adding language transferring funds from certain special and revolving funds. As amended, excess funds are transferred to the general fund from only the following:

(a) Agricultural Loan Revolving Fund;

(b) Animal Quarantine Special Fund;

(c) State Motor Pool Revolving Fund;

(d) State Parking Revolving Fund;

(e) Stadium Special Fund;

(f) Dwelling Unit Revolving Fund;

(g) Foreign Trade Zones Special Fund;

(h) Hawaii Community Development Revolving Fund;

(i) Rental Assistance Revolving Fund;

(j) Compliance Resolution Fund;

(k) Environmental Response Revolving Fund;

(l) Boiler and Elevator Safety Revolving Fund;

(m) Special Land and Development Fund

(n) Driver Education and Training Fund;

(o) Hawaii Innovation Development Fund;

(p) State Disaster Revolving Loan Fund;

(q) Agricultural Loan Reserve Fund;

(r) Pesticide Use Revolving Fund;

(s) Cigarette Tax Stamp Enforcement Special Fund;

(t) Medicaid Investigations Recovery Fund;

(u) Litigation Settlement Fund;

(v) State Identification Revolving Fund;

(w) Fee Simple Residential Revolving Fund;

(x) Hawaii Capital Loan Revolving Fund;

(y) High Technology Special Fund

(z) Homes Revolving Fund;

(aa) Housing Finance Revolving Fund;

(bb) Housing For Elders Revolving Fund;

(cc) Petroleum Products Control Fund;

(dd) Insurance Regulation Fund;

(ee) Use of School Facilities for Recreational and Community Purposes Fund;

(ff) Human Resources Development Special Fund;

(gg) Hawaii Tobacco Settlement Special Fund;

(hh) Judiciary Computer System Special Fund;

(ii) Occupational Safety and Health Training and Assistance Fund;

(jj) Beach Restoration Special Fund;

(kk) Bureau of Conveyances Special Fund;

(ll) Commercial Fisheries Special Fund;

(mm) Controlled Substance Registration Revolving Fund;

(nn) Correctional Industries Revolving Fund;

(oo) Halawa Correctional Facility Inmate Store Revolving Fund;

(pp) Oahu Community Correctional Center Inmate Store Revolving Fund; and

(qq) Women's Community Correctional Center Inmate Store Revolving Fund.

(4) Requiring all new accounts or funds created administratively to be reported to the Legislature within 10 days of their creation, and requiring annual reports detailing activities of the accounts or funds;

(5) Reclassifying three revolving funds as trust funds to more accurately reflect their true nature; and

(6) Deleting the appropriation for ancillary improvements for the State Art Museum.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2827, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2827, H.D. 1, and be placed on the calendar for Third Reading.

 

 

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair