Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 1300, H.D. 2, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to provide for the fiscal biennium 2003-2005 budget of the Office of Hawaiian Affairs (OHA).

Your Committee recognizes OHA’s mandate under section 10-2, Hawaii Revised Statues to improve the conditions of both native Hawaiians and Hawaiians. It is clear that OHA must continue to provide services and create opportunities for a better life and future for all Hawaiians.

Your Committee also takes note of OHA’s desire to be regarded as equal to that of other state departments, and the role this desire has played in OHA’s revision of its requested budget.

OHA’s budget request for fiscal biennium 2003-2005, as submitted to the Senate Committee on Ways and Means and House Committee on Finance at a joint hearing on January 8, 2003, reflected a requested budget of approximately $2.5 million in general funds and $4 million in trust funds each fiscal year. This budget proposal requested that most of OHA’s personnel be funded at a 1:3 general to trust fund ratio.

OHA’s Board of Trustees approved a revised fiscal biennium budget on January 16, 2003. The revised budget reflects a requested budget of approximately $5.7 million in general funds and $1.3 million in trust funds each fiscal year. With the exception of the Board of Trustees, the revised budget request would fund all of OHA’s personnel entirely with general funds.

Your Committee believes that OHA’s budget requests must be considered in light of the state’s current financial situation. Economic realities have necessitated reductions in the State’s current and future expenditures. Restrictions of up to five per cent have been imposed on many state departments in the current fiscal year. Additional reductions to state departments are also being implemented for fiscal biennium 2003-2005 to bring state expenditures in line with expected revenue.

Your Committee also firmly believes that OHA is a unique organization, unlike any state department. OHA functions with a great degree of autonomy to serve Hawaiians. Its trust funds exist for the sole purpose of benefiting native Hawaiians. As such, your Committee believes it is appropriate that a portion of OHA’s personnel costs be funded with trust funds.

Upon consideration of OHA’s budget requests, it’s unique status as a government entity, and the State’s financial situation, your Committee provides the resources OHA requires to fulfill its statutory mandates as reflected in OHA’s original fiscal biennium budget request.

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 H.B. No. 1300, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1300, H.D. 2, S.D. 2.