SB1749 SD1 SSCR685

STAND. COM. REP. NO. 685

Honolulu, Hawaii

, 2005

RE: S.B. No. 1749

S.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1749 entitled:

"A BILL FOR AN ACT RELATING TO THE BUDGET,"

begs leave to report as follows:

The purpose of this measure is to require the Joint Legislative Budget Committee to hold public hearings to ascertain facts and make recommendations on the decision of the Governor or the Director of Finance to restrict or withhold funds appropriated by the Legislature.

The bill also requires the Governor or the Director of Finance to give prior written notice to the Joint Legislative Budget Committee prior to restricting or withholding any funds appropriated by the Legislature, including the reasons therefor.

Your Committee finds that the budget process includes many oversight activities. During the appropriation process the Legislature must determine the overall value of a program compared to other programs that compete for the same funding from limited state resources. However, past practice has indicated the Administration's disregard for the Legislature's diligence in carefully crafting a sound budget and appropriations thereunder. In many instances, the Administration has restricted, withheld, or otherwise failed to expend moneys appropriated by the Legislature for purposes that were painstakingly scrutinized during numerous public hearings and legislative deliberations. By authorizing the Joint Legislative Budget Committee to conduct public hearings on gubernatorial budget restrictions, withholding of funds, and other actions that result in the nonexpenditure of lawfully budgeted and appropriated funds, the Legislature and the general citizenry of the State will be able to ascertain, in a public venue, the reasons for the Administration's actions.

Your Committee amended the measure by:

(1) Authorizing the Joint Legislative Budget Committee to hold public hearings, rather than mandating it to do so;

(2) Clarifying the scope of what types of nonexpenditure actions taken by the Administration may trigger the holding of public hearings by the Joint Legislative Budget Committee;

(3) Moving the prior written notice requirement imposed on the Governor and the Director of Finance to chapter 37, Hawaii Revised Statutes, as your Committee believes that it is more appropriately placed in the chapter of law that relates to the State Budget;

(4) Adding a section to the measure that amends section 37-34(a), Hawaii Revised Statutes, to require that the allotment estimates submitted by executive departments and agencies to the Director of Finance include the entire amounts budgeted and appropriated in the budget acts and any other appropriation act passed by the Legislature; and

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

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. 1749, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1749, S.D. 1, and be placed on the calendar for Third Reading.

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

		____________________________ BRIAN T. TANIGUCHI, Chair