SB602.DOC

SECTION 1. Since the 2008 regular legislative session, the State of Hawaii has experienced the largest economic downturn in the State's history, with recent forecasts from the council on revenues projecting a $2,000,000,000 shortfall in revenues from fiscal year 2009 to fiscal year 2011. Given the enormity of budget cuts that may be needed during the upcoming legislative biennium, it is likely that the Hawaii state foundation on culture and the arts will not be able to fund its normal culture and arts grants or contracts through traditional general fund revenues.

However, the agency's grants budget of $2,200,000 in fiscal biennium 2007-2009 leveraged an additional $28,200,000 into Hawaii's economy and was, in effect, more than a twelve to one match from federal and private sources. The elimination of the funding provided through the agency's grant programs could result in the loss of 2,357 jobs that contribute over $1,000,000 to the State's economy in taxable income.

During these economically challenging times, Hawaii's diverse range of cultural and arts offerings also play an important role in preserving the uniqueness of the Hawaii visitor experience and maintaining a steady flow of visitors to Hawaii's shores from the mainland and overseas.

The legislature finds that, in the current economic downturn, it is necessary to draw upon alternative funding sources to protect the viability of Hawaii's culture and arts community of performing artists, creative media practitioners, writers and playwrights, and many others. The state administration announced an economic stimulus package that will expedite approximately $1,800,000,000 of funds for much needed repairs and upgrades of Hawaii's schools, higher educational facilities, and transportation infrastructure facilities, which will infuse the local economy with government spending.

The legislature further finds that, as a result of accelerated construction programming during 2009 and 2010, the works of art special fund will experience an increase in the level of bond proceeds deposited into the fund.

The purpose of this Act is to authorize the use of bond proceeds deposited into the State's works of art special fund to support the culture and arts organizations that would otherwise be funded by the Hawaii state foundation on culture and the arts for a temporary period from 2009 to 2012.

SECTION 2. Section 9-7, Hawaii Revised Statutes, is amended to read as follows:

"[[]§9-7[]] Requirement for artists receiving an individual artist fellowship. (a) Each artist who, after meeting the qualifications set out in section 9-6, receives an individual artist fellowship from the foundation, is required to hold an exhibition or give a performance for the benefit of the people of Hawaii.

(b) Any person satisfying the requirements set forth in subsection (a) shall receive a grant in accordance with part II of this chapter."

SECTION 3. Section 103-8.5, Hawaii Revised Statutes, is amended to read as follows:

"§103-8.5 Works of art special fund. (a) There is created a works of art special fund, into which shall be transferred one per cent for works of art and an additional per cent for works of performing art of all state fund appropriations for capital improvements designated for the construction cost element; provided that this transfer shall apply only to capital improvement appropriations that are designated for the construction or renovation of state buildings. The [~~one per cent~~] percentage transfer requirement shall not apply to appropriations from the passenger facility charge special fund established by section 261-5.5 and the rental motor vehicle customer facility charge special fund established under section 261-5.6.

(b) The works of art special fund shall be used solely for the following purposes:

(1) Costs related to the acquisition of works of art, including any consultant or staff services required to carry out the art in public places and relocatable works of art programs;

(2) Site modifications, display, and interpretive work necessary for the exhibition of works of art;

(3) Upkeep services, including maintenance, repair, and restoration of works of art; and

(4) Storing and transporting works of art.

(c) The [~~one per cent~~] percentage amount, which is included in all capital improvement appropriations, shall be calculated at the time the appropriation bills are signed into law. The moneys shall be transferred into the works of art special fund upon availability of moneys from the appropriations. Each agency receiving capital improvement appropriations shall calculate the [~~one per cent~~] percentage amount and transfer the moneys into the works of art special fund.

(d) The comptroller and the state foundation on culture and the arts shall decide on the specific art objects to acquire, giving first consideration to placing appropriate pieces of art at the locations of the original appropriation.

The selection of, commissioning artists for, reviewing of design, execution, and placement of, and the acceptance of works of art shall be the responsibility of the comptroller and the state foundation on culture and the arts in consultation with the affected agency or department.

Expenditures from the works of art special fund shall be made by the comptroller.

(e) The comptroller shall:

(1) Provide each agency receiving capital improvement appropriations with information regarding items that shall be included and excluded from the [~~one per cent~~] percentage amount;

(2) Ensure that each agency calculates its [~~one per cent~~] percentage amount correctly; and

(3) Ensure that each agency transfers the correct amount to the works of art special fund in a timely manner.

(f) The comptroller and the executive director shall track amounts due from each agency under the [~~one per cent~~] percentage requirement as provided in this section.

(g) For the purposes of this section:

"Permanent display" means the process of capturing and preserving a live performance by creating a visual and audio recording or other permanent record from digital or electronic media.

"Works of art" includes "arts" as defined in section 9‑1, as well as live performing arts, which include, but are not limited to, live music, dance, drama, choreographed athletic or acrobatic performances, poetry readings, speeches, and lectures, and any process by which arts and live performances can be made into a permanent display."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2009.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	602
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII