|
THE SENATE |
S.C.R. NO. |
18 |
|
TWENTY-FIFTH LEGISLATURE, 2010 |
S.D. 1 |
|
|
STATE OF HAWAII |
H.D. 1 |
|
|
|
|
|
|
|
||
|
|
||
SENATE CONCURRENT
RESOLUTION
ESTABLISHING A JOINT LEGISLATIVE INVESTIGATING COMMITTEE TO OVERSEE THE INVESTIGATION OF THE DEPARTMENT OF BUDGET AND FINANCE'S HANDLING OF THE STATE'S INVESTMENT IN STUDENT LOAN AUCTION RATE SECURITIES.
WHEREAS, the State of Hawaii is currently in the midst of an economic recession, whereby every dollar in the State's budget would help the State maintain essential services and reduce its budget deficit; and
WHEREAS, the State previously purchased $1,100,000,000 in student loan auction rate securities (SLARS) from Salomon Smith Barney, representing nearly 25 percent of the State's total investment in securities; and
WHEREAS, due to the financial collapse of the securities market, the assets have been frozen and the State is unable to utilize the $1,100,000,000 in SLARS; and
WHEREAS, six months ago, the Auditor required the State to revalue the SLARS at $114,000,000 less than the amount that the State actually paid, and other subsequent revaluations of the SLARS have estimated the loss at $254,000,000; and
WHEREAS, it has been asserted by the Auditor that a portion of the SLARS was purchased in violation of state laws that specify the maximum period of maturity and the minimum financial rating that state investment purchases must have; and
WHEREAS, a secondary market reportedly exists for
the State to sell the SLARS at a discount; and
WHEREAS, the Auditor issued a report citing several inadequacies, failures
in oversight, and legal violations in the purchase of SLARS by Department of
Budget and Finance (B&F) officials; and
WHEREAS, there has been widespread disagreement between the Auditor, the Director of Finance, and the Administration regarding the legality and fiscal integrity of the SLARS investments; and
WHEREAS, a joint legislative investigating committee would help to provide answers to questions surrounding the SLARS investments and help to clear the record between the Auditor's assertions and B&F's legal obligations; and
WHEREAS, section 21-3, Hawaii Revised Statutes (HRS), authorizes the establishment of a legislative investigating committee by resolution, and Rule 14(3) of the Rules of the Senate and Rule 14 of the Rules of the House of Representatives allow for the establishment of special committees; now, therefore,
BE IT RESOLVED by the Senate of the Twenty-fifth Legislature of the State of Hawaii, Regular Session of 2010, the House of Representatives concurring, that:
(1) The Legislature hereby jointly establishes a joint legislative investigating committee (investigating committee) pursuant to chapter 21, HRS, to oversee the investigation of B&F's handling of the State's investment in student loan auction rate securities;
(2) The purpose and the duties of the investigating committee and the subject matter and scope of its investigatory authority shall be to assist the independent attorney in charge of the investigation by holding meetings and hearings as requested, receiving all information from the investigation, and submitting a final report to the Legislature;
(3) The investigating
committee shall have every power and function allowed to an investigating
committee under the law, including without limitation the power to:
(A) Adopt rules for the conduct of its proceedings;
(B) Issue subpoenas requiring the attendance and testimony of witnesses and subpoenas duces tecum requiring the production of books, documents, records, papers, or other evidence in any matter pending before the investigating committee;
(C) Hold hearings appropriate for the performance of its duties, at such times and places as the committee determines;
(D) Administer oaths and affirmations to witnesses at hearings of the investigating committee;
(E) Report or certify instances of contempt as provided in section 21-14, HRS;
(F) Determine the means by which a record shall be made of its proceedings in which testimony or other evidence is demanded or adduced;
(G) Provide for the submission, by a witness's own counsel and counsel for another individual or entity about whom the witness has devoted substantial or important portions of the witness's testimony, of written questions to be asked of the witness by the chair; and
(H) Exercise all other powers specified under chapter 21, HRS, with respect to an investigating committee;
(4) The investigating committee shall consist of six members, composed of one budget chair from the Senate, one budget chair from the House of Representatives, one majority member from the Senate who shall be appointed by the Senate President, one majority member from the House of Representatives who shall be appointed by the Speaker of the House of Representatives, one minority member from the Senate who shall be appointed by the Senate President, and one minority member from the House of Representatives who shall be appointed by the Speaker of the House of Representatives; and
(5) Prior to issuing any subpoena for the testimony of any witness, or to calling any witness, the investigating committee shall determine whether litigation regarding the State's SLARS has been undertaken by the State, and, if not, shall inquire in writing of the Attorney General whether such litigation is reasonably likely; and if such litigation has been undertaken or if the Attorney General indicates it is reasonably likely, no such subpoena shall issue and no witness examined prior to the investigating committee receiving the written view of the Attorney General as to whether examination of such witness could materially harm the State's interests in such litigation; and if the written view of the Attorney General is in the affirmative, no subpoena shall issue and no examination of such witness shall take place absent the affirmative vote of four members of the investigating committee to issue such subpoena and conduct such examination;
and
BE IT FURTHER RESOLVED that the Senate President and the Speaker of the House of Representatives, from time to time, may refer to the investigating committee specific matters that are within the scope of the investigating committee's jurisdiction, and that the investigating committee shall work in cooperation with the President and the Speaker for the purposes stated in this Concurrent Resolution; and
BE IT FURTHER RESOLVED that the investigating committee shall submit its findings and recommendations to the Legislature no later than 20 days prior to the convening of the Regular Session of 2011 and shall dissolve upon submission of its report; and
BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, President of the Senate, Speaker of the House of Representatives, Director of Finance, Attorney General, and the Auditor.
Joint Legislative Investigating Committee; State Investments in Student Loan Auction Rate Securities