HB2542 SD1.DOC

PART I

SECTION 1. The severe recession of 2008 swept across the nation and many parts of the world with unanticipated force and brought with it enormous challenges for governments at all levels. Its effects on businesses and employment are still being felt today, including a profound impact on Hawaii in terms of tax revenues and the state budget.

The legislature finds that due to the extraordinary fiscal circumstances the State is facing, non-general funds must be reviewed and scrutinized to determine if there are excess balances available to help address the critical budget shortfall in fiscal year 2010-2011.

The purpose of this Act is to help address the fiscal year 2010-2011 budget shortfall by transferring excess balances from various non-general funds into the State's general fund.

SECTION 2. The legislature determines that there is in the agricultural loan reserve fund at least $1,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the agricultural loan reserve fund to the general fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 3. The legislature determines that there is in the state motor pool revolving fund at least $1,500,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the state motor pool revolving fund to the general fund the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 4. The legislature determines that there is in the state risk management revolving fund at least $2,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the state risk management revolving fund to the general fund the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 5. The legislature determines that there is in the stadium special fund at least $2,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the stadium special fund to the general fund the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 6. The legislature determines that there is in the medicaid investigations recovery fund at least $1,500,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the medicaid investigations recovery fund to the general fund the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 7. The legislature determines that there is in the Hawaii community development revolving fund, at least $1,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the Hawaii community development revolving fund to the general fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 8. The legislature determines that there is in the convention center enterprise special fund at least $2,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the convention center enterprise special fund to the general fund the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 9. The legislature determines that there is in the foreign trade zones special fund at least $300,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the foreign trade zones special fund to the general fund the sum of $300,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 10. The legislature determines that there is in the compliance resolution fund – business registration fund account at least $1,500,000 in excess of the requirements of the fund account. On July 1, 2010, the director of finance is authorized to transfer from the compliance resolution fund – business registration fund account to the general fund the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 11. The legislature determines that there is in the department of commerce and consumer affairs special drivers education fund account at least $1,400,000 in excess of the requirements of the fund account. On July 1, 2010, the director of finance is authorized to transfer from the special drivers education fund account to the general fund the sum of $1,400,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 12. The legislature determines that there is in the loss mitigation grant fund at least $3,200,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the loss mitigation grant fund to the general fund the sum of $3,200,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 13. The legislature determines that there is in the department of education drivers education fund account at least $1,000,000 in excess of the requirements of the fund account. On July 1, 2010, the director of finance is authorized to transfer from the drivers education fund account to the general fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 14. The legislature determines that there is in the deposit beverage container deposit special fund at least $1,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the deposit beverage container deposit special fund to the general fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 15. The legislature determines that there is in the Hawaii tobacco settlement special fund at least $7,200,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the Hawaii tobacco settlement special fund to the general fund the sum of $7,200,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 16. The legislature determines that there is in the neurotrauma special fund at least $1,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the neurotrauma special fund to the general fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 17. The legislature determines that there is in the special fund for disability benefits at least $7,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the special fund for disability benefits to the general fund the sum of $7,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 18. The legislature determines that there is in the land conservation fund at least $1,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the land conservation fund to the general fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 19. The legislature determines that there is in the natural area reserve fund at least $500,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the natural area reserve fund to the general fund the sum of $500,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 20. The legislature determines that there is in the federal reimbursement maximization special fund at least $500,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the federal reimbursement maximization special fund to the general fund the sum of $500,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 21. The legislature determines that there is in the University of Hawaii housing assistance revolving fund at least $2,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the University of Hawaii housing assistance revolving fund to the general fund the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 22. The legislature determines that there is in the university revenue-undertakings fund at least $2,500,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the university revenue-undertakings fund to the general fund the sum of $2,500,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 23. The legislature determines that there is in the University of Hawaii research and training revolving fund at least $400,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the University of Hawaii research and training revolving fund to the general fund the sum of $400,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 24. The legislature determines that there is in the judiciary computer system special fund at least $2,000,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the judiciary computer system special fund to the general fund the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 25. The legislature determines that there is in the driver education and training fund, under the judiciary, at least $1,500,000 in excess of the requirements of the fund. On July 1, 2010, the director of finance is authorized to transfer from the driver education and training fund to the general fund the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2010-2011.

SECTION 26. On June 1, 2010, the director of finance is authorized to transfer from the department of business, economic development, and tourism to the general fund the sum of $197,000 or so much thereof remaining from the balance of funds received from the United States Department of Commerce Market Development Cooperator Program as a reimbursement to the State for fiscal year 2009-2010.

PART II

SECTION 27. Section 235-110.6, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The tax credit claimed under this section by the principal operator shall be deductible from the principal operator's individual or corporate income tax liability, if any, for the tax year in which the credit is properly claimed; provided that a husband and wife filing separate returns for a taxable year for which a joint return could have been made by them shall claim only the tax credit to which they would have been entitled had a joint return been filed. If the tax credit claimed by the principal operator under this section exceeds the amount of the income tax payments due from the principal operator, the excess of credit over payments due shall be refunded to the principal operator[;] from the state highway fund; provided that the tax credit properly claimed by a principal operator who has no income tax liability shall be paid to the principal operator[;] from the state highway fund; and provided further no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1."

PART III

SECTION 28. Section 328L-5, Hawaii Revised Statutes, is amended to read as follows:

"§328L-5 Hawaii tobacco prevention and control trust fund. (a) There is established the Hawaii tobacco prevention and control trust fund as a separate fund of a nonprofit entity having a board of directors and qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, into which shall be deposited moneys received as provided under section 328L-2(b)(3). The director of health with the concurrence of the governor, shall select, in accordance with law, the entity based upon the proven record of accomplishment of the entity in administering a similar trust fund.

(b) Notwithstanding that the Hawaii tobacco prevention and control trust fund is established within a private entity, the department of budget and finance shall have oversight authority over the fund and may make periodic financial audits of the fund; provided that the director of finance may contract with a certified public accountancy firm for this purpose. The director of health with the concurrence of the governor in their sole discretion may rescind the selection of the entity. If the selection of the entity [[]is[]] rescinded, moneys in the trust fund shall revert back to the State and shall be deemed to be trust moneys.

(c) The entity selected under subsection (a), for each fiscal year, may expend up to fifty per cent of the total market value of the Hawaii tobacco prevention and control trust fund on the preceding June 30, for tobacco prevention and control, including but not limited to, reducing cigarette smoking and tobacco use among youth and adults through education and enforcement activities, and controlling and preventing chronic diseases where tobacco is a risk factor.

(d) The Hawaii tobacco prevention and control trust fund may receive appropriations, contributions, grants, endowments, or gifts in cash or otherwise from any source, including the State, corporations or other businesses, foundations, government, individuals, and other interested parties; provided that any appropriations made by the State shall not supplant or diminish the funding of existing tobacco prevention and control programs or any health related programs funded in whole or in part by the State.

(e) The assets of the Hawaii tobacco prevention and control trust fund shall consist of:

(1) Moneys appropriated under section 328L-2(b)(3);

(2) Moneys appropriated to the Hawaii tobacco prevention and control trust fund by the state, county, or federal government;

(3) Private contributions of cash or property; and

(4) Income and capital gains earned by the trust fund.

(f) All moneys in excess of $14,000,000 that remain in the balance of the Hawaii tobacco prevention and control trust fund on June 30 of each fiscal year shall lapse to the credit of the emergency and budget reserve fund. On July 1 of each fiscal year, the director of finance is authorized to transfer the excess funds in the Hawaii tobacco prevention and control trust fund to the emergency and budget reserve fund; provided that the moneys transferred to the emergency and budget reserve fund may be used to support programs such as kupuna care, adult dental services, respite services, health aging partnership, domestic violence shelters, outreach services, housing placement services, and similar programs or services.

[~~(f)~~] (g) The aggregate principal sum deposited in the Hawaii tobacco prevention and control trust fund shall be invested by the entity selected under subsection (a) in a manner intended to maximize the rate of return on investment of the trust fund consistent with the objective of preserving the trust fund's principal.

[~~(g)~~] (h) If the entity selected under subsection (a) is dissolved, the director of health, with the concurrence of the governor, shall select a successor entity. If the Hawaii tobacco prevention and control trust fund is terminated, the moneys remaining in the trust fund shall revert back to the State and shall be deemed to be trust moneys.

[~~(h)~~] (i) The administration of the Hawaii tobacco prevention and control trust fund shall be advised by the tobacco prevention and control advisory board created under section 328L-6."

PART IV

SECTION 29. Section 245-15, Hawaii Revised Statutes, is amended to read as follows:

"§245-15 Disposition of revenues. All moneys collected pursuant to this chapter shall be paid into the state treasury as state realizations to be kept and accounted for as provided by law; provided that, of the moneys collected under the tax imposed pursuant to:

(1) Section 245-3(a)(5), after September 30, 2006, and prior to October 1, 2007, 1.0 cent per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A‑2168, for research and operating expenses and for capital expenditures;

(2) Section 245-3(a)(6), after September 30, 2007, and prior to October 1, 2008:

(A) 1.5 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(B) 0.25 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5; and

(C) 0.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234;

(3) Section 245-3(a)(7), after September 30, 2008, and prior to July 1, 2009:

(A) 2.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(B) 0.5 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 0.25 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

(D) 0.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234;

(4) Section 245-3(a)(8), after June 30, 2009, and prior to July 1, [~~2010:~~] 2013:

(B) 0.75 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 0.75 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

(D) 0.5 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234; and

[~~(5)~~ ~~Section 245-3(a)(10), after June 30, 2010, and prior to July 1, 2011:~~

~~(A)~~ 2.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

~~(B)~~ ~~1.0 cent per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;~~

~~(C)~~ ~~1.0 cent per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321-1.65; and~~

~~(D)~~ ~~1.0 cent per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234; and~~

~~(6)~~] (5) Section 245-3(a)(11), after June 30, [~~2011,~~] 2013, and thereafter:

(B) 1.5 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 1.25 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

(D) 1.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234.

The department shall provide an annual accounting of these dispositions to the legislature."

PART V

SECTION 30. Section 392-61, Hawaii Revised Statutes, is amended to read as follows:

"§392-61 Establishment of special fund for disability benefits. There is established in the treasury of the State, separate and apart from all public moneys or funds of the State, a special fund for disability benefits [~~which shall be administered by the director exclusively for the purposes of this chapter;~~] and for the establishment and maintenance of a family leave data collection system under section 398-9.5. All contributions pursuant to this part shall be paid into the fund and all benefits payable under this part shall be paid from the fund. The fund shall consist of:

(1) [~~all~~] All contributions collected pursuant to this part, together with any interest thereon;

(2) [~~all~~] All fines and penalties for the fund pursuant to this chapter;

(3) [~~all~~] All moneys collected by way of subrogation;

(4) [~~interest~~] Interest earned on any moneys in the fund;

(5) [~~any~~] Any property or securities acquired through the use of moneys belonging to the fund;

(6) [~~all~~] All earnings of such property and securities; and

(7) [~~all~~] All other moneys received for the fund from any source."

SECTION 31. Section 392-62, Hawaii Revised Statutes, is amended to read as follows:

"[[]§392-62[]] Management of the fund. The director of finance shall be the treasurer and custodian of the special fund for disability benefits and shall administer the fund in accordance with the directions of the director of labor and industrial relations. [~~All moneys in the fund shall be held in trust for the purposes of this part only and shall not be expended, released, or appropriated or otherwise disposed of for any other purpose.~~] Moneys in the fund may be deposited in any depositary bank in which general funds of the State may be deposited but such moneys shall not be commingled with other state funds and shall be maintained in separate accounts on the books of the depositary bank. Such moneys shall be secured by the depositary bank to the same extent and in the same manner as required by the general depositary law of the State; and collateral pledged for this purpose shall be kept separate and distinct from any other collateral pledged to secure other funds of the State. The director of finance shall be liable for the performance of the director of finance's duties under this section as provided in chapter 37."

SECTION 32. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 33. This Act shall take effect on July 1, 2010.

HOUSE OF REPRESENTATIVES	H.B. NO.	2542
TWENTY-FIFTH LEGISLATURE, 2010		H.D. 1
STATE OF HAWAII		S.D. 1