HOUSE OF REPRESENTATIVES	H.B. NO.	2889
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE EMERGENCY AND BUDGET RESERVE FUND.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The purpose of this Act is to:

     (1)  Authorize the legislature to make a loan from the emergency and budget reserve fund to the general fund by separate act approved by a majority vote of each house; and

     (2)  Repeal the exemption of the fund from central services and departmental administrative expenses.

     SECTION 2.  Section 36-27, Hawaii Revised Statutes, is amended to read as follows:

     "§36-27  Transfers from special funds for central service expenses.  Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

     (1)  Special out-of-school time instructional program fund under section 302A-1310;

     (2)  School cafeteria special funds of the department of education;

     (3)  Special funds of the University of Hawaii;

     (4)  State educational facilities improvement special fund;

     (5)  Convention center enterprise special fund under section 201B-8;

     (6)  Special funds established by section 206E-6;

     (7)  Housing loan program revenue bond special fund;

     (8)  Housing project bond special fund;

     (9)  Aloha Tower fund created by section 206J-17;

    (10)  Funds of the employees' retirement system created by section 88-109;

    (11)  Unemployment compensation fund established under section 383-121;

    (12)  Hawaii hurricane relief fund established under chapter 431P;

    (13)  Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

    (14)  Tourism special fund established under section 201B-11;

    (15)  Universal service fund established under chapter 269;

   [(16) Emergency and budget reserve fund under section 328L-3;

(17)] (16)  Public schools special fees and charges fund under section 302A-1130(f);

   [(18)] (17)  Sport fish special fund under section 187A-9.5;

   [(19)] (18)  Glass advance disposal fee special fund established by section 342G-82;

   [(20)] (19)  Center for nursing special fund under section 304A-2163;

   [(21)] (20)  Passenger facility charge special fund established by section 261-5.5;

   [(22)] (21)  Court interpreting services revolving fund under section 607-1.5;

   [(23)] (22)  Hawaii cancer research special fund;

   [(24)] (23)  Community health centers special fund;

   [(25)] (24)  Emergency medical services special fund; and

   [(26)] (25)  Rental motor vehicle customer facility charge special fund established under section 261-5.6,

shall deduct five per cent of all receipts of all special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State.  All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers.  To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund.  No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year."

     SECTION 3.  Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Each special fund, except the:

     (1)  Transportation use special fund established by section 261D-1;

     (2)  Special out-of-school time instructional program fund under section 302A-1310;

     (3)  School cafeteria special funds of the department of education;

     (4)  Special funds of the University of Hawaii;

     (5)  State educational facilities improvement special fund;

     (6)  Special funds established by section 206E-6;

     (7)  Aloha Tower fund created by section 206J-17;

     (8)  Funds of the employees' retirement system created by section 88-109;

     (9)  Unemployment compensation fund established under section 383-121;

    (10)  Hawaii hurricane relief fund established under section 431P-2;

    (11)  Convention [[]center[]] enterprise special fund established under section 201B-8;

    (12)  Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

    (13)  Tourism special fund established under section 201B-11;

    (14)  Universal service fund established under chapter 269;

   [(15) Emergency and budget reserve fund under section 328L-3;

(16)] (15)  Public schools special fees and charges fund under section 302A-1130(f);

   [(17)] (16)  Sport fish special fund under section 187A-9.5;

   [(18)] (17)  Center for nursing special fund under section 304A-2163;

   [(19)] (18)  Passenger facility charge special fund established by section 261-5.5;

   [(20)] (19)  Court interpreting services revolving fund under section 607-1.5;

   [(21)] (20)  Hawaii cancer research special fund;

   [(22)] (21)  Community health centers special fund;

   [(23)] (22)  Emergency medical services special fund; and

   [(24)] (23)  Rental motor vehicle customer facility charge special fund established under section 261-5.6,

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned."

     SECTION 4.  Section 328l-3, Hawaii Revised Statutes, is amended to read as follows:

     "§328L-3  Emergency and budget reserve fund.  (a)  There is established in the state treasury the emergency and budget reserve fund which shall be a special fund administered by the director of finance, into which shall be deposited:

     (1)  Moneys received from the tobacco settlement moneys under section 328L-2;

(2) Repayments of principal of and interest on loans to the general fund; and

    [(2)] (3)  Appropriations made by the legislature to the fund.

     (b)  All interest earned from moneys in the emergency and budget reserve fund shall be credited to the general fund[.]; except that interest earned on loans to the general fund made pursuant to subsection (e) shall be credited to the emergency and budget reserve fund.

     (c)  Expenditures or loans from the emergency and budget reserve fund shall be a temporary supplemental source of funding for the State during times of emergency, economic downturn, or unforeseen reduction in revenues.  No expenditures or loans shall be made from the emergency and budget reserve fund except pursuant to appropriations.  The general appropriations bill or the supplemental appropriations bill, as defined in section 9 of article VII of the Constitution of the State of Hawaii, shall not be used to appropriate or loan moneys from the emergency and budget reserve fund.

     The governor, through [an] a separate appropriations bill, may recommend expenditures or loans from the emergency and budget reserve fund [by setting forth the purposes of the expenditures consistent with subsection (d), the amounts, and the reasons justifying the necessity for the appropriations.] for the current or ensuing fiscal year.  The contents of a separate appropriations bill submitted by the governor shall conform with subsection (d) or (e), as applicable.

The legislature, on its own initiative, may consider and pass an appropriation bill, separate from the general or supplemental appropriations bill, which proposes expenditures or loans from the emergency and budget reserve fund for the ensuing fiscal year.

     (d)  The legislature may make appropriations from the fund for expenditure on the following purposes[:] without necessity of repayment:

     (1)  To maintain levels of programs determined to be essential to public health, safety, welfare, and education;

     (2)  To provide for counter cyclical economic and employment programs in periods of economic downturn;

     (3)  To restore facilities destroyed or damaged or services disrupted by disaster in any county; and

     (4)  To meet other emergencies when declared by the governor or determined to be urgent by the legislature.

     Any act making appropriations from the emergency and budget reserve fund under this subsection shall include a declaration of findings and purposes setting forth the purposes, the amounts, and the reasons why the appropriations are necessary and shall require a two-thirds majority vote of each house of the legislature.

(e)  The legislature may make loans from the emergency and budget reserve fund to the general fund for expenditure on programs and projects, a general fund appropriation for which was approved by the legislature in a previous act, but not allotted by the governor or expended by the expending agency because of insufficient actual or projected general revenues.  Such a loan shall be made by legislative act passed by a majority vote of each house of the legislature.

A legislative act that makes a loan shall:

(1) Set forth the purpose and reason for, principal amount of, and, if any, interest charged on the loan;

(2) Identify the program or project, the loan for which is made; and

(3) Provide for the repayment of the entire principal of and, if any, interest on the loan by June 30 of the second fiscal year following the fiscal year in which the act takes effect or June 30, 2015, whichever is earlier.  As the means of repayment, the legislative act shall dedicate general revenues from an existing or new tax or fee.  If the principal and interest are not fully repaid by the applicable deadline, the director of finance shall transfer the delinquent amount from the general fund to the emergency and budget reserve fund.  No penalty shall be charged on any delinquent principal or interest.  The director shall make the transfer without necessity of appropriation or any other legislation.

     [(e)] (f)  Appropriations or loans for the following purposes from the emergency and budget reserve fund are specifically prohibited:

     (1)  To meet expenses of the legislature;

     (2)  To provide for salary adjustments for officials appointed pursuant to article V, section 6 or article VI, section 3 of the Constitution of the State of Hawaii and for others whose salaries are directly related to salaries of these officials; and

     (3)  To fund cost items, as defined under section 89-2, in any collective bargaining contract.  This paragraph shall not be deemed to prohibit the use of an appropriation or loan from the emergency and budget reserve fund to pay the portion of the wages of or fringe benefit contributions for employees that are not "cost items"."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 2010, and shall be repealed on June 30, 2015; provided that:

     (1)  Sections 36-37 and 36-30(a), Hawaii Revised Statutes, shall be reenacted in the form in which they read on June 30, 2009; and

     (2)  Section 328L-3, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of Act 119, Session Laws of Hawaii 2009.

INTRODUCED BY:

_____________________________

Report Title:

Emergency And Budget Reserve Fund; Loans To General Fund

Description:

Authorizes the legislature to make a loan from the emergency and budget reserve fund to the general fund by legislative act approved by a majority of each house.  Requires the legislative act to identify the source of the general funds to repay the loan.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.