HCR166.DOC

WHEREAS, there are many non-general funds, and those funds can provide financial relief to the State if transferred to the general fund; and

WHEREAS, while some non-general funds are easily defined and can be legally transferred to the general fund, many non-general funds are difficult to define and that ambiguity causes problems in transferring funds to the general fund; and

WHEREAS, for example, under the Hawaii Insurers Council case, special fund moneys derived from regulatory fees that are imposed by an administrative agency pursuant to authority delegated to the agency by the Legislature cannot be transferred to the general fund; and

WHEREAS, furthermore, the Hawaii Supreme Court determined that this type of transfer violated the separation of powers doctrine because administrative fees and assessments imposed by an administrative agency can only be used for the purpose of providing services to the persons or entities paying such fees, and any other use of the fees would constitute a tax, which can only be imposed by the Legislature; and

WHEREAS, the source of the money comprising the special fund is important in determining whether it is appropriate to transfer moneys from that special fund to the general fund; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-sixth Legislature of the State of Hawaii, Regular Session of 2011, the Senate concurring, that the Auditor is requested to conduct a study that identifies the non-general funds that can be transferred to the general fund and determines the source of the non-general fund moneys; and

BE IT FURTHER RESOLVED that the study:

(1) Identify whether the source of the money is a regulatory fee, a tax, or from a difference source; and

(A) Whether the regulatory agency assessed the fee via an administrative rule, whereby it is more likely to be a regulatory fee; or

(B) Whether the fee is statutorily set by the Legislature, whereby it is more likely to be a tax;

(2) Identify whether the moneys collected by a special or revolving fund are service or user fees, rather than regulatory fees, and if fees were imposed by an administrative rule, perform an analysis to determine if such fees would be retained by the special fund or could be transferred to the general fund;

(3) Determine whether the non-general moneys are used for a public purpose, or to defray regulatory expenses;

(4) Identify whether an existing special or revolving fund may be serving as security for revenue bonds issued by a department;

(5) Identify if federal law requires federal funds be segregated and used only for purposes specified by the federal government;

and

BE IT FURTHER RESOLVED that the Auditor report its finding and recommendations, including proposed legislation to implement any recommended transfers of non-general fund moneys to the general fund, to the Legislature no later than 20 days prior to the convening of the Regular Session of 2012; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Attorney General, the Auditor, the Comptroller, and the Director of Finance.

	OFFERED BY:	_____________________________

Report Title:

Non-general funds audit.

HOUSE OF REPRESENTATIVES	H.C.R. NO.	166
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII