HB2204.DOC

SECTION 1. The legislature finds that a fiscal note is a legislative document that is meant to provide a reliable estimate of the impact of a bill on state revenues and expenditures to decision makers and the general public. According to the National Conference of State Legislatures, "bills that have a fiscal impact may increase or decrease expenditures, may increase or decrease the yield of an existing tax, change personnel requirements, affect levels of services, impose or shift a tax to a new base, or change the funding of an existing program. Fiscal notes are used by legislators to decide whether or not a proposed bill has merit, to revise a bill or make it less costly or raise more revenues, or to make decisions about the state's budget or revenues."

The legislature also finds that fiscal notes can be a valuable tool for the Hawai`i legislature in making financial decisions in less than ideal economic times and provides added transparency to the decision making process and expenditure of taxpayer dollars, and that according to the National Conference of State Legislatures, over 30 states use some form of fiscal notes in their decision making process.

The purpose of this Act is to establish the practice of using fiscal notes to properly and transparently estimate the fiscal impact of legislation.

SECTION 2. Title III, Hawaii Revised Statutes, is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

FISCAL NOTE

§ -1 Short title. This chapter may be cited as the Fiscal Note Act.

§ -2 Requirements for a fiscal note. Every legislative measure that affects the receipt, expenditure, or allocation of state funds, either directly or indirectly, shall have attached to it, prior to its consideration by any committee of either house of the legislature, a fiscal note that shall include a reliable estimate of the fiscal impact of the measure. A fiscal note shall not constitute a legal attachment of the proposed measure.

§ -3 Preparation by legislative agencies. The sponsor of a legislative measure requiring a fiscal note shall be responsible for obtaining the required note from the appropriate legislative agency that drafted or amended the legislation. The legislative agency shall be responsible for obtaining, directly or through another state agency, the information necessary to complete the fiscal note. The agency furnishing the information to the requesting legislative agency shall do so within twenty-four hours. The legislative agency shall then prepare the fiscal note and transmit it to the sponsor of the measure. The legislative agency, for good and appropriate cause, may approve an extension of time to furnish the information.

§ -4 Form of the fiscal note. The fiscal note shall contain the following information:

(a) The fiscal impact on existing and new programs or activities; provided that the fiscal note shall reflect the estimated cost of the program or activity that is stated in the text of the bill, even if that cost estimate differs from the amount actually being appropriated for that program or activity in the bill at that time;

(b) A fiscal impact projection for the current fiscal year and for the five succeeding fiscal years, including an estimate of the amount of the appropriation increase or decrease that would result from enactment of the bill for the current fiscal year and five succeeding fiscal years;

(d) The number of new positions that may be required, identified as full-time, part-time, or temporary;

(e) An analysis of how the figures in the fiscal note were derived;

(f) Any additional information that may be necessary to explain the fiscal note; and

(g) The date the fiscal note was prepared; the name of the committee, agency, and persons that prepared the fiscal note; and the state agency, program, or subprogram affected.

§ -5 Update to fiscal note. Whenever any committee of either house reports any measure with any amendment that alters the fiscal effect of the measure, there shall be attached to the amendment, a fiscal note delineating the fiscal effect of the change proposed by the amendment. The committee chairperson shall request the note from the legislative agency.

§ -6 Absence of fiscal note. Whenever a measure requiring a fiscal note has been reported by any committee of either house of the legislature without a fiscal note, any member, on the reading of the measure, may offer a motion to defer the measure. Whenever a floor amendment alters the fiscal effect of a measure and is without a fiscal note, any member of the house in question may offer a motion that the amendment be withdrawn. The amendment may be proposed again at any time it would otherwise be in order; provided that the required fiscal note is attached.

§ -7 Exemptions. A fiscal note shall not be required for the general appropriations bill, any bill which appropriates a specific amount, nor any measure affecting state funds for retirement purposes.

§ -8 Programs using federal funds. Notwithstanding the provisions of section -7, a fiscal note shall be required for any measure concerning any program wholly or partially funded by federal moneys that involves an expenditure of state funds or a legislative appropriation of funds. The fiscal note shall reflect the immediate and long-range fiscal effect on the state of any applicable program and shall also include the following information:

(a) The length of time the federal funds are to be provided; and

(b) The probable amount of state funds required to continue the program.

The fiscal note shall comply with all rules and contain all the information contained in other fiscal notes."

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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HOUSE OF REPRESENTATIVES	H.B. NO.	2204
TWENTY-SIXTH LEGISLATURE, 2012
STATE OF HAWAII