STAND. COM. REP. NO.  601

Honolulu, Hawaii

                , 2013

RE:   H.B. No. 504

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No. 504 entitled:

"A BILL FOR AN ACT RELATING TO STATE FUNDS,"

begs leave to report as follows:

The purpose of this measure is to promote the efficient allocation of public funds between general funds and special, revolving, and trust funds by:

(1)  Clarifying the criteria to be used by the Auditor in analyzing proposed special funds or proposed revolving funds;

(2)  Expanding the Auditor's periodic five-year review of funds to include special funds as well as revolving funds and trust funds and adding the funds of the Department of Transportation and the Department of Defense to the schedule of reviews; and

(3)  Clarifying the criteria to be used by the Legislature in determining whether to establish or continue special funds and revolving funds.

Testimony in support of this measure was received from the Department of Budget and Finance and the Office of the Auditor.  Comments on the measure were submitted by the Hawaii Primary Care Association, High Technology Development Corporation, and Tax Foundation of Hawaii.

     Your Committee finds that because special and revolving funds should only be used for their specified purpose and cannot be used for other programs, efforts must be made to ensure that these funds are the most appropriate funding mechanism for the programs they support.

     Your Committee has amended this measure by:

(1)  Changing the effective date to July 1, 2030; and

(2)  Making technical nonsubstantive amendments for the purposes of clarity, continuity, and style.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 504, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 504, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

____________________________

SYLVIA LUKE, Chair