STAND. COM. REP. NO. 563

Honolulu, Hawaii

RE:    S.B. No. 190

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 190 entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to enhance legislative scrutiny of special funds and revolving funds.

Specifically, this measure:

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

(2)  Requires the Auditor periodically to review special funds, as well as revolving and trust funds, of designated agencies; and

(3)  Amends or repeals various special or revolving funds and transfers the balances of repealed funds to the general fund.

     Prior to the hearing on Senate Bill No. 190, your Committee distributed a proposed Senate Draft 1.  The proposed draft deleted provisions amending or repealing various special and revolving funds but retained the provisions relating to the criteria to be used in the review of proposed and existing special and revolving funds.

     Your Committee received testimony in support of this measure from the Department of Budget and Finance and the Office of the Auditor.

     The Hawaii Primary Case Association and ten individuals submitted testimony in opposition of this measure.

The Department of Health, Office of Hawaiian Affairs, High Technology Development Corporation, and Tax Foundation of Hawaii submitted written comments on this measure.

     Your Committee finds special and revolving funds should only be used for their intended purposes and not for other programs.  Accordingly, your Committee believes that this measure will provide more specific criteria for the Auditor's review of proposed new special and revolving funds, which will result in providing the Legislature with essential information relating to the appropriateness of the proposed special and revolving funds.  Clarified criteria for establishing and continuing special and revolving funds will ensure that these funds are used appropriately.

     Your Committee has amended this measure by adopting the proposed Senate Draft 1, with further technical nonsubstantive amendments made for the purposes of clarity, conformity, and style. 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 190, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 190, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair