SB2719 SD1.DOC

SECTION 1. The legislature finds that the health and welfare of the State require governmental fiscal responsibility. During this period of revenue shortfalls and a stagnant economy, it is imperative that measures passed by the legislature be cost effective.

A fiscal impact statement for all proposed legislation that authorizes an appropriation or will have a significant economic impact upon the State will result in a state government that is more fiscally accountable by informing legislators of all costs associated with certain bills and resolutions.

The purpose of this Act is to prohibit any legislative committee from holding a hearing on any measure until a fiscal impact statement on that measure has been prepared by the office of the auditor; provided that the office of the legislative analyst shall prepare all fiscal impact statements once the office is fully funded.

SECTION 2. Chapter 21F, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§21F- Fiscal impact statement; requirements. (a) Prior to the consideration of any legislative measure by a committee of either house of the legislature, that would affect the receipt, expenditure, or allocation of state or local funds, either directly or indirectly, the legislative measure shall have an attached fiscal impact statement, which shall include a reliable estimate of the measure's fiscal impact. The fiscal impact statement shall include an estimate of the immediate and long-range costs of the measure, a listing of any revenue or savings to be generated, and an itemization of costs that reflects the necessary capital expenditures and operating costs. A fiscal impact statement shall not constitute a legal attachment of the proposed measure.

(b) The author of a measure requiring a fiscal impact statement shall be responsible for obtaining the required statement from the legislative auditor; provided that once the office of the legislative analyst is fully funded, the legislative analyst shall be responsible for the preparation of all fiscal impact statements and any other responsibilities assigned to the legislative auditor under this section. The legislative auditor shall be responsible for obtaining, directly or through another agency, the information necessary to complete the fiscal impact statement. Within twenty-four hours of receipt of a request from the legislative auditor, the agency furnishing the information shall provide the information to the legislative auditor. Thereafter, the legislative auditor shall prepare the fiscal impact statement and transmit it to the author of the measure. The legislative auditor, for good cause, may approve an extension of the time within which the information is to be furnished.

(c) Fiscal impact statement forms shall consist of a worksheet and a fiscal effect form, and shall be prescribed and distributed by the legislative auditor to the appropriate agencies for the purpose of collecting information necessary for preparation of the fiscal impact statement.

The worksheet shall require a breakdown of the expected costs of the measure including but not limited to personnel, materials, supplies, and capital outlay; the anticipated effect of the expenditures or allocation or receipt of funds; and other pertinent information as the legislative auditor may deem appropriate.

The fiscal effect form shall require a factual, brief, and concise statement and a dollar estimate of the immediate and long-term fiscal effect of the measure. If no dollar estimate is possible, the fiscal effect form shall require the agency to set forth the reasons. The fiscal effect form shall not contain reference to the merits of the measure.

The name of the agency furnishing the information shall appear at the end of the fiscal impact statement form, and the original worksheet and fiscal effect form shall be signed by the head of the agency or by the head of the agency's designee.

Taking into consideration the fiscal impact statement form prepared by the agency and all other relevant available information, the legislative auditor shall prepare a fiscal impact statement and shall transmit it to the author of the measure as required by subsection (b). The fiscal impact statement form prepared by the agency shall be preserved by the legislative auditor, and a copy shall be transmitted to the author or any other person upon request.

(d) If a legislative committee passes a measure with an amendment that alters the fiscal effect of the measure, there shall be attached to the amendment a fiscal impact statement delineating the fiscal effect of the change proposed by the amendment. If a floor amendment alters the fiscal effect of a measure and is proposed without an attached fiscal impact statement of the fiscal effect of the floor amendment, any member of the legislative house in which the floor amendment is proposed may offer a motion that the floor amendment be withdrawn. The floor amendment may be proposed again at any time it would otherwise be in order; provided that the required fiscal impact statement is attached.

(e) If a measure requiring a fiscal impact statement has been passed by a legislative committee without a fiscal impact statement, on the reading of the measure by the full legislative house or senate, a member may offer a motion that the measure be deferred until a fiscal impact statement is prepared.

(f) An agency involved in providing or preparing information for a fiscal impact statement shall keep in strict confidence the subject matter of the proposed measure and the information provided to the legislative auditor prior to the filing or pre-filing of the measure with the office of the clerk. Violation of this subsection shall be a misdemeanor; provided that the maximum term of imprisonment shall not be more than six months, and the maximum fine shall not be more than $500.

(g) A fiscal impact statement shall not be required for general appropriations bills or bills that appropriate a specific amount, or any measure affecting state funds for retirement purposes.

(h) Notwithstanding the provisions of subsection (g), a fiscal impact statement shall be required for any measure concerning a program wholly or partially funded by federal moneys that involves an expenditure of state funds or any legislative appropriation of funds; provided that the fiscal impact statement shall reflect the immediate and long-term fiscal effect on the State of the program and shall include the following information:

(1) The length of time federal funds are to be provided;

(2) The estimated amount of state funds required to continue the program; and

(3) Any other information required by this section."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

THE SENATE	S.B. NO.	2719
TWENTY-EIGHTH LEGISLATURE, 2016		S.D. 1
STATE OF HAWAII