STAND. COM. REP. NO. 2569

Honolulu, Hawaii

RE:    S.B. No. 2845

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 2845 entitled:

"A BILL FOR AN ACT MAKING APPROPRIATIONS TO REPAY GENERAL FUND CASH ADVANCES,"

begs leave to report as follows:

The purpose of this measure is to formally reconcile general fund cash advances that have not been repaid and to more accurately reflect the State's general fund balance.

     Specifically, this measure appropriates from the general revenues of the State:

     (1)  $89,900,000 to repay general fund cash advances to the capital projects fund for the purchase of lands of the former Kapalama Military Reservation; and

     (2)  $13,300,000 to repay general fund cash advances to the Hawaii Health Systems Corporation for its employer contributions to the Employees' Retirement System and to the Employer-Union Health Benefits Trust Fund.

Your Committee received testimony in support of this measure from the Department of Budget and Finance and the Hawaii Health Systems Corporation.

     Your Committee finds that the State's general fund balance currently reflects repayments for an $89,900,000 cash advance authorized in 1989 for the purchase of lands of the former Kapalama Military Reservation and for a $13,300,000 cash advance made in fiscal year 2002-2003 for Hawaii Health Systems Corporation contributions to the Employees' Retirement System and to the Employer-Union Health Benefits Trust Fund.  However, these cash advances totaling $103,200,000 have not been repaid and it appears unlikely that they will be repaid.  Consequently, the assets and liabilities of the general fund are currently overstated by $103,200,000.

     Your Committee further finds that making the necessary appropriations and formally reconciling these general fund cash advances will more accurately reflect the general fund balance and actual resources available to finance state programs and expenses.

     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. 2845 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

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

____________________________

JILL N. TOKUDA, Chair