STAND. COM. REP. NO. 1249

Honolulu, Hawaii

RE: H.B. No. 172

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Hawaiian Affairs, to which was referred H.B. No. 172, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE BUDGET OF THE OFFICE OF HAWAIIAN AFFAIRS,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Appropriate funds for various operating expenses of the Office of Hawaiian Affairs;

(2) Allocate an unspecified amount of trust funds appropriated to the Office of Hawaiian Affairs to reimburse the Auditor for expenses related to a financial and management audit of the Office of Hawaiian Affairs; and

(3) Allocate unspecified amounts of funds appropriated for beneficiary advocacy to social services, educational improvement programs, legal services, and housing issues.

Your Committee received testimony in support of this measure from the Office of Hawaiian Affairs, Ke One O Kakuhihewa – O‘ahu Council of the Association of Hawaiian Civic Clubs, Council for Native Hawaiian Advancement, ALEA Bridge, Ali‘i Pauahi Hawaiian Civic Club, The Queen's Health Systems, Kua‘āina Ulu ‘Auamo, Kamehameha Schools, Prince Kūhiō Hawaiian Civic Club, Association of Hawaiian Civic Clubs, and thirteen individuals. Your Committee received testimony in opposition to this measure from the Center for Hawaiian Sovereignty Studies and one individual. Your Committee received comments on this measure from the Office of the Auditor.

Your Committee finds that this measure expresses programs or positions, maximum sums appropriated or authorized, or means of financing indicated for the Office of Hawaiian Affairs to be incorporated into the General Appropriations Act of 2019, or other appropriate legislative vehicle, or to be adopted separately.

Your Committee further finds the Auditor's 2018 Audit of the Office of Hawaiian Affairs did not include a review of the limited liability companies created and used by the Office of Hawaiian Affairs in the course of its business. A performance and management audit of the Office of Hawaiian Affairs' limited liability companies may address community concerns, increase government transparency, and ensure public funds are expended effectively.

Your Committee has amended this measure by:

(1) Limiting the audit of the Office of Hawaiian Affairs to a financial and management audit of limited liability companies created and used by the Office of Hawaiian Affairs and clarifying that auditing functions may be contracted to outside parties;

(2) Changing the means of financing for the financial and management audit to general funds;

(3) Expanding the permissible uses of beneficiary funds allocated for legal services to include assisting with Department of Hawaiian Home Lands matters; and

(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

Your Committee requests that if your Committee on Ways and Means passes this measure that it consider incorporating items in this measure into the appropriate legislative vehicle as necessary or amend this measure to include any provisions necessary to effectuate its purpose and intent.

As affirmed by the record of votes of the members of your Committee on Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 172, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 172, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Hawaiian Affairs,

________________________________

MAILE S.L. SHIMABUKURO, Chair