HB1199

SECTION 1. The legislature finds that numerous states incorporate fiscal notes into their legislative process, which increase public transparency by disclosing the potential financial impact a measure would have on the state and local government. The Council of State Governments reports that forty-four states include "projected future cost" in their bill notes. Some states require fiscal notes in their house rules, while others require them in statute. In contrast, Hawaii does not require fiscal notes to accompany measures during the legislative process. Therefore, representatives and senators are forced to vote on measures without knowing the financial impact of their decisions. The purpose of this Act is to require the office of legislative analyst to produce fiscal notes on all fiscal bills.

SECTION 2. Section 21F-6, Hawaii Revised Statutes, is amended to read as follows:

"[[]§21F-6[]] Office of the legislative analyst established. (a) There is established the office of the legislative analyst [~~to be administered by the committee]~~. The [~~committee~~] legislature, by a majority vote of each house in joint session, shall appoint a legislative analyst who shall serve for a period of four years. The [~~committee, by a three-fourths vote of its members,~~] legislature, by a majority vote of each house in joint session, may remove the legislative analyst from office, but only for cause. [~~The committee shall fix the salary of the legislative analyst.~~] The salary of the legislative analyst shall be the same as the salary of the director of the legislative reference bureau.

(b) The legislative analyst may employ [~~other clerical and technical employees~~] a first assistant and other employees as may be necessary to carry out the functions of the office. The legislative analyst, first assistant and other [~~clerical and technical~~] employees shall be entitled to participate in any employee benefit program plan or privilege generally available to state employees."

SECTION 3. Section 21F-7, Hawaii Revised Statutes, is amended to read as follows:

"[[]§21F-7[]] General purposes of analyst. (a) The purpose of the office of the legislative analyst shall be:

(1) To provide the legislature with research and analysis of current and projected state revenues and expenditures;

(2) To provide the legislature with a report analyzing the governor's proposed levels of revenue and expenditures for biennial budgets submitted under chapter 37 as well as other supplemental budget submittals to the legislature by the governor;

(3) To provide an analysis of the impact of the governor's proposed revenue and expenditure plans for the next biennium;

(4) To conduct research matters of economic and fiscal policy and to report to the legislature on the result of the research;

(5) To provide economic reports and studies on the state of the State's economy, including trends and forecasts for consideration by the legislature;

(6) To conduct budget and tax studies and provide general fiscal and budgetary information;

(7) To review and make recommendations on the operation of state programs in order to appraise the implementation of state laws regarding the expenditure of funds and to recommend means of improving their efficiency; [~~and~~]

(8) To recommend to the legislature changes in the mix of revenue sources for programs, in the percentage of state expenditures devoted to major programs, and in the role of the legislature in overseeing state government expenditures and revenue projections[.]; and

(9) To prepare a fiscal note to accompany each fiscal bill before the measure is recommended for passage by each house committee or senate committee of the legislature to which the measure is referred.

(b) In performing the duties under subsection (a), the legislative analyst shall consider, among other things:

(1) The relative dependence on state tax revenues, federal funds, and user fees to support state-funded programs, and whether the existing mix of revenue sources is appropriate, given the purposes of the programs;

(2) The relative percentages of state expenditures that are devoted to major programs such as education, assistance to local government, aid to individuals, state agencies and institutions, and debt service; and

(3) The role of the legislature in overseeing state government expenditures, including legislative appropriation of money from the general fund, legislative appropriation of money from funds other than the general fund, state agency receipt of money into revolving and other dedicated funds and expenditure of money from these funds, and state agency expenditure of federal funds."

SECTION 4. Section 21F-8, Hawaii Revised Statutes, is amended to read as follows:

"[[]§21F-8[]] Agencies to cooperate. (a) All departments, agencies, and education institutions of the executive and judicial branches, the office of Hawaiian affairs, and the University of Hawaii shall comply with requests of the office of the legislative analyst for information, data, estimates, and statistics on the funding revenue operations, and other affairs of the department, agency, education institution, the office of Hawaiian affairs, or University of Hawaii. The comptroller, the director of finance, the director of taxation, the administrative director of the courts, the administrator of the office of Hawaiian affairs, and the president of the University of Hawaii shall provide the office of the legislative analyst with full and free access to information, data, estimates, and statistics in the possession of their respective departments on the state budget, revenue, expenditures, and tax revenue and expenditures.

(b) All departments, agencies, and education institutions of the executive and judicial branches, the office of Hawaiian affairs, the University of Hawaii, and county departments and agencies shall promptly provide any information requested by the legislative analyst for preparing a fiscal note, including but not limited to an estimate, in dollars, of the amount by which the bill would increase or decrease the revenues or expenditures received of made by the department, agency, or office."

SECTION 5. Chapter 21F, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§21F-_ Fiscal notes. (a) A fiscal note, where possible, shall:

(1) Cite the effect of the measure in dollar amounts;

(2) Cite the statutory provisions affected;

(3) Estimate the increase or decrease in revenues or expenditures by the state or counties;

(4) Include the costs which may be absorbed without additional funds;

(5) Include the assumptions used in determining the cost estimates; and

(6) Specify any long-range implication.

(b) A fiscal note may comment on technical or mechanical defects in the bill but shall express no opinions concerning the merits of the proposal.

(c) A copy of the fiscal note shall be delivered to the chair of the senate committee on ways and means, the chair of the house committee on finance, the chairs of the standing committees to which the bill has been referred, and to the first primary introducer of the bill. No committee shall make a decision regarding disposition of a fiscal bill without having received a completed fiscal note for review and informed decision making.

(d) Any fiscal note produced by the office of the legislative analyst for a measure up for consideration shall be a legislative document attached as an addendum to the measure's standing committee report and shall be made available to the public."

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the operations of the office of the legislative analyst, including the payment of salaries of the legislative analyst, first assistant, and other employees as may be necessary, and the purchase of necessary equipment.

The sums appropriated shall be expended by the office of the legislative analyst for the purposes of this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2025.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1199
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII