REPORT TITLE:
Public Funds


DESCRIPTION:
Establishes the emergency and budget stabilization fund for
emergency or unanticipated shortfalls.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            598         
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC FUNDS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that the establishment of
 
 2 an emergency and budget stabilization fund is necessary to
 
 3 provide for emergency or unanticipated shortfalls.
 
 4      The purpose of this Act is to establish an emergency and
 
 5 budget stabilization fund into which, at the close of any fiscal
 
 6 year in which the general fund balance exceeds five per cent of
 
 7 the total moneys deposited into the general fund for that year,
 
 8 shall be transferred an amount equal to such excess.
 
 9      SECTION 2.  Chapter 37, Hawaii Revised Statutes, is amended
 
10 by adding a new part to be appropriately designated and to read
 
11 as follows:
 
12                 "PART    . EMERGENCY AND BUDGET
 
13                        STABILIZATION FUND
 
14      37-     Establishment of fund; transfers.  There is
 
15 established an emergency and budget stabilization fund into which
 
16 shall be transferred periodically the amounts specified by this
 
17 section.  Whenever the general fund balance at the close of a
 
18 fiscal year exceeds five per cent of the total moneys deposited
 
19 into the general fund for that fiscal year, including any
 

 
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 1 beginning balance, the legislature shall transfer an amount equal
 
 2 to such excess into the emergency and budget stabilization fund.
 
 3      All interest earned from moneys in the emergency and budget
 
 4 stabilization fund shall accumulate and become part of the fund.
 
 5      37-     Appropriations required; purposes; prohibitions.
 
 6 (a)  No expenditures shall be made from the emergency and budget
 
 7 stabilization fund except pursuant to appropriations.  The
 
 8 governor, through the executive budget, supplemental budget, or
 
 9 any appropriations bill, may recommend appropriations from the
 
10 emergency and budget stabilization fund upon certification to the
 
11 legislature, together with the governor's recommended
 
12 appropriation by amount and specific purpose, that the
 
13 recommended utilization of the emergency and budget stabilization
 
14 fund is necessary by reason of emergency or unanticipated
 
15 shortfalls and that no reasonable alternative funding source
 
16 exists.
 
17      (b)  The legislature, upon adoption of a concurrent
 
18 resolution indicating agreement with the governor's certification
 
19 as set forth in subsection (a), may make appropriations from the
 
20 fund for the following purposes:
 
21      (1)  To maintain levels of programs determined to be
 
22           essential to the public health, safety, and welfare;
 
23      (2)  To maintain current services for federally assisted
 

 
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 1           state programs determined to be essential to the public
 
 2           health, safety, and welfare when federal funds for
 
 3           these programs are reduced or are less than
 
 4           anticipated;
 
 5      (3)  To meet debt service payments when interest costs are
 
 6           higher than anticipated or to meet capital investment
 
 7           costs when high interest rates prevent the State from
 
 8           borrowing at reasonable rates in the long-term
 
 9           borrowing market;
 
10      (4)  To provide for counter-cyclical economic and employment
 
11           programs in periods of economic downturn or slowdown;
 
12      (5)  To restore facilities destroyed or damaged or services
 
13           disrupted by disaster in any county; or
 
14      (6)  To meet other emergencies when declared by the governor
 
15           or determined to be urgent by the legislature.
 
16      (c)  Notwithstanding subsections (a) and (b), in any fiscal
 
17 year the governor may recommend and the legislature may
 
18 appropriate up to fifty per cent of the balance of the emergency
 
19 and budget stabilization fund at the conclusion of the previous
 
20 fiscal year for payment of general obligation debt without the
 
21 prerequisites of the governor's certification and the
 
22 legislature's concurrent resolution as set forth in subsections
 
23 (a) and (b), respectively.
 

 
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 1      (d)  Appropriations from the fund for the following purposes
 
 2 are specifically prohibited:
 
 3      (1)  To meet expenses of the legislature;
 
 4      (2)  To provide for salary adjustments for officials
 
 5           appointed pursuant to article V, section 6, or article
 
 6           VI, section 3, of the state constitution and for others
 
 7           whose salaries may be directly related to the salaries
 
 8           of such officials; and
 
 9      (3)  To fund cost items in any collective bargaining
 
10           contract.
 
11      (e)  Total general fund expenditures by the State during any
 
12 fiscal year, including expenditures from appropriations from the
 
13 emergency and budget stabilization fund, shall not exceed the
 
14 general fund expenditure ceiling established pursuant to chapter
 
15 37, part V, except as otherwise provided.
 
16      37-     Report. At least twenty days prior to the
 
17 convening of each regular session, the director of finance shall
 
18 submit to the legislature a report of the condition of the
 
19 emergency and budget stabilization fund, including:
 
20      (1)  For the previous fiscal year:  the beginning balance;
 
21           the amount transferred to the fund; the appropriations
 
22           made from the fund; the expenditures and encumbrances
 
23           for each appropriation; the amount, if any, passed for
 

 
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 1           each appropriation; and the closing balance; and
 
 2      (2)  For the fiscal year in progress:  the beginning
 
 3           balance; the amount transferred to the fund; the
 
 4           appropriations made from the fund; expenditures for
 
 5           each appropriation for the first quarter; estimated
 
 6           expenditures for the remaining three quarters; and the
 
 7           estimated closing balance."
 
 8      SECTION 3.  There is transferred out of the general revenues
 
 9 of the State of Hawaii into the emergency and budget
 
10 stabilization fund the sum of $5,000,000 for fiscal year 1999-
 
11 2000 for the purposes of this Act.
 
12      SECTION 4.  This Act shall take effect on July 1, 1999.
 
13 
 
14                           INTRODUCED BY:  _______________________