Honolulu, Hawaii
                                                     , 1999

                                   RE:  GOV. MSG. NO. 146

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Ways and Means, to which was referred
Governor's Message No. 146, submitting for study and
consideration the nomination of:

     EARL I. ANZAI, gubernatorial nominee as Director of Finance,
     for a term to expire December 2, 2002,

begs leave to report as follows:

     Upon review of the qualifications and other background
information submitted by the nominee, your Committee finds that
Earl I. Anzai has served as the Director of Finance for the past
four years.

     Prior to assuming the position of Director of Finance, Mr.
Anzai amassed an extensive public service career record which
includes his tenure as a management analyst with the U.S. General
Accounting Office, a legislative analyst with the Hawaii Office
of the Auditor, a committee clerk with the Constitutional
Convention, chief clerk for the Hawaii Senate Ways and Means
Committee, as well as several legal positions including attorney
for the Special Senate Committee Investigating the Pesticide
Heptachlor in Milk, chief counsel for the Senate Committee on
Judiciary, and special legal counsel to the Chairperson of the
Board of Trustees of the Office of Hawaiian Affairs. 

     Mr. Anzai holds Bachelor's and Master's degrees in Economics
from the University of Hawaii, and a J.D. from the William S.
Richardson School of Law.

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                                   STAND. COM. REP. NO. 1806
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     Your Committee members diligently questioned the nominee
regarding his administrative qualifications, his vision and
priorities for the Department of Budget and Finance, and related
policy issues presently before the Legislature.  Your Committee
wishes to express some concerns regarding his responses and
performance as Director of Finance.

     In 1997, Mr. Anzai orally requested an opinion from the
Attorney General regarding the need to submit a balanced budget
to the Legislature.  Despite the Attorney General's reponse that
a balanced budget must be submitted, Mr. Anzai did not do so.
Attorney General Opinion No. 83-4 stated that "while the
allotment system authorizes the governor to avoid wasteful
expenditures in circumstances where the social purposes of the
appropriation are not compromised or to reduce expenditures where
unanticipated revenue shortfalls occur, it does not permit the
executive branch to prioritize authorized expenditures and
reallocate resources, for to do so would be an usurpation of the
legislature's appropriation powers."

     Mr. Anzai's responses to the Legislature have been slow and
incomplete with regard to requests for details on the
Administration's plans to resolve the State's fiscal problems.
Your Committee has been particularly frustrated in its efforts to
obtain reliable information on which to make policy decisions in
such critical areas as funding for Felix and the Administration's
recent proposal to divert excess investment earnings from the
Employees' Retirement System to fund collective bargaining
retroactive increases and school repair and maintenance projects.

     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, after full consideration of the background, character,
experience, and qualifications of the nominee, has found the
nominee to be qualified for the position to which nominated and
recommends that the Senate advise and consent to the nomination.

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                                   STAND. COM. REP. NO. 1806
                                   Page 3

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

                                 CAROL FUKUNAGA, Co-Chair

                                 ANDREW LEVIN, Co-Chair

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