STAND. COM. REP. NO. 2474

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2544
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 2544 entitled:

     "A BILL FOR AN ACT RELATING TO THE LEGISLATIVE ANALYST,"

begs leave to report as follows:

     The purpose of this bill is to establish the Office of the
Legislative Analyst as a legislative service agency and repeal
the Joint Legislative Budget Committee.

     Your Committee agrees with the intent of this bill, and
finds that there is an immediate need for a Legislative Analyst
to assist the Legislature in performing an independent analysis
of executive or other agency budgets, revenues and expenditures,
economic conditions, and tax policies.

     In the past, the Legislature was able to borrow fiscal
analysts from state and county agencies or the private sector
more readily.  However, your Committee finds that economic,
fiscal, and tax issues today are far more complex, requiring the
work of analysts who have long-term expertise and are better
capable of conducting in-depth analyses of these issues on a
regular basis.

     Your Committee further finds that the Legislative Analyst's
Office in the State of California, for example, plays a key role
in that State's Legislature by assisting legislators in doing in-

 
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depth evaluations of state programs and conducting analyses on
fiscal, economic, and tax policy issues.  The California
Legislative Analyst's Office has been providing fiscal and policy
advice to the Legislature for more than fifty-five years and is
well known for its fiscal and programmatic expertise and
nonpartisan analyses of that state's budget.  The office serves
as the "eyes and ears" for the California Legislature to ensure
that the executive branch is implementing legislative policy in a
cost efficient and effective manner.  The office carries out this
legislative oversight function by reviewing and analyzing the
operations and finances of state government.

     Historically, one of the most important responsibilities of
the California Legislative Analyst's Office has been to analyze
the annual Governor's budget and publish a detailed review at the
end of February.  This document, the Analysis of the Budget Bill,
includes individual department reviews and recommendations for
legislative action.  A companion document, Perspectives and
Issues, provides an overview of the state's fiscal picture and
identifies some of the major policy issues confronting the
Legislature.  These documents help set the agenda for the work of
the Legislature's fiscal committees in developing a state budget.
Staff of the office work with these committees throughout the
budget process and provide public testimony on the office's
recommendations.

     Given the size and expertise of budget and fiscal analysis
staff in the executive branch as compared to the significantly
smaller size of the legislative branch staff, primarily the
staffs of the House Committee on Finance and the Senate Committee
on Ways and Means, with assistance from the Auditor's office and
Legislative Reference Bureau, and in view of the fact that the
executive branch no longer loans staff to the Legislature, your
Committee finds that it is incumbent upon the Legislature to
develop its own independent capacity to conduct fiscal, economic,
and tax analysis.

     Upon further consideration, your Committee has amended this
bill by:

     (1)  Requiring the Legislative Analyst to prepare and
          distribute fiscal impact statements for all legislative
          measures, and specifying the requirements for these
          statements; and

     (2)  Making technical, nonsubstantive changes for the
          purposes of clarity and consistency.

 
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     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.
2544, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as S.B. No. 2544, S.D. 1, and
be placed on the calendar for Third Reading.

                                 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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