Report Title:

Const. Amend; "Rainy Day" Fund

 

Description:

Proposes to establish a fund for emergency and budget reserve purposes and to clarify that appropriations to the Emergency and Budget Reserve Fund are excluded from the general fund expenditure ceiling and that appropriations from the Emergency and Budget Reserve Fund are included. (HB575 HD2)

 

HOUSE OF REPRESENTATIVES

H.B. NO.

575

TWENTY-FIRST LEGISLATURE, 2001

H.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

PROPOSING AMENDMENTS TO ARTICLE VII OF THE HAWAII CONSTITUTION REGARDING AN EMERGENCY AND BUDGET RESERVE FUND.

 

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

SECTION 1. The purpose of this Act is to propose amendments to article VII of the Constitution of the State of Hawaii that would require the establishment of a financial reserve, to be used when there is an emergency or economic downturn or when there is an unforeseen reduction in revenues.

This Act also clarifies that:

(1) Appropriations to the financial reserve are not subject to the general fund expenditure ceiling; and

(2) Appropriations from the financial reserve are subject to the general fund expenditure ceiling.

It is the legislature's intent that appropriations of moneys into the emergency and budget reserve fund be regarded as measures to save for a rainy day rather than spending measures, and thus be excluded from the general fund expenditure ceiling. When the reserves are actually used to fund programs, the expenditures shall be counted against the expenditure ceiling.

SECTION 2. Article VII of the Constitution of the State of Hawaii is amended by adding a new section to be appropriately designated and to read as follows:

"EMERGENCY AND BUDGET RESERVE FUND

Section . There shall be established by law an emergency and budget reserve fund to receive moneys set aside as financial reserves for the State.

Expenditures from the emergency and budget reserve fund are meant to be a temporary supplemental source of funding during times of emergency, economic downturn, or unforeseen reduction in revenues. Expenditures shall not be made from the emergency and budget reserve fund unless authorized by the enactment of legislation approved by a two-thirds vote of the members of each house of the legislature."

SECTION 3. Article VII, section 9, of the Constitution of the State of Hawaii is amended to read as follows:

"LEGISLATIVE APPROPRIATIONS; PROCEDURES;

EXPENDITURE CEILING

Section 9. In each regular session in an odd-numbered year, the legislature shall transmit to the governor an appropriation bill or bills providing for the anticipated total expenditures of the State for the ensuing fiscal biennium. [In such session, no] No appropriation bill, except bills recommended by the governor for immediate passage[,] or to cover the expenses of the legislature, shall be passed on final reading [until] unless the bill authorizing operating expenditures for the ensuing fiscal biennium, to be known as the general appropriations bill, [shall have] has first been transmitted to the governor.

In each regular session in an even-numbered year[, at such time] and as [may be] otherwise provided by law, the governor may submit to the legislature a bill to amend any appropriation for operating expenditures of the current fiscal biennium, to be known as the supplemental appropriations bill, and bills to amend any appropriations for capital expenditures of the current fiscal biennium[, and at]. At the same time, the governor shall submit a bill or bills to provide for any added revenues or borrowings that [such amendments] the supplemental appropriations bill and bills amending appropriations for capital expenditures of the current fiscal biennium may require. In each regular session in an even-numbered year, bills may be introduced in the legislature to amend any appropriation act or bond authorization act of the current fiscal biennium or prior fiscal periods.

In any [such] session in which the legislature submits to the governor a supplemental appropriations bill, no other appropriation bill, except bills recommended by the governor for immediate passage[,] or to cover the expenses of the legislature, shall be passed on final reading [until such] unless the supplemental appropriations bill [shall have] has first been transmitted to the governor.

GENERAL FUND EXPENDITURE CEILING

Notwithstanding any other provision to the contrary, the legislature shall establish a general fund expenditure ceiling [which shall limit] that limits the rate of growth of general fund appropriations[, excluding federal funds received by the general fund,] to the estimated rate of growth of the State's economy as provided by law. The ceiling shall apply to expenditures authorized from the emergency and budget reserve fund. The ceiling shall not apply to federal funds received by the general fund or to appropriations made to the emergency and budget reserve fund.

No appropriations in excess of [such] the ceiling shall be authorized during any legislative session unless an appropriation bill is passed by the legislature [shall,] at final reading by a two-thirds vote of the members to which each house of the legislature is entitled[, set] and the bill sets forth the dollar amount and the rate by which the ceiling will be exceeded and the reasons [therefor.] for exceeding the ceiling."

SECTION 4. The question to be printed on the ballot shall be as follows:

"Shall article VII of the Constitution of the State of Hawaii be amended to:

(1) Require the establishment of an emergency and budget reserve fund;

(2) Require each house of the legislature to authorize expenditures from the emergency and budget reserve fund by a two-thirds vote;

(3) Exclude appropriations to the emergency and budget reserve fund from the general fund expenditure ceiling; and

(4) Apply expenditures authorized from the emergency and budget reserve fund to the general fund expenditure ceiling?"

SECTION 5. Constitutional material to be repealed is bracketed and stricken. New constitutional material is underscored.

SECTION 6. This Act shall take effect upon compliance with article XVII, section 3, of the Constitution of the State of Hawaii.