CONFERENCE COMMITTEE REP. N 157-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 1491

S.D. 1

H.D. 1

C.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 1491, S.D. 1, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO STATE GOVERNMENT,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

The purpose of this bill is to ensure the State's fiscal integrity by:

(1) Authorizing the transfer of excess amounts in various state funds, special funds, revolving funds, and special accounts to the state general fund; and

(2) Repealing the authority of any department, with the approval of the Governor or the Director of Finance if so delegated by the Governor, to transfer excess amounts in any special funds related to that department to the state general fund.

On April 12, 2004, H.B. 1800, H.D. 1, S.D. 1, C.D. 1, also known as the Supplemental Appropriations Act of 2004, was finalized in anticipation of its April 15, 2004, transmittal to the Governor. On the same day the Supplemental Appropriations bill was finalized, the Governor sent a Message to the Legislature proposing various program reductions to help balance the State’s six-year financial plan. While a number of these proposals were included in the Supplemental Appropriations Act of 2004, the Governor proposed reductions not previously considered by the Legislature. These new reductions warranted further review.

In addition to the Governor’s Message of April 12, 2004, the Governor transmitted another Message on April 26, 2004, responding to the Conference Draft of the Supplemental Appropriations bill by presenting additional items that the Governor wanted the Legislature to reconsider.

To ensure the efficient functioning of the State by the Governor and her Administration, your Committee on Conference has carefully reviewed the Governor's requests. After deleting the contents of this bill, your Committee on Conference has inserted provisions that reflect the adjustments proposed by the Governor in her Messages to the Legislature dated April 12, and 26, 2004, and which your Committee on Conference agrees are responsive to the needs and demands of our communities.

Based on the April 12, 2004, Governor’s Message, your Committee on Conference has replaced $501,714 of the general fund appropriation for the Department of Hawaiian Home Lands (DHHL) with $675,307 from the DHHL’s special fund.

In addition, your Committee on Conference has provided for a majority of the Governor’s requests made in the April 26, 2004, Governor’s Message. However, due to the State’s fiscal situation, your Committee on Conference, regrettably, could not fund many of the additional general fund appropriation requests.

The Legislature has been an advocate for the development of new facilities in Kakaako. Your Committee on Conference continues to support the State’s effort to further the development of biomedical research and recognizes the important role these new facilities will have in this effort. In the Supplemental Appropriations bill, the Legislature appropriated moneys from the revolving funds to provide for non-personnel operating expenses for these new facilities. The April 26, 2004, Governor’s Message raised concerns that the "Research and Training Fund may not be able to absorb these expenses." Your Committee on Conference carefully considered these concerns and notes that the Research and Training Revolving Fund (Fund), established to facilitate research and training at the University, currently has a balance of over $21,000,000, which is more than adequate to support the $2,531,561 in revolving funds for non-personnel operating expenses for fiscal year 2004-2005. As such, your Committee on Conference finds that the Administration’s concern on this matter is unsubstantiated. In addition, your Committee on Conference has authorized the University of Hawaii (UH) to use any other revolving fund under its control to support the facility operations if UH determines it is appropriate to do so.

Although non-personnel operating expenses have been funded by revolving fund appropriations in this bill, your Committee on Conference notes that the general fund request for personnel expenses was authorized in the Supplemental Appropriations bill. Such a cost sharing arrangement is similar to the arrangement for collective bargaining costs negotiated by the Governor for the UH faculty.

Your Committee on Conference also carefully reviewed the Governor’s request to provide $703,782 for the Department of Health’s Home and Community Based Services waiver match. After much deliberation, your Committee on Conference decided not to restore this funding in fiscal year 2004-2005 for the following reasons:

(1) The Supplemental Appropriations Act of 2004 provided the Developmental Disabilities Division (DDD) with $2.05 million of the $2.75 million requested for fiscal year 2004-2005. This amount takes into account an increase in the average patient cost (APC) and addresses the waitlist of clients requesting services;

(2) The reduction of the requested amount was based on the inability of the DDD to provide updated APC data. The DDD has been unable to provide the estimated APC for fiscal year 2004-2005 because it has not received actual client data from the Department of Human Services (DHS);

(3) The DDD calculated its supplemental budget request based on an estimated APC of $30,041 for fiscal year 2004-2005 as opposed to the budgeted rate of $27,000 for the Title XIX waiver match to DHS. Your Committee on Conference strongly believes that without appropriate data from DHS to verify the actual APC for fiscal year 2002-2003 and the estimated APC for fiscal year 2003-2004, providing funding at an APC

of $29,076 is reasonable and will still allow the DDD to provide services for additional clients. Repeated efforts during the last five months to solicit updated APC information from DHS to justify providing for any additional funding has been fruitless; and

(4) The DDD lapsed to the general fund a total of $2.9 million in fiscal year 2002-2003.

Your Committee on Conference finds that until such time as the DDD is able to provide the Legislature with actual APC data rather than estimates, the current level of additional funding for the Home and Community Based Services waiver match is appropriate.

Your Committee on Conference also restored vacant positions over and above those requested in the Governor’s Message dated April 26, 2004. DHS was provided $231,159 in general funds for vacant positions, despite the fact that none of these positions were identified in the April 26, 2004, Governor’s Message. Correspondence with the DHS indicates that removing these positions would result in the elimination of "warm bodies," which would contradict the Legislature’s policy on the reduction of positions. In addition, DHS has indicated that keeping these positions is critical in implementing the Rx Plus Program, an initiative that has the support of both the Legislature and the Administration.

 

As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 1491, S.D. 1, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 1491, S.D. 1, H.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE HOUSE

ON THE PART OF THE SENATE

__________________________

DWIGHT Y. TAKAMINE, Chair

__________________________

BRIAN T. TANIGUCHI, Chair

____________________________

CAL KAWAMOTO, Chair