THE SENATE

S.B. NO.

105

TWENTY-EIGHTH LEGISLATURE, 2015

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO THE BUDGET.

 

 

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

 


     SECTION 1.  The purpose of this Act is to address the state budget.

     More specifically, this Act requires information on the estimated future debt service for a proposed capital improvement project to be included in the budget documents submitted to the legislature.  The legislature finds that the information is necessary to make the best decisions regarding the funding of proposed capital improvement projects.

     The legislature intends that this Act also apply to the judiciary budget by operation of section 601-2, Hawaii Revised Statutes.

     SECTION 2.  Section 37-69, Hawaii Revised Statutes, is amended by amending subsections (c) and (d) to read as follows:

     "(c)  The financial plan for the ensuing six fiscal years shall more specifically include:

     (1)  Economic data for the State and the counties of the following kinds:

         (A)  Population: Including historical, current, and projected population count; population distribution by age and sex; estimated increases and decreases, including increases and decreases by immigration;

         (B)  Employment: Including magnitude of labor force by age and sex; labor force participation rates; employment by age and sex; industry and occupational surpluses and shortages; effects of government programs on employment rate;

         (C)  Income:  Including per capita and per family income; disposable income; income distribution;

         (D)  Wages and prices: Including wages by industry and occupational groups; prices for government procurement items; construction costs; cost of living index; price indices for components of personal consumption;

         (E)  Industry and business trends; and

         (F)  Effects of national economic and financial policies and conditions;

     (2)  Brief statements disclosing the basis upon which the revenue estimates in the plan were made, including for each specific tax and nontax revenue source:

         (A)  The previous projections for the last completed fiscal year and the fiscal year in progress;

         (B)  The variance between the projections and the actual or revised estimate, and the reasons for the variances;

         (C)  Tax or source base and rates;

         (D)  Yield projections of existing revenue sources and existing taxes at authorized rates;

         (E)  Assumptions made and methodology used in projections;

         (F)  Changes recommended; and

         (G)  Projected yields if changes are adopted; etc.;

     (3)  At the lowest level on the state program structure, for each program:

         (A)  The total actual program cost for the last completed fiscal year, the estimated cost for the fiscal year in progress, and the estimated cost for each of the next six fiscal years; research and development, operating, and capital costs shall be included and the means of financing shall be identified.  The number of personnel positions and all lease payments shall be shown for the program, identified by their means of financing;

         (B)  The program size indicators; the actual size attained in the last completed fiscal year, the estimated size for the fiscal year in progress, and the estimated size for each of the next six fiscal years; and

         (C)  The effectiveness measures; the actual level of effectiveness attained in the last completed fiscal year, the estimated level of effectiveness for the fiscal year in progress, and the estimated level for each of the next six fiscal years;

     (4)  Appropriate displays of paragraph (3)(A) and (C), at every level of the state program structure above the lowest level, by the major groupings of programs encompassed within the level.  The displays of [[]paragraph[]] (3)(A) shall appropriately identify the means of financing and the number of positions included in the level;

     (5)  Financial summaries displaying the State's financial condition, actual for the last completed fiscal year, and estimated for the fiscal year in progress and each of the next six fiscal years, including:

         (A)  A display of the programmed, total state expenditures, by cost categories, the total state resources anticipated from existing tax and nontax sources at existing rates, by resource categories, including the fund balance or deficit at the beginning of the fiscal year and bond receipts, and the resulting fund balance or deficit at the close of each fiscal year.  Lease payments in each cost category shall be stated separately; and

         (B)  The changes proposed to the existing tax and nontax rates, sources or structure, and the estimated increases or reductions in revenues, the estimated cumulative increases or reductions, and the estimated fund balance or deficit in each of the next six fiscal years as a result of [such] the proposed changes.  Proposals for changes in the existing tax and nontax rates, sources or structure shall be made in every case where the proposed, total state expenditures exceed the total resources anticipated from existing tax and nontax sources at existing rates.

          [Such] The financial summaries shall be prepared for the total state expenditures and resources and for the general fund and special fund portions thereof;

     (6)  A summary of the balance of each special fund, actual for the last completed fiscal year and estimated for the fiscal year in progress and estimated for each of the next six fiscal years;

     (7)  A summary of the State's total bond fund required to carry out the recommended programs and the kinds of bonds and amounts thereof through which the requirements were met in the last completed fiscal year, are to be met in the fiscal year in progress, and are proposed to be met in each of the next six fiscal years.  The summary shall detail, for each fiscal year:

         (A)  Of the total bond fund requirements, the amount, by cost categories, requiring new bond issuance authorization and the kinds and amounts of bonds planned for issuance under such new authorizations;

         (B)  By bond categories, the total, cumulative balance of bonds authorized in prior years but unissued and the amount thereof proposed to be issued; [and]

         (C)  A recapitulation of the total bonds to be issued, including both new authorizations and prior authorizations, by bond categories; and

         (D)  The total annual debt service, itemized by bond category;

     (8)  Separately for general fund tax revenues, special fund tax revenues, general fund nontax revenues, and special fund nontax revenues:

         (A)  By kinds of taxes or sources, the amount of revenue from existing, authorized taxes or sources at existing rates received in the last completed fiscal year and estimated to be received in the fiscal year in progress and in each of the next six fiscal years;

         (B)  A summary of the proposed changes in the existing taxes or sources or rates, and the estimated increases or reductions in revenues in each of the next six fiscal years resulting from [such] the changes; and

         (C)  The total estimated revenues with and without the proposed changes in each of the next six fiscal years; and

     (9)  A summary of the State's total payments due under financing agreements required to carry out the recommended programs and the kinds of financing agreements and amounts thereof through which the requirements were met in the last completed fiscal year, are to be met in the fiscal year in progress, and are proposed to be met in each of the next six fiscal years.  The summary shall detail, for each fiscal year:

         (A)  Of the total financing agreement requirements, the amount, by cost categories, requiring new financing agreement authorizations and the kinds and amounts of financing agreements planned for execution and delivery under such new authorizations;

         (B)  By cost category, the cumulative balance of financing agreements authorized in prior years but not executed and delivered and the amount proposed to be executed and delivered; and

         (C)  A recapitulation of the total financing agreements to be executed and delivered, including both new authorizations and prior authorizations, by cost categories.

     (d)  The program plans for the ensuing six fiscal years shall more specifically include:

     (1)  At the lowest level on the state program structure, for each program:

         (A)  A statement of its objectives;

         (B)  Measures by which the effectiveness in attaining the objectives is to be assessed;

         (C)  The level of effectiveness planned for each of the ensuing six fiscal years;

         (D)  A brief description of the activities encompassed;

         (E)  The program size indicators;

         (F)  The program size planned for each of the next six fiscal years;

         (G)  A narrative explanation of the plans for the program.  It shall contain, and in general be limited to, the following:

              (i)  A description of the kinds of activities carried out or unusual technologies employed;

             (ii)  A statement of key policies pursued;

            (iii)  Identification of important program or organizational relationships involved;

             (iv)  A description of major external trends affecting the program;

              (v)  A discussion of significant discrepancies between previously planned cost, effectiveness, and program size levels and those actually achieved;

             (vi)  Comments on, and an interpretation of, cost, effectiveness, and program size data over the upcoming budget period, with special attention devoted to changes from the current budget period;

            (vii)  Comments on, and an interpretation of, cost, effectiveness, and program size data over the four years of the planning period and how they relate to the corresponding data for the budget period; and

           (viii)  A summary of the special analytic study, program evaluation, or other analytic report supporting a substantial change in the program where such a major program change recommendation has been made;

         (H)  The full cost implications of the recommended programs, by cost categories and cost elements, actually experienced in the last completed fiscal year, estimated for the fiscal year in progress, and estimated for each of the next six fiscal years.  The means of financing shall be identified for each cost category.  The personal services cost element and the lease payments cost element shall be shown separately; the cost elements of other current expenses, equipment, and motor vehicles may be combined.  The number of positions included in the program shall be appropriately identified by means of financing;

         (I)  A recapitulation of subparagraph (H) for the last completed fiscal year, the fiscal year in progress and each of the next six fiscal years, by means of financing grouped under each cost category.  The number of positions included in any program shall be appropriately identified;

         (J)  An identification of the revenues generated in the last completed fiscal year and estimated to be generated in the fiscal year in progress and in each of the next six fiscal years, and the fund into which [such] the revenues are deposited;

         (K)  Details of implementation of each capital improvement project included in the total program cost, including:

              (i)  A description of the project, location, and scope;

             (ii)  The initially estimated, currently estimated, and final cost of the project, by capital investment cost elements and by means of financing;

            (iii)  The amounts previously appropriated by the legislature for the project, by cost elements and by means of financing specified in the acts appropriating the sums, and an identification of the acts so appropriating;

             (iv)  The costs incurred in the last completed fiscal year and the estimated costs to be incurred in the fiscal year in progress and in each of the next six fiscal years, by cost elements and by means of financing; [and]

              (v)  A commencement and completion schedule, by month and year, of the various phases of the capital improvement project (i.e., land acquisition, design, construction, and occupancy) as originally intended, as currently estimated, and as actually experienced; [and]

             (vi)  If the cost of the project is planned to be totally or partially financed with bond receipts, the bond category to be used, term of the bonds, total debt service to fully amortize the bonds, and annual debt service, itemized by principal and interest, in each of the next six fiscal years; and

            (vii)  If clause (vi) is applicable to a project, the total debt service to fully amortize the bonds used to finance the project and annual debt service in each of the next six fiscal years under at least one alternative with different realistic assumptions from the bond financing plan."

     SECTION 3.  Section 37-71, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  The display of financial requirements for the ensuing two fiscal years shall more specifically include:

     (1)  At the lowest level on the state program structure, for each program:

         (A)  The total recommended expenditures, including research and development, capital and operating costs, by cost categories and cost elements for the ensuing biennium; the planned allocation of the total biennial request, by cost categories, and cost elements, between the two fiscal years of the biennium.  The means of financing and the number of positions included in any cost category amount shall be appropriately identified;

         (B)  A summary showing means of financing the total recommended expenditures, those amounts requiring and those amounts not requiring legislative appropriation or authorization for spending in each fiscal year of the biennium;

         (C)  A crosswalk of the total proposed biennial expenditures between the program and expending agencies.  The means of financing the number of positions and the lease payments included in any cost amount, and the net amount requiring appropriation or authorization shall be appropriately identified for each expending agency; and

         (D)  The proposed changes in the levels of expenditures, by cost categories, between the biennium in progress and the ensuing biennium, together with a brief explanation of the major reasons for each change.  The reasons shall include, as appropriate, the following:

              (i)  Salary adjustments to existing positions of personnel;

             (ii)  The addition or deletion of positions;

            (iii)  Changes in the number of persons being served or to be served by the program;

             (iv)  Changes in the program implementation schedule;

              (v)  Changes in the actual or planned level of program effectiveness;

             (vi)  Increases due to the establishment of a program not previously included in the State's program structure;

            (vii)  Decreases due to the phasing out of a program previously included in the State's program structure; and

           (viii)  Changes in the purchase price of goods or services;

          As appropriate, references to the program and financial plan shall be noted for an explanation of the changes.  Notwithstanding the provisions of subsection (b)(5), the proposed changes in the levels of expenditures may be shown to the nearest thousand dollars;

     (2)  Appropriate summaries of paragraph (1)(A) and (C) immediately above at every level of the state program structure above the lowest level.  [Such] The summaries shall be by the major groupings of programs encompassed within the level.  The summaries of paragraph (1)(A) shall identify the means of financing and the number of positions and the lease payments included in any cost category amount; and

     (3)  A summary listing of all capital improvement projects included in the proposed capital investment costs for the ensuing biennium.  The listing shall be by programs at the lowest level of the state program structure and shall show for each project, by capital investment cost elements[:] for subparagraphs (A) to (C):

         (A)  The cost of the project;

         (B)  The amount of funds previously appropriated and authorized by the legislature; and

         (C)  The amount of new appropriations and authorizations proposed in each of the two fiscal years of the ensuing biennium and in each of the succeeding four years.  The amount of the new appropriations and authorizations proposed shall constitute the proposed new requests for the project in each of the fiscal bienniums.

          If applicable, the listing shall also include the projected annual debt service in the ensuing biennium for bonds to be issued to finance each project.  In every instance, the means of financing shall be noted."

     SECTION 4.  Section 601-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The chief justice shall possess the following powers, subject to [such] rules as may be adopted by the supreme court:

     (1)  To assign circuit judges from one circuit to another;

     (2)  In a circuit court with more than one judge, (A) to make assignments of calendars among the circuit judges for [such] a period as the chief justice may determine and, as deemed advisable from time to time, to change assignments of calendars or portions thereof (but not individual cases) from one judge to another, and (B) to appoint one of the judges, for [such] a period as the chief justice may determine, as the administrative judge to manage the business of the court, subject to the rules of the supreme court and the direction of the chief justice;

     (3)  To prescribe for all of the courts a uniform system of keeping and periodically reporting statistics of their business;

     (4)  To procure from all of the courts estimates for their appropriations; with the cooperation of the representatives of the court concerned to review and revise them as the chief justice deems necessary for equitable provisions for the various courts according to their needs and to present the estimates, as reviewed and revised by the chief justice, to the legislature as collectively constituting a unified budget for all of the courts;

     (5)  To exercise exclusive authority over the preparation, explanation, and administration of the judiciary budget, programs, plans, and expenditures, including without limitation policies and practices of financial administration and the establishment of guidelines as to permissible expenditures, provided that all expenditures of the judiciary shall be in conformance with program appropriations and provisions of the legislature, and all powers of administration over judiciary personnel that are specified in Title 7; and

     (6)  To do all other acts [which] that may be necessary or appropriate for the administration of the judiciary.

The budget, supplemental budget, six-year program and financial plan, and the variance report of the judiciary shall be submitted by the chief justice to the legislature in accordance with the schedule of submission specified for the governor in chapter 37 and shall contain the program information prescribed in that chapter[.] as applicable to the judiciary.  By November 1 of each year preceding a legislative session in which a budget is to be submitted, the chief justice shall provide written notification to the governor of the proposed total expenditures, by cost categories and sources of funding, and estimated revenues of the judiciary for each fiscal year of the next fiscal biennium[.] or fiscal year, as applicable."

     SECTION 5.  Sections 2, 3, and 4 shall apply to the six-year program and financial plans and budgets submitted under sections 37-69, 37-71, 37-72, and 601-2 Hawaii Revised Statutes, after the effective date of this Act.

     SECTION 6.  This Act shall not be construed as requiring the legislature or any of its committees or members to prepare an estimate of the debt service for a capital improvement project before including an appropriation for that project in a bill.

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect on July 1, 2016.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Budget Documents; CIP Estimated Debt Service

 

Description:

Requires the inclusion in the six-year program and financial plan and budget of information on the debt service for bonds issued to finance a proposed capital improvement project.  States intent that the provisions also apply to the judiciary budget by operation of existing law.  Effective 07/01/16.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.