Bill Text: HI SB2692 | 2010 | Regular Session | Introduced

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Bill Title: State Fiscal Stabilization Fund; Deposits; Uses

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2010-02-09 - (S) The committee on HMS deferred the measure. [SB2692 Detail]

Download: Hawaii-2010-SB2692-Introduced.html

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THE SENATE	S.B. NO.	2692
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO THE STATE FISCAL STABILIZATION FUND.

 

 

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

 

     SECTION 1.  During periods of economic growth, tax collections can exceed spending needs resulting in a positive balance at the end of the fiscal year.  However, when the economy is sluggish, tax revenues generally decline even as the need for public services continues or increases, resulting in short-term budget deficits.  As a result, a state fiscal stabilization fund is necessary to balance the highs and lows of an economic cycle by setting aside general fund revenues in good years, and using the saved revenues to offset the State budget shortfall in bad years.

     The purpose of this Act is to require a percentage of general fund revenues not required for immediate needs to be deposited into a newly established state fiscal stabilization fund during periods of economic growth, which ensures that the fund functions as needed to meet budgeting requirements during periods of economic downturn.

     SECTION 2.  Chapter 37, Hawaii Revised Statutes, is amended by adding to part V a new section to be appropriately designated and to read as follows:

     "§37-    Compliance with expenditure ceiling.  Notwithstanding any other law to the contrary, the general fund expenditure ceiling requirement shall not apply to appropriations made to the state fiscal stabilization fund but shall apply to appropriations authorized from the state fiscal stabilization fund."

     SECTION 3.  Section 328L-3, Hawaii Revised Statutes, is amended by to read as follows:

     "§328L-3  [Emergency and budget reserve fund.] State fiscal stabilization fund.  (a)  There is established in the state treasury the [emergency and budget reserve] state fiscal stabilization fund which shall be a special fund administered by the director of finance, into which shall be [deposited]:

     (1)  [Moneys] Deposited moneys received from the tobacco settlement moneys under section 328L-2; [and]

     (2)  [Appropriations] Deposited appropriations made by the legislature to the fund[.]; and

     (3)  Transferred five per cent of the state general fund balance at the close of the fiscal year, whenever state general fund revenues for each of two successive fiscal years exceeds revenues for each of the preceding fiscal years by five per cent, pursuant to article VII, section    of the Constitution of the State of Hawaii.  For the purpose of this section, the general fund balance at the close of the fiscal year shall be before any tax refund or tax credit, pursuant to article VII, section 6 of the Constitution of the State of Hawaii, that is provided during the same regular session as the transfer depositing such moneys to the state fiscal stabilization fund;

provided that transfers shall not be made to the state fiscal stabilization fund whenever the balance of the fund is more than ten per cent of general fund revenues for the preceding fiscal year.  The transfer shall be executed by the director of finance.

     (b)  All interest earned from moneys in the [emergency and budget reserve] state fiscal stabilization fund shall be credited to the [general] state fiscal stabilization fund.

     (c)  Expenditures from the [emergency and budget reserve]  state fiscal stabilization fund shall be a temporary [supplemental] source of funding for the State during times of [emergency,] severe economic downturn, or unforeseen reduction in revenues.  No expenditures shall be made from the [emergency and budget reserve] state fiscal stabilization fund except pursuant to appropriations.  The general appropriations bill or the supplemental appropriations bill, as defined in section 9 of article VII of the Constitution of the State of Hawaii, shall not be used to appropriate moneys from the [emergency and budget reserve] state fiscal stabilization fund.  The governor, through an appropriations bill, may recommend expenditures from the [emergency and budget reserve] state fiscal stabilization fund by setting forth the purposes of the expenditures consistent with subsection (d), the amounts, and the reasons justifying the necessity for the appropriations.

     (d)  The legislature may make appropriations from the fund for the following purposes:

     (1)  To maintain levels of programs determined to be essential to public health, safety, welfare, and education;

     (2)  To provide for counter cyclical economic and employment programs in periods of economic downturn;

     (3)  To restore facilities destroyed or damaged or services disrupted by disaster in any county; and

     (4)  To meet other emergencies when declared by the governor or determined to be urgent by the legislature.

     Any act making appropriations from the [emergency and budget reserve] state fiscal stabilization fund shall include a declaration of findings and purposes setting forth the purposes, the amounts, and the reasons why the appropriations are necessary and shall require a two-thirds majority vote of each house of the legislature.

     (e)  Appropriations for the following purposes from the [emergency and budget reserve] state fiscal stabilization fund are specifically prohibited:

     (1)  To meet expenses of the legislature;

     (2)  To provide for salary adjustments for officials appointed pursuant to article V, section 6 or article VI, section 3 of the Constitution of the State of Hawaii and for others whose salaries are directly related to salaries of these officials; and

     (3)  To fund cost items in any collective bargaining contract."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2011, following the ratification of a constitutional amendment to establish the state fiscal stabilization fund; provided that the amendments made to section 328L-3, Hawaii Revised Statutes, by this Act shall not be repealed when section 328L-3, Hawaii Revised Statutes, is reenacted pursuant to section 6 of Act 119, Session Laws of Hawaii 2009.

 

INTRODUCED BY:	_____________________________
	By Request

 

 

Report Title:

State Fiscal Stabilization Fund; Deposits; Uses

 

Description:

Ensures funds are available for future fiscal emergencies by renaming and revising the Emergency Budget and Reserve Fund to create the State Fiscal Stabilization Fund and requiring five percent of general fund end of year balances to be deposited into it.

 

 

 

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