REPORT TITLE:
Emergency and Budget Stabilization Fund


DESCRIPTION:
Proposes a constitutional amendment to repeal the excess revenues
tax refund and instead establish a "rainy day fund" to be known
as the Emergency and Budget Stabilization Fund.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            1284        
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT
PROPOSING AN AMENDMENT TO ARTICLE VII, SECTION 6 OF THE HAWAII
   CONSTITUTION TO REPEAL THE EXCESS REVENUE TAX REFUND AND
   ESTABLISH AN EMERGENCY AND BUDGET STABILIZATION FUND.



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

 1      SECTION 1.  The purpose of this Act is to propose an
 
 2 amendment to article VII, section 6 of the Constitution of the
 
 3 State of Hawaii to establish a mechanism for the State to build a
 
 4 financial reserve to be used when there is an emergency or
 
 5 economic downturn, or when there is an unforeseen reduction in
 
 6 revenues.  The proposal is to repeal the excess revenues tax
 
 7 refund and, in its place, establish an emergency and budget
 
 8 stabilization fund.
 
 9      SECTION 2.  Article VII, section 6 of the Constitution of
 
10 the State of Hawaii is amended to read as follows:
 
11                  "DISPOSITION OF EXCESS REVENUES
 
12      Section 6.  [Whenever the state general fund balance at the
 
13 close of each of two successive fiscal years exceeds five percent
 
14 of general fund revenues for each of the two fiscal years, the
 
15 legislature in the next regular session shall provide for a tax
 
16 refund or tax credit to the taxpayers of the State, as provided
 
17 by law.] There shall be established by law an emergency and
 
18 budget stabilization fund.  Whenever the state general fund
 

 
Page 2                                         1284        
                                     H.B. NO.           
                                                        
                                                        

 
 1 balance exceeds       percent of general fund revenues at the
 
 2 close of a fiscal year, the legislature in the next regular
 
 3 session shall deposit into the emergency and budget stabilization
 
 4 fund an amount not less than       percent of the general fund
 
 5 balance in excess of the       percent level, up to the maximum
 
 6 size of the emergency and budget stabilization fund as provided
 
 7 by law.
 
 8      Expenditures from the emergency and budget stabilization
 
 9 fund shall provide a temporary supplemental source of funding
 
10 during times of emergency, economic downturn, or unforeseen
 
11 reduction in revenues.  No expenditures shall be made from the
 
12 emergency and budget stabilization fund except pursuant to
 
13 appropriations approved by a three-fourths vote of the members of
 
14 each house of the legislature."
 
15      SECTION 3.  The question to be printed on the ballot shall
 
16 be as follows:
 
17      "Shall the constitutional tax refund from excess revenues be
 
18      eliminated and replaced with an Emergency and Budget
 
19      Stabilization Fund, which would enable the State to build a
 
20      financial reserve to be used during times of emergency,
 
21      economic downturn, for unforseen reduction in revenues?"
 

 
 
 
 
 
Page 3                                         1284        
                                     H.B. NO.           
                                                        
                                                        

 
 1      SECTION 4.  Constitutional material to be repealed is
 
 2 bracketed.  New constitutional material is underscored.
 
 3      SECTION 5.  This Act shall take effect upon compliance with
 
 4 article XVII, section 3 of the Constitution of the State of
 
 5 Hawaii.
 
 6                           INTRODUCED BY:  _______________________