REPORT TITLE:
Performance based budgeting


DESCRIPTION:
Implements performance based budgeting.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1311       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PERFORMANCE BASED BUDGETING.
 


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

 1      SECTION 1.  The legislature finds that in order to deliver
 
 2 government services more effectively and at lower cost, there is
 
 3 an urgent need to implement performance based budgeting as called
 
 4 for in Act 230, Session Laws of Hawaii 1998, and in line with the
 
 5 federal government's selection of Hawaii as the second state to
 
 6 participate in its National Partnerships for Reinvention
 
 7 Government (NPRG) initiative.
 
 8      SECTION 2.  In view of the report of the committee called
 
 9 for in Act 230, Part II that it is alert to "the complexities
 
10 that exist in the development and use" of performance based
 
11 measures, and in view of the committee's "concern" that "the
 
12 scope" of its project "may be too broad," the governor is
 
13 authorized to appoint five additional private sector individuals
 
14 to the committee, and directed to assign a person from the
 
15 governor's staff to insure the committee both receives the
 
16 governor's office's attention and coordinates closely with the
 
17 NPRG initiative.
 
18      SECTION 3.  The committee has designated the department of
 
19 accounting and general services, the department of land and
 

 
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 1 natural resources, and the department of transportation to
 
 2 complete prototype budget transformations by December 31, 1999.  
 
 3 Recognizing the urgency of this task, the legislature will
 
 4 withhold twenty percent of each department's FY 2000 budget,
 
 5 making receipt conditional upon each department's being able to
 
 6 justify that it has achieved performance based budgeting as
 
 7 called for in Act 230, with measurement of outputs and their
 
 8 relationship to outcomes, with implementation of activity based
 
 9 costing, and with clearly understood, measurable information
 
10 about resource allocation choices. Departments must build their
 
11 budgets around measurable outcomes, and must report to the
 
12 legislature quarterly, beginning on April 1, 2000, on measurable
 
13 progress toward each outcome.  Failure to provide reports based
 
14 on measurable progress toward outcomes will result in loss of
 
15 twenty percent of the department's budget for FY 2000.
 
16      SECTION 4.  The department of accounting and general
 
17 services shall present to the legislature by December 31, 1999 an
 
18 alternative plan that calls for abolishing the department, in
 
19 line with Act 167, Session Laws of Hawaii, 1996, and dividing its
 
20 responsibilities among the remaining departments, each with an
 
21 office of accounting and an office covering general services.  In
 
22 the course of preparing its plan for abolition, the department
 
23 will suggest functions that can be outsourced.  Rights secured
 

 
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 1 through collective bargaining shall remain protected for all
 
 2 department employees.  Failure to come up with a workable plan
 
 3 for department abolition shall cost the department twenty percent
 
 4 of its general fund budget beyond the sum subject to the
 
 5 strictures of section 3.
 
 6      SECTION 5.  Before FY 2001, the department of accounting and
 
 7 general services, the department of land and natural resources,
 
 8 and the department of transportation will sign a contract with
 
 9 the appropriate subject committee in each house committing each
 
10 department budget to measurable outcomes in FY 2001, report its
 
11 progress quarterly, be required to have up to fifty percent of
 
12 its budget withheld for failure to meet its measurable outcomes,
 
13 and if it exceeds outcome targets, be authorized to carry over to
 
14 the next fiscal year half of any surplus funds under its control.
 
15      SECTION 6.  For the remaining state departments, the
 
16 legislature will withhold twenty percent of each department's FY
 
17 2001 budget, making receipt conditional upon each department's
 
18 being able to justify that it has achieved performance based
 
19 budgeting as called for in Act 230, with measurement of outputs
 
20 and their relationship to outcomes, with implementation of
 
21 activity based costing, and with clearly understood, measurable
 
22 information about resource allocation choices. Departments must
 
23 build their budgets around measurable outcomes, and must report
 

 
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                                     H.B. NO.1311       
                                                        
                                                        

 
 1 to the legislature quarterly, beginning on April 1, 2001, on
 
 2 progress toward each outcome.  Failure to report satisfactorily
 
 3 will result in loss of twenty percent of the department's budget
 
 4 for FY 2001.
 
 5      SECTION 7.  This Act shall take effect upon its approval.
 
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