REPORT TITLE:
Emergency and Budget Stabilization Fund


DESCRIPTION:
Proposes a constitutional amendment to distribute excess revenues
equally:  half to taxpayers in the form of a tax refund or credit
and half to a "rainy day fund" to be known as the Emergency and
Budget Stabilization Fund.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            60          
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 REDISTRIBUTE EXCESS STATE GENERAL FUND
   REVENUES.



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 change the distribution of excess
 
 7 state general fund revenues as follows:
 
 8      (1)  Half to taxpayers in the form of a tax refund or
 
 9           credit; and
 
10      (2)  Half to an emergency and budget stabilization fund to
 
11           be established by law.
 
12      SECTION 2.  Article VII, section 6, of the Constitution of
 
13 the State of Hawaii is amended to read as follows:
 
14                  "DISPOSITION OF EXCESS REVENUES
 
15      Section 6.  There shall be established by law an emergency
 
16 and budget stabilization fund.  Whenever the state general fund
 
17 balance at the close of each of two successive fiscal years
 
18 exceeds five percent of general fund revenues for each of the two
 
19 fiscal years, the legislature in the next regular session shall
 
20 [provide]:
 

 
Page 2                                         60          
                                     H.B. NO.           
                                                        
                                                        

 
 1      (1)  Provide for a tax refund or tax credit to the taxpayers
 
 2           of the State, as provided by law[.]; and
 
 3      (2)  Deposit an equal amount into the emergency budget
 
 4           stabilization fund."
 
 5      Expenditures from the emergency and budget stabilization
 
 6 fund shall be a temporary supplemental source of funding during
 
 7 times of emergency, economic downturn or unforeseen reduction in
 
 8 revenues.  No expenditures shall be made from the emergency and
 
 9 budget stabilization fund except pursuant to appropriations
 
10 approved by a three-fourths vote of the members of each house of
 
11 the legislature."
 
12      SECTION 3.  The question to be printed on the ballot shall
 
13 be as follows:
 
14      "Shall the distribution of excess state general fund
 
15      revenues be changed so that:
 
16      (1)  Half goes to taxpayers in the form of a tax refund or
 
17           credit; and
 
18      (2)  Half goes to an emergency and budget stabilization
 
19           fund, which would enable the State to build a financial
 
20           reserve to be used during times of emergency, economic
 
21           downturn, or unforeseen reduction in revenues?"
 
22      SECTION 4.  Constitutional material to be repealed is
 
23 bracketed.  New constitutional material is underscored.
 

 
Page 3                                         60          
                                     H.B. NO.           
                                                        
                                                        

 
 1      SECTION 5.  This Act shall take effect upon compliance with
 
 2 Article XVII, section 3, of the Constitution of the State of
 
 3 Hawaii.
 
 4 
 
 5                           INTRODUCED BY:  _______________________