Analyses of Proposed Special and Revolving Funds 2022

from Hawaii State Auditor, March, 2022 (excerpts)

SECTION 23-11, HAWAI‘I REVISED STATUTES (HRS), requires the Auditor to analyze all legislative bills introduced each session that propose to establish new special or revolving funds. Specifically, the Auditor’s analysis of each bill must be based on the following criteria:

1. The need for the fund, as demonstrated by:

a. The purpose of the program to be supported by the fund;

b. The scope of the program, including financial information on fees to be charged, sources of projected revenue, and costs; and

 c. An explanation of why the program cannot be implemented successfully under the general fund appropriation process; and

2. Whether there is a clear nexus between the benefits sought and charges made upon the program users or beneficiaries or a clear link between the program and the sources of revenue, as opposed to serving primarily as a means to provide the program or users with an automatic means of support that is removed from the normal budget and appropriation process.

Section 23-11, Hawai‘i Revised Statutes, requires the Auditor to submit no later than 30 days prior to the end of the legislative session an analysis of each new special or revolving fund proposed by legislative bills….

We sent surveys to bill introducers requesting information about the proposed funds, including the need for the fund as set forth in section 23-11(b)(1), HRS, and nexus as required by section 23-11(b)(2), HRS.

Our review included survey responses and statutory criteria; we include with each analysis an assessment of alternative forms of funding and, where we are able, the probable effects of the proposed fund. We reviewed 104 Senate and House bills introduced during the 2022 legislative session proposing 63 special and revolving funds.

None satisfied the criteria set forth in section 23-11, HRS, for proposed special and revolving funds. References to Senate Draft and House Draft versions reflect bill status at the time of our review….

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