HB 1154: RELATING TO CENTRAL SERVICES ASSESSMENT.

A BILL FOR AN ACT

RELATING TO CENTRAL SERVICES ASSESSMENT.

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

     SECTION 1.  Section 36-28, Hawaii Revised Statutes, is amended to read as follows:

     "§36-28  Transfers from state highway fund for central service expenses.  (a)  Except as hereinafter provided, and notwithstanding any other law to the contrary, there shall be deducted from time to time by the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to the state highway fund created by section 248-8, five per cent of all receipts and deposits in the fund, after deducting therefrom any amounts pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year, from which receipts or deposits no deduction of five per cent has been previously made, [which] or $5,000,000, whichever is less.

     (b)  Beginning September 30, 2025, and every year thereafter, the director of transportation shall propose to the governor an adjustment to the amount transferred from the state highway fund by calculating a percentage based on the Consumer Price Index for All Urban Consumers in the Honolulu area, or a successor index, for the twelve months prior to September 1 of each year, less food and energy, as calculated by the United States Bureau of Labor Statistics; provided that if in any year the percentage adjustment based on the Consumer Price Index for All Urban Consumers in Honolulu, or a successor index, would result in a negative percentage, the governor may approve a zero per cent adjustment or no adjustment.  Upon the governor's approval of the percentage adjustment, the director of finance shall apply the percentage adjustment to the amount deducted from the state highway fund and deduct any additional amounts.

     (c)  The deductions shall be transferred to the general fund of the State and become general realizations of the State.  The [state] department of transportation shall cooperate with the director of finance in effecting these transfers."

     SECTION 2.  Section 36-28.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§36-28.5[]]  Transfer from airport revenue fund.  (a)  Any law to the contrary notwithstanding, there shall be deducted from time to time by the director of finance for the purpose of defraying the prorated estimate of central service expenses of government in relation to the airport revenue fund five per cent of all receipts and deposits in the airport revenue fund after deducting therefrom any amounts pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year, from which receipts or deposits no deduction of five per cent has previously been made[.], or $5,000,000, whichever is less.

     (b)  Beginning September 30, 2025, and every year thereafter, the director of transportation shall propose to the governor an adjustment to the amount transferred from the airport revenue fund by calculating a percentage based on the Consumer Price Index for All Urban Consumers in the Honolulu area, or a successor index, for the twelve months prior to September 1 of each year, less food and energy, as calculated by the United States Bureau of Labor Statistics; provided that if in any year the percentage adjustment based on the Consumer Price Index for All Urban Consumers in Honolulu, or a successor index, would result in a negative percentage, the governor may approve a zero per cent adjustment or no adjustment.  Upon the governor's approval of the percentage adjustment, the director of finance shall apply the percentage adjustment to the amount deducted from the airport revenue fund and deduct any additional amounts.

     (c)  The deductions shall be transferred to the general fund of the State and become general realizations of the State.

     (d)  For the purpose of this section, [the term] "any amounts pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year" shall include:

     (1)  Amounts [which] that are so pledged, charged, or encumbered;

     (2)  Amounts otherwise required to be applied to the payment of principal of and interest on revenue bonds or other revenue obligations; and

     (3)  Amounts required by law to be paid from the airport revenue fund into the general fund of the State to reimburse the general fund for bond requirements for general obligation bonds issued for airport purposes.

     (e)  The director of transportation shall cooperate with the director of finance in effecting the transfer."

     SECTION 3.  Section 36-29, Hawaii Revised Statutes, is amended to read as follows:

     "§36-29  Transfer from harbor special fund.  (a)  Any other law to the contrary notwithstanding, there shall be deducted from time to time by the director of finance for the purpose of defraying the prorated estimate of central service expenses of government in relation to the harbor special fund five per cent of all receipts and deposits in the harbor special fund after deducting therefrom any amounts pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year, from which receipts or deposits no deduction of five per cent has previously been made[.], or $5,000,000, whichever is less.

     (b)  Beginning September 30, 2025, and every year thereafter, the director of transportation shall propose to the governor an adjustment to the amount transferred from the harbor special fund by calculating a percentage based on the Consumer Price Index for All Urban Consumers in the Honolulu area, or a successor index, for the twelve months prior to September 1 of each year, less food and energy, as calculated by the United States Bureau of Labor Statistics; provided that if in any year the percentage adjustment based on the Consumer Price Index for All Urban Consumers in Honolulu, or a successor index, would result in a negative percentage, the governor may approve a zero per cent adjustment or no adjustment.  Upon the governor's approval of the percentage adjustment, the director of finance shall apply the percentage adjustment to the amount deducted from the harbor special fund and deduct any additional amounts.

     (c)  The deductions shall be transferred to the general fund of the State and become general realizations of the State.

     (d)  For the purposes of this section, [the term] "any amount pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year" shall include:

     (1)  Amounts [which] that are so pledged, charged, or encumbered;

     (2)  Amounts otherwise required to be applied to the payment of principal of and interest on revenue bonds or other revenue obligations;

     (3)  Amounts required to be paid into a separate special fund for the payment of principal of and interest on revenue bonds or other revenue obligations payable from the second separate special fund; and

     (4)  Amounts required by law to be paid from the harbor special fund into the general fund of the State to reimburse the general fund for bond requirements for general obligation bonds issued for harbor purposes.

     (e)  The second separate special fund maintained by deposits from the harbor special fund shall not be deemed to be a special fund within the meaning of section 36-27 or section 36-30.

     (f)  The director of transportation shall cooperate with the director of finance in effecting the transfer."

     SECTION 4.  If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

     SECTION 5.  If manifest clerical, typographical, or other mechanical errors are found in this Act, the governor may correct such errors.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect on July 1, 3000.

Report Title:

Central Service Expenses; Transfers; Central Services Assessment; Central Service Expenses of Government; State Highway Fund; Airport Revenue Fund; Harbor Special Fund

Description:

Amends the transfer of funds for central service expenses from the State Highway Fund, Airport Revenue Fund, and Harbor Special Fund.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO CENTRAL SERVICES ASSESSMENT.

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

     SECTION 1.  Section 36-28, Hawaii Revised Statutes, is amended to read as follows:

     "§36-28  Transfers from state highway fund for central service expenses.  (a)  Except as hereinafter provided, and notwithstanding any other law to the contrary, there shall be deducted from time to time by the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to the state highway fund created by section 248-8, five per cent of all receipts and deposits in the fund, after deducting therefrom any amounts pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year, from which receipts or deposits no deduction of five per cent has been previously made, [which] or $5,000,000, whichever is less.

     (b)  Beginning September 30, 2025, and every year thereafter, the director of transportation shall propose to the governor an adjustment to the amount transferred from the state highway fund by calculating a percentage based on the Consumer Price Index for All Urban Consumers in the Honolulu area, or a successor index, for the twelve months prior to September 1 of each year, less food and energy, as calculated by the United States Bureau of Labor Statistics; provided that, if in any year the percentage adjustment based on the Urban Honolulu Consumer Price Index, or a successor index, would result in negative percentage, the governor can approve a zero per cent adjustment or no adjustment.  Upon governor's approval of the percentage adjustment, the director of finance shall apply the percentage adjustment to the amount deducted from the state highway fund and deduct any additional amounts.

     (c)  The deductions shall be transferred to the general fund of the State and become general realizations of the State.  The state department of transportation shall cooperate with the director of finance in effecting these transfers."

     SECTION 2.  Section 36-28.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§36-28.5[]]  Transfer from airport revenue fund.  (a)  Any law to the contrary notwithstanding, there shall be deducted from time to time by the director of finance for the purpose of defraying the prorated estimate of central service expenses of government in relation to the airport revenue fund five per cent of all receipts and deposits in the airport revenue fund after deducting therefrom any amounts pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year, from which receipts or deposits no deduction of five per cent has previously been made[.], or $5,000,000, whichever is less.

     (b)  Beginning September 30, 2025, and every year thereafter, the director of transportation shall propose to the governor an adjustment to the amount transferred from the airport revenue fund by calculating a percentage based on the Consumer Price Index for All Urban Consumers in the Honolulu area, or a successor index, for the twelve months prior to September 1 of each year, less food and energy, as calculated by the United States Bureau of Labor Statistics; provided that, if in any year the percentage adjustment based on the Urban Honolulu Consumer Price Index, or a successor index, would result in negative percentage, the governor can approve a zero per cent adjustment or no adjustment.  Upon the governor's approval of the percentage adjustment, the director of finance shall apply the percentage adjustment to the amount deducted from the airport revenue fund and deduct any additional amounts.

     (c)  The deductions shall be transferred to the general fund of the State and become general realizations of the State.

     (d)  For the purpose of this section, the term "any amounts pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year" shall include:

     (1)  Amounts [which] that are so pledged, charged, or     encumbered;

     (2)  Amounts otherwise required to be applied to the payment of principal of and interest on revenue bonds or other revenue obligations; and

     (3)  Amounts required by law to be paid from the airport revenue fund into the general fund of the State to reimburse the general fund for bond requirements for general obligation bonds issued for airport purposes.

     (e)  The director of transportation shall cooperate with the director of finance in effecting the transfer."

     SECTION 3.  Section 36-29, Hawaii Revised Statutes, is amended to read as follows:

     "§36-29  Transfer from harbor special fund.  (a)  Any other law to the contrary notwithstanding, there shall be deducted from time to time by the director of finance for the purpose of defraying the prorated estimate of central service expenses of government in relation to the harbor special fund five per cent of all receipts and deposits in the harbor special fund after deducting therefrom any amounts pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year, from which receipts or deposits no deduction of five per cent has previously been made[.], or $5,000,000, whichever is less.

     (b)  Beginning September 30, 2025, and every year thereafter, the director of transportation shall propose to the governor an adjustment to the amount transferred from the harbor special fund by calculating a percentage based on the Consumer Price Index for All Urban Consumers in the Honolulu area, or a successor index, for the twelve months prior to September 1 of each year, less food and energy, as calculated by the United States Bureau of Labor Statistics; provided that, if in any year the percentage adjustment based on the Urban Honolulu Consumer Price Index, or a successor index, would result in negative percentage, the governor can approve a zero per cent adjustment or no adjustment.  Upon the governor's approval of the percentage adjustment, the director of finance shall apply the percentage adjustment to the amount deducted from the harbor special fund and deduct any additional amounts.

     (c)  The deductions shall be transferred to the general fund of the State and become general realizations of the State.

     (d)  For the purposes of this section, the term "any amount pledged, charged, or encumbered for the payment of bonds or interest thereon during the current year" shall include:

     (1)  Amounts [which] that are so pledged, charged, or encumbered;

     (2)  Amounts otherwise required to be applied to the payment of principal of and interest on revenue bonds or other revenue obligations;

     (3)  Amounts required to be paid into a separate special fund for the payment of principal of and interest on revenue bonds or other revenue obligations payable from the second separate special fund; and

     (4)  Amounts required by law to be paid from the harbor special fund into the general fund of the State to reimburse the general fund for bond requirements for general obligation bonds issued for harbor purposes.

     (e)  The second separate special fund maintained by deposits from the harbor special fund shall not be deemed to be a special fund within the meaning of section 36-27 or section 36-30.

     (f)  The director of transportation shall cooperate with the director of finance in effecting the transfer."

     SECTION 4.  If any portion of this Act or its application to any person, entity, or circumstance is held to be invalid for any reason, then the legislature declares that the remainder of the Act and each and every other provision thereof shall not be affected thereby.

     SECTION 5.  If manifest clerical, typographical, or other mechanical errors are found in this Act, the governor may correct such errors.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act, upon its approval, shall take effect on July 1, 2025.

Report Title:

Central Service Expenses; Transfers; Central Services Assessment; Central Service Expenses of Government; State Highway Fund; Airport Revenue Fund; Harbor Special Fund

Description:

Amends the transfer of funds for central service expenses from the State Highway Fund, Airport Revenue Fund, and Harbor Special Fund by:  (1) limiting the deduction to five per cent of all receipts and deposits in the fund, or $5,000,000, whichever is less, and (2) creating a process to deduct additional amounts based on the Consumer Price Index.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  548

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 1154

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Transportation, to which was referred H.B. No. 1154 entitled:

"A BILL FOR AN ACT RELATING TO CENTRAL SERVICES ASSESSMENT,"

begs leave to report as follows:

     The purpose of this measure is to, beginning September 30, 2025, require the Director of Transportation to propose to the Governor an adjustment to the amount transferred from the State Highway Fund, Airport Revenue Fund, and Harbor Special Fund by:

     (1)  Limiting the deduction to five percent of all receipts and deposits into the funds or $5,000,000, whichever is less; and

     (2)  Creating a process to deduct additional amounts based on the Consumer Price Index.

     Your Committee received testimony in support of this measure from the Department of Transportation.  Your Committee received comments on this measure from the Department of Budget and Finance.

     Your Committee finds that a set percentage is deducted from the State Highway Fund, Airport Revenue Fund, and Harbor Special Fund, but there is no way to know in advance how much will be available to pay for central service expenses.  This measure provides certainty by setting an amount that will be deducted from each fund while also addressing increases in the cost of government services due to inflation by allowing for additional deductions from each fund based on the Consumer Price Index.

     Your Committee has amended this measure by:

     (1)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1154, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1154, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Transportation,