SB 1081: RELATING TO LEGISLATIVE BUDGET OFFICE.

A BILL FOR AN ACT

RELATING TO LEGISLATIVE BUDGET OFFICE.

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

     SECTION 1.  The legislature finds that the work of the legislature is hampered by a lack of timely fiscal analysis regarding the impact of proposed legislation on the revenues and expenditures of the State.  Without a system of neutral fact-finding and fiscal analysis, the work of estimating the fiscal impact of legislation falls upon the shoulders of the members of the legislature and their staff, individuals who may or may not possess the skills and training needed for such an endeavor.  Reports on the fiscal impact of legislation produced by qualified personnel from a neutral, nonpartisan point of view would serve as an important tool for the legislature in the performance of its duties.

     The legislature further finds that fiscal reports of legislation serve the interests of the public by providing an additional resource to inform and educate the public on the fiscal impact of the various proposals in the legislative process.  The reports would promote transparency and help demystify the legislative process for the public.

     The legislature further finds that the existence of various legislative budget offices, whose duties involve the production of fiscal notes and reports on the fiscal impact of proposed legislation, at the federal and state level demonstrate the utility and practicability of establishing a legislative budget office within the legislature.

     The legislature also finds that Act 347, Session Laws of Hawaii 1990, established a permanent joint legislative budget committee, with the assistance of an office of the legislative analyst, to provide the legislature with information, facts, and analyses concerning fiscal, budgetary, and tax matters of the State.  However, the joint legislative budget committee and office of the legislative analyst have not been implemented or funded since their inception.

     Accordingly, the purpose of this Act is to:

     (1)  Require the department of budget and finance to conduct a feasibility study that includes the costs associated with the establishment and implementation of a legislative budget office and submit a report to the legislature;

     (2)  Repeal the existing non-functional joint legislative budget committee and office of the legislative analyst.

     SECTION 2.  (a)  The department of budget and finance shall conduct a feasibility study that includes the costs associated with the establishment and implementation of a legislative budget office.  The study shall examine:

     (1)  The costs associated with the resources that would be required to operate a legislative budget office, including office space and equipment;

     (2)  The need for, and estimated cost of, additional staff positions with benefits;

     (3)  The amount of time needed to implement a legislative budget office;

     (b)  In conducting the feasibility study, the department of budget and finance shall consider the duties of the legislative budget office, which shall include:

     (1)  Preparing a fiscal analysis of any bill introduced during the regular session of the legislature if the bill appears to affect the revenues or expenditures of the State or a county before the bill is:

          (A)  Recommended for passage by each house of representatives standing committee or the senate standing committee to which the bill is referred; and

          (B)  Taken up for third reading and final reading by either house of the legislature;

          provided that the fiscal analysis shall include an estimate, in dollars, of the amount by which the bill would increase or decrease revenues or expenditures and any other information the legislative budget office considers necessary to explain the fiscal effect of the bill;

     (2)  Distributing copies of a fiscal analysis to:

          (A)  The primary introducer of the bill;

          (B)  Each member of the standing committees to which the bill is referred; and

          (C)  Each member of each house of the legislature that is considering the bill for third reading and final reading;

     (3)  Requesting any state or county department, office, or agency to provide pertinent information to preparing a fiscal analysis;

     (4)  Making the fiscal analysis available to the public through the legislature's website; and

     (5)  Annually compiling a volume of all completed fiscal analyses and any other reports published by the legislative budget office to be delivered to the legislative reference bureau reference library.

     (c)  The department of budget and finance shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2027.

     SECTION 3.  Chapter 21F, Hawaii Revised Statutes, is repealed.

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for a feasibility study on the establishment and implementation of a legislative budget office.

     The sums appropriated shall be expended by the department of budget and finance for the purposes of this Act.

     SECTION 5.  This Act shall take effect on January 1, 2491.

Report Title:

B&F; Legislative Budget Office; Fiscal Analysis; Feasibility Study; Report; Appropriations

Description:

Requires the Department of Budget and Finance to conduct a feasibility study on the associated costs of establishing and implementing a Legislative Budget Office.  Requires a report to the Legislature.  Repeals the Joint Legislative Budget Committee and the Office of the Legislative Analyst.  Appropriates funds.  Effective 1/1/2491.  (SD1)

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 Legislative Budget office.

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

     SECTION 1.  The legislature finds that the work of the legislature is hampered by a lack of timely fiscal analysis regarding the impact of proposed legislation on the revenues and expenditures of the State.  Without a system of neutral fact-finding and fiscal analysis, the work of estimating the fiscal impact of legislation falls upon the shoulders of the members of the legislature and their staff, individuals who may or may not possess the skills and training needed for such an endeavor.  Reports on the fiscal impact of legislation produced by qualified personnel from a neutral, nonpartisan point of view would serve as an important tool for the legislature in the performance of its duties.

     The legislature further finds that fiscal reports of legislation serve the interests of the public by providing an additional resource to inform and educate the public on the fiscal impact of the various proposals in the legislative process.  The reports would promote transparency and help demystify the legislative process for the public.

     The legislature further finds that the existence of various legislative budget offices, whose duties involve the production of fiscal notes and reports on the fiscal impact of proposed legislation, at the federal and state level demonstrate the utility and practicability of establishing a legislative budget office within the legislature.

     The legislature also finds that Act 347, Session Laws of Hawaii 1990, established a permanent legislative budget committee, with the assistance of an office of the legislative analyst, to provide the legislature with information, facts, and analyses concerning fiscal, budgetary, and tax matters of the State.  However, the joint legislative budget committee and legislative analyst office has not been implemented or funded since their inception.

     The purpose of this Act is to:

     (1)  Establish the legislative budget office to provide reports and notes on the fiscal impact of legislation appearing before the legislature; and

     (2)  Repeal the existing non-functional joint legislative budget committee and office of the legislative analyst.

     SECTION 2.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

Legislative Budget Office

     §   -1  Legislative budget office; director, appointment, tenure, removal, compensation, vacancy.  (a)  There is established a legislative budget office.  The legislature, by a majority vote of each house in joint session, shall appoint a director for the office who shall serve for a period of six years and thereafter until a successor shall have been appointed.  The legislature, by two-thirds vote of the members in joint session, may remove or suspend the director from office but only for neglect of duty, misconduct, or disability.

     (b)  If the director dies, resigns, becomes ineligible to serve, or is removed or suspended from office, the first assistant to the director shall become the acting director until a new director is appointed.

     (c)  The salary of the director shall be the same as the salary of the director of the legislative reference bureau.  The salary of the director shall not be diminished during the director's term of office, unless by general law applying to all salaried officers of the State.

     §   -2  Assistant; staff.  (a)  The director shall appoint a first assistant and other employees as may be necessary to carry out the functions of the office.  All employees, including the first assistant, shall be hired by the director and shall serve at the director's pleasure.

     (b)  In determining the salary of the employees of the office, the director shall consult with the department of human resources development; provided that the salary of the first assistant shall not be more than ninety-two per cent of the salary of the director.

     (c)  The director and the director's full-time staff shall be entitled to participate in any employee benefit program plan or privilege.

     §   -3  Duties.  (a)  In any regular session of the legislature, if a bill introduced appears to affect the revenues or expenditures of the State or a county, the legislative budget office shall prepare a fiscal analysis of the bill before the bill is:

     (1)  Recommended for passage by each house committee or the senate committee of the legislature to which the bill is referred; and

     (2)  Taken up for third reading and final reading by either house of the legislature.

     (b)  The fiscal analysis shall include an estimate, in dollars, of the amount by which the bill would increase or decrease revenues or expenditures and any other information the legislative budget office considers necessary to explain the fiscal effect of the bill.

     (c)  The legislative budget office shall distribute copies of a fiscal analysis to:

     (1)  The primary introducer of the bill;

     (2)  Each standing committee member to which a bill is referred; and

     (3)  Each member of the house that is considering the bill for third reading and final reading.

     (d)  In preparing a fiscal analysis, the legislative budget office may request any state or county department, office, or agency to provide any of the following information:

     (1)  An estimate, in dollars, of the amount by which the bill would increase or decrease the revenues or expenditures received or made by the agency, officer, or entity; and

     (2)  Any other information the legislative budget office considers necessary for it to understand or explain the fiscal effect of the bill.

     (e)  An agency, officer, or entity shall comply with a request pursuant to subsection (d) within five days after it receives the request.  The legislative budget office shall specify the manner of compliance in its request, and if necessary, may specify a longer period of time than five days for compliance.  The legislative budget office may consider any information provided in preparing a fiscal analysis.

     (f)  The failure of the legislative budget office to prepare a fiscal analysis before a bill is taken up for consideration by the house or senate committees, or by either house for third reading or final reading shall not be construed to impair the validity of any bill passed by either house of the legislature.

     §   -4  Publication of fiscal analyses and reports.  (a)  Any fiscal analysis produced by the legislative budget office for a bill up for consideration shall be a legislative document attached to the bill and made available to the public through the legislature's website.

     (b)  The legislative budget office shall annually compile a volume of all completed fiscal analyses and any other reports published by the legislative budget office to be delivered to the legislative reference bureau reference library."

     SECTION 3.  Chapter 21F, Hawaii Revised Statutes, is repealed.

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the establishment and implementation of the legislative budget office.

     The sums appropriated shall be expended by the legislature for the purposes of this Act.

     SECTION 5  This Act shall take effect on July 1, 2025.

Report Title:

Legislative Budget Office; Fiscal Analysis; Appropriations

Description:

Establishes the legislative budget office to produce fiscal analyses and reports on bills impacting state or county finances.  Repeals the joint legislative budget committee and the office of the legislative analyst.  Appropriates funds.

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. 318

Honolulu, Hawaii

RE:    S.B. No. 1081

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Government Operations, to which was referred S.B. No. 1081 entitled:

"A BILL FOR AN ACT RELATING TO LEGISLATIVE BUDGET OFFICE,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Establish the Legislative Budget Office to report on the fiscal impact of legislation;

     (2)  Repeal the existing non-functional Joint Legislative Budget Committee and Office of the Legislative Analyst; and

     (3)  Appropriate funds for the establishment and implementation of the Legislative Budget Office.

     Your Committee received testimony in support of this measure from the Grassroot Institute of Hawaii, Hawaiʻi Children's Action Network Speaks!, League of Women Voters of Hawaii, Maui Chamber of Commerce, Public First Law Center, and two individuals.

     Your Committee finds that a majority of laws have a fiscal impact.  Therefore, it is critical that policymakers comprehend the potential fiscal impact of a measure before its passing, in order to fully evaluate its merits and make an informed decision.  However, the State currently lacks a functional body to perform these assessments.  While the Joint Legislative Budget Committee and the Office of the Legislative Analyst were established in 1990, your Committee finds that neither were properly funded, and are currently not functional.  This measure will repeal the nonfunctional offices and establishing a new Legislative Budget Office to provide fiscal analyses of measures during the Legislative session.

     Your Committee acknowledges that the cost of establishing a Legislative Budget Office has varied widely in other states, and that estimates to fully fund an office with the proposed scope of duties outlined in this measure are as high as $1,000,000, for office space, equipment, staff, and benefits.  Therefore, your Committee finds that a feasibility study is first needed to determine the proper funding amount.

     Accordingly, your Committee has amended this measure by:

     (1)  Deleting language that would have established the Legislative Budget Office and appropriated funds therefor;

     (2)  Inserting language requiring the Department of Budget and Finance to conduct a feasibility study that includes the costs associated with the establishment and implementation of a Legislative Budget Office and report its findings to the Legislature;

     (3)  Appropriating an unspecified amount of funds for the feasibility study;

     (4)  Inserting an effective date of July 1, 2491, to encourage further discussion;

     (5)  Amending section 1 to reflect its amended purpose; and

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

     Your Committee notes that this measure, as amended, contains an unspecified appropriation amount.  Should your Committee on Ways and Means choose to deliberate on this measure, your Committee respectfully requests that it consider inserting an appropriation amount of $50,000 for the feasibility study, given its expected size and scope.

     As affirmed by the record of votes of the members of your Committee on Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1081, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1081, S.D. 1, and be referred to your Committees on Ways and Means and Judiciary.

Respectfully submitted on behalf of the members of the Committee on Government Operations,