HB2827

Report Title:

Relating to the State Finances .

 

Description:

Establishes litigation deposits trust fund. Repeals exemption of certain special and revolving funds from fees for central services. Repeals certain special and revolving funds. Authorizes payments for state art museum from works of art special fund. Transfers non-general funds to the general fund. Lapses excess money in special funds.

HOUSE OF REPRESENTATIVES	H.B. NO.	2827
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII

A BILL FOR AN ACT

 

relating to the state finances.

 

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

PART I

SECTION 1. Chapter 28, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§28-    Litigation deposits trust fund. (a) There is created in the state treasury the litigation deposits trust fund. There shall be deposited into this fund all moneys received through any civil action where the settlement amount is $100,000 or higher, and in which the State is a party to a civil action except for those departments able to procure their own legal services as provided for by section 28-8.3 and where there is no other state statute specifically providing for the deposit of these moneys.

(b) The fund shall be under the control of the department of the attorney general. The department shall maintain accounting records pertaining to the fund, including subsidiary records of individual litigation deposits and disbursements thereof. Moneys in one subsidiary account shall not be intermingled with moneys from another account except for deposit or investment purposes under subsection (d).

(c) Disbursements from each account maintained under subsection (b) may include attorneys' fees and other necessary expenses that the department determines to be reasonable and that are directly related to the prosecution of the civil action for which the account is maintained; provided that in the case of moneys deposited as a result of recoveries for a non-general fund, the moneys shall be held and disbursed intact for deposit to the credit of the non-general fund. Any money deposited in the fund pursuant to an order of the court shall be disbursed in accordance with the order of the court. Any residue remaining in an account shall be transferred to the respective non-general or general fund for which the civil action resulted from, no later than thirty days after the civil action for which the account is maintained is closed and all costs of that civil action have been paid, unless otherwise provided for by statute.

(d) Money in the fund may be invested in any securities described in section 36-21 by the department.

All earnings from the investment of such funds shall be deposited to the credit of the general fund.

(e) The department shall submit a report on the transactions that take place in the fund for each fiscal year by subsidiary account; and, the collections made in any amount on behalf of other departments and agencies broken down by numbers of transactions and amount collected for each department and agency to the legislature no later than twenty days prior to the start of every regular session."

SECTION 2. Chapter 37, part III, Hawaii Revised Statutes, is amended by adding four new sections to be appropriately designated and to read as follows:

"§37-     Criteria for the establishment and continuance of special funds. Special funds may only be established pursuant to an act by the legislature. The legislature, in establishing on reviewing a special fund, shall ensure that the special fund meets the following requirements:

(1) Serves or continues to serve the purpose for which it was originally established;

(2) Reflects a clear nexus between the benefits sought and charges made upon the users or beneficiaries of the program, 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;

(3) Provides an appropriate means of financing for the program or activity; and

(4) Demonstrates the capacity to be financially self sustaining.

§37-     Criteria for the establishment and continuance of revolving funds. Revolving funds may only be established pursuant to an act by the legislature. The legislature, in establishing or reviewing a revolving fund, shall ensure that the revolving fund meets the following requirements:

(1) Serves or continues to serve the purpose for which it was originally established;

(2) Reflects a clear nexus between the benefits sought and charges made upon the users or beneficiaries of the program, 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;

(3) Provides an appropriate means of financing for the program or activity; and

(4) Demonstrates the capacity to be financially self sustaining.

§37-     Excess funds remaining in special or revolving funds at the end of each fiscal year. Prior to the end of each fiscal year, the department of budget and finance shall audit each special and revolving fund to ascertain the existence of excess funds in each special or revolving fund. Not later than twenty days prior to the convening of each regular session of the legislature, the department shall include in the executive budget request, a detailed listing of all moneys deemed excess to the needs of each special and revolving fund and the amounts to be lapsed into the general fund.

§37-     General funds encumbered for more than one fiscal year. Encumbered general funds not expended on the purpose for which the funds were originally encumbered for within the fiscal year succeeding the original encumbrance shall lapse into the general fund. The department shall include in the executive budget request, a detailed listing of all moneys subject to this section and the amounts to be lapsed into the general fund."

SECTION 3. Section 36-27, Hawaii Revised Statutes, is amended to read as follows:

"§36-27  Transfers from special funds for central service expenses. Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

[(5) Convention center capital and operations special fund under section 206X-10.5;

(6) Special funds established by section 206E-6;

(7) Housing loan program revenue bond special fund;

(8) Housing project bond special fund;

(9) Aloha Tower fund created by section 206J-17;

(10) Domestic violence prevention special fund under section 321-1.3;

(11) Spouse and child abuse special account under section 346-7.5;

(12) Spouse and child abuse special account under section 601-3.6;

(13)] (5) Funds of the employees' retirement system created by section 88-109;

[(14)] (6) Unemployment compensation fund established under section 383-121; and

[(15) Hawaii hurricane relief fund established under chapter 431P;

(16) Hawaii health systems corporation special funds;

(17) Boiler and elevator safety revolving fund established under section 397-5.5;

(18) Tourism special fund established under section 201B-11;

(19) Department of commerce and consumer affairs' special funds;

(20) Compliance resolution fund established under section 26-9;

(21) Universal service fund established under chapter 269;

(22) Integrated tax information management systems special fund under section 231-3.2;

(23) Insurance regulation fund under section 431:2-215;

(24) Hawaii tobacco settlement special fund under section 328L-2;

(25) Emergency budget and reserve fund under section 328L-3;

(26) Probation services special fund under section 706-649;

(27) High technology special fund under section 206M-15.5;

(28)] (7) Public schools special fees and charges fund under section 302A-1130(f);

[(29) Cigarette tax stamp enforcement special fund established by section 28-14;

(30) Cigarette tax stamp administrative special fund established by section 245-41.5; and

(31) Tobacco enforcement special fund established by section 28-15;]

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year."

SECTION 4. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each special fund, except the:

(1) [Transportation use special fund established by section 261D-1;

(2)] Special out-of-school time instructional program fund under section 302A-1310;

[(3)] (2) School cafeteria special funds of the department of education;

[(4)] (3) Special funds of the University of Hawaii;

[(5) State educational facilities improvement special fund;

(6) Special funds established by section 206E-6;

(7) Aloha Tower fund created by section 206J-17;

(8) Domestic violence prevention special fund under section 321-1.3;

(9) Spouse and child abuse special account under section 346-7.5;

(10) Spouse and child abuse special account under section 601-3.6;]

[(11)] (4) Funds of the employees' retirement system created by section 88-109;

[(12)] (5) Unemployment compensation fund established under section 383-121; and

[(13) Hawaii hurricane relief fund established under chapter 431P;

(14) Convention center capital and operations special fund established under section 206X-10.5;

(15) Hawaii health systems corporation special funds;

(16) Tourism special fund established under section 201B-11;

(17) Compliance resolution fund established under section 26-9;

(18) Universal service fund established under chapter 269;

(19) Integrated tax information management systems special fund under section 231-3.2;

(20) Insurance regulation fund under section 431:2-215;

(21) Hawaii tobacco settlement special fund under section 328L-2;

(22) Emergency and budget reserve fund under section 328L-3;

(23) Probation services special fund under section 706-649;

(24) High technology special fund under section 206M-15.5;]

[(25)] (6) Public schools special fees and charges fund under section 302A-1130(f);

[(26) Cigarette tax stamp enforcement special fund established by section 28-14;

(27) Cigarette tax stamp administrative special fund established by section 245-41.5; and

(28) Tobacco enforcement special fund established by section 28-15;]

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned."

SECTION 5. Section 328L-3, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The legislature may make appropriations from the fund for the following purposes:

(1) To maintain levels of programs determined to be essential to [the] public health, safety, [and] welfare[;], and education;

(2) To provide for counter cyclical economic and employment programs in periods of economic downturn;

(3) To restore facilities destroyed or damaged or services disrupted by disaster in any county; and

(4) To meet other emergencies when declared by the governor or determined to be urgent by the legislature.

Any act making appropriations from the emergency and budget reserve fund shall include a declaration of findings and purposes setting forth the purposes, the amounts, and the reasons why the appropriations are necessary and shall require a two-thirds majority vote of each house of the legislature."

PART II

SECTION 6. The legislature finds that the Auditor conducted an update of its 1992 Loss of Budgetary Control: A Summary Report of the Review of Special and Revolving Funds (Report No.92-14). Report No. 92-14 provided an overview of five reports issued in 1991 and 1992 that reviewed all special and revolving funds in existence as of July 1, 1990, of sixteen state departments, the University of Hawaii, and the judiciary. This update examined all special and revolving funds created since July 1, 1990, that are administered by, or are administratively attached to, the same eighteen agencies. The update also included a review of significant operational changes for those funds reviewed in the auditor's 1991 and 1992 reports on the same matter.

Since July 1, 1990, seventy-one special and revolving funds have been repealed or discontinued. However, according to the auditor's July, 2001, update of Report No. 92-14, a majority (106 out of 166) of the special and revolving funds previously reviewed were still in existence as of July 1, 1999. The auditor also found that few of the 106 special and revolving funds have undergone significant changes since they were last reviewed. The auditor also found thirty-one special and revolving funds previously reviewed in 1991 and 1992, which were in existence as of July 1, 1999, still did not meet all established criteria. The fiscal year 1999-2000 ending cash balance of these thirty-one funds totaled approximately $77.4 million.

The auditor also found that 132 special and revolving funds have been statutorily or administratively created since July 1, 1990, but twenty-five of these funds have since been repealed or discontinued. The aggregate cash balance of the special and revolving funds created after July 1, 1990, and still in existence as of June 30, 2000, totaled approximately $220 million. However, the auditor found that thirty-eight of these special and revolving funds did not meet all criteria of a special or revolving fund and held over $19 million outside the general fund.

Despite the proliferation of special and revolving funds, the legislature believes that there are many methods available to the legislature to strengthen its control over non-general funds. To strengthen its oversight, the legislature is following the recommendation of the auditor to repeal or discontinue the sixty-nine special and revolving funds that do not meet established criteria.

The purpose of this Part is to repeal or discontinue all revolving and special funds that do not meet the minimum qualifications of the auditor on June 30, 2003, in order for activities based on the repealed funds to request the appropriate general fund appropriation.

SECTION 7. Section 28-91.5, Hawaii Revised Statutes, is repealed.

["[§28-91.5] Medicaid investigations recovery fund; established. There is established in the state treasury the medicaid investigations recovery fund as a special fund, and which is to be administered by the department of the attorney general, into which shall be deposited all funds that have been recovered as a result of medicaid fraud settlements. Moneys from this special fund shall be used to support a portion of operating expenses of the medicaid fraud unit within the department of the attorney general."]

SECTION 8. Section 36-32, Hawaii Revised Statutes, is repealed.

["§36-32 State educational facilities improvement special fund. (a) There is created in the treasury of the State the state educational facilities improvement special fund, into which shall be deposited a portion of all general excise tax revenues collected by the department of taxation under section 237-31. The special fund shall be used solely to plan, design, acquire lands for and to construct public school facilities and to provide equipment and technology infrastructure to improve public schools and other facilities under the jurisdiction of the department of education, except public libraries. In addition, activities of the department of education intended to eliminate the gap between the facility needs of schools and available resources shall be eligible for funding from the special fund. Expenditures from the special fund shall be limited to projects authorized by the legislature and shall be subject to sections 37-31, and 37-33 through 37-40. Appropriations or authorizations from the special fund shall be expended by the comptroller.

(b) The department of accounting and general services shall submit an annual report to the legislature, which shall include a financial statement of the special fund and the status of projects undertaken pursuant to this section, no later than twenty days prior to the convening of each regular session."]

SECTION 9. Section 41D-4, Hawaii Revised Statutes, is repealed.

["§41D-4 State risk management revolving fund. (a) The state risk management revolving fund is created and shall be funded in amounts reasonably necessary to:

(1) Carry out the responsibilities of the comptroller established in section 41D-2;

(2) Pay claims to state agencies for losses to property of the State caused by fire or other casualty, including the cost to repair or replace buildings and other structures, replace damaged contents, and to provide alternate structures while damaged structures are being repaired or replaced;

(3) Pay claims against the State under sections 662-11, 41D-3, and 41D-8; and

(4) Pay for losses to the State incurred by the dishonesty, nonfeasance, or misfeasance of any officer or employee of the State or for any losses to the State through larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction, wilful misapplication, or any other fraudulent or dishonest act committed by one or more of the employees of the State acting directly or in collusion with others.

(b) In addition to any appropriation the legislature shall make to the state risk management revolving fund, the comptroller may apportion to, and collect from, state agencies those amounts of money that, in the discretion of the comptroller, reflect benefits received by the agencies under this chapter. The comptroller may consider the relevant risk and loss experience of the agencies in making apportionments and assessments. Funds so collected shall be deposited into the state risk management revolving fund.

(c) The comptroller may establish deductibles for the state agencies for certain perils or classes of property losses and may:

(1) Assess the agencies for losses incurred in the amount of the deductible; or

(2) Reduce the payment from the state risk management revolving fund to cover the casualty loss by the amount of the deductible.

(d) The comptroller may establish a formula for refunds to the state agencies based upon the agencies' risk and loss experience.

(e) Money in the state risk management revolving fund shall be expended only for the purposes delineated in subsection (a) and only upon the authority of the comptroller, who is given discretion when to permit expenditures from the fund. Money in the state risk management revolving fund shall not be garnished, attached, or otherwise subjected to legal compulsion to pay actual or alleged obligations of the State, any state agency, or any state employee.

(f) The comptroller shall prepare, for each fiscal year, a report of all claims arbitrated, compromised, or settled for $10,000 or less paid from the state risk management revolving fund. The report shall be submitted to the legislature twenty days prior to the commencement of the regular session next succeeding the year for which the report is made.

(g) Money received from the settlement of claims or losses of the State as delineated in subsection (a) may be deposited into the state risk management revolving fund."]

SECTION 10. Section 81-3, Hawaii Revised Statutes, is repealed.

["§81-3 Financing of operations. Funds necessary for the development and operation of in-service training programs and activities shall be provided by general fund appropriations. Additional revenues may be provided through the charging of fees as may be necessary to conduct programs for participating agencies and shall be made part of a revolving fund."]

SECTION 11. Section 103-8.5, Hawaii Revised Statutes, is repealed.

["§103-8.5 Works of art special fund. (a) There is created a works of art special fund, into which shall be transferred one per cent of all state fund appropriations for capital improvements designated for the construction cost element; provided that this transfer shall apply only to capital improvement appropriations that are designated for the construction or renovation of state buildings.

(b) The works of art special fund shall be used solely for the following purposes:

(1) Costs related to the acquisition of works of art, including any consultant or staff services required to carry out the art in public places and relocatable works of art programs;

(2) Site modifications, display, and interpretive work necessary for the exhibition of works of art;

(3) Upkeep services, including maintenance, repair, and restoration of works of art;

(4) Storing and transporting works of art.

(c) The one per cent amount, which is included in all capital improvement appropriations, shall be calculated at the time the appropriation bills are signed into law. The moneys shall be transferred into the works of art special fund upon availability of moneys from the appropriations. Each agency receiving capital improvement appropriations shall calculate the one per cent amount and transfer the moneys into the works of art special fund.

(d) The comptroller and the state foundation on culture and the arts shall decide on the specific art objects to acquire, giving first consideration to placing appropriate pieces of art at the locations of the original appropriation.

The selection of, commissioning artists for, reviewing of design, execution, and placement of, and the acceptance of works of art shall be the responsibility of the comptroller and the state foundation on culture and the arts in consultation with the affected agency or department.

Expenditures from the works of art special fund shall be made by the comptroller.

(e) The comptroller shall:

(1) Provide each agency receiving capital improvement appropriations with information regarding items that shall be included and excluded from the one per cent amount;

(2) Ensure that each agency calculates its one per cent amount correctly; and

(3) Ensure that each agency transfers the correct amount to the works of art special fund in a timely manner.

(f) The comptroller and the executive director shall track amounts due from each agency under the one per cent requirement as provided in this section."]

SECTION 12. Section 125C-7, Hawaii Revised Statutes, is repealed.

["§125C-7 Petroleum products control fund. (a) There is established in the state treasury a revolving fund to be known as the petroleum products control fund. All fees or charges collected for services furnished or petroleum products sold, all moneys borrowed, and all contributions or grants of money received under this chapter shall be deposited in this fund; provided that the governor may establish other suitable funds in the state treasury for the deposit and separate accounting of moneys contributed or granted for special purposes under this chapter. All moneys in the petroleum products control fund are appropriated for the purposes of this chapter and shall be expended by the governor or the governor's authorized representative. The governor or the governor's authorized representative may expend and use the moneys in the petroleum products control fund to purchase petroleum products, to obtain services, equipment, materials, and supplies necessary under this chapter, and to repay moneys borrowed under this chapter.

(b) The governor's authorized representative shall submit requests to the governor to withdraw moneys from the petroleum products control fund as may be necessary for expenditure, by or under the direction of the governor, for immediate relief in the event of a shortage, or when the governor determines a shortage to be imminent and unavoidable; provided that not more than $500,000 shall be expended for the immediate relief of any single shortage.

(c) In expending the moneys, the governor's authorized representative may allot any portion thereof to any state or county agency, office, or employee, for relief of the conditions created by the shortage. The governor may determine whether a shortage contemplated by this section has occurred, or is imminent and unavoidable. The determination of the governor in this matter shall be conclusive.

(d) The governor's authorized representative may expend funds from the petroleum products control fund during ordinary petroleum market conditions for planning and preparation to respond to a shortage."]

SECTION 13. Section 128D-2, Hawaii Revised Statutes, is repealed.

["§128D-2 Environmental response revolving fund; uses. (a) There is created within the state treasury an environmental response revolving fund, which shall consist of moneys appropriated to the fund by the legislature, moneys paid to the fund as a result of departmental compliance proceedings, moneys paid to the fund pursuant to court-ordered awards or judgments, moneys paid to the fund in court-approved or out-of-court settlements, all interest attributable to investment of money deposited in the fund, moneys generated by the environmental response tax established in section 243-3.5, and moneys allotted to the fund from other sources; provided that when the total balance of the fund exceeds $20,000,000, the department of health shall notify the department of taxation of this fact in writing within ten days. The department of taxation then shall notify all distributors liable for collecting the tax imposed by section 243-3.5 of this fact in writing, and the imposition of the tax shall be discontinued beginning the first day of the second month following the month in which notice is given to the department of taxation. If the total balance of the fund thereafter declines to less than $3,000,000, the department of health shall notify the department of taxation which then shall notify all distributors liable for collecting the tax imposed by section 243-3.5 of this fact in writing, and the imposition of the tax shall be reinstated beginning the first day of the second month following the month in which notice is given to the department of taxation.

(b) Moneys from the fund shall be expended by the department for response actions and preparedness, including removal and remedial actions, consistent with this chapter; provided that the revenues generated by the "environmental response tax" and deposited into the environmental response revolving fund:

(1) Shall also be used:

(A) For oil spill planning, prevention, preparedness, education, research, training, removal, and remediation; and

(B) For direct support for county used oil recycling programs; and

(2) May also be used to support environmental protection and natural resource protection programs, including but not limited to energy conservation and alternative energy development, and to address concerns related to air quality, global warming, clean water, polluted runoff, solid and hazardous waste, drinking water, and underground storage tanks, including support for the underground storage tank program of the department and funding for the acquisition by the State of a soil remediation site and facility."]

SECTION 14. Section 150A-48, Hawaii Revised Statutes, is repealed.

["[§150A-48] Microorganism import certification revolving fund. (a) There is established in the state treasury the microorganism import certification revolving fund which shall be administered by the department for the purposes of this section. The microorganism import certification revolving fund shall consist of:

(1) Legislative appropriations to the microorganism import certification revolving fund;

(2) Certification and inspection fees, as authorized by rule;

(3) All fines collected pursuant to this part;

(4) Reimbursements for any costs paid by the department to remediate any impending danger or actual emergencies involving microorganisms imported pursuant to certificate;

(5) All interest earned on or accrued to moneys deposited in the microorganism import certification revolving fund;

(6) Grants and gifts to the microorganism import certification revolving fund; and

(7) Any other moneys made available to the microorganism import certification revolving fund from other sources.

(b) The balance in the microorganism import certification revolving fund shall not exceed $500,000. All amounts in excess of $500,000 shall be deposited to the credit of the state general fund.

(c) The department shall expend moneys in the microorganism import certification revolving fund for the development, administration, and operation of the microorganism import certification program, including but not limited to personnel, training, materials and equipment, compliance monitoring activities, educational workshops for certified importers and applicants for certification, evaluation and remediation of impending threat or actual emergencies related to microorganisms imported pursuant to certificate, and for any other purpose deemed necessary to carry out the purposes of this part.

(d) The department may set fees, by rule, for educational workshops for certified importers or applicants for certification."]

SECTION 15. Section 163D-17, Hawaii Revised Statutes, is amended to read as follows:

"§163D-17 Hawaii agricultural development [revolving fund; established]; use of corporation funds. (a) [There is established the Hawaii agricultural development revolving fund, to which shall be credited any state appropriations to the fund or other moneys made available to the fund, to be expended as directed by the corporation.

(b)] The corporation shall [hold the fund in an account or accounts separate from other funds. The corporation shall] invest and reinvest the [fund and the income thereof] moneys allocated to it to:

(1) Purchase qualified securities issued by enterprises for the purpose of raising seed capital; provided that the investment shall comply with the requirements of this chapter;

(2) Make grants, loans, and provide other monetary forms of assistance necessary to carry out the purposes of this chapter; and

(3) Purchase securities as may be lawful investments for fiduciaries in the State.

All appropriations, grants, contractual reimbursements, and other funds not designated for this purpose may be used to pay for the proper general expenses and to carry out the purposes of the corporation.

[(c)] (b) The corporation shall purchase qualified securities issued by an enterprise only after:

(1) Receiving:

(A) An application from the enterprise containing a business plan, which is consistent with the business and agricultural development plan, including a description of the enterprise and its management, product, and market;

(B) A statement of the amount, timing, and projected use of the capital required;

(C) A statement of the potential economic impact of the enterprise, including the number, location, and types of jobs expected to be created; and

(D) Any other information as the corporation shall require;

(2) Determining, based upon the application submitted, that:

(A) The proceeds of the investment will be used only to cover the seed capital needs of the enterprise, except as authorized in this section;

(B) The enterprise has a reasonable chance of success;

(C) The enterprise has the reasonable potential to create employment within the State and offers employment opportunities to residents;

(D) The coordinating entrepreneur and other founders of the enterprise have already made or are prepared to make a substantial financial and time commitment to the enterprise;

(E) The securities to be purchased are qualified securities;

(F) There is reasonable possibility that the corporation will recoup at least its initial investment; and

(G) Binding commitments have been made to the corporation by the enterprise for adequate reporting of financial data to the corporation, which shall include a requirement for an annual or other periodic audit of the books of the enterprise, and for control by the corporation that it considers prudent over the management of the enterprise, in order to protect the investment of the corporation, including membership on the board of directors of the enterprise, ownership of voting stock, input in management decisions, and the right of access to the financial and other records of the enterprise; and

(3) Entering into a binding agreement with the enterprise concerning the manner of payback by the enterprise of the funds advanced, granted, loaned, or received from the corporation. The manner of payback may include the payment of dividends, returns from the public sale of corporate securities or products, royalties, and other methods of payback acceptable to the corporation. In determining the manner of payback the corporation shall establish a rate of return or rate of interest to be paid on any investment, loan, or grant of corporation funds under this section.

[(d)] (c) If the corporation makes a direct investment, it shall also find that a reasonable effort has been made to find a professional investor to make an investment in the enterprise as a coventure, and that the effort was unsuccessful. The findings, when made by the corporation, shall be conclusive.

[(e)] The corporation shall not make investments in qualified securities issued by an enterprise in excess of the following limits:

(1) Not more than $500,000 shall be invested in the securities of any one enterprise, except that more than a total of $500,000 may be invested in the securities of any one enterprise, if the corporation finds, after its initial investment, that additional investments in that enterprise are required to protect the initial investment of the corporation, and the other findings set forth in subsections [(d) and (e)] (c) and (d) are made as to the additional investment;

(2) The corporation shall not own securities representing more than forty-nine per cent of the voting stock of any one enterprise at the time of purchase by the corporation after giving effect to the conversion of all outstanding convertible securities of the enterprise, except that in the event of severe financial difficulty of the enterprise, threatening the investment of the corporation in the enterprise, a greater percentage of those securities may be owned by the corporation; and

(3) Not more than fifty per cent of the assets of the corporation shall be invested in direct investments at any time.

[(f)] (e) No investment, loan, grant, or use of corporate funds for the purposes of this chapter shall be subject to chapter 42F or 103D."

SECTION 16. Section 166-10, Hawaii Revised Statutes, is repealed.

["§166-10 Agricultural park special fund. (a) There is created in the state treasury a special fund to be designated as the agricultural park special fund. The proceeds in the fund shall be used for the following purposes:

(1) Payment of agricultural park lease rents of privately owned lands under lease to the State pursuant to sections 171-112 and 166-3;

(2) Establishing, operating, maintaining, and improving infrastructure improvements in agricultural parks designated by the department pursuant to section 166-3; and

(3) Any other purposes deemed necessary by the department for the purpose of maintaining and operating those agricultural parks and related facilities designated by the department pursuant to section 166-3.

For the purpose of paragraph (2), infrastructure improvements may include, but shall not be limited to: irrigation water system projects, wind power or hydro power and pumping systems, waste disposal systems, domestic water systems, roads, street lights, land and roads drainage, and bridges.

(b) Moneys appropriated for the purpose of the fund; any other provision of the law to the contrary notwithstanding, all moneys received or collected from an agricultural park project designated pursuant to section 166-3, including residential and agricultural lot lease rents; and all money collected or received by the department for the use and maintenance of domestic and irrigation water systems within an agricultural park and other systems enumerated in subsection (a) shall be deposited into the agricultural park special fund. All interest earned or accrued on moneys deposited in the fund shall become a part of the fund. Moneys in the fund shall be expended upon warrants drawn by the comptroller."]

SECTION 17. Section 167-22, Hawaii Revised Statutes, is repealed.

["§167-22 Irrigation system revolving fund. (a) There is established the irrigation system revolving fund, into which shall be deposited:

(1) All legislative appropriations to the irrigation system revolving fund; and

(2) All or any portion of the receipts and revenues collected under this chapter, as determined by the board of agriculture, exclusive of the receipts and revenues deposited into the irrigation water development special fund.

(b) The irrigation system revolving fund shall be administered by the department of agriculture. Moneys in the revolving fund shall be expended for:

(1) Administrative costs, engineering surveys, economic studies, plans, and maps; and

(2) Other water projects or purposes of the board of agriculture.

In the event any moneys are expended from the revolving fund for engineering surveys, economic studies, plans, and other expenses directly attributable to any water project, or for the establishment of any water project, the amount of the expenditures shall be reimbursed to the revolving fund from any funds received by the board for and on account of the project."]

SECTION 18. Section 167-22.5, Hawaii Revised Statutes, is repealed.

["[§167-22.5] Irrigation water development special fund. (a) There is established in the state treasury the irrigation water development special fund, into which shall be deposited:

(1) Appropriations by the legislature to the irrigation water development special fund;

(2) All receipts and revenues derived from irrigation projects financed through the issuance of revenue bonds;

(3) All or any portion of the receipts and revenues collected under this chapter, as determined by the board, whether or not receipts or revenues are derived from irrigation projects financed through the issuance of revenue bonds; and

(4) Interest earned or accrued on moneys in the irrigation water development special fund.

(b) Moneys in the irrigation water development special fund shall be used by the board for the following purposes:

(1) Planning, design, improvement, construction, land acquisition, and equipment necessary for the development, operation, or maintenance of an irrigation project;

(2) Payment of debt service on revenue bonds issued by the department for irrigation project purposes, and the establishment of debt service and other revenues deemed necessary by the board;

(3) Reimbursement of the general fund for debt service on general obligation bonds issued to finance irrigation projects where the bonds are designated to be reimbursable out of the irrigation water development special fund; and

(4) Any other purpose deemed necessary by the board for the purpose of planning, designing, improving, constructing, developing, operating, and maintaining irrigation projects."]

SECTION 19. Section 195D-31, Hawaii Revised Statutes, is repealed.

["[§195D-31] Trust fund. (a) There is established within the state treasury a special fund to be known as the endangered species trust fund to be administered by the department in order to implement the purposes of this chapter.

The fund shall consist of moneys from the following sources:

(1) Moneys accrued from the sale of retail items officially sponsored by the department for the fund;

(2) Private contributions for the management and recovery of Hawaii's unique plants and animals;

(3) Fees and assessments charged for the commercial use of public land and waters and designated for the fund;

(4) Penalties, fines, or auctions resulting from enforcement violations [for this chapter]; and

(5) Legislative appropriations.

(b) The fund shall be held separate and apart from all other moneys, funds, and accounts in the state treasury; provided that moneys received as deposits or contributions from private sources shall be deposited and accounted for in accordance with the conditions established by the agencies or persons making the contribution. Earnings on the investment of the assets of the fund shall become a part of the fund. Any balance in the fund at the end of a fiscal year shall be carried forward to the next fiscal year."]

SECTION 20. Section 195F-4, Hawaii Revised Statutes, is repealed.

["§195F-4 Forest stewardship fund. (a) There is established a special fund within the state treasury known as the forest stewardship fund which shall be used as follows:

(1) Payments shall be made by the board pursuant to agreements entered into with qualified landowners to further the purposes of this chapter;

(2) Moneys collected from the harvest of non-native forest products from forest reserves, from the harvest of native forest products from degraded forests as defined in section 186-5.5, within forest reserves, from forest products found dead and lying on the ground, or from the sale of tree seedlings from the state nurseries, shall be used for the following activities:

(A) Replanting, managing, and maintaining designated timber management areas;

(B) Enhancing the management of public forest reserves with an emphasis on restoring degraded koa forests; and

(C) Developing environmental education and training programs pertaining to sustainable forestry;

provided that the activities described in subparagraphs (B) and (C) may not be funded unless the activities described in approved management plans pertaining to subparagraph (A) are adequately funded; and

(3) Moneys deposited into the fund as authorized by section 247-7 may also be used by the department to administer the program.

(b) The fund shall consist of moneys received from any public or private sources. The fund shall be held separate and apart from all other moneys, funds, and accounts in the state treasury; provided that any moneys received from the federal government or from private contributions shall be deposited and accounted for in accordance with conditions established by the agencies or persons from whom the moneys are received.

Investment earnings credited to the fund shall become a part of the assets of the fund. Any balance remaining in the fund at the end of any fiscal year shall be carried forward in the fund for the next fiscal year."]

SECTION 21. Section 201-106, Hawaii Revised Statutes, is repealed.

["[§201-106] Clean Hawaii fund established. (a) There is established within the state treasury a special fund to be known as the clean Hawaii fund, which shall be administered and used by the department to market and promote the development of local processing and manufacturing industries for collected recycled materials. All moneys derived from the following sources to market and promote the development of local processing and manufacturing industries for collected recycled materials shall be deposited into the fund:

(1) Moneys appropriated to the fund by the legislature;

(2) Moneys received by the department from federal, state, or county agencies;

(3) Direct transfers of funds from federal, state, or county agencies;

(4) Moneys received in fees, royalties, or premiums;

(5) Private grants, contracts, or gifts;

(6) Funds from other sources; and

(7) Earnings on investments.

(b) The department may use moneys in the clean Hawaii fund to:

(1) Make grants for marketing and promoting the development of local processing and manufacturing industries for collected recycled materials, subject to the standards provided in section 42F-103;

(2) Pay for expenses, fees, or costs related to the marketing, promotion, or development of local processing, manufacturing, or purchasing of recycled products; or

(3) Pay for expenses, fees, or costs to organize, conduct, sponsor, or cooperate with others in sponsoring conferences, workshops, demonstrations, studies, or other events or functions that are related to the stimulation and formation of recycling or environmental businesses.

(c) The director may execute contracts and adopt rules pursuant to chapter 91 to implement the purposes of the clean Hawaii fund."]

SECTION 22. Section 201G-325, Hawaii Revised Statutes, is repealed.

["[§201G-325] Downpayment loan program revolving fund. There is created within the state treasury a revolving fund to be administered by the corporation and to be known as the downpayment loan revolving fund. The revolving fund shall be funded from the proceeds of general obligation bonds or other appropriations from the state legislature, and shall be used to carry out the purposes of this subpart."]

SECTION 23. Section 201G-342, Hawaii Revised Statutes, is repealed.

["[§201G-342] Housing alteration revolving loan fund for persons with physical disabilities. There is created a housing alteration revolving loan fund for persons with physical disabilities, to be administered by the corporation as a separate fund from the other funds under this chapter. The fund shall provide low interest loans to eligible persons with physical disabilities or their caregivers to make design alterations for the purposes of this subpart; provided that the maximum loan shall be $25,000 per residence occupied by one or more eligible persons with physical disabilities. Any funds appropriated for the purpose of the housing alteration revolving loan fund for persons with physical disabilities and all moneys received or collected by the corporation for the purpose of the revolving fund shall be used for loans under this subpart; provided that interest earned on funds appropriated for the housing alteration revolving loan fund may be used by the corporation for administrative purposes."]

SECTION 24. Section 206E-109, Hawaii Revised Statutes, is repealed.

["§206E-109 Revenue bonds; special funds. The authority shall establish a separate special fund in accordance with section 39-62 for each reserved housing loan program or part thereof financed from the proceeds of the revenue bonds secured under the same trust indenture."]

SECTION 25. Section 206J-17, Hawaii Revised Statutes, is repealed.

["§206J-17 Aloha Tower fund. (a) There is created the Aloha Tower fund. All:

(1) Moneys;

(2) Rentals;

(3) Charges;

(4) Other revenues of the development corporation; and

(5) Moneys or charges received by the department of business, economic development, and tourism;

including reimbursements for costs and staff services as a result of planning, development, or redevelopment of the lands located seaward of Nimitz Highway between Pier 4 and the Honolulu International Airport shall be deposited into the fund.

(b) The development corporation may establish a separate account with respect to each issue of bonds issued under this chapter and direct that the moneys, rentals, charges, and other revenues pledged to the payment of the bond issue be credited to that account and, as permitted by section 206J-12(g)(7), designate a trustee to receive and receipt for, hold, and administer the moneys in the account. Moneys credited to a separate account held by a trustee may be paid directly to the trustee; provided that appropriate entries are made for purposes of accounting.

(c) The moneys on deposit in the fund shall be used for the purposes of this chapter and for the development, redevelopment, or improvement of the Honolulu Waterfront located seaward of Nimitz Highway between Pier 4 and the Honolulu International Airport."]

SECTION 26. Section 206M-15.5, Hawaii Revised Statutes, is repealed.

["§206M-15.5 High technology special fund. There is established in the state treasury a fund to be known as the high technology special fund, into which shall be deposited, except as otherwise provided by section 206M-17, all moneys, fees, and equity from tenants, qualified persons, or other users of the development corporation's industrial parks, projects, other leased facilities, and other services and publications; provided that the total amount of moneys in the fund shall not exceed $3,000,000 at the end of any fiscal year. All moneys in the fund are appropriated for the purposes of and shall be expended by the development corporation for the operation, maintenance, and management of its industrial parks, projects, facilities, services, and publications, and to pay the expenses in administering the special purpose revenue bonds of the development corporation or in carrying out its project agreements."]

SECTION 27. Section 210D-4, Hawaii Revised Statutes, is repealed.

["§210D-4 Hawaii community-based economic development revolving fund; established. There is established a revolving fund to be known as the Hawaii community-based economic development revolving fund from which moneys shall be loaned, granted by the department under this chapter. All moneys appropriated to the fund by the legislature, received as repayments of loans, payments of interest or fees, received as royalties, shall be deposited into the revolving fund and used for the purposes of this chapter. The department may use all appropriations and other moneys in the revolving fund not appropriated for a designated purpose to make grants or loans, provided that at no time shall the department reallocate funds from the loan program to the grant program so that insufficient funds remain available to make loans."]

SECTION 28. Section 211F-5, Hawaii Revised Statutes, is repealed.

["[§211F-5] Hawaii strategic development corporation revolving fund. There is established the Hawaii strategic development corporation revolving fund. The following moneys shall be deposited into the Hawaii strategic development corporation revolving fund and shall not be considered part of the general fund: all moneys appropriated by the legislature, received as repayments of loans, earned on investments, received pursuant to a venture agreement, received as royalties, received as premiums or fees charged by the corporation, or otherwise received by the corporation."]

SECTION 29. Section 227D-5, Hawaii Revised Statutes, is repealed.

["§227D-5 Special fund. There is established in the state treasury a fund to be known as the natural energy laboratory of Hawaii authority special fund, into which shall be deposited all moneys and fees from tenants or other users of the authority's parks, projects, other leased facilities, and other services and publications as well as any grants or gifts received by the authority. All moneys in the fund are appropriated for the purposes of and shall be expended by the authority for the operation, maintenance, and management of its parks, projects, facilities, services, and publications, and for the design and construction of new facilities and the renovation of or addition to existing facilities."]

SECTION 30 Section 302A-1304, Hawaii Revised Statutes, is repealed.

["[§302A-1304] Department of education storeroom; revolving fund. There shall be a storeroom established by the department to provide schools a source for commonly used educational, office, and custodial supplies. There is established a revolving fund to be known as the "storeroom revolving fund", into which shall be deposited the receipts from charges made to schools for the supplies and cost of issuing the supplies from the storeroom and transfers from other accounts or funds. Receipts and transfers deposited into the storeroom revolving fund may be expended to purchase educational, office, and custodial supplies, and equipment and services needed to operate the storeroom. Balances in excess of $400,000 at the end of each fiscal year shall lapse into the general fund."]

SECTION 31. Section 304-8.1, Hawaii Revised Statutes, is repealed.

["§304-8.1 Research and training revolving fund. (a) There is established a University of Hawaii research and training revolving fund into which shall be deposited one hundred per cent of the total amount of indirect overhead revenues generated by the university from research and training programs. The board of regents of the University of Hawaii is authorized to expend one hundred per cent of the revenues deposited in the fund for:

(1) Research and training purposes which may result in additional research and training grants and contracts;

(2) Facilitating research and training at the university; and

(3) Further deposit into the discoveries and inventions revolving fund and the University of Hawaii housing assistance revolving fund.

(b) The University of Hawaii shall prepare and submit an annual report on the status of the research and training revolving fund to the legislature twenty days before the convening of each regular session. The annual report shall include but not be limited to a breakdown of travel expenses.

(c) Notwithstanding sections 304-10, 304-8.92, and 304-8.96 to the contrary, the board of regents or its designee, may establish a separate account within the research and training revolving fund for the purpose of providing advance funding to meet reimbursable costs incurred in connection with federally financed research and training projects. Any reimbursement received as a result of providing advance funding shall be deposited into the research and training revolving fund to be used for the purpose of meeting reimbursable costs incurred in connection with federally financed projects.

(d) Revenues deposited into the fund shall not be used as a basis for reducing any current or future budget request or allotment to the University of Hawaii unless the university requests such a reduction."]

SECTION 32. Section 304-8.7, Hawaii Revised Statutes, is repealed.

["§304-8.7 University of Hawaii at Manoa intercollegiate athletics revolving fund and University of Hawaii at Hilo intercollegiate athletics revolving fund. Notwithstanding any other law to the contrary, there are established revolving funds for the intercollegiate athletic programs of the University of Hawaii at Manoa and the University of Hawaii at Hilo, which shall be used to receive, deposit, disburse, and account for funds from the activities of the intercollegiate athletic programs. The university may establish appropriate charges for activities related to its athletic programs and the use of its athletic facilities, the proceeds from which shall be deposited into these revolving funds.

The university shall maintain the financial integrity and viability of these revolving funds, including the maintenance of an adequate reserve to cope with the various factors that impact the revenue structure of an intercollegiate athletic program."]

SECTION 33. Section 304-8.8, Hawaii Revised Statutes, is repealed.

["[§304-8.8] University of Hawaii at Manoa malpractice special fund. There is established a special fund to be known as the University of Hawaii at Manoa malpractice special fund, which shall be used for costs arising from the defense and settlement of claims against the university, its students, or its faculty for professional malpractice in programs which provide professional services, including but not limited to clinical medicine, nursing, and law; provided that this fund shall not be used to fund settlements funded through professional liability insurance or through special appropriations of the legislature.

The university may establish appropriate charges and fees to individuals who are provided professional liability coverage under this section, the proceeds of which shall be deposited in accounts and credited to the University of Hawaii at Manoa malpractice special fund."]

SECTION 34. Section 304-8.91, Hawaii Revised Statutes, is repealed.

["§304-8.91 Child care programs revolving fund. There is established a child care programs revolving fund for the operation of child care programs and the construction and renovation of child care centers established by the University of Hawaii. Fees charged for child care at child care programs, proceeds from donations to the university for child care programs, and proceeds from loans or other instruments of indebtedness for the construction or renovation of child care centers, shall be deposited into the revolving fund. Expenditures from the revolving fund shall be made for the operation of child care programs and payment of principal and interest on obligations incurred for the construction or renovation of child care centers."]

SECTION 35. Section 304-8.945, Hawaii Revised Statutes, is repealed.

["[§304-8.945 Conference center revolving fund for Hilo campus.] (a) As used in this section, "dean" means the dean of the college of continuing education and community service. There is established a revolving fund for the conference center program in the college of continuing education and community service of the University of Hawaii, Hilo campus. All fees, charges, and other moneys collected in conjunction with the conference center program shall be deposited in the revolving fund. The dean is authorized to expend funds from the revolving fund for all costs associated with conducting conferences, seminars, and courses by the conference center program, including but not limited to, expenses for honoraria, hotel and room rentals, food and refreshment, printing and mailing, airfare and per diem, leis, rental of audio-visual equipment, and conference supplies and materials, without regard to sections 103-22 and 103-42.

(b) The dean shall prepare an annual report to the legislature accounting for all income and expenditures of the revolving fund."]

SECTION 36. Section 304-8.95, Hawaii Revised Statutes, is repealed.

["§304-8.95 Hawaii opportunity program in education endowment special fund. (a) There is created in the treasury of the State, the Hawaii opportunity program in education (HOPE) endowment special fund. Expenditures from the Hawaii opportunity program in education endowment special fund shall be limited to:

(1) Providing funds to award scholarships, stipends, and mandatory fees for the University of Hawaii to financially needy students with priority given to students from ethnic groups which are under-represented in the student population of the University of Hawaii; and

(2) Pay all costs incident to the prudent investment of the principal and income deposited in the endowment special fund.

Appropriations or authorizations from the Hawaii opportunity program in education endowment special fund shall be expended by the board of regents.

(b) The endowment special fund shall be administered by the board of regents, which shall also be responsible for investing the principal and income deposited therein.

(c) Scholarship, stipend, and mandatory fee awards for the University of Hawaii, funded by sums from the Hawaii opportunity program in education endowment special fund, shall be made beginning in the fiscal year 1998, in accordance with rules adopted by the board of regents pursuant to chapter 91. The rules shall include criteria for determining under-representation of particular groups in the student population of the university and financial need. Scholarship, stipend, and mandatory fee awards shall be made from appropriations or authorizations from the Hawaii opportunity program in education endowment special fund, and only earnings from the investment of principal and income on deposit in the endowment special fund received after June 30, 1997, shall be available for such appropriations or authorizations. The total sum appropriated or authorized for scholarship, stipend, and mandatory fee awards in any fiscal year shall not exceed ten per cent of the amount deposited in the endowment special fund on June 30, 1997, and in no event shall the total sum appropriated or authorized out of the special fund for scholarship awards in any fiscal year cause the amount deposited in the Hawaii opportunity program in education endowment special fund to be less than the amount on deposit in the special fund on June 30, 1997.

(d) Notwithstanding any law to the contrary, revenues derived from private organizations and individuals may be received by the Hawaii opportunity program in education endowment special fund and may be managed and invested pursuant to this section."]

SECTION 37. Section 304-8.956, Hawaii Revised Statutes, is repealed.

["[§304-8.956] University of Hawaii auxiliary enterprises special fund. (a) There is established the University of Hawaii auxiliary enterprises special fund. Except as otherwise provided by law, all revenues, including interest, derived and collected from the university's provision of auxiliary services shall be deposited into the University of Hawaii auxiliary enterprises special fund and shall be expended solely for the costs of providing these services. The university may establish and collect fees and charges for the costs of providing these services. The university also may transfer other funds into the University of Hawaii auxiliary enterprises special fund to offset the cost of these services. The university may establish accounts under the University of Hawaii auxiliary enterprises special fund to facilitate the administration of this fund among the various campuses and operating units of the University of Hawaii system. All expenditures from this fund shall be subject to legislative appropriation.

(b) As used in this section, "auxiliary services" means those services provided by the university to students, faculty, staff, and others that are ancillary to, but facilitate the instruction, research, and public service missions of the university, and may include food services, transportation services, counseling and guidance, and laboratory animal services."]

SECTION 38. Section 304-8.97, Hawaii Revised Statutes, is repealed.

["§304-8.97 University of Hawaii alumni revolving fund. There is established a revolving fund to be known as the University of Hawaii alumni revolving fund, into which shall be deposited funds and proceeds received by the university from alumni activities and donations from alumni. Funds deposited into this account may be expended by the university for all costs associated with conducting alumni affairs activities and programs for the university system, including but not limited to expenses for honoraria, hotel and room rentals, food and refreshment, printing and mailing, banners and signs, plaques and awards, airfare and per diem, leis, rental of audio visual, musical and stage equipment, and activity supplies and materials, without regard to statutory competitive bidding requirements."]

SECTION 39. Section 304-68.5, Hawaii Revised Statutes, is repealed.

["[§304-68.5] International exchange health care tourism revolving fund. (a) There is established a revolving fund for the international exchange of health care tourism program into which shall be deposited all donations, gifts, contributions, legislative appropriations, and moneys generated by the program through education, training, and research contracts and grants. Moneys deposited into this fund for the school of medicine and the school of nursing shall be divided into separate accounts for each school, provided that moneys not designated for use by a particular school shall be divided equally. Moneys shall be expended from each account by the school of medicine and the school of nursing, for student aid, training projects, teaching, supplies, services, and activities related to the development and promotion of the health-related tourism education program.

(b) The deans of the school of medicine and the school of nursing shall jointly prepare and submit an annual report to the legislature accounting for all income and expenditures of the revolving fund.

(c) All unexpended and unencumbered moneys appropriated by the legislature remaining in the fund at the close of each fiscal year which are deemed, by the director of finance, to be in excess of the moneys necessary to carry out the purposes of this section over the next following fiscal year shall lapse to the credit of the state general fund."]

SECTION 40. Section 323F-21, Hawaii Revised Statutes, is amended to read as follows:

"[[]§323F-21[]] Fiscal provisions. (a) [There is created in the state treasury a special fund to be known as the health systems special fund into which shall be deposited all fees, proceeds, reimbursements, and the like owed to or received by the corporation and its facilities, except as herein provided. The special fund shall be used solely to fulfill the purposes outlined in this chapter.

The corporation may establish and maintain within its special fund, accounts that may be necessary and appropriate to carry out its purposes and responsibilities.

The corporation may provide reasonable reserves for any of the following purposes:

(1) Insurance deductibles;

(2) The improvement, replacement, or expansion of its facilities or services;

(3) The securing of the corporation's bonds, notes, or other instruments of indebtedness; or

(4) Any other purpose it deems necessary or appropriate in the performance of its purposes and responsibilities.

(b)] The corporation board shall develop annual operating and capital budgets for each facility. The corporation shall develop budgetary guidelines, and may allocate to each facility reasonable corporation administrative costs, including funds determined by the corporation to be needed from or provided to each facility to:

(1) Repay corporation debts;

(2) Provide subsidies to any facility determined to be unable to fund from within that facility's programs and services deemed essential to community needs; and

(3) Maintain appropriate reserves.

[(c)] (b) The corporation shall develop annual corporation operating and capital budgets, taking into account anticipated surpluses from or subsidies to the facilities pursuant to the annual guidelines described in this section, accumulated corporation reserves and accounts, subsidies, if any, that are determined to be needed from the general fund, and other sources of corporation-wide income as may be identified.

[(d)] (c) The corporation may share in any facility's surplus and may offset any facility's deficits. Obligations undertaken by a facility shall be paid only from funds of that facility, unless the corporation board or its authorized agent explicitly agrees to guarantee the obligation.

[(e)] (d) In accordance with each annual facility budget, each facility of the corporation shall:

(1) Bill and collect for its services;

(2) Maintain bank accounts; and

(3) Pay for needed personnel, supplies, equipment, and other operational and capital expenditures.

[(f)] (e) The corporation may elect to manage its own capital improvement project and funds, either directly or indirectly by contract; provided that annual reports of the project moneys are provided to the governor and legislature.

[(g)] (f) The corporation board may hold public informational meetings on its budget. Representatives of any county government, state government, or any other person having an interest in the budget, shall have the right to be heard at the meetings."

SECTION 41. Section 329-59, Hawaii Revised Statutes, is repealed.

["§329-59 Controlled substance registration revolving fund; established. (a) There is established within the state treasury the controlled substance registration revolving fund. The fund shall be expended at the discretion of the director of public safety for the purpose of:

(1) Offsetting the cost of the electronic prescription accountability system and the registration and control of the manufacture, distribution, prescription, and dispensation of controlled substances and regulated chemicals listed under section 329-61, within the State; and

(2) Funding positions authorized by the legislature by law.

(b) The fund shall consist of all moneys derived from fees collected pursuant to sections 329-31 and 329-67 and legislative appropriations. All fees collected pursuant to sections 329-31 and 329-67 shall be deposited in the controlled substance registration revolving fund."]

SECTION 42. Section 334-15, Hawaii Revised Statutes, is repealed.

["§334-15 Mental health and substance abuse special fund; established. (a) There is established a special fund to be known as the mental health and substance abuse special fund into which shall be deposited all revenues and other moneys collected from certification programs and treatment services rendered by the mental health and substance abuse programs operated by the State. Notwithstanding any other law to the contrary, the department is authorized to establish separate accounts within the special fund for depositing moneys received from certification programs and from each mental health and substance abuse program. Moneys deposited into the respective accounts of each program shall be used for the payment of the operating expenses of the respective program.

(b) The director shall submit a report to the legislature, not later than twenty days prior to the convening of each regular session, which identifies for each account in the special fund, the account balance and ceiling increase, any transfers and expenditures made, and the purposes of the expenditures."]

SECTION 43. Section 346E-15, Hawaii Revised Statutes, is repealed.

["[§346E-15] Health care revolving fund. The department shall collect the tax and pay all tax revenues into the state general fund for deposit into the health care revolving fund which is hereby created in the state treasury. Amounts deposited in the health care revolving fund, and any interest earned on these amounts, shall be used only for section 346-14 Medicaid purposes. Any federal Medicaid matching funds to expenditures made from funds deposited in the health care revolving fund shall not become part of the health care revolving fund. The funds in the health care revolving fund shall be expended by the department."]

SECTION 44. Section 347-12.5, Hawaii Revised Statutes, is repealed.

["[§347-12.5] Randolph-Sheppard revolving account. (a) There is established within the state treasury the Randolph-Sheppard revolving account. The revolving account shall be used by the department of human services for:

(1) The provision of the following benefits for blind vendors:

(A) A retirement or pension plan;

(B) Health insurance; and

(C) Sick and vacation leave;

(2) The maintenance and replacement of equipment used in the blind vending program;

(3) The purchase of new equipment to be used in the blind vending program; and

(4) The provision of management services, which shall include, but not be limited to:

(A) The hiring of consultants;

(B) The sponsoring of training seminars;

(C) Transportation;

(D) Per diem for vendors to attend meetings of the state committee of blind vendors;

(E) Services for the state committee of blind vendors; and

(F) Other costs related to the blind vending program.

(b) Income from vending machines on federal, state, and county properties that are within reasonable proximity to, and in direct competition with, a blind vendor may be deposited into the account and then disbursed to the blind vendor.

(c) The revolving account shall consist of funds derived from:

(1) Vending machine income generated by federal, state, and county operations;

(2) Any other legally accepted source of income; and

(3) Donations."]

SECTION 45. Section 351-62.5, Hawaii Revised Statutes, is repealed.

["§351-62.5 Crime victim compensation special fund; when payments authorized. (a) There is established a crime victim compensation special fund from which the commission may make payments as provided in subsection (b). The fund shall be administered by the director of public safety for purposes of this chapter. Interest and investment earnings credited to the assets of the fund shall become part of the fund. Any balance remaining in the fund at the end of any fiscal year shall be carried forward for the next fiscal year.

(b) Where the commission has made an award pursuant to this chapter, the commission shall make the payments to or on behalf of the victim or one or more of the dependents of a deceased victim, or to or for the benefit of other persons who have suffered pecuniary loss or incurred expenses on account of hospital, medical, funeral, or burial expenses as a result of the victim's injury or death. Victims or dependents entitled to receive awards shall be notified of the option to have payments made on their behalf to other designated persons. Payments made pursuant to this section shall not exceed the total amount of the award.

(c) The amount appropriated under section 351-70 shall be redeposited into the fund and applied to other payments as authorized by the commission.

(d) Funds received pursuant to section 354D-12(b)(1) and amounts received pursuant to sections 351-35, 351-62.6, 351-63, 706-605, and 853-1 shall be deposited into the crime victim compensation special fund. Moneys received shall be used for compensation payments, operating expenses, salaries of positions as authorized by the legislature, and collection of fees. The commission may enter into memorandums of agreement with the judiciary for the collection of fees by the judiciary; provided that no funds shall be deposited by the judiciary into the crime victim compensation special fund until collected."]

SECTION 46. Section 393-41, Hawaii Revised Statutes, is repealed.

["[§393-41] Establishment of special premium supplementation fund. There is established in the treasury of the State, separate and apart from all public moneys or funds of the State, a special fund for premium supplementation which shall be administered exclusively for the purposes of this chapter. All premium supplementations payable under this part shall be paid from the fund. The fund shall consist of (1) all money appropriated by the State for the purposes of premium supplementation under this part and (2) all fines and penalties collected pursuant to this chapter."]

SECTION 47. Section 396-20, Hawaii Revised Statutes, is repealed.

["[§396-20] Hoisting machine operators' certification revolving fund. (a) There is established in the state treasury a revolving fund to be known as the hoisting machine operators' certification revolving fund into which shall be deposited all fees, penalties, fines, and interest collected from:

(1) Certification of hoisting machine operators;

(2) Interest and investment moneys earned on any moneys in the fund; and

(3) All moneys received for the fund from any source.

The moneys in the fund may be used to carry out the purposes of this section. The director of finance shall disburse the moneys in the fund in accordance with instructions from the director.

(b) The fund may be used for:

(1) Personnel and operating expenses for an executive director for the hoisting machine operators advisory board;

(2) All necessary board costs and reimbursements;

(3) Preparation and dissemination of public information on hoisting machine operators' certification and training;

(4) Preparation of annual reports on certification program activities and accomplishments and on the fund; and

(5) Any reimbursements to the state general fund for funds appropriated by the legislature to establish the revolving fund.

(c) The director shall submit an annual report to the legislature on the status of the fund, including expenditures and program results, not less than twenty days prior to the convening of each regular session."]

SECTION 48. Section 431:10C-115, Hawaii Revised Statutes, is repealed

["§431:10C-115 Drivers education fund underwriters fee. (a) The commissioner shall assess and levy upon each insurer, and self-insurer, a drivers education fund underwriters fee of $2 a year on each motor vehicle insured by each insurer or self-insurer. This fee is due and payable on an annual basis by means and at a time to be determined by the commissioner.

(b) The commissioner shall deposit the fees into a special drivers education fund account.

(c) The commissioner shall allocate the fees deposited for each fiscal year in the following manner:

(1) Fifty per cent to the commissioner to be expended for the operation of the drivers education program provided in section 286-128(d); and

(2) Fifty per cent to the director of commerce and consumer affairs for:

(A) The drivers education program administered by the department of education for high school students; and

(B) The traffic safety education program established and administered by the department of education pursuant to section 302A-417.

(d) Motor vehicles insured under the joint underwriting plan shall be excluded from the drivers education fund assessment.

(e) The commissioner shall adopt rules in accordance with chapter 91 for the execution of this section and the distribution of this fund."]

SECTION 49. Section 712A-16, Hawaii Revised Statutes, is amended to read as follows:

"§712A-16 Disposition of property forfeited. (1) All property forfeited to the State under this chapter shall be transferred to the attorney general who:

(a) May transfer property, other than currency, which shall be distributed in accordance with subsection (2) to any local or state government entity, municipality, or law enforcement agency within the State;

(b) May sell forfeited property to the public by public sale; provided that for leasehold real property:

(i) The attorney general shall first offer the holder of the immediate reversionary interest the right to acquire the leasehold interest and any improvements built or paid for by the lessee for the then fair market value of the leasehold interest and improvements. The holder of the immediate reversionary interest shall have thirty days after receiving written notice within which to accept or reject the offer in writing; provided that the offer shall be deemed to be rejected if the holder of the immediate reversionary interest has not communicated acceptance to the attorney general within the thirty-day period. The holder of the immediate reversionary interest shall have thirty days after acceptance to tender to the attorney general the purchase price for the leasehold interest and any improvements, upon which tender the leasehold interest and improvements shall be conveyed to the holder of the immediate reversionary interest.

(ii) If the holder of the immediate reversionary interest fails to exercise the right of first refusal provided in subparagraph (i), the attorney general may proceed to sell the leasehold interest and any improvements by public sale.

(iii) Any dispute between the attorney general and the holder of the immediate reversionary interest as to the fair market value of the leasehold interest and improvements shall be settled by arbitration pursuant to chapter 658;

(c) May sell or destroy all raw materials, products, and equipment of any kind used or intended for use in manufacturing, compounding, or processing a controlled substance;

(d) May compromise and pay valid claims against property forfeited pursuant to this chapter; or

(e) May make any other disposition of forfeited property authorized by law.

(2) All forfeited property and the sale proceeds thereof, up to a maximum of three million dollars per year, not previously transferred pursuant to [[]subsection[]] (1)(a) of this section, shall, after payment of expenses of administration and sale, be distributed as follows:

(a) One quarter shall be distributed to the unit or units of state or local government [[]whose[]] officers or employees conducted the investigation and caused the arrest of the person whose property was forfeited or seizure of the property for forfeiture; and

(b) One quarter shall be distributed to the prosecuting attorney who instituted the action producing the forfeiture[; and

(c) One half shall be deposited into the criminal forfeiture fund established by this chapter].

(3) Property and money distributed to units of state and local government shall be used for law enforcement purposes, and shall complement but not supplant the funds regularly appropriated for such purposes.

[(4) There is established in the department of the attorney general a revolving fund to be known as the criminal forfeiture fund, hereinafter referred to as the "fund" in which shall be deposited one-half of the proceeds of a forfeiture and any penalties paid pursuant to section 712A-10(6). All moneys in the fund shall be expended by the attorney general and are hereby appropriated for the following purposes:

(a) The payment of any expenses necessary to seize, detain, appraise, inventory, safeguard, maintain, advertise, or sell property seized, detained, or forfeited pursuant to this chapter or of any other necessary expenses incident to the seizure, detention, or forfeiture of such property and such contract services and payments to reimburse any federal, state, or county agency for any expenditures made to perform the foregoing functions;

(b) The payment of awards for information or assistance leading to a civil or criminal proceeding;

(c) The payment of supplemental sums to state and county agencies for law enforcement purposes; and

(d) The payment of expenses arising in connection with programs for training and education of law enforcement officers.

(5) The attorney general may, without regard to the requirements of chapter 91, promulgate rules and regulations concerning the disposition of property, the use of the fund, and compromising and paying valid claims against property forfeited pursuant to this chapter.

(6)] (4) Not less than twenty days prior to the convening of each regular session, the attorney general shall provide to the legislature a report on the use of the Hawaii omnibus criminal forfeiture act during the fiscal year preceding the legislative session. The report shall include:

(a) The total amount and type of property seized by law enforcement agencies;

(b) The total number of administrative and judicial actions filed by prosecuting attorneys and the disposition thereof;

(c) The total number of claims or petitions for remission or mitigation filed in administrative actions and the dispositions thereof;

(d) The total amount and type of property forfeited and the sale proceeds thereof; and

(e) The total amount and type of property distributed to units of state and local government[;

(f) The amount of money deposited into the criminal forfeiture fund; and

(g) The amount of money expended by the attorney general from the criminal forfeiture fund under subsection (5) and the reason for the expenditures]."

PART III.

SECTION 50. The legislature determines that there is in the agricultural loan revolving fund at least $1,200,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the agricultural loan revolving fund to the general fund the sum of $1,200,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 51. The legislature determines that there is in the animal quarantine special fund at least $190,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the animal quarantine special fund to the general fund the sum of $190,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 52. The legislature determines that there is in the financial assistance for agriculture special fund at least $1,250,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the financial assistance for agriculture special fund to the general fund the sum of $1,250,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 53. The legislature determines that there is in the interagency federal revenue maximization revolving fund at least $4,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the interagency federal revenue maximization revolving fund to the general fund the sum of $4,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 54. The legislature determines that there is in the motor pool revolving fund at least $500,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the motor pool revolving fund to the general fund the sum of $500,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 55. The legislature determines that there is in the parking control revolving fund at least $2,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the parking control revolving fund to the general fund the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 56. The legislature determines that there is in the stadium special fund at least $2,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the stadium special fund to the general fund the sum of $2,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 57. The legislature determines that as of December 31, 2001 there was in the capital loan revolving fund, at least $5,025,000 in excess of the requirements of the fund. Notwithstanding any interdepartmental transfer of funds from the capital loan revolving fund subsequent to December 31, 2001, on July 1, 2002, the director of finance is authorized to transfer from the capital loan revolving fund, the Hawaii technology loan revolving fund, the state disaster revolving loan fund, the Hawaii innovation development fund and the Hawaii strategic development corporation fund to the general fund the combined sum of $5,025,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 58. The legislature determines that there is in the dwelling unit revolving fund at least $13,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the dwelling unit revolving fund to the general fund the sum of $13,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 59. The legislature determines that there is in the foreign trade zones special fund at least $400,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the foreign trade zones special fund to the general fund the sum of $400,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 60. The legislature determines that there is in the Hawaii community development revolving fund at least $8,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the Hawaii community development revolving fund to the general fund the sum of $8,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 61. The legislature determines that there is in the natural energy laboratory of Hawaii authority special fund at least $500,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the natural energy laboratory of Hawaii authority special fund to the general fund the sum of $500,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 62. The legislature determines that there is in the rental assistance revolving fund at least $4,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the rental assistance revolving fund to the general fund the sum of $4,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 63. The legislature determines that there is in the rental housing trust fund at least $3,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the rental housing trust fund to the general fund the sum of $3,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 64. The legislature determines that there is in the tourism special fund at least $10,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the tourism special fund to the general fund the sum of $10,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 65. The legislature determines that there is in the public utilities special fund at least $1,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the public utilities special fund to the general fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 66. The legislature determines that there is in the compliance resolution special fund at least $10,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the compliance resolution special fund to the general fund the sum of $10,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 67. The legislature determines that there is in the insurance regulation fund at least $1,500,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the insurance regulation fund to the general fund the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 68. The legislature determines that there is in the environmental response revolving fund at least $1,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the environmental response revolving fund to the general fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 69. The legislature determines that there is in the boiler and elevator safety revolving fund at least $200,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the boiler and elevator safety revolving fund to the general fund the sum of $200,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 70. The legislature determines that there is in the employment and training fund at least $2,200,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the employment and training fund to the general fund the sum of $2,200,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 71. The legislature determines that there is in the bureau of conveyances special fund at least $400,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the bureau of conveyances special fund to the general fund the sum of $400,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 72. The legislature determines that there is in the natural area reserve fund at least $920,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the natural area reserve fund to the general fund the sum of $920,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 73. The legislature determines that there is in the special land and development fund at least $2,500,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the special land and development fund to the general fund the sum of $2,500,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 74. The legislature determines that there is in the state parks special fund at least $400,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the state parks special fund to the general fund the sum of $400,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 75. On July 1, 2002, the following amounts shall be paid into the general fund from accounts established in the state treasury:

(1) $407,000 from account S-01-302, legal services;

(2) $20,000,000 from account T-01-901, litigation settlement clearance account;

(3) $300,000 from account T-01-917, insurance regulatory services;

(4) $350,000 from account T-01-901, shippers wharf committee fund; and

(5) $234,000 from account S-01-314, special unemployment insurance administrative fund.

SECTION 76. The legislature determines that there is in the driver education and training fund at least $1,200,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the driver education and training fund to the general fund the sum of $1,200,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 77. The legislature determines that there is in the Hawaii innovation development fund at least $200,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the Hawaii innovation development fund to the general fund the sum of $200,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 78. The legislature determines that there is in the state disaster revolving fund at least $300,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the state disaster revolving fund to the general fund the sum of $300,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 79. The legislature determines that there is in the libraries special fund at least $500,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the libraries special fund to the general fund the sum of $500,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 80. The legislature determines that there is in the schools special fees special fund at least $250,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the schools special fees special fund to the general fund the sum of $250,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 81. The legislature determines that there is in the special fund for disability benefits at least $5,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the special fund for disability benefits to the general fund the sum of $5,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

SECTION 82. The legislature determines that there is in the University of Hawaii research and training revolving fund at least $15,000,000 in excess of the requirements of the fund. On July 1, 2002, the director of finance is authorized to transfer from the University of Hawaii research and training revolving fund to the general fund the sum of $15,000,000 or so much thereof as may be necessary for fiscal year 2002-2003.

PART IV

SECTION 83. There is appropriated out of the works of art special fund the sum of $800,000, or so much thereof as may be necessary for fiscal year 2002-2003, for ancillary improvements for the state art museum.

The sum appropriated shall be expended by the department of accounting and general services for the purposes of this Act.

PART V

SECTION 84. All special or revolving funds or accounts not explicitly established by statute and in existence on the effective date of this Act shall be abolished and all unencumbered moneys contained in these funds or accounts shall be lapsed into the general fund on June 30, 2002.

SECTION 85. All special and revolving funds repealed under part II of this Act shall have until the end of the 2002-2003 fiscal year to close their accounts and transfer funding sources for personnel from revolving or special funds to the general fund. No moneys subject to part II of this Act shall be encumbered under its respective revolving or special fund beyond the 2002-2003 fiscal year.

SECTION 86. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 87. This Act shall take effect on July 1, 2002; provided that part II of this Act shall take effect on June 30, 2003.

INTRODUCED BY:	_____________________________