HOUSE OF REPRESENTATIVES	H.B. NO.	679
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII

A BILL FOR AN ACT

relating to state funds.

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

SECTION 1. This Act is recommended by the governor for immediate passage in accordance with section 9 of article VII of the Constitution of the State of Hawaii.

SECTION 2. The legislature finds that the federal funding received under the American Rescue Plan (ARP) Act of 2021, Public Law 117-2, required that states receiving elementary and secondary school emergency relief (ESSER) program III funds for maintenance of effort for fiscal year 2022-2023 maintain State support for elementary and secondary education that is at least at the proportional level of the State's support for elementary and secondary education relative to the State's overall spending, averaged over fiscal years 2016-2017, 2017-2018, and 2018-2019. If the State fails to meet these requirements, the United States Department of Education has the authority to impose a range of enforcement options, including seeking recovery of the approximately $412,300,000 in ESSER program III funds awarded to the state department of education.

As the State's economy has improved and general fund revenues have rebounded, the State's maintenance of effort obligation has become increasingly difficult to manage, in part due to certain large general fund appropriations made in fiscal year 2021-2022 and fiscal year 2022-2023 for non-educational purposes. These appropriations were made for worthy purposes but have the impact of increasing the denominator for ARP ESSER maintenance of effort calculations if expended in fiscal year 2022-2023. However, these worthy purposes would not be adversely affected by statutory adjustments to modestly delay expenditures beyond fiscal year 2022-2023, to ensure the expenditures no longer impact the ARP ESSER maintenance of effort calculations.

The purpose of this Act is to reduce the potential for federal ARP ESSER maintenance of effort enforcement actions against the State by delaying the encumbrance and expenditure of various large general fund appropriations made by the legislature in the regular session of 2022 until or beyond July 1, 2024, so these expenditures are no longer part of the fiscal year 2022-2023 ARP ESSER maintenance of effort calculations.

SECTION 3. Act 236, Session Laws of Hawaii 2022, is amended by amending section 3 to read as follows:

"SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $300,000,000 or so much thereof as may be necessary for fiscal year 2022-2023 to be deposited into the rental housing revolving fund established in section 201H-202, Hawaii Revised Statutes[.]; provided that funds shall not be expended or deposited into the rental housing revolving fund prior to July 1, 2023; provided further that any unencumbered balances from the appropriation shall lapse to the general fund on June 30, 2024."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

ARPA; Maintenance of Effort Calculations; HHFDC; State Funds; Appropriation

Description:

Amends the general fund appropriation for the Hawaii housing finance and development corporation in Act 236, SLH 2022, to help the State meet its American Rescue Plan Act maintenance of effort obligations.

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