Bill Text: HI HB589 | 2019 | Regular Session | Amended

Hawaii House Bill 589 (Prior Session Legislation)

Bill Title: Relating To The Land Conservation Fund.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2019-03-20 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [HB589 Detail]

Download: Hawaii-2019-HB589-Amended.html

HOUSE OF REPRESENTATIVES	H.B. NO.	589
THIRTIETH LEGISLATURE, 2019		H.D. 2
STATE OF HAWAII		S.D. 1

A BILL FOR AN ACT

RELATING TO THE LAND CONSERVATION FUND.

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

SECTION 1. (a) During the regular session of 2017, the legislature enacted Act 209, Session Laws of Hawaii 2017 (Act 209), which required the auditor to conduct a performance audit of the department of land and natural resources' land conservation fund and provide recommendations as appropriate. The audit required by Act 209 was submitted to the legislature in January 2019.

The audit found that the department of land and natural resources has struggled to properly manage the land conservation fund, hampering the program's effectiveness. Significantly, the department of land and natural resources has not established a resource land acquisition plan, which is required by section 173A-3, Hawaii Revised Statutes. The auditor noted that without this plan in place, the legacy land conservation program and the department of land and natural resources "lack an overall direction and purpose."

The audit found a number of specific concerns with program implementation and financial management. Overall, the department of land and natural resources failed to exercise proper financial management over the land conservation fund. For example:

(1) Program staff missed fiscal deadlines to create and execute contracts for grant awards, triggering a domino effect of borrowing anticipated future funds that had not yet been appropriated by the legislature. In practice, this reduced the amount of funding available for future projects;

(2) Program staff did not track balances in the trust account used to hold legacy land conservation program funds awarded to state agencies, and therefore reported an incomplete picture of encumbered funds to the legislature;

(3) Department staff mistakenly paid nearly $685,000 for state central service fees during fiscal years 2016 and 2017, even though the land conservation fund had been statutorily exempt from paying the fees since 2015;

(4) The department of land and natural resources used the land conservation fund's limited administrative budget for the salary of an employee to support the program; however, a portion the employee's time was spent on other departmental projects unrelated to the legacy land conservation fund program; and

(5) The division of forestry and wildlife of the department of land and natural resources has at times sought and obtained legislative authority for funding from the land conservation fund above the spending ceiling for public lands acquisition projects outside of the legacy land conservation program's grant award process.

(b) The legislature agrees with the auditor that the department of land and natural resources must follow its obligations under the law and implement the policies and procedures required for the department to exercise proper financial management over the land conservation fund.

Accordingly, the purpose of this Act is to require the department of land and natural resources to implement certain recommendations made by the auditor.

Specifically, this Act requires the department of land and natural resources to:

(1) Establish an initial resource land acquisition plan no later than June 30, 2021;

(2) Maintain a record of the transfer of funds to and from any department of land and natural resources trust account and report these transactions to the governor and the legislature in the program's annual report;

(3) Develop and implement written policies and procedures, including internal controls, to govern the grant award and blanket encumbrance processes;

(4) Develop clear and well-defined policies and procedures between the legacy land conservation program and the division of forestry and wildlife regarding the distribution of land conservation fund moneys;

(5) Maintain a centralized file system and establish a records retention policy for all awarded projects, including pending, completed, and discontinued projects; and

(6) Report on its progress in meeting its obligations under this Act prior to the convening of the regular session of 2020, as part of the annual report to the governor and the legislature pursuant to chapter 173A, Hawaii Revised Statutes.

SECTION 2. Section 173A-3, Hawaii Revised Statutes, is amended to read as follows:

"§173A-3 Resource land acquisition plan. In consultation with the senate president and speaker of the house of representatives, the department shall prepare and, from time to time, revise a plan for the acquisition of land having value as a resource to the State[.]; provided that an initial plan shall be completed no later than June 30, 2021. This plan shall guide the board in acquiring [~~such~~] applicable land in the exercise of its powers under this chapter. In preparing this plan, the department may institute studies relating to the need for [~~such~~] the land and shall consider any plan relating to the acquisition of [~~such~~] applicable land that has been prepared by any state or county agency."

SECTION 3. Section 173A-5, Hawaii Revised Statutes, is amended by amending subsection (l) to read as follows:

"(l) The board shall:

(1) Track amounts disbursed from the fund;

(2) Prepare and submit an annual report to the governor and the legislature at least twenty days prior to the convening of each regular session. The annual report shall include:

(A) A summary of all interests or rights in land acquired during the preceding fiscal year;

(B) A summary of what value each newly acquired land has as a resource to the State;

(D) A financial report for the preceding fiscal year; [~~and~~]

(E) A record of the balance of and all transfers of funds to or from any department of land and natural resources trust account established to hold awards granted to state agencies. The report shall include a list of all projects for which a grant was awarded and the status of each project; and

[~~(E)~~] (F) Objectives and budget projections for the following fiscal year; and

(3) Make copies of the annual report available to the public."

SECTION 4. No later than June 30, 2021, the department of land and natural resources shall:

(1) Develop and implement written policies and procedures, including internal controls, governing the grant award and blanket encumbrance processes to ensure that project contracts are executed on time and blanket encumbrance funds do not lapse;

(2) Develop clear and well-defined policies and procedures between the legacy land conservation program and the division of forestry and wildlife regarding distribution of moneys from the land conservation fund; provided that the procedures shall require the division of forestry and wildlife to follow the grant application process described in section 173A-5, Hawaii Revised Statutes, in order to receive funding from the land conservation fund, except as otherwise authorized by the legislature; and

(3) Develop a centralized file system and establish a records retention policy for all awarded projects, including pending, completed, and discontinued projects.

SECTION 5. The department of land and natural resources shall submit a report of its progress in meeting its obligations under this Act no later than twenty days prior to the convening of the regular session of 2020, as part of the annual report to the governor and legislature required pursuant to chapter 173A, Hawaii Revised Statutes.

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

SECTION 7. This Act shall take effect on July 1, 2050.

Report Title:

DLNR; Land Conservation Fund; Auditor's Recommendations; Report

Description:

Requires the DLNR to comply with recommendations contained in Auditor's Report No. 19-01 related to management of the Land Conservation Fund including by completing a Land Resource Acquisition Plan by 6/30/2021 and implementing policies, procedures, and internal controls related to the use of the fund and grant awards. Takes effect 7/1/2050. (SD1)

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