WeVote
Log In

Bill

Bill

GM 1325

Informing the Legislature that on June 25, 2025, the Governor signed the following bill into law: SB326 SD1 HD1 CD1 (ACT 223).

2025 Regular Session

Hawaii Act 223 tightens revolving funds: requires clear program purpose, fees linked to benefits, and self-sustaining finances without general fund support; adds oversight.

Received.
#act223
0
WeVote Research Nonpartisan
Bill Summary · GM 1325

Summary: Act 223 (SB 326, CD1, HD1)

Overview

Act 223, signed into law on June 25, 2025, Relating to Revolving Funds, amends Hawaii Revised Statutes §37-52.4 to tighten the criteria for establishing and continuing revolving funds. The act emphasizes greater oversight, a clear link between program benefits and user charges, and a demonstrated path to financial self-sustainability without relying on general fund appropriations.

What the bill does

  • Recasts the criteria for creating and reviewing revolving funds to ensure they meet specific, demonstrable requirements.
  • Establishes standards to prevent revolving funds from serving as an automatic or external source of support outside the normal budget and appropriation process.
  • Requires explicit financial planning showing the fund’s sustainability and financing structure.

Key provisions (section highlights)

The amended §37-52.4 requires revolving funds to demonstrate:
1. A clear purpose and program scope, including:
- The purpose of the program supported by the fund;
- Financial details such as fees, projected revenue, and costs;
- An explanation of why the program cannot be implemented through the general fund.
2. A tangible nexus between benefits and charges or revenue sources, rather than funding the program primarily through an automatic subsidy outside the budget process.
3. An appropriate financing mechanism that is used only when essential to the program’s operation.
4. Financial self-sufficiency, demonstrated by either:
- Annual projections showing sustainability without general fund appropriations, or
- A schedule of projected collections from outstanding payments that will capitalize the fund.

Note: Section 2 indicates a portion of the statutory material was repealed and replaced (the text provided shows the formatting indicating changes with bracketed and underscored material).

Effective date

  • The Act takes effect upon approval (i.e., effective immediately upon Governor’s signature, June 25, 2025).

Legislative history (context)

  • SB326, SD1, HD1, CD1: Passed final readings in both chambers on April 30, 2025.
  • Governor Josh Green signed the bill on June 25, 2025, issuing Act 223.
  • The Governor’s message (GM 1325) formally informs the Legislature of the signing.

Who is affected

  • State agencies and programs that establish or operate revolving funds.
  • Program administrators and fiscal managers responsible for financing, fees, revenue projections, and annual sustainability planning.
  • Legislative budgeting and oversight processes that review revolving funds for compliance with the new criteria.

Practical impact

  • Revolving funds will face more rigorous justification and business-case requirements before establishment or continuance.
  • Funds must demonstrate a clear linkage between user fees/revenue and program benefits and must show financial self-sufficiency without general fund support.
  • This may increase upfront planning and reporting requirements but aims to ensure revolving funds are financially durable and transparent.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.