State lawmakers have scaled back efforts to remake the Department of Business, Economic Development and Tourism as a smaller agency, though they may further reconfigure it next year, they say.

House and Senate conferees on Wednesday agreed on measures that would split up one of DBEDT's five divisions, while transferring two attached agencies to other departments. The tourism liaison office would move to the governor's office.

They also agreed to other changes that could further diminish the agency, including providing only a year funding for a deputy director and the Aloha Tower Development Corp.

More could be done next year, said Sen. Donna Mercado Kim, head of the Senate Ways and Means Committee.

"I believe we will take a closer look during the interim and have something more next session," said Kim, noting lawmakers have passed a resolution that asks for the creation of a task force that will make recommendations on boosting government efficiency.

She said lawmakers also want to look at the results of DBEDT audits that are being conducted.

State lawmakers have been unhappy with the performance of DBEDT director Ted Liu, a Lingle administration appointee who has drawn criticism about the soliciting of private donations to fund a trade mission to China and South Korea. A Senate investigation concluded Liu sought to manipulate the procurement and award of a hydrogen contract and turned its findings over the Honolulu prosecutor's office.

LIU UNDER FIRE

Earlier this month, Liu came under fire again when an auditor report found sloppy purchasing practices with numerous violations of procurement procedures and poor training.

Kim said those and other factors played a role in the lawmakers' decision.

"There were many concerns about the most recent audit."

Liu yesterday said his department continues to be focused on ways to improve the Hawai'i economy in the short and long terms. Liu said he doesn't disagree that a thoughtful and thorough review of government efficiency is needed, and not an ad-hoc effort that came up during the legislative session.

"We're very much aligned as a department to the department's economic mission," Liu said. "We will continue to do it and to serve the people of the state."

Liu was caught off guard in March when the House Finance Committee came up with a budget that largely dismantled the department.

RECONFIGURING

The proposals called for the transferring of three of DBEDT's five divisions to other departments while reassigning most of the dozen boards attached to the department for administrative purposes.

House Finance Committee staffers said conferees decided on a less-ambitious reconfiguring of DBEDT this session, and that the Legislature most likely will review the agency again next year.

The current changes by the conferees call for the splitting up of the dozen-person Creative Industries Division, with its Film Industry Branch being assigned to the Hawai'i Tourism Authority and the Arts & Culture Development Branch finding a home with the State Foundation on Culture and the Arts.

The state Tourism Authority would also receive four tourism data researchers who now work for DBEDT's Research & Economic Analysis Division.

Other changes include the sending of the Natural Energy Laboratory of Hawai'i Authority to the Department of Accounting and General Services and transferring the Small Business Regulatory Review Board to the Department of Commerce and Consumer Affairs.