Public Employment

Establishes an advisory panel to modernize public employment.
Authorizes experimental modernization projects in human resource
management.  Allows recruitment above first step of pay range.
Makes salary overpayments the subject of collective bargaining.
Authorizes establishment of flexible spending accounts for
cafeteria plans.  (CD1)

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HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                S.D. 2
STATE OF HAWAII                                            C.D. 1

                   A  BILL  FOR  AN  ACT



 1                              Part I
 2      SECTION 1.  For several decades, the civil service system
 3 has admirably met its mandate to support Hawaii state
 4 government's mission to serve the people of Hawaii.  Within the
 5 past few years, however, with the advancement of digital
 6 technology, public needs have changed at a constant and ever-
 7 increasing rate.  Our current civil service system, which was
 8 created at a time when digital technology was at best, mostly
 9 theory, has outlived its usefulness.  Therefore, for state
10 government to continue to meet the public's needs, the civil
11 service system will have to be modernized to provide flexible,
12 timely, responsive, and people-centered personnel support.
13      To create an opportunity that encourages all stakeholders to
14 work collaboratively to co-create this modernized civil service,
15 it is proposed that a "fresh-start" provision be established for
16 civil service laws.  Such a "fresh-start" concept would not only
17 serve to "clear-the-deck" but would also capture the public's
18 attention and thus provide the drive to seriously engage in the
19 process of co-creating a new statutory framework by all

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 1 stakeholders.
 2      SECTION 2.  (a)  There is established, within the department
 3 of human resources development for administrative purposes, an
 4 advisory panel to establish partnerships with all stakeholders,
 5 labor and management included, in order to design and effectuate
 6 a process to modernize the civil service system.  The panel shall
 7 consist of the following persons:
 8      (1)  The chairperson of the senate committee on labor and
 9           environment;
10      (2)  The chairperson of the house committee on labor and
11           public employment;
12      (3)  The director of human resources development, who shall
13           be the chairperson of the panel;
14      (4)  A representative of the conference of personnel
15           directors;
16      (5)  A representative of the Hawaii Government Employees'
17           Association;
18      (6)  A representative of the United Public Workers;
19      (7)  A representative of the State of Hawaii Organization of
20           Police Officers; and
21      (8)  A representative of the Hawaii Fire Fighters
22           Association.
23      (b)  The panel may solicit input from other individuals with

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 1 relevant expertise, who shall be designated by the panel.
 2      (c)  In discussions and agreements on proposed new laws, the
 3 panel shall identify and work collaboratively with the various
 4 stakeholders governed by chapters 76, 77, 78, 79, 80, 81, and 82,
 5 Hawaii Revised Statutes, and other applicable laws, to draft
 6 replacement legislation as deemed necessary.  The panel shall
 7 discuss issues including but not limited to:
 8      (1)  The negotiability of health and retirement benefits;
 9      (2)  The creation of a streamlined classification system
10           using professionally recognized techniques, including
11           broadbanding, to provide flexibility that will result
12           in a reduction in the number of existing classes of
13           work;
14      (3)  A total compensation package that includes pay and
15           benefits;
16      (4)  The recruitment of personnel above the first step of
17           the pay range in accordance with section 4;
18      (5)  The autonomy of personnel administration systems;
19      (6)  The elimination of duplication between the collective
20           bargaining law and other laws;
21      (7)  The need for civil service commissions and the public
22           employees compensation appeals board;
23      (8)  The restructuring of departments based on the proposed

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 1           new laws;
 2      (9)  The civil service law;
 3     (10)  The compensation law;
 4     (11)  Public service;
 5     (12)  Leaves of absence;
 6     (13)  Hours of work;
 7     (14)  In-service training programs; and
 8     (15)  Incentive and service awards.
 9      (d)  The panel shall establish a process for developing a
10 broadbased series of recommendations and submit draft model civil
11 service legislation to a joint house and senate labor committee
12 meeting during the week of November 15, 1999.
13      (e)  The panel shall submit to the chairperson of the senate
14 committee on labor and environment and the chairperson of the
15 house committee on labor and public employment, in bill form and
16 prior to the deadline for introducing bills to the regular
17 session of 2000, recommended model civil service legislation to
18 carry out the purposes of this section.
19                              Part II
20      SECTION 3.  Experimental modernization projects.(a)  The
21 department of human resources development, with the approval of
22 the governor, may conduct experimental modernization projects to
23 determine whether a specific change in human resource management

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 1 procedures, methods, policies, or statutes would result in
 2 improved human resource management within the State.
 3      (b)  Prior to implementing any experimental modernization
 4 project, the department of human resources development shall
 5 develop a plan that identifies the purposes of the project, the
 6 methodology to be used, the duration of the project, the
 7 methodology and criteria for evaluation of the project, and, if
 8 applicable, the cost of the project.
 9      (c)  The conduct of experimental modernization projects
10 pursuant to this section shall not be limited by chapters 76 and
11 77, Hawaii Revised Statutes, and existing civil service rules and
12 procedures, except that no project shall waive or abridge equal
13 employment opportunity rights or those rules prohibiting
14 discrimination based on race, sex, age, religion, color,
15 ancestry, politics, physical or mental disability, marital
16 status, or sexual orientation.
17      (d)  If any experimental modernization project will have a
18 significant impact on existing employees, the consent of
19 appropriate exclusive representatives prior to implementation of
20 the project shall be required.  If any experimental modernization
21 project involves the modification of any terms and conditions of
22 a valid collective bargaining agreement, an agreement amending
23 those specific terms and conditions shall be negotiated with the

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 1 exclusive representative prior to implementation of the project.
 2      (e)  The department of human resources development, through
 3 the governor, shall submit an annual report to the legislature on
 4 any approved experimental modernization projects, including the
 5 plan, status, and, as applicable, results of the project for the
 6 legislature's information.
 7                             Part III
 8      SECTION 4.  Recruitment above the first step of the pay
 9 range.(a)  Notwithstanding section 77-9, Hawaii Revised
10 Statutes, to the contrary, the department of human resources
11 development may announce vacancies at a range of rates, rather
12 than at the first step as provided by law, for professional and
13 scientific positions and positions in the excluded managerial
14 compensation plan.  The range shall consist of the first step and
15 may consist of additional steps or rates up to and including, but
16 not exceeding, the midpoint of the salary range.
17      (b)  The department of human resources development shall
18 determine the number of steps or range of rates to be made
19 available under this section at any given time and the minimum
20 number of creditable years of experience required.
21      (c)  The appointing authority, as part of the selection and
22 appointment process, may evaluate the relevancy of each
23 applicant's qualifications to the specific duties of the position

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 1 and, in recognition of pertinent education or experience which
 2 exceed the minimum qualification requirements of the class, may
 3 make an initial appointment at an appropriate step or rate within
 4 the advertised range.  All such evaluations and appointments
 5 shall be in accordance with the guidelines adopted by the
 6 department of human resources development.  Only excess
 7 experience or equivalent education of a kind and level directly
 8 relevant to the work to be performed by the appointee shall be
 9 credited under this section.
10      (d)  Nothing in this section shall be deemed to preclude an
11 employer from offering a higher starting rate that may be
12 authorized by section 77-9, Hawaii Revised Statutes.
13                              Part IV
14      SECTION 5.  Section 78-12, Hawaii Revised Statutes, is
15 amended by amending subsection (e) to read as follows:
16      "(e)  If the indebtedness has occurred as a result of salary
17 or wage overpayment, the comptroller or other officer shall
18 determine the amount of indebtedness and notify the employee in
19 writing of the indebtedness.  If the employee contests the
20 comptroller or other officer's determination of indebtedness, the
21 employee may request a hearing pursuant to chapter 91, and upon
22 conclusion of the hearing or if the employee waives the hearing,
23 if the indebtedness is equal to or less than $1,000, the

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 1 comptroller or other officer shall immediately deduct from any
 2 subsequent periodic payment normally due the employee any amount
 3 up to the total amount of indebtedness[.]; provided that if the
 4 employee may grieve the indebtedness under a collective
 5 bargaining grievance procedure, then the procedure shall be
 6 utilized to contest the indebtedness in lieu of a hearing
 7 pursuant to chapter 91.  For indebtedness greater than $1,000,
 8 the comptroller or other officer shall deduct:
 9      (1)  An amount agreed to by the employee and employer, but
10           not less than $100 per pay period; or
11      (2)  One-quarter of the salary, wages, or compensation due
12           the employee until the indebtedness is repaid in full."
13                              Part V
14      SECTION 6.  Notwithstanding any other law to the contrary,
15 the legislature shall adopt legislation to be effective June 29,
16 2000, to define the employment of persons in the civil service
17 system.  Such legislation shall be governed by the merit
18 principle.
19      SECTION 7.  Effective June 30, 2000, chapters 76, 77, 78,
20 79, 80, 81, and 82, Hawaii Revised Statutes, and other applicable
21 laws are repealed or modified as deemed necessary; provided that
22 the legislature has adopted replacement legislation for these
23 laws in accordance with section 6 and, in so doing, identifies

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 1 the specific repealed law or laws that are deemed to be replaced
 2 by the new law.
 3                              PART VI
 4      SECTION 8.  Chapter 78, Hawaii Revised Statutes, is amended
 5 by adding a new section to part II to be appropriately designated
 6 and to read as follows:
 7      "78-    Flexible spending accounts.  (a)  As used in this
 8 section:
 9      "Contributions" means the employee pretax compensation
10 reductions contributed to the plan.
11      "Flexible spending accounts" and the "plan" mean a flexible
12 spending accounts plan for state employees authorized by section
13 125 of the Internal Revenue Code of 1986, as amended, and
14 established in accordance with this part.
15      (b)  In addition to any other powers and duties provided by
16 law, the department or agency charged with the administration of
17 the flexible spending accounts may enter into any contracts
18 necessary to establish, administer, or maintain the plan.
19      (c)  The contributions, interest earned, and forfeited
20 participant balances shall be held in trust for the exclusive
21 benefit of the participants and the plan.  The department or
22 agency charged with administration of the plan shall have the
23 authority to hold these funds in trust outside the state

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 1 treasury.
 2      (d)  The interest earned and forfeited participant balances
 3 shall be used to defray participant fees and other administrative
 4 costs as determined by the department or agency charged with
 5 administration of the plan.
 6      (e)  The contributions, interest earned, and forfeited
 7 participant balances shall not be subject to the general
 8 creditors of the State."
 9                             Part VII
10      SECTION 9.  Statutory material to be repealed is bracketed.
11 New statutory material is underscored.
12      SECTION 10.  This Act shall take effect upon its approval.

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