REPORT TITLE:
UH Autonomy


DESCRIPTION:
Provides complete autonomy to the University of Hawaii, by making
its status comparable to that of the judiciary.  Makes all
employees subject to the university's personnel system.
Eliminates director of finance and governor from the university
budgetary process.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           538
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO THE UNIVERSITY OF HAWAII.


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

 1      SECTION 1.  The legislature finds that a strong university
 
 2 system can be a significant contributor to a robust economy,
 
 3 providing both quality higher education and dollars for the
 
 4 surrounding communities.  The legislature further finds that
 
 5 those universities that contribute to a significant degree to the
 
 6 community's economic well being have broad authority to respond
 
 7 to changing opportunities.
 
 8      In recent years, the University of Hawaii has been granted
 
 9 increasing fiscal autonomy from the executive branch.  Last year,
 
10 the legislature passed a broad-based measure that gave the
 
11 university increased authority to manage its assets, personnel,
 
12 and programs.  Although the university received increased
 
13 autonomy, the legislature further finds that it is necessary to
 
14 grant the University of Hawaii complete autonomy from the
 
15 executive branch to maximize the university's potential to grow
 
16 as a world-class institution and contribute to the State's
 
17 economic revitalization.
 
18      The purpose of this Act is to provide the University of
 
19 Hawaii with complete autonomy from the executive branch in order
 
20 to provide the university with opportunities and incentives for
 

 
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 1 developing an entrepreneurial, competitive role and contributing
 
 2 to Hawaii's economic growth.
 
 3      SECTION 2.  Chapter 76, Hawaii Revised Statutes, is amended
 
 4 by adding three new sections to be appropriately designated and
 
 5 to read as follows:
 
 6      "76-    Employees of the University of Hawaii.  It is the
 
 7 intent of the legislature that the personnel of the University of
 
 8 Hawaii shall form a separately administered part of the system of
 
 9 personnel administration established by this chapter and chapter
 
10 77, unless specifically exempted by this chapter or any other law
 
11 or are faculty under section 304-11; provided that:
 
12      (1)  The University of Hawaii shall have a status coequal
 
13           with the executive branch of the State and with the
 
14           several counties for purposes of the development of a
 
15           position classification plan, the formulation of
 
16           personnel rules and regulations, and the administration
 
17           of the University of Hawaii personnel system,
 
18           including, but not limited to the classification,
 
19           reclassification, allocation, and reallocation of a
 
20           particular position, the publication of a vacancy
 
21           announcement, the examination of applicants, and the
 
22           preparation of eligible lists;
 
23      (2)  In the development of a position classification plan,
 

 
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 1           the formulation of personnel rules and regulations, and
 
 2           the administration of the University of Hawaii
 
 3           personnel system, the board of regents or the president
 
 4           of the University of Hawaii shall consult with the
 
 5           director of human resources development;
 
 6      (3)  Any action of the board of regents or the president
 
 7           including the classification, reclassification,
 
 8           allocation, and reallocation of a particular position,
 
 9           the publication of a vacancy announcement, the
 
10           examination of applicants, the preparation of an
 
11           eligible list, and appeals from suspensions, dismissals
 
12           and demotions may be appealed by any person, employee,
 
13           or the exclusive bargaining unit representative to the
 
14           University of Hawaii personnel appeals board.  The
 
15           board shall be composed of three members, one
 
16           representative from the department of human resources
 
17           development, one representative of the University of
 
18           Hawaii, and one exclusive bargaining unit
 
19           representative.  The provisions contained in section
 
20           26-34 shall not apply to the members of the University
 
21           of Hawaii personnel appeals board.  The board shall sit
 
22           as an appellate body on matters within the jurisdiction
 
23           of the University of Hawaii with equal authority as the
 

 
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 1           civil service commission established by section 26-5;
 
 2      (4)  Nothing in chapters 76 and 77 shall be construed to
 
 3           require the approval of the governor or any executive
 
 4           agency for the University of Hawaii to establish
 
 5           positions in the University of Hawaii branch that may
 
 6           be authorized and funded by the legislature.
 
 7      76-    University of Hawaii; powers and duties.  All of the
 
 8 powers and duties assigned in parts I, IV, and V of this chapter
 
 9 to the governor or the director of human resources development
 
10 with respect to the University of Hawaii, shall be assigned to
 
11 the board of regents or the president of the University of
 
12 Hawaii.
 
13      76-    Civil service for the University of Hawaii.  (a)
 
14 There shall be a civil service system for the University of
 
15 Hawaii.  Except as otherwise specifically provided in this
 
16 section, all of the provisions of part II shall apply to the
 
17 University of Hawaii.
 
18      (b)  All of the powers and duties assigned to the director
 
19 of human resources development in part II of this chapter, with
 
20 respect to the University of Hawaii, shall be exercised by the
 
21 president of the University of Hawaii.
 
22      (c)  When applying part II of this chapter to the University
 
23 of Hawaii:
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1      "Department" means the University of Hawaii;
 
 2      "Director" means the president of the University of Hawaii;
 
 3      "Governor" means the board of regents of the University of
 
 4 Hawaii; and
 
 5      "State" means the University of Hawaii."
 
 6      SECTION 3.  Chapter 304, Hawaii Revised Statutes, is amended
 
 7 by adding a new section to be appropriately designated and to
 
 8 read as follows:
 
 9      "304-    Administration; budget preparation and submission.
 
10 (a)  The board of regents shall make an annual report to the
 
11 legislature, at each regular session thereof, of the business of
 
12 the University of Hawaii and of the administration of the
 
13 university system throughout the State.  The board of regents
 
14 shall present to the legislature a unified budget, six-year
 
15 program and financial plan, and variance report for all of the
 
16 colleges, departments, and programs of the University of Hawaii.
 
17 The president of the university, who shall be appointed by the
 
18 board of regents, shall direct the administration of the
 
19 University of Hawaii with responsibility for the efficient
 
20 operation of all of the colleges, departments, and programs.
 
21      (b)  The president of the university shall possess the
 
22 following powers, that may be delegated by the board of regents:
 
23      (1)  To prescribe for all of the colleges, departments, and
 

 
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 1           programs, a uniform system of keeping and periodically
 
 2           reporting statistics of their business;
 
 3      (2)  To procure from all of the colleges, departments, and
 
 4           programs, estimates for their appropriations; with the
 
 5           cooperation of the representatives of the colleges,
 
 6           departments, and programs concerned to review and
 
 7           revise them as the president deems necessary for the
 
 8           equitable provision for the various colleges,
 
 9           departments, or programs according to their needs and
 
10           to present the estimates, as reviewed and revised by
 
11           the board of regents, to the legislature as
 
12           collectively constituting a unified budget for all of
 
13           the University of Hawaii;
 
14      (3)  To exercise exclusive authority over the preparation,
 
15           explanation, and administration of the University of
 
16           Hawaii budget, programs, plans, and expenditures,
 
17           including without limitation policies and practices of
 
18           financial administration and the establishment of
 
19           guidelines as to permissible expenditures; provided
 
20           that all expenditures of the University of Hawaii shall
 
21           be in conformance with program appropriations and
 
22           provisions of the legislature; and
 
23      (4)  To do all other acts which may be necessary or
 

 
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 1           appropriate for the administration of the University of
 
 2           Hawaii.
 
 3      (c)  The budget, six-year program and financial plan, and
 
 4 the variance report of the University of Hawaii shall be
 
 5 submitted by the board of regents to the legislature in
 
 6 accordance with the schedule of submission specified for the
 
 7 governor in chapter 37 and shall contain the program information
 
 8 prescribed in that chapter.  By November 1 of each year preceding
 
 9 a legislative session in which a budget is to be submitted, the
 
10 board of regents shall provide written notification to the
 
11 governor of the proposed total expenditures, by cost categories
 
12 and sources of funding, and estimated revenues of the University
 
13 of Hawaii for each fiscal year of the next fiscal biennium.
 
14      (d)  If the governor in anticipation of a revenue shortfall
 
15 restricts the expenditures of general fund appropriations by
 
16 executive branch departments and agencies by a total
 
17 of        per cent or more of the total general fund
 
18 appropriation to the executive branch in a fiscal year, where at
 
19 the end of the fiscal year those funds will lapse into the
 
20 general fund, the governor shall inform the legislature and the
 
21 board of regents of this action.  Once the board of regents is
 
22 informed of the governor's action, then the board of regents
 
23 shall also restrict the expenditure of general fund
 

 
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 1 appropriations made to the university system by an equal
 
 2 percentage.  If in the same fiscal year the governor increases
 
 3 the percentage of general fund expenditures restricted to more
 
 4 than that         per cent and informs the legislature and the
 
 5 board of regents of this increase, the board of regents shall
 
 6 increase its restriction of the expenditure of general fund
 
 7 appropriations in an equal percentage."
 
 8      SECTION 4.  Section 26-4, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "26-4 Structure of government.  Under the supervision of
 
11 the governor, all executive and administrative offices,
 
12 departments, and instrumentalities of the state government and
 
13 their respective functions, powers, and duties shall be allocated
 
14 among and within the following principal departments that are
 
15 hereby established:
 
16      (1)  Department of human resources development (Section
 
17           26-5)
 
18      (2)  Department of accounting and general services (Section
 
19           26-6)
 
20      (3)  Department of the attorney general (Section 26-7)
 
21      (4)  Department of budget and finance (Section 26-8)
 
22      (5)  Department of commerce and consumer affairs (Section
 
23           26-9)
 

 
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 1      (6)  Department of taxation (Section 26-10)
 
 2     [(7)  University of Hawaii (Section 26-11)
 
 3      (8)] (7)  Department of education (Section 26-12)
 
 4     [(9)] (8)  Department of health (Section 26-13)
 
 5    [(10)] (9)  Department of human services (Section 26-14)
 
 6    [(11)] (10)  Department of land and natural resources (Section
 
 7           26-15)
 
 8    [(12)] (11)  Department of agriculture (Section 26-16)
 
 9    [(13)] (12)  Department of Hawaiian home lands (Section 26-17)
 
10    [(14)] (13)  Department of business, economic development, and
 
11           tourism (Section 26-18)
 
12    [(15)] (14)  Department of transportation (Section 26-19)
 
13    [(16)] (15)  Department of labor and industrial relations
 
14           (Section 26-20)
 
15    [(17)] (16)  Department of defense (Section 26-21)
 
16    [(18)] (17)  Department of public safety (Section 26-14.6)"
 
17      SECTION 5.  Section 26-25, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "[[]26-25[]]  Services to the judiciary [and],
 
20 legislature[.], and the University of Hawaii.  Any executive
 
21 department may provide services to the judiciary [and], the
 
22 legislature, and the University of Hawaii, but nothing in this
 
23 part and this chapter shall be construed as granting any
 

 
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 1 authority to the governor or any department to exercise control
 
 2 over the organization, programs, functions, operations, and
 
 3 expenditures of the judiciary [and], the legislature[.], and the
 
 4 University of Hawaii."
 
 5      SECTION 6.  Section 26-52, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "26-52  Department heads and executive officers.  The
 
 8 salaries of the following state officers shall be as follows:
 
 9      (1)  The salary of the superintendent of education shall be
 
10           $90,041 a year;
 
11     [(2)  The salary of the president of the University of Hawaii
 
12           shall be set by the board of regents;
 
13      (3)] (2)  The salaries of all department heads or executive
 
14           officers of the departments of accounting and general
 
15           services, agriculture, attorney general, budget and
 
16           finance, business, economic development, and tourism,
 
17           commerce and consumer affairs, Hawaiian home lands,
 
18           health, human resources development, human services,
 
19           labor and industrial relations, land and natural
 
20           resources, public safety, taxation, and transportation
 
21           shall be $85,302 a year; and
 
22     [(4)] (3)  The salary of the adjutant general shall be
 
23           $85,302 a year; provided that if this salary is in
 

 
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 1           conflict with the pay and allowance fixed by the tables
 
 2           of the regular army or air force of the United States,
 
 3           the latter shall prevail."
 
 4      SECTION 7.  Section 37-31, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "37-31  Intent and policy.  It is declared to be the policy
 
 7 and intent of the legislature that the total appropriations made
 
 8 by it, or the total of any budget approved by it, for any
 
 9 department or establishment, shall be deemed to be the maximum
 
10 amount authorized to meet the requirements of the department or
 
11 establishment for the period of the appropriation, excepting as
 
12 may otherwise be provided by law, and that the governor and the
 
13 director of finance should be given the powers granted by
 
14 sections 37-32 to 37-41 in order that savings may be effected by
 
15 careful supervision throughout each appropriation period with due
 
16 regard to changing conditions; and by promoting more economic and
 
17 efficient management of state departments and establishments[.];
 
18 provided that this part shall not apply to the appropriations
 
19 made by the legislature to the University of Hawaii."
 
20      SECTION 8.  Section 37-34, Hawaii Revised Statues, is
 
21 amended to read as follows:
 
22      "37-34  Appropriations available for allotment; estimate of
 
23 expenses.(a)  No appropriation to which the allotment system is
 

 
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 1 applicable shall become available to any department or
 
 2 establishment for expenditure during any allotment period until
 
 3 the department or establishment submits an estimate to the
 
 4 director of finance, at whatever time prior to the beginning of
 
 5 the allotment period and in whatever form as the director may
 
 6 prescribe, of the amount required to carry on the work of the
 
 7 department or establishment during that period and until the
 
 8 estimate is approved, increased, or decreased by the director and
 
 9 funds are allotted pursuant to section 37-35.
 
10      [(b)  Before appropriations for the University of Hawaii
 
11 become available to the university, the university shall advise
 
12 the governor and the director of finance of the amount necessary
 
13 for payments for financing agreements under chapter 37D, the
 
14 governor, with the assistance of the director of finance, as may
 
15 be necessary, shall establish allotment ceilings for each source
 
16 of funding of all of the appropriations of the University of
 
17 Hawaii for each allotment period and shall advise the university
 
18 of these determinations.
 
19      (c)] (b)  Any other law to the contrary notwithstanding,
 
20 general fund appropriations for the operating expenses of public
 
21 health facilities shall be made available to the public health
 
22 facilities for expenditure during any allotment period."
 
23      SECTION 9.  Section 37-35, Hawaii Revised Statutes, is
 

 
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 1 amended to read as follows:
 
 2      "37-35  Estimated expenditures; approval.  The director of
 
 3 finance shall review all estimates submitted under section 37-34
 
 4 and, having due regard for:
 
 5      (1)  The probable further needs of the department or
 
 6           establishment for the remainder of the term for which
 
 7           the appropriation was made;
 
 8      (2)  The terms and purposes of the appropriation, the
 
 9           progress of collection of revenues, and condition of
 
10           the treasury; and
 
11      (3)  The probable receipts and total cash requirements for
 
12           the ensuing quarter, shall approve, increase, or reduce
 
13           the amount of the estimate[;
 
14 provided that the director of finance shall approve the estimates
 
15 submitted by the University of Hawaii when:
 
16      (1)  The sum of the estimates for each funding source does
 
17           not exceed the applicable allotment ceilings
 
18           established by the governor under section 37-34;
 
19      (2)  The progress of collection of revenues, the condition
 
20           of the treasury, and the probable receipts and total
 
21           cash requirements for the ensuing quarter permit; and
 
22      (3)  All other legal requirements are satisfied].
 
23 The director shall act promptly upon all estimates and notify
 

 
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 1 each department or establishment of its allotment, and shall
 
 2 notify the comptroller."
 
 3      SECTION 10.  Section 37-36, Hawaii Revised Statutes, is
 
 4 amended by amending subsection (a) to read as follows:
 
 5      "(a)  The director of finance may modify or amend any
 
 6 previous allotment upon notice to the department or establishment
 
 7 concerned; provided that:
 
 8      [(1) For the University of Hawaii, the director of finance
 
 9           may modify or amend any previous allotment only upon
 
10           application of or notice to the university, and upon
 
11           public declaration, which shall be made ten days prior
 
12           to the modification or amendment taking effect;
 
13      (2)] (1)  The modification or amendment shall be made only
 
14           to avoid an illegal result or in anticipation of a
 
15           revenue shortfall;
 
16     [(3)] (2)  No deficit or undue reduction of funds to meet
 
17           future needs of the department or establishment will
 
18           result from the modification or amendment; and
 
19     [(4)] (3)  No modification or amendment shall reduce an
 
20           allotment below the amount required to meet valid
 
21           obligations or commitments previously incurred against
 
22           the allotted funds."
 
23      SECTION 11.  Section 37-37, Hawaii Revised Statutes, is
 

 
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 1 amended to read as follows:
 
 2      "37-37  Reduction.(a)  [Except as provided in subsection
 
 3 (b), when] When the director of finance determines at any time
 
 4 that the probable receipts from taxes or any other sources for
 
 5 any appropriation will be less than was anticipated, and that
 
 6 consequently the amount available for the remainder of the term
 
 7 of the appropriation or for any allotment period will be less
 
 8 than the amount estimated or allotted therefor, the director
 
 9 shall, with the approval of the governor and after notice to the
 
10 department or establishment concerned, reduce the amount allotted
 
11 or to be allotted; provided that no reduction reduces any
 
12 allotted amount below the amount required to meet valid
 
13 obligations or commitments previously incurred against the
 
14 allotted funds.
 
15      [(b)  For the University of Hawaii, when the director of
 
16 finance determines at any time that the probable receipts from
 
17 taxes or any other sources for any appropriation will be less
 
18 than was anticipated, and that consequently the amount available
 
19 for the remainder of the term of the appropriation or for any
 
20 allotment period will be less than the amount estimated or
 
21 allotted therefor, the director shall advise the governor of the
 
22 situation, and the governor shall redetermine the allotment
 
23 ceiling for the affected source or sources of funding pursuant to
 

 
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 1 section 37-34, and shall advise the university and make a public
 
 2 declaration ten days prior to the effective date of the
 
 3 redetermination.  The university, not more than twenty days after
 
 4 the governor's notification, shall submit revised estimates
 
 5 consistent with the governor's redetermination to the director of
 
 6 finance.  Otherwise, the director of finance shall modify, amend,
 
 7 or reduce any allotment of the university to comply with the
 
 8 governor's redetermination; provided that no reduction shall
 
 9 reduce any allotted amount below the amount required to meet
 
10 valid obligations or commitments previously incurred against the
 
11 allotted funds.
 
12      (c)] (b)  Prior to the implementation of any reduction in
 
13 allotment proposed by the director of finance or the governor
 
14 pursuant to subsection (a) [or (b)], in which the sum of the
 
15 reductions exceed 2.5 per cent of the total general fund
 
16 appropriation made by the legislature in any fiscal year, the
 
17 director of finance shall notify the president of the senate, the
 
18 speaker of the house of representatives, and the chairpersons of
 
19 the senate committee on ways and means and the house of
 
20 representatives committee on finance, respectively, of the
 
21 director's intent."
 
22      SECTION 12.  Section 37-62, Hawaii Revised Statutes, is
 
23 amended by amending the definition of "agency" to read as
 

 
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 1 follows:
 
 2      ""Agency" means any executive department, independent
 
 3 commission, board, agency, authority, bureau, office, or other
 
 4 establishment of the state government (except the legislature
 
 5 [and], the judiciary[)], and the University of Hawaii), or any
 
 6 quasi-public institution which is supported in whole or in part
 
 7 by state funds."
 
 8      SECTION 13.  Section 37-74, Hawaii Revised Statutes, is
 
 9 amended by amending subsections (b) to (d) to read as follows:
 
10      "(b)  The appropriations by the legislature for a biennium
 
11 shall be allocated between the two fiscal years of the biennium
 
12 in the manner provided in the budget or appropriations act and as
 
13 further prescribed by the director of finance.  The amounts
 
14 allocated for each fiscal year shall be subject to the allotment
 
15 system prescribed in chapter 37, part II.  Each agency (except
 
16 the courts[),] and the University of Hawaii), in estimating its
 
17 quarterly requirements under chapter 37, part II, shall prepare a
 
18 plan for the fiscal year for the operation of each of the
 
19 programs it is responsible for administering.  The operations
 
20 plan shall be in such form and content as the department of
 
21 budget and finance may prescribe.  It shall be submitted,
 
22 together with the estimated quarterly requirements, to the
 
23 department of budget and finance on such date as the department
 

 
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 1 may prescribe.
 
 2      (c)  The department of budget and finance shall:
 
 3      (1)  Review each operations plan to determine:
 
 4           (A)  That it is consistent with the policy decisions of
 
 5                the governor and appropriations by the
 
 6                legislature;
 
 7           (B)  That it reflects proper planning and efficient
 
 8                management methods; and
 
 9           (C)  That appropriations have been made for the planned
 
10                purpose and will not be exhausted before the end
 
11                of the fiscal year;
 
12           [provided that the department of budget and finance
 
13           shall review the operations plan submitted by the
 
14           University of Hawaii solely for consistency with the
 
15           allotment ceilings established by the governor under
 
16           section 37-34, appropriations by the legislature, and
 
17           the status of revenues to support operations plans for
 
18           all state programs;]
 
19      (2)  Approve the operations plan if satisfied that it meets
 
20           the requirements under paragraph (1).  Otherwise, the
 
21           department of budget and finance shall require revision
 
22           of the operations plan in whole or in part; and
 
23      (3)  Modify or withhold the planned expenditures at any time
 

 
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 1           during the appropriation period if the department of
 
 2           budget and finance finds that the expenditures are
 
 3           greater than those necessary to execute the programs at
 
 4           the level authorized by the governor and the
 
 5           legislature, or that state receipts and surpluses will
 
 6           be insufficient to meet the authorized expenditure
 
 7           levels[; provided that the planned expenditures for the
 
 8           University of Hawaii may be modified or withheld only
 
 9           in accordance with sections 37-36 and 37-37].
 
10      (d)  No appropriation transfers or changes between programs
 
11 or agencies shall be made without legislative authorization;
 
12 provided that:
 
13      (1)  Authorized transfers or changes, when made, shall be
 
14           reported to the legislature; and
 
15      (2)  [Except with respect to appropriations to fund
 
16           financing agreements under chapter 37D, the University
 
17           of Hawaii shall have the flexibility to transfer
 
18           appropriated funds and positions for the operating cost
 
19           category among programs, among cost elements in a
 
20           program, and between quarters, as applicable; and the]
 
21           The Hawaii health systems corporation shall have the
 
22           flexibility to transfer special fund appropriations
 
23           among community hospitals facilities as applicable;
 

 
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 1           provided that the Hawaii health systems corporation
 
 2           shall maintain the integrity and services of each
 
 3           individual facility and shall not transfer
 
 4           appropriations out of any facility that would result in
 
 5           a reduction of services offered by the facility, with
 
 6           due regard for statutory requirements, changing
 
 7           conditions, the needs of the programs, and the
 
 8           effective utilization of resources[; and
 
 9      (3)  The university shall account for each transfer
 
10           implemented under this subsection in quarterly reports
 
11           to the governor and annual reports at the end of each
 
12           fiscal year to the legislature and the governor, which
 
13           shall be prepared in the form and manner prescribed by
 
14           the governor and shall include information on the
 
15           sources and uses of the transfer]."
 
16      SECTION 14.  Section 37-92, Hawaii Revised Statutes, is
 
17 amended to read as follows: 
 
18      "37-92  Proposed general fund appropriations; executive
 
19 branch; judicial branch[.]; and University of Hawaii.  (a)  The
 
20 governor shall submit a plan of proposed appropriations for the
 
21 State to the legislature which shall accompany the state budget
 
22 in odd-numbered years and the supplemental budget in even-
 
23 numbered years.  The plan of proposed appropriations shall
 

 
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 1 include the executive budget, proposed grants to private
 
 2 entities, and any specific appropriation measures to be proposed
 
 3 by the executive branch, and estimates of the aggregate proposed
 
 4 appropriations of the the judicial and legislative branches of
 
 5 government[.], and the University of Hawaii.  In any year in
 
 6 which the plan of proposed appropriations from the general fund
 
 7 exceeds the expenditure ceiling, the governor shall set forth the
 
 8 dollar amount, the rate by which the expenditure ceiling would be
 
 9 exceeded, and the reasons for proposing appropriations in excess
 
10 of those allowed under the expenditure ceiling.
 
11      (b)  The proposed appropriations from the general fund for
 
12 each year of the biennium or each supplementary budget fiscal
 
13 year for the executive and judicial branches and the University
 
14 of Hawaii shall not be increased over the appropriations from the
 
15 general fund for the preceding fiscal year for each branch[,] and
 
16 the University of Hawaii, respectively, by more than the state
 
17 growth, except as provided in this section.  For purposes of this
 
18 subsection, the appropriations from the general fund for the
 
19 executive and judicial branches and the University of Hawaii
 
20 shall not include any appropriations representing amounts
 
21 authorized by the legislature under section 37-93(b).
 
22      (c)  The governor shall submit a plan of proposed
 
23 appropriations for the executive branch to the legislature which
 

 
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 1 shall accompany the state budget in odd-numbered years and the
 
 2 supplemental budget in even-numbered years.  The plan of proposed
 
 3 appropriations shall include the executive budget, proposed
 
 4 grants to private entities, and any specific appropriation
 
 5 measures to be proposed by the executive branch.
 
 6      (d)  The budget documents presented by the governor to the
 
 7 legislature shall include a statement or summary showing (1) the
 
 8 total state personal income for each of the four calendar years
 
 9 immediately preceding the fiscal year for which appropriations
 
10 from the state general fund are to be made, (2) the
 
11 appropriations from the general fund for the previous fiscal
 
12 year, (3) the appropriations from the general fund for the fiscal
 
13 year in progress, and (4) the general fund expenditure ceiling
 
14 for the fiscal year in progress and for the ensuing fiscal year
 
15 or, when necessary, for each fiscal year of the ensuing biennium.
 
16      (e)  The governor shall also include a statement or summary
 
17 showing (1) recommended appropriations from the general fund for
 
18 the executive branch for the ensuing fiscal year or fiscal
 
19 biennium, (2) actual appropriations from the general fund for the
 
20 executive branch plus any recommended appropriations from the
 
21 general fund for the executive branch for the fiscal year in
 
22 progress, (3) the appropriations from the general fund for the
 
23 executive branch for the previous fiscal year, and (4) the
 

 
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 1 general fund appropriation ceiling for the executive branch as
 
 2 established by subsection (b) for the fiscal year in progress and
 
 3 for the ensuing fiscal year or, when necessary, for each fiscal
 
 4 year of the ensuing biennium.
 
 5      (f)  The chief justice shall submit a plan of proposed
 
 6 appropriations of the judicial branch to the legislature which
 
 7 shall accompany the judiciary biennial budget in odd-numbered
 
 8 years and the supplemental budget in even-numbered years.  The
 
 9 plan of proposed appropriations shall include the judiciary
 
10 budget, proposed grants to private entities, and any specific
 
11 appropriation measures to be proposed by the judicial branch.
 
12      (g)  The budget documents presented by the chief justice to
 
13 the legislature shall include a statement or summary showing (1)
 
14 recommended appropriations from the general fund for the judicial
 
15 branch for the ensuing fiscal year or fiscal biennium, (2) actual
 
16 appropriations from the general fund for the judicial branch plus
 
17 any recommended appropriations from the general fund for the
 
18 judicial branch for the fiscal year in progress, (3) the
 
19 appropriations from the general fund for the judicial branch for
 
20 the previous fiscal year, and (4) the general fund appropriation
 
21 ceiling for the judicial branch as established by subsection (b)
 
22 for the fiscal year in progress and for the ensuing fiscal year
 
23 or, when necessary, for each fiscal year of the ensuing biennium.
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1      (h)  The board of regents of the University of Hawaii shall
 
 2 submit a plan of proposed appropriations of the University of
 
 3 Hawaii to the legislature which shall accompany the University of
 
 4 Hawaii biennial budget in odd-numbered years and the supplemental
 
 5 budget in even-numbered years.  The plan of proposed
 
 6 appropriations shall include the University of Hawaii budget,
 
 7 proposed grants to private entities, and any specific
 
 8 appropriation measures to be proposed by the board of regents of
 
 9 the University of Hawaii.
 
10      (i)  The budget documents presented by the board of regents
 
11 of the University of Hawaii to the legislature shall include a
 
12 statement or summary showing (1) recommended appropriations from
 
13 the general fund for the University of Hawaii for the ensuing
 
14 fiscal year or fiscal biennium, (2) actual appropriations from
 
15 the general fund for the University of Hawaii plus any
 
16 recommended appropriations from the general fund for the
 
17 University of Hawaii for the fiscal year in progress, (3) the
 
18 appropriations from the general fund for the University of Hawaii
 
19 for the previous fiscal year, and (4) the general fund
 
20 appropriation ceiling for the University of Hawaii as established
 
21 by subsection (b) for the fiscal year in progress and for the
 
22 ensuing fiscal year or, when necessary, for each fiscal year of
 
23 the ensuing biennium.
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1      [(h)] (j)  The governor [or], the chief justice, or the
 
 2 board of regents may propose appropriations from the general fund
 
 3 for the executive or judicial branches[,] or the University of
 
 4 Hawaii, respectively, in excess of those allowed by subsection
 
 5 (b) if the governor [or], the chief justice, or the board of
 
 6 regents sets forth the dollar amount and the percentage change in
 
 7 excess of the appropriations allowed by subsection (b), and the
 
 8 reasons for proposing appropriations in excess of those allowed
 
 9 by subsection (b)."
 
10      SECTION 15.  Section 37D-1, Hawaii Revised Statutes, is
 
11 amended by amending the definition of "agency" to read as
 
12 follows:
 
13      ""Agency" means the judiciary, the University of Hawaii, any
 
14 executive department, any independent commission, any board, any
 
15 authority, any bureau, any office, any other establishment of the
 
16 State (except the legislature and its agencies), or any public
 
17 corporation that is supported in whole or in part by state funds,
 
18 or any agent thereof, authorized by law to expend available
 
19 moneys."
 
20      SECTION 16.  Section 40-1, Hawaii Revised Statutes, is
 
21 amended by amending subsections (b) and (c) to read as follows:
 
22      "(b)  With respect to the executive branch, except [the
 
23 University of Hawaii and] the department of education, the
 

 
Page 26                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 comptroller shall have complete supervision of all accounts.  The
 
 2 comptroller shall preaudit all proposed payments of $10,000 or
 
 3 more to determine the propriety of expenditures and compliance
 
 4 with executive orders and rules that may be in effect.  When
 
 5 necessary, the comptroller shall withhold approval of any
 
 6 payment.  Whenever approval is withheld, the department or agency
 
 7 concerned shall be promptly notified.  With respect to [the
 
 8 University of Hawaii and] the department of education, the
 
 9 comptroller shall issue warrants for the release of funds for the
 
10 operating costs of [the university or] the department of
 
11 education[, as applicable,] in amounts and at times mutually
 
12 agreed upon by the governor or director of finance and the
 
13 [university or] department of education[, as applicable];
 
14 provided:
 
15      (1)  The amounts released shall not exceed the allotment
 
16           ceilings for the respective funding sources of [the
 
17           university's or] the department of education's
 
18           appropriations established by the governor for an
 
19           allotment period pursuant to section 37-34; and
 
20      (2)  The comptroller may issue warrants as an advance from
 
21           the state treasury to [the University of Hawaii and]
 
22           the department of education to establish a checking
 
23           account and provide working capital in amounts and at
 

 
Page 27                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1           times mutually agreed upon by the governor or director
 
 2           of finance and [the University of Hawaii and] the
 
 3           department of education.
 
 4 The [University of Hawaii and the] department of education shall
 
 5 preaudit all proposed payments to determine the propriety of
 
 6 expenditures and compliance with applicable laws, executive
 
 7 orders, and rules as may be in effect.  The [University of Hawaii
 
 8 and the] department of education shall make disbursements for
 
 9 operating expenses from the amounts released by the comptroller
 
10 and maintain records and documents necessary to support those
 
11 disbursements at times mutually agreed upon by [the university
 
12 president or] the superintendent of education[, as applicable,]
 
13 and the comptroller; provided that when requested by the
 
14 [university or] department of education, the comptroller shall
 
15 make all disbursements for the [university or] department of
 
16 education, as applicable, subject to available allotment.  Funds
 
17 released pursuant to this section shall be deposited by the
 
18 [university or] department of education[, as applicable,] in
 
19 accordance with the provisions applicable to the director of
 
20 finance by chapter 38.  Any interest earned on the deposit of
 
21 funds released pursuant to this section shall be deposited in the
 
22 state treasury at the end of each fiscal year.
 
23      (c)  With respect to the judiciary [and], the legislature,
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 and the University of Hawaii, the comptroller shall make
 
 2 available to the judiciary [and], the legislature, and the
 
 3 University of Hawaii the total amount appropriated to each,
 
 4 except that the judiciary [and], the legislature, and the
 
 5 University of Hawaii may request the comptroller's services in
 
 6 maintaining custody of the amount appropriated to each and in
 
 7 making payments therefrom.  When such services are requested, the
 
 8 comptroller shall make all disbursements requested by the
 
 9 judiciary [or], the legislature, or the University of Hawaii, but
 
10 shall not make any disbursement for which no appropriation has
 
11 been made or which would cause a specific appropriation to be
 
12 exceeded."
 
13      SECTION 17.  Section 40-2, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "40-2 Accounting systems and internal control; enforcing
 
16 the use of and inspection of the same.  The accounting system
 
17 installed by the commission on public accountancy under Act 181,
 
18 Session Laws of Hawaii 1923, as amended by Act 220, Session Laws
 
19 of Hawaii 1925, for use in the offices of the comptroller,
 
20 director of finance, departmental and agency services of the
 
21 State, and the auditors, treasurers, departmental and agency
 
22 services of the several counties shall be the accounting and
 
23 reporting systems of the State and counties; provided [that the
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 University of Hawaii may install a different accounting system
 
 2 which shall be in conformity with generally accepted accounting
 
 3 principles as applied to colleges and universities; and provided
 
 4 further] that the department of education may install a different
 
 5 accounting system which shall be in conformity to generally
 
 6 accepted accounting principles.  The comptroller shall make such
 
 7 changes and modifications in the accounting system as shall from
 
 8 time to time appear to be in the best interest of the State and
 
 9 counties.
 
10      The departments and agencies of the executive branch are
 
11 respectively charged with the responsibility to maintain an
 
12 adequate system of internal control and with the further
 
13 responsibility to see that the internal control system continues
 
14 to function effectively as designed.  The comptroller shall make
 
15 such investigations and audits from time to time to enforce the
 
16 use of the accounting system and internal control systems in the
 
17 executive branch.
 
18      The judiciary, the legislature, the University of Hawaii,
 
19 and each county shall be responsible for the establishment and
 
20 maintenance of its respective internal control system."
 
21      SECTION 18.  Section 40-6, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 
23      "40-6 Approval of business and accounting forms.  The
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 comptroller shall determine the forms required to adequately
 
 2 supply accounting and statistical data for the state government.
 
 3 The comptroller shall require heads of departments and
 
 4 establishments of the state government to submit proposed new
 
 5 forms or proposed changes in current business and accounting
 
 6 forms for review and approval before ordering the same printed;
 
 7 except that [the University of Hawaii and] the department of
 
 8 education shall be subject to this requirement only with respect
 
 9 to uniform business and accounting forms of statewide use in the
 
10 State's accounting system.  All standard state forms shall be
 
11 classified, numbered, and standardized in design, dimensions,
 
12 color, and grade of paper and recorded in a catalogue of
 
13 accounting and statistical forms by the comptroller."
 
14      SECTION 19.  Section 40-51, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "40-51  Money drawn only on warrants.  Excepting moneys
 
17 paid for the redemption of bonds of the state debt, and the
 
18 interest coupons of the same, and for interest on overdue
 
19 warrants, and drafts against special deposits and for the
 
20 expenses of the legislature [and], the judiciary, and the
 
21 University of Hawaii, and payment authorized by the comptroller
 
22 by means of electronic funds transfers and through automated
 
23 clearinghouses for the purposes of implementing an electronic
 

 
Page 31                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 benefits transfer system for the department of human services, no
 
 2 money shall be drawn from or out of the treasury except upon
 
 3 warrants, substantially in the form of section 40-52, issued from
 
 4 the comptroller's office; provided that upon request, the
 
 5 comptroller shall provide financial services involving the
 
 6 issuance of warrants on behalf of the legislature [and], the
 
 7 judiciary[.], and the University of Hawaii.  Every warrant shall
 
 8 be signed by the comptroller or the comptroller's deputy or by
 
 9 means of any mechanical check signer that may be adopted by the
 
10 comptroller, and shall be made payable upon such date as may be
 
11 approved by the director of finance to the order of the person to
 
12 whom the State is directly indebted."
 
13      SECTION 20.  Section 40-58, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "40-58  In favor of assignees.  No assignment of moneys by
 
16 a person to whom the State is directly indebted shall be
 
17 effective unless the assignment is first approved by the
 
18 comptroller or, in the case of [the University of Hawaii and] the
 
19 department of education, by [their] its respective chief
 
20 financial [officers.] officer.  The comptroller or the chief
 
21 financial [officers of the University of Hawaii and] officer of
 
22 the department of education may prescribe the form for an
 
23 assignment, and may approve the assignment within a reasonable
 

 
Page 32                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 time period if, in their respective discretion, the rights or
 
 2 obligations of the State[, the University of Hawaii,] or the
 
 3 department of education under any contract or other undertaking
 
 4 or under any law, rule, or order by a competent authority will
 
 5 not be prejudiced thereby.  Upon approval of the assignment, the
 
 6 comptroller or the respective chief financial [officers of the
 
 7 University of Hawaii and] officer of the department of education
 
 8 shall draw a warrant payable to the assignee.  Except as to
 
 9 contracts encumbered by the comptroller[, the University of
 
10 Hawaii,] or the department of education, each expending agency,
 
11 upon notification of the comptroller's approval of an assignment,
 
12 shall prepare a claim for payment in accordance with the terms of
 
13 the assignment."
 
14      SECTION 21.  Section 40-81, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "40-81  Report by agencies receiving special moneys.  All
 
17 state officers, departments, boards, bureaus, commissions, or
 
18 agencies collecting or receiving any moneys not required by law
 
19 to be deposited in the state treasury shall report to the
 
20 comptroller all receipts and disbursements on account thereof for
 
21 each quarterly period of the calendar year not later than the
 
22 fifteenth day following the end of each quarterly period on such
 
23 forms and under such rules as may be prescribed by the
 

 
Page 33                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 comptroller; provided that with respect to all moneys held
 
 2 outside the state treasury by [the University of Hawaii or] the
 
 3 department of education pursuant to the authority granted to [the
 
 4 university and] the department of education by this chapter, [the
 
 5 University of Hawaii and] the department of education shall
 
 6 report to the comptroller all transactions for each quarterly
 
 7 period not later than the fifteenth day following the end of each
 
 8 quarterly period on such forms and under such rules as may be
 
 9 prescribed by the comptroller."
 
10      SECTION 22.  Section 40-84, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "40-84  Petty cash funds; regulations.  Whenever the head
 
13 of any state department, board, bureau, commission, or other
 
14 agency deems it necessary to have a petty cash fund for the
 
15 proper transaction of the business of the agency, a written
 
16 application therefor shall be made to the comptroller setting
 
17 forth the details covering the purposes and uses of and for the
 
18 fund.  The comptroller, before issuing a state warrant for that
 
19 purpose, shall determine whether or not the business of the
 
20 agency warrants the establishment of such a fund, and if the
 
21 comptroller is satisfied that such a fund is necessary, the
 
22 comptroller shall issue a state warrant to such agency for an
 
23 amount as the comptroller shall determine, not to exceed the sum
 

 
Page 34                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 of $100,000, except that this limitation of $100,000 shall not
 
 2 apply to [the University of Hawaii and] the stadium authority.
 
 3      The comptroller may prescribe such rules as the comptroller
 
 4 may deem necessary for the proper administration and
 
 5 accountability of these funds."
 
 6      SECTION 23.  Section 76-3, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "76-3 Uniform administration.  It is the intent of the
 
 9 legislature that the system of personnel administration
 
10 established by this chapter and chapter 77 shall be as uniformly
 
11 administered as is practicable.  In order to promote such
 
12 uniformity, the several commissioners and directors of the state
 
13 department of human resources development and of the county
 
14 departments of civil service, the administrative director of the
 
15 courts, [and] the Hawaii health systems corporation chief
 
16 executive officer's designee, and the designee of the president
 
17 of the University of Hawaii shall meet at least once each year at
 
18 the call of the director of human resources development of the
 
19 State."
 
20      SECTION 24.  Section 76-4, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "76-4 Agreements of state, county departments, judiciary,
 
23 [and] the Hawaii health systems corporation[.], and the
 

 


 

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                                     S.B. NO.           538
                                                        
                                                        

 
 1 University of Hawaii.  The state department of human resources
 
 2 development, the judiciary, the several departments of civil
 
 3 service of the counties, [and] the Hawaii health systems
 
 4 corporation, and the University of Hawaii may enter into
 
 5 agreements for the joint administration of matters that may be
 
 6 practicable and consistent with this chapter and chapter 77,
 
 7 including the conducting of examinations and other procedures for
 
 8 the establishment and use of eligible lists, reciprocity in the
 
 9 use of eligible lists, and the conducting of salary studies.  All
 
10 eligible lists established or used under the agreements shall be
 
11 as fully effective as those established or used separately."
 
12      SECTION 25.  Section 76-5, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "76-5 Furnishing of services and facilities.  Subject to
 
15 the rules of the state department of human resources development,
 
16 the director of human resources development may enter into
 
17 agreements with the judiciary, any county, [and] the Hawaii
 
18 health systems corporation, and the University of Hawaii to
 
19 furnish services and facilities of the state department to the
 
20 judiciary, any county, [and] the Hawaii health systems
 
21 corporation, and the University of Hawaii in the administration
 
22 of civil service including position classification in the
 
23 judiciary, any county, [and] the Hawaii health systems
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 corporation[.], and the University of Hawaii.  The agreements may
 
 2 provide for the reimbursement to the State of the reasonable
 
 3 value of the services and facilities furnished, as determined by
 
 4 the director.  The judiciary, all counties, [and] the Hawaii
 
 5 health systems corporation, and the University of Hawaii are
 
 6 authorized to enter into the agreements."
 
 7      SECTION 26.  Section 76-5.5, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "76-5.5  Recruitment flexibility for the counties, the
 
10 judiciary, [and] the Hawaii health systems corporation[.], and
 
11 the University of Hawaii.  Notwithstanding section 76-23, or any
 
12 other provision to the contrary, the directors of the county
 
13 departments of civil service, the administrative director of the
 
14 courts, [and] the Hawaii health systems corporation chief
 
15 executive officer's designee, and the designee of the president
 
16 of the University of Hawaii may determine, establish, and
 
17 maintain the manner in which positions shall be filled in
 
18 accordance with section 78-1 and the following standards:
 
19      (1)  Equal opportunity for all regardless of race, sex, age,
 
20           religion, color, ancestry, physical handicap, or
 
21           politics;
 
22      (2)  First consideration for competent employees already
 
23           within public service; and
 

 
Page 37                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1      (3)  Impartial selection of the ablest person through
 
 2           competitive means which are fair, objective, and
 
 3           practical."
 
 4      SECTION 27.  Section 76-11, Hawaii Revised Statutes, is
 
 5 amended by amending the definition of "department" to read as
 
 6 follows:
 
 7      "(4) "Department" includes the judicial branch, the
 
 8           University of Hawaii, and any department, board,
 
 9           commission, or agency of the State;"
 
10      SECTION 28.  Section 77-1, Hawaii Revised Statutes, is
 
11 amended by amending the definitions of "chief executive officer",
 
12 "department", "director", and "fiscal officer" to read as
 
13 follows:
 
14      ""Chief executive officer" means the governor in the case of
 
15 the State, the chief justice of the supreme court in the case of
 
16 the judiciary, the chief executive officer in the case of the
 
17 Hawaii health systems corporation, the board of regents in the
 
18 case of the University of Hawaii, the mayor in the case of the
 
19 city and county of Honolulu or the counties of Hawaii, Maui, and
 
20 Kauai.
 
21      "Department" includes the judicial branch, the Hawaii health
 
22 systems corporation, the University of Hawaii, and any
 
23 department, board, commission, or agency of the State or any of
 

 
Page 38                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 its political subdivisions.
 
 2      "Director" means the director of human resources development
 
 3 in the case of the State, the administrative director of the
 
 4 courts in the case of the judiciary, the chief executive officer
 
 5 in the case of the Hawaii health systems corporation, the
 
 6 president in the case of the University of Hawaii, the director
 
 7 of civil service in the case of the city and county of Honolulu,
 
 8 or the respective personnel directors in the case of the counties
 
 9 of Hawaii, Maui, and Kauai.
 
10      "Fiscal officer" means the director of finance in the case
 
11 of the State, the administrative director of the courts in the
 
12 case of the judiciary, the chief executive officer in the case of
 
13 the Hawaii health systems corporation, the president in the case
 
14 of the University of Hawaii, the director of finance in the case
 
15 of the city and county of Honolulu and the counties of Hawaii,
 
16 Maui, and Kauai."
 
17      SECTION 29.  Section 77-2.5, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "77-2.5  Applicability of chapter to the judiciary [and],
 
20 the Hawaii health systems corporation[.], and the University of
 
21 Hawaii.  All of the provisions of this chapter apply with equal
 
22 force to the judiciary [and], the Hawaii health systems
 
23 corporation, and the University of Hawaii as to the State."
 

 
Page 39                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1      SECTION 30.  Section 78-51, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "78-51  Applicability of chapter to the judiciary [and],
 
 4 the Hawaii health systems corporation[.], and the University of
 
 5 Hawaii.  All of the provisions of this chapter apply with equal
 
 6 force to the judiciary [and], the Hawaii health systems
 
 7 corporation, and the University of Hawaii as to the State.  The
 
 8 powers and duties assigned in this chapter shall, with respect to
 
 9 the judiciary, be assigned to the chief justice of the supreme
 
10 court in the place and stead of the governor or chief executive
 
11 officer for the State, and to the administrative director of the
 
12 courts in the place and stead of the director of human resources
 
13 development.  The powers and duties assigned in this chapter,
 
14 with respect to the Hawaii health systems corporation, shall be
 
15 assigned to the chief executive officer of the Hawaii health
 
16 systems corporation in the place and stead of the governor or
 
17 chief executive officer for the State, and to the Hawaii health
 
18 systems chief executive officer's designee in the place and stead
 
19 of the director of human resources development.  The powers and
 
20 duties assigned in this chapter, with respect to the University
 
21 of Hawaii, shall be assigned to the board of regents of the
 
22 University of Hawaii in the place and stead of the governor or
 
23 chief executive officer for the State, and to the president of
 

 
Page 40                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 the University of Hawaii in the place and stead of the director
 
 2 of human resources development."
 
 3      SECTION 31.  Section 79-31, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "79-31  Judiciary [and], the Hawaii health systems
 
 6 corporation[;], and the University of Hawaii; powers and duties.
 
 7 All of the powers and duties assigned in this chapter to the
 
 8 governor or the director of human resources development, with
 
 9 respect to the judiciary, shall be assigned to the chief justice
 
10 of the supreme court or the administrative director of the
 
11 courts, [and] with respect to the Hawaii health systems
 
12 corporation, shall be assigned to the chief executive officer of
 
13 the Hawaii health systems corporation or designee[.], and with
 
14 respect to the University of Hawaii, shall be assigned to the
 
15 board of regents of the University of Hawaii or the president."
 
16      SECTION 32.  Section 80-21, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "80-21  Judiciary [and], the Hawaii health systems
 
19 corporation[;], and the University of Hawaii; powers and duties.
 
20 All of the powers and duties assigned in this chapter to the
 
21 governor or the department or director of human resources
 
22 development, with respect to the judiciary, shall be assigned to
 
23 the chief justice of the supreme court or the administrative
 

 
Page 41                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 director of the courts, [and] with respect to the Hawaii health
 
 2 systems corporation, shall be assigned to the chief executive
 
 3 officer of the Hawaii health systems corporation or designee[.],
 
 4 and with respect to the University of Hawaii, shall be assigned
 
 5 to the board of regents of the University of Hawaii or the
 
 6 president."
 
 7      SECTION 33.  Section 81-21, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "81-21  Judiciary [and], the Hawaii health systems
 
10 corporation[;], and the University of Hawaii; powers and duties.
 
11 All of the powers and duties assigned in this chapter to the
 
12 governor or the director of human resources development, with
 
13 respect to the judiciary, shall be exercised by the chief justice
 
14 of the supreme court or the administrative director of the
 
15 courts, [and] with respect to the Hawaii health systems
 
16 corporation, shall be assigned to the chief executive officer of
 
17 the Hawaii health systems corporation or designee[.], and with
 
18 respect to the University of Hawaii, shall be assigned to the
 
19 board of regents of the University of Hawaii or the president."
 
20      SECTION 34.  Section 82-6, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "82-6 Judiciary [and], the Hawaii health systems
 
23 corporation[;], and the University of Hawaii; powers and duties.
 

 
Page 42                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 All of the powers and duties assigned in this chapter to the
 
 2 governor or the director of human resources development shall
 
 3 with respect to the judiciary be assigned to the chief justice of
 
 4 the supreme court or the administrative director of the courts[,
 
 5 and with].  With respect to the Hawaii health systems
 
 6 corporation, these duties shall be assigned to the chief
 
 7 executive officer of the Hawaii health systems corporation or a
 
 8 designee.  With respect to the University of Hawaii, these duties
 
 9 shall be assigned to the board of regents of the University of
 
10 Hawaii or the president."
 
11      SECTION 35.  Section 83-4, Hawaii Revised Statutes, is
 
12 amended to read as follows:
 
13      "83-4 Judiciary [and], the Hawaii health systems
 
14 corporation[;], and the University of Hawaii; powers and duties.
 
15 All of the powers and duties assigned in this chapter to the
 
16 governor or the director of human resources development, with
 
17 respect to the judiciary, shall be exercised by the chief justice
 
18 of the supreme court or the administrative director of the
 
19 courts, [and] with respect to the Hawaii health systems
 
20 corporation, shall be assigned to the chief executive officer of
 
21 the Hawaii health systems corporation or designee[.], and with
 
22 respect to the University of Hawaii, shall be assigned to the
 
23 board of regents of the University of Hawaii or the president."
 

 
Page 43                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1      SECTION 36.  Section 103F-102, Hawaii Revised Statutes, is
 
 2 amended by amending the definition of "agency" to read as
 
 3 follows:
 
 4      ""Agency" means any department, authority, commission,
 
 5 council, board, committee, institution, legislative body, agency,
 
 6 or other establishment or office of the executive, legislative,
 
 7 or judicial branch of the State, and includes the University of
 
 8 Hawaii and the office of Hawaiian affairs."
 
 9      SECTION 37.  Section 304-3, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "304-3 Regents; appointment; tenure; qualifications;
 
12 meetings.  (a)  The affairs of the university shall be under the
 
13 general management and control of the board of regents consisting
 
14 of twelve members who shall be appointed and may be removed by
 
15 the governor.  No more than six of the members shall be members
 
16 of the same political party and at least part of the membership
 
17 of the board shall represent geographic subdivisions of the
 
18 State.  At least one member shall be a University of Hawaii
 
19 student at the time of the initial appointment.
 
20      (b)  The term of each member shall be for four years;
 
21 provided that the term of the student member shall be for two
 
22 years[.]; and provided further that the student member may be
 
23 reappointed for one additional term even though the member may no
 

 
Page 44                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 longer be a student at the time of reappointment.  Except as
 
 2 otherwise provided by statute, state officers shall be eligible
 
 3 to appointment and membership.  Every member may serve beyond the
 
 4 expiration date of the member's term of appointment until the
 
 5 member's successor has been appointed and has qualified.  The
 
 6 board shall at its first meeting after June 30, elect a
 
 7 chairperson and vice-chairperson, who shall serve until
 
 8 adjournment of its first meeting after June 30 of the next year
 
 9 or thereafter until their successors are appointed and have
 
10 qualified and whose election shall be immediately certified by
 
11 the board to the chief election officer.  The board shall appoint
 
12 a secretary, who shall not be a member of the board.  The
 
13 president of the university shall act as executive officer of the
 
14 board.
 
15      (c)  The board shall meet not less often than ten times
 
16 annually, and may from time to time meet in each of the counties
 
17 of Hawaii, Maui, and Kauai.
 
18      (d)  The members of the board shall serve without pay but
 
19 shall be entitled to their traveling expenses within the State
 
20 when attending meetings of the board or when actually engaged in
 
21 business relating to the work of the board."
 
22      SECTION 38.  Section 304-4, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 

 
Page 45                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1      "304-4 Powers of regents; official name.(a)  The board
 
 2 of regents shall have management and control of the general
 
 3 affairs, and exclusive jurisdiction over the internal
 
 4 organization and management[,] of the university[.] through its
 
 5 executive officer.
 
 6      (b)  The board of regents shall appoint and may remove an
 
 7 executive officer to be known as the president of the University
 
 8 of Hawaii, and shall set the salary of the president.  It may
 
 9 appoint a treasurer and such other officers as it deems
 
10 necessary.  It may authorize any officer, elected or appointed by
 
11 it, to approve and sign on its behalf any voucher or other
 
12 document which the board may approve and sign.  It may delegate
 
13 to the president or the president's designee to authority to
 
14 render the final decision in contested case proceedings subject
 
15 to chapter 91, as it deems appropriate.  It may purchase or
 
16 otherwise acquire lands, buildings, appliances, and other
 
17 property for the purposes of the university and expend such sums
 
18 of money as may be from time to time placed at the disposal of
 
19 the university from whatever source.  All lands, buildings,
 
20 appliances, and other property so purchased or acquired shall be
 
21 and remain the property of the university to be used in
 
22 perpetuity for the benefit of the university.  The board of
 
23 regents, in accordance with law, shall manage the inventory,
 

 
Page 46                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 equipment, surplus property, and expenditures of the university
 
 2 and, subject to chapter 91, may adopt rules, further controlling
 
 3 and regulating the same.
 
 4      [(b)] (c)  The board may charge resident and nonresident
 
 5 tuition fees for regular courses of instruction at any University
 
 6 of Hawaii campus, including any community college.
 
 7      The board may also charge other fees for special programs of
 
 8 instruction, as well as laboratory fees, course fees, fees for
 
 9 student activities, and an information technology user fee.  The
 
10 board may charge other fees for summer session or evening
 
11 courses, including differential fees for nonresident students.
 
12      The board may waive entirely or reduce the tuition fee or
 
13 any of the other fees for graduate teaching and research
 
14 assistants.  The board may enter into agreements with government
 
15 and university officials of any other state or foreign country to
 
16 provide for reciprocal waiver of the nonresident tuition and fee
 
17 differential.  The board may waive the nonresident tuition and
 
18 fee differential for selected students from Pacific and Asian
 
19 jurisdictions when their presence would be beneficial to the
 
20 university or the State.  The board may waive entirely or reduce
 
21 the tuition fee or any of the other fees for students, resident
 
22 or nonresident.  The board shall determine the percentage of
 
23 allowable tuition and fee waivers for financial need and other
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 university priorities.  These tuition waivers and waivers of the
 
 2 nonresident tuition and fee differential shall be awarded in
 
 3 accordance with guidelines established by the board.
 
 4      [(c)] (d)  The board shall adopt the necessary rules
 
 5 defining residence for tuition purposes herein; provided that the
 
 6 basic rule shall be that a student shall qualify for the resident
 
 7 tuition fee only if the following criteria are met:
 
 8      (1)  The adult student, or in the case of a minor student,
 
 9           the student's parents or guardians, has been a bona
 
10           fide resident of this State for at least twelve
 
11           consecutive months next preceding the student's first
 
12           day of officially scheduled instruction for any
 
13           semester or term in which the student is enrolling at
 
14           the particular college or campus; and
 
15      (2)  The adult or minor student has not been claimed as a
 
16           dependent for tax purposes for at least twelve months
 
17           next preceding the student's first day of officially
 
18           scheduled instruction for any semester or term in which
 
19           the student is enrolling at the particular college or
 
20           campus by the student's parents or guardians who are
 
21           nonresidents of the State; provided that this provision
 
22           shall not apply in cases where the parent claiming the
 
23           student as a dependent is entitled to do so under a
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1           child support order or agreement issued or entered into
 
 2           in conjunction with a divorce proceeding or legal
 
 3           separation agreement, and the other parent and the
 
 4           student meet the criteria set forth in paragraph (1).
 
 5      [(d)] (e)  The board shall develop internal policies and
 
 6 procedures for the procurement of goods, services, and
 
 7 construction, consistent with the goals of public accountability
 
 8 and public procurement practices, but not subject to chapter
 
 9 103D.  However, where possible, the board is encouraged to use
 
10 the provisions of chapter 103D; provided that the use of one or
 
11 more provisions of chapter 103D shall not constitute a waiver of
 
12 the exemption of chapter 103D and shall not subject the board to
 
13 any other provision of chapter 103D.
 
14      [(e)] (f)  The board may enter into concession agreements
 
15 without regard to chapter 102.
 
16      [(f)] (g)  The official name of the board shall be Board of
 
17 Regents, University of Hawaii, and the board shall adopt and use
 
18 a common seal by which all official acts shall be authenticated."
 
19      SECTION 39.  Section 304-7, Hawaii Revised Statutes, is
 
20 amended by amending subsection (c) to read as follows:
 
21      "(c)  The board shall cause to be kept suitable books of
 
22 account wherein shall be recorded each gift, the essential facts
 
23 of the management thereof, and the expenditure of the income, and
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 a statement of all trust funds shall be included in the annual
 
 2 report to [the governor and] the legislature."
 
 3      SECTION 40.  Section 304-7.5, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "304-7.5  Budget appropriations; University of Hawaii.(a)
 
 6 Beginning in fiscal year 1998-1999, and every year thereafter,
 
 7 the general fund budget appropriations for the University of
 
 8 Hawaii shall be an amount not less than three times and not
 
 9 greater than five times the amount of regular tuition and related
 
10 fee revenues estimated for that fiscal year.
 
11      (b)  Any general fund budget appropriation for the
 
12 University of Hawaii for operating purposes for any fiscal year
 
13 shall include the consideration of:
 
14      (1)  The fiscal condition of the State;
 
15      (2)  Enrollment;
 
16      (3)  Access to educational opportunity;
 
17      (4)  The mix of resident and nonresident students; and
 
18      (5)  Community service and noninstruction programs.
 
19      [(c)  No revenue received by the University of Hawaii
 
20 pursuant to the University of Hawaii tuition and fees special
 
21 fund established under section 304-16.5 may be used by the
 
22 governor or the director of finance as a justification for
 
23 reducing any budget request or allotment to the University of
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 Hawaii unless the university requests such a reduction.]"
 
 2      SECTION 41.  Section 304-7.8, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "[[]304-7.8[]]  Appropriations for special and revolving
 
 5 funds of the University of Hawaii.  In any fiscal year if the
 
 6 amount of revenues deposited into a special or revolving fund of
 
 7 the university exceeds the amount appropriated from that fund for
 
 8 that year, the president may approve expenditures in excess of
 
 9 the amount appropriated, up to the amount by which revenues for
 
10 that fund exceed the appropriations from that fund for a fiscal
 
11 year; provided the university shall submit annually a report to
 
12 [the governor and] the legislature of all expenditures in excess
 
13 of each fund's appropriation for each fiscal year."
 
14      SECTION 42.  Section 304-8, Hawaii Revised Statutes, is
 
15 amended by amending subsection (a) to read as follows:
 
16      "(a)  Moneys appropriated by the legislature for the
 
17 university shall be payable by the director of finance, upon
 
18 vouchers approved by the board of regents or by any officer
 
19 elected or appointed by the board under section 304-4 and
 
20 authorized by the board to approve such vouchers on behalf of the
 
21 board.  All moneys received by or on behalf of the board of the
 
22 university shall be deposited with the director of finance,
 
23 except that any moneys received from the federal government or
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 from private contributions shall be deposited and accounted for
 
 2 in accordance with conditions established by the agencies or
 
 3 persons from whom the moneys are received and except that [with
 
 4 the concurrence of the director of finance,] moneys received from
 
 5 the federal government for research, training, and other related
 
 6 purposes of a transitory nature and moneys in trust, special, or
 
 7 revolving funds administered by the university may be deposited
 
 8 in depositories other than the state treasury[; provided that the
 
 9 university informs the director of finance of the depositories in
 
10 which moneys from the funds have been deposited, and submits
 
11 copies of annual statements from each of the depositories in
 
12 which the moneys from the funds are deposited].  All income from
 
13 regular credit tuition and tuition related course and fee charges
 
14 against students shall be deposited to the credit of the
 
15 University of Hawaii tuition and fees special fund pursuant to
 
16 section 304-16.5.  Income from university projects as defined and
 
17 described in sections 306-1 to 306-12, may be credited to special
 
18 or other funds."
 
19      SECTION 43.  Section 304-8.1, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "304-8.1  Research and training revolving fund.(a)  There
 
22 is established a University of Hawaii research and training
 
23 revolving fund into which shall be deposited one hundred per cent
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 of the total amount of indirect overhead revenues generated by
 
 2 the university from research and training programs.  The board of
 
 3 regents of the University of Hawaii is authorized to expend
 
 4 eighty-four per cent of the revenues deposited in the fund for:
 
 5      (1)  Research and training purposes which may result in
 
 6           additional research and training grants and contracts;
 
 7           and
 
 8      (2)  Facilitating research and training at the university.
 
 9      (b)  The University of Hawaii shall prepare and submit an
 
10 annual report on the status of the research and training
 
11 revolving fund to the legislature twenty days before the
 
12 convening of each regular session.  The annual report shall
 
13 include but not be limited to a breakdown of travel expenses.
 
14      (c)  Notwithstanding sections 304-10, 304-8.92, and 304-8.96
 
15 to the contrary, the board of regents or its designee, may
 
16 establish a separate account within the research and training
 
17 revolving fund for the purpose of providing advance funding to
 
18 meet reimbursable costs incurred in connection with federally
 
19 financed research and training projects.  Any reimbursement
 
20 received as a result of providing advance funding shall be
 
21 deposited into the research and training revolving fund to be
 
22 used for the purpose of meeting reimbursable costs incurred in
 
23 connection with federally financed projects.
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1      [(d)  Revenues deposited into the fund shall not be used as
 
 2 a basis for reducing any current or future budget request or
 
 3 allotment to the University of Hawaii unless the university
 
 4 requests such a reduction.]"
 
 5      SECTION 44.  Section 304-8.4, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "304-8.4  Vocational and technical training projects
 
 8 revolving fund.  There is established a revolving fund for the
 
 9 vocational and technical training projects of the community
 
10 colleges and the University of Hawaii at Hilo into which shall be
 
11 deposited the receipts from fees for services, supplies, and use
 
12 of equipment provided by or in connection with these projects.
 
13 Funds deposited in this account shall be expended for vocational
 
14 and technical training projects, and supplies, equipment, and
 
15 services related thereto.
 
16      The University of Hawaii at Hilo shall report as of the
 
17 close of each fiscal year to [the governor and] the legislature
 
18 on the revolving fund's revenues and expenditures for the
 
19 reported year.  These reports shall be submitted not later than
 
20 twenty days prior to the convening of each regular session."
 
21      SECTION 45.  Section 304-8.92, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 
23      "304-8.92  Discoveries and inventions revolving fund.(a)
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 There is established a discoveries and inventions revolving fund
 
 2 into which shall be deposited four per cent of the total indirect
 
 3 overhead funds generated by the university for research and
 
 4 training purposes in the prior fiscal year.  Appropriations by
 
 5 the state legislature [subject to the approval of the governor],
 
 6 proceeds from the commercial exploitation of inventions and
 
 7 intellectual property developed at the university, gifts,
 
 8 donations, fees collected, and grants from public agencies and
 
 9 private persons may also be deposited into the fund for the
 
10 purposes of supporting innovation and research commercialization
 
11 and the patenting, copyrighting, licensing, and marketing of
 
12 discoveries, inventions, and technologies developed at the
 
13 university.  The fund shall be used to develop technologies which
 
14 have potential commercial value, support the administration of
 
15 technology transfer activities, and facilitate economic
 
16 development through education and research undertaken at the
 
17 university.
 
18      (b)  The University of Hawaii shall provide an annual report
 
19 to [the governor and] the legislature describing all transactions
 
20 and activities involved in the administration of the discoveries
 
21 and inventions revolving fund."
 
22      SECTION 46.  Section 304-8.96, Hawaii Revised Statutes, is
 
23 amended by amending subsection (b) to read as follows:
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1      "(b)  The University of Hawaii shall provide an annual
 
 2 report to [the governor and] the legislature describing all
 
 3 transactions and activities involved in the administration of the
 
 4 housing assistance revolving fund."
 
 5      SECTION 47.  Section 304-16.5, Hawaii Revised Statutes, is
 
 6 amended by amending subsection (a) to read as follows:
 
 7      "(a)  There is established the University of Hawaii tuition
 
 8 and fees special fund into which shall be deposited all revenue
 
 9 collected by the university for regular, summer, and continuing
 
10 education credit tuition, tuition related course and fee charges,
 
11 and any other charges to students, except as provided by law.
 
12 Moneys deposited into the fund shall be expended to maintain or
 
13 improve the university's programs and operations and shall not
 
14 be[:
 
15      (1)  Used as a justification for reducing any budget request
 
16           or allotment to the University of Hawaii unless the
 
17           university requests such a reduction;
 
18      (2)  Transferred] transferred unless otherwise authorized by
 
19           the legislature[; and
 
20      (3)  Restricted by the governor or the director of finance
 
21           without the prior approval of the legislature].
 
22      Any rule, policy, or action of any agency or individual in
 
23 contravention of this subsection shall be void as against public
 

 
Page 56                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 policy."
 
 2      SECTION 48.  Section 304-19, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "304-19  Reporting of exempt fees of scholarship holders.
 
 5 In computing its budget requests, the board of regents shall not
 
 6 show amounts of tuition and registration fees from which holders
 
 7 of scholarships are exempted.  These amounts shall be reported
 
 8 for information purposes to the [department of budget and
 
 9 finance] legislature but shall not be included in the statement
 
10 of university income."
 
11      SECTION 49.  Section 304-75, Hawaii Revised Statutes, is
 
12 amended to read as follows:
 
13      "304-75  Powers and duties of agency.  The board of regents
 
14 may:
 
15      (1)  Formulate, pursuant to the standards therefor set forth
 
16           in section 7(a) of the Act of Congress, agricultural
 
17           plans for this State for each calendar year, and from
 
18           time to time make such revisions in the agricultural
 
19           plans as may be necessary to conform to such standards;
 
20      (2)  Utilize, in formulating and revising the agricultural
 
21           plans, the assistance of the agricultural extension
 
22           service and the agricultural experiment station;
 
23      (3)  Designate in such agricultural plans the board of
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1           regents, University of Hawaii, as the agency of this
 
 2           State to administer the agricultural plans;
 
 3      (4)  Submit the agricultural plans to the Secretary of
 
 4           Agriculture of the United States, prior to such time
 
 5           and in such manner and form as the Secretary may
 
 6           prescribe;
 
 7      (5)  Receive on behalf of the State any grants made pursuant
 
 8           to section 7 of the Soil Conservation and Domestic
 
 9           Allotment Act, and utilize and expend the grants in
 
10           accordance with such agricultural plans as may have
 
11           been approved by the Secretary of Agriculture;
 
12      (6)  Make provision for establishment of state, county, and
 
13           community committees or associations of agricultural
 
14           producers, organized for such purpose, and for
 
15           participation by them in the administration of the
 
16           agricultural plans;
 
17      (7)  Employ such personal services and incur such other
 
18           expenses as it finds necessary for the efficient
 
19           exercise of its powers and duties under this section;
 
20      (8)  Utilize in the administration of the provisions hereof
 
21           available services and assistance of other agencies of
 
22           this State and of the agricultural extension service
 
23           and the agricultural experiment station of the
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1           University of Hawaii;
 
 2      (9)  Delegate to committees, associations, individuals,
 
 3           corporations, or other agencies of this State, such
 
 4           functions in carrying out sections 304-73 to 304-75 as
 
 5           it deems suitable, and exercise all other powers and
 
 6           authorities and do any and all other things which it
 
 7           may deem necessary or proper to the performance of its
 
 8           duties and functions hereunder;
 
 9     (10)  Provide for the submission to the Secretary of
 
10           Agriculture of such reports as may be deemed requisite,
 
11           including such reports as may be required to ascertain
 
12           whether the agricultural plans are being carried out
 
13           according to their terms;
 
14     (11)  Prescribe such rules and regulations as may be
 
15           necessary or expedient for the effective administration
 
16           of the agricultural plans, and assure the correctness
 
17           of and make possible the verification of such reports
 
18           as may be required by the terms of the agricultural
 
19           plans;
 
20     (12)  Submit to the [governor of the State] legislature an
 
21           annual report for each year covering the administration
 
22           and operation of such program.
 
23      The board shall perform its duties and functions as such
 

 
Page 59                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1 agency under sections 304-73 to 304-75 separately and distinctly
 
 2 from the performance of its duties and functions under any other
 
 3 act or in any other capacity, except that the board may utilize
 
 4 the services and the assistance of the personnel and faculties
 
 5 normally used by it in the performance of such other functions if
 
 6 it finds that the utilization of such services and assistance is
 
 7 necessary to, or is calculated to assist substantially in, the
 
 8 effective administration of such sections and that such personnel
 
 9 or faculties may be utilized without interference with the
 
10 effective performance of such other duties and functions."
 
11      SECTION 50.  Section 304-93, Hawaii Revised Statutes, is
 
12 amended by amending subsection (b) to read as follows:
 
13      "(b)  The university may spend out of the state higher
 
14 education loan fund up to two per cent of the total amount of
 
15 loans outstanding for collection and administrative expenses.
 
16 [In accordance with chapter 103D, the] The university may enter
 
17 into written contracts with collection agencies for the purpose
 
18 of collecting delinquent student loans.  All payments collected,
 
19 exclusive of a collection agency's commissions, shall revert, and
 
20 be credited, to the loan fund."
 
21      SECTION 51.  Section 661-12, Hawaii Revised Statutes, is
 
22 amended by amending the definition of "agency" in subsection (f)
 
23 to read as follows:
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1      ""Agency" means any state or county board, commission,
 
 2 department, or officer authorized by law to make rules or to
 
 3 adjudicate contested cases except those in the legislative or
 
 4 judicial branches[.] or the University of Hawaii."
 
 5      SECTION 52.  Section 12 of Act 321, Session Laws of Hawaii
 
 6 1986, as amended by section 69 of Act 283, Session Laws of Hawaii
 
 7 1987, by section 7 of Act 371, Session Laws of Hawaii 1989, by
 
 8 section 3 of Act 163, Session Laws of Hawaii 1991, by section 2
 
 9 of Act 314, Session Laws of Hawaii 1993, by section 22 of Act 8,
 
10 Special Session Laws of Hawaii 1993, by section 1 of Act 180,
 
11 Session Laws of Hawaii 1997, and by section 24 of Act 115,
 
12 Session Laws of Hawaii 1998, is amended to read as follows:
 
13      "SECTION 12.  This Act shall take effect on July 1, 1986[,
 
14 and shall be repealed as of June 30, 2005; provided that on
 
15 repeal sections 40-1, 40-2, 40-4, 40-6, and 40-81, Hawaii Revised
 
16 Statutes, are reenacted in the form in which they read on
 
17 June 30, 1986, and section 40-85, Hawaii Revised Statutes, is
 
18 reenacted in the form in which it read on June 30, 1991.];
 
19 provided that:
 
20      (1)  Section 3 of this Act is repealed on June 30, 2005;
 
21      (2)  Section 40-1(b), Hawaii Revised Statutes, is repealed
 
22           on June 30, 2005; provided that it is reenacted in the
 
23           form in which it read on June 30, 1986;
 

 
Page 61                                                    
                                     S.B. NO.           538
                                                        
                                                        

 
 1      (3)  Sections 40-2, 40-6, and 40-81, Hawaii Revised
 
 2           Statutes, are repealed on June 30, 2005; provided that
 
 3           they are reenacted in the form in which they read on
 
 4           June 30, 1986; and provided that amendments made by
 
 5           Act    , Session Laws of Hawaii 1999, shall not be
 
 6           repealed;
 
 7      (4)  Section 40-4, Hawaii Revised Statutes, is repealed on
 
 8           June 30, 2005; provided that it is reenacted in the
 
 9           form in which it read on June 30, 1986; and provided
 
10           that the amendment made to that section adding the
 
11           University of Hawaii shall not be repealed; and
 
12      (5)  Section 40-58, Hawaii Revised Statutes, is repealed on
 
13           June 30, 2005; provided that it is reenacted in the
 
14           form in which it read on June 30, 1991; and provided
 
15           that amendments made by Act    , Session Laws of Hawaii
 
16           1999, shall not be repealed."        
 
17      SECTION 53.  Section 26-11, Hawaii Revised Statutes, is
 
18 repealed.
 
19      ["26-11  University of Hawaii.  (a)  The University of
 
20 Hawaii shall be headed by an executive board to be known as the
 
21 board of regents.
 
22      The board shall consist of twelve members.  No more than six
 
23 of the members shall be members of the same political party and
 

 
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                                     S.B. NO.           538
                                                        
                                                        

 
 1 at least part of the membership of the board shall represent
 
 2 geographic subdivisions of the State.  At least one member shall
 
 3 be a University of Hawaii student at the time of the initial
 
 4 appointment.  This member may be reappointed for one additional
 
 5 term even though the member may no longer be a student at the
 
 6 time of reappointment.
 
 7      The board shall have power, in accordance with the
 
 8 Constitution of the State and with law, to formulate policy, and
 
 9 to exercise control over the university through its executive
 
10 officer, the president of the university.  The board shall have
 
11 exclusive jurisdiction over the internal organization and
 
12 management of the university.
 
13      (b)  The board of regents shall appoint and may remove an
 
14 executive officer to be known as the president of the University
 
15 of Hawaii.
 
16      The University of Hawaii as heretofore constituted as a body
 
17 corporate is continued as the University of Hawaii established by
 
18 this chapter."]
 
19      SECTION 54.  Except as modified in sections 2, 23, 24, 25,
 
20 26, 27, 28, and 29 of this Act, no part of this Act shall
 
21 contravene any part of chapters 76, 77, 89, Hawaii Revised
 
22 Statutes, or any collective bargaining agreement that may have
 
23 been or may be negotiated under chapter 89, Hawaii Revised
 

 
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 1 Statutes.
 
 2      SECTION 55.  No regular civil service employees shall lose
 
 3 their status or have their statutory rights and benefits reduced
 
 4 as a result of this Act.
 
 5      SECTION 56.  If any provision of this Act, or the
 
 6 application thereof to any person or circumstance is held
 
 7 invalid, the invalidity does not affect other provisions or
 
 8 applications of the Act which can be given effect without the
 
 9 invalid provision or application, and to this end the provisions
 
10 of this Act are severable.
 
11      SECTION 57.  Following approval of this Act, the revisor of
 
12 statutes shall insert the number of this Act in the blank spaces
 
13 in paragraphs (3) and (5) of Section 52.
 
14      SECTION 58.  Statutory material to be repealed is bracketed.
 
15 New statutory material is underscored.
 
16      SECTION 59.  This Act shall take effect on July 1, 1999.
 
17 
 
18                           INTRODUCED BY:  _______________________