Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 153
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Higher Education, to which was referred
H.B. No. 153 entitled: 


begs leave to report as follows:

     The purpose of this bill is to remove a barrier for faculty
of the University of Hawaii to engage in entrepreneurial
activities by requiring the Ethics Commission to presume that any
consultative, entrepreneurial, or economic development activity
of the faculty of the University of Hawaii is valid under certain

     The University of Hawaii and Dawson International, Inc.
submitted testimony supporting the measure.  The Ethics
Commission opposed the bill.

     Act 115, Session Laws of Hawaii 1998, granted the University
of Hawaii more flexibility and autonomy in managing its resources
than other state departments.  The rationale was that the
University of Hawaii differs considerably from other state
agencies, and this increased flexibility will enable it to grow
and contribute more to the economy of Hawaii.

     Your Committee is willing to remove further barriers that
will allow the University of Hawaii to control its own destiny.
In this regard, the University of Hawaii remains under the
jurisdiction of the State Ethics Commission in matters relating
to conflicts of interest.  Allowing the University of Hawaii to

                                 STAND. COM. REP. NO. 300
                                 Page 2

prescribe and enforce its own ethics code would further
flexibility and autonomy for the University of Hawaii.

     Your Committee has amended the bill by deleting its contents
and replacing it with the authority for the University of Hawaii
to establish its own ethics system.  The amended bill:

     (1)  Removes the University of Hawaii from the purview of
          the State Ethics Commission, with the exception of the
          Board of Regents and the President of the University of
          Hawaii, who remain under the State Ethics Commission;

     (2)  Requires the Board of Regents to establish a system for
          prescribing and enforcing a code of ethics for faculty
          and other employees of the University of Hawaii.

     As affirmed by the record of votes of the members of your
Committee on Higher Education that is attached to this report,
your Committee is in accord with the intent and purpose of H.B.
No. 153, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 153, H.D. 1, and
be referred to the Committee on Judiciary and Hawaiian Affairs.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Higher Education,

                                   DAVID MORIHARA, Chair