Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 46
                                     S.D. 2
                                     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 Education, to which was referred S.B. No.
46, S.D. 2, entitled: 


begs leave to report as follows:

     The purpose of this bill is to provide schools with maximum
flexibility to prepare and execute their operating budgets by
providing schools with earlier knowledge of the Department of
Education's (DOE) proposed school-by-school allocation.
     Specifically, this bill:

     (1)  Requires the DOE to provide the schools and the
          Legislature, by the opening day of each regular
          legislative session, reports on its proposed school-by-
          school budget allocation; 

     (2)  Requires the DOE to submit an annual school-by-school
          budget report;

     (3)  Requires each school, prior to the beginning of each
          school year, to submit to the DOE expenditure reports
          for the previous fiscal year; and

     (4)  Provides maximum flexibility to each school over the
          funds designated to the school, to the extent allowed
          for each type of funding, to achieve instructional
          program goals.

                                 STAND. COM. REP. NO. 1321
                                 Page 2


     The Hawaii State Teachers Association testified in support
of the concept of the bill, provided that there are clearly
developed processes which ensure that the budgeting process is
open, democratic, and collaborative, and that teachers shall
share in the decisions regarding school-based budgeting using a
mechanism established by the principals and teachers and
understood by all.

     While the DOE testified in support of the intent to provide
greater budget flexibility for schools, it expressed concerns
that the bill imposes additional accounting and report
preparation tasks on schools.  The bill does not give schools
increased funding for the additional reports that will be

     A concerned individual opposed the bill, testifying that
workloads at the school level should not be increased.

     Your Committee has amended the bill by making technical,
nonsubstantive amendments for purposes of style and clarity.

     As affirmed by the record of votes of the members of your
Committee on Education that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
46, S.D. 2, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as S.B. No. 46, S.D. 2, H.D.
1, and be referred to the Committee on Finance.

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

                                   KEN ITO, Chair