Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 46
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Education and Technology, to which was
referred S.B. No. 46 entitled: 


begs leave to report as follows:

     The purpose of this measure is to move the Department of
Education further towards the goal of school-based budgeting.

     Specifically, the measure:

     (1)  Requires the Governor to submit the Department of
          Education's budget to the Legislature on a school-by-
          school basis, except for the portions of the budget
          that include district and state office programs;

     (2)  Establishes an Education Contingent Fund to cover
          unexpected changes in school budgets that occur as a
          result of personnel movements between schools; and

     (3)  Establishes specific budgetary criteria for the
          Department of Education when submitting school-by-
          school budget requests.

     Your Committee received testimony that supported the intent
of the measure from the Departments of Budget and Finance and
Education and the Hawaii State Teachers Association.

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                                   STAND. COM. REP. NO. 336
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     Your Committee finds that a similar bill passed by the
Legislature in 1998 but was vetoed by the Governor due to
concerns over the July 1, 1998, implementation date.  In order to
allay concerns over providing principals with sufficient time to
learn how to craft and submit individual school budget requests,
this measure proposes a 2001 starting date.

     Your Committee has amended the measure by deleting
provisions that:

     (1)  Require the Governor to submit the Department of
          Education's budget to the Legislature on a school-by-
          school basis;

     (2)  Establish the Education Contingent Fund;

     (3)  Provide the Department of Education with the
          flexibility to move funds between schools; and

     (4)  Allow schools to minimally report on actual and
          estimated program costs and effectiveness measures in
          fiscal years 2001-2002 and 2002-2003.

     Your Committee believes that the amended measure provides
sufficient time and guidance to the Department of Education to
successfully implement school-based budgeting.

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

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

                                   DAVID Y. IGE, Chair

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