Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 4
                                     S.D. 2
                                     H.D. 2

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


     Your Committee on Finance, to which was referred S.B. No. 4,
S.D. 2, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill, as received, is to establish an
incentive award program to encourage state employees to make
cost-saving recommendations to improve government operations.

     For purposes of the public hearing, your Committee
circulated a proposed H.D. 2 version that deletes the provisions
of the bill and inserts new language that redefines the scope of
negotiation in collective bargaining to exclude cost items for a
period of four years.

     A concerned citizen supported the proposed measure. The
University of Hawaii Professional Assembly, United Public
Workers, Hawaii Government Employees Association, and Hawaii
State Teachers Association submitted comments.

     Upon further consideration, your Committee has amended this
bill to redefine the scope of negotiation in collective
bargaining by giving the Legislature and the county council
chairpersons an opportunity to participate in the collective
bargaining process.  Specifically, this bill:

                                 STAND. COM. REP. NO. 1833
                                 Page 2

     (1)  Provides that for the purposes of negotiations,
          mediation, and arbitration of cost items only, the
          Senate President and Speaker of the House of
          Representatives, or their designated representatives,
          and the county council chairpersons, or their
          designated representatives, shall each have one vote on
          cost items;

     (2)  Provides that no wage increase shall be authorized by
          the public employer without prior concurrence of a
          majority of legislators and council chairpersons, or
          their designated representatives, voting on cost items;

     (3)  Eliminates provisions making cost items subject to
          appropriations by the appropriate legislative bodies.

     It was brought to the attention of your Committee that this
bill may be violative of certain provisions in the State
Constitution.  In recognition of this concern, your Committee is
in the process of requesting the Attorney General for an opinion
on the constitutionality of this bill.  It is hoped that the
Attorney General will respond to this request in an expeditious
manner to ensure a timely resolution of this matter.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No. 4,
S.D. 2, H.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 4, S.D. 2,
H.D. 2.

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

                                   DWIGHT Y. TAKAMINE, Chair