Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 538
                                        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. 538 entitled: 


begs leave to report as follows:

     The purpose of this measure is to provide complete autonomy
to the University of Hawaii, by making its status comparable to
that of the judiciary.  This measure subjects all university
employees to the university's personnel system, and eliminates
the director of finance and governor from the university
budgetary process.  

     Testimony in support of this measure was submitted by the
University of Hawaii Professional Assembly.  Testimony in support
of this measure was submitted by the University of Hawaii with
proposed amendments.  Opposing testimony was submitted by the
Department of Budget and Finance, and the Hawaii Government
Employees Association.

     Your Committee finds that this measure would grant the
University of Hawaii complete autonomy from the executive branch.
This would provide the university with opportunities and
incentives for developing an entrepreneurial, competitive role
and contributing to Hawaii's economic growth.  This measure
advances the purposes of Act 320, Session Laws 1986, Act 321,
Session Laws 1986, Act 161, Session Laws 1995, as amended, and
Act 115, Session Laws 1998.  Your Committee views this measure as
the next step in complete university autonomy, by permitting a

a                                                     SB538 SD1
                                   STAND. COM. REP. NO. 538
                                   Page 2

more flexible and responsive approach to the management of
university resources.

     Your Committee has adopted the recommendations of the
University of Hawaii to amend the measure by removing university
employees from the civil service completely.  University
employees are currently comprised of executive/managerial,
faculty, administrative, professional, technical (APT), and civil
service categories.  Except for civil service employees, all
other employees fall under the jurisdiction of the university.
The flexibility afforded to the Board of Regents to administer
their personnel system has served them well.  The transfer of
current civil service employees to the exclusive jurisdiction of
the Board of Regents would complete the delegation of personnel
administration to the university.  Your Committee notes that
current civil service employees at the university would remain in
their current bargaining units as there are no amendments to
Chapter 89, Hawaii Revised Statutes.

     Accordingly, your Committee has deleted sections 2, 23, and
29 from this measure which would have established a civil service
system for the University of Hawaii under the umbrella of the
state civil service law.  In its place, a new section has been
added that amends section 76-16 (11), Hawaii Revised Statutes
(HRS), to exempt all university employees from the civil service.
Your Committee also amended section 304-4, HRS, to add a new
subsection which recommends that the Board of Regents follow as
closely as possible the provisions of chapters 76 and 77, HRS,
but does not make it mandatory.  Your Committee also has made
technical, nonsubstantive amendments for the purposes of clarity.

     Although this measure makes the necessary changes to the
Hawaii Revised Statutes to allow the University of Hawaii greater
autonomy and status comparable to the judiciary, your Committee
is aware that additionally, a Constitutional amendment would be
needed to remove references to the university from sections which
apply to the executive branch.  Your Committee will be hearing
S.B. No. 539 this session, which proposes this Constitutional

     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. 538, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 538,
S.D. 1, and be referred to the Committee on Ways and Means.

a                                                     SB538 SD1
                                   STAND. COM. REP. NO. 538
                                   Page 3

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

                                   DAVID Y. IGE, Chair

a                                                     SB538 SD1