Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 803
                                     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 Labor and Public Employment, to which was
referred S.B. No. 803, S.D. 2, entitled: 


begs leave to report as follows:

     The purpose of this bill is to provide for a planned
reduction in the size of Hawaii's government and a framework for
the orderly restructuring of government programs.  Specifically,
this bill:

     (1)  Requires all heads of departments, the Judiciary, and
          the University of Hawaii (UH) to submit strategic
          workforce reduction and reorganization draft plans and
          final plans;

     (2)  Requires each department, the Judiciary, and UH to
          implement its strategic plan within one month after
          final approval and prepare annual status reports;

     (3)  Provides for the use of voluntary separation incentive
          programs, specifically, transitional severance

     (4)  Provides for a process by which affected employees may
          elect for early retirement benefits;

                                 STAND. COM. REP. NO. 1416
                                 Page 2

     (5)  Allows the affected department or agency head to keep
          positions if they:

          (A)  Establish a mentoring agreement with employees who
               would otherwise qualify for retirement or
               transitional severance benefits under this Act;

          (B)  Deem that the employee's retention is essential to
               ensuring that direct services to the public are
               not compromised;

     (6)  Allows for an extended training period for replacement
          employees required as a result of implementing the
          strategic plan;

     (7)  Requires the Department of Human Resources (DHRD) and
          the Judiciary, in cooperation with the Employees'
          Retirement System, to provide educational briefings to
          all affected employees;

     (8)  Requires DHRD to develop and coordinate career
          transition programs for all affected employees; and

     (9)  Gives the county mayors, with the approval of the
          respective county council, discretion with respect to
          county participation in the voluntary separation

     The Judiciary and the Public Employees Management
Association of Hawaii testified in support of this bill.  The
Hawaii State Teachers Association testified in support of the
concept of this bill.  The Department of Human Resources
Development testified in support of the intent of this bill.  The
Hawaii Government Employees Association testified in opposition
to this bill.  The Employees' Retirement System submitted
comments on this bill.

     Upon further consideration, your Committee has amended this
bill by:

     (1)  Deleting the provision which allowed the heads of
          affected departments or agencies to keep positions if
          the department or agency:

          (A)  Established a mentoring agreement with affected
               employees; and

          (B)  Deemed that the employee's retention is essential;

                                 STAND. COM. REP. NO. 1416
                                 Page 3

     (2)  Deleting the preemption of employee rights under
          reduction in workforce policies, collective bargaining
          agreements, rules and procedures, placement and bumping
          under collective bargaining agreements, or special
          retirement incentives when an employee receives
          transitional severance benefits;

     (3)  Deleting graduated transition severance benefits based
          on years of service and replacing them with a cap of

     (4)  Deleting the provision that states that no employee who
          is eligible to retire without penalty or eligible to
          retire pursuant to this section shall be eligible for
          the transitional severance benefits offered under
          section 3 of the bill; and

     (5)  Making technical, nonsubstantive changes for style,
          clarity, and consistency.

     Your Committee finds that as the State enters the new
millenium, the citizens of Hawaii require, demand, and deserve a
government that is responsive, efficient, and flexible to address
the everchanging needs of a modern society.  This bill reinvents
government and way it operates, to achieve lower costs, better
productivity, and higher efficiency.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 803, S.D. 2, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B. No.
803, 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 Labor and Public

                                   TERRY NUI YOSHINAGA, Chair