Honolulu, Hawaii

, 2002

RE: S.B. No. 2969

S.D. 2



Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committee on Ways and Means, to which was referred S.B. No. 2969, S.D. 1, entitled:


begs leave to report as follows:

The purpose of this measure is to improve accountability, performance, efficiency, and effectiveness of the Department of Education and its services for children with a disability.

Your Committee finds that it has been a continual challenge for the Departments of Education and Health to serve Hawaii's children with a disability in compliance with federal and state laws and to generally provide them with services that meet their special education needs. Recent investigations into the departments' efforts have revealed systemic problems that hinder the delivery of appropriate, efficient, and effective special education-related services. Your Committee finds that this measure provides a comprehensive approach to ensuring Hawaii's children who have a disability receive a quality and appropriate education.

Part I provides that the intent of this measure is to implement structural and procedural changes within the Department of Education to improve efficiency and to ensure that Hawaii's children with a disability receive a quality education.

Part II establishes an Office of Educational Accountability and Performance within the Board of Education to monitor and evaluate the performance of the State's public education system.

Part III appropriates funds for the employment of three internal auditors and two support staff for the Department of Education whose function is to ensure fiscal accountability, improve the internal financial controls, and improve responsiveness to fiscal problems within the Department of Education.

Part IV allows the Department of Education to appoint and retain its own attorneys.

Part V requires:

(1) The Department of Education to maintain longitudinal data on students, and store and warehouse the data in a manner that allows for efficient, comprehensive, and complex analysis;

(2) The Departments of Education, Health, and Human Services to establish an integrated information management system that shall provide for the interdepartmental sharing and exchange of student records;

(3) The Department of Education to map a listing of all department resources and services and to publish the map in an accessible format and on the Internet; and

(4) The Department of Education to ensure that the department receives and collects all federal funds and reimbursements, including Medicaid reimbursements.

Part VI appropriates funds for school design, improvements, and equipment to accommodate school-based health services for students including the medically fragile.

Part VII requires the Department of Education to obtain prior approval from the Governor to increase the federal fund expenditure ceiling to expend federal funds received in excess of the amounts appropriated by the Legislature and to report to the Legislature immediately regarding the increase. In addition, this Part provides that the Governor may not approve increases to federal fund expenditure ceilings in amounts greater than the excess federal funds received by the Department of Education.

Part VIII provides that claims against educational officers, teachers, and classified personnel for services provided to children with a disability and members of the plaintiff class under the Felix consent decree shall only be brought against the departments of education and health.

Part IX requires that when a proposal or contract for the procurement of services specifies academic degree requirements, the proposal or contract shall specify that the academic degree shall be issued by a college or university accredited by an accrediting agency recognized by the United States Secretary of Education.

Part X clarifies that the children's mental health services branch of the Department of Health shall not restrict services to students belonging to a specific class, such as the Felix class, and emphasizes that the department has a duty to service the mental health of all students regardless of whether or not they are members of the Felix class.

Part XI provides that this measure shall take effect upon its approval; provided that parts II, III, VI, and VIII shall take effect on July 1, 2002.

Your Committee has amended this measure by amending:

(1) Part VII by replacing its content with provisions that establish legislative control over federal impact aid and U.S. Department of Defense funds and force the Department of Education to more accurately plan and budget use of such funds by:

(a) Repealing section 29-25, Hawaii Revised Statutes;

(b) Amending section 302A-1401, Hawaii Revised Statutes, to specify that impact aid funds shall be expended only by legislative appropriation;

(c) Amending section 40-89, Hawaii Revised Statutes, to establish new accounts every year for federal impact aid and U.S. Department of Defense funds and require that the unencumbered cash balances in all prior federal impact aid and U.S. Department of Defense fund accounts be deposited in the accounts established for the current year; and

(d) Requiring the Board of Education to submit semiannual reports to the Legislature on the receipt and expenditure of federal impact aid and U.S. Department of Defense funds;

(2) Part VIII by clarifying that the indemnification provisions shall not apply to wilful or wanton acts or omissions, or acts or omissions of gross negligence, committed by educational officers, teachers, and classified personnel; and

(3) Part XI by making Part VII effective on July 1, 2002.

Your Committee further amended this measure by making technical, nonsubstantive changes for purposes of style and clarity.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2969, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2969, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,