Report Title:

UH

Description:

Creates a separate budget preparation and submission process for the University of Hawaii. Recognizes the University of Hawaii as a state agency apart from the executive branch. Removes University of Hawaii employees from the state civil service system.

HOUSE OF REPRESENTATIVES

H.B. NO.

1851

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE UNIVERSITY OF HAWAII.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that, to achieve the intent of allowing the University of Hawaii greater autonomy, it is necessary to provide greater budgetary flexibility to the university. Accordingly, it is the purpose of this Act to make the University of Hawaii, for budgetary purposes, more akin to a separate branch of government, much like the judiciary, rather than as a traditional department within the executive branch of government. More specifically, the purposes of this Act are to:

(1) Provide the University of Hawaii with greater budgetary autonomy from the rest of the executive branch; and

(2) Vest greater power and responsibility for administering the University of Hawaii in its board of regents.

The legislature is aware that the University of Hawaii has already been given a certain level of flexibility since the enactment of fiscal flexibility legislation for both the University of Hawaii and the Department of Education first enacted on a temporary basis during the mid 1980s and extended since that time. This Act is intended to do more. This Act both makes permanent the fiscal flexibility legislation, but also provides for a substantial level of actual budgetary autonomy for the University of Hawaii. In enacting this Act, the legislature intends that the University of Hawaii be treated, at least for budgetary purposes, in a manner more akin to a separate branch of government, much like the judiciary, rather than as a traditional department within the executive branch of government.

SECTION 2. Chapter 304, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§304- Administration; budget preparation and submission. (a) The board of regents shall make an annual report to the legislature, at each regular session thereof, of the business of the University of Hawaii and of the administration of the university system throughout the State. The board of regents shall present to the legislature a unified budget, six-year program and financial plan, and variance report of the University of Hawaii. The president of the university, who shall be appointed by the board of regents, shall direct the administration of the University of Hawaii and be responsible for the efficient operation of all of its colleges, departments, and programs.

(b) The president of the university shall have the power to:

(1) Prescribe, for all of the colleges, departments, and programs, a uniform system of keeping and periodically reporting statistics concerning their business;

(2) Obtain, from all of the colleges, departments, and programs, estimates for their proposed appropriations; with the cooperation of the representatives of the colleges, departments, and programs concerned, review and revise the estimates as the president deems necessary for the equitable provision of resources to the various colleges, departments, or programs according to their needs; and present the estimates, as reviewed and revised by the board of regents, to the legislature as collectively constituting a unified budget for all of the University of Hawaii;

(3) Exercise exclusive authority over the preparation, explanation, and administration of the University of Hawaii budget, programs, plans, and expenditures, including without limitation policies and practices of financial administration and the establishment of guidelines as to permissible expenditures; provided that all expenditures of the University of Hawaii shall be in conformance with program appropriations and provisions established by the legislature; and

(4) Do all other acts that may be necessary or appropriate for the administration of the University of Hawaii.

(c) The budget, six-year program and financial plan, and the variance report of the University of Hawaii shall be submitted by the board of regents to the legislature in accordance with the schedule of submission specified for the governor in chapter 37 and shall contain the program information prescribed in that chapter. By November 1 of each year preceding a legislative session in which a budget is to be submitted, the board of regents shall provide written notification to the governor of the proposed total expenditures, by cost categories and sources of funding, and estimated revenues of the University of Hawaii for each fiscal year of the next fiscal biennium."

SECTION 3. Section 26-4, Hawaii Revised Statutes, is amended to read as follows:

"§26-4 Structure of government. Under the supervision of the governor, all executive and administrative offices, departments, and instrumentalities of the state government and their respective functions, powers, and duties shall be allocated among and within the following principal departments that are hereby established:

(1) Department of human resources development (Section 26-5)

(2) Department of accounting and general services (Section 26-6)

(3) Department of the attorney general (Section 26-7)

(4) Department of budget and finance (Section 26-8)

(5) Department of commerce and consumer affairs (Section 26-9)

(6) Department of taxation (Section 26-10)

    [(7) University of Hawaii (Section 26-11)

(8)] (7) Department of education (Section 26-12)

    [(9)] (8)  Department of health (Section 26-13)

   [(10)] (9)  Department of human services (Section 26-14)

   [(11)] (10)  Department of land and natural resources (Section 26-15)

   [(12)] (11)  Department of agriculture (Section 26-16)

   [(13)] (12)  Department of Hawaiian home lands (Section 26-17)

   [(14)] (13) Department of business, economic development, and tourism (Section 26-18)

   [(15)] (14)  Department of transportation (Section 26-19)

   [(16)] (15)  Department of labor and industrial relations (Section 26-20)

   [(17)] (16)  Department of defense (Section 26-21)

   [(18)] (17)  Department of public safety (Section 26-14.6)"

SECTION 4. Section 26-11, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The University of Hawaii shall be headed by an executive board to be known as the board of regents.

The board shall consist of [twelve members.] thirty members. No more than six of the members shall be members of the same political party and at least part of the membership of the board shall represent geographic subdivisions of the State. At least one member shall be a University of Hawaii student at the time of the initial appointment. [This member may be reappointed for one additional term even though the member may no longer be a student at the time of reappointment.]

The board shall have power, in accordance with the Constitution of the State and with law, to formulate policy[,] and to exercise control over the university through its executive officer, the president of the university. The board shall have exclusive jurisdiction over the internal [organization and management] structure, management, and operation of the university."

SECTION 5. Section 26-25, Hawaii Revised Statutes, is amended to read as follows:

"[[]§26-25[]] Services to the judiciary [and], legislature[.], and the University of Hawaii. Any executive department may provide services to the judiciary [and], the legislature, and the University of Hawaii, but nothing in this part and this chapter shall be construed as granting any authority to the governor or any department to exercise control over the organization, programs, functions, operations, and expenditures of the judiciary [and], the legislature[.], and the University of Hawaii."

SECTION 6. Section 37-92, Hawaii Revised Statutes, is amended to read as follows:

"§37-92 Proposed general fund appropriations; executive branch; judicial branch[.]; and University of Hawaii. (a) The governor shall submit a plan of proposed appropriations for the State to the legislature, which shall accompany the state budget in odd-numbered years and the supplemental budget in even-numbered years. The plan of proposed appropriations shall include the executive budget, proposed grants to private entities, and any specific appropriation measures to be proposed by the executive branch, and estimates of the aggregate proposed appropriations of the judicial and legislative branches of government[.], and the University of Hawaii. In any year in which the plan of proposed appropriations from the general fund exceeds the expenditure ceiling, the governor shall set forth the dollar amount, the rate by which the expenditure ceiling would be exceeded, and the reasons for proposing appropriations in excess of those allowed under the expenditure ceiling.

(b) The proposed appropriations from the general fund for each year of the biennium or each supplementary budget fiscal year for the executive and judicial branches and the University of Hawaii shall not be increased over the appropriations from the general fund for the preceding fiscal year for each branch[,] and the University of Hawaii, respectively, by more than the state growth, except as provided in this section. For purposes of this subsection, the appropriations from the general fund for the executive and judicial branches and the University of Hawaii shall not include any appropriations representing amounts authorized by the legislature under section 37-93(b).

(c) The governor shall submit a plan of proposed appropriations for the executive branch to the legislature, which shall accompany the state budget in odd-numbered years and the supplemental budget in even-numbered years. The plan of proposed appropriations shall include the executive budget, proposed grants to private entities, and any specific appropriation measures to be proposed by the executive branch.

(d) The budget documents presented by the governor to the legislature shall include a statement or summary showing the:

(1) [the total] Total state personal income for each of the four calendar years immediately preceding the fiscal year for which appropriations from the state general fund are to be made[,];

(2) [the appropriations] Appropriations from the general fund for the previous fiscal year[,];

(3) [the appropriations] Appropriations from the general fund for the fiscal year in progress[,]; and

(4) [the general] General fund expenditure ceiling for the fiscal year in progress and for the ensuing fiscal year or, when necessary, for each fiscal year of the ensuing biennium.

(e) The governor shall also include a statement or summary showing:

(1) [recommended] Recommended appropriations from the general fund for the executive branch for the ensuing fiscal year or fiscal biennium[,];

(2) [actual] Actual appropriations from the general fund for the executive branch plus any recommended appropriations from the general fund for the executive branch for the fiscal year in progress[,];

(3) [the] The appropriations from the general fund for the executive branch for the previous fiscal year[,]; and

(4) [the] The general fund appropriation ceiling for the executive branch, as established by subsection (b), for the fiscal year in progress and for the ensuing fiscal year or, when necessary, for each fiscal year of the ensuing biennium.

(f) The chief justice shall submit a plan of proposed appropriations of the judicial branch to the legislature, which shall accompany the judiciary biennial budget in odd-numbered years and the supplemental budget in even-numbered years. The plan of proposed appropriations shall include the judiciary budget, proposed grants to private entities, and any specific appropriation measures to be proposed by the judicial branch.

(g) The budget documents presented by the chief justice to the legislature shall include a statement or summary showing:

(1) [recommended] Recommended appropriations from the general fund for the judicial branch for the ensuing fiscal year or fiscal biennium[,];

(2) [actual] Actual appropriations from the general fund for the judicial branch plus any recommended appropriations from the general fund for the judicial branch for the fiscal year in progress[,];

(3) [the] The appropriations from the general fund for the judicial branch for the previous fiscal year[,]; and

(4) [the] The general fund appropriation ceiling for the judicial branch, as established by subsection (b), for the fiscal year in progress and for the ensuing fiscal year or, when necessary, for each fiscal year of the ensuing biennium.

(h) The board of regents of the University of Hawaii shall submit a plan of proposed appropriations of the University of Hawaii to the legislature which shall accompany the University of Hawaii biennial budget in odd-numbered years and the supplemental budget in even-numbered years. The plan of proposed appropriations shall include the University of Hawaii budget, proposed grants to private entities, and any specific appropriation measures to be proposed by the board of regents of the University of Hawaii.

(i) The budget documents presented by the board of regents of the University of Hawaii to the legislature shall include a statement or summary showing:

(1) Recommended appropriations from the general fund for the University of Hawaii for the ensuing fiscal year or fiscal biennium;

(2) Actual appropriations from the general fund for the University of Hawaii plus any recommended appropriations from the general fund for the University of Hawaii for the fiscal year in progress;

(3) The appropriations from the general fund for the University of Hawaii for the previous fiscal year; and

(4) The general fund appropriation ceiling for the University of Hawaii, as established by subsection (b), for the fiscal year in progress and for the ensuing fiscal year or, when necessary, for each fiscal year of the ensuing biennium.

[(h)(j) The governor [or], the chief justice, or the board of regents may propose appropriations from the general fund for the executive or judicial branches[,] or the University of Hawaii, respectively, in excess of those allowed by subsection (b) if the governor [or], the chief justice, or the board of regents sets forth the dollar amount and the percentage change in excess of the appropriations allowed by subsection (b)[,] and the reasons for proposing appropriations in excess of those allowed by subsection (b)."

SECTION 7. Section 37D-1, Hawaii Revised Statutes, is amended by amending the definition of "agency" to read as follows:

""Agency" or "participating agency" means the judiciary, the University of Hawaii, any executive department, any independent commission, any board, any authority, any bureau, any office, any other establishment of the State (except the legislature and its agencies), or any public corporation that is supported in whole or in part by state funds, or any agent thereof, authorized by law to expend available moneys; provided that the Hawaii health systems corporation shall not be governed by this chapter for any financing agreement unless it elects to do so."

SECTION 8. Section 40-1, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) With respect to the executive branch, except [the University of Hawaii and] the department of education, the comptroller shall have complete supervision of all accounts. The comptroller shall preaudit all proposed payments of $10,000 or more to determine the propriety of expenditures and compliance with executive orders and rules that may be in effect. When necessary, the comptroller shall withhold approval of any payment. Whenever approval is withheld, the department or agency concerned shall be promptly notified. With respect to [the University of Hawaii and] the department of education, the comptroller shall issue warrants for the release of funds for the operating costs of [the university or] the department of education[, as applicable,] in amounts and at times mutually agreed upon by the governor or director of finance and the [university or] department of education[, as applicable]; provided:

(1) The amounts released shall not exceed the allotment ceilings for the respective funding sources of [the university's or] the department of education's appropriations established by the governor for an allotment period pursuant to section 37-34; and

(2) The comptroller may issue warrants as an advance from the state treasury to the University of Hawaii and the department of education to establish a checking account and provide working capital in amounts and at times mutually agreed upon by the governor or director of finance and [the University of Hawaii and] the department of education.

The [University of Hawaii and the] department of education shall preaudit all proposed payments to determine the propriety of expenditures and compliance with applicable laws, executive orders, and rules as may be in effect. The [University of Hawaii and the] department of education shall make disbursements for operating expenses from the amounts released by the comptroller and maintain records and documents necessary to support those disbursements at times mutually agreed upon by [the university president or] the superintendent of education[, as applicable,] and the comptroller; provided that when requested by the university or department of education, the comptroller shall make all disbursements for the [university or] department of education, [as applicable,] subject to available allotment. Funds released pursuant to this section shall be deposited by the [university or] department of education[, as applicable,] in accordance with the provisions applicable to the director of finance by chapter 38. Any interest earned on the deposit of funds released pursuant to this section shall be deposited in the state treasury at the end of each fiscal year.

(c) With respect to the judiciary [and], the legislature, and the University of Hawaii, the comptroller shall make available to the judiciary [and], the legislature, and the University of Hawaii the total amount appropriated to each, except that the judiciary [and], the legislature, and the University of Hawaii may request the comptroller's services in maintaining custody of the amount appropriated to each and in making payments therefrom. When such services are requested, the comptroller shall make all disbursements requested by the judiciary [or], the legislature, or the University of Hawaii, but shall not make any disbursement for which no appropriation has been made or which would cause a specific appropriation to be exceeded."

SECTION 9. Section 40-2, Hawaii Revised Statutes, is amended to read as follows:

"§40-2 Accounting systems and internal control; enforcing the use of and inspection of the same. The accounting system installed by the commission on public accountancy under Act 181, Session Laws of Hawaii 1923, as amended by Act 220, Session Laws of Hawaii 1925, for use in the offices of the comptroller, director of finance, departmental and agency services of the State, and the auditors, treasurers, departmental and agency services of the several counties shall be the accounting and reporting systems of the State and counties; provided [that the University of Hawaii may install a different accounting system which shall be in conformity with generally accepted accounting principles as applied to colleges and universities; and provided further] that the department of education may install a different accounting system which shall be in conformity to generally accepted accounting principles. The comptroller shall make such changes and modifications in the accounting system as shall from time to time appear to be in the best interest of the State and counties.

The departments and agencies of the executive branch are respectively charged with the responsibility to maintain an adequate system of internal control and with the further responsibility to see that the internal control system continues to function effectively as designed. The comptroller shall make such investigations and audits from time to time to enforce the use of the accounting system and internal control systems in the executive branch.

The judiciary, the legislature, the University of Hawaii, and each county shall be responsible for the establishment and maintenance of its respective internal control system."

SECTION 10. Section 40-6, Hawaii Revised Statutes, is amended to read as follows:

"§40-6 Approval of business and accounting forms. The comptroller shall determine the forms required to adequately supply accounting and statistical data for the state government. The comptroller shall require heads of departments and establishments of the state government to submit proposed new forms or proposed changes in current business and accounting forms for review and approval before ordering the [same] forms printed; except that [the University of Hawaii and] the department of education shall be subject to this requirement only with respect to uniform business and accounting forms of statewide use in the State's accounting system. All standard state forms shall be classified, numbered, and standardized in design, dimensions, color, and grade of paper and recorded in a catalogue of accounting and statistical forms by the comptroller."

SECTION 11. Section 40-51, Hawaii Revised Statutes, is amended to read as follows:

"§40-51 Money drawn only on warrants. Excepting moneys paid for [the]:

(1) The redemption of bonds of the state debt, and the interest coupons of the [same, and for interest] bonds;

(2) Interest on overdue warrants[, and drafts];

(3) Drafts against special deposits [and for]; and

(4) For the expenses of the legislature [and], the judiciary, and the University of Hawaii; and [payment]

(5) Payment authorized by the comptroller by means of electronic funds transfers and through automated clearinghouses for the purposes of implementing an electronic benefits transfer system for the department of human services,

no money shall be drawn from or out of the treasury except upon warrants, substantially in the form of section 40-52, issued from the comptroller's office; provided that upon request, the comptroller shall provide financial services involving the issuance of warrants on behalf of the legislature [and], the judiciary[.], and the University of Hawaii. Every warrant shall be signed by the comptroller or the comptroller's deputy or by means of any mechanical check signer that may be adopted by the comptroller, and shall be made payable upon such date as may be approved by the director of finance to the order of the person to whom the State is directly indebted."

SECTION 12. Section 40-58, Hawaii Revised Statutes, is amended to read as follows:

"§40-58 In favor of assignees. No assignment of moneys by a person to whom the State is directly indebted shall be effective unless the assignment is first approved by the comptroller or, in the case of [the University of Hawaii and] the department of education, by [their] its respective chief financial [officers.] officer. The comptroller or the chief financial [officers of the University of Hawaii and] officer of the department of education may prescribe the form for an assignment[,] and may approve the assignment within a reasonable time period if, in their respective discretion, the rights or obligations of the State[, the University of Hawaii,] or the department of education under any contract or other undertaking or under any law, rule, or order by a competent authority will not be prejudiced thereby. Upon approval of the assignment, the comptroller or the [respective] chief financial [officers of the University of Hawaii and] officer of the department of education shall draw a warrant payable to the assignee. Except as to contracts encumbered by the comptroller[, the University of Hawaii,] or the department of education, each expending agency, upon notification of the comptroller's approval of an assignment, shall prepare a claim for payment in accordance with the terms of the assignment."

SECTION 13. Section 40-81, Hawaii Revised Statutes, is amended to read as follows:

"§40-81 Report by agencies receiving special moneys. All state officers, departments, boards, bureaus, commissions, or agencies collecting or receiving any moneys not required by law to be deposited in the state treasury shall report to the comptroller all receipts and disbursements on account thereof for each quarterly period of the calendar year not later than the fifteenth day following the end of each quarterly period on such forms and under such rules as may be prescribed by the comptroller; provided that with respect to all moneys held outside the state treasury by [the University of Hawaii or] the department of education pursuant to the authority granted to [the university and] the department of education by this chapter, [the University of Hawaii and] the department of education shall report to the comptroller all transactions for each quarterly period not later than the fifteenth day following the end of each quarterly period on such forms and under such rules as may be prescribed by the comptroller."

SECTION 14. Section 40-84, Hawaii Revised Statutes, is amended to read as follows:

"§40-84 Petty cash funds; regulations. Whenever the head of any state department, board, bureau, commission, or other agency deems it necessary to have a petty cash fund for the proper transaction of the business of the agency, a written application therefor shall be made to the comptroller setting forth the details covering the purposes and uses of and for the fund. The comptroller, before issuing a state warrant for that purpose, shall determine whether or not the business of the agency warrants the establishment of such a fund, and if the comptroller is satisfied that such a fund is necessary, the comptroller shall issue a state warrant to such agency for an amount as the comptroller shall determine, not to exceed the sum of $100,000, except that this limitation of $100,000 shall not apply to [the University of Hawaii and] the stadium authority.

The comptroller may prescribe such rules as the comptroller may deem necessary for the proper administration and accountability of these funds."

SECTION 15. Section 76-11, Hawaii Revised Statutes, is amended by amending the definition of "director" to read as follows:

""Director" means the head of the central personnel agency for a jurisdiction regardless of title, whether it is the director of human resources development, director of personnel, director of personnel services, [or] personnel director[.]; or the chief executive of the University of Hawaii."

SECTION 16. Section 76-16, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The civil service to which this chapter applies shall comprise all positions in the State now existing or hereafter established and embrace all personal services performed for the State, except the following:

(1) Commissioned and enlisted personnel of the Hawaii national guard as such, and positions in the Hawaii national guard that are required by state or federal laws or regulations or orders of the national guard to be filled from those commissioned or enlisted personnel;

(2) Positions filled by persons employed by contract where the director of human resources development has certified that the service is special or unique or is essential to the public interest and that, because of circumstances surrounding its fulfillment, personnel to perform the service cannot be obtained through normal civil service recruitment procedures. Any such contract may be for any period not exceeding one year;

(3) Positions that must be filled without delay to comply with a court order or decree if the director determines that recruitment through normal recruitment civil service procedures would result in delay or noncompliance, such as the Felix-Cayetano consent decree;

(4) Positions filled by the legislature or by either house or any committee thereof;

(5) Employees in the office of the governor and office of the lieutenant governor, and household employees at Washington Place;

(6) Positions filled by popular vote;

(7) Department heads, officers, and members of any board, commission, or other state agency whose appointments are made by the governor or are required by law to be confirmed by the senate;

(8) Judges, referees, receivers, masters, jurors, notaries public, land court examiners, court commissioners, and attorneys appointed by a state court for a special temporary service;

(9) One bailiff for the chief justice of the supreme court who shall have the powers and duties of a court officer and bailiff under section 606-14; one secretary or clerk for each justice of the supreme court, each judge of the intermediate appellate court, and each judge of the circuit court; one secretary for the judicial council; one deputy administrative director of the courts; three law clerks for the chief justice of the supreme court, two law clerks for each associate justice of the supreme court and each judge of the intermediate appellate court, one law clerk for each judge of the circuit court, two additional law clerks for the civil administrative judge of the circuit court of the first circuit, two additional law clerks for the criminal administrative judge of the circuit court of the first circuit, one additional law clerk for the senior judge of the family court of the first circuit, two additional law clerks for the civil motions judge of the circuit court of the first circuit, two additional law clerks for the criminal motions judge of the circuit court of the first circuit, and two law clerks for the administrative judge of the district court of the first circuit; and one private secretary for the administrative director of the courts, the deputy administrative director of the courts, each department head, each deputy or first assistant, and each additional deputy, or assistant deputy, or assistant defined in paragraph (16);

(10) First deputy and deputy attorneys general, the administrative services manager of the department of the attorney general, one secretary for the administrative services manager, an administrator and any support staff for the criminal and juvenile justice resources coordination functions, and law clerks;

(11) (A) Teachers, principals, vice-principals, complex area superintendents, deputy and assistant superintendents, other certificated personnel, not more than twenty noncertificated administrative, professional, and technical personnel not engaged in instructional work;

(B) Effective July 1, 2003, teaching assistants, educational assistants, bilingual/bicultural school-home assistants, school psychologists, psychological examiners, speech pathologists, athletic health care trainers, alternative school work study assistants, alternative school educational/supportive services specialists, alternative school project coordinators, and communications aides in the department of education;

(C) The special assistant to the state librarian and one secretary for the special assistant to the state librarian; and

(D) Members of the faculty of the University of Hawaii, including research workers, extension agents, personnel engaged in instructional work, and administrative, professional, [and] technical personnel, and classified staff of the university;

(12) Employees engaged in special, research, or demonstration projects approved by the governor;

(13) Positions filled by inmates, kokuas, patients of state institutions, persons with severe physical or mental handicaps participating in the work experience training programs, and students and positions filled through federally funded programs that provide temporary public service employment such as the federal Comprehensive Employment and Training Act of 1973;

(14) A custodian or guide at Iolani Palace, the Royal Mausoleum, and Hulihee Palace;

(15) Positions filled by persons employed on a fee, contract, or piecework basis, who may lawfully perform their duties concurrently with their private business or profession or other private employment and whose duties require only a portion of their time, if it is impracticable to ascertain or anticipate the portion of time to be devoted to the service of the State;

(16) Positions of first deputies or first assistants of each department head appointed under or in the manner provided in section 6, Article V, of the State Constitution; three additional deputies or assistants either in charge of the highways, harbors, and airports divisions or other functions within the department of transportation as may be assigned by the director of transportation, with the approval of the governor; four additional deputies in the department of health, each in charge of one of the following: behavioral health, environmental health, hospitals, and health resources administration, including other functions within the department as may be assigned by the director of health, with the approval of the governor; an administrative assistant to the state librarian; and an administrative assistant to the superintendent of education;

(17) Positions specifically exempted from this part by any other law; provided that all of the positions defined by paragraph (9) shall be included in the position classification plan;

(18) Positions in the state foster grandparent program and positions for temporary employment of senior citizens in occupations in which there is a severe personnel shortage or in special projects;

(19) Household employees at the official residence of the president of the University of Hawaii;

(20) Employees in the department of education engaged in the supervision of students during meal periods in the distribution, collection, and counting of meal tickets, and in the cleaning of classrooms after school hours on a less than half-time basis;

(21) Employees hired under the tenant hire program of the housing and community development corporation of Hawaii; provided that not more than twenty-six per cent of the corporation's work force in any housing project maintained or operated by the corporation shall be hired under the tenant hire program;

(22) Positions of the federally funded expanded food and nutrition program of the University of Hawaii that require the hiring of nutrition program assistants who live in the areas they serve;

(23) Positions filled by severely handicapped persons who are certified by the state vocational rehabilitation office that they are able to perform safely the duties of the positions;

(24) One public high school student to be selected by the Hawaii state student council as a nonvoting member on the board of education as authorized by the State Constitution;

(25) Sheriff, first deputy sheriff, and second deputy sheriff;

(26) A gender and other fairness coordinator hired by the judiciary; and

(27) Positions in the Hawaii national guard youth challenge academy.

The director shall determine the applicability of this section to specific positions.

Nothing in this section shall be deemed to affect the civil service status of any incumbent as it existed on July 1, 1955."

SECTION 17. Section 103F-102, Hawaii Revised Statutes, is amended by amending the definition of "agency" to read as follows:

""Agency" means any department, authority, commission, council, board, committee, institution, legislative body, agency, or other establishment or office of the executive, legislative, or judicial branch of the State, and includes the University of Hawaii and the office of Hawaiian affairs."

SECTION 18. Section 304-2, Hawaii Revised Statutes, is amended to read as follows:

"§304-2 University to be public corporation; general powers. The University of Hawaii is established as the state university and constituted a body corporate. The university, under the direction of the board of regents, shall have the following general powers:

(1) To adopt, amend, and repeal bylaws governing the conduct of its business and the performance of the powers and duties granted to or imposed upon it by law.

(2) To acquire in any lawful manner any property, real, personal, or mixed, tangible or intangible, or any interest therein; to hold, maintain, use, and operate the same; and to sell, lease, or otherwise dispose of the same at such time, in such manner, and to the extent deemed necessary or appropriate to carry out its purposes.

(3) Notwithstanding and without complying with section 103-7 or any other law to the contrary, to acquire, purchase, construct, reconstruct, improve, better, or extend any university project as defined in chapter 306.

(4) Notwithstanding and without complying with part III of chapter 39, to issue revenue bonds under chapter 306 from time to time in such principal amounts and for any university project as defined in chapter 306; which the board of regents shall determine.

[(3)] (5) To enter into and perform such contracts, leases, cooperative agreements, or other transactions as may be necessary in the conduct of its business and on such terms as it may deem appropriate, with any agency or instrumentality of the United States, or with any state, territory, or possession, or with any political subdivision thereof, or with any person, firm, association, or corporation.

    [(4)] (6)  To determine the character of and the necessity for its obligations and expenditures, and the manner in which they shall be incurred, allowed, and paid, subject to provisions of law specifically applicable to the university.

    [(5)] (7)  To execute, in accordance with its bylaws, all instruments necessary or appropriate in the exercise of any of its powers.

    [(6)] (8)  To take such actions as may be necessary or appropriate to carry out the powers conferred upon it by law."

SECTION 19. Section 304-4, Hawaii Revised Statutes, is amended to read as follows:

"§304-4 Powers of regents; official name. (a) The board of regents shall have management and control of the general affairs, and exclusive jurisdiction over the internal organization and management[,] of the university[.] through its executive officer.

(b) The board of regents shall appoint and may remove an executive officer to be known as the president of the University of Hawaii and shall set the salary of the president. It may appoint a treasurer and such other officers as it deems necessary. It may authorize any officer, elected or appointed by it, to approve and sign on its behalf any voucher or other document [which] that the board may approve and sign. It may delegate to the president or the president's designee the authority to render the final decision in contested case proceedings subject to chapter 91, as it deems appropriate. It may purchase or otherwise acquire lands, buildings, appliances, and other property for the purposes of the university and expend such sums of money as may be from time to time placed at the disposal of the university from whatever source. All lands, buildings, appliances, and other property so purchased or acquired shall be and remain the property of the university to be used in perpetuity for the benefit of the university. The board of regents, in accordance with law, shall manage the inventory, equipment, surplus property, and expenditures of the university and, subject to chapter 91, may adopt rules, further controlling and regulating the same.

[(b)(c) The board may charge resident and nonresident tuition fees for regular courses of instruction at any University of Hawaii campus, including any community college.

The board may also charge other fees for special programs of instruction, as well as laboratory fees, course fees, fees for student activities, and an information technology user fee. The board may charge other fees for summer session or evening courses, including differential fees for nonresident students.

The board may waive entirely or reduce the tuition fee or any of the other fees for graduate teaching and research assistants. The board may enter into agreements with government and university officials of any other state or foreign country to provide for reciprocal waiver of the nonresident tuition and fee differential. The board may waive the nonresident tuition and fee differential for selected students from Pacific and Asian jurisdictions when their presence would be beneficial to the university or the State. The board may waive entirely or reduce the tuition fee or any of the other fees for students, resident or nonresident. The board shall determine the percentage of allowable tuition and fee waivers for financial need and other university priorities. These tuition waivers and waivers of the nonresident tuition and fee differential shall be awarded in accordance with guidelines established by the board.

[(c)(d) The board shall adopt the necessary rules defining residence for tuition purposes herein; provided that the basic rule shall be that a student shall qualify for the resident tuition fee only if the following criteria are met:

(1) The adult student, or in the case of a minor student, the student's parents or guardians, has been a bona fide resident of this State for at least twelve consecutive months next preceding the student's first day of officially scheduled instruction for any semester or term in which the student is enrolling at the particular college or campus; and

(2) The adult or minor student has not been claimed as a dependent for tax purposes for at least twelve months next preceding the student's first day of officially scheduled instruction for any semester or term in which the student is enrolling at the particular college or campus by the student's parents or guardians who are nonresidents of the State; provided that this provision shall not apply in cases where the parent claiming the student as a dependent is entitled to do so under a child support order or agreement issued or entered into in conjunction with a divorce proceeding or legal separation agreement, and the other parent and the student meet the criteria set forth in paragraph (1).

[(d)(e) The board shall develop internal policies and procedures for the procurement of goods, services, and construction, consistent with the goals of public accountability and public procurement practices, but not subject to chapter 103D. However, where possible, the board is encouraged to use the provisions of chapter 103D; provided that the use of one or more provisions of chapter 103D shall not constitute a waiver of the exemption of chapter 103D and shall not subject the board to any other provision of chapter 103D.

[(e)(f) The board may enter into concession agreements without regard to chapter 102.

(g) The board may enter into health and human services agreements without regard to chapter 103F.

(h) Any law to the contrary notwithstanding, the board may impose fees for dishonored checks written or electronic funds transfers made for charges administered by the university. Fees may include a late payment penalty, interest, and a service fee. The fees collected shall be deposited as a realization of the tuition and fees special fund.

(i) The board shall develop internal policies and procedures for personnel management, consistent with the goals of public accountability and public civil service management, but not subject to chapter 76, for classified staff currently employed by the university and those employed in the future. However, where possible, the board is encouraged to follow chapter 76; provided that the use of one or more provisions of chapter 76 shall not constitute a waiver of the exemption of chapter 76 and shall not subject the board to any other provisions of chapter 76.

[(f)(j) The official name of the board shall be Board of Regents, University of Hawaii, and the board shall adopt and use a common seal by which all official acts shall be authenticated."

SECTION 20. Section 304-7, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The board shall cause to be kept suitable books of account wherein shall be recorded each gift, the essential facts of the management thereof, and the expenditure of the income, and a statement of all trust funds shall be included in the annual report to [the governor and] the legislature."

SECTION 21. Section 304-7.8, Hawaii Revised Statutes, is amended to read as follows:

"[[]§304-7.8[]] Appropriations for special and revolving funds of the University of Hawaii. In any fiscal year if the amount of revenues deposited into a special or revolving fund of the university exceeds the amount appropriated from that fund for that year, the president may approve expenditures in excess of the amount appropriated, up to the amount by which revenues for that fund exceed the appropriations from that fund for a fiscal year; provided the university shall submit annually a report to [the governor and] the legislature of all expenditures in excess of each fund's appropriation for each fiscal year."

SECTION 22. Section 304-8, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Moneys appropriated by the legislature for the university shall be payable by the [director of finance,] university upon vouchers approved by the board of regents or by any officer elected or appointed by the board under section 304-4 and authorized by the board to approve such vouchers on behalf of the board. All moneys received by or on behalf of the board of the university shall be deposited with the director of finance, except that any moneys received from the federal government or from private contributions shall be deposited and accounted for in accordance with conditions established by the agencies or persons from whom the moneys are received and except that [with the concurrence of the director of finance,] moneys received from the federal government for research, training, and other related purposes of a transitory nature and moneys in trust, special, or revolving funds administered by the university may be deposited in depositories other than the state treasury[; provided that the university informs the director of finance of the depositories in which moneys from the funds have been deposited, and submits copies of annual statements from each of the depositories in which the moneys from the funds are deposited]. All income from regular credit tuition and tuition related course and fee charges against students shall be deposited to the credit of the University of Hawaii tuition and fees special fund pursuant to section 304-16.5. Income from university projects, as defined and described in sections 306-1 to 306-12, may be credited to special or other funds."

SECTION 23. Section 304-8.1, Hawaii Revised Statutes, is amended to read as follows:

"§304-8.1 Research and training revolving fund. (a) There is established a University of Hawaii research and training revolving fund into which shall be deposited one hundred per cent of the total amount of indirect overhead revenues generated by the university from research and training programs. The board of regents of the University of Hawaii is authorized to expend one hundred per cent of the revenues deposited in the fund for:

(1) Research and training purposes [which] that may result in additional research and training grants and contracts;

(2) Facilitating research and training at the university; and

(3) Further deposit into the discoveries and inventions revolving fund and the University of Hawaii housing assistance revolving fund.

(b) The University of Hawaii shall prepare and submit an annual report on the status of the research and training revolving fund to the legislature twenty days before the convening of each regular session. The annual report shall include but not be limited to a breakdown of travel expenses.

(c) Notwithstanding sections 304-10, 304-8.92, and 304-8.96 to the contrary, the board of regents, or its designee, may establish a separate account within the research and training revolving fund for the purpose of providing advance funding to meet reimbursable costs incurred in connection with federally financed research and training projects. Any reimbursement received as a result of providing advance funding shall be deposited into the research and training revolving fund to be used for the purpose of meeting reimbursable costs incurred in connection with federally financed projects.

[(d) Revenues deposited into the fund shall not be used as a basis for reducing any current or future budget request or allotment to the University of Hawaii unless the university requests such a reduction.]"

SECTION 24. Section 304-8.4, Hawaii Revised Statutes, is amended to read as follows:

"§304-8.4 Vocational and technical training projects revolving fund. There is established a revolving fund for the vocational and technical training projects of the community colleges and the University of Hawaii at Hilo into which shall be deposited the receipts from fees for services, supplies, and use of equipment provided by or in connection with these projects. Funds deposited in this account shall be expended for vocational and technical training projects, and related supplies, equipment, and services [related thereto].

The University of Hawaii at Hilo shall report as of the close of each fiscal year to [the governor and] the legislature on the revolving fund's revenues and expenditures for the reported year. These reports shall be submitted not later than twenty days prior to the convening of each regular session."

SECTION 25. Section 304-8.92, Hawaii Revised Statutes, is amended to read as follows:

"§304-8.92 Discoveries and inventions revolving fund. (a) There is established a discoveries and inventions revolving fund into which shall be deposited a portion of the total indirect overhead funds generated by the university for research and training purposes in the prior fiscal year as determined by the board of regents. Appropriations by the state legislature [subject to the approval of the governor], proceeds from the commercial exploitation of inventions and intellectual property developed at the university, gifts, donations, fees collected, and grants from public agencies and private persons may also be deposited into the fund for the purposes of supporting innovation and research commercialization and the patenting, copyrighting, licensing, and marketing of discoveries, inventions, and technologies developed at the university. The fund shall be used to develop technologies [which] that have potential commercial value, support the administration of technology transfer activities, and facilitate economic development through education and research undertaken at the university.

(b) The University of Hawaii shall provide an annual report to [the governor and] the legislature describing all transactions and activities involved in the administration of the discoveries and inventions revolving fund."

SECTION 26. Section 304-10, Hawaii Revised Statutes, is amended to read as follows:

"§304-10 Loans; advances. The university may borrow, from time to time, sums [which in the aggregate shall not exceed $100,000,] from the state treasury; and the director of finance may make such loans to the university, without interest[,]; provided that the loans shall be repaid within the same fiscal year unless extended by the director. In addition to the foregoing, the director may advance funds to the university when required to meet reimbursable costs incurred in connection with federally financed research and training projects[, and provided that such advances shall not amount in the aggregate to more than $100,000 at any time]."

SECTION 27. Section 304-16.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established the University of Hawaii tuition and fees special fund into which shall be deposited all revenue collected by the university for regular, summer, and continuing education credit tuition, tuition related course and fee charges, and any other charges to students, except as provided by law. Moneys deposited into the fund shall be expended to maintain or improve the university's programs and operations and shall not be[:

(1) Used as a justification for reducing any budget request or allotment to the University of Hawaii unless the university requests such a reduction;

(2) Transferred] transferred unless otherwise authorized by the legislature[; and

(3) Restricted by the governor or the director of finance without the prior approval of the legislature].

Any rule, policy, or action of any agency or individual in contravention of this subsection shall be void as against public policy."

SECTION 28. Section 304-93, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The university may spend out of the state higher education loan fund up to two per cent of the total amount of loans outstanding for collection and administrative expenses. [In accordance with chapter 103D, the] The university may enter into written contracts with collection agencies for the purpose of collecting delinquent student loans. All payments collected, exclusive of a collection agency's commissions, shall revert, and be credited, to the loan fund."

SECTION 29. Section 306-2, Hawaii Revised Statutes, is amended to read as follows:

"§306-2 Powers of the board. In addition to the powers which it now possesses, the board of regents shall have power to:

(1) Construct and maintain university projects, including a university project included or to be in a university system;

(2) Combine two or more university projects, now or hereafter existing on any one or more of the areas of any one or more of the educational institutions under the control of or governed by the board, into a university system or systems[,] and to maintain such system or systems;

(3) Prescribe and collect rents, fees, and charges for the use of or services furnished by any university project or the facilities thereof;

(4) [With the approval of the governor, issue] Issue revenue bonds[,] to finance in whole or in part the cost of construction, or maintenance, or both, of any university project, including a university project included or to be included in a university system;

(5) Pledge, to the punctual payment of such revenue bonds and interest thereon, the revenue of the university project or projects for the construction or maintenance of which the bonds have been issued, or the revenue of the university system in which such university project is to be included, and the revenue of other or all university projects or university systems, in an amount sufficient to pay such bonds and interest as the same become due and to create and maintain reasonable reserves therefor;

(6) Advance such moneys of the university, not otherwise required, as are necessary to pay the expenses incurred in making the preparations for the initial issuance of revenue bonds under this chapter, and to take any other action necessary or proper for carrying into execution and administering this chapter, including providing for the full utilization of university projects and university systems in every way conducive to the furtherance of any or all of the purposes of the university."

SECTION 30. Section 306-13, Hawaii Revised Statutes, is amended to read as follows:

"§306-13 Funding and refunding bonds; authorization and purpose. The board of regents may[, with the approval of the governor,] provide for the issuance of revenue bonds (herein referred to as refunding bonds) for the purpose of refunding, redeeming, or retiring at or at any time before maturity or at any time before the first date upon which the outstanding bonds to be refunded may be called for redemption, any bonds issued under this chapter, including any bonds [which] that the holders may consent to be paid or refunded even though the bonds are not matured or are not callable or redeemable, and for the purpose of funding indebtedness not evidenced by revenue bonds but [which] that was incurred for purposes for which revenue bonds may be issued pursuant to this chapter. The rate or rates of interest borne by the refunding bonds shall not be affected or limited by the rate or rates of interest borne by the bonds to be refunded or the indebtedness to be funded. All provisions of this chapter applicable to the issuance of revenue bonds shall be complied with in the issuance of refunding bonds. Refunding bonds shall be sold as provided in section 306-4, or the board [may], in its discretion, may provide for the exchange of refunding bonds for a like principal amount of outstanding bonds for the refunding of which the issuance of such refunding bonds has been authorized, whether or not the interest rate on the refunding bonds is higher than the interest rate on the bonds refunded thereby."

SECTION 31. Section 661-12, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) As used in this section:

"Agency" means any state or county board, commission, department, or officer authorized by law to make rules or to adjudicate contested cases except those in the legislative or judicial branches[.] or the University of Hawaii.

"Civil proceeding" means any proceeding other than a criminal proceeding or a proceeding before a family court.

"Small business" means an independently owned business with less than fifty employees."

SECTION 32. Section 12 of Act 321, Session Laws of Hawaii 1986, as amended by section 69 of Act 283, Session Laws of Hawaii 1987, by section 7 of Act 371, Session Laws of Hawaii 1989, by section 3 of Act 163, Session Laws of Hawaii 1991, by section 2 of Act 314, Session Laws of Hawaii 1993, by section 22 of Act 8, Special Session Laws of Hawaii 1993, by section 1 of Act 180, Session Laws of Hawaii 1997, and by section 24, Act 115, Session Laws of Hawaii 1998, is amended to read as follows:

"SECTION 24. Section 12 of Act 321, Session Laws of Hawaii 1986, as amended by section 69 of Act 283, Session Laws of Hawaii 1987, as amended by section 7 of Act 371, Session Laws of Hawaii 1989, as amended by section 3 of Act 163, Session Laws of Hawaii 1991, as amended by section 2 of Act 314, Session Laws of Hawaii 1993, as amended by section 22 of Act 8, Special Session Laws of Hawaii 1993, and as amended by section 1 of Act 180, Session Laws of Hawaii 1997, is amended to read as follows:

"SECTION 12. This Act shall take effect on July 1, 1986[, and be repealed as of June 30, 2005; provided that on repeal sections 40-1, 40-2, 40-4, 40-6, and 40-81, Hawaii Revised Statutes, are reenacted in the form in which they read on June 30, 1986, and section 40-58, Hawaii Revised Statutes, is reenacted in the form in which it read on June 30, 1991]."

SECTION 33. Section 306-5, Hawaii Revised Statutes, is amended to read as follows:

"§306-5 Covenants in resolution authorizing revenue bonds. Any resolution or resolutions authorizing the issuance of revenue bonds under this chapter may contain covenants as to:

(1) The purpose or purposes to which the proceeds of the sale of the revenue bonds may be applied; the use and disposition of such proceeds; the investment thereof pending such use and disposition; and the use and disposition of the income from such investment;

(2) The use and disposition of the revenue of the university project or projects for the construction or maintenance of which the revenue bonds are issued or of the university system or systems in which such project or projects are to be included; the use and disposition of the revenue of all university projects and university systems, and of the revenues of the university, including the creation and maintenance of reserves; the investment of such revenues and of the moneys in such reserves; and the use and disposition of the income from such investments;

(3) The minimum amount of revenues to be produced by the university projects or university systems, over and above the amount required to be produced by the first sentence and clauses (1) through (3) of the second sentence of section 306-9;

(4) The use and disposition of the proceeds of the sale of any university project or university system, or part of either thereof;

(5) The construction and maintenance of any university project or university system other than the university project or projects for the construction or maintenance of which revenue bonds are issued or the university system or systems in which such latter project or projects are to be included;

(6) The issuance of other or additional revenue bonds payable either from the revenue of the university project or projects for the construction or maintenance of which the revenue bonds are issued or the revenue of the university system or systems in which such project or projects are to be included, or payable from the revenue of other university projects or university systems;

(7) The maintenance of the university project or university system, including the creation by the board of regents of such supervisory positions, which shall not be subject to chapter 76, as are necessary to facilitate the issuance of revenue bonds by ensuring the adequacy of revenues;

(8) The insurance to be carried on university projects and university systems and the use and disposition of insurance moneys;

(9) Books of account and inspection and audit thereof;

(10) A procedure by which the terms and conditions of the bond resolution or indenture may be subsequently amended or modified with the consent of the board, the vote or written assent of the holders of bonds or any proportion of the holder, or any trustee thereof; and

(11) The terms and conditions upon which the holders of bonds evidencing the obligation to repay loans, or any proportion of the holders, or any trustee thereof, shall be entitled to the appointment of a receiver by any court of competent jurisdiction, which court shall have jurisdiction in such proceedings, and which receiver may enter and take possession of the university project or projects, or university system or systems, maintain them, prescribe rents, fees, and charges, and collect, receive, and apply all revenue thereafter arising therefrom in the same manner as the board itself might do, but the receiver shall have no power, nor be granted any power, to utilize, or permit the utilization of, any university project or university system other than in a manner consistent with and in furtherance of the purposes of the university[; provided that all such covenants shall be subject to review by the governor].

This chapter and any such resolution or resolutions shall be a contract with the holders of bonds issued under this chapter, and the duties of the board and any such resolution or resolutions shall be enforceable by any bondholder by mandamus or other appropriate suit, action, or proceeding in any court of competent jurisdiction."

SECTION 34. Except as modified in sections 15 and 16 of this Act, no part of this Act shall contravene any part of chapter 76 or 89, Hawaii Revised Statutes, or any collective bargaining agreement that may have been or may be negotiated under chapter 89, Hawaii Revised Statutes.

SECTION 35. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 36. This Act shall take effect on July 1, 2004.

INTRODUCED BY:

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