Report Title:

DOE; Weighted Student Formula; School Community Councils; Hawaii Principals Academy; National Board Certification Incentive Program; Reduction of Bureaucracy

Description:

Implements education reform and decentralization measures; appropriates funding. (SD1)

THE SENATE

S.B. NO.

3238

TWENTY-SECOND LEGISLATURE, 2004

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to education.

 

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

PART I

PURPOSE

SECTION 1. The legislature finds that the public education system in Hawaii needs to be improved. Over the years, we have been improving the state of our system by continuing to fix the schools, continuing to improve the salaries and working conditions of professionals, and continuing to help students achieve. There are several ideas that will improve the state of our educational system beginning in 2004 and going forward. In order to implement these concepts and initiatives, it will require more than a year, more than dollars, more than criticism, more than sweat. A collaborative effort is required.

The purpose of this Act is to enhance educational outcomes in public schools by:

(1) Implementing education reform and decentralization measures;

(2) Establishing a weighted student formula for providing operating moneys to individual public schools and school complexes;

(3) Establishing school community councils;

(4) Establishing a Hawaii principals academy;

(5) Establishing a national board certification incentive program; and

(6) Reducing bureaucracy from outside the department of education by transferring to it many of those functions, positions, records, and equipment from other state agencies that were previously dedicated to serving department of education needs.

PART II

WEIGHTED STUDENT FORMULA

SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A-   Weighted student formula. (a) In providing operating moneys to public schools, the department shall implement a weighted student formula that takes into account the educational needs of each student. Under the weighted student formula, the department shall:

(1) Create a list of applicable criteria that affect the cost of educating students;

(2) Determine the cost of educating a baseline student; and

(3) Create a system of weights based upon the criteria that may be applied to the cost of a baseline student to determine the relative cost of educating a student.

As used in this section, "baseline student" means a public school student to which none of the criteria determined under paragraph (1) apply.

(b) Under the weighted student formula, the principal shall be responsible for expending operating moneys provided to the principal's school.

(c) Not less than ninety three and one-half per cent of moneys allotted to the department shall be spent for schools and school complexes."

SECTION 3. Section 302A-101, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Weighted student formula" means a formula for allocating operating monies to individual public schools that includes a system of weighted criteria affecting the baseline cost of educating each student attending a public school."

SECTION 4. Section 302A-1306, Hawaii Revised Statutes, is repealed.

["[§302A-1306] School priority program; established. (a) There is established within the department a school priority program to augment regular instruction and other educational services at the discretion of the individual public schools. Further, it is the intent of the legislature that the school priority program promote the equitable distribution of educational resources statewide, strengthen the scope of decisionmaking, increase flexibility in resource allocation at the school level, and provide a systematic method of conforming resource allocation to the unique needs and priorities of individual schools.

(b) All moneys to carry out the purposes of the school priority program under this section to section 302A-1309 shall be allocated by the legislature through appropriations out of the state general fund.

(c) The department shall include in its budgetary request for each upcoming fiscal period, the amounts necessary to effectuate the purposes of this section to section 302A-1309."]

SECTION 5. Section 302A-1307, Hawaii Revised Statutes, is repealed.

["[§302A-1307] Distribution of resources. The superintendent shall allot the moneys of the school priority program to the school districts based on enrollment. In the allotment of positions to the districts, the superintendent shall calculate each district's entitlement based on enrollment and may deploy one instructional resource augmentation position for each two hundred fifty students enrolled in each school; provided that all positions shall be deployed."]

SECTION 6. Section 302A-1309, Hawaii Revised Statutes, is amended to read as follows.

"[[]§302A-1309[]] Departmental controls. The superintendent shall develop and implement appropriate planning procedures and follow-up accountability reports, without regard to chapter 91, to ensure sound planning, control, and accountability in the use of moneys [allocated by the legislature to the school priority program.] by schools and school complexes. The procedures and reports, however, shall recognize the need for providing the schools latitude and discretion to determine their needs and priorities, and shall avoid imposing undue amounts of paperwork and administrative burdens on the schools.

The department shall submit an annual report to the legislature, which shall include but not be limited to an accounting of how funds were used by the schools."

SECTION 7. (a) There is established within the department of education for administrative purposes, the advisory group on weighted student funding to:

(1) Identify critical impediments to the successful implementation of weighted student funding, and recommend a course of action that the legislature, board of education, and department of education should follow in order to remove these impediments in a timely manner;

(2) Identify collective bargaining issues that must be resolved in order to successfully implement weighted student funding, and recommend a course of action that the legislature, board of education, and department of education should follow in order to resolve these issues in a timely manner;

(3) Recommend approval or disapproval, in whole or in part, on the basis of efficiency, the allocation that should be retained at the school, school complex, complex area, departmental school district, and state-level in order to improve student achievement, including:

(A) Special education and related services;

(B) School-based behavioral health services;

(C) School repair and maintenance;

(D) The consistency of curricula, in terms of scope and sequence, within a school complex; and

(E) The utilization of teacher and educational officer positions above the school-level; and

(4) Recommend approval or disapproval of the weighted student formula, in whole or in part, to the board of education;

provided that the determination of specific student and school weights, including their dollar value, to carry out the purposes of this part, shall be the responsibility of the committee on weights established in section 8.

(b) The advisory group shall be composed of eleven members, who shall be appointed by the superintendent from a list of not less than seven names submitted by each of the following individuals:

(1) The president of the senate;

(2) The speaker of the house of representatives; and

(3) The governor;

provided that each member of the advisory group shall have the appropriate professional skills, experiences, and qualifications needed to participate in the activities described under subsection (a); provided further that each list shall include diverse geographic and community interests; and provided still further that the superintendent shall choose not less than three members from each of the three lists submitted. The members of the advisory group shall select a chairperson from among themselves. The advisory group may hire a consultant to oversee, coordinate, and facilitate the activities of the advisory group. The members of the advisory group shall not be subject to section 26-34, Hawaii Revised Statutes.

(c) All members of the advisory group shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(d) The advisory group shall:

(1) With respect to subsection (a)(1), (2), and (3), submit its preliminary recommendations, including proposed legislation to implement the preliminary recommendations if appropriate, to the board of education and the legislature not less than thirty days prior to the convening of the regular session of 2005;

(2) With respect to subsection (a)(1) and (2), submit its final recommendations, including proposed legislation to implement the final recommendations, to the board of education and the legislature not less than thirty days prior to the convening of the regular session of 2006;

(3) With respect to subsection (a)(3), submit its recommendation for approval or disapproval of the method by which allocations are to be apportioned, in whole or in part, to the board of education and legislature not less than thirty days prior to the convening of the regular session of 2005; and

(4) With respect to subsection (a)(4), submit its recommendation for approval or disapproval of the weighted student formula, in whole or in part, to the board of education and legislature not less than thirty days prior to the convening of the regular session of 2005.

(e) The advisory group shall cease to exist on June 30, 2006.

SECTION 8. (a) There is established within the department of education for administrative purposes, the committee on weights to assist the department of education in determining specific student and school weights, including their dollar value, to carry out the purposes of this part.

(b) The composition of the committee on weights shall be determined by the board of education based on recommendations from the superintendent of education. The superintendent or the superintendent's designee shall chair the committee on weights.

The committee on weights may form advisory subcommittees in order to obtain input from urban and rural school communities, including parents and students; teachers, principals, and other school staff, including their collective bargaining representatives; the legislative and judicial branches of state government; the counties; private businesses; and other segments of the State’s population deemed appropriate by the board of education.

(c) Upon the completion of its appointed tasks, the committee on weights may be dismissed subject to the recall of the board of education.

(d) The members of the committee on weights shall serve at the pleasure of the board of education and shall not be subject to section 26-34, Hawaii Revised Statutes.

(e) All members of the committee on weights shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

SECTION 9. Nothing in this Act is intended to alter or otherwise affect the rights, remedies, and procedures afforded under the terms of collective bargaining agreements, memoranda of understanding, or other agreements between:

(1) The board of education and the Hawaii State Teachers Association, in respect of teachers and other personnel under the same pay schedule; and

(2) The board of education and the Hawaii Government Employees Association, in respect of educational officers and other personnel under the same pay schedule,

in effect on January 8, 2002.

SECTION 10. Any law, rule, or policy enacted, adopted, or promulgated after the effective date of this Act shall not exempt a principal, the superintendent of education, or the executive secretary of the Hawaii teacher standards board from taking actions they may be required to take with respect to public school or department of education employees in order to implement the weighted student funding system established under this part.

SECTION 11. When collective bargaining agreements, memoranda of understanding, or other agreements are renegotiated, the board of education shall ensure that those agreements do not prohibit actions that a principal, the superintendent of education, or the executive secretary of the Hawaii teacher standards board may be required to take with respect to public school or department of education employees in order to implement the weighted student funding system established under this part.

SECTION 12. Any powers not delegated to the board of education, the superintendent of education, or the executive secretary of the Hawaii teacher standards board by law, nor prohibited by law to a school or the principal of a school, are reserved to the school and the principal of the school.

SECTION 13. In the event of a conflict between this Act and section 89-10(d) or 89-19, Hawaii Revised Statutes, this Act shall control.

PART III

SCHOOL COMMUNITY COUNCILS

SECTION 14. Section 89-10.6, Hawaii Revised Statutes, is repealed.

"[§89-10.6 School/community-based management waiver. A school or a learning support center participating in the school/community-based management program may initiate a waiver from policies, rules, or procedures, including collective bargaining agreements, as provided for in section 302A-1126.]"

SECTION 15. Section 302A-101, Hawaii Revised Statutes, is amended by deleting the definition of "school/community-based management system":

[""School/community-based management system" means a method of educational management that diffuses educational decisionmaking to involve or secure the input of those persons directly affected by the decision to be made at the school level, and encourages school-initiated methods for achieving educational goals established statewide by the board."]

SECTION 16. Section 302A-202, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-202 Student assessments.[]] Any [school electing to participate in school/community-based management] school community council may develop and implement its own student assessment mechanisms; provided that the board shall include the results of the assessments in the educational status report to the legislature and the governor required in section 302A-1004."

SECTION 17. Section 302A-601, Hawaii Revised Statutes, is repealed.

["[§302A-601] Selection of school personnel. School/community-based management councils may participate in the selection of school personnel by providing input into the selection process."]

SECTION 18. Section 302A-1103, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1103[]] Principal; authority and responsibility. (a) The role of the principal shall include but not be limited to overseeing the day-to-day management of the school, the primary function of which is to develop and deliver instructional services to students in accordance with statewide educational policy and standards.

(b) The principal shall collaborate with the principals complex forum, which shall be composed of all principals in a school complex and facilitated by the high school principal, to ensure that:

(1) The goals and objectives of the complex are being met;

(2) The curriculum is aligned throughout the school complex;

(3) Coordinate the use of school complex-based personnel who divide their time between more than one school in a school complex;

(4) Coordinate the passage of students through the continuum of grades in a manner consistent with the accountability provisions of section 302A-1004; and

(5) Receive and address community concerns related to the school complex.

(c) The principals shall collaborate with the school community council to assist the school's principal in:

(1) Ensuring the school's compliance with the educational accountability system of section 302A-1004; and

(2) Developing and implementing an academic and financial plan for success;

(3) Raising the academic performance of all students to state standards; and

(4) Providing collaborative opportunities for input and consultation;

provided that, in the event of any failure to reach consensus among the school community council, the principal shall have paramount executive authority to manage the school as the principal sees fit.

(d) The principal shall ensure that the curriculum facilitates the achievement of the statewide student performance standards adopted for the public school system."

SECTION 19. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A- School complex-based decision making. Beginning with the 2006-2007 school year, all decisions relating to contracts for professional services and health and human services shall be made jointly and by majority vote of the principals in a school complex. Notwithstanding any law to the contrary, all decisions subject to this section shall be binding on all schools within the school complex. In the event of a conflict between this subsection and any other law, this subsection shall control."

SECTION 20. Section 302A-1124, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1124[]] Mandate to initiate [school/community-based management system] school community councils. (a) The department[, through the board and its superintendent, shall formulate policies, including criteria and procedures to determine which schools and learning support centers shall participate in the system, to initiate a school/community-based management system in the public schools.] shall establish school community councils that:

(1) Diffuse educational decision-making by involving and securing the input of those persons directly affected at the school level;

(2) Possess shared decision-making powers by providing the councils with responsibility over the school weighted student funding budget to ensure student achievement; and

(3) Encourage school-initiated methods to develop an academic plan for success in order to achieve statewide educational goals established by the board.

Rules adopted to implement this section shall be exempt from the public notice and public hearing requirements of chapter 91.

(b) Each public school shall establish and maintain a school community council which shall collaborate with and assist the school's principal in:

(1) Ensuring the school's compliance with the educational accountability system of section 302A-1004; and

(2) Developing and implementing an academic and financial plan for success;

(3) Raising the academic performance of all students to state standards; and

(4) Providing collaborative opportunities for input and consultation;

provided that, in the event of any failure to reach consensus among the school community council, the principal shall have paramount executive authority to manage the school as the principal sees fit. School community councils may participate in the selection of school personnel by providing input into the selection process.

(c) The complex area superintendents shall monitor the school community councils within their respective complexes to ensure the progress and success of the school's improvement plan.

(d) The superintendent may require a school community council to revise its school improvement plan if the plan is in violation of law or conflicts with statewide educational policies and standards. The superintendent may dissolve the existing school community council and establish a new school community council if the existing school community council engages in any act or omission that would constitute gross negligence, wilful and wanton misconduct, or intentional misconduct.

(e) Unless otherwise specified, the board shall establish policies governing the composition, election, four-year staggered terms of office for members and officers, and operation of school community councils, provided that such school community councils shall be constituted to ensure parity between the principal, teachers, and other school personnel; and equal numbers of parents, students, and community members.

(1) At the elementary and middle school levels, school community councils shall be composed of the principal and representatives of:

(A) Parents elected by ballots and collected from the parents of the school’s students;

(B) Teachers and other school personnel elected by ballots distributed among and collected from the school’s teachers and other school personnel;

(C) Community representatives selected and elected by parents of the school's students; and

(D) Not more than two student council representatives elected by students attending the school.

(2) At the secondary level, school community councils shall be composed of the principal and representatives of:

(A) Parents elected by the parents of the school’s students;

(B) Teachers and other school personnel elected by ballots distributed among and collected from the school’s teachers and other school personnel;

(C) Community representatives selected and elected by the parents of the school's students; and

(D) Students elected by students attending the school.

Vacancies on a school community council shall be filled pursuant to the school community council's bylaws.

(f) School community councils shall elect officers, including:

(1) A chairperson;

(2) A vice-chairperson;

(3) A secretary; and

(4) Other officers as needed to perform stated duties in support of the work of the council.

(g) Existing school/community-based management council members shall assist the new school community council members for one school year. All decisions made by existing school/community-based management councils shall remain in effect until otherwise repealed or revised by members of the new school community council.

(h) Each community school council shall receive not less than            annually for the purpose of training and staff development. The cost thereof shall be met by legislative appropriations for the school community councils."

SECTION 21. Section 302A-1125, Hawaii Revised Statutes, is repealed.

["[§302A-1125] Educational objectives. The board shall formulate such policy and exercise such control as may be necessary to define a common set of educational goals that the schools subject to the school/community-based management system shall be responsible for fulfilling. The board shall also be responsible for formulating standards for measuring the efforts of each participating school toward achieving those goals each year. The participating schools shall be free to use all reasonable means to accomplish those goals with the resources available to them."]

SECTION 22. Section 302A-1126, Hawaii Revised Statutes, is repealed.

["[§302A-1126] Waiver of policy, rule, or procedures. Any state agency that may be required to act under state law on a matter affecting an individual school, its school community, or a learning support center shall waive otherwise applicable policies, rules, or procedures when requested to do so by a school or a learning support center participating in the school/community-based management system unless the agency, within thirty days, can justify a denial to the appropriate authority. The board shall adopt procedures necessary to process waivers initiated by schools or learning support centers subject to the school/community-based management system. This section shall apply to collective bargaining agreements as provided for in all relevant collective bargaining agreements negotiated pursuant to chapter 89."]

SECTION 23. Section 302A-1505, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Prior to meeting with the department of accounting and general services to advise it of a school's repair and maintenance needs, the school's principal and the business and fiscal officer shall consider the recommendations made by the [school/community-based management] school community council, if there is such a council at the school; or the local school board, if the school is a new century charter school or a new century conversion charter school. If there is no [school/community-based management] school community council or local school board, then the school's principal shall appoint a standing committee composed of a teacher, a member of the support staff, a parent, a student, and a community member."

SECTION 24. Section 302A-1507, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1507[]] Classroom cleaning project; established. (a) There is established a classroom cleaning project in all [schools designated to participate in school/community-based management.] school community councils. Each [school/community-based management] school community council school, through its school community council, may develop mechanisms to provide for classroom cleaning, including but not limited to having parent, student, or other community groups clean the classrooms on a regular, continuing basis.

(b) [School/community-based management] School community council schools may use any available resources to achieve the purposes of this section; provided that no full-time custodial staff currently employed at the school shall be displaced."

PART IV

HAWAII PRINCIPALS ACADEMY

SECTION 25. The role of principals in the department of education is continuing to evolve over time. For far too long, their essential role as the leaders of learning communities has been hindered by excessive demands on their time to perform administrative, fiscal, reporting, and logistical functions. These types of responsibilities are increasingly being assumed by vice principals, educational officers, district business and fiscal officers, and complex area superintendents. To give the principals the tools they need to succeed in the performance of their new responsibilities and achieve the accountability required under section 302A-1004, Hawaii Revised Statutes, they need to be given adequate training in a newly established Hawaii principal academy, and recruited and retained with appropriate measures. The Hawaii principal academy may also provide training to school community councils designed to facilitate their effective collaboration with principals.

SECTION 26. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A-   Hawaii principals academy. There is established the Hawaii principals academy, which shall be placed within the department for administrative purposes only. The academy shall fully support and train department principals to become better school leaders, assuring that each principal is trained to fully assume the principal's role as the educational leader accountable under section 302A-1004. The academy may also provide training to school community councils designed to facilitate their effective collaboration with principals."

PART V

NATIONAL BOARD CERTIFICATION INCENTIVE PROGRAM

SECTION 27. The regular session of the 2001 legislature of the State of Hawaii appropriated funding to help teachers achieve national board certification, following the lead of many other states that have provided incentives and support for teachers seeking such certification. States that have successfully encouraged teachers have typically made long-term commitments, often providing bonuses or salary increases for the ten-year life of their national certification. The State of Hawaii has no such long-term commitment. The previous legislative appropriation has ended and department of education support is in question.

The legislature finds that national board certification will help ensure that students are receiving the highest quality instruction and teachers are actively encouraged to remain in their profession. The legislature further finds that national certification also provides a useful means of helping teachers advance in their careers without moving into administration or some other role outside of the classroom.

SECTION 28. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A-   Teacher national board certification incentive program. There is established within the department of education a teacher national board certification incentive program to recognize public school teachers who have achieved national board certification from the national board for professional teaching standards. The program shall provide:

(1) A $5,000 bonus per year for each public school teacher who has current national board certification; and

(2) A one-time reimbursement of not more than $2,500 for public school teacher applicants who achieve national board certification for expenses related to the application for national board certification not previously reimbursed, provided that this reimbursement shall not apply for the 2004-2005 fiscal year if the reimbursement called for in the existing memorandum of understanding between the board of education and Hawaii state teachers association which expires on June 30, 2005 is already funded in a separate budget, Act, or agreement;

provided that such public school teachers shall participate in the department of education's program on best practices in the building of capacity for teaching and learning by training and mentoring other teachers."

PART VI

REDUCTION OF BUREAUCRACY

SECTION 29. The legislature finds that too many departments have been restricting the efficiency of the State's public educational system. The services provided to the department of education from the department of accounting and general services, department of budget and finance, department of human resources development, department of the attorney general, and department of human services need to be scrutinized to reduce bureaucracy and improve the responsiveness and service delivery of the department of education. The legislature further finds that the department of education needs to create effective and responsive fiscal and personnel systems that ensure resources are spent effectively to improve the academic achievement, health and well-being, and civic responsibility of all students.

SECTION 30. (a) There is established within the department of education for administrative purposes, the working group on interagency relations to develop comprehensive plans for transferring certain rights, powers, functions, duties, and resources from the department of accounting and general services, department of budget and finance, department of health, department of human resources development, department of the attorney general, and department of human services to the department of education.

(b) The board of education shall appoint a chairperson to oversee, coordinate, and facilitate the activities of the working group. The working group shall be composed of:

(1) The chairperson;

(2) One individual appointed by the board of education from a list of not less than three names submitted by the auditor;

(3) Five representatives from the business community appointed by the board of education from a list of not less than fifteen names submitted by the superintendent of education; and

(4) Two individuals appointed by the board of education from a list of not less than six names submitted by the chairperson of the working group;

provided that each member of the working group shall have the appropriate professional skills, experiences, and qualifications needed to participate in the development of the comprehensive plans described in this part. The members of the working group shall serve at the pleasure of the board of education and shall not be subject to section 26-34, Hawaii Revised Statutes. The working group may hire one or more consultants to provide any specialized technical assistance that may be needed to facilitate the work of the group.

(c) All members of the working group shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(d) All agencies of the executive branch shall cooperate fully with the working group by, among other things, responding to the group’s requests for information in a timely and thorough manner.

SECTION 31. (a) All the rights, powers, functions, duties, and resources of the department of accounting and general services relating to:

(1) The expending of capital improvement funds for the acquisition and development of land, the design and construction of new facilities, and the making of renovations or additions to existing facilities, including moneys in the state educational facilities improvement special fund; and

(2) The buying, purchasing, renting, leasing, or otherwise acquiring of any good, service, or construction, including the description of requirements, selection and solicitation of sources, preparation and awarding of contracts, payment of vendors, and all other phases of contract administration;

are transferred to the department of education effective July 1, 2004.

(b) All moneys budgeted in support of each position to be transferred to the department of education, including moneys for direct and indirect employee benefits, shall be transferred to the department of education on July 1, 2004.

SECTION 32. (a) The working group shall develop a comprehensive plan for transferring, to the department of education by July 1, 2005, all the rights, powers, functions, duties, and resources of the department of accounting and general services relating to the expending of physical plant operations and maintenance funds, including moneys in the state educational facilities repair and maintenance account, school physical plant operations and maintenance account, and school repair and maintenance fund.

(b) The comprehensive plan shall identify:

(1) Each position to be transferred pursuant to this section, by position number; and

(2) All moneys budgeted in support of each position to be transferred, including moneys for direct and indirect employee benefits,

at the lowest level on the state program structure.

(c) The working group shall submit its comprehensive plan, including proposed legislation to implement the plan, to the board of education and the legislature not less than thirty days prior to the convening of the regular session of 2005.

SECTION 33. (a) All the rights, powers, functions, duties, and resources of the department of budget and finance relating to:

(1) The funding of collective bargaining agreement increases; and

(2) The securing, administering, use, and expending of federal funds and other aid, including their custodial supervision;

are transferred to the department of education effective July 1, 2004.

(b) All moneys budgeted in support of each position to be transferred to the department of education, including moneys for direct and indirect employee benefits, shall be transferred to the department of education on July 1, 2004.

SECTION 34. (a) The working group shall develop a comprehensive plan for transferring, to the department of education by July 1, 2005, all the rights, powers, functions, duties, and resources of the department of budget and finance relating to:

(1) The rendering of assistance to the governor in the preparation, explanation, and administration of the state long-range plans, the proposed six-year program and financial plan, and the state budget, as they relate to the department of education;

(2) The allotment system, including the availability of appropriations for allotment and the modification and reduction of allotments;

(3) The transferring of appropriated funds from one program of the state budget to another without prior approval;

(4) The carryover and use of appropriations, and the reversion of unexpended and unencumbered appropriations to the general fund;

(5) The capital improvement project allotment process, including the reviewing, analyzing, prioritizing, evaluating, and reporting of capital improvement project appropriation proposals submitted by department of education; and

(6) The determination of retirement and other employee benefits.

(b) The comprehensive plan shall identify:

(1) Each position to be transferred pursuant to this section, by position number; and

(2) All moneys budgeted in support of each position to be transferred, including moneys for direct and indirect employee benefits,

at the lowest level on the state program structure.

(c) The working group shall submit its comprehensive plan, including proposed legislation to implement the plan, to the board of education and the legislature not less than thirty days prior to the convening of the regular session of 2005.

SECTION 35. (a) The working group shall develop a comprehensive plan for transferring, to the department of education by July 1, 2005, all the rights, powers, functions, duties, and resources of the department of human resources development relating to:

(1) The operation of a centralized human resources system that encompasses the classes of work performed by department of education employees, and that integrates payroll, records, transactions, leaves, and reports; and

(2) The recruitment, certification, examination, management, classification, and compensation of department of education employees, including labor relations.

(b) The comprehensive plan shall identify:

(1) Each position to be transferred pursuant to this section, by position number; and

(2) All moneys budgeted in support of each position to be transferred, including moneys for direct and indirect employee benefits,

at the lowest level on the state program structure.

(c) The working group shall submit its comprehensive plan, including proposed legislation to implement the plan, to the board of education and the legislature not less than thirty days prior to the convening of the regular session of 2005.

SECTION 36. (a) The working group shall develop a comprehensive plan for transferring, to the department of education by July 1, 2005, all the rights, powers, functions, duties, and resources of the department of the attorney general relating to:

(1) The negotiating workers' compensation claims; and

(2) Labor-management relations within department of education.

(b) The comprehensive plan shall identify:

(1) Each position to be transferred pursuant to this section, by position number; and

(2) All moneys budgeted in support of each position to be transferred, including moneys for direct and indirect employee benefits,

at the lowest level on the state program structure.

(c) The working group shall submit its comprehensive plan, including proposed legislation to implement the plan, to the board of education and the legislature not less than thirty days prior to the convening of the regular session of 2005.

SECTION 37. (a) The working group shall develop a comprehensive plan for transferring, to the department of education by July 1, 2005, all the rights, powers, functions, duties, and resources of the department of human services relating to the conduct of employment background checks for A+, private vendor, and other employees and trainees who work with public school students.

(b) The comprehensive plan shall identify:

(1) Each position to be transferred pursuant to this section, by position number; and

(2) All moneys budgeted in support of each position to be transferred, including moneys for direct and indirect employee benefits,

at the lowest level on the state program structure.

(c) The working group shall submit its comprehensive plan, including proposed legislation to implement the plan, to the board of education and the legislature not less than thirty days prior to the convening of the regular session of 2005.

SECTION 38. (a) The working group shall develop a comprehensive plan for transferring, to the department of education by July 1, 2005, all the rights, powers, functions, duties, and resources of the department of health relating to school health nurses and school health aides.

(b) The comprehensive plan shall identify:

(1) Each position to be transferred pursuant to this section, by position number; and

(2) All moneys budgeted in support of each position to be transferred, including moneys for direct and indirect employee benefits,

at the lowest level on the state program structure.

(c) The working group shall submit its comprehensive plan, including proposed legislation to implement the plan, to the board of education and the legislature not less than thirty days prior to the convening of the regular session of 2005.

SECTION 39. The working group on interagency relations shall cease to exist on June 30, 2006.

SECTION 40. Section 37-67, Hawaii Revised Statutes, is amended to read as follows:

"[[]§37-67[]] Responsibilities of the department of budget and finance. The director of finance shall assist the governor in the preparation, explanation and administration of the state long-range plans, the proposed six-year program and financial plan and the state budget. To this end, subject to this part, the director shall:

(1) With the approval of the governor, develop procedures and prescribe rules and regulations to guide such state agencies as may be assigned by the director the task of formulating and preparing the initial proposals with respect to long-range plans, program and financial plans, program budget requests and program performance reports and to assure the availability of information needed for effective policy decision-making.

(2) Assist such state agencies in the formulation of program objectives, preparation of program plans and program budget requests, and reporting of program performance.

(3) Coordinate, analyze and revise as necessary the program objectives, long-range plans, program and financial plans, program budget requests and program performance reports initially proposed or prepared by such state agencies and develop the state comprehensive program and financial plan, budget and program performance report.

(4) Administer its responsibilities under the program execution provisions of this part so that the policy decisions and budget determinations of the governor and the legislature are implemented to the fullest extent possible within the concepts of proper management.

(5) Investigate continuously the administration of the various agencies for the purpose of advising the governor and recommending to the governor, the legislature and the committees of the legislature concerning the duties of the various positions in these agencies, the methods of the agency, the standards of efficiency therein, and changes which in the director's judgment will produce greater effectiveness of programs and economy in the conduct of government programs and assist in the preparation of program and financial plans, budget requests and program performance reports.

(6) Provide the legislature and any member or committee of either house of the legislature with such documents and information as may be requested concerning the programs, budget, and fiscal and management operations of the State[.];

provided that this section shall not apply to the board of education and department of education."

SECTION 41. Section 37-41.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The department of education may retain up to ten [five] per cent of any appropriation, except for appropriations to fund financing agreements entered into in accordance with chapter 37D, [for the school-based budgeting program EDN 100 and for the comprehensive school support services program EDN 150 at the close of a fiscal year] and the funds retained shall not lapse until June 30 of the first fiscal year of the next fiscal biennium. The department of education shall submit:

(1) A report to the director of finance ninety days after the close of each fiscal year, which shall be prepared in the form prescribed by the director of finance and shall identify the total amount of funds that will carry over to the next fiscal year; and

(2) A copy of this report to the legislature, as well as a report identifying the carryover of funds on a school-by-school basis, at least twenty days prior to the convening of the next regular session of the legislature."

SECTION 42. Section 302A-1301, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1301[]] School system financial accountability. [(a)] Beginning with the 1995-1997 fiscal biennium, the department's administrative expenditures shall not exceed 6.5 per cent of the total department operating budget unless approved by the legislature.

[(b) The department shall not transfer any funds appropriated under the school-based budgeting program EDN 100 of the state budget, except for unforeseeable circumstances that pose a threat to the health and safety of personnel and students, and subject to approval by the governor and notification to the legislature.]"

SECTION 43. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of accounting and general services and department of budget and finance relating to the functions transferred to the department of education shall be transferred with the functions to which they relate.

SECTION 44. All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

An officer or employee of the State, whether tenured or not, who may be transferred or appointed to a civil service position as a consequence of this Act shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee:

(1) Possesses the minimum qualifications for the position to which transferred or appointed; and

(2) That such a salary preservation or increase shall not last more than two years if the transfer is to a lower position or one of lesser responsibility.

If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State as determined by the head of the department.

SECTION 45. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A-     Procurement of goods, services, and construction. The department 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 chapters 103D and 103F. Where possible, however, the department is encouraged to use the provisions of chapters 103D and 103F; provided that the use of one or more provisions of chapters 103D and 103F shall not constitute a waiver of the exemption of chapters 103D and 103F and shall not subject the department to any other provision of chapters 103D and 103F."

SECTION 46. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2004-2005, for the purposes of this Act.

The sum appropriated shall be expended by the department of education for the purposes of this Act.

SECTION 47. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 48. This Act shall take effect upon its approval, provided that:

(1) Section 45 shall take effect on July 1, 2004;

(2) Sections 2, 3, 4, 5, and 6 shall take effect on July 1, 2006, and shall apply to the 2006-2007 school year; and

(3) Part III shall take effect on July 1, 2005, and shall apply to the 2005-2006 school year.