STAND. COM. REP. NO.  418

Honolulu, Hawaii

                , 2015

RE:   H.B. No. 541

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Sir:

     Your Committee on Higher Education, to which was referred H.B. No. 541 entitled:

"A BILL FOR AN ACT RELATING TO THE UNIVERSITY OF HAWAII TUITION AND FEES SPECIAL FUND,"

begs leave to report as follows:

The purpose of this measure is to strengthen fiscal accountability at the University of Hawaii by requiring:

     (1)  That at the end of any fiscal year in which the balance in the University of Hawaii Tuition and Fees Special Fund exceeds a certain sum, the funds in excess of that amount must lapse to the credit of the general fund; and

     (2)  During the next regular session following a fiscal year in which the University of Hawaii Tuition and Fees Special Fund incurs a lapse of funds, the Legislature to appropriate funds to the University for the following fiscal year in a sum that is not less than the amount of the lapsed funds.

The University of Hawaii and several concerned individuals opposed this measure.  The Department of Budget and Finance and a concerned individual submitted comments.

     Your Committee has amended this measure by:

     (1)  Directing each campus of the University of Hawaii, in estimating its quarterly budget requirements, to prepare an operations plan for the fiscal year for each of the programs that it is responsible for administering;

     (2)  Providing that at the end of each fiscal year, the moneys in the University of Hawaii Tuition and Fees Special Fund for each campus must lapse to the credit of Program Identification Number UH900 (University of Hawaii, system wide support);

     (3)  Requiring the President and Vice President for Budget and Finance and Chief Financial Officer of the University of Hawaii to review the operations plan for each campus to:

          (A)  Determine if the operations plan meets certain criteria; and

          (B)  Approve the operations plan, or modify or withhold the planned expenditures, depending on whether the criteria are met; and

     (4)  Deleting the requirement that the Legislature appropriate funds in the following fiscal year that are not less than the amount of lapsed funds.

     As affirmed by the record of votes of the members of your Committee on Higher Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 541, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 541, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Higher Education,

____________________________

ISAAC W. CHOY, Chair