STAND. COM. REP. NO. 1560

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 142
                                        H.D. 1
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 142, H.D. 1, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO PUBLIC EMPLOYMENT,"

begs leave to report as follows:

     The purpose of this measure is to create a task force to
conduct a comprehensive review of the State's civil service laws.

     Specifically, the measure requires the Director of Human
Resources Development to:

     (1)  Bring together major stakeholders in civil service
          reform to identify and work collaboratively to develop
          a broad-based set of recommendations for reforms to
          chapters 76, 77, 78, 79, 80, 81, and 82, Hawaii Revised
          Statutes;

     (2)  Submit monthly reports to the Legislature;

     (3)  In collaboration with the stakeholders, submit draft
          model legislation to a joint House and Senate Labor
          Committee meeting on November 15, 1999; and 

     (4)  Submit revised legislation developed in collaboration
          with the major stakeholders to the Legislature by
          January 15, 2000.


 
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     In addition, the measure requires that the Legislature adopt
civil service reform legislation effective June 29, 2000, and
that, effective June 30, 2000, chapters 76, 77, 78, 79, 80, 81,
and 82, Hawaii Revised Statutes, be repealed if such reform
legislation is enacted.

     Your Committee has amended the measure by adding provisions
that:

     (1)  Provide voluntary severance benefits to qualified
          dislocated public employees;

     (2)  Provide special retirement benefits to qualified
          dislocated public employees;

     (3)  Provide for the orderly transfer of employees of the
          Hawaii Public Broadcasting Authority to the Hawaii
          Public Television Foundation;

     (4)  Authorize the establishment of flexible spending
          accounts to allow public employees to deduct moneys
          from their paycheck on a pre-tax basis to pay for
          unreimbursed medical and dependent care expenses; and

     (5)  Authorize the Department of Human Resources Development
          to conduct human resource management demonstration
          projects.

     The amended measure gives permanent full-time employees
whose positions are to be eliminated the right to receive
transitional severance benefits in lieu of other rights to which
the employee may be entitled.  If the employee is a vested member
of the Employees' Retirement System, the amended measure also
gives the employee special retirement benefits in lieu of other
entitlements.

     With respect to the transfer of Hawaii Public Broadcasting
Authority employees to the Hawaii Public Television Foundation,
your Committee inserted this provision to ensure that the needs
of affected employees would be adequately addressed.

     With regard to authorizing the establishment of flexible
spending accounts by public agencies for the benefit of their
employees, your Committee believes that these accounts will
provide an additional benefit to participants without undue
administrative costs to the State since the interest earned on
the accounts and any unused and forfeited participant balances
can be used to defray administrative costs.


 
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     Your Committee finds that if government is to transform the
outdated civil service system in order to meet the needs of a
modern, flexible economy, the current system must be replaced
with new laws that are flexible, responsive, and sensitive to the
needs of not only the public it serves, but to its employees as
well.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B.
No. 142, H.D. 1, S.D. 1, as amended herein, and recommends that
it pass Third Reading in the form attached hereto as H.B.
No. 142, H.D. 1, S.D. 2.

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



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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