STAND. COM. REP. NO. 324

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 704
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Higher Education, to which was referred
H.B. No. 704 entitled: 

     "A BILL FOR AN ACT RELATING TO TUITION WAIVERS,"

begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Waive tuition for 500 additional Hawaiian students in
          the University of Hawaii system; and

     (2)  Give priority to those Hawaiian students who are
          enrolled in Hawaiian language courses, education, are
          financially needy, or participating in student
          recruitment programs.

     Your Committee finds that Hawaiians are represented in a
much lower proportion in the UH system than they are in the
general population.  According to a "FACTS" brochure printed by
UH Relations and Institutional Research Office in December 1998,
while approximately 25 percent of the student population in the
public school system is Hawaiian, only 14 percent of the 11,500
undergraduate students on the UH-Manoa campus are of Hawaiian
ancestry.  Fully 25 percent of Hawaiians attending UH-Manoa drop
out by the end of their second year.  And, the graduation rate of
Hawaiian students from the UH system with a four-year degree is
far less than that of the general UH student population.
Economics, family responsibilities, and a lack of role models
have been given as reasons for this underrepresentation.  This

 
 
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bill would make it possible for Hawaiians to attend UH who would
otherwise be unable to do so.

     The Office of Hawaiian Affairs (OHA) testified in support of
the bill.  OHA also testified, however, that tuition waivers for
more Hawaiian students will not compromise or otherwise affect
negotiations currently taking place between OHA and the State on
ceded lands compensation.

     Testimony in support of the bill was received from the
Ilio`ulaokalani Coalition and more than 50 Hawaiian educators,
students, and other interested individuals.  Most of the
testifiers suggested amendments to the bill providing for the
waiver of tuition fees for all Hawaiian students, regardless of
financial need.  In addition, testimony containing 23 pages of
petitions, signed by both Hawaiians and non-Hawaiians, in support
of tuition waivers for all students of Hawaiian ancestry was
received.

     Much of the testimony received focused on the fact that the
UH system controls approximately 16,000 acres of ceded lands.
Testimony overwhelmingly supported the idea that tuition waivers
should be part of the ceded land settlement.

     The University of Hawaii (UH) testified that, while it
agreed with the intent of the proposed bill, it could not support
the bill due to its inconsistency with Act 161, Session Laws of
Hawaii (SLH) 1995, which granted the UH Board of Regents the
authority to grant, suspend, or modify tuition waivers and
requires general funds for legislatively-mandated tuition
waivers.

     When asked, UH testified that out of approximately 6,235
Hawaiian students enrolled in the UH system, 900 are currently
receiving full or partial tuition waivers.  For UH to provide 500
additional tuition waivers to Hawaiian students, approximately
$577,000 would have to be appropriated by the Legislature,
whereas for UH to provide tuition waivers to all Hawaiian
students, approximately $7.2 million a year would have to be
appropriated. 

     Your Committee agrees with the testimony of UH that,
although the Legislature has established tuition waivers for
students of Hawaiian ancestry in the past, currently, the
authority to grant tuition waivers is left solely to the
University.  By way of brief background, in 1993, the Legislature
passed Act 360, Session Laws of Hawaii (SLH) 1993, which mandated
UH to waive all tuition fees for 250 Hawaiian students in
addition to tuition waivers that were already being granted.  At

 
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that time, UH tuition revenues were deposited in the general
funds of the State.  In 1995, the Legislature passed Act 161, SLH
1995, which created a special fund under UH control for the
deposit of tuition revenues.  At the same time, the Legislature
felt that because UH was being given the authority to control
income generated from tuition, which is a significant part of
overall UH revenues, it was more appropriate for UH, rather than
the Legislature, to determine how and to whom tuition waivers
should be granted.

     The authority for tuition waivers granted to UH recognizes
its special status granted under the State Constitution, which
constitutes UH as a body corporate.  As such, UH should have more
independence than typical state agencies in managing its
resources.

     With regard to the ceded lands issue, your Committee notes
that the Admission Act cites public educational institutions as
one of the five purposes for which ceded lands may be used.  Of
course, another of the purposes is the betterment of the
conditions of native Hawaiians.  And so, the issues are complex
and not easily resolved.

     After much discussion, your Committee finds that a bill to
provide additional Hawaiian students in the UH system with full
or partial tuition waivers would amount to an unfunded mandate.
This, in turn, would essentially amount to a reduction to the UH
budget, depriving other students of services and programs.
Therefore, your Committee finds that, at this time, rather than
mandating that UH provide additional tuition waivers to a
specified number of Hawaiian students, and to be consistent with
the process the Legislature has provided for regarding other
tuition waivers, a separate appropriation should be made to UH to
provide as many tuition waivers for Hawaiian students as
possible.  

     However, recognizing the complexity of the issues involved,
your Committee urges that discussions continue on this matter.
Your Committee urges the UH to review its tuition waiver
policies, and in particular the number of tuition waivers are
provided to those from the Asia-Pacific region.  Your Committee
also urges that possible consideration be given to making the
grant of additional tuition waivers to Hawaiian students part of
the ceded land settlement.

     Your Committee has amended the bill by:

     (1)  Making an appropriation in the amount of $1 for fiscal
          year 1999-2000 and fiscal year 2000-2001, for purposes

 
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          of further discussion, for the provision of tuition
          waivers for Hawaiians in the University of Hawaii
          system in addition to those currently granted to
          Hawaiian students;

     (2)  Specifying that, for purposes of this bill, "Hawaiian"
          means any descendant of the aboriginal peoples
          inhabiting the Hawaiian islands that exercised
          sovereignty and subsisted in the Hawaiian Islands in
          1778 and have continued to reside in Hawaii since 1778;
          and

     (3)  Removing the requirement that tuition waivers shall be
          awarded to Hawaiian students who are financially needy
          or participating in student recruitment programs within
          the university system.

     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. 704, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 704, H.D. 1, and
be referred to the Committee on Judiciary and Hawaiian Affairs.

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



                                   ______________________________
                                   DAVID MORIHARA, Chair