CONFERENCE COMMITTEE REPORT NO. 111

                            Honolulu, Hawaii
                                            , 1999

                            RE:   S.B. No. 450
                                  S.D. 1
                                  H.D. 2
                                  C.D. 1




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

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

Sir:

     Your Committee on Conference on the disagreeing vote of the
Senate to the amendments proposed by the House of Representatives
in S.B. No. 450, S.D. 1, H.D. 2, entitled:  

     "A BILL FOR AN ACT RELATING TO STATE GOVERNMENT," 

having met, and after full and free discussion, has agreed to
recommend and does recommend to the respective Houses the final
passage of this bill in an amended form.

     The purpose of this bill is to continue the on-going work to
privatize government services by:

     (1)  Specifying the tasks that the committee charged with
          developing a managed process for public-private
          competition must complete; and

     (2)  Specifying deadlines by which the committee must
          complete a draft and a final draft of the managed
          process, and a report of its findings, plans,
          implementations, and recommendations for statutory
          changes to civil service laws to the legislature.

 
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     Your Committee on Conference finds that article 16,
section 1, Hawaii State Constitution, requires the employment of
civil servants to be governed by the merit principle.  While
recognizing that civil service laws and certain merit principles
must be upheld, your Committee on Conference does not intend that
the merit principle as interpreted under Konno v. County of
Hawaii, 85 Haw. 61, 937 P.2d 397 (1997), be an impediment to
contracting out under a managed process system under this Act.

     Your Committee on Conference has amended this measure by:

     (1)  Deleting the requirement that the committee monitor and
          review the managed process;

     (2)  Deleting the repeal of merit principles as a factor the
          committee should consider when developing a managed
          process that ensures civil service laws are not
          violated;

     (3)  Repealing the June 30, 2001, sunset date for those
          provisions related to the managed process, including
          the committee created to develop, monitor, and review
          the managed process, and public-private competition for
          government services; and 

     (4)  Amending the effective date of this measure to take
          effect upon approval.

     Your Committee on Conference is in accord with the intent
and purpose of S.B. No. 450, S.D. 1, H.D. 2, as amended herein,
and recommends that it pass Final Reading in the form attached
hereto as S.B. No. 450, S.D. 1, H.D. 2, C.D. 1.

                                   Respectfully submitted,

MANAGERS ON THE PART OF THE        MANAGERS ON THE PART OF THE
            HOUSE                             SENATE
                                   
                                   
                                   
______________________________     ______________________________
TERRY NUI YOSHINAGA, Co-Chair      ROD TAM, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
DWIGHT Y. TAKAMINE, Co-Chair       CAROL FUKUNAGA, Co-Chair

 
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                            CONFERENCE COMMITTEE REPORT NO. 111
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______________________________     ______________________________
EZRA R. KANOHO, Member             ANDREW LEVIN, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
BOB NAKASONE, Member               JONATHAN CHUN, Member
                                   
                                   
                                   
______________________________     ______________________________
BARBARA MARUMOTO, Member           WHITNEY ANDERSON, Member

 
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