REPORT TITLE:
Civil Service Reform


DESCRIPTION:
Reforms the public employment laws that were enacted to implement
two constitutional mandates -- that there be a civil service
based on merit and that public employees have the right to
bargain collectively.

 
a                                                     HRD-01(00)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2859
THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC EMPLOYMENT.



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

 1      SECTION 1.  The purpose of this Act is to reform the public
 
 2 employment laws that were enacted to implement two constitutional
 
 3 mandates -- that there be a civil service based on merit and that
 
 4 public employees have the right to bargain collectively.
 
 5      The legislature finds many of the civil service laws are
 
 6 obsolete.  Statutes on wages, hours, benefits, and terms and
 
 7 conditions of employment for public employees have been retained,
 
 8 even though the legislature shifted decision-making on these
 
 9 matters to the bargaining table, over thirty years ago in 1970
 
10 when it passed the collective bargaining law, and to appropriate
 
11 authorities, in 1978, for employees excluded from collective
 
12 bargaining coverage.  Therefore, this Act repeals obsolete
 
13 statutes where decision-making is no longer within the
 
14 legislative purview, except for funding of cost items by the
 
15 appropriate legislative bodies.
 
16      The legislature finds that the civil service, initially
 
17 conceived to ensure public service is based on merit, has evolved
 
18 into a bureaucracy entangled in its own red tape. Chief
 
19 executives, appointing authorities, managers, and employees, as
 

 
a                                                     HRD-01(00)
Page 2                                                     2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 well as the general public, are dissatisfied with the existing
 
 2 system.  It has outlived its usefulness, lost its focus, has
 
 3 become too rigid and inflexible, and must be reformed and
 
 4 modernized.  An example is the requirement for statewide
 
 5 uniformity among the jurisdictions that was once heralded as a
 
 6 protective necessity and is now considered a barrier that
 
 7 prohibits flexibility and autonomy.  The jurisdictions are
 
 8 prevented thereby from addressing localized priorities, needs,
 
 9 and concerns within their own funding limitations.  This "one
 
10 size fits all" has resulted in compromises that are not
 
11 satisfactory to any particular jurisdiction.  Therefore, instead
 
12 of requiuring statewide uniformity, this act permits each
 
13 jurisdiction the necessary flexibility and autonomy to address
 
14 its own priorities, needs, and concerns.
 
15      The legislature finds that the personnel statutes are so
 
16 prescriptive that whenever change is desired or necessary,
 
17 legislative action is usually required before the change can be
 
18 made.  With a 60-day legislative session, the legislature can
 
19 ill-afford to be concerned with micro-managing the personnel
 
20 systems of the jurisdictions.  Therefore, this Act provides
 
21 enabling language, rather than prescriptive language, so that
 
22 desired changes and improvements can be made in the personnel
 
23 systems expeditiously without the need for legislative action.
 

 
a                                                     HRD-01(00)
Page 3                                                     2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      The legislature finds that the proverbial "red tape" that
 
 2 frustrates the general public is doubly frustrating for the
 
 3 central personnel agencies who are required to makes rules in
 
 4 accordance with chapter 91.  Their rules concern the employment
 
 5 of persons in government, employees and potential employees or
 
 6 applicants for jobs, unlike the operating line departments whose
 
 7 rules concern rights, obligations, or sanctions affecting the
 
 8 general public.  Rule-making in accordance with chapter 91 is a
 
 9 cumbersome process that entails notice and opportunity for input
 
10 by the general public on changes that do not concern or affect
 
11 them.  Requiring rule-making in accordance with chapter 91 for
 
12 personnel statutes is an example of how government operates in
 
13 conformance with law, regardless of the merits of the law, and
 
14 expends scarce resources on activities that are of little or no
 
15 value.  Therefore, this Act allows the central personnel agencies
 
16 and merit appeals board to develop rules, without regard to
 
17 chapter 91, after seeking input from appropriate stakeholders who
 
18 have a direct interest in the outcome.
 
19      The legislature finds that the public employment area has
 
20 become so complex and confusing as a result of the applicability
 
21 of other state and federal labor laws, each with its own
 
22 enforcement agency, superimposed on the civil service and
 
23 collective bargaining appeal processes which already overlap.
 

 
a                                                     HRD-01(00)
Page 4                                                     2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 Overlapping jurisdiction has resulted in multiple avenues of
 
 2 appeal, conflicting decisions, and unnecessary litigation -- all
 
 3 at the expense of the taxpaying public. Reform is needed in this
 
 4 area particularly when the wholesale application of minimum
 
 5 standards primarily intended for private employment are applied
 
 6 to public employment.  Civil service and collective bargaining
 
 7 already provide employees benefits and protections above the
 
 8 minimum standards.  This Act initiates reform to minimize
 
 9 confusion by requiring exclusive internal review procedures and
 
10 assigning the Hawaii labor relations board the responsibility to
 
11 expeditiously resolve controversies on appeal processes and
 
12 pursue additional reform efforts with appropriate agencies.
 
13      The legislature finds that the unions have been blamed as a
 
14 convenient scapegoat for government's inefficiencies and its
 
15 inability to terminate poor performing workers.  Under attack is
 
16 the union's reliance on seniority, which is definitely a negative
 
17 when the civil service is perceived as a complacent, inefficient
 
18 system because seniority would perpetuate these negative
 
19 characteristics.  However, if the civil service were a competent,
 
20 efficient system, reliance on seniority would be viewed as
 
21 beneficial because it would perpetuate these positive
 
22 characteristics.  Employers and unions must work in sync to
 
23 provide the public with a civil service system that retains,
 

 
a                                                     HRD-01(00)
Page 5                                                     2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 promotes, and rewards employees based on their demonstrated
 
 2 superior performance and eliminates inefficient employees.  Only
 
 3 then will reliance on seniority be compatible with the merit
 
 4 principle.
 
 5      This Act provides an infrastructure that will facilitate
 
 6 improvements and additional reforms in public employment.  The
 
 7 reform of the personnel systems will provide the catalyst for
 
 8 needed reform in other systems, whether the budgetary process or
 
 9 the accounting and payroll systems.  Appointing authorities must
 
10 have greater flexibility if they are expected to provide quality
 
11 public services in the most cost efficient manner.  If the hiring
 
12 is flexible, but the budgetary process restricts that
 
13 flexibility, we have not accomplished much except to minimize
 
14 blame on the personnel system.
 
15      Enabling language is provided to permit appropriate
 
16 stakeholders maximum opportunity to build a civil service system
 
17 that is truly based on the merit principle.  Where requirements
 
18 or limitations are imposed on collective bargaining, the
 
19 legislature deemed that proper balance was needed to preserve the
 
20 merit principle or to realign the collective bargaining process.
 
21 For example, the legislature believes that the maintenance of the
 
22 merit principle to retain only those employees who continue to
 
23 meet all performance requirements should not be left to the
 

 
a                                                     HRD-01(00)
Page 6                                                     2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 decision of an arbitrator, a disinterested third party whose
 
 2 primary focus is the collective bargaining agreement and not the
 
 3 merit principle.  Therefore, the legislature has required that
 
 4 collective bargaining grievance procedures recognize the merit
 
 5 appeals board, not the arbitrator, as the appropriate body to
 
 6 determine whether an adverse action due to inefficiency was or
 
 7 was not in accordance with the merit principle.
 
 8      Similarly, the legislature believes that it cannot be
 
 9 fiscally responsible or prudent by considering the operating
 
10 budget in a vacuum without knowledge of the collective bargaining
 
11 cost items that are to be effective during the same period.
 
12 Therefore, it is requiring that collective bargaining cost items
 
13 for each biennium be submitted at the same time the operating
 
14 budget is required to be submitted and is prohibiting
 
15 retroactivity of cost items if the parties fail to meet that
 
16 deadline.  Impasse procedures have been modified to coincide with
 
17 requirements on submission of cost items.
 
18      Additionally, the legislative believes that certain public
 
19 policy issues should not be compromised.  Examples include the
 
20 requirement for a drug free workforce under a "two strikes you're
 
21 out" rule, the expeditious recovery of wage and salary
 
22 overpayments, and prohibitions against using public moneys to pay
 
23 for work not performed, for premiums that are excessive in
 

 
a                                                     HRD-01(00)
Page 7                                                     2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 relation to the amount of work performed, or for penalties
 
 2 unrelated to the performance of work.  Therefore, the legislature
 
 3 has required that negotiations and collective bargaining
 
 4 agreements be redirected accordingly.
 
 5      To facilitate the monumental task of restructuring
 
 6 government and implementing planned workforce reduction programs,
 
 7 the legislature has provided alternatives to the painful,
 
 8 disruptive, and relatively ineffective layoff and bumping
 
 9 process.  This Act provides a voluntary severance benefit to
 
10 encourage employees whose positions will be eliminated to
 
11 voluntarily separate from service in lieu of exercising layoff
 
12 and bumping rights.  The Act also provides an early retirement
 
13 incentive that waives the customary penalties associated with
 
14 insufficient age to encourage employees whose positions will be
 
15 eliminated to retire earlier if they meet service requirements.
 
16 These vacated positions for which a voluntary severance benefit
 
17 or an early retirement incentive is conferred must be abolished.
 
18      The legislature is cognizant that it is imperative for
 
19 government to explore new and improved ways of providing quality
 
20 services to their constituencies at less cost.  Some alternatives
 
21 by which government can reinvent itself that have aroused the
 
22 legislature's interest but are still being explored are the
 
23 managed process to increase public-private competition,
 

 
a                                                     HRD-01(00)
Page 8                                                     2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 partnerships for providing services to or on behalf of
 
 2 government, and agreements with former employees to create an
 
 3 employee stock ownership program (ESOP).  Therefore, the
 
 4 legislature encourages further pursuit and consideration of
 
 5 alternative ways to provide services to the public more
 
 6 efficiently, effectively and economically.
 
 7      The legislature finds that some costs of government can be
 
 8 minimized, in particular, the costs that reflect a bygone era
 
 9 when the salaries of government workers lagged substantially
 
10 behind those of the private sector.  A generous package of
 
11 benefits was offered to attract persons into public service.
 
12 However, the gap between private and public sector salaries has
 
13 been significantly reduced, but the generous benefits package at
 
14 the taxpayers' expense remains.  For example, new hires receive
 
15 the equivalent of one month of vacation and one month of sick
 
16 leave from the onset of employment, the same as long-service
 
17 employees.  The legislature believes that continuing the vacation
 
18 and sick leave benefits at this generous level for new hires is
 
19 no longer warranted.  Despite the controversy that may arise, the
 
20 legislature feels that it must initiate a roll back in the
 
21 benefits of new employees to a more acceptable level, sooner than
 
22 later.  Therefore, the vacation and sick leave benefits for new
 
23 employees have been limited and negotiated benefits for these
 

 
a                                                     HRD-01(00)
Page 9                                                     2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 employees must be within the limitations.
 
 2      Regardless of how the statutes are crafted, the legislature
 
 3 realizes that the success or failure of these reform efforts
 
 4 ultimately depends on the commitment and good faith of all
 
 5 appropriate stakeholders in working out the necessary details and
 
 6 implementing them accordingly. Nonetheless, this Act represents a
 
 7 significant step forward in initiating reform in government and
 
 8 is a product of collaboration among the stakeholders who can make
 
 9 it happen.
 
10                              PART I.
 
11      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
12 a new chapter to be appropriate designated and to read as
 
13 follows:
 
14                             "CHAPTER
 
15                       PUBLIC EMPLOYMENT LAW
 
16      §  -1  Title.  This chapter shall be known as the "Public
 
17 Employment Reform Act".
 
18      §  -2  Findings and purpose.  The purpose of this chapter is
 
19 to interface the two major laws governing public employment --
 
20 civil service and collective bargaining.
 
21      In 1970, when the collective bargaining law was passed, the
 
22 legislature believed that collective bargaining and civil service
 
23 could co-exist without making any significant change to the civil
 

 
a                                                     HRD-01(00)
Page 10                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 service laws.  It simply and clearly stated that the merit
 
 2 principle and the principle of equal pay for equal work among the
 
 3 jurisdictions are to be maintained.  It also excluded specific
 
 4 subjects from the scope of bargaining and prohibited agreement on
 
 5 proposals that would interfere with employers' rights.
 
 6      A provision allowing the collective bargaining law to take
 
 7 precedence over conflicting statutes on wages, hours, and terms
 
 8 and conditions of employment was included so that collective
 
 9 bargaining rights could be exercised immediately without the
 
10 necessity of deleting or amending pre-existing statutes on these
 
11 matters.  From time to time over the last thirty years changes
 
12 have been made to these laws, but the obsolete provisions still
 
13 remain and the provision allowing the collective bargaining law
 
14 to take precedence has been relied on to expand collective
 
15 bargaining beyond its intended parameters.  The legislature never
 
16 intended that the collective bargaining law would preempt any and
 
17 all other conflicting statutes or that it would bar the enactment
 
18 of subsequent statutes.
 
19      Therefore, the legislature finds that additional
 
20 clarification and safeguards are necessary to ensure the
 
21 collective bargaining law does not go beyond its intended
 
22 parameters and that it is enforced in a manner that:
 
23      (1)  Maintains the merit principle;
 

 
a                                                     HRD-01(00)
Page 11                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (2)  Does not interfere with the public employers' rights,
 
 2           as well as their obligations to the public; and
 
 3      (3)  Gives due recognition to the legislature's authority to
 
 4           enact laws, including those necessary to fulfill its
 
 5           on-going constitutional mandate to define the rights of
 
 6           public employees to bargain collectively.
 
 7      §  -3.  Definitions.  As used in this chapter:
 
 8      "Appointing authority" means a department head or designee
 
 9 having the power to make appointments or changes in the status of
 
10 employees.
 
11      "Chief executive" means the governor, the respective mayors,
 
12 the chief justice of the supreme court, and the chief executive
 
13 officer of the Hawaii health systems corporation.
 
14      "Department" includes any department, board, commission, or
 
15 agency of a jurisdiction.
 
16      "Director" means the head of the central personnel agency
 
17 for a jurisdiction regardless of title, whether it is director of
 
18 human resources development, director of personnel, director of
 
19 personnel services, or personnel director.
 
20      "Employee" means any person holding a position in the
 
21 service of a jurisdiction, irrespective of status or type of
 
22 appointment.
 
23      "Employer" or "public employer" means the governor, in the
 

 
a                                                     HRD-01(00)
Page 12                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 case of the State; the respective mayors, in the case of the
 
 2 counties; the chief justice of the supreme court, in the case of
 
 3 the judiciary; the board of education, in the case of the
 
 4 department of education; the board of regents, in the case of the
 
 5 University of Hawaii, and the Hawaii health systems corporation
 
 6 board, in the case of the Hawaii health systems corporation, and
 
 7 includes any individual who represents one of these employers or
 
 8 acts in their interest in dealing with public employees.
 
 9      "Exclusive representative" means the employee organization
 
10 certified by the Hawaii labor relations board as the collective
 
11 bargaining agent to represent all employees in an appropriate
 
12 bargaining unit without discrimination and without regard to
 
13 employee organization membership.
 
14      "Jurisdiction" means the State, the city and county of
 
15 Honolulu, the counties of Hawaii, Maui, and Kauai, the judiciary,
 
16 and the Hawaii health systems corporation.
 
17      "Legislative body" means the state legislature in the case
 
18 of the State, the judiciary, and the Hawaii health systems
 
19 corporation; the city council, in the case of the city and county
 
20 of Honolulu; and the respective county councils, in the case of
 
21 the counties of Hawaii, Maui, and Kauai.
 
22      "Position" means a specific job requiring the full or part-
 
23 time employment of one person.
 

 
a                                                     HRD-01(00)
Page 13                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      "Merit appeals board" means the appellate body of each
 
 2 jurisdiction under section   -31 that is authorized to hear
 
 3 appeals concerning the civil service of the jurisdiction.
 
 4                    PART I.  GENERAL PROVISIONS
 
 5      §  -4  Citizenship and residence; exceptions.  (a)  All
 
 6 elective officers in the service of the government of the State
 
 7 or any county shall be citizens of the United States and
 
 8 residents of the State for at least three years immediately
 
 9 preceding assumption of office.
 
10      (b)  All appointive officers in the service of the
 
11 government of the State or any county who are employed as
 
12 department heads, first assistants, first deputies, second
 
13 assistants, or second deputies or their equivalent, whatever
 
14 their title, to a department head shall be citizens of the United
 
15 States and residents of the State for at least one year
 
16 immediately preceding their appointment.  All others appointed in
 
17 the service of the government of the State or any county shall be
 
18 citizens, nationals, or permanent resident aliens of the United
 
19 States and residents of the State at the time of their
 
20 appointment.  A national or permanent resident alien appointee
 
21 shall not be eligible for continued employment unless the person
 
22 diligently seeks citizenship upon becoming eligible to apply for
 
23 United States citizenship.
 

 
a                                                     HRD-01(00)
Page 14                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (c)  All persons seeking employment in service of the
 
 2 government of the State or any county shall be citizens,
 
 3 nationals, permanent resident aliens of the United States, or
 
 4 eligible under federal law for unrestricted employment in the
 
 5 United States and residents of the State at the time of their
 
 6 application for employment and as a condition of eligibility for
 
 7 continued employment.
 
 8      "Resident" means a person who is physically present in the
 
 9 State at the time the person claims to have established the
 
10 person's domicile in the State and shows the person's intent is
 
11 to make Hawaii the person's permanent residence.  In determining
 
12 this intent, the following factors shall be considered:
 
13      (1)  Maintenance of a domicile or permanent place of
 
14           residence in the State; and
 
15      (2)  Absence of residency in another state.
 
16      (d)  The appointing authority may approve the appointment of
 
17 persons without consideration of the requirements under
 
18 subsection (c) when services essential to the public interest
 
19 require highly specialized technical and scientific skills or
 
20 knowledge for critical-to-fill and labor shortage positions.
 
21      (e)  For the positions involved in the performance of
 
22 services in planning and executing measures for the security of
 
23 Hawaii and the United States, persons seeking employment shall be
 

 
a                                                     HRD-01(00)
Page 15                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 citizens of the United States in addition to meeting the
 
 2 requirement of residency in subsection (c).
 
 3      (f)  This section shall not apply to persons recruited by
 
 4 the University of Hawaii under the authority of section 304-11.
 
 5      §  -5  Experimental modernization projects.  (a)  It is the
 
 6 intent of this section to encourage and facilitate improvements
 
 7 in the human resource programs of the several jurisdictions.
 
 8 With the approval of the chief executive, the director may
 
 9 conduct experimental modernization projects to determine whether
 
10 specific changes in its human resource program would result in a
 
11 more desirable program for the jurisdiction.
 
12      (b)  Prior to implementing any experimental modernization
 
13 project, the director shall:
 
14      (1)  Develop a plan identifying the purposes of the project,
 
15           the methodology to be used, the duration of the
 
16           project, the criteria for evaluation of the project,
 
17           and the cost of the project, if any.
 
18      (2)  Consult with the employees who would be involved in the
 
19           conduct of the project.
 
20      (3)  Negotiate with the exclusive representative if a
 
21           modification or waiver of provisions under a collective
 
22           bargaining agreement is necessary for the employees
 
23           involved in the conduct of the project.
 

 
a                                                     HRD-01(00)
Page 16                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (c)  While the project is in progress, it shall not be
 
 2 limited by state or local personnel laws and rules, but shall be
 
 3 in compliance with all equal employment opportunity laws and laws
 
 4 prohibiting discrimination.
 
 5      §  -6  Alternatives in providing human resources program
 
 6 services.(a)  Whenever consistent with economic and efficient
 
 7 administration, the director may delegate the performance of
 
 8 services under this chapter to the departments, which shall be
 
 9 done in compliance with statutes, rules, and any policies,
 
10 standards, and procedures issued by the director.  The delegation
 
11 may be withdrawn as determined by the director.
 
12      (b)  Whenever consistent with economic and efficient
 
13 administration and upon the recommendation of its director, the
 
14 chief executive may decentralize powers of the director under
 
15 this chapter, except for rule-making, to an appointing authority
 
16 who shall exercise the powers, including the issuance of
 
17 policies, standards, and procedures applicable to the department,
 
18 in compliance with statutes and rules. Accountability for all
 
19 actions taken by the appointing authority or any subordinate
 
20 officer and employee, as a result of empowerment by the chief
 
21 executive shall rest with the appointing authority to the same
 
22 extent as though the action had been taken by the director.
 
23      (c)  Whenever consistent with economic and efficient
 

 
a                                                     HRD-01(00)
Page 17                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 administration a jurisdiction, or a department if authorized by
 
 2 the jurisdiction, may enter into an agreement on furnishing
 
 3 services or facilities with respect to matters under this
 
 4 chapter; provided that the services are performed in compliance
 
 5 with statutes and rules.  An agreement may be with another
 
 6 jurisdiction or a department as allowed by rules of the director
 
 7 and may provide for reciprocity or reimbursement from authorized
 
 8 funds for the value of services or facilities furnished as
 
 9 mutually agreed between the parties to the agreement.  An
 
10 agreement may be with a private entity if authorized by the state
 
11 legislature and shall be subject to any requirements and
 
12 parameters set by the state legislature or the respective
 
13 legislative body, as applicable.  The agreement to contract
 
14 services or facilities may be, but is not required to be, part of
 
15 a managed competition process.
 
16      When determining how services are to be provided for the
 
17 state executive branch, consideration shall be given to options,
 
18 such as, but not limited to:  restructuring the workforce in
 
19 conjunction with providing affected employees the option of
 
20 electing a voluntary severance benefit or an early retirement
 
21 incentive, initiating a reduction-in-force, entering into an
 
22 agreement with former employees as part of an employee stock
 
23 ownership program (ESOP), or permitting current employees to
 

 
a                                                     HRD-01(00)
Page 18                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 submit a competitive bid.
 
 2      The services furnished under an agreement on behalf of a
 
 3 jurisdiction or department shall be as fully effective as though
 
 4 the services has been performed by the jurisdiction or
 
 5 department.
 
 6      §  -7  Oversight program on compliance.  Whenever the
 
 7 director delegates any services, the director shall institute and
 
 8 maintain a system of inspection to determine that the personnel
 
 9 laws and rules are applied and administered by the departments in
 
10 a manner consistent with the provisions of this chapter.  This
 
11 oversight shall extend to any services being performed through
 
12 decentralization by the chief executive or any agreement with a
 
13 public or private entity.  In the event of any failure to comply
 
14 with the provisions of this chapter, the director shall take or
 
15 recommend appropriate action.  Such action may include requiring
 
16 immediate correction be taken, retracting the delegation of
 
17 authority, advising its chief executive of any refusal to take
 
18 immediate corrective action, or terminating an agreement for
 
19 services.
 
20      §  -8  Complaint and appeal procedures; clarifying and
 
21 resolving controversy.  To minimize confusion and controversy due
 
22 to overlapping labor laws governing public employment that has
 
23 resulted in unnecessary and costly litigation, loss of appeal
 

 
a                                                     HRD-01(00)
Page 19                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 rights, and conflicting decisions, it is declared to be in the
 
 2 public interest that various complaint, grievance, and appeal
 
 3 procedures be clarified and coordinated.  Any existing procedures
 
 4 applicable to public employment on the effective date of this Act
 
 5 shall be reviewed and amended or eliminated to be consistent with
 
 6 the intent and requirements of this section through collective
 
 7 bargaining, rule-making, or legislation, as applicable.
 
 8      (1)  Each jurisdiction shall have exclusive internal review
 
 9           procedures that allow specific groups of individuals
 
10           aggrieved by actions of a chief executive, director,
 
11           appointing authority, or designee to resolve a
 
12           complaint or a grievance internally, up to the level of
 
13           the chief executive or designee.
 
14           (A)  A departmental complaint procedure shall be
 
15                available for exclusive use by individuals who are
 
16                not employees and employees who are excluded from
 
17                collective bargaining.
 
18           (B)  The grievance procedure in a collective bargaining
 
19                agreement shall be the exclusive remedy available
 
20                for use by employees covered by the collective
 
21                bargaining agreement.
 
22           (C)  The procedures shall encourage informal resolution
 
23                before a formal complaint or grievance is referred
 

 
a                                                     HRD-01(00)
Page 20                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1                to or filed with the appropriate level that has
 
 2                the authority to act.  Informal resolution
 
 3                includes the use of an agency's administrative
 
 4                review process.
 
 5      (2)  If any complaint or grievance cannot be resolved
 
 6           internally, the matter may be appealed after the level
 
 7           of the chief executive, but only with the appropriate
 
 8           authority over the matter, whether the merit appeals
 
 9           board, another appellate body or administrative agency,
 
10           or an arbitrator.
 
11      (3)  The Hawaii labor relations board created pursuant to
 
12           section   -56 shall have exclusive jurisdiction to
 
13           decide any controversy regarding appeal rights under
 
14           this chapter.  It shall expeditiously resolve the
 
15           controversy and shall require that any proceedings
 
16           before a merit appeals board or an arbitrator be held
 
17           in abeyance until the controversy is decided.  It may
 
18           exercise jurisdiction with respect to a matter covered
 
19           by this chapter if it is in the best interest of the
 
20           public and all parties concerned or defer the matter to
 
21           the merit appeals board or to arbitration.  Any matter
 
22           under the jurisdiction of another appellate body or
 
23           administrative agency shall not be referred to the
 

 
a                                                     HRD-01(00)
Page 21                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           merit appeals board or to arbitration.
 
 2      (4)  The Hawaii labor relations board shall work
 
 3           cooperatively with the various agencies having
 
 4           authority over employment laws that apply to public
 
 5           employment to:
 
 6           (A)  Clarify and minimize any overlap in jurisdiction,
 
 7                including whether the statutes should continue to
 
 8                apply to public employment and in the same manner
 
 9                as private employment in light of safeguards
 
10                provided by civil service and collective
 
11                bargaining;
 
12           (B)  Encourage agencies to allow for resolution of
 
13                complaints or grievances internally and for
 
14                decision-making by the Hawaii labor relations
 
15                board on controversies involving appeal rights
 
16                before tolling the time for filing an appeal with
 
17                their respective agencies; and
 
18           (C)  Recommend to agencies any changes in statutes or
 
19                their administrative procedures, as may be
 
20                appropriate and consistent with the intent of this
 
21                section.
 
22      §  -9  Chapter takes precedence, unenforceable, or
 
23 inoperative, when; transition period; state legislature's
 

 
a                                                     HRD-01(00)
Page 22                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 authority.(a)  This chapter shall take precedence over
 
 2 conflicting statutes pertaining to the wages, hours, benefits,
 
 3 and terms and conditions of employment of public employees and
 
 4 other personnel statutes, including those relating to civil
 
 5 service, that were in effect prior to the effective date of this
 
 6 Act.  The absence of a statutory provision or broad enabling
 
 7 language in lieu of specificity in this chapter with respect to
 
 8 these matters recognizes there are better, alternative means for
 
 9 determining and maintaining these matters; provided that these
 
10 matters are consistent with the requirements and limitations in
 
11 this chapter.  Alternative means includes the director's rule-
 
12 making authority and personnel rules as provided in part II,
 
13 joint-decision making between the employer and the exclusive
 
14 representative and collective bargaining agreements as provided
 
15 in part III, or the discretion of the appropriate authority and
 
16 executive orders or directives as provided in part IV.
 
17      (b)  This chapter is not intended to diminish, impair,
 
18 amend, or limit any rights or benefits in statutes, rules,
 
19 ordinances, executive orders or directives, or collective
 
20 bargaining agreements in existence prior to the date of this Act,
 
21 unless expressly stated in this chapter.  Rights or benefits in
 
22 statutes, rules, ordinances, executive orders or directives, or
 
23 collective bargaining agreements in existence prior to the date
 

 
a                                                     HRD-01(00)
Page 23                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 of this Act that are consistent with this chapter shall remain in
 
 2 effect.
 
 3      (c)  This chapter shall preempt all contrary provisions in
 
 4 rules, ordinances, executive orders or directives, or collective
 
 5 bargaining agreements.  A transition period is provided for the
 
 6 implementation of this chapter, from the effective date of this
 
 7 Act until June 30, 2001, the effective date of repeal of the
 
 8 chapters specified in this Act.  During the transition period,
 
 9 any rule, ordinance, executive order or directive, or provision
 
10 in a collective bargaining agreement that is not consistent with
 
11 this chapter shall be amended accordingly.  Where new provisions
 
12 are necessary to implement this chapter, the appropriate
 
13 authorities shall ensure inclusion or adoption of these
 
14 provisions as expeditiously as possible during the transition
 
15 period, after discussions with appropriate stakeholders.
 
16 Stakeholders are the persons or groups who can affect or are
 
17 affected by the provisions.  New or amended provisions that are
 
18 included or adopted to comply with this chapter may take effect
 
19 immediately upon inclusion or adoption and shall supersede any
 
20 conflicting statute that is scheduled to be repealed at the end
 
21 of the transition period.
 
22      (d)  This chapter shall not take precedence over or preempt
 
23 any state or federal law or mandate that applies, without
 

 
a                                                     HRD-01(00)
Page 24                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 discretion and irrespective of collective bargaining agreements
 
 2 or rules, to employers in general, both private and public.  If
 
 3 any provision in a collective bargaining agreement or rules would
 
 4 cause an employer or appointing authority to be in violation of
 
 5 or non-compliance with any applicable state or federal law or
 
 6 mandate, the provision, insofar as it would result in violation
 
 7 or non-compliance, shall be unenforceable.
 
 8      (e)  If any provision of this chapter jeopardizes the
 
 9 receipt by the State or any county of any federal funds, the
 
10 provision shall, insofar as the receipt of funds is jeopardized,
 
11 be inoperative.
 
12      (f)  This chapter shall not diminish or impair, in any way,
 
13 the authority of the legislature to fulfill its obligations under
 
14 the state constitution to define by law a civil service governed
 
15 by the merit principle and the right of public employees to
 
16 organize for the purpose of collective bargaining.
 
17                      PART II.  CIVIL SERVICE
 
18      §  -11  Purposes; merit principle.  It is the purpose of
 
19 this part to require that each jurisdiction establish and
 
20 maintain a separately administered civil service system based on
 
21 the merit principle.  The merit principle is the selection of
 
22 persons based on their fitness and ability for public employment
 
23 and the retention of employees based on their demonstrated
 

 
a                                                     HRD-01(00)
Page 25                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 appropriate conduct and productive performance. It is also the
 
 2 purpose of this part to build a career service in government,
 
 3 free from coercive political influences, to render impartial
 
 4 service to the public at all times, and to render such service
 
 5 according to the dictates of ethics and morality and in
 
 6 compliance with all laws.
 
 7      In order to achieve these purposes it is the declared policy
 
 8 of the State that the human resource program within each
 
 9 jurisdiction be administered in accordance with the following:
 
10      (1)  Equal opportunity for all in compliance with all
 
11           applicable laws prohibiting discrimination.  No person
 
12           shall be discriminated against in examination,
 
13           appointment, reinstatement, reemployment, promotion,
 
14           transfer, demotion, or removal, with respect to any
 
15           position when the work may be efficiently performed by
 
16           the person without hazard or danger to the health or
 
17           safety of the person or others.
 
18      (2)  Impartial selection of individuals for public service
 
19           by means of tests that are fair, objective, and
 
20           practical.
 
21      (3)  Incentives for competent employees within the service,
 
22           whether financial or promotional opportunities and
 
23           other performance based group and individual rewards
 

 
a                                                     HRD-01(00)
Page 26                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           that encourage continuous improvement to achieve
 
 2           superior performance.
 
 3      (4)  Reasonable job security for competent employees and
 
 4           elimination of unnecessary or inefficient employees,
 
 5           with the right of appeal from improper personnel
 
 6           actions.
 
 7      (5)  Equal pay for equal work within the jurisdiction
 
 8           through systematic classification of positions based on
 
 9           objective criteria and adequate job evaluation.
 
10      (6)  Harmonious and cooperative relations between government
 
11           and its employees, including employee organizations
 
12           representing them, to develop and maintain a well-
 
13           trained, efficient, and productive work force for the
 
14           delivery of services to the public.
 
15      (7)  Competition between public employees and the private
 
16           sector over the performance of public duties and the
 
17           provision of public service to the public.
 
18      §  -12  Definitions.  As used in this part:
 
19      "Civil service" includes all positions within a jurisdiction
 
20 that must be filled through civil service recruitment procedures
 
21 based on merit.
 
22      "Civil service employee" means an employee appointed to a
 
23 position in the civil service who has met the initial
 

 
a                                                     HRD-01(00)
Page 27                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 requirements for membership in the civil service and who must
 
 2 meet on-going requirements to remain a member in the civil
 
 3 service.
 
 4      "Class" means a group of positions that reflect sufficiently
 
 5 similar duties and responsibilities such that the same title and
 
 6 the same pay range may apply to each position allocated to the
 
 7 class.
 
 8      "Classification plan" means classes of positions arranged in
 
 9 a logical and systematic order.
 
10      §  -13  General powers and duties of director.  The director
 
11 shall:
 
12      (1)  Represent the public interest in the improvement of
 
13           human resources administration in the civil service;
 
14      (2)  Assist in fostering the interest of institutions of
 
15           learning and civic, professional, and employee
 
16           organizations in the improvement of human resources
 
17           standards in civil service;
 
18      (3)  Advise the chief executive on policies and problems
 
19           concerning the human resources program; and
 
20      (4)  Make investigations concerning the administration of
 
21           human resources policies in the civil service,
 
22           including any matter respecting the enforcement or
 
23           effect of this chapter or the rules adopted thereunder,
 

 
a                                                     HRD-01(00)
Page 28                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           or the action or failure to act of any officer or
 
 2           employee with respect thereto.
 
 3      §  -14  Specific duties and powers of director.  The
 
 4 director shall direct and supervise all the administrative and
 
 5 technical activities of the director's department.  In addition
 
 6 to other duties imposed upon the director by this chapter, the
 
 7 director shall:
 
 8      (1)  Establish and maintain a roster of all persons in the
 
 9           civil service;
 
10      (2)  Appoint employees necessary to assist the director in
 
11           the proper performance of the director's duties and for
 
12           which appropriations shall have been made;
 
13      (3)  Foster and develop, in cooperation with appointing
 
14           authorities and others, programs for the improvement of
 
15           employee efficiency;
 
16      (4)  Cooperate fully with appointing authorities, giving
 
17           full recognition to their requirements and needs, in
 
18           the administration of this chapter to promote public
 
19           service by establishing conditions of service that will
 
20           attract and retain employees of character and
 
21           capability and to increase efficiency and economy in
 
22           governmental departments by continuously improving
 
23           methods of human resources administration;
 

 
a                                                     HRD-01(00)
Page 29                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (5)  Encourage and exercise leadership in the development of
 
 2           effective human resources administration within the
 
 3           several departments and make available the facilities
 
 4           of the director's department to this end;
 
 5      (6)  Investigate from time to time the operation and effect
 
 6           of this chapter and the rules adopted thereunder;
 
 7      (7)  Develop and maintain a classification plan;
 
 8      (8)  Ensure that collective bargaining agreements under part
 
 9           III do not violate the merit principle or the principle
 
10           of equal pay for equal work within the jurisdiction and
 
11           do not interfere with the employer's rights and
 
12           obligations;
 
13      (9)  Make recommendations and advise the chief executive on
 
14           appropriate adjustments for employees excluded from
 
15           collective bargaining under part IV; and
 
16     (10)  Perform any other lawful acts deemed by the director to
 
17           be necessary or desirable to carry out the purposes and
 
18           provisions of this chapter.
 
19      §  -15  Rules; policies and standards.  (a)  Whenever the
 
20 director is required to or finds it necessary to prescribe rules
 
21 for the establishment and maintenance of a human resource program
 
22 in conformance with this chapter, the rules shall be prescribed,
 
23 without regard to chapter 91.  The procedures for rule-making
 

 
a                                                     HRD-01(00)
Page 30                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 shall be as set forth in rules, which shall minimally provide
 
 2 for:
 
 3      (1)  Opportunity for consultation on the proposed rules with
 
 4           affected departments and employee organizations
 
 5           representing affected employees;
 
 6      (2)  Adoption of rules at open meetings that permit the
 
 7           attendance of any interested person;
 
 8      (3)  Approval of rules by the chief executive; and
 
 9      (4)  Filing of rules with the lieutenant governor in the
 
10           case of the State or with the respective county clerks
 
11           in the case of the counties.
 
12      (b) The director may also issue policies, standards, and
 
13 procedures consistent with its rules to facilitate and ensure
 
14 appropriate functioning of the human resources program.
 
15      §  -16  Civil service and exemptions.  (a)  The state
 
16 constitution mandates that the employment of persons in the civil
 
17 service, as defined by law, be governed by the merit principle.
 
18 The legislature declares that it is the public policy of the
 
19 State that the civil service systems of the respective
 
20 jurisdictions include all positions, whether permanent or
 
21 temporary, that should be filled through civil service
 
22 recruitment procedures based on merit.
 
23      (b)  No position shall be exempted from civil service
 

 
a                                                     HRD-01(00)
Page 31                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 recruitment procedures unless it is based on valid reasons as
 
 2 specified in rules.  Valid reasons for exemption from civil
 
 3 service include, but are not limited to, the appointment of an
 
 4 individual to the position:
 
 5      (1)  Is specified in statutes;
 
 6      (2)  Is conditioned upon or limited to individuals meeting
 
 7           specific requirements, such as, commissioned or
 
 8           enlisted personnel of the Hawaii national guard;
 
 9      (3)  Is under the control of other authority, such as, the
 
10           legislative body, the board of regents, or the board of
 
11           education;
 
12      (4)  Is to be left to the discretion of the chief executive
 
13           or the appointing authority because the appointment
 
14           coincides with the chief executive or appointing
 
15           authority's term of office or the appointee serves at
 
16           the pleasure of the chief executive or appointing
 
17           authority, such as, private secretaries and division
 
18           chiefs or agency heads; or
 
19      (5)  Is to be made in accordance with a court order or
 
20           decree, such as, the Felix-Cayetano consent decree.
 
21 Regardless of whether a position is exempted from civil service
 
22 recruitment procedures, the determination of collective
 
23 bargaining coverage shall be made in accordance with section
 
24    -57 and the employer for purposes of negotiations shall be as
 

 
a                                                     HRD-01(00)
Page 32                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 specified in section    -60.
 
 2      (c)  The rules may provide for an exemption from civil
 
 3 service recruitment procedures if the appointment to the position
 
 4 has a limitation date and it would be impracticable to recruit
 
 5 under civil service recruitment procedures because the required
 
 6 probation period that is part of the examination process can not
 
 7 be completed.  The rules shall not permit multiple exemptions
 
 8 from civil service recruitment procedures to the same position
 
 9 when the position will be filled for a duration that would be
 
10 sufficient to recruit under civil service recruitment procedures
 
11 and allow for completion of the required probation period.
 
12      (d)  It is also the public policy of the State that all
 
13 civil service positions be covered under the classification plan
 
14 for the jurisdiction, unless the position is exempted from the
 
15 classification plan for valid reasons as set forth in rules.  The
 
16 rules may provide for the temporary exemption of a position until
 
17 a new class is established or for a permanent exemption.
 
18      (e)  The exemption of a position from the classification
 
19 plan, whether temporary or permanent, or an appointment with a
 
20 limitation date shall not itself result in an exemption from
 
21 civil service recruitment procedures.  Civil service recruitment
 
22 procedures based on merit shall be followed for all positions
 

 
a                                                     HRD-01(00)
 
Page 33                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 unless exempted pursuant to subsection (b) or (c).  Applicants
 
 2 referred under civil service recruitment procedures shall be
 
 3 informed if the position is temporarily or permanently exempted
 
 4 from the position classification plan or if the appointment has a
 
 5 limitation date.
 
 6      (f)  Each director shall be responsible for ensuring that
 
 7 all exemptions from civil service recruitment procedures or from
 
 8 the classification plan are consistent with its rules. With
 
 9 respect to positions exempted prior to the effective date of this
 
10 Act, the director shall review all positions to determine whether
 
11 the positions should continue to be exempt and if so, whether
 
12 from civil service recruitment procedures or the classification
 
13 plan, or both.  If the director determines that the exemption
 
14 from either or both are not for valid reasons in accordance with
 
15 rules, the director shall consult with the appropriate appointing
 
16 authority and its chief executive on removing the exemptions.
 
17 With the approval of the chief executive, the director shall take
 
18 whatever action is necessary to remove the exemptions, including
 
19 proposed statutory amendments.  The positions shall be converted
 
20 into the civil service or be included in the classification plan,
 
21 as appropriate, but only upon the approval of the legislature if
 
22 a statutory amendment is required.
 
23      (g)  The director shall establish rules for converting
 

 
a                                                     HRD-01(00)
Page 34                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 positions into the civil service or including positions in the
 
 2 classification plan.  The rules may allow for incumbents in
 
 3 positions to be retained; provided that, the rules shall not
 
 4 allow any incumbent to be retained unless the incumbent meets the
 
 5 minimum qualification requirements of the position.  The rules
 
 6 shall establish the manner for setting the compensation of
 
 7 incumbents upon their inclusion into the classification plan,
 
 8 which shall be fair and equitable in comparison to the
 
 9 compensation of other incumbents with comparable experience in
 
10 the same or essentially similar classes.  The rules may provide
 
11 for a temporary differential to preserve the incumbent's pay if
 
12 the incumbent's pay exceeds what is considered fair and equitable
 
13 in relation to incumbents in the class.
 
14      (h)  All positions established after the date of this Act
 
15 shall be included in the civil service and be filled through
 
16 civil service recruitment procedures unless exempted therefrom by
 
17 the director in accordance with rules or by the legislative body
 
18 of the jurisdiction.  Employees in positions subject to civil
 
19 service recruitment procedures shall be entitled to become and
 
20 remain members of the civil service for the duration of their
 
21 appointments as provided in section   -23. Employees in positions
 
22 exempted from civil service recruitment procedures shall not be
 
23 entitled to membership in the civil service.
 

 
a                                                     HRD-01(00)
Page 35                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (i)  All positions established after the date of this Act
 
 2 shall be included in the classification plan unless exempted
 
 3 therefrom by the director in accordance with rules or by the
 
 4 legislative body of the jurisdiction.  Employees in positions
 
 5 that are exempted from the classification plan, whether
 
 6 temporarily or permanently, may be entitled to membership in the
 
 7 civil service as provided in subsection (h).
 
 8      §  -17  Recruitment.  The director shall adopt rules in
 
 9 accordance with section   -4 and -11 to determine, establish, and
 
10 maintain the manner in which civil service positions are to be
 
11 filled.  The director shall seek continuous improvements to
 
12 streamline the recruitment process so that positions are filled
 
13 in the most economic, efficient, and expeditious manner possible.
 
14 This includes maximizing use of new technologies and developing
 
15 more efficient alternatives to ensure the availability of
 
16 qualified applicant pools whether it involves a change in the
 
17 manner in which initial appointments are to be made, increased
 
18 delegation to departments, or decentralization to appointing
 
19 authorities, as necessary and appropriate.
 
20      §  -18  Recruitment incentives.  Within limits set forth in
 
21 rules of the director, appointing authorities may pay for all or
 
22 a portion of the travel and transportation expenses or provide a
 
23 monetary incentive to enhance the recruitment of persons employed
 

 
a                                                     HRD-01(00)
Page 36                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 or appointed to critical-to-fill and labor shortage positions.
 
 2      §  -19  Examinations.  There shall be examinations for
 
 3 testing the fitness and ability of applicants for positions in
 
 4 civil service.  The director shall adopt rules to administer the
 
 5 examination programs.
 
 6      §  -20  Examination consultants.  (a)  The director or an
 
 7 appointing authority may select employees in the state service or
 
 8 any individual to act as volunteer subject-matter consultants in
 
 9 the preparation and rating of applications and examinations.
 
10 Notwithstanding the provisions of chapter 92F, the identity of
 
11 any volunteer subject-matter consultant, and any information
 
12 which would result in actual identification of any volunteer
 
13 subject-matter consultant, are confidential and shall not be
 
14 disclosed.
 
15      (b)  An appointing authority may excuse any employee in the
 
16 appointing authority's department from the employee's regular
 
17 duties for the time required for the employee's work as a
 
18 volunteer subject-matter consultant.  Employees shall not be
 
19 entitled to extra pay for services as volunteer consultants, but
 
20 shall be entitled to reimbursement for necessary traveling and
 
21 other expenses.
 
22      §  -21  Person ineligible for appointment.  A person shall
 
23 be ineligible for any appointment in the civil service for a
 

 
a                                                     HRD-01(00)
Page 37                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 specified period of time as determined appropriate by the
 
 2 director for reasons including any of, but not limited to, the
 
 3 following:
 
 4      (1)  Deception, fraud, or providing false or misleading
 
 5           statements of material facts in the application or
 
 6           examination process;
 
 7      (2)  Unauthorized or improper assistance in an examination;
 
 8           or
 
 9      (3)  A determination of unsuitability for employment.
 
10      §  -22  Classification.  Each director shall establish,
 
11 implement, and maintain one or more classification systems
 
12 covering all civil service positions, not otherwise exempted by
 
13 rules.  The classification systems shall be constructed with the
 
14 objective of achieving equal pay for equal work within the
 
15 jurisdiction.  The director shall establish rules that allow for
 
16 review and appeal of classification and initial pricing actions.
 
17      §  -23  Membership in civil service; requirements.  (a)  All
 
18 employees appointed to civil service positions shall constitute
 
19 the membership of the civil service, but no employee shall be
 
20 entitled to membership in civil service unless the employee:
 
21      (1)  Successfully serves the initial probation period that
 
22           is required as part of the examination process to
 
23           determine the employee's fitness and ability for the
 

 
a                                                     HRD-01(00)
Page 38                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           position; and
 
 2      (2)  Satisfies all qualifications in section   -4.  Any
 
 3           employee who does not satisfy the requirements of this
 
 4           subsection shall not become a member in the civil
 
 5           service and shall be allowed to resign from the
 
 6           position, otherwise the employee shall be terminated
 
 7           from the position.
 
 8      (b)  Upon becoming a member in the civil service, the
 
 9 employee shall be entitled to hold the member's position for the
 
10 duration of the member's appointment during good behavior and
 
11 while meeting all qualification and performance requirements of
 
12 the position; provided that:
 
13      (1)  An employee may be subject to suspension, demotion, or
 
14           dismissal for disciplinary reasons;
 
15      (2)  An employee may be subject to demotion or termination
 
16           for failure to meet qualification or performance
 
17           requirements of the employee's position; or
 
18      (3)  An employee may be subject to termination for lack of
 
19           work, lack of funds, or other legitimate reasons.
 
20 All civil service employees with permanent appointments,
 
21 including an employee who has the return rights to a position in
 
22 which the employee has a permanent appointment, shall have layoff
 
23 rights pursuant to section   -28.  All other civil service
 

 
a                                                     HRD-01(00)
Page 39                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 employees whose appointments have a limitation date shall not
 
 2 have layoff rights and shall be released at the end of their
 
 3 appointments or earlier if there is lack of work, funds, or other
 
 4 legitimate reasons.
 
 5      (c)  To retain membership in the civil service, including
 
 6 the right to return to a former position, all employees must
 
 7 continue to demonstrate their fitness and ability for their
 
 8 current positions by meeting all of the qualification and
 
 9 performance requirements.  Whenever an employee is not meeting
 
10 qualification or performance requirements of the position, the
 
11 employee shall be allowed the option to resign from civil
 
12 service, otherwise the employee shall be terminated from the
 
13 civil service.
 
14      (d)  If an employee is not meeting performance requirements
 
15 but the appointing authority deems that the employee's
 
16 deficiencies are correctable within a reasonable period, the
 
17 appointing authority may provide the employee an opportunity to
 
18 re-qualify for the position.  The appointing authority may
 
19 require the employee to successfully complete a special probation
 
20 period, not exceeding a period of three months, to demonstrate
 
21 the employee's fitness and ability for the position by meeting
 
22 all performance requirements.  While serving a special probation
 
23 period, the employee shall not be granted any pay increase that
 

 
a                                                     HRD-01(00)
Page 40                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 is provided to other employees for successfully meeting all
 
 2 performance requirements of their respective positions.  If an
 
 3 employee does not successfully complete the special probation
 
 4 period, the provisions of subsection (c) shall apply.
 
 5      (e)  A member who voluntarily moves from the employee's
 
 6 position to another position in the civil service may be required
 
 7 to successfully serve a new probation period as part of the
 
 8 examination process to determine the employee's fitness and
 
 9 ability for the new position.  A member who does not successfully
 
10 complete the new probation period after moving voluntarily from
 
11 the employee's former position shall be allowed to return to the
 
12 employee's former or a comparable position or to resign from
 
13 civil service, otherwise the employee shall be terminated from
 
14 civil service.
 
15      (f)  A member who is involuntarily moved due to work
 
16 performance or other work related reasons -from the employee's
 
17 position to another position in the civil service may be required
 
18 to successfully serve a new probation period as part of the
 
19 examination process to determine the employee's fitness and
 
20 ability for the new position.  A member who does not successfully
 
21 complete the new probation period after being moved involuntarily
 
22 from the employee's former position shall be allowed the option
 
23 to resign from civil service, otherwise the employee shall be
 

 
a                                                     HRD-01(00)
Page 41                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 terminated from civil service.
 
 2      (g)  The resignation or termination of an employee under
 
 3 this section shall not itself serve as a bar for future
 
 4 employment in public service, but the employee's inability to
 
 5 meet qualification or performance requirements may be considered
 
 6 in a determination of the employee's fitness and ability for
 
 7 positions essentially similar to the position from which the
 
 8 employee resigned or was terminated.
 
 9      (h)  An employee serving an appointment with a limitation
 
10 date may subsequently be appointed to the same position or a
 
11 related position in the same class within the department when a
 
12 permanent position is established or is vacated; provided that
 
13 the employee was initially hired through civil service
 
14 recruitment procedures and the period of service as a temporary
 
15 appointee immediately preceded the appointment to the permanent
 
16 position.  The period of service as a temporary appointee may be
 
17 credited toward the probation period if the appointing authority
 
18 certifies that the employee's performance as a temporary
 
19 appointee was satisfactory and encompassed duties essentially
 
20 similar to those required during an initial or new probation
 
21 period.  Upon such certification, the period of service performed
 
22 as a temporary appointee shall be credited toward the probation
 
23 period and the employee shall be required to serve only the
 

 
a                                                     HRD-01(00)
Page 42                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 remainder of the probation period, if any.
 
 2      §  -24  Performance appraisal systems.  Each director shall
 
 3 ensure that there shall be performance appraisal systems in place
 
 4 for civil service employees to carry out the purposes and
 
 5 policies of section   -11.
 
 6      §  -25  Non-disciplinary adverse actions; procedures and
 
 7 appeal rights.(a)  An appointing authority may demote or
 
 8 terminate any employee for failing to meet qualification and
 
 9 performance requirements of the employee's position and for other
 
10 non-disciplinary reasons that will promote efficiency of
 
11 government service.  Procedures for taking non-disciplinary
 
12 actions shall be as provided in this part and rules.
 
13      (b)  Adverse actions taken by the appointing authority
 
14 because of an employee's failure to meet qualification and
 
15 performance requirements of the position or to successfully
 
16 complete a probation period may be grieved internally up to the
 
17 level of the chief executive, through the departmental complaint
 
18 procedure or collective bargaining grievance procedure, as
 
19 applicable.  If the grievance has not been resolved internally
 
20 through the departmental complaint procedure or collective
 
21 bargaining grievance procedure, civil service employees may
 
22 appeal to the merit appeals board; provided that, the grievance
 
23 does not involve matters under the authority of another appellate
 

 
a                                                     HRD-01(00)
Page 43                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 body or administrative agency.
 
 2      (c)  Adverse actions taken for non-disciplinary reasons
 
 3 shall not be referred to arbitration under a collective
 
 4 bargaining agreement.
 
 5      §  -26  Disciplinary actions; procedures and appeal rights.
 
 6 (a)  An appointing authority may, for disciplinary purposes,
 
 7 suspend, dismiss, or demote any employee as the appointing
 
 8 authority considers appropriate.  Procedures for taking
 
 9 disciplinary actions, including appropriate notice and placing an
 
10 employee on leave without pay pending an investigation, shall be
 
11 as provided by rules or as may be negotiated under collective
 
12 bargaining agreements, as applicable.
 
13      (b)  Any civil service employee who is suspended, dismissed,
 
14 or demoted for disciplinary reasons may grieve and appeal the
 
15 disciplinary action.  Civil service employees covered by
 
16 collective bargaining agreements in part III shall grieve under
 
17 the grievance procedure in collective bargaining agreements and
 
18 the grievance may be submitted to arbitration. Civil service
 
19 employees excluded from collective bargaining coverage under part
 
20 IV shall grieve under the departmental complaint procedure
 
21 provided by rules and the grievance may be appealed to the merit
 
22 appeals board.
 
23      §  -27  Tenure; resignations.  (a)  Every member of the
 

 
a                                                     HRD-01(00)
Page 44                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 civil service shall be entitled to hold the member's position for
 
 2 the duration of the member's appointment as provided in
 
 3 section    -23.
 
 4      (b)  When an employee resigns, the resignation shall be in
 
 5 writing in accordance with rules.  If an employee resigns without
 
 6 submitting a resignation or the resignation is not accepted for
 
 7 reasons allowed by rules, the appointing authority shall, within
 
 8 fifteen days following the resignation, file with the director a
 
 9 statement showing termination of employment.
 
10      (c)  An employee may be deemed to have resigned if the
 
11 employee does not report to work for fifteen days without
 
12 authorization and did not express any desire to the appointing
 
13 authority during the fifteen-day period to continue employment.
 
14 The appointing authority shall file with the director a statement
 
15 showing termination of employment at the end of the fifteen-day
 
16 period.
 
17      (d)  Statements regarding terminations under this section
 
18 shall include any supporting information why the employee has
 
19 been deemed to have resigned, including but not limited to: the
 
20 employee stated a desire to quit or an unwillingness to continue
 
21 employment; the absence follows the end of an authorized leave;
 
22 the employee is engaged in other employment; the employee is
 
23 able, but not available for employment; or the employee attempted
 

 
a                                                     HRD-01(00)
Page 45                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 to resign while an investigation was pending against the
 
 2 employee.  A termination under this section shall be considered
 
 3 as a voluntary separation of employment that is employee
 
 4 initiated and shall not be grieved or appealed.
 
 5      (e)  If the employee does not report for work for fifteen
 
 6 days without authorization, but expressed during the fifteen-day
 
 7 period a desire to continue employment, the employee shall not be
 
 8 deemed to have resigned.  The appointing authority may take
 
 9 appropriate disciplinary action, including dismissal, in
 
10 consideration of the reasons for the employee's absence.  The
 
11 disciplinary action may be grieved under the appropriate internal
 
12 review procedure and appealed to the appropriate authority,
 
13 whether the merit appeals board or to arbitration under a
 
14 collective bargaining agreement.
 
15      §  -28  Layoff.  When it is necessary to release employees
 
16 from their positions due to lack of work, lack of funds, or other
 
17 legitimate reasons, employees with permanent appointments in
 
18 civil service positions shall have layoff rights.  Layoffs shall
 
19 be made in accordance with the procedures provided in rules or as
 
20 may be negotiated under collective bargaining agreements, as
 
21 applicable.
 
22      §  -29  Forms required of appointing authorities.  Each
 
23 director shall develop and administer an employment records
 

 
a                                                     HRD-01(00)
Page 46                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 management system and require appointing authorities to transmit
 
 2 such records as the director may request.  Appointing authorities
 
 3 shall maintain all records of all appointments, terminations of
 
 4 employment, transfers, resignations, suspensions, demotions,
 
 5 dismissals, and other employment records and forms deemed
 
 6 appropriate by the director.
 
 7      §  -30  Complaints and grievances; procedures.  (a)  Any
 
 8 person aggrieved because of any action by the director or an
 
 9 appointing authority, or adversely affected or aggrieved by such
 
10 action, shall have an exclusive internal review procedure
 
11 available to have the complaint or grievance heard and resolved
 
12 expeditiously.
 
13      (1)  Persons who are not employees and employees who are
 
14           excluded from collective bargaining coverage under part
 
15           IV shall utilize the departmental complaint procedure
 
16           provided by rules in accordance with subsection (b).
 
17      (2)  Employees who are covered under collective bargaining
 
18           agreements under part III shall utilize the contractual
 
19           grievance procedure, up to the level of the chief
 
20           executive, as their internal review procedure.
 
21      (b)  The departmental complaint procedure shall be in
 
22 accordance with rules that shall provide the following:
 
23      (1)  The procedure shall encourage informal and expeditious
 

 
a                                                     HRD-01(00)
Page 47                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           resolution of the complaint.  Informal resolution
 
 2           includes the use of any administrative review process
 
 3           available.  A written decision shall be issued to the
 
 4           complainant on the outcome of any efforts to resolve
 
 5           the complaint informally.
 
 6      (2)  In presenting the complaint, the complainant shall be
 
 7           assured freedom from coercion, discrimination, and
 
 8           reprisal.
 
 9      (3)  The complainant shall have the right to be represented
 
10           by a person or persons of the complainant's choosing at
 
11           any stage in the presentation of the complaint.
 
12      (4)  To minimize confusion and loss of rights, the time and
 
13           manner for filing a formal complaint shall be as
 
14           uniform and easily understandable as possible to the
 
15           general public.  Complaint forms, instructions, and the
 
16           complaint procedure should be readily accessible.
 
17           Complaints should be required to be filed at central
 
18           locations convenient to the public, then the complaint
 
19           should be referred to the lowest level of the complaint
 
20           procedure that has the authority to act.  The deadline
 
21           for filing a formal complaint shall be tolled after a
 
22           reply is received to the informal complaint if efforts
 
23           were made to resolve the complaint informally.
 

 
a                                                     HRD-01(00)
Page 48                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (5)  All proceedings relating to the handling of a complaint
 
 2           by a person who is not an employee shall so far as
 
 3           practicable be conducted at times convenient to the
 
 4           complainant.  All proceedings relating to the handling
 
 5           of an employee complaint shall so far as practicable be
 
 6           conducted during the employee's work hours to permit
 
 7           the employee time off from work with pay.
 
 8      (6)  The departmental complaint procedure shall culminate in
 
 9           a written decision by the chief executive or the chief
 
10           executive's designee, whether the director or the
 
11           appointing authority, who has been assigned
 
12           responsibility and is accountable for the action being
 
13           complained about.
 
14      (c)  The applicable internal review procedure shall be
 
15 exhausted before an appeal is filed with the merit appeals board.
 
16 The complainant or grievant is responsible for the timely filing
 
17 of an appeal with the appropriate agency or appellate body
 
18 regardless of whether the applicable internal review procedure is
 
19 utilized.
 
20      §  -31  Merit appeals boards; establishment.  (a)  Each
 
21 jurisdiction shall establish a merit appeals board that shall
 
22 have exclusive authority to hear and decide appeals concerning
 
23 the civil service of the jurisdiction under this part; provided
 

 
a                                                     HRD-01(00)
Page 49                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 that, the appeal does not involve prohibited acts that is under
 
 2 the authority of another administrative agency or appellate body
 
 3 or may be referred to arbitration under a collective bargaining
 
 4 agreement.
 
 5      (b)  Members of the merit appeals board shall be persons who
 
 6 can objectively apply the merit principle to public employment.
 
 7      (c)  No person who occupies any elective or appointive
 
 8 office or any position under the state or county government shall
 
 9 be eligible for membership on or continue to be a member of the
 
10 merit appeals board.  No member of the board shall, during the
 
11 member's term of office, serve as an officer or committee member
 
12 of any political party organization, including a precinct
 
13 organization, or present oneself as a candidate or be a candidate
 
14 for nomination or election to any public office at any election.
 
15 The office of any member who violates this section shall be
 
16 conclusively presumed to have been abandoned and vacated by
 
17 reason thereof and thereupon a qualified person shall be
 
18 appointed to fill the vacancy.  As an alternative remedy,
 
19 proceedings in the nature of quo warranto may be brought by any
 
20 person to oust any member who violates this subsection.
 
21      (d)  Any other qualifications or limitations on board
 
22 members, whether the number of members, the manner of
 
23 appointment, the term of office, any limitation on terms, the
 

 
a                                                     HRD-01(00)
Page 50                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 appointment or designation of a chairperson, or the removal of
 
 2 members, and the designated name of the merit appeals board,
 
 3 shall be left to the determination of each jurisdiction based on
 
 4 its own preferences and needs.  The provisions of section 26-34
 
 5 shall not apply.
 
 6      (e)  The members on each jurisdiction's civil service
 
 7 commission or appeals board on the effective date of this Act
 
 8 shall continue in office in accordance with their appointments.
 
 9 A jurisdiction may use its civil service commission or appeals
 
10 board, with or without modification as allowed under subsection
 
11 (d), as its merit appeals board to assume all of the functions
 
12 and responsibilities under this part, as soon as practicable,
 
13 beginning with the adoption of rules of practice and procedure.
 
14      (f)  Official business of the merit appeals board, other
 
15 than mediation as provided in section   -32(c), shall be
 
16 conducted in meetings open to the public, unless otherwise
 
17 provided in chapter 92.  The majority of members to which the
 
18 board is entitled shall constitute a quorum.
 
19      (g)  Each member of the merit appeals board shall serve
 
20 without compensation, unless otherwise provided by the chief
 
21 executive under part IV.  When any member is required to travel
 
22 in the performance of such duties, the chief executive shall
 
23 provide for reasonable traveling expenses under part IV.
 

 
a                                                     HRD-01(00)
Page 51                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      §  -32  Merit appeals board; duties, and jurisdiction. (a)
 
 2 The merit appeals board of each jurisdiction shall have the
 
 3 authority to render a final and binding decision on actions under
 
 4 this part taken by the chief executive, the director, an
 
 5 appointing authority, or a designee acting on behalf of one of
 
 6 these individuals, including but not limited to:
 
 7      (1)  The classification, reclassification, allocation, and
 
 8           reallocation of a particular position;
 
 9      (2)  The initial pricing of classes;
 
10      (3)  The filling of vacancies, including the publication of
 
11           a vacancy announcement, examination of applicants, and
 
12           eligibility for referral;
 
13      (4)  The non-disciplinary demotion or termination of a civil
 
14           service employee for failure or inability to meet
 
15           qualification or performance requirements of the
 
16           employee's position; and
 
17      (5)  The disciplinary action taken against a civil service
 
18           employee who is not covered under collective bargaining
 
19           agreement.  With respect to disciplinary action taken
 
20           against a civil service employee who is covered under a
 
21           collective bargaining agreement, the merit appeals
 
22           board shall not accept an appeal, unless it is filed
 
23           with a written agreement.  The written agreement must
 

 
a                                                     HRD-01(00)
Page 52                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           be signed by the employee, the exclusive
 
 2           representative, and the employer stating that all
 
 3           parties mutually agree that an appeal may be filed with
 
 4           the merit appeals board, in lieu of arbitration under
 
 5           the collective bargaining agreement.
 
 6      (b)  A person, an employee, or an exclusive bargaining
 
 7 representative acting on behalf of an employee, shall be entitled
 
 8 to submit an appeal to the merit appeals board for a decision
 
 9 regarding an action under subsection (a). The appropriate
 
10 internal review procedure shall be exhausted before an appeal is
 
11 filed with the merit appeals board.  The appeal shall be subject
 
12 to the following:
 
13      (1)  If the act complained of constitutes an unlawful act
 
14           that is under the jurisdiction of an appellate body or
 
15           administrative agency, the merit appeals board shall
 
16           not act, but shall defer to the authority of the
 
17           appropriate agency.
 
18      (2)  If the act complained of is arbitrable under a
 
19           collective bargaining contract, the merit appeals board
 
20           shall not act, unless there is an agreement as provided
 
21           in paragraph (a)(5) or the matter is referred to it
 
22           under paragraph (b)(3).
 
23      (3)  In the event of controversy on the appropriate
 

 
a                                                     HRD-01(00)
Page 53                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           authority to hear an appeal, the merit appeals board
 
 2           shall hold any proceedings before it on the appeal in
 
 3           abeyance until the matter is determined by the Hawaii
 
 4           labor relations board as provided in section    -8.
 
 5           The merit appeals board shall not act or shall proceed
 
 6           in accordance with the determination of the Hawaii
 
 7           labor relations board.
 
 8      (4)  Employees who are not members of the civil service may
 
 9           utilize the appropriate internal review procedure, but
 
10           shall have no right to appeal actions of their
 
11           respective appointing authorities to the merit appeals
 
12           board unless they are applicants affected by actions
 
13           under paragraph (a)(3).
 
14      (c)  Whenever the board determines that mediation may result
 
15 in a satisfactory resolution of an appeal, may narrow the issues
 
16 on appeal, or otherwise expedite a decision, the board may
 
17 require the parties to submit the issues to mediation.  Mediation
 
18 may be provided by any member or members of the merit appeals
 
19 board or by a public or non-profit agency, which offers mediation
 
20 or similar services for resolving or narrowing differences.  If
 
21 mediation is used but the appeal is not resolved, the merit
 
22 appeals board shall conduct a hearing and issue a decision on all
 
23 unresolved issues.
 

 
a                                                     HRD-01(00)
Page 54                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (d)  Both the appealing employee and the appointing
 
 2 authority shall have the right to be heard publicly, present
 
 3 evidence, and be represented by counsel who shall have the right
 
 4 to examine and cross-examine witnesses.  At the hearing technical
 
 5 rules of evidence shall not apply.  The merit appeals board shall
 
 6 have the power to compel the attendance of witnesses and
 
 7 administer oaths to witnesses.
 
 8      (e)  For the purpose of hearing appeals fairly and
 
 9 expeditiously, the merit appeals board may at any time appoint a
 
10 competent and qualified disinterested person to act as its
 
11 hearing officer.  The hearing officer shall hear the matter in
 
12 the same manner as if it were before the merit appeals board and
 
13 upon the conclusion of the hearing, shall report the hearing
 
14 officer's findings of fact, conclusions, and recommendations to
 
15 all parties and the merit appeals board. The merit appeals board
 
16 shall render a decision after reviewing the hearing officer's
 
17 report.
 
18      (f)  All decisions of the merit appeals board shall be final
 
19 and binding and shall not be subject to chapter 91.
 
20      (g)  Each merit appeals board shall adopt rules of practice
 
21 and procedures without regard to chapter 91, but in accordance
 
22 with the same rule-making requirements in section    -15
 
23 applicable to each director.  The rules shall recognize that
 

 
a                                                     HRD-01(00)
Page 55                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 matters of methodology and administration are left for execution
 
 2 by the director.  The rules may provide for reimbursement or the
 
 3 sharing of specific expenses directly incurred as a result of the
 
 4 appeal if the merit appeals board deems that it would be
 
 5 equitable and appropriate.  It may include expenses of a hearings
 
 6 officer, mediation services not provided by members of the board,
 
 7 transcription if requested by the parties, traveling and per diem
 
 8 for individuals other than board members or permanent staff of
 
 9 the board, and other related expenses.
 
10      (h)  The legal counsel for each merit appeals board shall be
 
11 decided by agreement of the chief legal officers of all
 
12 jurisdictions in consideration of their need to avoid conflicts
 
13 in representation and the merit appeals boards' functions and
 
14 responsibilities.
 
15      §  -33  Director; deputy director.  (a)  The merit appeals
 
16 boards of the counties of Hawaii, Maui, and Kauai shall appoint
 
17 and may at their pleasure remove a director, who shall be the
 
18 head of the department or other organizational segment that
 
19 includes the central personnel agency of the jurisdiction.  The
 
20 director shall, at the time of the director's appointment, and
 
21 thereafter, be thoroughly familiar with the principles and
 
22 methods of personnel administration and shall apply merit
 
23 principle and scientific administrative methods to public
 

 
a                                                     HRD-01(00)
Page 56                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 personnel administration.
 
 2      (b)  Because cumulative experience and continuity in office
 
 3 are essential to the proper administration of this chapter, it is
 
 4 declared to be in the public interest to continue the director in
 
 5 office as long as efficiency is demonstrated.  The provisions of
 
 6 section 26-31 or any similar limitation on a term that expires at
 
 7 the end of the chief executive's term shall not apply to
 
 8 subsection (a).
 
 9      (c)  Each director under subsection (a) may designate a
 
10 qualified person as the director's deputy.  The deputy shall be
 
11 thoroughly familiar with the principles and methods of personnel
 
12 administration and shall apply merit principle and scientific
 
13 administrative methods to public personnel administration.  In
 
14 case of a vacancy in the office of director or of the absence of
 
15 the director or the director's inability from any cause to
 
16 discharge the powers and duties of the director's office, the
 
17 powers and duties shall devolve upon the director's deputy.
 
18      (d)  The director for the State shall be subject to
 
19 appointment and removal in the same manner as other department
 
20 heads in accordance with section 26-31.
 
21      (e)  The directors for the Hawaii health systems
 
22 corporation, the judiciary, and the city and county of Honolulu
 
23 respectively, shall be subject to appointment and removal in the
 

 
a                                                     HRD-01(00)
Page 57                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 manner determined by the appropriate authority of the
 
 2 jurisdiction.
 
 3      §  -34  State merit appeals board; establishment and
 
 4 exceptions.(a)  The merit appeals board for the State shall be
 
 5 comprised of three members appointed by the governor.  All
 
 6 members shall have prior experience in public employment and
 
 7 knowledge of public employment laws.  One member shall have
 
 8 experience as a representative of an employee organization, one
 
 9 member shall have experience as a representative of management
 
10 and one member shall have prior experience in public employment
 
11 and knowledge of public employment laws. The governor shall
 
12 consider the names of qualified individuals submitted by employee
 
13 organizations and management before appointing the members of the
 
14 appeals board.  The chairman of the merit appeals board shall be
 
15 designated as provided in rules established by the board.
 
16      (b)  Because cumulative experience and continuity in office
 
17 are essential to the proper administration of this part, it is
 
18 declared to be in the public interest to continue board members
 
19 in office as long as efficiency is demonstrated. The provisions
 
20 of sections 26-34 shall not apply.  Members shall be appointed
 
21 for five-year terms and may be re-appointed without limitation as
 
22 long as efficiency is demonstrated.  The governor shall fill any
 
23 vacancy by appointing a new member for a five-year term.  The
 

 
a                                                     HRD-01(00)
Page 58                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 governor may remove for cause any member after due notice and
 
 2 public hearing.
 
 3      (c)  All provisions with respect to the merit appeals board
 
 4 of each jurisdiction shall apply to the state merit appeals board
 
 5 unless otherwise expressly provided.
 
 6      §  -35  Special fund.  There is established a special fund
 
 7 for use by the department of human resources development.
 
 8 Revenues received as a result of entrepreneurial efforts of the
 
 9 department in securing new sources of funds not provided for in
 
10 the department's budget for services rendered by the department
 
11 shall be deposited into the special fund and expended for the
 
12 department's related activities and programs. The department may
 
13 use the moneys in the special fund to employ necessary personnel
 
14 or for other purposes in support of departmental entrepreneurial
 
15 initiatives and programs.
 
16                 PART III.  COLLECTIVE BARGAINING
 
17      §  -51  Statement of findings and policy.  (a)  The
 
18 legislature finds that joint decision-making is the modern way of
 
19 administering government.  Where public employees have been
 
20 granted the right to share in the decision-making process
 
21 affecting wages and working conditions, they have become more
 
22 responsive and better able to exchange ideas and information on
 
23 operations with their administrators.  Accordingly, government is
 

 
a                                                     HRD-01(00)
Page 59                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 made more effective.  The legislature further finds that the
 
 2 enactment of positive legislation establishing guidelines for
 
 3 public employment relations is the best way to harness and direct
 
 4 the energies of public employees eager to have a voice in
 
 5 determining their conditions of work; to provide a rational
 
 6 method for dealing with disputes and work stoppages; and to
 
 7 maintain a favorable political and social environment.
 
 8      (b)  The legislature declares that it is the public policy
 
 9 of the State to promote harmonious and cooperative relations
 
10 between government and its employees and to protect the public by
 
11 assuring effective and orderly operations of government.  These
 
12 policies are best effectuated by:
 
13      (1)  Recognizing the right of public employees to organize
 
14           for the purpose of collective bargaining;
 
15      (2)  Requiring public employers to negotiate with and enter
 
16           into written agreements with exclusive representatives
 
17           on matters of wages, hours, benefits, and other
 
18           conditions of employment, while, at the same time,
 
19           maintaining the merit principle and the principle of
 
20           equal pay for equal work within each jurisdiction as
 
21           provided in part II; and
 
22      (3)  Creating a labor relations board to administer the 
 
23 provisions of this part and chapter 377.
 

 
a                                                     HRD-01(00)
Page 60                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      §  -52  Definitions.  As used in this part:
 
 2      "Appropriate bargaining unit" or "bargaining unit" means the
 
 3 unit designated as appropriate under section   -57 for
 
 4 representation purposes, which may have sub-units established
 
 5 under section   -60 for purposes of negotiations when there are
 
 6 employees from more than one jurisdiction.
 
 7      "Arbitration" means the procedure whereby an employer and an
 
 8 exclusive representative submit their unresolved differences to a
 
 9 neutral third party for a decision.  It includes a "med-arb"
 
10 procedure in which a neutral third party serves as mediator and
 
11 arbitrator and the items not resolved in mediation are subject to
 
12 an arbitration decision by a mediator-arbitrator.
 
13      "Board" means the Hawaii labor relations board created
 
14 pursuant to section   -56.
 
15      "Collective bargaining" means the performance of the mutual
 
16 obligations of an employer and an exclusive representative to
 
17 meet at reasonable times, to confer and negotiate in good faith,
 
18 and to execute a written agreement with respect to wages, hours,
 
19 benefits, and other terms and conditions of employment.  These
 
20 obligations do not compel either party to agree to a proposal or
 
21 require either party to make a concession.
 
22      "Cost items" include wages, hours, benefits, and other terms
 
23 and conditions of employment that require appropriations and must
 

 
a                                                     HRD-01(00)
Page 61                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 be submitted to a legislative body for approval.
 
 2      "Employee" or "public employee" means any person employed by
 
 3 a public employer, except elected and appointed officials and
 
 4 other employees that are excluded from coverage in section
 
 5 -57(d).
 
 6      "Employee organization" means any organization of any kind
 
 7 in which public employees participate and which exists for the
 
 8 primary purpose of dealing with public employers concerning
 
 9 grievances, labor disputes, wages, hours, benefits, and other
 
10 terms and conditions of employment of public employees.
 
11      "Fact-finding" means identification of the major issues in a
 
12 particular impasse, review of the positions of the parties and
 
13 resolution of factual differences by one or more neutral fact-
 
14 finders, and the making of recommendations for settlement of the
 
15 impasse.
 
16      "Impasse" means failure of a public employer and an
 
17 exclusive representative to achieve agreement in the course of
 
18 collective bargaining.  It includes any declaration by the board
 
19 under section   -64(c).
 
20      "Mediation" means assistance by a neutral third party to
 
21 reconcile an impasse between an employer and an exclusive
 
22 representative through interpretation, suggestion, and advice to
 
23 resolve the impasse.
 

 
a                                                     HRD-01(00)
Page 62                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      "Strike" means a public employee's refusal, in concerted
 
 2 action with others, to report for duty, or the employee's willful
 
 3 absence from the employee's position, or the employee's stoppage
 
 4 of work, or the employee's abstinence in whole or in part from
 
 5 the full, faithful, and proper performance of the duties of
 
 6 employment, for the purpose of inducing, influencing, or coercing
 
 7 a change in the conditions, compensation, rights, privileges, or
 
 8 obligations of public employment; and except in the case of
 
 9 absences authorized by public employers, it includes such
 
10 refusal, absence, stoppage, or abstinence by any public employee
 
11 out of sympathy or support for any other public employee who is
 
12 on strike or because of the presence of any picket line
 
13 maintained by any other public employee; provided that, nothing
 
14 herein shall limit or impair the right of any public employee to
 
15 express or communicate a complaint or opinion on any matter
 
16 related to the conditions of employment.
 
17      §  -53  Rights of employees.  Employees shall have the right
 
18 of self-organization and the right to form, join, or assist any
 
19 employee organization for the purpose of bargaining collectively
 
20 through representatives of their own choosing on questions of
 
21 wages, hours, benefits, and other terms and conditions of
 
22 employment, and to engage in lawful, concerted activities for the
 
23 purpose of collective bargaining or other mutual aid or
 

 
a                                                     HRD-01(00)
Page 63                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 protection, free from interference, restraint, or coercion.  An
 
 2 employee shall have the right to refrain from any or all of such
 
 3 activities, except for having a payroll deduction equivalent to
 
 4 regular dues as authorized under sections   -54 and   -55.
 
 5      §  -54  Payroll deductions.  (a)  Upon receiving from an
 
 6 exclusive representative a written statement specifying the
 
 7 amount of regular dues required of its members in the appropriate
 
 8 bargaining unit, the employer shall deduct this amount from the
 
 9 payroll of every member employee in the appropriate bargaining
 
10 unit and remit the amount to the exclusive representative.
 
11 Additionally, the employer shall deduct an amount equivalent to
 
12 the regular dues from the payroll of every nonmember employee in
 
13 the appropriate bargaining unit and shall remit the amount to the
 
14 exclusive representative; provided that the deduction from
 
15 nonmember employees shall be made only for an exclusive
 
16 representative which provides a procedure for determining the
 
17 amount of a refund to any employee, who demands the return of any
 
18 part of the deduction, which represents the employee's pro rata
 
19 share of expenditures made by the exclusive representative for
 
20 activities of a political and ideological nature unrelated to
 
21 terms and conditions of employment.  If a nonmember employee
 
22 objects to the amount to be refunded, the nonmember employee may
 
23 petition the board for review thereof within fifteen days after
 

 
a                                                     HRD-01(00)
Page 64                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 notice of the refund has been received.  If an employee
 
 2 organization is no longer the exclusive representative of the
 
 3 appropriate bargaining unit, the deduction from the payroll of
 
 4 members and nonmembers shall terminate.
 
 5      (b)  The employer shall, upon written authorization by an
 
 6 employee executed at any time after the employee's joining an
 
 7 employee organization, deduct from the payroll of the employee
 
 8 the amount of membership dues, initiation fees, group insurance
 
 9 premiums, and other association benefits and shall remit the
 
10 amount to the employee organization designated by the employee.
 
11      (c)  The employer shall continue all payroll assignments
 
12 authorized by an employee prior to July 1, 1970 and all
 
13 assignments authorized under subsection (b) until notification is
 
14 submitted by an employee to discontinue the employee's
 
15 assignments.
 
16      §  -55  Religious exemption from support of employee
 
17 organization.  Any employee who is a member of and adheres to
 
18 established and traditional tenets or teachings of a bona fide
 
19 religion, body, or sect which has historically held conscientious
 
20 objections to joining or financially supporting employee
 
21 organizations, shall not be required to join or financially
 
22 support any employee organization as a condition of employment;
 
23 except that an employee may be required in a contract between an
 

 
a                                                     HRD-01(00)
Page 65                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 employee's employer and employee organization in lieu of periodic
 
 2 dues and initiation fees, to pay sums equal to the dues and
 
 3 initiation fees to a non-religious, non-labor organization
 
 4 charitable fund exempt from taxation under section 501(c)(3) of
 
 5 the Internal Revenue Code, chosen by the employee from a list of
 
 6 at least three funds, designated in the contract or if the
 
 7 contract fails to designate any funds, then to any fund chosen by
 
 8 the employee. If an employee who holds conscientious objections
 
 9 pursuant to this section requests the employee organization to
 
10 use the grievance-arbitration procedure on the employee's behalf,
 
11 the employee organization is authorized to charge the employee
 
12 for the reasonable cost of using the procedure.
 
13      §  -56  Hawaii labor relations board.  (a)  There is created
 
14 a Hawaii labor relations board which shall serve in the public's
 
15 best interest to ensure that collective bargaining is conducted
 
16 in accordance with this part and that the merit principle and the
 
17 principle of equal pay for equal work within a jurisdiction in
 
18 part II are maintained.
 
19      (b)  The board shall be composed of three members.  At least
 
20 one member shall have management experience, one member shall
 
21 have labor union experience, and the third member, the
 
22 chairperson, shall have experience in public sector employment
 
23 laws.  Public employers and employee organizations representing
 

 
a                                                     HRD-01(00)
Page 66                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 public employees may submit to the governor for consideration
 
 2 names of persons to serve as members of the board and the
 
 3 governor shall first consider these persons in selecting the
 
 4 members of the board.
 
 5      (c)  All members shall be appointed by the governor for
 
 6 terms of six years each.  Each member shall hold office until the
 
 7 member's successor is appointed and qualified.  Because
 
 8 cumulative experience and continuity in office are essential to
 
 9 the proper administration of this part, it is declared to be in
 
10 the public interest to continue board members in office as long
 
11 as efficiency is demonstrated, notwithstanding the provision of
 
12 section 26-34, which limits the appointment of a member of a
 
13 board or commission to two terms.
 
14      (d)  The members shall devote full time to their duties as
 
15 members of the board.  Effective January 1, 1989, and January 1,
 
16 1990, the salary of the chairperson of the board shall be set by
 
17 the governor within the range from $69,748 to $74,608 and $72,886
 
18 to $77,966 a year, respectively, and the salary of each of the
 
19 other members shall be ninety-five per cent of the chairperson's
 
20 salary.  No member shall hold any other public office or be in
 
21 the employment of the State or a county, or any department or
 
22 agency thereof, or any employee organization during the member's
 
23 term.
 

 
a                                                     HRD-01(00)
Page 67                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (e)  Any action taken by the board shall be by a simple
 
 2 majority of the members of the board.  All decisions of the board
 
 3 shall be reduced to writing and shall state separately its
 
 4 finding of fact and conclusions.  Any vacancy in the board shall
 
 5 not impair the authority of the remaining members to exercise all
 
 6 the powers of the board.  The governor may appoint an acting
 
 7 member of the board during the temporary absence from the State
 
 8 or the illness of any regular member. An acting member, during
 
 9 the acting member's term of service, shall have the same powers
 
10 and duties as the regular member.
 
11      (f)  The chairperson of the board shall be responsible for
 
12 the administrative functions of the board.  The board may appoint
 
13 an executive officer, mediators, members of fact-finding boards,
 
14 arbitrators, and hearing officers, and employ other assistants as
 
15 it may deem necessary in the performance of its functions,
 
16 prescribe their duties, and fix their compensation and provide
 
17 for reimbursement of actual and necessary expenses incurred by
 
18 them in the performance of their duties within the amounts made
 
19 available by appropriations therefor.  Section 103D-209(b)
 
20 notwithstanding, an attorney employed by the board as a full-time
 
21 staff member may represent the board in litigation, draft legal
 
22 documents for the board, and provide other necessary legal
 
23 services to the board and shall not be deemed to be a deputy
 

 
a                                                     HRD-01(00)
Page 68                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 attorney general.
 
 2      (g)  The board shall be within the department of labor and
 
 3 industrial relations for budgetary and administrative purposes
 
 4 only.  All members of the board and employees shall be exempt
 
 5 from civil service; except clerical and stenographic employees
 
 6 who shall be appointed in accordance with part II.
 
 7      (h)  At the close of each fiscal year, the board shall make
 
 8 a written report to the governor on its activities, including the
 
 9 cases and their dispositions, and the names, duties, and salaries
 
10 of its officers and employees.  Copies of the report shall be
 
11 transmitted to the other chief executives, the exclusive
 
12 representatives, and the legislative body and merit appeals board
 
13 of each jurisdiction.
 
14      (i)  In addition to the powers and functions provided in
 
15 other sections of this part, the board shall:
 
16      (1)  Establish procedures for, investigate, and resolve, any
 
17           dispute concerning the designation of an appropriate
 
18           bargaining unit and the application of section   -57 to
 
19           specific employees and positions;
 
20      (2)  Establish procedures for, resolve disputes with respect
 
21           to, and supervise the conduct of, elections for the
 
22           determination of employee representation;
 
23      (3)  Resolve controversies under this chapter in the
 

 
a                                                     HRD-01(00)
Page 69                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           public's best interest in consideration of the
 
 2           requirements to:  maintain a civil service system based
 
 3           on merit and equal pay for equal work within a
 
 4           jurisdiction; ensure public employees' right to bargain
 
 5           collectively are protected to the extent it does not
 
 6           interfere with the public employer's rights and
 
 7           obligations; and preserve any authority retained by the
 
 8           state legislature, whether through the exclusion of
 
 9           matters from negotiations, setting limitations on
 
10           negotiable matters, or requiring that negotiable
 
11           matters be submitted to the respective legislative
 
12           bodies for approval.
 
13      (4)  Conduct proceedings on complaints of prohibited
 
14           practices by employers, employees, and employee
 
15           organizations and take such actions with respect
 
16           thereto as it deems necessary and proper;
 
17      (5)  Hold such hearings and make such inquiries, as it deems
 
18           necessary, to carry out properly its functions and
 
19           powers, and for the purpose of such hearings and
 
20           inquiries, administer oaths and affirmations, examine
 
21           witnesses and documents, take testimony and receive
 
22           evidence, compel attendance of witnesses and the
 
23           production of documents by the issuance of subpoenas,
 

 
a                                                     HRD-01(00)
Page 70                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           and delegate such powers to any member of the board or
 
 2           any person appointed by the board for the performance
 
 3           of its functions;
 
 4      (6)  Determine qualifications and establish, after reviewing
 
 5           nominations submitted by the public employers and
 
 6           employee organizations, lists of qualified persons,
 
 7           broadly representative of the public, to be available
 
 8           to serve as mediators, members of fact-finding boards,
 
 9           or arbitrators;
 
10      (7)  Establish a fair and reasonable range of daily or
 
11           hourly rates at which mediators, members of fact-
 
12           finding boards, and arbitrators on the lists
 
13           established under paragraph (6) are to be compensated;
 
14      (8)  Conduct studies on problems pertaining to public
 
15           employee-management relations, and make recommendations
 
16           with respect thereto to the legislative bodies; request
 
17           information and data from state and county departments
 
18           and agencies and employee organizations necessary to
 
19           carry out its functions and responsibilities; make
 
20           available to all concerned parties, including
 
21           mediators, members of fact-finding boards, and
 
22           arbitrators, statistical data relating to wages,
 

 
a                                                     HRD-01(00)
 
Page 71                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           benefits, and employment practices in public and
 
 2           private employment to assist them in resolving issues
 
 3           in negotiations;
 
 4      (9)  Adopt rules relative to the exercise of its powers and
 
 5           authority and to govern the proceedings before it in
 
 6           accordance with chapter 91; and
 
 7     (10)  Execute all of its responsibilities in a timely manner
 
 8           so as to facilitate and expedite the resolution of
 
 9           issues before it.
 
10      (j)  For the purpose of minimizing travel and per diem
 
11 expenses for parties who are not located on Oahu, the board shall
 
12 utilize more cost efficient means such as teleconferencing which
 
13 does not require appearances on Oahu, whenever practicable, to
 
14 conduct its proceedings. Alternatively, it shall consider
 
15 conducting its proceedings on another island whenever it is more
 
16 cost efficient in consideration of the parties and the witnesses
 
17 involved.
 
18      §  -57  Appropriate bargaining units.  (a) All employees
 
19 throughout the State within any of the following categories shall
 
20 constitute an appropriate bargaining unit:
 
21      (1)  Non-supervisory employees in blue collar positions;
 
22      (2)  Supervisory employees in blue collar positions;
 
23      (3)  Non-supervisory employees in white collar positions;
 

 
a                                                     HRD-01(00)
Page 72                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (4)  Supervisory employees in white collar positions;
 
 2      (5)  Teachers and other personnel of the department of
 
 3           education under the same pay schedule, including part-
 
 4           time employees working less than twenty hours a week
 
 5           who are equal to one-half of a full-time equivalent;
 
 6      (6)  Educational officers and other personnel of the
 
 7           department of education under the same pay schedule;
 
 8      (7)  Faculty of the University of Hawaii and the community
 
 9           college system;
 
10      (8)  Personnel of the University of Hawaii and the community
 
11           college system, other than faculty;
 
12      (9)  Registered professional nurses;
 
13     (10)  Institutional, health, and correctional workers;
 
14     (11)  Firefighters;
 
15     (12)  Police officers; and
 
16     (13)  Professional and scientific employees, who can not be
 
17           included in any of the other bargaining units.
 
18      (b)  Because of the nature of work involved and the
 
19 essentiality of certain occupations that require specialized
 
20 training, supervisory employees who are eligible for inclusion in
 
21 units (9) through (13) shall be included in units (9) through
 
22 (13), respectively, instead of units (2) or (4).
 
23      (c)  The classification systems of each jurisdiction, the
 

 
a                                                     HRD-01(00)
Page 73                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 department of education, and the university of Hawaii, shall be
 
 2 the bases for differentiating blue collar from white collar
 
 3 employees, professional from institutional, health and
 
 4 correctional workers, supervisory from non-supervisory employees,
 
 5 teachers from educational officers, and faculty from non-faculty.
 
 6 In differentiating supervisory from non-supervisory employees,
 
 7 class titles alone shall not be the basis for determination.  The
 
 8 nature of the work, including whether a major portion of the
 
 9 working time of a supervisory employee is spent as part of a crew
 
10 or team with non-supervisory employees, shall be considered also.
 
11      (d)  The following individuals shall not be included in any
 
12 appropriate bargaining unit or be entitled to coverage under this
 
13 part:
 
14      (1)  Elected or appointed official;
 
15      (2)  Member of any board or commission;
 
16      (3)  Representative of a public employer, including the
 
17           administrative officer, director, or chief of a state
 
18           or county department or agency, or any major division
 
19           thereof, as well as any first deputy, first assistant,
 
20           legal counsel, and other top-level managerial and
 
21           administrative personnel;
 
22      (4)  Secretary to top-level managerial and administrative
 

 
a                                                     HRD-01(00)
 
Page 74                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           personnel under (3);
 
 2      (5)  Individual concerned with confidential matters
 
 3           affecting employee-employer relations;
 
 4      (6)  Part-time employee working less than twenty hours per
 
 5           week, except part-time employees included in unit (5);
 
 6      (7)  Temporary employee of three months' duration or less;
 
 7      (8)  Employee of the executive office of the governor or a
 
 8           household employee at Washington Place;
 
 9      (9)  Employee of the executive office of the lieutenant
 
10           governor;
 
11     (10)  Employee of the executive office of the mayor;
 
12     (11)  Staff of the legislative branch of the State;
 
13     (12)  Staff of the legislative branches of the counties,
 
14           except employees of the clerks' offices of the
 
15           counties;
 
16     (13)  Any commissioned and enlisted personnel of the Hawaii
 
17           national guard;
 
18     (14)  Inmate, kokua, patient, ward or student of a state
 
19           institution;
 
20     (15)  Student help; or
 
21     (16)  Staff of the board.
 
22      (e)  Where any controversy arises under this section, the
 
23 board shall, pursuant to chapter 91, make an investigation and,
 

 
a                                                     HRD-01(00)
Page 75                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 after a hearing upon due notice, make a final determination on
 
 2 the applicability of this section to specific individuals,
 
 3 employees, or positions.
 
 4      §  -58  Elections.  (a)  Whenever in accordance with rules
 
 5 prescribed by the board pursuant to chapter 91, a petition is
 
 6 filed by an employee organization to determine whether or by
 
 7 which organization employees desire to be represented for the
 
 8 purpose of collective bargaining, the board shall conduct an
 
 9 investigation and may conduct an election where appropriate as
 
10 specified in this section.  In its investigation of the showing
 
11 of interest, the board shall afford all interested parties a
 
12 contested case hearing.
 
13      (b)  In any election where none of the choices on the ballot
 
14 receives a majority of the votes cast, a runoff election shall be
 
15 conducted with the ballot providing for a selection between the
 
16 two choices receiving the largest number of valid votes cast in
 
17 the election.
 
18      (c)  The board shall certify election results and the
 
19 employee organization receiving a majority of the votes cast by
 
20 employees in an appropriate bargaining unit shall be certified as
 
21 the exclusive representative of all employees in that unit for
 
22 the purpose of collective bargaining.  The employee organization
 
23 shall remain certified as the exclusive representative until it
 

 
a                                                     HRD-01(00)
Page 76                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 is replaced by another employee organization, decertified, or
 
 2 dissolved.
 
 3      (d)  Whenever two or more employee organizations certified
 
 4 as exclusive representatives enter into an agreement for common
 
 5 administration or operation of their affairs, all rights and
 
 6 duties of the employee organizations as exclusive representatives
 
 7 shall inure to and shall be discharged by the organization
 
 8 resulting from the merger, combination, amalgamation, or
 
 9 agreement, either alone or with the employee organizations.
 
10 Election by the employees in the appropriate bargaining units
 
11 involved and certification by the board of the resulting employee
 
12 organization shall not be required.
 
13      (e)  No election shall be directed by the board in any
 
14 appropriate bargaining unit within which (1) a valid election has
 
15 been held in the preceding twelve months; or (2) a valid
 
16 collective bargaining agreement is in force and effect.
 
17      (f)  Any petition to decertify or to change the exclusive
 
18 bargaining representative must be supported by fifty per cent of
 
19 employees in an appropriate bargaining unit, through verifiable
 
20 written proof of the names and signatures of employees.
 
21 Signatures of employees supporting the petition must be obtained
 
22 within two months of the date of the petition to be valid with
 
23 the board.
 

 
a                                                     HRD-01(00)
Page 77                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (g)  The board shall adopt rules consistent with this
 
 2 section governing the conduct of elections to determine
 
 3 representation, including the time, place, manner of
 
 4 notification, and reporting the results of elections, and the
 
 5 manner for filing any petition for an election or a
 
 6 decertification election or concerning the results of an
 
 7 election.  No mail ballots shall be permitted by the board except
 
 8 when for reasonable cause a specific individual would otherwise
 
 9 be unable to cast a ballot.  No names, addresses or information
 
10 regarding the work location of employees eligible to vote shall
 
11 be provided to employee organizations involved in an election.
 
12 The board shall have the final determination on any controversy
 
13 concerning the eligibility of an employee to vote.
 
14      §  -59  Recognition and representation; employee
 
15 participation.(a)  The employee organization certified by the
 
16 board as representing the majority of employees in an appropriate
 
17 bargaining unit shall be the exclusive representative of all
 
18 employees in the unit.  As exclusive representative, it shall
 
19 have the right to act for and negotiate agreements covering all
 
20 employees in the unit and shall be responsible for representing
 
21 the interests of all these employees without discrimination and
 
22 without regard to employee organization membership.
 
23      (b)  An individual employee may present a grievance at any
 

 
a                                                     HRD-01(00)
Page 78                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 time to the employee's employer and have the grievance heard
 
 2 without intervention of the exclusive representative; provided
 
 3 that the exclusive representative is afforded the opportunity to
 
 4 be present at any meeting and any adjustment made shall be
 
 5 consistent with the terms of collective bargaining applicable to
 
 6 the employee.
 
 7      (c)  Employee participation in the collective bargaining
 
 8 process conducted by the exclusive representative shall be
 
 9 permitted during regular working hours without loss of regular
 
10 salary or wages.  The number of participants shall be as mutually
 
11 agreed to between the employer and the exclusive representative.
 
12 Participants shall be selected from representative departments,
 
13 divisions, or sections to minimize interference with the normal
 
14 operations and services.
 
15      §  -60  Jurisdictional flexibility; sub-units and employers
 
16 established for negotiations.(a)  To provide greater
 
17 flexibility in negotiations to address jurisdictional needs and
 
18 concerns, the following sub-units shall be established within
 
19 multi-jurisdictional appropriate bargaining units (1), (2), (3),
 
20 (4), (9), (10), (11), (12) and (13), to the extent applicable, as
 
21 follows:
 
22      (1)  Employees of the State, including the judiciary;
 
23      (2)  Employees of the Hawaii health system corporation;
 

 
a                                                     HRD-01(00)
Page 79                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (3)  Employees of the city and county of Honolulu;
 
 2      (4)  Employees of the county of Hawaii;
 
 3      (5)  Employees of the county of Maui; and
 
 4      (6)  Employees of the county of Kauai.
 
 5      (b)  Except for sections   -57 and   -58, wherever reference
 
 6 is made to "appropriate bargaining unit," it shall also mean each
 
 7 sub-unit that is authorized to negotiate, reach an agreement,
 
 8 arrive at an impasse, and execute a collective bargaining
 
 9 agreement independently of any other sub-unit within the
 
10 appropriate bargaining unit.  Each sub-unit's collective
 
11 bargaining agreement shall include the wages, hours, benefits,
 
12 and other terms and conditions of employment for all employees in
 
13 that sub-unit.
 
14      (c)  For purposes of negotiations, the public employer of a
 
15 sub-unit shall mean the governor, the mayor, or the Hawaii health
 
16 systems corporation board, as applicable.  In the case of the
 
17 judiciary, the governor shall be the employer for purposes of
 
18 negotiations, but uniformity between the State and the judiciary
 
19 shall not be required and each may have its own unique
 
20 provisions, as mutually agreed to between the exclusive
 
21 representative and the governor.
 
22      (d)  For purposes of negotiations, the public employer for
 
23 units (5) and (6) shall mean the governor together with the board
 

 
a                                                     HRD-01(00)
Page 80                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 of education and for units (7) and (8), the governor together
 
 2 with the board of regents.  The governor shall be entitled to
 
 3 three votes and each board shall have two votes. The votes to
 
 4 which the governor or a board is entitled to may be assigned to
 
 5 their designated representatives.  Any decision to be reached by
 
 6 the applicable employer group shall be on the basis of simple
 
 7 majority.
 
 8      §  -61  Scope of negotiations; consultation; grievance
 
 9 procedures.(a)  The employer and the exclusive representative
 
10 shall meet at reasonable times, including meetings sufficiently
 
11 in advance of the time for an impasse determination under
 
12 section    -64, and shall negotiate in good faith with respect to
 
13 wages, hours, benefits, and other terms and conditions which are
 
14 subject to negotiations under this part and which are to be
 
15 embodied in a written agreement, or any question arising
 
16 thereunder, but such obligation does not compel either party to
 
17 agree to a proposal or make a concession.
 
18      (b)  The employer or the exclusive representative desiring
 
19 to initiate negotiations shall notify the other party in writing,
 
20 setting forth the time and place of the meeting desired and the
 
21 nature of the business to be discussed, sufficiently in advance
 
22 of the meeting.
 
23      (c)  Except as otherwise provided in this part, all matters
 

 
a                                                     HRD-01(00)
Page 81                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 affecting employee relations, including those that are, or may
 
 2 be, the subject of a rule adopted by the employer or any
 
 3 director, shall be subject to consultation with the exclusive
 
 4 representatives of the employees concerned.  The employer shall
 
 5 make every reasonable effort to consult with exclusive
 
 6 representatives and consider their input, along with the input of
 
 7 other affected parties, prior to effecting changes in any major
 
 8 policy affecting employee relations.
 
 9      (d)  In the event of any controversy on whether the employer
 
10 has met its obligation to negotiate or consult as required in
 
11 this section before making a change, the board shall consider the
 
12 conduct of both the employer and the exclusive representative.
 
13 The failure to reach mutual agreement after good faith
 
14 negotiations or dissatisfaction on the part of an exclusive
 
15 representative after consulting in good faith shall not prevent
 
16 the employer from implementing the change on which it negotiated
 
17 or consulted.  If negotiations or consultation did not transpire
 
18 because of the unwillingness or unreasonable delay on the part of
 
19 the exclusive representative, the employer may implement the
 
20 change by filing with the board the change together with a
 
21 statement of its good faith efforts to negotiate and consult on
 
22 the change.  The board shall not issue any order that prevents
 
23 the employer from making the change or requires the employer to
 

 
a                                                     HRD-01(00)
Page 82                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 restore the status quo if the exclusive representative was
 
 2 notified of the change and was provided reasonable opportunity to
 
 3 negotiate or consult on the change.
 
 4      (e)  For the biennium 1999 to 2001, the parties may not
 
 5 negotiate with respect to cost items as defined by section    -52
 
 6 and the cost items of employees in bargaining units under section
 
 7 -57 in effect on June 30, 1999, shall remain in effect until
 
 8 July 1, 2001.
 
 9      (f)  Excluded from the subjects of negotiations are matters
 
10 of classification and reclassification; retirement benefits under
 
11 chapter 88, unless specifically authorized by that chapter; any
 
12 employer contributions that are to be made on behalf of employees
 
13 after they have separated from service; the maximum limits on
 
14 vacation and sick leave allowances and accumulations for
 
15 employees hired after June 30, 2000; and any other matter that
 
16 the legislature may specifically exclude or limit under this
 
17 chapter or by other law.  The employer and the exclusive
 
18 representative shall not agree to any proposal which would be
 
19 inconsistent with the merit principle or the principle of equal
 
20 pay for equal work within a jurisdiction pursuant to part II or
 
21 which would interfere with the rights and obligations of a public
 
22 employer to:
 
23      (1)  Direct employees;
 

 
a                                                     HRD-01(00)
Page 83                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (2)  Determine qualification, standards for work, the nature
 
 2           and contents of examinations;
 
 3      (3)  Hire, promote, transfer, assign, and retain employees
 
 4           in positions;
 
 5      (4)  Suspend, demote, discharge, or take other disciplinary
 
 6           action against employees for proper cause;
 
 7      (5)  Relieve an employee from duties because of lack of work
 
 8           or other legitimate reason;
 
 9      (6)  Maintain efficiency of government operations;
 
10      (7)  Determine methods, means, and personnel by which the
 
11           employer's operations are to be conducted; and
 
12      (8)  Take such actions as may be necessary to carry out the
 
13           missions of the employer in cases of emergencies.
 
14 The employer and the exclusive representative may negotiate
 
15 procedures governing the promotion and transfer of employees to
 
16 positions within a bargaining unit; the suspension, demotion,
 
17 discharge or other disciplinary actions taken against employees
 
18 within the bargaining unit; and the layoff of employees within
 
19 the bargaining unit.  Violations of the procedures so negotiated
 
20 may be subject to the grievance procedure in the collective
 
21 bargaining agreement.
 
22      (g)  The public employer and the exclusive representative
 
23 may negotiate the repricing of classes within its jurisdiction.
 

 
a                                                     HRD-01(00)
Page 84                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 Alternatively, if repricing has not been negotiated, the public
 
 2 employer shall establish procedures to periodically review, but
 
 3 at least once in five years, the pricing of classes.  Any
 
 4 appropriations necessary to implement the repricing actions shall
 
 5 be subject to the same requirements as other cost items under
 
 6 section   -63.
 
 7      (h)  A public employer may enter into a written agreement
 
 8 with the exclusive representative setting for a grievance
 
 9 procedure culminating in a final and binding decision, to be
 
10 invoked in the event of any dispute concerning the interpretation
 
11 or application of a written agreement and other matters as
 
12 provided in section   -8.  Any grievance procedure contained in a
 
13 collective bargaining agreement that is inconsistent with section
 
14 -8 shall be modified accordingly by mutual agreement of the
 
15 parties, in particular, with respect to:  having an exclusive
 
16 internal review procedure by use of the contractual grievance
 
17 procedure, up to the level of the chief executive, to process all
 
18 complaints of bargaining unit employees; filing of an appeal with
 
19 the appropriate forum that has jurisdiction over a matter and not
 
20 submitting the matter to arbitration; and recognizing that the
 
21 board, not an arbitrator, will determine any controversy on
 
22 whether a matter should be decided by arbitration, the merit
 
23 appeals board, or another appellate body or administrative
 

 
a                                                     HRD-01(00)
Page 85                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 agency.
 
 2      (i)  With respect to a controversy on whether a matter is
 
 3 subject to negotiations or consultation; a matter is excluded
 
 4 from the scope of negotiations; a proposal would or a provision
 
 5 does violate the merit principle or equal pay for equal work
 
 6 within a jurisdiction or interfere with the employer's rights and
 
 7 obligations, the board shall make a determination in the most
 
 8 expeditious manner to ensure that the progress of negotiations is
 
 9 not adversely impacted because of unnecessary delay in making its
 
10 determination.  With respect to a controversy on whether a
 
11 grievance procedure is in compliance with this chapter or whether
 
12 an arbitrator should have jurisdiction over a matter, the board
 
13 shall make a determination in the most expeditious manner so that
 
14 the merits can be heard without undue delay.  In making its
 
15 determination on a jurisdictional controversy, the board shall
 
16 give due consideration to the rights of any other individuals
 
17 involved who are not included in the bargaining unit, whether
 
18 non-employees, employees excluded from collective bargaining, or
 
19 employees in another collective bargaining unit.  These
 
20 individuals may not have standing in an arbitration proceeding,
 
21 but may have appeal rights to another appellate body or
 
22 administrative agency.  The board's determination shall be
 
23 consistent with the intent of section   -8, even if the matter
 

 
a                                                     HRD-01(00)
Page 86                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 may also involve an alleged violation of the collective
 
 2 bargaining agreement, if it could result in conflicting
 
 3 decisions.
 
 4      §  -62  Collective bargaining; school exceptions.  (a) Any
 
 5 collective bargaining agreement concerning public school
 
 6 employees may include terms that would allow an employee to work
 
 7 a longer period each day and a longer school year. Consideration
 
 8 of a longer school day or longer school year shall be related to
 
 9 state and local school initiatives and may be included in
 
10 proposals submitted in connection with the incentive and
 
11 innovation grant review process.
 
12      (b)  A school or a learning support center participating in
 
13 the school/community-based management program may initiate a
 
14 waiver from policies, rules, or procedures, including collective
 
15 bargaining agreements, as provided for in section 302A-1126.
 
16      (c)  No collective bargaining agreement or executive policy
 
17 put forth after July 1, 1993, shall contain provisions that may
 
18 preclude the implementation of the classroom cleaning project
 
19 established in section 302A-1507, unless a contract waiver
 
20 process exists between the parties.
 
21      §  -63  Written agreements; approval and implementation.
 
22 (a)  Collective bargaining agreements shall be subject to
 
23 ratification by the employees concerned, except when the
 

 
a                                                     HRD-01(00)
Page 87                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 agreement is reached pursuant to an arbitration decision.  The
 
 2 agreement shall be reduced to writing and executed by both
 
 3 parties.  All provisions in the agreement that are in conformance
 
 4 with this chapter, including a grievance procedure and an impasse
 
 5 procedure, shall be valid and enforceable, except for any cost
 
 6 items that were not approved by the appropriate legislative body.
 
 7      (b)  Because effective and orderly operations of government
 
 8 are essential to the public, it is declared to be in the public
 
 9 interest that each collective bargaining agreement shall have a
 
10 June 30th expiration date in an odd-numbered year.  The agreement
 
11 may include provisions for reopening if the duration of the
 
12 agreement is for more than two years.  Any cost items that are
 
13 reopened shall be subject to the same requirements as any other
 
14 cost items.
 
15      (c)  It is also in the public's best interest that the
 
16 legislative body of a jurisdiction consider cost items in
 
17 collective bargaining agreements for any biennium along with
 
18 requests for other operating funds for the same period.  A
 
19 "biennium" means a period beginning July 1st of an odd-numbered
 
20 year and ending two years later on June 30th of the next odd-
 
21 numbered year.  Cost items shall be submitted for legislative
 
22 approval separately for each biennium if an agreement is for more
 
23 than two years.  To accomplish this objective, the legislative
 

 
a                                                     HRD-01(00)
Page 88                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 bodies shall establish and notify their respective chief
 
 2 executives, by February 1 of each even-numbered year, of the
 
 3 following:
 
 4      (1)  The date by which the chief executive shall be required
 
 5           to submit all cost items for the biennium agreed to in
 
 6           collective bargaining agreements.  This date shall
 
 7           coincide with the due date for requests for operating
 
 8           funds for the first year of the biennium and shall be
 
 9           referred to as the "biennium submission date."
 
10      (2)  The date by which the chief executive shall be required
 
11           to submit all cost items for the biennium subsequently
 
12           agreed to in collective bargaining agreements.  The
 
13           date shall coincide with the due date for its request
 
14           for operating funds for the second year of the
 
15           biennium.
 
16 The chief executive shall immediately notify the exclusive
 
17 representatives and the board of these dates.  The conduct of
 
18 negotiations, issuance of arbitration decisions, and submission
 
19 of cost items shall be done at times that will meet this
 
20 objective.
 
21      (d)  All cost items for the jurisdiction in any collective
 
22 bargaining agreement, including an agreement reached pursuant to
 
23 an arbitration decision, shall be submitted by the respective
 

 
a                                                     HRD-01(00)
Page 89                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 chief executive to its legislative body for approval.  Each chief
 
 2 executive shall submit the cost items for any biennium by the
 
 3 biennium submission date established pursuant to (c)(1).  If the
 
 4 cost items have not been submitted by that date, all cost items
 
 5 for the biennium that are subsequently submitted shall have an
 
 6 effective date no earlier than July 1 of the second year of the
 
 7 biennium. The chief executive shall submit these cost items by
 
 8 the date established pursuant to paragraph (c)(2).
 
 9      (e)  Each legislative body shall approve or reject the cost
 
10 items in a collective bargaining agreement that are timely
 
11 submitted in accordance with subsection (d) by the next June
 
12 30th.  Any failure to approve or reject the cost items by the
 
13 next June 30th shall be considered a rejection of the cost items
 
14 by the legislative body.  Whenever a legislative body rejects or
 
15 fails to approve the cost items in an agreement, it shall notify
 
16 the chief executive and the exclusive representative of its
 
17 reasons.  If further bargaining might result in the subsequent
 
18 approval of cost items, the parties shall bargain further in
 
19 consideration of the legislative body's specific reasons for
 
20 rejecting or not approving the cost items initially.  Any
 
21 agreement on cost items after further bargaining shall be
 
22 submitted by the chief executive to the legislative body within
 
23 ten days of the agreement.  The limitation in subsection (d) on
 

 
a                                                     HRD-01(00)
Page 90                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 the effective date of cost items shall not apply to cost items
 
 2 that were timely submitted to, but rejected or not approved by,
 
 3 the appropriate legislative body.
 
 4      §  -64  Resolution of impasses.  (a)  A public employer may
 
 5 enter into a written agreement with an exclusive representative
 
 6 setting forth an impasse procedure, culminating in an arbitration
 
 7 decision that complies with this subsection (g), to be invoked in
 
 8 the event of an impasse over the terms of an initial or renewed
 
 9 agreement.  An impasse during the term of a collective bargaining
 
10 agreement on reopened items shall not be subject to the impasse
 
11 procedures in this section.  The parties may voluntarily agree to
 
12 an impasse procedure for reopened items, provided that if the
 
13 procedure culminates in an arbitration decision, the decision
 
14 shall be in compliance with subsection (g).
 
15      (b)  At least one hundred and twenty days prior to the
 
16 biennium submission date under section   -63(c), the board shall
 
17 initiate an investigation to determine whether an impasse exists
 
18 in negotiations for any of the bargaining units as follows:
 
19      (1)  The board shall require each party to submit to it and
 
20           to the other party a clear, concise statement of all
 
21           unresolved issues.
 
22      (2)  The board shall immediately determine whether the
 
23           parties have mutually agreed upon an impasse procedure
 

 
a                                                     HRD-01(00)
Page 91                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           allowed in subsection (a).  It shall permit the parties
 
 2           to proceed with the impasse procedure mutually agreed
 
 3           upon and shall assist in the appointment of neutral
 
 4           third parties, at times and in the manner as may be
 
 5           specified in the impasse procedure.
 
 6      (c)  If there are still unresolved issues on the one
 
 7 hundredth day prior to the biennium submission date and the
 
 8 parties have not mutually agreed upon an impasse procedure, the
 
 9 board shall declare that an impasse exists on that date and the
 
10 parties shall be required to follow the impasse procedures
 
11 applicable to the bargaining unit as provided in this section.
 
12      (d)  The impasse procedures for bargaining unit (1), non-
 
13 supervisory employees in blue collar positions; bargaining unit
 
14 (2), supervisory employees in blue collar positions; bargaining
 
15 unit (3), non-supervisory employees in white collar positions;
 
16 bargaining unit (4), supervisory employees in white collar
 
17 positions; bargaining unit (5), teachers and other personnel of
 
18 the department of education; bargaining unit (6), educational
 
19 officers and other personnel of the department of education under
 
20 the same salary schedule; bargaining unit (7), faculty of the
 
21 University of Hawaii and the community college system; bargaining
 
22 unit (8), personnel of the University of Hawaii and the community
 
23 college system, other than faculty; bargaining unit (9),
 

 
a                                                     HRD-01(00)
Page 92                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 registered professional nurses; bargaining unit (10),
 
 2 institutional, health, and correctional workers; and bargaining
 
 3 unit (13), professional and scientific employees, who can not be
 
 4 included in any of the other bargaining units, shall be as
 
 5 follows:
 
 6      (1)  Mandatory mediation.  During the first fifteen days of
 
 7           the impasse, the board shall assist the parties in a
 
 8           voluntary resolution of the impasse by providing a
 
 9           mediator or mediators, representative of the public,
 
10           from a list of qualified persons maintained by the
 
11           board.  If mutually requested by the parties, the board
 
12           may provide additional mediation assistance at any
 
13           time.
 
14      (2)  Mandatory fact-finding.  If the impasse continues
 
15           fifteen days after the date of the impasse, the board
 
16           shall immediately convene a fact-finding board of not
 
17           more than three members, representative of the public,
 
18           from a list of qualified persons maintained by the
 
19           board.  The fact-finding board shall, in addition to
 
20           powers delegated to it by the board, have the power to
 
21           make recommendations for the resolution of the impasse.
 
22           The fact-finding board, acting by a majority of its
 
23           members, shall transmit its findings of fact and any
 

 
a                                                     HRD-01(00)
Page 93                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           recommendations for the resolution of the impasse to
 
 2           both parties within thirty days after the date of the
 
 3           impasse.
 
 4      (3)  Voluntary arbitration.  The parties may mutually agree
 
 5           to submit the impasse, at any time, to an arbitration
 
 6           procedure for a decision that complies with subsection
 
 7           (g).  If there is mutual agreement on an arbitration
 
 8           procedure, but no agreement on an arbitrator or an
 
 9           arbitration panel, the board shall assist by convening
 
10           an arbitration panel pursuant to subsection (f).
 
11      (4)  Fact-finding report made public; mandatory cooling-off
 
12           period.  If the impasse remains unresolved and the
 
13           parties have not agreed to submit the impasse to
 
14           voluntary arbitration within thirty-five days after the
 
15           date of impasse, the board shall make public the fact-
 
16           finding report, including any recommendations.  Either
 
17           party shall be free to take whatever lawful action it
 
18           deems necessary to end the dispute; provided that no
 
19           action shall involve the disruption or interruption of
 
20           public services within sixty days after the fact-
 
21           finding report was made public.
 
22      (5)  Cost items to legislative bodies.  If the impasse
 
23           remains unresolved and there is no mutual agreement to
 

 
a                                                     HRD-01(00)
Page 94                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           submit to voluntary arbitration, the employers shall
 
 2           submit to their respective legislative bodies their
 
 3           recommendations for the settlement of all cost items,
 
 4           together with the fact-finding report, no later than
 
 5           its biennium submission date.  The exclusive
 
 6           representatives may submit to the respective
 
 7           legislative bodies their recommendations for the
 
 8           settlement of all cost items by the same date.
 
 9      (e)  The impasse procedures for bargaining unit (11),
 
10 firefighters, and bargaining unit 12, police officers, shall be
 
11 as follows:
 
12      (1)  Mandatory mediation.  During the first fifteen days of
 
13           the impasse, the board shall assist the parties in a
 
14           voluntary resolution of the impasse by providing a
 
15           mediator or mediators, representative of the public,
 
16           from a list of qualified persons maintained by the
 
17           board.  If mutually requested by the parties, the board
 
18           may provide additional mediation assistance prior to
 
19           convening an arbitration panel.
 
20      (2)  Voluntary arbitration.  The parties may mutually agree
 
21           to submit the impasse, at any time, to an arbitration
 
22           procedure for a decision that complies with subsection
 
23           (g).  If there is mutual agreement on an arbitration
 

 
a                                                     HRD-01(00)
Page 95                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           procedure, but no agreement on an arbitrator or an
 
 2           arbitration panel, the board shall assist by convening
 
 3           an arbitration panel pursuant to subsection (f).
 
 4      (3)  Mandatory final offer arbitration.  If the impasse
 
 5           continues thirty days after the date of the impasse and
 
 6           there is no mutual agreement to submit the impasse to
 
 7           an arbitration procedure, the board shall convene an
 
 8           arbitration panel as provided in subsection (f) within
 
 9           forty-five days after the date of the impasse.  Each
 
10           party shall submit in writing to the panel upon its
 
11           appointment a final offer which shall include all
 
12           provisions in any existing collective bargaining
 
13           agreement not being modified, all provisions already
 
14           agreed to in negotiations, and all provisions being
 
15           proposed for inclusion in the agreement.  A copy of the
 
16           final offer shall be given to the other party and the
 
17           board.  Upon its appointment, the arbitration panel
 
18           shall schedule a hearing as soon as practicable and
 
19           issue an arbitration decision no later than five days
 
20           prior to the employer's biennium submission date that
 
21           includes the factors as specified in subsection (g).
 
22           During the hearing, the parties shall be allowed to
 
23           submit either in writing or through oral testimony, all
 

 
a                                                     HRD-01(00)
Page 96                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           information or data supporting their respective final
 
 2           offers or positions, as the case may be.
 
 3      (f)  Whenever an impasse is submitted to arbitration for a
 
 4 decision and the parties have not agreed on an arbitrator or
 
 5 arbitration panel, the board shall convene a three-member
 
 6 arbitration panel in the following manner:
 
 7      (1)  Two members of the arbitration panel shall be selected
 
 8           by the parties; one shall be selected by the employer
 
 9           and one shall be selected by the exclusive
 
10           representative.
 
11      (2)  The neutral third member of the arbitration panel shall
 
12           be selected by the two previously selected panel
 
13           members and shall chair the arbitration panel.
 
14      (3)  In the event that the two previously selected
 
15           arbitration panel members fail to select a neutral
 
16           third arbitrator within five calendar days from the
 
17           date of their appointment, the board shall furnish a
 
18           list of five qualified arbitrators from which the
 
19           neutral arbitrator shall be selected.  In developing
 
20           the list of arbitrators, the board may request the
 
21           assistance of the American Arbitration Association or
 
22           any other organization of arbitrators.  Within five
 
23           calendar days after receipt of the list, the parties
 

 
a                                                     HRD-01(00)
Page 97                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           shall alternately strike names therefrom until a single
 
 2           name is left, who shall be appointed by the board as
 
 3           the neutral arbitrator and chairperson of the
 
 4           arbitration panel.
 
 5      (g)  Any arbitration procedure utilized to resolve an
 
 6 impasse shall provide for the issuance of a decision no later
 
 7 than five days prior to the employer's biennium submission date,
 
 8 if possible.  If an arbitration decision cannot be issued by that
 
 9 time, the arbitrator or arbitration panel shall ensure that the
 
10 effective date of cost items in the decision are in compliance
 
11 with section   -63(d).  In reaching a decision, an arbitrator or
 
12 arbitration panel utilized to resolve any impasse shall give
 
13 weight to the factors listed below and shall include in a written
 
14 opinion an explanation of how the factors were taken into
 
15 account:
 
16      (1)  The lawful authority of the employer including, but not
 
17           limited to, federal restrictions on the ability of the
 
18           employer to access special funds or other restrictions
 
19           on the ability of the employer to access funds that are
 
20           authorized to be used only for a specific purpose.
 
21      (2)  Stipulations of the parties.
 
22      (3)  Due consideration to the interests and welfare of the
 
23           public that shall not be compromised or diminished
 

 
a                                                     HRD-01(00)
Page 98                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           because of the need to fund new or enhanced cost items
 
 2           by reallocating funds from current levels of services
 
 3           or programs previously authorized by the legislature.
 
 4      (4)  The financial ability of the employer to meet these
 
 5           costs; provided that, the employer's ability to fund
 
 6           cost items shall not be predicated on the premise that
 
 7           the employer may increase or impose new taxes, fees, or
 
 8           charges, or develop other sources of revenues.
 
 9      (5)  The present and future general economic condition of
 
10           the counties and the State; provided that, any revenue
 
11           estimates exceeding the latest council of revenue
 
12           estimates reported pursuant to section 37-11, which is
 
13           used by the state executive branch to prepare the
 
14           state's financial plan, shall not be considered.
 
15      (6)  Comparison of wages, hours, benefits, and conditions of
 
16           employment of the employees involved in the arbitration
 
17           proceeding with the wages, hours, benefits, and
 
18           conditions of employment of other persons performing
 
19           similar services in Hawaii, and of other state and
 
20           county employees in Hawaii; provided that, with respect
 
21           to a bargaining unit that has historically recruited on
 
22           a national level, the comparison shall be with the
 
23           wages, hours, benefits, and other conditions of
 

 
a                                                     HRD-01(00)
Page 99                                                    2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           employment of other persons performing similar services
 
 2           across the nation.
 
 3      (7)  The average consumer prices for goods or services,
 
 4           commonly known as the cost of living, including
 
 5           comparison of the rate of change in Hawaii with the
 
 6           rate of change nationally.
 
 7      (8)  The overall compensation presently received by the
 
 8           employees, including direct wage compensation,
 
 9           vacation, holidays and excused time, insurance and
 
10           pensions, medical and hospitalization benefits, the
 
11           continuity and stability of employment, and all other
 
12           benefits received.
 
13      (9)  Changes in any of the foregoing circumstances during
 
14           the pendency of the arbitration proceedings.
 
15 All provisions in an arbitration decision that are in compliance
 
16 with this chapter shall be final and binding upon the parties;
 
17 provided that cost items shall not be final or binding and shall
 
18 be subject to section   -63.  The parties shall take whatever
 
19 action is necessary to carry out and effectuate the final and
 
20 binding agreement but may, at any time and by mutual agreement,
 
21 amend or modify the arbitration decision.
 
22      (h)  Nothing in this section shall be construed to prohibit
 
23 the parties from reaching a voluntary settlement on the
 

 
a                                                     HRD-01(00)
Page 100                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 unresolved issues, with or without the assistance of a mediator,
 
 2 at any time prior to the conclusion of the hearing conducted by
 
 3 the arbitration panel.
 
 4      (i)  Any time frame provided in this section may be modified
 
 5 by mutual agreement of the parties, subject to the approval of
 
 6 the board; provided that the times for submission of cost items
 
 7 in section   -63 shall not be altered and shall remain
 
 8 applicable.
 
 9      (j)  The costs for mandatory mediation and fact-finding
 
10 required in this section shall be borne by the board.  Costs
 
11 incurred by either party for arbitration, including the costs of
 
12 its selected member on the arbitration panel, shall be borne by
 
13 the party incurring them.  All other costs and expenses for the
 
14 services of any other neutrals, including additional mediation,
 
15 shall be borne equally by the parties.
 
16      §  -65  Strikes; rights and prohibitions.  (a)  It shall be
 
17 unlawful for any employee to participate in a strike if the
 
18 employee:
 
19      (1)  Is not included in the appropriate bargaining unit
 
20           involved in an impasse; or
 
21      (2)  Is included in the appropriate bargaining unit involved
 
22           in an impasse that has been referred to arbitration for
 
23           a decision.
 

 
a                                                     HRD-01(00)
Page 101                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (b)  It shall be lawful for an employee, who is not
 
 2 prohibited from striking under subsection (a) and who is in the
 
 3 appropriate bargaining unit involved in an impasse, to
 
 4 participate in a strike under the following conditions:
 
 5      (1)  The requirements of section   -64 relating to the
 
 6           resolution of disputes have been complied with in good
 
 7           faith;
 
 8      (2)  The proceedings for the prevention of any prohibited
 
 9           practices have been exhausted;
 
10      (3)  Sixty days have elapsed since the fact-finding report
 
11           and any recommendations were made public;
 
12      (4)  The collective bargaining agreement and any extension
 
13           of the agreement has expired; and
 
14      (5)  The exclusive representative has given a ten-day notice
 
15           of intent to strike to the board and to the employer.
 
16      (c)  No employee organization shall declare or authorize a
 
17 strike of employees which is or would be in violation of this
 
18 section.  Where it is alleged by the public employer that an
 
19 employee organization has declared or authorized a strike of
 
20 employees which is or would be in violation of this section, the
 
21 public employer may apply to the board for a declaration that the
 
22 strike is or would be unlawful.  The board, after affording an
 
23 opportunity to the employee organization to be heard on the
 

 
a                                                     HRD-01(00)
Page 102                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 application, may make such a declaration.
 
 2      (d)  If any employee organization or any employee is
 
 3 violating or failing to comply, or if there is reasonable cause
 
 4 to believe that an employee organization or an employee will
 
 5 violate or fail to comply, with the requirements of this section,
 
 6 the public employer affected shall, forthwith, institute
 
 7 appropriate proceedings in the circuit in which the violation
 
 8 occurs to enjoin the performance of any acts or practices
 
 9 forbidden by this section or to require the employee organization
 
10 or employees to comply with the requirements of this section.
 
11 Jurisdiction to hear and dispose of all actions under this
 
12 section is conferred upon each circuit court, and each court may
 
13 issue in compliance with chapter 380, such orders and decrees, by
 
14 way of injunction, mandatory injunction, or otherwise, as may be
 
15 appropriate to enforce this section.  The right to a jury trial
 
16 shall not apply to any proceeding brought under this section.
 
17      §  -66  Prohibited practices; evidence of bad faith.  (a) It
 
18 shall be a prohibited practice for a public employer or its
 
19 designated representative willfully to:
 
20      (1)  Interfere, restrain, or coerce any employee in the
 
21           exercise of any right guaranteed under this part;
 
22      (2)  Dominate, interfere, or assist in the formation,
 
23           existence, or administration of any employee
 

 
a                                                     HRD-01(00)
Page 103                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           organization;
 
 2      (3)  Discriminate in regard to hiring, tenure, or any term
 
 3           or condition of employment to encourage or discourage
 
 4           membership in any employee organization;
 
 5      (4)  Discharge or otherwise discriminate against an employee
 
 6           because the employee has signed or filed an affidavit,
 
 7           petition, or complaint or given any information or
 
 8           testimony under this part, or because the employee has
 
 9           informed, joined, or chosen to be represented by any
 
10           employee organization;
 
11      (5)  Refuse to bargain collectively or consult in good faith
 
12           with the exclusive representative as required in
 
13           section   -61;
 
14      (6)  Refuse to participate in good faith in the mediation,
 
15           fact-finding, and arbitration procedures set forth in
 
16           section   -64;
 
17      (7)  Refuse or fail to comply with any provision of this
 
18           part;
 
19      (8)  Violate the terms of a collective bargaining agreement;
 
20      (9)  Replace any employee for participating in a lawful
 
21           labor dispute; or
 
22     (10)  Give employment preference to an individual employed
 
23           during a labor dispute and whose employment termination
 

 
a                                                     HRD-01(00)
Page 104                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           date occurs after the end of the dispute, over an
 
 2           employee who exercised the right to join, assist, or
 
 3           engage in lawful collective bargaining or mutual aid or
 
 4           protection through the labor organization involved in
 
 5           the dispute.
 
 6      (b)  It shall be a prohibited practice for a public employee
 
 7 or for an employee organization or its designated agent willfully
 
 8 to:
 
 9      (1)  Interfere, restrain, or coerce any employee in the
 
10           exercise of any right guaranteed under this part;
 
11      (2)  Refuse to bargain collectively or consult in good faith
 
12           with the public employer, if it is an exclusive
 
13           representative, as required in section   -61;
 
14      (3)  Refuse to participate in good faith in the mediation,
 
15           fact-finding and arbitration procedures set forth in
 
16           section   -64;
 
17      (4)  Refuse or fail to comply with any provision of this
 
18           part; or
 
19      (5)  Violate the terms of a collective bargaining agreement.
 
20      §  -67  Prevention of prohibited practices.  (a)  Any
 
21 controversy concerning prohibited practices may be submitted to
 
22 the board in the same manner and with the same effect as under
 
23 section 377-9; provided that the board shall have exclusive
 

 
a                                                     HRD-01(00)
Page 105                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 original jurisdiction over such a controversy.  This section does
 
 2 not preclude (1) the institution of appropriate proceedings in
 
 3 circuit court pursuant to section   -65(d) or (2) the judicial
 
 4 review of decisions or orders of the board in prohibited practice
 
 5 controversies in accordance with section 377-9 and chapter 91.
 
 6 All references in section 377-9 to "labor organization" shall
 
 7 include employee organization.
 
 8      §  -68  Public records and proceedings.  The complaints,
 
 9 orders, and testimony relating to a proceeding instituted by the
 
10 board under section 377-9 shall be public records and be
 
11 available for inspection or copying.  All proceedings pursuant to
 
12 section 377-9 shall be open to the public.
 
13      §  -69  Personal information; access by exclusive
 
14 representatives.(a)  An exclusive representative shall be
 
15 allowed access to information in the personal records of the
 
16 employees it represents that are relevant to the investigation or
 
17 processing of a grievance.  The exclusive representative shall
 
18 notify the affected employees whenever it has obtained access to
 
19 information in their personal records.
 
20      (b)  The appropriate government agencies shall, upon written
 
21 request, disclose to an exclusive representative information
 
22 relating to the administration of payroll deductions authorized
 
23 under section   -54, as follows:  name; mailing address; social
 

 
a                                                     HRD-01(00)
Page 106                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 security number; bargaining unit; date of change in bargaining
 
 2 unit status of the employee; full-time equivalence of the
 
 3 employee; the employee's leave without pay status with effective
 
 4 dates and duration; basic rate of pay; types and effective dates
 
 5 of personnel actions that affect the amount and payment of the
 
 6 basic rate of pay; pay range and step or equivalent; amounts and
 
 7 dates of differential pay; amounts and dates of statutory dues
 
 8 deductions; and amounts and dates of other authorized voluntary
 
 9 payroll deductions remitted to the exclusive representative;
 
10 except that this provision shall not apply to information
 
11 regarding present or former employees involved in an undercover
 
12 capacity in a law enforcement agency.  The information shall be
 
13 provided in a form conducive to electronic data processing;
 
14 provided that the employer possesses appropriate data processing
 
15 capability and the exclusive representative may be required to
 
16 pay for any extraordinary costs.
 
17      (c)  Information requested by an exclusive representative
 
18 shall be disclosed or provided within a reasonable time after
 
19 receipt of the request.  An exclusive representative receiving
 
20 personal information shall be subject to the same restrictions on
 
21 disclosure of personal information as the originating agency.
 
22      §  -70  List of employee organizations and exclusive
 
23 representatives.  The board shall maintain a list of employee
 

 
a                                                     HRD-01(00)
Page 107                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 organizations.  To be included in the list, an organization shall
 
 2 file with the board a statement of its name, the name and address
 
 3 of its secretary or other officer to whom notices may be sent,
 
 4 the date of its organization, and its affiliations with other
 
 5 organizations, if any.  No other qualifications for inclusion
 
 6 shall be required, but every employee organization shall notify
 
 7 the board promptly of any changes in its name, the name and
 
 8 address of the person to whom notices may be sent, or its
 
 9 affiliations.
 
10      The board shall indicate on the list which employee
 
11 organizations are exclusive representatives of appropriate
 
12 bargaining units, the effective dates of their certification, and
 
13 the effective date and expiration date of any agreement reached
 
14 with the public employer.  Copies of the list shall be made
 
15 available to interested parties upon request.
 
16      §  -71  Financial reports to employees.  Every employee
 
17 organization shall keep an adequate record of its financial
 
18 transactions.  It shall make available to all employees who pay
 
19 the employee organization dues or its equivalent an annual
 
20 financial report in the form of a balance sheet and an operating
 
21 statement, certified as to accuracy by a certified public
 
22 accountant, within sixty days after the end of its fiscal year.
 
23 Additional details on which the financial report is based shall
 

 
a                                                     HRD-01(00)
Page 108                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 be made available to an employee upon request. In the event of
 
 2 failure to comply with this section, an employee may petition the
 
 3 board for an order compelling compliance.  The order shall be
 
 4 enforceable in the same manner as other orders of the board under
 
 5 this part.
 
 6      §  -72  Penalty.  Any person who willfully assaults,
 
 7 resists, prevents, impedes, or interferes with any member of the
 
 8 board or any of its agents or employees in the performance of
 
 9 duties pursuant to this part, shall be fined not more than $500
 
10 or imprisoned not more than one year, or both.  The term "agent"
 
11 includes a neutral third party that assists in the resolution of
 
12 an impasse under section   -64.
 
13      §  -73  Office of collective bargaining and managed
 
14 competition.(a)  There shall be established an office of
 
15 collective bargaining and managed competition in the office of
 
16 the governor to assist the governor in implementation and review
 
17 the managed process of public-private competition for a
 
18 particular government services through the managed competition
 
19 process, and negotiating with and entering into written
 
20 agreements between the public employers and the exclusive
 
21 representatives on matters of wages, hours, and other negotiable
 
22 terms and conditions of employment.
 
23      (b)  The position of chief negotiator for the State is
 

 
a                                                     HRD-01(00)
Page 109                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 hereby established to head the office.  The chief negotiator
 
 2 shall be experienced in labor relations.  The governor shall
 
 3 appoint and remove the chief negotiator and the deputy
 
 4 negotiators, who shall not be subject to chapters 76, 77, and 89.
 
 5 Effective January 1, 1989, and January 1, 1990, the salary of the
 
 6 chief negotiator_shall be set by the governor within the range
 
 7 from $69,748 to $74,608 and $72,886 to $77,966 a year,
 
 8 respectively.  The chief negotiator and its deputy negotiators
 
 9 shall be included in any benefit program generally applicable to
 
10 the officers and employees of the State.  All other employees
 
11 shall be appointed.  The chief negotiator shall serve as one of
 
12 the governor's designated representatives as set forth in section
 
13    -60(d).
 
14      (c)  In addition to the powers and functions provided in
 
15 other sections of this chapter, and subject to the approval of
 
16 the governor, the office of collective bargaining shall:
 
17      (1)  Assist the governor in formulating plans, including
 
18           objectives, criteria to measure management's
 
19           accomplishment of objectives, and programs through
 
20           which the objectives are to be attained;
 
21      (2)  Assist the governor in formulating management's
 
22           philosophy for public collective bargaining, managed
 
23           process for the public private competition for
 

 
a                                                     HRD-01(00)
Page 110                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           government services, including which particular service
 
 2           can provided more efficiently, effectively, and
 
 3           economically considering all relevant costs_as well as
 
 4           planning bargaining strategies;
 
 5      (3)  Conduct negotiations with the exclusive representatives
 
 6           of each employee organization and designate employer
 
 7           spokespersons for each negotiation;
 
 8      (4)  Coordinate the State's resources in all mediation,
 
 9           fact-finding and interest arbitration cases as well as
 
10           in all labor disputes;
 
11      (5)  Conduct systematic reviews of collective bargaining
 
12           agreements for the purpose of contract negotiations;
 
13      (6)  Coordinate the systematic compilation of data by all
 
14           agencies that is required for negotiating purposes;
 
15      (7)  Coordinate the establishment of cost data negotiated
 
16           with each exclusive representative and assist the
 
17           governor in making recommendations with respect thereto
 
18           to the legislative bodies;
 
19      (8)  Coordinate the managed competition process to ensure
 
20           the negotiations of subject matters that are negotiable
 
21           under the collective bargaining laws in the public
 
22           sector;
 
23      (9)  Prepare and submit an annual report and such other
 

 
a                                                     HRD-01(00)
Page 111                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           reports as may be requested to the governor and to the
 
 2           legislature on the implementation of the collective
 
 3           bargaining act.
 
 4 
 
 5              PART IV.  PUBLIC OFFICERS AND EMPLOYEES
 
 6                EXCLUDED FROM COLLECTIVE BARGAINING
 
 7      §  -81  Purpose.  The legislature finds that the appropriate
 
 8 authorities in the several branches of State and county
 
 9 governments do not have sufficient flexibility to adjust the
 
10 wages, hours, benefits, and other terms and conditions of
 
11 employment for their respective excluded public officers and
 
12 employees.  The organizational status and employment conditions
 
13 of these individuals in the excluded group are diverse and
 
14 include:  cabinet members, board and commission members,
 
15 managerial employees, and non-managerial employees; appointees,
 
16 civil service employees, and employees exempt from civil service;
 
17 permanent and temporary employees; and full-time, part-time,
 
18 seasonal, casual, and intermittent employees.  Sufficient
 
19 flexibility must be provided so that timely and relevant
 
20 adjustments can be made.
 
21      To this end, the legislature grants appropriate authorities
 
22 the necessary flexibility to make adjustments as provided in this
 

 
a                                                     HRD-01(00)
 
Page 112                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 part; provided that nothing in this part shall be construed to
 
 2 interfere with or diminish authority already provided to them.
 
 3      The legislature also finds that the chief executives do not
 
 4 have a sufficient cadre of key personnel to ensure that the
 
 5 various program areas are in sync with the directions,
 
 6 priorities, and program objectives and goals that they have
 
 7 established for their administrations.  The department heads and
 
 8 their deputies have difficulty in making desired changes and
 
 9 accomplishing the program objectives and goals of the
 
10 administration during their limited terms of office without the
 
11 cooperation, commitment, support, leadership capability, and
 
12 technical knowledge of key personnel in charge of the various
 
13 program areas.  Therefore, to enable the chief executives and
 
14 their cabinet officials to have a sufficient cadre of key
 
15 personnel to accomplish their program objectives and goals, the
 
16 legislature authorizes each chief executive to develop, at their
 
17 discretion, a cadre of key personnel who shall be appointed by
 
18 and serve at the pleasure of the chief executive to head the
 
19 various program areas within their respective jurisdictions as
 
20 provided in this part.
 
21      §  -82  Definitions.  As used in this part:
 
22      "Adjustment" means a change in wages, hours, benefits, or
 
23 other term and condition of employment.
 

 
a                                                     HRD-01(00)
Page 113                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      "Appropriate authority" means the governor, the respective
 
 2 mayors, the chief justice of the supreme court, the board of
 
 3 education, the board of regents, the Hawaii health system
 
 4 corporation board, and the legislative auditor, the ombudsman,
 
 5 and the director of the legislative reference bureau.  These
 
 6 individuals or boards may make adjustments for their respective
 
 7 excluded officers and employees.
 
 8      "Excluded employee" means any individual who is employed by
 
 9 one of the appropriate authorities and who is not included in an
 
10 appropriate bargaining unit under section    -57 and, therefore,
 
11 is not entitled to collective bargaining coverage under part III.
 
12      "Key personnel" means an individual appointed to a division
 
13 chief or an agency head position, regardless of job title, that
 
14 is responsible for the operations of a departmental program area
 
15 and is excluded from collective bargaining coverage under part
 
16 III.  The term does not include any of the following:
 
17      (1)  An individual whose appointment, prior to the effective
 
18           date of this Act, is at the pleasure of an appointing
 
19           authority;
 
20      (2)  An individual whose appointment is required to be made
 
21           as specifically provided for by law; or
 
22      (3)  An individual who is the head of a departmental staff
 
23           office, such as, personnel or budget, that provides
 

 
a                                                     HRD-01(00)
Page 114                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           support services to the key personnel in charge of the
 
 2           program operations within the department.
 
 3      §  -83  Key personnel in charge of program operations.(a)
 
 4 At the discretion of the chief executive, a cadre of key
 
 5 personnel may be appointed by and serve at the pleasure of the
 
 6 chief executive, based on recommendations submitted by the
 
 7 respective department head or other appropriate authority.  An
 
 8 employee appointed to serve in a key personnel position, who is a
 
 9 member of the civil service, shall be granted a leave of absence
 
10 from the employee's civil service position for the duration of
 
11 the appointment and shall have return rights to the employee's
 
12 former or a comparable position upon being released from the
 
13 appointment.
 
14      (b)  Because technical knowledge and continuity is essential
 
15 for expeditious accomplishment of program objectives and goals,
 
16 as well as the cooperation, commitment, support, and leadership
 
17 capability of the individuals occupying these positions,
 
18 appointment to these key personnel positions shall be made as
 
19 follows:
 
20      (1)  Priority consideration shall be given to the incumbent
 
21           in the position based on past performance in the
 
22           position, willingness and ability to accomplish the
 
23           objectives and goals of the administration, and other
 

 
a                                                     HRD-01(00)
Page 115                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           criteria deemed appropriate by the chief executive or
 
 2           the department head;
 
 3      (2)  If a determination is made to release the incumbent,
 
 4           the appointment shall be made from among employees
 
 5           within the service of the jurisdiction who have at
 
 6           least five years of continuous service immediately
 
 7           prior to the date of appointment; provided that, the
 
 8           five-year service requirement shall not apply to a
 
 9           position that cannot be filled from among employees
 
10           within the service because of unique or special
 
11           qualifications required of the position.
 
12      (c)  All incumbents in positions identified as key personnel
 
13 positions, who are members of the civil service on the effective
 
14 date of this Act, shall be considered as serving in exempt
 
15 positions at the pleasure of the chief executive and shall suffer
 
16 no loss of pay.  Upon the incumbent's release from the key
 
17 personnel position, the incumbent shall be entitled to placement
 
18 in another civil service position deemed appropriate by the
 
19 appointing authority.  The incumbent shall not suffer any loss of
 
20 benefits or prior service credits and shall be entitled to retain
 
21 the same pay on the effective date of this Act with appropriate
 
22 adjustments made for the duration of appointment in the key
 
23 personnel position, irrespective of the position in which they
 

 
a                                                     HRD-01(00)
Page 116                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 are placed; provided that, if the employee's pay exceeds the
 
 2 maximum rate of the new pay range, the employee shall not be
 
 3 entitled to any pay adjustment until the maximum rate of the pay
 
 4 range equals or exceeds the employee's pay.
 
 5      §  -84  Adjustments authorized; limitations, restrictions.
 
 6 Each appropriate authority may make adjustments for their
 
 7 respective excluded employees subject to the following guidelines
 
 8 and limitations:
 
 9      (1)  The compensation of excluded employees, whose pay is
 
10           presently fixed or limited by legislative action, shall
 
11           not be adjusted under this part and shall continue to
 
12           be fixed or limited by the respective legislative body.
 
13      (2)  The compensation of excluded employee exempt from civil
 
14           service coverage under part II, whose pay is set at the
 
15           discretion of the appointing authority, shall continue
 
16           to be adjusted at the discretion of the appointing
 
17           authority from funds allowed for this purpose.
 
18      (3)  Any adjustment made for excluded civil service
 
19           employees shall be consistent with the principles under
 
20           part II and shall not diminish any rights provided
 
21           under part II.
 
22      (4)  Adjustments shall, to the extent practicable, uniformly
 
23           apply to every excluded employee within a homogenous
 

 
a                                                     HRD-01(00)
Page 117                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           grouping, such as, cabinet members or managerial
 
 2           employees, to ensure fairness.  This does not preclude
 
 3           variable adjustments based on performance or other job
 
 4           criteria and specific adjustments warranted based on
 
 5           the nature of work performed or working conditions.
 
 6      (5)  No adjustment shall be made in benefits provided under
 
 7           chapter 88 unless specifically authorized by that
 
 8           chapter, or with respect to any other matter that the
 
 9           State legislature may specifically prohibit or limit by
 
10           law.
 
11      §  -85  Excluded civil service employees.  (a)  Each
 
12 appropriate authority shall determine the adjustments that are
 
13 relevant for their respective excluded civil service employees
 
14 based on recommendations from its respective director.
 
15      (b)  In formulating recommendations to the appropriate
 
16 authority, the respective director shall:
 
17      (1)  Establish rules and procedures that allow excluded
 
18           civil service employees and employee organizations
 
19           representing them the opportunity to provide input on
 
20           the kinds of adjustments that are relevant and
 
21           important to them for the director's consideration.
 
22      (2)  Ensure that adjustments for excluded civil service
 
23           employees result in compensation and benefit packages
 

 
a                                                     HRD-01(00)
Page 118                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           that are appropriate for what they do and the
 
 2           contribution they make in consideration of the
 
 3           compensation and benefit packages provided under
 
 4           collective bargaining agreements for counterparts and
 
 5           subordinates within the jurisdiction.
 
 6      (3)  Confer with other directors on proposed adjustments to
 
 7           ensure that adjustments are consistent with part II.
 
 8      §  -86  Excluded employees exempt from civil service.  (a)
 
 9 Each appropriate authority shall determine the adjustments that
 
10 are relevant for their respective excluded employees who are
 
11 exempt from civil service in consideration of the compensation
 
12 and benefit packages provided for other employees within the
 
13 jurisdiction.
 
14      §  -87  Implementation; approval and appropriations.  (a)
 
15 Adjustments that do not require appropriations by the respective
 
16 legislative body and do not exceed those provided for
 
17 counterparts or subordinates under collective bargaining
 
18 agreements may be implemented without legislative approval.  Any
 
19 such adjustment shall not be effective earlier than the date on
 
20 which the adjustment was made under the relevant collective
 
21 bargaining agreement.
 
22      (b)  All other adjustments that require appropriations by
 
23 the respective legislative body or exceed those provided for
 

 
a                                                     HRD-01(00)
Page 119                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 counterparts or subordinates under collective bargaining
 
 2 agreements units shall be subject to approval and, if necessary,
 
 3 appropriations by the respective legislative body.  These
 
 4 adjustments and applicability, effective dates, and any
 
 5 associated costs shall be submitted separately to the respective
 
 6 legislative body for consideration, at such time and in such
 
 7 matter as the legislative body may require.  The respective
 
 8 legislative body may approve any adjustment as submitted or, if
 
 9 amended, after discussing the change with the appropriate
 
10 authority.
 
11      (c)  No adjustment shall be made nor shall be funds used for
 
12 purposes of this part without the prior approval of the
 
13 respective legislative body as required in this section.
 
14      §  -88  Documentation and notice of adjustments.  Any
 
15 adjustment made shall be reduced to writing.  Each appropriate
 
16 authority shall determine how the adjustments will be documented
 
17 and maintained.  Each appropriate authority shall ensure that all
 
18 affected employees are promptly notified of any adjustment that
 
19 applies to them.
 
20                      PART V.  PUBLIC SERVICE
 
21      §  -91  Office hours.  Offices of the State and counties
 
22 shall be open for the transaction of public business as
 
23 determined by the chief executive.  Offices need not be open for
 

 
a                                                     HRD-01(00)
Page 120                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 the transaction of public business on the state holidays
 
 2 designated under section 8-1 and as observed under section 8-2.
 
 3      §  -92  Hours of work.  Except for elected officials, the
 
 4 head of any department, first deputy or first assistant, and
 
 5 officers and employees assigned to salary ranges 31 or equivalent
 
 6 and above, the normal work week of all employees, irrespective of
 
 7 status or type of appointment and whether their work is performed
 
 8 during the hours specified in section  -91, shall be forty hours.
 
 9 Hours worked in excess of the forty hours shall be paid as
 
10 negotiated under collective bargaining agreements in part III,
 
11 provided in executive orders or directives in part IV, or rules,
 
12 as applicable.
 
13      (b)  Any law to the contrary notwithstanding, the
 
14 legislature declares that as a matter of public policy, no public
 
15 funds shall be used to pay employees for work not performed or to
 
16 pay employees overtime pay, compensatory time credit, or any
 
17 other penalty unless it is directly related to actual work that
 
18 is performed.  For purposes of this limitation, actual work may
 
19 include actual time spent in traveling to and from home and work
 
20 in excess of an employee's normal commute time and actual time
 
21 that an employee is required to standby for the purpose of
 
22 responding to an emergency.  This limitation does not preclude
 
23 negotiations under part III or adjustments under part IV with
 

 
a                                                     HRD-01(00)
Page 121                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 respect to:
 
 2      (1)  Paid leaves, paid holidays, and other paid time off
 
 3           from work that are allowed as employee benefits; or
 
 4      (2)  Compensation for overtime work, whether premium pay,
 
 5           compensatory time credit, or other penalty, if it is
 
 6           based on the amount of actual work performed; provided
 
 7           that no other pay, credit, or penalty shall be allowed
 
 8           for time not worked, unless an employee's health and
 
 9           safety is involved.  In such case, an employee may be
 
10           allowed paid time off to rest on a regular workday
 
11           because of the actual hours the employee was required
 
12           to work with little or no rest due to an emergency.
 
13 Any provisions negotiated under part III or adjusted under part
 
14 IV that provide for the use of public funds for purposes
 
15 prohibited under this subsection shall not be valid or
 
16 enforceable after June 30, 2001.
 
17      §  -93  Leaves.  (a)  Employees shall be entitled to
 
18 vacation leave, sick leave, and other leaves, with or without
 
19 pay, as negotiated under collective bargaining agreements in part
 
20 III, provided in executive orders or directives in part IV, or
 
21 rules, as applicable; provided that leaves shall be consistent
 
22 with all limitations or requirements under this section.
 
23      (b)  The vacation leave and sick leave allowances for all
 

 
a                                                     HRD-01(00)
Page 122                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 employees hired after June 30, 2000 shall limited as provided for
 
 2 in this section:
 
 3      (1)  After the completion of twelve months of service, no
 
 4           more than eighty hours of vacation leave and eighty
 
 5           hours of sick leave shall be allowed.
 
 6      (2)  After the completion of each succeeding twelve months
 
 7           of service thereafter, no more than eight additional
 
 8           hours of vacation leave and eight additional hours of
 
 9           sick leave shall be allowed for each twelve-month
 
10           period, subject to the maximum allowances under (3).
 
11      (3)  The maximum allowances for vacation leave and sick
 
12           leave shall be no more than one hundred and twelve
 
13           hours.
 
14 In operations where employees do not earn or use vacation or sick
 
15 leave credits in essentially the same manner as twelve-month
 
16 employees on a forty hour per week work schedule, the appropriate
 
17 authority shall ensure that the equivalent of the limitations
 
18 under this subsection shall also apply to employees in those
 
19 operations who are hired after June 30, 2000.  The limitations
 
20 under this subsection do not prohibit negotiations under part III
 
21 or adjustments under part IV with respect to vacation and sick
 
22 leave allowances as long as the allowances do not exceed the
 
23 limitations of this subsection which apply specifically to
 

 
a                                                     HRD-01(00)
Page 123                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 employees hired after June 30, 2000.
 
 2      (c)  Vacation and sick leave allowances shall be recorded
 
 3 and administered on a calendar year basis.  The allowance
 
 4 accruing during each calendar year shall be credited to employees
 
 5 as of December 31 of each year.
 
 6      (d)  Any unused vacation and sick leave allowances, which
 
 7 are not used by an employee during the year in which it accrues,
 
 8 shall accumulate for succeeding years, except that the total
 
 9 recorded accumulation of vacation shall be:
 
10      (1)  No more than seven hundred and twenty hours for
 
11           employees hired before July 1, 2000; and
 
12      (2)  No more than three hundred and sixty hours for
 
13           employees hired after June 30, 2000.
 
14 No employee shall be granted or permitted to take a vacation in
 
15 any calendar year in excess of the maximum accumulation allowed
 
16 in this subsection.
 
17      (e)  When an employee is transferred from one department to
 
18 another within the same jurisdiction or to another department
 
19 within another jurisdiction, the employee shall be given credit
 
20 for the vacation earned or accumulated in the department from
 
21 which the employee transferred, and the director of finance of
 
22 the State or the equivalent officers of the several jurisdictions
 
23 shall make the appropriate transfer of funds to implement the
 

 
a                                                     HRD-01(00)
Page 124                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 employee transfer.  Moneys received from any such transfer of
 
 2 funds by a state department financed by the general fund of the
 
 3 State shall be deposited with the director of finance of the
 
 4 State to the credit of the general fund of the State; provided
 
 5 further that when an officer or employee is transferred from one
 
 6 department to another within the same jurisdiction, the transfer
 
 7 of funds shall not be made if the employee's salary is paid from
 
 8 the same fund.  Compensation for any period of vacation allowance
 
 9 shall be paid at the rate to which the employee is entitled at
 
10 the time the allowance is granted.
 
11      (f)  Upon the termination of an employee's services, the
 
12 employee shall be entitled to all of the employee's accumulated
 
13 vacation allowance plus the employee's current accrued vacation
 
14 allowance to and including the date of termination,
 
15 notwithstanding that the current accrued vacation allowance may
 
16 not have been recorded at the time.
 
17      If any employee dies with accumulated or current accrued
 
18 vacation earned but not taken, an amount equal to the value of
 
19 the employee's pay over the period of such earned vacation, and
 
20 any earned and unpaid wages, shall be paid to the person or
 
21 persons who may have been designated as the beneficiary or
 
22 beneficiaries by the employee during the employee's lifetime in a
 
23 verified written statement filed with the comptroller or other
 

 
a                                                     HRD-01(00)
Page 125                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 disbursing officer who issues warrants or checks to pay the
 
 2 employee for the employee's services as a public employee, or,
 
 3 failing the designation, to the employee's surviving spouse or
 
 4 reciprocal beneficiary, or, failing the surviving spouse or
 
 5 reciprocal beneficiary, to the employee's estate.
 
 6      (g)  Whenever an employee's service is to be terminated,
 
 7 voluntarily or involuntarily, the service may be terminated, at
 
 8 the option of the appointing authority, and the separating
 
 9 employee may be paid, in lieu of the employee's vacation
 
10 allowance, the amount of compensation to which the employee would
 
11 be entitled or which the employee would be allowed during the
 
12 vacation period if the employee were permitted to take the
 
13 employee's vacation in the normal manner, and in such case the
 
14 employee's position may be declared vacant and may be permanently
 
15 filled by a new appointee before the expiration of any vacation
 
16 period following the date of the termination.  For an employee
 
17 hired after June 30, 1997, whose service is to be terminated,
 
18 voluntarily or involuntarily, the amount of compensation to be
 
19 paid in lieu of vacation allowance under this subsection shall be
 
20 computed using the rate of pay and amount of accumulated and
 
21 accrued vacation on the date the employee is terminated.  Prompt
 
22 notice upon such forms and in such manner as may be required
 
23 shall be given by the department head of any action taken under
 

 
a                                                     HRD-01(00)
Page 126                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 this provision.
 
 2      §  -94  Leave sharing.  A leave sharing program may be
 
 3 established by the chief executive of a jurisdiction to allow
 
 4 employees to donate accumulated vacation leave credits to another
 
 5 employee within the same jurisdiction who has a serious personal
 
 6 illness or injury or who has a family member who has a serious
 
 7 personal illness or injury.  The program shall allow employees
 
 8 who are not entitled to vacation leave to donate accumulated sick
 
 9 leave credits.  The director shall develop rules governing
 
10 donors, recipients, and an approval process that ensures fair
 
11 treatment and freedom from coercion of employees and imposes no
 
12 undue hardship on the employer's operations.  If it is
 
13 administratively unfeasible to allow leave sharing between
 
14 different departments or different bargaining units, the rules
 
15 may limit leave sharing to employees within the same department
 
16 or same bargaining unit, as necessary.  At a minimum, the rules
 
17 shall require that an eligible recipient must have:
 
18      (1)  No less than six months of service within the
 
19           respective jurisdiction;
 
20      (2)  Exhausted or is about to exhaust all vacation leave,
 
21           sick leave, and compensatory time credits; provided,
 
22           however, that sick leave need not be exhausted when the
 
23           illness or injury involves a family member;
 

 
a                                                     HRD-01(00)
Page 127                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (3)  A personal illness or injury certified by a competent
 
 2           medical examiner as being serious and the cause of the
 
 3           recipient's inability to work; provided that, the
 
 4           illness or injury is not covered under chapter 386 or,
 
 5           if covered, all benefits under chapter 386 have been
 
 6           exhausted or, a family member whose illness or injury
 
 7           is certified by a competent medical examiner as being
 
 8           serious; and
 
 9      (4)  No disciplinary record of sick leave abuse within the
 
10           past two years.
 
11      §  -95  Credits for employees receiving workers'
 
12 compensation benefits; wage supplement.  (a)  Where an employee
 
13 is absent from work because of injuries incurred within the scope
 
14 of the employee's employment and the employee is receiving
 
15 workers' compensation benefits, the employee shall continue to
 
16 earn vacation, sick leave, and retirement credits as though the
 
17 employee were not absent but performing duties of the employee's
 
18 regular employment.  Section 386-57 or any other law to the
 
19 contrary notwithstanding, the employee may elect to have deducted
 
20 from the employee's workers' compensation benefit checks an
 
21 amount calculated in the same manner as if the employee were not
 
22 absent but performing duties of the employee's regular employment
 
23 to be used as the employee's contribution to the retirement
 

 
a                                                     HRD-01(00)
Page 128                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 system.
 
 2      (b)  An employee who is receiving workers' compensation wage
 
 3 loss replacement benefits may use the employee's accumulated sick
 
 4 leave credits to supplement the workers' compensation wage loss
 
 5 replacement benefits to a sum equal to the employee's regular
 
 6 salary.
 
 7      §  -96  Injured employee; liability of third persons. (a)
 
 8 Whenever any police officer, firefighter, or any other employee,
 
 9 who is temporarily exposed to unusually hazardous conditions or
 
10 is a member of a class that is recognized by repricing to be
 
11 exposed to unusually hazardous conditions, receives personal
 
12 injury arising out of and in the performance of his duty and
 
13 without negligence on his part, the employee shall be placed on
 
14 accidental injury leave unless suspended or dismissed for cause.
 
15 The employee shall be continued on the department's payroll, as
 
16 though he did not sustain an industrial injury, as follows:
 
17      (1)  During the first four months of disability, at the
 
18           employee's full regular monthly salary; and
 
19      (2)  Thereafter, during the period of total disability from
 
20           work, at sixty per cent of the employee's regular
 
21           monthly salary.
 
22 The employee shall be entitled to all rights and remedies allowed
 
23 under chapter 386; provided that any salary paid under this
 

 
a                                                     HRD-01(00)
Page 129                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 section shall be applied on account of any compensation allowed
 
 2 the employee chapter 386 or any benefits awarded the employee
 
 3 under part III of chapter 88.
 
 4      (b)  When the employer pays benefits to or incurs medical
 
 5 expenses on behalf of its employees under this section for any
 
 6 injury sustained under circumstances creating in some person or
 
 7 entity other than the employer a legal liability to pay damages
 
 8 in respect thereto, the employer or the employee may proceed
 
 9 against such third persons and recover all payments made, paid or
 
10 due under this section.  The employer or employee shall have all
 
11 of the rights and remedies contained in or provided for under
 
12 section 386-8.
 
13      §  -97  Temporary inter- and intra-governmental governmental
 
14 assignments and exchanges.  (a)  With the approval of the
 
15 respective employer, a governmental unit of this State may
 
16 participate in any program of temporary inter- or intra-
 
17 governmental assignments or exchanges of employees as a sending
 
18 or receiving agency.  "Agency" means any local, national, or
 
19 foreign governmental agency or private agency with government
 
20 sponsored programs or projects.
 
21      (b)  As a sending agency, a governmental unit of this State
 
22 may consider its employee on a temporary assignment or exchange
 
23 as being on detail to a regular work assignment or on leave of
 

 
a                                                     HRD-01(00)
Page 130                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 absence without pay from the employee's position. The employee on
 
 2 temporary assignment or exchange shall be entitled to all rights
 
 3 and benefits as any other employee on a regular work assignment.
 
 4      (c)  As a receiving agency, a governmental unit of this
 
 5 State shall not consider the employee on a temporary assignment
 
 6 or exchange who is detailed from another government as its
 
 7 employee, except for the purpose of disability or death resulting
 
 8 from personal injury arising out of and in the course of the
 
 9 temporary intergovernmental assignment.  The employee on detail
 
10 may not receive a salary from the receiving agency, but the
 
11 receiving agency may pay for or reimburse the other government
 
12 for the costs, or any portion of the costs, of salaries,
 
13 benefits, and travel and transportation expenses if it will
 
14 benefit from the assignment or exchange.
 
15      (d)  An agreement consistent with this section and policies
 
16 of the employer shall be made between the sending and receiving
 
17 agencies on matters relating to the assignment or exchange,
 
18 including but not limited to supervision of duties, costs of
 
19 salary and benefits, and travel and transportation expenses.
 
20      (e)  As a receiving agency, a governmental unit of this
 
21 State may give the employee of another government on a temporary
 
22 assignment or exchange an exempt appointment and grant the
 
23 employee rights and benefits as other exempt appointees of the
 

 
a                                                     HRD-01(00)
Page 131                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 receiving agency if it will benefit from the assignment or
 
 2 exchange.
 
 3      §  -98  In-service training programs.  (a)  Each director
 
 4 shall monitor, make recommendations, or develop policies and
 
 5 guidelines for suitable in-service training programs and
 
 6 activities so that the quality of service rendered by government
 
 7 employees may be continually improved.  Participating agencies
 
 8 may be charged fees for training programs.
 
 9      (b)  In the case of the State, funds necessary for
 
10 developing and operating in-service training programs and
 
11 activities shall be provided by general fund appropriations.
 
12 Additional revenues from the charging of participant fees shall
 
13 be placed in a revolving fund of the department of human
 
14 resources development.
 
15      §  -99  Incentive and service awards.  (a)  Each chief
 
16 executive may establish incentive and service awards programs to
 
17 recognize officers and employees who contribute to the
 
18 efficiency, economy, or other improvement of government
 
19 operations or who perform exceptionally meritorious special acts
 
20 or services in the public interest in connection with or related
 
21 to their official employment.  The programs may allow appointing
 
22 authorities to establish their own programs consistent with the
 
23 policies of the chief executive.
 

 
a                                                     HRD-01(00)
Page 132                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (b)  The program may provide for cash awards to recognize
 
 2 suggestions, inventions, superior accomplishments, length of
 
 3 service, and other personal efforts.  A cash award shall be in
 
 4 addition to the officer's or employee's regular compensation. The
 
 5 acceptance of a cash award shall constitute an agreement that use
 
 6 by the government of any idea, method, or device for which the
 
 7 award is made shall not form the basis of a further claim upon
 
 8 the government by the employee or the employee's heirs and
 
 9 assigns.
 
10      (c)  Awards and expenses for programs may be paid from funds
 
11 available to the departments benefiting from the officer's or
 
12 employee's contribution, as determined by the chief executive or
 
13 the appointing authority, as applicable.  All decisions made on
 
14 the issuance of awards under this section shall be final and
 
15 deemed a performance of a discretionary function of the chief
 
16 executive or appointing authority.
 
17      §  -100  Cafeteria plans.  (a)  Each chief executive may
 
18 establish a wage and salary reduction benefit program which
 
19 qualifies as a cafeteria plan within the meaning of section 125
 
20 of the Internal Revenue Code of 1986, as amended.  The cafeteria
 
21 plan shall allow eligible employee to elect to reduce their
 
22 pretax compensation in return for payment by the jurisdiction of
 
23 the expenses of eligible benefits.
 

 
a                                                     HRD-01(00)
Page 133                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (b)  The contributions, interest earned, and forfeited
 
 2 participant balances may be held in trust outside of the
 
 3 jurisdiction's treasury for the benefit of the participants and
 
 4 the plan.  The funds in trust shall not be subject to the
 
 5 jurisdiction's general creditors.  Interest earned or forfeited
 
 6 participant balances may be used to defray participant fees and
 
 7 other administrative costs.
 
 8      §  -101  Prohibition on certain increases in salaries for
 
 9 certain employees.  Any law to the contrary notwithstanding, each
 
10 jurisdiction shall not provide or pay any adjustment or increase
 
11 in the employee's respective salary or compensation where such
 
12 adjustment or increase constitutes a mandatory adjustment or
 
13 increase which is, directly or indirectly, dependent upon and
 
14 related to negotiated salary adjustments or increases received
 
15 under collective bargaining agreements by civil service or other
 
16 public employees covered by collective bargaining to any elected
 
17 or appointed employee of a jurisdiction:
 
18      (1)  Whose salary or compensation is fixed, limited, or
 
19           otherwise specified by statute, ordinance, or other
 
20           legislative enactment whether or not in express dollar
 
21           amounts or express dollar amount ceilings;
 
22      (2)  Who is not subject to part II; and
 
23      (3)  Who is excluded from collective bargaining and not
 

 
a                                                     HRD-01(00)
Page 134                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           subject to part III.
 
 2      §  -102  Boards and commissions; service limited.  (a)  Any
 
 3 other provision of law to the contrary notwithstanding, no person
 
 4 shall be allowed to serve on more than one state board or
 
 5 commission expressly created by a state statute or the state
 
 6 constitution.
 
 7      (b)  Any prohibition in any law against the holding of
 
 8 outside employment or dual public office, employment, or position
 
 9 by an employee shall not bar the appointment of an employee to
 
10 membership on a commission or board unless service on the
 
11 commission or board would be inconsistent or incompatible with or
 
12 would tend to interfere with the duties and responsibilities of
 
13 the other office, employment or position held by the employee.
 
14      (c)  When any employee must be away from the employee's
 
15 regular work because of service as a member on a board or
 
16 commission, the employee shall not, as a result of the absence,
 
17 suffer any loss of the employee's regular salary or wages.  The
 
18 time spent in service as a board or commission member shall not
 
19 be credited as time worked for purposes of overtime compensation.
 
20      §  -103  Certain public employees prohibited from receiving
 
21 certain masterships and master's fees; forfeiture.(a)  No
 
22 person holding any salaried office or employment or holding any
 
23 office or employment any part of the compensation for which is
 

 
a                                                     HRD-01(00)
Page 135                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 paid by a jurisdiction, shall be appointed to serve as master to
 
 2 examine, pass, or report upon any account filed in any court of
 
 3 the State by any guardian, trustee, or personal representative
 
 4 except where the estate concerned is insolvent or there are
 
 5 insufficient funds therein to pay a reasonable master's fee.
 
 6      (b)  The master shall not receive, directly or indirectly,
 
 7 any fee or other remuneration for services rendered as master to
 
 8 examine, pass, or report upon any account filed in any court of
 
 9 the State by any guardian, trustee, or personal representative.
 
10 The person receiving or accepting the fee or remuneration shall
 
11 by virtue of the acceptance be deemed to have released and
 
12 forfeited all claim and right thereafter to any compensation
 
13 payable by the jurisdiction by virtue of the office or
 
14 employment, and in addition, if the person is holding an office
 
15 or employment, subject to the power of the legislature of the
 
16 State to provide for forfeiture thereof as herein provided, shall
 
17 be deemed to have forfeited and been ipso facto discharged from
 
18 the person's office or employment.  In any event, upon acceptance
 
19 of the fee or remuneration, the comptroller of the jurisdiction
 
20 is prohibited from issuing any warrant to the person except for
 
21 services rendered prior to the forfeiture.
 
22      (c)  This section shall not apply to officers whose only
 
23 compensation from the government is paid pursuant to any state
 

 
a                                                     HRD-01(00)
Page 136                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 statute upon a per diem basis or upon a fee basis, or to officers
 
 2 or employees appointed or employed by contract to render a
 
 3 temporary professional service.  Traveling or other expenses paid
 
 4 or payable by the jurisdiction to any officer or employee shall
 
 5 not be deemed to be compensation.
 
 6      §  -104  Failure to appear or testify, termination of
 
 7 employment; procedure.(a)  The persons subject to this section
 
 8 are those elected to or appointed or employed in a jurisdiction,
 
 9 or appointed to or employed in any office or employment for which
 
10 any part of their compensation is paid out of public funds.
 
11      (b)  If any person under subsection (a), after lawful notice
 
12 or process, willfully refuses or fails to appear before any court
 
13 or judge, any legislative committee, or any officer, board,
 
14 commission, or other body authorized to conduct any hearing or
 
15 inquiry, or having appeared refuses to testify or to answer any
 
16 question regarding:
 
17      (1)  The government, property or affairs of the State or of
 
18           any political subdivision thereof; or
 
19      (2)  The person's qualifications for public office or
 
20           employment (including matters pertaining to loyalty or
 
21           disloyalty); or
 
22      (3)  The qualifications of any officer or employee of the
 
23           State or any political subdivision thereof, on the
 

 
a                                                     HRD-01(00)
Page 137                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           ground that the person's answer would tend to
 
 2           incriminate the person, or refuses to testify or to
 
 3           answer any such question without right;
 
 4 the person's term or tenure of office or employment shall
 
 5 terminate and the office or employment shall be vacant, and the
 
 6 person shall not be eligible to election or appointment to any
 
 7 office or employment under the jurisdiction.  To the extent that
 
 8 the State is without authority to require, under the constitution
 
 9 or laws of the United States, compliance by any public officer or
 
10 public employee, this section shall apply to the extent that the
 
11 section or any part thereof can lawfully be made applicable.
 
12      (c)  If any person refuses to appear or refuses to testify
 
13 under any of the circumstances contemplated in (b), the presiding
 
14 judge or officer of the court or body before which the default or
 
15 refusal occurs shall certify the fact thereof to the appointing
 
16 or employing authority having cognizance of the person as a
 
17 public officer or public employee and to the comptroller or other
 
18 disbursing officer who issues warrants or checks to pay the
 
19 person for the person's services as a public officer or public
 
20 employee.  If the default or refusal occurs before any court or
 
21 body whose presiding judge or officer may not be required by the
 
22 legislature to make and file such a certificate, then:
 
23      (1)  The presiding judge or officer may make and file the
 

 
a                                                     HRD-01(00)
Page 138                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           certificate; and
 
 2      (2)  The attorney general of the State, upon learning of the
 
 3           default or refusal, shall make and file the certificate
 
 4           if the presiding judge or officer of the court or body
 
 5           has not filed the same.
 
 6      Upon receiving a certificate:
 
 7           (A)  The appointing or employing authority shall remove
 
 8                or discharge the person from office or employment;
 
 9                and
 
10           (B)  The comptroller or other disbursing officer shall
 
11                make no further payments of public funds to the
 
12                person, except to pay the person the salary,
 
13                wages, bonus, or other compensation to which the
 
14                person otherwise would be entitled if the person
 
15                were voluntarily terminating the person's office
 
16                or employment on the day the order is served on
 
17                the comptroller or other disbursing officer.
 
18      (d)  The removal or discharge of any person from office or
 
19 employment shall not be reviewable by any court, officer, or
 
20 agency of a jurisdiction but nothing herein shall preclude any
 
21 court of competent jurisdiction from reviewing the question
 
22 whether the removal or discharge is in accordance with this
 
23 section.  In the case of any officer who may only be removed from
 

 
a                                                     HRD-01(00)
Page 139                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 office by the governor by and with the advice and consent of the
 
 2 senate of the State, the removal of the officer shall not be
 
 3 effected until the advice and consent of the senate thereto is
 
 4 given, but the duties of the comptroller or other appropriate
 
 5 disbursing officer specified in (c) shall remain the same.
 
 6      §  -105  Limitation of liability.  Except in cases of gross
 
 7 negligence, no public officer or employee shall be liable for
 
 8 damages to government property if such damages to government
 
 9 property were caused by the public officer or employee while
 
10 performing work within the scope of the officer's or employee's
 
11 employment.
 
12      §  -106  Sureties.  Whenever by any law, regulation,
 
13 ordinance, rule or order of court, or any rule of any department
 
14 of the state government or of any subdivision thereof, any person
 
15 shall be required to give any written bond or undertaking for the
 
16 performance of any contract or the provisions of any license, or
 
17 for the indemnity or security of any person, party or any
 
18 officer, there shall be attached to the bond or undertaking an
 
19 affidavit of each of the sureties thereon, duly verified by oath,
 
20 from which it shall appear that the sureties have property
 
21 situate within the State subject to execution and that the
 
22 sureties taken together are worth in the property the amount of
 
23 the penalty specified in the bond or undertaking, over and above
 

 
a                                                     HRD-01(00)
Page 140                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 all of their debts and liabilities.  In default of the
 
 2 justification no bond or undertaking shall be accepted.
 
 3 Notwithstanding any provision requiring two or more sureties, if
 
 4 any such bond or undertaking is executed by the principal and by
 
 5 any corporation, organized for the purpose of becoming surety on
 
 6 such bonds, authorized under the laws of the United States or of
 
 7 the State to act as surety, and doing business in the State under
 
 8 the provisions of the laws of the United States or of the State,
 
 9 if a foreign corporation, and under the laws of the State, if a
 
10 Hawaiian corporation, the corporation may be accepted as sole
 
11 surety on the bond, whenever, in the opinion of the officer or
 
12 officers whose duty it is to approve the bond, the rights of all
 
13 parties in interest will be fully protected.  When the surety on
 
14 any such bond is a corporation authorized to do a surety company
 
15 business, no justification shall be required.
 
16      Nothing herein shall be deemed to prevent the deposit of
 
17 cash or other security in lieu of any surety or sureties, when
 
18 permitted by the law, regulation, ordinance, rule or order
 
19 concerned.
 
20                   PART VI.  DRUG FREE WORKFORCE
 
21      §  -121  Purpose.  Drug abuse is a serious statewide
 
22 problem.  Individuals may exhibit little or no signs of drug
 
23 abuse, but are nevertheless dangerous to themselves, their co-
 

 
a                                                     HRD-01(00)
Page 141                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 workers, and the public.  Public employees in safety sensitive
 
 2 positions pose a particular risk to the safety of the public.
 
 3 Even if functional in routine activities, public employees who
 
 4 use controlled substances are impaired and may be unreliable in
 
 5 times of crisis.  Drug abusers should not be given access to guns
 
 6 with the concomitant potential for violence; should not be given
 
 7 access to prisoners with the possibility of exacerbating any
 
 8 existing drug problem in the prison; should not given access to
 
 9 controlled substances with the inevitable opportunity to succumb
 
10 to the temptation; should not be entrusted with commercial motor
 
11 vehicles with the potential for accidents and loss of life;
 
12 should not be given positions the public must rely upon for
 
13 judgment and integrity; and should not be given positions
 
14 involving highly sensitive information.
 
15      Accordingly, this part requires:
 
16      (1)  The termination of all public employees who use drugs
 
17           twice during the period of employment;
 
18      (2)  All new hires to demonstrate their suitability for
 
19           public employment by passing a pre-employment drug test
 
20           if required by the employing jurisdiction and having no
 
21           record of a prior conviction for a controlled
 
22           substance-related offense within the preceding five-
 
23           year period; and
 

 
a                                                     HRD-01(00)
Page 142                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (3)  Mandatory random drug testing for all public employees
 
 2           whose jobs require unimpeachable integrity and
 
 3           judgment, enhance public safety, impact the care of
 
 4           human life, require unimpaired performance to avoid
 
 5           risk to the health or safety of the public, or involve
 
 6           the custody and maintenance of truly sensitive
 
 7           information;
 
 8      and shall be interpreted in a manner that best protects
 
 9           these compelling governmental interests.
 
10      §  -122  Definitions.  For purposes of this part:
 
11      "Controlled substance" means a drug, substance, or immediate
 
12 precursor in Schedules I through V of chapter 329, part II.
 
13      "During the period of employment" means the start date of
 
14 employment until the date of separation and includes off-duty
 
15 hours, holidays, and weekends.
 
16      "Safety sensitive positions" means positions which require
 
17 unimpeachable integrity and judgment, enhance public safety,
 
18 impact the care of human life, require unimpaired performance to
 
19 avoid risk to the health and safety of the public, or involve the
 
20 custody and maintenance of truly sensitive information, including
 
21 but not limited to the following categories:
 
22      (1)  Positions requiring the ability to carry firearms,
 
23           including police officers, adult corrections officers,
 

 
a                                                     HRD-01(00)
Page 143                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           harbor patrol officers, department of land and natural
 
 2           resources patrols, investigators for the Department of
 
 3           the Attorney General, the Prosecuting Attorney, and the
 
 4           Department of Public Safety, State Law Enforcement
 
 5           Officers, sheriffs, and any other positions authorized
 
 6           to carry firearms;
 
 7      (2)  Positions located in an adult correctional facility or
 
 8           youth correction facility including social workers,
 
 9           medical personnel, education, kitchen, office, and
 
10           work-line staff, treatment providers, and counselors,
 
11           and supervisors of these positions;
 
12      (3)  Positions authorized to administer controlled
 
13           substances including doctors, nurses, emergency medical
 
14           technicians, and physician assistants;
 
15      (4)  Positions requiring a commercial drivers license;
 
16      (5)  Positions requiring unimpaired performance to avoid
 
17           risk to the health or safety of the public including
 
18           drivers of passenger carrying vehicles or equipment
 
19           vehicles;
 
20      (6)  Lifeguards, water safety officers, firefighters, and
 
21           other positions involved in life-saving activities,
 
22           responding to emergencies, or rescue operations;
 
23      (7)  Positions with responsibility for the security of
 

 
a                                                     HRD-01(00)
Page 144                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           government buildings;
 
 2      (8)  Positions requiring unimpeachable integrity and
 
 3           judgment including deputy attorney generals, deputy
 
 4           corporation counsels, and deputy prosecuting attorneys,
 
 5           but excluding members of the judiciary; and
 
 6      (9)  Positions which involve the custody and maintenance of
 
 7           truly sensitive information including public employees
 
 8           who must have a military security clearance in order to
 
 9           perform their jobs.
 
10      §  -123  Safety-sensitive positions; mandatory drug testing
 
11 and termination for two strikes.  (a)  Each director shall
 
12 identify all safety sensitive positions within its jurisdiction,
 
13 consistent with the purpose of this part, that shall be required
 
14 to undergo mandatory random controlled substance testing.  To
 
15 implement this part, the director shall establish a written
 
16 policy setting forth the manner in which individuals are chosen
 
17 to be tested, the type of test to be given, and the consequences
 
18 of a positive controlled substance test, including adverse
 
19 actions, additional testing, counseling and treatment, and any
 
20 other requirements.
 
21      (b)  All public employees in safety sensitive positions in
 
22 the jurisdiction shall be required to undergo mandatory random
 
23 controlled substance testing pursuant to the director's written
 

 
a                                                     HRD-01(00)
Page 145                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 policy.
 
 2      (c)  There is a rebuttable presumption that a public
 
 3 employee testing positive for a controlled substance during the
 
 4 period of employment was in fact using controlled substances
 
 5 during the period of employment.
 
 6      (d)  Any conviction for a controlled substance-related
 
 7 offense which occurred during the period of employment shall be
 
 8 an irrebuttable presumption that the public employee was in fact
 
 9 using controlled substances during the period of employment.
 
10      (e)  Any public employee covered by this section, using
 
11 controlled substances once during the period of employment, may
 
12 be placed on mandatory leave, be required to undergo additional
 
13 drug testing, and be required to receive counseling and treatment
 
14 pursuant to the director's written policy.
 
15      (f)  Any public employee using controlled substances twice
 
16 during the period of employment shall be immediately terminated
 
17 and shall be ineligible for public employment for not less than
 
18 five years thereafter.
 
19      (g)  Any adverse action taken against an employee for using
 
20 controlled substances may be grieved and appealed as provided in
 
21 section   -25, as other adverse actions taken for non-
 
22 disciplinary reasons.
 
23      (h)  An exclusive representative may negotiate procedures on
 

 
a                                                     HRD-01(00)
Page 146                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 maintaining a drug free workforce as it applies to safety
 
 2 sensitive employees within its bargaining unit; provided that any
 
 3 procedures negotiated shall be consistent with the provisions in
 
 4 this part and do not interfere with the responsibilities required
 
 5 of the director in subsection (a).  If there are provisions in a
 
 6 collective bargaining agreement that are inconsistent with this
 
 7 part, the inconsistent provisions shall not be valid and
 
 8 enforceable and the parties shall repeal or amend the provisions
 
 9 to be in conformance with this part.
 
10      §  -124  Prospective employees; suitability for public
 
11 employment.(a)  All prospective employees, regardless of the
 
12 positions they will assume, may be required to demonstrate their
 
13 suitability for public employment by:
 
14      (1)  Passing a pre-employment controlled substance drug test
 
15           if required by the employing jurisdiction; and
 
16      (2)  Attesting that during the five year period immediately
 
17           preceding the date of application for employment, the
 
18           person was not convicted of any controlled substance-
 
19           related offense.
 
20      (b)  A failure to meet any of the requirements of subsection
 
21 (a) shall result in a determination of unsuitability and the
 
22 person may be ineligible for appointment under the provisions of
 
23 section   -21.
 

 
a                                                     HRD-01(00)
Page 147                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      §  -125  Mandatory termination for two convictions.(a)
 
 2 All public employees in positions that are not covered by
 
 3 section   -123, regardless of the positions they occupy, shall be
 
 4 subject during the period of employment to a determination of
 
 5 unsuitability resulting in immediate termination if they are
 
 6 convicted twice for a controlled substance-related offense.  In
 
 7 implementing this section, subsections   -123(d), (f), and (g)
 
 8 shall apply.
 
 9      (b)  Each director shall adopt rules necessary to implement
 
10 this section."
 
11                             PART II.
 
12      SECTION 3.  The legislature finds that as the State begins
 
13 the new millennium, the citizens of Hawaii require, demand, and
 
14 deserve a government that is responsive, efficient, and flexible
 
15 in order to address the ever-changing needs of a modern society.
 
16 To effectively provide for the requirements of the twenty-first
 
17 century, state government must reinvent itself and the way it
 
18 operates so that it will cost less, work better, and get
 
19 measurable results.  As such, it is the objective of the
 
20 legislature to restructure state government into an organization
 
21 that provides:
 
22      (1)  The best value for every taxpayer dollar;
 
23      (2)  The best service for each customer and regulated
 

 
a                                                     HRD-01(00)
Page 148                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           business;
 
 2      (3)  The best workplace for its employees; and
 
 3      (4)  The best legacy for Hawaii's future.
 
 4      The purpose of this part is to provide the governor with
 
 5 tools necessary to facilitate the restructuring of the executive
 
 6 branch of state government.  Specifically, this part authorizes
 
 7 planned workforce reduction programs to offer a voluntary
 
 8 severance benefit or an early retirement incentive to encourage
 
 9 employees in positions that will be eliminated to voluntarily
 
10 separate from service.  Layoffs customarily result in reduced
 
11 productivity because of operational adjustments necessary for
 
12 placement/bumping rights, lowered morale of less senior employees
 
13 who fear being bumped, and heightened frustration of those
 
14 employees who meet the service, but not the age, requirements to
 
15 qualify for immediate retirement benefits.  By offering a
 
16 voluntary severance benefit or an early retirement incentive,
 
17 workforce reductions can be made more expeditiously and the
 
18 disruption to operations and personal lives that usually
 
19 accompany forced layoffs can be minimized or avoided.
 
20      SECTION 4.  This part applies to employees in the executive
 
21 branch of state government, including employees of the board of
 
22 education, the board of regents, and the Hawaii health systems
 
23 corporations board.  For the purposes of this part, "employee"
 

 
a                                                     HRD-01(00)
Page 149                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 means an individual covered under chapter 88 and employed with
 
 2 the state executive branch, except for school level personnel
 
 3 with the department of education engaged in administrative or
 
 4 instructional work, such as, principals and teachers.
 
 5      This part may apply to county employees covered under
 
 6 chapter 88 and employed with the city and county of Honolulu,
 
 7 county of Hawaii, county of Kauai or county of Maui should the
 
 8 county chief executive declare by providing notice to each of the
 
 9 exclusive collective bargaining representatives for public
 
10 employees and to the board of trustees for the employees'
 
11 retirement system that the county will initiate a planned
 
12 workforce reduction program in conjunction with the offering of a
 
13 voluntary severance benefit or an early retirement incentive
 
14 program.
 
15      This part does not apply to the state legislature, the
 
16 judiciary or the office of Hawaiian affairs.
 
17      SECTION 5.  Voluntary severance benefit.  (a)  Any employee
 
18 who receives official notification or a ninety day notice of a
 
19 reduction-in-force from an appointing authority that the
 
20 employee's position is specifically eliminated or eliminated as a
 
21 result of a workforce reduction plan proposed by the department,
 
22 may elect to receive a voluntary severance benefit under this
 
23 section in lieu of any reduction-in-force rights to which the
 

 
a                                                     HRD-01(00)
Page 150                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 employee is entitled under a collective bargaining agreement or
 
 2 rules.  An employee who is not entitled to reduction-in-force
 
 3 rights shall not be eligible to receive a voluntary severance
 
 4 benefit under this section.  An employee who elects to receive
 
 5 the early retirement incentive under section 6 shall not be paid
 
 6 a voluntary severance benefit under this section.  An employee
 
 7 who receives a reduction-in-force notice as the result of a
 
 8 reduction-in-force bumping action shall not be eligible to
 
 9 receive a voluntary severance benefit under this section.
 
10      (b)  A one-time lump sum cash bonus voluntary severance
 
11 benefit shall be calculated and paid by the terminated employee's
 
12 department as follows:  Five per cent of the employee's base
 
13 annual salary for every year of service worked, up to ten years,
 
14 that shall not exceed fifty per cent of the employee's annual
 
15 base salary.
 
16      For the purposes of this section, "base salary" means an
 
17 employee's annual salary for the position from which the employee
 
18 is to be separated, excluding all other forms of compensation
 
19 paid or accrued, whether a bonus, allowance, differential, or
 
20 value of leave or compensatory time off credits.  Compensation
 
21 excluded from base salary include but are not limited to:
 
22 shortage category differential, night shift differential,
 
23 overtime, compensatory time off credits, vacation or sick leave,
 

 
a                                                     HRD-01(00)
Page 151                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 and workers' compensation benefits.
 
 2      (c)  A voluntary severance benefit provided under this
 
 3 section shall not be considered as a part of a terminated
 
 4 employee's salary, service credit, or a collectively bargainable
 
 5 cost item when calculating retirement benefits or sick and
 
 6 vacation leave.
 
 7      (d)  The voluntary severance benefit shall be in addition to
 
 8 any payment owing to the employee for accumulated unused vacation
 
 9 allowances.
 
10      (e)  All voluntary severance benefits payable pursuant to
 
11 this section shall be subject to applicable state income tax laws
 
12 and rules.
 
13      (f)  No employee who has received a voluntary severance
 
14 benefit provided by this section shall be reemployed by the
 
15 employee's immediate former State or county employer within five
 
16 years of receiving the voluntary severance benefit unless the
 
17 gross amount of the voluntary severance benefit is returned by
 
18 the employee to the appropriate fund prior to the commencement of
 
19 reemployment.
 
20      (g)  The heads of all affected state departments shall
 
21 transmit a list of all employees whose positions are eliminated
 
22 and who elected and received voluntary severance benefits under
 
23 this section to the directors of finance and human resources
 

 
a                                                     HRD-01(00)
Page 152                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 development.  The heads of all affected departments shall certify
 
 2 that the employees on the list have in fact selected the
 
 3 voluntary severance benefit, which shall be in lieu of an early
 
 4 retirement incentive under section 6 and any reduction-in-force
 
 5 rights to which the employees may have been entitled.
 
 6      SECTION 6.  Early retirement incentive.  (a)  Any employee
 
 7 who receives official notification or a ninety day notice of
 
 8 reduction-in-force notification from an appointing authority that
 
 9 the employee's position is specifically eliminated or eliminated
 
10 as a result of a workforce reduction plan proposed by the
 
11 department, may elect, if the employee is a vested member of the
 
12 employees' retirement system and meets any of the criteria
 
13 specified in subsection (c), the early retirement incentive
 
14 provided by this section.  If an employee is also eligible for a
 
15 voluntary severance benefit under section 5, the early retirement
 
16 incentive shall be in lieu of the voluntary severance benefit and
 
17 any reduction-in-force rights the employee may be entitled to
 
18 under a collective bargaining agreement or rules.  An employee
 
19 who receives reduction-in-force notice as the result of a
 
20 reduction-in-force bumping action shall not be eligible to
 
21 receive the early retirement incentive benefit under this
 
22 section.  To receive the early retirement incentive under this
 
23 section, the employee shall comply with the requirements
 

 
a                                                     HRD-01(00)
Page 153                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 specified in subsection (b).
 
 2      (b)  An employee who elects to retire and receive the early
 
 3 retirement incentive under this section shall notify the
 
 4 employee's department by filing a formal application for
 
 5 retirement not less than thirty days nor more than ninety days
 
 6 prior to the date of retirement.
 
 7      (c)  Notwithstanding the age and length of service
 
 8 requirements of sections 88-73 and 88-28, an employee shall
 
 9 qualify for the early retirement incentive if, on the member's
 
10 retirement date, the member meets any of the following criteria:
 
11      (1)  Has at least ten years of credited service as a
 
12           contributory class A or B member and is at least fifty
 
13           years of age;
 
14      (2)  Has at least twenty years of credited service as a
 
15           contributory class A or B member, irrespective of age;
 
16      (3)  Has at least ten years of credited service as a
 
17           noncontributory class C member and is at least fifty-
 
18           seven years of age; or
 
19      (4)  Has at least twenty-five years of credited service as a
 
20           noncontributory class C member, irrespective of age.
 
21      (d)  Any employee who exercises the option of early
 
22 retirement under this section who does not qualify with respect
 
23 to the age and length of service requirements under section 88-73
 

 
a                                                     HRD-01(00)
Page 154                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 to receive a retirement benefit without penalty, shall not have
 
 2 the retirement benefit reduced in accordance with the actuarial
 
 3 formula normally used by the employees' retirement system for the
 
 4 calculation of early retirement benefits.
 
 5      (e)  The member shall forfeit any benefit derived from the
 
 6 early retirement incentive, as determined by the board of
 
 7 trustees of the employee's retirement system, upon subsequent
 
 8 reentry into the employees' retirement system.
 
 9      (f)  The heads of all affected state departments and the
 
10 chief executive of participating county shall transmit a list of
 
11 employees whose positions are eliminated and who elected and
 
12 received early retirement incentives under this section to the
 
13 board of trustees of the employees' retirement system not less
 
14 than thirty days but not more than ninety days prior to the
 
15 employees' retirement dates.  The heads of the affected
 
16 department or chief executive of the county shall certify that
 
17 the employees on the list have in fact selected the early
 
18 retirement incentive, which shall be in lieu of a voluntary
 
19 severance benefit under section 5 and any reduction-in-force
 
20 rights to which employees may have been entitled.
 
21      SECTION 7. All positions vacated by employees who are
 
22 provided a voluntary severance benefit under section 5 or an
 
23 early retirement incentive under section 6 shall be abolished
 

 
a                                                     HRD-01(00)
Page 155                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 upon the employees' separation from service.  All funds allocated
 
 2 for the salary of the position vacated and abolished pursuant to
 
 3 this part shall be lapsed to the appropriate fund from which the
 
 4 position is funded, as applicable, upon the separation of the
 
 5 employee and after the deduction of amounts sufficient to cover
 
 6 the voluntary severance benefit or the costs, direct or indirect,
 
 7 associated with the retiring employee's early retirement
 
 8 incentive, and the accumulated vacation leave of the employee who
 
 9 occupied the position.
 
10      All state departments affected by the voluntary severance
 
11 benefit and early retirement incentive authorized by this part
 
12 shall reduce its personnel count by the equivalent of each
 
13 voluntary severance benefit and each early retirement incentive
 
14 conferred.  Each state department shall forward a report on the
 
15 positions affected to the directors of finance and human
 
16 resources development who shall then abolish the vacated
 
17 positions from the appropriate budget and personnel data files.
 
18      Each participating county shall initiate appropriate action
 
19 to abolish vacated positions from the appropriate budget and
 
20 personnel files.
 
21      SECTION 8.  The department of human resources development
 
22 and the department of budget and finance for the state and the
 
23 respective county directors of personnel and finance for the
 

 
a                                                     HRD-01(00)
Page 156                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 participating county shall develop guidelines for participating
 
 2 agencies to facilitate the implementation of the voluntary
 
 3 severance benefit provided in section 5 and the early retirement
 
 4 incentive provided in section 6.
 
 5      SECTION 9.  The department of human resources development,
 
 6 in cooperation with the employees' retirement system, shall for
 
 7 the state and the county director of personnel and employees
 
 8 retirement system shall for the participating county provide
 
 9 briefings prior to the implementation of any strategic workforce
 
10 reduction plan to educate those employees whose positions are
 
11 being eliminated.
 
12      SECTION 10.  The governor and respective mayors for each
 
13 participating county shall report to the legislature no later
 
14 than twenty days prior to the convening of each regular session
 
15 on the restructuring or reengineering activities initiated within
 
16 the various departments and the positions abolished by offering a
 
17 voluntary severance benefit or an early retirement incentive as a
 
18 consequence of this part.
 
19      SECTION 11.  The board of trustees of the employees'
 
20 retirement system shall make payments with respect to all
 
21 eligible employees who retire pursuant to section 6.  The board
 
22 shall determine the portion of the additional actuarial present
 
23 value of benefits to be charged to the State or participating
 

 
a                                                     HRD-01(00)
Page 157                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 county, based on retirements under the early retirement incentive
 
 2 program.  If necessary, the State or participating county shall
 
 3 make additional payments to the employees, retirement system in
 
 4 the amounts required to amortize the additional actuarial present
 
 5 value of benefits over a period of twenty years beginning
 
 6 January 1, 2001.
 
 7                             PART III.
 
 8      SECTION 12.  Chapter 40, Hawaii Revised Statutes, is amended
 
 9 by adding a new section to be appropriately designated and to
 
10 read as follows:
 
11      "§40-    Salary withheld for indebtedness to the government;
 
12 salary or wage overpayment.  (a)  In case any officer, agent,
 
13 employee, or other person in the service of the State, any
 
14 county, or any independent board or commission, is indebted to
 
15 the State, any county, or any independent board or commission,
 
16 and the indebtedness has been determined by a hearing pursuant to
 
17 chapter 91, upon demand of the officer charged with the duty of
 
18 collecting the indebtedness, the comptroller or other officer
 
19 charged with the duty of paying the indebted officer, agent,
 
20 employee, or other person, after notice to the indebted person,
 
21 shall withhold one-quarter of the salary, wages, or compensation
 
22 due the indebted person and pay the same, from time to time as
 
23 the same shall become due, to the officer charged with the duty
 

 
a                                                     HRD-01(00)
Page 158                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 of collecting the indebtedness, until the full amount of the
 
 2 indebtedness, together with penalties and interest thereon, is
 
 3 paid.
 
 4      (b)  If the indebtedness has arisen or been incurred by
 
 5 reason of the indebted officer, agent, employee, or other person
 
 6 having embezzled, stolen, or otherwise unlawfully acquired any
 
 7 moneys or other property of the State, any county, or any
 
 8 independent board or commission, the whole amount of the salary,
 
 9 wages, or compensation, or so much thereof as may be required to
 
10 pay the indebtedness in full, shall be withheld and paid over to
 
11 the officer charged with the duty of collecting the indebtedness.
 
12      (c)  The officer, agent, employee, or other person in the
 
13 service of the State, any county, or any independent board or
 
14 commission alleged to be indebted to the State, any county, or
 
15 any independent board or commission may waive the right to a
 
16 hearing to determine the indebtedness and instead assign by
 
17 contract to the officer charged with the duty of collecting
 
18 debts:
 
19      (1)  The priority right to payment of the total amount of
 
20           the alleged indebtedness; and
 
21      (2)  The right of the officer to deduct from each and every
 
22           periodic payment normally due the assignor an amount
 
23           equal to the maximum legally permissible amount
 

 
a                                                     HRD-01(00)
Page 159                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           deductible under garnishment law until the total amount
 
 2           owing is paid in full.
 
 3      For purposes of this section, a person shall be deemed to
 
 4 waive the hearing if the person fails to request a hearing within
 
 5 fifteen days from the date the person was notified of the
 
 6 indebtedness and the opportunity to request a hearing.
 
 7      (d)  The operation of all garnishment processes served upon
 
 8 the comptroller or other paying officer shall be stayed until the
 
 9 indebtedness has been fully paid.
 
10      (e)  A salary or wage overpayment made to an employee or
 
11 former employee shall not be considered as indebtedness under
 
12 this section.  Notwithstanding the provisions of Chapter 91 the
 
13 comptroller or appropriate officer of a jurisdiction shall
 
14 establish payroll overpayment procedures for the expeditiously
 
15 recovery of the salary or wage overpayment.
 
16      For employees still in the service of the jurisdiction,
 
17 recovery shall commence at the next earliest pay date possible,
 
18 through payroll deduction in accordance with a salary offset
 
19 repayment schedule, if the employee has not agreed to a voluntary
 
20 repayment plan within prescribed time limits.
 
21      The comptroller or appropriate officer of a jurisdiction
 
22 shall establish a salary offset repayment schedule that may vary
 
23 according to the overpayment amount or other appropriate
 
24 criteria.  Amounts in accordance with the schedule shall be
 

 
a                                                     HRD-01(00)
Page 160                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 deducted from any subsequent wages, salaries, or compensation due
 
 2 the employee until the overpayment amount is repaid in full, if
 
 3 the employee has not agreed to a voluntary repayment plan within
 
 4 prescribed time limits.  Whenever the salary offset repayment
 
 5 schedule is used, the employee shall be informed of the offset
 
 6 dates and amounts at least ten calendar days prior to making the
 
 7 first offset.
 
 8      The comptroller or appropriate officer of a jurisdiction
 
 9 shall also establish a method for the crediting of interest on
 
10 any monies paid or recovered that are in excess of the correct
 
11 overpayment amount.  The interest shall be payable to the
 
12 employee if is subsequently discovered that the overpayment
 
13 determination was in error.
 
14      Before any deductions are made to recover a salary or wage
 
15 overpayment, the appointing authority shall give the employee:
 
16      (1)  Written notice of the overpayment amount with an
 
17           explanation of how the overpayment amount was
 
18           determined.  A copy of the notice and explanation shall
 
19           also be given to the employee's exclusive
 
20           representative if required under a collective
 
21           bargaining agreement.
 
22      (2)  Opportunity to enter into a voluntary agreement to
 
23           repay the overpayment amount by cash, payroll
 

 
a                                                     HRD-01(00)
Page 161                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           deduction, or applying the value of appropriate leave
 
 2           or compensatory time credits available to the employee,
 
 3           or any combination thereof.  A voluntary repayment plan
 
 4           must be acceptable to and approved by the appointing
 
 5           authority or designee.
 
 6      (3)  Opportunity to dispute the overpayment amount if the
 
 7           employee disagrees with the overpayment determination
 
 8           through the departmental complaint procedure; provided
 
 9           that, if the employee is covered under a collective
 
10           bargaining agreement, the employee shall utilize the
 
11           contractual grievance procedure instead to dispute the
 
12           overpayment amount.
 
13      The appointing authority shall commence immediate recovery
 
14 of the overpayment amount, regardless of whether a dispute on the
 
15 overpayment amount is still pending, in accordance with the
 
16 employee's approved voluntary repayment plan or the salary offset
 
17 repayment schedule, as applicable.  If it is subsequently
 
18 discovered that any monies repaid or recovered is in error, the
 
19 employee shall be refunded all monies paid or recovered in excess
 
20 of the correct overpayment amount, including applicable interest
 
21 payable on the excess amount, and be re-credited any leave or
 
22 compensatory time credits that was applied in excess of the
 
23 correct overpayment amount.
 

 
a                                                     HRD-01(00)
Page 162                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      Any overpayment recovery procedures, including those
 
 2 contained in a collective bargaining agreement, that are not
 
 3 consistent with this subsection shall be repealed or modified
 
 4 accordingly by mutual agreement of the parties to be consistent
 
 5 with this subsection and procedures established by the
 
 6 comptroller or other appropriate officer of the jurisdiction
 
 7 pursuant to this subsection."
 
 8      For former employees no longer in-service, the comptroller
 
 9 or appropriate officer of a jurisdiction shall establish payroll
 
10 overpayment procedures subject to Chapter 91 for the
 
11 expeditiously recovery of the salary or wage overpayment.
 
12      SECTION 13.  Chapter 40, Hawaii Revised Statutes, is amended
 
13 by adding a new section to be appropriately designated and to
 
14 read as follows:
 
15      "§40-    Salary periods.  (a)  All officers and employees
 
16 shall be paid at least semimonthly except that substitute
 
17 teachers, part-time hourly rated teachers of adult and evening
 
18 classes, and other part-time, intermittent, or casual employees
 
19 may be paid once a month.  Pay days will be on the fifth and the
 
20 twentieth of every month.  If the fifth and the twentieth fall on
 
21 a state holiday, Saturday, or Sunday, the pay day will be the
 
22 immediately preceding weekday.
 

 
a                                                     HRD-01(00)
 
Page 163                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (b)  If an employee has been working for the State for at
 
 2 least six months, has no paid leave accumulated, and has an
 
 3 existing salary overpayment balance:
 
 4      (1)  The employee may be paid the employee's salary on the
 
 5           same pay dates and for the same pay periods as non-
 
 6           salaried employees.
 
 7      (2)  Upon accumulation of eighty hours of paid leave, the
 
 8           employee shall be paid the employee's salary on the
 
 9           same pay dates and for the same pay periods as salaried
 
10           employees.
 
11      (c)  If an employee has been working for the State for at
 
12 least six months and has had at least two incidents of leave
 
13 which results in salary overpayment within the past six months:
 
14      (1)  The employee may be paid the employee's salary on the
 
15           same pay dates and for the same pay period as non-
 
16           salaried employees.
 
17      (2)  If there are no incidents of leave which result in
 
18           salary overpayment for a subsequent four-month period,
 
19           the employee shall be paid the employee's salary on the
 
20           same pay dates and for the same pay periods as salaried
 
21           employees.
 
22      (d)  The implementation of this section shall not be subject
 
23 to negotiation under the public employment law, part III.
 

 
a                                                     HRD-01(00)
Page 164                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      (e)  All employees, except those belonging to units 5 and 7,
 
 2 hired after June 30, 1998, shall be paid on the same pay dates
 
 3 and for the same pay periods as non-salaried employees.  All
 
 4 employees belonging to units 5 and 6, hired after June 30, 2000,
 
 5 shall be paid on the same pay dates and for the same pay periods
 
 6 as non-salaried employees."
 
 7      SECTION 14.  Chapter 40, Hawaii Revised Statutes, is amended
 
 8 by adding a new section to be appropriately designated and to
 
 9 read as follows:
 
10      "§40-    Payment of excess vacation; forfeiture.  Whenever
 
11 the employee's vacation credits exceed the maximum allowable
 
12 accumulated working hours, the employee shall be paid salary in
 
13 lieu of vacation to the extent of the excess if, upon
 
14 investigation by the comptroller of the State or the director of
 
15 finance of the county, as the case may be, it is found that the
 
16 excess vacation credits resulted from the employee's inability to
 
17 be allowed vacation time off because of orders of the employee's
 
18 appointing authority; otherwise the employee shall automatically
 
19 forfeit the excess."
 
20      SECTION 15.  Chapter 302A, part III, Hawaii Revised
 
21 Statutes, is amended by adding a new section to be appropriately
 
22 designated and to read as follows:
 
23      "§302A-    School personnel, other than teachers and
 

 
a                                                     HRD-01(00)
Page 165                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 educational officers engaged in instructional work.  (a)  The
 
 2 board of education shall appoint all personnel as may be required
 
 3 to carry of the purposes of this chapter, prescribe their
 
 4 qualifications and duties, and fix their compensation.  For
 
 5 tenured positions that allow employees to remain in service
 
 6 subject to good behavior and competent service, the board shall
 
 7 establish probationary and other requirements for tenure, adopt
 
 8 classification/compensation plans, classify all positions
 
 9 accordingly, and provide a classification appeals procedure.
 
10      (b)  The wages, hours, benefits, and other terms and
 
11 conditions of employment for employees in collective bargaining
 
12 units shall be negotiated in accordance with the public
 
13 employment law, chapter   , part III.  The wages, hours,
 
14 benefits, and other terms and conditions of employment for
 
15 employees excluded from collective bargaining coverage shall be
 
16 adjusted in accordance with chapter   , part IV."
 
17      SECTION 16.  Chapter 312, Hawaii Revised Statutes, is
 
18 amended by adding a new section to be appropriately designated
 
19 and to read as follows:
 
20      "§312-    Personnel of the public library system.  (a) The
 
21 board of education shall appoint all personnel as may be required
 
22 to carry of the purposes of this chapter, prescribe their
 
23 qualifications and duties, and fix their compensation.  For
 
24 tenured positions that allow employees to remain in service
 
25 subject to good behavior and competent service, the board shall
 
26 establish probationary and other requirements for tenure, adopt
 
a                                                     HRD-01(00)
Page 166                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 classification/compensation plans, classify all positions
 
 2 accordingly, and provide a classification appeals procedure.
 
 3      (b)  The wages, hours, benefits, and other terms and
 
 4 conditions of employment for employees in collective bargaining
 
 5 units shall be negotiated in accordance with the public
 
 6 employment law, chapter   , part III.  The wages, hours, benefits
 
 7 and other terms and conditions of employment for employees
 
 8 excluded from collective bargaining coverage shall be adjusted in
 
 9 accordance with chapter   , part IV."
 
10                             PART IV.
 
11      SECTION 17. Section 26-5, Hawaii Revised Statutes is amended
 
12 to read as follows:
 
13      "26-5  Department of human resources development.  The
 
14 department of human resources development shall be headed by a
 
15 single executive to be known as the director of human resources
 
16 development.
 
17      [The director shall have the authority to adopt rules as
 
18 heretofore exercised by the civil service commission.  Whenever
 
19 consistent with economic and efficient administration, the
 
20 director may delegate any of the duties imposed upon the director
 
21 by chapter 76 or chapter 77 to the department heads, or any of
 
22 them, in accordance with standards and procedures issued by the
 

 
a                                                     HRD-01(00)
 
Page 167                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 director.  The director shall institute and maintain a system of
 
 2 inspection to determine that the personnel laws are applied and
 
 3 administered by the departments in a manner consistent with the
 
 4 purposes and provisions of the civil service law.  Whenever an
 
 5 inspection indicates failure on the part of a department to
 
 6 comply with established policies, rules, and standards, the
 
 7 director shall take any action that may be appropriate, including
 
 8 suspension or revocation of any delegation of the director's
 
 9 authority.]
 
10      The department shall administer the state human resources
 
11 program, including human resources development and training, and
 
12 central human resources services such as recruitment,
 
13 examination, position classification, and pay administration for
 
14 all departments.
 
15      There shall be within the department of human resources
 
16 development a [commission] board to be known as the [civil
 
17 service commission] merit appeals board which shall sit as an
 
18 appellate body on matters [within the jurisdiction of the
 
19 department of human resources development.] as set forth in
 
20 chapter   , the public employment law.  [The commission shall
 
21 consist of seven members, one from each county and three at
 
22 large.  At least one member of the commission shall be selected
 

 
a                                                     HRD-01(00)
 
Page 168                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 from among persons employed in private industry in skilled or
 
 2 unskilled laboring positions as distinguished from executive or
 
 3 professional positions.  The functions, duties, and powers of the
 
 4 commission with respect to appeals shall be as heretofore
 
 5 provided by law for the civil service commission and for the
 
 6 loyalty board existing immediately prior to November 25, 1959.
 
 7      The functions and authority heretofore exercised by the
 
 8 department of civil service and loyalty board as heretofore
 
 9 constituted are transferred to the department of human resources
 
10 development established by this chapter.]
 
11      Nothing in this section shall be construed as in any manner
 
12 affecting the civil service laws applicable to the several
 
13 counties, the judiciary, or the Hawaii health systems
 
14 corporation, which shall remain the same as if this chapter had
 
15 not been enacted."
 
16      SECTION 18.  Section 88-6, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "§88-6  Payment of retirement benefits.  Notwithstanding any
 
19 other provision of this chapter, all retirees of the state
 
20 retirement system or county pension funds shall be paid
 
21 semimonthly[.] and, effective January 1, 2001, all retirees shall
 
22 be paid monthly."
 

 
a                                                     HRD-01(00)
 
Page 169                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      SECTION 19.  Section 88E-3, Hawaii Revised Statues, is
 
 2 amended to read as follows:
 
 3      "§88E-3  Board of trustees.  (a)  The authority to establish
 
 4 the plan and [make] implement this chapter [effective] is vested
 
 5 in the board of trustees.  The board shall be placed within the
 
 6 department of human resources development for administrative
 
 7 purposes.
 
 8      (b)  The board shall adopt [such rules to carry out this
 
 9 chapter in accordance with chapter 91.], without regard to
 
10 chapter 91, rules necessary to implement this chapter.  The board
 
11 may engage services, as necessary, to establish, administer, or
 
12 maintain the plan under its direction.  An administrator may be
 
13 engaged only after a solicitation of proposals from interested
 
14 persons in accordance with specifications deemed appropriate by
 
15 the board."
 
16      SECTION 20.  Section 88E-8, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "§88E-8  Deferred funds.  Sums deferred under the plan, as
 
19 well as property and rights purchased with such amounts and
 
20 income attributable to such amounts, shall be held in trust
 
21 outside the State treasury in accordance with section 457 of the
 
22 Internal Revenue Code, as amended, for the exclusive benefit of
 
23 participants and their beneficiaries."
 

 
a                                                     HRD-01(00)
Page 170                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      SECTION 21.  Section 88F-3, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (b) as follows:
 
 3      "(b)  The board shall adopt, [in accordance with] without
 
 4 regard to chapter 91, rules [as are] necessary to implement this
 
 5 chapter.  The board may engage services, as necessary, to
 
 6 establish, administer, or maintain the plan under its direction.
 
 7 An administrator may be engaged only after a solicitation of
 
 8 proposals from interested persons in accordance with
 
 9 specifications deemed appropriate by the board."
 
10      SECTION 22.  Section 88F-6, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "§88F-6  Deferred funds.  Sums deferred under the plan, as
 
13 well as property and rights purchased with the amounts and income
 
14 attributable to the amounts, shall be held in trust outside the
 
15 State treasury in accordance with section 457 of the Internal
 
16 Revenue Code of 1986, as amended, for the exclusive benefit of
 
17 participants and their beneficiaries."
 
18      SECTION 23.  Section 304-11, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "304-11  Personnel.  [Personnel] (a)  All personnel of the
 
21 university [not subject to chapters 76 and 77] shall be under the
 
22 direction of a president who shall be appointed by the board of
 
23 regents.  The board shall appoint [such deans, directors, members
 
24 of the faculty, and other employees] all personnel as may be
 
25 required to carry out the purposes of the institution, prescribe
 

a                                                     HRD-01(00)
Page 171                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 their [salaries and terms of service, where such salaries and
 
 2 terms of service are not specifically fixed by legislative
 
 3 enactment, make and enforce rules governing sabbatical and
 
 4 professional improvement leaves with or without pay, consistent
 
 5 with the practice of similar institutions on the mainland, and
 
 6 notwithstanding the laws of the State relating to vacations of
 
 7 the officers and employees of the State.] qualifications and
 
 8 duties, and fix their compensation.  For tenured positions that
 
 9 allow employees to remain in service subject to good behavior and
 
10 competent service, the board shall establish probationary and
 
11 other requirements for tenure, adopt classification/compensation
 
12 plans, classify all positions accordingly, and provide a
 
13 classification appeals procedure.
 
14      (b)  The wages, hours, benefits, and other terms and
 
15 conditions of employment for employees in collective bargaining
 
16 units shall be negotiated in accordance with the public
 
17 employment law, chapter   , part III.  The wages, hours,
 
18 benefits, and other terms and conditions of employment for
 
19 employees excluded from collective bargaining coverage shall be
 
20 adjusted in accordance with chapter   , part IV."
 
21      SECTION 24.  Section 312-1, Hawaii Revised Statutes, is
 

 
a                                                     HRD-01(00)
 
 
 
Page 172                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 amended to read as follows:
 
 2      "§312-1  Duties of the board of education.  The board of
 
 3 education shall care for, manage, and control all property set
 
 4 apart, donated, loaned to, or in any manner acquired for the use
 
 5 of libraries; receive, care for, expend, and account for any
 
 6 money which may be received for the purpose of erecting buildings
 
 7 for libraries or for any other purposes of the libraries;
 
 8 collect, purchase, receive gifts of, and otherwise acquire all
 
 9 books and other publications proper for libraries, and arrange,
 
10 classify, and catalogue the same; provide for their safekeeping;
 
11 expend moneys appropriated by the legislature and otherwise
 
12 acquired for the development, use, support, and maintenance of
 
13 libraries; provide ways and means for placing libraries within
 
14 reach of all residents throughout the State and particularly of
 
15 all public and private school children; provide and maintain
 
16 branch libraries, offices, or places for the distribution of
 
17 books and periodicals throughout the State; make such contracts
 
18 as may be necessary to carry into effect the general duties
 
19 herein imposed; [appoint such officers and employees as it deems
 
20 necessary;] and make rules for the management and use of
 
21 libraries, and for the control of the property under its
 
22 management."
 
23      SECTION 25.  Section 398-1, Hawaii Revised Statutes, is
 

 
a                                                     HRD-01(00)
Page 173                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 amended by amending the definition of "employer" to read:
 
 2      ""Employer" means any individual or organization, [including
 
 3 the State, any of its political subdivisions, any instrumentality
 
 4 of the State or its political subdivisions,] any partnership,
 
 5 association, trust, estate, joint stock company, insurance
 
 6 company, or corporation, whether domestic or foreign, or receiver
 
 7 or trustee in bankruptcy, or the legal representative of a
 
 8 deceased person, who employs one hundred or more employees for
 
 9 each working day during each of twenty or more calendar weeks in
 
10 the current or preceding calendar year."
 
11                              PART V.
 
12      SECTION 26.  Chapter 76, Hawaii Revised Statutes, is
 
13 repealed.
 
14      SECTION 27.  Chapter 77, Hawaii Revised Statutes, is
 
15 repealed.
 
16      SECTION 28.  Chapter 78, Hawaii Revised Statutes, is
 
17 repealed.
 
18      SECTION 29.  Chapter 79, Hawaii Revised Statutes, is
 
19 repealed.
 
20      SECTION 30.  Chapter 80, Hawaii Revised Statutes, is
 
21 repealed.
 
22      SECTION 31.  Chapter 81, Hawaii Revised Statutes, is
 
23 repealed.
 

 
a                                                     HRD-01(00)
Page 174                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1      SECTION 32.  Chapter 82, Hawaii Revised Statutes, is
 
 2 repealed.
 
 3      SECTION 33.  Chapter 83, Hawaii Revised Statutes, is
 
 4 repealed.
 
 5      SECTION 34.  Section 88E-10, Hawaii Revised Statutes, is
 
 6 repealed.
 
 7      ["[§88E-10]  Custodian of the funds.  The state director of
 
 8 finance shall be the custodian of the funds created under the
 
 9 plan.  All payments from the fund shall be made by the director
 
10 only upon vouchers signed by the chairperson of the board and
 
11 countersigned by other persons designated by the board."]
 
12      SECTION 35.  Section 88F-8, Hawaii Revised Statutes, is
 
13 repealed.
 
14      ["[§88F-8]  Custodian of the funds.  The state director of
 
15 finance shall be the custodian of the funds created under the
 
16 plan.  All payments from the fund shall be made by the director
 
17 only upon vouchers signed by the chairperson of the board and
 
18 countersigned by other persons designated by the board."]
 
19      SECTION 36.  Chapter 89, Hawaii Revised Statutes, is
 
20 repealed.
 
21      SECTION 37.  Chapter 89A, Hawaii Revised Statutes, is
 
22 repealed.
 
23      SECTION 38.  Chapter 89C, Hawaii Revised Statutes, is
 

 
a                                                     HRD-01(00)
Page 175                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 repealed.
 
 2      SECTION 39.  Section 302A-634, Hawaii Revised Statutes, is
 
 3 repealed.
 
 4      ["[§302A-634]  Noncertificated personnel.  (a)  All
 
 5 noncertificated administrative, professional, and technical
 
 6 personnel not engaged in instructional work shall be placed by
 
 7 the department in the appropriate salary ranges within the
 
 8 educational officers schedule.
 
 9      (b)  Beginning with the 1997-1998 school year, this section
 
10 shall be interpreted as though the term "certificate" read
 
11 "license" or "credential", as the later terms are used in subpart
 
12 D, and as circumstances require."]
 
13      SECTION 40.  Section 302A-635, Hawaii Revised Statutes, is
 
14 repealed.
 
15      ["[§302A-635]  Educational assistants.  All educational
 
16 assistants employed in the department shall be employed under the
 
17 provisions of chapter 76 and shall have their compensation fixed
 
18 in accordance with chapter 77; provided that:
 
19      (1)  The monthly rate of compensation so determined shall be
 
20           multiplied by ten and then divided by twelve and the
 
21           resulting amount shall be the employee's monthly salary
 
22           payable over a twelve-month period;
 
23      (2)  Weekly working hours for educational assistants shall
 

 
a                                                     HRD-01(00)
Page 176                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1           be established in the same manner as working hours for
 
 2           teachers; and
 
 3      (3)  Educational assistants shall have the same vacation and
 
 4           sick leave allowances as teachers."]
 
 5      SECTION 41.  Section 302A-636, Hawaii Revised Statutes, is
 
 6 repealed.
 
 7      ["[§302A-636]  Cafeteria managers.  All cafeteria managers
 
 8 employed in the department shall be employed under chapter 76 and
 
 9 shall have their salaries fixed in accordance with chapter 77,
 
10 and the monthly rates of basic compensation so determined shall
 
11 be payable over a twelve-month period without proration or
 
12 deduction for periods when school is not in session.  Cafeteria
 
13 managers shall have the same vacation and sick leave allowances
 
14 as school teachers and principals."]
 
15      SECTION 42.  Section 302A-637, Hawaii Revised Statutes, is
 
16 repealed.
 
17      ["[§302A-637]  Cafeteria workers.  All cafeteria workers
 
18 employed in the department shall be employed under chapter 76 and
 
19 shall have their compensation fixed in accordance with chapter
 
20 77, and the monthly rates of basic compensation so determined
 
21 shall be payable for employment over a twelve-month period.  All
 
22 cafeteria workers shall be employed on a full-time basis, except
 
23 that a limited number of part-time workers may be employed by the
 
24 department.  No cafeteria worker employed on a part-time basis
 
25 shall work less than twenty hours per week.  The department shall
 
26 establish a schedule, based on factors that determine the need
 
a                                                     HRD-01(00)
Page 177                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 for part-time workers, fixing the number of part-time workers
 
 2 that may be employed by the department."]
 
 3      SECTION 43.  Section 302A-639, Hawaii Revised Statutes, is
 
 4 repealed.
 
 5      ["[302A-639]  Houseparents; statewide center for students
 
 6 with hearing and visual impairments.  All houseparents at the
 
 7 statewide center for students with hearing and visual impairments
 
 8 employed in the department shall be employed under chapter 76 and
 
 9 shall have their compensation fixed in accordance with chapter
 
10 77, and the monthly rates of basic compensation so determined
 
11 shall be payable for employment over a twelve-month period.  All
 
12 houseparents shall be employed for twelve months on a full-time
 
13 basis."]
 
14      SECTION 44.  Section 304-13, Hawaii Revised Statues, is
 
15 repealed.
 
16      "[§304-13  Classification schedule.  The board of regents
 
17 shall classify all members of the faculty of the university
 
18 including research workers, extension agents, and all personnel
 
19 engaged in instructional work as defined in section 76-16 and
 
20 adopt a classification schedule conforming, as nearly as may be
 
21 practical, to the schedules set forth in chapter 77.  The
 
22 department of human resources development of the State shall,
 
23 upon the request of the board of regents, render such assistance
 
24 as may be practicable in connection with such classification.
 

 
a                                                     HRD-01(00)
Page 178                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 The adjustments of compensation to conform with the
 
 2 classification shall be made in general accordance, so far as may
 
 3 be practical, with chapter 77 relating to state employees.
 
 4      Annual increases of compensation shall be allowable, and
 
 5 shall be allowed, in general accordance, so far as may be
 
 6 practical, with chapter 77, providing for the allowance of annual
 
 7 increases to state employees for efficient service, and the board
 
 8 of regents shall adopt a fair and reasonable plan for rating the
 
 9 efficiency of individual employees affected by this section.]"
 
10                             PART VI.
 
11      SECTION 45.  All acts by the legislature during the Regular
 
12 Session of 2000, whether enacted before or after the effective
 
13 date of this Act, shall be amended to conform to this Act unless
 
14 such acts specifically provide that this Act is being amended.
 
15      SECTION 46.  If any part of this Act is found to be in
 
16 conflict with federal requirements that are a prescribed
 
17 condition for the allocation of federal funds to the State or a
 
18 county, the conflicting part of this Act is inoperative solely to
 
19 the extent of the conflict and with respect to the agencies
 
20 directly affected, and this finding does not affect the operation
 
21 of the remainder of this Act in its application to the agencies
 
22 concerned.  The rules prescribed to implement this Act shall meet
 
23 federal requirements that are a necessary condition to the
 

 
a                                                     HRD-01(00)
Page 179                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 receipt of federal funds by the State.
 
 2      SECTION 47.  If any provision of this Act, or the
 
 3 application thereof to any person or circumstance is held
 
 4 invalid, the invalidity does not affect other provisions or
 
 5 applications of the Act which can be given effect without the
 
 6 invalid provision or application, and to this end the provisions
 
 7 of this Act are severable.
 
 8      SECTION 48.  There is appropriated out of the general
 
 9 revenues of the State of Hawaii the sum of $600,000 for fiscal
 
10 year 2000-2001, to be paid into the training revolving fund
 
11 created in section 2 of this Act,   -98, Hawaii Revised Statutes.
 
12 The sum appropriated shall be expended by the department of human
 
13 resources development for the purposes of the fund.
 
14      SECTION 49.  There is appropriated out of the general
 
15 revenues of the State of Hawaii the sum of $128,000 for fiscal
 
16 year 2000-2001, for the REACH (Resource for Employee Assistance
 
17 and Counseling Help) program that provides short-term counseling
 
18 for troubled State employees who need help in dealing with
 
19 personal problems affecting their work performance.  The sum
 

 
a                                                     HRD-01(00)
 
 
 
 
 
 
 
Page 180                                                   2859
                                     S.B. NO.           
                                                        
                                                        

 
 1 appropriated shall be expended by the department of human
 
 2 resources development.
 
 3      SECTION 50.  There is appropriated out of the employees'
 
 4 retirement system's investment earnings the sum of $        , or
 
 5 so much thereof as may be necessary for fiscal year 2000-2001,
 
 6 for the employees' retirement system to process the early
 
 7 retirement incentive elected by state employees in the executive
 
 8 branch whose positions are being eliminated as authorized in
 
 9 section 6 of this Act.  The sum appropriated shall be expended by
 
10 the employees' retirement system.
 
11      SECTION 51.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 52.  This Act shall take effect upon its approval;
 
14 provided that sections 26-33 and 36-44 relating to repeals that
 
15 necessitate new or amended rules, policies, procedures,
 
16 collective bargaining provisions, or other adjustments shall take
 
17 effect on June 30, 2001. 
 
18 
 
19                           INTRODUCED BY:  _______________________
 

 
a                                                     HRD-01(00)