REPORT TITLE:
School Repair & Maintenance


DESCRIPTION:
Establishes the state educational facilities repair and
maintenance special fund to eliminate the backlog of projects
existing on June 30, 2000.  Establishes the school physical plant
operations and maintenance special fund to pay for school repairs
and cyclical maintenance projects scheduled after June 30, 2000.
Specifies how school repair and maintenance moneys are to be
prioritized and allocated.  Provides for the overseeing of school
facility planning.  Authorizes the issuance of general obligation
bonds for the two funds.  Makes other appropriations. (SB3026
HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        3026
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                H.D. 1
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO SCHOOL FACILITIES.


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

 1      SECTION 1.  The legislature finds that the State has over
 
 2 $1,700,000,000 invested in the construction of school facilities.
 
 3 Through the department of accounting and general services, repair
 
 4 and maintenance services are performed to assure the health and
 
 5 safety of our school children and to protect this substantial
 
 6 investment.  Within the past six years, however, the severe
 
 7 downturn in the State's economy has made it difficult to fund
 
 8 school repair and maintenance at required levels.  According to
 
 9 the National Association of Higher Education Facilities Officers
 
10 and the American Public Works Association, a minimum of two to
 
11 four per cent of a physical plant's replacement cost should be
 
12 allocated annually for repair and maintenance.  Using the two per
 
13 cent figure to be conservative, this translates to $51,800,000,
 
14 per year, based on 18,500,000 square feet of school facilities
 
15 and a replacement cost of $140 per square foot.  Approximately
 
16 $36,100,000, of this $51,800,000, is attributable to cyclical
 
17 costs, and $15,700,000, is attributable to salaries and current
 
18 expenses.  Where neglect of repair and maintenance needs has
 
19 caused a backlog of projects to accumulate, spending must exceed
 

 
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 1 this minimum recommended level until the backlog has been
 
 2 eliminated.
 
 3      The inconsistency of annual funding has made it impossible
 
 4 to systematically tackle needed repairs.  Deferred projects are
 
 5 costing the State millions more in future costs due to secondary
 
 6 damage.  Additionally, the allocation of funds is based on a
 
 7 formula rather than actual budget projections that reflect
 
 8 cyclical facility maintenance and replacement costs.  To assure
 
 9 safe, aesthetic, and structurally sound school facilities, the
 
10 State needs to fund the repair and maintenance backlog and
 
11 provide a consistently funded repair and maintenance system based
 
12 on the best possible facilities maintenance planning and
 
13 practices.
 
14      Consequently, this Act:
 
15      (1)  Establishes the state educational facilities repair and
 
16           maintenance special fund to eliminate the backlog of
 
17           projects existing on June 30, 2000;
 
18      (2)  Establishes the school physical plant operations and
 
19           maintenance special fund to pay for school repairs and
 
20           cyclical maintenance projects scheduled after June 30,
 
21           2000;
 
22      (3)  Specifies how school repair and maintenance moneys are
 
23           to be prioritized and allocated;
 

 
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 1      (4)  Provides for the establishment of departmental school
 
 2           district business and fiscal officers to oversee school
 
 3           facilities planning; and
 
 4      (5)  Authorizes the department of finance to issue general
 
 5           obligation bonds for these two special funds.
 
 6      It is not the intent of this Act to undermine the authority
 
 7 of schools to prioritize and approve their repair and maintenance
 
 8 needs pursuant to section 302A-1505, Hawaii Revised Statutes, nor
 
 9 to interfere with any partnerships schools have formed with
 
10 community groups, volunteers, and businesses to obtain donated
 
11 and discounted repair and maintenance services and materials.
 
12 The legislature remains committed to the principles of local
 
13 control and decentralized decision making.
 
14      SECTION 2.  Chapter 36, Hawaii Revised Statutes, is amended
 
15 by adding two new sections to be appropriately designated and to
 
16 read as follows:
 
17      "§36-     State educational facilities repair and
 
18 maintenance special fund.  (a)  There is created in the treasury
 
19 of the State the state educational facilities repair and
 
20 maintenance special fund, into which shall be deposited a portion
 
21 of all general excise tax revenues collected by the department of
 
22 taxation under section 237-31.  The special fund shall be used
 
23 solely to eliminate the backlog of school repair and maintenance
 

 
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 1 projects existing on June 30, 2000.  Expenditures from the
 
 2 special fund shall be subject to sections 37-31, and 37-33 to
 
 3 37-40.  Appropriations or authorizations from the special fund
 
 4 shall be expended by the comptroller.
 
 5      (b)  The department of accounting and general services, with
 
 6 the assistance of the department of education, shall review the
 
 7 existing condition of school facilities, and establish current
 
 8 repair and maintenance requirements and overall repair and
 
 9 maintenance priorities.
 
10      (c)  Factors used to establish current repair and
 
11 maintenance requirements shall include:
 
12      (1)  The remaining useful life of the school facility and
 
13           its major components;
 
14      (2)  The adjusted life of the school facility and its major
 
15           components after repair or maintenance; and
 
16      (3)  The current and future repair and maintenance
 
17           requirements of the school facility and its components
 
18           based on established industry standards or product
 
19           manufacturer recommendations.
 
20      (d)  Factors used to establish overall repair and
 
21 maintenance priorities shall include:
 
22      (1)  Whether a school facility will continue to be used for
 
23           the next twenty-five years; and
 

 
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 1      (2)  Whether a repair or maintenance project is required:
 
 2           (A)  For health or safety reasons;
 
 3           (B)  To comply with legal mandates; or
 
 4           (C)  To comply with current building codes;
 
 5 provided that first priority shall be given to school facilities
 
 6 that were more than twenty-five years of age on July 1, 2000.
 
 7      (e)  The department of accounting and general services shall
 
 8 submit an annual report to the legislature, which shall include a
 
 9 financial statement of the special fund and the status of repair
 
10 and maintenance projects undertaken pursuant to this section, no
 
11 later than twenty days prior to the convening of each regular
 
12 session.  Expenditures for repair and maintenance projects
 
13 undertaken pursuant to this section shall be posted
 
14 electronically by the department of accounting and general
 
15 services within          days of each project's completion.
 
16      (f)  The comptroller shall develop and implement a strategy
 
17 for the efficient and effective use of government and private-
 
18 sector workforces to ensure that the State receives the best
 
19 value for its money, and to avoid the creation of shortages and
 
20 surpluses in the marketplace by overpurchasing in one segment and
 
21 underpurchasing in another segment of the marketplace at any
 
22 given time.
 

 
 
 
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 1      (g)  This section shall be repealed on July 1, 2004;
 
 2 provided that the comptroller shall transfer to the credit of the
 
 3 state general fund, any unencumbered balance remaining in the
 
 4 state educational facilities repair and maintenance special fund,
 
 5 prior to July 1, 2004.
 
 6      §36-     School physical plant operations and maintenance
 
 7 special fund; maintenance schedule.  (a)  There is created in the
 
 8 treasury of the State the school physical plant operations and
 
 9 maintenance special fund, into which shall be deposited a portion
 
10 of all general excise tax revenues collected by the department of
 
11 taxation under section 237-31.  The special fund shall be used
 
12 solely for school repairs and cyclical maintenance projects
 
13 scheduled after June 30, 2000.  Expenditures from the special
 
14 fund shall be subject to sections 37-31, and 37-33 to 37-40.
 
15 Appropriations or authorizations from the special fund shall be
 
16 expended by the comptroller.
 
17      (b)  The department of accounting and general services shall
 
18 submit an annual report to the legislature, which shall include a
 
19 financial statement of the special fund and the status of school
 
20 repair and cyclical maintenance projects undertaken pursuant to
 
21 this section, no later than twenty days prior to the convening of
 
22 each regular session.  The department of accounting and general
 

 
 
 
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 1 services shall post the following reports electronically on the
 
 2 internet and update them quarterly:
 
 3      (1)  Expenditures for school repair and cyclical maintenance
 
 4           projects undertaken pursuant to this section, to be
 
 5           posted within          days of each project's
 
 6           completion; and
 
 7      (2)  A list of each school's repair and maintenance needs to
 
 8           be undertaken.
 
 9      (c)  The comptroller shall develop and implement a strategy
 
10 for the efficient and effective use of government and private-
 
11 sector workforces to ensure that the State receives the best
 
12 value for its money, and to avoid the creation of shortages and
 
13 surpluses in the marketplace by overpurchasing in one segment and
 
14 underpurchasing in another segment of the marketplace at any
 
15 given time.  Repairs, replacements, and additions to existing
 
16 facilities shall be accomplished with maximum allowable
 
17 operational and maintenance efficiency.
 
18      (d)  Every new or renovated school facility constructed
 
19 after June 30, 2000, shall include a cyclical maintenance
 
20 schedule prepared by the architect or engineer of the facility or
 
21 the capital improvement project.  The maintenance schedule shall
 
22 include a description of each major component of a facility or
 
23 capital improvement project and:
 

 
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 1      (1)  The component's maintenance;
 
 2      (2)  The starting date for a maintenance project;
 
 3      (3)  Whether the maintenance project has a recurring cost;
 
 4      (4)  The current cost of the maintenance project;
 
 5      (5)  The future cost of the maintenance project;
 
 6      (6)  The useful life of the facility or capital improvement
 
 7           project;
 
 8      (7)  The present value of normally scheduled maintenance for
 
 9           the useful life of the facility;
 
10      (8)  The adjusted life of the facility or capital
 
11           improvement project; and
 
12      (9)  The replacement date of the facility or capital
 
13           improvement project.
 
14      (e)  Moneys in AGS807, physical plant operations and
 
15 maintenance, shall be allocated according to departmental school
 
16 districts based on:
 
17      (1)  Estimated cyclical and scheduled maintenance costs,
 
18           which reflect the age and condition of existing school
 
19           facilities in the State, in the following categories:
 
20           reroofing, electrical, athletic facilities,
 
21           resurfacing, equipment, exterior painting, plumbing,
 
22           structural integrity, termite ground treatment, termite
 

 
 
 
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 1           tent treatment, interior painting, air conditioning
 
 2           change out, and recarpeting; and
 
 3      (2)  Budgeted recurring maintenance, health and safety
 
 4           requirements, and legal mandates."
 
 5      SECTION 3.  Chapter 302A, Hawaii Revised Statutes, is
 
 6 amended as follows:
 
 7      1.  By adding four new sections to be appropriately
 
 8 designated and to read:
 
 9      "§302A-A  Six-year program and financial plan for school
 
10 repair and maintenance.  (a)  The department of accounting and
 
11 general services, in consultation with the department of
 
12 education, shall prepare a six-year program and financial plan,
 
13 which shall be:
 
14      (1)  Based on estimated cyclical and scheduled maintenance
 
15           costs, and budgeted recurring maintenance, health and
 
16           safety requirements, and legal mandates;
 
17      (2)  Prepared in accordance with the applicable principles
 
18           and procedures contained in section 514A-83.6; and
 
19      (3)  Submitted to the legislature not less than thirty days
 
20           prior to the convening of each regular session of the
 
21           legislature;
 
22 provided that the governor may incorporate the six-year program
 
23 and financial plan required by this subsection into the six-year
 

 
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 1 program and financial plan required by section 37-69, if the plan
 
 2 required by this subsection is incorporated without reductions or
 
 3 restrictions into the plan required by section 37-69.
 
 4      (b)  The comptroller shall develop and maintain a facilities
 
 5 physical analysis report and a facilities financial analysis
 
 6 report for each public school.  These reports shall be posted
 
 7 electronically on the internet.
 
 8      §302A-B  Departmental school district business and fiscal
 
 9 officers.  (a)  The department shall establish at least one
 
10 permanent full-time equivalent business and fiscal officer
 
11 position in each departmental school district; provided that the
 
12 fiscal officer:
 
13      (1)  Shall have a business and facilities management
 
14           background;
 
15      (2)  Shall not be subject to the requirements of chapters 76
 
16           and 77; and
 
17      (3)  Shall not be required to be a licensed or credentialed
 
18           teacher.
 
19      (b)  Departmental school district business and fiscal
 
20 officers shall be responsible for:
 
21      (1)  Coordinating physical plant operations and maintenance
 
22           activities with the department of accounting and
 
23           general services;
 

 
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 1      (2)  Overseeing the school-level minor repairs and
 
 2           maintenance accounts at the direction of school
 
 3           principals;
 
 4      (3)  Planning for capital improvement projects with the
 
 5           department of education and the department of
 
 6           accounting and general services;
 
 7      (4)  Ensuring that school facilities comply with the laws
 
 8           and rules regarding:
 
 9           (A)  The provision of a free appropriate public
 
10                education for exceptional children with
 
11                disabilities; and
 
12           (B)  The provision of a free appropriate public
 
13                education for qualified students with
 
14                disabilities;
 
15      (5)  Assisting the department, individual schools, and
 
16           school complexes in forming partnerships with community
 
17           groups, volunteers, and businesses to obtain donated
 
18           and discounted repair and maintenance services and
 
19           materials; and
 
20      (6)  Developing, coordinating, and overseeing the
 
21           maintenance plan for each school.
 
22      §302A-C  Donated repair and maintenance services and
 
23 materials.  (a)  The department may accept donated repair and
 

 
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 1 maintenance services and materials, including money to purchase
 
 2 these services and materials, on behalf of the department,
 
 3 individual schools, or school complexes.  Donations that meet
 
 4 current educational specifications or exceed existing educational
 
 5 specifications, if applicable, shall be deemed acceptable in
 
 6 instances where the donations enhance the school environment or
 
 7 improve the administration of school programs in accordance with
 
 8 criteria established by the department pursuant to chapter 91.
 
 9 For the purposes of this section, "donated repair and maintenance
 
10 services and materials" include discounted repair and maintenance
 
11 services and materials.
 
12      (b)  The private source making a donation shall not be
 
13 liable upon any claim for injury arising from the donated or
 
14 discounted services or materials; provided that this subsection
 
15 shall not affect the responsibility or liability of manufacturers
 
16 of defective products nor shall it reflect the responsibilities
 
17 of negligent persons who cause dangerous conditions that result
 
18 in injury.
 
19      302A-D  Federal and state cooperation authorized.  The
 
20 department may enter into agreements with the federal Department
 
21 of Defense to construct, repair, or renovate Hawaii public
 
22 schools on military bases and elsewhere in the State using
 
23 federal funds, subject to the department's educational
 

 
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 1 specifications and standards for facilities.  The department
 
 2 shall cooperate with the Department of Defense to carry out this
 
 3 section."
 
 4      2.  By amending section 302A-1504, subsection (a), to read:
 
 5      "(a)  The department shall establish school-level minor
 
 6 repairs and maintenance accounts for the use of each public
 
 7 school, which shall not exceed [$8,000] $25,000 per school.  The
 
 8 accounts shall be comprised of funds appropriated to the
 
 9 department for school-level minor repairs and maintenance and
 
10 shall not be used for any other purpose, nor shall any other
 
11 funds be deposited into the accounts.  The department shall
 
12 allocate funds based on the number of students at the school
 
13 multiplied by a factor that recognizes the age and condition of
 
14 the school."
 
15      3.  By amending section 302A-1505 to read:
 
16      "[[]§302A-1505[]]  Prioritization of repair and maintenance.
 
17 (a)  Each school shall meet with the department of accounting and
 
18 general services on an annual basis to advise the department of
 
19 school needs.  Before any repair and maintenance projects for the
 
20 upcoming fiscal year are implemented, each individual school
 
21 administration shall prioritize and approve its repair and
 
22 maintenance needs, and approve the scope of the implementation
 
23 plan for the individual projects.  After schools have prioritized
 

 
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 1 their repair and maintenance projects, a statewide list shall be
 
 2 prepared, reviewed, and approved by the department of education;
 
 3 provided that the department may make adjustments among schools
 
 4 and districts.  Each school repair and maintenance priority
 
 5 listing shall be approved by the individual school administration
 
 6 and submitted to the department of accounting and general
 
 7 services for implementation.  Each listing shall be posted
 
 8 electronically on the internet.  The department of accounting and
 
 9 general services shall implement the school repair and
 
10 maintenance program in accordance with the priorities set forth
 
11 by the individual school administration.
 
12      (b)  Prior to meeting with the department of accounting and
 
13 general services to advise the department of a school's repair
 
14 and maintenance needs, the school's principal and the
 
15 departmental school district business and fiscal officer shall
 
16 consider the recommendations made by the school and community-
 
17 based management council, if there is such a council at the
 
18 school; or the local school board, if the school is a new century
 
19 charter school.  If there is no school and community-based
 
20 management council or local school board, the school's principal
 
21 shall appoint a standing committee composed of a teacher, a
 
22 member of the support staff, a parent, a student, and a community
 
23 member.
 

 
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 1      (c)  In prioritizing a school's repair and maintenance
 
 2 needs, the department of accounting and general services, the
 
 3 school's principal, and the departmental school district business
 
 4 and fiscal officer shall consider the availability of donated and
 
 5 discounted repair and maintenance services and materials that
 
 6 will be provided by community groups, volunteers, and
 
 7 businesses."
 
 8      SECTION 4.  Section 237-31, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§237-31  Remittances.  All remittances of taxes imposed by
 
11 this chapter shall be made by money, bank draft, check, cashier's
 
12 check, money order, or certificate of deposit to the office of
 
13 the department of taxation to which the return was transmitted.
 
14 The department shall issue its receipts therefor to the taxpayer
 
15 and shall pay the moneys into the state treasury as a state
 
16 realization, to be kept and accounted for as provided by law;
 
17 provided that:
 
18      (1)  The sum from all general excise tax revenues realized
 
19           by the State that represents the difference between
 
20           $45,000,000 and the proceeds from the sale of any
 
21           general obligation bonds authorized for that fiscal
 
22           year for the purposes of the state educational
 

 
 
 
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 1           facilities improvement special fund shall be deposited
 
 2           in the state treasury in each fiscal year to the credit
 
 3           of the state educational facilities improvement special
 
 4           fund;
 
 5      (2)  A sum, not to exceed $5,000,000, from all general
 
 6           excise tax revenues realized by the State shall be
 
 7           deposited in the state treasury in each fiscal year to
 
 8           the credit of the compound interest bond reserve fund;
 
 9           [and]
 
10      (3)  A sum, not to exceed the amount necessary to meet the
 
11           obligations of the integrated tax information
 
12           management systems performance-based contract may be
 
13           retained and deposited in the state treasury to the
 
14           credit of the integrated tax information management
 
15           systems special fund.  The sum retained by the director
 
16           of taxation for deposit to the integrated tax
 
17           information [[]management[]] systems special fund for
 
18           each fiscal year shall be limited to amounts
 
19           appropriated by the legislature.  This paragraph shall
 
20           be repealed on July 1, 2004[.];
 
21      (4)  Beginning July 1, 2000, and ending on June 30, 2004,
 
22           the sum from all general excise tax revenues realized
 
23           by the State that represents the difference between
 

 
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 1           $45,000,000 and the proceeds from the sale of any
 
 2           general obligation bonds authorized for the purposes of
 
 3           the state educational facilities repair and maintenance
 
 4           special fund for that fiscal year shall be deposited in
 
 5           the state treasury in each fiscal year to the credit of
 
 6           the state educational facilities repair and maintenance
 
 7           special fund.  This paragraph shall be repealed on
 
 8           July 1, 2004; and
 
 9      (5)  The sum from all general excise tax revenues realized
 
10           by the State that represents the difference between
 
11           $            and the proceeds from the sale of any
 
12           general obligation bonds authorized for the purposes of
 
13           the school physical plant operations and maintenance
 
14           special fund for that fiscal year shall be deposited in
 
15           the state treasury in each fiscal year to the credit of
 
16           the school physical plant operations and maintenance
 
17           special fund."
 
18      SECTION 5.  The director of finance is authorized to issue
 
19 general obligation bonds in the sum of $           or so much
 
20 thereof as may be necessary for fiscal year 2000-2001 and the
 
21 same sum or so much thereof as may be necessary shall be
 
22 deposited into the state educational facilities repair and
 
23 maintenance special fund.
 

 
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 1      SECTION 6.  There is appropriated out of the state
 
 2 educational facilities repair and maintenance special fund of the
 
 3 State of Hawaii the sum of $           or so much thereof as may
 
 4 be necessary for fiscal year 2000-2001 solely to eliminate the
 
 5 backlog of school repair and maintenance projects existing on
 
 6 June 30, 2000; provided that the comptroller shall develop and
 
 7 implement a strategy for the efficient and effective use of
 
 8 government and private-sector workforces to ensure that the State
 
 9 receives the best value for its money, and to avoid the creation
 
10 of shortages and surpluses in the marketplace by overpurchasing
 
11 in one segment and underpurchasing in another segment of the
 
12 marketplace at any given time.
 
13      The sum appropriated shall be expended by the department of
 
14 accounting and general services for the purposes of this Act.
 
15      SECTION 7.  There is appropriated out of the general
 
16 revenues of the State of Hawaii the sum of $           or so much
 
17 thereof as may be necessary for fiscal year 2000-2001 to
 
18 establish at least one permanent full-time equivalent (1.00 FTE)
 
19 business and fiscal officer position in each departmental school
 
20 district, as delineated by section 13-1(d), Hawaii Revised
 
21 Statutes.
 
22      The sum appropriated shall be expended by the department of
 
23 education for the purposes of this Act.
 

 
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 1      SECTION 8.  There is appropriated out of the general
 
 2 revenues of the State of Hawaii the sum of $           or so much
 
 3 thereof as may be necessary for fiscal year 2000-2001 for the
 
 4 department of accounting and general services to hire an engineer
 
 5 and a clerk to coordinate neighbor island department of education
 
 6 repair requirements and to work with the department of education
 
 7 to identify, prioritize, and maintain historical repair records.
 
 8      The sum appropriated shall be expended by the department of
 
 9 accounting and general services for the purposes of this Act.
 
10      SECTION 9.  The director of finance is authorized to issue
 
11 general obligation bonds in the sum of $           or so much
 
12 thereof as may be necessary for fiscal year 2000-2001 and the
 
13 same sum or so much thereof as may be necessary shall be
 
14 deposited into the school physical plant operations and
 
15 maintenance special fund.
 
16      SECTION 10.  There is appropriated out of the school
 
17 physical plant operations and maintenance special fund of the
 
18 State of Hawaii the sum of $           or so much thereof as may
 
19 be necessary for fiscal year 2000-2001 solely for school repairs
 
20 and cyclical maintenance projects scheduled after June 30, 2000;
 
21 provided that the comptroller shall develop and implement a
 
22 strategy for the efficient and effective use of government and
 
23 private-sector workforces to ensure that the State receives the
 

 
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 1 best value for its money, and to avoid the creation of shortages
 
 2 and surpluses in the marketplace by overpurchasing in one segment
 
 3 and underpurchasing in another segment of the marketplace at any
 
 4 given time.
 
 5      The sum appropriated shall be expended by the department of
 
 6 accounting and general services for the purposes of this Act.
 
 7      SECTION 11.  In codifying the new sections added to chapter
 
 8 302A, Hawaii Revised Statutes, by section 3 of this Act, the
 
 9 revisor of statutes shall substitute appropriate section numbers
 
10 for the letters used in the new sections' designations in this
 
11 Act.
 
12      SECTION 12.  Statutory material to be repealed is bracketed.
 
13 New statutory material is underscored.
 
14      SECTION 13.  This Act shall take effect on July 1, 2000.