REPORT TITLE:
School Repair & Maintenance


DESCRIPTION:
Establishes the state educational facilities repair and
maintenance special fund to eliminate the backlog of projects
existing on 6/30/00.  Establishes the school physical plant
operations and maintenance special fund to pay for school repairs
and cyclical maintenance projects scheduled after 6/30/00.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        3026
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
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 of Hawaii
 
 2 has over $1,700,000,000 invested in the construction of school
 
 3 facilities.  Through the department of accounting and general
 
 4 services, repair and maintenance services are performed to assure
 
 5 the health and safety of our school children and to protect this
 
 6 substantial investment.  Within the past six years, however, the
 
 7 severe downturn in the State's economy has made it difficult to
 
 8 fund school repair and maintenance at required levels.  According
 
 9 to the National Association of Higher Education Facilities
 
10 Officers and the American Public Works Association, a minimum of
 
11 two to four per cent of a physical plant's replacement cost
 
12 should be allocated annually for repair and maintenance.  Using
 
13 the two per cent figure to be conservative, this translates to
 
14 $51,800,000, per year, based on 18,500,000 square feet of school
 
15 facilities and a replacement cost of $140 per square foot.
 
16 Approximately $36,100,000, of this $51,800,000, is attributable
 
17 to cyclical costs, and $15,700,000, is attributable to salaries
 
18 and current expenses.  Where neglect of repair and maintenance
 
19 needs has caused a backlog of projects to accumulate, spending
 
20 must exceed this minimum recommended level until the backlog has
 

 
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 1 been eliminated.
 
 2      The inconsistency of annual funding has made it impossible
 
 3 to systematically tackle needed repairs.  Deferred projects are
 
 4 costing the State millions more in future costs due to secondary
 
 5 damage.  Additionally, the allocation of funds is based on a
 
 6 formula rather than actual budget projections that reflect
 
 7 cyclical facility maintenance and replacement costs.  In order to
 
 8 assure safe, aesthetic, and structurally sound school facilities,
 
 9 the State needs to fund the repair and maintenance backlog and
 
10 provide a consistently funded repair and maintenance system based
 
11 on the best possible facilities maintenance planning and
 
12 practices.
 
13      Consequently, this Act establishes the state educational
 
14 facilities repair and maintenance special fund to eliminate the
 
15 backlog of projects existing on June 30, 2000, establishes the
 
16 school physical plant operations and maintenance special fund to
 
17 pay for school repairs and cyclical maintenance projects
 
18 scheduled after June 30, 2000, specifies how school repair and
 
19 maintenance moneys are to be prioritized and allocated, provides
 
20 for the establishment of departmental school district business
 
21 and fiscal officers to oversee school facilities planning, and
 
22 authorizes the department of finance to issue general obligation
 
23 bonds for these two special funds.
 

 
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 1      It is not the intent of this Act to undermine the authority
 
 2 of schools to prioritize and approve their repair and maintenance
 
 3 needs pursuant to section 302A-1505, Hawaii Revised Statutes, nor
 
 4 to interfere with any partnerships schools have formed with
 
 5 community groups, volunteers, and businesses to obtain donated
 
 6 and discounted repair and maintenance services and materials.
 
 7 The legislature remains committed to the principles of local
 
 8 control and decentralized decision making.
 
 9      SECTION 2.  Chapter 36, Hawaii Revised Statutes, is amended
 
10 by adding two new sections to be appropriately designated and to
 
11 read as follows:
 
12      "§36-     State educational facilities repair and
 
13 maintenance special fund.  (a)  There is created in the treasury
 
14 of the State the state educational facilities repair and
 
15 maintenance special fund, into which shall be deposited a portion
 
16 of all general excise tax revenues collected by the department of
 
17 taxation under section 237-31.  The special fund shall be used
 
18 solely to eliminate the backlog of school repair and maintenance
 
19 projects existing on June 30, 2000.  Expenditures from the
 
20 special fund shall be subject to sections 37-31, and 37-33 to
 
21 37-40.  Appropriations or authorizations from the special fund
 
22 shall be expended by the comptroller.
 
23      (b)  The department of accounting and general services, with
 

 
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 1 the assistance of the department of education, shall review the
 
 2 existing condition of school facilities, and establish current
 
 3 repair and maintenance requirements and overall repair and
 
 4 maintenance priorities.
 
 5      (c)  Factors used to establish current repair and
 
 6 maintenance requirements shall include:
 
 7      (1)  The remaining useful life of the school facility and
 
 8           its major components;
 
 9      (2)  The adjusted life of the school facility and its major
 
10           components after repair or maintenance; and
 
11      (3)  The current and future repair and maintenance
 
12           requirements of the school facility and its components
 
13           based on established industry standards or product
 
14           manufacturer recommendations.
 
15      (d)  Factors used to establish overall repair and
 
16 maintenance priorities shall include:
 
17      (1)  Whether or not a school facility will continue to be
 
18           used for the next twenty-five years; and
 
19      (2)  Whether or not a repair or maintenance project is
 
20           required:
 
21           (A)  For health or safety reasons;
 
22           (B)  To comply with legal mandates; or
 
23           (C)  To comply with current building codes;
 

 
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 1 provided that first priority shall be given to school facilities
 
 2 that were more than twenty-five years of age on July 1, 2000.
 
 3      (e)  The department of accounting and general services shall
 
 4 submit an annual report to the legislature, which shall include a
 
 5 financial statement of the special fund and the status of repair
 
 6 and maintenance projects undertaken pursuant to this section, no
 
 7 later than twenty days prior to the convening of each regular
 
 8 session.  Expenditures for repair and maintenance projects
 
 9 undertaken pursuant to this section shall be posted
 
10 electronically by the department of accounting and general
 
11 services within          days of each project's completion.
 
12      (f)  The comptroller shall develop and implement a strategy
 
13 for the efficient and effective use of government and private-
 
14 sector workforces to ensure that the State receives the best
 
15 value for its money, and to avoid the creation of shortages and
 
16 surpluses in the marketplace by over-purchasing in one segment
 
17 and under-purchasing in another segment of the marketplace at any
 
18 given time.
 
19      (g)  This section shall be repealed on July 1, 2004;
 
20 provided that the comptroller shall transfer to the credit of the
 
21 state general fund, any unencumbered balance remaining in the
 
22 state educational facilities repair and maintenance special fund,
 
23 prior to July 1, 2004.
 

 
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 1      §36-     School physical plant operations and maintenance
 
 2 special fund; maintenance schedule.  (a)  There is created in the
 
 3 treasury of the State the school physical plant operations and
 
 4 maintenance special fund, into which shall be deposited a portion
 
 5 of all general excise tax revenues collected by the department of
 
 6 taxation under section 237-31.  The special fund shall be used
 
 7 solely for school repairs and cyclical maintenance projects
 
 8 scheduled after June 30, 2000.  Expenditures from the special
 
 9 fund shall be subject to sections 37-31, and 37-33 to 37-40.
 
10 Appropriations or authorizations from the special fund shall be
 
11 expended by the comptroller.
 
12      (b)  The department of accounting and general services shall
 
13 submit an annual report to the legislature, which shall include a
 
14 financial statement of the special fund and the status of school
 
15 repair and cyclical maintenance projects undertaken pursuant to
 
16 this section, no later than twenty days prior to the convening of
 
17 each regular session.  The department of accounting and general
 
18 services shall post the following reports electronically on the
 
19 Internet and update them quarterly:
 
20      (1)  Expenditures for school repair and cyclical maintenance
 
21           projects undertaken pursuant to this section, to be
 
22           posted within          days of each project's
 
23           completion; and
 

 
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 1      (2)  A list of each school's repair and maintenance needs to
 
 2           be undertaken.
 
 3      (c)  The comptroller shall develop and implement a strategy
 
 4 for the efficient and effective use of government and private-
 
 5 sector workforces to ensure that the State receives the best
 
 6 value for its money, and to avoid the creation of shortages and
 
 7 surpluses in the marketplace by over-purchasing in one segment
 
 8 and under-purchasing in another segment of the marketplace at any
 
 9 given time.  Repairs, replacements, and additions to existing
 
10 facilities shall be accomplished with maximum allowable
 
11 operational and maintenance efficiency.
 
12      (d)  Every new or renovated school facility constructed
 
13 after June 30, 2000, shall include a cyclical maintenance
 
14 schedule prepared by the architect or engineer of the facility or
 
15 the capital improvement project.  The maintenance schedule shall
 
16 include a description of each major component of a facility or
 
17 capital improvement project and the component's maintenance, the
 
18 starting date for a maintenance project, whether or not the
 
19 maintenance project has a recurring cost, the current cost of the
 
20 maintenance project, the future cost of the maintenance project,
 
21 the useful life of the facility or capital improvement project,
 
22 the present value of normally scheduled maintenance for the
 
23 useful life of the facility, the adjusted life of the facility or
 

 
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 1 capital improvement project, and the replacement date of the
 
 2 facility or capital improvement project.
 
 3      (e)  Moneys in AGS807, physical plant operations and
 
 4 maintenance, shall be allocated according to departmental school
 
 5 districts based on:
 
 6      (1)  Estimated cyclical and scheduled maintenance costs,
 
 7           which reflect the age and condition of existing school
 
 8           facilities in the State, in the following categories:
 
 9           re-roofing, electrical, athletic facilities, re-
 
10           surfacing, equipment, exterior painting, plumbing,
 
11           structural integrity, termite ground treatment, termite
 
12           tent treatment, interior painting, air conditioning
 
13           change out, and re-carpeting; and
 
14      (2)  Budgeted recurring maintenance, health and safety
 
15           requirements, and legal mandates."
 
16      SECTION 3.  Chapter 302A, Hawaii Revised Statutes, is
 
17 amended as follows:
 
18      1.  By adding four new sections to be appropriately
 
19 designated and to read:
 
20      "§302A-A  Six year program and financial plan for school
 
21 repair and maintenance.  (a)  The department of accounting and
 
22 general services, in consultation with the department of
 
23 education, shall prepare a six-year program and financial plan
 

 
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 1 which shall be:
 
 2      (1)  Based on estimated cyclical and scheduled maintenance
 
 3           costs, and budgeted recurring maintenance, health and
 
 4           safety requirements, and legal mandates;
 
 5      (2)  Prepared in accordance with the applicable principles
 
 6           and procedures contained in section 514A-83.6; and
 
 7      (3)  Submitted to the legislature not less than thirty days
 
 8           prior to the convening of each regular session of the
 
 9           legislature;
 
10 provided that the governor may incorporate the six-year program
 
11 and financial plan required by this subsection into the six-year
 
12 program and financial plan required by section 37-69, if the plan
 
13 required by this subsection is incorporated without reductions or
 
14 restrictions into the plan required by section 37-69.
 
15      (b)  The comptroller shall develop and maintain a facilities
 
16 physical analysis report and a facilities financial analysis
 
17 report for each public school.  These reports shall be posted
 
18 electronically on the Internet.
 
19      §302A-B  Departmental school district business and fiscal
 
20 officers.  (a)  The department shall establish at least one
 
21 permanent full-time equivalent business and fiscal officer
 
22 position in each departmental school district; provided that the
 
23 fiscal officer:
 

 
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 1      (1)  Shall have a business and facilities management
 
 2           background;
 
 3      (2)  Shall not be subject to the requirements of chapters 76
 
 4           and 77; and
 
 5      (3)  Shall not be required to be a certified teacher.
 
 6      (b)  Departmental school district business and fiscal
 
 7 officers shall be responsible for:
 
 8      (1)  Coordinating physical plant operations and maintenance
 
 9           activities with the department of accounting and
 
10           general services;
 
11      (2)  Overseeing the school-level minor repairs and
 
12           maintenance accounts at the direction of school
 
13           principals;
 
14      (3)  Planning for capital improvement projects with the
 
15           department of education and the department of
 
16           accounting and general services;
 
17      (4)  Ensuring that school facilities comply with the laws
 
18           and rules regarding:
 
19           (A)  The provision of a free appropriate public
 
20                education for exceptional children with
 
21                disabilities; and
 
22           (B)  The provision of a free appropriate public
 
23                education for qualified students with
 

 
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 1                disabilities;
 
 2      (5)  Assisting the department, individual schools, and
 
 3           school complexes in forming partnerships with community
 
 4           groups, volunteers, and businesses to obtain donated
 
 5           and discounted repair and maintenance services and
 
 6           materials; and
 
 7      (6)  Developing, coordinating, and overseeing the
 
 8           maintenance plan for each school.
 
 9      §302A-C  Donated repair and maintenance services and
 
10 materials.  (a)  The department may accept donated repair and
 
11 maintenance services and materials, including money to purchase
 
12 these services and materials, on behalf of the department,
 
13 individual schools, or school complexes.  Donations that meet
 
14 current educational specifications or exceed existing educational
 
15 specifications, if applicable, shall be deemed acceptable in
 
16 instances where the donations enhance the school environment or
 
17 improve the administration of school programs in accordance with
 
18 criteria established by the department pursuant to chapter 91.
 
19 For the purposes of this section, "donated repair and maintenance
 
20 services and materials" includes discounted repair and
 
21 maintenance services and materials.
 
22      (b)  The private source making a donation shall not be
 
23 liable upon any claim for injury arising from the donated or
 

 
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 1 discounted services or materials; provided that this subsection
 
 2 shall not affect the responsibility or liability of manufacturers
 
 3 of defective products nor shall it reflect the responsibilities
 
 4 of negligent persons who cause dangerous conditions that result
 
 5 in injury.
 
 6      302A-D Federal/state cooperation authorized.  The department
 
 7 may enter into agreements with the federal Department of Defense
 
 8 to construct, repair, or renovate Hawaii public schools on
 
 9 military bases and elsewhere in the State using federal funds,
 
10 subject to the department's educational specifications and
 
11 standards for facilities.  The department shall cooperate with
 
12 the Department of Defense in order to carry out this section."
 
13      2.  By amending section 302A-1504, subsection (a), to read:
 
14      "(a)  The department shall establish school-level minor
 
15 repairs and maintenance accounts for the use of each public
 
16 school, which shall not exceed [$8,000] $25,000 per school.  The
 
17 accounts shall be comprised of funds appropriated to the
 
18 department for school-level minor repairs and maintenance and
 
19 shall not be used for any other purpose, nor shall any other
 
20 funds be deposited into the accounts.  The department shall
 
21 allocate funds based on the number of students at the school
 
22 multiplied by a factor which recognizes the age and condition of
 
23 the school."
 

 
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 1      3.  By amending section 302A-1505 to read:
 
 2      "[[]§302A-1505[]]  Prioritization of repair and maintenance.
 
 3 (a)  Each school shall meet with the department of accounting and
 
 4 general services on an annual basis to advise the department of
 
 5 school needs.  Before any repair and maintenance projects for the
 
 6 upcoming fiscal year are implemented, each individual school
 
 7 administration shall prioritize and approve its repair and
 
 8 maintenance needs, and approve the scope of the implementation
 
 9 plan for the individual projects.  After schools have prioritized
 
10 their repair and maintenance projects, a statewide list shall be
 
11 prepared, reviewed, and approved by the department of education;
 
12 provided that the department may make adjustments among schools
 
13 and districts.  Each school repair and maintenance priority
 
14 listing shall be approved by the individual school administration
 
15 and submitted to the department of accounting and general
 
16 services for implementation.  Each listing shall be posted
 
17 electronically on the Internet.  The department of accounting and
 
18 general services shall implement the school repair and
 
19 maintenance program in accordance with the priorities set forth
 
20 by the individual school administration.
 
21      (b)  Prior to meeting with the department of accounting and
 
22 general services to advise the department of a school's repair
 
23 and maintenance needs, the school's principal and the
 

 
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 1 departmental school district business and fiscal officer shall
 
 2 consider the recommendations made by the school/community-based
 
 3 management council, if there is such a council at the school; or
 
 4 the local school board, if the school is a new century charter
 
 5 school.  If there is no school/community-based management council
 
 6 or local school board, the school's principal shall appoint a
 
 7 standing committee composed of a teacher, a member of the support
 
 8 staff, a parent, a student, and a community member.
 
 9      (c)  In prioritizing a school's repair and maintenance
 
10 needs, the department of accounting and general services, the
 
11 school's principal, and the departmental school district business
 
12 and fiscal officer shall consider the availability of donated and
 
13 discounted repair and maintenance services and materials that
 
14 will be provided by community groups, volunteers, and
 
15 businesses."
 
16      SECTION 4.  Section 237-31, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "§237-31  Remittances.  All remittances of taxes imposed by
 
19 this chapter shall be made by money, bank draft, check, cashier's
 
20 check, money order, or certificate of deposit to the office of
 
21 the department of taxation to which the return was transmitted.
 
22 The department shall issue its receipts therefor to the taxpayer
 
23 and shall pay the moneys into the state treasury as a state
 

 
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 1 realization, to be kept and accounted for as provided by law;
 
 2 provided that:
 
 3      (1)  The sum from all general excise tax revenues realized
 
 4           by the State that represents the difference between
 
 5           $45,000,000 and the proceeds from the sale of any
 
 6           general obligation bonds authorized for that fiscal
 
 7           year for the purposes of the state educational
 
 8           facilities improvement special fund shall be deposited
 
 9           in the state treasury in each fiscal year to the credit
 
10           of the state educational facilities improvement special
 
11           fund;
 
12      (2)  A sum, not to exceed $5,000,000, from all general
 
13           excise tax revenues realized by the State shall be
 
14           deposited in the state treasury in each fiscal year to
 
15           the credit of the compound interest bond reserve fund;
 
16           [and]
 
17      (3)  A sum, not to exceed the amount necessary to meet the
 
18           obligations of the integrated tax information
 
19           management systems performance-based contract may be
 
20           retained and deposited in the state treasury to the
 
21           credit of the integrated tax information management
 
22           systems special fund.  The sum retained by the director
 
23           of taxation for deposit to the integrated tax
 

 
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 1           information [[]management[]] systems special fund for
 
 2           each fiscal year shall be limited to amounts
 
 3           appropriated by the legislature.  This paragraph shall
 
 4           be repealed on July 1, 2004[.];
 
 5      (4)  Beginning July 1, 2000, and ending on June 30, 2004,
 
 6           the sum from all general excise tax revenues realized
 
 7           by the State that represents the difference between
 
 8           $45,000,000 and the proceeds from the sale of any
 
 9           general obligation bonds authorized for the purposes of
 
10           this Act for that fiscal year shall be deposited in the
 
11           state treasury in each fiscal year to the credit of the
 
12           state educational facilities repair and maintenance
 
13           special fund.  This paragraph shall be repealed on
 
14           July 1, 2004; and
 
15      (5)  The sum from all general excise tax revenues realized
 
16           by the State that represents the difference between
 
17           $            and the proceeds from the sale of any
 
18           general obligation bonds authorized for the purposes of
 
19           this Act for that fiscal year shall be deposited in the
 
20           state treasury in each fiscal year to the credit of the
 
21           school physical plant operations and maintenance
 
22           special fund."
 
23      SECTION 5.  The director of finance is authorized to issue
 

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

 
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 1 business and fiscal officer position in each departmental school
 
 2 district, as delineated by section 13-1(d), Hawaii Revised
 
 3 Statutes.  The sum appropriated shall be expended by the
 
 4 department of education.
 
 5      SECTION 8.  There is appropriated out of the general
 
 6 revenues of the State of Hawaii the sum of $          , or so
 
 7 much thereof as may be necessary for fiscal year 2000-2001, for
 
 8 the department of accounting and general services to hire an
 
 9 engineer and a clerk to coordinate neighbor island department of
 
10 education repair requirements and to work with the department of
 
11 education to identify, prioritize, and maintain historical repair
 
12 records.  The sum appropriated shall be expended by the
 
13 department of accounting and general services.
 
14      SECTION 9.  The director of finance is authorized to issue
 
15 general obligation bonds in the sum of $          , or so much
 
16 thereof as may be necessary for fiscal year 2000-2001, and the
 
17 same sum, or so much thereof as may be necessary shall be
 
18 deposited into the school physical plant operations and
 
19 maintenance special fund.
 
20      SECTION 10.  There is appropriated out of the school
 
21 physical plant operations and maintenance special fund of the
 
22 State of Hawaii the sum of $          , or so much thereof as may
 
23 be necessary for fiscal year 2000-2001, solely for school repairs
 

 
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 1 and cyclical maintenance projects scheduled after June 30, 2000.
 
 2 The sum appropriated shall be expended by the department of
 
 3 accounting and general services; provided that the comptroller
 
 4 shall develop and implement a strategy for the efficient and
 
 5 effective use of government and private-sector workforces to
 
 6 ensure that the State receives the best value for its money, and
 
 7 to avoid the creation of shortages and surpluses in the
 
 8 marketplace by over-purchasing in one segment and under-
 
 9 purchasing in another segment of the marketplace at any given
 
10 time.
 
11      SECTION 11.  In codifying the new sections added to chapter
 
12 302A, Hawaii Revised Statutes, by section 3 of this Act, the
 
13 revisor of statutes shall substitute appropriate section numbers
 
14 for the letters used in the new sections' designations in this
 
15 Act.
 
16      SECTION 12.  Statutory material to be repealed is bracketed.
 
17 New statutory material is underscored.
 
18      SECTION 13.  This Act shall take effect on July 1, 2000.