REPORT TITLE:
University of Hawaii


DESCRIPTION:
Provides greater independence for the University of Hawaii, such
as, by separating its budgeting process from the executive
branch.  (SB538 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        538
THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                H.D. 1
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO THE UNIVERSITY OF HAWAII.


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

 1      SECTION 1.  The legislature finds that a strong university
 
 2 system can be a significant contributor to a robust economy,
 
 3 providing both quality higher education and dollars for the
 
 4 surrounding communities.  The legislature further finds that
 
 5 those universities that contribute to a significant degree to the
 
 6 community's economic well being have broad authority to respond
 
 7 to changing opportunities.
 
 8      In recent years, the University of Hawaii has been granted
 
 9 increasing fiscal independence from the executive branch.  Last
 
10 year, the legislature passed a broad-based measure that gave the
 
11 university increased authority to manage its assets, personnel,
 
12 and programs.  The legislature further finds that it is necessary
 
13 to grant the University of Hawaii additional independence from
 
14 the executive branch to maximize the university's potential to
 
15 grow as a world-class institution and contribute to the State's
 
16 economic revitalization.  The purpose of this Act is to provide
 
17 the University of Hawaii with this added independence.
 
18      SECTION 2.  Chapter 304, Hawaii Revised Statutes, is amended
 
19 by adding a new section to be appropriately designated and to
 
20 read as follows:
 

 
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 1      "§304-    Administration; budget preparation and submission.
 
 2 (a)  The board of regents shall make an annual report to the
 
 3 legislature at each regular session regarding the business of the
 
 4 University of Hawaii and of the administration of the university
 
 5 system throughout the State.  The board of regents shall present
 
 6 to the legislature a unified budget, a six-year program and
 
 7 financial plan, and a variance report for all of the colleges,
 
 8 departments, and programs of the University of Hawaii.  The
 
 9 president of the university shall direct the administration of
 
10 the University of Hawaii and be responsible for the efficient
 
11 operation of all of its colleges, departments, and programs.
 
12      (b)  The president of the university may:
 
13      (1)  Prescribe for all of the colleges, departments, and
 
14           programs, a uniform system of keeping and periodically
 
15           reporting statistics concerning their business;
 
16      (2)  Procure from all of the colleges, departments, and
 
17           programs, estimates for their proposed appropriations;
 
18           with the cooperation of the representatives of the
 
19           colleges, departments, and programs concerned, to
 
20           review and revise the estimates as the president deems
 
21           necessary for the equitable provision of resources to
 
22           the various colleges, departments, or programs
 

 
 
 
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 1           according to their needs; and to present the estimates,
 
 2           as reviewed and revised by the board of regents, to the
 
 3           legislature as collectively constituting a unified
 
 4           budget for all of the University of Hawaii;
 
 5      (3)  Exercise exclusive authority over the preparation,
 
 6           explanation, and administration of the University of
 
 7           Hawaii budget, programs, plans, and expenditures
 
 8           including without limitation policies and practices of
 
 9           financial administration and the establishment of
 
10           guidelines as to permissible expenditures; provided
 
11           that all expenditures of the University of Hawaii shall
 
12           be in conformance with program appropriations and
 
13           provisions established by the legislature; and
 
14      (4)  Do all other acts that may be necessary or appropriate
 
15           for the administration of the University of Hawaii.
 
16      (c)  The budget, six-year program and financial plan, and
 
17 the variance report of the University of Hawaii shall be
 
18 submitted by the board of regents to the legislature in
 
19 accordance with the schedule of submission specified for the
 
20 governor in chapter 37 and shall contain the program information
 
21 prescribed in that chapter.  By November 1 of each year preceding
 
22 a legislative session in which a budget is to be submitted, the
 

 
 
 
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 1 board of regents shall provide written notification to the
 
 2 governor of the proposed total expenditures, by cost categories
 
 3 and sources of funding, and estimated revenues of the University
 
 4 of Hawaii for each fiscal year of the next fiscal biennium.
 
 5      (d)  If the governor, in anticipation of a revenue
 
 6 shortfall, restricts the expenditure of general fund
 
 7 appropriations by executive branch departments and agencies by a
 
 8 total of        per cent or more of the total general fund
 
 9 appropriation to the executive branch in a fiscal year, where at
 
10 the end of the fiscal year those funds will lapse into the
 
11 general fund, the governor shall inform the legislature and the
 
12 board of regents of this action.  After the board of regents is
 
13 informed of the governor's action, then the board of regents
 
14 shall also restrict the expenditure of general fund
 
15 appropriations made to the university system by an equal
 
16 percentage.  If, in the same fiscal year, the governor increases
 
17 the percentage of general fund appropriations restricted and
 
18 informs the legislature and the board of regents of this increase
 
19 in restrictions, then the board of regents shall increase its
 
20 restriction of the expenditure of general fund appropriations by
 
21 an equal percentage."
 

 
 
 
 
 
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 1      SECTION 3.  Section 26-4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§26-4 Structure of government.  Under the supervision of
 
 4 the governor, all executive and administrative offices,
 
 5 departments, and instrumentalities of the state government and
 
 6 their respective functions, powers, and duties shall be allocated
 
 7 among and within the following principal departments that are
 
 8 hereby established:
 
 9      (1)  Department of human resources development (Section
 
10           26-5)
 
11      (2)  Department of accounting and general services (Section
 
12           26-6)
 
13      (3)  Department of the attorney general (Section 26-7)
 
14      (4)  Department of budget and finance (Section 26-8)
 
15      (5)  Department of commerce and consumer affairs (Section
 
16           26-9)
 
17      (6)  Department of taxation (Section 26-10)
 
18     [(7)  University of Hawaii (Section 26-11)
 
19      (8)] (7)  Department of education (Section 26-12)
 
20     [(9)] (8)  Department of health (Section 26-13)
 
21    [(10)] (9)  Department of human services (Section 26-14)
 

 
 
 
 
 
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 1    [(11)] (10)  Department of land and natural resources (Section
 
 2           26-15)
 
 3    [(12)] (11)  Department of agriculture (Section 26-16)
 
 4    [(13)] (12)  Department of Hawaiian home lands (Section 26-17)
 
 5    [(14)] (13)  Department of business, economic development, and
 
 6           tourism (Section 26-18)
 
 7    [(15)] (14)  Department of transportation (Section 26-19)
 
 8    [(16)] (15)  Department of labor and industrial relations
 
 9           (Section 26-20)
 
10    [(17)] (16)  Department of defense (Section 26-21)
 
11    [(18)] (17)  Department of public safety (Section 26-14.6)"
 
12      SECTION 4.  Section 26-25, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "[[]§26-25[]]  Services to the judiciary [and],
 
15 legislature[.], and the University of Hawaii.  Any executive
 
16 department may provide services to the judiciary [and], the
 
17 legislature, and the University of Hawaii, but nothing in this
 
18 part and this chapter shall be construed as granting any
 
19 authority to the governor or any department to exercise control
 
20 over the organization, programs, functions, operations, and
 
21 expenditures of the judiciary [and], the legislature[.], or the
 
22 University of Hawaii."
 

 
 
 
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 1      SECTION 5.  Section 26-52, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§26-52  Department heads and executive officers.  The
 
 4 salaries of the following state officers shall be as follows:
 
 5      (1)  The salary of the superintendent of education shall be
 
 6           $90,041 a year;
 
 7     [(2)  The salary of the president of the University of Hawaii
 
 8           shall be set by the board of regents;
 
 9      (3)] (2)  The salaries of all department heads or executive
 
10           officers of the departments of accounting and general
 
11           services, agriculture, attorney general, budget and
 
12           finance, business, economic development, and tourism,
 
13           commerce and consumer affairs, Hawaiian home lands,
 
14           health, human resources development, human services,
 
15           labor and industrial relations, land and natural
 
16           resources, public safety, taxation, and transportation
 
17           shall be $85,302 a year; and
 
18     [(4)] (3)  The salary of the adjutant general shall be
 
19           $85,302 a year; provided that if this salary is in
 
20           conflict with the pay and allowance fixed by the tables
 
21           of the regular army or air force of the United States,
 
22           the latter shall prevail."
 

 
 
 
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 1      SECTION 6.  Section 37-31, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§37-31  Intent and policy.  It is declared to be the policy
 
 4 and intent of the legislature that the total appropriations made
 
 5 by it, or the total of any budget approved by it, for any
 
 6 department or establishment, shall be deemed to be the maximum
 
 7 amount authorized to meet the requirements of the department or
 
 8 establishment for the period of the appropriation, excepting as
 
 9 may otherwise be provided by law, and that the governor and the
 
10 director of finance should be given the powers granted by
 
11 sections 37-32 to 37-41 in order that savings may be effected by
 
12 careful supervision throughout each appropriation period with due
 
13 regard to changing conditions; and by promoting more economic and
 
14 efficient management of state departments and establishments[.];
 
15 provided that this part shall not apply to the appropriations
 
16 made by the legislature to the University of Hawaii."
 
17      SECTION 7.  Section 37-34, Hawaii Revised Statues, is
 
18 amended to read as follows:
 
19      "§37-34  Appropriations available for allotment; estimate of
 
20 expenses.(a)  No appropriation to which the allotment system is
 
21 applicable shall become available to any department or
 
22 establishment for expenditure during any allotment period until
 

 
 
 
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 1 the department or establishment submits an estimate to the
 
 2 director of finance, at whatever time prior to the beginning of
 
 3 the allotment period and in whatever form as the director may
 
 4 prescribe, of the amount required to carry on the work of the
 
 5 department or establishment during that period and until the
 
 6 estimate is approved, increased, or decreased by the director and
 
 7 funds are allotted pursuant to section 37-35.
 
 8      [(b)  Before appropriations for the University of Hawaii
 
 9 become available to the university, the university shall advise
 
10 the governor and the director of finance of the amount necessary
 
11 for payments for financing agreements under chapter 37D, the
 
12 governor, with the assistance of the director of finance, as may
 
13 be necessary, shall establish allotment ceilings for each source
 
14 of funding of all of the appropriations of the University of
 
15 Hawaii for each allotment period and shall advise the university
 
16 of these determinations.
 
17      (c)] (b)  Any other law to the contrary notwithstanding,
 
18 general fund appropriations for the operating expenses of public
 
19 health facilities shall be made available to the public health
 
20 facilities for expenditure during any allotment period."
 
21      SECTION 8.  Section 37-35, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 

 
 
 
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 1      "§37-35  Estimated expenditures; approval.  The director of
 
 2 finance shall review all estimates submitted under section 37-34
 
 3 and, having due regard for:
 
 4      (1)  The probable further needs of the department or
 
 5           establishment for the remainder of the term for which
 
 6           the appropriation was made;
 
 7      (2)  The terms and purposes of the appropriation, the
 
 8           progress of collection of revenues, and condition of
 
 9           the treasury; and
 
10      (3)  The probable receipts and total cash requirements for
 
11           the ensuing quarter, shall approve, increase, or reduce
 
12           the amount of the estimate[;
 
13 provided that the director of finance shall approve the estimates
 
14 submitted by the University of Hawaii when:
 
15      (1)  The sum of the estimates for each funding source does
 
16           not exceed the applicable allotment ceilings
 
17           established by the governor under section 37-34;
 
18      (2)  The progress of collection of revenues, the condition
 
19           of the treasury, and the probable receipts and total
 
20           cash requirements for the ensuing quarter permit; and
 
21      (3)  All other legal requirements are satisfied].
 

 
 
 
 
 
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 1 The director shall act promptly upon all estimates and notify
 
 2 each department or establishment of its allotment, and shall
 
 3 notify the comptroller."
 
 4      SECTION 9.  Section 37-36, Hawaii Revised Statutes, is
 
 5 amended by amending subsection (a) to read as follows:
 
 6      "(a)  The director of finance may modify or amend any
 
 7 previous allotment upon notice to the department or establishment
 
 8 concerned; provided that:
 
 9      [(1) For the University of Hawaii, the director of finance
 
10           may modify or amend any previous allotment only upon
 
11           application of or notice to the university, and upon
 
12           public declaration, which shall be made ten days prior
 
13           to the modification or amendment taking effect;
 
14      (2)] (1)  The modification or amendment shall be made only
 
15           to avoid an illegal result or in anticipation of a
 
16           revenue shortfall;
 
17     [(3)] (2)  No deficit or undue reduction of funds to meet
 
18           future needs of the department or establishment will
 
19           result from the modification or amendment; and
 
20     [(4)] (3)  No modification or amendment shall reduce an
 
21           allotment below the amount required to meet valid
 
22           obligations or commitments previously incurred against
 
23           the allotted funds."
 

 
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 1      SECTION 10.  Section 37-37, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§37-37  Reduction.(a)  [Except as provided in subsection
 
 4 (b), when] When the director of finance determines at any time
 
 5 that the probable receipts from taxes or any other sources for
 
 6 any appropriation will be less than was anticipated, and that
 
 7 consequently the amount available for the remainder of the term
 
 8 of the appropriation or for any allotment period will be less
 
 9 than the amount estimated or allotted therefor, the director
 
10 shall, with the approval of the governor and after notice to the
 
11 department or establishment concerned, reduce the amount allotted
 
12 or to be allotted; provided that no reduction reduces any
 
13 allotted amount below the amount required to meet valid
 
14 obligations or commitments previously incurred against the
 
15 allotted funds.
 
16      [(b)  For the University of Hawaii, when the director of
 
17 finance determines at any time that the probable receipts from
 
18 taxes or any other sources for any appropriation will be less
 
19 than was anticipated, and that consequently the amount available
 
20 for the remainder of the term of the appropriation or for any
 
21 allotment period will be less than the amount estimated or
 
22 allotted therefor, the director shall advise the governor of the
 

 
 
 
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 1 situation, and the governor shall redetermine the allotment
 
 2 ceiling for the affected source or sources of funding pursuant to
 
 3 section 37-34, and shall advise the university and make a public
 
 4 declaration ten days prior to the effective date of the
 
 5 redetermination.  The university, not more than twenty days after
 
 6 the governor's notification, shall submit revised estimates
 
 7 consistent with the governor's redetermination to the director of
 
 8 finance.  Otherwise, the director of finance shall modify, amend,
 
 9 or reduce any allotment of the university to comply with the
 
10 governor's redetermination; provided that no reduction shall
 
11 reduce any allotted amount below the amount required to meet
 
12 valid obligations or commitments previously incurred against the
 
13 allotted funds.
 
14      (c)] (b)  Prior to the implementation of any reduction in
 
15 allotment proposed by the director of finance or the governor
 
16 pursuant to subsection (a) [or (b)], in which the sum of the
 
17 reductions exceed 2.5 per cent of the total general fund
 
18 appropriation made by the legislature in any fiscal year, the
 
19 director of finance shall notify the president of the senate, the
 
20 speaker of the house of representatives, and the chairpersons of
 
21 the senate committee on ways and means and the house of
 
22 representatives committee on finance, respectively, of the
 
23 director's intent."
 

 
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 1      SECTION 11.  Section 37-62, Hawaii Revised Statutes, is
 
 2 amended by amending the definition of "agency" to read as
 
 3 follows:
 
 4      ""Agency" means any executive department, independent
 
 5 commission, board, agency, authority, bureau, office, or other
 
 6 establishment of the state government (except the legislature
 
 7 [and], the judiciary[)], and the University of Hawaii), or any
 
 8 quasi-public institution which is supported in whole or in part
 
 9 by state funds."
 
10      SECTION 12.  Section 37-74, Hawaii Revised Statutes, is
 
11 amended by amending subsections (b) to (d) to read as follows:
 
12      "(b)  The appropriations by the legislature for a biennium
 
13 shall be allocated between the two fiscal years of the biennium
 
14 in the manner provided in the budget or appropriations act and as
 
15 further prescribed by the director of finance.  The amounts
 
16 allocated for each fiscal year shall be subject to the allotment
 
17 system prescribed in chapter 37, part II.  Each agency (except
 
18 the courts[),] and the University of Hawaii), in estimating its
 
19 quarterly requirements under chapter 37, part II, shall prepare a
 
20 plan for the fiscal year for the operation of each of the
 
21 programs it is responsible for administering.  The operations
 
22 plan shall be in such form and content as the department of
 

 
 
 
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 1 budget and finance may prescribe.  It shall be submitted,
 
 2 together with the estimated quarterly requirements, to the
 
 3 department of budget and finance on such date as the department
 
 4 may prescribe.
 
 5      (c)  The department of budget and finance shall:
 
 6      (1)  Review each operations plan to determine:
 
 7           (A)  That it is consistent with the policy decisions of
 
 8                the governor and appropriations by the
 
 9                legislature;
 
10           (B)  That it reflects proper planning and efficient
 
11                management methods; and
 
12           (C)  That appropriations have been made for the planned
 
13                purpose and will not be exhausted before the end
 
14                of the fiscal year;
 
15           [provided that the department of budget and finance
 
16           shall review the operations plan submitted by the
 
17           University of Hawaii solely for consistency with the
 
18           allotment ceilings established by the governor under
 
19           section 37-34, appropriations by the legislature, the
 
20           requirements of chapter 37D, and the status of revenues
 
21           to support operations plans for all state programs;]
 

 
 
 
 
 
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 1      (2)  Approve the operations plan if satisfied that it meets
 
 2           the requirements under paragraph (1).  Otherwise, the
 
 3           department of budget and finance shall require revision
 
 4           of the operations plan in whole or in part; and
 
 5      (3)  Modify or withhold the planned expenditures at any time
 
 6           during the appropriation period if the department of
 
 7           budget and finance finds that the expenditures are
 
 8           greater than those necessary to execute the programs at
 
 9           the level authorized by the governor and the
 
10           legislature, or that state receipts and surpluses will
 
11           be insufficient to meet the authorized expenditure
 
12           levels[; provided that the planned expenditures for the
 
13           University of Hawaii may be modified or withheld only
 
14           in accordance with sections 37-36 and 37-37].
 
15      (d)  No appropriation transfers or changes between programs
 
16 or agencies shall be made without legislative authorization;
 
17 provided that:
 
18      (1)  Authorized transfers or changes, when made, shall be
 
19           reported to the legislature; and
 
20      (2)  [Except with respect to appropriations to fund
 
21           financing agreements under chapter 37D, the University
 
22           of Hawaii shall have the flexibility to transfer
 

 
 
 
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 1           appropriated funds and positions for the operating cost
 
 2           category among programs, among cost elements in a
 
 3           program, and between quarters, as applicable; and the]
 
 4           The Hawaii health systems corporation shall have the
 
 5           flexibility to transfer special fund appropriations
 
 6           among community hospitals facilities as applicable;
 
 7           provided that the Hawaii health systems corporation
 
 8           shall maintain the integrity and services of each
 
 9           individual facility and shall not transfer
 
10           appropriations out of any facility that would result in
 
11           a reduction of services offered by the facility, with
 
12           due regard for statutory requirements, changing
 
13           conditions, the needs of the programs, and the
 
14           effective utilization of resources[; and
 
15      (3)  The university shall account for each transfer
 
16           implemented under this subsection in quarterly reports
 
17           to the governor and annual reports at the end of each
 
18           fiscal year to the legislature and the governor, which
 
19           shall be prepared in the form and manner prescribed by
 
20           the governor and shall include information on the
 
21           sources and uses of the transfer]."
 

 
 
 
 
 
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 1      SECTION 13.  Section 37-92, Hawaii Revised Statutes, is
 
 2 amended to read as follows: 
 
 3      "§37-92  Proposed general fund appropriations; executive
 
 4 branch; judicial branch[.]; and University of Hawaii.  (a)  The
 
 5 governor shall submit a plan of proposed appropriations for the
 
 6 State to the legislature which shall accompany the state budget
 
 7 in odd-numbered years and the supplemental budget in even-
 
 8 numbered years.  The plan of proposed appropriations shall
 
 9 include the executive budget, proposed grants to private
 
10 entities, and any specific appropriation measures to be proposed
 
11 by the executive branch, and estimates of the aggregate proposed
 
12 appropriations of the judicial and legislative branches of
 
13 government[.], and the University of Hawaii.  In any year in
 
14 which the plan of proposed appropriations from the general fund
 
15 exceeds the expenditure ceiling, the governor shall set forth the
 
16 dollar amount, the rate by which the expenditure ceiling would be
 
17 exceeded, and the reasons for proposing appropriations in excess
 
18 of those allowed under the expenditure ceiling.
 
19      (b)  The proposed appropriations from the general fund for
 
20 each year of the biennium or each supplementary budget fiscal
 
21 year for the executive and judicial branches and the University
 
22 of Hawaii shall not be increased over the appropriations from the
 

 
 
 
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 1 general fund for the preceding fiscal year for each branch[,] and
 
 2 the University of Hawaii [respectively,] by more than the state
 
 3 growth, except as provided in this section.  For purposes of this
 
 4 subsection, the appropriations from the general fund for the
 
 5 executive and judicial branches and the University of Hawaii
 
 6 shall not include any appropriations representing amounts
 
 7 authorized by the legislature under section 37-93(b).
 
 8      (c)  The governor shall submit a plan of proposed
 
 9 appropriations for the executive branch to the legislature which
 
10 shall accompany the state budget in odd-numbered years and the
 
11 supplemental budget in even-numbered years.  The plan of proposed
 
12 appropriations shall include the executive budget, proposed
 
13 grants to private entities, and any specific appropriation
 
14 measures to be proposed by the executive branch.
 
15      (d)  The budget documents presented by the governor to the
 
16 legislature shall include a statement or summary showing [the]:
 
17      (1)  The total state personal income for each of the four
 
18           calendar years immediately preceding the fiscal year
 
19           for which appropriations from the state general fund
 
20           are to be made[, the];
 
21      (2)  The appropriations from the general fund for the
 
22           previous fiscal year[, the];
 

 
 
 
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 1      (3)  The appropriations from the general fund for the fiscal
 
 2           year in progress[, the]; and
 
 3      (4)  The general fund expenditure ceiling for the fiscal
 
 4           year in progress and for the ensuing fiscal year or,
 
 5           when necessary, for each fiscal year of the ensuing
 
 6           biennium.
 
 7      (e)  The governor shall also include a statement or summary
 
 8 showing [recommended]:
 
 9      (1)  Recommended appropriations from the general fund for
 
10           the executive branch for the ensuing fiscal year or
 
11           fiscal biennium[, actual];
 
12      (2)  Actual appropriations from the general fund for the
 
13           executive branch plus any recommended appropriations
 
14           from the general fund for the executive branch for the
 
15           fiscal year in progress[, the];
 
16      (3)  The appropriations from the general fund for the
 
17           executive branch for the previous fiscal year[, the];
 
18           and
 
19      (4)  The general fund appropriation ceiling for the
 
20           executive branch as established by subsection (b) for
 
21           the fiscal year in progress and for the ensuing fiscal
 
22           year or, when necessary, for each fiscal year of the
 
23           ensuing biennium.
 

 
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 1      (f)  The chief justice shall submit a plan of proposed
 
 2 appropriations of the judicial branch to the legislature which
 
 3 shall accompany the judiciary biennial budget in odd-numbered
 
 4 years and the supplemental budget in even-numbered years.  The
 
 5 plan of proposed appropriations shall include the judiciary
 
 6 budget, proposed grants to private entities, and any specific
 
 7 appropriation measures to be proposed by the judicial branch.
 
 8      (g)  The budget documents presented by the chief justice to
 
 9 the legislature shall include a statement or summary showing
 
10 [recommended]:
 
11      (1)  Recommended appropriations from the general fund for
 
12           the judicial branch for the ensuing fiscal year or
 
13           fiscal biennium[, actual];
 
14      (2)  Actual appropriations from the general fund for the
 
15           judicial branch plus any recommended appropriations
 
16           from the general fund for the judicial branch for the
 
17           fiscal year in progress[, the];
 
18      (3)  The appropriations from the general fund for the
 
19           judicial branch for the previous fiscal year[, the];
 
20           and
 
21      (4)  The general fund appropriation ceiling for the judicial
 
22           branch as established by subsection (b) for the fiscal
 

 
 
 
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 1           year in progress and for the ensuing fiscal year or,
 
 2           when necessary, for each fiscal year of the ensuing
 
 3           biennium.
 
 4      (h)  The board of regents of the University of Hawaii shall
 
 5 submit a plan of proposed appropriations of the University of
 
 6 Hawaii to the legislature which shall accompany the University of
 
 7 Hawaii biennial budget in odd-numbered years and the supplemental
 
 8 budget in even-numbered years.  The plan of proposed
 
 9 appropriations shall include the University of Hawaii budget,
 
10 proposed grants to private entities, and any specific
 
11 appropriation measures to be proposed by the board of regents of
 
12 the University of Hawaii.
 
13      (i)  The budget documents presented by the board of regents
 
14 of the University of Hawaii to the legislature shall include a
 
15 statement or summary showing:
 
16      (1)  Recommended appropriations from the general fund for
 
17           the University of Hawaii for the ensuing fiscal year or
 
18           fiscal biennium;
 
19      (2)  Actual appropriations from the general fund for the
 
20           University of Hawaii plus any recommended
 
21           appropriations from the general fund for the University
 
22           of Hawaii for the fiscal year in progress;
 

 
 
 
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 1      (3)  The appropriations from the general fund for the
 
 2           University of Hawaii for the previous fiscal year; and
 
 3      (4)  The general fund appropriation ceiling for the
 
 4           University of Hawaii as established by subsection (b)
 
 5           for the fiscal year in progress and for the ensuing
 
 6           fiscal year or, when necessary, for each fiscal year of
 
 7           the ensuing biennium.
 
 8      [(h)] (j)  The governor [or], the chief justice, or the
 
 9 board of regents may propose appropriations from the general fund
 
10 for the executive or judicial branches[,] or the University of
 
11 Hawaii [respectively,] in excess of those allowed by subsection
 
12 (b) if the governor [or], the chief justice, or the board of
 
13 regents sets forth the dollar amount and the percentage change in
 
14 excess of the appropriations allowed by subsection (b), and the
 
15 reasons for proposing appropriations in excess of those allowed
 
16 by subsection (b)."
 
17      SECTION 14.  Section 37D-1, Hawaii Revised Statutes, is
 
18 amended by amending the definition of "agency" to read as
 
19 follows:
 
20      ""Agency" means the judiciary, the University of Hawaii, any
 
21 executive department, any independent commission, any board, any
 
22 authority, any bureau, any office, any other establishment of the
 

 
 
 
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 1 State (except the legislature and its agencies), or any public
 
 2 corporation that is supported in whole or in part by state funds,
 
 3 or any agent thereof, authorized by law to expend available
 
 4 moneys."
 
 5      SECTION 15.  Section 40-1, Hawaii Revised Statutes, is
 
 6 amended by amending subsections (b) and (c) to read as follows:
 
 7      "(b)  With respect to the executive branch, except [the
 
 8 University of Hawaii and] the department of education, the
 
 9 comptroller shall have complete supervision of all accounts.  The
 
10 comptroller shall preaudit all proposed payments of $10,000 or
 
11 more to determine the propriety of expenditures and compliance
 
12 with executive orders and rules that may be in effect.  When
 
13 necessary, the comptroller shall withhold approval of any
 
14 payment.  Whenever approval is withheld, the department or agency
 
15 concerned shall be promptly notified.  With respect to [the
 
16 University of Hawaii and] the department of education, the
 
17 comptroller shall issue warrants for the release of funds for the
 
18 operating costs of [the university or] the department of
 
19 education[, as applicable,] in amounts and at times mutually
 
20 agreed upon by the governor or director of finance and the
 
21 [university or] department of education[, as applicable];
 
22 provided:
 

 
 
 
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 1      (1)  The amounts released shall not exceed the allotment
 
 2           ceilings for the respective funding sources of [the
 
 3           university's or] the department of education's
 
 4           appropriations established by the governor for an
 
 5           allotment period pursuant to section 37-34; and
 
 6      (2)  The comptroller may issue warrants as an advance from
 
 7           the state treasury to [the University of Hawaii and]
 
 8           the department of education to establish a checking
 
 9           account and provide working capital in amounts and at
 
10           times mutually agreed upon by the governor or director
 
11           of finance and [the University of Hawaii and] the
 
12           department of education.
 
13 The [University of Hawaii and the] department of education shall
 
14 preaudit all proposed payments to determine the propriety of
 
15 expenditures and compliance with applicable laws, executive
 
16 orders, and rules as may be in effect.  The [University of Hawaii
 
17 and the] department of education shall make disbursements for
 
18 operating expenses from the amounts released by the comptroller
 
19 and maintain records and documents necessary to support those
 
20 disbursements at times mutually agreed upon by [the university
 
21 president or] the superintendent of education[, as applicable,]
 
22 and the comptroller; provided that when requested by the
 

 
 
 
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 1 [university or] department of education, the comptroller shall
 
 2 make all disbursements for the [university or] department of
 
 3 education, as applicable, subject to available allotment.  Funds
 
 4 released pursuant to this section shall be deposited by the
 
 5 [university or] department of education[, as applicable,] in
 
 6 accordance with the provisions applicable to the director of
 
 7 finance by chapter 38.  Any interest earned on the deposit of
 
 8 funds released pursuant to this section shall be deposited in the
 
 9 state treasury at the end of each fiscal year.
 
10      (c)  With respect to the judiciary [and], the legislature,
 
11 and the University of Hawaii, the comptroller shall make
 
12 available to the judiciary [and], the legislature, and the
 
13 University of Hawaii the total amount appropriated to each,
 
14 except that the judiciary [and], the legislature, and the
 
15 University of Hawaii may request the comptroller's services in
 
16 maintaining custody of the amount appropriated to each and in
 
17 making payments therefrom.  When such services are requested, the
 
18 comptroller shall make all disbursements requested by the
 
19 judiciary [or], the legislature, or the University of Hawaii, but
 
20 shall not make any disbursement for which no appropriation has
 
21 been made or which would cause a specific appropriation to be
 
22 exceeded."
 

 
 
 
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 1      SECTION 16.  Section 40-2, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§40-2 Accounting systems and internal control; enforcing
 
 4 the use of and inspection of the same.  The accounting system
 
 5 installed by the commission on public accountancy under Act 181,
 
 6 Session Laws of Hawaii 1923, as amended by Act 220, Session Laws
 
 7 of Hawaii 1925, for use in the offices of the comptroller,
 
 8 director of finance, departmental and agency services of the
 
 9 State, and the auditors, treasurers, departmental and agency
 
10 services of the several counties shall be the accounting and
 
11 reporting systems of the State and counties; provided [that the
 
12 University of Hawaii may install a different accounting system
 
13 which shall be in conformity with generally accepted accounting
 
14 principles as applied to colleges and universities; and provided
 
15 further] that the department of education may install a different
 
16 accounting system which shall be in conformity to generally
 
17 accepted accounting principles.  The comptroller shall make such
 
18 changes and modifications in the accounting system as shall from
 
19 time to time appear to be in the best interest of the State and
 
20 counties.
 
21      The departments and agencies of the executive branch are
 
22 respectively charged with the responsibility to maintain an
 

 
 
 
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 1 adequate system of internal control and with the further
 
 2 responsibility to see that the internal control system continues
 
 3 to function effectively as designed.  The comptroller shall make
 
 4 such investigations and audits from time to time to enforce the
 
 5 use of the accounting system and internal control systems in the
 
 6 executive branch.
 
 7      The judiciary, the legislature, the University of Hawaii,
 
 8 and each county shall be responsible for the establishment and
 
 9 maintenance of its respective internal control system."
 
10      SECTION 17.  Section 40-6, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "§40-6 Approval of business and accounting forms.  The
 
13 comptroller shall determine the forms required to adequately
 
14 supply accounting and statistical data for the state government.
 
15 The comptroller shall require heads of departments and
 
16 establishments of the state government to submit proposed new
 
17 forms or proposed changes in current business and accounting
 
18 forms for review and approval before ordering the same printed;
 
19 except that [the University of Hawaii and] the department of
 
20 education shall be subject to this requirement only with respect
 
21 to uniform business and accounting forms of statewide use in the
 
22 State's accounting system.  All standard state forms shall be
 

 
 
 
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 1 classified, numbered, and standardized in design, dimensions,
 
 2 color, and grade of paper and recorded in a catalogue of
 
 3 accounting and statistical forms by the comptroller."
 
 4      SECTION 18.  Section 40-51, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "§40-51  Money drawn only on warrants.  Excepting moneys
 
 7 paid for the redemption of bonds of the state debt, and the
 
 8 interest coupons of the same, and for interest on overdue
 
 9 warrants, and drafts against special deposits and for the
 
10 expenses of the legislature [and], the judiciary, and the
 
11 University of Hawaii, and payment authorized by the comptroller
 
12 by means of electronic funds transfers and through automated
 
13 clearinghouses for the purposes of implementing an electronic
 
14 benefits transfer system for the department of human services, no
 
15 money shall be drawn from or out of the treasury except upon
 
16 warrants, substantially in the form of section 40-52, issued from
 
17 the comptroller's office; provided that upon request, the
 
18 comptroller shall provide financial services involving the
 
19 issuance of warrants on behalf of the legislature [and], the
 
20 judiciary[.], and the University of Hawaii.  Every warrant shall
 
21 be signed by the comptroller or the comptroller's deputy or by
 
22 means of any mechanical check signer that may be adopted by the
 

 
 
 
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 1 comptroller, and shall be made payable upon such date as may be
 
 2 approved by the director of finance to the order of the person to
 
 3 whom the State is directly indebted."
 
 4      SECTION 19.  Section 40-58, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "§40-58  In favor of assignees.  No assignment of moneys by
 
 7 a person to whom the State is directly indebted shall be
 
 8 effective unless the assignment is first approved by the
 
 9 comptroller or, in the case of [the University of Hawaii and] the
 
10 department of education, by [their respective] its chief
 
11 financial [officers.] officer.  The comptroller or the chief
 
12 financial [officers of the University of Hawaii and] officer of
 
13 the department of education may prescribe the form for an
 
14 assignment, and may approve the assignment within a reasonable
 
15 time period if, in their respective discretion, the rights or
 
16 obligations of the State[, the University of Hawaii,] or the
 
17 department of education under any contract or other undertaking
 
18 or under any law, rule, or order by a competent authority will
 
19 not be prejudiced thereby.  Upon approval of the assignment, the
 
20 comptroller or the [respective] chief financial [officers of the
 
21 University of Hawaii and] officer of the department of education
 
22 shall draw a warrant payable to the assignee.  Except as to
 

 
 
 
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 1 contracts encumbered by the comptroller[, the University of
 
 2 Hawaii,] or the department of education, each expending agency,
 
 3 upon notification of the comptroller's approval of an assignment,
 
 4 shall prepare a claim for payment in accordance with the terms of
 
 5 the assignment."
 
 6      SECTION 20.  Section 40-81, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "§40-81  Report by agencies receiving special moneys.  All
 
 9 state officers, departments, boards, bureaus, commissions, or
 
10 agencies collecting or receiving any moneys not required by law
 
11 to be deposited in the state treasury shall report to the
 
12 comptroller all receipts and disbursements on account thereof for
 
13 each quarterly period of the calendar year not later than the
 
14 fifteenth day following the end of each quarterly period on such
 
15 forms and under such rules as may be prescribed by the
 
16 comptroller; provided that with respect to all moneys held
 
17 outside the state treasury by [the University of Hawaii or] the
 
18 department of education pursuant to the authority granted to [the
 
19 university and] the department of education by this chapter, [the
 
20 University of Hawaii and] the department of education shall
 
21 report to the comptroller all transactions for each quarterly
 
22 period not later than the fifteenth day following the end of each
 

 
 
 
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 1 quarterly period on such forms and under such rules as may be
 
 2 prescribed by the comptroller."
 
 3      SECTION 21.  Section 40-84, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "§40-84  Petty cash funds; regulations.  Whenever the head
 
 6 of any state department, board, bureau, commission, or other
 
 7 agency deems it necessary to have a petty cash fund for the
 
 8 proper transaction of the business of the agency, a written
 
 9 application therefor shall be made to the comptroller setting
 
10 forth the details covering the purposes and uses of and for the
 
11 fund.  The comptroller, before issuing a state warrant for that
 
12 purpose, shall determine whether or not the business of the
 
13 agency warrants the establishment of such a fund, and if the
 
14 comptroller is satisfied that such a fund is necessary, the
 
15 comptroller shall issue a state warrant to such agency for an
 
16 amount as the comptroller shall determine, not to exceed the sum
 
17 of $100,000, except that this limitation of $100,000 shall not
 
18 apply to [the University of Hawaii and] the stadium authority.
 
19      The comptroller may prescribe such rules as the comptroller
 
20 may deem necessary for the proper administration and
 
21 accountability of these funds."
 

 
 
 
 
 
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 1      SECTION 22.  Section 103F-102, Hawaii Revised Statutes, is
 
 2 amended by amending the definition of "agency" to read as
 
 3 follows:
 
 4      ""Agency" means any department, authority, commission,
 
 5 council, board, committee, institution, legislative body, agency,
 
 6 or other establishment or office of the executive, legislative,
 
 7 or judicial branch of the State or the University of Hawaii, and
 
 8 includes the office of Hawaiian affairs."
 
 9      SECTION 23.  Section 304-3, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "§304-3 Regents; appointment; tenure; qualifications;
 
12 meetings.  (a)  The affairs of the university shall be under the
 
13 general management and control of the board of regents consisting
 
14 of twelve members who shall be appointed and may be removed by
 
15 the governor.  No more than six of the members shall be members
 
16 of the same political party and at least part of the membership
 
17 of the board shall represent geographic subdivisions of the
 
18 State.  At least one member shall be a University of Hawaii
 
19 student at the time of the initial appointment.
 
20      (b)  The term of each member shall be for four years;
 
21 provided that the term of the student member shall be for two
 
22 years[.]; and provided further that the student member may be
 

 
 
 
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 1 reappointed for one additional term even though the member may no
 
 2 longer be a student at the time of reappointment.  Except as
 
 3 otherwise provided by statute, state officers shall be eligible
 
 4 to appointment and membership.  Every member may serve beyond the
 
 5 expiration date of the member's term of appointment until the
 
 6 member's successor has been appointed and has qualified.  The
 
 7 board shall at its first meeting after June 30, elect a
 
 8 chairperson and vice-chairperson, who shall serve until
 
 9 adjournment of its first meeting after June 30 of the next year
 
10 or thereafter until their successors are appointed and have
 
11 qualified and whose election shall be immediately certified by
 
12 the board to the chief election officer.  The board shall appoint
 
13 a secretary, who shall not be a member of the board.  The
 
14 president of the university shall act as executive officer of the
 
15 board.
 
16      (c)  The board shall meet not less often than ten times
 
17 annually, and may from time to time meet in each of the counties
 
18 of Hawaii, Maui, and Kauai.
 
19      (d)  The members of the board shall serve without pay but
 
20 shall be entitled to their traveling expenses within the State
 
21 when attending meetings of the board or when actually engaged in
 
22 business relating to the work of the board."
 

 
 
 
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 1      SECTION 24.  Section 304-4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§304-4 Powers of regents; official name.(a)  The board
 
 4 of regents shall have management and control of the general
 
 5 affairs, and exclusive jurisdiction over the internal
 
 6 organization and management[,] of the university[.] through its
 
 7 executive officer.
 
 8      (b)  The board of regents shall appoint and may remove an
 
 9 executive officer to be known as the president of the University
 
10 of Hawaii, and shall set the salary of the president.  It may
 
11 appoint a treasurer and such other officers as it deems
 
12 necessary.  It may authorize any officer, elected or appointed by
 
13 it, to approve and sign on its behalf any voucher or other
 
14 document which the board may approve and sign.  It may delegate
 
15 to the president or the president's designee to authority to
 
16 render the final decision in contested case proceedings subject
 
17 to chapter 91, as it deems appropriate.  It may purchase or
 
18 otherwise acquire lands, buildings, appliances, and other
 
19 property for the purposes of the university and expend such sums
 
20 of money as may be from time to time placed at the disposal of
 
21 the university from whatever source.  All lands, buildings,
 
22 appliances, and other property so purchased or acquired shall be
 

 
 
 
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 1 and remain the property of the university to be used in
 
 2 perpetuity for the benefit of the university.  The board of
 
 3 regents, in accordance with law, shall manage the inventory,
 
 4 equipment, surplus property, and expenditures of the university
 
 5 and, subject to chapter 91, may adopt rules, further controlling
 
 6 and regulating the same.
 
 7      [(b)] (c)  The board may charge resident and nonresident
 
 8 tuition fees for regular courses of instruction at any University
 
 9 of Hawaii campus, including any community college.
 
10      The board may also charge other fees for special programs of
 
11 instruction, as well as laboratory fees, course fees, fees for
 
12 student activities, and an information technology user fee.  The
 
13 board may charge other fees for summer session or evening
 
14 courses, including differential fees for nonresident students.
 
15      The board may waive entirely or reduce the tuition fee or
 
16 any of the other fees for graduate teaching and research
 
17 assistants.  The board may enter into agreements with government
 
18 and university officials of any other state or foreign country to
 
19 provide for reciprocal waiver of the nonresident tuition and fee
 
20 differential.  The board may waive the nonresident tuition and
 
21 fee differential for selected students from Pacific and Asian
 
22 jurisdictions when their presence would be beneficial to the
 

 
 
 
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 1 university or the State.  The board may waive entirely or reduce
 
 2 the tuition fee or any of the other fees for students, resident
 
 3 or nonresident.  The board shall determine the percentage of
 
 4 allowable tuition and fee waivers for financial need and other
 
 5 university priorities.  These tuition waivers and waivers of the
 
 6 nonresident tuition and fee differential shall be awarded in
 
 7 accordance with guidelines established by the board.
 
 8      [(c)] (d)  The board shall adopt the necessary rules
 
 9 defining residence for tuition purposes herein; provided that the
 
10 basic rule shall be that a student shall qualify for the resident
 
11 tuition fee only if the following criteria are met:
 
12      (1)  The adult student, or in the case of a minor student,
 
13           the student's parents or guardians, has been a bona
 
14           fide resident of this State for at least twelve
 
15           consecutive months next preceding the student's first
 
16           day of officially scheduled instruction for any
 
17           semester or term in which the student is enrolling at
 
18           the particular college or campus; and
 
19      (2)  The adult or minor student has not been claimed as a
 
20           dependent for tax purposes for at least twelve months
 
21           next preceding the student's first day of officially
 
22           scheduled instruction for any semester or term in which
 

 
 
 
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 1           the student is enrolling at the particular college or
 
 2           campus by the student's parents or guardians who are
 
 3           nonresidents of the State; provided that this provision
 
 4           shall not apply in cases where the parent claiming the
 
 5           student as a dependent is entitled to do so under a
 
 6           child support order or agreement issued or entered into
 
 7           in conjunction with a divorce proceeding or legal
 
 8           separation agreement, and the other parent and the
 
 9           student meet the criteria set forth in paragraph (1).
 
10      [(d)] (e)  The board shall develop internal policies and
 
11 procedures for the procurement of goods, services, and
 
12 construction, consistent with the goals of public accountability
 
13 and public procurement practices, but not subject to chapter
 
14 103D.  However, where possible, the board is encouraged to use
 
15 the provisions of chapter 103D; provided that the use of one or
 
16 more provisions of chapter 103D shall not constitute a waiver of
 
17 the exemption of chapter 103D and shall not subject the board to
 
18 any other provision of chapter 103D.
 
19      [(e)] (f)  The board may enter into concession agreements
 
20 without regard to chapter 102.
 
21      [(f)] (g)  The official name of the board shall be Board of
 
22 Regents, University of Hawaii, and the board shall adopt and use
 
23 a common seal by which all official acts shall be authenticated."
 

 
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 1      SECTION 25.  Section 304-7, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (c) to read as follows:
 
 3      "(c)  The board shall cause to be kept suitable books of
 
 4 account wherein shall be recorded each gift, the essential facts
 
 5 of the management thereof, and the expenditure of the income, and
 
 6 a statement of all trust funds shall be included in the annual
 
 7 report to [the governor and] the legislature."
 
 8      SECTION 26.  Section 304-7.5, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§304-7.5  Budget appropriations; University of Hawaii.(a)
 
11 Beginning in fiscal year 1998-1999, and every year thereafter,
 
12 the general fund budget appropriations for the University of
 
13 Hawaii shall be an amount not less than three times and not
 
14 greater than five times the amount of regular tuition and related
 
15 fee revenues estimated for that fiscal year.
 
16      (b)  Any general fund budget appropriation for the
 
17 University of Hawaii for operating purposes for any fiscal year
 
18 shall include the consideration of:
 
19      (1)  The fiscal condition of the State;
 
20      (2)  Enrollment;
 
21      (3)  Access to educational opportunity;
 
22      (4)  The mix of resident and nonresident students; and
 

 
 
 
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 1      (5)  Community service and noninstruction programs.
 
 2      [(c)  No revenue received by the University of Hawaii
 
 3 pursuant to the University of Hawaii tuition and fees special
 
 4 fund established under section 304-16.5 may be used by the
 
 5 governor or the director of finance as a justification for
 
 6 reducing any budget request or allotment to the University of
 
 7 Hawaii unless the university requests such a reduction.]"
 
 8      SECTION 27.  Section 304-7.8, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "[[]§304-7.8[]]  Appropriations for special and revolving
 
11 funds of the University of Hawaii.  In any fiscal year if the
 
12 amount of revenues deposited into a special or revolving fund of
 
13 the university exceeds the amount appropriated from that fund for
 
14 that year, the president may approve expenditures in excess of
 
15 the amount appropriated, up to the amount by which revenues for
 
16 that fund exceed the appropriations from that fund for a fiscal
 
17 year; provided the university shall submit annually a report to
 
18 [the governor and] the legislature of all expenditures in excess
 
19 of each fund's appropriation for each fiscal year."
 
20      SECTION 28.  Section 304-8, Hawaii Revised Statutes, is
 
21 amended by amending subsection (a) to read as follows:
 

 
 
 
 
 
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 1      "(a)  Moneys appropriated by the legislature for the
 
 2 university shall be payable by the director of finance, upon
 
 3 vouchers approved by the board of regents or by any officer
 
 4 elected or appointed by the board under section 304-4 and
 
 5 authorized by the board to approve such vouchers on behalf of the
 
 6 board.  All moneys received by or on behalf of the board of the
 
 7 university shall be deposited with the director of finance,
 
 8 except that any moneys received from the federal government or
 
 9 from private contributions shall be deposited and accounted for
 
10 in accordance with conditions established by the agencies or
 
11 persons from whom the moneys are received and except that [with
 
12 the concurrence of the director of finance,] moneys received from
 
13 the federal government for research, training, and other related
 
14 purposes of a transitory nature and moneys in trust, special, or
 
15 revolving funds administered by the university may be deposited
 
16 in depositories other than the state treasury[; provided that the
 
17 university informs the director of finance of the depositories in
 
18 which moneys from the funds have been deposited, and submits
 
19 copies of annual statements from each of the depositories in
 
20 which the moneys from the funds are deposited].  All income from
 
21 regular credit tuition and tuition related course and fee charges
 
22 against students shall be deposited to the credit of the
 

 
 
 
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 1 University of Hawaii tuition and fees special fund pursuant to
 
 2 section 304-16.5.  Income from university projects as defined and
 
 3 described in sections 306-1 to 306-12, may be credited to special
 
 4 or other funds."
 
 5      SECTION 29.  Section 304-8.1, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "§304-8.1  Research and training revolving fund.(a)  There
 
 8 is established a University of Hawaii research and training
 
 9 revolving fund into which shall be deposited one hundred per cent
 
10 of the total amount of indirect overhead revenues generated by
 
11 the university from research and training programs.  The board of
 
12 regents of the University of Hawaii is authorized to expend
 
13 eighty-four per cent of the revenues deposited in the fund for:
 
14      (1)  Research and training purposes which may result in
 
15           additional research and training grants and contracts;
 
16           and
 
17      (2)  Facilitating research and training at the university.
 
18      (b)  The University of Hawaii shall prepare and submit an
 
19 annual report on the status of the research and training
 
20 revolving fund to the legislature twenty days before the
 
21 convening of each regular session.  The annual report shall
 
22 include but not be limited to a breakdown of travel expenses.
 

 
 
 
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 1      (c)  Notwithstanding sections 304-10, 304-8.92, and 304-8.96
 
 2 to the contrary, the board of regents or its designee, may
 
 3 establish a separate account within the research and training
 
 4 revolving fund for the purpose of providing advance funding to
 
 5 meet reimbursable costs incurred in connection with federally
 
 6 financed research and training projects.  Any reimbursement
 
 7 received as a result of providing advance funding shall be
 
 8 deposited into the research and training revolving fund to be
 
 9 used for the purpose of meeting reimbursable costs incurred in
 
10 connection with federally financed projects.
 
11      [(d)  Revenues deposited into the fund shall not be used as
 
12 a basis for reducing any current or future budget request or
 
13 allotment to the University of Hawaii unless the university
 
14 requests such a reduction.]"
 
15      SECTION 30.  Section 304-8.4, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "§304-8.4  Vocational and technical training projects
 
18 revolving fund.  There is established a revolving fund for the
 
19 vocational and technical training projects of the community
 
20 colleges and the University of Hawaii at Hilo into which shall be
 
21 deposited the receipts from fees for services, supplies, and use
 
22 of equipment provided by or in connection with these projects.
 

 
 
 
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 1 Funds deposited in this account shall be expended for vocational
 
 2 and technical training projects, and supplies, equipment, and
 
 3 services related thereto.
 
 4      The University of Hawaii at Hilo shall report as of the
 
 5 close of each fiscal year to [the governor and] the legislature
 
 6 on the revolving fund's revenues and expenditures for the
 
 7 reported year.  These reports shall be submitted not later than
 
 8 twenty days prior to the convening of each regular session."
 
 9      SECTION 31.  Section 304-8.92, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "§304-8.92  Discoveries and inventions revolving fund.(a)
 
12 There is established a discoveries and inventions revolving fund
 
13 into which shall be deposited four per cent of the total indirect
 
14 overhead funds generated by the university for research and
 
15 training purposes in the prior fiscal year.  Appropriations by
 
16 the state legislature [subject to the approval of the governor],
 
17 proceeds from the commercial exploitation of inventions and
 
18 intellectual property developed at the university, gifts,
 
19 donations, fees collected, and grants from public agencies and
 
20 private persons may also be deposited into the fund for the
 
21 purposes of supporting innovation and research commercialization
 
22 and the patenting, copyrighting, licensing, and marketing of
 

 
 
 
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 1 discoveries, inventions, and technologies developed at the
 
 2 university.  The fund shall be used to develop technologies which
 
 3 have potential commercial value, support the administration of
 
 4 technology transfer activities, and facilitate economic
 
 5 development through education and research undertaken at the
 
 6 university.
 
 7      (b)  The University of Hawaii shall provide an annual report
 
 8 to [the governor and] the legislature describing all transactions
 
 9 and activities involved in the administration of the discoveries
 
10 and inventions revolving fund."
 
11      SECTION 32.  Section 304-8.96, Hawaii Revised Statutes, is
 
12 amended by amending subsection (b) to read as follows:
 
13      "(b)  The University of Hawaii shall provide an annual
 
14 report to [the governor and] the legislature describing all
 
15 transactions and activities involved in the administration of the
 
16 housing assistance revolving fund."
 
17      SECTION 33.  Section 304-16.5, Hawaii Revised Statutes, is
 
18 amended by amending subsection (a) to read as follows:
 
19      "(a)  There is established the University of Hawaii tuition
 
20 and fees special fund into which shall be deposited all revenue
 
21 collected by the university for regular, summer, and continuing
 
22 education credit tuition, tuition related course and fee charges,
 

 
 
 
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 1 and any other charges to students, except as provided by law.
 
 2 Moneys deposited into the fund shall be expended to maintain or
 
 3 improve the university's programs and operations and shall not
 
 4 be[:
 
 5      (1)  Used as a justification for reducing any budget request
 
 6           or allotment to the University of Hawaii unless the
 
 7           university requests such a reduction;
 
 8      (2)  Transferred] transferred unless otherwise authorized by
 
 9           the legislature[; and
 
10      (3)  Restricted by the governor or the director of finance
 
11           without the prior approval of the legislature].
 
12      Any rule, policy, or action of any agency or individual in
 
13 contravention of this subsection shall be void as against public
 
14 policy."
 
15      SECTION 34.  Section 304-19, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "§304-19  Reporting of exempt fees of scholarship holders.
 
18 In computing its budget requests, the board of regents shall not
 
19 show amounts of tuition and registration fees from which holders
 
20 of scholarships are exempted.  These amounts shall be reported
 
21 for information purposes to the [department of budget and
 
22 finance] legislature but shall not be included in the statement
 
23 of university income."
 

 
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 1      SECTION 35.  Section 304-75, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§304-75  Powers and duties of agency.  The board of regents
 
 4 may:
 
 5      (1)  Formulate, pursuant to the standards therefor set forth
 
 6           in section 7(a) of the Act of Congress, agricultural
 
 7           plans for this State for each calendar year, and from
 
 8           time to time make such revisions in the agricultural
 
 9           plans as may be necessary to conform to such standards;
 
10      (2)  Utilize, in formulating and revising the agricultural
 
11           plans, the assistance of the agricultural extension
 
12           service and the agricultural experiment station;
 
13      (3)  Designate in such agricultural plans the board of
 
14           regents, University of Hawaii, as the agency of this
 
15           State to administer the agricultural plans;
 
16      (4)  Submit the agricultural plans to the Secretary of
 
17           Agriculture of the United States, prior to such time
 
18           and in such manner and form as the Secretary may
 
19           prescribe;
 
20      (5)  Receive on behalf of the State any grants made pursuant
 
21           to section 7 of the Soil Conservation and Domestic
 
22           Allotment Act, and utilize and expend the grants in
 

 
 
 
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 1           accordance with such agricultural plans as may have
 
 2           been approved by the Secretary of Agriculture;
 
 3      (6)  Make provision for establishment of state, county, and
 
 4           community committees or associations of agricultural
 
 5           producers, organized for such purpose, and for
 
 6           participation by them in the administration of the
 
 7           agricultural plans;
 
 8      (7)  Employ such personal services and incur such other
 
 9           expenses as it finds necessary for the efficient
 
10           exercise of its powers and duties under this section;
 
11      (8)  Utilize in the administration of the provisions hereof
 
12           available services and assistance of other agencies of
 
13           this State and of the agricultural extension service
 
14           and the agricultural experiment station of the
 
15           University of Hawaii;
 
16      (9)  Delegate to committees, associations, individuals,
 
17           corporations, or other agencies of this State, such
 
18           functions in carrying out sections 304-73 to 304-75 as
 
19           it deems suitable, and exercise all other powers and
 
20           authorities and do any and all other things which it
 
21           may deem necessary or proper to the performance of its
 
22           duties and functions hereunder;
 

 
 
 
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 1     (10)  Provide for the submission to the Secretary of
 
 2           Agriculture of such reports as may be deemed requisite,
 
 3           including such reports as may be required to ascertain
 
 4           whether the agricultural plans are being carried out
 
 5           according to their terms;
 
 6     (11)  Prescribe such rules and regulations as may be
 
 7           necessary or expedient for the effective administration
 
 8           of the agricultural plans, and assure the correctness
 
 9           of and make possible the verification of such reports
 
10           as may be required by the terms of the agricultural
 
11           plans;
 
12     (12)  Submit to the [governor of the State] legislature an
 
13           annual report for each year covering the administration
 
14           and operation of such program.
 
15      The board shall perform its duties and functions as such
 
16 agency under sections 304-73 to 304-75 separately and distinctly
 
17 from the performance of its duties and functions under any other
 
18 act or in any other capacity, except that the board may utilize
 
19 the services and the assistance of the personnel and faculties
 
20 normally used by it in the performance of such other functions if
 
21 it finds that the utilization of such services and assistance is
 
22 necessary to, or is calculated to assist substantially in, the
 

 
 
 
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 1 effective administration of such sections and that such personnel
 
 2 or faculties may be utilized without interference with the
 
 3 effective performance of such other duties and functions."
 
 4      SECTION 36.  Section 304-93, Hawaii Revised Statutes, is
 
 5 amended by amending subsection (b) to read as follows:
 
 6      "(b)  The university may spend out of the state higher
 
 7 education loan fund up to two per cent of the total amount of
 
 8 loans outstanding for collection and administrative expenses.
 
 9 [In accordance with chapter 103D, the] The university may enter
 
10 into written contracts with collection agencies for the purpose
 
11 of collecting delinquent student loans.  All payments collected,
 
12 exclusive of a collection agency's commissions, shall revert, and
 
13 be credited, to the loan fund."
 
14      SECTION 37.  Section 661-12, Hawaii Revised Statutes, is
 
15 amended by amending the definition of "agency" in subsection (f)
 
16 to read as follows:
 
17      ""Agency" means any state or county board, commission,
 
18 department, or officer authorized by law to make rules or to
 
19 adjudicate contested cases except those in the legislative or
 
20 judicial branches[.] or the University of Hawaii."
 
21      SECTION 38.  Section 12 of Act 321, Session Laws of Hawaii
 
22 1986, as amended by section 69 of Act 283, Session Laws of Hawaii
 

 
 
 
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 1 1987, by section 7 of Act 371, Session Laws of Hawaii 1989, by
 
 2 section 3 of Act 163, Session Laws of Hawaii 1991, by section 2
 
 3 of Act 314, Session Laws of Hawaii 1993, by section 22 of Act 8,
 
 4 Special Session Laws of Hawaii 1993, by section 1 of Act 180,
 
 5 Session Laws of Hawaii 1997, and by section 24 of Act 115,
 
 6 Session Laws of Hawaii 1998, is amended to read as follows:
 
 7      "SECTION 12.  This Act shall take effect on July 1, 1986[,
 
 8 and be repealed as of June 30, 2005; provided that on repeal
 
 9 sections 40-1, 40-2, 40-4, 40-6, and 40-81, Hawaii Revised
 
10 Statutes, are reenacted in the form in which they read on
 
11 June 30, 1986, and section 40-58, Hawaii Revised Statutes, is
 
12 reenacted in the form in which it read on June 30, 1991.];
 
13 provided further that:
 
14      (1)  Section 3 of this Act is repealed on June 30, 2005;
 
15      (2)  Section 40-1(b), Hawaii Revised Statutes, is repealed
 
16           on June 30, 2005; provided that section 40-1(b) is
 
17           reenacted in the form in which it read on June 30,
 
18           1986;
 
19      (3)  Sections 40-2, 40-6, and 40-81, Hawaii Revised
 
20           Statutes, are repealed on June 30, 2005; provided that
 
21           they are reenacted in the form in which they read on
 
22           June 30, 1986; provided further that amendments made by
 
23           this Act    , shall not be repealed;
 

 
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 1      (4)  Section 40-4, Hawaii Revised Statutes, is repealed on
 
 2           June 30, 2005; provided that it is reenacted in the
 
 3           form in which it read on June 30, 1986; and provided
 
 4           further that the amendment made to that section adding
 
 5           the University of Hawaii shall not be repealed; and
 
 6      (5)  Section 40-58, Hawaii Revised Statutes, is repealed on
 
 7           June 30, 2005; provided that it is reenacted in the
 
 8           form in which it read on June 30, 1991; and provided
 
 9           further that amendments made by this Act shall not be
 
10           repealed."        
 
11      SECTION 39.  Section 26-11, Hawaii Revised Statutes, is
 
12 repealed.
 
13      ["§26-11  University of Hawaii.  (a)  The University of
 
14 Hawaii shall be headed by an executive board to be known as the
 
15 board of regents.
 
16      The board shall consist of twelve members.  No more than six
 
17 of the members shall be members of the same political party and
 
18 at least part of the membership of the board shall represent
 
19 geographic subdivisions of the State.  At least one member shall
 
20 be a University of Hawaii student at the time of the initial
 
21 appointment.  This member may be reappointed for one additional
 
22 term even though the member may no longer be a student at the
 
23 time of reappointment.
 

 
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 1      The board shall have power, in accordance with the
 
 2 Constitution of the State and with law, to formulate policy, and
 
 3 to exercise control over the university through its executive
 
 4 officer, the president of the university.  The board shall have
 
 5 exclusive jurisdiction over the internal organization and
 
 6 management of the university.
 
 7      (b)  The board of regents shall appoint and may remove an
 
 8 executive officer to be known as the president of the University
 
 9 of Hawaii.
 
10      The University of Hawaii as heretofore constituted as a body
 
11 corporate is continued as the University of Hawaii established by
 
12 this chapter."]
 
13      SECTION 40.  No part of this Act shall contravene any part
 
14 of chapters 76,77, or 89, Hawaii Revised Statutes, or any
 
15 collective bargaining agreement that may have been or may be
 
16 negotiated under chapter 89, Hawaii Revised Statutes.
 
17      SECTION 41.  If any provision of this Act, or the
 
18 application thereof to any person or circumstance is held
 
19 invalid, the invalidity does not affect other provisions or
 
20 applications of the Act which can be given effect without the
 
21 invalid provision or application, and to this end the provisions
 
22 of this Act are severable.
 

 
 
 
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 1      SECTION 42.  Statutory material to be repealed is bracketed.
 
 2 New statutory material is underscored.
 
 3      SECTION 43.  This Act shall take effect on July 1, 1999.