CONFERENCE COMMITTEE REPORT NO. 194

                            Honolulu, Hawaii
                                            , 1999

                            RE:   H.B. No. 142
                                  H.D. 1
                                  S.D. 2
                                  C.D. 1




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

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

Sir:

     Your Committee on Conference on the disagreeing vote of the
House of Representatives to the amendments proposed by the Senate
in H.B. No. 142, H.D. 1, S.D. 2, entitled:

    "A BILL FOR AN ACT RELATING TO PUBLIC EMPLOYMENT,"

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

     The purpose of this bill is to repeal existing public
employment laws, specifically those laws relating to civil
service, compensation, public service, leaves of absence, hours
of work, in-service training programs, and incentive and service
awards, upon the adoption of replacement legislation by the
Legislature redesigning the civil service system.

     Specifically, this bill requires the Director of Human
Resources Development to design and effectuate a process for
modernizing the civil service system in collaboration with all

 
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stakeholders, labor and management included; and to submit draft
and recommended model civil service legislation for the
modernization of the civil service system to the Legislature.

     In addition, as received by your Committee on Conference,
this bill:

     (1)  Provides a lump sum voluntary severance benefit or a
          one-time special retirement incentive benefit to a
          dislocated employee in exchange for the employee's
          right to exercise any reduction-in-force policy,
          collective bargaining agreement, rule, and placement
          and bumping procedure under collective bargaining;

     (2)  Abolishes the position held by an employee who is
          provided a voluntary severance benefit or special
          retirement incentive benefit upon the termination or
          retirement of the employee, and reduces the affected
          agency's personnel count by one full-time equivalent
          (1.00 FTE) position for each full-time benefit
          conferred;

     (3)  Requires the Legislature to establish the number of
          positions to be eliminated each fiscal year, requires
          the Department of Human Resources Development to brief
          employees on any workforce reduction plan, and requires
          the State to liquidate the additional actuarial present
          value of special retirement incentive benefits over a
          period of five years;

     (4)  Allows employees of the Hawaii Public Broadcasting
          Authority to remain state employees without the loss of
          employment benefits and privileges upon the transfer of
          the Authority's licenses, assets, responsibilities, and
          functions to the Hawaii Public Television Foundation;
          or to be offered retraining for another position;

     (5)  Allows agencies to establish flexible spending accounts
          in order to operate wage and salary reduction benefit
          programs that allow employees to reduce their pretax
          compensation in return for the payment of eligible
          benefits--or "cafeteria plans", and to hold
          contributions, earned interest, and forfeited balances
          in these accounts in trust outside the state treasury;
          and


 
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     (6)  Allows the Department of Human Resources Development,
          with the consent of the appropriate public employees
          unions, to conduct demonstration projects to determine
          whether a specific change in human resource management
          procedures, methods, policies, or statutes would result
          in improved human resource management within the State.

     Your Committee on Conference has amended this bill to
incorporate the many changes agreed to by representatives of
labor and management, and by managers on the part of the House
and Senate.  Most notably, your Committee on Conference:

     (1)  Established an advisory panel within the Department of
          Human Resources Development and assigned to the panel
          the task of modernizing the civil service system;
          limited the membership of the advisory panel; and
          expanded the scope of the panel's discussions;

     (2)  Added a provision to allow the recruitment of personnel
          above the first step of the pay range;

     (3)  Added a provision to make salary and wage overpayments
          the subject of collective bargaining;

     (4)  Deleted the provisions relating to voluntary severance
          benefits and special retirement incentive benefits;

     (5)  Deleted the provision relating to employees of the
          Hawaii Public Broadcasting Authority; and

     (6)  Deleted the provision requiring the Legislature to
          establish the number of positions to be eliminated each
          fiscal year.

     More specifically, your Committee on Conference limited the
applicability of the provision relating to flexible spending
accounts only to state employees.

     Your Committee on Conference wishes to thank the parties
involved in crafting this bill for their civility and diplomacy-
-including their ability to disagree without becoming
disagreeable, and for their willingness to compromise on
contentious issues for the good of the State.

     Your Committee on Conference is in accord with the intent
and purpose of H.B. No. 142, H.D. 1, S.D. 2, as amended herein,

 
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and recommends that it pass Final Reading in the form attached
hereto as H.B. No. 142, H.D. 1, S.D. 2, C.D. 1.

                                   Respectfully submitted,

MANAGERS ON THE PART OF THE        MANAGERS ON THE PART OF THE
           SENATE                              HOUSE
                                   
                                   
                                   
______________________________     ______________________________
BOB NAKATA, Co-Chair               TERRY NUI YOSHINAGA, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
CAROL FUKUNAGA, Co-Chair           DWIGHT Y. TAKAMINE, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
SUZANNE CHUN OAKLAND, Member       IRIS IKEDA CATALANI, Member
                                   
                                   
                                   
______________________________     ______________________________
DAVID IGE, Member                  KENNY GOODENOW, Member
                                   
                                   
                                   
______________________________     ______________________________
LES IHARA, JR., Member             BOB NAKASONE, Member
                                   
                                   
                                   
______________________________     ______________________________
BRIAN T. TANIGUCHI, Member         NATHAN SUZUKI, Member
                                   
                                   
                                   
______________________________     ______________________________
WHITNEY T. ANDERSON, Member        COLLEEN MEYER, Member
                                   
                                   
                                   
                                   ______________________________
                                   MARK MOSES, Member

 
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