STAND. COM. REP. NO. 3200

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 1873
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 1873, H.D. 2, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO EDUCATION,"

begs leave to report as follows:

     The purpose of this bill is to require that the Department
of Education receive the full amount of federal impact aid,
federal Department of Defense funds, and federal indirect
overhead reimbursements.

     Specifically, this bill:

     (1)  Prohibits federal impact aid, federal Department of
          Defense funds, and federal indirect overhead
          reimbursements received by the Department of Education
          from being returned to the general fund;

     (2)  Requires the Governor to:

          (A)  Allow the Department of Education to increase the
               federal fund expenditure ceiling for EDN 100,
               school-based budgeting; and


 
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          (B)  Allow the Department to retain the general fund
               offset created by increased impact aid receipts to
               further carry out the purposes of EDN 100;

          if the amount of federal impact aid and federal
          Department of Defense funds received by the Department
          of Education exceeds the authorized appropriation in
          the General or the Supplemental Appropriations Act; and

     (3)  Allows the Department to retain and expend federal
          indirect overhead reimbursements for discretionary
          grants in excess of the negotiated rate for these
          reimbursements.

     In addition, this bill:

     (1)  Establishes the federal grants search and application
          revolving fund, and requires the Department of
          Education's share of federal indirect overhead
          reimbursements to be deposited into the fund;

     (2)  Allows the Department of Education to expend moneys in
          the revolving fund to search for discretionary grants
          and to develop program applications to secure
          additional revenues for the Department;

     (3)  Appropriates an unspecified sum from the federal grants
          search and application revolving fund to carry out the
          purposes of this bill, including the creation and
          hiring of necessary staff; and

     (4)  Allows the Superintendent to approve expenditures in
          excess of the amount appropriated, if the amount of
          revenues deposited into a trust fund of the Department
          exceeds the amount appropriated from the trust fund.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1873, H.D. 2, S.D. 1, and recommends that it pass Third Reading.


 
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                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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