STAND. COM. REP. NO. 2998

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2062
                                        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 Education and Technology, to which was
referred H.B. No. 2062, H.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO HIGHER EDUCATION,"

begs leave to report as follows:

     The purpose of this measure is to provide the University of
Hawaii with additional flexibility in managing its resources.

     This measure enables the University, until June 30, 2002,
to:

     (1)  Carry over unexpended general funds for operating
          purposes for one additional fiscal year; and

     (2)  Use these retained funds for instructional programs.

This measure also exempts the University from the provisions of
section 37-42, Hawaii Revised Statutes (HRS), which requires
departments to limit expenditures of appropriated funds to
allotment ceilings established by the Governor for each
department.

     Testimony in support of the measure was received from the
University of Hawaii and Hawaii Association of Realtors.  The
Department of Budget and Finance opposed the measure.


 
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                                   STAND. COM. REP. NO. 2998
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     Your Committee finds that the proposal to carry forward
general fund appropriations would facilitate better operational
expenditure planning and assure more effective and efficient
expenditure of public funds once they are allotted.

     Your Committee agrees that the carry forward provision of
this measure will assist the University to move closer to its
goal of achieving full autonomy in the administration of
appropriated funds and allow it to better respond to the needs of
the public.  The Department of Budget and Finance expressed
concerns about allowing the University to incur obligations in
excess of any allotment, which would effectively exempt the
University from section 37-42, HRS, and would require the State
to cover excess University expenditures at the expense of other
executive departments.

     Upon further consideration, your Committee amended the
measure to:

     (1)  Broaden the use of carryover funds to apply to any
          University program;

     (2)  Remove section 5 of the measure, which exempted the
          University from the requirement of section 37-42, HRS,
          that it not incur obligations in excess of an
          allotment; and

     (3)  Remove the reference in section 6 of the measure,
          reenacting section 37-42, HRS, as it is unnecessary in
          light of these amendments.

     As affirmed by the record of votes of the members of your
Committee on Education and Technology that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 2062, H.D. 2, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as
H.B. No. 2062, H.D. 2, S.D. 1, and be referred to the Committee
on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Education and
                                   Technology,



                                   ______________________________
                                   DAVID Y. IGE, Chair

 
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