STAND. COM. REP. NO. 2685

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 3026
                                        S.D. 1




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

Sir:

     Your Committees on Education and Technology and Ways and
Means, to which was referred S.B. No. 3026 entitled: 

     "A BILL FOR AN ACT RELATING TO SCHOOL FACILITIES,"

beg leave to report as follows:

     The purpose of this measure is to establish the state
educational facilities repair and maintenance special fund to
eliminate the backlog of projects existing on June 30, 2000.

     In addition, this measure establishes the school physical
plant operations and maintenance special fund to pay for school
repairs and cyclical maintenance projects scheduled after
June 30, 2000.  The measure requires remittances of taxes to be
deposited into these newly created special funds, authorizes the
issuance of general obligation bonds for them, and makes
appropriations for them.

     Testimony in support of the measure was received from the
Department of Education, Department of Accounting and General
Services, Hawaii Association of Realtors, and HGEA-AFSCME.
Testimony in opposition to the measure was received from the
Department of Budget and Finance.  The Tax Foundation of Hawaii
submitted comments.

     Your Committees find that although the State has invested
over $1.7 billion in constructing school facilities, within the
past six years, the severe downturn in the State's economy has
made it difficult to fund school repair and maintenance at

 
a                                                     SB3026 SD1
                                   STAND. COM. REP. NO. 2685
                                   Page 2


required levels.  The inconsistency of annual funding has made it
impossible to systematically tackle needed repairs.  Consequently
there is a backlog of repair and maintenance projects.

     Your Committees agree that by establishing special funds for
repair and maintenance to address the current backlog and future
repairs, the State can address current repair and maintenance
needs and provide a framework for future repair and maintenance
costs.  Having departmental school district business and fiscal
officers to oversee school facilities planning will facilitate
this process.

     Your Committees amended the measure as follows:

     (1)  Adding the following requirements to the school
          physical plant operations and maintenance special fund:

          (A)  Requiring reports, for expenditures for school
               repair and cyclical maintenance projects and a
               list of each school's repair and maintenance
               needs, to be posted electronically on the Internet
               and to be updated quarterly;

          (B)  Requiring maximum allowable operational and
               maintenance efficiency;

          (C)  Adding "present value of normally scheduled
               maintenance for the useful life of the facility"
               to the maintenance schedule; and

          (D)  Allocating moneys in AGS807 physical plant
               operations and maintenance for estimated cyclical
               and scheduled maintenance costs which reflect the
               age and condition of existing school facilities.
               These provisions were moved from section 302A-A,
               Hawaii Revised Statutes;

     (2)  Changing the title of section 302A-A, Hawaii Revised
          Statutes, for a six year program and financial plan,
          requiring physical and financial analysis reports for
          each public school and requiring such reports to be
          posted electronically on the Internet;

     (3)  Adding qualifications for business and fiscal officers
          in section 302A-B, Hawaii Revised Statutes;

     (4)  Requiring business and fiscal officers to develop,
          coordinate, and oversee each school's maintenance plan;


 
a                                                     SB3026 SD1
                                   STAND. COM. REP. NO. 2685
                                   Page 3


     (5)  Authorizing the department of education to enter into
          agreements with the federal Department of Defense to
          use federal funds to construct, repair, or renovate
          Hawaii public schools;

     (6)  Amending section 302A-1504, Hawaii Revised Statutes, to
          allow up to $25,000 for minor repair and maintenance
          accounts for each school and to require allocation of
          such funds based on the number of students at the
          school multiplied by an age and condition factor of the
          school;

     (7)  Requiring each school repair and maintenance priority
          listing to be posted electronically on the Internet for
          section 302A-1505, Hawaii Revised Statutes;

     (8)  With respect to remittances in section 237-31, Hawaii
          Revised Statutes,

          (A)  Requiring the sum of all general excise tax
               revenues representing the difference between
               $45,000,000 and proceeds from the sale of any
               general obligation bonds to be deposited into the
               facilities repair and maintenance special fund;
               and

          (B)  Requiring the sum of all general excise tax
               revenues representing the difference between an
               unspecified amount and proceeds from the sale of
               any general obligation bonds to be deposited into
               the school physical plant operations and
               maintenance special fund;

     (9)  Authorizing the Director of Finance to issue general
          obligation bonds each for the facilities repair and
          maintenance special fund and for the school physical
          plant operations and maintenance special fund;

     (10) Appropriating funds for an engineer and clerk for the
          Department of Accounting and General Services; and

     (11) Making technical, nonsubstantive amendments to the
          measure for clarity, consistency, and style.

     As affirmed by the records of votes of the members of your
Committees on Education and Technology and Ways and Means that
are attached to this report, your Committees are in accord with
the intent and purpose of S.B. No. 3026, as amended herein, and
recommend that it pass Second Reading in the form attached hereto

 
a                                                     SB3026 SD1
                                   STAND. COM. REP. NO. 2685
                                   Page 4


as S.B. No. 3026, S.D. 1, and be placed on the calendar for Third
Reading.

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




_____________________________      ______________________________
CAROL FUKUNAGA, Co-Chair           DAVID Y. IGE, Chair




_____________________________
ANDREW LEVIN, Co-Chair

 
a                                                     SB3026 SD1